Ply Gem Industries Inc., a building products producer with more than $700 million in sales, has been pulled off the selling block. The news comes nearly one year after the New York company said it might be sold. Ply Gem, stung by a 1994 restructuring attempt that ended up causing financial problems, announced in August 1995 that it hired investment banker Bear, Stearns & Co. Inc. to explore ways to maximize shareholder value, including a possible sale.
``After an extensive review of operations, market conditions and external opportunities, the board and its financial advisers have determined that shareholder value can best be maximized by ongoing improvement of our existing businesses and not through the company's sale,'' according to Jeffrey Silverman, chairman and chief executive officer.
Ply Gem makes wood and vinyl products. The company's plastics operations are Variform Inc. of Kearney, Mo., a vinyl siding extruder; Great Lakes Window Inc., a major vinyl window fabricator in Toledo, Ohio; Richwood Building Products Inc., an injection molding operation in Richwood, Ky.; and Crestline Windows & Doors, which fabricates vinyl and wood windows in Mosinee, Wis.
The goal of the 1994 restructuring, which included elimination of about 600 jobs, was to reduce costs. Instead, costs increased. Ply Gem lost $8.5 million in 1994 and $7.4 million in 1995, as sales declined.
But, at least through the first half of 1996, Ply Gem has returned to profitability. Through the first six months, ended June 30, Ply Gem reported a profit of $1.52 million. In the same period of 1995, the company lost $1.64 million.
The second quarter was especially strong, as the company reported a profit of $4.16 million for the quarter, more than four times higher than the $1 million in profit earned for the second quarter of 1995.
Sales were up 3.8 percent for the second quarter, at $212.1 million, but declined by about the same amount for the first six months, reaching $354.1 million.
Ply Gem management said it wants to generate a 15 percent return on equity. The company expects to be halfway to that goal by the end of 1996.
Dana Snyder, president and chief operating officer, said the second quarter showed results of plans, first announced in 1995, to improve manufacturing efficiency and quality, while reducing raw material and conversion costs.