Exhibit 99.1
FOR IMMEDIATE RELEASE
LEXINGTON PRECISION REPORTS THIRD QUARTER RESULTS
NEW YORK, November 15, 2004 -- Lexington Precision Corporation reported a net
loss of $2,719,000, or 55 cents per diluted common share, for the third quarter
ended September 30, 2004, compared to a net loss of $1,963,000, or 41 cents per
diluted common share, for the third quarter of 2003.
Net sales for the third quarter of 2004 were $27,485,000, compared to
$28,294,000 for the third quarter of 2003, a decrease of 3%. Net sales of the
company's Rubber Group decreased by 5% to $23,499,000, while net sales of the
Metals Group increased by 10% to $3,986,000.
During the third quarter of 2004, the loss from operations totaled $433,000,
compared to income from operations of $6,000 for the third quarter of 2003.
Income from operations at the Rubber Group increased to $2,253,000 from
$1,602,000. The Metals Group reported a loss from operations of $2,044,000 for
the third quarter of 2004, compared to a loss of $976,000 for the third quarter
of 2003. During the third quarter of 2004, the company decided to discontinue
the operations of its die casting division, which is one of two operating units
that comprise the Metals Group. As a result, the Metals Group's operating
results for the third quarter of 2004 included a non-cash impairment charge of
$928,000 to reduce the carrying value of the long-lived assets of the die
casting division to estimated fair value. Corporate Office expenses increased to
$642,000 for the third quarter of 2004, from $620,000 for the third quarter of
2003.
Earnings before interest, taxes, depreciation, amortization, and other
non-operating items of income and expense (EBITDA) for the third quarter of
2004, totaled $1,934,000, compared to EBITDA of $2,463,000 for the third quarter
of 2003, a decrease of 21%. EBITDA for the Rubber Group increased 20% to
$3,992,000, while EBITDA for the Metals Group, decreased to negative $1,427,000
from negative $261,000. EBITDA for the Corporate Office decreased to negative
$631,000 from negative $610,000. (Non-operating items of income and expense for
the periods discussed in this press release include the cumulative effect of a
change in accounting principle in the third quarter of 2003 and the gain on the
repurchase of debt in the second quarter of 2004, as set forth in the
reconciliation on the company's Condensed Consolidated Statement of Operations
on page 3 of this press release.)
The company reported a net loss of $1,593,000, or 32 cents per diluted common
share, for the first nine months of 2004, compared to a net loss of $2,806,000,
or 58 cents per diluted common share, for the first nine months of 2003. Net
sales for the first nine months of 2004 were $91,901,000, compared to
$91,550,000 for the first nine months of 2003. Net sales of the Rubber Group
increased by 0.4% to $78,346,000, and net sales of the Metals Group increased by
0.3% to $13,555,000.
-3-
Lexington Precision Corporation
November 15, 2004
During the first nine months of 2004, income from operations totaled $1,841,000,
compared to $2,757,000 for the first nine months of 2003. Income from operations
at the Rubber Group increased to $8,402,000 from $7,441,000. The Metals Group
reported a loss from operations of $4,593,000 for the first nine months of 2004,
compared to a loss of $2,818,000 for the first nine months of 2003. The Metals
Group's operating results for the first nine months of 2004 included a non-cash
impairment charge of $928,000 to reduce the carrying value of the long-lived
assets of the die casting division to estimated fair value. Corporate Office
expenses increased to $1,968,000 for the first nine months of 2004, from
$1,866,000 for the first nine months of 2003.
EBITDA for the first nine months of 2004, totaled $8,723,000, compared to EBITDA
of $10,616,000 for the first nine months of 2003, a decrease of 18%. EBITDA for
the Rubber Group increased 6% to $13,565,000, while EBITDA for the Metals Group
decreased to negative $2,905,000 from negative $400,000. EBITDA for the
Corporate Office decreased to negative $1,937,000 from negative $1,837,000.
Net cash provided by operating activities for the first nine months of 2004
totaled $3,247,000, compared to $9,105,000 for the first nine 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 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 U. S.
generally accepted accounting principles 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 U. S. 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
-4-
LEXINGTON PRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- ----------------------
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $ 27,485 $ 28,294 $ 91,901 $ 91,550
Cost of sales 25,103 26,278 82,973 82,518
-------- -------- -------- --------
Gross profit 2,382 2,016 8,928 9,032
Selling and administrative expenses 1,887 2,010 6,159 6,275
Impairment of long-lived assets 928 -- 928 --
-------- -------- -------- --------
Income (loss) from operations (433) 6 1,841 2,757
Gain on repurchase of debt -- -- 3,252 --
Interest expense 2,271 1,715 6,600 5,255
-------- -------- -------- --------
Loss before income taxes and cumulative effect
of change in accounting principle (2,704) (1,709) (1,507) (2,498)
Income tax provision 15 7 86 61
-------- -------- -------- --------
Loss before cumulative effect of change in
accounting principle (2,719) (1,716) (1,593) (2,559)
Cumulative effect of change in accounting principle -- (247) -- (247)
-------- -------- -------- --------
Net loss $ (2,719) $ (1,963) $ (1,593) $ (2,806)
======== ======== ======== ========
Basic and diluted net loss applicable to
common stockholders $ (0.55) $ (0.41) $ (0.32) $ (0.58)
======== ======== ======== ========
Weighted average number of common shares
outstanding 4,932 4,828 4,932 4,828
======== ======== ======== ========
Reconciliation of net loss to EBITDA:
Net loss $ (2,719) $ (1,963) $ (1,593) $ (2,806)
Adjustments to net loss:
Depreciation and amortization 2,367 2,457 6,882 7,859
Gain on repurchase of debt -- -- (3,252) --
Interest expense 2,271 1,715 6,600 5,255
Income tax provision 15 7 86 61
Cumulative effect of change in accounting
principle -- 247 -- 247
-------- -------- -------- --------
EBITDA $ 1,934 $ 2,463 $ 8,723 $ 10,616
======== ======== ======== ========
Net cash provided by operating activities $ 1,515 $ 4,248 $ 3,247 $ 9,105
======== ======== ======== ========
-5-
LEXINGTON PRECISION CORPORATION
SEGMENT FINANCIAL DATA
(IN THOUSANDS)
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- ----------------------
2004 2003 2004 2003
-------- -------- -------- --------
Net sales:
Rubber Group $ 23,499 $ 24,665 $ 78,346 $ 78,032
Metals Group 3,986 3,629 13,555 13,518
-------- -------- -------- --------
Total net sales $ 27,485 $ 28,294 $ 91,901 $ 91,550
======== ======== ======== ========
Income (loss) from operations:
Rubber Group $ 2,253 $ 1,602 $ 8,402 $ 7,441
Metals Group (2,044) (976) (4,593) (2,818)
Corporate Office (642) (620) (1,968) (1,866)
-------- -------- -------- --------
Total income (loss) from operations (433) 6 1,841 2,757
-------- -------- -------- --------
Add back depreciation and amortization included
in income from operations:
Rubber Group 1,739 1,732 5,163 5,412
Metals Group 617 715 1,688 2,418
Corporate Office 11 10 31 29
-------- -------- -------- --------
Total depreciation and amortization 2,367 2,457 6,882 7,859
-------- -------- -------- --------
Earnings (loss) before interest, taxes, depreciation,
amortization, and other non-operating items of income
and expense (EBITDA):
Rubber Group 3,992 3,334 13,565 12,853
Metals Group (1,427) (261) (2,905) (400)
Corporate Office (631) (610) (1,937) (1,837)
-------- -------- -------- --------
Total EBITDA $ 1,934 $ 2,463 $ 8,723 $ 10,616
======== ======== ======== ========
Capital expenditures:
Rubber Group $ 1,039 $ 1,651 $ 3,521 $ 3,870
Metals Group 141 64 1,042 683
Corporate Office 7 9 7 11
-------- -------- -------- --------
Total capital expenditures $ 1,187 $ 1,724 $ 4,570 $ 4,564
======== ======== ======== ========
# # #
-6-