Diamond Triumph Auto Glass Inc. announced yesterday that net sales for the year ended December 31, 2004 decreased $10.3 million, or 4.7 percent, to $208.4 million compared to $218.7 million for the previous year.
Due primarily to a valuation reserve of approximately $40 million established against its deferred tax asset, the company experienced a $41.2 million net loss in 2004 compared to $800,000 of net income in 2003.
Doug Boyle, vice president finance for the Kingston, Pa., based company, explained
that the $40 million tax asset had been on the company's balance sheet since 1998
when it recorded a tax benefit related to the company's 1998 recapitalization.
Due to a more stringent financial reporting environment, the company's new independent
auditors advised Diamond to establish a full reserve for this asset. "This
one time financial statement valuation adjustment does not at all affect our cash
flow or operating income nor do we lose the $40 million tax benefit related to
this transaction," Boyle explained.
Norm Harris, Diamond Triumph's chief executive officer, had these comments regarding the company. "As reflected in our operating results for calendar year 2004, it was a very difficult year for the industry. In addition to weaker industry demand, overall pricing conditions continue to be very challenging. As a company we continue to capitalize on opportunities to leverage costs throughout the organization; however, the uncertain pricing environment may be of ongoing concern."
Michael Sumsky, Diamond Triumph's president and chief financial officer added, "Despite the pricing and demand challenges within the industry, we were able to reduce our long-term debt during calendar year 2004 while maintaining adequate capital for operational needs. We are pleased to have capitalized on opportunities to reduce ongoing operating costs and are continuing to implement other initiatives to improve operating efficiencies."
EBITDA for the year ended December 31, 2004 decreased $3.3 million, or 27.5 percent, to $8.7 million from $12 million for year ended December 31, 2003.
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