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): February 25, 2015
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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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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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
Integration of CGI Windows and Doors, Inc.
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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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Exhibit No.
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Description
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99
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Press release of PGT, Inc., dated February 25, 2015.
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●
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Net sales of $84.7 million, an increase of $22.7 million, or 36.6%, including $12.7 million of CGI net sales, and representing organic growth of $10.0 million, or 16.1%;
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Net income of $2.9 million, compared to $5.3 million;
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Net income, adjusted for the costs related to the start up of our new glass facility, certain new product launch and ERP implementation costs and ineffective hedges of $4.2 million, compared to $5.9 million (reflecting tax expense of $2.3 million in 2014, compared to none in 2013);
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EBITDA, adjusted for the costs related to the start up of our new glass facility, certain new product launch and ERP implementation costs and ineffective hedges, of $12.1 million, including $2.9 million (or 22.8% of sales) of EBITDA from CGI, compared to $9.5 million.
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Net sales of $306.4 million, an increase of $67.1 million, or 28.0%; including $13.3 million of CGI net sales, and representing organic growth of $53.8 million, or 22.5%;
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Net income of $16.4 million, compared to $26.8 million;
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Net income, adjusted for costs related to the acquisition of CGI, debt refinancing and common stock offering costs, costs related to the start up of our new glass facility, certain new product launch and ERP implementation costs and ineffective hedges, of $21.6 million, compared to $23.2 million (reflecting tax expense of $12.7 million in 2014, compared to nil in 2013);
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●
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EBITDA, adjusted for costs related to the acquisition of CGI, debt refinancing and common stock offering costs, costs related to the start up of our new glass facility, certain new product launch and ERP implementation costs and ineffective hedges, of $46.3 million, including $3.0 million (or 22.8% of sales) of EBITDA from CGI, compared to $37.8 million.
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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 OPERATIONS
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(unaudited - in thousands, except per share amounts)
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Three Months Ended
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Year Ended
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January 3,
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December 28,
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January 3,
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December 28,
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2015
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2013
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2015
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2013
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Net sales
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$ | 84,722 | $ | 62,035 | $ | 306,388 | $ | 239,303 | ||||||||
Cost of sales
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61,031 | 41,410 | 213,596 | 159,169 | ||||||||||||
Gross profit
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23,691 | 20,625 | 92,792 | 80,134 | ||||||||||||
Gain on sale of assets held
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- | - | - | (2,195 | ) | |||||||||||
Selling, general and administrative expenses
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15,758 | 13,777 | 56,377 | 54,594 | ||||||||||||
Income from operations
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7,933 | 6,848 | 36,415 | 27,735 | ||||||||||||
Interest expense
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3,151 | 956 | 5,960 | 3,520 | ||||||||||||
Debt extinguishment costs
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(204 | ) | - | 2,625 | 333 | |||||||||||
Other expense, net
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832 | 29 | 1,750 | 437 | ||||||||||||
Income before income taxes
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4,154 | 5,863 | 26,080 | 23,445 | ||||||||||||
Income tax expense (benefit)
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1,233 | 519 | 9,675 | (3,374 | ) | |||||||||||
Net income
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$ | 2,921 | $ | 5,344 | $ | 16,405 | $ | 26,819 | ||||||||
Basic net income per common share
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$ | 0.06 | $ | 0.11 | $ | 0.35 | $ | 0.55 | ||||||||
Diluted net income per common share
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$ | 0.06 | $ | 0.11 | $ | 0.33 | $ | 0.51 | ||||||||
Weighted average common shares outstanding:
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Basic
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47,667 | 46,824 | 47,376 | 48,881 | ||||||||||||
Diluted
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49,941 | 49,554 | 49,777 | 52,211 |
PGT, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(unaudited - in thousands)
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January 3,
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December 28,
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2015
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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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$ | 42,469 | $ | 30,204 | ||||
Accounts receivable, net
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25,374 | 20,821 | ||||||
Inventories
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19,970 | 12,908 | ||||||
Prepaid expenses
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1,564 | 1,538 | ||||||
Other current assets
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4,900 | 3,166 | ||||||
Deferred income taxes
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5,160 | 2,763 | ||||||
Total current assets
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99,437 | 71,400 | ||||||
Property, plant and equipment, net
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60,898 | 44,123 | ||||||
Intangible assets, net
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82,724 | 38,869 | ||||||
Goodwill
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66,580 | - | ||||||
Other assets, net
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2,110 | 2,240 | ||||||
Total assets
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$ | 311,749 | $ | 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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$ | 17,328 | $ | 15,522 | ||||
Current portion of long-term debt
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1,962 | 4,890 | ||||||
Total current liabilities
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19,290 | 20,412 | ||||||
Long-term debt
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191,792 | 72,365 | ||||||
Deferred income taxes
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25,956 | 13,380 | ||||||
Other liabilities
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735 | 1,400 | ||||||
Total liabilities
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237,773 | 107,557 | ||||||
Total shareholders' equity
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73,976 | 49,075 | ||||||
Total liabilities and shareholders' equity
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$ | 311,749 | $ | 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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Year Ended
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January 3,
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December 28,
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January 3,
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December 28,
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2015
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2013
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2015
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2013
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Reconciliation to Adjusted Net Income and
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Adjusted Net Income per share (1):
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Net income
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$ | 2,921 | $ | 5,344 | $ | 16,405 | $ | 26,819 | ||||||||
Reconciling items:
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Gain on sale of Salisbury, NC facility (2)
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- | - | - | (2,195 | ) | |||||||||||
Expenses related to offering of common stock
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and debt refinancing (3)
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- | - | - | 1,918 | ||||||||||||
Expenses related to debt extinguishment (4)
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(204 | ) | - | 2,625 | - | |||||||||||
Ineffective and de-designated hedges (5)
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832 | - | 2,020 | - | ||||||||||||
CGI acquisition costs (6)
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167 | - | 1,700 | - | ||||||||||||
Addition of new glass processing facility (7)
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1,160 | - | 1,491 | - | ||||||||||||
New product and ERP launch costs (8)
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402 | - | 402 | - | ||||||||||||
Discrete tax items (9)
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- | 524 | - | (3,374 | ) | |||||||||||
Tax effect of reconciling items
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(1,036 | ) | - | (3,042 | ) | - | ||||||||||
Adjusted net income
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$ | 4,242 | $ | 5,868 | $ | 21,601 | $ | 23,168 | ||||||||
Weighted average shares outstanding:
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Diluted
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49,941 | 49,554 | 49,777 | 52,211 | ||||||||||||
Adjusted net income per share - diluted
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$ | 0.08 | $ | 0.12 | $ | 0.43 | $ | 0.44 | ||||||||
Reconciliation to EBITDA and Adjusted EBITDA:
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Net income
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$ | 2,921 | $ | 5,344 | $ | 16,405 | $ | 26,819 | ||||||||
Reconciling items:
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Depreciation and amortization expense
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2,396 | 2,694 | 5,980 | 11,080 | ||||||||||||
Interest expense
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3,151 | 956 | 5,960 | 3,520 | ||||||||||||
Income tax expense (benefit)
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1,233 | 519 | 9,675 | (3,374 | ) | |||||||||||
EBITDA
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9,701 | 9,513 | 38,020 | 38,045 | ||||||||||||
Add-backs:
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Gain on sale of Salisbury, NC facility (2)
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- | - | - | (2,195 | ) | |||||||||||
Expenses related to offering of common stock
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and debt refinancing (3)
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- | - | - | 1,918 | ||||||||||||
Expenses related to debt extinguishment (4)
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(204 | ) | - | 2,625 | - | |||||||||||
Ineffective and de-designated hedges (5)
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832 | - | 2,020 | - | ||||||||||||
CGI acquisition costs (6)
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167 | - | 1,700 | - | ||||||||||||
Addition of new glass processing facility (7)
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1,160 | - | 1,491 | - | ||||||||||||
New product and ERP launch costs (8)
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402 | - | 402 | - | ||||||||||||
Adjusted EBITDA
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$ | 12,058 | $ | 9,513 | $ | 46,258 | $ | 37,768 | ||||||||
Adjusted EBITDA as percentage of net sales
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14.2 | % | 15.3 | % | 15.1 | % | 15.8 | % | ||||||||
(1) The Company's non-GAAP financial measures were explained in its Form 8-K filed February 25, 2015.
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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) 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 $1.6 million of these charges are included in selling, general and administrative expenses, while the remaining $333 thousand are included in other expense (income) for the year ended December 28, 2013.
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(4) Costs associated with the termination of our then existing credit facility as a result of the refinancing completed in September 2014, which included certain estimates in the third quarter that were finalized in the fourth quarter of 2014.
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(5) Charges associated with our interest rate swap of $1.6 million, including $429 thousand in the fourth quarter, that was de-designated for accounting purposes during the third quarter of 2014 in connection with entering into the new credit facility and charges for ineffective aluminum hedges of $403 thousand in the fourth quarter of 2014.
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(6) Costs associated with CGI Windows and Doors, Inc. acquisition completed on September 22, 2014, included in selling, general and administrative expenses.
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(7) Start-up costs incurred for the new glass facility that began production in September 2014, included in cost of goods sold.
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(8) Costs associated with new product launch and ERP implementation, of which $167 thousand is included in selling, general and administrative expenses and $235 thousand is included in cost of goods sold.
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(9) During the second quarter of 2013, we reversed the valuation allowance on deferred tax assets (DTA) of approximately $3.9 million. In the fourth quarter of 2013, we recorded $524 thousand of tax expense in excess of the release of the net operating loss valuation allowance.
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