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March 14, 2014
07:08 EDTPGEMPly Gem says weather to have adverse impact on Q1 operating results
“As we look ahead and our volumes recover, we expect to generate meaningful operating leverage. However, we certainly do not expect a linear recovery, and there will continue to be some growing pains as our operations scale, but this is to be expected and we view it as a normal and healthy part of the recovery process. What is clearly outside of our control is the adverse weather that we experienced in recent months and the resulting market pullback. We expect weather to have an adverse impact on our first quarter operating results with net sales expected to be down by 15%-20% on a sequential basis with our Q1 adjusted EBITDA being breakeven to slightly down. As a reminder, Q1 and Q4 are our seasonally weakest periods with our lowest profitability, so we do expect a typical pick up as we move through the more important Q2 and Q3. The opportunity ahead of us is really about recapturing margin in our Windows and Doors segment as that continues to scale as volume expands, regional builders become more active in the market, and pricing discipline returns. We are confident in recapturing those margins and we are making progress in many areas including on the pricing front and in January we announced our third price increase over the past 12 months for our Windows & Doors segment as well as price increases in our Siding, Fencing and Stone segment. We expect to largely maintain full year gross profit margins in our Siding, Fencing and Stone segment in the mid-to-high 20% range, while delivering the $15M-$20M of cost savings and synergies from our Gienow and Mitten acquisitions. Ply Gem has an attractive position in the market place and we’ll continue to strengthen our position as underlying macro trends improve and we move past these unprecedented weather conditions."
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