Investment group files suit against Ply Gem

By Catherine Kavanaugh
Staff Reporter

Published: June 2, 2014 2:16 pm ET
Updated: June 2, 2014 2:21 pm ET

Related to this story

Topics Public Policy, Construction, Pipe/Profile/Tubing

A retirement fund representing firefighters and police in Waterford, Mich., is claiming in a lawsuit that Ply Gem Holdings Inc. misrepresented its financial performance in violation of federal securities laws.

The investment group alleges that the Cary, N.C.-based manufacturer of vinyl siding and other exterior building materials omitted required information from a registration statement leading up to its initial public offering last year.

On May 22, 2013, Ply Gem issued more than 18 million common shares to the public on the New York Stock Exchange for $21 each, raising net proceeds of $353.4 million. The shares are listed under the trade name PGEM, which hit a 52-week low of $10.63 and opened at $11.60 a share on the first anniversary of its initial public offering.

With Ply Gem shares trading at about half the IPO price, the Waterford Township Police and Fire Retirement System commenced a class action lawsuit in U.S. District Court in New York.

The complaint was filed May 19 on behalf of purchasers of the common stock that can be traced to the IPO. The law firm of Robbins Geller Rudman & Dowd LLP has until July 18 to seek other lead plaintiffs and make the case a class-action suit.

The complaint says certain Ply Gem officers, directors and underwriters of the IPO violated the Securities Act of 1933 by failing to disclose all risks and business changes known at the time of its registration statement. The omissions allegedly caused the financial information that was reported “not to be indicative of Ply Gem’s future operating results.”

The complaint says the undisclosed information included: a new supply agreement with Home Depot that had an inventory take-back provision, labor inefficiencies, and ramp-up costs for a lower-price, lower-margin product to be initially sold by Home Depot.

“These known, but undisclosed, events had a material adverse effect on Ply Gem’s operating results during its second quarter ended June 29, 2013,” according to a statement by the law firm representing the system for first responders retired from the Detroit suburb.

A Ply Gem spokeswoman could not be reached for comment.

In addition to vinyl siding and fencing, Ply Gem makes windows, patio doors and other kinds of siding and accessories for the professional and do-it-yourself construction and remodeling markets primarily in the United States and Canada.

Ply Gem ranks among the top pipe, profile and tubing extruders in North America. The company reported that net sales increased 4.8 percent to $269.5 million for the first three months of 2014 compared to the prior year. However, operating earnings showed a $19.6 million loss, which is a decrease of $19 million from the first quarter of 2013.


Comments

Investment group files suit against Ply Gem

By Catherine Kavanaugh
Staff Reporter

Published: June 2, 2014 2:16 pm ET
Updated: June 2, 2014 2:21 pm ET

Post Your Comments


Back to story


More stories

Image

Audacious vandal stuns Taipei Plas

September 29, 2014 4:59 pm ET

Melodrama erupted at the traditionally tranquil Taipei Plas trade show on Sept. 28 when a mysterious intruder flung red paint at the Baumüller...    More

Image

Germans, Chinese question Plastindia move to Gujarat

September 29, 2014 4:39 pm ET

Two major international partners of the Plastindia trade show have raised serious concerns about the show organizer's decision to move it to another...    More

Image

EEOC suing movable wall maker Hufcor

September 29, 2014 3:09 pm ET

Movable wall and partition maker Hufcor Inc. is facing a federal lawsuit from the U.S. Equal Employment Opportunity Commission after violating...    More

Image

Early decision on 3-D motion technology goes to National Graphics

September 29, 2014 2:29 pm ET

Even without super powers, technology firm National Graphics Inc. has won a decision in a patent challenge vs. a rival company.    More

Image

Sale of PVC maker Oltchim still in limbo

September 29, 2014 10:25 am ET

Fresh attempts to privatize insolvent Romanian PVC producer Oltchim SA have met with new obstacles as the European Union questioned the Romanian gover...    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events