DXT Dixon Ticonderoga Company

Dixon Ticonderoga Company Reports Best Annual Results Since 1999 HEATHROW, Fla., Dec. 22 /PRNewswire-FirstCall/ -- Dixon Ticonderoga Company (AMEX:DXT) today announced its highest annual profit in five years. Net income for the fiscal year ended September 30, 2004 was $1,731,906 or $0.54 per basic and diluted share, compared with a net loss of ($1,427,980) or ($0.45) per share in the prior fiscal year. Pro forma net income from continuing operations (excluding the effects of debt refinancing; restructuring costs; investment banking costs; other income and expense; and valuation allowances for deferred tax assets, collectively "special items") for fiscal 2004 was $2,300,973 or $0.72, compared with $1,751,030 or $0.55 in the prior fiscal year. Fiscal 2004 revenues from continuing operations were $88,168,759 compared with $88,837,615 last year. Basic and diluted weighted average shares outstanding were approximately 3,205,000 and 3,197,000 in fiscal 2004 and 2003, respectively. Net income in the fourth fiscal quarter of 2004 was $913,031 or $0.28 per share, compared with a net loss of ($2,179,692) or ($0.68) in the prior year quarter. Pro forma net income from continuing operations (excluding special items) in the fourth quarter of fiscal 2004 was $1,172,827 or $0.36 per share, compared with $648,018 or $0.20 per share in the 2003 quarter. Fourth quarter 2004 revenues from continuing operations were $26,372,023, as compared with $27,134,761 in the prior year quarter. Basic and diluted average shares outstanding during the 2004 period were approximately 3,208,000 and 3,220,000, respectively. Basic and diluted average shares outstanding approximated 3,202,000 in the 2003 period. Commenting on the improved year-end results, Chairman and Co-Chief Executive Officer Gino N. Pala said, "Despite lower U.S. sales due to management's decision to discontinue certain year-end promotional activities, we experienced continued profit improvement in the U.S. consumer products business. As we begin to fully realize the benefits of our consolidation and cost reduction efforts over the past several years, our company's pro forma net income from continuing operations grew from $350,000 in 2002 to $2.3 million. We believe that we are well-positioned for enhanced profitability in the future as we can now fully focus on growing our top-line revenues." On December 17, 2004, Dixon announced that on December 16, 2004 it had reached a definitive agreement with Fila-Fabbrica Italiana Lapis ed Affini S.p.A for the acquisition by Fila of all the outstanding shares of Dixon common stock for $7.00 per share in cash. 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 supplies, 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 and the U.K. 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, management's belief that it is positioned for enhanced profitability and future growth) 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 with the company's consolidation and cost reduction programs; manufacturing inefficiencies; increased competition; reduced revenues; U.S. and foreign economic factors; interest rate fluctuation risk; and foreign currency exchange risk, among others. Three Months Ended Fiscal Year Ended September 30, September 30, 2004 2003 2004 2003 Revenues $26,372,023 $27,134,761 $88,168,759 $88,837,615 Operating Income $1,648,623 $1,399,103 $5,807,149 $4,470,382 Other Income (Expense)(1) (93,963) -- (93,963) 1,052,500 Interest Expense (942,252) (932,849) (3,461,733) (3,585,729) Income Taxes (2) 314,082 (2,365,223) (472,889) (2,744,420) Minority Interest (13,459) (13,392) (46,658) (42,221) Income (Loss) From Continuing Operations 913,031 (1,912,361) 1,731,906 (849,488) Loss From Discontinued Operations -- (267,331) -- (578,492) Net Income (Loss) $913,031 $(2,179,692) $1,731,906 $(1,427,980) Earnings (Loss) Per Share (Basic and Diluted): Continuing Operations $0.28 $(0.60) $0.54 $(0.27) Discontinued Operations -- (0.08) -- (0.18) Net Income (Loss) $0.28 $(0.68) $0.54 $(0.45) Weighted Average Shares - Basic 3,207,894 3,202,149 3,204,543 3,196,714 Weighted Average Shares - Diluted 3,219,669 3,202,149 3,204,613 3,196,714 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, 2004 2003 2004 2003 Income (Loss) From Continuing Operations $913,031 $(1,912,361) $1,731,906 $(849,488) Debt Refinancing, Net of Income Taxes -- -- -- 424,770 Restructuring and Related Costs, Net of Income Taxes -- -- -- 331,069 Investment Banking and Related Costs, Net of Income Taxes 197,780 328,775 507,051 328,775 Other Income (Expense), Net of Income Taxes (1) 62,016 -- 62,016 (715,700) Valuation Allowances for Deferred Tax Assets (2) -- 2,231,604 -- 2,231,604 Pro Forma Net Income $1,172,827 $648,018 $2,300,973 $1,751,030 Pro Forma Net Income Per Share $0.36 $0.20 $0.72 $0.55 (1) Other income (expense) represents gains on receipt of securities from insurance company demutualizations and income (expense) related to certain import duty rebates. (2) In the fourth fiscal quarter of 2003, the Company provided full valuation allowances for any tax benefits generated in the U.S. given the previous history of U.S. tax losses. Tax benefits were not recognized for such U.S. losses in fiscal 2004. DATASOURCE: Dixon Ticonderoga Company CONTACT: Gino N. Pala of Dixon Ticonderoga Company, +1-407-829-9000 Web site: http://www.dixonticonderoga.com/

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