A $98.2 million gain from the extinguishment of debt powered Ply Gem Holdings Inc. to swing to a $54.1 million net profit in the first quarter ended April 3 from a net loss of $55.5 million in the year-earlier period, the company announced today. Net sales also contributed, climbing 11.7% to $204.2 million.
Cary, N.C.-based Ply Gem prefers to measure its progress via adjusted EBITDA--earnings before interest, taxes, depreciation, and amortization, plus foreign currency changes, impairment charges, customer inventory buybacks, restructuring and integration costs, and gain on extinguishment of debt. By that measure, adjusted EBITDA swung to a positive $12.1 million during 2009's first three months from a negative $13.2 million in last year's first quarter.
On an operating basis, the company posted a loss of $3.7 million this year vs. $32.8 million a year ago. Selling, general, and administrative expenses shrank 17.5% to $33.8 million. The gross margin percentage rose to 18.1% from a year-earlier 7.1%.
"In addition to Ply Gem's strong operating performance, I am pleased to report that during the first quarter of 2010, Ply Gem successfully completed a major de-levering transaction which reduced our long-term debt by approximately $210.0 million," president and CEO Gary Robinette said in a news release. "As I have previously commented, this de-levering transaction is significant, reducing our annual cash interest expense by approximately $13.0 million, providing Ply Gem with additional operating liquidity and demonstrating our financial sponsor's continued confidence and support of our business and management team."
On Jan. 11, Ply Gem announced it had placed $150 million worth of 13.125% senior subordinated notes due in 2014. It used just about all of those proceeds to redeem $141.2 million worth of 9% senior subordinated notes due in 2012.