EX-99.1 2 a4838612ex991.txt EXHIBIT 99.1 Exhibit 99.1 Dayton Superior Reports Management Changes and Fourth Quarter and Full Year Results DAYTON, Ohio--(BUSINESS WIRE)--March 8, 2005--Dayton Superior Corporation reported today that sales for the fourth quarter of 2004 totaled $99.8 million, virtually flat with the fourth quarter 2003 sales of $100.0 million. Product sales were $74.9 million for the fourth quarter of 2004, flat with the fourth quarter of 2003. Increases in sales from previously announced price increases were offset by a decrease in volume. Rental revenue of $11.4 million and used rental equipment sales of $13.4 million were also virtually flat with the fourth quarter of 2003. Gross profit on product sales for the fourth quarter of 2004 was $14.7 million, or 19.6% of sales, a decrease from the $15.4 million, or 20.6% of sales, in the fourth quarter of 2003. The decrease in gross profit was a result of volume decline in product sales, which negatively impacted manufacturing leverage. Sales price increases more than offset increased material costs, which were primarily driven by steel prices. Rental gross profit decreased $2.8 million from the fourth quarter of 2003. Increases in rental cost of sales resulted from higher rental fleet depreciation expense due to a higher mix of equipment with shorter depreciable lives. Gross profit on the sale of used rental equipment for the fourth quarter of 2004 was $9.0 million, or 66.9% of sales, compared to $8.5 million, or 63.1% of sales, for the fourth quarter of 2003. Selling, general, and administrative expenses were $23.4 million in Q4, a slight decrease from $23.5 million for the fourth quarter of 2003. Interest expense for the fourth quarter of 2004 was virtually flat with the fourth quarter of 2003. Pre-tax loss was $(11.6) million in the fourth quarter of 2004, versus $(9.3) million in the fourth quarter of 2003. The Company reported a net loss of $(28.0) million for the fourth quarter of 2004, versus a net loss of $(4.9) million for the fourth quarter of 2003. In the fourth quarter of 2004, non-cash income tax expense of $16.4 million was recorded in accordance with FAS 109, as we reserved for the income tax benefit of prior years' net operating loss carryforwards until realization is reasonably assured. Upon realization, this would reduce future income tax expense and payments. A portion of such benefit, $4.4 million, was recorded in the fourth quarter of 2003. Sales for the year ended December 31, 2004 totaled $418.6 million, a 10.3% increase from the prior year's sales of $379.5 million. Product sales, benefiting from price increases, were $348.0 million in 2004, an increase of 14.5% from 2003. Rental revenue increased to $42.2 million in 2004, an increase of 18.5% from 2003. The increase was primarily due to the acquisition of Safway in July 2003. Used rental equipment sales decreased to $28.4 million in 2004 from $39.7 million in 2003. Sales of used rental equipment tend to be sporadic and, therefore, inconsistent from period to period. Gross profit on product sales for the year ended December 31, 2004 was $82.8 million, or 23.8% of sales, an increase of $15.6 million over 2003's gross profit of $67.2 million, or 22.1% of sales. Despite the increase in material costs, primarily steel, gross profit as a percent of sales improved as a result of productivity gains from lean manufacturing and price increases. Rental gross profit for 2004 was $7.0 million, a decrease of $0.6 million from 2003. The increase in rental cost of sales was due to higher depreciation expense and higher freight costs, both as a result of the acquisition of Safway. Gross profit on the sales of used rental equipment in 2004 was $18.0 million, or 63.4% of sales, compared to $27.0 million, or 67.8% of sales in 2003. Selling, general, and administrative expenses increased to $89.7 million for the year ended December 31, 2004 from $84.6 million in 2003. The increase was entirely due to the acquisition of Safway. Without Safway, selling, general, and administrative expenses would have declined. Interest expense increased to $47.0 million in 2004 from $40.0 million in 2003. This increase was primarily due to the higher interest rate from the senior second secured notes issued in June 2003, and higher borrowings. Pre-tax loss was $(31.9) million for 2004 as compared to $(27.8) million for 2003. This resulted in a net loss of $(48.4) million for the year ended December 31, 2004, versus a net loss of $(17.1) million for 2003. In the fourth quarter of 2004, non-cash income tax expense of $16.4 million was recorded in accordance with FAS 109, to reserve for the income tax benefit of prior years' net operating loss carryforwards until realization is reasonably assured. Upon realization, this would reduce future income tax expense and payments. The majority of such income tax benefit, $10.7 million, was recorded in 2003. Edward J. Puisis, Dayton Superior's Vice President and Chief Financial Officer said, "We are pleased with our 2004 results, which saw gross profit on product sales increase $15.6 million in the face of flat unit volume, as price and productivity gains continued to outpace cost increases. This represents an improvement in the quality of earnings for our core business, product sales, as opposed to used rental equipment sales which declined significantly from 2003 and was a focus of management this past year. By retaining more of our rental equipment, we believe we are positioned to take advantage of an expected recovery in rental revenues as our end markets improve." Separately, the Company today also announced that the Board of Directors has appointed Chairman J. A. "Chic" Ciccarelli as President and Chief Executive Officer on an interim basis effective immediately. Mr. Ciccarelli replaces President and Chief Executive Officer, Stephen R. Morrey, who has left the Company. Mr. Ciccarelli will also continue as Chairman of the Board of Directors, a position he has held since 2000. The Board will begin a search for a new CEO immediately. Mr. Ciccarelli led the management team in the leveraged buyout of Dayton Superior Corp. in 2000 and served as the company's Chief Executive Officer until 2002. Mr. Ciccarelli said, "We thank Steve for his contributions to Dayton, especially for beginning to lead the successful transformation of our supply chain that has led to improved operating performance." The Company has scheduled a conference call at 11:00 a.m. ET; Wednesday, March 9, 2005 to discuss the fourth quarter and full year results. The conference call can be accessed by dialing 1-866-259-7123. A replay of the call will be available from 4:00 p.m. ET on Wednesday, March 9, 2005 through 11:59 p.m. ET, on Wednesday, March 16, 2005, by calling 1-888-266-2081 and entering reservation 657477. 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 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: December 31, December 31, 2004 2003 Product sales $74,935 $74,854 Rental revenue 11,439 11,612 Used rental equipment sales 13,394 13,534 -------------- -------------- Net Sales 99,768 100,000 -------------- -------------- Product cost of sales 60,280 59,460 Rental cost of sales 11,423 8,856 Used rental equipment cost of sales 4,432 4,994 -------------- -------------- Cost of Sales 76,135 73,310 -------------- -------------- Product gross profit 14,655 15,394 Rental gross profit 16 2,756 Used rental equipment gross profit 8,962 8,540 -------------- -------------- Gross Profit 23,633 26,690 Product gross profit % 19.6% 20.6% Rental gross profit % 0.1% 23.7% Used rental equipment gross profit % 66.9% 63.1% Gross Profit % 23.7% 26.7% Selling, General & Administrative 23,441 23,509 Selling, General & Administrative % 23.5% 23.5% Facility Closing and Severance Expenses 643 1,051 (Gain) loss on Disposals of Property, Plant, and Equipment 138 (799) Amortization of Intangibles 132 501 -------------- -------------- Operating Income (Loss) (721) 2,428 Operating Income % (0.7)% 2.4 % Interest Expense 11,481 11,698 Interest Income (517) (15) Loss on Early Extinguishment of Long-term Debt - - Other (Income) Expense (134) 16 -------------- -------------- Loss Before Income Taxes (11,551) (9,271) Pretax Margin (11.6)% (9.3)% Provision (Benefit) for Income Taxes 16,427 (4,406) -------------- -------------- Net Loss $(27,978) $(4,865) ============== ============== Depreciation and Amortization $9,792 $8,325 Dayton Superior Corporation Summary Income Statement, Unaudited (in thousands) For the fiscal twelve months ended: December 31, December 31, 2004 2003 Product sales $348,036 $304,101 Rental revenue 42,231 35,633 Used rental equipment sales 28,372 39,724 -------------- -------------- Net Sales 418,639 379,458 -------------- -------------- Product cost of sales 265,228 236,877 Rental cost of sales 35,275 28,009 Used rental equipment cost of sales 10,388 12,791 -------------- -------------- Cost of Sales 310,891 277,677 -------------- -------------- Product gross profit 82,808 67,224 Rental gross profit 6,956 7,624 Used rental equipment gross profit 17,984 26,933 -------------- -------------- Gross Profit 107,748 101,781 Product gross profit % 23.8% 22.1% Rental gross profit % 16.5% 21.4% Used rental equipment gross profit % 63.4% 67.8% Gross Profit % 25.7% 26.8% Selling, General & Administrative 89,735 84,545 Selling, General & Administrative % 21.4% 22.3% Facility Closing and Severance Expenses 2,036 2,294 Gain on Disposals of Property, Plant, and Equipment (248) (636) Amortization of Intangibles 989 944 -------------- -------------- Operating Income 15,236 14,634 Operating Income % 3.6% 3.9% Interest Expense 47,030 40,008 Interest Income (559) (53) Loss on Early Extinguishment of Long-term Debt 842 2,480 Other Expense (134) 20 -------------- -------------- Loss Before Income Taxes (31,943) (27,821) Pretax Margin (7.6)% (7.3)% Provision (Benefit) for Income Taxes 16,427 (10,713) -------------- -------------- Net Loss $(48,370) $(17,108) ============== ============== Depreciation and Amortization $31,018 $26,878 Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) As of: December 31, December 31, 2004 2003 Summary Balance Sheet: Cash $4,504 $1,995 Accounts Receivable, Net 68,031 64,849 Inventories 59,389 49,437 Other Current Assets 14,222 10,934 -------------- -------------- Total Current Assets 146,146 127,215 Rental Equipment, Net 69,662 78,042 Property & Equipment, Net 59,458 62,238 Goodwill & Other Assets 118,872 125,889 -------------- -------------- Total Assets $394,138 $393,384 ============== ============== Current Portion of Long-Term Debt $2,455 $3,067 Accounts Payable 21,086 20,526 Other Current Liabilities 27,322 32,028 -------------- -------------- Total Current Liabilities 50,863 55,621 Long-Term Debt 375,189 338,823 Other Long-Term Liabilities 23,616 6,207 Shareholders' Deficit (55,530) (7,267) -------------- -------------- Total Liabilities & Shareholders' Deficit $394,138 $393,384 ============== ============== Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) For the twelve months ended: December 31, December 31, 2004 2003 Net Loss $(48,370) $(17,107) Non-Cash Adjustments to Net Loss 36,092 (5,275) Changes in Assets and Liabilities (16,280) (10,106) -------------- -------------- Net Cash Used in Operating Activities (28,558) (32,488) -------------- -------------- Property, Plant and Equipment Additions, Net (4,586) (6,935) Rental Equipment Additions, Net 6,273 12,152 Acquisition (245) (13,668) -------------- -------------- Net Cash Provided by (Used in) Investing Activities 1,442 (8,451) -------------- -------------- Issuance of Long-Term Debt, Net 31,954 28,569 Financing Costs Incurred (2,557) (1,860) Changes in Loans to Shareholders (38) 149 Issuance of Common Shares 73 13,059 -------------- -------------- Net Cash Provided By Financing Activities 29,432 39,917 -------------- -------------- Other, Net 193 613 -------------- -------------- Net Increase (decrease) in Cash $2,509 $(409) ============== ============== CONTACT: Dayton Superior Corporation Edward J. Puisis, 937-428-7172 Fax: 937-428-9115