EX-99 3 a4514208ex991.txt DAYTON SUPERIOR CORPORATION PRESS RELEASE Exhibit 99.1 Dayton Superior Reports Third Quarter Results and Commitment to Increase Line of Credit DAYTON, Ohio--(BUSINESS WIRE)--Nov. 11, 2003--Dayton Superior Corporation reported today that sales for the third quarter of 2003 totaled $101.0 million, an 8.9% decline from year earlier third quarter sales of $110.9 million. Sales declined as the lagging domestic economy continued to adversely impact non-residential construction activity during the recent quarter. Gross margin for the third quarter of 2003 was 24.5% as compared to 33.0% in the third quarter of 2002. This was primarily due to decreased revenues as well as higher operating expenses, such as steel, insurance, and depreciation. Dayton's SG&A increased to $23.1 million in the recent quarter from $21.4 million in the third quarter of 2002, primarily due to the recent acquisition of Safway Formwork Systems. Income from operations in the recent quarter totaled $1.0 million versus $12.8 million in the third quarter of 2002. The Company reported a net loss of $6.4 million in the third quarter of 2003, versus net income of $2.6 million in the third quarter of 2002. Dayton Superior also reported today that it has received a commitment from GE Capital for an $80 million senior secured revolving credit facility. This credit facility would be used to refinance the existing $50 million revolving credit facility and will provide the Company with substantial liquidity to manage the business and future growth opportunities. The proposed facility will have no financial covenants, and will be subject to availability under a borrowing base calculation. Closing of this transaction is contingent upon normal due diligence and is expected to close by year end. Third quarter 2003 Credit Agreement EBITDA (see definition and reconciliation to net income (loss) following the last financial table in the accompanying tables) totaled $8.4 million versus $20.4 million in the like quarter of 2002. Dayton's Credit Agreement EBITDA margin (see definition following the last financial table in the accompanying tables) was 8.4% in the recent quarter versus 18.4% in the third quarter of 2002. Sales for the first three quarters of 2003 totaled $278.5 million, versus $305.5 million in the year earlier period. Gross margins declined to 27.6% for the first three quarters of 2003 versus 32.6% in the first three quarters of 2002 as declining rental revenues and product volume impacted profitability. SG&A expenses for the first three quarters declined 6.9% year-over-year as management continued its efforts to minimize costs. For the most recent nine months, Dayton Superior achieved an operating income of $12.4 million versus $29.2 million in the first three quarters of 2002. The Company reported a net loss of $12.2 million for the first three quarters of 2003 versus the net loss of $14.7 million reported in the first three quarters of 2002. Included in the 2002 loss was a goodwill write-down of $17.1 million after taxes. For the first three quarters of 2003, Dayton Superior achieved Credit Agreement EBITDA (see definition and reconciliation to net income (loss) following the last financial table in the accompanying tables) of $32.2 million versus $47.5 million in the year earlier nine months. The Company's Credit Agreement EBITDA margin (see definition following the last financial table in the accompanying tables) was 11.5% for the first nine months of 2003 versus 15.5% for the same period of 2002. Based on preliminary internal estimates, management expects that Credit Agreement EBITDA (see definition and reconciliation to net loss, following the last financial table in the accompanying tables) in the fourth quarter of 2003 will be in the range of $9.0 million to $11.0 million. Actual results for the quarter will depend on numerous factors, many of which are beyond the Company's control. Stephen R. Morrey, Dayton Superior's President and Chief Executive Officer said, "Sales volumes continue to be negatively affected by weak construction markets. Lower sales of used rental equipment also hurt our sales and gross margins. We also experienced higher operating expenses, such as steel, depreciation and insurance. One response to these higher costs was to increase our prices effective October 1, 2003. The market appears to be accepting this increase and we intend to make other increases if steel and other costs continue to rise. Despite the difficult non-residential construction market, we continue to take the steps necessary to position the Company for the market recovery that we believe will occur." "During the quarter, we completed the acquisition of certain assets of Safway Formwork Systems from ThyssenKrupp AG and we are ahead of our goals in integrating this acquisition. Safway sells and rents European style concrete forming and shoring systems, an area in which our Symons division has become increasingly active. "We are also excited about our relationship with GE Capital and the increased liquidity and flexibility the $80 million revolving line of credit will bring." The Company has scheduled a conference call at 11:00 a.m. ET, November 12, 2003 to discuss the third quarter 2003 results. The conference call can be accessed by dialing 1-952-556-2833. A replay of the call will be available from 2:00 p.m. ET on November 12, 2003 through 11:59 p.m. on November 21, 2003 by calling 1-800-615-3210 and entering reservation #311586. Dayton Superior Corporation is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and metal accessories used in masonry construction and has an expanding construction chemicals business. The Company's products, which are marketed under the Dayton Superior(R), Dayton/Richmond(R), Symons(R), American Highway Technology(R) and Dur-O-Wal(R) names, among others, are used primarily in two segments of the construction industry: non-residential buildings and infrastructure construction projects. Note: Certain statements made herein concerning anticipated future performance are forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) the cyclical nature of nonresidential building and infrastructure construction activity, which can be affected by factors outside Dayton Superior's control such as the general economy, governmental expenditures, interest rate increases, and changes in banking and tax laws; the amount of debt we must service; the effects of weather and the seasonality of the construction industry; our ability to implement cost savings programs successfully and on a timely basis; and Dayton Superior's ability to successfully integrate acquisitions on a timely basis. This list of factors is not intended to be exhaustive, and additional information concerning relevant risk factors can be found in Dayton Superior's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current Reports on Form 8-K, and Registration Statement on Form S-4 filed with the Securities and Exchange Commission. (tables follow) Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal quarter ended: Sept. 26, 2003 Sept. 27, 2002 Net Sales $ 100,988 $ 110,895 Cost of Sales 76,259 74,272 Gross Profit 24,729 36,623 Gross Margin 24.5% 33.0% Selling, General & Administrative 23,074 21,349 Selling, General & Administrative % 22.8% 19.2% Facility Closing and Severance Expenses 499 2,285 Amortization of Intangibles 184 150 Operating Income 972 12,839 Operating Margin 1.0% 11.6% Interest Expense 11,199 8,468 Other Expense 27 59 Income (Loss) Before Income Taxes (10,254) 4,312 Pretax Margin (10.2%) 3.9% Provision (Benefit) for Income Taxes (3,861) 1,725 Effective Tax Rate 37.7% 40.0% Net Income (Loss) $ (6,393) $ 2,587 Credit Agreement EBITDA(A) $ 8,428 $ 20,359 Credit Agreement EBITDA Margin(A) 8.4% 18.4% (A) See definition and reconciliation to net income (loss) following the last financial table. Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal nine months ended: Sept. 26, 2003 Sept. 27, 2002 Net Sales $ 278,496 $ 305,512 Cost of Sales 201,755 205,785 Gross Profit 76,741 99,727 Gross Margin 27.6% 32.6% Selling, General & Administrative 62,689 67,365 Selling, General & Administrative % 22.5% 22.0% Facility Closing and Severance Expenses 1,243 2,859 Amortization of Intangibles 443 301 Operating Income 12,366 29,202 Operating Margin 4.4% 9.6% Interest Expense 28,272 24,881 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Other Expense 164 209 Income (Loss) Before Income Taxes (18,550) 4,112 Pretax Margin (6.7%) 1.3% Benefit for Income Taxes (6,307) 1,645 Effective Tax Rate 34.0% 40.0% Net Income (Loss) Before Cumulative Effect of Change in Accounting Principle (12,243) 2,467 Cumulative Effect of Change in Accounting Principle, Net of Income Tax Benefit of $2,754 -- (17,140) Net Loss $ (12,243) $ (14,673) Credit Agreement EBITDA(A) $ 32,162 $ 47,451 Credit Agreement EBITDA Margin(A) 11.5% 15.5% (A) See definition and reconciliation to net loss following the last financial table. Dayton Superior Corporation Segment Data, Unaudited (in thousands) For the fiscal quarter ended: Sept. 26, 2003 Sept. 27, 2002 Sales: Construction Products Group $ 75,867 $ 81,475 Symons 30,871 35,520 Intersegment Eliminations (5,750) (6,100) ------------- ------------- Net Sales $ 100,988 $ 110,895 Income from Operations: Construction Products Group $ 4,473 $ 10,298 Symons 3,574 8,681 Corporate (4,274) (2,474) Intersegment Eliminations (2,801) (3,666) ------------- ------------- Income from Operations $ 972 $ 12,839 For the fiscal nine months ended: Sept. 26, 2003 Sept. 27, 2002 Sales: Construction Products Group $ 202,805 $ 224,931 Symons 91,670 97,680 Intersegment Eliminations (15,979) (17,099) ------------- ------------- Net Sales $ 278,496 $ 305,512 Income from Operations: Construction Products Group $ 14,021 $ 25,996 Symons 17,446 20,109 Corporate (10,819) (8,279) Intersegment Eliminations (8,282) (8,624) ------------- ------------- Income from Operations $ 12,366 $ 29,202 Dayton Superior Corporation Supplementary Information, Unaudited % Change 2003 vs. 2002 Third Quarter First Three Quarters Results of Operations: Net Sales by Segment: Construction Products Group (6.9%) (9.8%) Symons (13.1%) (6.2%) Net Sales (8.9%) (8.8%) Gross Profit (32.5%) (23.0%) Selling, General & Administrative 8.1% (6.9%) Facility Closing & Severance Expenses (78.2%) (56.5%) Amortization of Intangibles 22.7% 47.2% Operating Income (92.4%) (57.7%) Credit Agreement EBITDA(A) (58.6%) (32.2%) (A) See definition and reconciliation to net income (loss) following the last financial table. Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) As of: Sept. 26, 2003 Sept. 27, 2002 Dec. 31, 2002 Summary Balance Sheet: Cash $ 1,668 $ 4,134 $ 2,404 Accounts Receivable, Net 71,981 73,758 61,165 Inventories 50,713 53,833 47,911 Other Current Assets 18,540 12,012 17,257 Total Current Assets 142,902 143,737 128,737 Rental Equipment, Net 87,142 63,841 63,160 Property & Equipment, Net 62,471 60,550 61,246 Goodwill & Other Assets 118,180 120,497 120,828 Total Assets $ 410,695 $ 388,625 $ 373,971 Current Portion of Long-Term Debt $ 2,577 $ 5,878 $ 6,991 Accounts Payable 24,173 27,849 25,667 Other Current Liabilities 27,180 31,498 30,328 Total Current Liabilities 53,930 65,225 62,986 Long-Term Debt 337,731 300,249 292,545 Other Long-Term Liabilities 21,848 20,889 22,681 Shareholders' Equity (Deficit) (2,814) 2,262 (4,241) Total Liabilities & Shareholders' Equity (Deficit) $ 410,695 $ 388,625 $ 373,971 Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) For the fiscal nine months ended: Sept. 26, 2003 Sept. 27, 2002 Net Loss $ (12,243) $ (14,673) Non-Cash Adjustments to Net Loss 4,206 19,937 Changes in Assets and Liabilities (20,026) (26,213) Net Cash Used in Operating Activities (28,063) (20,949) Property, Plant and Equipment Additions, Net (5,850) (6,391) Rental Equipment Additions, Net 4,689 12,233 Acquisition (13,535) -- Net Cash Provided By (Used in) Investing Activities (14,696) 5,842 Financing Activities 41,557 14,166 Other, Net 466 86 Net Decrease in Cash $ (736) $ (855) Dayton Superior Corporation Definition and Reconciliation of Credit Agreement EBITDA to Net Income (Loss), Unaudited (in thousands) For the fiscal quarter ended: Sept. 26, 2003 Sept. 27, 2002 Net Income (Loss) $ (6,393) $ 2,587 Provision (Benefit) for Income Taxes (3,861) 1,725 Other Expense 27 59 Interest Expense 11,199 8,468 ------------- ------------- Income from Operations $ 972 $ 12,839 Facility Closing and Severance Expenses 499 2,285 Depreciation Expense 6,773 5,085 Amortization of Intangibles 184 150 ------------- ------------- Credit Agreement EBITDA $ 8,428 $ 20,359 Credit Agreement EBITDA Margin: Credit Agreement EBITDA $ 8,428 $ 20,359 Net Sales 100,988 110,526 ------------- ------------- Credit Agreement EBITDA Margin 8.4% 18.4% For the fiscal nine months ended: Sept. 26, 2003 Sept. 27, 2002 Net Loss $ (12,243) $ (14,673) Cumulative Effect of Change in Accounting Principle -- 17,140 Benefit for Income Taxes (6,307) (1,645) Other Expense 164 209 Loss on Early Extinguishment of Long-Term Debt 2,480 -- Interest Expense 28,272 24,881 ------------- ------------- Income from Operations $ 12,366 $ 29,202 Facility Closing and Severance Expenses 1,243 2,859 Depreciation Expense 18,110 15,089 Amortization of Intangibles 443 301 ------------- ------------- Credit Agreement EBITDA $ 32,162 $ 47,451 Credit Agreement EBITDA Margin: Credit Agreement EBITDA $ 32,162 $ 47,451 Net Sales 278,496 305,512 ------------- ------------- Credit Agreement EBITDA Margin 11.5% 15.5% Dayton Superior Corporation Definition and Reconciliation of Credit Agreement EBITDA to Net Loss, Unaudited (in millions) For the fiscal quarter ended December 31, 2003 Low High Net Loss $ (7.4) $ (6.4) Benefit for Income Taxes (3.8) (3.3) Interest Expense 11.0 11.2 ---------- ---------- Income (Loss) from Operations (0.2) 1.5 Facility Closing and Severance Expenses 1.2 1.5 Depreciation Expense 7.8 7.8 Amortization of Intangibles 0.2 0.2 ---------- ---------- Credit Agreement EBITDA $ 9.0 $ 11.0 Note: Credit Agreement EBITDA, as defined in our credit agreement and as we use it in this press release, is calculated as net income (loss) before cumulative effect of change in accounting principle, interest expense, loss on early extinguishment of long-term debt, provision (benefit) for income taxes, depreciation expense, amortization of intangibles, facility closing and severance expenses, and other expense. Credit Agreement EBITDA margin, as we use it in this press release, is calculated as Credit Agreement EBITDA divided by net sales. Dayton Superior believes that certain investors may find Credit Agreement EBITDA to be a useful tool for measuring our ability to service our debt and comply with the requirements of the Credit Agreement. Credit Agreement EBITDA does not represent net cash flows from operating activities, as defined by U.S. generally accepted accounting principles, and is not a substitute for operating income or net income (loss) as an indicator of operating performance or operating cash flows as a measure of liquidity. The way we calculate Credit Agreement EBITDA may differ from that used by other companies and, therefore, comparability may be limited. CONTACT: Dayton Superior Corporation Edward J. Puisis, 937-428-7172 Fax: 937-428-9115