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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): MAY 9, 2000
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ATRIUM COMPANIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 333-20095 75-2642488
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
1341 W. MOCKINGBIRD LANE
SUITE 1200W
DALLAS, TEXAS
(Address of principal 75247
executive offices) (Zip code)
Registrant's telephone number, including area code: (214) 630-5757
N/A
(former address if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
Atrium Companies, Inc. reported that its Wing interior wood door
division has been notified by The Home Depot ("THD") that the retailer plans to
shift its interior door business to two integrated full-line door manufacturers.
These manufacturers apparently have committed to make significant capital and
resource investments to serve the majority of THD's interior wood door needs.
Consequently, THD's reported strategic alliance will result in a significant
reduction in purchases of solid wood, hollow-core and bi-fold doors for stock
purposes from Atrium and several other millwork producers. The timing of the
transition will be affected by several factors, but is expected to be completed
in 2000.
Statements in this Current Report on Form 8-K, 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, the risks associated with the ability to consummate the
transactions set forth above, as well as operating risks. Those and other risks
are described in Atrium's filings with the Securities and Exchange Commission
(the "SEC") made over the last 12 months, copies of which are available from the
SEC or may be obtained upon request from Atrium.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
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*99.1 Press Release of Atrium Companies, Inc. dated May 9, 2000.
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*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATRIUM CORPORATION
By: /s/ Jeff L. Hull
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Name: Jeff L. Hull
Title: President, Chief Financial
Officer and Treasurer
Date: May 17, 2000
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
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*99.1 Press Release of Atrium Companies, Inc. dated May 9, 2000.
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*Filed herewith.
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EXHIBIT 99.1
PRESS RELEASE OF ATRIUM COMPANIES, INC. DATED MAY 9, 2000
Contact: Jeff Hull
President and
Chief Financial Officer
Atrium Companies, Inc.
(214) 630-5757
ATRIUM ANNOUNCES STRATEGIC CHANGE IN WOOD INTERIOR DOOR PRODUCT LINE
DALLAS, May 9 /PRNewswire/ -- Atrium Companies, Inc., the largest unit
volume manufacturer of vinyl and aluminum windows in the United States reported
that its Wing interior wood door division has been notified by The Home Depot
("THD") that the retailer plans to shift its interior door business to two
integrated full-line door manufacturers. These manufacturers apparently have
committed to make significant capital and resource investments to serve the
majority of THD's interior wood door needs. Consequently, THD's reported
strategic alliance will result in a significant reduction in purchases of solid
wood, hollow-core and bi-fold doors for stock purposes from Atrium and several
other millwork producers. The affected business lines represent less than 3% of
Atrium's 1999 earnings before interest, taxes, depreciation and amortization
(EBITDA), or less than $2 million.
THD has informed Atrium that Atrium will continue to serve THD's needs for
exterior patio doors and exterior entry doors, and will continue to sell certain
interior wood door products to the West Coast and Pacific Northwest regions
served by THD. Window sales by Atrium's Aluminum Window Division are unaffected
by THD's reported change in door suppliers. Atrium and THD are currently
discussing strategic alternatives regarding Atrium's door operations, including
selling certain assets and operations to third-parties and transitioning
existing committed inventories to THD. The timing of the transition will be
affected by several factors, but is expected to be completed in 2000.
Atrium will continue to focus on its window operations where it is a low
cost manufacturer, as a result of its substantial vertical integration and
economies of scale related to volume purchasing, serving a strong, diverse
customer base. Having tailored our acquisition efforts over the last four years
to augment window operations, and having benefited from internal growth in
window sales of approximately 10% per year over the last five years,
management's priority continues to be growing Atrium's higher margin core window
business. Due to the technical requirements of production, the window business
is traditionally a higher margin business than other building products of a more
commodity nature, which is further enhanced by Atrium's integrated manufacturing
processes. Atrium expects to continue to invest in the company's vinyl and
aluminum window product lines both in the repair and remodeling and new
construction segments of the market.
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Atrium's proforma net sales in 1999 were $527 million. The affected business
lines represent less than 3% of Atrium's 1999 EBITDA, or less than $2 million,
and approximately 18% of proforma net sales over the same period. Atrium's core
vinyl and aluminum window sales grew 10.2% in 1999 to approximately $358.9
million, generating EBITDA growth of approximately 11.2%, and EBITDA totaling
approximately $53.3 million, which represents a 14.9% EBITDA margin.
Frank E. Sheeder, Atrium's Chief Executive Officer stated, "While we never
want to lose sales to a large customer, the minor impact on our profitability
which those sales represent will be counterbalanced by a more focused mission as
the leader in the United States for vinyl and aluminum windows. Atrium also
expects to benefit from the proceeds of contemplated divestitures of certain
valuable assets and operations currently being utilized in its door operations."
Additionally, Jeff L. Hull, Atrium's President and Chief Financial Officer
remarked, "the advances we have made to date and plan in the future in the
window industry should continue to enhance the financial strength of Atrium as a
result of strong growth rates and profit margins."
Daniel T. Morley, President of Ardshiel, Inc., one of Atrium's primary
equity sponsors, commented, "we continue to work toward completing our
previously announced acquisition of certain assets of the window division of The
Ellison Company, and are assessing several strategic financing alternatives in
connection with that transaction." As previously disclosed, the acquisition is
subject to receipt of financing and satisfaction of certain conditions. There
can be no assurance as to when or whether the acquisition will be consummated.
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, the risks associated with the ability to consummate the
transactions set forth above, as well as operating risks. Those and other risks
are described in Atrium's filings with the Securities and Exchange Commission
(the "SEC") made over the last 12 months, copies of which are available from the
SEC or may be obtained upon request from Atrium.
