PGT Reports 2011 Third Quarter Results
November 02 2011 - 4:46PM
PGT, Inc. (Nasdaq:PGTI), the leading U.S. manufacturer and supplier
of residential impact-resistant windows and doors, announces
financial results for the third quarter ended October 1, 2011. In
our third quarter:
- Net sales were $45.8 million, a decrease of $1.4 million, or
3.0%, from prior year third quarter;
- Net income was $241 thousand compared to a net loss of $207
thousand in the third quarter of 2010. Adjusted Net income was
$982 thousand after adjusting for $741 thousand of consolidation
related charges;
- EBITDA was $5.1 million, compared to EBITDA of $4.7 million in
the prior year third quarter. Adjusted EBITDA was $5.9 million
after adjusting for consolidation related charges.
Rod Hershberger, President and Chief Executive Officer of PGT
said, "The consolidation is complete, and our Florida location is
now operating at the capacity both plants were achieving prior to
the consolidation. This is evidenced by our lead times
returning to their industry leading standards enabling us to ship
additional product versus the second quarter of
2011. Additionally, our sales in the third quarter included
$2.2 million of our new vinyl sliding glass door series launched
earlier this year. This door won the industry's Crystal
Achievement award for the most innovative door design, our second
in a row.
"Compared to prior year, third quarter sales decreased 3.0%, due
mainly to our decision to reduce efforts out of state and continued
issues within the economy, specifically, within the housing
industry. We expect these issues to continue affecting our top
line into the fourth quarter, where demand typically softens in the
repair and remodeling market," said Mr. Hershberger.
Jeff Jackson, PGT's Executive Vice President and Chief Financial
Officer, further explained the decrease in sales, stating, "Vinyl
non-impact sales were down $1.8 million, or 38%, when compared to
the prior year. This was driven by our decision to reduce
sales and marketing efforts in certain out of state
markets. Also contributing to the decline was a $2.1 million
decrease in the Architectural Systems products sales based in part
on the continued softness in the commercial market. Offsetting
these decreases were increases of $1.5 million and $0.9 million
from our PremierVue and Vinyl WinGuard product lines, respectively,
due in part to the new sliding glass door and our commitment to
serve the ever increasing vinyl demand in Florida."
Mr. Jackson continued, "Our results confirm that we are
benefiting from the savings generated by the
consolidation. Adjusted EBITDA improved $1.2 million despite
lower sales, to $5.9 million or 12.8% of sales, compared to 9.9% a
year ago. Also, our adjusted net income of $982 thousand was
the highest in any quarter since the second quarter of
2008. During the quarter, we generated $4.0 million of cash
from operations and repaid $2.5 million of long term debt. At
the end of the quarter, our net debt was $37.6
million."
Conference Call
As previously announced, PGT will hold a conference call
Thursday, November 3, 2011, at 10:30 a.m. eastern time and will
simultaneously broadcast it live over the Internet. To participate
in the teleconference, please dial into the call a few minutes
before the start time: 877-769-6798 (U.S. and Canada) and
678-894-3060 (international). A replay of the call will be
available beginning November 3, 2011, at 1:30 p.m. eastern time
through November 24, 2011. To access the replay, dial 855-859-2056
(U.S. and Canada) and 404-537-3406 (international) and refer to
pass code 16332433.
The webcast will also be available through the Investor
Relations section of the PGT, Inc. website,
http://www.pgtinc.com.
About PGT
PGT® pioneered the U.S. impact-resistant window and door
industry and today is the nation's leading manufacturer and
supplier of residential impact-resistant windows and doors. Founded
in 1980, the company employs approximately 1,150 at its
manufacturing, glass laminating and tempering plants in Florida.
Utilizing the latest designs and technology, PGT products are ideal
for new construction and replacement projects serving the
residential, commercial, high-rise and institutional markets. PGT's
product line includes a variety of aluminum and vinyl windows and
doors. Product brands include WinGuard®; SpectraGuard™;
PremierVue™; PGT Architectural Systems; and Eze-Breeze®. PGT
Industries is a wholly owned subsidiary of PGT, Inc.
(Nasdaq:PGTI).
The PGT, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4199
Forward-Looking
Statements
Statements in this news release and the schedules hereto, which
are not purely historical facts or which necessarily depend upon
future events, including statements about forecasted financial
performance or other statements about anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may
be forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended. Readers are
cautioned not to place undue reliance on forward-looking
statements. All forward-looking statements are based upon
information available to PGT, Inc. on the date this release was
submitted. PGT, Inc. undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Any
forward-looking statements involve risks and uncertainties that
could cause actual events or results to differ materially from the
events or results described in the forward-looking statements,
including risks or uncertainties related to the Company's revenues
and operating results being highly dependent on, among other
things, the homebuilding industry, aluminum prices, and the
economy. PGT, Inc. may not succeed in addressing these and
other risks. Further information regarding factors that could
affect our financial and other results can be found in the risk
factors section of PGT, Inc.'s most recent annual report on Form
10-K filed with the Securities and Exchange Commission.
Consequently, all forward-looking statements in this release are
qualified by the factors, risks and uncertainties contained
therein.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(unaudited - in
thousands, except per share amounts) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
October 1, 2011 |
October 2, 2010 |
October 1, 2011 |
October 2, 2010 |
|
|
|
|
|
Net sales |
$ 45,751 |
$ 47,179 |
$ 131,567 |
$ 136,700 |
Cost of sales |
32,747 |
32,594 |
101,166 |
95,547 |
Gross margin |
13,004 |
14,585 |
30,401 |
41,153 |
Selling, general and administrative
expenses |
11,613 |
13,580 |
37,244 |
39,413 |
Income/(loss) from operations |
1,391 |
1,005 |
(6,843) |
1,740 |
Interest expense |
1,114 |
1,212 |
3,287 |
3,950 |
Other (income) expense, net |
36 |
-- |
455 |
(20) |
Income/(loss) before income taxes |
241 |
(207) |
(10,585) |
(2,190) |
Income tax expense |
-- |
-- |
-- |
77 |
Net income/(loss) |
$ 241 |
$ (207) |
$ (10,585) |
$ (2,267) |
|
|
|
|
|
Basic net income/(loss) per common share |
$ 0.00 |
$ (0.00) |
$ (0.20) |
$ (0.05) |
|
|
|
|
|
Diluted net income/(loss) per common
share |
$ 0.00 |
$ (0.00) |
$ (0.20) |
$ (0.05) |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
53,659 |
53,654 |
53,658 |
49,014 |
|
|
|
|
|
Diluted |
53,962 |
53,654 |
53,658 |
49,014 |
|
|
PGT, INC. AND
SUBSIDIARY |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in
thousands) |
|
|
|
|
October 1,
2011 |
January 1, 2011 |
ASSETS |
(unaudited) |
|
Current assets: |
|
|
Cash and cash equivalents |
$ 7,856 |
$ 22,012 |
Accounts receivable, net |
17,221 |
13,687 |
Inventories |
12,108 |
10,535 |
Prepaid expenses |
1,255 |
881 |
Other current assets |
3,048 |
4,246 |
Total current assets |
41,488 |
51,361 |
|
|
|
Property, plant and equipment, net |
49,589 |
52,863 |
Other intangible assets, net |
59,414 |
64,291 |
Other assets, net |
2,461 |
604 |
Total assets |
$ 152,952 |
$ 169,119 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued expenses |
$ 14,536 |
$ 16,696 |
Deferred income taxes |
185 |
185 |
Current portion of long-term debt and capital
lease obligations |
79 |
245 |
Total current liabilities |
14,800 |
17,126 |
Long-term debt and capital lease
obligations |
45,500 |
49,918 |
Deferred income taxes |
17,130 |
17,130 |
Other liabilities |
2,069 |
1,903 |
Total liabilities |
79,499 |
86,077 |
|
|
|
Total shareholders' equity |
73,453 |
83,042 |
Total liabilities and shareholders'
equity |
$ 152,952 |
$ 169,119 |
|
|
PGT, INC. AND
SUBSIDIARY |
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO THEIR GAAP EQUIVALENTS |
(unaudited - in
thousands, except per share amounts) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
October 1, 2011 |
October 2, 2010 |
October 1, 2011 |
October 2, 2010 |
Reconciliation to Adjusted Net
Income/(Loss) and Adjusted Net Income/(Loss) per share
(1): |
|
|
|
|
Net Income/(loss) |
$ 241 |
$ (207) |
$ (10,585) |
$ (2,267) |
Reconciling item: |
|
|
|
|
Consolidation (2) |
107 |
-- |
4,106 |
-- |
Manufacturing inefficiencies(3) |
634 |
-- |
4,005 |
-- |
Write off deferred financing costs (4) |
-- |
-- |
420 |
-- |
Tax effect of reconciling item |
-- |
-- |
-- |
-- |
Adjusted net income/(loss) |
$ 982 |
$ (207) |
$ (2,054) |
$ (2,267) |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
53,659 |
53,654 |
53,658 |
49,014 |
Diluted |
53,962 |
53,654 |
53,658 |
49,014 |
|
|
|
|
|
Adjusted net income/(loss) per share -
basic |
$ 0.02 |
$ (0.00) |
$ (0.04) |
$ (0.05) |
Adjusted net income/(loss) per share -
diluted |
$ 0.02 |
$ (0.00) |
$ (0.04) |
$ (0.05) |
|
|
|
|
|
Reconciliation to EBITDA and Adjusted
EBITDA: |
|
|
|
|
Net Income/(loss) |
$ 241 |
$ (207) |
$ (10,585) |
$ (2,267) |
Reconciling items: |
|
|
|
|
Depreciation and amortization
expense |
3,764 |
3,650 |
10,788 |
11,537 |
Interest expense |
1,114 |
1,212 |
3,287 |
3,950 |
Income tax expense |
-- |
-- |
-- |
77 |
EBITDA |
5,119 |
4,655 |
3,490 |
13,297 |
Consolidation (2) |
107 |
-- |
4,106 |
-- |
Manufacturing inefficiencies(3) |
634 |
-- |
4,005 |
-- |
Write off deferred financing costs (4) |
-- |
-- |
420 |
-- |
Adjusted EBITDA |
$ 5,860 |
$ 4,655 |
$ 12,021 |
$ 13,297 |
Adjusted EBITDA as percentage of net
sales |
12.8% |
9.9% |
9.1% |
9.7% |
|
|
|
|
|
(1) The Company's non-GAAP
financial measures were explained in its Form 8-K filed November 2,
2011. |
(2) Represents charges related to
consolidation actions taken in 2011. These charges relate
primarily to employee separation costs and move related
expenses. Of the $4.1 million in consolidation charges in the
nine months ended October 1, 2011, $3.4 million is included in cost
of goods sold and $0.7 million is included in selling, general and
administrative expenses. |
(3) Represents temporary excess
labor and scrap expense incurred as a result of the consolidation
actions taken in 2011. The amounts were determined by
comparing the July and August manufacturing results with normalized
pre-consolidation quarter results. These charges are included
in cost of goods sold for the three and nine months ended October
1, 2011. |
(4) Represents the write
off of the remaining unamortized fees associated with our
previous financing agreement. These charges are included in
other expense for the nine months ended October 1, 2011. |
CONTACT: PGT, Inc.
Jeffrey T. Jackson
Executive Vice President and CFO
941-480-2714
jjackson@pgtindustries.com
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