Diamond Triumph Auto Glass, Inc. Announces Third Quarter 2004 Results
KINGSTON, Pa., Nov. 15, 2004 -- Diamond Triumph Auto Glass, Inc. announced today that net sales for the nine months ended September 30, 2004 decreased $7.1 million, or 4.2%, to $163.9 million as compared to $171.0 million for the nine months ended September 30, 2003. Net sales for the third quarter ended September 30, 2004 decreased $3.5 million, or 6.1%, to $53.6 million as compared to $57.1 million for the third quarter of 2003. Net income for the nine months ended September 30, 2004 decreased by $.6 million, or 19.4%, to $2.5 million from $3.1 million of net income for the nine months ended September 30, 2003. Net income for the third quarter ended September 30, 2004 increased by $1.9 million, or 86.4% to $2.2 million as compared to $0.3 million for the third quarter of 2003. EBITDA for the nine months ended September 30, 2004 decreased by $2.4 million, or 18.7%, to $10.4 million from $12.8 million for the nine months ended September 30, 2003. EBITDA for the third quarter of 2004 decreased by $0.2 million, or 6.5%, to $2.9 million from $3.1 million for the third quarter of 2003.
Diamond Triumph Auto Glass, Inc.
($ in Millions)
Nine Months Ended Three Months Ended
September 30, September 30,
2004 2003 2004 2003
(unaudited) (unaudited)
Net Sales $163.9 $171.0 $53.6 $57.1
Cost of Sales 46.7 52.3 15.2 17.5
Gross Profit 117.2 118.7 38.4 39.6
Operating Expenses 108.5 108.0 36.0 37.1
Income From Operations $8.7 $10.7 $2.4 $2.5
Net Income $2.5 $3.1 $2.2 $0.3
EBITDA (1) $10.4 $12.8 $2.9 $3.1
Total Long-Term Debt $80.0 $80.0 $80.0 $80.0
Norm Harris, Diamond Triumph's Chief Executive Officer, had the following comments regarding the Company. "During this sustained period of weaker demand and very challenging pricing conditions throughout the industry, we are pleased that our Company has been able to leverage costs by capitalizing on continual cost reduction initiatives. As a Company, we will continue our drive to improve efficiency while we work to bring new products and services to our customers."
Michael Sumsky, Diamond Triumph's President and Chief Financial Officer added, "Despite weaker industry conditions, our Company's capital structure and cost environment has enabled the Company to continue to generate positive cash flow. As of September 30, 2004, the Company continued to maintain cash reserves and had no outstanding borrowings under our Credit Facility."
Diamond Triumph Auto Glass, Inc., headquartered in Kingston, PA, is a leading provider of automotive glass replacement and repair services. Diamond Triumph currently operates 251 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:
Nine Months Ended Three Months Ended
September 30, September 30,
2004 2003 2004 2003
(dollars in millions) (dollars in millions)
Net income $2.5 $3.1 $2.2 $0.3
Interest expense 6.2 5.6 2.0 2.0
Depreciation and
amortization 1.7 2.1 0.5 0.6
Provision for
income taxes 0.0 2.0 (1.8) 0.2
EBITDA $10.4 $12.8 $2.9 $3.1