VENICE, Fla., Feb. 20, 2008 (PRIME NEWSWIRE) -- PGT, Inc. (Nasdaq:PGTI), the leading U.S. manufacturer and supplier of residential impact-resistant windows and doors, today announced financial results for its fourth quarter and year ended December 29, 2007.
"We continued to outperform the housing market in the fourth quarter with sales decreasing 20.4% versus a 53% decline in housing starts compared to the fourth quarter of 2006," said Rod Hershberger, PGT's President and Chief Executive Officer. "For the year, starts were down 49% compared to 2006, and our sales were down 25.1%. In the fourth quarter, we reduced our cost structure and better aligned our operations with the reduced sales levels. We expect to face further challenging times ahead as the housing market continues to correct and economic conditions continue to soften."
Highlights of the Fourth Quarter Financial Results include:
(See accompanying financial schedules for full financial details and reconciliations of adjusted (non-GAAP) financial measures to their GAAP equivalents.)
- Total revenues were $54.3 million, a decrease of $13.9 million or 20.4% versus the fourth quarter of 2006. - Gross margin percentage was 27.1%, compared to 28.8% in the same quarter of 2006. Gross margin decreased due mainly to declining operating leverage due to lower overall sales volumes. Adjusted for a $0.7 million restructuring charge in the fourth quarter, gross margin percentage was 28.3%. - SG&A was $16.3 million, a decrease of $1.6 million from the prior year quarter mainly due to lower distribution and selling costs associated with lower sales volumes. As a percentage of sales, SG&A was 30.0% for the fourth quarter compared to 26.2% in the fourth quarter of 2006. - There was a net loss in the fourth quarter of $4.0 million compared to a net loss of $2.0 million for the same period of 2006. On an adjusted basis, the net loss for the fourth quarter was $2.6 million compared to an adjusted net loss of $1.3 million for the same period in 2006. - Net loss per diluted share for the fourth quarter was $0.15 compared to net loss per diluted share of $0.07 for the comparable period of 2006. On an adjusted basis, the net loss per diluted share for the fourth quarter was $0.09 compared to an adjusted net loss per diluted share of $0.05 for the same period in 2006. - Adjusted EBITDA for the quarter was $3.0 million compared to an adjusted EBITDA of $5.8 million for the 2006 fourth quarter.
Commenting on the fourth quarter results, Jeff Jackson, PGT's Chief Financial Officer, stated, "In the fourth quarter, we saw further declines in sales as the markets we serve remain very weak. The reduction in sales resulted in a decrease in operating leverage. We reduced operating expenses as revenues declined and began to see the benefits of these cost reductions in the fourth quarter. We will closely monitor the housing market and take additional action as required as we focus on our operational cost structure."
Highlights for the Fiscal Year 2007 include:
(See accompanying financial schedules for full financial details and reconciliations of adjusted (non-GAAP) financial measures to their GAAP equivalents.)
- Total revenues for the year were $278.4 million, a decrease of 25.1%, versus $371.6 million for 2006. - Gross margin percentage was 32.7%, compared to 38.1% in 2006. Adjusted for a $0.7 million restructuring charge in the fourth quarter, gross margin percentage was 32.9%. - SG&A was $75.3 million for the year, a decrease of $10.9 million from 2006 due mainly to lower distribution and selling costs of $5.1 million associated with lower sales volumes. As a percentage of sales, SG&A was 27.1% for 2007 compared to 23.2% in 2006. - There was net income in 2007 of $0.6 million compared to a net loss of $1.0 million in 2006. On an adjusted basis, net income for 2007 was $2.6 million versus $26.3 million in 2006. - Net income per diluted share for 2007 was $0.02 compared to a net loss per diluted share of $0.05 for 2006. On an adjusted basis, net income per diluted share for 2007 was $0.09, compared to $0.94 for the prior year period. - Adjusted EBITDA for 2007 was $31.7 million compared to $72.7 million for 2006.
Conference Call
As previously announced, PGT will hold a conference call Thursday, February 21, 2008, 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: 888-679-8018 (U.S. and Canada) and 617-213-4845 (international). Refer to passcode 71730660. A replay of the call will be available beginning February 21, 2008, at 12:30 p.m. Eastern Time through March 6, 2008. To access the replay, dial 888-286-8010 (U.S. and Canada) or 617-801-6888 (international) and refer to passcode 31547367. The webcast will also be available through the Thomson StreetEvents Network. Individual investors can listen to the call at http://www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (http://www.streetevents.com), a password-protected event management site.
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. PGT is also one of the largest window and door manufacturers in the United States. In its 27th year, the company employs approximately 1,900 at its manufacturing, glass laminating and tempering plants, and delivery fleet facilities in Venice, FL, Salisbury, NC and Lexington, 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(R) Aluminum and Vinyl Windows and Doors; WinGuard(R) Impact-Resistant Windows and Doors; PGT(R) Architectural Systems; and Eze-Breeze(R) Sliding Panels. PGT Industries, Inc. is a wholly owned subsidiary of PGT, Inc. (Nasdaq:PGTI).
The PGT, Inc. logo is available at http://www.primenewswire.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
(unaudited - in thousands, except per share amounts)
3 Months Ended Year Ended
---------------------- ---------------------
December 29, December 30, December 29, December 30,
2007 2006 2007 2006
--------- --------- --------- ---------
Net sales $ 54,335 $ 68,229 $ 278,394 $ 371,598
Cost of sales 39,625 48,566 187,389 229,867
--------- --------- --------- ---------
Gross margin 14,710 19,663 91,005 141,731
Restructuring
charge 1,696 -- 1,696 --
Impairment charge -- 1,151 826 1,151
Stock compensation
expense related
to dividends paid -- -- -- 26,898
Selling, general
and
administrative
expenses 16,274 17,864 75,308 86,219
--------- --------- --------- ---------
(Loss) income
from operations (3,260) 648 13,175 27,463
Interest expense 2,707 3,077 11,404 28,509
Other expenses
(income), net 264 147 692 (178)
--------- --------- --------- ---------
(Loss) income
before income
taxes (6,231) (2,576) 1,079 (868)
Income tax
(benefit)
expense (2,200) (585) 456 101
--------- --------- --------- ---------
Net (loss) income $ (4,031) $ (1,991) $ 623 $ (969)
========= ========= ========= =========
Basic net (loss)
income per
common share $ (0.15) $ (0.07) $ 0.02 $ (0.05)
========= ========= ========= =========
Diluted net (loss)
income per
common share $ (0.15) $ (0.07) $ 0.02 $ (0.05)
========= ========= ========= =========
Weighted
average common
shares
outstanding:
Basic 27,572 26,995 27,294 21,204
========= ========= ========= =========
Diluted 27,572 26,995 28,337 21,204
========= ========= ========= =========
PGT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
December December
29, 2007 30, 2006
-------- --------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 19,479 $ 36,981
Accounts receivable, net 20,956 25,244
Inventories, net 9,223 11,161
Deferred income taxes 3,683 4,031
Other current assets 7,080 13,041
-------- --------
Total current assets 60,421 90,458
Property, plant and equipment, net 80,184 78,802
Other intangible assets, net 96,348 101,918
Goodwill 169,648 169,648
Other assets, net 1,264 1,968
-------- --------
Total assets $407,865 $442,794
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 15,235 $ 17,807
Current portion of long-term debt 332 420
-------- --------
Total current liabilities 15,567 18,227
Long-term debt 129,668 165,068
Deferred income taxes 48,927 51,217
Other liabilities 3,231 3,076
-------- --------
Total liabilities 197,393 237,588
Total shareholders' equity 210,472 205,206
-------- --------
Total liabilities and shareholders' equity $407,865 $442,794
======== ========
PGT, INC. AND SUBSIDIARY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO THEIR GAAP EQUIVALENTS
(unaudited - in thousands, except per share amounts)
3 Months Ended Year Ended
--------------------- ---------------------
December 29, December 30, December 29, December 30,
2007 2006 2007 2006
-------- -------- -------- --------
Reconciliation
to Adjusted Net
(Loss) Income
and Adjusted Net
(Loss) Income
per pro forma
share (1):
Net (loss) income $ (4,031) $ (1,991) $ 623 $ (969)
Reconciling items:
Restructuring
charge (2) 2,375 -- 2,375 --
Cash payment to
stock option
holders (3) -- -- -- 26,898
Write-off of
unamortized
debt issuance
costs in
connection
with the
February 2006
refinancing
and prepayment
of debt in Q3
2006 (4) -- -- -- 6,626
Reduction in
interest
expense
assuming
February 2006
debt
refinancing
and repayment
of debt with
IPO proceeds
were completed
at the
beginning of
the period (4) -- -- -- 6,355
Prepayment
penalty
resulting from
debt repayment
in July 2006 (4) -- -- -- 2,300
Impairment of
property held
for sale (5) -- 1,151 826 1,151
Management
fee (6) -- -- -- 1,434
Tax effect of
reconciling
items (926) (449) (1,248) (17,458)
-------- -------- -------- --------
Adjusted net
(loss) income $ (2,582) $ (1,289) $ 2,576 $ 26,337
======== ======== ======== ========
Weighted average
shares
outstanding:
Diluted shares 27,572 26,995 28,337 21,204
Incremental
shares for
IPO (7) -- -- -- 6,888
-------- -------- -------- --------
Pro forma diluted
shares 27,572 26,995 28,337 28,092
======== ======== ======== ========
Adjusted net
(loss) income
per pro forma
share - diluted $ (0.09) $ (0.05) $ 0.09 $ 0.94
======== ======== ======== ========
Reconciliation to
EBITDA and
Adjusted EBITDA:
Net (loss) income $ (4,031) $ (1,991) $ 623 $ (969)
Reconciling items:
Depreciation
and
amortization
expense 4,155 4,133 15,988 15,613
Interest
expense 2,707 3,077 11,404 28,509
Income tax
(benefit)
expense (2,200) (585) 456 101
-------- -------- -------- --------
EBITDA 631 4,634 28,471 43,254
Add:
Restructuring
charge (2) 2,375 -- 2,375 --
Cash payment
to stock
option
holders (3) -- -- -- 26,898
Impairment of
property held
for sale (5) -- 1,151 826 1,151
Management
fee (6) -- -- -- 1,434
-------- -------- -------- --------
Adjusted
EBITDA $ 3,006 $ 5,785 $ 31,672 $ 72,737
======== ======== ======== ========
Adjusted
EBITDA as
percentage of
sales 5.5% 8.5% 11.4% 19.6%
======== ======== ======== ========
(1) The company provided detailed explanations of its non-GAAP
financial measures in its Form 8-K filed February 20, 2008.
(2) Represents charge related to restructuring actions taken in the
fourth quarter of 2007 as announced on October 25, 2007 of which
$0.7 million is classified within cost of goods sold. This charge
related primarily to employee separation costs.
(3) 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.
(4) This amount is included in interest expense.
(5) Represents the write-down of the value of the Lexington,
North Carolina property which had 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.
(6) 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.
(7) 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 2006.