Exterior building products maker Ply Gem Holdings posted net income of $16.9 million in the third quarter of 2013, an improvement over the third quarter of 2012 net loss of $3.7 million. Net sales in the quarter totaled $407.4 million, a 33% over year-ago net sales of $101.2 million.
The Cary, N.C.-based company’s windows and doors business increased by 41.8%, while the siding, fencing and stone segment grew by 26.9%. Operating earnings increased by 27% or $7.7 million to $36.2 million compared to the third quarter 2012 after adjusting for $5.3 million of one-time charges.
“We experienced strong revenue growth led by our windows and doors segment,” says president and CEO Gary E. Robinette. “As a result, we are continuing to add labor resources to scale our operations in order to satisfy customer demand.”
He said, vinyl siding demand, which is tracks the repair and remodel market, showed improvement year over year.
Siding, fencing, and stone net sales came to $228.2 million in the third quarter, up $48.4 million, or 26.9%, from third quarter 2012 sales of $179.9 million. Gross profit margins were 27.7% for the third quarter 2013, representing a 130 basis point reduction from third quarter 2012 primarily driven by fluctuations in aluminum commodity costs within the quarter, while year-to-date gross margins of 27% remain more consistent with the prior year of 27.3%.
Windows and doors net sales totaled $179.2 million, up $52.9 million, or 41.8%, compared to $126.3 million in the third quarter of 2012. The segment’s improvement reflects continued growth of the U.S. housing market. Excluding one-time inventory buyback expense, gross profit margins for the third quarter were 13%, representing margin contraction of 160 basis points. The lower gross margin was largely due to labor ramp-up costs associated with increased sales volume and a sales increase.
On Nov. 1, 2013, Gem refinanced of its asset based lending facility which increased the capacity from $212.5 million to $250 million with a $100 accordion feature. The refinancing reduces the grid pricing of the facility by 75 basis points. The new facility will mature in November 2018.
“The housing market recovery is still in the early stages, however, I am encouraged by the favorable trends in the market and the significant demand it is creating for our products,” Robinette said. “Our expectation is that the housing market will continue its recovery into 2014 and 2015.”
The company produced a net loss of $62 million for the first nine months of 2013, compared to a net loss of $24 million in the year-ago period.