Atrium Companies, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2003.Business Editors DALLAS--(BUSINESS WIRE)--March 24, 2004 Atrium Companies, Inc. ("Atrium" or the "Company"), one of the largest non-wood window manufacturers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , today announced its unaudited financial results for the fourth quarter and year ended December December: see month. 31, 2003. Selected financial results are set forth in the table at the end of this press release and the Company's definitive results will be included in Atrium's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. to be filed with the Securities and Exchange Commission (the "SEC") no later than Tuesday Tuesday: see week. , March 30, 2004. The following is a summary of Atrium's financial highlights for the fourth quarters and years ended December 31, 2003 and 2002 (reported results include the results of MD Casting, Inc., Danvid Window Company, Aluminum Screen Manufacturers, Inc. and Superior Engineered Products Corporation ("Superior") since their dates of acquisition, which were January January: see month. 31, 2003, April 1, 2003, October October: see month. 1, 2003 and December 31, 2003, respectively, while pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results give effect to the 2003 acquisitions, the sale of the Company, the debt refinancing Refinancing An extension and/or increase in amount of existing debt. and the 2002 closing of Kel-Star Building Products as if they had occurred as of the beginning of each of the respective periods presented): Reported: -- Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased $25.5 million, or 19.6%, to $155.6 million during the fourth quarter of 2003 from $130.1 million during the fourth quarter of 2002, while net sales for the year increased $61.5 million, or 11.5%, to $597.8 million during 2003 from $536.3 million during 2002. -- Gross profit totaled $46.8 million (30.1% of net sales) during the fourth quarter of 2003 compared to $42.9 million (33.0% of net sales) during the fourth quarter of 2002, while gross profit for the year totaled $189.3 million (31.7% of net sales) during 2003 compared to $176.0 million (32.8% of net sales) during 2002. -- Net loss totaled $11.5 million during the fourth quarter of 2003 compared to net income of $3.5 million during the fourth quarter of 2002, while net income for the year totaled $6.3 million during 2003 compared to $14.0 million during 2002. -- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become totaled $16.0 million (10.3% of net sales) during the fourth quarter of 2003 compared to $17.2 million (13.2% of net sales) during the fourth quarter of 2002, representing a decrease of 7.0%, while EBITDA for the year totaled $73.8 million (12.3% of net sales) during 2003 compared to $71.1 million (13.3% of net sales) during 2002, representing an increase of 3.8%. -- Adjusted EBITDA totaled $17.7 million (11.4% of net sales) during the fourth quarter of 2003 compared to $18.0 million (13.9% of net sales) during the fourth quarter of 2002, representing a decrease of 2.0%, while Adjusted EBITDA for the year totaled $78.5 million (13.1% of net sales) during 2003 compared to $75.1 million (14.0% of net sales) during 2002, representing an increase of 4.6%. -- As of December 31, 2003, the Company had total liquidity of $59.2 million, including cash of $7.7 million, availability under its $50.0 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility of $41.3 million (net of outstanding letters of credit totaling $8.7 million) and availability under its $50.0 million accounts receivable securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facility of $10.2 million (net of borrowings of $31.0 million and $8.8 million currently unavailable due to borrowing base limitations). Pro Forma: -- Net sales increased $11.4 million, or 7.2%, to $170.1 million during the fourth quarter of 2003 from $158.7 million during the fourth quarter of 2002, while net sales for the year increased $16.0 million, or 2.4%, to $681.9 million during 2003 from $665.9 million during 2002. -- Gross profit totaled $50.8 million (29.8% of net sales) during the fourth quarter of 2003 compared to $50.3 million (31.7% of net sales) during the fourth quarter of 2002, while gross profit for the year totaled $215.8 million (31.6% of net sales) during 2003 compared to $211.5 million (31.8% of net sales) during 2002. -- Net loss totaled $6.1 million during the fourth quarter of 2003 compared to net income of $5.5 million during the fourth quarter of 2002, while net income for the year totaled $18.1 million during 2003 compared to $30.4 million during 2002. -- EBITDA totaled $19.0 million (11.2% of net sales) during the fourth quarter of 2003 compared to $20.2 million (12.7% of net sales) during the fourth quarter of 2002, representing a decrease of 5.9%, while EBITDA for the year totaled $88.7 million (13.0% of net sales) during 2003 compared to $88.2 million (13.2% of net sales) during 2002, representing an increase of 0.7%. -- Adjusted EBITDA totaled $20.5 million (12.0% of net sales) during the fourth quarter of 2003 compared to $20.8 million (13.1% of net sales) during the fourth quarter of 2002, representing a decrease of 1.3%, while Adjusted EBITDA for the year totaled $92.2 million (13.5% of net sales) during 2003 compared to $90.8 million (13.6% of net sales) during 2002, representing an increase of 1.6%. "While the fourth quarter financial results were not as strong as expected, we are pleased with our accomplishments during 2003, which included three quarters of strong financial performance, four acquisitions and the sale of the Company. The fourth quarter results include a significant non-cash LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack expense and additional reserves for workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. costs. Excluding these amounts, the quarter would have been consistent with prior financial performance. Overall, 2003 was a very strong year and while growth was not as high as desired, we were able to overcome the loss of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $15 million in Lowe's “Lowes” redirects here. For other uses, see Lowes (disambiguation). Lowe's Home Improvement Warehouse (NYSE: LOW) is a US-based chain of retail home improvement and appliance stores. business and still grow pro forma sales and EBITDA," stated Chairman, President and Chief Executive Officer, Jeff L. Hull Hull, city, Canada Hull, city (1991 pop. 60,707), SW Que., Canada, at the confluence of the Ottawa and Gatineau rivers, opposite Ottawa; inc. 1875. Hull has a hydroelectric power station. . "As reported in recent press releases, we completed the sale of the Company and the acquisition of Superior on December 10th and December 31st, respectively. With these transactions behind us, we can get back to running the business and pick up where we left off in 2003," added Mr. Hull. The results for the fourth quarter and year ended December 31, 2003 discussed herein are preliminary and subject to completion of the annual audit by Atrium's independent public auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together . We can provide no assurance that these results will not be subject to adjustment or reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. upon completion of the audit. Atrium will hold a conference call at 10:00 a.m. (central) on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , March 26, 2004 to discuss its fourth quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results. The call-in call-in adj. Being in a format such that listeners or viewers are invited to have their telephone conversations with the host or guests on a show broadcast to other listeners: a call-in radio show. n. number is 888-428-4471 (reference "Atrium 2003 Year-end Earnings"). A replay will be available at 3:15 p.m. (central) on March 26, 2004 and will run until 11:59 p.m. (central) on April 9, 2004. The replay call-in number is 800-475-6701, access code 722908. Atrium, based in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , is one of the largest non-wood window manufacturers in the United States, with annual pro forma net sales of approximately $700 million, over 6,000 employees and 56 manufacturing facilities and distribution centers in 22 states and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. .
Atrium Companies, Inc.
Unaudited selected historical and pro forma financial results
(dollars in millions)
Reported:
Fourth Quarter Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net sales $155.6 $130.1
Gross profit 46.8 42.9
Net income (loss) (11.5) 3.5
EBITDA 16.0 17.2
Adjusted EBITDA 17.7 18.0
Year Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net sales $597.8 $536.3
Gross profit 189.3 176.0
Net income 6.3 14.0
EBITDA 73.8 71.1
Adjusted EBITDA 78.5 75.1
Pro Forma:
Fourth Quarter Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net sales $170.1 $158.7
Gross profit 50.8 50.3
Net income (loss) (6.1) 5.5
EBITDA 19.0 20.2
Adjusted EBITDA 20.5 20.8
Year Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net sales $681.9 $665.9
Gross profit 215.8 211.5
Net income 18.1 30.4
EBITDA 88.7 88.2
Adjusted EBITDA 92.2 90.8
The reconciliation of net income (loss) (in accordance with GAAP)
to EBITDA and Adjusted EBITDA (as defined below) is summarized as
follows (dollars in millions):
Reported:
Fourth Quarter Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net income (loss) $(11.5) $3.5
Interest expense 11.2 9.0
Securitization expense 1.0 0.3
Income taxes (0.2) 0.1
Depreciation and amortization 4.9 3.9
Stock compensation expense -- 0.1
Special charges 10.6 0.3
---------------- ----------------
EBITDA 16.0 17.2
Management fees 0.4 0.5
LIFO expense (benefit) 0.8 (0.1)
Operating lease conversion 0.5 0.4
---------------- ----------------
Adjusted EBITDA $17.7 $18.0
================ ================
Year Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net income $6.3 $14.0
Interest expense 36.2 35.9
Securitization expense 1.9 1.1
Income taxes 0.4 0.6
Depreciation and amortization 17.4 14.9
Stock compensation expense 0.6 0.4
Special charges 11.0 4.2
---------------- ----------------
EBITDA 73.8 71.1
Management fees 1.7 1.9
LIFO expense 0.9 0.3
Operating lease conversion 2.1 1.8
---------------- ----------------
Adjusted EBITDA $78.5 $75.1
================ ================
Pro Forma:
Fourth Quarter Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net income (loss) $(6.1) $5.5
Interest expense 8.5 8.8
Securitization expense 0.2 0.2
Income taxes 0.5 0.5
Depreciation and amortization 5.8 5.2
Stock compensation expense -- --
Special charges 10.1 --
---------------- ----------------
EBITDA 19.0 20.2
Management fees -- --
LIFO expense (benefit) 0.8 (0.1)
Operating lease conversion 0.5 0.5
Owners' compensation 0.2 0.2
---------------- ----------------
Adjusted EBITDA $20.5 $20.8
================ ================
Year Ended December 31,
---------------------------------
2003 2002
---------------- ----------------
Net income $18.1 $30.4
Interest expense 34.6 34.5
Securitization expense 1.0 1.0
Income taxes 3.1 2.5
Depreciation and amortization 21.6 19.7
Stock compensation expense 0.3 0.1
Special charges 10.0 --
---------------- ----------------
EBITDA 88.7 88.2
Management fees -- --
LIFO expense 0.9 0.3
Operating lease conversion 2.1 1.8
Owners' compensation 0.5 0.5
---------------- ----------------
Adjusted EBITDA $92.2 $90.8
================ ================
EBITDA, for purposes of this press release, is defined as earnings before interest, securitization expense, income taxes, depreciation and amortization, stock compensation expense and special charges. Adjusted EBITDA, for purposes of this press release is defined as EBITDA plus (i) historical management fees in excess of ongoing management fees, (ii) non-cash LIFO expense, (iii) historical rent expense related to operating leases Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. which were converted to capital leases on December 31, 2003 and January 1, 2004, and (iv) compensation paid to the former Chairman of Superior, no longer employed by the Company. While we do not intend for EBITDA or Adjusted EBITDA to represent cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses as defined by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and we do not suggest that you consider it as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of operating performance or an alternative to cash flow or operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (as measured by GAAP) or as a measure of liquidity, we include it herein to provide additional information with respect to our ability to meet our future debt service, capital expenditures and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . We believe EBITDA and Adjusted EBITDA provide investors and analysts in the building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . industry the necessary information to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. and compare our historical results on a comparable basis with other companies on the basis of operating performance, leverage and liquidity. However, as EBITDA and Adjusted EBITDA are not defined by GAAP, it may not be calculated on the same basis as other similarly titled measures of other companies within the building materials industry. Statements in this press release, other than statements of historical information, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those projected or suggested herein due to certain risks and uncertainties including, without limitation, operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. . Those and other risks are described in Atrium's filings with the SEC made over the last 12 months, copies of which are available from the SEC or may be obtained upon request from the Company's Chief Financial Officer. |
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