Volume 13, Issue 1 - January/February 2012

What's News

Atrium Confirms Hiring Illegal Workers; Will Pay DHS $2 Million
Atrium Companies, the owner of Houston-based Champion Window, confirmed the hiring of illegal aliens as concluded by a federal government investigation into the hiring practices of the company and its affiliated divisions and agreed to adhere to revised immigration compliance programs and pay $2 million as forfeited funds to the Department of Homeland Security (DHS). The announcement was made by U.S. Attorney Kenneth Magidson, along with Robert Rutt, special agent in charge of Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in Houston. For its part, the United States has agreed not to criminally prosecute the company, the announcement says.

According to the ICE announcement, Atrium received multiple notices from the Social Security Administration (SSA) known as "no-match letters," which indicated employee names and Social Security numbers did not match SSA records. Reportedly, the companies failed to take corrective measures, resulting in the continued employment of the undocumented aliens. Champion derived at least $2 million in revenue from the sales of its products manufactured and services provided with the use of its predominantly illegal workforce from 2006 through 2010, according to ICE.

Likewise, the announcement notes that Champion engaged in a pattern and practice of hiring undocumented workers for years prior to its acquisition by Atrium Companies in June 2006. In fact, last fall Champion Windows filed a petition and application for writ of attachment in the amount of $5 million and for Injunctive Relief in the Harris County (Texas) District Court against Ralph Zuckerberg, former president/CEO and Patrick M. Cahill, former CFO, alleging that they participated in wrongful hiring practices, while working at the company. According to the ICE announcement, an audit conducted by HSI in early 2011 revealed that about 269 of Champion's 451-person workforce consisted of undocumented aliens; at the request of the government, all of the undocumented aliens were terminated from Champion by the end of April 2011.

The ICE HSI investigation also revealed that, since acquiring Champion, management at Atrium had become aware of the possibility of large numbers of undocumented aliens being employed at Champion's Houston factory. A follow-up audit conducted by ICE HSI of Atrium Companies' remaining 12 subsidiaries in May 2011 revealed that about 8.3 percent of the parent company's 3,382 employees (excluding Champion employees) were undocumented aliens. All of these workers were terminated within a matter of weeks, states the ICE announcement.

The ICE announcement reported that since December 2010, Atrium Companies has taken substantial remedial measures to ensure compliance with immigration law in its hiring process, including revising its immigration compliance procedures to include new policies concerning the proper completion, retention and auditing of I-9 forms and for responding to SSA no match letters. Under the terms of the non-prosecution agreement, Atrium Continues must also hire a full-time chief compliance officer and must also continue to consult with immigration counsel in order to ensure the legality of its workforce.

According to a statement issued by the Atrium Companies, for more than a year it has been cooperating in the investigation, which led to the termination of any company employee who was not authorized to work in the United States. The investigation involved an audit of personnel records across all 14 Atrium-owned business units located throughout the United States.

“We are pleased that this investigation has been fully resolved to the government’s satisfaction and each employee now holds proper work authorizations,” says Kevin P. O’Meara, chairman and CEO of Atrium. “Every employee at each Atrium division is fully documented, and our policies assure that this status will be maintained going forward. Atrium remains a strong and important presence in the residential housing industry, and we are especially grateful for the support and patience shown by our customers, suppliers and employees during this time. ”

Loewen Expands With New Showrooms
Loewen, based in Steinbach, Manitoba, opened 12 new showrooms across North America. The centers range in size from 1,500 to 5,000 square feet and showcase the company’s wood and metal-clad doors and windows.

The new showrooms are located in Belfast, Maine, Boston and Brewster, Mass., Westport, Conn., Westerly, R.I., Chicago, St. Louis, Mo., Fort Worth, Texas, San Diego, Calgary and Edmonton, Alberta and Vancouver, British Columbia, with more centers slated to open in the future. The new locations are part of an international initiative to help builders and architects find the right products for their clients, according to the company.

“These showrooms are yet another example of how Loewen is growing to better serve our customers,” says Tom DeBolt, Loewen vice president of sales and marketing. “Our products deliver unparalleled performance, durability and a striking beauty that very few manufactures can achieve. We’re proud to make these expansions in 2011.”

Manufacturer Starts Production from New Facility
Canadian window manufacturer All Weather Windows has began production from its new manufacturing facility in Mississauga, Ontario. According to a company press release, the new facility was needed due to “continued growth and demand in Eastern Canada markets.”

“Substantial growth in the Ontario and Atlantic markets made it necessary to move into a new facility,” says Jon Wagner, Ontario and Atlantic regional manager. “This new building has an additional 30 percent more manufacturing floor space, which will help us continue to meet the expectations of our current customer base. It also allows us to continue to grow our business in the Eastern Canada marketplace.”

The facility features a new showroom displaying the company’s range of energy-efficient products. In addition to the new location, All Weather Windows has 15 existing branches and 1,000 dealer locations across Canada, according to the company.

“This is another major step forward for our company,” says Richard Scott, president.

Manufacturer Sheds Window Business to Focus on Doors
Haddon Windows and Doors, based in Bensalem, Pa., is winding down its window business and will solely focus on its door division, according to chairman Sam Jadallah.

“The window industry has been under tremendous pressure,” he says. “The average selling price of a window has dropped dramatically while input prices went up from almost all our suppliers. We saw very little ability to predict when market conditions would get more favorable.”

But while all this was happening on the window side, Jadallah says the “door business was healthy, stable and strong.”

“Homeowners are more likely to spend $2,500 on an entry door and less interested in spending $20,000 on replacing a lot of windows,” he says. “We were the first to introduce an R-5 window but energy efficiency is hard to innovate around so we put our energy into security and doors.”

Last year Haddon introduced its SecuraSeal sliding patio door, and the product was awarded the Popular Science “Best of What’s New” for 2011 Award in the security category.

“We have won some awards and received good customer reaction so we are putting the energy there rather than into commodity manufacturing,” he says. “Our plans are to expand the patio door to dealers nationwide.”

He adds, “We find that with homeowners security is a major theme and they will pay more for it. The sliding patio door is easily the easiest way into your house and this product changes that.”

Jadallah says the company is also researching similar products on the entry door side.

“We think there is a lot of innovation that can be done on locking systems, etc. That’s where our focus is.”

FrontLine Purchases Assets of GW Millwork
FrontLine® Building Products Inc. and GW Millwork, have purchased the assets of GW Inc., which will operate as a division of
FrontLine®. The current Green Bay and Medford, Wis., operations, as well as the Merrill, Wis., operations of GW Inc. “will remain operational to take advantage of the significant capabilities of each location as well as retaining the experienced personnel of each location,” according to a FrontLine press release.

The organizations will together provide a full line of aluminum-clad products, including entry doors and garage door frames, as well as architectural windows, transoms, wood and aluminum window grilles and custom millwork capabilities.

Builders FirstSource Secures $160 Million Term Loan

Builders FirstSource Inc., based in Dallas, has completed a new $160 million first-lien Term Loan financing agreement (Term Loan) with affiliates of Highbridge Principal Strategies LLC. The company also announced it had entered into a stand-alone letter of credit facility (LC Facility) with SunTrust Bank, which provides for the issuance of up to $20 million of letters of credit. With the proceeds, the company intends to repay the $20 million outstanding under the current revolving credit facility, use $14.2 million to collateralize letters of credit outstanding under the new LC Facility, and Builders FirstSource Inc., based in Dallas, has completed a new $160 million first-lien Term Loan financing agreement (Term Loan) with affiliates of Highbridge Principal Strategies LLC. The company also announced it had entered into a stand-alone letter of credit facility (LC Facility) with SunTrust Bank, which provides for the issuance of up to $20 million of letters of credit. With the proceeds, the company intends to repay the $20 million outstanding under the current revolving credit facility, use $14.2 million to collateralize letters of credit outstanding under the new LC Facility, and pay fees and expenses related to the transaction, according to a company press release.

“This financing transaction strengthens our liquidity and positions us to take full advantage of the expected recovery in housing,” says Floyd Sherman, Builders FirstSource CEO. “This financing transaction would not have been possible without the continued improvement in our 2011 financial results.”

Sherman states that upon receipt of the $119.6 million in net proceeds related to this transaction, the company’s cash balance was approximately $150 million, and net liquidity was approximately $115 million after giving effect to a $35 million minimum cash requirement contained in the term loan.

“Our sales results through November have exceeded our expectations, delaying the anticipated seasonal reduction in working capital typically seen by this point in the year. Our liquidity has also enabled us to take advantage of opportunistic inventory buys to protect customer pricing as we head into 2012,” adds Sherman.

Brio USA Moves into New Facility
Brio USA Inc. has moved into a new 15,000-square-foot facility in Rochester, N.Y. The architectural hardware supplier, which has operated in Australia since 1973, entered the U.S. market late last year.

“Our new manufacturing facility will help us support the U.S. market supplying the O.E.M. and architectural/specification markets,” says Kevin O’Connor, president. “The new building will give us capabilities in Rochester that will allow us to be very responsive to the marketplace and provide architectural hardware solutions for bi-fold doors and retractable screens.”

The company will manufacture and assemble components at this location, stocking aluminum extrusions for the track, channel and thresholds and all related products.

Financial Snapshot
Quanex Building Products Corp. of Houston reported that for its fiscal 2011 fourth quarter and full year results for the period ending October 31, 2011, fourth quarter 2011 net sales were $233.0 million, compared to $222.3 million a year ago. This included $23.3 million of net sales from Edgetech IG of Cambridge, Ohio. Net sales for 2011 were $848.3 million, compared to $798.3 million last year, and included $53.4 million of net sales from Edgetech. Operating income for EPG in the quarter was $14.9 million, 32 percent better than a year ago.

Officials at Asahi Glass Co. (AGC), announced the company’s consolidated financial results for the nine months ended September 30, 2011. The AGC Group posted a 5.3-percent decrease in net sales from the corresponding period of the previous year. Operating income decreased by 32.5 percent year-on-year, and ordinary income decreased by 41.7 percent.
Net income was down 45.7 percent on a year-on-year basis.

Net sales were $45.8 million for PGT Industries in the third quarter—a decrease of $1.4 million, or 3 percent, from the prior year’s third quarter, according to its financial results for the third quarter ended October 1, 2011. Net income was $241,000 compared to a net loss of $207,000 in the third quarter of 2010. Adjusted net income was $982,000 after adjusting for $741, 000 of consolidation related charges; EBITDA was $5.1 million, compared to EBITDA of $4.7 million in the prior year third quarter.

Georgia Gulf, parent company of Royal Building Products, released its financial results for the third quarter, and in the Building Products segment, net sales were $262.5 million—an increase of 18 percent (14 percent on a constant currency basis) compared to $222.9 million recorded for the same quarter in the prior year. The segment’s operating income was $14.3 million for the third quarter of 2011, compared to $5.6 million of operating income during the same quarter of the prior year. The increase in operating income was primarily due to improved conversion costs, the addition of Exterior Portfolio and lower selling, general and administrative costs, offset in part by higher raw material costs and a less favorable geographic and product sales mix.

Amesbury Acquires Overland Products
Amesbury has acquired Overland Products Inc., a Fremont, Neb.-based supplier of stampings for a wide range of applications, primarily in the fenestration market. The company is also a long-standing partner and supplier to Amesbury’s Hardware Products Division.

Overland will continue to supply its existing customer base from Fremont as a part of Amesbury Hardware Products. Bill Ekeler, CEO of Overland, will become general manager of the Overland business.

“The acquisition of Overland’s product range and expertise in metal stamping is an exciting opportunity to return to Amesbury’s strategy of acquiring well-run companies that expand our product offering and capabilities within the fenestration industry,” says Jonathan Petromelis, president and CEO.

Association News
Latest NAFS Standard Published

The 2011 edition of AAMA/WDMA /CSA 101/I.S.2/A440, NAFS “North American Fenestration Standard/ Specification for windows, doors, and skylights” (NAFS-11) has received final approval and is now available. This standard is the result of a multi-year effort by the American Architectural Manufacturers Association (AAMA), Canadian Standards Association (CSA) and Window & Door Manufacturers Association (WDMA). The updated 2011 standard replaces the 2008 edition.

The 2011 NAFS standard is already referenced in the 2012 editions of the International Building Code and International Residential Code, and the new standard is being proposed to replace the 2008 edition in the National Building Code of Canada when it is updated.

The Joint Document Management Group (JDMG), comprised of representatives from all three associations, stresses the importance of NAFS-11.

According to the announcement, the 2011 standard represents significant steps toward achieving seamless trade across the U.S./Canadian border for fenestration industry manufacturers. A Canadian Supplement to the standard has been created by the CSA A440 Technical Committee to address those few Canada-only items not included within the new NAFS standard.

FeneTech Inc. Aurora, Ohio, has an updated website, which provides information on the company’s FeneVision software, engineering services and industry events, and supports multiple languages. In addition, the company also updated its corporate logo … AAMA has revised two specifications related to secondary storm products: AAMA 1002-11, “Voluntary Specification for Secondary Storm Products for Windows and Sliding Glass Doors” and AAMA 1102-11, “Voluntary Specification for Side-Hinged Secondary Storm Doors.” In previous versions of AAMA 1002, secondary storm products (SSPs) were referred to as combination storm windows and sliding glass doors or insulating storm products for windows and sliding glass doors; however, these products are now included in the scope of AAMA/WDMA/CSA 101/I.S.2/A440-11 … Woodgrain Millwork Inc. based in Fruitland, Idaho, received recognition from The Home Depot at its Annual Partnership Meeting as a Top Ten Finalist for the 2011 Innovation Award for its latest product, Finished Elegance … Arkema Inc. of King of Prussia, Pa., has commissioned its online chemical vapor deposition (CVD) flat glass coating system with two multislot coaters for low-E glass at Hebei Yingxin Glass Group Co.’s float line in Shahe City, HebeiProvince, China, according to a company release … JELD-WEN received the 2011 Theodore Roosevelt Workers’ Compensation and Disability Management Award The award, given by Risk & Insurance magazine, recognizes programs annually for their efforts to reduce the number of injuries to workers on the job. JELD-WEN has reduced its annual workers’ compensation injuries since 2002 in the United States by 80 percent.


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