Ply Gem — Investor Presentation (October 2007)
47 slides from Ply Gem's investor presentation, Oct 4, 2007
Slide 1: Ply Gem Industries Oct 5, 2007
Ply Gem Industries Oct 5, 2007:
Slide 2: Disclaimer
Disclaimer These slides contain (and the accompanying oral discussion will contain) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual re
Slide 3: Ply Gem's profile
Ply Gem’s profile: One of the largest manufacturers of exterior building and home improvement products in the U.S. Approximately 7000 associates Over 8 million sq. ft. of mfg. space 24 manufacturing facilities Over 1.5 billion in Sales
Slide 4: Ply Gem's market overview
Ply Gem’s market overview: Provider of branded products for new construction and home improvement markets sold through many channels of distribution covering most price points #1 in Aluminum accessories #1 in Vinyl Railing Leading position In Vinyl Windows #2 market share In Vinyl Siding
Slide 5: Ply Gem's financial partner is Caxton-Iseman
Ply Gem’s financial partner is Caxton-Iseman: With investments in a variety of well managed growth companies Caxton-Iseman invests private capital rather than pension or insurance funds so short term IRR’s are secondary. Conservative Growth Long term investor $2 Billion dollar PE arm of Hedge Fund T
Slide 6: Ply Gem's product mix
45% 3% 52% Ply Gem’s product mix: Windows and Doors Fence and Rail Siding & Accessories New Products
Slide 7: Ply Gem's customer mix
44% 1% 55% 1% Ply Gem’s customer mix: Remodel and Repair Commercial New Construction Exported
Slide 8: Ply Gem's leading brands
Ply Gem’s leading brands: New Construction Windows Fence and Rail Siding & Accessories Remodel & Repair Windows
Slide 9: Ply Gem's competitive advantage
Ply Gem’s competitive advantage: Customers Operational Excellence Facilities Efficient Mfg. Ply Gem • Customer focused • Recognized for outstanding service/lead times • Strong brands....GP..Alcoa..Mastic..MW…Alenco • Siding plants most efficient in industry • Virtual facility strategy • DFT/Lean mfg
Slide 10: Windows
Windows
Slide 11: Market Overview Windows
Market Overview Windows: Vinyl demand remains strong but differentiation between value and premium vinyl products eroding. Premium products must deliver desired features. Residential Window Market Share by Material 2009F Source: 2003 & 2006 WDMA/AAMA industry report - Ducker Research Co.
Slide 12: Ply Gem's Window Platform
Ply Gem’s Window Platform : Entry Level Aluminum Entry Level Vinyl SH Mid Range Vinyl SH/DH Top Line Vinyl SH/DH Twinseal Classic Mid Range Clad DH Mid Range Wood DH Jefferson Jefferson Freedom Freedom
Slide 13: Ply Gem's window mfg. plants
Ply Gem’s window mfg. plants:
Slide 14: Siding
Siding
Slide 15: US Vinyl Siding Marketshares Leading Market Positions
US Vinyl Siding Marketshares Leading Market Positions ¨ #2 vinyl siding manufacturer in North America ¨ #1 Aluminum accessories manufacturer in North America ¨ #2 Designer accents manufacturer in North America Other 2% Heartland 5% Crane 6% Royal 5% Alside 11% Certainteed/Norandex 35% Kaycan 7% Ply
Slide 16: Combined Siding Overview
Sales by Product Category Sales by End Market Combined Siding Overview: Metal Accessories 29% Vinyl Siding 65% Designer Accents 5% Decking & Railing 1% Remodeling 51% New Construction 49%
Slide 17: Siding Group - manufacturing plants
Siding Group - manufacturing plants: Vinyl Siding Plant Metal Accessories Plant Injection Molding Plant
Slide 18: Siding Market Overview: Market Share Trends by Product Type
Market Share Trends by Siding Product Type Vinyl siding remains the market share leader as fiber cement grows at the expense of wood. Siding Market Overview ’00 ’05 ‘10 ’00 ’05 ‘10 ’00 ’05 ‘10 ’00 ’05 ‘10 ’00 ’05 ‘10 ’00 ’05 ‘10 Vinyl Wood Stucco Brick Fiber Cement Metal & Misc. Source: Freedonia Gr
Slide 19: The future Ply Gem
The future Ply Gem
Slide 20: Ply Gem's Strategic Evolution
Fewer Operating Companies Simplicity Organic growth Synergy/cooperative activities Focus on Development of HR Focus on growth of sales & profits Ply Gem’s Strategic Evolution: to Many Operating Companies Complexity Growth through acquisition Division autonomy Focus on ROIC Focus on profit growth Bui
Slide 21: Ply Gem's strategic priorities
Human Resources Customer focus Innovation Profitable Growth Continuous Improvement Ply Gem’s strategic priorities: • Excellent customer service • Measure • Brand management • New Products • Utilize technology • Improve diversity • Double digit growth • Safety • Low cost • High quality standard • Tal
Slide 22: The Brand behind the Brands
One Siding Company One New Const. Window One Replacement Window Co The Brand behind the Brands: The Brand you can build on
Slide 23: Ply Gem year sales history
Ply Gem 5 year sales history: Ply Gem has more than doubled its Sales since 2004 and expects to do so again going forward.
Slide 24: Market Opportunity
Market Opportunity Exterior Cladding Fence and Rail New Construction Windows Remodel and Repair Windows Market size Ply Gem Source: Management best estimates
Slide 25: Ply Gem Industries
fs PLY GEM INDUSTRIES, INO. @PLY GEM
Slide 26: Demonstrated Ability to Integrate Strategic Acquisitions
Demonstrated Ability to Integrate Strategic Acquisitions • Successfully established a “Holding Company” structure for near-term reporting & operating efficiency • MW Windows acquired for $320 million or 6.3x’s including $6.8 million of expected cost savings & synergies • Realized cost savings & syne
Slide 27: Demonstrated Ability to Integrate Strategic Acquisitions
Demonstrated Ability to Integrate Strategic Acquisitions • Successfully refinanced existing bank debt which resulted in cash interest savings of over $4.0 million per year • CertainTeed’s vinyl window and patio door business acquired on September 30, 2007 • Provides window platform for servicing the
Slide 28: CertainTeed Window Acquisition
CertainTeed Window Acquisition • Expands Ply Gem’s national window footprint • Low risk alternative for expanding operations in the West versus green-fielding • Allows production to be shifted from the East to service Ply Gem’s existing West Coast customers • CT has balanced end market sales mix of
Slide 29: AHE Integration Update
AHE Integration Update The integration of AHE is completed and exceeded expectations. – No loss of customers, suppliers or unplanned employees – On pace to exceed $28.3mm in synergies, an increase of $6.3mm, or 28.6% versus original estimates – Strategic sourcing savings substantiated through events
Slide 30: AHE Synergy Rationalization
AHE Synergy Rationalization The Company has modeled in one-time expenses, primarily in relation to plant closures, severance and retainment bonuses, and brand transition, estimated to total $9.5 million and expected to be incurred from 2006-2009 Management believes $28.3 million in annual cost savin
Slide 31: Alenco Update
Alenco Update • Integration § Implemented December 2006 • Cost Savings Plan Actual Status § Insurance 200K 200K Complete § Aluminum 300K 300K Complete § Hardware 100K 150K Complete § Extrusion 3,500K 3,500K Completed Q207 § Salaries 0 750K Totals $ 4,100K $4,900K • Arizona Plant - Start up § Complet
Slide 32: Net Sales
Net Sales • Sales growth that outperformed our industry • Improved sales mix to 58% New Construction and 42% R&R • Reduced customer concentration largest customer = only 10% of sales • Long-term customer relationships with leaders within each channel • Demonstrated ability to manage selling price ag
Slide 33: Adjusted EBITDA
Adjusted EBITDA • Ply Gem has demonstrated history of strong earnings performance • Adjusted EBITDA Margins improved from 10.5% in 2004 to 12.6% in 2006 • Highly variable cost structure 75% variable and only 25% fixed • Low S,G&A expense of 11.3% in 2006 when adjusted for unusual items • Demonstrate
Slide 34: Capital Spending
Capital Spending • Ply Gem has had very modest Capex requirements which averaged only 1.6% • Historically approximately 25% of Ply Gem’s Capex has been maintenance • Ply Gem has demonstrated its ability to reduce Capex when appropriate
Slide 35: Adjusted EBITDA - Capex
Adjusted EBITDA - Capex • Ply Gem has a history of Strong EBITDA performance, modest Capex requirements and has been an efficient user of working capital. • Ply Gem reduced it’s Net Debt position by $49.7 million during 2005 and $66.2 million in 2006 when we take into account the cash from operation
Slide 36: Ply Gem has demonstrated Strong Financial Performance
Net Sales Adjusted EBITDA Adjusted EBITDA - CapEx Capital Expenditures Ply Gem ’s has demonstrated Strong Financial Performance Note: Historical pro forma results include MW, Alenco and AHE for all periods shown.
Slide 37: Key Attributes of Ply Gem
Demonstrated Ability to Integrate Acquisitions with Significant Synergies and Cost Savings Balance Between Repair & Remodeling and New Construction Ply Gem’s Proven and Experienced Management Team Substantial and Sustainable Free Cash Flow Generation Long-standing and Diversified Customer Relationsh
Slide 38: Questions & Answers
Questions & Answers
Slide 39: Supplemental Information
Supplemental Information
Slide 40: Supplemental Information - Excluding AHE
Supplemental Information - Excluding AHE ¨ Computation of Pro Forma Net Sales
Slide 41: Computation of Adjusted EBITDA - Excluding AHE
Supplemental Information Computation of Adjusted EBITDA - Excluding AHE
Slide 42: Computation of Pro Forma Capital Expenditures - Excluding AHE
Supplemental Information - Excluding AHE Computation of Pro Forma Capital Expenditures (CAPEX)
Slide 43: Computation of Adjusted Pro Forma EBITDA - CAPEX - Excluding AHE
Supplemental Information - Excluding AHE Computation of Adjusted Pro Forma EBITDA - CAPEX
Slide 44: Supplemental Information - Including AHE
Supplemental Information - Including AHE ¨ Computation of Pro Forma Net Sales
Slide 45: Computation of Adjusted EBITDA - Including AHE
Supplemental Information Computation of Adjusted EBITDA - Including AHE
Slide 46: Computation of Pro Forma Capital Expenditures - Including AHE
Supplemental Information - Including AHE Computation of Pro Forma Capital Expenditures (CAPEX)
Slide 47: Computation of Adjusted Pro Forma EBITDA - CAPEX - Including AHE
Supplemental Information - Including AHE Computation of Adjusted Pro Forma EBITDA - CAPEX
PLY GEM Holdings — Investor Presentation (October 2007) on 6ix