EX-99.1 2 y37750exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
 

Exhibit 99.1
(PGT LOGO)
FOR IMMEDIATE RELEASE
PGT Reports Second Quarter and First Half 2007 Results
VENICE, FL, August 1, 2007 —PGT, Inc. (NASDAQ:     PGTI), the leading U.S. manufacturer and supplier of residential impact-resistant windows and doors, today announced financial results for its second quarter ended June 30, 2007.
“During the second quarter of 2007, we continued to execute our strategy of gaining market share and controlling costs during the current housing downturn. Compared to the second quarter of 2006, the industry experienced a decline in housing permits of 46% in the second quarter of 2007 while our revenues declined 26.7%. We also introduced several new products in the second quarter designed to spur revenue growth in new and existing markets.” said Rod Hershberger, PGT’s President and Chief Executive Officer. “In addition, we have improved our operating leverage from previous cost structure adjustments made in response to the downturn resulting in an adjusted EBITDA as a percent of sales of 14.9%.”
Second Quarter 2007 Financial Results
(See accompanying financial schedules for full financial details and reconciliations of adjusted (non-GAAP) financial measures to their GAAP equivalents.)
  §   Total revenues for the second quarter were $79.7 million, an increase of $7.0 million or 9.6% over the first quarter of 2007, and a decrease of 26.7% or $29.0 million versus the same period in 2006. The decrease from 2006 is largely due to the market conditions described above which impacted most of our product lines.
 
  §   Gross margin percentage was 36.4%, compared to 43.3% in the same quarter of 2006. Gross margin decreased as a result of declining operating leverage due to lower overall sales volumes and an increase in aluminum costs.
 
  §   SG&A spending decreased by $2.1 million from the prior year quarter mainly due to lower distribution costs associated with lower sales volumes and lower management fees, offset by an impairment charge on the Lexington facility in North Carolina currently held for sale.
 
  §   Second quarter net income was $2.8 million compared to $10.0 million for the same period in 2006. On an adjusted basis, second quarter net income was $3.3 million versus $13.0 million in the same quarter of 2006.
 
  §   Diluted weighted average shares outstanding for the second quarter of 2007 were 28,321,461 compared to 18,173,432 for the same quarter last year. The higher share count was mainly due to our IPO, completed in June 2006. Assuming the IPO occurred at the beginning of each of the respective reporting periods, the pro


 

      forma diluted weighted average shares outstanding for the second quarters of 2007 and 2006 were 28,321,461 and 27,932,643, respectively.
 
  §   Net income per diluted share for the second quarter was $0.10 compared to $0.55 for the comparable period of 2006. On an adjusted basis, net income per pro forma diluted share was $0.12, compared to $0.47 for the prior year period.
 
  §   EBITDA for the second quarter was $11.1 million versus $27.4 million for the comparable period of 2006. On an adjusted basis, EBITDA for the second quarter was $11.9 million versus $28.4 million for the comparable period of 2006.
Commenting on the second quarter results, Jeff Jackson, PGT’s Chief Financial Officer, stated, “Capitalizing on actions taken in the past six months, we continued to control our manufacturing expenses and increased our leverage resulting in an improvement in gross margin of 2.3% over the first quarter of 2007 to 36.4%. We prepaid $5 million of our long term debt in June 2007, in addition to the $20 million prepaid in the first quarter.”
First Half 2007 Financial Results
(See accompanying financial schedules for full financial details and reconciliations of adjusted (non-GAAP) financial measures to their GAAP equivalents.)
  §   Total revenues for the first half were $152.4 million, a decrease of 25.7%, versus $205.0 million for the same period in 2006.
 
  §   Gross margin percentage for the first half was 35.3%, compared to 40.3% in the first half of 2006. Gross margin decreased as a result of declining operating leverage due to lower overall sales volumes and an increase in aluminum costs, offset in part by lower overhead spending.
 
  §   SG&A spending decreased by $3.7 million from the first half of 2006 due mainly to lower distribution costs associated with lower sales volumes and lower management fees, offset by an impairment charge on the Lexington facility in North Carolina currently held for sale.
 
  §   First half net income (loss) was $3.6 million compared to $(4.1) million for the same period in 2006. On an adjusted basis, first half net income was $4.1 million versus $19.8 million in the first half of 2006.
 
  §   Diluted weighted average shares outstanding for the first half of 2007 were 28,343,654 compared to 15,950,129 for the comparable period of 2006. Assuming the IPO occurred at the beginning of each of the respective reporting periods, the pro forma diluted weighted average shares outstanding for the second quarters of 2007 and 2006 were 28,343,654 and 27,890,530, respectively.
 
  §   Net income (loss) per diluted share for the first half was $0.13 compared to $(0.25) for the comparable period of 2006. On an adjusted basis, net income per pro forma diluted share was $0.14, compared to $0.71 for the prior year period.
 
  §   EBITDA for the first half was $19.4 million versus $18.6 million for the comparable period of 2006. On an adjusted basis, EBITDA for the first half was $20.2 million versus $47.0 million for the comparable period of 2006.


 

Conference Call
As previously announced, PGT will hold a conference call Thursday, August 2, 2007, 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: 888-680-0865 (U.S. and Canada) and 617-213-4853 (international). Refer to passcode 10513713. A replay of the call will be available beginning August 2, 2007, at 12:30 p.m. Eastern time through August 9, 2007. To access the replay, dial 888-286-8010 (U.S. and Canada) or 617-801-6888 (international) and refer to passcode 35655100. To access the webcast, go to www.pgtinc.com and click “Investor Relations.”
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. PGT is also one of the largest window and door manufacturers in the United States. In its 26th year, the company employs approximately 2, 200 at its manufacturing, glass laminating and tempering plants, and delivery fleet facilities in Venice, FL and Salisbury, NC. Sold through a network of over 1,300 independent distributors, the company’s total line of custom windows and doors is now available throughout the eastern United States, the Gulf Coast and in a growing international market that includes the Caribbean, South America and Australia. PGT’s product line includes PGT® Aluminum and Vinyl Windows and Doors; WinGuard® Impact-Resistant Windows and Doors; PGT® Architectural Systems; and Eze-Breeze® Sliding Panels. PGT Industries, Inc. is a wholly owned subsidiary of PGT, Inc. (NASDAQ:PGTI).
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 and 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.
# # #
CONTACT: PGT, Inc.
Jeffrey T. Jackson, 941-486-0100, ext. 22786
jjackson@pgtindustries.com
Financial Schedules to Follow


 

PGT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited — in thousands, except per share amounts)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
    2007     2006     2007     2006  
Net sales
  $ 79,707     $ 108,689     $ 152,382     $ 205,044  
Cost of sales
    50,685       61,579       98,588       122,213  
 
                       
Gross margin
    29,022       47,110       53,794       82,831  
Stock compensation expense related to dividend
                      26,898  
Selling, general and administrative expenses
    21,718       23,796       41,964       45,664  
 
                       
Income from operations
    7,304       23,314       11,830       10,269  
Other expense (income), net
    98       (357 )     230       (766 )
Interest expense
    2,801       7,282       5,925       17,641  
 
                       
Income (loss) before income taxes
    4,405       16,389       5,675       (6,606 )
Income tax expense (benefit)
    1,620       6,365       2,090       (2,554 )
 
                       
Net income (loss)
  $ 2,785     $ 10,024     $ 3,585     $ (4,052 )
 
                       
 
                               
Basic net income (loss) per common share
  $ 0.10     $ 0.62     $ 0.13     $ (0.25 )
Diluted net income (loss) per common and common equivalent share
  $ 0.10     $ 0.55     $ 0.13     $ (0.25 )
Weighted average common shares outstanding:
                               
Basic
    27,123       16,151       27,061       15,950  
Diluted
    28,321       18,173       28,344       15,950  


 

PGT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
                 
    June 30,     December 30,  
    2007     2006  
    (unaudited)          
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 18,875     $ 36,981  
Accounts receivable, net
    29,905       25,244  
Inventories
    12,065       11,161  
Deferred income taxes
    6,693       5,231  
Other current assets
    11,374       13,041  
 
           
Total current assets
    78,912       91,658  
 
               
Property, plant and equipment, net
    79,987       78,802  
Goodwill
    169,648       169,648  
Other intangible assets, net
    99,133       101,918  
Other assets, net
    1,507       1,968  
 
           
Total assets
  $ 429,187     $ 443,994  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable and accrued expenses
  $ 20,645     $ 17,807  
Current portion of long-term debt
          420  
 
           
Total current liabilities
    20,645       18,227  
Long-term debt
    140,488       165,068  
Deferred income taxes
    52,417       52,417  
Other long-term liabilities
    3,444       3,076  
 
           
Total liabilities
    216,994       238,788  
 
           
Total shareholders’ equity
    212,193       205,206  
 
           
Total liabilities and shareholders’ equity
  $ 429,187     $ 443,994  
 
           


 

PGT, INC. AND SUBSIDIARY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR GAAP EQUIVALENTS
(unaudited — in thousands, except per share amounts)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     July 1,     June 30,     July 1,  
    2007     2006     2007     2006  
Reconciliation to Adjusted Net Income (Loss) and Adjusted Net
                               
Income per pro forma share (1):
                               
Net income (loss)
  $ 2,785     $ 10,024     $ 3,585     $ (4,052 )
Reconciling items:
                               
Cash payment to stock option holders (2)
                      26,898  
Write-off of unamortized debt issuance costs in connection with the February 2006 refinancing (3)
                      4,617  
Reduction in interest expense assuming February 2006 debt refinancing and repayment of debt with IPO proceeds were completed at the beginning of the period (3)
          3,897             5,941  
Impairment of property held for sale (4)
    826             826        
Management fee (5)
          973             1,434  
Tax effect of reconciling items
    (322 )     (1,880 )     (322 )     (15,012 )
 
                       
Adjusted net income
  $ 3,289     $ 13,014     $ 4,089     $ 19,826  
 
                       
 
                               
Weighted average shares outstanding:
                               
Diluted shares
    28,321       18,173       28,344       15,950  
Incremental shares for IPO (6)
          9,759             9,953  
Incremental shares for stock incentive awards (7)
                      1,987  
 
                       
Pro forma diluted shares
    28,321       27,933       28,344       27,891  
 
                       
Adjusted net income per pro forma share — diluted
  $ 0.12     $ 0.47     $ 0.14     $ 0.71  
 
                       
 
                               
Reconciliation to EBITDA and Adjusted EBITDA:
                               
Net income (loss)
  $ 2,785     $ 10,024     $ 3,585     $ (4,052 )
Reconciling items:
                               
Depreciation and amortization expense
    3,857       3,772       7,801       7,591  
Interest expense
    2,801       7,282       5,925       17,641  
Income tax expense (benefit)
    1,620       6,365       2,090       (2,554 )
 
                       
EBITDA
    11,063       27,443       19,401       18,626  
Add: Cash payment to stock option holders (2)
                      26,898  
Impairment of property held for sale (4)
    826             826        
Management fee (5)
          973             1,434  
 
                       
Adjusted EBITDA
  $ 11,889     $ 28,416     $ 20,227     $ 46,958  
 
                       
Adjusted EBITDA as percentage of sales
    14.9 %     26.1 %     13.3 %     22.9 %
 
(1)   The company has provided detailed explanations of its non-GAAP financial measures in its Form 8-K filed August 1, 2007.
 
(2)   Represents cash payments made to stock option holders (including applicable payroll taxes) in lieu of adjusting exercise prices in conjunction with the payment of dividends to our shareholders. This amount is included as a separate line item in the consolidated statement of operations of which $5,069 and $21,829 related to cost of sales and selling, general and administrative expenses, respectively, for 2006.
 
(3)   This amount is included in interest expense.
 
(4)   Represents the write-down of the value of the Lexington, North Carolina property which has been classified as an asset held for sale due to the relocation of our plant to Salisbury, North Carolina and related exit costs. These expenses are included in Selling, General, and Administrative expenses.
 
(5)   Represents management fees paid to our majority stockholder. Since consummating the initial public offering, these fees are no longer paid. The fees are included in selling, general and administrative expenses.
 
(6)   Represents incremental shares related to the company’s IPO assuming 10,147 shares sold by the company (including the over-allotment option of 1,324 shares) were issued at the beginning of the respective periods.
 
(7)   Represents incremental shares for stock options that were excluded from the calculation of earnings per share for the first half of 2006 because their effect would have been anti-dilutive.