Ply Gem Reports Third Quarter 2006 Results.KEARNEY, Mo. -- Ply Gem Holdings, Inc. ("Ply Gem" or the "Company"), a leading manufacturer of residential exterior building products in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , today announced third quarter 2006 net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $257.1 million, a 14.0% increase over the $225.5 million for the same period in 2005. For the first nine months of 2006, net sales were a record $761.5 million or 21.3% higher than the $627.6 million of net sales for the first nine months of 2005. The results for 2006 include the operations of the Company's subsidiary, AWC (Association for Women in Computing, San Francisco, CA, www.awc-hq.org) A membership organization, founded in 1978, dedicated to the advancement of women in computing. It publishes newsletters, hosts seminars and annual conferences and recognizes distinguished women in the field with its Holding Company ("Alenco"), which was acquired by Ply Gem on February 24, 2006. Alenco contributed $37.2 million of net sales for the third quarter of 2006 and $90.9 million of net sales for the first nine months of 2006. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the third quarter of 2006 were $27.3 million compared to $31.4 million for the third quarter of 2005. For the first nine months of 2006, operating earnings were $75.6 million compared to $69.2 million for the first nine months of 2005. Alenco contributed $3.1 million of operating earnings for the third quarter of 2006 and $8.2 million of operating earnings for the first nine months of 2006. Net income for the third quarter of 2006 was $6.5 million compared to net income of $11.3 million for the third quarter of 2005. For the first nine months of 2006, net income was $15.5 million compared to $16.5 million for the first nine months of 2005. Ply Gem's net income for the third quarter of 2006 and the first nine months of 2006 included $0.1 million of after tax impact of a foreign currency loss and $0.6 million of after tax impact of a foreign currency gain, respectively. Net income for the third quarter of 2005 and the first nine months of 2005 included $0.8 million and $0.5 million of after tax impact of a foreign currency gain, respectively. Alenco contributed $1.9 million and $4.9 million to net income for the third quarter and first nine months of 2006, respectively. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the third quarter of 2006 was $37.2 million compared to $37.9 million for the third quarter of 2005. Adjusted EBITDA for the third quarter of 2006 excludes $1.7 million of non-recurring expense associated with the conversion of all outstanding awards under Ply Gem's Phantom Stock Plan Phantom Stock Plan An employee benefit plan that gives selected employees (senior management) many of the benefits of stock ownership without actually giving them any company stock. Sometimes referred to as "shadow stock. . For the first nine months of 2006, Adjusted EBITDA was $102.5 million compared to $88.7 million for the first nine months of 2005. Adjusted EBITDA for the first nine months of 2006 excludes $1.7 million of one-time non-recurring expense associated with the conversion of all outstanding awards under Ply Gem's Phantom Stock Plan and $2.2 million of non-recurring restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs associated with the closure of our Sarver, PA window facility. Alenco contributed $4.1 million of Adjusted EBITDA for the third quarter of 2006 and $10.3 million for the first nine months of 2006. Adjusted EBITDA for all periods presented excludes currency translation gains or losses. Gary Robinette, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said: "We are pleased with Ply Gem's third quarter performance in light of recent downward trends in the single family housing market. Our ability to gain profitable market share coupled with our lean cost structure continues to produce strong financial results." Mr. Robinette continued: "We expect the addition of our recently announced acquisition of Alcoa Home Exteriors to Ply Gem's portfolio will enable us to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. attractive market opportunities and provide us with a strong sustainable platform to fully serve all channels of the vinyl siding Wikipedia is not the place for advertisement or self-advertising. Vinyl siding, first introduced to the exterior cladding market in the late 1950s, is an alternative to aluminum siding, fiber cement siding, and timber siding. market. Alcoa Home Exteriors' products and associates clearly add to Ply Gem's existing value proposition for servicing a diverse customer base." On February 24, 2006, Ply Gem Industries, Inc. acquired all of the outstanding shares of AWC Holding Company (the "Alenco Acquisition") in accordance with a stock purchase agreement entered into among Ply Gem Industries, Inc. and Linsalata Capital Partners for aggregate consideration of approximately $120.0 million, subject to a working capital adjustment and the aggregate value of certain stock options cancelled or forfeited for·feit n. 1. Something surrendered or subject to surrender as punishment for a crime, an offense, an error, or a breach of contract. 2. Games a. in connection with the Alenco Acquisition. On October 31, 2006, Ply Gem Industries, Inc. acquired all of the outstanding shares of Alcoa Home Exteriors, Inc. (AHE) in accordance with a stock purchase agreement entered into among Ply Gem Industries, Inc. and Alcoa Securities Corporation and Alcoa Inc. for aggregate consideration of approximately $305.0 million, subject to a working capital adjustment. Ply Gem's results for all periods presented do not include the results of operations from AHE. Ply Gem Industries, Inc. is a leading manufacturer of residential exterior building products. The company sells a broad range of vinyl siding, vinyl, aluminum and wood windows, aluminum trim coil, aluminum siding and accessories, and vinyl and composite fence, railing and decking products. Ply Gem is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Ply Gem Holdings, Inc., which is controlled by affiliates of Caxton-Iseman Capital. For more information, please visit the Company's website at www.plygem.com. Ply Gem management will host a conference call on November 10, 2006 at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to report third quarter results. To participate, please call 866-770-7129 and use call confirmation number 89877728. Note: As used herein, the term "Ply Gem" refers to Ply Gem Holdings, Inc. and all its subsidiaries, including Ply Gem Industries, Inc., unless the context indicates otherwise. This term is used for convenience only and is not intended as a precise description of any of the separate corporations. This document and oral statements made from time to time by our representatives may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on the Company's current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors impacting such forward-looking statements include the availability and cost of raw materials and purchased components, the level of construction and remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure. bone remodeling activity, changes in general economic conditions, the rate of sales growth, and product liability claims. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to the reports and filings of the Company with the Securities and Exchange Commission. [TABLE OMITTED] The accompanying notes are an integral part of this unaudited condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statement of operations See Income statement. . 1. The accompanying unaudited condensed consolidated statements of operations of Ply Gem Holdings, Inc. (the "Company") do not include all of the information and footnotes required by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. ) considered necessary for a fair presentation have been included. Operating results for the period from January 1, 2006 through September 30, 2006 are not necessarily indicative of the results that may be expected for the year ended December 31, 2006. The selected balance sheet data for the periods presented in Note 4 has been derived from the December 31, 2005 audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge of Ply Gem Holdings, Inc. and the unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. as of September 30, 2006, and does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The Company's fiscal quarters are based on periods ending on the last Saturday of the last week in the quarter. Therefore the financial results of certain fiscal quarters will not be exactly comparable to the prior and subsequent fiscal quarters. 2. Adjusted EBITDA means net income (loss) plus interest expense (net of investment income), provision (benefit) for income taxes, depreciation and amortization, non-cash foreign currency gain/(loss), amortization of non-cash write-off of the portion of excess purchase price from acquisitions allocated to inventories, third-party charges associated with business combination financing costs ("other expense"), cumulative effect of accounting changes and other non-recurring charges. Other companies may define Adjusted EBITDA differently and, as a result, our measure of Adjusted EBITDA may not be directly comparable to Adjusted EBITDA of other companies. Management believes that the presentation of Adjusted EBITDA included in this press release provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business. Although we use Adjusted EBITDA as a financial measure to assess the performance of our business, the use of Adjusted EBITDA is limited because it does not include certain material costs, such as interest and taxes, necessary to operate our business. Adjusted EBITDA included in this press release should be considered in addition to, and not as a substitute for, net earnings in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). as a measure of performance in accordance with GAAP. You are cautioned not to place undue reliance on Adjusted EBITDA. The following tables set forth the reconciliation of Adjusted EBITDA to net income (loss) for Ply Gem as a whole and that portion contributed by Alenco: [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] 3. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. at September 30, 2006 and December 31, 2005 consisted of the following:
> > September 30,
December 31, 2005
> > (Amounts in
> >
Senior term loan facility > > $ 398,000
$ 277,192
Senior subordinated notes > > 360,242
360,276
> > 758,242
637,468
Less current maturities > > 4,000
1,692
> > $ 754,242
$ 635,776
4. The following is a summary of selected balance sheet amounts at September 30, 2006 and December 31, 2005: [TABLE OMITTED] |
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