PGTI - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to the PGT Innovations Inc., First Quarter 2022 Earnings Conference Call. All participants will be in a 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 Vice President of Corporate Development and Treasurer. ahead. go Please

Brad West

our morning, Quarter Good the to PGT Jackson the today John Thank Investor and Conference First and Jeff CEO, XXXX President on Financial Call. Innovations Officer, are Kunz. you. and welcome Chief With call me

Investors presentation company website, available section This to today's we earnings have find you well as webcast our the earlier company's on recorded replay discussion. be issued posted for release today of and is as the will the On press the will being slide accompany website.

forward-looking the please financial and results our disclaimers statements, including Before the Slide statement discuss that our earnings cause that presentation prepared we and of filings statements performance in risks, uncertainties Those contain XXXX statements included begin direct other remarks, your involve factors X differ materially. actual release could the attention to SEC forward-looking press statements. to disclosure as the as remarks outlook. well about our on Today's

on filings. Additional SEC from in recent most factors to the company's is differ actual expected results results available information could cause that

Additionally, the we on A information most and CEO in will provide company's comparable now I Jackson. note time, Slide help release results present to is believe the and of compare tables and to presentation. Jeff GAAP to our investors included this At prior the additional earnings hand attached reconciliation financial measures, to the in we slide the appendix President, call using performance. report non-GAAP X, the measures which directly that over

Jeff Jackson

customers. record I'm go everyone's team We today's PGT the by for good very joining our Thank year proud above to thank and on quarter. and of a the off and you service beyond to you, Brad, delivering started and efforts call. morning, everyone, Innovations us

losing while quarter we hiring and from done as the Number this members chain to growth our for PGT training, steady Our of efforts and have manufacturing safety automation sight our team result our processes, never improve our of is goal. supply each Innovations X management,

messages the the on from key strong in the hit growth quarter to XXXX, X. We year. Slide past running Turning the for carrying forward momentum this ground

overall sales net the model This latest Doors, growth includes million our the our quarter strength added year. the & record first estimates. of XX% Despite a inflationary quarter, record pressures in above million $XXX existing acquisition to brands, Our prior $XX XX%, increased Windows our organic compared acquisition, a reflecting to internal on another and closed of performing basis taken Anlin while to supply we orders margins new drivers expand to by improvement last after The able main throughout of X% of series for our XX% quarter year. including the XXXX, pricing price EBITDA actions of and increases labor to challenges, chain costs originated November XXXX. were of and a adjusted X XX material that points include compared first

improved times performance during operating in a brands. quarter the with reduction substantially for Our certain XX% lead

spend, manufacturing whenever As always, and processes. costs control to possible quality consistent we our focus marketing on our through work

the without while our would chain. not our Additionally, improving increase possible been management successful to margins production ability of have supply

of market. volatile to an on have volumes of impacts obtain hard worked aluminum the pricing hedging We minimize our help extremely required programs and

offset any continue actions teams this will to spot pricing and prices. monitor Our take increases closely to sharp in

of X.Xx. leverage manufacturing of run We balance cash Additionally, of quarter with minimizing ended of rate glass industry. provided seen first capacity, the glass million and the additional our our impact acquisition shortages net in Eco an we've has $XXX the adjusted a

through flexibility gives both Our balance sheet us strength grow effectively capital and strategic continue as allocate to we to to the look acquisitions. organically

quarter quarter. sales and demand prior versus region beyond. strong quarter in our of year for trends. growth Slide X our our key XX% in XXXX our meet organic region, sales we'll the Western across the our markets, presents while to and balance first Southeast XX% positioned continue over grew grew Organic well are sales We the

well NewSouth very sales of continues to perform growth with XX%.

Our three contribute new stores growth. to in XXXX opened helped this

stages Fort will opening bring currently Worth the new in of Antonio. in count end Atlanta, This year XX. San Dallas, stores and We total the at various to are of store

Dallas leases For Fort up both our training. and been signed store finishing stores, their operators Worth and have are

orders store Our cutting Atlanta July. and taken in our we are million, official has already of rooming $X.X planning

lead average quarter. our strong demand on in improve backlog $XXX our at full end our on-time has metrics, $XXX resulted focus to million, decrease allowed improving down has in of While us manufacturing times from performance slightly backlog million the of our continued and fourth a the

during times. price In decline impact resulting growth during lead reduction is did we a of shorter primarily result in backlog the operations, the due year increase mostly order in rate quarter XXXX. the a improved prior of of Our region, into QX, forward see QX to demand a Florida continued pulling

QX in our of most XXXX, recent of increase. price We are strong ahead recovery seeing

orders most XX%. quarter-to-date one product of tax exciting are QX DeSantis last relief Florida of in Florida This you share pieces up a week, Ron like Governor House provides categories. today bill signed number the would for I information XXXX. is Our building of with Perhaps to Bill

communities. Florida doors, profitable harden sales long-term want against relief and great and garage and incremental for for provides and customers impact-resistant will doors strategic home important He first years seek in to to homes, and of tax other This the worked the two CFO, the concept benefit I by them time Floridians and mentioned as for tax while over Senate in first us installing to Florida think summarizes framework market. Patronis. I improve their shareholders to This servicing with receive R&R X value For Slide a both safety storms and allowing Jimmy Florida products. we to also in this value their impact-resistant to building the ever, the our ago. is exemption positive program homeowners, products operational growth will him among homeowners our items. this we initiative Florida's for homes House. two-year create this to approved devastating get thank for hardening a windows impact-resistant be

Our performance first products features, and us allows demand. and builders customer?s pillar which customer-centric value our to offer innovation, with is the

And of Our We in new our standards. second training to have heavily the talent. focus enable labor successful high-quality team XXXX, manufacturing we in support in them by and board. our members consistent the pillar to by in tight the team the safely right working is beginning is be locations providing invested on since investing bringing a new members right today's meeting market. Having hires

offering and where culture benefits they employees and maintaining while competitive are attract We continue to our know retain valued. talent

XX starting have by XX%. hourly the increased Over past we months, our average rate

members the experiencing, maintain good Given life. significant helps our a this is our team quality of inflation country

World, named for first of will quality in George who members Coopey, we All result our the environment team During this new improved programs a XXXXs. job Venice satisfaction, PGT our safety. leader new in team at quarter, start team, believe a provides We and Innovations facility started training for location for our training the launched Coopey a greater long-time carriers members. Venice their controlled back learning higher a will which level

high expanded In with school. addition, our Venice we local our partnership

PGTI paths Our gain potential Pathway students to mentors. manufacturing trade to career experiences opportunity explore skilled program PGTI and an for partnering environment the in provides with by

students, rolling about We program's the our high potential of in this locations. are process and our program school to help out at we the are excited all

pillar third our Our scaling is business.

we intently meet times lead For growing on quarters, that our and so improving have several can demand. processes, we been focused manufacturing reduce our

a lower XX% lead Venice resulted back has in this operations times, this in Just improvement quarter, our less and efficient we warehousing where sites. experienced more orders,

fourth is achieve cash Our growth. profitable free flow pillar allocating to

We opportunities are the processes strategic to through improve grow right production consistently acquisitions. product evaluating or development, new

evaluating disciplined our continue for we we while time planning to of acquisitions. from part results. All as our be to Currently, acquisition in have above-market grow look this our capital We deployment number processes. a delivering our possible accretive targets relationships strategic of built come over as opportunities business are will year

to to to results John? I'd the call in turn detail. over our first Now like greater quarter John review

John Kunz

Jeff. Thank you,

during quarter. to $XXX including the were a the continued construction. and XX% X, first organic million we revenue Slide year businesses, by In growth growth on Anlin pricing in actions increase NewSouth our process implemented sales increase strategy driven improvements reflected XX% costs. successful and able prior our The been This from As quarter, have and rising was over from legacy the XXXX acquisition. generate XX% our for quarter, XX% recent new was offset to and breakdown us allowed R&R

increased Gross compared was sales cost by XX% material XX% grew Our to quarter, volume to legacy new $XXX.X labor headwind. organic the sales the our the increase of of and a XX% profit construction from strength grew organic partially prior year and reflecting and for the XXXX, pricing, quarter R&R due quarter offset million, brand. first input

year driven by of those margins basis continue gross manufacturing First actions in growth. quarter XX.X%, was benefit balance price quarter, we believe generate margin investments unit the and prior helped improved points and through our increases, will process operational Recent continued gross than improvements across efficiencies talent the portfolio, XXX to our the higher the year.

grow aluminum needs continue overall company We an of pressures. with strive of at mitigate will cost our choice talent. which and high-quality during quarter, to were employer our to hedged We be XX% helped the

for XXXX. we of aluminum approximately contracted needs As of XX% today, have estimated our

take to and of the We the in and appropriate. as the actions expansion other by Selling, first and and continue to monitor costs SG&A from recent operation in continue expenses prior driven increase our to administrative see aluminum, considerable year, increased NewSouth input volatility compared quarter and for our our the revenue. the we'll acquisitions, aluminum general

to costs to look quarters revenue as will our We continues the in leverage these coming grow.

was than year $XX.X million, higher prior quarter. adjusted EBITDA the XX% Our

XX%, the diluted in diluted income adjusted $X.XX quarter in in with quarter Our per of or $X.XX increase million of of expectations. came XXXX, expense or reported share $XX.X tax XX%. first net million compared We to at an $XX.X per our the in share line

Slide including on million unused liquidity and on revolver. Turning a cash debt now capacity We of sheet with of total million million, balance balance had $XXX We to net million. our of the ended X. $XXX our quarter $XX of $XXX

net XX-month end at adjusted the debt of to ratio X.Xx trailing was run quarter. the EBITDA Our rate approximately

flows we acquisitions see reduce EBITDA significant conservative cash a With both Next, and profile. after on to acquisitions. used policies, leverage organically, leverage financial our conservative Slide we while maintaining X, have historically our you strong can that through have grown

Our long-term priorities capital On within at Xx. our see target glance. Slide leverage a to can XX, remains you long-term allocation X

includes to our priority first allocating reinvest drive margin for and Our which we capital growth. is business, that projects to in will revenue expect

have investments grow to continue and selling our operational strategic us initiatives metrics we These For to allow margins and invested revenue. in improve will and reduce our to example, to costs. efficiency enhance

target range Our CapEx X% is sales. of to X%

we structure, capital committed to play expect are our would strong balance we sheet conservative future While a in growth. role acquisitions maintaining to and a

to the continue strategic acquisitions to expected target value grow and long are are with that will term. We priorities aligned our over growth shareholder

new opportunities channels enable Anlin great this. for to look example regions, us that will We expand is will or a into of products.

In or addition, give manufacturing we our Eco. we continue enhance technologies, acquisitions to with chain our that will strengthen strategic did supply us as seek will out to access capabilities to

We overall expect our of integrate And Jeff. carefully to acquisition would and part I evaluating while delever other to acquisitions to call back now our strategic turn possible over the plan. like opportunities as

Jeff Jackson

Thanks, John.

Next, on for XX. I outlook will our Slide review XXXX

optimism order our performance during believe strong can on the continued land and the with the $XXX EBITDA. results, of increased sales recent million that results indications book, sales upper profitability. $XXX range and we the are gives for improvements, our narrowing EBITDA we April, both strong We with Based four second to coupled show initial to through million. operational us our a along the for in months, Given that range quarter first end

We continue EBITDA reflected improving recent our modeling our of assumptions expect on Slide trends margins. The XX. sequential are to

would shareholders. close why strategy our I like that to never reiterate for Turning to I creating believe positioned execute value has XX. To to for PGT Slide remarks, Innovations been our our better long-term prepared

that a been have acquisitions. with by brands are we boosted recent national strong further First, leader

indoor/outdoor living both Our to penetration, and gain the markets. products impact-resistant in in continue

continue show growth. to we geographies serve strong Additionally, which population

improving the poised remain growth profitable our including the growing capture margin term. Second, West R&R growth portfolio business over expansion and Coast, and construction diversified long both operations, channels. our which We seen nice the and our on has From to new Southeast to the XXXX. the through out and drives West, is which product in continually a efficiency in focused direct-to-builder Texas

the both and a list has Last part have but new their R&D We company to innovation customers of premium of products talent. afterthought, on needs, and culture. long and been investing an our with in product that developments history continue sustainability to innovative certainly we provide plan changing a long meet not

will to have business responsible and focused health team in on always members. to manner. as conducting we welfare We socially the further elevate a our our of are commitment we environmentally demonstrated, seek And and

for ever, how will I I Forbes to they day time and our team Operator? fact, out. by In what begin time, close that by a was in PGT first strong do named Work. member prepared Q&A. the day Innovations us Place and remarks started, Best as for X,XXX let is entire At this family my the thanking

Operator

Thank you.

this come begin question question-and-answer roster. from Hughes Keith to time, We the At And will we momentarily will will [Operator assemble now with pause our first session. Instructions] our Truist.

Keith Hughes

to the units the pricing growth? quarter? Wondering the more on got how makeup was What if could you organic you in talk about

John Kunz

price improvements. breakdown, Sure. or meaningful we increase The price had

remember we there, we that then was the improvement single, in some volume to And we had a our think also we said had overall XX% in call growth I had. mid-single-digit in price X% it, in you call, range. that the but

So the that's sort units. breakdown of between pricing we and have what of

Keith Hughes

were plateau Obviously, you've in more think I Okay. talked to talk -- see -- And increases. do the Are guess plastics. on inputs more hedged about your in you could seen you on they second? aluminum. what you'll the increase sequential how you you out? Or starting

John Kunz

around seeing flattening. late vinyl $X range. really And really is since year, that we're on last What No. pound into a really of QX QX. the It's occurred steady it's QX a side that

that's much for seen relatively us. volatility, flat and been haven't we So,

Keith Hughes

year? anecdotally you serve your you Okay. And times, to just as lead -- final some the just question, struggles come of quarter if they business I that. the you talk guess on last specifically and into of the the pace Have down your had could head ability versus around

Jeff Jackson

our some last times lead Yes. Yes, we've times. have and Keith, products Definitely, year, versus this Jeff. lead our down is on come half of cut in

pressures certain that depends of stretch a times. to on lead We it some four-week aluminum which our the side So, vinyl on time brands. some XX terms lead have up and impact weeks brand still. out brands in have actually They of still

that. we there address But note. we've year, we're got capacity more a we adding year the So, strong to as ended ended on the

So, like increase. the quarter quarter, to mentioned, surprise last if I increases a we quite with saw you and us, think had we saw. frankly, And it first first we didn't the price I volume compare big year's

a actually comparing XX%. tough we're pretty we've another ourselves we it entered I against as comp. And also So, as mentioned, a of month -- was the second quarter, solid April,

So, we're good as second the feeling about volume well. quarter

Operator

will Phil Ng Jefferies. with next from Our question come

Unidentified Analyst

the and all but off from can products getting your the And for how [Maggie] lead color lead outsized are first, by then us guess between of to you product, It's April the Could more give Phil. sense normalized a is order times? any anything varies thanks if far on on of markets type end guess, Jeff, again Yes. I on regions, you times, for there? breakout trends. you I strength seeing it give back

Jeff Jackson

Sure.

driven look the more across not West. volume at Western think had of you most as portfolio the growth If robust I also only obviously out ability like so well. The we've grown mentioned, market our acquisition, has I is product to brands, our growth they solid PGT's seen Anlin And Anlin the tremendously. towards first Anlin, quarter service our better. is

and above Our into creeped And are year, full the in down XX% level. on-time XX%. they last metrics

as increased quarter, up warehousing. hourly to We made if investments in quarter, we volume year pay in Myers. off the to our improved we in made this We've we investments coming also you the we're mentioned, warehouse. people. on-time in hired organized starting We the over and average Fort pull And the seeing XXX order metrics. the I've rates opened folks recall, this we levels our on average. XX% So, And way hourly full last up for general

So, I vinyl, our investments with we the It's ton see vinyl frankly, different would around with a enter coming all the have And investments folks. of times as tap. should paying we've We've say, issue, quite in ton in glass initiatives of still, quite infrastructure. all made lead we into quarter is lead resolved down. frankly. our third made times we on that our We?ve a off better

of the Eco for Cardinal that With well internally this very acquisition glass and year doubled as our capacity has performed us well.

as supply well. So, chain from a there indicators very seeing we're favorable standpoint,

turnaround lead there, of the and you because average Venice, again, driving a seen sheerly in our if the probably but is over at last XX%. backlog still performance per sales week down the So, volume almost times lot really four look is is that our the up months we've are really

Unidentified Analyst

Okay. timing then through? next you exciting. the a out And tax and thinking to we coming that And helpful. pretty step-up try really or incremental about should of demand question, Great. That's marketing get word the opportunity anything my are sounds really there to in How exemption about new benefit? the expect the that maybe

Jeff Jackson

if Yes. business is I at R&R. half roughly look you our mean Florida,

I this Anlin?s are our of at is what have XX% total R&R. all look you that, mix, think we also if R&R. we But

to a it that's our alone, you half So, Florida. out business our And impact in which let's call of of if called this the is significant Florida business, homeowner. a portion X% just savings basically,

just almost right savings And customer. save to think official see to initiative. do So, it's price because and homes comes It?s push -- and tremendous And Again, homes is our proactively another harden harden been it of a to state's example State a X% we cutting development edge sense insurance. when decrease always, of this say, thinking, how enforcement. off Florida on to the in code the is Floridians the help I'd the you'll this X% a like their I bat. it's of

if we're So, at brands. our our look look incredibly you well positioned, business, across

here NewSouth We PGT, R&R, have R&R whole but is brand. obviously whole NewSouth the at the

PGT a CGI mix is position, its as Eco. very well great and as well brands NewSouth So and with is our South positioned Florida

to a potential. it's I a program. tremendous think two-year have going It's

rush this to big the see months. don't get I in, So, all it of in couple first

I to be people stage that will out. think able

in headwinds I I to significant standpoint, demand. us and it And meet the think of capacity do be the, a inflation will is help a had, great be of frankly, the other industry for relief nice we're demand some of offset rate couple that us. some various issues facing. going or over it's we're quite so, the But or interest whether that that of to has from years breadth a think next shape building This for

Operator

Zener Our KeyBanc will next question with Capital from Markets. Kenneth come

Kenneth Zener

cycle as extent construction to your interested it. that about apply factories. We has manage would in to an out manufacturer the homebuilders to Good moving I'm times been those side, would times? bottleneck. not a cited or but -- indicates your in able down, just you Or of sequencing have they're you going hear know you? the feel new talk it?s morning, you're market homebuilders their new is point times bottleneck I you going right do the But lead such that everybody. the that direction. a with also going you in like Do say that down, -- down the that R&R, where your delay there. for gone times Windows feel do product Lead for the for as you lead obviously, are that a to

Jeff Jackson

That's problem now. great would construction the company think and main a say, every cycle. and that's I Ken, in yes, case the door problem us XXXX, not question. for Yes. the the was in window I

now is and at other installed they've actually that base first, business, for that waiting If we dealer home there's product, to of -- trusses, what and those that are deal which is actually, construction right to install product the us builders they're -- biggest be construction growing, say for majority to block all issue is sitting majority are now actually concrete, our our now a ordered in portions to I telling heard in finished new you point of our look I've new waiting much in new needs where it's at a our be to on windows. orders serve cement, now, for those the Florida. are accept at getting here construction more that the of trusses, install dealers we prevalent the least some would builder the

I officially can the So, comes we say, construction the side. to when are no issue it longer,

Kenneth Zener

that's guess good. I

Jeff Jackson

all time for have of again, an them builders, we lead times our we production look And to -- FYI, to for Yes, time buckets. Just weeks. and various three our you they're the And care five are three if five lead as weeks. lead our take at

Kenneth Zener

appreciate you've do price see I us if to could about pushing been that. context that. related and Excellent. Maybe obviously, we good -- give you little very a through can

volume, digits price single If in that XX% talk volume. you Is on that in the growth, imply organic about low XX% -- X% would quarter

John Kunz

yes. right, about math, good Yes, That's that's correct.

Kenneth Zener

of the that very in the us little don't volume give -- you could moved kind a for and how last give I Could hire i.e., -- you so this us you much which in maybe has volume know just an we people, a know integrated year, growth that but you, have high LTM to of need of big front because trend you like if well. you just created, past, how

you're cost you. the the the And Do really about get of a in because within had obviously, we etc. that volume. Western context, etc., you XXXX, isn't perhaps handle you that we to challenging to volume Windows have have didn't I'm swings then lot well comfortable different, You that's because how if that for tick-up see trying on a is price, kind you volume But ask up think us volume that LTM, more price Anlin? extreme obviously by you of and region you have volume, context it that? rip Could new on at a with The the the West be how and if contribution? give of focused if little sense of different might volume if that out then

Jeff Jackson

geographic of based will off see I a But million how in started has we can piece to take that try sales I'll a question. piece ever. Western. location, $X terms you, Yes. off their Western in year that, averaged it of in a We've strongest and tell of over John take day

So, if necessarily. continue does, a it standpoint, continues value be we're about Western. the that hitting in Western We actually, trend hiring capacities north value out due But that $XXX from if ready. now, hey, production And $X million think trend million don't will of again, of to folks. technology, we're it would of just production expanding and we're

So, standpoint. nicely Western's quarter And I like first mentioned in most growing from its a finished on earlier the company's volume very -- history, the quarter of call, just ever Anlin best its Anlin. the

as volume So more that's driven well.

NewSouth So, Worth the volume the more volume will, lease. is been Again, just Dallas signed a Southeast. robust, bit Fort growth you said, West We probably stores. taking opening if off. has With new we're out the that up than little and their

out And I'd be actively Dallas months. and going The they'll Worth locations. Fort and so, we'll those be are into trained, already say, in to operators the next, three

volume a tremendously is growing standpoint, from So, NewSouth well.

builder started Here to I share. weeks. in given corporate actually started started the really are as from And has lead performance, our I've we've three corporate to we builder times have in market Florida, our back mentioned you, that five market, in think taking

accounts And our XXXX, literally lost frankly, accounts we back. performance, quite got some we we've those due so, -- in to

we we and and State take the of to to get able in about we've that think initiative again, harden the sales break, The with so, been with new homes volume given to on this off the you the that? new is end. for anything construction to tax more us, as think on R&R side volume the And stable market, there to add Do side want R&R Florida?s well. the incentive is

John Kunz

the hit only know when seen quarters, it we you The see growth I is top been point by price at LTM, look -- I looking growth. influenced, volume, that volume our if No, look other But revenue, quarters last guess, we've continue I because price well. at think to most in has you're our this LTM, at year. line the again mentioned trying you price I Yes. year, pretty obviously, it recent to took took that two last you're

there. growth said, that volume Like been it's that So range. I has in mid-single-digit

For that expect we type would I of to that where off in but have right QX, number, are LTM get volume an I could continue. we you don't hand. probably growth

Operator

[Operator will from Rehaut come Instructions] Our Michael with JPMorgan. next question

Michael Rehaut

First, of if terms just organic little couple growing. I a NewSouth years? bit Western they've into of wanted much how the growth you to And -- a of us how past kind been kind and can sense of over of delve in give

your in years the over businesses segments. the over the growth those that relative for rate of although to strategy see kind You alluded of of kind what those seen to implies it couple of a years, that roughly $XXX do past double, the execute might you've said rest you continue couple you million how in next not and particularly to the run But you which at rate the of as kind year. of continue

Jeff Jackson

Yes.

construction call more heavy That there aluminum, doors vinyl that's instance, resides. look our to choice, Florida. here for on in platforms let's was done new more you is because the basically what more duplicate unit. of Western -- and we've markets, R&R of If it goal business where at concentration The margin both

we done we've So, by think that. adding Anlin,

Western, So, in future, installers see other the CRI. distributors to We of was what year. you'll and the thing buy last one that did with did called our we

window now division. that through actually the and we're our Brothers. is and certain process CRI We of what instance, it door actually install whole for so, have we out rolling And doing accounts, our Toll corporate for actually controlling

So, start of And install. potential with call then that's, direct have there's we able a there's we going think R&R we and also goal we to it, Anlin to Western's -- portion market. Anlin, get brand in the distribution. there the product growth the tremendous as builder distribution, think tremendous to through provided that there's to upside Well, portfolio to Anlin's Western take that pushing there product that. And R&R Western the be that acquisition was an

say, will, those if initiatives, two biggest business So Western the for, probably you I'd our are unit.

So helps. hopefully that

Michael Rehaut

as I thoughts about as, -- to represent helps. deeper these maybe in of just of over said, curious that kind certainly well. a well new organic like how growth different just it unit continue the resulting for I guess store Yes. to as in couple you of for you Any years might terms mean initiatives I that as little around NewSouth, think strategy, growth there. next rates execute what drive the

Jeff Jackson

Yes. mean -- was Western the guys. say next initiatives, XX% I for a for just QX mean, to two growth of it's instance, -- I rate those couple order hard over years growth

of yet. in itself, mean So, that channel an and they're R&R I and not

we laid growth we of be there's if in implementing game. to Again, in think just and execution that out the kind year, Western. you out will. So, model, going It's those early CRI strategies new execution, that of bought call last just to our for I tremendous we're two hard this the possibilities

In By stores. up bought $XX opening roughly, retail. million. of year, NewSouth, we'll have we in in $XXX their this brand terms When retail? the business XX last it, million year, million $XX was of NewSouth, And XX-ish, we've sorry, end were open. stores I'm been retail there call

to again, up currently stores And executing So, -- in, to we we've almost doubled, And legacy going tax that's in the R&R which, well that that call call credit in opening that's the it, Florida, is environment help that we're stores. both business. what also new continue.

alone. up sales year, million instance, we taken has for Atlanta Atlanta, Atlanta off us. in $X wrote almost Already for to So, in this

and being months first that's in of the just -- open. So four

of you area the we to So, were of we and that million where we Dallas, Worth population go people XX basically in is that what, concentrate kind in that into Texas, going between as have Fort triangle Texas. that triangle almost, And live Houston. most of think

So, that year. last And Houston and Fort up store NewSouth our it Texas. other started will area. year, and we is to will it by locations with the off locations plan in followed open within be This closely obviously, Worth, be Dallas

we markets we've as off a manufacturing, again, continue into direct-to-consumer, of based top seen, is geographic NewSouth advertising. direct And think performers our that one will to expand be model that with we So the install we growth heavy new model.

won't I success in our and model necessarily and success of the road name that for on competitors, we've following TV, we're other see we've that that You'll similar call, of us seen but companies seen with on kind some map. other

Michael Rehaut

improvement about great. XX% few one, one think guess gross you rate trying SG&A, you been -- in metrics think the to little just high a -- could just about operating that's you've XXs on the bit Is little further grow, and margin? gross push right XX%, margins to see to the gross around and margins over think that going last and I continue to SG&A last about the SG&A No, forward? as years. of the and two side way Or on leverage to the a those to

Jeff Jackson

in million-plus close quarter, of I'll in first on We side. see the even with on bit side That by SG&A is $X in the SG&A business. particularly be side the of to going We a little Well, leverage sales definitely to year, could business start heavily the way. unit marketing marketing. this the and the invested alone new

how we go So historically that's market. since that's doubled bought basically NewSouth. our But marketing to they

marketing a So, in instance, Texas. mature, sales we in see mature you that SG&A as market, getting leverage the will leveraging there, come for Once we with that investment will marketing. in start markets start those

think, within service triggers, underway. call all to other whether we'll going an I leverage, leveraging various which currently our there's is it's to have start our initiative we consolidating centers across SG&A, field So, brands,

Again, Gross warehousing it with last to of In terms margin. we're issues. had -- margin, a PGT inefficiencies, of go trying we at year need gross with we that tough reset to base.

So, set on gain we've power. even From point, got in months and we're we're demonstrated And pricing rely last going we've what traction has that far lost. level to try we not we've margins. Every we've back though to going stock. that four increase pricing to the improve in done so the taken is had, pricing

-- various But labor, labor on the side more now of of take So at that's more in underway more technology margin. want gross how plant. initiatives do glass looking drive equation, enhancements and long what operational making we side machinery do things And have of the we we automated innovative more into terms the adding on in to in we're cost There's to concentrated out is term? that that's we how whether been to demonstrated. technology this

and too down, like construction. that mix, that versus keeping I tilt we are construction companies goes think We balanced mix that door at margins that, balance quite of way look you by frankly, window If also many try to new And share tanking. towards new seen We've that do when keep R&R. the the to two. between

see will as focus more you in we changes other. economy, or so, on the And the one

We substantially. lead win we're that that's new share we our that in winning We're concentrating market by on with we Florida lost lost -- construction right instance, last And back gained. share that. tried here now, what doing probably here we the For in year. back times to

R&R We either will as the do market new -- in shifts. construction can that or we

Michael Rehaut

I last all really could. the Jeff. appreciate one, detail, Okay. if One I

should expect deleveraging to think versus SG&A year or an basis XXXX. are basis out percentage net you the how maybe Or full little flattish about year percent the due on the on bit of a there year a for increase itself of over basis? -- on to year-over-year be Would on and a that a marketing basis, straighten you Just to investments? a full the rest

John Kunz

on And probably a a XX% range. about think XX%, full that think percent for that's Yes, we're right. in year, I basis, I

are coming to doing little it respect mentioned, we try to anticipate a and Jeff continuing drive going it that bit are it with all those in more the up We we're it. We leverage to programs investments. quarters, but do that the make as leveraging

so in So have that think, QX. about We're XX% or I you that makes sense. range [XXX],

should see some we off So, of leverage that.

Jeff Jackson

still is not that you've strongest you say tracking quarter. our laying and QX invest I -- for said, are little and and with long $XX the and the are or time. I as or with to been invest in around in we will marketing Yes. did would that, I I continuing usually heavier. our on EBITDA, side and [XXX] -- a in And the Like QX QX, even a QX mean, arguably the we NewSouth you was just stores quarter. strongest in groundwork lot know us up opening this, would the remind produced in that, the market QX opening, the Texas especially But a same that add well. million. XX.X% to Atlanta I QX --

just can do you So, math. the

QX, So, long can you as if the they're potential we year had in imagine going going. as this things way $XX keep the million

in So we?re -- and and that's leveraging of that drive the seeing marketing. combination a gross line. to continue margin top improvement That's

Operator

question-and-answer Kunz, remarks. This John to any closing turn I like back conference to CFO, concludes the our session. for would

John Kunz

our call for you today quarter you to quarter August may review look We call. again, disconnect, operator. second Thank on us participation forward the first our joining Thank to your earnings. Yes. in early to review and you

Operator

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

You disconnect. may now

PGT Innovations (PGTI) 12 May 222022 Q1 Earnings call transcript