PGT Reports 2011 Fourth Quarter Results
February 23 2012 - 6:04PM
PGT, Inc. (Nasdaq:PGTI), the leading U.S. manufacturer and supplier
of residential impact-resistant windows and doors, announces
financial results for the fourth quarter ended December 31, 2011.
In the fourth quarter:
- Net sales were $35.7 million, a decrease of $3.3 million, or
8.5%, from prior year fourth quarter;
- Gross margin percentage in the fourth quarter of 2011 was
25.1%, compared to 25.7% for the fourth quarter 2010, when adjusted
for 2010 consolidation charges;
- There was a net loss in the fourth quarter of 2011 of $6.3
million, compared to a net loss of $12.2 million for the fourth
quarter of 2010. Adjusted net loss was $3.6 million in the
fourth quarter compared to an adjusted net loss of $4.6 million in
the fourth quarter 2010. Adjusted net loss per diluted share was
$0.07 compared to an adjusted net loss per diluted share of $0.09
in 2010; and
- Non-cash impairment charges totaled $6.0 million, compared to
the prior year fourth quarter amount of $5.6 million. The
current year impairment relates to our trade names. The prior year
impairment related to the closing of our North Carolina plant,
completed in the second quarter of 2011. Consolidation charges
totaled $2.1 million in the fourth quarter of 2010.
"During 2011, we completed our consolidation in the midst of a
market mired in high unemployment, depressed housing prices, and
economic uncertainty. Housing starts did improve 22% over the
fourth quarter of 2010, but remain well below historical
averages. Although the housing starts increase is a positive
sign, the other factors mentioned suggest growth will be slow in
the near future," said Rod Hershberger, President and Chief
Executive Officer of PGT.
Mr. Hershberger continued, "Sales decreased $3.3 million, or
8.5%, in the fourth quarter of 2011 compared to the same quarter a
year ago, due mainly to decreased sales in our out of state
markets, where sales were down $2.2 million, or
37.9%. This decrease is due mainly to our decision to
reduce our efforts out of state. Also contributing to our
sales decrease are the Architectural System products which
decreased $900 thousand, or 60.0%."
Jeff Jackson, PGT's Executive Vice President and Chief Financial
Officer, further explained, "Our results for the quarter include
savings of approximately $1.5 million from the consolidation which
more than offset an additional $400 thousand in advertising
investment and the negative impact of lost contribution from lower
sales. Adjusted EBITDA improved $400 thousand to $631 thousand
or 1.8% of sales, compared to 0.6% a year ago. We also generated
$2.9 million of cash from operations, and finished the quarter with
net debt of $34.6 million."
Mr. Hershberger closed by saying, "The Florida market continues
to present challenges; however, the actions taken to date including
the consolidation and the refocus on our core markets, as well as
our continued belief in our people and our products, drive our
confidence that PGT will remain the industry leader in impact
resistant windows and doors."
Conference Call
As previously announced, PGT will hold a conference call Friday,
February 24, 2012, 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 February 24, 2012 at 1:30 p.m. Eastern Time
through March 16, 2012. To access the replay, dial 855-859-2056
(U.S. and Canada) and 404-537-3406 (international) and refer to
pass code 45102342. The webcast will also be available
through the Investor Relations section of the PGT, Inc. website,
http://www.pgtinc.com.
About PGT
PGT(R) 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 1,100 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 (R);
SpectraGuard (TM); PremierVue (TM); PGT Architectural Systems; and
Eze-Breeze (R). 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.
PGT, INC. AND
SUBSIDIARY |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands, except
per share amounts) |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December 31, |
January 1, |
December 31, |
January 1, |
|
2011 |
2011 |
2011 |
2011 |
|
(unaudited) |
|
(unaudited) |
|
Net sales |
$ 35,709 |
$ 39,041 |
$ 167,276 |
$ 175,741 |
Cost of sales |
26,753 |
29,893 |
128,171 |
125,615 |
Gross margin |
8,956 |
9,148 |
39,105 |
50,126 |
Impairment charges |
5,959 |
5,561 |
5,959 |
5,561 |
Selling, general and administrative
expenses |
11,627 |
14,643 |
48,619 |
53,879 |
Loss from operations |
(8,630) |
(11,056) |
(15,473) |
(9,314) |
Interest expense |
881 |
1,173 |
4,168 |
5,123 |
Other income, net |
(874) |
-- |
(419) |
(19) |
Loss before income taxes |
(8,637) |
(12,229) |
(19,222) |
(14,418) |
Income tax (benefit) expense |
(2,324) |
-- |
(2,324) |
77 |
Net loss |
$ (6,313) |
$ (12,229) |
$ (16,898) |
$ (14,495) |
|
|
|
|
|
Basic and diluted net loss per common
share |
$ (0.12) |
$ (0.23) |
$ (0.31) |
$ (0.29) |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
Basic and diluted |
53,659 |
53,654 |
53,659 |
50,174 |
|
|
|
|
|
PGT, INC. AND
SUBSIDIARY |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in
thousands) |
|
|
|
|
|
|
|
December 31, |
January 1, |
|
2011 |
2011 |
ASSETS |
(unaudited) |
|
Current assets: |
|
|
Cash and cash equivalents |
$ 10,940 |
$ 22,012 |
Accounts receivable, net |
13,830 |
13,687 |
Inventories |
11,602 |
10,535 |
Other current assets |
3,741 |
5,127 |
Total current assets |
40,113 |
51,361 |
|
|
|
Property, plant and equipment, net |
48,606 |
52,863 |
Other intangible assets, net |
51,830 |
64,291 |
Other assets, net |
2,286 |
604 |
Total assets |
$ 142,835 |
$ 169,119 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued expenses |
$ 12,706 |
$ 16,696 |
Deferred income taxes |
-- |
185 |
Current portion of long-term debt and capital
lease obligations |
50 |
245 |
Total current liabilities |
12,756 |
17,126 |
Long-term debt and capital lease
obligations |
45,500 |
49,918 |
Deferred income taxes |
15,041 |
17,130 |
Other liabilities |
2,176 |
1,903 |
Total liabilities |
75,473 |
86,077 |
|
|
|
Total shareholders' equity |
67,362 |
83,042 |
Total liabilities and shareholders'
equity |
$ 142,835 |
$ 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 |
Year
Ended |
|
December 31, |
January 1, |
December 31, |
January 1, |
|
2011 |
2011 |
2011 |
2011 |
Reconciliation to Adjusted net loss
and Adjusted net loss per share (1): |
|
|
|
|
Net loss |
$ (6,313) |
$ (12,229) |
$ (16,898) |
$ (14,495) |
Reconciling item: |
|
|
|
|
Intangible impairment charges (2) |
5,959 |
-- |
5,959 |
-- |
Asset impairment charges (3) |
-- |
5,561 |
-- |
5,561 |
Consolidation charges (4) |
-- |
2,053 |
4,106 |
2,053 |
Gain on equipment sales (5) |
(875) |
-- |
(875) |
-- |
Manufacturing inefficiencies (6) |
-- |
-- |
4,005 |
-- |
Write off deferred financing costs
(7) |
-- |
-- |
420 |
-- |
Tax effect of reconciling items |
(2,324) |
-- |
(2,324) |
-- |
Adjusted net loss |
$ (3,553) |
$ (4,615) |
$ (5,607) |
$ (6,881) |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Diluted (8) |
53,659 |
53,654 |
53,659 |
50,174 |
|
|
|
|
|
Adjusted net loss per share - diluted |
$ (0.07) |
$ (0.09) |
$ (0.10) |
$ (0.14) |
|
|
|
|
|
Reconciliation to EBITDA and Adjusted
EBITDA: |
|
|
|
|
Net loss |
$ (6,313) |
$ (12,229) |
$ (16,898) |
$ (14,495) |
Reconciling items: |
|
|
|
|
Depreciation and amortization
expense |
3,303 |
3,670 |
14,091 |
15,208 |
Interest expense |
881 |
1,173 |
4,168 |
5,123 |
Income tax (benefit) expense |
(2,324) |
-- |
(2,324) |
77 |
EBITDA |
(4,453) |
(7,386) |
(963) |
5,913 |
Intangible impairment charges (2) |
5,959 |
-- |
5,959 |
-- |
Asset impairment charges (3) |
-- |
5,561 |
-- |
5,561 |
Consolidation charge (4) |
-- |
2,053 |
4,106 |
2,053 |
Gain on Equipment Sales (5) |
(875) |
-- |
(875) |
-- |
Manufacturing inefficiencies(6) |
-- |
-- |
4,005 |
-- |
Write off deferred financing costs
(7) |
-- |
-- |
420 |
-- |
|
|
|
|
|
Adjusted EBITDA |
$ 631 |
$ 228 |
$ 12,652 |
$ 13,527 |
Adjusted EBITDA as percentage of net
sales |
1.8% |
0.6% |
7.6% |
7.7% |
|
|
|
|
|
(1) The Company's non-GAAP
financial measures were explained in its Form 8-K filed February
23, 2012. Certain prior period amounts within Exhibit 99 to
the Form 8-K have been reclassified to conform with current year
presentation. |
(2) The Company completed its
annual impairment tests in the fourth quarter of 2011, which
resulted in additional impairment charges totaling $6.0 million
related to trade names. |
(3) Represents the write-down of
the value of certain fixed assets of the Company. |
|
|
|
|
(4) Represents charges and
credits related to consolidation actions taken in 2010 and
2011. These charges relate primarily to employee separation
costs and move related expenses. Of the $4.1 million in
consolidation charges in the year ended December 31, 2011, $3.4
million is included in cost of goods sold and $0.7 million is
included in selling, general and administrative expenses. Of
the consolidation charges taken in 2010, $0.9 million was recorded
in costs of goods sold and $1.2 million was recorded in selling,
general, and administrative expenses. |
(5) Represents gains related to
the sale of equipment previously used in North Carolina
operations. These gains are included in other income for the
fourth quarter and year ended December 31, 2011. |
(6) 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 manufacturing results with normalized
pre-consolidation results. These charges are included in cost
of goods sold for the year ended December 31, 2011. |
(7) Represents the write
off of the remaining unamortized fees associated with our
previous financing agreement. These charges are included in
other expense for the year ended December 31, 2011. |
(8) Due to the net losses in the
fourth quarters and fiscal years 2011 and 2010, the effect of
equity compensation plans for these periods is anti-dilutive. |
|
CONTACT: PGT, Inc.
Jeffrey T. Jackson
Executive Vice President and CFO
941-480-2714
jjackson@pgtindustries.com
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