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Ply Gem Industries
JP Morgan SMid Cap Conference
December 10, 2013
Legal
Disclaimer
These slides and the accompanying oral discussion contain certain statements that are not historical fact...
Management
Presenters

•President and Chief Executive Officer since 2006

Gary Robinette

President and CEO

Shawn Poe

Vi...
Ply Gem’s
Profile
One of the largest manufacturers of exterior building
and home improvement products in North America

Ne...
Ply Gem’s
Market

Provider of branded products for new construction
and home improvement markets sold through many
channel...
NA

Footprint
Window Manufacturing
Siding / Access Manufacturing
Fence + Rail Manufacturing
Corporate / HQ
Stone Manufactu...
Product

Categories
Gable vents and accessories
Gutter protection systems
Vinyl and aluminum soffit
Window mantles
Manufac...
Siding
Group

Market Leader in Vinyl Siding
Why We Win

Key Brands

• #1 vinyl siding manufacturer in North America
(with ...
Window
Group

Leader in Vinyl and Aluminum Windows
Why We Win

Key Brands

• #1 vinyl & aluminum window manufacturer in
th...
Strategic

Excellentcustomer service
Measure, Engagement
Brand management

Priorities

Customer
Focus
TalentManagement
Suc...
Strategic
Evolution

“Ply Gem’s Future”
2013

to

A Market Leader
A Ply Gem Brand
Organic Growth (Market Share)
Coordinate...
The Designed Complete Exterior Solution Offering for Customers
Exterior
• Provides differentiation for Ply Gem customers
•...
Innovation

Foundation
Labs

The Culture of Innovation
New Products
Open
Innovation

Partnerships
Suppliers/Partners
Unive...
Priority #1
Safety

A world class safety record is Job #1
Recordable Incident Rate
Ply Gem Industries, Inc.

8.00
7.00

WO...
Market and Housing
Update
Crisis of Confidence is Starting to Improve…
7.3%
5.4%

81.5%

15

Source: Zillow, Census, Conference Board
SFHS Forecasted to Increase
Single-Family

Multi-Family

2,500

2,073
2,000

354

338

1,500

75%

1,812
1,342
306

1,000
...
Canada SFHS Forecast
Single-Family

Multi-Family

250

200

106

109
118

150

112

94

83

2010

2011

131
105

106

84

...
Top Growth Products
for Replacement Contractors
60

55

50
40
30

30

27
25

24

20

21
13

10

10

8

Windows
Siding
Door...
Growth will be in Healthier Markets
Market Health Index

19
Financial Overview
Ply Gem
Results

3rd Qtr & 9 Month Highlights
(Operating Earnings Excludes IPO & Acquisition Cost)

9 Month Results

Q3 20...
Gross Margin
Summary
Q3 2012 Gross Margins

New customer win costs

23.1%

-0.4%

Restructuring charges

-0.4%

Acquisitio...
Financial
Summary

Q313 LTM Net Sales = $1.3 Billion

• Ply Gem continues to outperform the market
• SFHS down 48% from ‘0...
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  1. 1. Ply Gem Industries JP Morgan SMid Cap Conference December 10, 2013
  2. 2. Legal Disclaimer These slides and the accompanying oral discussion contain certain statements that are not historical facts, including information concerning possible or assumed future results of our operations. Those statements constitute “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 results of the Company to differ materially from the results expressed in or implied by our forward-looking statements, including the availability and cost of raw materials and purchased components, the level of construction and remodeling activity, changes in general economic and business conditions, conditions affecting the industries we serve and our customers, the rate of sales growth, availability of labor force and efficiencies, product liability claims, our high degree of leverage and other factors discussed in the Company’s news releases, public statements and/or filings with the Securities and Exchange Commission, including the Company’s most recent Annual and Quarterly Reports on Form 10-K and Form 10-Q. Many of these factors are outside of the Company’s control and all of these factors are difficult or impossible to predict accurately. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these slides and the accompanying oral discussion reference non-GAAP financial measures, such as adjusted EBITDA. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in our earnings releases posted on www.plygem.com. 1
  3. 3. Management Presenters •President and Chief Executive Officer since 2006 Gary Robinette President and CEO Shawn Poe Vice President and CFO 2 •30+ years of experience with building products and distribution companies •Prior to joining Ply Gem, served as Executive Vice President and COO of Stock Building Supply •Vice President and Chief Financial Officer since 2004 •22+ years of experience •Prior to his current role, served as VP of Finance of siding and accessories subsidiaries
  4. 4. Ply Gem’s Profile One of the largest manufacturers of exterior building and home improvement products in North America Nearly$1.5Billioninsales Approx6,700associates 45% 55% 55% WINDOWS 45% SIDING NEW CONSTRUCTION REPLACEMENT 3
  5. 5. Ply Gem’s Market Provider of branded products for new construction and home improvement markets sold through many channels of distribution covering most price points. #1 #1 #1 #1 4 Vinyl Siding Aluminum Accessories Vinyl and Aluminum Windows Western Canada (Windows)
  6. 6. NA Footprint Window Manufacturing Siding / Access Manufacturing Fence + Rail Manufacturing Corporate / HQ Stone Manufacturing Window Distribution - Canada Siding Distribution - Canada 5  23 manufacturing plants  30 distribution centers  On-time delivery
  7. 7. Product Categories Gable vents and accessories Gutter protection systems Vinyl and aluminum soffit Window mantles Manufactured Stone Vinyl and aluminum siding Shutters Mounting Blocks Decorative corner posts Rain removal systems Door surround systems Patio Doors Windows Railing and Fencing Composite Rail Outdoor Structures Exterior Doors New Window Technology PVC Trim uite of New Exterior Products 6
  8. 8. Siding Group Market Leader in Vinyl Siding Why We Win Key Brands • #1 vinyl siding manufacturer in North America (with approx. 40% share in the US) • Consolidated industry with 4 participants holding over 90% share • Strong trade brands • Multi-channel distribution network servicing both new construction and R&R North American Market Summary $ millions ~$5,300 • State-of-the-art automated manufacturing facilities with capacity to support planned growth ~$1,800 Exterior Cladding Market Size Vinyl Siding Market Size Market size: According to Principia Partners 7 $658 Ply Gem 2012 Net Sales
  9. 9. Window Group Leader in Vinyl and Aluminum Windows Why We Win Key Brands • #1 vinyl & aluminum window manufacturer in the US • #1 window & door manufacturer in Western Canada (post-acquisitions) • Multi-channel distribution network servicing both new construction and R&R covering every price point • Highly efficient, vertically integrated production • Continued to gain market share during North American Market Summary $ millions ~$9,000 downturn $463 Market Size Ply Gem 2012 Net Sales Market size: Company estimate – New construction and R&R 8
  10. 10. Strategic Excellentcustomer service Measure, Engagement Brand management Priorities Customer Focus TalentManagement Succession Plan Communicate & empower Human Resources Innovation LEVERAGE NewProducts Utilizetechnology (Products /operations) Sustainability Profitable Growth Safety Lowcost High quality standard 9 Continuous Improvement Improve business diversity Double digit growth Cross sellour products
  11. 11. Strategic Evolution “Ply Gem’s Future” 2013 to A Market Leader A Ply Gem Brand Organic Growth (Market Share) Coordinated back office New Products and Share Executive Dev & Succession 10 2017 The Market Innovator The Leading Brand Growth Through Strategic Acquisitions Lean through Technology New Channels and Markets Our Future Leaders
  12. 12. The Designed Complete Exterior Solution Offering for Customers Exterior • Provides differentiation for Ply Gem customers • • • • BEFORE 11 Alexandria, VA Designed Exterior Remodel Provides a single sourcing opportunity Hits the sweet spot of an emerging trend Features NAHB Green Approved products Fulfills the “One Ply Gem” MISSION AFTER Three Weeks later using The Designed Exterior concept
  13. 13. Innovation Foundation Labs The Culture of Innovation New Products Open Innovation Partnerships Suppliers/Partners Universities Innovation into Collaboration Hire Innovation Compensation Structure Platform Officer 12
  14. 14. Priority #1 Safety A world class safety record is Job #1 Recordable Incident Rate Ply Gem Industries, Inc. 8.00 7.00 WORLD CLASS 7.26 TRR 6.00 7.11 6.65 5.00 5.42 5.47 5.21 5.27 1.81 1.76 1.58 1.85 1.94 2009 2010 2011 2012 Q3 2013 4.00 3.00 3.99 3.98 3.30 2.00 1.00 0.00 2006 2007 2008 Year 13 Ply Gem Combined National Trend
  15. 15. Market and Housing Update
  16. 16. Crisis of Confidence is Starting to Improve… 7.3% 5.4% 81.5% 15 Source: Zillow, Census, Conference Board
  17. 17. SFHS Forecasted to Increase Single-Family Multi-Family 2,500 2,073 2,000 354 338 1,500 75% 1,812 1,342 306 1,000 1,719 1,152 900 284 1,474 1,036 500 1,518 616 612 178 783 924 326 296 554 112 585 114 442 471 434 537 629 2009 2010 2011 2012 2013E 247 357 826 1,161 0 2005 16 Source: NAHB 2006 2007 2008 2014E 2015E
  18. 18. Canada SFHS Forecast Single-Family Multi-Family 250 200 106 109 118 150 112 94 83 2010 2011 131 105 106 84 78 81 2012 2013E 2014E 73 100 50 97 121 119 93 76 0 2006 Source: CMHC 17 2007 2008 2009
  19. 19. Top Growth Products for Replacement Contractors 60 55 50 40 30 30 27 25 24 20 21 13 10 10 8 Windows Siding Doors Roofing Bathtubs & Showers Decking Flooring Kitchen Cabinets Water Pipes 0 18 WDMA Market Outlook 2014 Source: Hanley Wood August 2013 Audience Survey
  20. 20. Growth will be in Healthier Markets Market Health Index 19
  21. 21. Financial Overview
  22. 22. Ply Gem Results 3rd Qtr & 9 Month Highlights (Operating Earnings Excludes IPO & Acquisition Cost) 9 Month Results Q3 2013 Gross Profit $84.2 $70.7 Operating Earnings $852.7 $1,032.7 YTD 2012 YTD 2013 $200.3 $187.0 Q3 2013 YTD 2013 $32.2 Q3 2012 $59.4 $27.3 Q3 2012 21 Net Sales Q3 2012 $407.4 Gross Profit $306.2 Q3 2013 Operating Earnings Net Sales Third Quarter Results YTD 2013 $58.0 YTD 2012 YTD 2013
  23. 23. Gross Margin Summary Q3 2012 Gross Margins New customer win costs 23.1% -0.4% Restructuring charges -0.4% Acquisition related costs -0.3% Volume 1.0% One-Time Changes -1.1% Siding Aluminum Price -0.7% Windows Product Mix -1.0% Windows Ramp-up Costs -0.7% Q3 2013 Gross Margins 22 20.7% Quarterly timing of price to aluminum material cost Recovered on an annualized basis expected Outsized growth of our lower end aluminum window products New Construction window unit volume up 37%
  24. 24. Financial Summary Q313 LTM Net Sales = $1.3 Billion • Ply Gem continues to outperform the market • SFHS down 48% from ‘07 to ‘12, Ply Gem down 17.8% • Market share gains of over $350 million from 2007 to 2011 • Numerous new customer wins as Ply Gem is a clear Ply Gem sales $1,400 $1,200 $1,000 $800 industry leader $600 • Gienow & Mitten acquisitions contribute $108 to ‘13 2007 2008 2009 2010 2011 2012 2013 LTM LTM Sales • Customer mix is well balanced at approx. 55%/45% 2007 23 2010 2011 2012 2013 LTM 1,036 616 442 471 434 535 616 (40.5)% (28.2)% 6.5% (8.1)% 23.3% 15.1% $1,363.5 $1,175.0 $951.4 $995.9 $1,034.9 $1,121.3 $1,301.3 (13.4)% Ply Gem Net Sales 2009 (29.7)% Single Family Housing Starts 2008 (13.8)% (19.0)% 4.7% 3.9% 8.4% 16.1%

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