EX-99.1 2 a5546026ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Dayton Superior Reports Third Quarter Results Obtains Commitment for a Debt Refinancing that is Expected to Generate $3 Million to $4 Million of Estimated Annual Savings or Approximately $0.15 to $0.20 Per Share Company Moves Up Financial Community Conference Call to Wednesday, November 14th at 8 a.m. Eastern Time DAYTON, Ohio--(BUSINESS WIRE)--Nov. 13, 2007--Dayton Superior Corporation (NASDAQ:DSUP), the leading North American provider of specialized products for the non-residential concrete construction market, today issued financial results for the third quarter ended September 28, 2007, which reflected third quarter net income for the first time in five years. Financial highlights of the quarter included: -- Net income of $386,000, or $0.02 per diluted share, versus a net loss of $342,000, or $0.03 per diluted share, for the third quarter of 2006. -- Net sales of $131 million, versus $132 million in the prior year quarter. -- Gross profit of $39 million, also approximately level with gross profit in the prior year quarter and reflecting gains in product gross profit offset by declines in gross profit from rental revenue and used rental equipment sales. Dayton Superior also announced that it has obtained a commitment letter for a debt refinancing that is currently estimated to reduce annual interest expense by $3 million to $4 million, or approximately $0.15 to $0.20 per share. Eric R. Zimmerman, Dayton Superior's President and Chief Executive Officer, said: "The operational enhancements we are driving through our business will continue over the year ahead as we realize the benefits of our capital expenditures in lean manufacturing, IT infrastructure and regionally focused sales and customer service activities over the past two years. We will also continue to emphasize new product development, lean manufacturing, customer service efficiencies, and overall cost controls which should buffer against what some observers are predicting to be challenging industry and economic conditions in 2008. "I am particularly pleased that, despite the currently difficult capital market environment, we were able to secure a commitment from GE Commercial Finance for debt refinancing that will significantly reduce our annual interest expenses and strengthen our balance sheet. We view this as the first step in our overall refinancing efforts. During the coming 12 to 18 months, we expect to undertake the refinancing of our subordinated debt which, we currently believe, should result in further interest expense reductions," Mr. Zimmerman said. Third Quarter Results Sales of Dayton Superior's concrete construction related products increased 4% to $112 million, stemming both from higher selling prices and higher unit volume. Equipment rental revenues decreased 10% to $15 million and revenues from sales of used rental equipment also declined, both reflecting a lower level of non-residential construction activity, particularly in Florida, and in the Baltimore/Washington and Philadelphia metropolitan areas. Gross profit on product sales was $30 million, or 27% of product sales, compared with $27 million, or 25% of product sales, in the third quarter of 2006. Rental gross profit was $6 million, or 40% of rental revenue, compared with $7 million, or 41% of rental revenue, in the third quarter of 2006. Third quarter gross profit as a percentage of sales of used rental equipment increased to 85% from 70% in last year's third quarter. Selling, general, and administrative expenses, at $27 million or 20% of sales, were flat compared to 2006 levels. Stock compensation expense and amortization of intangibles are now reported in those expenses. For the first nine months of 2007, Dayton Superior had a net loss of $3 million, or $0.19 per share, on net sales of $367 million. For the first nine months of 2006, the net loss was $8 million, or $0.80 per share, on net sales of $363 million. Debt Refinancing Under the debt refinancing plan announced today, Dayton Superior has received a commitment from GE Commercial Finance for a new $150 million revolving credit facility and a new $100 million term loan, for total new financing of $250 million. The new "revolver," an Asset Based Lending facility currently expected to be issued at the rate of LIBOR plus 225 basis points, will replace the Company's existing $130 million revolving credit facility. A portion of the revolving credit facility, as well as the new term loan, which is currently expected to be issued at LIBOR plus 375 basis points, will be used to retire the Company's 10 3/4% Senior Second Secured Notes due in September 2008 at a redemption price of 102.813% of principal amount plus accrued interest. Upon completion of the debt refinancing, drawdowns against the new revolving credit facility including for payment of associated fees are expected to be approximately $65 million. Consummation of the new debt financing is subject to customary conditions, including an absence of material adverse changes in Dayton Superior's business and a requirement for minimum adjusted EBITDA, as defined. The financing commitment provides for customary up-front fees and expires on January 25, 2008. Dayton Superior expects to complete the refinancing prior to that date. Certain of the terms of the new GE Commercial Finance commitment are contained in the Exhibits to the Company's Form 10-Q for the third quarter of 2007, which was filed today with the SEC. Dayton Superior expects to explore refinancing alternatives with respect to its 13% Senior Subordinated Notes in the future. Investment Community Conference Call The Company will hold an investment community conference call (previously scheduled for Thursday afternoon) at 8:00 a.m. Eastern Time on Wednesday, November 14, 2007 to discuss the third quarter results. The conference call can be accessed by dialing 1-800-226-0630 and enter ID#23652784. A replay of the call will be available from 10:00 a.m. ET on Wednesday, November 14, 2007 through 11:59 p.m. ET on Wednesday, November 22, 2007 by calling 1-800-642-1687 or 1-706-645-9291 and entering ID#23652784. About Dayton Superior Corporation Dayton Superior is the leading North American provider of specialized products consumed in non-residential, concrete construction, and the largest concrete forming and shoring rental company serving the domestic, non-residential construction market. The Company's products can be found on construction sites nationwide and are used in non-residential construction projects, including: infrastructure projects, such as highways, bridges, airports, power plants and water management projects; institutional projects, such as schools, stadiums, hospitals and government buildings; and commercial projects, such as retail stores, offices and recreational, distribution and manufacturing facilities. 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): -- depressed or fluctuating market conditions for our products and services; -- operating restrictions imposed by our existing debt; -- increased raw material costs and operating expenses; -- our ability to increase manufacturing efficiency, leverage our purchasing power and broaden our distribution network; -- the competitive nature of our industry in general, as well as our specific market areas; -- changes in prevailing interest rates and the availability of and terms of financing to fund the anticipated growth of our business; -- satisfaction of the conditions for completion of our refinancing. 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, and current Reports on Form 8-K filed with the Securities and Exchange Commission. Dayton Superior Corporation Summary Income Statement, Unaudited (amounts in thousands, except per share amounts) For the three months ended: September 28, 2007 September 29, 2006 % of % of Amount Sales Amount Sales ---------- ------- ---------- ------- Product Sales $112,327 85.9% $107,852 81.9% Rental Revenue 14,707 11.2% 16,275 12.4% Used Rental Equipment Sales 3,789 2.9% 7,514 5.7% ---------- ------- ---------- ------- Net Sales 130,823 100.0% 131,641 100.0% ---------- ------- ---------- ------- Product Cost of Sales 82,394 73.4% 80,589 74.7% Rental Cost of Sales 8,784 59.7% 9,600 59.0% Used Rental Equipment Cost of Sales 581 15.3% 2,243 29.9% ---------- ------- ---------- ------- Cost of Sales 91,759 70.1% 92,432 70.2% ---------- ------- ---------- ------- Product Gross Profit 29,933 26.6% 27,263 25.3% Rental Gross Profit 5,923 40.3% 6,675 41.0% Used Rental Equipment Gross Profit 3,208 84.7% 5,271 70.1% ---------- ------- ---------- ------- Gross Profit 39,064 29.9% 39,209 29.8% Selling, General & Administrative (SG&A) 26,677 20.4% 26,750 20.3% ---------- ------- ---------- ------- Gross Profit Less SG&A(1) 12,387 9.5% 12,459 9.5% Facility Closing and Severance Expenses 140 0.1% 96 0.1% (Gain) Loss on Disposals of Property, Plant, and Equipment 217 0.2% (439) (0.3%) ---------- ------- ---------- ------- Income from Operations 12,030 9.2% 12,802 9.7% Interest Expense, net 11,635 8.9% 12,946 9.8% Other Income (214) (0.2%) (46) ---- ---------- ------- ---------- ------- Income Before Income Taxes 609 0.5% (98) (0.1%) Provision for Income Taxes 223 0.2% 244 0.2% ---------- ------- ---------- ------- Net Income (Loss) $386 0.3% $(342) (0.3%) ========== ======= ========== ======= Weighted Average Shares Outstanding 18,312 9,917 ---------- ---------- Basic Net Income (Loss) Per Share $0.02 $(0.03) ========== ========== Weighted Average Shares and Equivalents Outstanding 19,302 9,917 ---------- ---------- Diluted Net Income (Loss) Per Share $0.02 $(0.03) ========== ========== Rental Depreciation $4,207 $5,534 Other Depreciation 2,442 1,553 ---------- ---------- Total Depreciation $6,649 $7,087 ========== ========== Rental Gross Profit Without Depreciation 10,130 68.9% 12,209 75.0% (1) Gross Profit Less SG&A is calculated and reconciled to Gross Profit ($39,064 and $39,209, respectively, for the three months ended September 28, 2007 and September 29, 2006) by subtracting SG&A expenses ($26,677 and $26,750, respectively, for the three months ended September 28, 2007 and September 29, 2006) from Gross Profit. Dayton Superior Corporation Summary Income Statement, Unaudited (amounts in thousands, except per share amounts) For the nine months ended: September 28, 2007 September 29, 2006 % of % of Amount Sales Amount Sales ---------- ------- ---------- ------- Product Sales $309,677 84.3% $300,535 82.8% Rental Revenue 44,211 12.0% 44,428 12.2% Used Rental Equipment Sales 13,473 3.7% 18,224 5.0% ---------- ------- ---------- ------- Net Sales 367,361 100.0% 363,187 100.0% ---------- ------- ---------- ------- Product Cost of Sales 226,160 73.0% 226,992 75.5% Rental Cost of Sales 25,129 56.8% 26,330 59.3% Used Rental Equipment Cost of Sales 3,214 23.9% 5,435 29.8% ---------- ------- ---------- ------- Cost of Sales 254,503 69.3% 258,757 71.2% ---------- ------- ---------- ------- Product Gross Profit 83,517 27.0% 73,543 24.5% Rental Gross Profit 19,082 43.2% 18,098 40.7% Used Rental Equipment Gross Profit 10,259 76.1% 12,789 70.2% ---------- ------- ---------- ------- Gross Profit 112,858 30.7% 104,430 28.8% Selling, General & Administrative (SG&A) 79,837 21.7% 75,648 20.9% ---------- ------- ---------- ------- Gross Profit Less SG&A(1) 33,021 9.0% 28,782 7.9% Facility Closing and Severance Expenses 591 0.2% 373 0.1% (Gain) Loss on Disposals of Property, Plant, and Equipment 478 0.1% (1,775) (0.5%) ---------- ------- ---------- ------- Income from Operations 31,952 8.7% 30,184 8.3% Interest Expense, net 34,769 9.5% 37,540 10.4% Other Expense 119 ---- 108 ---- ---------- ------- ---------- ------- Loss Before Income Taxes (2,936) (0.8%) (7,464) (2.1%) Provision for Income Taxes 454 0.1% 459 0.1% ---------- ------- ---------- ------- Net Loss $(3,390) (0.9%) $(7,923) (2.2%) ========== ======= ========== ======= Weighted Average Shares Outstanding 18,273 9,917 ---------- ---------- Basic and Diluted Net Loss Per Share $(0.19) $(0.80) ========== ========== Rental Depreciation $12,145 $14,227 Other Depreciation 6,337 4,747 ---------- ---------- Total Depreciation $18,482 $18,974 ========== ========== Rental Gross Profit Without Depreciation 31,227 70.6% 32,325 72.8% (1) Gross Profit Less SG&A is calculated and reconciled to Gross Profit ($112,828 and $104,430 respectively, for the nine fiscal months ended September 28, 2007 and September 29 2006) by subtracting SG&A expenses ($79,837 and $75,648, respectively, for the nine fiscal months ended September 28, 2007 and September 29, 2006) from Gross Profit. Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) As of: September 28, 2007 December 31, 2006 Summary Balance Sheet: Cash $62 $26,813 Accounts Receivable, Net 79,579 71,548 Inventories 72,612 58,396 Other Current Assets 7,165 6,227 ------------------ ----------------- Total Current Assets 159,418 162,984 Rental Equipment, Net 68,286 63,766 Property & Equipment, Net 51,918 45,697 Goodwill & Other Assets 48,725 49,188 ------------------ ----------------- Total Assets $328,347 $321,635 ================== ================= Revolving Credit Facility $17,900 $- Current Portion of Long-Term Debt 167,053 2,551 Accounts Payable 30,113 40,883 Other Current Liabilities 34,130 38,195 ------------------ ----------------- Total Current Liabilities 249,196 81,629 Other Long-Term Debt 157,585 319,899 Other Long-Term Liabilities 19,678 21,651 ------------------ ----------------- Total Liabilities 426,459 423,179 ------------------ ----------------- Stockholders' Deficit (98,112) (101,544) ------------------ ----------------- Total Liabilities & Stockholders' Deficit $328,347 $321,635 ================== ================= Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) For the nine months ended: September 28, 2007 September 29, 2006 Net Loss $(3,390) $(7,923) Non-Cash Adjustments to Net Loss 15,231 9,017 Changes in Assets and Liabilities (36,966) (25,139) ------------------ ------------------ Net Cash Used in Operating Activities (25,125) (24,045) ------------------ ------------------ Property, Plant and Equipment Additions, Net (13,907) (7,261) Rental Equipment Additions, Net (6,010) 2,236 ------------------ ------------------ Net Cash Used in Investing Activities (19,917) (5,025) ------------------ ------------------ Net Borrowings Under Revolving Credit Facility 17,900 30,550 Repayments of Other Long-Term Debt (1,118) (1,616) Financing Costs Incurred (659) - Issuance of Shares of Common Stock 808 - Net Change in Loans to Stockholders 1,191 186 ------------------ ------------------ Net Cash Provided By Financing Activities 18,122 29,120 ------------------ ------------------ Other, Net 169 263 ------------------ ------------------ Net Increase (Decrease) in Cash $(26,751) $313 ================== ================== Dayton Superior Corporation EBITDA and Reconciliation to Net Income (Loss), Unaudited (in thousands) For the three For the nine months ended: months ended: Sept 28, Sept 29, Sept 28, Sept 29, 2007 2006 2007 2006 -------- -------- -------- -------- Net Income (Loss) $386 $(342) $(3,390) $(7,923) Provision for Income Taxes 223 244 454 459 Interest Expense 11,682 12,743 34,996 37,364 Interest Income (47) 203 (227) 176 Depreciation Expense 6,649 7,087 18,481 18,974 Amortization of Intangibles 42 158 133 485 -------- -------- -------- -------- EBITDA $18,935 $20,093 $50,447 $49,535 ======== ======== ======== ======== EBITDA was reduced (increased) by the following items: (Gain) Loss on Disposals of Property, Plant and Equipment 217 (439) 478 (1,775) Facility Closing and Severance Expenses 140 96 591 373 Stock Compensation Expense 696 590 2,062 652 EBITDA, a metric used by management to measure operating performance, is defined as earnings (loss) before interest expense, interest income, income taxes, depreciation and amortization of intangibles. Dayton Superior presents EBITDA because our management believes that EBITDA is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in its industry, some of which present EBITDA when reporting their results. Dayton Superior's management regularly evaluates our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates by using EBITDA. Dayton Superior believes EBITDA allows for meaningful company-to-company performance comparisons by adjusting for factors such as interest expense, depreciation, amortization and income taxes, which often vary from company-to-company. In addition, Dayton Superior uses EBITDA in evaluating acquisition targets. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income, operating income or any other performance measures derived in accordance with GAAP. Since not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. CONTACT: Dayton Superior Corporation Edward J. Puisis, 937-428-7172 Executive Vice President & CFO Fax: 937-428-9115