Ply Gem saw sales increase in the third quarter of 2017 despite experiencing some disruptions caused by hurricanes that hit the southern United States during the period.

“During the third quarter, the unprecedented occurrence of two major back-to-back hurricanes affected the geographically significant markets of Texas, Florida, Georgia and South Carolina,”  said Gary E. Robinette, Ply Gem’s chair and CEO. “Due to the significant flooding and wind damage caused by these hurricanes, Ply Gem experienced some short-term product demand disruption, which we expect to recover over the next several quarters.”

Ply Gem was one of many companies that experienced cost increases for PVC resin and other chemicals used in the production of vinyl windows after Hurricane Harvey significantly damaged the petrochemical industry along the Texas Gulf Coast.

“Although Ply Gem was able to obtain an adequate supply of PVC resin and other chemically dependent raw materials, the market costs and associated freight costs have significantly increased,” Robinette said. “Although we face demand and cost headwinds from Hurricanes Harvey and Irma, we expect these to be short-term followed by longer-term product demand strength and a return to normalized margin levels within our impacted product categories.”

Net sales increased $34.3 million or 6.5 percent to $564.7 million compared to $530.4 million for the third quarter of 2016. The net sales increase was primarily driven by improved U.S. market demand, higher Canadian net sales, new business wins and higher average selling prices.

Gross profit margin was 23.4 percent, which represented a decrease of 240 basis points from the third quarter of 2016. The decrease in gross profit margin resulted from higher raw material input costs for aluminum, PVC resin, and glass that were not fully offset with higher selling prices. In addition, our gross profit margins were unfavorably impacted by hurricanes Harvey and Irma as well as higher operating and freight costs during the three months ended September 30, 2017.

Operating earnings were $61.9 million, a decrease of $6.1 million from the third quarter of 2016 based on the gross profit decline partially offset by lower SG&A expense as a percentage of net sales and lower amortization expense in 2017.

Doors and Windows

Net sales for doors and windows totaled $286.5 million, an increase of $15.0 million, or 5.5 percent, compared to $271.5 million for the third quarter of 2016. The net sales increase for the quarter ended September 30, 2017 can be attributed to improved U.S. and Canadian market demand conditions which favorably impacted our new construction and repair and remodeling business. For the quarter ended September 30, 2017 compared to the quarter ended October 1, 2016, our U.S. new construction business increased $6.6 million or 3.8 percent, while our U.S. repair and remodeling business increased $0.8 million or 1.1 percent due primarily to higher average selling prices. Our Canadian net sales increased $7.6 million or 29.3 percent for the quarter ended September 30, 2017 relative to the quarter ended October 1, 2016.

Gross profit margin for doors and windows was 21 percent for the quarter ended September 30, 2017, increasing from 20.6 percent for the quarter ended October 1, 2016. Our gross profit increase of 40 basis points resulted from the continued improvement in our new construction products and Canadian business partially offset by increased commodity costs, mainly PVC resin, aluminum and glass, increased freight costs and a gross margin deterioration for our repair and remodeling business.