SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 333-33572
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DIAMOND TRIUMPH AUTO GLASS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2758853
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 DIVISION STREET, KINGSTON, PENNSYLVANIA 18704
(Address, including zip code of principal executive offices)
(570) 287-9915
(Telephone number, including area code)
Indicate by check mark whether the registrant (1) has
filed all reports to be filed by Section 13 or Section 15(d) of
the Securities and Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of November 10, 2000, there were 1,000,000 shares
outstanding of Diamond's Common Stock ($.01 par value) and 35,000
shares outstanding of Diamond's Series A 12% Senior Redeemable
Cumulative Preferred Stock ($.01 par value).
<PAGE>
DIAMOND TRIUMPH AUTO GLASS, INC.
Form 10-Q
For the Quarter Ended September 30, 2000
INDEX
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Condensed Balance Sheets -
September 30, 2000 and December 31, 1999....... 3
Condensed Statements of Operations -
Three Months Ended
September 30, 2000 and 1999.................... 4
Condensed Statements of Operations -
Nine Months Ended
September 30, 2000 and 1999.................... 5
Condensed Statements of Cash Flows -
Nine Months Ended
September 30, 2000 and 1999.................... 6
Notes to Condensed Financial Statements............ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K...................13
Signature..........................................14
2
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<TABLE>
<CAPTION>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DIAMOND TRIUMPH AUTO GLASS, INC.
CONDENSED BALANCE SHEETS
(Dollars in Thousands)
September 30, 2000 December 31, 1999
------------------ -----------------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $35 $94
Accounts receivable, net 16,044 10,895
Other receivables 321 189
Inventories 12,519 12,620
Prepaid expenses 1,204 962
Deferred income taxes 3,081 3,081
--------- --------
Total current assets 33,204 27,841
--------- --------
Equipment and leasehold improvements, net 6,256 7,693
Deferred loan costs and senior notes discount, net 6,308 7,502
Deferred income taxes 41,554 44,082
Other assets 395 401
--------- --------
Total assets $87,717 $87,519
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $8,748 $7,950
Accrued expenses:
Payroll and related items 3,795 3,314
Accrued interest 4,630 2,363
Accrued income taxes 1,208 1,216
Other 554 362
--------- --------
Total accrued expenses 10,187 7,255
--------- --------
Total current liabilities 18,935 15,205
--------- --------
Long-term debt:
Credit facility - 7,500
Senior notes 100,000 100,000
--------- --------
Total long-term debt 100,000 107,500
--------- --------
Total liabilities 118,935 122,705
--------- --------
Series A 12% senior redeemable cumulative
preferred stock - par value $0.01 per share;
authorized 100,000 shares; issued and outstanding
35,000 shares in 2000 and 1999, at liqudation
preference value 47,037 43,046
--------- --------
Stockholders' equity (deficit):
Common stock, 2000 and 1999 par value $0.01 per share;
authorized 1,100,000 shares; issued and outstanding
1,000,000 shares 10 10
Additional paid-in capital 48,756 52,747
Retained earnings (accumulated deficit) (127,021) (130,989)
--------- --------
Total stockholders' equity (deficit) (78,255) (78,232)
--------- --------
Total liabilities and stockholders' equity (deficit) $87,717 $87,519
========= ========
</TABLE>
See notes to condensed financial statements
3
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DIAMOND TRIUMPH AUTO GLASS, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
Three Months Three Months
Ended Ended
September 30, 2000 September 30, 1999
------------------ ------------------
Net sales $48,628 $43,848
Cost of sales 14,806 13,638
--------- --------
Gross profit 33,822 30,210
Operating expenses 29,086 26,730
--------- --------
Income from operations 4,736 3,480
Other (income) expense:
Interest income (8) (16)
Interest expense 2,577 2,766
--------- --------
2,569 2,750
--------- --------
Income before provision for income taxes 2,167 730
Provision for income taxes 862 292
--------- --------
Net income 1,305 438
Preferred stock dividends 1,370 1,217
--------- --------
Net (loss) applicable to common stockholders ($65) ($779)
========= ========
See notes to condensed financial statements
4
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DIAMOND TRIUMPH AUTO GLASS, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
Nine Months Nine Months
Ended Ended
September 30, 2000 September 30, 1999
------------------ ------------------
Net sales 142,446 $128,621
Cost of sales 44,077 39,708
-------- --------
Gross profit 98,369 88,913
Operating expenses 82,924 75,889
-------- --------
Income from operations 15,445 13,024
Other (income) expense:
Interest income (52) (28)
Interest expense 8,060 8,284
-------- --------
8,008 8,256
-------- --------
Income before provision for income taxes
and extraordinary loss on
extinguishment of debt 7,437 4,768
Provision for income taxes 2,965 1,907
-------- --------
Net income before extraordinary item 4,472 2,861
Extraordinary loss on extinguishment
of debt, net of income taxes of $336 504 -
-------- --------
Net income 3,968 2,861
Preferred stock dividends 3,991 3,546
-------- --------
Net (loss) applicable to common stockholders ($23) ($685)
======== ========
See notes to condensed financial statements
5
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DIAMOND TRIUMPH AUTO GLASS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
Nine Months Nine Months
Ended Ended
September 30, 2000 September 30, 1999
------------------ ------------------
OPERATING ACTIVITIES
Net cash provided by operating activities $8,399 $6,227
-------- ---------
INVESTING ACTIVITIES
Capital expenditures (667) (1,868)
Proceeds from sale of equipment 34 74
Decrease (increase) in other assets 5 (34)
-------- ---------
Net cash (used in) investing activities (628) (1,828)
-------- ---------
FINANCING ACTIVITIES
Net proceeds from bank facility 9,500 16,000
Payments on bank facility (17,000) (20,500)
Deferred loan cost (330) (32)
-------- ---------
Net cash (used in) financing activities (7,830) (4,532)
-------- ---------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (59) (133)
Cash and cash equivalents, beginning of period 94 301
-------- ---------
Cash and cash equivalents, end of period $35 $168
======== =========
See notes to condensed financial statements
6
<PAGE>
DIAMOND TRIUMPH AUTO GLASS, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Significant Accounting Policies
These interim financial statements are unaudited but, in the opinion
of management, reflect all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the data for
these periods. The interim financial statements should be read in
conjunction with the audited financial statements and notes thereto
contained in Diamond's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999. Diamond's results for interim periods
are not normally indicative of results to be expected for the fiscal
year. Diamond's business is somewhat seasonal, with the first and
fourth calendar quarters of each year traditionally being its
slowest periods of activity. This reduced level of sales has
historically resulted in less operating income during the first and
fourth calendar quarters of each year. The severity of weather also
has an impact on Diamond's sales and operating income, with severe
winter weather generating increased sales and income and mild
winters generating lower sales and income.
Deferred Loan Costs - In March 2000, unamortized deferred loan costs
of $504,000 (net of income taxes of $336,000) related to the old
revolving credit facility were recorded as an extraordinary loss on
the extinguishment of outstanding debt under the old credit
facility, which was repaid with borrowings under the new credit
facility.
Preferred Stock - At September 30, 2000 and December 31, 1999, the
liquidation value of the Preferred Stock recorded on Diamond's
Balance Sheet was $47,037,000 and $43,046,000, respectively, which
includes dividends of $12,037,000 and $8,046,000, respectively,
added to the liquidation value.
Long-Term Debt:
Credit Facility - On March 27, 2000, Diamond entered into a new
credit facility. The new credit facility has an initial term of four
years and provides for revolving advances of up to the lesser of:
(1) $25,000,000; (2) the sum of 85% of Diamond's Eligible Accounts
Receivable (as defined in the new credit facility) plus 85% of
Diamond's Eligible Inventory (as defined in the new credit
facility), less certain reserves; or (3) an amount equal to 1.5
times Diamond's EBITDA (as defined in the new credit facility) for
the prior twelve months. A portion of the new credit facility, not
to exceed $3,000,000 is available for the issuance of letters of
credit. Borrowings under the new credit facility bear interest, at
Diamond's discretion, at either the Chase Manhattan Bank Rate (as
defined in the new credit facility) or LIBOR, plus a margin of 0.50%
for the Chase Manhattan Rate and 2.25% for the LIBOR Rate. In
addition, a commitment fee of 0.25% is charged against any unused
balance of the new credit facility. Interest rates are subject to
increases or reductions based upon Diamond meeting certain EBITDA
levels. The proceeds of the new credit facility are available for
working capital requirements and for general corporate purposes. The
new credit facility is secured by first priority security interests
in all of Diamond's tangible and intangible assets. In addition, the
new credit facility contains certain restrictive covenants
including, among other things, the maintenance of a minimum EBITDA
level for the prior twelve months, as well as restrictions on
additional indebtedness, dividends and certain other significant
transactions. At September 30, 2000, Diamond had no outstanding
borrowings under the credit facility with $21.7 million in
availability. Diamond's rolling 12-month EBITDA for the period ended
September 30, 2000 was $16.4 million. Subsequent to September 30,
2000, Diamond has borrowed $2.3 million on the credit facility.
Senior Notes - On April 27, 2000, Diamond commenced an offer to
exchange up to $100,000,000 in aggregate principal amount of its new
9 1/4% Senior Notes due 2008 (the "New Notes") for any and all of
its outstanding 9 1/4% Senior Notes due 2008 (the "Old Notes"). The
terms of the New Notes are substantially identical to the terms of
the Old Notes, except for certain transfer restrictions and
registration rights relating to the Old Notes. The exchange offer
relating to the New Notes was registered under the Securities Act of
1933, as amended, pursuant to a registration statement that was
declared effective by the Securities and
7
<PAGE>
Exchange Commission on April 27, 2000. In June 2000, the
exchange offer was consummated with 100% of the
outstanding Old Notes being exchanged for the New Notes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table summarizes Diamond's historical results of
operations and historical results of operations as a percentage of
sales for the nine and three months ended September 30, 2000 and
1999.
<TABLE>
<CAPTION>
Nine Months Ended September 30, Three Months Ended September 30,
------------------------------- --------------------------------
2000 1999 2000 1999
-------------- ------------- ------------ ------------
$ % $ % $ % $ %
----- ----- ----- ----- ----- ----- ----- -----
(dollars in millions) (dollars in millions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales ................................................ 142.4 100.0 128.6 100.0 48.6 100.0 43.8 100.0
Cost of Sales ............................................ 44.1 31.0 39.7 30.9 14.8 30.5 13.6 31.1
----- ----- ----- ----- ----- ----- ----- -----
Gross Profit ............................................. 98.3 69.0 88.9 69.1 33.8 69.5 30.2 68.9
Operating Expenses ....................................... 82.9 58.2 75.9 59.0 29.1 59.9 26.7 61.0
----- ----- ----- ----- ----- ----- ----- -----
Income From Operations ................................... 15.4 10.8 13.0 10.1 4.7 9.7 3.5 8.0
Interest Income .......................................... (0.1) (0.1) -- -- -- -- -- --
Interest Expense ......................................... 8.1 5.7 8.3 6.5 2.6 5.3 2.8 6.4
----- ----- ----- ----- ----- ----- ----- -----
8.0 5.6 8.3 6.5 2.6 5.3 2.8 6.4
----- ----- ----- ----- ----- ----- ----- -----
Income before provision for income taxes and extraordinary
loss on etinguishment of debt ........................ 7.4 5.2 4.7 3.7 2.1 4.3 0.7 1.6
Provision for income taxes ............................... 2.9 2.0 1.8 1.4 0.8 1.6 0.3 0.7
----- ----- ----- ----- ----- ----- ----- -----
Net income before extraordinary item ..................... 4.5 3.2 2.9 2.3 1.3 2.7 0.4 0.9
Extraordinary loss on extinguishment of debt, net of taxes 0.5 0.4 -- -- -- -- -- --
----- ----- ----- ----- ----- ----- ----- -----
Net income ............................................... 4.0 2.8 2.9 2.3 1.3 2.7 0.4 0.9
===== ===== ===== ===== ===== ===== ===== =====
EBITDA (1) ............................................... 17.6 12.4 14.9 11.6 5.4 11.1 4.2 9.6
</TABLE>
-------------
(1) EBITDA represents income before taxes, interest
expense, depreciation and amortization expense. While
EBITDA is not intended to represent cash flow from
operations as defined by GAAP and should not be
considered as an indicator of operating performance or
an alternative to cash flow (as measured by GAAP) as a
measure of liquidity, it is included herein to provide
additional information with respect to Diamond's ability
to meet its future debt service, capital expenditure and
working capital requirements.
Nine Months Ended September 30, 2000 Compared to Nine Months
Ended September 30, 1999
Net Sales. Net sales for the nine months ended September
30, 2000 increased by $13.8 million, or 10.7%, to $142.4 million
from $128.6 million for the nine months ended September 30, 1999.
Replacement unit volume increased 1.3% during the nine months ended
September 30, 2000 compared to the nine months ended September 30,
1999. Diamond experienced an increase in its average revenue per
replacement unit of 8.9% for the nine months ended September 30,
2000 compared to the nine months ended September 30, 1999. The
increase in Diamond's average revenue per replacement unit was
primarily attributable to an increase in demand related to inclement
weather conditions experienced throughout a large portion of
Diamond's network in the first quarter of 2000 and an increased
percentage of higher revenue-generating replacement units. In
addition, during the nine months ended September 30, 2000, there was
a net opening of three new service centers.
8
<PAGE>
Gross Profit. Gross profit for the nine months ended
September 30, 2000 increased by $9.4 million, or 10.6%, to $98.3
million from $88.9 million for the nine months ended September 30,
1999. The increase in gross profit for the nine months ended
September 30, 2000 was due to an increase in net sales and average
revenue per replacement unit as discussed above. Gross profit as a
percentage of net sales for the nine months ended September 30, 2000
decreased slightly to 69.0% from 69.1% for the nine months ended
September 30, 1999. The decrease in gross profit percentage for the
nine months ended September 30, 2000 was due to an increase in
product costs compared to the nine months ended September 30, 1999,
which was offset by an increase in average revenue per replacement
unit.
Operating Expenses. Operating expenses for the nine
months ended September 30, 2000 increased by $7.0 million, or 9.2%,
to $82.9 million from $75.9 million for the nine months ended
September 30, 1999. The operating expense increase was due to the
expansion of capacity within Diamond's existing service center
network, an increase in wage expense caused by certain wage rate
pressures, primarily at the service center level, and to an increase
in vehicle related expenses, particularly increased fuel costs due
to rising gas prices. Operating expenses as a percentage of sales
decreased to 58.2% for the nine months ended September 30, 2000 from
59.0% for the nine months ended September 30, 1999. The decrease in
operating expenses as a percentage of sales is primarily
attributable to an increase in net sales and certain efficiencies
achieved within the service center and back office operations.
Depreciation and amortization expense for the period
ending September 30, 2000 increased by $0.2 million, or 10.5%, to
$2.1 million from $1.9 million for the same period in 1999. This
increase is attributable to an increase in amortization expense
related to the implementation of certain sales, billing and
financial systems software.
Income From Operations. Income from operations was $15.4
million for the nine months ended September 30, 2000 versus $13.0
million for the same period ending September 30, 1999. Income from
operations as a percentage of sales increased to 10.8% for the nine
months ended September 30, 2000 from 10.1% for the nine months ended
September 30, 1999. The increases were attributable to the increase
in net sales and gross profit and a decrease in operating expenses
as a percentage of sales due to the factors discussed above.
Interest Expense. Interest expense for the nine months
ended September 30, 2000 decreased $0.2 million to $8.1 million from
$8.3 million for the nine months ended September 30, 1999. Cash
interest expense was $7.4 million for the nine months ended
September 30, 2000 compared to $7.6 million for the nine months
ended September 30, 1999.
Net Income Before Extraordinary Item. Net income before
the extraordinary item for the nine months ended September 30, 2000
increased by $1.6 million, or 55.2%, to $4.5 million from $2.9
million for the nine months ended September 30, 1999. This increase
was due to the $2.4 million increase in income from operations as
discussed above.
Net Income. Net income for the nine months ended
September 30, 2000 increased by $1.1 million, or 37.9%, to $4.0
million from $2.9 million for the nine months ended September 30,
1999. Net income as a percentage of sales increased to 2.8% for the
nine months ended September 30, 2000 from 2.3% for the nine months
ended September 30, 1999. The increase in net income and net income
margin during the nine months ended September 30, 2000 compared to
the nine months ended September 30, 1999 was primarily due to the
increase in net income before the extraordinary item as discussed
above. This increase was offset by a $0.5 million extraordinary
loss, net of taxes, related to the extinguishment of debt under the
old credit facility, which was repaid with borrowings under the new
credit facility.
EBITDA. EBITDA was $17.6 million for the nine months
ended September 30, 2000, representing an increase of $2.7 million,
or 18.1%, as compared to $14.9 million for the nine months ended
September 30, 1999. EBITDA as a percentage of sales increased to
12.4% for the nine months ended September 30, 2000 from 11.6% for
the nine months ended September 30, 1999. The increase in EBITDA and
EBITDA margin for the nine months ended September 30, 2000 was
primarily due to the increase in
9
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sales compared to the nine months ended September 30, 1999, and a
decrease in operating expenses as a percentage of sales as discussed
above.
Three Months Ended September 30, 2000 Compared to Three Months Ended
September 30, 1999
Net Sales. Net sales for the three months ended
September 30, 2000 increased by $4.8 million, or 11.0%, to $48.6
million from $43.8 million for the three months ended September 30,
1999. Replacement unit volume decreased 2.7% during the three months
ended September 30, 2000 compared to the three months ended
September 30, 1999. Diamond experienced an increase in its average
revenue per replacement unit for the three months ended September
30, 2000 compared to the three months ended September 30, 1999. The
increase in Diamond's average revenue per replacement unit was
primarily attributable to an increased percentage of higher
revenue-generating replacement units.
Gross Profit. Gross profit for the three months ended
September 30, 2000 increased by $3.6 million, or 11.9%, to $33.8
million from $30.2 million for the three months ended September 30,
1999. The increase in gross profit for the three months ended
September 30, 2000 was due to an increase in net sales and average
revenue per replacement unit as discussed above. Gross profit as a
percentage of net sales for the three months ended September 30,
2000 increased to 69.5% from 68.9% for the three months ended
September 30, 1999. The increase in gross profit percentage for the
three months ended September 30, 2000 was due to an increase in
average revenue per replacement unit compared to the three months
ended September 30, 1999.
Operating Expenses. Operating expenses for the three
months ended September 30, 2000 increased by $2.4 million, or 9.0%,
to $29.1 million from $26.7 million for the three months ended
September 30, 1999. A material portion of the operating expense
increase was due to higher wage expense caused by certain wage rate
pressures, primarily at the service center level, and to an increase
in vehicle related expenses, particularly increased fuel costs due
to rising gas prices. Operating expenses as a percentage of sales
decreased to 59.9% for the three months ended September 30, 2000
from 61.0% for the three months ended September 30, 1999. The
decrease in operating expenses as a percentage of sales is primarily
attributable to an increase in net sales and certain efficiencies
achieved within the service center and back office operations.
Depreciation and amortization expense for the period
ending September 30, 2000 remained constant at $0.7 million in
comparison to the same period in 1999. This expense was primarily
related to costs incurred for the implementation of certain sales,
billing and financial systems software.
Income From Operations. Income from operations increased
by $1.2 million, or 34.3%, to $4.7 million from $3.5 million for the
three months ended September 30, 1999. Income from operations as a
percentage of sales increased to 9.7% for the three months ended
September 30, 2000 from 8.0% for the three months ended September
30, 1999. These increases were attributable to the increase in net
sales and gross profit and decrease in operating expenses as a
percentage of sales due to the factors discussed above.
Interest Expense. Interest expense for the three months
ended September 30, 2000 decreased $0.2 million to $2.6 million from
$2.8 million for the three months ended September 30, 1999. Cash
interest expense was $2.3 million for the three months ended
September 30, 2000 compared to $2.5 million for the three months
ended September 30, 1999.
Net Income. Net income for the three months ended
September 30, 2000 increased by $0.9 million, or 225.0%, to $1.3
million from $0.4 million for the three months ended September 30,
1999. Net income as a percentage of sales increased to 2.7% for the
three months ended September 30, 2000 from 0.9% for the three months
ended September 30, 1999. The increase in net income and net income
margin during the three months ended September 30, 2000 compared to
the three months ended September 30,
10
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1999 was primarily due to the higher income from operations and
lower interest expense as discussed above.
EBITDA. EBITDA was $5.4 million for the three months
ended September 30, 2000, representing an increase of $1.2 million,
or 28.6%, as compared to $4.2 million for the three months ended
September 30, 1999. EBITDA as a percentage of sales increased to
11.1% for the three months ended September 30, 2000 from 9.6% for
the three months ended September 30, 1999. The increase in EBITDA
and EBITDA margin for the three months ended September 30, 2000 was
primarily due to the increase in net sales compared to the three
months ended September 30, 1999 and a decrease in operating expenses
as a percentage of sales as discussed above.
Liquidity and Capital Resources
Diamond's need for liquidity will arise primarily from
the interest payable on the senior notes, the new credit facility
and the funding of Diamond's capital expenditures and working
capital requirements. There are no mandatory principal payments on
the senior notes prior to their maturity on April 1, 2008 and,
except to the extent that the amount outstanding under the new
credit facility exceeds the borrowing base thereunder, no required
payments of principal on the new credit facility prior to its
expiration on March 27, 2004.
Net Cash Provided by Operating Activities. Net cash
provided by operating activities for the nine months ended September
30, 2000 increased by $2.2 million to $8.4 million from $6.2 million
for the nine months ended September 30, 1999. The increase was
primarily attributable to lower working capital requirements in the
nine months ended September 30, 2000 compared to the nine months
ended September 30, 1999. In particular, there was a decrease in
inventory for the nine months ended September 30, 2000 of $0.1
million compared to a $2.0 million inventory increase for the nine
months ended September 30, 1999. In addition, deferred income taxes
decreased by $2.5 million over the nine months ended September 30,
2000. This was coupled with an increase in accounts receivable of
$5.7 million for the nine months ended September 30, 2000 compared
to a $3.0 million increase for the nine months ended September 30,
1999.
Net Cash Used in Investing Activities. Net cash used in
investing activities for the nine months ended September 30, 2000
was $0.6 million compared to $1.8 million in the nine months ended
September 30, 1999. The primary reason for the variance was a
decrease in capital expenditures. Diamond is currently
evaluating software to upgrade and replace certain of its
application software including, but not limited to, its purchasing,
inventory and distribution systems.
Net Cash Used in Financing Activities. Net cash used by
financing activities in the nine months ended September 30, 2000 was
$7.8 million compared to $4.5 million in the nine months ended
September 30, 1999. During the nine months ended September 30, 2000,
Diamond repaid $7.5 million, net of outstanding borrowings, under
its credit facility and paid $0.3 million in loan costs.
Capital Expenditures. Capital expenditures for the nine
months ended September 30, 2000 were $0.7 million, as compared to
$1.9 million for the nine months ended September 30, 1999. Capital
expenditures for the nine months ended September 30, 2000 were made
primarily to fund the continued upgrade of Diamond's management
information systems. Diamond is currently evaluating software to
upgrade and replace certain of its application software including,
but not limited to, its purchasing, inventory and distribution
systems.
Liquidity. Management believes that Diamond will have
adequate capital resources and liquidity to satisfy its debt service
obligations, working capital needs and capital expenditure
requirements, including those related to the opening of new service
centers for the foreseeable future. Diamond's capital resources and
liquidity are expected to be provided by Diamond's net cash provided
by operating activities and borrowings under the credit facility.
11
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Forward-Looking Statements
Readers are cautioned that there are statements
contained in this report which are "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Act"). Forward-looking statements include statements
which are predictive in nature, which depend upon or refer to future
events or conditions, which include words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates," or
similar expressions. In addition, any statements concerning future
financial performance (including future revenues, earnings or growth
rates), ongoing business strategies or prospects, and possible
future actions, which may be provided by management, are also
forward-looking statements as defined by the Act. Forward-looking
statements are based on current expectations and projections about
future events and are subject to risks, uncertainties, and
assumptions about Diamond, economic and market factors and the
industries in which Diamond does business, among other things. These
statements are not guarantees of future performance and Diamond has
no specific intention to update these statements.
These forward-looking statements, like any
forward-looking statements, involve risks and uncertainties that
could cause actual results to differ materially from those projected
or anticipated. The risks and uncertainties include the effect of
overall economic and business conditions, the demand for Diamond's
products and services, regulatory uncertainties, the impact of
competitive products and pricing, changes in customers' ordering
patterns and potential system interruptions. This list should not be
construed as exhaustive. Our prospectus dated April 27, 2000
relating to our exchange offer details some of the important risk
factors.
12
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed
during the quarter ended September 30, 2000.
13
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SIGNATURE
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.
DIAMOND TRIUMPH AUTO GLASS, INC.
Date: November 10, 2000 By: /s/ Michael A. Sumsky
--------------------------------
Name: Michael A. Sumsky
Title: Executive Vice President
Chief Financial Officer
and General Counsel
(Principal Financial and
Chief Accounting Officer)
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