As Filed Pursuant to Rule 424(b)(3)
Registration No. 333-33572
Prospectus Supplement No. 2 Dated May 25, 2000
to Prospectus Dated April 27, 2000,
as supplemented by the
Prospectus Supplement Dated May 15, 2000
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DIAMOND TRIUMPH AUTO GLASS, INC.
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Offer to Exchange
up to $100,000,000 9 1/4% Senior Notes due 2008
for any and all outstanding 9 1/4% Senior Notes due 2008
This Prospectus Supplement No. 2 (the "Second Supplement") supplements,
and should be read in conjunction with, the Prospectus dated April 27, 2000 (the
"Prospectus"), and the Prospectus Supplement dated May 15, 2000 (the "First
Supplement"), issued by Diamond Triumph Auto Glass, Inc. ("Diamond") in
connection with its offer to exchange up to $100,000,000 in aggregate principal
amount of new 9 1/4% Senior Notes due 2008 for any and all of its outstanding 9
1/4% Senior Notes due 2008 (the "Old Notes").
On May 22, 2000, Standard & Poor's Corp. announced that it lowered the
rating of the Old Notes to single - `B' from single - `B' - plus. A copy of the
press release issued by Standard & Poor's Corp. is attached to this Second
Supplement as Exhibit A. Any information in the Prospectus or the First
Supplement that is inconsistent with the information set forth in this Second
Supplement is superseded by this Second Supplement.
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The date of this Second Supplement is May 25, 2000
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EXHIBIT A
Diamond Triumph Auto Glass
Ratings Lowered and Removed From CreditWatch
Lisa Jenkins, New York (1) 212-438-7697
NEW YORK (Standard & Poor's CreditWire) May 22, 2000 - Standard & Poor's today
lowered its corporate credit and senior unsecured debt ratings for Diamond
Triumph Auto Glass Inc. to single - `B' from single - `B' - plus. The ratings
are removed from CreditWatch, where they were placed with negative implications
on Nov. 30, 1999.
The current rating outlook is negative.
The rating actions reflect Diamond's weaker-than-expected financial
performance over the past year and Standard & Poor's expectation that debt
protection measures will remain below previously expected levels over the
near-to-intermediate term.
Diamond is one of the larger players in the highly fragmented North
American automotive glass replacement and repair market. The automotive glass
replacement industry is highly competitive. During the latter half of 1999, weak
demand caused competitive pressures in the industry to intensify. This led to a
dramatic decline in operating results for the year. Pre-depreciation operating
margins (adjusted for operating leases) fell from 16.8% in 1998 to 11.7% and, on
a net income basis, Diamond operated at a near break-even level.
The decline in operating results is of particular concern given Diamond's
high leverage. The company's aggressive capital structure reflects the
recapitalization that Diamond completed in 1998. Adjusted debt to EBITDA, which
had been expected to decline to the 4 times (x) area, has increased instead, and
is presently about 6x. Adjusted funds from operations to debt is about 8%,
compared with 13% in 1998. Although Diamond scaled back its growth initiatives
as a result of its recent industry pressures, no significant reduction in debt
leverage is expected over the next year or two due to continuing competitive
pressures. Industry demand has increased somewhat in recent months. However,
pricing pressures remain intense, and margins are expected to remain well below
the level generated in 1998. While Diamond faces no significant near-term debt
maturities, it does face a significant interest burden. Adjusted EBITDA interest
coverage about 1.6x in 1999.
OUTLOOK: NEGATIVE
Difficult industry fundamentals are likely to preclude a significant
improvement in operating results over the near term. Any deterioration in
operating results could lead to further downgrades, Standard & Poor's said. --
CreditWire.
