According to the law firm press release, Ply Gem is a manufacturer of exterior building products for the residential and commercial construction, do-it-yourself, and professional remodeling and renovation markets, whose products are primarily sold in the United States and Canada.
On or about May 22, 2013, the SEC declared effective Ply Gem’s Form S-1 Registration Statement, as amended (the “Registration Statement”) for the IPO. The complaint alleges that the Registration Statement, and the documents referenced and incorporated therein, negligently failed to disclose certain material events known to defendants that caused the financial information reported in the Registration Statement not to be indicative of Ply Gem’s future operating results. These material events included: (i) Ply Gem had agreed to buy back certain inventory from The Home Depot, Inc. (“Home Depot”) as an accommodation related to a new supply agreement between the two companies (the “Supply Agreement”); (ii) the Supply Agreement required that Ply Gem initially sell Home Depot a large volume of lower-priced, lower-margin product; (iii) Ply Gem was experiencing on-going labor inefficiencies and other ramp-up costs associated with the initial roll out of lower-priced, lower-margin products to Home Depot; (iv) April 2013 was a particularly poor month for the Company, with management noting that “maybe it wasn’t our worst April in eight years, but it was our worst in a while”; and (v) high customer inventory at the end of the first quarter was adversely affecting the demand for and sales of Ply Gem’s siding products in April 2013 and May 2013. In addition, the Registration Statement failed to disclose all material risks and changes in Ply Gem’s business affairs as required pursuant to the instructions of Form S-1.
These known, but undisclosed, events had a material adverse effect on Ply Gem’s operating results during its second quarter ended June 29, 2013. At the time of the filing of this lawsuit, Ply Gem common shares trade in a range between $10.50 and $11 a share – 50% less than the IPO price.
On October 14, 2014, the Court issued an Order consolidating cases, and appointing lead plaintiff and lead counsel. Lead Plaintiff filed a consolidated complaint on December 15, 2014.
On September 29, 2015, the Court issued an Order granting the Defendants' motion to dismiss. Plaintiffs were given leave to amend their complaint. The Second Amended Complaint was filed on November 6, 2015.
On September 23, 2016, the Court issued an Order granting in part and denying in part Defendants' motion to dismiss.