Exhibit 99.1
[PGT LOGO OMITTED]
FOR IMMEDIATE RELEASE
PGT Reports Fourth Quarter and Fiscal Year 2006 Results
VENICE, FL, February 21, 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 fourth quarter and fiscal year ended
December 30, 2006.
"The building industry continues to see significant deterioration in new
construction as evidenced by a decline in new housing permits of 48% in the
fourth quarter of 2006 versus the same period in the prior year. Comparatively,
our revenues declined 22.6% in the fourth quarter of 2006 versus the same
period in the prior year," said Rod Hershberger, PGT's President and Chief
Executive Officer, "We have been able to offset some of this decline by gaining
market share due to our superior product offering and increasing our repair and
replacement business.
For the fiscal year ended 2006, we reported sales of $371.6 million, which
represents an increase of 11.7% over the prior year. Excluding the $26.9
million cash payment made in connection with the repayment of a dividend to our
shareholders and other non-recurring items, adjusted net income was $26.3
million, an increase of 41.4% year-over-year."
Fourth Quarter 2006 Financial Results
- -------------------------------------
(See accompanying financial schedules for full financial details and
reconciliations of non-GAAP financial measures to their GAAP equivalents.)
o Total revenues for the fourth quarter were $68.2 million, a decrease of
22.6%, versus $88.1 million for the same period in 2005. The decrease is
largely due to the market conditions described above which impacted most
of our product lines.
o Gross margin percentage for the fourth quarter was 28.8%, compared to
38.3% in the same quarter of 2005. Gross margins were driven down during
the fourth quarter as a result of declining operating leverage due to our
lower overall sales volumes and the impact of aluminum cost increases of
approximately $1.3 million.
o SG&A spending decreased by $5.1 million from the prior year quarter mainly
due to lower amounts accrued for performance based compensation as well as
lower requirements needed for our allowance for doubtful accounts as a
result of the improved aging profile of our accounts receivable.
o Fourth quarter net loss was $(2.0) million compared to $(0.9) for the same
period in 2005. On an adjusted basis, fourth quarter net income (loss) was
$(1.3) million versus $4.6 million in the same quarter of 2005, a decrease
of $5.9 million.
o Diluted weighted average shares outstanding for the fourth quarter of 2006
were 26,994,911 compared to 15,730,112 for the same quarter last year. The
higher share count was due to our IPO, which was completed in June 2006.
Assuming the IPO were completed at the beginning of the respective
reporting periods, the pro forma diluted weighted average shares
outstanding for the fourth quarters of 2006 and 2005 were 26,994,911 and
27,677,303, respectively.
o Net loss per diluted share for the fourth quarter was $(0.07) compared to
$(0.05) for the comparable period of 2005. On an adjusted basis, net
income (loss) per pro forma diluted share was $(0.05), compared to $0.17
for the prior year period.
o EBITDA for the fourth quarter was $4.6 million versus $6.4 million for the
comparable period of 2005. On an adjusted basis, EBITDA for the fourth
quarter was $5.8 million versus $15.2 million for the comparable period of
2005, a decrease of $9.4 million.
Year-to-Date 2006 Financial Results
- -----------------------------------
(See accompanying financial schedules for full financial details and
reconciliations of non-GAAP financial measures to their GAAP equivalents.)
o Total sales for 2006 were $371.6 million, an increase of 11.7%, versus
$332.8 million in 2005. This growth was largely due to increased sales
volume of our WinGuard(R) branded impact-resistant products, up 29.5% year
over year.
o Gross margin percentage for 2006 was 38.1% compared to 37.1% in 2005. The
primary drivers of gross margin expansion include an increase in sales of
our WinGuard impact-resistant products, which carry a higher margin than
our other products, as well as overall higher prices and improved
manufacturing efficiencies.
o SG&A spending as a percentage of sales decreased by approximately 1.6%
points from the prior year as we leveraged these costs against increasing
sales despite increased investment in targeted marketing expenditures,
higher distribution costs related to our sales growth, as well as
incremental costs associated with being a public company.
o Net loss for 2006 was $(1.0) million compared to net income of $7.9
million in 2005. The decrease was largely due to the $26.9 million cash
payment to option holders made in connection with the payment of a
dividend to our shareholders.
o Diluted weighted average shares outstanding for 2006 were 21,203,793,
compared to 17,298,669 for 2005. The higher share count was due to the
company's IPO, which was completed in June 2006. Assuming the IPO were
completed at the beginning of the respective reporting periods, the pro
forma diluted weighted average shares outstanding for 2006 and 2005 would
have been 28,092,060 and 27,445,727, respectively.
o EBITDA for 2006 was $43.3 million, compared to $41.2 million for 2005.
EBITDA was negatively impacted by the $26.9 million payment to option
holders in 2006. On an adjusted basis, EBITDA for 2006 was $72.7 million,
an increase of 24.6%, versus $58.4 million for 2005.
Commenting on the fourth quarter results, Jeff Jackson, PGT's Chief Financial
Officer, said, "Our overall lower sales volume resulted in declining operating
leverage for the fourth quarter. We decreased our operating expenses, and we
have slowed the production output of our plants to reflect the current sales
level. We will continue to implement improvements in our manufacturing
operations and reduce our selling, general and administrative expenses to help
offset the reduced volume. We believe we are making the right decisions to
position our business to emerge even stronger when the housing cycle rebounds."
Mr. Hershberger further commented, "We believe the current conditions in the
building products market will prove to be challenging for everyone. We also
believe we have the strategies in place to navigate through this near-term
correction and will continue to manage our costs during this period and adjust
accordingly. We remain confident that our core business model and operating
strategy will continue to allow us to grow our business over the long-term and
maintain our strong market position regardless of cyclical declines in housing
demand."
Conference Call
---------------
As previously announced, PGT will hold a conference call Thursday, February 22,
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: 866-700-0133 (U.S. and Canada) and
617-213-8831 (international). Refer to passcode 55197649. A replay of the call
will be available beginning February 22, 2007 at 3:00 pm Eastern time through
March 8, 2007. To access the replay, dial 888-286-8010 (U.S. and Canada) and
617-801-6888 (international) and refer to passcode 64496678. To access the
webcast, go to www.pgtinc.com and click on "Investors". The online archive of
the webcast will be available for approximately 14 days.
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 26th year, the company employs
approximately 2,300 at its manufacturing, glass laminating and tempering
plants, and delivery fleet facilities in Venice, Fla. and Salisbury, N.C. 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, which 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 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 Form S-1 (File No. 333-132365) 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
or
Lynda Williams, 941-486-0100, ext. 22334
lwilliams@ pgtindustries.com
Financial Schedules to Follow
PGT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - dollars in thousands, except per share amounts)
Three Months Ended Year Ended
--------------------------------- -----------------------------------
December 30, December 31, December 30, December 31,
2006 2005 2006 2005
---------------- -------------- --------------- ----------------
Net sales $ 68,230 $ 88,143 $ 371,598 $ 332,813
Cost of sales 48,565 54,348 229,867 209,475
---------------- -------------- --------------- ----------------
Gross margin 19,665 33,795 141,731 123,338
Stock compensation expense related to dividend - 541 26,898 7,146
Write-off of trademak - 7,200 - 7,200
Selling, general and administrative expenses 19,015 24,116 87,370 83,634
---------------- -------------- --------------- ----------------
Income from operations 650 1,938 27,463 25,358
Other expense (income), net 149 (276) (178) (286)
Interest expense 3,077 3,503 28,509 13,871
---------------- -------------- --------------- ----------------
(Loss) income before income taxes (2,576) (1,289) (868) 11,773
Income tax (benefit) expense (585) (428) 101 3,910
---------------- -------------- --------------- ----------------
Net (loss) income $ (1,991) $ (861) $ (969) $ 7,863
================ ============== =============== ================
Basic net (loss) income per common share $ (0.07) $ (0.05) $ (0.05) $ 0.50
Diluted net (loss) income per common and
common equivalent share $ (0.07) $ (0.05) $ (0.05) $ 0.45
Weighted average common shares
outstanding:
Basic 26,995 15,730 21,204 15,723
Diluted 26,995 15,730 21,204 17,299
PGT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
December 30, December 31,
2006 2005
---------------- ----------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 36,981 $ 3,270
Accounts receivable, net 25,244 45,193
Inventories 11,161 13,981
Deferred income taxes 5,231 3,133
Other current assets 13,041 11,360
---------------- ----------------
Total current assets 91,658 76,937
Property, plant and equipment, net 78,802 65,508
Goodwill 169,648 169,648
Other intangible assets, net 101,918 107,760
Other assets, net 1,968 5,700
---------------- ----------------
Total assets $ 443,994 $ 425,553
================ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 20,883 $ 31,137
Current portion of long-term debt 420 -
---------------- ----------------
Total current liabilities 21,303 31,137
Long-term debt 165,068 183,525
Deferred income taxes 52,417 54,320
---------------- ----------------
Total liabilities 238,788 268,982
---------------- ----------------
Total shareholders' equity 205,206 156,571
---------------- ----------------
Total liabilities and shareholders' equity $ 443,994 $ 425,553
================ ================
PGT, INC. AND SUBSIDIARY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR GAAP EQUIVALENTS
(unaudited - dollars and shares in thousands, except per share amounts)
Three Months Ended Year Ended
-------------------------- --------------------------
December 30, December 31, December 30, December 31
2006 2005 2006 2005
------------ ------------ ------------ ------------
Reconciliation to Adjusted Net (Loss)
Income and Adjusted Net
(Loss) Income per pro forma share (1):
Net (loss) income $ (1,991) $ (861) $ (969) $ 7,863
Reconciling items:
Cash payment to stock option holders (2) - 541 26,898 7,146
Write-off of Naturescape trademark (3) - 7,200 - 7,200
Naturescape exit costs (3) - 629 - 629
Impairment of property held for sale (4) 1,151 - 1,151 -
Write-off of unamortized debt issuance costs
in connection with the February 2006 refinancing
and prepayment of debt in Q3 2006 (5) - - 6,626 -
Refinancing fees incurred in connection with
September 2005 refinancing (6) - - - 404
Prepayment penalty resulting from debt repayment
in July 2006 and September 2005 (5) - - 2,300 450
Reduction in interest expense assuming February
2006 debt refinancing and repayment of debt with
IPO proceeds were completed at the beginning of
each period (5) - 187 6,355 (22)
Management fee (7) - 460 1,434 1,840
Tax effect of reconciling items at 39% (449) (3,517) (17,458) (6,882)
------------ ------------ ------------ ------------
Adjusted net (loss) income $ (1,289) $ 4,639 $ 26,337 $ 18,627
============ ============ ============ ============
Weighted average shares outstanding:
Diluted shares 26,995 15,730 21,204 17,299
Incremental shares for IPO (8) - 10,147 5,089 10,147
Incremental shares for stock incentive awards (9) - 1,800 1,799 -
------------ ------------ ------------ ------------
Pro forma diluted shares 26,995 27,677 28,092 27,446
============ ============ ============ ============
------------ ------------ ------------ ------------
Adjusted net (loss) income per pro forma share -
diluted $ (0.05) $ 0.17 $ 0.94 $ 0.68
============ ============ ============ ============
Reconciliation to EBITDA and Adjusted EBITDA:
Net (loss) income $ (1,991) $ (861) $ (969) $ 7,863
Reconciling items:
Depreciation and amortization expense 4,133 4,147 15,613 15,524
Interest expense 3,077 3,503 28,509 13,871
Income tax (benefit) expense (585) (428) 101 3,910
------------ ------------ ------------ ------------
EBITDA 4,634 6,361 43,254 41,168
Add: Cash payment to stock option holders (2) - 541 26,898 7,146
Write-off of Naturescape trademark (3) - 7,200 - 7,200
Naturescape exit costs (3) - 629 - 629
Impairment of Property held for sale (4) 1,151 1,151
Refinancing fees incurred in connection with
September 2005 refinancing (6) - - - 404
Management fee (7) - 460 1,434 1,840
------------ ------------ ------------ ------------
Adjusted EBITDA $ 5,785 $ 15,191 $ 72,737 $ 58,387
============ ============ ============ ============
Adjusted EBITDA as percentage of sales 8.5% 17.2% 19.6% 17.5%
(1) The company has provided detailed explanations of its non-GAAP financial measures in its Form
8-K filed February 21, 2006.
(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, and $1,292 and $5,854 related to cost of sales
and selling, general and administrative expenses, respectively, for 2005.
(3) Represents a write-down of our NatureScape trademark in connection with the sale of this
business and associated exit costs. The exit costs are included in selling, general and
administrative expenses.
(4) Represents a 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) This amount is included in interest expense.
(6) This amount is included in selling, general and administrative expenses.
(7) 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.
(8) 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.
(9) Represents incremental shares for stock options that were excluded from the calculation of
earnings per share for the fourth quarter of 2005 and for the year ended December 30, 2006
because their effect would have been anti-dilutive.