Reddy Ice 8-K Reddy Ice Reports Second Quarter 2004 Results

Exhibit 99.1

PRESS RELEASE

REDDY ICE REPORTS SECOND QUARTER 2004 RESULTS

AUGUST 12, 2004 - DALLAS, TEXAS - Reddy Ice Holdings, Inc., today reported financial results for the second quarter ended June 30, 2004.

Revenues in the second quarter of 2004 were $88.5 million, compared to $70.7 million in the same quarter of 2003.  Net income before preferred dividends was $15.4 million in the second quarter of 2004, compared to net income before preferred dividends of $8.5 million in the second quarter of 2003.

Revenues in the first six months of 2004 were $125.9 million, compared to $103.3 million in the same period of 2003.  Net income before preferred dividends was $3.7 million in the first six months of 2004, compared to a net loss before preferred dividends of $6.2 million in the first six months of 2003.

EBITDA (as adjusted), defined as earnings before interest, taxes, depreciation and amortization, gain or loss on the disposition of assets, impairment of assets, gain or loss on extinguishment of debt and the cumulative effect of changes in accounting principle, and referred to as EBITDA, was $29.9 million in the second quarter of 2004, compared to $23.0 million in the second quarter of 2003.  EBITDA was $30.5 million for the first six months of 2004, compared to $22.4 million for the same period in 2003.  A discussion regarding the presentation of EBITDA in this press release is set forth below in the section titled, “SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION.”

During the second quarter of 2004, Reddy Ice completed three acquisitions with an aggregate cash purchase price of approximately $4.2 million.  Annual revenue associated with the acquired operations was approximately $5 million.

 “We are pleased to report that the second quarter results met our overall targets,” commented Chairman and Chief Executive Officer William P. Brick.  “The performance of the acquired operations have met our expectations and strengthened our organization.  In addition, we continue to expect significant free cash flow generation for the full year of 2004 and look forward to the continued improvement in our financial position.”

OUTLOOK

The following statements are based on current expectations.  These statements are forward-looking, and actual results may differ materially.  These statements do not include the potential impact of any mergers, acquisitions or other business combinations, or divestitures that may be completed after August 12, 2004.  The projections for the third quarter of 2004 and the full year 2004 include the effects of the acquisitions completed through the date of this press release.  The pro forma amounts for 2003 discussed below reflect the results of Reddy

Ice as if the acquisitions of Packaged Ice, Service Ice, Triangle Ice and the six acquisitions completed in the six months ended June 30, 2004 had all occurred on January 1, 2003.

Management expects revenues for 2004 to range between $274 and $284 million, and EBITDA in the range of $76 to $81 million.  This compares to pro forma 2003 revenue and EBITDA of $273.2 million and $75.4 million, respectively.  Management further expects to report net income before preferred dividends in 2004 ranging from $16 million to $19 million.  Management expects revenues in the third quarter of 2004 to range between $98 million and $104 million, with EBITDA in the range of $36 million to $40 million.  This compares to pro forma revenue and EBITDA in the third quarter of 2003 of $103.2 million and $40.1 million, respectively.  Net income before preferred dividends in the third quarter of 2004 is expected to be in the range of $14 million to $17 million.  The outlook for the third quarter and full year does not include gains or losses from the disposition of assets, asset impairment charges, or gains or losses on the extinguishment of debt.

CONFERENCE CALL

Reddy Ice has scheduled a conference call on Thursday, August 12, 2004 at 10:00 a.m. eastern time.  To participate, dial 973-935-2407 and ask for the Reddy Ice call 10 minutes prior to the start time.  A telephonic replay will be available through August 19, 2004 and may be accessed by calling 973-341-3080 and using the passcode 5023878#.

Reddy Ice is the largest manufacturer and distributor of packaged ice in the United States.  With over 2,000 year-round employees, the Company sells its products primarily under the widely known Reddy IceÒ brand to more than 82,000 locations in 32 states and the District of Columbia.  The Company provides a broad array of product offerings in the marketplace through traditional direct store delivery, warehouse programs, and its proprietary technology, The Ice FactoryÒ.  Reddy Ice serves most significant consumer packaged goods channels of distribution, as well as restaurants, special entertainment events, commercial users and the agricultural sector.  Reddy Ice Holdings, Inc. is an entity owned by Trimaran Capital Partners and Bear Stearns Merchant Banking.

This press release contains various forward-looking statements and information that are based on management’s belief as well as assumptions made by and information currently available to management.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.  Such statements contain certain risks, uncertainty and assumptions.  Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.

– Financial Tables to Follow –

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FINANCIAL TABLES

Reddy Ice Holdings, Inc. was established on May 8, 2003.  On August 15, 2003, Reddy Ice Holdings acquired Packaged Ice, Inc., which was renamed Reddy Ice Group, Inc.  Reddy Ice Holdings and Reddy Ice Group are collectively referred to as “Successor.”  Packaged Ice prior to the merger on August 15, 2003 is referred to as “Predecessor.”  Reddy Ice Holdings conducted no operations during the period from May 8, 2003 through August 14, 2003.

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Predecessor			Successor			Successor			Predecessor
	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
	(in thousands )
Revenues	$	88,529		$	70,749		$	125,909		$	103,316
Cost of sales	49,849			40,520			78,357			66,311
Gross profit	38,680			30,229			47,552			37,005
Operating expenses	8,779			7,316			17,097			14,661
Depreciation and amortization expense	5,716			5,919			11,278			11,710
Gain on disposition of assets	—			(1		)	—			(11		)
Income from operations	24,185			16,995			19,177			10,645
Other income, net	—			41			—			31
Interest expense	(6,569		)	(8,542		)	(13,246		)	(16,902		)
Income (loss) before income taxes	17,616			8,494			5,931			(6,226		)
Income tax expense	2,254			—			2,254			—
Net income (loss) before preferred dividends	15,362			8,494			3,677			(6,226		)
Preferred dividends	(3,198		)	(1,039		)	(6,302		)	(2,033		)
Net income (loss) available to common shareholders	$	12,164		$	7,455		$	(2,625	)	$	(8,259	)
EBITDA	$	29,901		$	22,954		$	30,455		$	22,375

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(Unaudited)

	Successor		Successor
	June 30, 2004		December 31, 2003
	(in thousands )
Cash and cash equivalents	$	6,555	$	12,801
All other current assets	52,279		28,620
Total assets	628,958		614,336
Current liabilities (less current portion of long-term debt and line of credit)	36,968		31,911
Total current and non-current debt (including line of credit)	335,331		330,947
Shareholders’ equity	196,499		191,318
Total liabilities and shareholders’ equity	628,958		614,336

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SUPPLEMENTAL DISCLOSURE REGARDING NON-GAAP FINANCIAL INFORMATION

By presenting EBITDA, Reddy Ice intends to provide investors a better understanding of the core operating results and underlying trends to measure past performance as well as prospects for the future.  Reddy Ice evaluates operating performance based on several measures, including EBITDA, as the Company believes it is an important measure of the operational strength of its business.  Since EBITDA is not a measure calculated in accordance with generally accepted accounting principles (��GAAP”), it should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies.  EBITDA is not necessarily a measure of Reddy Ice’s ability to fund its cash needs.  As it excludes certain financial information compared with net income or loss, the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions, which are excluded.  Reconciliations of EBITDA to net income or loss can be found below:

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

RECONCILIATION OF EBITDA TO NET INCOME (LOSS) AVAILABLE TO

COMMON SHAREHOLDERS

(Unaudited)

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
	(in thousands)
EBITDA	$	29,901		$	22,954		$	30,455		$	22,375
Depreciation and amortization expense	(5,716		)	(5,919		)	(11,278		)	(11,710		)
Gain on disposition of assets	—			1			—			11
Interest expense	(6,569		)	(8,542		)	(13,246		)	(16,902		)
Income tax expense	(2,254		)	—			(2,254		)	—
Net income (loss) before preferred dividends	15,362			8,494			3,677			(6,226		)
Preferred dividends	(3,198		)	(1,039		)	(6,302		)	(2,033		)
Net income (loss) available to common shareholders	$	12,164		$	7,455		$	(2,625	)	$	(8,259	)

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

RECONCILIATION OF PRO FORMA EBITDA TO NET INCOME

AVAILABLE TO COMMON SHAREHOLDERS

(Unaudited)

	Combined			Combined
	Three Months Ended September 30, 2003			Twelve Months Ended December 31, 2003
	(in millions)
Pro forma EBITDA	$	40.1		$	75.4
Adjustments related to the purchase of Packaged Ice, Inc.:
Elimination of Ice Factory operating lease expense	(0.5		)	(2.5		)
Non-cash amortization of unearned equity compensation	0.0			0.1
Management fees	0.1			0.4
EBITDA attributable to the Service Ice acquisition	(0.4		)	(0.7		)
EBITDA attributable to the Triangle Ice acquisition	(6.2		)	(9.2		)
EBITDA attributable to the six acquisitions completed in the six months ended June 30, 2004	(1.3		)	(1.6		)
Historical EBITDA	31.8			61.9
Depreciation and amortization expense	(5.2		)	(22.1		)
Interest expense	(8.0		)	(31.4		)
Income tax expense	—			(1.1		)
Net income before preferred dividends	18.6			7.3
Preferred dividends	(2.0		)	(7.0		)
Net income available to common shareholders	$	16.6		$	0.3

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

RECONCILIATION OF PROJECTED EBITDA TO

PROJECTED NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

(Unaudited)

	Three Months Ended September 30,
	2004			2004
	Lower Range			Upper Range
	(in millions )
EBITDA	$	36		$	40
Depreciation and amortization expense	(6		)	(6		)
Interest expense	(7		)	(7		)
Income tax expense	(9		)	(10		)
Net income before preferred dividends	14			17
Preferred dividends	(3		)	(3		)
Net income available to common shareholders	$	11		$	14

	Twelve Months Ended December 31,
	2004			2004
	Lower Range			Upper Range
	(in millions )
EBITDA	$	76		$	81
Depreciation and amortization expense	(24		)	(24		)
Interest expense	(26		)	(26		)
Income tax expense	(10		)	(12		)
Net income before preferred dividends	16			19
Preferred dividends	(13		)	(13		)
Net income available to common shareholders	$	3		$	6

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