BALA CYNWYD, Pa., July 15, 2014 /PRNewswire/ -- Law Office of Brodsky & Smith, LLC announces that it has commenced a class action lawsuit in the Southern District of New York on behalf of purchasers of Ply Gem Holdings, Inc. ("Ply Gem") (NYSE: PGEM) common stock pursuant and/or traceable to the Company's initial public offering ("IPO") on or about May 23, 2013, seeking to pursue remedies under the Securities Act of 1933.
Ply Gem is a self-described "leading manufacturer of exterior building products" in North America. The Company manufactures a variety of products utilized in residential and commercial construction, including siding, fencing, stone, windows, and doors. On or about May 23, 2013, the Company filed its IPO Materials and conducted its IPO, selling over 18 million shares of common stock to investors at a price of $21.00 per share.
However, Ply Gem's shareholders would slowly discover that the IPO Materials were negligently prepared and failed to discuss a number of known material trends and events that were likely to have a material adverse effect on Ply Gem's financial results and condition. For example, the IPO Materials negligently failed to disclose that Ply Gem had entered into a supply contract with Home Depot that required the Company to (i) buy back inventory from Home Depot and (ii) sell a large volume of low-priced/low-margin product to Home Depot. The IPO Materials also negligently failed to disclose that Ply Gem was experiencing ongoing labor inefficiencies and other costs associated with, among other things, the production of the low-priced/low-margin products for Home Depot.
On August 13, 2013, Ply Gem's executive officers revealed that "labor resource requirements," "abnormal inefficiencies," and a "lower-end mix of product sold" to Home Depot had negatively impacted the Company's financial results for the second quarter of 2013. Following this disclosure, shares of the Company's stock declined $3.66 per share, or 19.3%, to close on August 13, 2013 at $15.26 per share.
On November 6, 2013, Ply Gem executives held a conference call to discuss the Company's third quarter 2013 financial results. During the call, Ply Gem's executive officers discussed, among other things, how product pricing, expenses related to an "inventory buyback" from Home Depot, labor "ramp up costs" from scaling up the Company's workforce to meet demand, and a high employee turnover rate had negatively impacted the Company's financial results for the third quarter of 2013.
On January 10, 2014, the Company issued a press release providing an "update" on its 2013 fourth quarter. Citing a "continued lag in demand for … higher profit margin 'big ticket' repair and remodeling products," the Company announced that it expected to report disappointing net sales and earnings results for the fourth quarter, and disclosed additional details about its labor inefficiencies. Following these disclosures, shares of the Company's stock declined an additional $2.92 per share, or over 17%, to close on January 13, 2014 at $14.07 per share.
Finally, on March 14, 2014, Ply Gem reported its fourth quarter and full year 2013 financial results, which included disappointing net sales, earnings and gross profit margin. Ply Gem's executive officers also disclosed, among other things, that as result of an "unexpected drop in demand," the Company had "experienced a number of operating inefficiencies, predominately labor inefficiencies," at its manufacturing facilities. Following these disclosures, shares of the Company's stock fell an additional $0.44 per share, or nearly 4%, to close on March 14, 2014 at $11.55 per share.
Ply Gem shareholders may, no later than July 18, 2014, move the Court to serve as a lead plaintiff of the class. In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you own shares of Ply Gem common stock and wish to discuss this action, or if you have any questions, you may e-mail or call the law office of Brodsky & Smith, LLC who will, without obligation or cost to you, attempt to answer your questions. You may contact Jason L. Brodsky, Esquire or Evan J. Smith, Esquire at Brodsky & Smith, LLC, Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by e-mail at [email protected], by visiting http://brodsky-smith.com/790-pgem-ply-gem-holdings-inc.html, or calling toll free 877-LEGAL-90.
Brodsky & Smith, LLC is a litigation law firm with extensive expertise representing shareholders throughout the nation in securities and case action lawsuits. The attorneys at Brodsky & Smith have been appointed by numerous courts throughout the country to serve as lead counsel in class actions and successfully recovered millions of dollars for our clients and shareholders.
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SOURCE Law Office of Brodsky & Smith, LLC