What's News_DWM

Volume 11, Issue 4 - May 2010

What'sNews

COMPANY NEWS
White House Officials Visit Northeast Building Products

When U.S Secretary of Housing and Urban Development Shaun Donovan announced that 162,000 new jobs were created nationwide in March, he traveled to Philadelphia’s Northeast Building Products (NBP) as a testament of companies who are hiring new workers. On April 2, Donovan, along with Pennsylvania Gov. Ed Rendell, Philadelphia Mayor Michael Nutter and executive director of the Philadelphia Housing Authority Carl Greene, toured the window manufacturing plant and spoke to the company’s 285 employees.

“It was great to have them here,” says Alan Levin, NBP president and chief executive officer. “We couldn’t get them through the tour quick enough because they kept stopping to talk to those working around the plant, which was a thrill for [our employees].”

While Donovan focused on the positive employment numbers for March, Greene focused on the $128 million dollars of stimulus money that was distributed to the Philadelphia Housing Authority in 2009 as part of the stimulus package, some of which was responsible for NBP’s uptick in business. He also focused on the window tax credit which was an even bigger factor in the company’s growth since last year, says Levin.

Donovan also spoke of President Obama’s commitment to “making green building an engine of economic growth … and to lowering greenhouse gas emissions and energy costs,” according to NBP officials.

“We share President Obama’s vision for a greener America,” adds Levin. “By producing high-performance, ultra energy-efficient windows, we are able to play our part by providing products that help consumers reduce their energy consumption and save money through energy tax credits.”

Glasslam to Open Three New Locations, Close One, in 2010
Glasslam N.G.I. Inc., headquartered in Pompano Beach, Fla., has announced worldwide expansion plans for the company’s Air-Tight™ insulating glass foam spacer products, including the investment for three new manufacturing facilities.

Among the new facilities is Air-Tight UK Ltd. in Kent, United Kingdom. This factory will service existing and new accounts in the European market. Air-Tight™ UK Ltd. is scheduled to open this summer. According to information from the company, the first of three extruding lines are almost complete and staff training currently is underway.

In the third quarter of 2010 the company plans to open Air-Tight™ Asia Ltd. in Kowloon, Hong Kong. This new facility, in partnership with Glasslam Asia Ltd., will produce foam spacer products for use in Asian markets.

Completing the company’s 2010 expansion plans will be the fourth-quarter addition of a new Air-Tight™ foam spacer plant in the Southeastern United States. Site search is underway in the Carolinas for the best location
for the new facility. The company’s new Air-Tight™ Smart Edge™ will be the focus of the new operation.

This last announcement followed a March 14 editorial in The Bahamas Weekly, in which Steve Howes, chief executive officer of Glasslam N.G.I./Fenestration and Glass Services Ltd., announced that FGS would be closing its facilities in Freeport, Grand Bahama Island, and relocating that facility to North Carolina, citing problems working with Grand Bahama Power Co.

Howes says that the company will retain a small satellite window factory on the island but the closure will mean the loss of more than 500 jobs.

ProBuild to Open New Locations in Utah and Virginia
ProBuild Holdings Inc. is opening two new locations, one in Orem, Utah, and one in Winchester, Va.

The Orem location, which will begin with nine employees, is ProBuild’s fourth in the state of Utah, joining Heber City, Midvale (Salt Lake City) and Ogden. The Orem facility will service lumber and millwork customers and opens with Forest Stewardship Council (FSC) Chain of Custody Certification that enables Orem to sell FSC-certified material. The Virginia location, formerly a location operated by Glaize Components, will extend ProBuild’s capabilities to serve the Washington, D.C./Baltimore markets. Winchester will manufacture components including roof trusses, floor trusses and wall panels.

The 18-acre site will also feature a full-service lumberyard.

Royal Window and Door Profiles Expands Distribution Presence in Western Canada
Royal Window and Door Profiles, a division of Royal Group Inc., announced in March that it has signed a distribution partnership agreement with British Columbia-based Coniston Products. Royal Window and Door Profiles officials say it hopes the partnership will help it to meet the growing demand for its door products in Western Canada, according to the company.

Royal adds that its customers will benefit from Coniston’s extensive experience in warehousing and distribution of products for the door and window industry. Simon Fitzgerald, key account manager at Royal Window and Door Profiles, Central Division, will coordinate the sales effort along with Coniston’s president, Chris Meekley, and international sales director, Tony Scigliano.

The distribution center is located at 7550 MacDonald Rd., Delta, B.C., and will complement the already existing distribution center in Woodbridge, Ontario.

Secretary Chu and Congresswoman Dahlkemper Visit Seaway Manufacturing
Secretary of Energy Dr. Stephen Chu and Congresswoman Kathleen Dahlkemper visited Seaway Manufacturing Corp. in March to meet with the owners and several employees and tour the plant. Seaway says the Secretary and Congresswoman chose to visit Seaway because of its reputation for building high-quality, energy-efficient doors and windows that comply with the
Energy Tax Credit.

Secretary Chu said the credits help businesses like Seaway survive these difficult economic times. He said the goal of the incentives and rebates is to “take the pain out of energy efficient home improvements.”

Congresswoman Dahlkemper also spoke about the benefit of the Energy Tax Credit for windows in the Reinvestment and Recovery Act of 2009.

“Thanks to the Recovery Act, homeowners can save as much as $1,500 in tax credits for energy improvements—a major savings for families. With quality, energy-efficient products made right here in Erie, homeowners in our region can save money and support local businesses at the same time,” said Rep. Dahlkemper.

Seaway president Jana Goodrich thanked the Secretary and the Congresswoman for making energy efficiency a priority.

“It is a credit to your efforts and this administration that has so aggressively pursued making energy-efficient home improvements more desirable and affordable for more Americans. It’s good for the industry, good for the country, and the tax incentives and rebates help us to provide more jobs and to ensure job security for our employees and their families,” she said.

LEGAL NEWS
Weiland Files Patent Infringement Suit Against Panda Windows and Doors
Weiland Sliding Doors and Windows Inc. recently filed a suit against Panda Windows and Doors alleging patent infringement. The complaint was filed in the U.S. District Court for the Southern District of California on March 30.

Weiland alleges that Panda infringed on U.S. Patent 7,007,343 (the ‘343 patent) and U.S. Patent 6,792,651 (the ‘651 patent), which are said to cover two inventions by Weiland founder William R. Weiland and relate to drainage systems often found in “lift and slide” doors.

“[Panda] has offered for sale and sold, and continues to offer for sale and sell tracks that have identical drainage systems to the system which Weiland protected by the ‘343 and ‘651 patents, throughout the United States, including in this judicial district,” writes Weiland in its complaint.

Weiland goes on to assert that Panda “knew of Weiland’s patent rights from the time of the first such product manufactured by Defendant, in part, because the products of Defendant appear to be copies of those from Weiland.”

In addition to patent infringement, Weiland alleges that Panda “induced and is inducing” the alleged infringement by “advertising, promoting, providing instructions and brochures on the assembly, installation use and sale of the patented inventions in such a manIn addition to patent infringement, Weiland alleges that Panda “induced and is inducing” the alleged infringement by “advertising, promoting, providing instructions and brochures on the assembly, installation use and sale of the patented inventions in such a manner as to actively induce infringement of the Plaintiff’s patents in the United States and specifically in this Southern District of California, and will continue such infringement unless enjoined by this court.”

Weiland is seeking a preliminary and permanent injunction against Panda, damages related to the charges “in an amount yet to be ascertained,” attorneys fees and court costs, and that Panda “be required to cancel any purchase orders for infringing products and destroy all inventory of the same,” according to the complaint.

Panda owner Avi Shoshan says the disagreement regarding the patents began more than two years ago.

“Panda was contacted by Weiland more than two years ago about the same patents that are the subject of this California lawsuit,” says Shoshan in an exclusive statement provided to DWM magazine. “At that time, we advised Weiland that we were not aware of any Panda product that was covered by a Weiland patent. We asked Weiland to notify us within a specified time frame if it had a different view—otherwise, we explained, Panda would assume that Weiland agreed that no Panda product was covered by a Weiland patent. Weiland never responded to that letter, showing that it agreed with Panda on this issue.”

Shoshan says the Panda product referenced in the suit has been on the market since at least 2005.

He adds, “It is our view that Weiland has brought suit now to try to interfere with Panda’s business relationships, and to try to win business from Panda’s customers.”

Shoshan also says Panda’s attorneys have advised Weiland via letter “that if they do not stop this interference, and if they do not drop the lawsuit, Panda will have no alternative but to file suit against Weiland for this conduct.”

MERGERS AND ACQUISITIONS
Stock Building Supply Purchases Assets of National Home Centers Inc.
Stock Building Supply has acquired the assets of National Home Centers Inc., a supplier of building materials in Arkansas.

“We are pleased to complete this transaction and look forward to working with our new colleagues in central and northwest Arkansas,” says Joe Appelmann, president and chief executive officer. “Stock transformed its operating model over the past year to become a leaner, more focused organization. This process has allowed us to seize significant opportunities like National Home Centers. We will continue to explore intelligent growth options both in our core markets and elsewhere if opportunities arise.”

Ken Greene has been appointed market manager for Stock’s Arkansas operations. Greene has served in numerous positions within Stock including posts in operations and sourcing.

Masonite Completes Acquisition of LEDCO
Masonite Inc. announced in March that it has acquired substantially all of the assets of LEDCO Inc., located in Shelbyville, Ky. LEDCO is an interior flush door manufacturer specializing in molded, veneer, mirror, pine, and bifold doors. LEDCO (previously known as Lake Erie Door Co.) was founded in 1964 in Akron, Ohio, by the Solomon family. The financial details of the acquisition have not been disclosed.

LEDCO’s president, Steve Solomon, will remain with Masonite in a senior advisory role. Joseph Solomon will remain with Masonite having the overall responsibility of the Shelbyville facility. LEDCO’s vice president of sales and marketing, Drew Scott, also will remain with the company and assume a senior sales role with Masonite’s wholesale team.

ASSOCIATION NEWS
AMD Certification Program Adds Fire Rating Certification
The Association of Millwork Distributors (AMD) Certification Program’s newest program is Fire Rating Certification. AMD, in collaboration with the National Accreditation and Management Institute (NAMI), offers a variety of door-related, third-party certifications through the AMD Certification Program. The Fire Rating Certification will be the premiere service sponsored under the AMD Certification Program. This program is accredited by the American National Standard Institute (ANSI).

“We have had many inquiries since the AMD Certification Program was launched last year when AMD would be offering Fire Rating Certification” said Rosalie Leone, AMD chief executive officer. “This premiere service has been in the works for some time, so we are pleased that it is now available for the industry.”

TECHNOLOGY NEWS
Buying Windows: There’s an App for That
Marvin Windows has released an innovative tool called The “Window Shopping” iPhone app, designed to help homeowners plan basic designs for doors and windows, inside and outside the house. After taking a photo of an interior or exterior space that could use an upgrade, the app user can choose from nearly 50 resizable photos of Marvin windows and doors, arrange them over the photo, and save or send the photo to share with friends, family or a local Marvin dealer.
www.marvin.com/iphone

FINANCIAL
Georgia Gulf Restructures Debt; Positions Royal Group for Growth
Royal Group Inc. anticipates disciplined growth across its building products divisions following the successful debt-for-equity exchange by parent Georgia Gulf Corp., according to a company press release. The new capital structure reduces Georgia Gulf’s long-term debt by $736 million, also reducing its annual interest expense by $69.7 million.

“We are immediately positioned to be a stronger competitor and to achieve strategic growth,” says Mark J. Orcutt, Georgia Gulf executive vice president – Building Products. “We are refocused on what we do best – innovating and providing the highest levels of service to our customers. Royal Group Inc. has been fortunate that even in the market’s downturn, we have introduced new products that are very well-received and that meet the needs of our customers. It’s an exciting time to move forward, expanding into new markets and growing in existing markets.”

Atrium Companies Inc. Emerges from Chapter 11
Atrium Companies Inc. has successfully completed its balance sheet restructuring and has emerged from Chapter 11. The company had filed for bankruptcy on January 20, 2010 (see related story in March DWM, page 24).

As a result of the restructuring, Atrium officials say the company has reduced its outstanding debt by almost 60 percent, from $680 million at the time of filing to approximately $280 million at emergence. In addition, the company has secured $170 million in new equity from Golden Gate Capital and Kenner and Co. and $280 million in new financing.

As a result of the restructuring, Golden Gate Capital and Kenner and Co. have acquired 92.5 percent of the reorganized company’s new common stock and former bondholders have received the remaining 7.5 percent of the reorganized company’s new common stock.

Company subsidiary North Star Windows also has completed the restructuring process in Canada, under the Companies’ Creditors Arrangement Act (CCAA).

Atrium’s legal advisors were Kirkland & Ellis in the U.S. and Goodmans LLP in Canada. Its financial advisor was Moelis & Company.

GLOBAL NEWS
H.B. Fuller to Discontinue Production of Polysulfide-Based IG Sealant Product Line in Europe H.B. Fuller Company announced on April 26 that it will exit the polysulfide-based insulating glass sealant product line in Europe by the end of calendar year 2010.

The company, which provides sealant solutions for the residential IG market in the United States says the move will allow the company to “focus on more innovative technologies.”

In 2006 the company expanded into the European residential insulating glass market by acquiring a polysulfide-based product line. In fiscal year 2009, the company says this product line generated net revenue of approximately $25 million.

The company says it will now focus on “more innovative technologies for this market” and adds that polysulfide-based products have essentially become commodity products, leading to this decision.

RESEARCH NEWS
Foreign Competition Report for U.S. Building Products Industry Available from Jordan, Knauff and Company
Jordan, Knauff & Company, a middle-market investment bank with a specialized practice in the building products industry, has announced the publication of its second annual issue of the “Foreign Competition Report for the U.S. Building Products Industry.”

The report summarizes import statistics and growth rates of the top importing countries in eleven different building products categories and includes information about the following industry segments: doors and windows, vinyl profiles, glass, flooring, fencing, siding, roofing, decking, columns, cabinets and engineered wood products.

The report is published annually and offers information about the level of risk of foreign competition faced by the various building products segments.
www.jordanknauff.com/windoor/