Ply Gem Holdings’ produced a second quarter 2013 loss of $50.9 million compared to the year-ago quarter’s net income $5.3 million, while for the first half of the year net losses fell 74% from the year-earlier period to $79 million loss, versus a net loss $20.4 million in the first six months of 2012
The Cary, N.C., manufacturer told investors today that most of the losses stemmed from two one-time charges during the quarter—costs of $23.5 million from its May initial public offering and $18.9 million for the retirement of debt.
The company reported a 19.8% increase in net sales in the quarter to $368.1 million compared to $307.3 million in sales in the second quarter of 2012. The company's second quarter acquisitions of Gienow and Mitten added $37.5 million in net sales for the quarter.
In May, Ply Gem received $353.4 million, after underwriting costs and offering expenses, for 18,157,895 shares of common stock from an initial public offering (IPO). The company's second quarter acquisitions of Gienow and Mitten added $37.5 million in net sales for the quarter.
Excluding IPO costs of $23.5 million, second quarter 2013 operating earnings decreased $6.7 million to $24.2 million compared to operating earnings of $30.9 million for 2012. The company blamed the poor performance on bad weather in the period, labor inefficiencies, and operating ramp-up costs related to significant unit volume increases in its U.S. window business.
Second quarter 2013 adjusted EBITDA was $41.1 million compared to adjusted EBITDA of $45.1 million for the second quarter of 2012.
“Ply Gem's sales continue to benefit from the recovery in new construction markets; however, demand for big ticket repair and remodeling items has been sluggish and further compressed by unfavorable weather conditions during the first quarter that drove higher inventory levels within distribution channels, which resulted in lower demand for our products during April and May,” said president and CEO Gary E. Robinette.
He said the recovery of the U.S. housing market represents an opportunity for growth for Ply Gem, but near-term challenges include “labor resource requirements” to meet the rising demand.
The company’s window units results were up 50% during the first half of the year, but were also constrained by difficulties in finding workers to meet the increasing demand. The window repair segment was down 1.6% in the U.S., and down 9% in Canada.
Ply Gem's siding, fencing and stone segment sales totaled $199.2 million in the second quarter, a 5.6% increase over year ago sales of $188.5 million. The window and door group produced sale of $168.9 million in the quarter, a 42% increase over year ago sales of $118.7 million.
The siding, fencing and stone portion of the business produced operating earnings of $36.4 million in the second quarter, falling 4.4% from year ago segment earnings of $38.1 million. The window and door business turned returned an operating loss of $6.1 million, compared to year ago operating loss of $2.8 million.