VENICE, Fla.--(BUSINESS WIRE)-- PGT Innovations, Inc. (NYSE: PGTI), a national leader in premium windows and doors, including impact-resistant products and products designed to unify indoor/outdoor living spaces, today announced financial results for its second quarter ended July 2, 2022.
Financial Highlights for Second Quarter 2022
(All results reflect comparison to prior-year period; Cash on hand is compared to prior-year end)
Updated Fiscal Year 2022 Guidance
* Adjusted net income, Adjusted net income per diluted share and Adjusted EBITDA are non-GAAP measures. Please see “Use of Non-GAAP Financial Measures” below for more information.
"Our very strong second quarter financial results, with year-over-year revenue growth of 42 percent, was driven by continued improvement across our portfolio of brands. The effectiveness of our business model to drive long-term and profitable growth, both organic growth and acquisitions, showed strong during the quarter, and included $39 million in net sales from Anlin Windows & Doors, which we acquired in the fourth quarter of last year,” said Jeff Jackson, President and Chief Executive Officer.
"Organic revenue in our Western region grew 41 percent year-over-year as we continue to gain significant market share and deliver quality products. Organic revenue in our Southeast region grew 27 percent, reflecting strength in our core Florida market and improved lead times stemming from investments in increased operational efficiencies. We achieved 660 basis points of gross margin expansion as operational improvements and pricing actions helped us offset rising costs," added Jackson.
“Our strong revenue and margin growth benefited from many strategic actions and ongoing strength across the markets we serve,” commented Jackson. “Over the past four years, we acquired Western Window Systems, New South, Eco, and Anlin, which together expanded our geographic footprint and product lines so that we can effectively meet growth in consumer demand for our target markets. I am also extremely proud of our team’s focus on operational excellence, which has reduced lead times, further increased our manufacturing quality, improved safety performance and reduced costs. They are a testament to our value proposition that drives the execution of our long-term strategy.”
"Given the strength of our financial results to date and robust open-orders backlog for the second half, we are raising fiscal year 2022 guidance for net sales in the range of $1.450 billion to $1.525 billion, and Adjusted EBITDA in the range of $250 million to $265 million,” added John Kunz, Senior Vice President and Chief Financial Officer. "We generated strong cash flow in the second quarter of 2022, ending the period with a cash balance of $159 million."
| Prior 2022 Guidance* (as of 05/12/2022) | Updated 2022 Guidance* (as of 07/26/2022) | ||
Net sales (in billions) | $1.350 | $1.450 | $1.450 | $1.525 |
% growth vs. prior year | 16% | 25% | 25% | 31% |
Adj. EBITDA** (in millions) | $225 | $250 | $250 | $265 |
% growth vs. prior year | 33% | 48% | 48% | 56% |
* 2022 guidance includes Eco at 100% contribution. ** Adjusted EBITDA is a non-GAAP measure. Please see "Use of Non-GAAP Measures" below. |
Conference Call
PGT Innovations will host a conference call today at 10:30 a.m. The conference call will be available at the same time through the Investor Relations section of the PGT Innovations, Inc. website, http://ir.pgtinnovations.com/events.cfm.
To participate in the teleconference, kindly dial into the call about 10 minutes before the start time: 833-316-0547 (U.S. toll-free) and 412-317-5728 (International). A replay of the call will be available within approximately one hour after the scheduled end of the call on July 26, 2022, through approximately 12:30 p.m. on August 2, 2022. To access the replay, dial 877-344-7529 (U.S. Only toll-free), 855-669-9658 (Canada Only toll-free) and 412-317-0088 (International) and refer to pass code 3547969. Other international replay dial-in numbers can be obtained at: https://services.choruscall.com/ccforms/replay.html
You may join the conference online by using the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=k2gfjtZV.
About PGT Innovations, Inc.
PGT Innovations manufactures and supplies premium windows and 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. The company 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®, CGI Commercial, NewSouth Window Solutions, and a 75 percent ownership stake in Eco Window Systems. 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 www.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 our acquisition of Anlin; pricing actions benefiting margins; improvement of our operations and business integration; and our Sales and EBITDA guidance.
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. 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. We believe these measures enable investors and analysts to more thoroughly evaluate our current performance as compared to past performance and provide a better baseline for assessing the Company's future earnings potential. However, these measures do not provide a complete picture of our operations.
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.
Our calculations of Adjusted net income and Adjusted net income per share, and Adjusted EBITDA 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, and Adjusted EBITDA 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.
Adjusted EBITDA as used in the calculation of the net debt-to-Adjusted EBITDA ratio, consists of our Adjusted EBITDA as described above, but for the trailing twelve-month period, adjusted pursuant to the covenants contained in the 2016 Credit Agreement due 2022.
PGT INNOVATIONS, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(unaudited - in thousands, except per share amounts) |
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| Three Months Ended |
| Six Months Ended |
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| July 2, |
| July 3, |
| July 2, |
| July 3, |
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| 2022 |
| 2021 |
| 2022 |
| 2021 |
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Net sales | $ | 406,521 |
| $ | 285,500 |
| $ | 765,183 |
| $ | 556,592 |
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Cost of sales |
| 241,391 |
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| 188,491 |
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| 465,460 |
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| 365,621 |
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Gross profit |
| 165,130 |
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| 97,009 |
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| 299,723 |
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| 190,971 |
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Selling, general and administrative expenses |
| 109,505 |
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| 75,745 |
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| 205,387 |
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| 145,511 |
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Income from operations |
| 55,625 |
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| 21,264 |
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| 94,336 |
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| 45,460 |
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Interest expense, net |
| 7,155 |
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| 7,825 |
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| 14,235 |
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| 15,282 |
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Income before income taxes |
| 48,470 |
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| 13,439 |
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| 80,101 |
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| 30,178 |
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Income tax expense |
| 12,005 |
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| 2,726 |
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| 19,810 |
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| 6,670 |
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Net income |
| 36,465 |
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| 10,713 |
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| 60,291 |
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| 23,508 |
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Less: Net income attributable to redeemable non-controlling interest |
| (304 | ) |
| (568 | ) |
| (961 | ) |
| (979 | ) |
Net income attributable to the Company | $ | 36,161 |
| $ | 10,145 |
| $ | 59,330 |
| $ | 22,529 |
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Calculation of net income per common share attributable to PGT Innovations, Inc. common shareholders: |
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Net income attributable to the Company | $ | 36,161 |
| $ | 10,145 |
| $ | 59,330 |
| $ | 22,529 |
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Change in redemption value of redeemable non-controlling interest |
| 351 |
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| (3,563 | ) |
| (1,785 | ) |
| (3,563 | ) |
Net income attributable to PGT Innovations, Inc. common shareholders | $ | 36,512 |
| $ | 6,582 |
| $ | 57,545 |
| $ | 18,966 |
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Net income per common share attributable to PGT Innovations, Inc. common shareholders: |
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Basic | $ | 0.61 |
| $ | 0.11 |
| $ | 0.96 |
| $ | 0.32 |
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Diluted | $ | 0.61 |
| $ | 0.11 |
| $ | 0.96 |
| $ | 0.32 |
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Weighted average number of common shares outstanding: |
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Basic |
| 59,928 |
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| 59,551 |
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| 59,880 |
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| 59,418 |
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Diluted |
| 60,257 |
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| 60,051 |
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| 60,241 |
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| 59,977 |
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PGT INNOVATIONS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(unaudited - in thousands) |
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| July 2, |
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| January 1, |
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| 2022 |
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| 2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | 159,261 |
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| $ | 96,146 |
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Accounts receivable, net |
| 178,185 |
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| 141,221 |
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Inventories |
| 110,245 |
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| 91,440 |
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Contract assets, net |
| 59,309 |
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| 55,239 |
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Prepaid expenses and other current assets |
| 28,841 |
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| 37,712 |
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Total current assets |
| 535,841 |
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| 421,758 |
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Property, plant and equipment, net |
| 185,597 |
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| 185,266 |
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Operating lease right-of-use asset, net |
| 95,511 |
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| 91,162 |
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Intangible assets, net |
| 374,801 |
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| 394,525 |
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Goodwill |
| 372,652 |
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| 364,598 |
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Other assets, net |
| 1,963 |
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| 3,301 |
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Total assets | $ | 1,566,365 |
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| $ | 1,460,610 |
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LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST, |
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AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses | $ | 175,129 |
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| $ | 122,681 |
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Current portion of operating lease liability |
| 14,883 |
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| 13,180 |
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Total current liabilities |
| 190,012 |
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| 135,861 |
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Long-term debt |
| 626,266 |
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| 625,655 |
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Operating lease liability, less current portion |
| 87,514 |
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| 83,903 |
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Deferred income taxes, net |
| 34,249 |
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| 37,489 |
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Other liabilities |
| 7,910 |
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| 11,742 |
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Total liabilities |
| 945,951 |
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| 894,650 |
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Commitments and contingencies |
| — |
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| — |
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Redeemable non-controlling interest |
| 39,609 |
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| 36,863 |
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Total shareholders' equity |
| 580,805 |
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| 529,097 |
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Total liabilities, redeemable non-controlling interest and shareholders' equity | $ | 1,566,365 |
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| $ | 1,460,610 |
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PGT INNOVATIONS, INC. |
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR |
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MOST DIRECTLY COMPARABLE GAAP EQUIVALENTS |
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(unaudited - in thousands, except per share amounts and percentages) |
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| Three Months Ended | Six Months Ended |
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| July 2, |
| July 3, | July 2, |
| July 3, |
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| 2022 |
| 2021 | 2022 |
| 2021 |
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Reconciliation to Adjusted Net Income and |
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Adjusted Net Income per share - diluted: |
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Net income | $ | 36,465 |
| $ | 10,713 | $ | 60,291 |
| $ | 23,508 |
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Reconciling items: |
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Asset impairment charges (1) |
| 1,408 |
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| - |
| 2,131 |
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| - |
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Adjustments to contingent consideration (2) |
| 3,793 |
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| - |
| 4,754 |
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| - |
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CGI Commercial relocation costs (3) |
| 277 |
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| - |
| 277 |
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| - |
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Acquisition-related costs (4) |
| - |
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| - |
| - |
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| 672 |
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Business wind-down costs (5) |
| - |
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| - |
| - |
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| 4,197 |
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Tax effect of reconciling items |
| (1,411 | ) |
| - |
| (1,843 | ) |
| (1,205 | ) | |
Adjusted net income | $ | 40,532 |
| $ | 10,713 | $ | 65,610 |
| $ | 27,172 |
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Weighted-average diluted shares |
| 60,257 |
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| 60,051 |
| 60,241 |
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| 59,977 |
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Adjusted net income per share - diluted | $ | 0.67 |
| $ | 0.18 | $ | 1.09 |
| $ | 0.45 |
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Reconciliation to Adjusted EBITDA: |
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Depreciation and amortization expense | $ | 14,475 |
| $ | 12,802 | $ | 30,988 |
| $ | 24,248 |
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Interest expense, net |
| 7,155 |
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| 7,825 |
| 14,235 |
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| 15,282 |
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Income tax expense |
| 12,005 |
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| 2,726 |
| 19,810 |
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| 6,670 |
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Reversal of tax effect of reconciling items for |
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adjusted net income above |
| 1,411 |
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| - |
| 1,843 |
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| 1,205 |
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Stock-based compensation expense |
| 2,704 |
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| 1,744 |
| 4,909 |
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| 3,494 |
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Adjusted EBITDA | $ | 78,282 |
| $ | 35,810 | $ | 137,395 |
| $ | 78,071 |
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Adjusted EBITDA as percentage of net sales | 19.3% |
| 12.5% | 18.0% |
| 14.0% |
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(1) Represents write-offs of property and equipment, classified as selling, general and administrative expense in the accompanying condensed statement of operations for the three- and six-month periods ended July 2, 2022. | ||||||||
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(2) Represents adjustments to contingent consideration associated with our Anlin Acquisition as required under ASC 805, classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the three- and six-month periods ended July 2, 2022. | ||||||||
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(3) 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 three- and six-month periods ended July 2, 2022. | ||||||||
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(4) Represents costs relating to our acquisition of Eco, classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the six-month period ended July 3, 2021. | ||||||||
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(5) Represents incremental costs related to the wind-down in the first quarter of 2021 of our commercial business acquired in the New South acquisition. Of the $4.2 million of these costs, $2.7 million are classified as cost of sales, and $1.5 million are classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the six-month period ended July 3, 2021. A portion of these costs may be recoverable through insurance. | ||||||||
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220722005415/en/
Investor Relations: John Kunz, 941-480-1600 Senior Vice President and CFO JKunz@PGTInnovations.com
Media Relations: Stephanie Cz, 941-480-1600 Corporate Communications Manager
Source: PGT Innovations, Inc.