Volume 13, Issue 6 - July/August 2012

What's News

COMPANY NEWS
Roto President Discusses Fasco Purchase

Roto AG, the parent company of Roto Frank of America Inc. anno- unced the acquisition of Fasco Die Cast Inc., a Canadian-based manufacturer of window and patio door hardware earlier this year. DWM interviewed Roto Frank president Chris Dimou about the acquisition.

DWM: Why were you interested in Fasco? Did their Canadian location play a role in your decision?
Dimou: First, to give a little background, when I came here from the German headquarters in 2009, my first task was to discover how to develop the company further and determine what our next step would be in North America. We analyzed market segments—residential versus commercial–and U.S. versus Canada and the third item we looked at was product offerings and whether we had gaps in the market. I came up with acquisition targets and Fasco was a great fit for us. Their location did play a role as they have a manufacturing facility in Ontario. In September they acquired Vanguard’s zinc products so they have warehouses on the West Coast. I wanted a company that offered a less premium product and that was geared more toward the medium price point. Lastly, Fasco has been around for many years, and all that led me to the conclusion that [the company] would be a nice target. The acquisition also gives us sales force synergies, new customer bases and cross-selling opportunities. When you want to buy there are two parties. Fasco was one of the first ones I approached and, for me, it was target number one. Harvey Blatt, former owner, told me he saw growth opportunities for Fasco as well through becoming part of a larger group. DWM: What other plans/growth strategies are there to further increase your North American presence? Dimou: We have been focusing on just the residential market but where I see growth moving forward is the light commercial market, particularly for our European product offerings. There are growth opportunities for products with a European heritage. We can also expand in the vinyl market.

DWM: Why is Roto posting increases when others are not? How are you able to gain market share as you referred to in your acquisition announcement?
Dimou: We focused on specific market segments and I call it the right customers in terms of size. We also increased the sales force by adding independent reps. We were also doing a lot of market research and developing products that were market inspired. We focused on the right decision makers and offered different benefits according to their specific needs. Overall we have defined very well what our mission is and how to position ourselves. So we have the right tools and the right sales structure. It is also about how to manage the organization–it’s not just sales-oriented but improving the cost structure. We became much leaner and improved our processes and are well-balanced.

DWM: When you addressed your employees regarding the change, what did you tell them about changes coming for both companies?
Dimou: I developed a post-merger acquisition plan and we will analyze Fasco’s existing structure and identify real synergies for us in terms of products, personnel, etc. This will be the first step but until then it is business as usual. But at the end the consolidated effort will be the outcome and we will take advantage of the two locations.

Industry Discusses Thermal Optimization
The insulating glass (IG) business has gone through continuous transformation in the last 30 years, and the accumulation of these options has resulted in a much higher performing, and better quality window than produced in the past. This is according to Mike McHugh, president of Integrated Automation Systems, who presented at FeneTech’s Annual User Conference which took place in June in Cleveland and included a number of presentations, including a discussion on thermal optimization of residential windows. While each change was often labeled “incremental” and not worth the investment, McHugh said these changes have presented a new challenge: How do we best combine all these improvements to produce the highest performing window that is both durable and cost effective? He said there are a number of options to consider, including:
• Hard coat or soft coat;
• Single, double or triple silver coating;
• Fourth-surface coatings in two pane units;
• Sixth-surface coatings in three pane units;
• Double pane vs. triple pane;
• Symmetric vs. asymmetric;
• Edge effect of the spacer;
• Argon, krypton or air;
• Argon and krypton and air; and
• Overall IG unit thickness.

McHugh explained that the purpose of his analysis was not only to provide specific answers to the cost/value question, but also to demonstrate a methodology to evaluate the cost of different IG process options and compare it with the resulting U-value for a generic vinyl window.

“Using this methodology provides a better understanding of both the cost and ability to affect performance,” he said in the presentation. “I am excited to be conducting an analysis that does not discuss center of glass or even the U-value of an entire unit, but only its contribution as a component of a window.”

He broke the market into three segments based on window glazing pockets:
• ¾-inch units;
• 7/8-inch units; and
• 1-inch units. The base unit is a ¾-inch two pane with:
• 2.5-mm clear panes;
• Stainless steel spacer;
• 0.563 air space;
• Air filled; and
• 2.5-mm double stack low-E.

McHugh said the ¾-inch unit was used as the base; he then accounted for the cost to upgrade from this base to the different unit designs considered. The same incremental costs were used consistently for all designs.

“Keep in mind that if you regard the process as a credible way to make evaluations, it would be relatively easy to substitute your particular numbers for cost considerations,” he said. In his conclusions, McHugh said R-5 windows are cost effective. He pointed out that:
• Whatever glazing pocket size you make, thermal optimization will play a significant role in your product development;
• There are lots of options using the above combinations, and no wrong answers;
• If there is a wrong answer, it is that producing an R-5 window is not cost effective. “With a manufacturing cost premium in the range of $2 per square foot of glazing, I believe we as an industry can provide solutions to the rising cost of energy, as well as CO2 reductions,” he said;
• He added, “The incremental changes have not stopped happening. We as an industry are continuing to develop better performing products for our customers and the outlook is positive;” and
• “It is clear Energy Star has leveled the playing field. Window companies that win in this new competition will be incorporating thermal optimization as tool for developing future products.”

Acquisitions
THV Compozit Acquires Paragon Door Designs THV Compozit Windows & Doors has acquired Paragon Door Designs. According to the announcement, the acquisition gives THV Compozit a line of premiere entryway products, while offering coast-to-coast distribution and added support for regional distribution. Charles L. Smith, CEO of THV Compozit, talked to DWM magazine to offer more details regarding the purchase.

He says the company identified a need for a door program a few years back and this acquisition offers its customers the opportunity to purchase both its door and window products from one supplier.

“Often a company buys windows from one company and doors from another and coordinating the two is often a hassle for the remodeler,” says Smith.

THV began pre-hanging its own doors about two years ago but it was a limited program. “We decided to start out small before learning to run, so to speak,” he says. “It was so highly successful that we were swamped and were surprised about how successful it was even in a slow economy.”

Smith says the company was considering expanding its door line by adding more manufacturing space, but was lucky in that Paragon and THV share Louisville, Ky., as their headquarter city so an interesting opportunity presented itself.

“I knew David Burks, Paragon CEO, for a number of years, and they happened to be pre-hanging the same product we were but doing it for 20 years,” says Smith. “It was a no brainer for us to talk to them about a possible merger.”

As a result, the company has shut down its small door fabrication facility in North Dakota but continues to make windows there.

‘The people who lost their jobs in the door plant have now bolstered our staff in window manufacturing so we are expanding there ten times fold,” says Smith. “Overall, this just creates a lot of opportunity for us,” he adds.

David Burks, THV Compozit executive vice president, sales and former president/CEO of Paragon, adds,

“This acquisition gives the dealer partners of THV Compozit and Paragon access to window and door products from one supplier with one vision—ensuring dealer success. We’re excited about broadening our product offerings and we expect our combined talents to create great opportunities at THV Compozit to help our dealer partners prosper and grow their businesses.”

Ridgeview Capital Purchases Krosswood Doors
Ridgeview Capital has purchased Krosswood Doors and committed growth capital in order to increase the overall service it provides, according to a statement by Krosswood CEO Brad Boyle. The management team will stay in place to ensure a smooth transition, according to the announcement.

“… We will be focusing on getting the production of product back up to speed and adjusting our inventory to better suit the needs of our wholesale distributor customers,” says Boyle in the statement. “We are committed to having the best doors, and having them available to sell as soon as possible.”

Washington Congressman Visits Quanex Building Products
Rep. Adam Smith (D-Wash.) visited Quanex Building Products in Kent, Wash. on May 21. Company officials say the visit was part of their efforts to engage with lawmakers and support policies that are in the best interest of the door and window industry, as well as local communities. The company says this is the first of many such congressional visits as it aims to get the voice of the door and window industry heard on Capitol Hill.

U. S. Commerce Secretary Bryson Tours Schlegel Facility
U.S. Commerce Secretary John Bryson toured Schlegel’s 350,000-square-foot manufacturing facility in Rochester, N.Y., in April. He met with company employees, including general manager Kathleen Ferrara and the engineering team to learn how the Commerce Department’s Manufacturing Extension Partnership in New York is helping Schlegel accelerate new products into the marketplace and expand its markets.

Gulf South Forest Products Receives Presidential “E” Award for Exports
Gulf South Forest Products of Fort Lauderdale, Fla., was awarded the Presidential “E” Award for Exports by U.S. Department of Commerce Secretary John Bryson at the White House. The “E” Awards are the highest recognition any U.S. entity may receive for making a significant contribution to the expansion of U.S. exports, reports the company.

briefly
The U.S. Department of Labor secured a settlement agreement with Bostik Inc. to resolve litigation stemming from citations issued by the department’s Occupational Safety and Health Administration (OSHA) for safety violations following a March 2011 explosion … Seven-D Industries in Hollidaysburg, Pa., was named a Safety and Health Achievement Recognition Program (SHARP) site by the Occupational Safety and Health Administration (OSHA) … The Window and Door Manufacturers Association and the Fenestration Manufacturers Association announced an agreement in principle to formally affiliate and eventually integrate operations. Over the coming months the two groups will begin the process of formalizing the details of the agreement for final approval by both organizations, with the formal change expected to take effect in January 2015 … Soft-Lite Gorell LLC has moved manufacturing of its newly acquired Gorell brand windows into Soft-Lite’s Streetsboro, Ohio, plant … MI Windows and Doors Inc. and its Gratz, Pa., manufacturing facility received a SHARP award from OSHA in recognition of its safety and health management systems. This is now the second manufacturing facility that has received this award. The Hegins, Pa., facility also received a recertification of its SHARP award … MIWD also donated and helped install a complete window package of its EnergyCore windows for a Homes for Our Troops home being built in Parker, Colo., for Army Corporal Nick Orchowski and his family … Thompson Creek Window Co. was recognized with the Capital-Gazette’s Readers Choice Best of 2012 Awards in the best windows and doors category. The Readers Choice Awards poll the publication’s readers to find their choice of the best of the best in more than 100 categories in the Annapolis, Md., area … Royal Building Products announced that its new logo was honored with a gold medal for Elements of Advertising in the Charlotte, N.C., chapter competition of the ADDY Awards … Niles, Mich.-based Tem-Pace LLC acquired Atwood Spec-Temp Glass in Antwerp, Ohio, from Atwood Mobile Products LLC. Production will remain active in both locations, according to the announcement … Window World Inc. and Good Housekeeping announced that windows from five Window World product series earned the Good Housekeeping Seal of Approval for the fifth consecutive year. Windows from the 1000, 2000, 3000, 4000 and 6000 … Perennial Wood, a modified real wood product made by Eastman Chemical Co., was named honorable mention for the Medium Award for Material of the Year by Material ConneXion … Sunset Moulding Co. is installing a new moulding and finishing line at its Idabel, Okla., plant. Capacity output on the new line will be up to an additional 10 loads per shift of primed mouldings and primed boards per week … Atrium Companies Inc. has changed its name to Atrium Corp. According to the announcement, the name change is part of the company’s ongoing strategy to provide its products and services throughout multiple distribution channels across North America.


DWM

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