DXT Dixon Ticonderoga Company

Dixon Ticonderoga Reports Pro Forma Earnings Of $2 Million In Fiscal 2003 HEATHROW, Fla., Dec. 29 /PRNewswire-FirstCall/ -- Dixon Ticonderoga Company today announced a dramatic improvement in pro forma net income from continuing operations in fiscal 2003. Pro forma net income from continuing operations for the fiscal year ended September 30, 2003 was $2,009,572 or $0.63 per basic and diluted share, compared with $350,403 or $0.11 per share in the prior year. Including the effects of debt refinancing; restructuring costs; investment banking costs; gains on the receipt of securities from insurance company demutualizations; valuation allowances for deferred tax assets (collectively, "special items"); and discontinued operations, net loss in fiscal 2003 was (1,427,980) or ($0.45) per basic and diluted share, compared with a net loss of ($559,923) or ($0.18) per share in 2002. Fiscal 2003 revenues from continuing operations were $88,837,615, as compared with $88,590,730 in the prior year. Basic and diluted weighted average shares outstanding were 3,196,714 and 3,183,866 during 2003 and 2002, respectively. Pro forma net income from continuing operations (excluding special items) in the fourth quarter of fiscal 2003 was $648,018 or $0.20 per basic and diluted share, compared with $82,920 or $0.03 per share in the prior year quarter. Net loss in the fourth quarter (including the effects of special items and discontinued operations) was ($2,179,692) or ($0.68) per basic and diluted share, compared with a net loss of ($617,981) or ($0.19) per share in 2002. Fourth quarter 2003 revenues from continuing operations increased 8.5% to $27,134,761, as compared with $25,018,709 in the prior year quarter. Basic and diluted weighted average shares outstanding during the fourth quarter of 2003 were 3,202,149, as compared with 3,192,832 in the 2002 quarter. Commenting on the year-end results, Chairman and Co-Chief Executive Officer Gino N. Pala, said, "Despite a very challenging year which included, among other initiatives, a major debt refinancing, the completion of our comprehensive manufacturing consolidation plan and the sale of our final industrial business, the Company achieved significantly improved operating results. We are extremely gratified that these strategies, as well as other cost reduction activities pursued over the past several years, have begun to substantially enhance profitability. Our pro forma earnings of $2 million imply that our Company is indeed headed in the right direction". Dixon Ticonderoga Company, with operations dating back to 1795, is one of the oldest publicly held companies in the U.S. Its consumer group manufactures and markets a wide range of writing instruments, art materials and office products, including the well-known Ticonderoga(R), Prang(R) and Dixon(R) brands. Headquartered in Heathrow, Florida, Dixon Ticonderoga employs approximately 1,600 people at 8 facilities in the U.S., Canada, Mexico, the U.K. and China. The company has been listed on the American Stock Exchange since 1988 under the symbol DXT. Forward-Looking Statements Any "forward-looking" statements in this press release (including, among others, the company's ability to continue to improve cash flow and profitability going forward and to maintain adequate liquidity) involve known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those expressed or implied by such forward- looking statements. Such risks include (but are not limited to) difficulties encountered by the company with its cost reduction activities, plant consolidations and/or inventory reduction program; the inability to maintain and/or secure new sources of capital; increased competition; U.S. and foreign economic factors; foreign currency exchange risk; interest rate fluctuation risk; and the inability to generate taxable income to utilize certain tax benefits in the future, among others. Dixon Ticonderoga Company Three Months Ended Fiscal Year Ended September 30, September 30, 2003 2002 2003 2002 Revenues $27,134,761 $25,018,709 $88,837,615 $88,590,730 Operating Income $1,399,103 $426,159 $4,470,382 $2,643,985 Other Income, Net -- -- 1,052,500 252,676 Interest Expense (932,849) (1,247,555) (3,585,729) (4,087,731) Income Tax Benefit (Expense) (2,365,223) 217,590 (2,744,420) 559,064 Minority Interest (13,392) (6,666) (42,221) (51,214) Income (Loss) From Continuing Operations (1,912,361) (610,472) (849,488) (683,220) Income (Loss) From Discontinued Operations (267,331) (7,509) (578,492) 123,297 Net Loss $(2,179,692) $(617,981) $(1,427,980) $(559,923) Earnings (Loss) Per Share (Basic and Diluted): Continuing Operations $(0.60) $(0.19) $(0.27) $(0.22) Discontinued Operations (0.08) 0.00 (0.18) 0.04 Net Income (Loss) $(0.68) $(0.19) $(0.45) $(0.18) Weighted Average Shares - Basic 3,202,149 3,192,832 3,196,714 3,183,866 Weighted Average Shares - Diluted 3,202,149 3,192,832 3,196,714 3,183,866 Reconciliation Of Income (Loss) From Continuing Operations To Pro Forma Net Income From Continuing Operations Three Months Ended Fiscal Year Ended September 30, September 30, 2003 2002 2003 2002 Income (Loss) From Continuing Operations $(1,912,361) $(610,472) $(849,488) $(683,220) Debt Refinancing, Net of Income Taxes -- -- 424,770 -- Restructuring and Related Costs, Net of Income Taxes -- 693,392 331,069 1,033,673 Investment Banking and Related Costs, Net of Income Taxes 328,775 -- 328,775 -- Gains on Receipt of Securities from Insurance Company Demutualizations, Net of Income Taxes -- -- (457,158) -- Valuation Allowances for Deferred Tax Assets 2,231,604 -- 2,231,604 -- Pro Forma Net Income $648,018 $82,920 $2,009,572 $350,453 Pro Forma Net Income Per Share $0.20 $0.03 $0.63 $0.11 DATASOURCE: Dixon Ticonderoga Company CONTACT: Gino N. Pala, Dixon Ticonderoga Company, +1-407-829-9000 Web site: http://www.dixonticonderoga.com/

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