PGTI Reports Fourth Quarter and Fiscal Year 2022 Results, Provides First Quarter 2023 Guidance

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 and fiscal year ended December 31, 2022.

Financial Highlights for Fourth Quarter 2022

(All results reflect comparison to prior-year period; Cash on hand is compared to prior-year end)

  • Net sales totaled $341 million, an increase of 12 percent (includes organic growth of 5 percent).
  • Net income was $8 million, a decrease of 54 percent.
  • Adjusted net income* was $16 million, a decrease of 14 percent.
  • Adjusted EBITDA* was $48 million, on par with last year.
  • Net income per common share attributable to common shareholders, diluted, was $0.18, a decrease of 25 percent.
  • Adjusted net income per diluted share* was $0.27, a decrease of 13 percent.
  • Total liquidity at the end of the fourth quarter was $235 million, including cash of $67 million and revolver availability of $168 million.

Financial Highlights for Fiscal Year 2022

(All results reflect comparison to prior-year period)

  • Net sales totaled $1.49 billion, an increase of 28 percent (includes organic growth of 16 percent).
  • Net income was $98 million, an increase of 180 percent.
  • Adjusted net income* was $116 million, an increase of 88 percent
  • Adjusted EBITDA* was $254 million, an increase of 50 percent.
  • Net income per common share attributable to common shareholders, diluted, was $1.64, an increase of 264 percent.
  • Adjusted net income per diluted share* was $1.92, an increase of 86 percent.
  • Cash flow from operations was $196 million, an increase of 208 percent.

First Quarter 2023 Guidance

  • Net sales in the range of $370 million to $390 million.
  • Adjusted EBITDA* in the range of $60 million to $64 million.

* 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.

"We finished our fiscal year with another strong quarter. Our fourth quarter financial results, with year-over-year net sales growth of 12 percent, showed recovery from impacts of Hurricane Ian and the ransomware incident, and was driven by continued operational improvement across our portfolio of brands. We were able to offset new construction demand weakness from macro-economic headwinds, including higher inflation and interest rates through solid execution across the enterprise,” said Jeff Jackson, President and Chief Executive Officer.

"Organic sales growth in the fourth quarter was 5 percent year-over-year, with our Western region growing 15 percent, and our Southeast region growing 2 percent. Our fourth quarter revenues were impacted by approximately $15 million due to the effects of Hurricane Ian and the ransomware incident. The suddenness of the two events impacted our ability to expand gross margin during the quarter, and we realized a year-over-year flat gross margin. In spite of the challenges during the fourth quarter, our team showed resilience and ended the quarter with some of the strongest performances for the year across our core businesses," added Jackson.

“We completed our acquisition of Martin Door during the fourth quarter, as noted on our third quarter call. We are making progress in integrating Martin across our dealer, distributor and direct-to-consumer channels and look forward to its contributions in the coming year,” added Jackson.

"Over the past five years, we have expanded our geographic footprint and product lines to meet consumer demand with our acquisitions of Western Window Systems, New South, Eco, Anlin, and Martin. We believe our national footprint and depth of product offering provide a strong basis for future profitable growth. Going forward, we will be looking to maximize shareholder value through the return of capital with our recently announced share repurchase program. Our primary priority will continue to invest in our enterprise through high-return capital projects,” concluded Jackson.

“In the fourth quarter of 2022, we generated $44 million of operating cash flow, ending the fiscal year with a cash balance $67 million,” said John Kunz, Senior Vice President and Chief Financial Officer. “For the full year, we generated over $151 million in free cash flow, a great source to fund our capital priorities,” added Kunz.

"The strong 28 percent full-year sales growth for 2022 was driven by operational improvements and the impact of price increases, offsetting a reduction in unit demand and backlog. Our organic backlog declined $126 million during the year. With the uncertainty in macro-economic conditions, higher interest rates and an inflationary environment, we are issuing first quarter 2023 guidance for net sales in the range of $370 million to $390 million, and Adjusted EBITDA in the range of $60 million to $64 million," concluded Kunz.

 

Q1 2023 Guidance*

($ in millions)

(as of 02/22/2023)

Net sales

$370

$390

Adj. EBITDA**

$60

$64

* Q1 2023 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 February 22, 2023, through approximately 12:30 p.m. on March 1, 2023. 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 3471776. 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=6voKyZcY

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. 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®, NewSouth Window Solutions, Martin Door, 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 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 our acquisition of Martin Door Holdings, Inc. ("Martin"); our national footprint and depth of product offering providing a strong basis for profitable growth; our share-repurchase program; and our net sales and Adjusted 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:

  • the impact of the COVID-19 pandemic (the "COVID-19 pandemic" or "Pandemic") and related measures taken by governmental or regulatory authorities to combat the Pandemic, including the impact of the Pandemic and these measures on the economies and demand for our products in the states where we sell them, and on our customers, suppliers, labor force, business, operations and financial performance;
  • unpredictable weather and macroeconomic factors that may negatively impact the repair and remodel and new construction markets and the construction industry generally, especially in the state of Florida and the western United States, where the substantial portion of our sales are currently generated, and in the U.S. generally;
  • changes in raw material prices, especially for aluminum, glass and vinyl, including, price increases due to the implementation of tariffs and other trade-related restrictions, Pandemic-related supply chain interruptions, or interruptions from the conflict in Ukraine;
  • our dependence on a limited number of suppliers for certain of our key materials;
  • our dependence on our impact-resistant product lines, which increased with the acquisition of Eco Enterprises, LLC ("Eco"), and contemporary indoor/outdoor window and door systems, and on consumer preferences for those types and styles of products;
  • the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our recent acquisitions, including our acquisitions of Martin and Anlin Windows & Doors ("Anlin");
  • our level of indebtedness, which increased in connection with our recent acquisitions, including our acquisitions of Martin and Anlin;
  • increases in credit losses from obligations owed to us by our customers in the event of a downturn in the home repair and remodel or new home construction channels in our core markets and our inability to collect such obligations from such customers;
  • the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of Martin and Anlin may not be fully realized or may take longer to realize than expected or that our actual integration costs may exceed our estimates;
  • increases in transportation costs, including increases in fuel prices;
  • our dependence on our limited number of geographically concentrated manufacturing facilities, which increased further due to our acquisition of Eco;
  • sales fluctuations to and changes in our relationships with key customers;
  • federal, state and local laws and regulations, including unfavorable changes in local building codes and environmental and energy code regulations;
  • risks associated with our information technology systems, including cybersecurity-related risks, such as unauthorized intrusions into our systems by "hackers" and theft of data and information from our systems, and the risks that our information technology systems do not function as intended or experience temporary or long-term failures to perform as intended;
  • product liability and warranty claims brought against us;
  • in addition to our acquisitions of Martin and Anlin, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected when we acquired it; and
  • the other risks and uncertainties discussed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K/A for the year ended January 1, 2022, and our other filings with the Securities and Exchange Commission.

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.

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.

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(unaudited - in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

Dec. 31,

 

 

Jan. 1,

 

 

Dec. 31,

 

 

Jan. 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

340,934

 

 

$

304,441

 

 

$

1,491,954

 

 

$

1,161,464

 

Cost of sales

 

 

219,790

 

 

 

196,116

 

 

 

921,285

 

 

 

757,965

 

Gross profit

 

 

121,144

 

 

 

108,325

 

 

 

570,669

 

 

 

403,499

 

Selling, general and administrative expenses

 

 

95,100

 

 

 

78,937

 

 

 

402,886

 

 

 

303,043

 

Impairment of trade name

 

 

7,423

 

 

 

 

 

 

7,423

 

 

 

 

Income from operations

 

 

18,621

 

 

 

29,388

 

 

 

160,360

 

 

 

100,456

 

Interest expense, net

 

 

7,755

 

 

 

7,061

 

 

 

28,879

 

 

 

30,029

 

Debt extinguishment costs

 

 

410

 

 

 

 

 

 

410

 

 

 

25,472

 

Income before income taxes

 

 

10,456

 

 

 

22,327

 

 

 

131,071

 

 

 

44,955

 

Income tax expense

 

 

2,756

 

 

 

5,499

 

 

 

32,666

 

 

 

9,759

 

Net income

 

 

7,700

 

 

 

16,828

 

 

 

98,405

 

 

 

35,196

 

Less: Net income attributable to redeemable non-controlling interest

 

 

(189

)

 

 

(662

)

 

 

(1,523

)

 

 

(2,318

)

Net income attributable to the Company

 

$

7,511

 

 

$

16,166

 

 

$

96,882

 

 

$

32,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of net income per common share attributable to PGT Innovations, Inc. common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the Company

 

$

7,511

 

 

$

16,166

 

 

$

96,882

 

 

$

32,878

 

Change in redemption value of redeemable non-controlling interest

 

 

3,514

 

 

 

(1,553

)

 

 

2,000

 

 

 

(6,081

)

Net income attributable to PGT Innovations, Inc. common shareholders

 

$

11,025

 

 

$

14,613

 

 

$

98,882

 

 

$

26,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to PGT Innovations, Inc. common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

 

$

0.24

 

 

$

1.65

 

 

$

0.45

 

Diluted

 

$

0.18

 

 

$

0.24

 

 

$

1.64

 

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

59,980

 

 

 

59,646

 

 

 

59,926

 

 

 

59,518

 

Diluted

 

 

60,441

 

 

 

60,172

 

 

 

60,319

 

 

 

60,058

 

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(unaudited - in thousands)

 

 

 

 

 

 

 

 

December 31,

 

 

January 1,

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

66,548

 

 

$

96,146

 

Accounts receivable, net

 

160,107

 

 

 

141,221

 

Inventories

 

112,672

 

 

 

91,440

 

Contract assets, net

 

47,919

 

 

 

55,239

 

Prepaid expenses and other current assets

 

28,295

 

 

 

37,712

 

Total current assets

 

415,541

 

 

 

421,758

 

Property, plant and equipment, net

 

208,354

 

 

 

185,266

 

Operating lease right-of-use asset, net

 

104,121

 

 

 

91,162

 

Intangible assets, net

 

447,052

 

 

 

394,525

 

Goodwill

 

460,415

 

 

 

364,598

 

Other assets, net

 

4,766

 

 

 

3,301

 

Total assets

$

1,640,249

 

 

$

1,460,610

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST,

 

 

 

 

 

AND SHAREHOLDERS' EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

$

168,961

 

 

$

122,681

 

Current portion of operating lease liability

 

16,393

 

 

 

13,180

 

Total current liabilities

 

185,354

 

 

 

135,861

 

Long-term debt

 

642,134

 

 

 

625,655

 

Operating lease liability, less current portion

 

95,159

 

 

 

83,903

 

Deferred income taxes, net

 

47,407

 

 

 

37,489

 

Other liabilities

 

7,459

 

 

 

11,742

 

Total liabilities

 

977,513

 

 

 

894,650

 

Commitments and contingencies

 

 

 

 

 

Redeemable non-controlling interest

 

34,721

 

 

 

36,863

 

Total shareholders' equity

 

628,015

 

 

 

529,097

 

Total liabilities, redeemable non-controlling interest and shareholders' equity

$

1,640,249

 

 

$

1,460,610

 

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

(unaudited - in thousands)

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

January 1,

 

 

2022

 

 

2022

 

 

(unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

Net income

$

98,405

 

 

$

35,196

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

Depreciation

 

34,048

 

 

 

30,487

 

Amortization

 

26,150

 

 

 

21,082

 

Impairment of trade name

 

7,423

 

 

 

 

Other asset impairments

 

2,131

 

 

 

 

Provision for allowance for credit losses

 

10,979

 

 

 

3,834

 

Stock-based compensation

 

9,670

 

 

 

7,819

 

Amortization of deferred financing costs, debt discount and premium

 

1,242

 

 

 

978

 

Debt extinguishment costs

 

410

 

 

 

25,472

 

Deferred income taxes

 

(11,340

)

 

 

7,632

 

(Gain) loss on sales of assets

 

(240

)

 

 

261

 

Change in operating assets and liabilities (net of effects of acquisitions):

 

 

 

 

 

Accounts receivable

 

(20,622

)

 

 

(34,390

)

Inventories

 

(12,017

)

 

 

(15,984

)

Contract assets, net, prepaid expenses, other current and other assets

 

12,826

 

 

 

(5,958

)

Accounts payable, accrued and other liabilities

 

37,309

 

 

 

(12,750

)

Net cash provided by operating activities

 

196,374

 

 

 

63,679

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(45,377

)

 

 

(33,424

)

Investment in and acquisition of business

 

(188,580

)

 

 

(220,676

)

Proceeds from sales of assets

 

37

 

 

 

187

 

Net cash used in investing activities

 

(233,920

)

 

 

(253,913

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Payment of fair value of contingent consideration in Anlin Acquisition

 

(2,362

)

 

 

 

Proceeds of amounts drawn from revolving credit facility

 

160,000

 

 

 

 

Payments of borrowing under revolving credit facility

 

(83,648

)

 

 

 

Proceeds from issuance of senior notes

 

 

 

 

638,300

 

Payments of senior notes

 

 

 

 

(425,000

)

Payment of call-premium on redemption of senior notes

 

 

 

 

(21,518

)

Proceeds from issuance of term loan debt

 

 

 

 

60,000

 

Payments of term loan debt

 

(60,000

)

 

 

(54,000

)

Payments of financing costs

 

(1,526

)

 

 

(10,675

)

Purchases of treasury stock under repurchase program

 

(1,565

)

 

 

 

Purchases of treasury stock relating to tax withholdings on employee equity awards

 

(1,888

)

 

 

(1,648

)

Proceeds from exercise of stock options

 

 

 

 

138

 

Distribution to redeemable non-controlling interest

 

(1,665

)

 

 

 

Proceeds from issuance of common stock under ESPP

 

602

 

 

 

463

 

Net cash provided by financing activities

 

7,948

 

 

 

186,060

 

Net decrease in cash and cash equivalents

 

(29,598

)

 

 

(4,174

)

Cash and cash equivalents at beginning of period

 

96,146

 

 

 

100,320

 

Cash and cash equivalents at end of period

$

66,548

$

96,146

 

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. 31,

 

 

Jan. 1,

 

 

Dec. 31,

 

 

Jan. 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Reconciliation to Adjusted Net Income and

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

7,700

 

 

$

16,828

 

 

$

98,405

 

 

$

35,196

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

 

 

Asset impairment charges (1)

 

 

-

 

 

 

-

 

 

 

2,131

 

 

 

-

 

WinDoor trade name impairment charge (2)

 

 

7,423

 

 

 

-

 

 

 

7,423

 

 

 

-

 

Cyberattack recovery costs (3)

 

 

415

 

 

 

-

 

 

 

415

 

 

 

-

 

Adjustments to contingent consideration (4)

 

 

381

 

 

 

-

 

 

 

5,432

 

 

 

-

 

Hurricane Ian-related costs (5)

 

 

20

 

 

 

-

 

 

 

1,868

 

 

 

-

 

Tax gross-up payment (6)

 

 

(59

)

 

 

-

 

 

 

368

 

 

 

-

 

CGI Commercial relocation costs (7)

 

 

-

 

 

 

602

 

 

 

277

 

 

 

602

 

Acquisition-related costs (8)

 

 

3,523

 

 

 

736

 

 

 

4,773

 

 

 

2,443

 

Debt extinguishment costs (9)

 

 

410

 

 

 

-

 

 

 

410

 

 

 

25,472

 

Business wind-down costs (10)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,197

 

Pandemic-related costs (11)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,041

 

Product line rationalization and transition costs (12)

 

 

682

 

 

 

1,300

 

 

 

682

 

 

 

1,300

 

Tax effect of reconciling items

 

 

(4,351

)

 

 

(650

)

 

 

(6,194

)

 

 

(8,482

)

Adjusted net income

 

$

16,144

 

 

$

18,816

 

 

$

115,990

 

 

$

61,769

 

Weighted-average diluted shares

 

 

60,441

 

 

 

60,172

 

 

 

60,319

 

 

 

60,058

 

Adjusted net income per share - diluted

 

$

0.27

 

 

$

0.31

 

 

$

1.92

 

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

$

15,114

 

 

$

14,105

 

 

$

60,198

 

 

$

51,569

 

Interest expense, net

 

 

7,755

 

 

 

7,061

 

 

 

28,879

 

 

 

30,029

 

Income tax expense

 

 

2,756

 

 

 

5,499

 

 

 

32,666

 

 

 

9,759

 

Reversal of tax effect of reconciling items for adjusted net income above

 

 

4,351

 

 

 

650

 

 

 

6,194

 

 

 

8,482

 

Stock-based compensation expense

 

 

2,032

 

 

 

2,071

 

 

 

9,670

 

 

 

7,819

 

Adjusted EBITDA

 

$

48,152

 

 

$

48,202

 

 

$

253,597

 

 

$

169,427

 

Adjusted EBITDA as percentage of net sales

 

14.1%

 

 

15.8%

 

 

17.0%

 

 

14.6%

 

(1) Represents write-offs of property, equipment and other impaired assets, classified as selling, general and administrative expense in the accompanying condensed statement of operations for the three-months and year ended December 31, 2022.

(2) Represents impairment charge relating to our WinDoor trade name classified as impairment of trade name in the accompanying condensed statement of operations for the three-months and year ended December 31, 2022.

(3) 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.

(4) 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.

(5) 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 year ended December 31, 2022.

(6) 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 year ended December 31, 2022.

(7) 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.

(8) In 2022, represents costs relating to the Martin acquisition. In 2021, represents costs relating to our acquisitions of Eco and Anlin. These costs are classified within selling, general and administrative expenses in the years ended December 31, 2022, and January 1, 2022, respectively.

(9) 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. In 2021, represents debt extinguishment costs relating to the prepayment of our $425 million of 6.750% senior notes due 2026, and the prepayment of our $54 million term loan A facility, which was due in 2022. Of the $25.5 million of debt extinguishment costs, $21.5 million represents a 5.063% call premium paid for prepaying the $425 million of 6.750% senior notes, and $4.0 million represents the net write-offs of deferred financing premiums, costs, fees and original issue discounts that existed at the time of these events. These costs are classified as debt extinguishment costs in the accompanying statement of operations for the years ended December 31, 2022, and January 1, 2022, respectively.

(10) 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 year ended January 1, 2022. A portion of these costs are being recovered through insurance.

(11) Represents incremental costs incurred relating to the coronavirus pandemic and resurgence of its Delta and Omicron variants in 2021, including cleaning and sanitizing costs for the protection of the health of our employees and safety of our facilities, as well as costs of lost productivity from employee quarantines and testing, classified within selling, general and administrative expenses for the year ended January 1, 2022.

(12) Represents costs relating to product line rationalizations and transitions, classified within cost of sales for the years ended December 31, 2022, and January 1, 2022, respectively.

 

Contacts

PGT Innovations Contacts:

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

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