Atrium Companies, Inc. Announces Financial Results for the First Quarter Ended March 31, 2004

Business Wire, May 7, 2004

Business Editors

DALLAS--(BUSINESS WIRE)--May 7, 2004

Atrium Companies, Inc. ("Atrium" or the "Company"), one of the largest manufacturers and suppliers of residential windows in North America, today announced its unaudited financial results for the first quarter ended March 31, 2004. Selected financial results are set forth in the table at the end of this press release and the Company's definitive results will be included in its Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission (the "SEC") no later than Monday, May 17, 2004.

The following is a summary of Atrium's financial highlights for the first quarters ended March 31, 2004 and 2003 (reported results include the results of MD Casting, Inc., Danvid Window Company, Aluminum Screen Manufacturers, Inc. and Superior Engineered Products Corporation since their dates of acquisition, which were January 31, 2003, April 1, 2003, October 1, 2003 and December 31, 2003, respectively, while pro forma results give effect to the 2003 transactions, including the acquisitions, the sale of the Company and the debt refinancing as if they had occurred as of January 1, 2003):

Reported:

-- Net sales increased $36.9 million, or 32.5%, to $150.5 million

during the first quarter of 2004 from $113.6 million during

the first quarter of 2003.

-- Gross profit totaled $43.9 million (29.2% of net sales) during

the first quarter of 2004 compared to $35.0 million (30.8% of

net sales) during the first quarter of 2003.

-- Net loss totaled $5.7 million during the first quarter of 2004

compared to a net loss of $2.6 million during the first

quarter of 2003.

-- EBITDA totaled $12.1 million (8.0% of net sales) during the

first quarter of 2004 compared to $10.1 million (8.9% of net

sales) during the first quarter of 2003, representing an

increase of 20.4%.

-- As of March 31, 2004, the Company had total liquidity of $48.8

million, including cash of $2.7 million, availability under

its $50.0 million revolving credit facility of $41.3 million

(net of letters of credit totaling $8.7 million) and

availability under its $50.0 million accounts receivable

securitization facility of $4.8 million (net of borrowings of

$35.6 million and $9.6 million currently unavailable due to

borrowing base limitations).

Pro Forma:

-- Net sales increased $9.6 million, or 6.8%, to $150.5 million

during the first quarter of 2004 from $140.9 million during

the first quarter of 2003.

-- Gross profit totaled $43.9 million (29.2% of net sales) during

the first quarter of 2004 compared to $41.7 million (29.6% of

net sales) during the first quarter of 2003.

-- Net loss totaled $5.7 million during the first quarter of 2004

compared to a net loss of $2.3 million during the first

quarter of 2003.

-- EBITDA totaled $12.1 million (8.0% of net sales) during the

first quarter of 2004 compared to $11.9 million (8.4% of net

sales) during the first quarter of 2003, representing an

increase of 1.7%.

"While we were pleased with the quarter over quarter sales growth of nearly 7% and while EBITDA was in line with the previous estimates provided during the fourth quarter earnings call, EBITDA was negatively impacted during the first quarter by higher than expected workers' compensation and health insurance costs. Excluding these amounts, EBITDA growth would have exceeded sales growth for the quarter," stated Chairman, President and Chief Executive Officer, Jeff L. Hull. "Short of higher insurance costs, which are being addressed through cost reduction programs, the business performed very well in the first quarter and the trends that we are seeing right now bode well for the remainder of the year," added Mr. Hull.

The results for the first quarter ended March 31, 2004 discussed herein are preliminary and subject to completion of the annual audit by Atrium's independent public auditors. We can provide no assurance that these results will not be subject to adjustment or reclassification upon completion of the audit.

Atrium will hold a conference call at 10:00 a.m. (central) on Tuesday, May 11, 2004 to discuss its first quarter results. The call-in number is (888) 428-4478 (reference "Atrium First Quarter Earnings"). A replay will be available at 1:30 p.m. (central) on May 11, 2004 and will run until 11:59 p.m. (central) on May 25, 2004. The replay call-in number is (800) 475-6701, access code 730003.

Atrium, based in Dallas, is one of the largest manufacturers and suppliers of residential windows in North America, with annual pro forma net sales of approximately $700 million, over 6,000 employees and 56 manufacturing facilities and distribution centers in 22 states and Mexico.

                        Atrium Companies, Inc.
    Unaudited selected historical and pro forma financial results
                        (dollars in millions)

Reported:
                                        First Quarter Ended March 31,
                                        ------------------------------
                                                 2004            2003
                                        -------------- ---------------
Net sales                                      $150.5          $113.6
Gross profit                                     43.9            35.0
Net income (loss)                                (5.7)           (2.6)
EBITDA                                           12.1            10.1

Pro Forma:
                                        First Quarter Ended March 31,
                                        ------------------------------
                                                 2004            2003
                                        -------------- ---------------
Net sales                                      $150.5          $140.9
Gross profit                                     43.9            41.7
Net income (loss)                                (5.7)           (2.3)
EBITDA                                           12.1            11.9