Atrium Companies, Inc. Announces Second Quarter 2001 Financial Results.

Business Editors

DALLAS--(BUSINESS WIRE)--Aug. 14, 2001

Atrium Companies, Inc. ("Atrium" or the "Company"), one of the largest non-wood window manufacturers in the United States, today announced financial results for the second quarter of 2001.

Due to the transactions that were completed in 2000, including the divestitures of the Company's wood interior door and wood patio door divisions and the acquisition of Ellison, the Company's 2000 results are not reflective of its current operations. Therefore, the financial results discussed below are presented giving pro forma effect for the transactions as if they occurred on January 1, 2000. Selected financial results are set forth in the table at the end of this press release and the Company's definitive results have been included in Atrium's quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission (the "SEC") later today.

Pro forma financial highlights for the second quarters and year to date periods ended June 30, 2001 and 2000 included:

- Net sales increased $12.7 million from $131.1 million during the second
quarter of 2000 to $143.8 million during the second quarter of 2001, or 9.7%,
while year to date net sales increased $15.3 million from $240.8 million during
2000 to $256.1 million during 2001, or 6.4%.

- Gross profit totaled $46.1 million (32.0% of net sales) during the second
quarter of 2001 compared to $46.2 million (35.3% of net sales) during the
second quarter of 2000, while year to date gross profit totaled $82.3 million
(32.1% of net sales) during 2001 compared to $82.6 million (34.3% of net sales)
during 2000.

- EBITDA totaled $19.0 million (13.2% of net sales) during the second quarter
of 2001 versus $21.9 million (16.7% of net sales) during the second quarter of
2000, while EBITDA for the year to date period totaled $31.3 million (12.2% of
net sales) in 2001 versus $33.6 million (14.0% of net sales) in 2000.

- Cost savings initiatives helped delivery expenses to remain flat at 6.0% of
net sales during the 2001 year to date period, even with the significant
increases in fuel costs. The Company was also able to reduce general and
administrative expenses in the 2001 year to date period from 8.3% of net sales
in 2000 to 7.4% of net sales in 2001. The general and administrative expense
reduction continues to demonstrate the Company's ability to leverage its
overhead through acquisitions and organic growth.

- Because of the Company's efforts to closely manage working capital,
inventories remained relatively flat at $46.2 million as of June 30, 2001, up
only $.2 million from the December 31, 2000 balance of $46.0 million and down
$5.7 million from a pro forma inventory balance of $51.9 million as of June 30,
2000. Additionally, accounts receivable has increased due to the growth in
sales, however, the Company has continued to focus on improving its collection
efforts and has improved its days sales outstanding ratio (DSO) from 41 days as
of June 30, 2000 to 38 days as of June 30, 2001.

"We are very pleased that the Company was able to pick up where it left off in the first quarter and grow sales 9.7% during the second quarter, increasing its year to date growth in sales over the prior year to 6.4%, however, the operational initiatives that we undertook during the second quarter of 2001 prevented us from growing EBITDA at the same rate. The Company completed several plant moves during the second quarter, including the move into the Company's newly completed 215,000 square foot extrusion facility in Wylie, Texas. In addition to the actual costs of moving these facilities, the Company's financial results included costs associated with production inefficiencies as well as increased overhead from the newly leased facilities. The moving costs associated with these moves were approximately $1.1 million and the additional overhead expense associated with operating leases totaled approximately $1.2 million year-to-date. While these costs certainly impacted our second quarter results, we feel these moves were necessary in terms of completing our consolidation strategy and in increasing current production capacity. We believe that the future benefits associated with these moves will more than offset the additional costs and we should begin to see benefits in the second half of the year," stated President and Chief Executive Officer Jeff L. Hull. "Additionally, the second quarter and year to date period ended June 30, 2000 included non-recurring gains associated with sales of assets of approximately $.5 million and $.8 million, respectively," added Mr. Hull.

Mr. Hull added, "On other fronts, besides managing operating expenses and working capital very closely, we are very encouraged by the progress that was made in the second quarter in terms of providing the Company with ample liquidity and the flexibility to support our continued growth." On May 15, 2001, the Company amended its credit facility to allow for certain changes to its financial covenants, as well as permit the Company to enter into certain transactions, including an accounts receivable securitization facility. On July 31, 2001 the Company completed a transaction with Fairway Finance Corp., agented by BMO Nesbitt Burns, which allows the Company to sell a pro rata share of its trade accounts receivable portfolio for aggregate payments of up to $50.0 million. On August 3, 2001, the Company sold a pro rata share of its receivable portfolio for $33.0 million and received approximately $32.2 million after deducting transaction expenses of approximately $.8 million. The Company plans to include details of this transaction in its report on Form 8-K to be filed with the SEC later today.

On May 24, 2001, the Company entered into a new three year agreement with the Amalgamated Clothing and Textile Workers. "We couldn't be happier with this new contract. Our workers are very important to the future success of Atrium. We believe this agreement demonstrates the commitment of both management and the front line employees in meeting our goals for the next three years", stated Mr. Hull.

The results for the second quarter and year to date period ended June 30, 2001 discussed herein are preliminary and subject to completion of the annual audit by Atrium's independent public accountants. We can provide no assurance that these results will not be subject to adjustment or reclassification upon completion of the audit.

Atrium, will hold a conference call at 10:00 a.m. (central) on Thursday, August 16, 2001 to discuss its second quarter and year to date results. The call-in number is [phone] (reference "Atrium Second Quarter Results"). A replay will be available at 4:30p.m. on August 16, 2001 and will run until 12:00 p.m. on August 23, 2001. The replay call-in number is [phone], access code 599517.

Atrium, based in Dallas, Texas, is one of the largest non-wood window manufacturers in the United States, with over $500 million in annual net sales, over 5,000 employees and 14 manufacturing plants in 11 states.

                        Atrium Companies, Inc.
     Unaudited selected historical and pro forma financial results
                        (dollars in thousands)

                             Second Quarter Ended June 30,
                          2001                          2000
                          ----                          ----
               As reported    Pro forma      As reported   Pro forma
               -----------    ---------      -----------   ---------
Net sales        143,810        143,810       136,291       131,051
Gross profit      46,084         46,084        32,819        46,231
EBITDA            19,023         19,023         2,334        21,873

                          Year to Date Period Ended June 30,
                          2001                          2000
                          ----                          ----
               As reported    Pro forma      As reported   Pro forma
               -----------    ---------      -----------   ---------
Net sales        256,112        256,112       270,074       240,797
Gross profit      82,312         82,312        69,897        82,554
EBITDA            31,267         31,267        10,142        33,564

Statements in this press release, other than statements of historical information, are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act 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. 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.