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 record net income for its second quarter ended June 27, 2008. Compared with results for the similar period of 2007: Net sales were $141 million, up 3%; Gross profit increased 16%, or $7 million, to $51 million, driven by pricing and productivity disciplines; Record second quarter net income doubled to $8 million, or 44 cents per share, versus $4 million, or 23 cents per share in 2007. Eric R. Zimmerman, Dayton Superior�s President and Chief Executive Officer, said, �We are proud of our operational and organizational improvements in this difficult market environment. All facets of our organization contributed to our second quarter success. Our marketing and sales disciplines, manufacturing productivity, distribution center controls, and new product sales were all key to our improved performance. In light of the non-residential construction challenges in some regions, intense steel cost inflation, and continued tight credit markets, we are pleased with our results through June.� For the quarter, sales of Dayton Superior�s concrete construction related products were $121 million, an increase of 3%, due to increased pricing and new product sales. Revenues from rentals of concrete forming and shoring equipment were $14 million, down 9%, due to a slower non-residential construction market in some regions. Sales of used rental equipment sales were up 14% due to the timing of customer demand. Gross profit on product sales was $40 million for the quarter, which was 33% of net sales, or 19% higher than last year. Rental gross profit was $5 million, compared with $7 million last year due to the decline in revenue. As a percentage of sales, gross profit on the sales of used rental equipment for the quarter increased significantly due to more sales of fully depreciated equipment. Selling, general, and administrative expenses increased to $30 million in the recent quarter from $27 million last year. The increase was due to increased headcount, salaries, and other personnel related expenses. The following results for the first half of 2008 are compared with results for the similar period of 2007: Net sales were flat at $236 million; Income from operations was $22 million compared to $20 million, driven by pricing and productivity disciplines; Net loss of $9 million, or $0.50 per share, including a $6 million charge related to a debt refinancing, versus $4 million, or $0.21 per share. The Company has commenced an offer to exchange its 13% Senior Subordinated Notes due 2009 for new Senior Secured Notes due 2014. Mr. Zimmerman added, �As we enter the second half of 2008 and into 2009, we will continue to focus on improving customer service and product line performance. These have been and will continue to be keys to sustaining continuous improvement at Dayton Superior Corporation.� The Company has scheduled a conference call at 11:00 a.m. EDT, Thursday, July 31, 2008 to discuss the second quarter results. The conference call can be accessed by dialing 1-877-741-4253 or 1-719-325-4815 and enter ID# 7125441 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, Thursday, July 31, 2008, until 11:59 p.m. ET, Thursday, August 14, 2008. Please call 1-888-203-1112 or 1-719-457-0820 and enter ID# 7125441. 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. (tables follow) � Dayton Superior Corporation Summary Income Statement, Unaudited (amounts in thousands, except per share amounts) � For the three fiscal months ended: June 27, 2008 � June 29, 2007 Amount � % ofSales Amount � % ofSales � Product Sales $ 121,267 86.0 % $ 117,174 85.2 % Rental Revenue 13,615 9.6 % 14,931 10.9 % Used Rental Equipment Sales � 6,155 4.4 % � 5,411 3.9 % Net Sales � 141,037 100.0 % � 137,516 100.0 % � Product Cost of Sales 80,936 66.7 % 83,334 71.1 % Rental Cost of Sales 8,226 60.4 % 8,252 55.3 % Used Rental Equipment Cost of Sales � 514 8.4 % � 1,507 27.9 % Cost of Sales � 89,676 63.6 % � 93,093 67.7 % � Product Gross Profit 40,331 33.3 % 33,840 28.9 % Rental Gross Profit 5,389 39.6 % 6,679 44.7 % Used Rental Equipment Gross Profit � 5,641 91.6 % � 3,904 72.1 % Gross Profit 51,361 36.4 % 44,423 32.3 % � Selling, General and Administrative 29,619 21.0 % 27,302 19.8 % Facility Closing and Severance Expenses 472 0.3 % 83 0.1 % Loss on Disposals of Property, Plant, and Equipment � 118 0.1 % � 178 0.1 % Income from Operations 21,152 15.0 % 16,860 12.3 % � Interest Expense, net 12,475 8.8 % 12,084 8.8 % Other Expense � 24 --- � � 221 0.2 % Income Before Income Taxes 8,653 6.2 % 4,555 3.3 % Provision for Income Taxes � 192 0.1 % � 172 0.1 % Net Income $ 8,461 6.1 % $ 4,383 3.2 % � Weighted Average Shares Outstanding � 18,563 � 18,298 Basic Net Income Per Share $ 0.46 $ 0.24 � Weighted Average Shares and Equivalents Outstanding � 19,298 � 19,320 Diluted Net Income Per Share $ 0.44 $ 0.23 � Rental Depreciation $ 3,501 $ 3,954 Other Depreciation � 2,497 � 2,032 Total Depreciation $ 5,998 $ 5,986 � Rental Gross Profit Without Depreciation 8,890 65.3 % 10,633 71.2 % � Dayton Superior Corporation Summary Income Statement, Unaudited (amounts in thousands, except per share amounts) � For the six fiscal months ended: June 27, 2008 � June 29, 2007 Amount � % ofSales Amount � % ofSales � Product Sales $ 198,570 84.0% $ 197,350 83.4% Rental Revenue 27,195 11.5% 29,504 12.5% Used Rental Equipment Sales 10,651 4.5% 9,684 4.1% Net Sales 236,416 100.0% 236,538 100.0% � Product Cost of Sales 139,173 70.1% 143,766 72.8% Rental Cost of Sales 16,763 61.6% 16,345 55.4% Used Rental Equipment Cost of Sales 1,064 10.0% 2,633 27.2% Cost of Sales 157,000 66.4% 162,744 68.8% � Product Gross Profit 59,397 29.9% 53,584 27.2% Rental Gross Profit 10,432 38.4% 13,159 44.6% Used Rental Equipment Gross Profit 9,587 90.0% 7,051 72.8% Gross Profit 79,416 33.6% 73,794 31.2% � Selling, General and Administrative 56,454 23.9% 53,160 22.5% Facility Closing and Severance Expenses 1,174 0.5% 451 0.2% (Gain) Loss on Disposals of Property, Plant, and Equipment (413) (0.2%) 261 0.1% Income from Operations 22,201 9.4% 19,922 8.4% � Interest Expense, net 24,869 10.5% 23,134 9.8% Loss on Extinguishment of Long-Term Debt 6,224 2.6% ---- ---- Other Expense 54 0.1% 333 0.1% Loss Before Income Taxes (8,946) (3.8%) (3,545) (1.5%) Provision for Income Taxes 256 0.1% 231 0.1% Net Loss $ (9,202) (3.9%) $ (3,776) (1.6%) � Weighted Average Shares Outstanding 18,563 18,254 Basic and Diluted Net Loss Per Share $ (0.50) $ (0.21) � Rental Depreciation $ 7,747 $ 7,938 Other Depreciation 4,844 3,895 Total Depreciation $ 12,591 $ 11,833 � Rental Gross Profit Without Depreciation 18,179 66.8% 21,097 71.5% � Dayton Superior Corporation Summary Balance Sheet, Unaudited (amounts in thousands) � As of: June 27, 2008 � December 31, 2007 Summary Balance Sheet: Cash $ 574 $ 3,381 Accounts Receivable, Net 90,454 68,593 Inventories 81,898 66,740 Other Current Assets � 7,749 � � 6,458 � Total Current Assets 180,675 145,172 � Rental Equipment, Net 65,495 67,640 Property & Equipment, Net 55,706 56,812 Goodwill & Other Assets � 49,282 � � 47,629 � Total Assets $ 351,158 � $ 317,253 � � Revolving Credit Facility $ 118,721 $ - Current Portion of Long-Term Debt 256,849 8,990 Accounts Payable 40,223 39,204 Other Current Liabilities � 25,836 � � 34,933 � Total Current Liabilities 441,629 83,127 � Other Long-Term Debt 98 315,607 Other Long-Term Liabilities � 7,707 � � 8,162 � Total Liabilities � 449,434 � � 406,896 � Stockholders� Deficit � (98,276 ) � (89,643 ) Total Liabilities & Stockholders� Deficit $ 351,158 � $ 317,253 � � Dayton Superior Corporation Summary Cash Flow Statement, Unaudited (amounts in thousands) � For the six fiscal months ended: June 27, 2008 � June 29, 2007(As restated) � Net Loss $ (9,202 ) $ (3,776 ) Non-Cash Adjustments to Net Loss 14,522 9,519 Changes in Assets and Liabilities � (45,532 ) � (38,738 ) Net Cash Used in Operating Activities � (40,212 ) � (32,995 ) � Property, Plant and Equipment Additions, Net (5,505 ) (10,013 ) Rental Equipment Proceeds (Additions), Net � 5,324 � � (5,346 ) Net Cash Used in Investing Activities � (181 ) � (15,359 ) � Net Borrowings Under Revolving Credit Facility 118,721 20,000 Net Repayments of Other Long-Term Debt (72,086 ) (453 ) Financing Costs Paid (4,237 ) (633 ) Prepayment Premium on Redemption of Long-Term Debt (4,641 ) - Issuance of Shares of Common Stock - 826 Net Change in Loans to Stockholders � (16 ) � 1,133 � Net Cash Provided By Financing Activities � 37,741 � � 20,873 � � Other, Net � (155 ) � 668 � Net Decrease in Cash $ (2,807 ) $ (26,813 )