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): October 29, 2014
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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·
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Changes in new home starts and home remodeling trends
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·
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The economy in the U.S. generally or in Florida where the substantial portion of our sales are generated
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·
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Raw material prices, especially aluminum
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·
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Integration of CGI Windows and Doors, Inc. |
·
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Transportation costs
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·
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Level of indebtedness
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·
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Dependence on our WinGuard branded product lines
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·
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Product liability and warranty claims
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·
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Federal and state regulations
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·
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Dependence on our manufacturing facilities
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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 October 29, 2014.
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§
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Net sales of $77.3 million, an increase of $12.5 million, or 19.2%;
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§
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Gross margin, adjusted for costs related to the start up of our new glass facility, increased $2.6 million or 12.4%, to $23.5 million;
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§
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Selling, general and administrative costs, adjusted for costs related to the acquisition, of $12.8 million, or 16.5% of sales, compared to $13.4 million, or 20.7% of sales;
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§
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Adjusted EBITDA of $12.1 million compared to $10.2 million;
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§
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Adjusted net income of $6.2 million compared to $6.4 million (reflecting tax expense of $3.7 million in 2014, compared to $5 thousand in 2013);
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§
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Adjusted net income per diluted share of $0.12 compared to $0.13;
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§
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CGI Net Sales and EBITDA included above are $552 thousand and $123 thousand (or 22.3% of sales), respectively.
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§
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Net sales of $221.7 million, an increase of $44.4 million, or 25.0%;
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§
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Gross margin, adjusted for costs related to the start up of our new glass facility increased, $9.9 million or 16.7%, to $69.4 million;
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§
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Selling, general and administrative costs, adjusted for costs related to the acquisition, of $39.1 million, or 17.6% of sales, compared to $39.2 million, or 22.1% of sales;
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§
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Adjusted EBITDA of $34.2 million compared to $28.3 million;
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§
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Adjusted net income remained flat at $17.4 million (reflecting tax expense of $10.4 million in 2014, compared to $5 thousand in 2013);
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§
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Adjusted net income per diluted share of $0.35 compared to $0.33.
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·
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Changes in new home starts and home remodeling trends
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·
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The economy in the U.S. generally or in Florida where the substantial portion of our sales are generated
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·
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Raw material prices, especially aluminum
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·
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Integration of CGI
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·
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Transportation costs
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·
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Level of indebtedness
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·
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Dependence on our WinGuard branded product lines
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·
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Product liability and warranty claims
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·
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Federal and state regulations
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·
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Dependence on our manufacturing facilities
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PGT, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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(unaudited - in thousands, except per share amounts)
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||||||||||||||||
Three Months Ended
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Nine Months Ended
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|||||||||||||||
September 27,
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September 28,
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September 27,
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September 28,
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2014
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2013
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2014
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2013
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Net sales
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$ | 77,320 | $ | 64,858 | $ | 221,666 | $ | 177,268 | ||||||||
Cost of sales
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54,137 | 43,938 | 152,565 | 117,759 | ||||||||||||
Gross margin
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23,183 | 20,920 | 69,101 | 59,509 | ||||||||||||
Selling, general and administrative expenses
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14,289 | 13,507 | 40,619 | 38,622 | ||||||||||||
Income from operations
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8,894 | 7,413 | 28,482 | 20,887 | ||||||||||||
Interest expense
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1,020 | 1,055 | 2,809 | 2,564 | ||||||||||||
Debt extinguishment costs
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2,829 | - | 2,829 | 333 | ||||||||||||
Other income expense
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1,019 | 64 | 918 | 408 | ||||||||||||
Income before income taxes
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4,026 | 6,294 | 21,926 | 17,582 | ||||||||||||
Income tax expense (benefit)*
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1,694 | 5 | 8,442 | (3,893 | ) | |||||||||||
Net income
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$ | 2,332 | $ | 6,289 | $ | 13,484 | $ | 21,475 | ||||||||
Basic net income per common share
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$ | 0.05 | $ | 0.14 | $ | 0.29 | $ | 0.43 | ||||||||
Diluted net income per common share
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$ | 0.05 | $ | 0.13 | $ | 0.27 | $ | 0.40 | ||||||||
Weighted average common shares outstanding:
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Basic
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47,399 | 46,238 | 47,271 | 49,567 | ||||||||||||
Diluted
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49,792 | 49,257 | 49,728 | 53,097 | ||||||||||||
* Income tax expense (benefit) includes:
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Income taxes related to operations
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$ | 3,700 | $ | 5 | $ | 10,448 | $ | 5 | ||||||||
Income taxes on reconciled items
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(2,006 | ) | - | (2,006 | ) | (3,898 | ) | |||||||||
Total income tax expense (benefit)
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$ | 1,694 | $ | 5 | $ | 8,442 | $ | (3,893 | ) |
PGT, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(unaudited - in thousands)
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September 27,
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December 28,
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2014
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2013
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 43,672 | $ | 30,204 | |||
Accounts receivable, net
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30,266 | 20,821 | |||||
Inventories
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20,089 | 12,908 | |||||
Prepaid expenses
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1,419 | 1,538 | |||||
Deferred income taxes
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1,244 | 2,763 | |||||
Other current assets
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4,271 | 3,166 | |||||
Total current assets
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100,961 | 71,400 | |||||
Property, plant and equipment, net
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58,205 | 44,123 | |||||
Intangible assets, net
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83,701 | 38,869 | |||||
Goodwill
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66,658 | - | |||||
Deferred financing costs
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2,074 | 1,938 | |||||
Other assets, net
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146 | 302 | |||||
Total assets
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$ | 311,745 | $ | 156,632 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$ | 23,895 | $ | 15,522 | |||
Current portion of long-term debt
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1,962 | 4,890 | |||||
Total current liabilities
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25,857 | 20,412 | |||||
Long-term debt less current portion
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192,343 | 72,365 | |||||
Deferred income taxes
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19,880 | 13,380 | |||||
Other liabilities
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1,906 | 1,400 | |||||
Total liabilities
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239,986 | 107,557 | |||||
Total shareholders' equity
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71,759 | 49,075 | |||||
Total liabilities and shareholders' equity
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$ | 311,745 | $ | 156,632 |
PGT, INC.
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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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Nine Months Ended
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September 27,
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September 28,
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September 27,
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September 28,
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2014
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2013
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2014
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2013
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Reconciliation to Adjusted Net Income and Adjusted Net Income per share (1):
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Net income
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$ | 2,332 | $ | 6,289 | $ | 13,484 | $ | 21,475 | ||||||||
Reconciling items:
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Gain on sale of Salisbury Facility (2)
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- | - | - | (2,195 | ) | |||||||||||
Expenses related to offering of common stock and debt refinancing (3)
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- | 87 | - | 1,584 | ||||||||||||
Expenses related to debt extinguishment (4)
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2,829 | - | 2,829 | 333 | ||||||||||||
Interest rate swap (5)
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1,188 | - | 1,188 | - | ||||||||||||
CGI Acquisition Costs (6)
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1,533 | - | 1,533 | - | ||||||||||||
Addition of Glass Plant Facility (7)
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331 | - | 331 | - | ||||||||||||
Discrete tax items (8)
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- | - | - | (3,898 | ) | |||||||||||
Tax effect of reconciling items
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(2,006 | ) | - | (2,006 | ) | - | ||||||||||
Adjusted net income
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$ | 6,207 | $ | 6,376 | $ | 17,359 | $ | 17,299 | ||||||||
Weighted average shares outstanding:
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Basic
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47,399 | 46,238 | 47,271 | 49,567 | ||||||||||||
Diluted
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49,792 | 49,257 | 49,728 | 53,097 | ||||||||||||
Adjusted net income per share - basic
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$ | 0.13 | $ | 0.14 | $ | 0.37 | $ | 0.35 | ||||||||
Adjusted net income per share - diluted
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$ | 0.12 | $ | 0.13 | $ | 0.35 | $ | 0.33 | ||||||||
Reconciliation to EBITDA and Adjusted EBITDA:
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Net income
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$ | 2,332 | $ | 6,289 | $ | 13,484 | $ | 21,475 | ||||||||
Reconciling items:
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Depreciation and amortization expense
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1,141 | 2,783 | 3,584 | 8,386 | ||||||||||||
Interest expense
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1,020 | 1,055 | 2,809 | 2,564 | ||||||||||||
Income tax expense
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1,694 | 5 | 8,442 | (3,893 | ) | |||||||||||
EBITDA
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6,187 | 10,132 | 28,319 | 28,532 | ||||||||||||
Add:
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Gain on sale of Salisbury Facility (2)
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- | - | - | (2,195 | ) | |||||||||||
Expenses related to offering of common stock and debt refinancing (3)
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- | 87 | - | 1,584 | ||||||||||||
Expenses related to debt extinguishment (4)
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2,829 | - | 2,829 | 333 | ||||||||||||
Interest rate swap (5)
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1,188 | - | 1,188 | - | ||||||||||||
CGI Acquisition Costs (6)
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1,533 | - | 1,533 | - | ||||||||||||
Addition of Glass Plant Facility (7)
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331 | - | 331 | - | ||||||||||||
Adjusted EBITDA
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$ | 12,068 | $ | 10,219 | $ | 34,200 | $ | 28,254 | ||||||||
Adjusted EBITDA as percentage of net sales
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15.6 | % | 15.8 | % | 15.4 | % | 15.9 | % | ||||||||
(1) The Company's non-GAAP financial measures were explained in its Form 8-K filed October 29, 2014.
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(2) Gain on sale of Salisbury, NC facility of $2.2 million represents the net selling price of approximately $7.5 million less the asset's carrying value at the time of the sale of approximately $5.3 million.
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(3) The final costs associated with the secondary offering, $87 thousand, are included in Selling, general and administrative expenses for the three months ended September 28, 2013.The expenses related to the offering of 12.65 million shares of common stock of PGT by JLL Partners, and the unamortized costs that were written off as a result of the debt refinancing. Approximately $1,584 thousand of these charges are included in Selling, general and administrative expenses, while the remaining $333 thousand are included in Other Expense (income) for the nine months ended September 28, 2013.
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(4) Costs associated with the extinguishment of our old credit facility as a result of the refinancing completed on September 22, 2014.
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(5) Charges associated with our interest rate swap that was de-designated for accounting purposes during the third quarter of 2014 in connection with entering into the new credit facility.
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(6) Costs associated with CGI Windows and Doors, Inc. acquisition completed on September 22, 2014.
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(7) Start-up costs incurred for the new glass facility that began production in September 2014.
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(8) During the second quarter of 2013, we reversed the deferred tax asset ("DTA") valuation allowance.
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