Ply Gem Holdings, Inc. announced it has seen total net sales increase to the tune of 23.9 percent during the fourth quarter. Additionally, the company’s doors and windows segment net sales spiked 31.5 percent during the fourth quarter, according to Ply Gem’s recently released financial results for the fourth quarter and year ended December 31, 2013.

Other highlights from the company include a 17.7 percent increase in fourth-quarter net sales for Ply Gem’s siding, fencing and stone segment.

Additionally, the report shows declines during the fourth quarter, including adjusted operating earnings decreasing $8.7 million to $3.2 million compared to the fourth quarter 2012. Further, adjusted EBITDA was $16.0 million compared to $25.1 million for the fourth quarter of 2012.

For 2013, total net sales for 2013 increased 21.8 percent to $1,365.6 million, according to the report. Net sales in the doors and windows segment increased 35.5 percent while the siding, fencing and stone segment increased 12.1 percent.

Adjusted operating earnings decreased $8.6 million to $63.1 million compared to 2012 and adjusted EBITDA was $117.5 million compared to $127.3 million for 2012.

“Despite an uneven recovery in the U.S. housing market, our 2013 sales reflect the positive impact of our acquisitions of Gienow and Mitten, which were completed during our second quarter, as well as, a significant increase in demand for our U.S. new construction window products during the first half of the year. However, the market experienced a pull-back that began during the third quarter and intensified during the fourth quarter due to severe weather, compounded by the continued lag in demand for our higher profit margin big ticket repair and remodeling products,” says Gary E. Robinette, Ply Gem’s president and CEO.

During the fourth quarter, net sales totaled $332.9 million, up $64.3 million, or 23.9 percent, compared to $268.6 million for the fourth quarter of 2012. Excluding the impact of the acquisitions of Gienow and Mitten, net sales increased $8.9 million or 3.3 percent. According to a statement, “Our organic sales were relatively stable for the fourth quarter despite all of our businesses experiencing a decline in demand during the last five weeks of the year. We believe the decrease in demand was largely driven by severe winter weather and a pull-back in the new construction housing market.”

Gross profit margin was 17.5 percent, which represented a reduction of 380 basis points from the fourth quarter of 2012. “The decrease in gross profit margin was largely a result of segment and product mix in which the company experienced outsized growth of its doors and windows segment which has greater exposure to the recovering U.S. new construction market and currently has lower profit margins,” reads the statement. “In addition, during the last five weeks of the quarter, the unusually harsh winter weather in the upper Midwest, Northeast and Eastern seaboard regions in the U.S. adversely impacted demand for exterior building products and delayed new-home construction. As a result of this unexpected drop in demand, we experienced a number of operating inefficiencies, predominately labor inefficiencies, at our manufacturing facilities in both our operating segments.”

Operating earnings were a loss, reported at $3.2 million, a decrease of $13.9 million from the fourth quarter of 2012.

Adjusted EBITDA totaled $16.0 million compared to $25.1 million in the fourth quarter of 2012.

The doors and windows segment saw net sales totaled $160.1 million, up $38.3 million, or 31.5 percent, compared to $121.8 million in the fourth quarter of 2012. Excluding the acquisitions of Gienow and Mitten, sales increased $10.0 million or 8.2 percent. “The improvement in sales in our doors and windows, which is more closely aligned with residential new construction, reflects the continued improvement in the U.S. housing market partly offset by severe winter weather and a pull-back in the new construction housing market,” report company officials in the statement. Gross profit margin for the fourth quarter was 8.3 percent, representing margin reduction of 540 basis points from the fourth quarter of 2012. The decrease in gross profit margins for the quarter was attributed to “one-time restructuring and integration costs associated with the Gienow acquisition, lower operating efficiencies and a sales increase of our value-priced products which typically carry a lower margin.”

Siding, fencing and stone’s net sales totaled $172.8 million, up $25.9 million, or 17.7 percent, compared to $146.9 million in the fourth quarter of 2012. Excluding the acquisition of Mitten, net sales decreased $1.3 million or 0.9 percent.

“As we look ahead and our volumes recover, we expect to generate meaningful operating leverage,” adds Robinette. “However, we certainly do not expect a linear recovery, and there will continue to be some growing pains as our operations scale, but this is to be expected and we view it as a normal and healthy part of the recovery process. What is clearly outside of our control is the adverse weather that we experienced in recent months and the resulting market pullback. We expect weather to have an adverse impact on our first-quarter operating results with net sales expected to be down by 15 percent to 20 percent on a sequential basis with our first quarter Adjusted EBITDA being breakeven to slightly down. As a reminder, the first and fourth quarters are our seasonally weakest periods with our lowest profitability, so we do expect a typical pick up as we move through the more important second and third quarters.

“The opportunity ahead of us is really about recapturing margin in our doors and windows segment as that continues to scale as volume expands, regional builders become more active in the market, and pricing discipline returns,” Robinette continues. “We are confident in recapturing those margins and we are making progress in many areas including on the pricing front and in January 2014 we announced our third price increase over the past 12 months for our doors and windows segment as well as price increases in our siding, fencing and stone segment … Ply Gem has an attractive position in the market place and we’ll continue to strengthen our position as underlying macro trends improve and we move past these unprecedented weather conditions.”