Diamond Triumph Auto Glass, Inc. Announces Second Quarter 2004 Results
KINGSTON, Pa., Aug. 16, 2004 -- Diamond Triumph Auto Glass, Inc. announced today that net sales for the six months ended June 30, 2004 decreased $3.6 million, or 3.2%, to $110.3 million as compared to $113.9 million for the six months ended June 30, 2003. Net sales for the second quarter ended June 30, 2004 decreased $2.9 million, or 4.8%, to $56.9 million as compared to $59.8 million for the second quarter of 2003. Net income for the six months ended June 30, 2004 decreased by $2.5 million, or 86.2%, to $0.4 million from $2.9 million of net income for the six months ended June 30, 2003. Net income for the second quarter ended June 30, 2004 decreased by $1.8 million, or 81.8% to $0.4 million as compared to $2.2 million for the second quarter of 2003. EBITDA for the six months ended June 30, 2004 decreased by $2.2 million, or 22.7%, to $7.5 million from $9.7 million for the six months ended June 30, 2003. EBITDA for the second quarter of 2004 decreased by $.2 million, or 3.7%, to $5.2 million from $5.4 million for the second quarter of 2003.
Diamond Triumph Auto Glass, Inc.
($ in Millions)
Six Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004 2003
(unaudited) (unaudited)
Net Sales $110.3 $113.9 $56.9 $59.8
Cost of Sales 31.5 34.7 16.3 18.5
Gross Profit 78.8 79.2 40.6 41.3
Operating Expenses 72.5 70.9 35.9 36.5
Income From Operations $6.3 $8.3 $4.7 $4.8
Net Income $0.4 $2.9 $0.4 $2.2
EBITDA (1) $7.5 $9.7 $5.2 $5.4
Total Long-Term Debt $80.0 $82.0 $80.0 $82.0
Norm Harris, Diamond Triumph's Chief Executive Officer, had the following comments regarding the Company: "The Company's operating results have continued to be affected by weaker demand and challenging pricing conditions. We will continue to explore opportunities to broaden our revenue base and leverage costs throughout the organization."
Michael Sumsky, Diamond Triumph's President and Chief Financial Officer added, "Despite weaker industry conditions, the Company maintained positive cash flow during the second quarter and continued to repay debt. At June 30, 2004, the Company had no outstanding balance sheet debt related to our bank credit facility and has accumulated cash reserves."
Diamond Triumph Auto Glass, Inc. headquartered in Kingston, PA, is a leading provider of automotive glass replacement and repair services. Diamond Triumph currently operates 257 company owned automotive glass service centers, approximately 1,100 mobile installation vehicles and six distribution centers in 45 states. For more information about Diamond Triumph, visit the website at http://www.diamondtriumph.com/.
(1) EBITDA represents net income before interest, taxes, depreciation and
amortization. EBITDA is a measurement of Diamond Triumph's
performance that is not required by, or presented in accordance with,
GAAP. EBITDA is not a measurement of Diamond Triumph's financial
performance under GAAP and should not be considered an alternative to
net income, operating income or any other performance measures
derived in accordance with GAAP or as an alternative to cash flow
from operating activities as a measure of our liquidity.
Diamond Triumph presents EBITDA because it considers it an important
supplemental measure of its performance and believes it is frequently
used by securities analysts, investors and other interested parties
in the evaluation of companies in its industry, many of which present
EBITDA when reporting their results.
Diamond Triumph believes issuers of "high yield" securities also
present EBITDA because investors, analysts and rating agencies
consider it useful in measuring the ability of those issuers to meet
debt service obligations. Diamond Triumph believes EBITDA is an
appropriate supplemental measure of debt service capacity, because
cash expenditures on interest are, by definition, available to pay
interest, and tax expense is inversely correlated to interest expense
because tax expense goes down as deductible interest expense goes up;
depreciation and amortization are non-cash charges.
Diamond Triumph also uses EBITDA for the following purposes: (i) its
executives' compensation plans base incentive compensation payments
on its EBITDA performance measured against budgets; and (ii) its
credit agreement and its indenture for its Notes use EBITDA to
measure Diamond Triumph's compliance with covenants such as interest
coverage and debt incurrence. EBITDA has limitations as an
analytical tool, and should not be considered in isolation, or as a
substitute for analysis of Diamond Triumph's results as reported
under GAAP. Some of these limitations are:
-- EBITDA does not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments;
-- EBITDA does not reflect changes in, or cash requirements for, our
working capital needs;
-- EBITDA does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal
payments, on our debt;
-- Although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be
replaced in the future, and EBITDA does not reflect any cash
requirements for such replacements; and
-- Other companies in Diamond Triumph's industry may calculate EBITDA
differently than Diamond Triumph does, limiting its usefulness as
a comparative measure.
Because of these limitations, EBITDA should not be considered as a
measure of discretionary cash available to Diamond Triumph to invest
in the growth of its business. Diamond Triumph compensates for these
limitations by relying primarily on its GAAP results and using EBITDA
only supplementally.
Reconciliation of EBITDA to net income follows for the periods
indicated:
Six Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004 2003
(dollars in millions) (dollars in millions)
Net income $0.4 $ 2.9 $0.4 $2.2
Interest expense 4.1 3.6 2.1 1.2
Depreciation and amortization 1.2 1.4 .5 .6
Provision for income taxes 1.8 1.8 2.2 1.4
EBITDA $7.5 $ 9.7 $5.2 $5.4