EXHIBIT 99.1
FOR IMMEDIATE RELEASE
LEXINGTON PRECISION REPORTS SECOND QUARTER RESULTS
NEW YORK, August 18, 2004 -- Lexington Precision Corporation reported net income
of $1,282,000, or 26 cents per diluted common share, for the second quarter
ended June 30, 2004, compared to a net loss of $674,000, or 14 cents per diluted
common share, for the second quarter of 2003.
Net income for the three-month and six-month periods ended June 30, 2004,
included a pre-tax gain of $3,252,000 on the repurchase, in December 2003, of
the company's $7,500,000 senior, unsecured note. The gain had previously been
deferred and recorded in current liabilities as "deferred gain on repurchase of
debt" because the agreement governing the repurchase of the note provided that
the claim could be reinstated if certain events occurred prior to April 20,
2004. Because none of these events have occurred, the company realized the gain
during the second quarter of 2004. Excluding the gain on repurchase, the company
would have reported a net loss of $1,970,000, or 40 cents per diluted common
share for the quarter ended June 30, 2004.
Net sales for the second quarter of 2004 were $31,410,000, compared to
$30,873,000 for the second quarter of 2003, an increase of 2%. Net sales of the
company's Rubber Group increased by 1% to $27,044,000, while net sales of the
Metals Group increased by 3% to $4,366,000.
During the second quarter of 2004, income from operations totaled $268,000,
compared to $1,113,000 for the second quarter of 2003. Income from operations at
the Rubber Group decreased to $2,607,000 from $3,020,000. The Metals Group
reported a loss from operations of $1,589,000 for the second quarter of 2004,
compared to a loss of $1,259,000 for the second quarter of 2003. Corporate
Office expenses increased to $750,000 for the second quarter of 2004, from
$648,000 for the second quarter of 2003.
Earnings before interest, taxes, depreciation, amortization, and other
non-operating items of income and expense (EBITDA) for the second quarter of
2004, totaled $2,482,000, compared to EBITDA of $3,744,000 for the second
quarter of 2003, a decrease of 34%. EBITDA for the Rubber Group decreased 11% to
$4,291,000, while EBITDA for the Metals Group, decreased to negative $1,069,000
from negative $443,000. EBITDA for the Corporate Office decreased to negative
$740,000 from negative $638,000.
The company reported net income of $1,126,000, or 23 cents per diluted common
share, for the first six months of 2004, compared to a net loss of $843,000, or
17 cents per diluted common share, for the first six months of 2003.
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Lexington Precision Corporation
August 18, 2004
Excluding the gain on repurchase of the senior, unsecured note discussed above,
the company would have reported a net loss of $2,126,000, or 43 cents per
diluted common share for the first six months of 2004.
Net sales for the first six months of 2004 were $64,416,000, compared to
$63,256,000 for the first six months of 2003. Net sales of the Rubber Group
increased by 3% to $54,847,000, while net sales of the Metals Group decreased by
3% to $9,569,000.
During the first six months of 2004, income from operations totaled $2,274,000,
compared to $2,751,000 for the first six months of 2003. Income from operations
at the Rubber Group increased to $6,149,000 from $5,839,000. The Metals Group
reported a loss from operations of $2,549,000 for the first six months of 2004,
compared to a loss of $1,842,000 for the first six months of 2003. Corporate
Office expenses increased to $1,326,000 for the first six months of 2004, from
$1,246,000 for the first six months of 2003.
EBITDA for the first six months of 2004, totaled $6,789,000, compared to EBITDA
of $8,153,000 for the first six months of 2003, a decrease of 17%. EBITDA for
the Rubber Group increased 1% to $9,573,000, while EBITDA for the Metals Group
decreased to negative $1,478,000 from negative $139,000. EBITDA for the
Corporate Office decreased to negative $1,306,000 from negative $1,227,000.
Net cash provided by operating activities for the first six months of 2004
totaled $1,732,000, compared to $4,857,000 for the first six months of 2003, a
decrease of 64%.
NOTICE RELATING TO USE OF NON-GAAP MEASURES:
Attached to this press release are tables setting forth our unaudited condensed
consolidated statements of operations and segment financial data, including
information concerning our net cash provided by operating activities and
reconciliations of consolidated net income or loss from operations to
consolidated EBITDA. EBITDA is not a measure of performance under accounting
principles generally accepted in the United States and should not be considered
in isolation or used as a substitute for income from operations, net income, net
cash provided by operating activities, or other operating or cash flow statement
data prepared in accordance with generally accepted accounting principles. We
have presented EBITDA because this measure is used by investors, as well as our
own management, to evaluate the operating performance of our business, including
its ability to incur and service debt. Nevertheless, EBITDA has distinct
limitations as compared to a GAAP number such as net income. By excluding
interest and tax payments, for example, an investor may not see that both
represent a reduction in cash available to the company. Likewise, depreciation
and amortization, while non-cash items, represent generally the devaluation of
assets that produce revenue for the company. Our definition of EBITDA may not be
the same as the definition of EBITDA used by other companies.
Lexington Precision Corporation manufactures rubber and metal components that
are used primarily by manufacturers of automobiles, automotive replacement
parts, and medical devices.
Contact: Warren Delano, President (212) 319-4657
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LEXINGTON PRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<Table>
<Caption>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net sales $ 31,410 $ 30,873 $ 64,416 $ 63,256
Cost of sales 28,939 27,587 57,870 56,240
---------- ---------- ---------- ----------
Gross profit 2,471 3,286 6,546 7,016
Selling and administrative expenses 2,203 2,173 4,272 4,265
---------- ---------- ---------- ----------
Income from operations 268 1,113 2,274 2,751
Gain on repurchase of debt 3,252 -- 3,252 --
Interest expense 2,182 1,760 4,329 3,540
---------- ---------- ---------- ----------
Income (loss) before income taxes 1,338 (647) 1,197 (789)
Income tax provision 56 27 71 54
---------- ---------- ---------- ----------
Net income (loss) $ 1,282 $ (674) $ 1,126 $ (843)
========== ========== ========== ==========
Basic and diluted net income (loss) available to
common stockholders $ 0.26 $ (0.14) $ 0.23 $ (0.17)
========== ========== ========== ==========
Weighted average number of common shares
Outstanding 4,932 4,828 4,932 4,828
========== ========== ========== ==========
Reconciliation of net income (loss) to EBITDA:
Net income (loss) $ 1,282 $ (674) $ 1,126 $ (843)
Adjustments to net income (loss):
Depreciation and amortization 2,214 2,631 4,515 5,402
Gain on repurchase of debt (3,252) -- (3,252) --
Interest expense 2,182 1,760 4,329 3,540
Income tax provision 56 27 71 54
---------- ---------- ---------- ----------
EBITDA $ 2,482 $ 3,744 $ 6,789 $ 8,153
========== ========== ========== ==========
Net cash provided by operating activities $ 1,657 $ 4,467 $ 1,732 $ 4,857
========== ========== ========== ==========
</Table>
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LEXINGTON PRECISION CORPORATION
SEGMENT FINANCIAL DATA
(IN THOUSANDS)
(UNAUDITED)
<Table>
<Caption>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net sales:
Rubber Group $ 27,044 $ 26,645 $ 54,847 $ 53,367
Metals Group 4,366 4,228 9,569 9,889
---------- ---------- ---------- ----------
Total net sales $ 31,410 $ 30,873 $ 64,416 $ 63,256
========== ========== ========== ==========
Income (loss) from operations:
Rubber Group $ 2,607 $ 3,020 $ 6,149 $ 5,839
Metals Group (1,589) (1,259) (2,549) (1,842)
Corporate Office (750) (648) (1,326) (1,246)
---------- ---------- ---------- ----------
Total income from operations 268 1,113 2,274 2,751
---------- ---------- ---------- ----------
Add back depreciation and amortization included in
income from operations:
Rubber Group 1,684 1,805 3,424 3,680
Metals Group 520 816 1,071 1,703
Corporate Office 10 10 20 19
---------- ---------- ---------- ----------
Total depreciation and amortization 2,214 2,631 4,515 5,402
---------- ---------- ---------- ----------
Earnings (loss) before interest, taxes, depreciation,
amortization, and other non-operating items of income
and expense (EBITDA):
Rubber Group 4,291 4,825 9,573 9,519
Metals Group (1,069) (443) (1,478) (139)
Corporate Office (740) (638) (1,306) (1,227)
---------- ---------- ---------- ----------
Total EBITDA $ 2,482 $ 3,744 $ 6,789 $ 8,153
========== ========== ========== ==========
Capital expenditures:
Rubber Group $ 1,572 $ 1,392 $ 2,482 $ 2,219
Metals Group 418 443 901 619
Corporate Office -- -- -- 2
---------- ---------- ---------- ----------
Total capital expenditures $ 1,990 $ 1,835 $ 3,383 $ 2,840
========== ========== ========== ==========
</Table>
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