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 first quarter ended April 3, 2021.
Financial Highlights for First Quarter 2021 compared to First Quarter 2020
Full-Year 2021 Guidance Increased (includes results for Eco from date of acquisition at 100% of its sales)
“PGT Innovations’ sales increased 23 percent for a record quarter, including 15 percent organic growth, and during the quarter we completed the acquisition of a majority ownership stake in Eco Enterprises, which also contributed $18 million of sales,” said Jeff Jackson, President and Chief Executive Officer. “Reflecting strength in the housing sector across our key markets, our legacy business grew orders 31 percent. This includes orders from NewSouth in the first quarter of $35 million, up 42 percent over the prior-year quarter.”
“We recently announced price increases to help offset inflationary pressures on rising material costs and labor rates in the quarter which contributed a decline in gross margins of 220 basis-points to 34.7 percent,” added Jackson. “Going forward, we expect recently announced price increases will begin to offset these cost impacts beginning in the last month of the second quarter. Additionally, we remain focused on cost controls, strategic markets and operational excellence improvements as evidenced by the enhancements to our Western Phoenix operations, supporting their growing demand as the economy reopens.”
“Our results for the quarter included $4.2 million of costs related to our exit from the commercial business included in the New South acquisition. Adjusting for these charges, our adjusted EBITDA was $42 million, a 7% increase versus the prior-year quarter. Our net debt-to-trailing-twelve-month Adjusted EBITDA ratio ended the quarter at 2.6 times, near the midpoint of our targeted range,” said Brad West, Interim Chief Financial Officer and Senior Vice President of Corporate Development and Treasurer. “As we think about capital allocation, we continue to prioritize acquisitions and investing in internal projects that we expect to drive margin growth or further improve our operational efficiency.”
"Looking to the remainder of 2021, we expect continued sales growth, though margin pressures may continue into the second quarter longer than initially anticipated due to timing of price increases and our significant backlog now totaling $343 million,” added West.
“The health and well-being of our team members, customers and communities continues to be our greatest focus. In support of this commitment, we are making available COVID-19 vaccinations for employees at our Venice, Florida facility,” concluded Jackson.
Updated 2021 Guidance
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| Prior Guidance* (as of 02/24/2021) | Updated 2021 Guidance* (as of 05/13/2021) |
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| Net sales (in billions) | $1.0 | $1.075 | $1.050 | $1.125 |
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| % growth | 13% | 22% | 19% | 27% |
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| EBITDA (in millions) | $175 | $194 | $175 | $200 |
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| % growth | 17% | 29% | 17% | 33% |
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| * 2021 guidance includes Eco at 100% contribution for the post-acquisition period. |
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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 May 13, 2021, through approximately 12:30 p.m. on May 20, 2021. 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 10155679. 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://services.choruscall.com/links/pgti210513FDso7Ns5.html
The webcast will also be available through the Investors section of the PGT Innovations, Inc. website: http://ir.pgtinnovations.com/events.cfm.
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 unify indoor/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. PGT Innovations is also the nation’s largest manufacturer of impact-resistant windows and doors, holds the leadership position in its primary markets, and is part of the S&P SmallCap 400 Index.
The PGT Innovations’ family of brands include CGI®, PGT® Custom Windows & Doors, WinDoor®, Western Window Systems®, CGI Commercial®, Eze-Breeze®, NewSouth Window Solutions®, and Eco Enterprises®. The Company’s brands, in their respective markets, are a preferred choice of architects, builders, and homeowners throughout North America and the Caribbean. The Company’s high-quality products are available in custom and standard sizes with multiple dimensions that allow for greater 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 demand in our Western business recovering; price increases offsetting cost impacts; our prioritization of capital; and our Sales and EBITDA guidance.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are used 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.
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 |
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| April 3, |
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| April 4, |
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| 2021 |
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| 2020 |
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Net sales |
| $ | 271,092 |
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| $ | 220,204 |
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Cost of sales |
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| 177,130 |
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| 139,077 |
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Gross profit |
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| 93,962 |
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| 81,127 |
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Selling, general and administrative expenses |
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| 69,766 |
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| 54,220 |
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Income from operations |
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| 24,196 |
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| 26,907 |
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Interest expense, net |
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| 7,457 |
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| 7,169 |
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Income before income taxes |
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| 16,739 |
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| 19,738 |
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Income tax expense |
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| 3,944 |
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| 4,138 |
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Net income |
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| 12,795 |
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| 15,600 |
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Less: Net income attributable to redeemable non-controlling interest |
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| 411 |
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| — |
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Net income attributable to the Company |
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| 12,384 |
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| 15,600 |
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Change in redemption value of redeemable non-controlling interest |
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| — |
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| — |
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Net income attributable to common shareholders |
| $ | 12,384 |
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| $ | 15,600 |
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Net income per common share attributable to common shareholders: |
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Basic |
| $ | 0.21 |
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| $ | 0.27 |
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Diluted |
| $ | 0.21 |
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| $ | 0.26 |
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Weighted average number of common shares outstanding: |
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Basic |
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| 59,286 |
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| 58,668 |
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Diluted |
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| 59,894 |
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| 59,121 |
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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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| April 3, |
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| January 2, |
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| 2021 |
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| 2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | 58,979 |
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| $ | 100,320 |
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Accounts receivable, net |
| 117,239 |
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| 92,844 |
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Inventories |
| 72,352 |
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| 60,317 |
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Contract assets, net |
| 49,225 |
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| 28,723 |
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Prepaid expenses and other current assets |
| 28,543 |
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| 19,468 |
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Total current assets |
| 326,338 |
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| 301,672 |
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Property, plant and equipment, net |
| 160,129 |
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| 135,155 |
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Operating lease right-of-use asset, net |
| 65,763 |
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| 38,567 |
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Intangible assets, net |
| 324,458 |
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| 256,507 |
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Goodwill |
| 359,746 |
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| 329,695 |
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Other assets, net |
| 3,224 |
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| 925 |
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Total assets | $ | 1,239,658 |
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| $ | 1,062,521 |
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LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses | $ | 111,892 |
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| $ | 84,344 |
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Current portion of operating lease liability |
| 8,682 |
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| 6,132 |
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Total current liabilities |
| 120,574 |
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| 90,476 |
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Long-term debt, less current portion |
| 474,265 |
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| 412,098 |
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Operating lease liability, less current portion |
| 60,140 |
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| 35,130 |
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Deferred income taxes, net |
| 29,947 |
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| 28,329 |
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Other liabilities |
| 10,971 |
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| 11,354 |
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Total liabilities |
| 695,897 |
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| 577,387 |
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Redeemable non-controlling interest |
| 34,495 |
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| — |
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Total shareholders' equity |
| 509,266 |
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| 485,134 |
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Total liabilities, redeemable non-controlling interest and shareholders' equity | $ | 1,239,658 |
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| $ | 1,062,521 |
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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) | ||||||||
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| Three Months Ended | ||||||
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| April 3, |
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| April 4, | |||
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| 2021 |
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| 2020 |
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Reconciliation to Adjusted Net Income and Adjusted Net Income |
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per share - diluted - attributable to common shareholders: |
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Net income attributable to common shareholders |
| $ | 12,384 |
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| $ | 15,600 |
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Add: Net income of redeemable non-controlling interest |
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| 411 |
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| - |
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Net income |
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| 12,795 |
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| 15,600 |
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Reconciling items: |
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Acquisition-related costs (1) |
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| 672 |
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| 543 |
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Business wind-down costs (2) |
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| 4,197 |
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| - |
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Product line transition costs (3) |
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| - |
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| 382 |
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Pandemic-related costs (4) |
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| - |
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| 85 |
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Tax effect of reconciling items |
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| (1,205 | ) |
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| (253 | ) |
Adjusted net income |
| $ | 16,459 |
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| $ | 16,357 |
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Weighted-average diluted shares |
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| 59,894 |
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| 59,121 |
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Adjusted net income per share - diluted |
| $ | 0.27 |
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| $ | 0.28 |
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Reconciliation to Adjusted EBITDA: |
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Depreciation and amortization expense |
| $ | 11,446 |
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| $ | 9,928 |
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Interest expense, net |
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| 7,457 |
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| 7,169 |
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Income tax expense |
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| 3,944 |
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| 4,138 |
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Reversal of tax effect of reconciling items for |
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adjusted net income above |
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| 1,205 |
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| 253 |
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Stock-based compensation expense |
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| 1,750 |
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| 1,530 |
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Adjusted EBITDA |
| $ | 42,261 |
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| $ | 39,375 |
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Adjusted EBITDA as percentage of net sales |
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| 15.6 | % |
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| 17.9 |
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Net debt-to-Adjusted EBITDA ratio (5) |
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| 2.6 | x |
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(1) In 2021, represents costs relating to our investment in Eco. In 2020, relates to the acquisition of NewSouth Window Solutions. |
(2) Represents incremental costs related to the wind-down 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 condensed consolidated statement of operations for the three months ended April 3, 2021. A portion of these costs may be recoverable through insurance. We completed this wind-down during the first quarter of 2021. |
(3) Represents costs relating to product line transitions, classified within cost of sales for the three months ended April 4, 2020. |
(4) Represents incremental costs incurred relating to the coronavirus pandemic, including cleaning and sanitizing costs for the protection of the health of our employees and safety of our facilities, classified within selling, general and administrative expenses for the three months ended April 4, 2020. |
(5) Calculated using an adjusted EBITDA amount pursuant to the covenants included in our 2016 Credit Agreement due 2022 which includes the EBITDA of our investment in Eco on a proforma trailing twelve-month basis. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210513005353/en/
Investor Relations: Brad West, 941-480-1600 Senior Vice President and Interim CFO BWest@PGTInnovations.com
Media Relations: Stephanie Cz, 941-480-1600 Corporate Communications Manager
Source: PGT Innovations, Inc.