1. May 9, 2016
Ply Gem Holdings
First Quarter 2016 Results
Gary E. Robinette Shawn K. Poe
Chairman & Chief Executive Officer Chief Financial Officer
2. Legal
Disclaimer
1
These slides and the accompanying oral discussion may 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 results of Ply Gem Holdings, Inc. (the “Company”) to differ materially from the results expressed or implied, including:
downturns in the home repair and remodeling or the new construction end markets, or the economy or the availability of consumer
credit; competition from other exterior building products manufacturers and alternative building materials; inability to successfully
develop new products or improve existing products; changes in the costs and availability of raw materials; consolidation and further
growth of our customers; loss of, or a reduction in orders from, any of our significant customers; inclement weather conditions; increases
in union organizing activity and work stoppages at our facilities or the facilities of our suppliers; our ability to employ, train and retain
qualified personnel at a competitive cost; claims arising from the operations of our various businesses prior to our acquisitions; product
liability claims, including class action claims, relating to the products we manufacture; litigation outside of product liability claims; loss of
certain key personnel; interruptions in deliveries of raw materials or finished goods; environmental costs and liabilities; inability to realize
anticipated synergies and cost savings with respect to acquisitions; manufacturing or assembly realignments; threats to, or impairments
of, our intellectual property rights; increases in transportation and fuel costs; changes in foreign currency exchange and interest rates;
material non-cash impairment charges; our significant amount of indebtedness; covenants in the ABL Facility, the credit agreement
governing our Senior Secured Term Loan Facility and the indenture governing the 6.50% Senior Notes; limitations on our net operating
losses and payments under the tax receivable agreement to our stockholders; failure to successfully consummate and integrate
acquisitions; actual or perceived security vulnerabilities or cyberattacks on our networks; failure to effectively manage labor inefficiencies
associated with increased production and new employees added to the Company; failure to generate sufficient cash to service all of our
indebtedness and make capital expenditures; control by the CI Partnerships; and the risks set forth in the Company’s filings with the
Securities and Exchange Commission. Consequently such forward-looking statements should be regarded as the Company’s current plans,
estimates and beliefs. Except as required by law, the Company does not undertake and specifically declines any obligation to publicly
release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances
after the date of such statements or to reflect the occurrence of anticipated or unanticipatedevents.
In addition, these slides and the accompanying oral discussion reference non-GAAP financial measures, such as adjusted EBITDA. A
reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure is provided in the Appendix to
these slides and is included in our press release issued on May 9, 2016 and posted on www.plygem.com.
3. 2
41%
55% 45%
2
First Quarter 2016 Results
Today’s Presenters
90%
10%
Agenda
• First Quarter Review Gary Robinette
• Financial Results Shawn Poe
• Acquisition Synergies and Cost Savings Shawn Poe
• Margin Initiatives Gary Robinette
• Economic Outlook Gary Robinette
• Questions and Answers Gary Robinette & Shawn Poe
• Closing Remarks Gary Robinette
4. 3
41%
55% 45%
3
One of the Largest Manufacturers of Exterior
Building and Home Improvement Products
90%
10%
Company
Overview
Repair and
Remodel
Leverage to New
Housing Starts
New Products and
Innovation Drive
Share Gains
M&A Opportunities
Platform Built for Growth and Operating Leverage
• Leading Manufacturer of Exterior Building Products
• Comprehensive Product Portfolio with Strong Brand Recognition
• Multi-Channel Distribution Network Servicing a Broad Customer Base
• Balanced End Market Exposure Driven by Diversified Product Mix
• Highly Efficient, Low Cost Operating Platform
• Proven Track Record of Acquisition Integration & Cost Savings Realization
• Strong Management Team with Significant Ownership
US
89%
Canada
11%
(*)
Siding
46%Windows
54%
(*)
(*) LTM April 2, 2016, Pro Forma for Canyon Stone acquisition
5. 4
Ply Gem
Results
Key Highlights
First Quarter 2016 Highlights
• Sales increase of 8.7% was primarilydue to organic growth in our
U.S. businesses, the Canyon Stone acquisition, and favorableprice
and product mix. U.S. organic growth of 12.4% was driven by a 7.8%
lag affected increase in U.S. single-familyhousing starts and
increased demand for our products due to favorable winter weather
conditions in 2016 compared to the prior year. The Canyon Stone
acquisition resulted in a sales increase of $6.4. Favorable price and
product mix provided a sales increase of $2.1, which was driven by
our Windows and Doors segment. These sales drivers were partially
offset by weaker market conditions in Western Canada, unfavorable
foreign currency exchange rates which negativelyimpacted sales by
$4.1, and a $5.5 negative impact on sales due to 1 fewer shipping
days in the quarter compared to 2015 due to the Company’s fiscal
calendar.
• Gross margin expansion of 520 basis points primarilydriven by
increased average selling prices in our Windows and Doors segment,
improved operating leverage due to increased unit volume in both
business segments, favorable commodity costs, realizedsynergies
from acquisitions, and favorable freight costs, partiallyoffset by
unfavorable foreign currency impact from a weakening Canadian
dollar.
• Eighth consecutive year-over-year quarterly adjusted EBITDA
improvement. Excludingacquisitions, incremental year-over-year
quarterly adjusted EBITDA growth of 973.0%.
• 1Q16 LTM adjusted EBITDA of $207.1 exceeded $200.0 for the first
time in the Company’s history.
New
Construction
58%
Home
Repair &
Remodel
42%
End Market Exposure
($ in Millions) Q1 2016 Q1 2015
Net Sales
Y-O-Y Change
$408.6
8.7%
$376.0
Gross Profit
Gross Profit %
$86.7
21.2%
$60.3
16.0%
Operating Earnings (Loss)
Y-O-Y Change
$9.6
168.2%
($14.1)
Adj. EBITDA
As % of Net Sales
$24.7
6.1%
$2.3
0.6%
6. 5
Ply Gem
Results First Quarter 2016 Highlights
$24.72.4 0.5 1.4 1.1 0.9
$2.3
17.8
8.5
2.1 0.3
-
10.0
20.0
30.0
40.0
Q1 2015 Adj
EBITDA
Material
Costs
U.S. Volume Price/Mix Acquisitions Incentive
Comp.
Other CAD Volume Impact of
Shipping
Days
F/X Q1 2016 Adj
EBITDA
Adj.EBITDA
First Quarter Adjusted EBITDA Performance Bridge
First Quarter Net Sales Performance Bridge
$408.66.8
5.5
4.1
$376.0
40.5
2.1
6.4
350.0
375.0
400.0
425.0
450.0
Q1 2015 Net Sales U.S. Volume Price/Mix Acquisitions CAD Volume Impact of
Shipping Days
F/X Q1 2016 Net Sales
NetSales
8. 7
Windows&
Doors(W&D)
Segment
Key HighlightsFirst Quarter Results
Leader in
Vinyl and Aluminum Windows
$211.8
$189.7
$20.4
$29.9
Q1 2016 Q1 2015
Net Sales
U.S. Canada
$219.6
$232.2
End Market Exposure (*)
• Sales increase of 5.8% primarily due to the organic growth of our U.S. new
construction and repair and remodel products and favorable price and
product mix within the segment. Overall U.S. growth was 11.7% which was
driven by a 14.7% increase in our new construction products and a 5.6%
increase in our repair and remodel products, which exceeded the lag affected
7.8% increase in U.S. single family housing starts. In addition, price and
product mix within the U.S. and Western Canadian businesses increased sales
by $9.8. This sales growth was partially offset by weaker market conditions in
Western Canada, unfavorable foreign currency exchange rates which
negatively impacted sales by $2.1, and the negative impact of $3.3 on sales
due to 1 fewer shipping day in the quarter compared to 2015 due to the
Company’s fiscal calendar.
• Gross margin improved by 580 basis points primarily driven by a 640 basis
point gross margin improvement in our U.S. businesses due to improved
pricing and product mix, realized synergies from the Simonton acquisition,
and improved operating leverage at our U.S. businesses based on higher
volumes over fixed costs, partially offset by unfavorable foreign currency.
• SG&A expense as a percent of sales decreased from 17.7% to 16.6% or a
nominal decrease of $0.2.
Q1 2016 Q1 2015
U.S. 17.9% 11.5%
Canada 12.2% 12.4%
W&D Segment 17.4% 11.6%
Gross Margin %
New
construction
72%
Home repair
& remodel
28%
(*) For the three months ended April 2, 2016
9. W&DGross
Margin
Less operatingleverage due to sales
volume decreasesdriven by weather and
pull-backin new construction demand
8
W&D Segment Gross Margin Bridge
and Historical Performance
20.9%
15.4% 14.0% 15.4% 13.1% 13.8%
9.7%
12.9%
18.1% 19.4%
1,046
622
445 471 431
535
618 648
715 746
2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 LTM
Historical Gross Margin Performance
Annual Gross Profit % U.S. SFHS (*)
Note: Includes Simonton from date of acquisition
11.6%
17.4%
1.0%
4.2%
2.2% 0.4%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
Q1 2015 Gross
Margin
Selling Price /
Product Mix
Commodity Costs Freight Costs Unfavorable FX /
Other
Q1 2016 Gross
Margin
Quarterly Gross Margin Performance
• Selling price/product mix reflect
favorable product mix and impact of
selling price increases implemented
in 2015.
• Commodity cost favorability due
mainly from PVC resin and aluminum
costs and synergies realized through
the Simonton acquisition.
• Favorable freight costs due to
decline in fuel pricing partially offset
by rising driver and freight insurance
costs.
10. 9
Siding,Fencing
&Stone(SFS)
Segment
Key HighlightsFirst Quarter Results
Market Leader in Vinyl Siding
$157.7
$137.7
$18.7
$18.7
Q1 2016 Q1 2015
Net Sales
U.S. Canada
$156.4
New
construction
39%
Home repair
& remodel
61%
End Market Exposure (*)
• Sales increase of $19.9 or 12.7% primarily driven by organic growth of the
U.S. and Eastern Canadian businesses and the Canyon Stone acquisition
which accounted for $6.4 of sales growth. Growth in the segment was
partially offset by lower average selling prices, unfavorable foreign currency
exchange rates which negatively impacted sales by $2.0, and the negative
impact of $2.2 on sales due to 1 fewer shipping day in the quarter
compared to 2015 due to the Company’s fiscal calendar.
• Gross margin expanded by 400 basis points, primarily driven by favorable
leverage on additional sales volume, lower commodity costs and freight
expense, partially offset by unfavorable lower average selling prices and
unfavorable foreign currency.
• SG&A expense increased $1.2 which was due to the Canyon Stone
acquisitionwhich accounted for $1.6 of the SG&A expense increase. SG&A
expense as a percent of sales decreased from 13.7% to 12.8%.
Gross Margin %
Q1 2016 (**) Q1 2015
U.S. 26.4% 21.2%
Canada 24.4% 30.1%
SFS Segment 26.2% 22.2%
$176.4
(*) For the three months ended April 2, 2016
(**) Includes the impact of Canyon Stone
11. SFS Gross
Margin
10
SFS Segment Gross Margin Bridge
and Historical Performance
20.4% 18.4% 25.9% 25.7% 24.8% 27.4% 26.8% 26.1% 28.4% 28.9%
.5208
.6200
.5288
.6458
.6971 .6975 .7134 .7534
.7250 .7233
2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 LTM
Historical Gross Margin Performance
Annual Gross Profit % PVC Resin Price (*)
22.2%
26.2%2.1%
0.6%
6.3%
0.4%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
Q1 2015 Gross Margin Commodity Costs Freight Costs Selling Price /
Product Mix
Unfavorable FX /
Other
Q1 2016 Gross Margin
Quarterly Gross Margin Performance
• Commodity cost favorability due
mainly from PVC resin and aluminum
costs.
• Favorable freight costs due to
decline in fuel pricing partially offset
by rising driver and freight insurance
costs.
• Selling price/product mix reflects a
higher proportion of metal products
sold during the quarter compared to
the prior year which carry a lower
gross margin.
12. Acquisition Synergies and Cost
Savings
Acquisition
Synergies
• Simonton – $18 of synergies and cost
savings from Simonton acquisition
identified through raw material
sourcing,manufacturingefficiencies,
insourcingproductsand SG&A
• Canyon Stone – $1 of synergies and
cost savings from Canyon Stone
acquisition identified through
manufacturingefficiencies and raw
material sourcing
• During 1Q16, acquisition synergies of
$3.1 have been realized, bringing the
total acquisition synergies related to
the Simonton and Canyon Stone
acquisitionsto $12.1. We expect the
remainder of the synergies to be
realized throughout the balance of
2016.
$12.1
$19.0
$9.0
$3.1
$-
$5.0
$10.0
$15.0
$20.0
$25.0
2015 Realized Acq. Synergies 1Q16 Acq. Synergies Realized Total Acq. Synergies Realized Expected Acquisition Synergies
11
13. 12
Margin
Initiatives
The Market Innovator
The Leading Brand
Lean through Technology
Our Future Leaders
New Channels and Markets
Selling Price Increases
Q1 2016 price increases have been announced in October 2015 for the W&D
Segment. Selling price increases range from 6% to 12%
Q2 2016 price increases have been announced in January 2016 for the Canadian siding
products due to the continued weakening of the Canadian dollar
June 2016 price increases have been announced in April 2016 for the U.S. siding
products due to rising material costs
Continued Implementation of Enterprise Lean and Sales & Operations Planning
(S&OP) System in U.S. Windows and Doors
Enterprise Lean provides product simplification and improves manufacturing
flexibility. Realized approximately $4.5 of benefit in 2014 and 2015, and anticipated to
provide for an annual savings of approximately $10.0 once fully implemented in 2016
S&OP system provides enhanced capacity and resource planning system which will
reduce future ramp-up costs and maximize fixed manufacturing investments
Ply Gem Margin Enhancement
Initiatives
Cross Selling Opportunities
Continue to integrate our extensive product categories across our legacy customer
base and acquired Simonton customer base
14. 13
Ply Gem
Outlook
The Market Innovator
The Leading Brand
Lean through Technology
Our Future Leaders
New Channels and Markets
2Q 2016 Guidance
Based on the forecasted growth of the U.S. housing market and R&R spend, the
impact of our enacted selling price increases and other margin enhancing
initiatives, we expect our adjusted EBITDA for 2Q 2016 to be in the range of
$72.0 to $77.0 which represents a $9.5 to $14.5 year-over-year improvement.
Economic Outlook & Guidance
Expect Continued Steady Growth in U.S. Housing Starts
Expect continued overall moderate growth of 8% to 10% in U.S. housing
recovery in 2016, however we expect the market to experience periods of
choppiness
Expect an overall moderate growth rate for big ticket R&R spend of
approximately 3% to 5% in 2016
Overall Canadian housing starts expected to moderate relative to 2015 with
lower starts in oil-producing regions of Western Canada partially offset by
higher starts in other regions
17. (amounts in thousands) For the three months ended
April 2, 2016
For the three months ended
April 4, 2015
Net loss ($27,577) ($48,859)
Interest expense, net 18,682 19,084
Benefit for income taxes (1,494) (2,394)
Depreciation and amortization 14,030 14,821
EBITDA $3,641 ($17,348)
Non cash loss (gain) on foreign currency transactions (584) 934
Acquisition costs - 286
Customer inventory buybacks 471 52
Restructuring/integration expense 653 1,163
Loss on modification or extinguishment of debt 2,399 -
Tax receivable agreement liability adjustment 18,150 17,185
Adjusted EBITDA $24,730 $2,272
16
First Quarter Adjusted EBITDA Reconciliation
Appendix
18. (amounts in thousands) For the three months ended
April 2, 2016
For the three months ended
April 4, 2015
SFS Segment W&D Segment Total SFS Segment W&D Segment Total
Non cash loss (gain) on
foreign currency transactions
($74) ($510) ($584) $253 $681 $934
Acquisition costs - - - - 261 261
Customer inventory buybacks 484 (13) 471 52 - 52
Restructuring/integration
expense
131 522 653 160 1,003 1,163
$361 $922 $1,283 $465 $1,945 $2,410
17
First Quarter EBITDA Adjustments By Segment(*)
Appendix
(*) Does not reflect unallocated and corporate EBITDA adjustments
