Volume 6 Issue 4 May 2005
COMPANIES TO WATCH
Located throughout North America, the companies to watch in 2005 all have a lot in common, particularly in the way they have grown from being innovative, unique and responsive rather than being known for the products they manufacture, the services they provide or the size of their organization. Each has effected the market and each is expected to show continued growth. We believe they are companies to watch throughout the year. The profiles on the following pages will tell you why.
Arch Aluminum & Glass Co.
Private company; $250 million in annual sales; Approximately 1,800 employees; 25 locations in the United States, all but five are manufacturing.
Growing at the rate of 10-15 percent a year, and doubling in size every five years, Arch Aluminum is going beyond its traditional products, said Leon Silverstein, president and CEO. The company recently launched Arch Custom Solutions, a program specifically designed for window and door manufacturers that gives manufacturers a reliable source for difficult-to- produce products. This takes the company into custom tempering and custom laminating for the residential market, a relatively new arena which it enter-ed about four years ago but which now makes up 25-30 percent of its business.
“We see solutions for window and door manufacturers in custom fabricated products including laminates,” added Silverstein.
The company has already launched the program in three window manufacturing plants and recently acquired a tempering facility in Houston. In 2006, it will open a facility in Salt Lake City.
“We’re always trying to make things easier for our customers,” said Silverstein. As an example, the company has invested more than a million dollars in software and systems to help streamline operations and reduce costs.
“This investment will make us more efficient and also will be beneficial to our customers,” said Silverstein.
He explained that Arch already has the ability to offer electronic data input (EDI) and the new software systems will allow more expansion of that process.
In addition to software upgrades, Arch has the ability to create customized racking solutions to make the delivery process as seamless as possible.
“Whether it is inside the office or in the plant, our goal is to help the customer grow,” he said. “The better the customer can perform, the better off we will be as well.”
Silverstein also pointed out that Arch has multiple delivery methods on its company owned fleet of trucks. From an environmental standpoint, Arch has been involved in the green building program which includes a LEED-certification support system.
Port Elgin, New Brunswick
Private company; Does not release annual sales; 175 employees (seasonally adjusted); One plant in Port Elgin; More than 100,000 units projected for 2005.
Showing steady growth after more than two decades in the business, Atlantic Windows thrives on what is referred to as “The Atlantic Difference,” a combination of skills, service and technology. The workforce is described as being skilled to craft windows that exceed expectations for weather tightness, performance and appearance.
“We have the highest quality products and we offer the best support and service in the industry,” said Rob Miller, president.
He referred to the “Quality For A Lifetime” warranty, a required after-sales service conducted in the home and the company’s focus on listening to the needs of the consumer.
According to Miller, Atlantic was the first company to introduce the Super Spacer® warm-edge technology in its area; the first to use an integrated frame design; and the first to use an inclusive lifetime warranty on its products.
A recent purchase of a Lisec production line has brought about a significant change in its insulating glass operation, from manual to fully automated.
“They [Lisec] have provided a solution to enable us to run the Super Spacer products which in the past had been a manual operation and that will take place in May of this year,” he said.
Miller sees a never-ending challenge to do a lot of creative things in shapes and combinations. “Today, consumers want to be different. Twenty to thirty years ago, homes looked the same. We have responded by offering designs to complement their needs,” said Miller.
Beyond the Atlantic Provinces, the company has customers in the Caribbean and Bermuda with distribution in Spain and Iceland.
Miller pointed out the sustained growth since the company was established.
“We’ve had double-digit growth for more than 20 years and I don’t see that changing," he said.
Public company; approximately $140 million in annual sales worldwide; 120 employees in North America; two manufacturing facilities in Germany and one in Switzerland.
Two years ago, Bystronic Inc., a wholly-owned subsidiary of the Conzzeta Group, decided to focus on the residential market. According to sales and marketing director Marcel Bally, the company has since made a significant impact.
One of its products, a vertical cutting machine which defies the conventional wisdom of cutting glass horizontally, is a significant space saver. It enhances process efficiency and makes it easier to integrate process steps.
Highly accurate scoring on both sides of the glass, with tilt-table technology for separation, are among the features of the company’s equipment and systems for processing laminated glass. Its acquisition of Armatec, a laminated glass machinery company, expanded its offering in this new product area.
In addition to glass cutting/handling systems and IG manufacturing equipment, the company’s expertise is in integrating its equipment into automated production processes to help customers streamline production.
Described as “the total solution provider in residential glass manufacturing,” the company has expanded its presence in the residential market through alliances.
It teamed up with Stürtz Machinery Inc and Intra Product Development to develop what Bally refers to as “this ultra-efficient window manufacturing process.” With the Intra system, a vinyl frame is welded around an insulating glass unit and the assembled unit is subsequently automatically glazed, forming a structurally strong window sash with a relatively thin frame.
The company also formed the Glass and Windows Alliance (GWA) with Albat+Wirsam, Cantor and Stürtz to offer the market a complete window and glass production from a single source.
Champion Window Manufacturing Company
Private company; Approximately $270 million in annual sales; 200,000 units produced; Manufacturing plants in Cincinnati and Denver.
With more than a half century of service providing windows and doors, Champion remains a family-owned business. It was started by Arthur Stevens and Alvin Levine, whose son Edward is currently chairman and CEO. As a sign of its continued double-digit growth, the company has been opening new retail/showroom locations from coast to coast.
“We have grown 100 percent on our own, that is without acquisitions,” said Don Jones, vice president and general manager. The company’s substantial growth can be attributed to many factors. Jones explained that the company always stands behind its products. He says it has one of the best warranties in the business; it has always been factory direct to the consumer; it does its own installation; and its showrooms throughout the country display the latest in glass technology.
Replacement has become a significant part of the business.
“We were pioneers in replacement. It just seemed to evolve for us,” he said.
The company claims that it builds and installs more vinyl replacement windows, patio doors, entry doors and siding than any other company in the United States.
An Energy Star® partner, Champion’s trim line vinyl replacement windows are NFRC-certified. Through product enhancements, the company has lowered U-values by nearly 15 percent. Champion windows have also received the Gold Label of the American Architectural Manufacturers Association for air, water, structural and thermal qualities.
Its windows are custom manufactured in one of three state-of-the-art computerized facilities.
In 2003, the company introduced a complete basement remodeling system. It also designs and builds patio rooms to fit in with the architectural style of the house. All window and door units come standard with sliding, locking adjustable screens.
According to Jones, another part of the company’s growth can be attributed to the way it is perceived. Based on blind focus groups, it is considered an easy choice for home improvements. It has also been honored with the Torch Award for market ethics by the Better Business Bureau.
Private company; $300 million in annual sales; 2,000 employees; Two plants: Venice, Fla., Lexington, N.C; Approximately 18,000-25,000 units produced per week.
Serving consumers for a quarter of a century, PGT Industries enjoys a 20 percent annual growth rate as a manufacturer of custom windows, doors and sunrooms. Following the devastation of Hurricane Andrew, the company pursued the development of a window and door product line that would meet the Miami-Dade County requirements. Today, it claims to have introduced the first complete line of aluminum impact-resistant windows and doors approved by the Miami Dade Building Code Compliance Office.
“Meeting these strict codes with a high quality product and delivering it on time has been a priority. We have a 99.2 percent on-time and complete delivery record that is critical to contractors,” said Dave Olmstead who is responsible for public affairs and code compliance.
The company also supports its dealers and distributors with exclusive software that makes it possible to show consumers what a home will look like with a PGT sunroom installed (a room that combines vinyl-glazed, vinyl-framed or aluminum windows and doors.)
The acquisition of Binnings Building Products in 2003, a manufacturer of aluminum and vinyl windows and doors, with $20 million in sales and a 225,000 square-foot facility in Lexington, N.C., added to the company’s capability.
An active participant in building code development with the Florida Building Commission, PGT has been focused on educating the consumer and licensed contractors, which is increasingly important considering the devastation from recent hurricanes.
“We provide courses to those in the trade and we participate in many local committees. For example, I am giving a class to 300 people on analyzing hurricane damage and the latest changes that go into effect as of July 1, 2005. We are very active in every aspect of this industry and this commitment has given us creditability to those we serve,” said Olmstead.
He sees continued growth for a company whose sales were $30 million ten years ago. PGT windows and doors are now sold throughout the Eastern United States with a growing international market that includes the Caribbean, South America and Australia.
Deles Industries Ltd.
Private company; Does not release annual sales; Approximately 30 employees; Two manufacturing facilities: Toronto, Ontario and Coldwater, Mich.; Produced 117,000 doors in 2004.
Recognizing a need for a custom product to be manufactured in a reasonable timeframe, the founders of Deles Industries carved its niche with a one-of-a-kind door line. The company’s slogan, “tomorrow’s doors today,” is backed by a fully-automated manufacturing process and the ability to produce a custom product, faster than anyone else.
“This added (capability) is what sets us apart from our competitors,” said co-founder Dani Diena.
Established in 2001, the company also focuses on making non-standard, insulated steel/fiberglass panel doors, any size, for pre-hangers. In a new 50,000-square-foot facility, environmentally-friendly water-borne polyurethane foam is used with hot-dipped galvanized steel for superior rust-proofing performance. According to Ken Irwin, co-founder, less than 10 percent of the doors are standard.
“With everyone under one roof-–sales, customer service, administration and manufacturing—the Deles team can achieve both high quality and speed of delivery,” he said.
Both materials and finished products are tested at every step of the process to maintain the quality standards the company established. Described as “the most technologically advanced automation available for constructing doors,” the operation makes use of a variety of interfaces without interrupting the workflow. Irwin said the equipment adjusts automatically to allow almost any size door to be constructed in the same time it takes for a standard door. The fully-integrated facility with streamlined processes help achieve on-time delivery of its quality doors at competitive prices.
Combining efficiency with flexibility gives the company a lot of latitude when there are shortages in inventory.
“If we haven’t got the stock on hand, we manufacture what you require, in the quantity you need, with little advance notice,” said Irwin.
Two manufacturing styles are available, a 90-degree bend and a J bend, each of which has its advantages. All of the 24-gauge doors carry a ten-year written guarantee.
Looking ahead, the co-founders see a very bright future. Presently, 95 percent of their business is in the United States.
“As far as we are concerned, the sky is the limit,” they said. “It’s all about teamwork, efficiency, quality control and continuous improvement.”
Private company; Annual sales $30-40 million; 200 employees; One manufacturing facility in Streetsboro, Ohio and two distribution centers.
Completing another record year in 2004, Soft-Lite has been growing at a higher rate than the industry for the last several years, according to Roy Anderson, president and CEO, who refers to a recent Ducker report. With several hundred million product configurations available from its custom PVC window and patio door line, the company combines high quality with prompt delivery and exceptional customer service.
“We have the broadest range of product configurations in the industry and they’re available in one week. That’s what sets us apart from others. We have perfected the art of managed complexity,” Said Anderson.
Describing quality standards, he added, “we spare no cost on quality.”
“There are 139 inspection points on the line and every employee is empowered to stop the production line if any component does not meet quality standards,” he said.
Anderson also pointed out that the company uses visual factory methodology and provides photos at each workstation to indicate the right way every operation should be performed.
He said the company uses the Sparklite argon testing device for insulating glass units to be sure they have the required amount of argon gas.
“We have our own product testing facility so that products comply with AAMA and NFRC certification standards. And we periodically pull products off the line and test them to ensure that standards are maintained,” said Anderson.
He pointed out that the company’s reputation for quick delivery, unique product features and any color PVC exterior coating has made it possible for dealers to get jobs that ordinarily would not be possible.
Utilizing the Malcolm Baldrige criteria for excellence, Soft-Lite has structured every aspect of its business around serving the customer. With its enterprise resource planning system and PowerBids point-of-sale dealer management system, which Anderson refers to as “one of the best in the industry,” dealers can quote, configure, sign a contract and order windows in the customer’s home, electronically, using a tablet PC. They even have the flexibility to schedule deliveries to coincide with installation, maximizing cash flow.
“I know of no other company that has this fully-integrated capability, allowing orders to be configured in the home and sent wireless directly into the manufacturer’s ERP system. Our technology is geared around making our dealers the most profitable in the industry,” he added.
The company’s achievements and service have been well-documented. It was recognized by the State of Ohio for outstanding enterprise performance through the Ohio Partnership for Excellence and was featured on the Discovery Channel in the show Champions of Industry.
Private company; Does not report annual sales; 250 employees; Seven plants in the United States, Australia, Canada and Scotland.
One of five operating divisions of DMI Companies, Q’SO Inc. has experienced significant growth and increased revenue dramatically since it was acquired in 2002, according to Fred Arnoldt, owner and CEO. Established in 1980, the company has developed an extensive line of hot-melt products, sealants and adhesives. Its products are used for window glazing, perimeter seals and injection molded gaskets.
The success of Q’SO products is in part a response to the demand for lean manufacturing as well as green building products.
“Our hot-melt products allow manufacturers to reduce inventory and manufacturing costs. They are 100 percent environmentally-friendly and can be easily de-glazed, reducing rejects and waste,” said Arnoldt.
He said the company’s products for window glazing will soon meet the requirements for Miami Dade County.
“We are talking to more and more window and door manufacturers about getting our products into their facilities. So far, manufacturers like what they see,” said Arnoldt.
Looking to the future, he said the company will be occupying an additional facility in Ft. Worth, Texas, which will triple its manufacturing/warehousing space and quadruple the size of its laboratory. The change comes in response to the tremendous demand domestically for its manufactured products, according to the company.
The new facility is more than three acres with quadruple the lab space for the company’s growing staff of chemists and engineers.
“Our engineers are working diligently to expand the use of hot-melt technology for lean manufacturing. This is a very exciting time for us. The demand for Q’SO products and expertise is tremendous. There is no question that we are on the march!,” said Arnoldt.
Private company; Does not release annual sales; 30 employees; Three locations: Calgary and two in Wisconsin.
Established in 1999 specifically to meet the needs of window and door manufacturers, the company views itself as the leader in fenestration software.
According to Chad Banman, account executive, WTS is leveraging the knowledge of its founder, Lyn Hartl, in streamlining engineering change process and its impact on software and customers.
“Our software handles the complexities of the fenestration industry,” said Banman.
He explained that the company’s software makes it possible to create custom composites. It treats units as a ganged assembly rather than a “cut and paste” of individual units. Complex issues such as grille alignment and jamb extension can be resolved.
“Our proprietary trim and jamb extension wrapping logic recognizes practically any shape and generates detailed material information for exterior trim and jamb extension for complex products,” he said.
WTS has created software that can link architects to dealers, to manufacturers, even to the shop floor without re-entry, double-checking or creating CAD drawings.
According to Banman, the company has established itself as a leader and innovator in applications—custom stile and rail doors, stained glass—where success has been very limited because of the challenges posed to configurators.
What makes its software attractive are multiple access levels, accommodating one- or two-step distribution. It is one of the few companies to create the link between the manufacturer and its customers successfully and avoid the re-keying and order entry errors that occur in many systems today, according to the company.
“We extend your brand into the application and on to your quotes and orders. An unprecedented level of scalability handles thousands of users simultaneously with less hardware than anticipated,” said Banman.
WTS views its software as a way to improve the bottom line of window and door manufacturers by creating efficiencies, avoiding or reducing costs, strengthening relationships with dealers, distributors and customers and providing real-time information for better decision-making.
Referring to its software as the new standard for fenestration, the company is making an impact on window and door manufacturers throughout North America,
Banman said what really sets the company apart from competitors is the attention to detail and the ability to customize a system.
Private company; projecting $24 million in annual sales for 2005; 115 employees; one manufacturing facility; projecting 26,000 units in 2005.
Experiencing substantial growth, especially in the last three years, WinDoor is already exceeding its forecast for 2005.
“We started out leasing a facility and have grown into three. We have contracted to build a 300,000-square-foot facility east of Orlando in the International Corporate Park,” said Russ Traficante, one of the company’s owners.
He explained the reasons for the company’s rapid growth.
“We are extremely innovative and we have many ‘firsts’ to our name,” he said.
Traficante pointed out that the company was the first to test for impact with urethane sealants; the first to test and certify corner doors for impact, both single glazed and insulated; and the first to develop a unique delivery (tractor trailer) system.
Win-Door’s high-end doors systems have the appearance of a French door. They are available in 90- and 135-degree disappearing corners, with either impact or non-impact glass, with or without pockets.
“This is the most complete system in the country, with every glass option available,” he added.
“Homeowners like the corner doors because when the door is open, the outside patio becomes an extension of the home bringing the outside in,” said April Chambers, director of marketing.
Traficante also pointed out that unlike most companies, WinDoor’s custom color service includes two-tone custom coloring.
Acoustical ratings have been another attractive feature to meet growing consumer requirements.
“Tests have shown that we have the highest sound transmission class acoustical rating in the country,” added Traficante.
Plans for the future include all-aluminum, thermally-broken products, with options for impact resistant, double and triple-glazed units. The company is also planning to develop operable window products.
Traficante predicts that growth will continue at the same pace, focused on the East Coast, where impact resistance is a critical factor.
“Our products are fully warranted. They are engineered for a lifetime of protection from hurricane force winds, flying debris, forced entry home intrusions, damaging solar UV rays and sound transmission,” he said.
One Year Later
Proven as Ones to Watch
Now in our third year of publishing the "Companies to Watch", DMW thought it would be interesting to take a quick look at two companies chosen in previous years to determine if they really were ones to watch. So we followed up on two of last year’s companies: Sashlite and Masonite International.
In 2004, you couldn’t attend an industry event without hearing people buzzing about Sashlite, the new technology that could potentially change the way windows were made by allowing the manufacturer to adhere the glass directly to the sash.
Sashlite president Bob Hornung says that it hasn’t even been a year since the Sashlite technology was officially commercialized, which occurred in July 2004. He’s extremely pleased with the company’s successes since last year. Below is a quick look at the company’s growth, according to Hornung:
• Fabricators: The company has recently added to its list of fabricators. It has signed North East Building Products and Accuweld, both are window fabricators from Pennsylvania.
• Machinery Lines: A year ago, the only Sashlite lines available were manual. Today, nearly half of Sashlite’s fabricators are using Sashlite’s automated lines.
• Products: When Sashlite was featured as a company to watch in May 2004, only a few profiles were available—a casement window and a patio door. Hornung says extruders have been busy over the last eight months, cutting dies to provide Sashlite fabricators with four double-hung products: sliders, casements, patio doors and picture windows.
• Development Partners: The company has also added a new name to its list of development partners: Frank Lowe, which offers patent-pending setting blocks that are complementary to the Sashlite technology.
“The growth since last year has been tremendous,” said John France, vice president of Sashlite. “We were in a research and development stage with our key development partners for over three years. This year has been great for us in so many ways, especially being our beta year. The Sashlite process has proven itself to be an excellent value proposition from the fabricator to the consumer. If you take the time to visit a facility that is running it, you will see why we are so bullish.”
More importantly, Hornung said Sashlite’s customers are extremely pleased with the technology.
“In my 35 years in the window industry, I’ve introduced a large number of window and door systems, and I find this technology to be the easiest to initiate, the easiest to sell, and to have the least amount of field quality issues,” said Harold Kaye, president of FocusPoint Windows, a Sashlite fabricator. “The comprehension of Sashlite’s value has been significant at the dealer and consumer level.”
Masonite International Corp., the giant door manufacturer, based in Mississauga, Ontario, posted a 22-percent increase in annual sales since being names one of DWM’s companies to watch in 2004. Last year, Masonite reported the company’s annual sales to be at 1.8 billion. For the year ended December 31, 2004, this number jumped to $2.2 billion. The company operates 80 facilities in 17 countries and employs more than 14,000 people.
Additionally, Kohlberg Kravis Roberts & Co., one of the world’s largest private equity forms, has agreed to purchase Masonite at $42.25 per share (about $34.45 U.S.). The firm’s offer is valued at $3.26 billion, up from the original $3.1 billion. The final vote approving the acquisition took place on March 31, 2005. The transaction was approved by 91.9 percent of the votes cast by shareholders voting at the meeting, according to Masonite.
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