Ply Gem Industries Inc.'s roller coaster ride, which began last year, hit a loop-the-loop on Aug. 2, with an announcement that the $800 million building products company might be sold. Ply Gem said it hired investment banker Bear, Stearns & Co. Inc. to explore ways to maximize shareholder value, including the possible sale of the company. Ply Gem makes wood and plastic construction products, including vinyl windows and siding.
Company officials blamed an unsuccessful restructuring and high costs associated with implementing a new business information system with causing second-quarter earnings to plunge 83.6 percent, to $1 million, from $6.3 million a year earlier. Second-quarter sales also declined, by 9.2 percent, to $199.6 million, from $219.8 million. The quarter ended July 1.
Meanwhile, the New York company named as president and chief operating officer a high-profile plastics executive, Dana Snyder, former president of Alcoa Construction Products Group. Snyder began at Ply Gem June 19.
Most of Ply Gem's sales come from wood products. The company processes plastics at four businesses: vinyl siding extruder Variform Inc. of Kearney, Mo.; vinyl window fabricator Great Lakes Window Inc. in Toledo; Richwood Building Products Inc., an injection molding firm in Richwood, Ky.; and Crestline Windows & Doors, which assembles vinyl and wood windows in Mosinee, Wis.
Ply Gem reported 1994 sales of $796.4 million. For the year, the company lost $8.5 million - after at least 10 straight years of profitability. The firm has not broken out specific sales fromplastic processing, or said how the restructuring will impact its plastics operations.
Snyder, who has more than 20 years' experience in building products, said Ply Gem is well-positioned for a rebound.
``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,'' he said.
Here is a recap of Ply Gem's recent activities:
Ply Gem Industries Inc., in the third quarter of 1994, announced its restructuring. The move would cut 600 jobs and save $13 million a year.
On April 10 this year, Monte R. Haymon abruptly resigned as president and COO, after only a few months with the company. No reason was given.
On June 5, the company announced it had hired Snyder to replace Haymon. Snyder comes from Alcoa Construction Products Group, a $600 million business that includes Alcoa Building Products, vinyl window extruder Dayton Technologies, window fabricator Alcoa Vinyl Windows, and Caradco windows.
On Aug. 2, Ply Gem announced its possible sale. Instead of saving money, the restructuring - which reduced employment 15 percent, closed several plants and boosted the use of temporary employees, consultants and systems analysts - actually increased costs, according to the company.
Ply Gem said it would not say anything more unless a definitive transaction can be announced.
Despite reporting poor second-quarter numbers, news that a sale might happen sent Ply Gem's shares up $1, to $17.375 at the close of trading Aug. 2. The stock, traded on the New York Stock Exchange, was nearing $19 a share by the middle of last week.
