EX-99.1 2 a4703946ex991.txt NEWS RELEASE Exhibit 99.1 Dayton Superior Reports Second Quarter Results DAYTON, Ohio--(BUSINESS WIRE)--Aug. 17, 2004--Dayton Superior Corporation reported today that sales for the second quarter of 2004 totaled $115.2 million, an 8.8% increase from the second quarter 2003 sales of $105.9 million. Product sales were $101.2 million for the second quarter of 2004, an increase of 14.4% from the second quarter of 2003. The increase in sales was primarily due to previously announced price increases and, to a lesser extent, an increase in volume. Rental revenue increased $3.4 million for the second quarter of 2004, an increase of 52.4% from the second quarter of 2003. The increase resulted from the contribution from the Safway acquisition and an increase in volume from existing product lines. Used rental equipment sales decreased to $4.1 million for the second quarter of 2004 from $10.9 million for the second quarter of 2003, as one large sale in 2003 did not recur. Gross profit on product sales for the second quarter of 2004 was $25.8 million, or 25.5% of sales, an increase from the $21.2 million, or 23.9% of sales, in the second quarter of 2003. Despite the increase in material costs, primarily steel, gross profit as a percent of sales was higher due to increased productivity. Rental gross profit for the second quarter of 2004 was $3.2 million, an increase of $1.8 million over the second quarter of 2003. Increased revenues more than offset the increase in rental cost of sales resulting from higher depreciation expense from the acquisition of Safway. Gross profit on the sales of used rental equipment for the second quarter of 2004 was $2.4 million, or 59.1% of sales, compared to $8.1 million, or 73.6% of sales, for the second quarter of 2003. Used rental equipment tends to be sporadic and, therefore, difficult to predict in any one quarter. Selling, general, and administrative expenses increased to $21.9 million in the recent quarter from $19.7 million for the second quarter of 2003, due to the acquisition of Safway. Interest expense increased to $11.7 million for the second quarter of 2004 from $9.0 million for the second quarter of 2003, due to the higher interest rate from the senior second secured notes issued in 2003, and higher borrowings. The Company reported a net loss of $(2.7) million for the second quarter of 2004, versus a net loss of $(0.5) million for the second quarter of 2003. Sales for the six months ended July 2, 2004 totaled $204.3 million, a 14.7% increase from a year earlier six-month sales of $178.2 million. Product sales were $176.5 million for the first six months of 2004, an increase of 22.9% from the same period of 2003. The increase in sales was due to an increase in volume and previously announced price increases. Rental revenue increased $5.7 million for the first six months of 2004, an increase of 41.9% from the first six months of 2003. The contribution from the acquisition of Safway was enhanced by a slight increase in volume in existing product lines. Used rental equipment sales decreased to $8.5 million for the first six months of 2004 from $21.0 million for the first six months of 2003, as two large transactions from 2003 did not recur. Used rental equipment tends to be sporadic and, therefore, difficult to predict in any one quarter. Gross profit on product sales for the first six months of 2004 was $41.7 million, or 23.6% of sales, an increase of 70 basis points over the same period of 2003. Despite the increase in material costs, primarily steel, gross profit as a percent of sales improved as a result of increased productivity. Rental gross profit for the first six months of 2004 was $5.1 million, an increase of $1.8 million over the second quarter of 2003. Increased revenues more than offset the increase in rental cost of sales resulting from higher depreciation expense as a result of the acquisition of Safway. Gross profit on the sales of used rental equipment for the first six months of 2004 was $5.3 million, or 62.3% of sales, compared to $15.3 million, or 72.8% of sales, for the first six months of 2003. Selling, general, and administrative expenses increased to $44.5 million in the recent six months from $39.1 million for the first six months of 2003. The increase was due to the acquisition of Safway, and to a lesser extent, the higher sales volume. Interest expense increased to $23.6 million for the first six months of 2004 from $17.1 million for the first six months of 2003. This increase was primarily due to the higher interest rate from the senior second secured notes, and higher borrowings. The Company reported a net loss of $(18.6) million for the first six months of 2004, versus a net loss of $(5.9) million for the first six months of 2003. Stephen R. Morrey, Dayton Superior's President and Chief Executive Officer said, "We are happy with our second quarter and first half results. Our gross profit rose despite the decrease in used rental equipment sales, which was by design. Steel costs continue to rise, but we believe our price increases will offset the impact. We expect our operating income for the second half and full year of 2004 to be an improvement over the comparable periods of 2003." The Company has scheduled a conference call at 11:00 a.m. EDT, Wednesday, August 18, 2004 to discuss the second quarter results. The conference call can be accessed by dialing 1-703-639-1423. A replay of the call will be available from 4:00 p.m. EDT on Wednesday, August 18, 2004 through 11:59 p.m. on Saturday, August 28 by calling 1-703-925-2533 entering reservation 537747. Dayton Superior is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction, and a leading manufacturer of metal accessories used in masonry construction in terms of revenues. The company's products are used in two segments of the construction industry: infrastructure construction, such as highways, bridges, utilities, water and waste treatment facilities and airport runways, and non-residential building, such as schools, stadiums, prisons, retail sites, commercial offices, hotels and manufacturing facilities. The company sells most products under the registered trade names Dayton Superior(R), Dayton/Richmond(R), Symons(R), Aztec(R), BarLock(R), Conspec(R), Edoco(R), Dur-O-Wal(R) and American Highway Technology(R). 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 Used rental equipment tends to be sporadic and, therefore, difficult to predict in any one quarter. and tax laws; the amount of debt Dayton Superior must service; the effects of weather and the seasonality of the construction industry; Dayton Superior's ability to implement cost savings programs successfully and on a timely basis; Dayton Superior's ability to successfully integrate acquisitions on a timely basis; the mix of product sales, rental revenues, and sales of used rental equipment; and favorable market response to price increases. 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: July 2, 2004 June 27, 2003 Product sales $101,170 $88,420 Rental revenue 9,914 6,504 Used rental equipment sales 4,122 10,940 --------------- ------------- Net Sales 115,206 105,864 --------------- ------------- Product cost of sales 75,331 67,258 Rental cost of sales 6,740 5,103 Used rental equipment cost of sales 1,686 2,884 --------------- ------------- Cost of Sales 83,757 75,245 --------------- ------------- Product gross profit 25,839 21,162 Rental gross profit 3,174 1,401 Used rental equipment gross profit 2,436 8,056 --------------- ------------- Gross Profit 31,449 30,619 Product gross profit % 25.5% 23.9% Rental gross profit % 32.0% 21.5% Used rental equipment gross profit % 59.1% 73.6% Gross Profit % 27.3% 28.9% Selling, General & Administrative 21,871 19,661 Selling, General & Administrative % 19.0% 18.6% Facility Closing and Severance Expenses 492 349 Loss on Disposals of Property, Plant, and Equipment 19 58 Amortization of Intangibles 307 130 --------------- ------------- Operating Income 8,760 10,421 Operating Income % 7.6% 9.8% Interest Expense 11,691 9,012 Loss on Early Extinguishment of Long-term Debt - 2,480 Other (Income) Expense (250) 38 --------------- ------------- Loss Before Income Taxes (2,681) (1,109) Pretax Margin (2.3%) (1.0%) Benefit for Income Taxes - (649) --------------- ------------- Effective Tax Rate - 58.5% Net Loss $(2,681) $(460) =============== ============= Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal six months ended: July 2, 2004 June 27, 2003 Product sales $176,461 $143,552 Rental revenue 19,343 13,630 Used rental equipment sales 8,519 20,988 ---------------- --------------- Net Sales 204,323 178,170 ---------------- --------------- Product cost of sales 134,789 110,712 Rental cost of sales 14,265 10,287 Used rental equipment cost of sales 3,213 5,718 ---------------- --------------- Cost of Sales 152,267 126,717 ---------------- --------------- Product gross profit 41,672 32,840 Rental gross profit 5,078 3,343 Used rental equipment gross profit 5,306 15,270 ---------------- --------------- Gross Profit 52,056 51,453 Product gross profit % 23.6% 22.9% Rental gross profit % 26.3% 24.5% Used rental equipment gross profit % 62.3% 72.8% Gross Profit % 25.5% 28.9% Selling, General & Administrative 44,537 39,056 Selling, General & Administrative % 21.8% 21.9% Facility Closing and Severance Expenses 964 744 Loss on Disposals of Property, Plant, and Equipment 78 66 Amortization of Intangibles 555 259 ---------------- --------------- Operating Income 5,922 11,328 Operating Income % 2.9% 6.4% Interest Expense 23,584 17,073 Loss on Early Extinguishment of Long-term Debt 842 2,480 Other Expense 45 71 ---------------- --------------- Loss Before Income Taxes (18,549) (8,296) Pretax Margin (9.1%) (4.7%) Benefit for Income Taxes - (2,446) ---------------- --------------- Effective Tax Rate - 29.5% Net Loss $(18,549) $(5,850) ================ =============== Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) As of: July 2, 2004 Dec. 31, 2003 Summary Balance Sheet: Cash $- $1,995 Accounts Receivable, Net 76,965 64,849 Inventories 61,316 49,437 Other Current Assets 15,369 10,934 ------------- ------------- Total Current Assets 153,650 127,215 Rental Equipment, Net 75,415 78,042 Property & Equipment, Net 60,566 62,238 Goodwill & Other Assets 124,142 125,889 ------------- ------------- Total Assets $413,773 $393,384 ============= ============= Current Portion of Long-Term Debt $2,539 $3,067 Accounts Payable 27,141 20,526 Other Current Liabilities 29,277 32,028 ------------- ------------- Total Current Liabilities 58,957 55,621 Long-Term Debt 374,055 338,823 Other Long-Term Liabilities 6,753 6,207 Shareholders' Equity (Deficit) (25,992) (7,267) ------------- ------------- Total Liabilities & Shareholders' Equity (Deficit) $413,773 $393,384 ============= ============= Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) For the six months ended: July 2, 2004 June 27, 2003 Net Loss $(18,549) $(5,850) Non-Cash Adjustments to Net Loss 12,382 (508) Changes in Assets and Liabilities (24,026) (18,069) ------------ ------------- Net Cash Used in Operating Activities (30,193) (24,427) ------------ ------------- Property, Plant and Equipment Additions, Net (2,195) (3,727) Rental Equipment Additions, Net 376 4,198 Acquisition (245) - ------------ ------------- Net Cash Provided By (used in) Investing Activities (2,064) 471 ------------ ------------- Issuance of Long-Term Debt, Net 32,739 21,706 Financing Costs Incurred (2,301) (680) Changes in Loans to Shareholders (19) 37 Issuance of Common Shares 73 - ------------ ------------- Net Cash Provided By Financing Activities 30,492 21,063 ------------ ------------- Other, Net (230) 489 ------------ ------------- Net Decrease in Cash $(1,995) $(2,404) ============ ============= CONTACT: Dayton Superior Corporation, Dayton Edward J. Puisis, 937-428-7172 Fax: 937-428-9115