DSUP Dayton Superior Corp (MM)

Dayton Superior Corporation (NASDAQ: DSUP), the leading North American provider of specialized products for the non-residential concrete construction market, reported today its highest third quarter net income in nine years and record third quarter operating earnings. The following results for its third quarter ended September 26, 2008, are compared with results for the similar period of 2007: Net sales were $136 million, up 4%. Gross profit increased 22% to $48 million, reflecting gains in pricing and ongoing cost improvement programs; Net income of $6.4 million, or $0.33 per diluted share, improved sixteen-fold from net income of $0.4 million, or $0.02 cents per diluted share. Sales of Dayton Superior�s concrete construction related products increased 4% to $117 million, stemming from higher selling prices partially offset by lower unit volume. Equipment rental revenues increased 4% to $15 million due to higher rental prices. Revenues from sales of used rental equipment declined slightly, due to the timing of customer demand. Gross profit on product sales was $38 million, or 32% of product sales, compared with $30 million and 27% in the third quarter of 2007. Rental gross profit was $7 million, or 48% of rental revenue, compared with $6 million, or 40% of rental revenue, in the third quarter of 2007. Third quarter used rental equipment gross profit as a percent of sales of used rental equipment was 72% as compared to 85% in last year's third quarter. Selling, general, and administrative expenses increased to $28 million or 21% of net sales compared to 2007 levels at $27 million or 20% of net sales, due to inflation and cost increases related to the higher net sales and gross profit. Eric R. Zimmerman, Dayton Superior�s President and Chief Executive Officer, said, �The operational and organizational improvements made in this difficult market environment are significant. All facets of our organization contributed to our third quarter success. Our marketing and sales disciplines, manufacturing productivity, distribution center controls, and new product sales were all key to our improved financial performance. In light of the non-residential construction challenges in most regions, and the continued tight credit markets, we are pleased with our results through September.� The following results for the first nine months of 2008 are compared with results for the similar period of 2007: Net sales were $372 million, up 1%; Gross profit increased 13% to $127 million; Net loss of $3 million, or $0.15 per share, including a $6 million charge related to a debt refinancing in the first quarter, versus a net loss of $3 million, or $0.19 per share. Mr. Zimmerman added, �While currently focusing efforts on addressing our subordinated debt that will mature in early 2009, we continue to actively pursue improvements in customer service, product line and geographical performance, and cost controls.� The Company has scheduled a conference call at 11:00 a.m. ET, Thursday, October 30, 2008 to discuss the third quarter results. The conference call can be accessed by dialing 1-800-723-6575 or 1-785-830-1997 and entering ID# 8448455 at least 10 minutes before the start of the call to register. A replay of the call will be available from 2:00 p.m. ET on Thursday, October 30, 2008 through 11:59 p.m. ET on Thursday, November 13, 2008 by calling 1-888-203-1112 or 1-719-457-0820 and entering ID#8448455. Dayton Superior is the leading North American provider of specialized products consumed in non-residential, concrete construction, and we are the largest concrete forming and shoring rental company serving the domestic, non-residential construction market. Our 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): the ability to refinance the Company�s debt on commercially reasonable terms; depressed or fluctuating market conditions for the Company�s products and services; operating restrictions imposed by the Company�s existing debt increased raw material costs and operating expenses; the ability to increase manufacturing efficiency, leverage purchasing power and broaden the Company�s distribution network; the competitive nature of the non-residential construction industry in general, as well as specific market areas. 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 26, 2008 � September 28, 2007 Amount � % of Sales Amount � % of Sales � Product Sales $ 117,086 86.2 % $ 112,327 85.9 % Rental Revenue 15,274 11.3 % 14,707 11.2 % Used Rental Equipment Sales � 3,415 2.5 % � 3,789 � 2.9 % Net Sales � 135,775 100.0 % � 130,823 � 100.0 % � Product Cost of Sales 79,056 67.5 % 82,394 73.4 % Rental Cost of Sales 7,977 52.2 % 8,784 59.7 % Used Rental Equipment Cost of Sales � 974 28.5 % � 581 � 15.3 % Cost of Sales � 88,007 64.8 % � 91,759 � 70.1 % � Product Gross Profit 38,030 32.5 % 29,933 26.6 % Rental Gross Profit 7,297 47.8 % 5,923 40.3 % Used Rental Equipment Gross Profit � 2,441 71.5 % � 3,208 � 84.7 % Gross Profit 47,768 35.2 % 39,064 29.9 % � Selling, General & Administrative 28,327 20.9 % 26,667 20.4 % Facility Closing and Severance Expenses 158 0.1 % 140 0.1 % Loss on Disposals of Property, Plant, and Equipment � 107 0.1 % � 217 � 0.2 % Income from Operations 19,176 14.1 % 12,030 9.2 % � Interest Expense, net 12,293 9.1 % 11,635 8.9 % Other Expense (Income) � 102 0.1 % � (214 ) (0.2 %) Income Before Income Taxes 6,781 4.9 % 609 0.5 % Provision for Income Taxes � 415 0.3 % � 223 � 0.2 % Net Income $ 6,366 4.6 % $ 386 � 0.3 % � Weighted Average Shares Outstanding � 18,563 � 18,312 � Basic Net Income Per Share $ 0.34 $ 0.02 � � Weighted Average Shares and Equivalents Outstanding � 19,298 � 19,302 � Diluted Net Income Per Share $ 0.33 $ 0.02 � � Rental Depreciation $ 2,929 $ 4,207 Other Depreciation � 2,734 � 2,442 � Total Depreciation $ 5,663 $ 6,650 � Rental Gross Profit Without Depreciation 10,226 67.0 % 10,127 68.9 % Dayton Superior Corporation Summary Income Statement, Unaudited (amounts in thousands, except per share amounts) � For the nine months ended: September 26, 2008 � September 28, 2007 Amount � % of Sales Amount � % of Sales � Product Sales $ 315,656 84.8 % $ 309,677 84.3 % Rental Revenue 42,469 11.4 % 44,211 12.0 % Used Rental Equipment Sales � 14,066 � 3.8 % � 13,473 � 3.7 % Net Sales � 372,191 � 100.0 % � 367,361 � 100.0 % � Product Cost of Sales 218,229 69.1 % 226,160 73.0 % Rental Cost of Sales 24,740 58.3 % 25,129 56.8 % Used Rental Equipment Cost of Sales � 2,038 � 14.5 % � 3,214 � 23.9 % Cost of Sales � 245,007 � 65.8 % � 254,503 � 69.3 % � Product Gross Profit 97,427 30.9 % 83,517 27.0 % Rental Gross Profit 17,729 41.7 % 19,082 43.2 % Used Rental Equipment Gross Profit � 12,028 � 85.5 % � 10,259 � 76.1 % Gross Profit 127,184 34.2 % 112,858 30.7 % � Selling, General & Administrative 84,781 22.8 % 79,837 21.7 % Facility Closing and Severance Expenses 1,332 0.4 % 591 0.2 % (Gain) Loss on Disposals of Property, Plant, and Equipment � (306 ) (0.1 %) � 478 � 0.1 % Income from Operations 41,377 11.1 % 31,952 8.7 % � Interest Expense, net 37,162 10.0 % 34,769 9.5 % Loss on Extinguishment of Long-term Debt 6,224 1.7 % ---- ---- Other Expense � 156 � ---- � � 119 � ---- � Loss Before Income Taxes (2,165 ) (0.6 %) (2,936 ) (0.8 %) Provision for Income Taxes � 671 � 0.2 % � 454 � 0.1 % Net Loss $ (2,836 ) (0.8 %) $ (3,390 ) (0.9 %) � Weighted Average Shares Outstanding � 18,563 � � 18,273 � Basic and Diluted Net Loss Per Share $ (0.15 ) $ (0.19 ) � Rental Depreciation $ 10,676 $ 12,145 Other Depreciation � 7,578 � � 6,337 � Total Depreciation $ 18,254 � $ 18,482 � Rental Gross Profit Without Depreciation 28,405 66.9 % 31,227 70.6 % Dayton Superior Corporation Summary Balance Sheet, Unaudited (in thousands) � As of: September 26, 2008 � December 31, 2007 Summary Balance Sheet: Cash $ 833 $ 3,381 Accounts Receivable, Net 86,469 68,593 Inventories 95,253 66,740 Other Current Assets � 6,405 � � 6,458 � Total Current Assets 188,960 145,172 � Rental Equipment, Net 63,432 67,640 Property & Equipment, Net 54,267 56,812 Goodwill & Other Assets � 48,480 � � 47,629 � Total Assets $ 355,139 � $ 317,253 � � Revolving Credit Facility $ 116,346 $ - Current Portion of Long-Term Debt 258,469 8,990 Accounts Payable 28,267 39,204 Other Current Liabilities � 35,988 � � 34,933 � Total Current Liabilities 439,070 83,127 � Other Long-Term Debt 69 315,607 Other Long-Term Liabilities � 7,572 � � 8,162 � Total Liabilities � 446,711 � � 406,896 � Stockholders� Deficit � (91,572 ) � (89,643 ) Total Liabilities & Stockholders� Deficit $ 355,139 � $ 317,253 � Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (in thousands) � For the nine months ended: September 26, 2008 � September 28, 2007 (As Restated) � Net Loss $ (2,836 ) $ (3,390 ) Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities 21,704 15,231 Changes in Assets and Liabilities � (57,184 ) � (38,873 ) Net Cash Used in Operating Activities � (38,316 ) � (27,032 ) � Property, Plant and Equipment Additions, Net (7,036 ) (13,907 ) Rental Equipment Proceeds (Additions), Net � 8,394 � � (4,103 ) Net Cash Provided by (Used in) Investing Activities � 1,358 � � (18,010 ) � Net Borrowings Under Revolving Credit Facility 116,346 17,900 Repayments of Other Long-Term Debt (72,604 ) (1,118 ) Financing Costs Incurred (4,643 ) (659 ) Issuance of Shares of Common Stock - 808 Prepayment Premium on Redemption of Long-term Debt (4,641 ) - Net Change in Loans to Stockholders � (24 ) � 1,191 � Net Cash Provided By Financing Activities � 34,434 � � 18,122 � � Other, Net � (24 ) � 169 � Net Decrease in Cash $ (2,548 ) $ (26,751 )