CURRENT REPORT
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Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (date of earliest event reported): August 3, 2011
PGT, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
000-52059 20-0634715
(Commission File Number) (IRS Employer Identification No.)
1070 Technology Drive, North Venice, Florida 34275
(Address of Principal Executive Offices, Including Zip Code)
(941) 480-1600
(Registrant's Telephone Number, Including Area Code)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 9.01.
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FINANCIAL STATEMENTS AND EXHIBITS
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(d)
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Exhibits
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Exhibit No.
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Description
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99
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Press release of PGT, Inc., dated August 3, 2011.
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§
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Net sales were $45.2 million, a decrease of $3.8 million, or 7.8%, from prior year second quarter;
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§
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Adjusted gross margin was 30.1%, a decrease from the prior year second quarter gross margin of 31.1%;
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§
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Net loss was $5.0 million compared to a net income of $1 thousand in the second quarter of 2010. Consolidation charges totaled $1.4 million and additional expenses relating to manufacturing inefficiencies caused by the consolidation totaled $3.3 million in the second quarter of 2011;
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§
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Adjusted EBITDA was $4.6 million, compared to EBITDA of $5.3 million in the prior year second quarter.
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PGT, INC. AND SUBSIDIARY
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited - in thousands, except per share amounts)
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Three Months Ended
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Six Months Ended
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July 2,
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July 3,
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July 2,
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July 3,
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2011
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2010
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2011
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2010
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Net sales
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$ | 45,171 | $ | 49,006 | $ | 85,816 | $ | 89,522 | ||||||||
Cost of sales
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36,100 | 33,760 | 68,419 | 62,953 | ||||||||||||
Gross margin
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9,071 | 15,246 | 17,397 | 26,569 | ||||||||||||
Selling, general and administrative expenses
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12,597 | 13,904 | 25,631 | 25,833 | ||||||||||||
(Loss)/income from operations
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(3,526 | ) | 1,342 | (8,234 | ) | 736 | ||||||||||
Interest expense
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1,050 | 1,264 | 2,173 | 2,738 | ||||||||||||
Other expense (income), net
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461 | - | 419 | (20 | ) | |||||||||||
(Loss)/income before income taxes
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(5,037 | ) | 78 | (10,826 | ) | (1,982 | ) | |||||||||
Income tax expense
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- | 77 | - | 77 | ||||||||||||
Net (loss)/income
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$ | (5,037 | ) | $ | 1 | $ | (10,826 | ) | $ | (2,059 | ) | |||||
Basic net loss/(income) per common share
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$ | (0.09 | ) | $ | 0.00 | $ | (0.20 | ) | $ | (0.04 | ) | |||||
Diluted net loss/(income) per common share
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$ | (0.09 | ) | $ | 0.00 | $ | (0.20 | ) | $ | (0.04 | ) | |||||
Weighted average common shares outstanding:
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Basic
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53,659 | 53,649 | 53,658 | 46,694 | ||||||||||||
Diluted
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53,659 | 54,334 | 53,658 | 46,694 | ||||||||||||
PGT, INC. AND SUBSIDIARY
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(in thousands)
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July 2,
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January 1,
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|||||||
2011
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2011
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ASSETS
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(unaudited)
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Current assets:
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Cash and cash equivalents
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$ | 7,677 | $ | 22,012 | ||||
Accounts receivable, net
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18,565 | 13,687 | ||||||
Inventories
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11,581 | 10,535 | ||||||
Prepaid expenses
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1,104 | 881 | ||||||
Other current assets
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3,341 | 4,246 | ||||||
Total current assets
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42,268 | 51,361 | ||||||
Property, plant and equipment, net
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50,697 | 52,863 | ||||||
Other intangible assets, net
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61,040 | 64,291 | ||||||
Other assets, net
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2,086 | 604 | ||||||
Total assets
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$ | 156,091 | $ | 169,119 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$ | 15,396 | $ | 16,696 | ||||
Deferred income taxes
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185 | 185 | ||||||
Current portion of long-term debt and capital lease obligations
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1,296 | 245 | ||||||
Total current liabilities
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16,877 | 17,126 | ||||||
Long-term debt and capital lease obligations
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46,811 | 49,918 | ||||||
Deferred income taxes
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17,130 | 17,130 | ||||||
Other liabilities
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2,158 | 1,903 | ||||||
Total liabilities
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82,976 | 86,077 | ||||||
Total shareholders' equity
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73,115 | 83,042 | ||||||
Total liabilities and shareholders' equity
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$ | 156,091 | $ | 169,119 | ||||
PGT, INC. AND SUBSIDIARY
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR GAAP EQUIVALENTS
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(unaudited - in thousands, except per share amounts)
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Three Months Ended
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Six Months Ended
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July 2,
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July 3,
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July 2,
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July 3,
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2011
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2010
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2011
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2010
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Reconciliation to Adjusted Net Income/(Loss) and Adjusted Net Income/(Loss) per share (1):
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Net Income/(loss)
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$ | (5,037 | ) | $ | 1 | $ | (10,826 | ) | $ | (2,059 | ) | |||||
Reconciling item:
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Consolidation (2)
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1,367 | - | 3,998 | - | ||||||||||||
Manufacturing inefficiencies (3)
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3,371 | - | 3,371 | - | ||||||||||||
Write off deferred financing costs (4)
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420 | - | 420 | - | ||||||||||||
Tax effect of reconciling items
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- | - | - | - | ||||||||||||
Adjusted net income/(loss)
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$ | 121 | $ | 1 | $ | (3,037 | ) | $ | (2,059 | ) | ||||||
Weighted average shares outstanding:
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Diluted (5)
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53,659 | 54,334 | 53,658 | 46,694 | ||||||||||||
Adjusted net income/(loss) per share - diluted
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$ | 0.00 | $ | 0.00 | $ | (0.06 | ) | $ | (0.04 | ) | ||||||
Reconciliation to EBITDA and Adjusted EBITDA:
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Net Income/(loss)
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$ | (5,037 | ) | $ | 1 | $ | (10,826 | ) | $ | (2,059 | ) | |||||
Reconciling items:
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Depreciation and amortization expense
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3,477 | 3,921 | 7,025 | 7,887 | ||||||||||||
Interest expense
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1,050 | 1,264 | 2,173 | 2,738 | ||||||||||||
Income tax expense
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- | 77 | - | 77 | ||||||||||||
EBITDA
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(510 | ) | 5,263 | (1,628 | ) | 8,643 | ||||||||||
Consolidation (2)
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1,367 | - | 3,998 | - | ||||||||||||
Manufacturing inefficiencies (3)
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3,371 | - | 3,371 | - | ||||||||||||
Write off deferred financing costs (4)
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420 | - | 420 | - | ||||||||||||
Adjusted EBITDA
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$ | 4,648 | $ | 5,263 | $ | 6,161 | $ | 8,643 | ||||||||
Adjusted EBITDA as percentage of net sales
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10.3 | % | 10.7 | % | 7.2 | % | 9.7 | % | ||||||||
(1) The Company's non-GAAP financial measures were explained in its Form 8-K filed August 3, 2011.
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(2) Represents charges related to consolidation actions taken in 2011. These charges relate primarily to employee separation costs and move related expenses. Of the $1.4 million consolidation charge in three months ended July 2, 2011, $1.2 million is included in costs of goods sold and $0.2 million is included in selling, general and administrative expenses. Of the $4.0 million in consolidation charges in the six months ended July 2, 2011, $3.3 million is included in cost of goods sold and $0.7 million is included in selling, general and administrative expenses.
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(3) Represents temporary excess labor and scrap expense incurred as a result of the consolidation actions taken in 2011. The amounts were determined by comparing the second quarter manfacturing results with normalized pre-consolidation quarter results. These charges are included in cost of goods sold for the three and six months ended July 2, 2011.
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(4) Represents the write off of the remaining unamortized fees associated with our previous financing agreement. These charges are included in other expense for the three and six months ended July 2, 2011.
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(5) Due to the actual net losses in the second quarter of 2011, and the first six months of 2011 and 2010, the effect of equity compensation plans is anti-dilutive.
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