Ply Gem Holdings swung to an operating profit of $12.1 million from a year-earlier $10.2 million loss in the fourth quarter even though sales for the maker of exterior building products dipped 8.5% to $214.6 million. For all 2009, operating earnings more than doubled to $40.1 million despite the 19% drop in net sales to $951.4 million, the company reported March 19.
Cary, N.C.-based Ply Gem prefers to measure itself using adjusted EBITDA--earnings before interest, taxes, depreciation and amortization, plus the effects of foreign currency, impairment chargers, customer inventory buybacks, and restructuring and integration costs. By that yardstick, operating earnings for the fourth quarter more than quadrupled to $27.8 million from $6.1 million, and adjusted EBITDA for all 2009 climbed to $113.7 million from 2008's $94.4 million.
Ply Gem's fourth-quarter and full-year 2009 sales and adjusted EBITDA results continue to reflect the challenging conditions that exist in the housing market today," company president and CEO Gary Robinette said. "Despite these challenges, Ply Gem's fourth-quarter adjusted EBITDA demonstrated significant improvement over the same period in 2008 which continues our trends of positive year-over-year earnings performance which began with our second- and third-quarter results. Furthermore, our full-year adjusted EBITDA was over 20% higher than our 2008 performance despite the fact that single-family housing starts were 28.8% below 2008 levels.
"... Although there are some signs of improvement in the housing sector, we remain cautious as the market remains fragile," Robinette continued. "Thus, Ply Gem will continue to focus on maintaining a lean overall cost structure while maximizing cash flow and striving to outperform the marketplace in all business units, allowing us to emerge stronger when the housing market recovers."
Cost of products sold in the fourth quarter dropped to $166.2 milion from $203.9 million, and for all 2009 it dropped to $749.8 million from $980.1 million. But so did selling, general, and administrative costs, which fell to $31.3 million from $36 million in the fourth quarter and to $141.7 million in all 2009 from a year-earlier $155.4 million.