8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 25, 2020

PGT Innovations, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-37971	20-0634715
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1070 TECHNOLOGY DRIVE, NORTH VENICE, Florida		34275
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (941) 480-1600

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01 Per Share	PGTI	New York Stock Exchange LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. Results of Operations and Financial Condition

On February 25. 2020, PGT Innovations, Inc. (the “Company”) issued a press release announcing its financial results for its fourth quarter and year ended December 28, 2019.

On the same date, the Company posted an earnings presentation on its investor relations website at http://ir.pgtinnovations.com. The earnings presentation is being made available in connection with the Company’s earnings conference call and audio webcast on February 25, 2020 at 10:30 a.m. E.T. The press release and the earnings presentation are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are hereby incorporated herein by reference.

ITEM 7.01. Regulation FD Disclosure

The information set forth above under Item 2.02 is hereby incorporated herein by reference.

The information contained in this paragraph, as well as Exhibit 99.1 and Exhibit 99.2 referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No.	Description
99.1	Press release of PGT Innovations, Inc., dated February 25, 2020
99.2	Earnings presentation dated February 25, 2020

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PGT INNOVATIONS, INC.

By: /s/ Sherri Baker_____________________________        

       Name:  Sherri Baker

       Title:  Senior Vice President, and Chief Financial Officer

    Dated:  February 25, 2020

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release of PGT Innovations, Inc., dated February 25, 2020
99.2	Earnings presentation dated February 25, 2020

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

PGTI Reports 2019 Fourth Quarter and Fiscal Year Results

VENICE, Fla., February 25, 2020 – PGT Innovations, Inc. (NYSE: PGTI), a national leader in premium windows and doors, including impact-resistant products and products designed to unify indoor/outdoor living spaces, today announced financial results for its fourth quarter and year ended December 28, 2019.

Financial Highlights for 2019 compared to 2018

● Fourth quarter 2019 net sales were $175 million, compared to $190 million; Full year 2019 net sales were $745 million, compared to $698 million, including a net increase of $89 million from Western Window Systems

● Fourth quarter 2019 net income was $3 million, compared to $10 million; Fourth quarter 2019 adjusted net income was $6 million, compared to $12 million

● Fourth quarter 2019 net income per diluted share was $0.06, compared to $0.18; Fourth quarter 2019 adjusted net income per diluted share was $0.10, compared to $0.21

● Fourth quarter 2019 Adjusted EBITDA was $24 million, compared to $32 million; Full year 2019 Adjusted EBITDA was $128 million, compared to $127 million

2020 Guidance

• Net sales of $850 million to $880 million

• Adjusted EBITDA of $145 million to $155 million

• Net income per diluted share of $0.86 to $0.99

“Sales in the quarter were down by 8 percent compared to the prior-year quarter, in which we experienced record-setting growth, partially driven by the demand and overall consumer brand awareness generated by two major hurricanes.” said Jeff Jackson, President and Chief Executive Officer. “We are focused on driving growth and delivered better-than-expected sales in the fourth quarter of 2019 across our legacy repair and remodel business. We are seeing strong new order entries for our legacy business in the first quarter of 2020 compared to the prior-year quarter and expect this positive momentum to continue in 2020.”

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“Completion of the acquisition of NewSouth Window Solutions was another step toward fulfilling our strategy to become a national leader of premium windows and doors,” said Jackson.  “Last year we completed the acquisition of Western Window Systems, which extended our footprint to include growing markets outside of Florida. NewSouth further increases our diversification by adding a direct-to-consumer distribution channel. We will continue to pursue our strategy that we believe will drive long-term organic growth and expand our sales through the addition of incremental channels.”

“In our Western business unit, sales increased 8 percent compared to the prior-year quarter, reflecting continued expansion in its core and emerging markets,” added Jackson.

“We ended the year with a cash balance of $97 million and a trailing-twelve-month net debt-to-adjusted EBITDA ratio of 2.2 times,” said Sherri Baker, Senior Vice President and Chief Financial Officer of PGT Innovations. “Consistent with our priority of maintaining a strong and flexible balance sheet, we anticipate that reducing leverage after acquisitions will remain a capital allocation priority.”

“Today we are announcing full-year guidance for 2020, including net sales in the range of $850 million to $880 million, adjusted EBITDA in the range of $145 million to $155 million, and EPS in the range of $0.86 to $0.99. These estimates include the expected contribution from NewSouth Window Solutions. We remain focused on driving sales outside of our core markets and expanding our product portfolio in addition to continuing our execution on controlling costs,” concluded Baker.

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Conference Call

PGT Innovations will host a conference call today at 10:30 a.m. The conference call will be available at the same time through the Investor Relations section of the PGT Innovations, Inc. website, http://ir.pgtinnovations.com/events.cfm.

To participate in the teleconference, kindly dial into the call about 15 minutes before the start time: 800-309-1256 (U.S. and Canada) and 786-789-4796 (U.S.). The conference ID is 161268. A replay of the call will be available within approximately two hours after the scheduled end of the call, through 1:30 p.m. on March 3, 2020. To access the replay, dial 888-203-1112 (U.S. and Canada) and 719-457-0820 (U.S.) and refer to pass code 3487752.

You may also join the conference online by using the following link:

https://services.choruscall.com/links/pgti200225O4r89DPW.html

The webcast will also be available through the Investors section of the PGT Innovations, Inc. website:

http://ir.pgtinnovations.com/events.cfm.

About PGT Innovations, Inc.

PGT Innovations manufactures and supplies premium windows and doors. Its highly-engineered and technically-advanced products can withstand some of the toughest weather conditions on earth and unify indoor/outdoor living spaces.

PGT Innovations creates value through deep customer relationships, understanding the unstated needs of the markets it serves and a drive to develop category-defining products. PGT Innovations is also the nation’s largest manufacturer of impact-resistant windows and doors, holds the leadership position in its primary markets, and is part of the S&P SmallCap 400 Index.

The PGT Innovations’ family of brands include CGI®, PGT® Custom Windows & Doors, WinDoor®, Western Window Systems®, CGI Commercial® and Eze-Breeze®. The Company’s brands, in their respective markets, are a preferred choice of architects, builders, and homeowners throughout North America and the Caribbean. The Company’s high-quality products are available in custom and standard sizes with multiple dimensions that allow for greater design possibilities in residential, multi-family, and commercial projects. For additional information, visit www.pgtinnovations.com.

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Forward-Looking Statements

Statements in this press release regarding our business that are not historical facts are “forward-looking statements” that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as  “guidance,” “expect,” “believe,” “anticipate,” “may,” “outlook,” “forecast,” “intend,” “could,” “estimate,” and similar terminology. These risks and uncertainties include factors such as:

• unpredictable weather and macroeconomic factors that may negatively impact the repair and remodel and new construction markets and the construction industry generally, especially in the state of Florida and the western United States, where the substantial portion of our sales are currently generated, and in the U.S. generally;

• changes in raw material prices, especially for aluminum, glass and vinyl, including, price increases due to the implementation of tariffs and other trade-related restrictions;

• our dependence on a limited number of suppliers for certain of our key materials;

• our dependence on our impact-resistant product lines and contemporary indoor/outdoor window and door systems, and on consumer preferences for those types and styles of products;

• the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our acquisitions of NewSouth and Western Window Systems;

• our level of indebtedness, which increased in connection with our acquisition of Western Window Systems, and increased further in connection with our acquisition of NewSouth;

• increases in bad debt owed to us by our customers in the event of a downturn in the home repair and remodel or new home construction channels in our core markets and our inability to collect such debt;

• the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of NewSouth and Western Window Systems may not be fully realized or may take longer to realize than expected or that our actual integration costs may exceed our estimates;

• increases in transportation costs, including increases in fuel prices;

• our dependence on our limited number of geographically concentrated manufacturing facilities;

• sales fluctuations to and changes in our relationships with key customers;

• federal, state and local laws and regulations, including unfavorable changes in local building codes and environmental and energy code regulations;

• risks associated with our information technology systems, including cybersecurity-related risks, such as unauthorized intrusions into our systems by “hackers” and theft of data and information from our systems, and the risks that our information technology systems do not function as intended or experience temporary or long-term failures to perform as intended.

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• product liability and warranty claims brought against us;

• in addition to the acquisitions of NewSouth and Western Window Systems, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected at the time we acquired it; and

• the other risks and uncertainties discussed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 28, 2019 and our other SEC filings.

Statements in this press release that are forward-looking statements include, without limitation, our expectations regarding: (1) order entries and demand for our products during 2020; (2) our long-term organic growth; (3) our ability to expand our sales, including through our expansion outside of Florida and into markets throughout the Western United States; (4) our expectations regarding sales growth through the acquisition or other addition of incremental sales channels and markets; (5) our capital allocation priorities; (6) our cost-reduction measures; (7) the strength of our balance sheet and the flexibility it provides to us; and (8) the 2020 financial performance guidance described in this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances from the date of this press release.

Use of Non-GAAP Financial Measures

This press release and the financial schedules include financial measures and terms not calculated in accordance with U.S. generally accepted accounting principles (GAAP). We believe that presentation of non-GAAP measures such as adjusted net income, adjusted net income per share, and adjusted EBITDA provides investors and analysts with an alternative method for assessing our operating results in a manner that enables investors and analysts to more thoroughly evaluate our current performance compared to past performance. We also believe these non-GAAP measures provide investors with a better baseline for assessing our future earnings potential. The non-GAAP measures included in this press release are provided to give investors access to types of measures that we use in analyzing our results.

Adjusted net income consists of GAAP net income adjusted for the items included in the accompanying reconciliation. Adjusted net income per share consists of GAAP net income per share adjusted for the items included in the accompanying reconciliation. We believe these measures enable investors and analysts to more thoroughly evaluate our current performance as compared to the past performance and provide a better baseline for assessing the Company's future earnings potential. However, these measures do not provide a complete picture of our operations.

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Adjusted EBITDA consists of net income, adjusted for the items included in the accompanying reconciliation. We believe that adjusted EBITDA provides useful information to investors and analysts about the Company's performance because they eliminate the effects of period-to-period changes in taxes, costs associated with capital investments and interest expense. Adjusted EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the actual funds generated from operations or available for capital investments.

Our calculations of adjusted net income and adjusted net income per share, and adjusted EBITDA are not necessarily comparable to calculations performed by other companies and reported as similarly titled measures. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP measures. Schedules that reconcile adjusted net income, adjusted net income per share, and adjusted EBITDA to GAAP net income are included in the financial schedules accompanying this release.

Adjusted EBITDA as used in the calculation of the net debt-to-Adjusted EBITDA ratio, consists of our adjusted EBITDA as described above, but for the trailing twelve-month period, adjusted pursuant to the covenants contained in the 2016 Credit Agreement due 2022 for the acquisition of Western Window Systems.

SOURCE: PGT Innovations, Inc.

PGT Innovations Contacts:

Investor Relations:

Sherri Baker, 941-480-1600

Senior Vice President and CFO

SBaker@PGTInnovations.com

Media Relations:

Brent Boydston, 941-480-1600

Senior Vice President, Corporate Sales and Marketing

BBoydston@PGTInnovations.com

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PGT INNOVATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited - in thousands, except per share amounts)
	Three Months Ended				Year Ended
	December 28,		December 29,		December 28,		December 29,
	2019		2018		2019		2018
Net sales	$	174,826	$	189,887	$	744,956	$	698,493
Cost of sales		118,663		124,137		484,588		455,025
Gross profit		56,163		65,750		260,368		243,468
Selling, general and administrative expenses		43,708		45,617		176,312		150,910
Gains on sales of assets under purchase agreement		-		-		-		(2,551	)
Income from operations		12,455		20,133		84,056		95,109
Interest expense, net		6,495		7,136		26,417		26,529
Debt extinguishment costs		1,512		-		1,512		3,375
Income before income taxes		4,448		12,997		56,127		65,205
Income tax expense		1,168		2,523		12,439		11,272
Net income	$	3,280	$	10,474	$	43,688	$	53,933
Basic net income per common share	$	0.06	$	0.18	$	0.75	$	1.03
Diluted net income per common share	$	0.06	$	0.18	$	0.74	$	1.00
Weighted average common shares outstanding:
Basic		58,422		57,987		58,346		52,461
Diluted		59,049		59,240		59,150		54,106

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PGT INNOVATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited - in thousands)
	December 28,		December 29,
	2019		2018
ASSETS
Current assets:
Cash and cash equivalents	$	97,243	$	52,650
Accounts receivable, net		68,091		80,717
Inventories		43,851		44,666
Contract assets, net		10,547		6,757
Prepaid expenses and other current assets		13,878		10,771
Total current assets		233,610		195,561
Property, plant and equipment, net		128,199		115,707
Operating lease right-of-use asset, net		26,390		-
Intangible assets, net		255,962		271,818
Goodwill		277,600		277,827
Other assets, net		972		1,240
Total assets	$	922,733	$	862,153
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	51,394	$	68,557
Current portion of operating lease liability		4,703		-
Current portion of long-term debt		-		163
Total current liabilities		56,097		68,720
Long-term debt, less current portion		368,971		366,614
Operating lease liability, less current portion		24,040		-
Deferred income taxes, net		27,945		22,758
Other liabilities		14,132		18,517
Total liabilities		491,185		476,609
Total shareholders' equity		431,548		385,544
Total liabilities and shareholders' equity	$	922,733	$	862,153

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PGT INNOVATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR
MOST DIRECTLY COMPARABLE GAAP EQUIVALENTS
(unaudited - in thousands, except per share amounts and percentages)
	Three Months Ended						Year Ended
	December 28,			December 29,			December 28,			December 29,
	2019			2018			2019			2018
Reconciliation to Adjusted Net Income and
Adjusted Net Income per share (1):
Net income	$	3,280		$	10,474		$	43,688		$	53,933
Reconciling items:
Product line transition costs (2)		-			-			1,133			-
Other corporate costs (3)		219			1,560			1,928			1,560
Debt extinguishment costs (4)		1,512			-			1,512			3,375
Facility and equipment relocation costs (5)		-			398			-			833
Gains on sales of assets under
purchase agreement (6)		-			-			-			(2,551	)
Transaction-related costs and effects (7)		1,500			-			2,150			4,144
Write-offs of deferred lenders fees and
discount relating to debt prepayments (8)		-			260			-			5,557
Tax effect of Tax Cuts and Jobs Act (9)		-			231			-			231
Tax effect of reconciling items		(784	)		(513	)		(1,681	)		(3,271	)
Adjusted net income	$	5,727		$	12,410		$	48,730		$	63,811
Weighted-average diluted shares		59,049			59,240			59,150			54,106
Adjusted net income per share - diluted	$	0.10		$	0.21		$	0.82		$	1.18
Reconciliation to Adjusted EBITDA (1):
Depreciation and amortization expense	$	8,919		$	8,600		$	34,732		$	24,450
Interest expense, net		6,495			7,136			26,417			26,529
Income tax expense		1,168			2,523			12,439			11,272
Reversal of tax effect of reconciling items for
adjusted net income above		784			513			1,681			3,271
Reconciling item included in interest expense, net		-			(260	)		-			(5,557	)
Tax effect of Tax Cuts and Jobs Act (9)		-			(231	)		-			(231	)
Stock-based compensation expense		676			840			3,923			3,383
Adjusted EBITDA	$	23,769		$	31,531		$	127,922		$	126,928
Adjusted EBITDA as percentage of net sales		13.6%			16.6%			17.2%			18.2%
Net debt-to-Adjusted EBITDA ratio, as adjusted for Western Window Systems (10)								2.2x

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(1) The Company's non-GAAP financial measures were explained in its Form 8-K filed February 25, 2020.

(2) Represents costs relating to product line transitions, classified within cost of sales for the year ended December 28, 2019.

(3) In 2019, represents executive-level recruiting costs, and other infrequent corporate costs classified within selling, general and administrative expenses, including $219 thousand in severance costs in the fourth quarter of 2019. In 2018, represents certain costs incurred relating to a fourth quarter legal settlement and regulatory actions, as well as costs relating to a unique warranty issue.

(4)  In 2019, represents debt extinguishment costs relating to the Company's third refinancing and third amendment of the 2016 Credit Agreement on October 31, 2019. In 2018, represents debt extinguishment costs of $3.1 million recognized in the first quarter of 2018 relating to the Company's second refinancing and second amendment of the 2016 Credit Agreement on March 16, 2018, and $296 thousand in the third quarter relating to changes in lender positions under the revolving credit portion of the 2016 Credit Agreement.

(5) Represents costs associated with planned relocations of certain equipment and product lines, including the manufacturing operations of CGI Windows & Doors into its new facility in Miami, FL, costs associated with machinery and equipment relocations within our glass plant operations in Venice, FL as the result of our planned disposal of certain glass manufacturing assets to Cardinal Glass Industries, and relocation of our Eze-Breeze porch enclosures product line to our Orlando manufacturing facility, substantially all of which is classified within cost of sales in 2018.

(6) Represents gains from sales of assets to Cardinal LG Company (Cardinal) under an Asset Purchase Agreement (APA) dated September 22, 2017.

(7) In 2019, includes $1.5 million relating to our previously announced acquisition of NewSouth Window Systems, which closed on January 31, 2020, and $650 thousand relates to additional costs relating to our acquisition of Western Window Systems, all of which are classified within selling, general and administrative expenses. In 2018, represents costs and other effects relating to our acquisition of Western Window Systems. Of the $4.1 million in the year ended December 29, 2018, $3.8 million relates to transaction-related costs classified within selling, general and administrative expenses. The remaining $392 thousand relates to an opening balance sheet inventory valuation adjustment which is classified within cost of sales in the year ended December 29, 2018.

(8) Represents non-cash charges from write-offs of deferred lenders fees and discount relating to prepayments of borrowings outstanding under the term loan portion of the 2016 Credit Agreement totaling $160.0 million, of which $152.0 million was in the 2018 third quarter, and $8.0 million was in the 2018 fourth quarter using cash on hand, included in interest expense, net in the three months and year ended December 29, 2018.

(9) Represents a subsequent adjustment to our deferred tax liability relating to the Tax Cuts and Jobs Act legislation enacted on December 22, 2017.

(10) Calculated in accordance with the covenants pursuant to the 2016 Credit Agreement due 2022.

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EX-99.2

EXHIBIT 99.2

 PGT Innovations  Q4 and full year 2019 Financial results  February 25, 2020 

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 FORWARD LOOKING STATEMENTS  Statements in this presentation regarding our business that are not historical facts are “forward-looking statements” that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as “guidance,” “expect,” “believe,” “anticipate,” “may,” “outlook,” “forecast,” “intend,” “could,” “estimate,” and similar terminology. These risks and uncertainties include factors such as:unpredictable weather and macroeconomic factors that may negatively impact the repair and remodel and new construction markets and the construction industry generally, especially in the state of Florida and the western United States, where the substantial portion of our sales are currently generated, and in the U.S. generally;changes in raw material prices, especially for aluminum, glass and vinyl, including, price increases due to the implementation of tariffs and other trade-related restrictions;our dependence on a limited number of suppliers for certain of our key materials;our dependence on our impact-resistant product lines and contemporary indoor/outdoor window and door systems, and on consumer preferences for those types and styles of products;the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our acquisitions of NewSouth and Western Window Systems;our level of indebtedness, which increased in connection with our acquisition of Western Window Systems, and increased further in connection with our acquisition of NewSouth;increases in bad debt owed to us by our customers in the event of a downturn in the home repair and remodeling or new home construction channels in our core markets and our inability to collect such debt;sales fluctuations to and changes in our relationships with key customers;the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of NewSouth and Western Window Systems may not be fully realized or may take longer to realize than expected or that our actual integration costs may exceed our estimates;increases in transportation costs, including increases in fuel prices;our dependence on our limited number of geographically concentrated manufacturing facilities;sales fluctuations to and changes in our relationships with key customers;federal, state and local laws and regulations, including unfavorable changes in local building codes and environmental and energy code regulations;our dependence on our limited number of geographically concentrated manufacturing facilities;risks associated with our information technology systems, including cybersecurity-related risks, such as unauthorized intrusions into our systems by “hackers” and theft of data and information from our systems, and the risks that our information technology systems do not function as intended or experience temporary or long-term failures to perform as intended;product liability and warranty claims brought against us;in addition to the acquisitions of NewSouth and Western Window Systems, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected at the time we acquired it; and,the risks and uncertainties discussed under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 28, 2019.Forward looking statements in this presentation include our expectations regarding: (i) the impact of our strategic pillars on customer and shareholder value; (ii) market volumes in 2020 and the initiatives we undertake to drive above-market growth; (iii) the results of our strategic growth projects; (iv) the results of our advertising, marketing and promotional activities; (v) possible strategic acquisitions and the benefits they may provide; (vi) the strength of our balance sheet and our capital structure; (vii) our guidance for 2020 set forth in this presentation; (viii) the possible benefits of investing in talent and R&D; (ix) operational efficiencies and margin expansion; (x) order entries and demand for our products during 2020; and (xi) our ability to capture profitable growth in the new construction and repair and remodel markets. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances from the date of this presentation.  2 

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 Use of Non-GAAP Financial Measures  This presentation and the financial schedules include financial measures and terms not calculated in accordance with U.S. generally accepted accounting principles (GAAP). We believe that presentation of non-GAAP measures such as adjusted net income, adjusted net income per share, and adjusted EBITDA provides investors and analysts with an alternative method for assessing our operating results in a manner that enables investors and analysts to more thoroughly evaluate our current performance compared to past performance. We also believe these non-GAAP measures provide investors with a better baseline for assessing our future earnings potential. The non-GAAP measures included in this release are provided to give investors access to types of measures that we use in analyzing our results.Adjusted net income consists of GAAP net income adjusted for the items included in the accompanying reconciliation. Adjusted net income per share consists of GAAP net income per share adjusted for the items included in the accompanying reconciliation. We believe these measures enable investors and analysts to more thoroughly evaluate our current performance as compared to the past performance and provide a better baseline for assessing the Company's future earnings potential. However, these measures do not provide a complete picture of our operations.Adjusted EBITDA consists of net income, adjusted for the items included in the accompanying reconciliation. We believe that adjusted EBITDA provides useful information to investors and analysts about the Company's performance because they eliminate the effects of period-to-period changes in taxes, costs associated with capital investments and interest expense. Adjusted EBITDA does not give effect to the cash the Company must use to service its debt or pay its income taxes and thus does not reflect the actual funds generated from operations or available for capital investments.Our calculations of adjusted net income and adjusted net income per share, and adjusted EBITDA are not necessarily comparable to calculations performed by other companies and reported as similarly titled measures. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP measures. Schedules that reconcile adjusted net income, adjusted net income per share, and adjusted EBITDA to GAAP net income are included in the financial schedules accompanying this release.Adjusted EBITDA as used in the calculation of the net debt-to-Adjusted EBITDA ratio, consists of our adjusted EBITDA as described above, but for the trailing twelve-month period, adjusted pursuant to the covenants contained in our credit agreements.  3 

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 Executing 4 Strategic Pillars expected to Create Long-Term Customer and Shareholder Value   4  Customer-centric focus to drive brand recognition, loyalty and growth  Attracting and retaining talented, dedicated leaders to drive our business  Investing in our business and scaling our operations to meet expected increasing demand in the long-term  Strategically allocating capital generated from our free cash flow to support our growth                                                 

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 Closing Date  2/1/2020  Purchase Price  $92M  Showroom Locations  OrlandoTampaSarasotaW. Palm BeachFt. LauderdaleJacksonvilleBonita SpringsCharlestonPensacola  NewSouth Transaction Update    HighlightsNewSouth currently operates 8 showrooms across Florida and plans to open additional locations in strategic, coastal markets (Louisiana, Texas, Florida Panhandle, Georgia, & North Carolina)The company’s unique go-to-market strategy enables it to carry out all functions of manufacturing, distribution, showroom display, in-house consultation and in-home installationServes both residential (~70% net sales) and commercial (~30% net sales)2019 net sales estimate of $82-$85 million achieved  5  1. Not included in PGT Innovations' 2019 results 

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 Fourth Quarter key Messages  HighlightsQ4 2019 sales delivered at top-end of guidance rangePositive order momentum entering 2020 as legacy pipeline ended the quarter up 8% versus the prior year quarterWestern Business Unit sales increased 8% versus the prior-year quarter; continued expansion in core and emerging marketsMargins impacted by unfavorable product mix  6  1. Refer to reconciliation to GAAP  Q4 2019  vs. Q4 2018  $175MNet Sales   7.9%   32.1%Gross Margin  2.5%  13.6%Adjusted EBITDA1 Margin  3.0%       

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 Market Performance – Southeastern Business Unit  7  1. Q4 2018 invoicing benefitted from increased order intake from Q3 2018 price increase  Comparisons against 2018 are behind usQ4 2019 pipeline up 8% vs. Q4 2018Q4 2019 order entry up 12% vs. Q4 2018Expecting market growth up to 3% in repair & remodel and 3-5% in new construction; have capacity to serve incremental demand while maintaining competitive lead timesSelling initiatives in place to drive above-market growth   Orders, Invoicing and Order Pipeline ($)  Source: Internal PGT Innovations data  1 

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 Q4 2019  vs. Q4 2018  $175MNet Sales   7.9%   32.1%Gross Margin  250bps  $23.8MAdjusted EBITDA1  24.6%   $0.10Adjusted Diluted EPS1  52%  Q4 2019 RESULTS    HighlightsDecline in legacy R&R as expected; continued growth in core and emerging markets for Western Window SystemsGross margins impacted by unfavorable product mix and promotional investments in our legacy businessSG&A reduction driven by reduced incentive compensation versus prior year quarterAdjusted EBITDA impacted by reduced sales versus prior year quarter along with unfavorable product mix in both business units  8  1. Refer to reconciliation to GAAP         

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 Full-Year 2019  vs. Full-Year 2018  $745MNet Sales   6.7%   35.0%Gross Margin  0.1%  $128MAdjusted EBITDA1  0.8%   $0.82Adjusted Diluted EPS1  31%          HighlightsSales of $745M includes sales contribution of $138M from Western Window SystemsAdjusted EBITDA impacted by unfavorable product mix in both business units versus prior yearAdjusted diluted EPS for 2019 was $0.82 versus $1.18 in the prior year; weighted average diluted shares increased by 9.3%, primarily as a result of 7M shares issued in September 2018  9  FULL-YEAR 2019 RESULTS  1. Refer to reconciliation to GAAP       

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 Strong balance sheet  10    Net debt is total consolidated funded indebtedness as of 12/28/19 and calculated in accordance with our credit agreement except on an all cash netted basis. Adjusted EBITDA is calculated in accordance with our credit agreement. Refer to reconciliation to GAAP.Leverage ratio defined as net debt divided by trailing-twelve-month adjusted EBITDA; refer to reconciliation to GAAP.  Net Debt1 and Leverage Ratio2  HighlightsEnded 2019 with net debt of $282 million, down from $297 million in Q3 2019. Net debt to trailing-twelve month adjusted EBITDA of 2.2 times.Proven track record of deleveraging following acquisitions.  Acquisition of  Acquisition of  Acquisition of 

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 Capital Allocation priorities  11  Internal Investment    StrategicAcquisitions    Debt Reduction    Share Repurchase  Strategic growth projects expected to drive margin improvementAdvertising and marketing investments expected to drive sales    Strategic acquisitions are expected to grow shareholder valueExpansion into new geographies or customer markets or other window and door products with different market positioning    Expect to maintain a strong balance sheet and conservative capital structureCompleted private offering of $50M principal amount of additional 6.75% senior notes due 2026    No shares repurchased in Q4 2019  1  2  3  4 

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 Full-Year 2020 Guidance  12        Full-Year 2019 Results  2020 Guidance as of 2/25/20  2020 Guidance vs. Full-Year 2019  Net Sales$745M  Net Sales$850M-$880M    14% – 18%  Adjusted EBITDA1$128M  Adjusted EBITDA$145M – $155M    13% – 21%  Adj. Net Income / Diluted Share1$0.82  Net Income / Diluted Share$0.86 – $0.99                2020 Guidance Assumptions  Depreciation and Amortization2$10M / Quarter  Interest Expense3$29M   Non-cash Stock Compensation4$7M  Capex as % of Net Sales3% – 4%  Tax Rate26%   1. Refer to reconciliation to GAAP; 2. Includes estimate for NewSouth non-cash amortization; 3. Includes yield related to $50M of senior notes issued; 4. Includes $1.2M for non-cash incentive compensation from New South earn-out; $4.0M non-cash incentive compensation to be recognized over 3 years; Additional $4.0M to be included in SG&A over 3 years as cash incentive compensation for a total of $8.0M. 

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 Why Invest in PGT Innovations  13            National leader in growing premium impact-resistant and indoor/outdoor window and door category  Expect to continue investing in talent and R&D to remain an industry leader in innovation and product development  Continued focus on operational efficiencies expected to drive additional margin expansion  Execution of our strategy expected to create long-term customer and shareholder value  Well positioned with diversified product portfolio to capture profitable growth in new construction and repair and remodel channels           

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 Q&A  14   

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 Appendix  15  Reconciliation to Adjusted Net Income, Adjusted Net Income per Share-diluted, Adjusted EBITDA, and Adjusted EBITDA per our bank covenants  

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 Reconciliation of GAAP to NON-gaap MEASURES(unaudited - in thousands, except per share amounts)THREE MONTHS AND YEAR ENDED DECEMBER 28, 2019 AND DECEMBER 29, 2018  16 

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 17    Reconciliation of GAAP to NON-gaap MEASURES(unaudited - in thousands, except per share amounts)THREE MONTHS ENDED DECEMBER 28, 2019 AND DECEMBER 29, 2018 

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 Reconciliation of GAAP to NON-gaap MEASURES(in MILLIONS)  18 

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 19    Reconciliation of GAAP to NON-gaap MEASURES  Represents the total of the adjustments consistent with previously published and publicly available earnings releases as issued by the Company relating to the period for which the total adjustments is presented.Beginning in 2018, the Company updated its reporting of adjusted EBITDA for its publicly issued earnings to exclude non-cash stock-based compensation expense. As such, the total of the adjustments per previously published earnings as presented herein will not agree to the total adjustments as previously issued for periods prior to 2018, as they have been revised as a result of this change in presentation.Calculated in accordance with the covenants pursuant to the Company’s then existing credit agreement, which includes adjustments for expected cost savings, operating expense reductions and synergies related to acquisitions, as well as the earnings of the acquired entity on a pro forma basis for any pre-acquisition period within the trailing twelve-months relating to the period of the calculation. 

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XML

Document and Entity Information	Feb. 25, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 25, 2020
Entity Registrant Name	PGT Innovations, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-37971
Entity Tax Identification Number	20-0634715
Entity Address, Address Line One	1070 TECHNOLOGY DRIVE
Entity Address, City or Town	NORTH VENICE
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	34275
City Area Code	941
Local Phone Number	480-1600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001354327
Title of 12(b) Security	Common Stock, Par Value $0.01 Per Share
Trading Symbol	PGTI
Security Exchange Name	NYSE