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Share Name | Share Symbol | Market | Type |
---|---|---|---|
PGT Inc | NYSE:PGTI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 41.99 | 0 | 01:00:00 |
PGT Innovations, Inc. (NYSE: PGTI), a national leader in premium windows and doors, including impact-resistant products, garage doors, and products designed to unify indoor/outdoor living spaces, today announced financial results for its fourth quarter ended December 30, 2023.
Financial Highlights for Fourth Quarter 2023
(All results reflect comparison to prior-year period; Cash on hand is compared to prior-year end)
Financial Highlights for Fiscal Year 2023
* Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA, and Liquidity are non-GAAP measures. Please see “Use of Non-GAAP Financial Measures” below for more information.
“For the full year 2023, PGT Innovations delivered record financial results, driven by operational execution, balanced price/cost relationships, and strong cost discipline amid a continued dynamic macroeconomic environment,” said Jeff Jackson, President and Chief Executive Officer. “The performance is a testament to the power of our product lines, our geographic footprint, and the best team in the industry. We believe these foundations provide a strong basis for future profitable growth,” added Jackson.
“In the fourth quarter, we delivered net sales of $343 million, a slight increase from the prior year quarter. Our sales growth was driven by our Southeast region growing at six percent, partially offset by a 13 percent decline in our Western region. The sales growth was due primarily to prior price actions, as fourth-quarter unit volumes were flat with the prior year quarter. We are seeing positive signs of recovery in Western region demand trends, as well as continued demand growth in our Southeast region,” concluded Jackson.
“The Company delivered increasing profitability in the fourth quarter, with gross margins of 36.7 percent, up 120 basis points over the prior year quarter," said Craig Henderson, Senior Vice President and Chief Financial Officer. “Our selling, general and administrative expenses increased over the prior year quarter, as we invested in marketing, sales and other spending to support our 2024 growth initiatives, as well as timing impact of incentive compensation.”
“In the fourth quarter of 2023, we generated $57 million of operating cash flow, which enabled a reduction in our revolver borrowings of $20 million. Additionally, we returned $7 million of capital to our shareholders through share repurchases, for year-to-date repurchases of $82 million,” added Henderson.
“Due to the transaction with MITER Brands announced on January 17, 2024, we will not be holding a conference call or providing 2024 guidance. Refer to our proxy statement for additional information,” concluded Henderson.
About PGT Innovations, Inc.
PGT Innovations manufactures and supplies premium windows, doors, and garage doors. Its highly engineered and technically advanced products can withstand some of the toughest weather conditions on Earth and are revolutionizing the way people live by unifying indoor and outdoor living spaces.
PGT Innovations creates value through deep customer relationships, understanding the unstated needs of the markets it serves, and a drive to develop category-defining products. Through its brands, PGT Innovations is also the nation’s largest manufacturer of impact-resistant windows and doors and holds the leadership position in its primary market.
The PGT Innovations’ family of brands include CGI®, PGT® Custom Windows and Doors, WinDoor®, Western Window Systems, Anlin Windows & Doors, Eze-Breeze®, Eco Window Systems®, NewSouth Window Solutions® and Martin Door®. The company’s brands, in their respective markets, are a preferred choice of architects, builders, and homeowners throughout North America and the Caribbean. Their high-quality products are available in custom and standard sizes with massive dimensions that allow for unlimited design possibilities in residential, multi-family, and commercial projects. For additional information, visit https://pgtinnovations.com/.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "assume," "believe," "could," "estimate," "expect," "guidance," "intend," "many," "positioned," "potential," "project," "think," "should," "target," "will," "would" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future profitable growth and demand trends.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Use of Non-GAAP Financial Measures
This press release and the financial schedules include financial measures and terms not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that presentation of non-GAAP measures such as Adjusted net income, Adjusted net income per share, and Adjusted EBITDA provides investors and analysts with an alternative method for assessing our operating results in a manner that enables investors and analysts to more thoroughly evaluate our current performance compared to past performance. However, these measures do not provide a complete picture of our operations. Management also believes these non-GAAP measures provide investors with a better baseline for assessing our future earnings potential. The non-GAAP measures included in this press release are provided to give investors access to types of measures that we use in analyzing our results, and for internal planning and forecasting purposes.
Adjusted net income consists of GAAP net income adjusted for the items included in the accompanying reconciliation. Adjusted net income per share consists of GAAP net income per share adjusted for the items included in the accompanying reconciliation.
Adjusted EBITDA consists of net income, adjusted for the items included in the accompanying reconciliation. We believe that Adjusted EBITDA provides useful information to investors and analysts about the Company's performance because they eliminate the effects of period-to-period changes in taxes, costs associated with capital investments and interest expense. Adjusted EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the actual funds generated from operations or available for capital investments.
Liquidity consists of net revolver capacity plus cash and cash equivalents. Net revolver capacity is calculated as total revolver capacity, less revolver borrowings and off-balance-sheet outstanding letter-of-credit commitments.
Our calculations of Adjusted net income and Adjusted net income per share, Adjusted EBITDA and Liquidity are not necessarily comparable to calculations performed by other companies and reported as similarly titled measures. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP measures. Schedules that reconcile Adjusted net income, Adjusted net income per share, Adjusted EBITDA and Liquidity to GAAP net income are included in the financial schedules accompanying this release.
We are not able to provide a reconciliation of projected Adjusted EBITDA to the most directly comparable expected GAAP results due to the unknown effect, timing and potential significance of the effects of legal matters, tax considerations, and income and expense from changes in fair value of contingent consideration from acquisitions. Expenses associated with legal matters, tax consequences, and income and expense from changes in fair value of contingent consideration from acquisitions have in the past, and may in the future, significantly affect GAAP results in a particular period.
PGT INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - in thousands, except per share amounts)
Three Months Ended
Year Ended
Dec. 30,
Dec. 31,
Dec. 30,
Dec. 31,
2023
2022
2023
2022
Net sales
$
342,547
$
340,934
$
1,504,241
$
1,491,954
Cost of sales
216,860
219,790
913,600
921,285
Gross profit
125,687
121,144
590,641
570,669
Selling, general and administrative expenses
106,403
95,100
404,193
402,886
Impairment of trade name
5,500
7,423
5,500
7,423
Restructuring costs and charges, net
—
—
1,722
—
Income from operations
13,784
18,621
179,226
160,360
Interest expense, net
7,435
7,755
31,077
28,879
Debt extinguishment costs
—
410
—
410
Income before income taxes
6,349
10,456
148,149
131,071
Income tax expense
1,598
2,756
38,010
32,666
Net income
4,751
7,700
110,139
98,405
Less: Net income attributable to redeemable non-controlling interest
—
(189
)
(1,101
)
(1,523
)
Net income attributable to the Company
$
4,751
$
7,511
$
109,038
$
96,882
Calculation of net income per common share attributable to PGT Innovations, Inc. common shareholders:
Net income attributable to the Company
$
4,751
$
7,511
$
109,038
$
96,882
Change in redemption value of redeemable non-controlling interest
—
3,514
(1,637
)
2,000
Net income attributable to PGT Innovations, Inc. common shareholders
$
4,751
$
11,025
$
107,401
$
98,882
Net income per common share attributable to PGT Innovations, Inc. common shareholders:
Basic
$
0.08
$
0.18
$
1.84
$
1.65
Diluted
$
0.08
$
0.18
$
1.83
$
1.64
Weighted average number of common shares outstanding:
Basic
57,062
59,980
58,363
59,926
Diluted
57,507
60,441
58,700
60,319
PGT INNOVATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands)
December 30,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
32,708
$
66,548
Accounts receivable, net
117,617
160,107
Inventories
111,781
112,672
Contract assets, net
37,733
47,919
Prepaid expenses and other current assets
28,446
28,295
Total current assets
328,285
415,541
Property, plant and equipment, net
238,126
208,354
Operating lease right-of-use asset, net
124,012
104,121
Intangible assets, net
415,245
447,052
Goodwill
462,630
460,415
Other assets, net
9,581
4,766
Total assets
$
1,577,879
$
1,640,249
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST,
AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
113,820
$
168,961
Current portion of operating lease liability
20,368
16,393
Total current liabilities
134,188
185,354
Long-term debt
612,102
642,134
Operating lease liability, less current portion
114,030
95,159
Deferred income taxes, net
52,685
47,407
Other liabilities
5,007
7,459
Total liabilities
918,012
977,513
Commitments and contingencies
Redeemable non-controlling interest
—
34,721
Total shareholders' equity
659,867
628,015
Total liabilities, redeemable non-controlling interest and shareholders' equity
$
1,577,879
$
1,640,249
PGT INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited - in thousands)
Year Ended
December 30,
December 31,
2023
2022
(unaudited)
Cash flows from operating activities:
Net income
$
110,139
$
98,405
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation
35,991
34,048
Amortization
26,307
26,150
Impairment of trade name
5,500
7,423
Other asset impairments
—
2,131
Non-cash portion of restructuring costs and charges
1,679
—
Provision for allowance for credit losses
3,132
10,979
Stock-based compensation
12,240
9,670
Amortization of deferred financing costs, debt discount and premium
1,320
1,242
Debt extinguishment costs
—
410
Deferred income taxes
6,752
(11,340
)
Loss (gain) on sales of assets
406
(240
)
Change in operating assets and liabilities (net of effects of acquisitions):
Accounts receivable
37,452
(20,622
)
Inventories
527
(12,017
)
Contract assets, net, prepaid expenses, other current and other assets
26,158
12,826
Accounts payable, accrued and other liabilities
(70,717
)
37,309
Net cash provided by operating activities
196,886
196,374
Cash flows from investing activities:
Purchases of property, plant and equipment
(69,509
)
(45,377
)
Investment in and acquisition of business
(744
)
(188,580
)
Proceeds from sales of assets
1,167
37
Net cash used in investing activities
(69,086
)
(233,920
)
Cash flows from financing activities:
Payment of fair value of contingent consideration in Anlin Acquisition
(4,348
)
(2,362
)
Redemption of redeemable non-controlling interest
(37,459
)
—
Proceeds from amounts drawn under revolving credit facility
50,000
160,000
Payments of borrowing under revolving credit facility
(81,352
)
(83,648
)
Payments of term loan debt
—
(60,000
)
Payments of financing costs
—
(1,526
)
Purchases of treasury stock under repurchase program
(82,349
)
(1,565
)
Income taxes paid from stock withheld relating to vesting of equity awards
(7,240
)
(1,888
)
Distribution to redeemable non-controlling interest
—
(1,665
)
Proceeds from issuance of common stock under ESPP
1,108
602
Net cash (used in) provided by financing activities
(161,640
)
7,948
Net decrease in cash and cash equivalents
(33,840
)
(29,598
)
Cash and cash equivalents at beginning of period
66,548
96,146
Cash and cash equivalents at end of period
$
32,708
$
66,548
PGT INNOVATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR
MOST DIRECTLY COMPARABLE GAAP EQUIVALENTS
(unaudited - in thousands, except per share amounts and percentages)
Three Months Ended
Year Ended
Dec. 30,
Dec. 31,
Dec. 30,
Dec. 31,
2023
2022
2023
2022
Reconciliation to Adjusted Net Income and
Adjusted Net Income per share - diluted:
Net income
$
4,751
$
7,700
$
110,139
$
98,405
Reconciling items:
Insurance recovery of business wind-down costs (1)
-
-
(2,897
)
-
Restructuring costs and charges, net (2)
-
-
1,722
-
Acquisition- and merger-related costs (3)
5,687
3,523
6,738
4,773
Executive severance costs (4)
-
-
942
-
Cyberattack recovery costs (5)
-
415
206
415
Trade name impairment charges (6)
5,500
7,423
5,500
7,423
Triple Diamond Glass start-up costs (7)
1,386
-
1,386
-
Other corporate costs (8)
321
-
321
-
Asset impairment charges (9)
-
-
-
2,131
Adjustments to contingent consideration (10)
-
381
-
5,432
Hurricane Ian-related costs (11)
-
20
-
1,868
Tax gross-up payment (12)
-
(59
)
-
368
CGI Commercial relocation costs (13)
-
-
-
277
Debt extinguishment costs (14)
-
410
-
410
Product line rationalization and transition costs (15)
-
682
-
682
Tax effect of reconciling items
(3,399
)
(3,339
)
(3,669
)
(6,194
)
Adjusted net income
$
14,246
$
17,156
$
120,388
$
115,990
Weighted-average diluted shares
57,507
60,441
58,700
60,319
Adjusted net income per share - diluted
$
0.25
$
0.28
$
2.05
$
1.92
Reconciliation to Adjusted EBITDA:
Depreciation and amortization expense
$
15,889
$
15,114
$
62,298
$
60,198
Interest expense, net
7,435
7,755
31,077
28,879
Income tax expense
1,598
2,756
38,010
32,666
Reversal of tax effect of reconciling items for adjusted net income above
3,399
3,339
3,669
6,194
Stock-based compensation expense
3,186
2,032
12,240
9,670
Adjusted EBITDA
$
45,753
$
48,152
$
267,682
$
253,597
Adjusted EBITDA as percentage of net sales
13.4%
14.1%
17.8%
17.0%
(1) Represents an insurance recovery gain relating to the wind-down of the commercial portion of our New South acquisition. Proceeds from the insurance recovery totaled $5.0 million. We previously recorded an other receivable of $2.1 million, representing the low end of our range of estimated recovery amounts, resulting in a gain of $2.9 million, classified within selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023.
(2) Represents net costs and charges relating to our management-approved plan to exit the North Carolina market relating to our NewSouth brand. As a result, we determined to close our NewSouth showrooms in Raleigh-Durham and Charlotte, North Carolina, which resulted in net restructuring costs and charges, net, totaling $1.7 million, including $2.5 million in the second quarter of 2023, partially offset by a gain of $0.8 million in the third quarter of 2023 relating to the forgiveness of a portion of the operating lease liability by the landlord of the Charlotte, NC location, which we satisfied in the third quarter of 2023. Of the $2.5 million in restructuring costs and charges in the second quarter of 2023, $2.0 million represents the total impairments of the right-of-use assets of the leases of the Raleigh-Durham and Charlotte, North Carolina showroom facilities, and $0.4 relates to write-offs of the related leasehold improvements. The remainder represents personnel-related costs, which were paid by the end of the 2023 second quarter.
(3) In 2023, represents acquisition-related costs, including expenses totaling $5.6 million relating to the terminated merger agreement with Masonite, transfer taxes assessed to the Company in 2023 relating to the Anlin acquisition in the first quarter of 2023, and costs relating to the redemption of the 25% non-controlling interest in Eco, classified within selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023. In 2022, represents costs relating to the Martin acquisition.
(4) Represents severance costs relating to the termination of the employment of our former Chief Financial Officer, which was effective close of business February 27, 2023. These costs were paid in and are classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023.
(5) In 2023, represents additional cyberattack recovery costs incurred in the second quarter of 2023, classified as selling, general and administrative expense in the accompanying consolidated statement of operations for the year ended December 30, 2023. In 2022, represents cyberattack recovery costs, classified as selling, general and administrative expense in the accompanying condensed statement of operations for the three-months and year ended December 31, 2022. We previously disclosed this event by Current Report on Form 8-K, filed with the SEC on November 7, 2022, and updated the status of this event by Current Report on Form 8-K, filed with the SEC on April 6, 2023.
(6) In 2023, represents impairment charge relating to our Martin trade name classified as impairment of trade name in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023. In 2022, represents impairment charge relating to our WinDoor trade name classified as impairment of trade name in the accompanying consolidated statements of operations for the three-months and year ended December 31, 2022.
(7) Represents start-up costs relating to our previously announced Diamond Glass Thin Triple glass fabrication facility in Prince George County, Virginia, classified as selling, general and administrative expenses in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023.
(8) Represents third-party consulting costs relating to addressing certain personnel matters at our ECO facility in Medley, FL, classified as selling, general and administrative expenses in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023.
(9) Represents write-offs of property, equipment and other impaired assets, classified as selling, general and administrative expense in the accompanying consolidated statements of operations for the three-months and year ended December 31, 2022.
(10) Represents adjustments to contingent consideration associated with our Anlin Acquisition, classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the three-months and year ended December 31, 2022.
(11) Represents disruption and recovery costs caused by Hurricane Ian in late-September 2022, of which $1.1 million is classified within cost of sales, and $747 thousand is classified within selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022.
(12) Represents tax gross-up payment required to be made to the non-controlling interest relating to our acquisition of Eco, which we initially estimated to be $1.5 million, but which was ultimately determined to be $1.8 million, a difference of $368 thousand, which is classified within selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022.
(13) Represents additional costs relating to the relocation of our CGI Commercial business to a new location in the Miami, FL area, being shared with our Eco Enterprises entity, classified as cost of sales in the accompanying consolidated statement of operations for the year ended December 31, 2022.
(14) In 2022, represents debt extinguishment costs relating to the refinancing of our 2016 Credit Agreement and repayment, in full, of the then existing term loan, classified as debt extinguishment costs in the accompanying consolidated statement of operations for the year ended December 31, 2022.
(15) Represents costs relating to product line rationalizations and transitions, classified within cost of sales in the accompanying consolidated statement of operations for the year ended December 31, 2022.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240219248919/en/
PGT Innovations Contacts:
Investor Relations: Craig Henderson, 941-480-1600 Senior Vice President and CFO CHenderson@PGTInnovations.com
Media Relations: Stephanie Cz, 941-480-1600 Corporate Communications Manager
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