Associated Materials Announces First Quarter Results

Apr 30, 2001, 01:00 ET from Associated Materials Incorporated

    DALLAS, April 30 /PRNewswire/ -- Associated Materials Incorporated
 (Nasdaq: SIDE) today reported a first quarter net loss of $3.0 million, or
 $0.39 per share, compared to net income of $1.6 million, or $0.19 per share,
 in the first quarter of 2000.  Exclusive of a $2.4 million loss related to the
 writedown of the Company's Amercord investment, as discussed below, the
 Company's net loss for the period was $1.5 million or $0.20 per share.  Also
 contributing to the net loss in the quarter was the loss of income from the
 Company's divested cabinet division as well as losses at the Company's
 recently-acquired Alpine window operation.  Loss from operations for the first
 quarter 2001 was $930,000, compared to operating income of $4.3 million for
 the same period in 2000.
     Driven by higher sales at both the Alside and AmerCable divisions, net
 sales increased 5.0% to $108.6 million for the first quarter of 2001 versus
 $103.4 million for the same period in 2000.
     "In light of the bad weather and continued soft economy during the first
 quarter, our sales volume increase is particularly encouraging," said William
 W. Winspear, Chairman and Chief Executive Officer.  "A number of items,
 including the Amercord writedown, the loss of sales of a divested division,
 and the impact of Alpine, served to obscure bottom line comparisons to the
 year-ago first quarter, which incidentally, was the strongest first quarter in
 the Company's history.  A continuation of our performance would, in fact,
 yield very satisfactory results for the 2001 year."
 
     Alside Results
     Alside's net sales increased $2.8 million to $89.9 million for the first
 quarter 2001 as compared to the 2000 quarter as higher vinyl window sales more
 than offset lower vinyl siding and vinyl fence sales.  Unit sales of vinyl
 siding were down 2.8% for the first quarter 2001 as compared to the same
 period in 2000.  The Company believes the vinyl siding industry was down
 approximately 19% for the same period.  Unit sales of vinyl windows increased
 32.8% as the Company's restructuring of its window operations continues to
 yield significant positive results.  The 32.8% increase in unit volume did not
 include incremental window sales from the acquisition of the Alpine Industries
 window facility in October 2000.  Earnings for the first quarter of 2001 as
 compared to the first quarter of 2000 were adversely impacted by the sale of
 Alside's cabinet operation in June of 2000, which increased 2000 income from
 operations by $1.0 million, as well as a loss of approximately $847,000 from
 Alpine's operations in 2001.  Selling, general and administrative expense
 increased by $3.1 million to $24.9 million for the 2001 period due primarily
 to the addition of eight new Supply Centers in 2000 and a one-time insurance
 gain of $850,000 received in 2000.
 
     AmerCable Results
     Net sales at the Company's AmerCable division increased 14.7% to
 $18.7 million for the first quarter of 2001 due to higher sales across all
 product lines, particularly in industrial and mining cables.  Selling, general
 and administrative expense increased $305,000 for the 2001 period as compared
 to the 2000 period due to higher personnel costs and higher marketing expenses
 incurred in support of anticipated sales growth.  Income from operations
 increased $79,000 or 5.2% to $1.6 million for 2001 as compared to the same
 period in 2000.
     In response to deterioration of Amercord's operating results and financial
 position during the first quarter, the Company wrote off its $2.4 million
 investment in Amercord Inc.  The Company believes that it will not recover its
 investment in Amercord without a restructuring of Amercord's finances or
 operations, neither of which can be reasonably assured.  The Company's
 investment in Amercord consists of a $1.5 million subordinated note and 9.9%
 of Amercord's common stock.
     Associated Materials is a leading manufacturer of exterior residential
 building products which are distributed through more than 75 Company-owned
 Supply Centers across the country.  Through its Alside division, key products
 include a broad range of vinyl siding and vinyl window lines as well as vinyl
 decks, fencing and garage doors.  The Company's operations also include
 AmerCable, a manufacturer of electrical cables for use in underground and
 surface mining, marine and offshore drilling, automotive assembly robotics,
 telecommunications and a variety of other industrial applications.
     Associated Materials will broadcast its first-quarter conference call for
 investors over the Internet at www.associatedmaterials.com on Monday,
 April 30, 2001, at 11:00 a.m. EST.  To listen to the live call, please go to
 the website at least 15 minutes early to register, download and install any
 necessary audio software.  A replay of the conference call will also be
 available over the Internet at www.associatedmaterials.com beginning at
 1:00 p.m. EST on Monday, April 30, 2001.
 
     This press release contains certain forward-looking statements (as such
 term is defined in the Private Securities Litigation Reform Act of 1995)
 relating to Associated Materials that are based on the beliefs of Associated
 Materials' management. When used in this press release, the words
 "anticipate," "believe," "estimate," "expect," "intend," and similar
 expressions, as they relate to Associated Materials or its management,
 identify forward-looking statements. Such statements reflect the current views
 of Associated Materials with respect to the operations and results of
 operations of Associated Materials as well as its customers and suppliers,
 including as a result of the availability of consumer credit, interest rates,
 employment trends, changes in levels of consumer confidence, changes in
 consumer preferences, national and regional trends in new housing starts, raw
 material costs, pricing pressures, shifts in market demand, and general
 economic conditions. These statements are subject to certain risks and
 uncertainties. Certain factors that might cause a difference are discussed in
 more detail in the Company's Annual Report on Form 10-K for the year ended
 December 31, 2000. Should one or more of these risks or uncertainties
 materialize, or should underlying assumptions or estimates prove incorrect,
 actual results may vary materially from those described herein as anticipated,
 believed, estimated, expected or intended.
 
           For more information on Associated Materials Incorporated
       visit the company's website at www.associatedmaterials.com or via
              facsimile at no cost, simply dial 1-800-PRO-INFO and
                           enter the ticker symbol "SIDE".
 
 
                       ASSOCIATED MATERIALS INCORPORATED
               Condensed Selected Financial Statement Information
                                  (Unaudited)
                      (In Thousands Except Per Share Data)
 
                                                         Quarter Ended
                                                           March 31,
                                                       2001           2000
     Net sales (A)
     Alside                                           $89,939        $87,141
     AmerCable                                         18,672         16,278
     Total                                            108,611        103,419
 
     Gross Profit
     Alside                                            23,718         25,498
     AmerCable                                          3,479          3,095
     Total                                             27,197         28,593
 
     Income (loss) from operations
     Alside                                            (1,157)         3,749
     AmerCable                                          1,603          1,524
     Corporate overhead                                (1,376)          (963)
     Total                                              (930)          4,310
 
     Interest, net                                      1,579          1,724
     Loss on the writedown of Amercord Inc.            (2,393)             -
 
     Income (loss) before tax expense                  (4,902)         2,586
     Income tax expense (benefit)                      (1,887)           995
 
     Net income (loss)                                $(3,015)        $1,591
 
     Diluted earnings per common share
     Net income (loss) per common share                $(0.39)         $0.19
 
     Weighted average shares outstanding                7,677          8,238
 
     EBITDA                                            $1,731         $6,680
     Capital expenditures                              $6,765         $3,794
 
     (A) Certain prior period amounts have been reclassified to conform with
     the current period presentation.
 
 
                       ASSOCIATED MATERIALS INCORPORATED
                            Condensed Balance Sheets
                                  (Unaudited)
                                 (In Thousands)
 
                                                    March 31,       Dec. 31,
                                                         2001           2000
               Assets
     Cash                                              $2,046        $15,879
     Short term investment                                  -          5,019
     Accounts receivable, net                          56,219         50,853
     Inventories                                       77,146         74,429
     Income taxes receivable                            2,151            453
     Other current assets                               4,325          4,213
        Total current assets                          141,887        150,846
 
     Property, plant, and equipment, net               78,020         73,917
     Investment in Amercord Inc.                            -          2,393
     Other assets                                       3,724          3,985
 
        Total assets                                 $223,631       $231,141
 
 
            Liabilities and Stockholders' Equity
 
     Accounts payable                                 $31,009        $19,273
     Accrued liabilities                               15,544         29,509
        Total current liabilities                      46,553         48,782
 
     Deferred income taxes                              3,738          3,927
     Other liabilities                                  5,345          5,442
     Long-term debt                                    75,000         75,000
     Stockholders' equity                              92,995         97,990
        Total liabilities and stockholders' equity   $223,631       $231,141
 
 
 
                       Associated Materials Incorporated
               Condensed Selected Financial Statement Information
                                  (Unaudited)
                                 (In Thousands)
                                                          Quarter Ended
                                                           March 31,
                                                       2001           2000
 
     Cash from Operating Activities
       Net income (loss)                              $(3,015)        $1,591
       Depreciation and amortization                    2,661          2,370
       Loss on the writedown of Amercord                2,393              -
       Other                                             (139)            38
       Changes in operating assets and liabilities    (12,027)        (8,227)
       Net cash used by operating activities          (10,127)        (4,228)
 
 
     Investing Activities
       Additions to property, plant and equipment      (6,765)        (3,794)
       Proceeds from the sale of short-term investment  5,019              -
       Other                                               20             31
       Net cash used by investing activities           (1,726)        (3,763)
 
     Financing Activities
       Net increase on revolving line of credit             -          7,671
       Dividends paid                                    (765)          (801)
       Treasury stock acquired                         (1,803)             -
       Other                                              588              -
       Net cash provided by (used by) financing
         activities                                    (1,980)         6,870
 
        Net decrease in cash                         $(13,833)       $(1,121)
        Cash at beginning of period                    15,879          3,432
        Cash at end of period                          $2,046         $2,311
 
 
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SOURCE Associated Materials Incorporated
    DALLAS, April 30 /PRNewswire/ -- Associated Materials Incorporated
 (Nasdaq: SIDE) today reported a first quarter net loss of $3.0 million, or
 $0.39 per share, compared to net income of $1.6 million, or $0.19 per share,
 in the first quarter of 2000.  Exclusive of a $2.4 million loss related to the
 writedown of the Company's Amercord investment, as discussed below, the
 Company's net loss for the period was $1.5 million or $0.20 per share.  Also
 contributing to the net loss in the quarter was the loss of income from the
 Company's divested cabinet division as well as losses at the Company's
 recently-acquired Alpine window operation.  Loss from operations for the first
 quarter 2001 was $930,000, compared to operating income of $4.3 million for
 the same period in 2000.
     Driven by higher sales at both the Alside and AmerCable divisions, net
 sales increased 5.0% to $108.6 million for the first quarter of 2001 versus
 $103.4 million for the same period in 2000.
     "In light of the bad weather and continued soft economy during the first
 quarter, our sales volume increase is particularly encouraging," said William
 W. Winspear, Chairman and Chief Executive Officer.  "A number of items,
 including the Amercord writedown, the loss of sales of a divested division,
 and the impact of Alpine, served to obscure bottom line comparisons to the
 year-ago first quarter, which incidentally, was the strongest first quarter in
 the Company's history.  A continuation of our performance would, in fact,
 yield very satisfactory results for the 2001 year."
 
     Alside Results
     Alside's net sales increased $2.8 million to $89.9 million for the first
 quarter 2001 as compared to the 2000 quarter as higher vinyl window sales more
 than offset lower vinyl siding and vinyl fence sales.  Unit sales of vinyl
 siding were down 2.8% for the first quarter 2001 as compared to the same
 period in 2000.  The Company believes the vinyl siding industry was down
 approximately 19% for the same period.  Unit sales of vinyl windows increased
 32.8% as the Company's restructuring of its window operations continues to
 yield significant positive results.  The 32.8% increase in unit volume did not
 include incremental window sales from the acquisition of the Alpine Industries
 window facility in October 2000.  Earnings for the first quarter of 2001 as
 compared to the first quarter of 2000 were adversely impacted by the sale of
 Alside's cabinet operation in June of 2000, which increased 2000 income from
 operations by $1.0 million, as well as a loss of approximately $847,000 from
 Alpine's operations in 2001.  Selling, general and administrative expense
 increased by $3.1 million to $24.9 million for the 2001 period due primarily
 to the addition of eight new Supply Centers in 2000 and a one-time insurance
 gain of $850,000 received in 2000.
 
     AmerCable Results
     Net sales at the Company's AmerCable division increased 14.7% to
 $18.7 million for the first quarter of 2001 due to higher sales across all
 product lines, particularly in industrial and mining cables.  Selling, general
 and administrative expense increased $305,000 for the 2001 period as compared
 to the 2000 period due to higher personnel costs and higher marketing expenses
 incurred in support of anticipated sales growth.  Income from operations
 increased $79,000 or 5.2% to $1.6 million for 2001 as compared to the same
 period in 2000.
     In response to deterioration of Amercord's operating results and financial
 position during the first quarter, the Company wrote off its $2.4 million
 investment in Amercord Inc.  The Company believes that it will not recover its
 investment in Amercord without a restructuring of Amercord's finances or
 operations, neither of which can be reasonably assured.  The Company's
 investment in Amercord consists of a $1.5 million subordinated note and 9.9%
 of Amercord's common stock.
     Associated Materials is a leading manufacturer of exterior residential
 building products which are distributed through more than 75 Company-owned
 Supply Centers across the country.  Through its Alside division, key products
 include a broad range of vinyl siding and vinyl window lines as well as vinyl
 decks, fencing and garage doors.  The Company's operations also include
 AmerCable, a manufacturer of electrical cables for use in underground and
 surface mining, marine and offshore drilling, automotive assembly robotics,
 telecommunications and a variety of other industrial applications.
     Associated Materials will broadcast its first-quarter conference call for
 investors over the Internet at www.associatedmaterials.com on Monday,
 April 30, 2001, at 11:00 a.m. EST.  To listen to the live call, please go to
 the website at least 15 minutes early to register, download and install any
 necessary audio software.  A replay of the conference call will also be
 available over the Internet at www.associatedmaterials.com beginning at
 1:00 p.m. EST on Monday, April 30, 2001.
 
     This press release contains certain forward-looking statements (as such
 term is defined in the Private Securities Litigation Reform Act of 1995)
 relating to Associated Materials that are based on the beliefs of Associated
 Materials' management. When used in this press release, the words
 "anticipate," "believe," "estimate," "expect," "intend," and similar
 expressions, as they relate to Associated Materials or its management,
 identify forward-looking statements. Such statements reflect the current views
 of Associated Materials with respect to the operations and results of
 operations of Associated Materials as well as its customers and suppliers,
 including as a result of the availability of consumer credit, interest rates,
 employment trends, changes in levels of consumer confidence, changes in
 consumer preferences, national and regional trends in new housing starts, raw
 material costs, pricing pressures, shifts in market demand, and general
 economic conditions. These statements are subject to certain risks and
 uncertainties. Certain factors that might cause a difference are discussed in
 more detail in the Company's Annual Report on Form 10-K for the year ended
 December 31, 2000. Should one or more of these risks or uncertainties
 materialize, or should underlying assumptions or estimates prove incorrect,
 actual results may vary materially from those described herein as anticipated,
 believed, estimated, expected or intended.
 
           For more information on Associated Materials Incorporated
       visit the company's website at www.associatedmaterials.com or via
              facsimile at no cost, simply dial 1-800-PRO-INFO and
                           enter the ticker symbol "SIDE".
 
 
                       ASSOCIATED MATERIALS INCORPORATED
               Condensed Selected Financial Statement Information
                                  (Unaudited)
                      (In Thousands Except Per Share Data)
 
                                                         Quarter Ended
                                                           March 31,
                                                       2001           2000
     Net sales (A)
     Alside                                           $89,939        $87,141
     AmerCable                                         18,672         16,278
     Total                                            108,611        103,419
 
     Gross Profit
     Alside                                            23,718         25,498
     AmerCable                                          3,479          3,095
     Total                                             27,197         28,593
 
     Income (loss) from operations
     Alside                                            (1,157)         3,749
     AmerCable                                          1,603          1,524
     Corporate overhead                                (1,376)          (963)
     Total                                              (930)          4,310
 
     Interest, net                                      1,579          1,724
     Loss on the writedown of Amercord Inc.            (2,393)             -
 
     Income (loss) before tax expense                  (4,902)         2,586
     Income tax expense (benefit)                      (1,887)           995
 
     Net income (loss)                                $(3,015)        $1,591
 
     Diluted earnings per common share
     Net income (loss) per common share                $(0.39)         $0.19
 
     Weighted average shares outstanding                7,677          8,238
 
     EBITDA                                            $1,731         $6,680
     Capital expenditures                              $6,765         $3,794
 
     (A) Certain prior period amounts have been reclassified to conform with
     the current period presentation.
 
 
                       ASSOCIATED MATERIALS INCORPORATED
                            Condensed Balance Sheets
                                  (Unaudited)
                                 (In Thousands)
 
                                                    March 31,       Dec. 31,
                                                         2001           2000
               Assets
     Cash                                              $2,046        $15,879
     Short term investment                                  -          5,019
     Accounts receivable, net                          56,219         50,853
     Inventories                                       77,146         74,429
     Income taxes receivable                            2,151            453
     Other current assets                               4,325          4,213
        Total current assets                          141,887        150,846
 
     Property, plant, and equipment, net               78,020         73,917
     Investment in Amercord Inc.                            -          2,393
     Other assets                                       3,724          3,985
 
        Total assets                                 $223,631       $231,141
 
 
            Liabilities and Stockholders' Equity
 
     Accounts payable                                 $31,009        $19,273
     Accrued liabilities                               15,544         29,509
        Total current liabilities                      46,553         48,782
 
     Deferred income taxes                              3,738          3,927
     Other liabilities                                  5,345          5,442
     Long-term debt                                    75,000         75,000
     Stockholders' equity                              92,995         97,990
        Total liabilities and stockholders' equity   $223,631       $231,141
 
 
 
                       Associated Materials Incorporated
               Condensed Selected Financial Statement Information
                                  (Unaudited)
                                 (In Thousands)
                                                          Quarter Ended
                                                           March 31,
                                                       2001           2000
 
     Cash from Operating Activities
       Net income (loss)                              $(3,015)        $1,591
       Depreciation and amortization                    2,661          2,370
       Loss on the writedown of Amercord                2,393              -
       Other                                             (139)            38
       Changes in operating assets and liabilities    (12,027)        (8,227)
       Net cash used by operating activities          (10,127)        (4,228)
 
 
     Investing Activities
       Additions to property, plant and equipment      (6,765)        (3,794)
       Proceeds from the sale of short-term investment  5,019              -
       Other                                               20             31
       Net cash used by investing activities           (1,726)        (3,763)
 
     Financing Activities
       Net increase on revolving line of credit             -          7,671
       Dividends paid                                    (765)          (801)
       Treasury stock acquired                         (1,803)             -
       Other                                              588              -
       Net cash provided by (used by) financing
         activities                                    (1,980)         6,870
 
        Net decrease in cash                         $(13,833)       $(1,121)
        Cash at beginning of period                    15,879          3,432
        Cash at end of period                          $2,046         $2,311
 
 
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 SOURCE  Associated Materials Incorporated