Download PLY GEM HOLDINGS INC (Form: 8-K/A, Received

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
Amendment No. 1
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 14, 2009
PLY GEM HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
333-114041
(Commission File Number)
20-0645710
(IRS Employer Identification No.)
5020 WESTON PARKWAY, SUITE 400
CARY, NORTH CAROLINA
(Address of principal executive offices)
27513
(Zip Code)
(919) 677-3900
(Registrant’s Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions ( see General Instruction A.2. below):
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note
This Current Report on Form 8-K/A (Amendment No. 1) is being filed by Ply Gem Holdings, Inc. to amend the Current Report on Form 8-K
originally filed with the Securities and Exchange Commission on August 14, 2009 (the “Original 8-K”). The sole purpose of this amendment
is to designate Item 4.02 on EDGAR. All other information in the Original 8-K remains unchanged and has not been updated for events
occurring after the filing of the Original 8-K.
FORWARD-LOOKING INFORMATION
Certain statements made in this Form 8-K, including any statements as to future results of operations and financial projections, may constitute
"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking
statements are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future
performance and involve certain risks and uncertainties which are difficult to predict. Therefore, actual future results and trends may differ
materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is
contained in Ply Gem Holdings, Inc.'s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report
on Form 10-K.
ITEM 2.02
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 14, 2009, Ply Gem Holdings, Inc. (the "Company") reported its results of operations for its fiscal quarter ended July 4, 2009. A
copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated
herein by reference.
The information under Item 2.02 of this Form 8-K and the accompanying exhibit are being furnished under Item 2.02 and shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liability of
such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange
Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.
ITEM 4.02
NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR
COMPLETED INTERIM REVIEW.
On August 13, 2009, the Audit Committee of the Company’s Board of Directors, after consultation with and upon recommendation from
management of the Company, concluded the Company’s previously issued unaudited financial statements for the three months ended April 4,
2009 included in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 19, 2009 should no longer be
relied upon and that disclosure should be made and action should be taken to prevent future reliance. The Company will restate its financial
statements for the three months ended April 4, 2009 due to an error related to the application of FASB Interpretation No. 18, Accounting for
Income Taxes in Interim Periods .
1
The restatement relates solely to the correction of the recorded tax benefit for the three months ended April 4, 2009. In the Company’s
previously filed financial statements for the three months ended April 4, 2009, the Company incorrectly calculated its income tax valuation
allowance. This error resulted in an understatement of the Company’s benefit for income taxes and an overstatement of the Company’s net loss
for the three months ended April 4, 2009. After this correction, the Company does not expect that the overall annual estimated tax provision
will be affected for the entire year, but the allocation will differ among the four quarters.
As a result of this income tax error, instead of reporting a tax benefit of $3.9 million, the Company should have recorded a tax benefit of $11.0
million for the three months ended April 4, 2009. This results in a restated net loss of $55.5 million for the three months ended April 4, 2009,
as compared to the previously reported net loss of $62.6 million. Certain other adjustments related to income taxes would also be effected in
the Company’s balance sheet, as summarized below.
The following is a summary of the effects of the adjustments on the Company’s unaudited condensed consolidated balance sheet, statement of
operations and statement of cash flows as of and for the three months ended April 4, 2009:
Unaudited Condensed Consolidated Balance Sheet
April 4, 2009
As
Previously
Reported
Deferred income tax asset
Total current assets
Total assets
Accrued expenses and taxes
Total current liabilities
Deferred income tax liability
Accumulated deficit
Total stockholder's deficit
Total liabilities and stockholder's deficit
$
Adjustments
As Restated
(Amounts in thousands)
252,749
1,034,210
94,370
142,460
4,395
(509,631 )
(305,663 )
1,034,210
$
3,645
3,645
3,645
940
940
(4,395 )
7,100
7,100
3,645
$
3,645
256,394
1,037,855
95,310
143,400
(502,531 )
(298,563 )
1,037,855
Unaudited Condensed Consolidated Statement of Operations
For the three months ended April 4, 2009
As
Previously
Reported
Adjustments
As Restated
(Amounts in thousands)
Benefit for income taxes
Net loss
$
(3,949 )
(62,638 )
$
(7,100 )
7,100
$
(11,049 )
(55,538 )
Unaudited Condensed Consolidated Statement of Cash Flows
For the three months ended April 4, 2009
As
Previously
Reported
Adjustments
As Restated
(Amounts in thousands)
Net loss
Adjustments to reconcile net loss to cash used in operating activities:
Deferred income taxes
Changes in operating assets and liabilities:
Accrued expenses and taxes
Net cash used in operating activities
$
(62,638 )
(7,056 )
20,465
(48,716 )
$
7,100
(8,040 )
940
-
$
(55,538 )
(15,096 )
21,405
(48,716 )
2
As shown in the Adjusted EBITDA table below, the income tax error did not affect Adjusted EBITDA for the three months ended April 4,
2009. This non-cash adjustment did not impact the Company’s cash, its liquidity position or its ability to service its existing debt obligations.
Unaudited Adjusted EBITDA
For the three months ended April 4, 2009
As Previously
Reported
Adjustments
As Restated
(Amounts in thousands)
$
Net loss
Interest expense, net
Benefit for income taxes
Depreciation and amortization
Non cash loss on currency transaction
Customer inventory buyback
Restructuring/integration expense
Adjusted EBITDA
$
(62,638 )
33,691
(3,949 )
13,896
88
1,685
3,890
(13,337 )
$
$
7,100
(7,100 )
-
$
$
(55,538 )
33,691
(11,049 )
13,896
88
1,685
3,890
(13,337 )
The Company defines Adjusted EBITDA as net income (loss) plus interest expense (net of interest income), provision (benefit) for income
taxes, depreciation and amortization, non-cash foreign currency gain/(loss), goodwill impairment charges, customer inventory buybacks, and
restructuring and integration costs. Other companies may define Adjusted EBITDA differently and, as a result, the Company's measure of
Adjusted EBITDA may not be directly comparable to Adjusted EBITDA of other companies.
The Company, including the Audit Committee of the Board of Directors, has discussed the foregoing matters with the Company’s independent
registered public accounting firm, Ernst & Young LLP. The Board of Directors has authorized and directed that the officers of the Company
take the appropriate and necessary actions to restate the Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2009 and to
ensure that the appropriate filings are made with the Securities and Exchange Commission as soon as practicable.
ITEM 9.01
99.1
FINANCIAL STATEMENTS AND EXHIBITS
Press Release, dated August 14, 2009
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form
8-K/A to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: September 24, 2009
PLY GEM HOLDINGS, INC.
By
Name:
Title:
/s/ Shawn K.
Poe
Shawn K.
Poe
Vice
President,
Chief
Financial
Officer,
Treasurer and
Secretary
4
EXHIBIT INDEX
Exhibit
99.1
Description
Press Release, dated August 14, 2009.
5
Exhibit 99.1
Cary, NC
Contact: Shawn Poe, CFO 919-677-4019
Ply Gem Reports Second Quarter 2009 Results
August 14, 2009, Ply Gem Holdings, Inc. (“Ply Gem” or the “Company”), a leading manufacturer of residential exterior building
products in North America, today announced second quarter 2009 net sales of $260.6 million, a 23.6% decrease from the $341.3 million for the
same period in 2008. For the first half of 2009, net sales were $443.3 million or 25.8% lower than the $597.7 million of net sales for the first
half of 2008.
Adjusted EBITDA for the second quarter of 2009 was $41.5 million compared to $41.2 million for the second quarter of 2008. Adjusted
EBITDA for the first half of 2009 was $28.2 million compared to $46.4 million for the first half of 2008.
Net loss for the second quarter was $8.0 million compared to a net loss of $19.5 million for the second quarter of 2008. Net loss for the first
half of 2009 was $63.5 million compared to a net loss of $41.3 million for the first half of 2008.
Gary E. Robinette, President and CEO, said “Ply Gem's second quarter and first half of 2009 sales and Adjusted EBITDA results continue to
reflect the challenging conditions that exist in the housing market today. However, despite the fact that single family housing starts were down
51.6% and 36.2% in the first and second quarters of 2009, respectively, Ply Gem demonstrated an improvement in our second quarter Adjusted
EBITDA compared to last year. Our Adjusted EBITDA performance is a direct result of our continued focus on taking profitable market share
and managing our overall cost structure which includes the actions that we have taken to realign our capacity during this historic housing
slump. We will continue to realign our cost structure as necessary for current and future market demand. At the same time, we are focused on
maximizing cash flow and outperforming the market place in all business units, allowing us to emerge stronger when the housing market
recovers.”
Ply Gem, headquartered in Cary, N.C., is committed to helping North America’s homebuilders, remodelers, architects, distributors,
dealers and retailers do more than build homes. Ply Gem wants to help them build their business. The Company offers an unmatched solution
to exterior building product needs with a portfolio that includes leading window, door, siding and accessories, stone veneer, fence and rail
brands so there is something for every project. Ply Gem siding brands include Mastic ® Home Exteriors, Variform ® , NAPCO ® , United Stone
Veneer, Kroy ® , Cellwood ® , Georgia Pacific, DuraBuilt ® , Richwood ® , Leaf Relief ® and Monticello ® Columns. Ply Gem windows
manufactures and markets vinyl, vinyl-clad, wood-clad, aluminum-clad, and aluminum window and patio door brands including Ply Gem ®
Windows, CWD ® Windows and Doors and Great Lakes ® Window. The Company’s brands are sold through short-line and two-step
distributors, pro dealers, home improvement dealers and big box retailers. Ply Gem employs more than 4,300 people across North America.
Visit www.plygem.com for more information.
Ply Gem management will host a conference call on August 14, 2009 at 10:00 a.m. EDT to report second quarter results. To participate please
call 866-713-8395 and use call confirmation number 45786981.
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 within the meaning
of the Private Securities Litigation Reform Act 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 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.
###
PLY GEM HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months ended
July 4, 2009
June 28, 2008
(Amounts in thousands)
Net sales
Costs and expenses:
Cost of products sold
Selling, general and administrative expenses
Amortization of intangible assets
Total costs and expenses
Operating earnings
Foreign currency gain (loss)
Interest expense
Interest income
Loss before benefit for income taxes
Benefit for income taxes
Net loss
$
260,576
$
197,831
36,008
4,912
238,751
21,825
(70 )
(33,124 )
83
(11,286 )
(3,307 )
(7,979 )
$
341,280
$
272,926
42,569
4,912
320,407
20,873
56
(51,065 )
107
(30,029 )
(10,536 )
(19,493 )
For the six months ended
July 4, 2009
June 28, 2008
(Amounts in thousands)
Net sales
Costs and expenses:
Cost of products sold
Selling, general and administrative expenses
Amortization of intangible assets
Total costs and expenses
Operating earnings (loss)
Foreign currency loss
Interest expense
Interest income
Loss before benefit for income taxes
Benefit for income taxes
Net loss
$
443,327
$
367,522
76,970
9,818
454,310
(10,983 )
(158 )
(66,880 )
148
(77,873 )
(14,356 )
(63,517 )
$
597,653
$
498,807
82,431
9,826
591,064
6,589
(495 )
(74,139 )
310
(67,735 )
(26,400 )
(41,335 )
The accompanying notes are an integral part of this unaudited condensed consolidated statement of operations.
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 for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the period January 1, 2009 through July 4, 2009 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2009.
The selected balance sheet data for the periods presented in Note 4 has been derived from the December 31, 2008 audited consolidated
financial statements of Ply Gem Holdings, Inc. and the unaudited condensed consolidated financial statements of Ply Gem Holdings, Inc. as of
July 4, 2009, 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.
We define Adjusted EBITDA as net income (loss) plus interest expense (net of interest income), provision (benefit) for income taxes,
depreciation and amortization, non-cash foreign currency gain/(loss), goodwill impairment charges, customer inventory buybacks, and
restructuring and integration costs. 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 as a measure of performance in accordance with
GAAP. You are cautioned not to place undue reliance on Adjusted EBITDA.
Net loss
Interest expense, net
Benefit for income taxes
Depreciation and amortization
Non cash loss (gain) on currency transaction
Customer inventory buyback
Restructuring/integration expense
Adjusted EBITDA
Ply Gem Holdings, Inc.
(Amounts in thousands)
For the three months ended
July 4, 2009
June 28, 2008
$
(7,979 ) $
(19,493 )
33,041
50,958
(3,307 )
(10,536 )
14,188
14,654
70
(56 )
1,825
802
3,675
4,919
$
41,513 $
41,248
Net loss
Interest expense, net
Benefit for income taxes
Depreciation and amortization
Non cash loss on currency transaction
Customer inventory buyback
Restructuring/integration expense
Adjusted EBITDA
Ply Gem Holdings, Inc.
(Amounts in thousands)
For the six months ended
July 4, 2009
June 28, 2008
$
(63,517 ) $
(41,335 )
66,732
73,829
(14,356 )
(26,400 )
28,084
30,680
158
495
3,510
1,033
7,565
8,117
$
28,176 $
46,419
3. Long-term debt amounts in the selected balance sheets at July 4, 2009 and December 31, 2008 consisted of the following:
December 31,
July 4, 2009
2008
(Amounts in thousands)
Senior secured asset based revolving credit facility
9% Senior subordinated notes due 2012, including
unamortized premium of $126 and $146
11.75% Senior secured notes due 2013, net of
unamortized discount of $5,445 and $5,960
$
80,000
$
360,126
$
694,555
1,134,681
60,000
360,146
$
694,040
1,114,186
4. The following is a summary of selected balance sheet amounts at July 4, 2009 and December 31, 2008:
December 31,
July 4, 2009
2008
(Amounts in thousands)
Cash and cash equivalents
Accounts receivable, less allowances
Inventories
Prepaid expenses and other current assets
Property and equipment, net
Intangible assets, net
Goodwill
Accounts payable
Long-term debt
Stockholder's deficit
$
19,482
136,322
93,746
23,105
155,758
183,896
391,836
61,033
1,134,681
(304,929 )
$
58,289
90,527
123,412
19,985
170,011
193,604
390,779
59,603
1,114,186
(242,628 )