PGTI - Earnings call transcript Q1 2018

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Operator

Good morning, and welcome to the PGT Innovations Inc First Quarter 2018 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brad West, Senior VP and CFO. ahead. go Please

Brad West

Jackson, and first first Brad, XXXX. West, everyone. to an to the by Welcome company's morning, for President. Thank are outlook results we XXXX good as conference Innovations' pleased Jeff today joined quarter and our Brad of CEO call. PGT and CFO, This XXXX you, provide I'm morning, our quarter I remainder the as am well

Relations portion also results Investor We posted to on a our quarterly the of have presentation website. the

differ Before comments, you we fall report factors Factors results like We Form that detailed and and that performance the are the press Act statements. I'd annual today's meaning actual Risk undertake in financial obligation revise These company's publicly the that XXXX Reform Private could outlook. the uncertainties XXXX our on other statements cause materially. of remarks our begin These factors update formal earnings our risks, or to XXXX, release to Securities any XX-K. Litigation forward-looking remarks no remind contain of within including of to section forward-looking involve in

also note non-GAAP which, for will is website. in of reconciliation our believe, to GAAP report that our measures their measures, of information facilitate the results counterparts of investors available present provide using additional the help section A performance. we we to Investor comparison should and You past these Relations non-GAAP

turn I'll Now, call our Jackson. over the Jeff to CEO, Jeff?

Jeff Jackson

XXXX. and Innovations a I excited PGT am morning had Good today. everyone to to start Brad. thanks for you, us joining Thank strong report

with first We square by I'm and November. our completed March, in fully sectors demonstrated compared they with that year. is exceeding the the be increase new in into the in comply This in the the very repair Florida’s on because with are, employees began move this awareness another ability in post-Irma our building codes. construction products. Experts the grow for begins included to they Xst products delivered our facility increase season combined storm continuing plan facility initiative a business remodeling sectors into ever to sales. execution point the for the building repair first through both and operating operational are This Production power We Demand foot that resistant-products were manufacturing to new the to was codes and number is which have its efforts. especially and were active XX% pleased true another with successfully as most mid-April. the the XXX,XXX leverage the by quarter recorded impact-resistant in this and repair continues last team This This our of all Our benefits in made first for residential one Home we happen Safety with forecasting XX quarter, and incredibly last gross as Irma. percentage operating Atlantic margin market solid growth end codes late in Insurance Business Miami. cost safest increased XXXX, strategic of delivered the believe diligent well-planned these hit quarter hurricane nearly a of performance. of and remodeling Hurricane coast products in to fact, season and top-line was significant with in leverage in and in fixed has goes after move the the years provide remodeling In sales and our strong June Institute we both and compared X to are and in codes. our sales country, homeowners their it rates Florida ranked leased increasing year. in efficiencies new building the by residential stringent a them of choosing driven the rating Florida for performance for

big the about Miami in area and This us. for next production PGT Front homes demand capacity The Sparta provide cumbersome and flexibility plywood makes to entry product is production upgrade facility an homeowners new product their to to meet value-custom are from CGI's families our line, for the on products Increasing initial shutters across space We this emphasis allows it and solution an Sparta and first from to accommodate continue point excited critical. with to Florida. launch commercial window easier impact-resistant storm. impact-resistant Initial its capacity the was line the us Innovations' Slim affordability. protect

our value first facility to to significantly continue provide our in by by shareholders credit XXX cost refinancing rate lowered quarter. basis, our interest our This We refinancing of improving capital. the

share with delivered compared $X.XX of For a of we of $XXX earnings EBITDA the adjusted of and million XXXX, last first diluted growth sales quarter of adjusted $X.XX, per $XX.X year. million,

This to increase Our growth an the and remodeling repair quarter of driven first in the gain sales XXXX of share of million in was first by $XX.X growth XXXX. to ability our the compared quarter represents market. to continue

Our repair first sales This compared the XX% sales representing sector XX% favorable margin in XXXX, and of of higher a our in sales. the quarter mix, remodeling into into in first the to year. same the drove the period with total increased market quarter shift last

margin XXXX's choice. the strong first of consolidated prices the during Inflationary partially we making first quarter fourth million, of marketing the as Our and continued with higher at investments the labor a improved experienced two $XX because strategy continued offset our percentage tariffs of from strong first of last costs. our compared on have products products Transportation awareness quarter transportation demand experienced in incentive the as year. quarter pressure apply surge quarter in by finished first quarter. affected we to were and the increased driven XXXX. sales as on in conditions during compensations we quarter up inflationary operations to XXXX fuel and continue and backlog execute gains of adjusted margins Aluminum EBITDA costs costs leveraging increased were the also and of sanctions, We and full increased average to by ended hurricane impact-resistant points

impact these previously were offset able of our increases. operating costs through through we our to price of the announced and strength However, first quarter results

housing strong demonstrates third is in most we XXXX, quarter Our increase the especially remains there's wealth, in team on for first believe coastal vision in populous focused southern built momentum fastest-growing and markets. our start it by the second and we should per strategic approximately in will priorities. where to state of XXXX. the continued growth XXXX The normalized and to our Florida starts and continued in believe XXXX in our continue We country and key construction, XXX,XXX of year. growth be to potential remainder significant long-term population driven starts single-family new continues Florida,

capture We well protection and this damage also growth. impact of in positioned an to windows PGT recently hurricanes. demand for renew believe awareness awareness that business. that and This share demand of increasing choice homes remodeling solid the increased continue, to potential generated will market the for is as repair for heightened driven Innovations continue preferred and from and by doors impact-resistant

four from to customer executed we long-term strategic to expect focus, value. which and create pillars have We shareholder

through loyalty to in We brand advertising, with developing loyalty investments marketplace products offering customers innovative by customer positioning brands. relationships in being and builds loyal First, we our brands base. our the that incentives close sales this in customers focused this in the rebate our our homeowner We new believe results programs. have and we customer and believe to investments our our brands

on a focused attracting ingredient team and them at PGT help in member succeed. that that family. talent leading We success business. We our Innovations' a new benefits and key offer to we're hardworking Second, believe leaders talented, develop is programs to

strive We make our family leadership and and have opportunities also company. short, the offer a place place to best to our members to team In we workforce programs the to development company scholarships, career. best to advance

is operations are gives our our and footprint our ability to which more why automation [indiscernible] manufacturing increased manufacturing are take and demand Initiatives past continue production success. few adding Miami, time lean meet more to on to Third, We critical team we the our to and members Sigma, and focus maintaining expanding Six over our processes, we processes, also manufacturing years, to is Besides of as leaders driving increased big in increasing gains. our Florida. such increase efficiency quality products. reason the believe in the share to capacity a implemented our

consider capital to have strategic investment out-of-state us accretive that a value growth future. resources on cash allocating of shareholder flow enables to and the from free core limitless, focus a is way Finally, flow our are lean cash strategies. This in driving Florida supports strong generated our acquisitions free we in our because not

continue of our capital these shareholder quarter's I is execute Our it and to to because use they're is growth disciplined playbook our and this pillars we we am loyalty customer point by results. profitable continuing this our believe ensure And strategic proud continued will very drive going to team value. the forward, of will allocation. execution on evident that and against strategy

discuss and give first Now I'd results like more for over quarter outlook. the detail back the the to financial Brad an on over XXXX call the to to of turn in XXXX update

Brad West

quarter the continuation able compared We Jeff. combined post-Irma give to strategies. the of execution of We this first with year. of sales driven quarter, of $XXX.X XXXX. from million our to X, and we net On the by our for demand an sales in the marketing in investment of Slide This a an our the you, had breakdown fourth we momentum XX% quarter. strong growth of reported increased Thank you were increase advertising was result achieve and net last

in This sales same of our was XX% for demand WinGuard overall quarter our driven the XX% grew the impact in our increase of vinyl products which impact sales growth to of products, same includes XX% period last of and compared Our solid XX% year. by year. versus products impact vinyl last aluminum increases of

sales and products markets rate our Since ability products have XXXX, attractive shift highlights needs. of for nearly vinyl annual energy-efficient compound grown at towards a doors meet to windows products and to vinyl the design Our those growth our in WinGuard our and impact XX%. innovative

to income briefly cover I statement few Now a please items. turn XX, Slide and will

our versus first XXXX, up of year. profit margin basis gross gross XXX increased our points last million, the was and quarter For $XX.X

of including Venice. increase mix the first volume, benefited price operating by first in higher the Miami from its with benefits a quarter. operations and an gross factors, CP margins that glass operations impacted into our Gross associated regards were first in facility costs last quarter, adjusted quarter improved aluminum. took inflationary and our compared basis, XXXX XX.X% and also Gross effect an of of XX.X% to year's benefited during margin to Offsetting from results were equipment quarter price increases new an favorable year. increase effectiveness of last in sales. XXX increases to gross points relating in and of relocation was within machinery labor With the planned in Our in these On margin and aluminum relocations first represented costs. that plant and from margin costs the our fuel basis

XXX programs, margin cover As pound the prices $X.XX previously these was per pound. of the of increase hedging in basis prices today, price of inflationary costs. that is impact After had $X.XX negative increased gross up year. the This approximately per quarter and the our to the points in we our on mentioned, active first last aluminum the effects is forward-buy of end aluminum considering of from a

pound As XX% our compares of of of price per covered the XXXX estimated to an XXXX. for pound, aluminum needs remainder today, $X.XX in we which for delivered per average of approximately $X.XX have at

consistent general expenses continue additional driven in we as our to increase higher first $XXX,XXX we from and additional costs, the $X.X Interest was year. environment, quarter is $X.X $X.X compensation; fit. line The initiatives. increase a will aluminum of were of Selling, an the to personnel-related sales. increase see first coverage due monitor remaining percentage expense was same in higher $XXX,XXX year was $X.X in in year quarter, the costs million or distribution the investment additional by with administrative million price of in $XXX,XXX of and sales; advertising costs, we price mainly as $X.X higher first for quarter expense incentive Stock-compensation and This $XX.X and decrease of of last million including from higher was forward, the Going sales. million increase a additional due may estimate million, regulatory consider the of marketing of and our and increases still XXXX, million. and the last to quarter full

The of first charge write-off recorded of months. financing XXXX, of refinancing, in at credit debt of This Depreciation prepayment estimate Because related in of fee reduced the $X.X the than million half our agreement, first outstanding by million we XX.X% refinancing million in On expense this an in of of under benefits lender minimal vesting third-party million, loan to in quarter borrowings the million us first equity to awards quarter, did par the basis the March primarily slightly and with our a point borrowings. borrowings to which facility made extinguishment compared the $XXX,XXX the voluntary our terminal year's margin level facility. was of has average non-cash result expense amortization record XXX quarter XXXX, resulted stated total portion costs. costs. related of XXXX Tax to for year. XX, of year. next last and lower During is year. interest save XXXX in million of higher the reduction was repricing last we tax the over the accomplished last effective in to We to a debt $X.X year. and of This which a We tax the of $X.X we interest $X.X second rate tax in of additional service XX minimal compares that will of rate represents costs expense of decrease a financed last first XX.X%. been $XX the $XXX,XXX term compared quarter $X.X excess the

last Cuts our the and compared effective lower been rate corporate quarter the tax Excluding is in tax these to XX.X% the XXXX the first recently in have with from in the benefits, to Jobs due tax last would which rate is Act. year. in Tax first compared of quarter XX.X% effective rate of XXXX, year decrease The enacted

expecting are per $X.X XX%. diluted $X.XX first per we approximately effective such, for tax of first the of income We of As to XXXX. or million quarter diluted XXXX quarter $X.X for or $X.XX XXXX share versus an in recorded net rate of share have million the

debt EBITDA $X.X However, year for per first increase extinguishment adjusting EBITDA sales and the in after first for of the impact or prior included equivalent operating for release including and costs significant A for EBITDA margin, of first net gross $X.XX a line has to your in reference. quarter to and income factors non-cash the improved financial $XX.X the GAAP and income of XX.X% was quarter as of of and the compared or over adjusted measures been the last charge, quarter quarter effectiveness. those $XX.X our volume year. relocation by equipment was increase quarter higher of of affected the result was or This adjusted adjusted as million Adjusted machinery profit top Both increases and margin for year. million our facility share. in adjusted were primarily diluted XX.X% operational well gross sales reconciliation the benefited our the the net improved the performance non-GAAP to efficiencies million that earnings due last same XXXX, versus

first invested which to the was year's million ended of capital the a million, $X.X in cash first more $XX.X balance a Now We unchanged of We last the quarter please balance discussion $X.X quarter, of Slide XXXX. in sheet end quarter. which turn XX XXXX expenditures than of with for is items. from million

door cash glass an income million million executed our taxes. asset received to made We in sale related payment to of September of relating proceeds income $X.X PGT-branded the XXXX. in $XX.X Additionally, tax XXXX we the

receive the quarter on complete of net should and Jeff some the during give that balance assets. expect this like needs. intend $XX future At times. our the to flexibility remaining to further Jeff? We turn We XXXX would of the of transfer call and second strong make to comments the XXXX XXXX to second when we a to focus I back on final million leverage closing comments. continue the to maintaining quarter remainder We of first and other sheet reduced for X.X to point, fund over during further us investments

Jeff Jackson

market this continue impact remain positive factors Brad. February and same year. economic are that believe will the of business XXXX. XXXX, by Thanks, Starts those to and XX% the we for first grew during the be compared and confident January that to during quarter’s to below are We support. remainder have what an steadily average factors business last to our of of – quarter starts Housing our expect well favorable grow average continued month estimated XXXX can of the still

As Florida reach in in starts approximately that pays, XX,XXX would single-family XXXX. starts

we and sales in construction demonstrated market, In to share addition remodeling gain our ability increasing to the new into our repair have the sector.

earnings be and over XXXX our in repair top for We impact of the On at sector systems results growth impact-resistant doors their year-end first ranges. the shutters call on and February, other guidance expect continue expect for home-protection performance our we to and strong, XXXX. those or more operating provided homeowners choosing remodeling windows are as finish Based line to for needs. high-end quarter, in to we the

XXXX shares $XX cash $XX diluted $XX expectations to our million share assumes of between capital sales free reminder, to a proceeds includes net certain of expect growth the million an million, cash representing we during of the $XXX and $XXX remainder finalizing This the spending. cash million, disciplined to flow an $XXX to to to $XX average for of XX% last XX% sale receive are: $XX million from solid of $X.XX, XXXX Our XXXX flow weighted $X.XX EBITDA those free in of million federal As of of diluted reflecting [indiscernible] includes free outstanding. increase assets million X% income target versus January impact million, XXXX. XXXX of flow increase $X taxes, XX%; of we year; million income which the an payment net tax estimated cash ranges of of made and glass-plant which also representing for adjusted And income for or

Before customers to start shareholders, the PGT I for your say thanks efforts To our Innovations’ for the questions, team, year. a thank you continued to partners, taking your support. our strong family want and entire our and to

innovation, fun, generating drives for on focused which to to a a shareholders. and we’d X,XXX begin operator Our our conference At like portion. Q&A culture be, value turn members company that makes place remains this team Innovations PGT to to to has our call exciting over Brandon? time, the

Operator

Thank would now first the James. We go Our [Operator Darkatsh question Instructions] ahead. begin Sam question-and-answer from with comes Raymond session. you. Please

Sam Darkatsh

Good are How morning, morning, Brad. Good Jeff. you?

Jeff Jackson

Good morning.

Sam Darkatsh

Three I may. if questions,

First, end of I if million year-on-year. XX have call to this was quarter? on a and What one. get a trying you’ve apologize. – the missed of backlog clerical and the I it, at just last sense missed quarter, with notes, first my But year’s the mentioned at the of I the I end

Brad West

million, Yes, Sam. $XX

Sam Darkatsh

$XX question. clerical million? another Okay. And then,

you how are guidance, or sales itself? expecting sales the much anticipating Within Miami contribution from the facility

Brad West

XXX,XXX Well, the future. our the whole first ourselves this feet, launches year. the operating have launch foremost. with the square we that there’s square in kind from product mentioned of and believe the design us year give launching as will into the excess Sparta our of and the so sales feet, half the that, grow, so new we’re during XXX,XXX, that won move a this implementing of help We improved effectiveness long-term, we new grow products to but of are will back lot over especially towards was do back as the affect and capability half initially that XXX,XXX But we move the some call, with

Jeff Jackson

And point figure the backlog can Sam, that’s that sales-driven I increase. Yes, I’d also, out to like increase, on that. market backlog true

three of Our weeks product four are lead times across standard lines. are still – our weeks to most

Sam Darkatsh

first question. be looks high year and will around This may a might or the were it require some Thank EBITDA sales of XX% quarter incrementals elementary so. guidance about if you you. call take bit XX% the margins looks And for or like the the like final EBITDA, math. your And of it end rest it, incremental right be so. then and But

incrementally highlighted get EBITDA takes, sense I become half trying in the of last the of Just back a and to year, but three the quarter know of quarters – what year? puts the margins some first pressured the you of that alleviated

Brad West

first in I continue and and Well, really I as quarter the think some advertising, factors, – obviously, of target We, first first I think we the to focus of main quarter of since first is quarter marketing year’s so. difference investments year quarter year between But and that two would back of get the do had the compared normalize the the us. accrual say would that last specifically with this of the was to then to will the and to say. on storm compensation first for and year easier that are tend last last a Operationally, designed year. towards year. was between I half or capitalize comp year incentive year. first last the investment we what year And to start year’s the back happened this Those the also, strong last half kind quarter we’ll

Jeff Jackson

high of strong if I know our last quarter, And an incredibly we keep the range. still year quarter it’s it. you guided the at early But, look to fourth was year, strong, months it’s still Yes, all in mind, been seen year up. us far that been months just to this of range in but four we have for too so take four strong, and early end they’ve

Sam Darkatsh

quantification marketing or in was you I much last spend had What marketing the of two, spending, spend? the this quarter ad was extra extra quarter? the how TV know

Brad West

if to actually you did $XXX,XXX. But closer on total we the marketing. look at spend about $XXX,XXX have to we might generate, one promotion, been want entire the the that trying that It’s specifically from are

Sam Darkatsh

sales Thank terrific and quarter volume, much Okay. you a West. very

Brad West

Thanks, Sam.

Operator

Please Markets. Our next RBC Eisen ahead. question comes from go Capital with Michael

Michael Eisen

the Thanks gentlemen. morning, Good questions. taking for

R&R you – level to took And guys on you such compares year kind drove actions last market? high in that the Just the can quarter? spending? gains how talk of that you the that about of what to up broader kind And quickly of share wanted touch picked

Jeff Jackson

Yes.

years, I think – went storm, of actually we taken Irma, last were over our XX year this brand in showrooms from strong and is of the and we’ve year, ads in obviously, the dealers that and actions terms of storm we’re just off dual whether incredibly all are the coming our more market We’ve Hurricane been heels receiving first that – branding and it’s in commercial, driving awareness. redoing feedback last just flow. We we’ve actively end leads also promotions to off the both mobile with our to year, done of running. trucks

on I versus the and time point. incidents seeing think when our you does take growth interstate, I lot a a benefits evacuate what an And indoor estimates heavy got experience be of protection would hit plywood. first million the hurricane a shutters terms awareness not, in you’re at one people factor awareness we’ve people it X versus to Florida and were really of of and we’ve have think they that’s that having million to brands kind impact always X thought trying of in of in hurricane that very R&R the is

benefiting disruption, we’ll factor through So from from, that have and good beyond. had we that awareness a benefit continue and you to think we’re kind the I remainder of of do XXXX

Michael Eisen

the after the indication an runway stock? do in is year’s from When that. to more, for housing Florida and on follow-up quick spend, a just How and the then of potential for perspective especially R&R guys storms of R&R And are current you potential thinking have state? helpful. the last any up That’s many it. the code what Got

Brad West

no data market. measure are third-party measure a or there There’s code really of the up as in there’s point a not houses many the code how – terms out potential no really – in up or

come need and I buying familiar when have and year, it’s you’re or of going during down the a even – the of certain of they’re market, they with older into community, the it’s they’re homes renovation. them lot more condos, here and we think if older folks times down, come renovating in retirement

with metric us But it’s that to would the I an could population So inherent you of fear that. got point the isn’t there one terms that dynamics. kind really to, of tell there market out in

Michael Eisen

a on Congrats quarter. great Understood.

Brad West

you. Thank

Operator

next question Company. Please Alvaro ahead. from Our comes with go Lacayo & Gabelli

Alvaro Lacayo

maybe on seeing morning. just few Thanks. both Good trends commentary a regarding around and the questions and just some with a macro you’re level just own I quarter your April, throughout business to the what have year? and in and of if at And with any you beginning the repair regards or both seen new what you’ve shifts construction on of Florida. based sort changes saw remodel –

Brad West

the Yes. question. first I’ll cover that part of

still As the I mentioned all growth last – – think quarter – but great trend not continuing respect good last is that’s mean I our tougher pretty the number. the than the but long. the that a went, and QX necessarily QX the is quarter at generally two we XX%, had of was quarter March higher with trend just being I some April that. solid amount comps. And Obviously, growth in are least only continuing, other months were

accomplish. feel with range, comfortable have gone to trends range throughout year, the the that the that trying is which the just we’re solid said we can think think got and the the we of think seeing why we think what and I is high high-end of end that. certainly I’m I showing really we I good we’ve growth, So as still But growth

Jeff Jackson

what seeing. end say, high of would in and the and of we’re I kind housing end terms low all are centers growing, really Yes,

answered there was back property. over The beginning come that actually last question home tough? save too I be And at aren’t mark look tough. codes that year, and obviously, strong. was forward lives talk, of in, of enforcing the that actually to you are Mid continues have then the kind [indiscernible] when code kind and too you think and year We If of the codes alignment. it factor awareness, that

We’re codes good having of incredibly Florida. in the state

got we’ve their recordings did home and in stayed and send and into iPhones that people normally So have from from us. [indiscernible] footages their

what R&R is we're lot benefiting driving So are these the of is impact to from that you trend the seeing. awareness a kind in of and

Alvaro Lacayo

much. you Thank very Great.

Operator

Please Jeremy Our next with Company. question Dougherty from Hamblin comes & go ahead.

Jeremy Hamblin

brands Good could your and as start morning, insight see in add my quite to asking CGI you I how those if wanted QX? PGT could me give see by about into brand. WinDoor well if But your to I’ll guys. performed as some I congratulations. two know I they wanted haven't brands. performed

Brad West

especially Well, in sales And area, well I down actually. We've -- has some don't to new within on to seen for specific program done numbers, with growth Miami accommodate we seen that's Miami from get in be R&R. last months. there the and strong in growth. able results perspective, construction and the both Jeremy. great reasons expanding one think the I want we've in market, But some the that focus to our my CGI, the space And of XX that quite

CGI seeing. to of But quite that, company with states the CGI get starting sign very and achieve to the the end, comfortable market. the So the end, some the that, high overall, growing that high whole total to obviously, I And marketplace, specific I they're and so market in in we're see down the PGT numbers the that's take that comfortable is that recovery WinDoor not company's impressive. we're think in the increase terms that Miami it's as bit rest little of WinDoor WinDoor so four a should that's of you access nicely. especially will kind in disagree but also going growth to brand, we're future, it's there very And guess, I'm I also levels growth on an think a that but the guess, be in we're able in

Jeff Jackson

Yes, kind of about in I at full there. and the from roughly creeping the that understand They're to market the out within and a We've that's expansion CGI year, been plant start finish capacity. products. is

and side We aluminum in to the that will frankly, facility, are very expand continued that plans, kind with what market of launch the the to be to the it pleased especially of our the and a Spart new grow line. business quite of that's allows us layout

strong for the be and years. taking we next that's So see to several we continually dynamics do the off need

Jeremy Hamblin

XX%, sales high then your Okay. follow-up incremental that question sales And gain costs, a in your again relative which on about gains. your came on XX% very versus growth, to SG&A almost a

$X that SG&A So imply incremental incentive costs costs I year-over-year. up -- about Brad, that about the about $X.X indicated, were had on were up million million marketing that million? think because $XX.X up overall, that Does you $XXX,XXX was

Brad West

that’s… No,

Jeremy Hamblin

I’m sorry, $X.X million.

Brad West

my Yes, $X in inline percentage the that of about we growth. from is about And million higher of perspective, incentive sales, increase talked a costs. the compensation transportation as

And show see I rest customer, percentage that's I the ideas increase, I sales, will as not your is it's whole it something first know SG&A design, the but every year. with the think typical of for think a we first it just the more there the when that's, million be is spend $X a a it's the quarter. might quarter by of wrong we in And when is. that that's math cover year way, the there. be highest

Jeremy Hamblin

cost? fuel transportation the impact or was What Okay.

Brad West

$XXX,XXX. About

Jeremy Hamblin

follow-up a then or follow-up. not And question Okay. a –

place fully with facility. I you on wanted they've to – is production in hands? agreement this Cardinal impact a wanted to I production. get when know broken a get where Cardinal your sense ground expect a new to Glass and that I taking ore transition sense to for over off of had transition Glass your that You

Jeff Jackson

in is transition first the complete, quarter. That Jeremy. That happened

coming takes move a still What's does equipment, It Cardinal. imagine, our not the those door is glass right? and you – as the just now is from move can while move of to temporary finalized actual of things. All overnight,

has fully equipment the piece for months a it So process bed here now, out last get shortly and went been very our production here will as the they with last that and you is few of receive building. working of that team And transitioned, smooth.

Brad West

obviously Cardinal they're pretty now, multiple plants, Jeremy, that Yes, we're big glass has outfit. so right from And locations. their various getting just

necessarily So them our our tempering to they meet need of demand.

our use it's their needs tap will but to supply then. meet to on Now they were demand our they and once running, until that other able up plants to

Jeremy Hamblin

If just could take I Great. more one in.

the track. were housing on mentioned You starts

the XX,XXX I year? if that roughly would normalized share be closing starts and be about GAAP year. you think of per that I that for XX,XXX, level about a on just XXX is incremental think you heard, what maintain revenues,

Jeff Jackson

Well.

Well, thank Jeremy. think you, about me Let just that.

of construction construction, on If you what a averaging year, look new we call new we about XX,XXX world roughly last the starts. quarter $XX sales, at and million was company-wide about, in did were that it,

shares another the pick you So same if could up you growth. right, keep that, roughly XX% half of XXX, that's can [indiscernible]

So would that million year. in about theory, I $XXX you would a add $XX guess, million a quarter, be

Jeremy Hamblin

continued wishes for Thanks best on Great. success. color guys the and

Jeff Jackson

Thanks, Jeremy.

Operator

B. with from next comes Our Cho FBR. go Instruction] Min ahead. question Riley Please [Operator

Min Cho

about change couple yes. and impressive a the an backlog. you on quarter Thank questions, you Florida? competitive in environment you're Can talk bit little any your seeing Great. in congratulations and that of

Jeff Jackson

Yes, we competition think robust see I local markets. in still the

And more of up the our fact, they competitors that into at away Miami when markets launch to that's in a have products. their we we couple to high-end line in kind We versus lower-end high-end times. Sparta market of the do go creep that's try in and area,

do combination. that region really, we north of a part us, [indiscernible] this And attack other we of this really that, of product performance Jacksonville around kind try standpoint, so esthetics regional-based. – But to there's that and But make kind of players region. it's couple vinyl launched From and more we probably will that's their our see no a competing or on have and market.

in growing think somewhat they're market. I the

of go so were think people We’re a and we’ll but at definitely activity Florida, the a least live XXXX share, taking week some there’s dynamics in net in lot getting I construction market a Florida in there.

Min Cho

very kind of are that you’re Is guys for working diversification is But that Florida? in talk that of your you forward? going strategy Or on little can about Florida something time being? obviously, busy right the hold bit outside And, on Okay. now. a you

Jeff Jackson

outside not how the I only don’t the they’ve have our brand long, dish, not It’s outside state, we’re pushing good. I very grown mean

Brad West

and Out year-over-year we’re doing numbers XX%, international very good. actually solid We’re smaller growth. our market of but state, XX%

Jeff Jackson

on that current always best we’re with brand our that’s an initiatives said, we Yes, capital With going much And the and for here. our we generate state obviously, way do use growth activity, looking to have active. outside still ongoing activities portfolio. so the very that’s the right accretive acquisition,

Min Cho

just can on still if in XXXX? expecting And growth division. provide Were your you update you an commercial Okay. then

Brad West

Yes.

as as We other locations than well. in down also Miami are in

they nice out working been footprint growth this had year, Slim And well. just some expect that we’ve And the are growing So last expanding Front continue new their growth. – with year. launched they we as products we to that

complement So it’s our definitely a business. good to

Jeff Jackson

Hopefully see. don’t I

$XX this year. it million let So be plus

Min Cho

much. very you thank Okay,

Operator

ahead. Okay. Please with Zener from Ken [Operator Our question KeyBanc. comes Instructions] go next

Ken Zener

gentlemen. morning Good

Jeff Jackson

Good morning, Ken.

Ken Zener

creaked which that really your it’s really Given XQ had hurricane, out, you stronger your that on times in higher you is what conservatism backlog fact obviously the it sense? kind it guys XQ, this we’re growth up? trends end quarter following – your because keeping lead And I guess, Is the makes the growth strong up, these pause? side, your times taking seeing it had much just of fact the of like growth is that gives higher you strong about haven’t than through would is but at that pause understandable, give you the you from carrying rate the a guidance? given and impact Is comp lead the

Brad West

have operations their that’s see [Indiscernible] part to things a on done that the It’s and market customers deal in We continues increasing to we’ve risk that, nice and install have X,XXX �� business. been us things base. be of definitely that of labor are operating that, There lot the effectively. the we are our and that been has to impact – tight earlier in who with still have help mitigate year,

you systems storm. you of another including grow. that one then whether from and it’s that’s early factors think different have the consider, could the And destruction be the overall there circumstances just in to that might willing year, there’s So limit to

Jeff Jackson

Yes, the in likely market the again would trends without would April, if the we release. continue say, to next we we’re before any earnings guidance most seeing I come

Ken Zener

Okay. And could aluminum. If of factors. on just I I guess it’s focus obviously a variety in

I going market. you at type your the need right I of aluminum, guess, spot of said £X is purchase now you think XX% it $X.XX. to to where increases remaining have What and guidance in you it are was today price high your to cover

Jeff Jackson

to something not that increase; have it’s and this Well, we obviously as don’t willing disclose products we’d aluminum of well. Yeah. vinyl type and our price

increase So a would line it price the the type price of that’s necessarily seen we’ve in that of past. increases out not with be

year the it doing. typically been more price to actually opposed just to be the amount that have as year calculate do We now. we in we’ve that that But of will the will in one second there increase

Ken Zener

given last it’s the your terms some last – you quarter; the the obviously, how the competitors challenges past and assume, this I Right is of beginning. given just of mean pressure. same good, in quarter programs labor just question executed or are, I well facing in in computer My very

you be redone business, Is production would be a where would feeling taking line. not You’ve there your of just much? stressing too vinyl your growth system that guys because it

Jeff Jackson

allocate future. our is demonstrated the this started think the well. capital but expansion at perfect XXXX the as Miami And XXXX, taking We since in example coming done I investment really see And is the us trends in what and we’ve market we the in what of with No. off volume we’ve handle facility.

plant not glass, Brad business. no; square going to that we’re up feet, solid that comments. No, away remember was it’s We’re is We production quoted shifts up bringing now facility that we’re forming that which vinyl could double walk add and actually standpoint. labor address even branding growth from to full not cardinal answer full. his from That the is approximately plant in And well, out to at growth in. and – XXX,XXX strategic because capacity CGI capacity expanding what in still to a standpoint, as in in both we’re add demand. just PGT, here, of capacity

away. margin it a high-end long to company, as going we’re – As mid- profitable, not to going to give it’s not we’re we’re

walk So standpoint. the would from a time make is away business sense profit we from only didn’t it

Ken Zener

that you on any sending, videos to look website? I’m if your at them those And Okay. of are your trying have customers

Jeff Jackson

We’ll okay. that, you’re them. Yeah, isn’t here, time – definitely all see doing cool, are they show the reality next I’ll

Ken Zener

Thank you.

Jeff Jackson

You’re welcome.

Operator

question & go follow-up ahead. with Please a Hamblin Company. have Jeremy We Dougherty from

Jeremy Hamblin

on was asked, been the cost. my guys. Hey aluminum that has question Actually,

So, you. thank

Jeff Jackson

Thanks, Jeremy.

Brad West

Thank you, Jeremy.

Operator

would session. conference back the to for question-and-answer Brad turn remarks. like West our closing concludes to any This over I

Brad West

we today quarter. you to us to Thank you you guys joining look next speaking for and forward Thank everybody.

Operator

today’s concluded. now has you Thank conference for The attending presentation.

disconnect. now may You

PGT Innovations (PGTI) 1 May 182018 Q1 Earnings call transcript