June 6, 2005
Zip+4 Code: 20549-0305
Via Fax & U.S. Mail
Michael A. Sumsky, Chief Financial Officer
Diamond Triumph Auto Glass, Inc.
220 Division Street
Kingston, Pennsylvania 18704
RE: Diamond Triumph Auto Glass, Inc. (the "Company")
Form 10-K for the year ended December 31, 2004
File No. 333-33572
Dear Mr. Sumsky:
Based upon an examination restricted solely to considerations of
the
Financial Statements, Management`s Discussion and Analysis, and
Selected Financial Data, the staff has the following comments on
the
above-referenced documents. Where indicated, we think you should
revise your future filings in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not raise additional comments.
Please understand that the purpose of our review process is to
assist
you in your compliance with the applicable disclosure requirements
and
to enhance the overall disclosure in your filing. We look forward
to
working with you in these respects. We welcome any questions you
may
have about our comments or on any other aspect of our review.
Feel
free to call us at the telephone numbers listed at the end of this
letter.
Please respond to confirm that such comments will be complied
with,
or, if certain of the comments are deemed inappropriate by the
Company, advise the staff of the reason thereof.
Pursuant to Rule 101(a)(3) of Regulation S-T, your response should
be
submitted in electronic form, under the label "corresp" with a
copy to
the staff. After our review of your supplemental replies, we may
have
further comments. Please respond within fifteen (15) business
days.
Form 10-K For the Fiscal Year Ended October 29, 2004
Item 1- Business
Overview, page 1
1. We note your disclosure regarding "branch operating profit" of
approximately $104,000 per location in 2004. Please discontinue
the
presentation of this non-GAAP measure. See FR-65 for guidance.
Item 7- Management`s Discussion and Analysis
Liquidity and Capital Resources, page 21
2. Liquidity generally should be discussed on both a long-term and
short-term basis. Accordingly, the discussion of the sufficiency
of
your resources to satisfy ongoing cash requirements for the next
twelve months should be expanded to discuss liquidity on a long-
term
basis. In this regard, we note that substantially all of your
indebtedness comes due on April 1, 2008. Therefore, you should
discuss the consequences to your business if (for whatever reason)
you
fail to repay or refinance the Notes prior to their maturity on
April
1, 2008. See Instruction #5 to Item 303(a) of Regulation S-K.
3. Based on the disclosure in Item 2 of your filing, it appears
that
all of your properties are leased. If true, we suggest that your
discussion of liquidity and capital resources state that none of
your
properties are owned and, as a result, they do not represent a
potential source of liquidity (through sale or sale/leaseback
transactions). See Items 303(a)(1) and 303(a)(2)(ii) of
Regulation S-
K.
4. Please add a general discussion of your credit facility, with a
description of any limitations on borrowings. Based on the
disclosure
in Note 5 to your financial statements, it appears that your
available
borrowings are substantially less than the maximum amount of $25
million. Please specifically disclose the amount available in
light
of your restrictive covenants and the amount of your outstanding
letters of credit.
Contractual Obligations and Commercial Commitments, page 24
5. We believe you should include scheduled interest payments in
the
table or, in the alternative, include additional disclosure
regarding
interest payments in a footnote to the table. See Section IV.A of
FR-
72 for guidance.
Item 8- Financial Statements
Consolidated Balance Sheets, page F-5
6. In Note 6 to your financial statements, you state that, with
respect to your preferred stock, the mandatory redemption clause
has
been eliminated. However, on the face of your balance sheet, you
still refer to your preferred stock as redeemable. Please explain
supplementally and/or revise your disclosure, as appropriate.
Consolidated Statements of Operations, page F-6
7. We note from the description of your revenue recognition policy
in
Note 2 to your financial statements that installation and related
services are integral to the generation of revenues. Accordingly,
the
associated costs of these services should be deducted before
presenting any measure of profitability (such as gross profit).
Since
your cost of sales appears to represent the cost of glass but not
the
cost of installation, we believe you should discontinue the
presentation of gross profit and include cost of sales in your
operating expenses. Similarly revise the discussion of your
results
of operations in MD&A and, in your quarterly financial data on
page
16, substitute income from operations for gross profit.
We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filing reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have
made.
In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal
securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our
comments on your filing.
**********
You may contact Juan Migone at (202) 551-3312 or the undersigned
at
(202) 551-3211 with any other questions.
Sincerely,
David R. Humphrey
Branch Chief- Accountant
Via facsimile: Michael A. Sumsky
(570) 288-2456
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Michael A. Sumsky
Diamond Triumph Auto Glass, Inc.
June 6, 2005
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