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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 2, 1995
Commission File No. 1-4087
Ply Gem Industries, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-4087 11-1727150
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation)
777 Third Avenue, New York, New York 10017
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(Address of Principal Executive Offices)
Registrant's Telephone Number: (212) 832-1550
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Items 1 - 4. Not Applicable.
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Item 5. Other Events.
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On August 2, 1995 the Company announced its results for the second
quarter and six months ended July 2, 1995 and that it had retained Bear Stearns
Co. Inc. to explore various strategic alternatives to maximize shareholder
value, including the possible sale of the Company.
Item 6. Not Applicable.
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Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(c) Exhibits.
(20) Press Release issued August 2, 1995.
Item 8. Not Applicable.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: August 2, 1995
PLY GEM INDUSTRIES, INC.
By: /s/ Herbert P. Dooskin
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PRESS RELEASE DATED AUGUST 2, 1995
PRESS RELEASE
[LETTERHEAD OF PLY GEM INDUSTRIES APPEARS HERE]
New York, NY August 2, 1995
PLY GEM ANNOUNCES SECOND QUARTER RESULTS
Hires Bear Stearns to Explore Strategic Alternatives to Maximize Shareholder
Value
New York, NY...August 2, 1995...PLY GEM industries, Inc. (NYSE:PGI) today
announced its results for the second quarter and six months ended July 1, 1995.
At the same time, the Company announced that it has retained investment banker
Bear, Stearns & Co. Inc. to explore various strategic alternatives to accelerate
the maximization of shareholder value, including the possible sale of the
Company.
Financial Results
Net sales for the second quarter were $199,571,000, compared with last year's
record revenues of $219,805,000. Excluding discontinued product lines, net sales
declined $6 million or 3%. Net Income for the second quarter was $1,028,000, or
$.07 per share, a decline from the $6,265,000 or $.40 per share earned a year
ago.
The primary reasons for the Company's weakened performance were the significant
expenses associated with implementing the new business process redesign and
information systems, as well as higher costs associated with the restructuring,
which crated certain operating inefficiencies, which were incurred during the
second quarter. These internal problems were compounded by weakness in consumer
spending and housing activity and continued upward pressure from raw material
costs, which the Company was unable to pass along to customers.
Problems & Costs Associated With 1994 Restructuring
Management stated that the reengineering effort has not been as successful as
expected, and has resulted in poor process implementation and costly budget
over-runs, primarily in the Company's window subsidiaries. In addition, the
increased use of consultants, systems analysts, and temporary employees and the
creation of a secondary corporate infrastructure has negated any savings
benefits from the headcount reduction, and actually increased operating,
manufacturing and administrative costs,
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"Although external economic conditions certainly impacted our results, we know
that internal costs and problems associated with the 1994 restructuring are
primarily responsible for the Company's current poor performance. While we
cannot control external events, we can take steps to assert tighter control of
our internal operations and have embarked on a course to do exactly
that,"Jeffrey S. Silverman, Chairman & CEO.
Strategic Leadership Under New President Dana R. Snyder
In June, Dana R. Snyder joined PLY GEM as President and Chief Operating Officer.
A building products executive with over 20 years experience, most recently as
President of Alcoa Construction Products Group, he brings operational expertise
and his extensive knowledge of the customers, suppliers and markets to PLY GEM.
President Dana R. Snyder stated that "PLY GEM is well positioned in the home
improvement industry with high quality product lines and a loyal customer base.
The current issues facing PLY GEM are not revenue or product-related but are
primarily the result of increased costs due to operating problems in our window
subsidiaries which we are addressing. We have identified the issues and are
instituting effective solutions to generate quality revenue growth and reduce
costs to accelerate earnings, the results of which should be realized in early
1996. We are confident that this initiative will increase shareholder value.
However, we have retained Bear, Stearns in an effort to accelerate this
maximization of shareholder value. We believe that PLY GEM's leadership position
in the home improvement market, our plans and opportunities for 1995 and
thereafter, and potential synergistic opportunities will be attractive to
potential strategic acquirors."
The Company also stated that it does not expect to disclose developments with
respect to its exploration of strategic alternatives unless and until it is in a
position to announce a definitive transaction. Futhermore, no assurances can be
given that this process will result in any specific transaction.
Outlook for 1995 & Beyond
Regarding full year 1995 results, management stated that the current problems
and related higher costs will make significant gains in profitability, which
had been anticipated previously, unlikely in 1995. As to sales, for the
remainder of the year, the Company is encouraged by the recent pick-up in
consumer confidence, a rise in existing home sales and lower interest rates, all
of which are good growth indicators for building materials producers such as PLY
GEM.
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The following actions are being taken by management during the balance of 1995
to significantly improve operating results in early 1996:
. full implementation of the new BPCS management information systems necessary
to run the window businesses;
. reductions in cost of goods sold through new procurement strategies, improved
manufacturing efficiencies, process improvements and material utilization;
. profitable sales growth based on a renewed commitment to delivering the
highest levels of customer service and improvements in order fill ratios and
on-time deliveries;
. major reduction of administrative expenses and costs;
. realization of fixed cost reductions from the completion of facility
consolidations and headcount reductions, including the elimination of high
consulting fees associated with the restructuring; and
. creation and implementation of new employee productivity and empowerment
programs.
"It is important for all our stakeholders to realize that the fundamentals of
the Company remain very strong and that the short-term costs and problems
associated with the 1994 restructuring are being addressed. I am confident that
when the above actions are completed, PLY GEM will reach record earnings levels
in 1996," concluded Mr. Snyder.
PLY GEM Industries, Inc. is a leading national manufacturer and distributor of
specialty products for the home improvements industry employing 4,000 people in
over 40 locations throughout the U.S. and Canada.
(MORE)
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<CAPTION>
CONSOLIDATED CONDENSED EARNINGS SUMMARY (UNAUDITED)
(in thousands except per share data)
QUARTER ENDED SIX MONTHS ENDED
July 1,1995 July 2, 1994 July 1, 1995 July 2, 1994
<S> <C> <C> <C> <C>
Net Sales $199,571 $219,805 $359,806 $383,217
Cost of Sales 167,801 173,726 301,607 310,661
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Gross Profit 33,770 46,079 58,199 72,556
Selling, General & Admin. 29,974 32,494 56,947 58,807
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Operating Income 3,796 13,585 1,252 13,749
Interest Expense (1,770) (1,750) (3,248) (4,412)
Invstmt & Other Inc. (Exp.) (408) (459) (980) (333)
--- --- --- ---
Pretax Income (Loss) 1,618 11,376 (2,976) 9,004
Income Tax 590 5,111 (1,339) 4,044
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Net Income (Loss) $ 1,028 $ 6,265 $ (1,673) $ 4,960
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EARNINGS (Loss) Per Share
Primary $.07 $.40 $(.11) $.36
Fully Diluted $.07 $.40 $(.11) $.34
Average Shares Outstanding
Primary 14,440 15,756 14,444 13,639
Fully Diluted 14,440 15,756 14,444 14,623
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PLY GEM Industries, Inc. Contact Bear, Stearns & Co. Inc. Contacts:
Diane M. Cady Peter Rothschild Robert Bicknese
Vice President, Investor Relations Senior Managing Director Managing Director
(212) 832-1550 (212) 272-3769 (212) 272-3851
