Ply Gem is refinancing its existing debt with $380 million first lien term loan and $550 million senior unsecured notes. Pro forma for the transaction, Ply Gem will have senior secured and total net leverage of 2.5x and 6.1x respectively based on LTM adjusted EBITDA of $152 million. The presentation provided an overview of Ply Gem's business, strategic priorities, financial performance, and key credit highlights including its leading market position, comprehensive product portfolio, experienced management team, and favorable industry dynamics.
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6. Transaction
Overview
Transaction structure
Sources & uses
($ in mm)
Sources
Uses
First lien term loan
$380.0
Refinance outstanding 8.25% senior secured notes (1)
$813.5
Senior unsecured notes
$550.0
Refinance outstanding 9.375% senior notes (1)
$110.6
Cash on hand
$11.0
Total sources
(1)
(2)
Estimated transaction fees & ex penses
$941.0
(2)
$16.9
Total uses
$941.0
Includes prepayment premiums and accrued interest payments pro forma for the transaction at 9/28/13.
Includes OID.
Pro forma capitalization
($ in mm)
Actual
9/28/13
Cum. Net
EBITDA (x)
9/28/13
Cum. Net
EBITDA (x)
Maturity
$23
Cash
(1)
Asset-based RCF
New first lien term loan
8.250% Senior secured notes due Feb-18
Total secured debt
9.375% Senior notes due Apr-17
New senior unsecured notes
Total debt
$12
$14
$14
Nov-18
–
380
2021
756
$770
–
4.9x
$96
$2,006
LTM 9/28/13 PF Adj. EBITDA(2)
$152
Current facility size of $250mm.
Gives effect for LTM impact of Gienow and Mitten acquisitions and expected 2014 cost savings.
Feb-18
2.5x
Apr-17
$550
5.5x
$1,140
Total capitalization
$394
–
–
$866
Public equity (as of 1/10/14)
(1)
(2)
Pro forma
$944
2022
6.1x
$1,140
13.0x
$2,084
13.6x
$152
5
15. Company
Overview
Culture of innovation drives new growth
opportunities
Furthering a culture of innovation
A key growth initiative
• Implemented innovation into Ply Gem’s
• Several businesses currently active in
compensation structure
• Product development and innovation continues
to drive new sales
• Developed a collaboration platform and now
measure engagement
• Drive collaboration to achieve significant cross‐
selling potential
• Improved platform for idea generation process
• Managing innovation as a business process
through Foundation Labs
foundation labs
• Research concentration in advanced materials
and physics
• Each Hi‐Po serves on an Innovation
project team
Open innovation opportunities
• Focus on supplier/partner/universities
• Prime relationship with two major building
products companies in developing new business
opportunities
New products
• Cellular PVC trim product
• New Glass Technology
• Composite building materials
$400+mm of incremental annual sales from new products introduced since 2009
14
32. Financial
Overview
Cost savings / one time costs – Gienow and
Mitten
EBITDA impact of Gienow and Mitten cost savings
($ in mm)
Category
(1) Raw material sourcing
(2) Headcount
(3) Material reformulations
(4) Manufacturing efficiency improvements
(5) SG&A
(6) Insourcing third party products
Total
1Q14
$1.6
0.8
0.3
0.4
0.1
0.6
$3.7
2Q14
$2.1
0.9
0.4
0.5
0.1
1.0
$5.0
3Q14
$2.2
1.1
0.4
0.5
0.1
1.2
$5.4
4Q14
$1.6
0.9
0.2
0.4
0.1
0.8
$3.9
2014
$7.4
3.7
1.3
1.8
0.3
3.7
$18.1
One‐time costs to achieve savings
($ in mm)
Category
Severance, retention and incentives
Union discussions
Product harmonization
Marketing materials
Equipment move costs
Total
Note:
(1)
(2)
(3)
(4)
(5)
(6)
Note:
1Q14
$0.4
0.2
0.1
0.4
0.3
$1.5
2Q14
$0.4
–
–
0.1
0.0
$0.6
3Q14
$0.3
–
–
–
–
$0.3
4Q14
$0.0
–
–
–
–
$0.0
2014
$1.2
0.2
0.1
0.6
0.3
$2.4
One‐time costs that should be added back to EBITDA as restructuring expense.
Excludes capital expenditures and one-time costs incurred during 2013.
Improved procurement economics as a result of increased purchasing power
Headcount reductions for manufacturing facility consolidation and duplicative salary positions
Improved material cost as a result of utilizing Ply Gem's formulations to Mitten
Freight cost maximization and improved fixed overhead as a result of various manufacturing cost reductions from rationalizations
Corresponding SG&A reduction as a result of fewer employees and facility (distribution centers) consolidation
Savings from purchasing from internal Ply Gem businesses rather than third‐party suppliers
Numbers may not tie due to rounding.
31
42. Syndication
Overview
Indicative timeline
January 2014
M
T
W
T
1 2
6 7 8 9
13 14 15 16
20 21 22 23
27 28 29 30
Date:
F
S
S
Key date
3 4 5
10 11 12
17 18 19
24 25 26
31
January 13th
Bank Meeting in New York City
January 23rd
Commitments due from lenders
January 30th
Close and fund
41