<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED COMMISSION FILE NUMBER
MARCH 28, 1997 1-11781
DAYTON SUPERIOR CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0676346
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
721 Richard Street
Miamisburg, Ohio 45342
- --------------------------------- -----------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 937-866-0711
----------------
NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
----- -----
5,691,804 Shares of Common Stock were outstanding as of April 10, 1997
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
----------- ----------
(Unaudited) (Unaudited)
(Amounts in thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 103 $ 96
Accounts Receivable, net of allowance for
doubtful accounts of $720 and $436 13,221 16,652
Inventories (Note 2) 14,664 18,912
Prepaid expenses 751 773
Prepaid income taxes 427 993
Future tax benefits 1,393 986
--------- ---------
Total current assets 30,559 38,412
--------- ---------
RENTAL EQUIPMENT, NET 1,541 2,385
--------- ---------
PROPERTY, PLANT & EQUIPMENT: 28,205 32,793
Less accumulated depreciation (10,798) (13,993)
--------- ---------
Net property, plant & equipment 17,407 18,800
--------- ---------
GOODWILL AND INTANGIBLE ASSETS,
net of accumulated amortization (Note 2) 57,276 57,172
OTHER ASSETS 269 389
--------- ---------
Total assets $ 107,052 $ 117,158
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt (Note 4) $ 32 $ 3,282
Accounts payable 9,796 11,620
Accrued compensation and benefits 2,705 3,551
Accrued liabilities 3,391 2,962
Accrued interest 1,845 373
--------- ---------
Total current liabilities 17,769 21,788
LONG-TERM DEBT (Note 3) 56,777 37,216
DEFFERED INCOME TAXES 2,729 2,585
OTHER LONG-TERM LIABILITIES 2,693 2,180
--------- ---------
Total liabilities 79,968 63,769
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Class A Common Shares 17,483 32,997
Class B Common Shares 1,942 9,749
Cumulative foreign currency translation adjustment (139) (149)
Excess pension liability (50) --
Retained earnings 7,929 10,792
Treasury shares, Class A Common, at cost (81) --
--------- ---------
Total shareholders' equity 27,084 53,389
--------- ---------
Total liabilities and shareholders' equity $ 107,052 $ 117,158
========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements
<PAGE> 3
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Fiscal Months Ended
-------------------------
March 29, March 28,
1996 1997
----------- -----------
(Unaudited) (Unaudited)
(Amounts in thousands, except share and per share amounts)
<S> <C> <C>
NET SALES $ 23,615 $ 25,980
COST OF SALES 16,146 18,272
----------- -----------
Gross profit 7,469 7,708
SELLING, GENERAL AND ADMINSTRATIVE EXPENSES 5,629 6,273
AMORTIZATION OF GOODWILL AND INTANGIBLES 406 457
----------- -----------
Operating income 1,434 978
OTHER EXPENSES:
Interest expense, net 1,585 686
Other, net 8 11
----------- -----------
Income (loss) before income taxes (159) 281
PROVISION FOR INCOME TAXES 242 121
----------- -----------
Net income (loss) $ (401) $ 160
=========== ===========
Net income (loss) per share $ (0.12) $ 0.03
=========== ===========
Weighted average common and common equivalent
shares outstanding 3,333,389 5,899,325
=========== ===========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements
<PAGE> 4
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters Ended March 29, 1996 and March 28, 1997
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
----------- -----------
(Unaudited) (Unaudited)
(Amounts in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ($401) $ 160
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation 908 1,041
Amortization of goodwill and intangibles 406 457
Deferred income taxes (52) (109)
Amortization of debt discount and deferred financing costs 70 41
Loss (gain) on sales of assets (2) --
Change in assets and liabilities, net of the effects of acquisition:
Accounts receivable (1,497) (3,982)
Inventories (2,272) (4,438)
Rental equipment (394) (371)
Accounts payable 1,753 3,713
Accrued liabilities (1,780) (910)
Income tax payable 9 229
Accrued interest (218) 299
Other, net (182) (309)
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Net cash provided by/(used in) operating activities (3,652) (4,179)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment additions (667) (558)
Proceeds from sales of assets 2 9
Other, net -- (6)
Acquisition of the net assets of Ironco Manufacturing (Note 4) -- (1,098)
------- -------
Net cash provided by/(used in) investing activities (665) (1,653)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of long-term debt, net 3,777 5,729
------- -------
Net cash provided by/(used in) financing activities 3,777 5,729
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH -- (4)
------- -------
Net increase/(decrease) in cash (540) (107)
CASH, beginning of period 643 203
------- -------
CASH, end of period $ 103 $ 96
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid (refunded) for income taxes $ 248 ($1)
Cash paid for interest 1,783 1,222
Issuance of common stock in conjunction with acquisition (Note 4) 346
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements
<PAGE> 5
DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 29, 1996 and March 28, 1997
(Amounts in thousands, except for share amounts)
(Unaudited)
(1) CONSOLIDATED FINANCIAL STATEMENTS
The interim consolidated financial statements included herein have been
prepared by the Company, without audit, and include, in the opinion of
management, all adjustments necessary to state fairly the information set forth
therein. Any such adjustments were of a normal recurring nature. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted, although the Company believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that these unaudited
consolidated financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's annual
financial statements for the year ended December 31, 1996.
(2) ACCOUNTING POLICIES
The interim consolidated financial statements have been prepared in
accordance with the accounting policies described in the notes to the Company's
consolidated financial statements for the year ended December 31, 1996. While
management believes that the procedures followed in the preparation of interim
financial information are reasonable, the accuracy of some estimated amounts is
dependent upon facts that will exist or calculations that will be accomplished
at year end. Examples of such estimates include changes in the LIFO reserve
(based upon the Company's best estimate of inflation to date) and management
bonuses. Any adjustments pursuant to such estimates during the fiscal quarter
were of a normal recurring nature
(a) Fiscal Quarter - The Company's fiscal quarters are defined as
the periods ending on the last Friday in March, June and
September.
(b) Inventories - Substantially all finished products and raw
materials are stated at the lower of last in, first out (LIFO)
cost or market (which approximates current cost). Following is a
summary of the components of inventories as of March 29, 1996
and March 28, 1997:
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
------- -------
<S> <C> <C>
Raw materials.................. $ 2,996 $ 5,166
Finished goods................. 11,668 13,746
------- -------
14,664 18,912
LIFO reserve................... -- --
------- -------
$14,664 $18,912
======= =======
</TABLE>
(3) CREDIT ARRANGEMENTS
On June 17, 1996, the Company entered into an Amended Credit Facility
(as so amended, the "Amended Credit Facility") with Bank One, Dayton, NA and
Bank of America Illinois (collectively, the "Banks"). The Amended Credit
Facility provided for a Term Loan and a Revolving Credit Facility, each of which
will be secured by substantially all the assets of the Company. At March 28,
1997, $32,858 was available under the Revolving Credit
<PAGE> 6
Facility, of which $28,863 was outstanding at a weighted average interest rate
of 7.0%.
Average borrowings under the Revolving Credit Facility and its
predecessors were $24,944 and $14,959 during the three fiscal months ended March
28, 1997 and March 29, 1996, respectively, at an approximate weighted average
interest rate of 7.3% and 8.8%, respectively. The maximum borrowings outstanding
during the three fiscal months ended March 28, 1997 and March 29, 1996, was
$28,963 and $17,240, respectively.
Following is a summary of the Company's long-term debt as of March 29,
1996 and March 28, 1997:
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
-------- --------
<S> <C> <C>
Revolving lines of credit $ 17,070 $ 28,863
Term Loan, bearing a weighted average -- 11,375
interest rate of 7.43%
City of Parsons, KS Economic Development Loan 294 260
Unsecured Senior Promissory notes, prepaid
during 1996 (Note 4) 40,000 --
Unamortized debt discount (555) --
-------- --------
Total long-term debt 56,809 40,498
Less current portion (32) (3,282)
-------- --------
Long-term portion $ 56,777 $ 37,216
======== ========
</TABLE>
(4) ACQUISITION OF THE NET ASSETS OF IRONCO MANUFACTURING CO., INC. AND
BIRMINGHAM BAR COATING INC.
On February, 21, 1997, the Company acquired certain of the assets and
assumed certain of the liabilities of Ironco Manufacturing Co., Inc. and
Birmingham Bar Coating Inc., privately held concrete paving products
manufacturers. The purchase price, including acquisition related costs of $19,
is $1,438 and was paid in cash of $1,092 and 26,254 Class A Common Shares. The
acquisition has been accounted for as a purchase. The cost of the acquisition
was funded through draws under the Revolving Credit Facility. This purchase
price has been allocated on the basis of the agreed upon fair value of the
assets acquired and liabilities assumed.
(5) ACQUISITION OF THE NET ASSETS OF STEEL STRUCTURES, INC.
On April 29, 1996, the Company purchased, certain of the assets and
assumed certain of the liabilities of Steel Structures, Inc., a privately held
regional concrete paving products manufacturer based in Kankakee, IL. Steel
Structures was an epoxy coater and fabricator of paving products and, prior to
the acquisition, was both a major supplier of epoxy coating to the Company and
competitor in its concrete paving product line. Certain of the Company's
existing paving manufacturing equipment has been relocated from another plant to
the former Steel Structures facility in Kankakee. The acquisition is being
operated by the Company under the name American Highway Technology.
As of March 28, 1997, the Company has paid $4,845 of the $5,601
purchase price with the balance due by April 1998. The acquisition has been
accounted for as a purchase and the results of American Highway Technology have
been included in the accompanying consolidated financial statements since the
date of acquisition. The cost of the acquisition was funded through draws under
the Revolving Credit Facility. This purchase price has been allocated on the
basis of appraised fair value of the assets acquired of $6,113, including
goodwill of $1,374 and liabilities assumed of $512. Certain evaluations are
preliminary estimates and may change. In the opinion of management, the
preliminary allocation of the purchase price is not expected to differ
<PAGE> 7
materially from the final allocation.
(6) PUBLIC OFFERING OF COMPANY SHARES
On June 20 ,1996, the Company completed an initial public offering of
Company 1,974,750 shares of Class A Common Shares and received proceeds of
$22,654, net of expenses.
On July 16, 1996, the underwriters of the Company's initial public
offering of Class A Common Shares exercised a portion of their over-allotment
option pursuant to which the Company issued 56,200 shares of Class A Common
Shares and Ripplewood Holdings LLC converted 56,200 shares of its Class B Common
Shares into Class A Common Shares and sold those shares. The Company's proceeds
of $683 from the issuance of those shares were used to reduce the outstanding
balance of the Revolving Credit Facility.
(7) STOCK OPTION PLANS
The Company has three stock option plans all of which provide for an
option exercise price equal to the stock's market price on the date of grant and
all of which are accounted for under APB Opinion No. 25, under which no
compensation costs has been recognized. Had compensation cost for these plans
been determined with Statement of Financial Accounting Standards No.123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), the Company's net income
and earnings per share for the three fiscal months of 1996 and 1997 would have
been reduced to the following pro forma amounts:
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
--------- ---------
<S> <C> <C> <C>
Net Income/(loss) As Reported $(401) $160
Pro Forma (406) 150
Income/(loss) per share As Reported $(0.12) $0.03
Pro Forma (0.12) 0.02
</TABLE>
Because the SFAS 123 method of accounting has not been applied to
options granted prior to January 1, 1995, the resulting pro forma compensation
cost may not be representative of that to be expected in future years.
(8) RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 128 "Earnings per Share."
This standard is effective for both interim and annual periods ending after
December 15, 1997. If the earnings per share were calculated in accordance with
SFAS 128, the Company's income (loss) per share would be as follows:
<TABLE>
<CAPTION>
March 29, March 28,
1996 1997
--------- ---------
<S> <C> <C>
Basic $(0.12) $0.03
Diluted (0.12) 0.03
</TABLE>
<PAGE> 8
ITEM 7.
- -------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATION
- ---------
OVERVIEW
Dayton Superior's record first quarter 1997 net sales of $26.0 million were
10.2% higher than net sales in the first quarter of 1996. The Company's sales by
major product category during the last two years were:
<TABLE>
<CAPTION>
DOLLARS IN MILLIONS MARCH 28, 1997 MARCH 29, 1996
- ------------------- -------------- --------------
<S> <C> <C>
Concrete Products $ 17.3 $15.5
Paving Products 3.6 3.1
Masonry Products 5.1 5.0
--- ---
Net Sales $26.0 $23.6
===== =====
</TABLE>
Net sales of concrete products increased by $1.8 million, or 11.4%, to $17.3
million in the first quarter of 1997 due to strong market demand especially in
the rental and tilt-up markets. Paving products increased $0.5 million, or
15.2%, to $3.6 million in the first quarter of 1997 due to higher than expected
customer demand. Masonry products increased slightly in the first quarter
compared to last year, with a 2.5% increase. The masonry product market is
currently very price competitive, particularly in the hot dipped and galvanized
markets.
Income before taxes was $0.3 million in the first quarter of 1997 compared with
a loss of $0.2 million in 1996. Interest expense decreased by $0.9 million, or
56.7% in the first quarter of 1997 from the same period last year.
Net income for the first quarter of 1997 was $0.2 million or $0.03 per share,
compared to a loss of $0.4 million or $0.12 per share in the first quarter of
1996.
IMPLEMENTATION OF BUSINESS STRATEGY
To strengthen its' position in concrete paving products, in February 1997, the
Company acquired the principal assets of Ironco Manufacturing Co., Inc. and
Birmingham Bar Coating, Inc. These operations will remain in Birmingham, AL and
be operated as Ironco Manufacturing, as part of the American Highway Technology
division.
A December 1996 investment gave the Company a growing position in a new
Formliner product line. The Company invested in Spec Formliners, Inc., a
start-up manufacturer of Formliner products, which manufactures products for
Dayton Superior as well as other customers. The Company now markets a wide range
of Formliner products under the Dayton Superior(R) name.
<PAGE> 9
RESULTS OF OPERATIONS
The following table summarizes the Company's results of operations as a
percentage of net sales.
<TABLE>
<CAPTION>
MARCH 28, MARCH 29,
1997 1996
--------- ---------
<S> <C> <C>
Net sales 100.0 100.0
Cost of goods sold 70.3 68.4
----- -----
Gross profit 29.7 31.6
Selling, general and administrative expenses 24.1 23.8
Amortization of goodwill and intangibles 1.8 1.7
Interest expense, net 2.7 6.8
Other, net - -
----- -----
Income (loss) before income taxes 1.1 (0.7)
Provision for income taxes 0.5 1.0
----- -----
Net income/(loss) 0.6 (1.7)
===== =====
</TABLE>
- ------------------------------
COMPARISON OF THREE FISCAL MONTHS ENDED MARCH 28, 1997 AND MARCH 29, 1996
NET SALES
Net sales increased $2.4 million, or 10.0% from $23.6 million in the first
quarter of 1996 to $26.0 million in the first quarter of 1997. Sales of concrete
products increased by 11.4% from $15.5 million in the first quarter of 1996 to
$17.3 million in the first quarter of 1997, due to strong performance in our
rental and tilt-up product lines, and, to a lesser extent, new product sales.
Paving products increased $0.5 million, or 15.2% from the first quarter of 1996
to the first quarter of 1997. Strong demand from customers drove a portion of
the increase. Net sales of masonry products increased $0.1 million, to $5.1
million in the first quarter of 1997 compared to the first quarter 1996 levels.
Competition is strong in the hot dipped and mill galvanized product market.
GROSS PROFIT
Gross profit for the first quarter of 1997 was $7.7 million, a 3.2% increase
over $7.5 million from the first quarter of 1996. As a percent of net sales,
gross margin was 29.7% in the first quarter of this year, down slightly from
31.6% last year. The decrease in gross margin percentage was caused by three
primary factors: competitive pricing on masonry products, a higher mix of
paving products, which traditionally command a lower margin than concrete
accessories, and unfavorable raw material costs, which will be reflected in
subsequent pricing decisions.
OPERATING EXPENSES
SG&A expenses (excluding the amortization of goodwill and intangibles) were up
as a percent of sales from 23.8% in the first three months of last year, to
24.1% in the first three months of this year. SG&A expenses increased $0.7
million, or 11.4% from $5.6 million in the first quarter 1996, to $6.3 million
in the first quarter 1997. The increase resulted from incurring costs associated
with being a publicly owned company and to
<PAGE> 10
build and strengthen the new division-American Highway Technology. American
Highway Technology locations in Kankakee, IL and Birmingham, AL were added in
April 1996 and February 1997.
INTEREST AND OTHER EXPENSES
Interest expense decreased $0.9 million from $1.6 million in the first quarter
1996, to $0.7 million in the first quarter 1997. The Company used the proceeds
from its initial public offering in June 1996 to reduce debt levels and to
negotiate favorable interest rates.
NET INCOME
Income before income taxes increased $0.5 million to $0.3 million in the first
quarter 1997 compared to a $0.2 million loss in the first quarter 1996.
Provision for income taxes was $0.2 million in the first quarter of 1996 and
$0.1 in the first quarter of 1997. In the first quarter of 1996, the provision
for taxes reflected non-deductible goodwill amortization and a net operating
loss in Canada on which no tax carryback was available. The 1997 tax provision
reflects an annualized effective rate.
Net income in the first quarter of 1997 was $0.2 million or $0.03 per share
compared to a loss of $0.4 million or $0.12 per share in the first quarter 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements relate primarily to capital expenditures,
debt service and the cost of acquisitions. Historically, the Company's primary
sources of financing have been cash from operations, borrowings under its
revolving line of credit and the issuance of long-term debt and equity.
Net cash used in operating activities in the first quarter of 1997 was $4.2
million. Net income before non-cash charges of depreciation, amortization and
deferred taxes provided $1.7 million of operating cash flow. Working capital
growth used $5.7 million of operating cash flow. Significant working capital
uses included seasonal increases in accounts receivable and inventory of $4.0
million and $4.4 million, net of acquisitions, respectively. Accounts payable
grew by $3.7 million in the first quarter of 1997 due primarily to normal
seasonal expansion and to a lesser degree to the timing of strategic raw
material purchases late in the first quarter. Net cash generated from draws on
the line of credit funded the seasonal increases in operating activities,
investments in property, plant and equipment, the acquisition of the principal
assets of Ironco Manufacturing Co., Inc., and Birmingham Bar Coating Inc. and
the scheduled term loan repayments.
At March 28, 1997, working capital was $16.6 million, compared to $12.8 million
at March 29, 1996. The growth in working capital is primarily attributable to
acquisitions and growth in the base business.
In June 1996, the Company entered into an Amended Credit Facility to provide for
term
<PAGE> 11
loans to the Company and Dur-O-Wal (together, the "Term Loan") and revolving
credit facilities for the Company and Dur-O-Wal (together, the "Revolving Credit
Facility"), each of which is secured by substantially all the assets of the
Company and Dur-O-Wal. At March 28, 1997, $32.9 million of the $37.0 million
Revolving Credit Facility was available, of which $28.9 million of borrowings
were outstanding. The Term Loan had an outstanding balance at March 28, 1997 of
$11.4 million. At March 28, 1997, the Company had $40.5 million of long-term
debt outstanding, of which $3.3 million was current. Net borrowings during the
first quarter of 1997 were $5.7 million. The Company's debt to total
capitalization ratio decreased from 67.7% in March 1996 to 41.1% in March 1997
primarily as a result of the initial public offering and loan repayments.
The Company invested $0.6 million in property, plant and equipment additions
during the first three months of 1997. Significant investments were made in
equipment to further improve efficiencies and expand capacity in the concrete
paving product line and masonry accessory product line.
On February 21, 1997, the Company acquired certain of the assets of Ironco
Manufacturing Co., Inc. and Birmingham Bar Coating Inc., privately held concrete
paving products manufacturers. The purchase price, including acquisition related
costs, is $1.4 million and was paid in cash and Class A Common Shares. The
acquisition was accounted for as a purchase. The cost of the acquisition was
funded through draws under the Revolving Credit Facility. The purchase price was
allocated on the basis of the agreed upon fair value of the assets acquired and
liabilities assumed.
The Company believes its liquidity, capital resources and cash flows from
operations are sufficient to fund planned capital expenditures, working capital
requirements and debt service in absence of additional acquisitions.
The Company intends to fund future acquisitions with cash, securities or a
combination of cash and securities. To the extent the Company uses cash for all
or part of any such acquisitions, it expects to raise such cash primarily from
cash generated from operations, borrowings under the Amended Credit Facility or,
if feasible and attractive, issuances of long-term debt or additional Class A
Common Shares.
SEASONALITY
The Company's operations are seasonal in nature with approximately 60% of sales
historically occurring in the second and third quarters. Working capital and
borrowings fluctuate with sales volume. Historically more than 50% of cash flow
from operations is generated in the fourth quarter.
INFLATION
The Company does not believe inflation had a significant impact on its
operations over the past three years. In the past, the Company has been able to
pass along all or a portion of the effects of steel price increases. There can
be no assurance the Company will be able to continue to pass on the cost of such
increases in the future.
<PAGE> 12
RECENTLY ISSUED ACCOUNTING STANDARDS
In October 1996, the American Institute of Certified Public Accounts issued
Statement of Position 96-1, "Environmental Remediation Liabilities"
("SOP 96-1"). As described in footnote 2(f) of the consolidated financial
statements, the Company adopted the provisions of SOP 96-1 on January 1,1997.
The adoption did not have a material impact on the Company's financial position
or results of operations.
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128 "Earnings per Share." This
standard is effective for both interim and annual periods ending after December
15, 1997. If the earnings per share were calculated in accordance with SFAS 128,
the Company's income (loss) per share would be unchanged.
FORWARD-LOOKING STATEMENTS
This Form 10-Q includes, and future filings by the Company on Form 10-K, Form
10-Q and Form 8-K and future oral and written statements by the Company and its
management may include, certain forward-looking statements, including (without
limitation) statements with respect to anticipated future operating and
financial performance, growth opportunities and growth rates, acquisition and
divestitive opportunities and other similar forecasts and statements of
expectation. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and "should," and variations of these words and
similar expressions, are intended to identify these forward-looking statements.
Forward-looking statements by the Company and its management are based on
estimates, projections, beliefs and assumptions of management and are not
guarantees of future performance. The Company disclaims any obligation to update
or revise any forward-looking statement based on the occurrence of future
events, the receipt of new information, or otherwise.
Actual future performance, outcomes and results may differ materially from those
expressed in forward-looking statements made by the Company and its management
as the 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 the Company's control such as the general economy, governmental
expenditures and changes in banking and tax laws; the Company's ability to
successfully identify, finance, complete and integrate acquisition; the mix of
products sold by the Company; the Company's ability to successfully develop and
introduce new products; increases in the price of steel (the principal raw
material in the Company's products) and the Company's ability to pass along such
price increases to its customers; and the seasonality of the construction
industry. In addition to these factors, actual future performance, outcomes and
results may differ materially because of other, more general, factors including
(without limitation) general industry and market conditions and growth rates,
domestic economic conditions, governmental and public policy changes and the
continued availability of financing in the amounts, at the terms and on the
conditions necessary to support the Company's future business.
<PAGE> 13
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAYTON SUPERIOR CORPORATION
---------------------------
DATE: April 17, 1997 BY: /s/Vinod M. Khilnani
-------------------- -------------------------------
Vinod M. Khilnani
Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/Richard L. Braswell
-------------------------------
Richard L. Braswell
Vice President Finance and Treasurer
(Principal Accounting Officer)
<PAGE> 14
INDEX TO EXHIBITS
-----------------
(11) Statement Re: Computation of Earnings Per Share:
11.1 Computation of Earnings Per Share............. *
(27) Financial Data Schedule................................ *
- -------------------
"*" Indicates the Exhibit is filed with this Report.
<PAGE> 1
DAYTON SUPERIOR CORPORATION
EXHIBIT 11 - COMPUTATION OF EARNINGS
PER COMMON AND COMMON EQUIVALENT SHARE
(Amounts in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Fiscal Months Ended
-----------------------------
March 29, March 28,
1996 1997
-----------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Weighted average number of common
shares outstanding during the period 3,288,000 5,676,414
Common equivalent shares outstanding (a) 45,389 222,911
Weighted average common and common
-----------------------------
equivalent shares outstanding 3,333,389 5,899,325
=============================
Net income (loss) (401) 160
=============================
=============================
Net income (loss) per share ($0.12) $0.03
=============================
</TABLE>
Fully diluted earnings per share are not significantly different from primary
earnings per share.
- -------------
Notes:
(a) Common equivalent shares are shares issuable upon the exercise of stock
options and warrants, less the shares that could be purchased with the
proceeds from the exercise of the options and warrants, based on the
company's initial public offering price of $13.00 for 1996 and the
company's average trading price for 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000854709
<NAME> DAYTON SUPERIOR CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-28-1997
<EXCHANGE-RATE> 1
<CASH> 96
<SECURITIES> 0
<RECEIVABLES> 16,652
<ALLOWANCES> 436
<INVENTORY> 18,912
<CURRENT-ASSETS> 38,412
<PP&E> 32,793
<DEPRECIATION> 13,993
<TOTAL-ASSETS> 117,158
<CURRENT-LIABILITIES> 21,788
<BONDS> 37,216
<COMMON> 42,746
0
0
<OTHER-SE> 10,643
<TOTAL-LIABILITY-AND-EQUITY> 117,158
<SALES> 25,980
<TOTAL-REVENUES> 25,980
<CGS> 18,272
<TOTAL-COSTS> 18,272
<OTHER-EXPENSES> 6,741
<LOSS-PROVISION> (15)
<INTEREST-EXPENSE> 686
<INCOME-PRETAX> 281
<INCOME-TAX> 121
<INCOME-CONTINUING> 160
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 160
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
