United States
Securities and Exchange Commission
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 5, 1999
Diamond Home Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-20829 36-3886872
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
222 Church Street
Woodstock, IL 60098
(Address of principal executive offices)
Registrant's telephone number, including area code (815) 334-1414
None
(Former name or address, if changed since last report)
ITEM 5. OTHER EVENTS.
Please refer to the matters reflected below in Item 7(c)(99).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits (numbered pursuant to Item 601 of Registration S-K)
(99) Press release dated October 5, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Diamond Home Services, Inc.
(Registrant)
/s/ C. Stephen Clegg
C. Stephen Clegg
Chairman and Chief Executive Officer
(For the Registrant)
Date: October 8, 1999
DIAMOND HOME SERVICES ANNOUNCES EXTENSION
OF FORBEARANCE AGREEMENT WITH LENDERS
Woodstock, IL -- (October 5, 1999) -- Diamond Home Services, Inc. (NASDAQ: DHMS)
announced today that it has extended through October 18, 1999 its forbearance
agreement with its lenders, which was scheduled to expire September 29, 1999.
In connection with this extension, the Company did not make the $1.1 million
principal payment to its lenders due September 30, 1999 on the Company's $18
million term notes due 2003. Under the terms of the extension, the bank group
will forbear from exercising any remedies with respect to this payment default.
The extension allows the Company to complete its fourth quarter 1999 and year
2000 revised operating plans before negotiating amended terms with its bank
group and other significant creditors.
The Company also suspended indefinitely payments on certain other non-operating
obligations, including a $3.4 million note given to former shareholders of
Reeves Southeastern Corporation in connection with the Company's acquisition of
Reeves.
In addition, the Company announced today that, as expected, its third quarter
1999 revenues will be below comparative year ago revenues and that it
anticipates operating losses for the third quarter and forth quarters 1999. The
reduced revenues and anticipated operating losses are primarily attributable to
the Company's installed home improvement businesses.
Diamond Home Services, Inc. is a leading national marketer and contractor of
installed home improvement products, including roofing systems, gutters, doors,
and fencing. The Company, through its subsidiary, Reeves Southeastern
Corporation, is one of the largest manufacturers and distributors of fencing and
perimeter security products to the industrial and residential markets in the
U.S. Reeves Southeastern operates 32 distribution centers primarily in the
eastern half of the U.S. In addition, Reeves Southeastern furnishes and installs
private-label fencing home improvement products. Through its subsidiary Diamond
Exteriors, Inc.(R) the Company markets installed home improvement products and
services directly to consumers, primarily under the "SEARS" name. Through its
finance subsidiary Marquise Financial Services, Inc. the Company also offers
financing to its customers. The Company has home consultants located in major
cities across the U.S., providing the Company with a presence in markets
covering approximately 80% of the owner-occupied households in the U.S.
Certain statements contained herein, including without limitation, statements
addressing the beliefs, plans, objectives estimates or expectations of the
Company or future results or events constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, as
amended. Such forward-looking statements involve known or unknown risks,
including, but not limited to, general economic and business conditions, matters
related to the licensing agreement between Diamond Exteriors, Inc. and Sears,
Roebuck and Co., warranty exposure, the Company's reliance on home consultants
and on the availability of qualified independent installers, lead activity and
costs related thereto, the outcome of discussions with its creditors and other
constituencies, and conditions in the installed home improvement industry. There
can be no assurance that the actual future results, performance, or achievements
expressed or implied by such forward-looking statements will occur. Users of
forward-looking statements are encouraged to review Item 7 of the Company's most
recent annual report on Form 10-K, its filings on Form 10-Q, management's
discussion and analysis in the Company's most recent annual report to
stockholders, the Company's filings on Form 8-K, and other federal securities
law filings for a description of other important factors that may affect the
Company's business, results of operations and financial condition.
