10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                  

Commission file number 001-37971

PGT Innovations, Inc.

1070 Technology Drive

North Venice, FL 34275

Registrant’s telephone number: 941-480-1600

State of Incorporation	IRS Employer Identification No.
Delaware	20-0634715

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company☐ 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.

Yes ☐ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Common Stock, $0.01 par value, outstanding was 59,544,807 shares, as of April 30, 2021.

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, Inc.

PGT INNOVATIONS, INC.

TABLE OF CONTENTS

Form 10-Q for the Three months Ended April 3, 2021

			Page
			Number
Part I.	Financial Information		3
	Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Statements of Comprehensive Income	4
		Condensed Consolidated Balance Sheets	5
		Condensed Consolidated Statements of Cash Flows	6
		Condensed Consolidated Statements of Shareholders’ Equity	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	39
Part II.	Other Information		40
	Item 1.	Legal Proceedings	40
	Item 1A.	Risk Factors	40
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
	Item 6.	Exhibits	41

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PART I — FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

PGT INNOVATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(unaudited)
Net sales	$	271,092	$	220,204
Cost of sales		177,130		139,077
Gross profit		93,962		81,127
Selling, general and administrative expenses		69,766		54,220
Income from operations		24,196		26,907
Interest expense, net		7,457		7,169
Income before income taxes		16,739		19,738
Income tax expense		3,944		4,138
Net income		12,795		15,600
Less:  Net income attributable to redeemable non-controlling interest		411		—
Net income attributable to the Company		12,384		15,600
Change in redemption value of redeemable non-controlling interest		—		—
Net income attributable to common shareholders	$	12,384	$	15,600
Net income per common share attributable to common shareholders:
Basic	$	0.21	$	0.27
Diluted	$	0.21	$	0.26
Weighted average number of common shares outstanding:
Basic		59,286		58,668
Diluted		59,894		59,121

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PGT INNOVATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended
	April 3,			April 4,
	2021			2020
	(unaudited)
Net income	$	12,795		$	15,600
Other comprehensive income (loss) before tax:
Change in fair value of derivatives		8,288			(5,213	)
Reclassification to earnings		(1,775	)		612
Other comprehensive income (loss)   before tax		6,513			(4,601	)
Income tax expense (benefit) related to other   comprehensive income		1,618			(1,151	)
Other comprehensive income (loss),   net of tax		4,895			(3,450	)
Comprehensive income		17,690			12,150
Less:  Comprehensive income attributable to    redeemable non-controlling interest		411			—
Comprehensive income attributable to the Company	$	17,279		$	12,150

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PGT INNOVATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

	April 3,			January 2,
	2021			2021
ASSETS
Current assets:
Cash and cash equivalents	$	58,979		$	100,320
Accounts receivable, net		117,239			92,844
Inventories		72,352			60,317
Contract assets, net		49,225			28,723
Prepaid expenses		10,627			8,357
Other current assets		17,916			11,111
Total current assets		326,338			301,672
Property, plant and equipment, net		160,129			135,155
Operating lease right-of-use asset, net		65,763			38,567
Intangible assets, net		324,458			256,507
Goodwill		359,746			329,695
Other assets, net		3,224			925
Total assets	$	1,239,658		$	1,062,521
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST    AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	111,892		$	84,344
Current portion of operating lease liability		8,682			6,132
Total current liabilities		120,574			90,476
Long-term debt		474,265			412,098
Operating lease liability, less current portion		60,140			35,130
Deferred income taxes		29,947			28,329
Other liabilities		10,971			11,354
Total liabilities		695,897			577,387
Redeemable non-controlling interest		34,495			—
Shareholders' equity:
Preferred stock; par value $.01 per share; 10,000 shares   authorized; no shares outstanding		—			—
Common stock; par value $.01 per share; 200,000 shares authorized; 63,106 and   62,542 shares issued and 59,461 and 58,999 shares outstanding at   April 3, 2021 and January 2, 2021, respectively		631			625
Additional paid-in-capital		427,210			420,202
Accumulated other comprehensive income		7,615			2,720
Retained earnings		92,119			79,896
Treasury stock at cost		(18,309	)		(18,309	)
Total shareholders' equity		509,266			485,134
Total liabilities, redeemable non-controlling interest and shareholders' equity	$	1,239,658		$	1,062,521

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PGT INNOVATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended
	April 3,			April 4,
	2021			2020
	(unaudited)
Cash flows from operating activities:
Net income	$	12,795		$	15,600
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation		6,697			5,186
Amortization		4,749			4,742
Provision for allowance for doubtful accounts		2,411			646
Stock-based compensation		1,750			1,530
Amortization of deferred financing costs, debt discount and premium		230			311
Loss (gain) on sales of assets		67			(82	)
Change in operating assets and liabilities (net of effects of acquisition):
Accounts receivable		(24,980	)		(17,857	)
Inventories		(4,307	)		(4,039	)
Contract assets, net, prepaid expenses, other current and other assets		(20,898	)		(1,029	)
Accounts payable, accrued and other liabilities		20,039			5,916
Net cash (used in) provided by operating activities		(1,447	)		10,924
Cash flows from investing activities:
Purchases of property, plant and equipment		(6,512	)		(2,327	)
Investment in and acquisition of businesses		(94,321	)		(90,145	)
Proceeds from sales of assets		7			82
Net cash used in investing activities		(100,826	)		(92,390	)
Cash flows from financing activities:
Proceeds from issuance of senior notes		63,300			53,188
Payments of financing costs		(1,363	)		(1,266	)
Purchases of common stock relating to tax withholdings on employee equity awards		(1,005	)		(815	)
Proceeds from exercise of stock options		—			549
Proceeds from issuance of common stock under employee stock purchase plan (ESPP)		—			119
Net cash provided by financing activities		60,932			51,775
Net decrease in cash and cash equivalents		(41,341	)		(29,691	)
Cash and cash equivalents at beginning of period		100,320			97,243
Cash and cash equivalents at end of period	$	58,979		$	67,552
Non-cash activity:
Issuance of common stock in Eco Acquisition	$	6,108		$	—
Establish right-of-use asset	$	29,490		$	14,605
Establish operating lease liability	$	(29,490	)	$	(14,605	)
Property, plant and equipment additions in accounts payable	$	1,022		$	119

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PGT INNOVATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands, except shares)(unaudited)

	PGT Innovations, Inc. Shareholders' Equity
										Accumulated
							Additional			Other
	Common stock						Paid-in			Comprehensive			Retained			Treasury
	Shares			Amount			Capital			Income (Loss)			Earnings			Stock			Total
THREE MONTHS ENDED APRIL 4, 2020
Balance at December 28, 2019		58,504,734		$	619		$	414,688		$	(238	)	$	34,788		$	(18,309	)	$	431,548
Vesting of restricted stock		175,824			—			—			—			—			—			—
Grants of restricted stock		—			6			(6	)		—			—			—			—
Forfeitures of restricted stock		—			(1	)		1			—			—			—			—
Purchases of treasury stock		(51,479	)		—			—			—			—			(815	)		(815	)
Retirement of treasury stock		—			(1	)		(814	)		—			—			815			—
Stock-based compensation		—			—			1,530			—			—			—			1,530
Exercise of stock options		274,353			3			546			—			—			—			549
Common stock issued under ESPP		15,191			—			119			—			—			—			119
Net income attributable to the Company		—			—			—			—			15,600			—			15,600
Other comprehensive loss, net of   tax benefit of $1,151		—			—			—			(3,450	)		—			—			(3,450	)
Balance at April 4, 2020		58,918,623		$	626		$	416,064		$	(3,688	)	$	50,388		$	(18,309	)	$	445,081
THREE MONTHS ENDED APRIL 3, 2021
Balance at January 2, 2021		58,998,711		$	625		$	420,202		$	2,720		$	79,896		$	(18,309	)	$	485,134
Vesting of restricted stock		147,106			—			—			—			—			—			—
Grants of restricted stock		—			3			(3	)		—			—			—			—
Forfeitures of restricted stock		—			(1	)		1			—			—			—			—
Purchases of treasury stock		(42,414	)		—			—			—			—			(1,005	)		(1,005	)
Retirement of treasury stock		—						(844	)		—			(161	)		1,005			—
Stock-based compensation		—			—			1,750			—			—			—			1,750
Issuance in acquisition of Eco		357,797			4			6,104			—			—			—			6,108
Net income attributable to the Company		—			—			—			—			12,384			—			12,384
Change in redemption value of redeemable   non-controlling interest		—			—			—			—			—			—			—
Other comprehensive income, net of   tax expense of $1,618		—			—			—			4,895			—			—			4,895
Balance at April 3, 2021		59,461,200		$	631		$	427,210		$	7,615		$	92,119		$	(18,309	)	$	509,266

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PGT INNOVATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1.  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

About PGT Innovations, Inc.

The accompanying unaudited condensed consolidated financial statements include the accounts of PGT Innovations, Inc. and its direct and indirect wholly-owned subsidiaries, including, PGT Industries, Inc., CGI Window and Door Holdings, Inc. (“CGI”), CGI Commercial, Inc. (“CGIC”), WinDoor, Incorporated, Coyote Acquisition Co., WWS Acquisition LLC (formerly known as GEF WW Parent LLC) (“WWS”), and with their acquisition by PGT Innovations, Inc. effective on February 1, 2020, NewSouth Window Solutions LLC, and NewSouth Window Solutions of Orlando LLC (“NewSouth”), as well as, as of and for the period from February 1, 2021 through April 3, 2021, the accounts of Eco Enterprises, LLC (formerly New Eco Windows Holding, LLC), and its subsidiaries Eco Windows Systems, LLC, Eco Glass Production, LLC, and Unity Windows, LLC (together “Eco”), relating to our acquisition of a 75% ownership stake in Eco Enterprises on February 1, 2021 (the “Eco Acquisition”), after elimination of intercompany accounts and transactions (collectively, the “Company”).

PGT Innovations, Inc. (“PGTI,” “we,” or the “Company”), formerly named PGT, Inc., manufactures and supplies premium windows and doors. Our highly-engineered products can withstand some of the toughest weather conditions on earth and unify indoor/outdoor living spaces. We are also the nation’s largest manufacturer of impact-resistant windows and doors. Our family of brands include CGI®, PGT® Custom Windows & Doors, WinDoor®, Western Window Systems®, CGI Commercial®, Eze-Breeze®, NewSouth Window Solutions®, and Eco Windows Systems®. Our products other than NewSouth products are sold through an authorized dealer and distributor network. Our NewSouth products are sold directly to the end-user consumer through store-front locations throughout Florida, and through direct-to-homeowner door-to-door sales. We are also opening NewSouth store-front locations in other states as part of our strategy of expanding NewSouth’s geographic presence, including new locations opened in 2020 in Charleston, South Carolina, Pensacola, Florida, and Houston, Texas.

The majority of our sales are to customers in the state of Florida, which further increased with our acquisition of Eco, but we sell products to customers in many states, including the western United States through WWS. We also have sales in the Caribbean, Canada, and in South and Central America. See Note 6 for a discussion of the Eco Acquisition.

We were incorporated in the state of Delaware on December 16, 2003, as JLL Window Holdings, Inc., with primary operations in North Venice, Florida. On February 15, 2006, our Company was renamed PGT, Inc. On December 14, 2016, we announced that we changed our name to PGT Innovations, Inc. and, effective on December 28, 2016, the listing of our common stock was transferred to the New York Stock Exchange (“NYSE”) from the NASDAQ Global Market (NASDAQ), and began trading on the NYSE under its existing ticker symbol of “PGTI”. We have six window manufacturing operations in Florida, and one in Arizona. Our manufacturing facilities in Florida include one in North Venice, four in the greater Miami area, which includes two as a result of our investment in Eco, and one in Tampa with the acquisition of NewSouth. Our Arizona operations are in Phoenix. Regarding glass processing, we have two glass tempering and laminating plants and one insulation glass plant, all located in North Venice. Our Eco investment also has a glass processing facility in the greater Miami, Florida area.

All references to PGTI or our Company apply to the consolidated financial statements of PGT Innovations, Inc. unless otherwise noted.

COVID-19 Pandemic

During March 2020, a global pandemic (the “Pandemic”) was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The Pandemic has resulted in a significant number of infections, hospitalizations and deaths in several of our key markets, including Arizona, California, Florida and Texas. The Pandemic has significantly affected economic conditions in those markets, and in the United States in general, and internationally, including due to federal, state and local governments and employers reacting to the public health crisis with mitigation measures, and also due to the general fear and uncertainty created by the Pandemic, all of which has resulted in workforce, supply chain and production disruptions, along with reduced demand and spending in many industries and markets, including in our core markets in the western United States (“U.S.”), creating significant uncertainties in the U.S. economy. Although many of the government-mandated restrictions on economic and social activities that were put in place as part of the initial response to the Pandemic have been lifted, and vaccines with high degrees of efficacy have been approved, with others pending approval, by the United States Food and Drug Administration, or when the nation-wide program of vaccination will result in herd immunity to the coronavirus in the United States or globally, which is being impacted by several factors, including vaccine hesitancy or resistance, it is still currently unclear when, or if, social, business, occupational, educational and economic conditions will return to pre-Pandemic conditions. The extent to which the continuing

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circumstances around the Pandemic could affect our future business, operations and financial results will depend upon numerous evolving factors that we are not able to accurately predict, including the timing of any relief that may come from the current program of nationwide vaccinations and its effect on the duration of the continuing economic and market disruptions related to the Pandemic, and whether such vaccines are effective against any new variants of coronavirus, and the nature, amounts and duration of any additional government stimulus measures designed to bolster the economy. As such, we continue to be unable to accurately predict the impact the Pandemic and the challenges it has created for the U.S. and global economies, will have on our financial performance and operations going forward due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, when or if herd immunity is achieved in the United States, especially in our key markets, actions that may be taken by governmental authorities to attempt to control the Pandemic, the impact to our customers’ and suppliers’ businesses and other factors identified in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on March 2, 2021. We will continue to evaluate the nature and extent of the impact of the Pandemic to our business, consolidated results of operations, and financial condition.

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the remainder of the current year or for any future periods. The Company’s fiscal first quarter in 2021 ended April 3, 2021, consisted of 13 weeks, and our fiscal first quarter in 2020 ended April 4, 2020, consisted of 14 weeks.

The condensed consolidated balance sheet as of January 2, 2021, is derived from the audited consolidated financial statements, but does not include all disclosures required by GAAP. The condensed consolidated balance sheet as of January 2, 2021, and the unaudited condensed consolidated financial statements as of and for the periods ended April 3, 2021 and April 4, 2020, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended January 2, 2021, included in the Company’s most recent Annual Report on Form 10-K. The accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

As described above, the extent to which the COVID-19 pandemic and resulting measures that may be taken by the Company and/or its customers or suppliers and/or by governmental entities will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. Management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic.

We have two reportable segments: the Southeast segment and the Western segment. The Southeast reporting segment, which is also an operating segment, is composed of sales from our facilities in Florida. The Western reporting segment, also an operating segment, is composed of sales from our facility in Arizona. See Note 16 for segment disclosures.

Recently Adopted Accounting Pronouncements

Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles and also clarifies and amends existing guidance. This standard is effective beginning January 1, 2021, with early adoption permitted. The adoption of this standard did not have any impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in March 2021, subsequent amendment to the initial guidance, ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP

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to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.

NOTE 2.  REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS

Revenue Recognition Accounting Policy

The Company primarily manufactures fully customized windows and doors based on design specifications, measurements, colors, finishes, framing materials, glass-types, and other options selected by the customer at the point in time an order is received. The Company has an enforceable right to payment at the time an order is received and accepted at the agreed-upon sales prices contained in our agreements with our customers for all manufacturing efforts expended on behalf of its customers. Due to the customized build-to-order nature of these products, the Company’s assessment is that the substantial portion of its finished goods and certain unused glass components have no alternative use, and that control of these products and components passes to the customer over time during the manufacturing of the products in an order, or upon our receipt of certain pre-cut glass components from our supplier attributed to specific customer orders.

Based on these factors, the Company recognizes a substantial portion of revenue over time during the manufacturing process once customization begins, and for certain unused glass components on hand, at the end of a reporting period. Revenue on work-in-process at the end of a reporting period is recognized in proportion to costs incurred to total estimated cost of the product being manufactured. Except for the Western segment’s volume products, discussed in the section titled Disaggregation of Revenue from Contracts with Customers below, revenue recognized at a point in time is immaterial.

Disaggregation of Revenue from Contracts with Customers

As discussed in Note 1, we have two reportable segments: our Southeast segment and our Western segment. See Note 16 for more information. The following tables provide information about our net sales by reporting segment, product category and market for the three months ended April 3, 2021 and April 4, 2020 (dollars in millions):

	Three Months Ended
	April 3,		April 4,
Disaggregation of revenue (in millions):	2021		2020
Reporting segment:
Southeast	$	233.6	$	183.6
Western		37.5		36.6
Total net sales	$	271.1	$	220.2
Product category:
Impact-resistant window and door products	$	191.4	$	153.6
Non-impact window and door products		79.7		66.6
Total net sales	$	271.1	$	220.2
Market:
New construction	$	120.0	$	109.1
Repair and remodel		151.1		111.1
Total net sales	$	271.1	$	220.2

The Company’s Western segment includes both custom and volume products. This segment’s volume products are not made-to-order and are of standardized sizes and design specifications. Therefore, the Company’s assessment is that the Western segment’s volume products have alternative uses, and that control of these products passes to the customer at a point in time, which is typically when the product has been delivered to the customer. For the three months ended April 3, 2021 and April 4, 2020, the Western segment’s net sales of its volume products were $19.6 million and $15.2 million, respectively.

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Contract Balances

Contract assets represent sales recognized in excess of billings related to finished goods not yet shipped and certain unused glass components not yet placed into the production process for which revenue is recognized over time as noted above. Contract liabilities relate to customer deposits at the end of reporting periods. At April 3, 2021 and January 2, 2021, those contract liabilities totaled $34.0 million and $22.8 million, respectively, of which $27.8 million and $18.1 million, respectively, are classified within accrued liabilities, and $6.2 million and $4.6 million, respectively, are classified as a reduction to the contract assets to which they relate.  Contract assets, net, totaled $49.2 million at April 3, 2021 and $28.7 million at January 2, 2021, in the accompanying condensed consolidated balance sheets.

Because of the short-term nature of our performance obligations, as discussed below, substantially all of our performance obligations are satisfied within the quarter following the end of a reporting period. As such, substantially all of the contract liabilities at January 2, 2021 were satisfied in the first quarter of 2021, and contract assets at January 2, 2021 were transferred to accounts receivable in the first quarter of 2021. Contract liabilities at April 3, 2021 represents cash received during the three-month period ended April 3, 2021, excluding amounts recognized as revenue during that period. Contract assets at April 3, 2021 represents revenue recognized during the three-month period ended April 3, 2021, excluding amounts transferred to accounts receivable during that period.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue as the performance obligation is satisfied. Our contracts with our customers generally represent an approved purchase order together with our standard terms and conditions. Our custom product contracts include distinct goods that are substantially the same and have the same pattern of transfer to the customer over time, and therefore represent a series of distinct goods accounted for as a single performance obligation. For volume products, we allocate the contract’s transaction price to each distinct performance obligation based on the estimated relative standalone selling price of each distinct good. Observable standalone sales are used to determine the standalone selling price. Certain customers are eligible for rebates based on their volume or purchases during an annual period. Rebates are recorded as a reduction to sales and were immaterial in all periods presented.

Performance obligations are satisfied over time, generally for our custom products, and as of a point in time for our volume products. Performance obligations are supported by contracts with customers, and we have elected not to disclose our unsatisfied performance obligations as of April 3, 2021 under the short-term contract exemption as we expect such performance obligations will be satisfied within the quarter following the end of a reporting period.

On February 1, 2021, we completed our investment in Eco. Eco’s contracts with customers include the manufacturing of goods and installation services related to those goods. Both the manufacturing of goods and installation services represent distinct and separate performance obligations of Eco. As the goods are custom in nature, and Eco ensures its ability to collect payment from the customer by collecting a substantial portion of the contract price before production begins, the performance obligations are satisfied over time, as opposed to a point in time. The contract transaction price is allocated to each performance obligation based on an estimate of stand-alone selling price. Because installation is performed shortly after completion of production, revenue on the total contract is recognized over a relatively short period of time.

Policies Regarding Shipping and Handling Costs and Commissions on Contract Assets

The Company has made a policy election to continue to recognize shipping and handling costs as a fulfillment activity. Treating shipping and handling as a fulfillment activity requires estimated shipping and handling costs for undelivered products and certain glass components on which we have recognized revenue and created a contract asset, to be accrued to match this cost with the recognized revenue. Sales taxes collected from customers are recorded on a net basis.

The Company utilizes the practical expedient which permits expensing of costs to obtain a contract when the expected amortization period is one year or less, which typically results in expensing commissions paid to employees. We expense sales commissions paid to employees as sales are recognized, including sales from the creation of contract assets, as the expected amortization period is less than one year.

Allowance for Doubtful Accounts

In the ordinary course of business, we extend credit to qualified dealers and distributors, generally on a non-collateralized basis. The Company maintains an allowance for doubtful accounts which is based on management’s assessments of the amount which may become uncollectible in the future and is determined through consideration of our write-off history, specific identification of uncollectible accounts based in part on the customer’s past due balance (based on contractual terms), and consideration of prevailing economic and industry conditions, and may include anticipated unfavorable impacts of the COVID-19 pandemic on the businesses of

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our customers, such as dealers and distributors. Uncollectible accounts are written off after repeated attempts to collect from the customer have been unsuccessful. As of April 3, 2021 and January 2, 2021, the allowance for doubtful accounts was $4.6 million and $3.7 million, respectively.

NOTE 3.  WARRANTY

Most of our manufactured products are sold with warranties. Warranty periods, which vary by product components, generally range from 1 to 10 years; however, the warranty period for a limited number of specifically identified components in certain applications is a lifetime. The majority of the products sold have warranties on components which range from 1 to 3 years. The amount charged to expense for warranties is based on management’s assessment of the cost per service call and the number of service calls expected to be incurred to satisfy warranty obligations on the current net sales.

During the three months ended April 3, 2021, we recorded warranty expense at a rate of approximately 2.6% of sales, which was higher than rate in the three months ended April 4, 2020 of 1.7% of sales. The increase in our warranty expense rate in the first three months of April 3, 2021 compared to April 4, 2020 is a result of costs associated with the wind-down of the commercial business of NewSouth in the three months ended April 3, 2021, which resulted in warranty costs incremental to those we would incur in the normal course of business.

The following table summarizes current period charges, adjustments to previous estimates, if necessary, as well as settlements, which represent actual costs incurred during the period for the three months ended April 3, 2021 and April 4, 2020. The reserve is determined through specific identification and assessing Company history. Expected future obligations are discounted to a current value using a risk-free rate for obligations with similar maturities. Of the accrued warranty reserve of $9.6 million at April 3, 2021, $7.8 million is classified within accrued expenses on the condensed consolidated balance sheet at April 3, 2021, with the remainder classified within other liabilities. Of the accrued warranty reserve of $8.0 million at January 2, 2021, $6.5 million is classified within accrued expenses on the condensed consolidated balance sheet at January 2, 2021, with the remainder classified within other liabilities.

	Beginning		Acquisition-		Charged								End of
Accrued Warranty	of Period		Related		to Expense		Adjustments			Settlements			Period
(in thousands)
Three months ended April 3, 2021	$	8,001	$	—	$	6,966	$	389		$	(5,713	)	$	9,643
Three months ended April 4, 2020	$	6,244	$	1,592	$	3,841	$	(20	)	$	(4,269	)	$	7,388

NOTE 4.  INVENTORIES

Inventories consist principally of raw materials purchased for the manufacture of our products. We have limited finished goods inventory since the substantial majority of our products are custom, made-to-order and the revenue on these products, as well as the related cost, has been fully recognized upon completion of the manufacturing process. Finished goods inventory and work-in-progress costs include direct materials, direct labor, and overhead. All inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Inventories consisted of the following:

	April 3,		January 2,
	2021		2021
	(in thousands)
Raw materials	$	66,179	$	55,916
Work-in-progress		5,718		4,058
Finished goods		455		343
	$	72,352	$	60,317

NOTE 5.  STOCK BASED-COMPENSATION

We record stock compensation expense over an equity award’s vesting period based on the award’s fair value at the date of grant. We recorded compensation expense for stock-based awards of $1.8 million for the three months ended April 3, 2021, and $1.5 million for the three months ended April 4, 2020. As of April 3, 2021, there was $11.2 million in total unrecognized compensation cost related entirely to restricted share awards. These costs are expected to be recognized in earnings on an accelerated basis over the weighted average remaining vesting period of 1.9 years at April 3, 2021.

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Of the $1.8 million and $1.5 million in stock-based compensation expense in the three months ended April 3, 2021 and April 4, 2020, respectively, $1.5 million and $1.4 million, respectively, are classified within selling, general and administrative expense in the accompanying condensed consolidated statements of operations, with the remainders classified within cost of sales.

NOTE 6.  ACQUISITIONS

ECO WINDOW SYSTEMS

On February 1, 2021, we completed an acquisition of a 75% ownership stake in Eco Enterprises and its related companies, Eco Windows Systems, LLC, Eco Glass Production, LLC, and Unity Windows, LLC (together “Eco”), for fair value consideration of $100.4 million, including $94.3 million in cash, which was after an estimated working capital adjustment in our favor of approximately $5.6 million received at the closing, and PGT Innovations, Inc. common stock with a then fair value estimated to be $6.1 million. The cash portion of the purchase price was financed by a second add-on issuance of $60.0 million aggregate principal amount of 6.75% senior notes to the 2018 Senior Notes due 2026 on January 25, 2021 (the “Second Additional Senor Notes”), issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million, together with cash on hand of $31.0 million. See Note 9 for a discussion of the Second Additional Senior Notes.

The common stock portion of the purchase price was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a closing price value of $21.34 per share on that date, or approximately $7.6 million based on that price. However, the seller of Eco, who is also the holder of the 25% redeemable non-controlling interest in Eco Enterprises, is restricted from selling these shares for a three-year period from the date of the acquisition. As such, we estimated that there was an approximately 20% discount for the lack of marketability of the shares. The fair value of the redeemable non-controlling interest in the acquisition has been preliminarily estimated to be $34.1 million, resulting in total fair value of the Eco business in the acquisition, including the redeemable non-controlling interest, of $134.5 million. The fair value of the redeemable non-controlling interest has been calculated as 25% of the initial estimated fair value of the entity at the acquisition date, less a 5% estimated discount for seller’s lack of control in the new entity. See Note 17 for more information regarding the redeemable non-controlling interest. Eco is a manufacturer and installer of aluminum, impact-resistant windows and doors, serving the South Florida region since 2009. Eco is headquartered in Medley, Florida, near Miami, Florida, and has three manufacturing locations in the region.

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, are as follows:

	Preliminary Allocation
Accounts receivable	$	5,031
Inventories		7,728
Contract assets, net		4,312
Prepaid expenses and other assets		1,706
Property and equipment		24,009
Operating lease right-of-use asset		27,864
Intangible assets		72,700
Goodwill		30,051
Total assets acquired		173,401
Accounts payable		(6,809	)
Accrued and other liabilities, including customer deposits		(4,215	)
Operating lease liability		(27,864	)
Total liabilities assumed		(38,888	)
Net assets acquired		134,513
Redeemable non-controlling interest		(34,084	)
Fair value of consideration transferred	$	100,429
Consideration:
Cash	$	94,321
PGTI common stock		6,108
Fair value of consideration transferred	$	100,429

The fair value of certain working capital related items, including Eco’s accounts receivable, prepaid and other expenses, and accounts payable and accrued liabilities, approximated their book values at the date of the Eco Acquisition. Subsequent to our initial allocation, we adjusted the fair value of certain acquired commercial receivable accounts based on a further post-acquisition assessment of their collectability. The fair value of inventory was estimated by major category, at net realizable value, which we believe approximates the price a market participant could achieve in a current sale. Substantially all of inventories at the acquisition date was composed of raw

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materials. The fair value of property and equipment is being estimated with the assistance of a third-party valuation firm, using the indirect cost approach, which we consider to be Level 3 in the fair value hierarchy. Valuations of the intangible assets have been estimated using income and royalty relief approaches based on projections, which we consider to be Level 3 inputs, with the assistance of a third-party valuation firm.

We incurred acquisition costs totaling $1.7 million relating to legal expenses, representations and warranties insurance, diligence, accounting and printing services in the Eco Acquisition, which includes $1.0 million in the fourth quarter of 2020, and $0.7 million in first quarter of 2021, classified as selling, general and administrative expenses in the accompanying condensed consolidated statement of operations for the three months ended April 3, 2021.

The remaining consideration, after identified intangible assets and the net assets and liabilities recorded at fair value, has currently been estimated to be $30.1 million, classified as part of Southeast reporting unit goodwill, which we expect the portion of goodwill relating to our 75% investment to be deductible for tax purposes. In addition, we are currently evaluating the historical book and tax bases of assets and liabilities relating to the redeemable non-controlling interest, which may not be eligible for a step-up in basis, for any deferred tax assets and liabilities that may need to be recorded in the Eco Acquisition.

As of April 3, 2021, the purchase price allocation is still preliminary, and its finalization may result in changes to the preliminary estimate of goodwill. Goodwill represents the strengthening of our supply chain for glass through faster glass production, as well as diversification and expansion of product offerings in the high-growth commercial market, and an expansion of our dealer network with minimal overlap with our existing deal network.

Valuation of Identified Intangible Assets

The valuation of the identifiable intangible assets acquired in the Eco Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Preliminary		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	36,000	indefinite
Customer relationships		36,700	5 - 15
Intangible assets, net	$	72,700

Pro Forma Financial Information

The following unaudited pro forma financial information assumes the Eco Acquisition had occurred at the beginning of the earliest period presented that does not include Eco’s actual results for the entire period. Pro forma results have been prepared by adjusting our historical results to include the results of Eco adjusted for the following: amortization expense related to the estimated intangible assets arising from the acquisition and interest expense to reflect the Second Additional Senior Notes. The unaudited pro forma results below do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the earliest periods presented, nor does it indicate the results of operations in future periods. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(unaudited)
Net sales	$	279,044	$	231,353
Net income attributable to PGTI stockholders:	$	12,542	$	15,297
Net income per common share attributable to PGTI stockholders:
Basic	$	0.21	$	0.26
Diluted	$	0.21	$	0.26

Net sales of Eco included in the condensed consolidated statement of operations for the three months ended April 3, 2021, was nearly $16 million. The net income of Eco in the condensed consolidated statement of operations for the three months ended April 3, 2021, after allocation of interest expense and other corporate costs to Eco, was $1.6 million, including the portion attributable to the redeemable non-controlling interest of $411 thousand.

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NEWSOUTH WINDOW SOLUTIONS

On February 1, 2020 (the “closing date”), we completed the acquisition of NewSouth Window Solutions LLC and NewSouth Window Solutions of Orlando LLC (together, “NewSouth”, and the “NewSouth Acquisition”), which became wholly-owned subsidiaries of PGT Innovations, Inc. The fair value of consideration transferred in the acquisition was $90.4 million. The acquisition was financed with proceeds of $53.2 million from an add-on issuance of $50.0 million in 2018 Senior Notes due 2026 (“First Additional Senior Notes”), including a premium of $3.2 million, and with $37.2 million in cash. See Note 9 for a discussion of the First Additional Senior Notes.

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, were as follows:

	Final Allocation
Accounts receivable	$	8,434
Inventories		2,936
Contract assets, net		4,413
Prepaid expenses and other assets		1,756
Property and equipment		7,433
Operating lease right-of-use asset		10,578
Intangible assets		27,370
Goodwill		52,094
Accounts payable		(6,621	)
Accrued and other liabilities		(7,447	)
Operating lease liability		(10,578	)
Purchase price	$	90,368
Consideration:
Cash	$	90,368
Total fair value of consideration	$	90,368

The fair value of certain working capital related items, including NewSouth’s retail accounts receivable, prepaid expenses, and accounts payable and accrued liabilities, approximated their book values at the date of the NewSouth Acquisition. Subsequent to our initial allocation, we adjusted the fair value of certain acquired commercial receivable accounts based on a further post-acquisition assessment of their collectability. The fair value of inventory was estimated by major category, at net realizable value. The substantial majority of inventories at the acquisition date was composed of raw materials. The fair value of property and equipment and remaining useful lives were estimated by management, with the assistance of a third-party valuation firm, using the cost approach. Valuations of the intangible assets were done using income and royalty relief approaches based on projections provided by management, which we consider to be Level 3 inputs, with the assistance of a third-party valuations firm.

We incurred acquisition costs totaling $2.4 million relating to legal expenses, representations and warranties insurance, diligence, accounting and printing services in the NewSouth Acquisition, which includes $0.9 million in 2020, and $1.5 million in 2019. Of the expenses in 2020, $0.5 million were incurred in the first quarter of 2020, and classified as selling, general and administrative expenses in the accompanying condensed consolidated statement of operations for the three months ended April 4, 2020.

The remaining consideration, after identified intangible assets and the net assets and liabilities recorded at fair value, has been determined to be $52.1 million, all of which we expected to be deductible for tax purposes. Goodwill represents the increased value of the combined entity through new direct-to-consumer sales channel opportunities, as well as NewSouth’s extensive advertising throughout Florida, and NewSouth’s market intelligence, which we expect to utilize.

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Valuation of Identified Intangible Assets

The valuation of the identifiable intangible assets acquired in the NewSouth Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Final		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	22,200	15
Non-compete agreements		1,670	5
Developed technology		2,600	6
Customer-related intangible		900	<1
Intangible assets, net	$	27,370

Pro Forma Financial Information

The following unaudited pro forma financial information assumes the acquisition had occurred at the beginning of the earliest period presented that does not include NewSouth’s actual results for the entire period. Pro forma results have been prepared by adjusting our historical results to include the results of NewSouth adjusted for the following: amortization expense related to the intangible assets arising from the acquisition and interest expense to reflect the First Additional Senior Notes. The unaudited pro forma results below do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the earliest periods presented, nor does it indicate the results of operations in future periods. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 4,
	2020
	(unaudited)
Net sales		227,956
Net income		15,830
Net income per common share:
Basic	$	0.27
Diluted	$	0.27

NOTE 7. NET INCOME PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the dilutive effect of potential common shares from securities such as stock options and unvested stock awards.

There were no anti-dilutive securities excluded from the calculation of weighted average shares outstanding for the three months ended April 3, 2021, and 586 thousand for the three months ended April 4, 2020.

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The table below presents the calculation of EPS and a reconciliation of weighted average common shares used in the calculation of basic and diluted EPS:

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(in thousands, except per share amounts)
Net income	$	12,795	$	15,600
Less:  Net income attributable to redeemable non-controlling interest		411		—
Net income attributable to the Company		12,384		15,600
Change in redemption value of redeemable non-controlling interest		—		—
Net income attributable to common shareholders	$	12,384	$	15,600
Weighted-average common shares - Basic		59,286		58,668
Add:  Dilutive shares from equity plans		608		453
Weighted-average common shares - Diluted		59,894		59,121
Net income per common share attributable to common shareholders:
Basic	$	0.21	$	0.27
Diluted	$	0.21	$	0.26

NOTE 8.  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and intangible assets are as follows:

							Initial
	April 3,			January 2,			Useful Life
	2021			2021			(in years)
	(in thousands)
Goodwill	$	359,746		$	329,695		indefinite
Other intangible assets:
Trade names (indefinite-lived)	$	176,841		$	140,841		indefinite
Customer relationships and customer-related assets		238,247			201,547		<1-15
Trade name (amortizable)		22,200			22,200		15
Developed technology		5,600			5,600		6-10
Non-compete agreement		3,338			3,338		2-5
Software license		590			590		2
Less:  Accumulated amortization		(122,358	)		(117,609	)
Subtotal		147,617			115,666
Other intangible assets, net	$	324,458		$	256,507
Goodwill at January 2, 2021	$	329,695
Increase in goodwill from our investment in Eco		30,051
Goodwill at April 3, 2021	$	359,746
Trade names at January 2, 2021	$	140,841
Increase in trade names from our investment in Eco		36,000
Trade names at April 3, 2021	$	176,841

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Estimated amortization of our amortizable intangible assets for future years is as follows:

(in thousands)	Total
Remainder of 2021	$	15,247
2022		19,342
2023		17,181
2024		17,135
2025		16,896
Thereafter		61,816
Total	$	147,617

Amortization expense relating to amortizable intangible assets for the three months ended April 3, 2021 and April 4, 2020, was $4.7 million and $4.7 million, respectively.

We perform our annual goodwill and indefinite-lived intangible asset impairment testing on the first day of our fiscal fourth quarter of each year, and at interim periods if needed based on occurrence of triggering events. During the three months ended April 3, 2021, we did not identify any events which we believe would trigger the need for tests for impairments of our indefinite-lived intangibles assets. As of April 3, 2021 and January 2, 2021, the carrying value of our Southeast reporting unit goodwill is $231.3 million and $201.3 million, respectively. As of April 3, 2021 and January 2, 2021, the carrying value of our Western reporting unit goodwill is $128.4 million and $128.4 million, respectively. Goodwill of our Southeast reporting unit includes the goodwill relating to Eco.

NOTE 9.  LONG-TERM DEBT

	April 3,			January 2,
	2021			2021
	(in thousands)
2018 Senior Notes due 2026, maturing in August 2026	$	425,000		$	365,000
2016 Credit Agreement due 2022, maturing in October 2022		54,000			54,000
Long-term debt		479,000			419,000
Fees, costs, discount and premium		(4,735	)		(6,902	)
Long-term debt, net	$	474,265		$	412,098

2018 Senior Notes due 2026

On August 10, 2018, we completed the issuance of $315.0 million aggregate principal amount of 6.75% senior notes (“2018 Senior Notes due 2026”), issued at 100% of their principal amount. The 2018 Senior Notes due 2026 are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future restricted subsidiaries, other than any restricted subsidiary of the Company that does not guarantee the existing senior secured credit facilities or any permitted refinancing thereof. The 2018 Senior Notes due 2026 are senior unsecured obligations of the Company and the guarantors, respectively, and rank pari passu in right of payment with all existing and future senior debt and senior to all existing and future subordinated debt of the Company and the guarantors. The 2018 Senior Notes due 2026 were offered under Rule 144A of the Securities Act, and in transactions outside the United States under Regulation S of the Securities Act, and have not been, and will not be, registered under the Securities Act.

On January 24, 2020, we completed an add-on issuance of $50.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026, or the First Additional Senior Notes, issued at 106.375% of their principal amount, resulting in a premium to us of $3.2 million. The First Additional Senior Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the First Additional Senior Notes, including premium, were used, together with cash on hand, to pay the $90.4 million purchase price in the NewSouth Acquisition.

On January 25, 2021, we completed a second add-on issuance of $60.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026, or the Second Additional Senior Notes, issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million. The Second Additional Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the Second Additional Senior Notes, including premium, were used, together with $31.0

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million in cash on hand, to pay the $94.3 million cash portion of the $100.4 million purchase price in the ECO Acquisition. The common stock portion of the purchase consideration was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a then current value of $21.34 per share, which we discounted by an estimate of 20% for lack of marketability, as they are legally restricted from being sold by the recipient for a three-year period from February 1, 2021.

The 2018 Senior Notes due 2026 mature on August 10, 2026. Interest on the 2018 Senior Notes due 2026 is payable semi-annually, in arrears, beginning on February 16, 2019, with interest accruing at a rate of 6.75% per annum from August 10, 2018. We incurred financing costs relating to bank fees and professional services costs relating to the offering and issuance of the 2018 Senior Notes due 2026 totaling $10.4 million, the First Additional Senior Notes totaling $1.3 million, offset by the $3.2 million premium on the First Additional Senior Notes, and the Second Additional Senior Notes totaling $1.4 million, offset by the $3.3 million premium on the Second Additional Senior Notes, all of which are being amortized under the effective interest method. See “Deferred Financing Costs” below.

As of April 3, 2021, the face value of debt outstanding under the 2018 Senior Notes due 2026 was $425.0 million, and accrued interest totaled $4.9 million.

The indenture for the 2018 Senior Notes due 2026 gives us the option to redeem some or all of the 2018 Senior Notes due 2026 at the redemption prices and on the terms specified in the indenture governing the 2018 Senior Notes due 2026. The indenture governing the 2018 Senior Notes due 2026 does not require us to make any mandatory redemptions or sinking fund payments. However, upon the occurrence of a change of control, as defined in the indenture, the Company is required to offer to repurchase the notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

The indenture for the 2018 Senior Notes due 2026 includes certain covenants limiting the ability of the Company and any guarantors to, (i) incur additional indebtedness; (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; (iii) enter into agreements that restrict distributions from restricted subsidiaries; (iv) sell or otherwise dispose of assets; (v) enter into transactions with affiliates; (vi) create or incur liens; merge, consolidate or sell all or substantially all of the Company’s assets; (vii) place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company; and (viii) designate the Company’s subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications.

2016 Credit Agreement due 2022

On February 16, 2016, we entered into the 2016 Credit Agreement due 2022, among us, the lending institutions identified in the 2016 Credit Agreement due 2022, and Truist Financial Corporation (formerly known as SunTrust Bank), as Administrative Agent and Collateral Agent. The 2016 Credit Agreement due 2022 establishes senior secured credit facilities in an aggregate amount of $310.0 million, consisting of a $270.0 million Term B term loan facility originally maturing in February 2022 that amortizes on a basis of 1% annually during its six-year term, and a $40.0 million revolving credit facility originally maturing in February 2021 that includes a swing line facility and a letter of credit facility. Our obligations under the 2016 Credit Agreement due 2022 are, subject to exceptions, guaranteed by substantially all of our wholly-owned direct and indirect subsidiaries that are restricted subsidiaries and secured by substantially all of our assets as well as our direct and indirect restricted subsidiaries’ assets.

On March 16, 2018, we entered into an amendment of our 2016 Credit Agreement due 2022 (the “Second Amendment”). The Second Amendment, among other things, decreases the applicable interest rate margins for the Initial Term Loans (as defined in the 2016 Credit Agreement due 2022) from (i) 3.75% to 2.50%, in the case of the Base Rate Loans (as defined in the 2016 Credit Agreement due 2022), and (ii) 4.75% to 3.50%, in the case of the Eurodollar Loans (as defined in the 2016 Credit Agreement due 2022). On February 17, 2017, we entered into the first amendment to our 2016 Credit Agreement due 2022, which also resulted in decreases in the applicable margins, but which, unlike the Second Amendment, did not include any changes in lender positions.

On October 31, 2019, we entered into an amendment of our 2016 Credit Agreement due 2022 (“Third Amendment”). The Third Amendment provides for, among other things, (i) a three-year Term A loan in the then aggregate principal amount of $64.0 million (the “Initial Term A Loan”), maturing in October 2022, which refinances in full our existing Term B term loan facility under the 2016 Credit Agreement, and has no regularly scheduled amortization, and (ii) a new five-year revolving credit facility in an aggregate principal amount of up to $80.0 million (the “Revolving Facility”), maturing in October 2024, which replaced our then existing $40.0 million revolving credit facility under the 2016 Credit Agreement, and includes a swing-line facility and letter of credit facility. Our obligations under the 2016 Credit Agreement continue to be secured by substantially all of our assets, as well as our direct and indirect subsidiaries’ assets.

Pursuant to the Third Amendment, interest on all loans under the 2016 Credit Agreement is payable either quarterly or at the expiration of any LIBOR interest period applicable thereto. The Third Amendment decreases the applicable interest rate margins for the Initial Term Loan A from (i) 2.50% to a spread of 1.00% to 1.75% based on our first lien net leverage ratio, in the case of the Base Rate Loans (with a floor of 100 basis points), and (ii) 3.50% to a spread ranging from 2.00% to 2.75% based on our first lien leverage ratio, in the case of the Eurodollar Loans (with a floor of zero basis points).

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Also, in connection with the Third Amendment, we will pay quarterly fees on the unused portion of the revolving credit facility equal to a percentage spread (ranging from 0.25% to 0.35%) based on our first lien net leverage ratio. The Third Amendment also modifies the springing financial covenant under the 2016 Credit Agreement to provide that such financial covenant will not be tested until the Initial Term A Loan is paid in full. As of April 3, 2021, there were $5.8 million in letters of credit outstanding and $74.2 million available under the Revolving Facility.

Fees and costs relating to the Third Amendment were $0.9 million, which are deferred and being amortized. In connection with the Third Amendment, certain existing lenders modified their positions in or exited the 2016 Credit Agreement. Deferred financing costs and original issue discount allocated to these lenders of $1.5 million were written-off and classified as debt extinguishment costs in our consolidated statement of operations for the year ended December 28, 2019. As of April 3, 2021, after making prepayments of borrowings totaling $10.0 million during the third quarter of 2020, the principal amount of debt outstanding under the 2016 Credit Agreement due 2022 was $54.0 million. Accrued interest at April 3, 2021 was $16 thousand.

The weighted average all-in interest rate for borrowings under the term-loan portion of the 2016 Credit Agreement due 2022 was 2.14% as of April 3, 2021, and was 2.15% at January 2, 2021.

Pursuant to the Third Amendment, the 2016 Credit Agreement due 2022 contains a springing financial covenant that would apply if we draw in excess of thirty-five percent (35%) of the revolving facility commitment (excluding $7.5 million of undrawn letters of credit and letters of credit and draws thereunder that are cash collateralized at 103% of the stated amount thereof from such availability test). To the extent in effect, the springing financial covenant would prohibit us from exceeding a maximum first lien net leverage ratio (based on the ratio of total first lien (less unrestricted cash) debt to EBITDA) as of the last day of each applicable fiscal quarter. To the extent the springing financial covenant is in effect, the first lien net leverage ratio currently cannot exceed 4.00:1.00 (4.50:1.00 during a significant acquisition period, as defined, which we are in as of April 3, 2021). We have not been required to test our first lien net leverage ratio because we have not exceeded 35% of our revolving capacity.

The 2016 Credit Agreement due 2022 also contains a number of affirmative and restrictive covenants, including limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of our capital stock, entry into restrictive agreements, prepayments of certain debt and transactions with affiliates, in each case, subject to exceptions and qualifications. The 2016 Credit Agreement due 2022 also contains customary events of default. Upon the occurrence of an event of default, the amounts outstanding under the 2016 Credit Agreement due 2022 may be accelerated and may become immediately due and payable.

Deferred Financing Costs

The activity relating to third-party fees and costs, lender fees, discount and premiums for the three months ended April 3, 2021, are as follows. All debt-related fees, costs, discount and premiums are classified as a reduction of the carrying value of long-term debt:

(in thousands)	Total
At beginning of year	$	6,902
Add: Deferred financing costs from the issuance of Second Additional Senior Notes		1,363
Less: Premium on the Second Additional Senior Notes		(3,300	)
Less: Amortization expense		(230	)
At end of period	$	4,735

Estimated amortization expense relating to third-party fees and costs, lender fees, discount and premiums for the years indicated as of April 3, 2021, is as follows:

(in thousands)	Total
Remainder of 2021	$	657
2022		905
2023		844
2024		889
2025		861
Thereafter		579
Total	$	4,735

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As a result of prepayments of the 2016 Credit Agreement due 2022 totaling $214.0 million since its inception in February 2016 through April 3, 2021, we have no future scheduled repayments until the maturity of the facility on October 31, 2022. The contractual future maturities of long-term debt outstanding, as of April 3, 2021, are as follows (at face value):

(in thousands)
Remainder of 2021	$	—
2022		54,000
2023		—
2024		—
2025		—
Thereafter		425,000
Total	$	479,000

NOTE 10.  LEASES

We lease certain of our manufacturing facilities under operating leases. We also lease production equipment, vehicles, computer equipment, storage units and office equipment under operating leases. Our leases have remaining lease terms of 1 year to 9 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. All of our leases are operating leases. We did not recognize right-of-use assets or lease liabilities for certain short-term leases that are month-to-month leases. The lease expense relating to these leases is not significant.

The components of lease expense for the three months ended April 3, 2021 and April 4, 2020, are as follows. Certain amounts in the prior year period have been reclassified to conform to the current presentation (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Operating lease cost	$	2,879	$	2,104
Variable lease cost		2,200		786
Total lease cost	$	5,079	$	2,890

Other information relating to leases for the three months ended April 3, 2021 and April 4, 2020, are as follows (in thousands, except years and percentages):

	Three Months Ended
	April 3,			April 4,
	2021			2020
Supplemental cash flows information
Cash paid for amounts included in the   measurement of lease liabilities:
Operating cash flows relating to   operating leases	$	(2,764	)	$	(2,009	)
Right-of-use assets obtained in exchange   for lease obligations:
Operating leases	$	29,490		$	14,605
Weighted average remaining lease term in years
Operating leases		7.23			7.27
Weighted average discount rate
Operating leases		5.6	%		5.9	%

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Future maturities under operating leases were as follows at April 3, 2021 and January 2, 2021 (in thousands):

	April 3,			January 2,
	2021			2021
Remainder of 2021	$	9,278		$	8,327
2022		11,830			7,626
2023		11,557			7,149
2024		11,286			6,748
2025		10,871			6,253
Thereafter		28,847			13,800
Total future minimum lease payments		83,669			49,903
Less:  Imputed interest		(14,847	)		(8,641	)
Operating lease liability - total	$	68,822		$	41,262
Reported as of April 3, 2021 and January 2, 2021:
Current portion of operating lease liability	$	8,682		$	6,132
Operating lease liability, less current portion		60,140			35,130
Operating lease liability - total	$	68,822		$	41,262

As of April 3, 2021, we had no additional operating or finance leases that have not yet commenced. Our operating leases expire at various times through 2030. Lease expense was $5.1 million for the three months ended April 3, 2021 and was $2.9 million for the three months ended April 4, 2020. Of the $5.1 million for the three months ended April 3, 2021, $2.2 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Of the $2.9 million for the three months ended April 4, 2020, $1.5 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses.

The $29.5 million in operating lease right-of-use assets obtained in exchange for operating lease obligations during the three months ended April 3, 2021 includes $27.9 million related to the Eco Acquisition. See Note 6 for additional information.

NOTE 11.  COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Our Company is a party to various legal proceedings in the ordinary course of business. Although the ultimate disposition of those proceedings cannot be predicted with certainty, management believes the outcome of any claim that is pending or threatened, either individually or in the aggregate, will not have a material adverse effect on our operations, financial position or cash flows.

NOTE 12.  INCOME TAXES

Our income tax expense was $3.9 million for the three months ended April 3, 2021, compared with income tax expense of $4.1 million for the three months ended April 4, 2020. Our effective tax rate for the three months ended April 3, 2021, was an expense rate of 23.6%, and was an expense rate of 21.0% for the three months ended April 4, 2020. Our income tax expense for the three months ended April 3, 2021 includes $305 thousand relating to our 75% share of the pre-tax earnings of Eco.

Income tax expense in the three months ended April 3, 2021 included a minor discrete item of income tax benefit. The three months ended April 4, 2020 included excess tax benefits relating to exercises of stock options and lapses of restrictions on stock awards totaling $766 thousand. Excluding discrete items of income tax, the effective tax rates for the three months ended April 3, 2021, and April 4, 2020, would have been income tax expense rates of 24.1% and 24.8%, respectively.

We estimate that our annual effective tax rate for 2021, excluding discrete items, will approximate our current combined statutory federal and state rate of 24.7%.

We made no payments of estimated Federal or state income taxes during either of the three-month periods ended April 3, 2021 and April 4, 2020.

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NOTE 13.  FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is used to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The accounting guidance concerning fair value allows us to elect to measure financial instruments at fair value and report the changes in fair value through earnings. This election can only be made at certain specified dates and is irrevocable once made. We do not have a policy regarding specific assets or liabilities to elect to measure at fair value, but rather we make the election on an instrument-by-instrument basis as they are acquired or incurred.

During the three months ended April 3, 2021 or April 4, 2020, we did not make any transfers between Level 2 and Level 3 financial assets. We conduct reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure.

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, accounts and notes receivable, and accounts payable and accrued liabilities, whose carrying amounts approximate their fair values due to their short-term nature. Our financial instruments also include borrowings under our 2016 Credit Agreement due 2022, as well as the 2018 Senior Notes due 2026, both classified as long-term debt. The fair value of borrowings under the 2016 Credit Agreement due 2022 approximates its carrying value due to its variable-rate nature, and was approximately $54.0 million as of April 3, 2021, compared to a principal outstanding value of $54.0 million, and fair value of $54.0 million as of January 2, 2021, compared to a principal outstanding value of $54.0 million. The fair value of the 2018 Senior Notes due 2026 is based on debt with similar terms and characteristics and was approximately $450.5 million as of April 3, 2021, compared to a principal outstanding value of $425.0 million, which includes the Second Additional Senior Notes, and the fair value was approximately $387.8 million as of January 2, 2021, compared to a principal outstanding value of $365.0 million. Fair values were determined based on observed trading prices of our debt between domestic financial institutions, which we consider to be a Level 2 input.

Items Measured at Fair Value on a Recurring Basis

The following are measured in the condensed consolidated financial statements at fair value on a recurring basis and are categorized in the table below based upon the lowest level of significant input to the valuation (in thousands):

	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	April 3,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	5,885	$	—	$	5,885	$	—
MTP contracts		4,239		—		4,239		—
	$	10,124	$	—	$	10,124	$	—

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	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	January 2,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	3,190	$	—	$	3,190	$	—
MTP contracts		421		—		421		—
	$	3,611	$	—	$	3,611	$	—

See Note 14 for a description of the methods and assumptions used in the determination of the fair values of our aluminum forward and Midwest Transaction Premium (“MTP”) contracts, as well as the basis for classifying these assets and liabilities as Level 2.

NOTE 14.  DERIVATIVES

Aluminum Contracts and Midwest Transaction Premium

We enter into aluminum forward contracts to hedge the fluctuations in the purchase price of aluminum extrusion we use in production. Beginning late in the first quarter of 2020, we began entering into forward contracts to hedge the fluctuations in the price of the delivery component of our aluminum extrusion purchases, known as the Midwest Transaction Premium, or MTP. Our contracts are designated as cash flow hedges since they are highly effective in offsetting changes in the cash flows attributable to forecasted purchases of aluminum and the related MTP.

We record our aluminium hedge contracts at fair value, based on trading values for aluminum forward contracts. Aluminum forward contracts identical to those held by us trade on the London Metal Exchange (“LME”). The LME provides a transparent forum and is the world’s largest center for the trading of futures contracts for non-ferrous metals. The prices are used by the metals industry worldwide as the basis for contracts for the movement of physical material throughout the production cycle. Based on this high degree of volume and liquidity in the LME, we believe the valuation price at any measurement date for contracts with identical terms as to prompt date, trade date and trade price as those we hold at any time represents a contract’s exit price to be used for purposes of determining fair value.

We record our MTP hedge contracts at fair value based on the Platts MW US Transaction price per pound assessment, which has been a benchmark for decades in the North American aluminium industry. Platts surveys the North American market daily to capture trades, bids and offers on a delivered Midwest basis. Data is normalized to reflect the typical price per pound between the largest number of market participants, for delivery within 7 to 30 days from date of publication, net-30-day payment terms, for typical order quantities, chemistries and freight allowances. The survey is extensive and encompasses both domestic and offshore producers, traders and brokers that are varied in scope. Based on the extensive nature of this pricing mechanism, we believe the Platts MW US Transaction price at any time represents a contract’s exit price to be used for purposes of determining fair value.

Guidance under the Financial Instruments Topic 825 of the Codification requires us to record our hedge contracts at fair value and consider our credit risk for contracts in a liability position, and our counter-party’s credit risk for contracts in an asset position, in determining fair value. We assess our counter-party’s risk of non-performance when measuring the fair value of financial instruments in an asset position by evaluating their financial position, including cash on hand, as well as their credit ratings. We assess our risk of non-performance when measuring the fair value of our financial instruments in a liability position by evaluating our credit ratings, our current liquidity including cash on hand and availability under our revolving credit facility as compared to the maturities of the financial liabilities. We do not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting arrangement.

At April 3, 2021, the fair value of our aluminum forward contracts was in a asset position of $5.9 million. We had 25 outstanding forward contracts for the purchase of 33.7 million pounds of aluminum through June 2022, at an average price of $0.84 per pound, which excludes the Midwest premium, with maturity dates of between one month and fifteen months. At April 3, 2021, the fair value of our MTP contracts was in a net asset position of $4.2 million. We had 29 outstanding MTP contracts to hedge the Platt US MW Transaction price per pound for the delivery of 56.1 million pounds of aluminum through December 2022, at an average price of $0.12 per pound, with maturity dates of between one month and twenty-one months. We assessed the risk of non-performance of the Company and our counterparty to these contracts, as applicable, and determined it was immaterial and, therefore, did not record any adjustment to their fair values as of April 3, 2021.

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We assess the effectiveness of our aluminum forward and MTP contracts by comparing the change in the fair value of the forward contract to the change in the expected cash to be paid for the hedged item. The effective portion of the gain or loss on our aluminum forward contracts is reported as a component of accumulated other comprehensive income (loss) and is reclassified into earnings in the same line item in the income statement as the hedged item in the same period or periods during which the transaction affects earnings. The amount of income, net, recognized in the “accumulated other comprehensive income (loss)” line item in the accompanying condensed consolidated balance sheet as of April 3, 2021, that we expect will be reclassified to earnings within the next twelve months, is approximately $8.7 million.

The fair values of our aluminum hedges and MTP contracts are classified in the accompanying condensed consolidated balance sheets at April 3, 2021 and January 2, 2021, as follows (in thousands):

	Derivative Assets			Derivative Liabilities
	April 3, 2021			April 3, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	5,714	Accrued liabilities	$	—
MTP contracts	Other current assets		3,010	Accrued liabilities		—
Aluminum contracts	Other assets		171	Other liabilities		—
MTP contracts	Other assets		1,229	Other liabilities		—
Total derivative instruments	Total derivative assets	$	10,124	Total derivative liabilities	$	—
	Derivative Assets			Derivative Liabilities
	January 2, 2021			January 2, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	3,243	Accrued liabilities	$	(28	)
MTP contracts	Other current assets		423	Accrued liabilities		(24	)
Aluminum contracts	Other assets		—	Other liabilities		(25	)
MTP contracts	Other assets		26	Other liabilities		(4	)
Total derivative instruments	Total derivative assets	$	3,692	Total derivative liabilities	$	(81	)

The ending accumulated balance for the aluminum forward and MTP contracts included in accumulated other comprehensive income (losses), net of tax, was an accumulated other comprehensive income of $7.6 million as of April 3, 2021, and was an accumulated other comprehensive income of $2.7 million at January 2, 2021. The income tax effects of accumulated comprehensive income (losses) are released as amounts are reclassified out of accumulated comprehensive income (losses) at the income tax rate used at the time those income tax effects were provided, which generally represents our blended statutory income tax rate.

The following represents the gains (losses) on derivative financial instruments, and their classifications within the accompanying condensed consolidated financial statements, for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Derivatives in Cash Flow Hedging Relationships
	Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives					Location of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income
	Three Months Ended						Three Months Ended
	April 3,		April 4,				April 3,		April 4,
	2021		2020				2021		2020
Aluminum contracts	$	4,083	$	(5,160	)	Cost of sales	$	1,388	$	(612	)
MTP contracts	$	4,205	$	(53	)	Cost of sales	$	387	$	—

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NOTE 15.  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table shows the components of accumulated other comprehensive income (loss) for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

Three months ended April 3, 2021	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at January 2, 2021	$	2,403		$	317		$	2,720
Change in fair value of derivatives		4,083			4,205			8,288
Amounts reclassified from other comprehensive loss		(1,388	)		(387	)		(1,775	)
Tax effect		(670	)		(948	)		(1,618	)
Net current-period other comprehensive income		2,025			2,870			4,895
Balance at April 3, 2021	$	4,428		$	3,187		$	7,615

Three months ended April 4, 2020	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at December 28, 2019	$	(238	)	$	-		$	(238	)
Change in fair value of derivatives		(5,160	)		(53	)		(5,213	)
Amounts reclassified from other comprehensive loss		612			—			612
Tax effect		1,138			13			1,151
Net current-period other comprehensive income		(3,410	)		(40	)		(3,450	)
Balance at April 4, 2020	$	(3,648	)	$	(40	)	$	(3,688	)

NOTE 16. SEGMENTS

We have two reportable segments: the Southeast segment and the Western segment. The Southeast reporting segment, which is also an operating segment, is composed of sales from our facilities in Florida, including the net sales of our recent investment in Eco. The Western reporting segment, also an operating segment. Results of the Western segment are composed of the results of WWS.

Centralized financial and operational oversight, including resource allocation and assessment of performance on an income (loss) from operations basis, is performed by our CEO, whom we have determined to be our chief operating decision maker (“CODM”), with oversight by the Board of Directors. Total asset information by segment is not included herein as asset information by segment is not presented to or reviewed by the CODM. The following table represents summary financial data attributable to our operating segments for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Net sales:
Southeast segment	$	233,638	$	183,641
Western segment		37,454		36,563
Total net sales	$	271,092	$	220,204
Income from operations:
Southeast segment	$	18,743	$	25,821
Western segment		5,453		1,086
Total income from operations		24,196		26,907
Interest expense, net		7,457		7,169
Total income before income taxes	$	16,739	$	19,738

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NOTE 17. REEDEMABLE NON-CONTROLLING INTEREST

On February 1, 2021, we completed an acquisition of a 75% ownership stake in Eco. The seller of Eco obtained 25% equity interest in the newly formed company, Eco Enterprises. The seller’s redeemable non-controlling interest was initially established at fair value.

The agreement between PGT Innovations, Inc. and the seller provides the Company with a call right for seller’s equity interest which the Company may exercise during the three-years following the date of the acquisition, and provides the seller with a put right which can be exercised during the 15-day period following the three-year anniversary of the date of the acquisition. Upon exercise of the put or call right, the purchase price is calculated based on a 10-multiple of the sum of Eco’s trailing twelve-month earnings before interest, taxes, depreciation and amortization (TTM EBITDA), and certain synergy-related TTM EBITDA which may result from our investment in Eco (both as more specifically defined in the operating agreement). The put option makes the non-controlling interest redeemable and, therefore, the redeemable non-controlling interest is classified as temporary equity outside of shareholders’ equity.

The Company calculates the redemption value of the non-controlling interest on a quarterly basis using a 10-multiple of TTM EBITDA as determined in accordance with the agreement as described above. After giving effect to the change from the net income (loss) attributable to the redeemable non-controlling interest, the redeemable non-controlling interest is adjusted to be reported at its currently calculated redemption value. Any resulting change in the redemption value of the redeemable non-controlling interest is offset against retained earnings and impacts earnings used in the calculation of earnings per share attributable to common shareholders.

For the three months ended April 3, 2021, based on the formula for determining the value of the seller’s put option in the operating agreement governing this transaction, the redemption value of the redeemable non-controlling interest was estimated to be less than $34.5 million, the value of the redeemable non-controlling interest before giving effect to seller’s put option, as of April 3, 2021. As such, there was no change in redemption value to be recorded relating to the redeemable non-controlling interest for the three months ended April 3, 2021. There was no redeemable non-controlling interest in the first quarter of 2020.

The following table presents the changes in the Company’s redeemable non-controlling interest for the period presented:

	Three Months Ended
	April 3,
(in thousands)	2021
Balance at beginning of period	$	—
Redeemable non-controlling interest in Eco at initially estimated fair value		34,084
Net income attributable to redeemable non-controlling interest		411
Change in value of redeemable non-controlling interest		—
Balance at end of period	$	34,495

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto for the year ended January 2, 2021, included in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 2, 2021. All amounts herein are unaudited.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “assume,” “believe,” “could,” “estimate,” “guidance,” “may,” “outlook,” “forecast,” “intend,” “could,” “project,” “estimate,” “anticipate,” “should,” “plan” and similar references to future periods.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

• the impact of the COVID-19 pandemic and related measures taken by governmental or regulatory authorities to combat the pandemic, including the impact of the pandemic and these measures on the economies and demand for our products in the states where we sell them, and on our customers, suppliers, labor force, business, operations and financial performance;

• 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, which increased with the Eco Acquisition, 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 acquisition of NewSouth and our Eco Acquisition;

• our level of indebtedness, which increased in connection with our acquisition of NewSouth, and increased further in connection with our Eco Acquisition;

• 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 acquisition of NewSouth and from our Eco Acquisition 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, which increased further due to our Eco Acquisition;

• 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;

• product liability and warranty claims brought against us;

• in addition to our acquisition of NewSouth, and our Eco Acquisition, 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 II, Item 1A of this Quarterly Report on Form 10-Q for the quarter ended April 3, 2021, and under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 2, 2021 and our other filings with the Securities and Exchange Commission.

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Any forward-looking statement made by us in this Quarterly Report on Form 10-Q is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

EXECUTIVE OVERVIEW

Sales and Operations

During the first quarter of 2021, we experienced an increase in sales at our Southeast segment, as demand in Florida continued to increase, and also due to inclusion of the net sales of our investment in Eco of nearly $16 million. Strength in the housing sector in our key markets in the southeast drove solid growth in order entry in the first quarter of 2021 compared to last year’s first quarter. Excluding sales of Eco, our Southeast segment net sales were $215 million in the first quarter of 2021, compared to $184 million in the first quarter of 2020, an increase of $32 million, or 17%. Net sales of our Western segment increased $1 million, or 2%, to $38 million in the first quarter of 2021, from $37 million in the first quarter of 2020. Although we saw improved economic condition in our western markets, which also drove increasing order levels at our Western business unit in the 2021 first quarter compared to last year’s first quarter, we believe this market is slower to recover from the effects on the economy as a result of the Pandemic, especially in our core markets of California, Arizona and Nevada. We expect demand at both our Southeast and Western business units to continue to recover as the economy reopens and the country approaches pre-Pandemic activity. Our legacy business grew order levels during the first quarter of 2021 by 31% over the prior-year first quarter, including an increase of $35 million, or 42%, at NewSouth. We continue to execute on several strategic selling and marketing initiatives, which have also been key drivers of sales.

Although 2021 first quarter consolidated net sales increased $50.9 million, or 23.1%, compared to last year’s first quarter, our gross margin decreased to 34.7% in the first quarter of 2021, compared to 36.8% in the prior year first quarter. Company-wide, we saw inflationary pressures on material costs and labor rates, which contributed to this overall decline in gross margin. We recently announced price increases to attempt to offset these inflationary conditions, which we expect will begin to offset these cost impacts beginning in the last month of the second quarter of 2021. Over the past several quarters, we have made significant enhancements to manufacturing operations at our Western business unit facility in Phoenix, which has resulted in an improvement in gross margin at our Western business unit in the first quarter of 2021 compared to last year’s first quarter of 70 basis-points in our consolidated gross margin. Gross margin in the first quarter of 2021 was also impacted by incremental costs relating to our wind-down of NewSouth’s commercial business, which totaled  $4.2 million, including $2.7 million classified as cost of sales, which impacted gross profit and gross margin in the three months ended April 3, 2021.

Because we believe housing demand in the United States will continue to strengthen in our key markets, we have increased our 2021 full-year sales guidance to a range of $1.050 billion to $1.125 billion, from our prior guidance of $1.0 billion to $1.075 billion. These ranges include Eco from the date of our investment of February 1, 2021 at 100% of its sales.

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Performance Summary

The following table presents financial data derived from our unaudited condensed consolidated statements of operations as a percentage of total net sales for the periods indicated. The three-month period ended April 3, 2021 is composed of 13 weeks. The three-month period ended April 4, 2020 is composed of 14 weeks (in thousands, except percentages):

	Three Months Ended
	April 3,			April 4,
	2021			2020
	(unaudited)
Net sales	$	271,092	100.0%	$	220,204	100.0%
Cost of sales		177,130	65.3%		139,077	63.2%
Gross profit		93,962	34.7%		81,127	36.8%
Selling, general and administrative expenses		69,766	25.7%		54,220	24.6%
Income from operations		24,196	8.9%		26,907	12.2%
Interest expense, net		7,457	2.8%		7,169	3.3%
Income before income taxes		16,739	6.2%		19,738	9.0%
Income tax expense		3,944	1.5%		4,138	1.9%
Net income		12,795	4.7%		15,600	7.1%
Less:  Net income attributable to redeemable non-controlling interest		411	0.2%		—	-
Net income attributable to the Company		12,384	4.6%		15,600	7.1%
Change in redemption value of redeemable non-controlling interest		—	-		—	-
Net income attributable to common shareholders	$	12,384	4.6%	$	15,600	7.1%

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 3, 2021 AND APRIL 4, 2020

The three-month period ended April 3, 2021 is composed of 13 weeks, whereas the three-month period ended April 4, 2020 was composed of 14 weeks. We do not believe that this difference significantly affects comparability of the following results of operations.

Net sales

	Three Months Ended
	April 3, 2021			April 4, 2020
	Net Sales		% of sales	Net Sales		% of sales	% change
By segment:
Southeast segment	$	233.6	86.2%	$	183.6	83.4%	27.2%
Western segment		37.5	13.8%		36.6	16.6%	2.4%
Total net sales	$	271.1	100.0%	$	220.2	100.0%	23.1%

Net sales for the first quarter of 2021 were $271.1 million, a $50.9 million, or 23.1%, increase in sales, from $220.2 million in the first quarter of the prior year.

Net sales of our Southeast segment were $233.6 million in the first quarter of 2021, compared with $183.6 million in the 2020 first quarter, an increase of $50.0 million, or 27.2%. Southeast segment sales in the first quarter of 2021 includes nearly $16 million from our investment in Eco. Net sales of our Western segment were $37.5 million in the first quarter of 2021, compared with $36.6 million in the first quarter of 2020, an increase of $0.9 million, or 2.4%. Sales of our Western segment are composed of the sales of WWS.

The $50.9 million increase in net sales for the first quarter of 2021 was primarily driven by organic growth, and the effects of the recovery from the Pandemic, primarily at our Southeast segment, but also at our Western segment, and the inclusion in the first quarter of 2021 of the net sales of our investment in Eco. Net sales of our Southeast segment, excluding the sales of Eco of nearly $16 million, increased $31.6 million, or 17.2% as compared to the first quarter of 2020. We believe the organic increase in sales of our Southeast segment is due to a resumption of demand for our products in both the new construction and repair and remodel markets that approached the pre-Pandemic strength that existed in our 2020 first quarter. Our NewSouth direct-to-consumer brand also experienced solid organic growth in the 2021 first quarter, compared to last year’s first quarter. However, the first quarter of 2020 only included the post-acquisition sales of NewSouth from its February 2, 2020 acquisition date, whereas NewSouth’s net sales are included in the entire first quarter of 2021. Our Western segment experienced slight incremental growth in the first quarter of 2021, compared to the 2020 first quarter, which we believe continued to see a strengthening housing market in the western United States that began in late 2020, but to a lesser extent than in the Southeast.

Gross profit and gross margin

Gross profit was $94.0 million in the first quarter of 2021, an increase of $12.8 million, or 15.8%, from $81.1 million in the first quarter of 2020. The gross margin percentage was 34.7% in the first quarter of 2021, compared to 36.8% in the prior year first quarter. Gross margin in the first quarter of 2021, compared to the first quarter of 2020, was negatively impacted by inflationary conditions which increased material and labor costs in the U.S. during the first quarter of 2021, partially offset by improved operating efficiencies in our Western segment, and the addition of and accretion from our investment in Eco. Gross margin in the first quarter of 2021 was also impacted by incremental costs relating to our wind-down of NewSouth’s commercial business, which negatively impacted gross profit by $2.7 million. Excluding the costs relating to NewSouth’s commercial business, gross margin in the first quarter of 2021 would have been 35.7%.

Selling, general and administrative expenses

Selling, general and administrative (“SG&A”) expenses were $69.8 million in the first quarter of 2021, an increase of $15.5 million, from $54.2 million in the first quarter of 2020. SG&A in the first quarter of 2021 was 25.7% of net sales, compared to 24.6% of net sales in the first quarter of 2020. The increase in SG&A is primarily the result of the inclusion of the SG&A expenses of NewSouth for the entire first quarter of 2021, compared to just the post-acquisition period from February 1, 2020 in the first quarter of 2020. NewSouth’s SG&A in the first quarter of 2021, compared to the first quarter of 2020, increased $8.5 million. The increase in NewSouth’s SG&A in the first quarter of 2021 included costs relating to our wind-down of NewSouth’s commercial business, which totaled $1.5 million relating to write-offs of uncollectible commercial accounts and related legal costs.

The increase in SG&A is also due to the inclusion of SG&A from our investment in Eco, and the related expenses, which totaled $0.7 million in the first quarter of 2021. Additionally, there were increases compared to the first quarter of 2020 in several other categories, including depreciation, stock-based compensation, as well as additional costs from investing in our strategic selling and marketing initiatives, as well as higher distribution costs on increased sales levels.

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Income from operations

Income from operations was $24.2 million in the first quarter of 2021, a decrease of $2.7 million, from $26.9 million in the first quarter of 2020. Income from operations in the first quarter of 2021 includes $18.7 million from our Southeast segment and $5.5 million from our Western segment, compared to $25.8 million and $1.1 million from our Southeast and Western segments, respectively, in the first quarter of 2020, all after allocation of corporate operating costs in both periods. The decrease in income from operations in the first quarter of 2021 compared to the first quarter of 2020 is primarily a result of the $4.2 million of costs relating to our wind-down of NewSouth’s commercial business as discussed in “Gross profit and gross margin”, and “Selling, general and administrative expenses” above. The decrease in income from operations was also related to the increase in SG&A in the first quarter of 2021, compared to last year’s first quarter, driven by the inclusion of a full quarter of NewSouth SG&A in 2021 compared to 2020, partially offset by the accretion to gross profit from the addition of our investment in Eco.

Interest expense, net

Interest expense was $7.5 million in the first quarter of 2021, an increase of $0.3 million, or 4.0%, from $7.2 million in the first quarter of 2020. Interest expense in the first quarter of 2021 includes an increase in interest expense due to the issuance of the Second Additional Senior Notes totaling $60.0 million effective on January 25, 2021, which we used to finance a portion of the purchase price for our investment in Eco. This increase was partially offset by a decrease in interest costs relating to the amortization of the $3.3 million premium we received on the Second Additional Senior Notes.

Income tax expense

Our income tax expense was $3.9 million for the three months ended April 3, 2021, compared with income tax expense of $4.1 million for the three months ended April 4, 2020. Our effective tax rate for the three months ended April 3, 2021, was an expense rate of 23.6%, and was an expense rate of 21.0% for the three months ended April 4, 2020. Our income tax expense for the three months ended April 3, 2021 includes $305 thousand relating to our 75% share of the pre-tax earnings of Eco.

Income tax expense in the three months ended April 3, 2021 included a minor discrete item of income tax benefit. The three months ended April 4, 2020 included excess tax benefits relating to exercises of stock options and lapses of restrictions on stock awards totaling $766 thousand. Excluding discrete items of income tax, the effective tax rates for the three months ended April 3, 2021 and April 4, 2020, would have been income tax expense rates of 24.1% and 24.8%, respectively.

We estimate that our annual effective tax rate for 2021, excluding discrete items, will approximate our current combined statutory federal and state rate of 24.7%.

Net income attributable to redeemable non-controlling interest

Net income attributable to redeemable non-controlling interest for the three months ended April 3, 2021, was $411 thousand and represents the share of the net income of Eco for the period subsequent to the date of our investment of February 1, 2021 through April 3, 2021, attributable to the 25% interest of Eco not acquired by the Company. There was no redeemable non-controlling interest in the first quarter of 2020.

Change in redemption value of redeemable non-controlling interest

For the three months ended April 3, 2021, based on the formula for determining the redemption value of the seller’s put option in the operating agreement governing this transaction, the redemption value of the redeemable non-controlling interest was estimated to be less than $34.5 million, the redemption value of the redeemable non-controlling interest before giving effect to seller’s put option, as of April 3, 2021. As such, there was no change in value to be recorded relating to the redeemable non-controlling interest for the three months ended April 3, 2021. There was no redeemable non-controlling interest in the first quarter of 2020.

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LIQUIDITY AND CAPITAL RESOURCES

Consolidated Cash Flows

Our principal source of liquidity is cash flow generated by operations and supplemented by borrowings under our credit facilities. We expect that this cash generating capability will provide us with financial flexibility in meeting operating and investing needs, but there can be no assurance that will be the case in future periods. Our primary capital requirements are to fund working capital needs, meet required debt service payments on our credit facilities and fund capital expenditures.

The following table summarizes our cash flow results for the first three months of 2021 and 2020:

	Components of Cash Flows
	Three Months Ended
	April 3,			April 4,
(in millions)	2021			2020
Cash (used in) provided by operating activities	$	(1.4	)	$	10.9
Cash used in investing activities		(100.8	)		(92.4	)
Cash provided by financing activities		60.9			51.8
Decrease in cash and cash equivalents	$	(41.3	)	$	(29.7	)

Operating activities. Cash used in operating activities during the first three months of 2021 was $1.4 million, compared to cash provided of $10.9 million in the first three months of 2020. The decrease in cash provided by operating activities for the first three months of 2021, as compared to the first three months of 2020, of $12.3 million, was due to the factors set forth in the table below.

Direct cash flows from operations for the first three months of 2021 and 2020 are as follows:

	Direct Operating Cash Flows
	Three Months Ended
	April 3,			April 4,
(in millions)	2021			2020
Collections from customers	$	245.0		$	219.1
Other collections of cash		3.9			2.4
Disbursements to vendors		(163.2	)		(139.7	)
Personnel related disbursements		(74.4	)		(59.5	)
Debt service payments		(12.8	)		(11.4	)
Other cash activity, net		0.1			-
Cash (used in) from operations	$	(1.4	)	$	10.9

Days sales outstanding (DSO), which we calculate as accounts receivable divided by quarterly average daily sales, was 42 days at April 3, 2021, compared to 42 days at April 4, 2020.

Inventory on hand as of April 3, 2021, was $72.4 million, compared to $60.3 million at January 2, 2021, an increase of $12.1 million. Inventory on hand at April 3, 2021 includes $8.2 million relating to our investment in Eco.

We monitor and evaluate raw material inventory levels based on the need for each discrete item to fulfill short-term requirements calculated from current order patterns and to provide appropriate safety stock. Because a significant portion of our products are made-to-order, we have a low amount of work-in-process inventory. As a result of these factors, our inventories are not excessive, and we believe the value of such inventories will be realized through sales.

Investing activities. Cash used in investing activities was $100.8 million for the first three months of 2021, compared to cash used in investing activities of $92.4 million for the first three months of 2020, an increase in cash used in investing activities of $8.4 million. Cash used to invest in Eco in the first three months of 2021 totaled $94.3 million, compared with cash used in the first three months of 2020 to acquire NewSouth of $90.1 million. There was also an increase in cash used in investing activities due to an increase in capital expenditures of $4.2 million, which went from $2.3 million in the first three months of 2020, to $6.5 million in the first three months of 2021. In the first three months of 2020, management made the decision to decrease spending on a majority of capital projects as part of its cash preservation strategy due to the uncertainty around the Pandemic and its potential impact to the Company’s liquidity.

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During the third quarter of 2020, the Company’s management determined to begin funding certain previously deferred capital projects in view of the increased order entry, sales, cash position and overall liquidity the Company experienced, and has continued to return capital spending to near pre-Pandemic levels.

Financing activities. Cash provided in financing activities was $60.9 million in the first three months of 2021, compared to cash provided in financing activities of $51.8 million in the first three months of 2020, an increase in cash provided of $9.2 million. In the first three months of 2021, we issued the Second Additional Senior Notes, which provided proceeds of $63.3 million, including a premium of $3.3 million. Proceeds from the issuance of the Second Additional Senior Notes were used to partially fund our investment in Eco. In the first three months of 2020, we issued the First Additional Senior Notes, which provided proceeds of $53.2 million, including a premium of $3.2 million. Proceeds from the issuance of the First Additional Senior Notes were used to partially fund our acquisition of NewSouth. We paid financing costs totaling $1.4 million in the first three months of 2021, related to the issuance of the Second Additional Senior Notes, compared to $1.3 million in the first three months of 2020, related to the issuance of the First Additional Senior Notes. Taxes paid relating to common stock withheld from employees to satisfy tax withholding obligations in connection with the vesting of restricted stock awards were $1.0 million in the first three months of 2021, versus $0.8 million in the first three months of 2020, an increase in cash used of $0.2 million. Proceeds from the exercises of stock options for the first three months of 2020 were $0.5 million. There were proceeds from stock issued under our 2019 Employee Stock Purchase Plan of $0.1 million during the first three months of 2020.

Capital Resources and Debt Covenant

2018 Senior Notes due 2026.

On August 10, 2018, we completed the issuance of $315.0 million aggregate principal amount of 6.75% senior notes (“2018 Senior Notes due 2026”), issued at 100% of their principal amount. The 2018 Senior Notes due 2026 are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future restricted subsidiaries, other than any restricted subsidiary of the Company that does not guarantee the existing senior secured credit facilities or any permitted refinancing thereof. The 2018 Senior Notes due 2026 are senior unsecured obligations of the Company and the guarantors, respectively, and rank pari passu in right of payment with all existing and future senior debt and senior to all existing and future subordinated debt of the Company and the guarantors. The 2018 Senior Notes due 2026 were offered under Rule 144A of the Securities Act, and in transactions outside the United States under Regulation S of the Securities Act, and have not been, and will not be, registered under the Securities Act.

On January 24, 2020, we completed an add-on issuance of $50.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026 (“First Additional Senior Notes”), issued at 106.375% of their principal amount, resulting in a premium to us of $3.2 million. The First Additional Senior Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the First Additional Senior Notes, including premium, were used, together with cash on hand, to pay the $90.4 million purchase price in the NewSouth Acquisition.

On January 25, 2021, we completed a second add-on issuance of $60.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026 (the “Second Additional Senior Notes”), issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million. The Second Additional Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the Second Additional Senior Notes, including premium, were used, together with $31.0 million in cash on hand, to pay the $94.3 million cash portion of the $100.4 million purchase consideration in the ECO Acquisition. The common stock portion of the purchase price was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a then current value of $21.34 per share, which we discounted by an estimate of 20% for lack of marketability, as they are legally restricted from being sold by the recipient for a three-year period from February 1, 2021.

The 2018 Senior Notes due 2026 mature on August 10, 2026. Interest on the 2018 Senior Notes due 2026 is payable semi-annually, in arrears, beginning on February 16, 2019, with interest accruing at a rate of 6.75% per annum from August 10, 2018. We incurred financing costs relating to bank fees and professional services costs relating to the offering and issuance of the 2018 Senior Notes due 2026 totaling $10.4 million, the First Additional Senior Notes totaling $1.3 million, offset by the $3.2 million premium on the First Additional Senior Notes, and the Second Additional Senior Notes totaling $1.4 million, offset by the $3.3 million premium on the Second Additional Senior Notes, all of which are being amortized under the effective interest method. See “Deferred Financing Costs” below.

As of April 3, 2021, the face value of debt outstanding under the 2018 Senior Notes due 2026 was $425.0 million, and accrued interest totaled $4.9 million.

The indenture for the 2018 Senior Notes due 2026 gives us the option to redeem some or all of the 2018 Senior Notes due 2026 at the redemption prices and on the terms specified in the indenture governing the 2018 Senior Notes due 2026. The indenture governing the 2018 Senior Notes due 2026 does not require us to make any mandatory redemptions or sinking fund payments. However, upon the occurrence of a change of control, as defined in the indenture, the Company is required to offer to repurchase the notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

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The indenture for the 2018 Senior Notes due 2026 includes certain covenants limiting the ability of the Company and any guarantors to, (i) incur additional indebtedness; (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; (iii) enter into agreements that restrict distributions from restricted subsidiaries; (iv) sell or otherwise dispose of assets; (v) enter into transactions with affiliates; (vi) create or incur liens; merge, consolidate or sell all or substantially all of the Company’s assets; (vii) place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company; and (viii) designate the Company’s subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications.

2016 Credit Agreement due 2022.

On February 16, 2016, we entered into the 2016 Credit Agreement due 2022, among us, the lending institutions identified in the 2016 Credit Agreement due 2022, and Truist Financial Corporation (formerly known as SunTrust Bank), as Administrative Agent and Collateral Agent. The 2016 Credit Agreement due 2022 establishes senior secured credit facilities in an aggregate amount of $310.0 million, consisting of a $270.0 million Term B term loan facility originally maturing in February 2022 that amortizes on a basis of 1% annually during its six-year term, and a $40.0 million revolving credit facility originally maturing in February 2021 that includes a swing line facility and a letter of credit facility. Our obligations under the 2016 Credit Agreement due 2022 are, subject to exceptions, guaranteed by substantially all of our wholly-owned direct and indirect subsidiaries that are restricted subsidiaries and secured by substantially all of our assets as well as our direct and indirect restricted subsidiaries’ assets.

On March 16, 2018, we entered into an amendment of our 2016 Credit Agreement due 2022 (the “Second Amendment”). The Second Amendment, among other things, decreases the applicable interest rate margins for the Initial Term Loans (as defined in the 2016 Credit Agreement due 2022) from (i) 3.75% to 2.50%, in the case of the Base Rate Loans (as defined in the 2016 Credit Agreement due 2022), and (ii) 4.75% to 3.50%, in the case of the Eurodollar Loans (as defined in the 2016 Credit Agreement due 2022). On February 17, 2017, we entered into the first amendment to our 2016 Credit Agreement due 2022, which also resulted in decreases in the applicable margins, but which, unlike the Second Amendment, did not include any changes in lender positions.

On October 31, 2019, we entered into an amendment of our 2016 Credit Agreement due 2022 (“Third Amendment”). The Third Amendment provides for, among other things, (i) a three-year Term A loan in the then aggregate principal amount of $64.0 million (the “Initial Term A Loan”), maturing in October 2022, which refinances in full our existing Term B term loan facility under the 2016 Credit Agreement, and has no regularly scheduled amortization, and (ii) a new five-year revolving credit facility in an aggregate principal amount of up to $80.0 million (the “Revolving Facility”), maturing in October 2024, which replaced our then existing $40.0 million revolving credit facility under the 2016 Credit Agreement, and includes a swing-line facility and letter of credit facility. Our obligations under the 2016 Credit Agreement continue to be secured by substantially all of our assets, as well as our direct and indirect subsidiaries’ assets.

Pursuant to the Third Amendment, interest on all loans under the 2016 Credit Agreement is payable either quarterly or at the expiration of any LIBOR interest period applicable thereto. The Third Amendment decreases the applicable interest rate margins for the Initial Term Loan A from (i) 2.50% to a spread of 1.00% to 1.75% based on our first lien net leverage ratio, in the case of the Base Rate Loans (with a floor of 100 basis points), and (ii) 3.50% to a spread ranging from 2.00% to 2.75% based on our first lien leverage ratio, in the case of the Eurodollar Loans (with a floor of zero basis points).

Also, in connection with the Third Amendment, we will pay quarterly fees on the unused portion of the revolving credit facility equal to a percentage spread (ranging from 0.25% to 0.35%) based on our first lien net leverage ratio. The Third Amendment also modifies the springing financial covenant under the 2016 Credit Agreement to provide that such financial covenant will not be tested until the Initial Term A Loan is paid in full. As of April 3, 2021, there were $5.8 million in letters of credit outstanding and $74.2 million available under the Revolving Facility.

Fees and costs relating to the Third Amendment were $0.9 million, which are deferred and being amortized. In connection with the Third Amendment, certain existing lenders modified their positions in or exited the 2016 Credit Agreement. Deferred financing costs and original issue discount allocated to these lenders of $1.5 million were written-off and classified as debt extinguishment costs in our consolidated statement of operations for the year ended December 28, 2019. As of April 3, 2021, after making prepayments of borrowings totaling $10.0 million during the third quarter of 2020, the principal amount of debt outstanding under the 2016 Credit Agreement due 2022 was $54.0 million. Accrued interest at April 3, 2021 was $16 thousand.

The weighted average all-in interest rate for borrowings under the term-loan portion of the 2016 Credit Agreement due 2022 was 2.14% as of April 3, 2021, and was 2.15% at January 2, 2021.

Pursuant to the Third Amendment, the 2016 Credit Agreement due 2022 contains a springing financial covenant that would apply if we draw in excess of thirty-five percent (35%) of the revolving facility commitment (excluding $7.5 million of undrawn letters of credit and letters of credit and draws thereunder that are cash collateralized at 103% of the stated amount thereof from such availability test). To the extent in effect, the springing financial covenant would prohibit us from exceeding a maximum first lien net leverage ratio (based on the ratio of total first lien (less unrestricted cash) debt to EBITDA) as of the last day of each applicable fiscal

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quarter. To the extent the springing financial covenant is in effect, the first lien net leverage ratio currently cannot exceed 4.00:1.00 (4.50:1.00 during a significant acquisition period, as defined, which we are in as of April 3, 2021). We have not been required to test our first lien net leverage ratio because we have not exceeded 35% of our revolving capacity.

The 2016 Credit Agreement due 2022 also contains a number of affirmative and restrictive covenants, including limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of our capital stock, entry into restrictive agreements, prepayments of certain debt and transactions with affiliates, in each case, subject to exceptions and qualifications. The 2016 Credit Agreement due 2022 also contains customary events of default. Upon the occurrence of an event of default, the amounts outstanding under the 2016 Credit Agreement due 2022 may be accelerated and may become immediately due and payable.

Deferred Financing Costs

The activity relating to third-party fees and costs, lender fees, discount and premiums for the three months ended April 3, 2021, are as follows. All debt-related fees, costs, discount and premiums are classified as a reduction of the carrying value of long-term debt:

(in thousands)	Total
At beginning of year	$	6,902
Add: Deferred financing costs from the issuance of Second Additional Senior Notes		1,363
Less: Premium on the Second Additional Senior Notes		(3,300	)
Less: Amortization expense		(230	)
At end of period	$	4,735

Estimated amortization expense relating to third-party fees and costs, lender fees, discount and premiums for the years indicated as of April 3, 2021, is as follows:

(in thousands)	Total
Remainder of 2021	$	657
2022		905
2023		844
2024		889
2025		861
Thereafter		579
Total	$	4,735

As a result of prepayments of the 2016 Credit Agreement due 2022 totaling $214.0 million since its inception in February 2016, we have no future scheduled repayments until the maturity of the facility on October 31, 2022. The contractual future maturities of long-term debt outstanding, including the remaining balance of the financing arrangement described as other debt, as of April 3, 2021, are as follows (at face value):

(in thousands)
Remainder of 2021	$	—
2022		54,000
2023		—
2024		—
2025		—
Thereafter		425,000
Total	$	479,000

Investment in Eco Windows Systems. On February 1, 2021, we completed our previously announced acquisition of a 75% ownership stake in Eco Windows Systems and its related companies, Eco Glass Production, LLC, and Unity Windows, LLC (together “Eco”), Florida limited liability companies, for fair value consideration of $100.4 million, including $94.3 million in cash, which was after an estimated working capital adjustment in our favor of approximately $5.6 million received at the closing, and PGT Innovations, Inc. common stock with a then fair value estimated to be $6.1 million. The cash portion of the purchase price was financed by a Second Additional Senior Notes composed of an add-on issuance on January 25, 2021 of $60.0 million aggregate principal amount of 6.75% senior notes to the 2018 Senior Notes due 2026 on January 25, 2021, issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million, together with cash on hand of $31.0 million.

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The common stock portion of the purchase price was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a closing price value of $21.34 per share on that date, or approximately $7.6 million based on that price. However, the seller of Eco, who is also the holder of the 25% redeemable non-controlling interest in Eco Enterprises, is restricted from selling these shares for a three-year period from the date of the acquisition. As such, we estimated that there was an approximately 20% discount for the lack of marketability of the shares. The fair value of the redeemable non-controlling interest in the acquisition has been preliminarily estimated to be $34.1 million, resulting in total fair value of the Eco business in the acquisition, including the redeemable non-controlling interest, of $134.5 million. The fair value of the redeemable non-controlling interest has been calculated as 25% of the initial estimated fair value of the entity at the acquisition date, less a 5% estimated discount for seller’s lack of control in the new entity. Eco is a manufacturer and installer of aluminum, impact-resistant windows and doors, serving the South Florida region since 2009. Eco is headquartered in Medley, Florida, near Miami, Florida, and has three manufacturing locations in the region.

Capital Expenditures. Capital expenditures vary depending on prevailing business factors, including current and anticipated market conditions. For the first three months of 2021, capital expenditures were $6.5 million, compared to $2.3 million for the first three months of 2020. During the first half of 2020, management made the decision to decrease spending on a majority of capital projects as part of its cash preservation strategy implemented in response to the uncertainty around the Pandemic’s impact on the Company’s business and liquidity. During the third quarter of 2020, the Company’s management determined to begin funding certain previously deferred capital projects in view of the increased order entry, sales, cash position and overall liquidity the Company has experienced, and has continued to return capital spending to near pre-Pandemic levels. The Company’s management will continue to evaluate the level of capital expenditures the Company may incur for the remainder of 2021 and thereafter, but we expect to continue to fund previously deferred capital projects, which may continue to result in a higher level of capital spending in 2021 as compared to 2020. However, we may return to a more conservative approach to managing capital expenditures going forward based on our evaluation of future economic conditions and the performance of our businesses and operations, including any further impact of the Pandemic and the economic uncertainty it has caused on our sales, cash position and overall liquidity. Our capital expenditure program is directed towards making investments in capital assets that we believe will increase both gross sales and margins, but also includes capital expenditures for maintenance capital.

Aluminum Forward and Midwest Transaction Premium Contracts. We enter into aluminum forward contracts to hedge the fluctuations in the purchase price of aluminum extrusions we use in production. Beginning late in the first three months of 2021, we began entering into forward contracts to hedge the fluctuations in the price of the delivery component of our aluminum extrusion purchases, known as the Midwest Transaction Premium (MTP).

At April 3, 2021, the fair value of our aluminum forward contracts was in a net asset position of $5.9 million. We had 25 outstanding forward contracts for the purchase of 33.7 million pounds of aluminum through June 2022, at an average price of $0.84 per pound, which excludes the Midwest premium, with maturity dates of between one month and fifteen months. We assessed the risk of non-performance of the Company to these contracts and determined it was immaterial and, therefore, did not record any adjustment to fair value as of April 3, 2021.

At April 3, 2021, the fair value of our MTP contracts was in a net asset position of $4.2 million. We had 29 outstanding MTP contracts to hedge the Platt US MW Transaction price per pound for the delivery of 56.1 million pounds of aluminum through December 2022, at an average price of $0.12 per pound, with maturity dates of between one month and twenty-one months. We assessed the risk of non-performance of the Company to these contracts and determined it was immaterial and, therefore, did not record any adjustment to fair value as of April 3, 2021.

We assess the effectiveness of our aluminum forward contracts by comparing the change in the fair value of the forward contract to the change in the expected cash to be paid for the hedged item. The effective portion of the gain or loss on our aluminum forward contracts is reported as a component of accumulated other comprehensive income (loss) and is reclassified into earnings in the same line item in the income statement as the hedged item in the same period or periods during which the transaction affects earnings. The amount of income (loss), net, recognized in the “accumulated other comprehensive income (loss)” line item in the accompanying condensed consolidated balance sheet as of April 3, 2021, that we expect will be reclassified to earnings within the next twelve months, will be approximately $8.7 million.

Contractual Obligations. Except for the issuance of the Second Additional Senior Notes, as described in Part I., Item 1., Note 9, and the addition of $29.5 million in operating lease liabilities in the three months ended April 3, 2021, as described in Part I., Item 1., Note 10, including the $27.9 million in operating lease liabilities we are consolidating as a result of our investment in Eco, described in Part I., Item 1., Note 6, there have been no significant changes to the “Disclosures of Contractual Obligations and Commercial Commitments” table in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended January 2, 2021.

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Significant Accounting Policies and Critical Accounting Estimates. Our consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Significant accounting policies are those that are both important to the accurate portrayal of a Company’s financial condition and results, and those that require subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Certain estimates are particularly sensitive due to their significance to the condensed consolidated financial statements and the possibility that future events may be significantly different from our expectations. We identified our significant accounting policies in our Annual Report on Form 10-K for the year ended January 2, 2021. There have been no changes to our critical accounting policies during the first three months of 2021.

Recently Issued Accounting Pronouncements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in March 2021, a subsequent amendment to the initial guidance, ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We utilize derivative financial instruments to hedge price movements in aluminum materials used in our manufacturing process and to hedge the delivery component of our aluminum needs, known as the Midwest Transaction Premium (“MTP”). As of April 3, 2021, we are covered for approximately 66% of our anticipated aluminum needs during the remainder of 2021 at an average price of $0.83 per pound, and for approximately 4% of our anticipated aluminum needs in 2022 at an average price of $0.93 per pound. These calculations are based only on the LME price of aluminum and excludes an estimate for the MTP, which we hedge separately. As of April 3, 2021, we are covered for approximately 69% of our anticipated MTP costs for the remainder of 2021 at an average price of $0.12 per pound, and for approximately 34% of our anticipated MTP costs in 2022 at an average price of $0.12 per pound.

Regarding our aluminum hedging instruments for the purchase of aluminum, as of April 3, 2021, a 10% decrease in the price of aluminum per pound would decrease the fair value of our forward contracts of aluminum by an estimated $3.4 million. This calculation utilizes our actual commitment of 33.7 million pounds under contract (to be settled throughout June 2022) and the market price of aluminum as of April 3, 2021. This calculation is based only on the LME price of aluminum and excludes an estimate for the MTP. Regarding our MTP contracts for hedging of the delivery component of our aluminum needs, as of April 3, 2021, a 10% decrease in the Platts MW US Transaction price per pound would decrease the fair value of our MTP contracts an estimated $1.1 million. This calculation utilizes our actual commitment of 56.1 million pounds under contract (to be settled throughout December 2022) and the then current Platts MW US Transaction price per pound as of April 3, 2021.

We experience changes in interest expense when market interest rates change. Changes in our debt could also increase these risks. Based on debt outstanding with a variable rate as of the date of filing of this Quarterly Report on Form 10-Q, of $54.0 million, a 100 basis-point increase in interest rate would result in approximately $0.5 million of additional interest costs annually.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

A control system, however, no matter how well conceived and operated, can at best provide reasonable, not absolute, assurance that the objectives of the control system are met. Additionally, a control system reflects the fact that there are resource constraints, and the benefits of controls must be considered relative to costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of error or fraud, if any, within our Company have been detected, and due to these inherent limitations, misstatements due to error or fraud may occur and not be detected.

Our chief executive officer and interim chief financial officer, with the assistance of management, evaluated the design, operation and effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report (“Evaluation Date”). Based on that evaluation, our chief executive officer and interim chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective for the purposes of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and interim chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting.

During the period covered by this report, there have been no changes in our internal control over financial reporting identified in connection with the evaluation described above that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, during our first quarter ended April 3, 2021, we invested in Eco. We have elected to exclude Eco from our assessment of effectiveness of our internal controls over financial reporting as of January 1, 2022, the end of our 2021 fiscal year, but will include Eco in our assessment for our 2022 fiscal year.

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PART II — OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are involved in various claims and lawsuits incidental to the conduct of our business in the ordinary course. We carry insurance coverage in such amounts in excess of our self-insured retention as we believe to be reasonable under the circumstances and that may or may not cover any or all of our liabilities with respect to claims and lawsuits. We do not believe that the ultimate resolution of the matters pending or threatened against us at this time will have a material adverse impact on our financial position or results of operations.

Although our business and facilities are subject to federal, state, and local environmental regulation, environmental regulation does not have a material impact on our operations. We believe that our facilities are in material compliance with such laws and regulations. As owners and lessees of real property, we can be held liable for the investigation or remediation of contamination on such properties, in some circumstances without regard to whether we knew of or were responsible for such contamination. Our current expenditures with respect to environmental investigation and remediation at our facilities are minimal, although no assurance can be provided that more significant remediation may not be required in the future as a result of spills or releases of petroleum products or hazardous substances, or the discovery of previously unknown environmental conditions.

ITEM 1A. RISK FACTORS

Our operations are subject to a number of risks. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in this Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission, including the risk factors set forth in Part 1, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended January 2, 2021. If any of the events described in the risk factors actually occur, our business, financial condition or operating results, as well as the market price of our securities, could be materially adversely affected.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities and Use of Proceeds

On February 1, 2021, we issued 357,797 shares of PGT Innovations, Inc. common stock, composed of 279,529 shares to Seller of Eco, and 78,268 shares to U.S. Bank, N.A., as escrow agent, as the common stock portion of the purchase price of the Eco Acquisition. The shares were issued in reliance upon the exemption under Section 4(a)(2) of the Securities Act. See Part I, Item 1. Note 6 for additional information about the Eco Acquisition.

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ITEM 6. EXHIBITS

10.1*	Employment Agreement between PGT Innovations, Inc., and Robert Keller, dated January 1, 2021
10.2*	Employment Agreement between PGT Innovations, Inc., and Brad West, dated January 1, 2021
10.3*	Employment Agreement between PGT Innovations, Inc., and Brent C. Boydston, dated January 1, 2021
10.4*	Employment Agreement between PGT Innovations, Inc., and Michael Wothe, dated January 1, 2021
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

*Filed herewith.

**Furnished herewith.

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SIGNATURE

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 thereunto duly authorized.

	PGT INNOVATIONS, INC.
	(Registrant)
Date: May 13, 2021	/s/ Brad West
	Brad West
	Interim Chief Financial Officer and Senior Vice President of Corporate Development and Treasurer

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EX-10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into effective as of January 1, 2021, by and between PGT Innovations, Inc., a Delaware corporation (the "Employer"), and Robert Keller, an individual and resident of the State of Florida (the "Employee").

RECITALS:

          Employer desires to continue to employ Employee upon the terms and conditions set forth herein, and the Employee wishes to accept such continued employment upon the terms and conditions set forth herein including, without limitation, the nondisclosure and noncompetition covenants and agreements of the Employee set forth in Sections 7 and 8 hereof, in order to cause Employer to provide Employee the Compensation (as defined herein) and any right to Termination Pay pursuant to Section 6.2 hereof.

AGREEMENT

          In consideration of the foregoing and the mutual promises and covenants set forth herein, the parties, intending to be legally bound, agree as follows:

     1.   Definitions.

          For the purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.

          "Affiliate(s)" means any Person, directly or indirectly controlled by, or under common control with, the Employer or any other referenced Person.

          "Agreement" means this Employment Agreement.

          "Annual Performance Bonus" has the meaning set forth in Section 3.2 of this Agreement.

          "Benefits" has the meaning set forth in Section 3.1(b).

          "Board of Directors” means the board of directors of PGT Innovations, Inc. .

          "Cause" means the occurrence of any of the following events during the Employment Period: (a) conduct amounting to fraud or dishonesty against the Employer or any Affiliate of the Employer; (b) the Employee's intentional misconduct, refusal or failure to follow the lawful directions of the Chief Executive Officer (“CEO”) of the Company, or such other senior officer as the Employee may report to from time to time (collectively, the “Senior Managers”) or a breach

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of this Agreement; (c)  intoxication with alcohol or drugs while on the Employer's property or while carrying out the business of the Employer; (d) a conviction or plea of guilty or nolo contendere to a felony or to a misdemeanor involving charges of embezzlement, fraud, stealing or theft, or assault or battery to others; (e) a material breach or violation of the Company’s code of conduct, employee handbook or similar policies or rules, including without limitation, due to sexual or other forms of prohibited harassment;  or (f) the Employee's failure to observe and comply with the requirements in Sections 7 or 8 hereof.

“Change of Control” means a “Change in Control” as defined in Section 12 of the Employer’s 2019 Equity and Incentive Compensation Plan, provided that such “Change in Control” constitutes a change in control event for purposes of Section 409A of the Internal Reveue Code of 1986, as amended.

          "Compensation” means Salary and Benefits.

          "Confidential Information” means any and all:

               (a) trade secrets concerning the business and affairs of the Employer or any Affiliate of the Employer, product or service specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing, marketing or distribution methods and processes, customer lists, prospective customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures, and architectures (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas,  designs, methods and information), and any other information, however documented, that is a "trade secret" either under common law or as such term is defined by statute under the laws of any applicable jurisdiction;

               (b) information concerning the business and affairs of the Employer or its Affiliates (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and

               (c) notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer or Affiliates of the Employer, containing or based, in whole or in part, on any information included in the foregoing.

          "Disability” has the meaning set forth in Section 6.3.

          "Employee Invention” means any idea, invention, technique, modification, process, or improvement (whether patentable or not), and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee, either solely or in conjunction with others, during the Employment Period, or a period that includes a portion of the Employment Period, that relates in any way to, or is useful in any manner in, the business

2

then being conducted or proposed to be conducted by the Employer or any Affiliate of the Employer, and any such item created by the Employee, either solely or in conjunction with others, following termination of the Employee's employment with the Employer, that is based upon or uses Confidential Information; provided, however, that any item so created by the Employee that is based upon or uses Confidential Information that the Employee demonstrates was or became generally available to the public, other than as a result of a disclosure by the Employee, will not be deemed to be an Employee Invention for any purposes.

          "Employer” is the entity identified on the first page of this Agreement and its successors and assigns.

          "Employment Period” means the term of the Employee's employment with the Employer.

          "Good Reason” means the occurrence of any of the following events during the Employment Period: (a) a material diminution of the duties or responsibilities of the Employee; or (b) the assignment of the Employee to a worksite outside of a fifty (50) mile radius from the Employer's current headquarters; provided, however, that none of the foregoing events or conditions will constitute “Good Reason” unless: (i) Employee provides the Employer with written objection to the event or condition within thirty (30) days following the occurrence thereof, (ii) the Employer does not reverse or otherwise cure the event or condition within thirty (30) days of receiving that written objection, and (iii) Employee resigns his employment within thirty (30) days following the expiration of that cure period.

“Incentive Amount” means the target amount payable to the Employee under the Employer’s Annual Incentive Plan for the award period ending in the year in which the termination of employment occurs.

          "Noncompetition Agreement" means the agreements and covenants of the Employee found in Section 8.2.

          "Noncompetition Period” means a period of time equal to the Employment Period plus two (2) years, unless this Agreement is terminated by the Employer without Cause or by the Employee with Good Reason, in which case the Noncompetition Period will be for a period of time equal to the Employment Period plus one (1) year.

          "Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or governmental body.

          "Proprietary Items” has the meaning set forth in Section 7.2(a)(iv).

          "Salary” has the meaning set forth in Section 3.1(a).

    2.Employment Term and Duties.

          2.1 Employment. The Employer hereby continues the employment of the Employee, effective as of the date hereof, and the Employee shall accept such continued employment by the

3

Employer, effective as of the date hereof, upon the terms and conditions set forth in this Agreement.

          2.2 Term. Subject to the provisions of Section 6, the term of the Employee's employment under this Agreement shall  continue until terminated in accordance with Section 6.

          2.3 Duties. The Employee will continue to serve as the President of the Southeastern Business Unit of the Employer, with duties and responsibilities associated with and related to such position, and such other duties and responsibilities as the Employee may be requested to perform by the Employer’s CEO or such other Senior Manager as the CEO may designate from time to time. The Employee will (a) devote the Employee's business effort, time, energy and skill (vacations and reasonable absences due to illness excepted) as is necessary to fulfill the duties of his position and those assigned by the Senior Managers, (b) use his best efforts to promote the success of the business, and (c) cooperate fully with the lawful requests of the Senior Managers in the advancement of the best interests of the Employer and its Affiliates. During the Employment Period, the Employee shall not be engaged in or provide services to any other business or enterprise which interferes with the Employee's performance of the Employee’s job duties, and other obligations under this Agreement.

     3.   Compensation.

          3.1  Basic Compensation.

               (a) Salary. The Employer shall pay to the Employee an annualized salary at a rate of $390,000 per year, subject to the provisions of Section 6 and adjusted as provided below (the "Salary"), which Salary will be payable in equal periodic installments in accordance with the Employer's customary payroll practices. The Salary will be reviewed by the President and CEO of PGT Innovations, Inc. at least once each year and may be adjusted by the Employer following such review and the approval of any such adjustment by the Board of Directors or the Board’s designated committee. Any such adjustment in the Salary shall be made by, and at the sole discretion and approval of, the President and CEO and the Board of Directors or the Board’s designated committee, as the case may be, and, as adjusted, shall become the Employee's new "Salary" hereunder (unless and until further adjusted).

               (b) Benefits. The Employee will be entitled to participate in such life insurance, hospitalization and medical plans or insurance coverage, disability, and other employee benefit plans, programs and policies of the Employer in effect from time to time (collectively, the "Plans"), vacation and holidays (as further provided in Section 5 below), and any other plan which may be made available by the Employer to its key management employees from time to time in the future, if, and to the extent that, the Employee is eligible under the terms of such Plans. All of the plans, agreements, and undertakings of Employer set forth above shall be called, collectively, the "Benefits." Any Benefits hereunder shall be subject to such local, state or federal tax reporting requirements as maybe in effect from time to time.  This Agreement will not limit the Employer’s ability to amend, modify or terminate such Plans at any time for any reason.  

    3.2  Annual Performance Bonus.

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          As additional incentive compensation for the services to be rendered by the Employee pursuant to this Agreement, the Employee shall be eligible, each calendar year, to receive a bonus (the "Annual Performance Bonus"), if and to the extent that the performance metrics or other requirements that must be satisfied in order for the Employee to receive the Annual Performacne Bonus have been achieved. The determination of whether to pay an Annual Performance Bonus, if any, and the amount of any such Annual Performance Bonus, shall be determined by the Company’s  Board of Directors or the Board’s designated committee, in their discretion, and for 2021 shall be at a target value equal to 60% of the Employee’s Salary.  Any Annual Performance Bonus that is due to the Employee hereunder shall be paid as soon as practicable, but in no event later than 30 days following completion of the Employer's audited financial statements of the year to which the Annual Performance Bonus relates.

   3.3Annual Equity Grant

During the first fiscal quarter of each year, or such other time as the Board, in its discretion, may determine, the Employee will receive an annual equity grant with a target value, measured as of the grant date, equal to the percentage of the Employee’s Salary determined by the Board or its designated committee, which for 2021 shall be 90% (the “Annual Equity Grant”).  One-half of the Annual Equity Grant is expected to be in the form of restricted stock units or restricted share units with no performance restrictions or metrics associated with them, and which are expected to vest in three equal increments on each of the first, second and third anniversaries of the grant date.  The other one-half of the Annual Equity Grant is expected to be in the form of performance shares or performance restricted stock units, which will have Board-determined performance restrictions and metrics associated with them.  The determination of how many of those performance shares or performance restricted stock units have been earned will be made by the Board on or about the first anniversary of the grant date, based on the financial performance of the Company during the prior fiscal year, and any performance shares or performance stock units deemed by the Board to be earned are expected to vest in two equal increments on or about each of the second and third anniversaries of the grant date. Notwithstanding any other provision of this Agreement to the contrary, the determination of whether and when to make any Annual Equity Grant to Employee, and the design, nature and amount of any such Annual Equity Grant, shall be determined by the  Board in its discretion.  All Annual Equity Grants to Employee shall be subject to the terms of the grant agreement between Employer and Employee.  In the event of a Change of Control, the Board or its designated committee will determine the manner in which any unvested restricted shares, performance shares, restricted stock units or other unvested equity grants will be treated, with respect to the amount and timing of the vesting of such unvested equity, to the extent that the same is not already addressed in the terms of the applicable grant agreement between the Employer and Employee.

     4.   Facilities and Expenses.

          The Employer will furnish the Employee with office space, equipment, supplies, computer and facsimile equipment, telephones (including cellular telephone), and such other facilities, support staff and personnel as the Employer deems necessary or appropriate for the performance of the Employee's duties under this Agreement. The Employer will reimburse the Employee for

5

reasonable business expenses incurred by him on behalf of the Employer in the performance of his duties; provided, that Employee furnishes to Employer documentation of such expenses as is required by the Internal Revenue Service and the Employer’s internal policies, as well as such other documentation as the Employer may request. In addition, the Employer will reimburse the Employee or otherwise provide and pay for all professional affiliation expenses incurred by the Employee that have been pre-approved by the Employer. The Employee must file authorization requests, to the extent required by the Employer's employment policies and, in all instances, expense reports with respect to such expenses in accordance with the Employer's policies.

     5.   Vacations and Holidays.

          The Employee will be entitled to four weeks paid vacation each year or such other amount of paid vacation as may be provided for in the Employer's written vacation policy, if greater. Such vacation shall be taken in accordance with the vacation policies of the Employer in effect for its senior managers from time to time. Vacation must be taken by the Employee at such time or times as mutually agreed by the Employee and the Employer. The Employee will also be entitled to any paid holidays expressly provided for in the Employer's policies.

6.   Termination.

          6.1  Events of Termination.

               (a) Death; Disability. In the event of the Employee's death or Disability, the Employee’s employment with the Employer shall be deemed terminated as of the end of the month in which such death occurs or such Disability is determined, and all rights, duties and obligations of the parties hereunder shall thereupon cease, except for the Employee's obligations under Section 7 and Section 8 hereof (in the case of a termination due to Disability), and the Employer's obligations under Sections 6.2(a) and 6.2(b) hereof, as the case may be.

               (b) By The Employer for Cause. The Employee's employment with the Employer may be terminated at the option of and by written notice from the Employer if the Senior Managers finds Cause. Upon any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease (including, but not limited to, the payment by the Employer of all Compensation), except for the Employee's obligations under Section 7 and Section 8 hereof.

               (c) By The Employer Without Cause. The Employer may also terminate the Employee's employment at any time upon not less than ten (10) days advance written notice without Cause. Upon expiration of such notice period, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(c). The Employer mayaccelerate the effective date of such termination if, in lieu of such notice, and in addition to the payments required by Section 6.2(c) below, Employer continues to pay Salary to Employee for a number of days equal to the number of days by which Employer accelerated the effective date of Employee's termination.

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               (d) Voluntary Termination without Good Reason By Employee. The Employee may terminate his employment with the Employer without Good Reason upon not less than thirty (30) days advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(d).

               (e) Termination with Good Reason by the Employee. The Employee may terminate his employment with the Employer with Good Reason upon advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(e).

          6.2 Termination Pay. Upon cessation of Employee’s employment with Employer, the Employer will be obligated to pay the Employee (or, in the event of his death, his designated beneficiary) only such compensation, if any, as is provided in this Section 6.2. For purposes of this Section 6.2, the Employee's designated beneficiary will be such individual beneficiary or trust, located at such address, as the Employee may designate by notice to the Employer from time to time or, if the Employee fails to give notice to the Employer of such a beneficiary, the Employee's estate.

               (a) Termination by Death. If the Employee’s employment terminates because of the Employee's death, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, pay to the Employee's designated beneficiary the Employee's Salary for a period of six (6) months.

               (b) Termination upon Disability. If the Employee’s employment is terminated by either party as a result of the Employee's Disability, as determined under Section 6.3, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, continue to pay to the Employee his Salary for a period of twelve 12) months following the effective date of such termination.

               (c) Termination by the Employer Without Cause. If the Employer terminates the Employee's employment without Cause, the Employer will (i) pay to Employee his Salary, in accordance with normal payroll practice, for a period of twelve (12) months, commencing no later than the tenth business day following sixty (60) days after the date of Employee’s separation from service; (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twelve (12) months; (iii) pay 100% of Employee’s Incentive Amount, in a lump-sum payment payable no later then the tenth business day following the date of Employee’s separation from services.  Notwithstanding the preceding provisions of this Section 6.2(c), in the event the Employee’s employment is terminated by the Employer (or the successor employer to the Employer) without Cause at the time of or within

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twelve months after the effective date of a Change of Control, the Employer (or successor employer to the Employer following the Change of Control) will (i) pay to Employee an amount equal to his Salary for a period of  twenty-four (24) months, in a lump sum  payable on the 60^th day following the date of Employee’s separation from service (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twenty-four (24) months; and (iii) pay 200% of Employee’s Incentive Amount, in a lump-sum payment payable on the 60^th day following the date of Employee’s separation from service; provided, however. that to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended,  the amounts described in (i) and (iii) of this sentence will be paid on the same schedule as set forth in the first sentence of this paragraph. For purposes of the preceding sentence, Salary and the Incentive Amount shall be the greater of (i) Salary and the Incentive Amount as determined at the time of the Employee’s separation from service and (ii) Salary and the Incentive Amount as determined assuming a separation from service immediately prior to the effective date of the Change in Control.

               (d) Termination by the Employee without Good Reason. If the Employee terminates his employment other than with Good Reason, the Employer shall continue to pay to the Employee his Salary for the shorter of: (i) thirty (30) days; or (ii) the notice period provided by the Employee with respect to his termination.

  (e) Termination by the Employee with Good Reason. If the Employee terminates the Employee's employment with Good Reason, he will be entitled to the same payments and benefits described above in Section 6.2(c), including where Employee terminates his employment with Good Reason at the time of or following a Change of Control, within twelve months after the effective date of such Change of Control.

6.3Definition of Disability. For purposes of this Agreement, “Disability” has the meaning defined in Treas. Reg. § 1.409A-3(i)(4).

6.4Release Required as a Condition of Severance.  Notwithstanding any other provision of this Agreement, payments under Section 6.2, above, are conditioned on the Employee’s (a) immediate resignation, upon Employer’s request, from all employee and director positions with the Employer and its affiliates;  (b) execution and delivery to the Employer, within the applicable review period (e.g., 45 days or 21 days, depending on the context in which the termination occurs) following the termination of his employment, and non-revocation of, a general release of claims against the Employer and its affiliates in such form as the Employer may reasonably require (the “Release”); and (c) the Emplyoee’s full compliance with the provisions of this Agreement following the termination of his employment, including Sections 7 and 8 hereof. For avoidance of doubt, the payments and benefits described in this Section 6.2 are in lieu of, and not in addition to, any other severance arrangement maintained by the Employer.

     7.   Non-Disclosure Covenant; Employee Inventions.

          7.1 Acknowledgments by the Employee. The Employee acknowledges that (a) during the Employment Period and as a part of his employment, the Employee will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an

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adverse effect on the Employer and its business; (c) since the Employee possesses substantial expertise and skill with respect to the Employer's business, the Employer desires to obtain exclusive ownership of each Employee Invention, and the Employer will be at a substantial competitive disadvantage if it fails to acquire exclusive ownership of each Employee Invention; (d) the Compensation provided to Employee hereunder constitutes good and sufficient consideration for the Employee's agreements and covenants in this Section 7; and (e) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information and to provide the Employer with exclusive ownership of all Employee Inventions.

          7.2 Agreements of the Employee. In consideration of the Compensation to be paid or provided to the Employee by the Employer under this Agreement, the Employee covenants as follows:

               (a) Confidentiality.

                    (i) During and at all times following the Employment Period, the Employee will hold in confidence the Confidential Information and will not disclose it to any person except with the specific prior written consent of the Employer or except as otherwise expressly permitted by the terms of this Agreement.

                    (ii) Any trade secrets of the Employer will be entitled to all of the protections and benefits under applicable trade secret laws. If any information that the Employer deems to be a trade secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this Agreement, such information will, nevertheless, be considered Confidential Information for

purposes of this Agreement. The Employee hereby waives any requirement that the Employer submit proof of the economic value of any trade secret or post a bond or other security.

                    (iii) None of the foregoing obligations and restrictions apply to any part of the Confidential Information that the Employee demonstrates was or became generally available to the public other than as a result of a disclosure by the Employee.

                    (iv) The Employee will not remove from the Employer's (or any Affiliate's) premises (except to the extent such removal is for purposes of the performance of the Employee's duties at home or while traveling, or except as otherwise specifically authorized by the Employer in writing) any document, record, notebook, plan, model, component, device, or computer software or code, whether embodied in a disk or in any other form (collectively, the "Proprietary Items").  The Employee recognizes that, as between the Employer and the Employee, all of the Proprietary Items, whether or not developed by the Employee, are the exclusive property of the Employer. Upon termination of this Agreement by either party, the Employee will return to the Employer all of the Proprietary Items in the Employee's possession or subject to the Employee's control, and the Employee shall not retain any copies, abstracts, sketches, or other physical embodiment of any of the Proprietary Items.

               (b) Employee Inventions. Each Employee Invention will belong exclusively to the Employer. The Employee acknowledges that all of the Employee's writing, works of authorship, creations, designs, layouts and methods related to the fabrication, manufacture, processing and

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production of the Company’s products, sales and marketing plans and strategies, and other Employee Inventions are works made for hire and the property of the Employer, including any copyrights, patents, or other intellectual property rights pertaining thereto. If it is

determined that any such works are not works made for hire, the Employee hereby assigns to the Employer all of the Employee's right, title, and interest, including all rights of copyright, patent, and other intellectual property rights, to or in such Employee Inventions. The Employee covenants that he will promptly:

                    (i) disclose to the Employer in writing any Employee Invention;

                    (ii) assign to the Employer or to a party designated by the Employer, at the Employer's request and without additional compensation, all of the Employee's right to the Employee Invention for the United States and all foreign jurisdictions;

                    (iii) execute and deliver to the Employer such applications, assignments, and other documents as the Employer may request in order to apply for and obtain patents or other registrations with respect to any Employee Invention in the United States and any foreign jurisdictions;

                    (iv) sign all other papers necessary to carry out the above obligations; and

                    (v) give testimony and render any other assistance at Employer's expense, in support of the Employer's rights to any Employee Invention.

          7.3 Disputes or Controversies. The Employee recognizes that should a dispute or controversy arising from or relating to this Agreement be submitted for adjudication to any court, arbitration panel, or other third party, the preservation of the secrecy of Confidential Information may be jeopardized. All pleadings, documents, testimony, and records relating to any such adjudication will be maintained in secrecy and will be available for inspection by the Employer, the Employee, and their respective attorneys and experts, who will agree, in advance and in writing, to receive and maintain all such information in secrecy, except as may be limited by written agreement among them.

8. Non-Competition and Non-Interference.

8.1Acknowledgments By the Employee. The Employee acknowledges that:  the services to be performed by Employee under this Agreement are of a special, unique and unusual character; and (b) the Compensation provided to the Employee hereunder constitutes good and sufficient consideration for the Employee’s agreements and covenants in this Section 8; and (c) the provisions of this Section 8 are reasonable and necessary to protect the Employer’s business.

8.2Covenants of the Employee. In consideration of the acknowledgments by the Employee, and in consideration of the Compensation to be paid or provided to the Employee by the Employer, the Employee covenants that  the Employee will not, directly or indirectly:

(a)during the Noncompetition Period, (i) solicit business from, or compete with the Employer for the business of, any customer of the Employer where the Employee is doing so in

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the same or similar business as the business conducted by the Employer (i.e., the manufacturing, marketing and sales of either impact-resistant or non-impact resistant commercial and/or residential windows and doors, and vinyl patio or porch enclosures); (ii) own, operate, control, finance, manage, advise, be employed or engaged by, perform any services for, invest in or otherwise become associated in any capacity with, any business, company, partnership, organization, proprietorship, or other entity, whose activities compete in whole or in part with the activities of the Employer or any of its Affiliates in any state of the United States in which the Employer or any of its Affiliates conducted or conducts the manufacturing, marketing, distribution and/or sales of completed commercial and/or residential windor and door products (a “Competitive Business”); or (iii) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant; provided, however, that the Employee may purchase or otherwise acquire up to (but not more than) three percent (3%) of any class of securities of any Competitive Business (but without otherwise participating in the activities of such Competitive Business) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or

(b)whether for the Employee’s own account or the account of any other person (i) solicit or induce, directly or indirectly, whether or not for consideration, any employee or agent of the Employer to terminate his or his relationship with the Employer; or (ii) induce or attempt to induce any customer, supplier, service provider, vendor, consultant or contractor of the Employer to terminate or adversely change its relationship with the Employer or otherwise interfere with any relationship between the Employer and any of the Employer’s customers, prospective customers, suppliers, service providers or contractors.

8.3Enforceability; Notice. If any covenant in Section 8.2 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against the Employee. The period of time applicable to any covenant in Section 8.2 will be extended by the duration of any violation by the Employee of such covenant. The Employee will, while the covenant under Section 8.2 is in effect, give notice to the Employer, within ten (10) days after accepting any other employment, of the identity of the Employee’s employer. Employer may notify such employer that the Employee is bound by this Agreement and, at the Employer’s election, furnish such employer with a copy of this Agreement or relevant portions thereof.

     9. General Provisions.

          9.1 Injunctive Relief and Additional Remedy. The Employee acknowledges that the injury that would be suffered by the Employer as a result of a breach of the provisions of this Agreement (including any provision of Section 7 and Section 8) would be irreparable and that an award of monetary damages to the Employer for such a breach would be an inadequate remedy.

Consequently, the Employer will have the right, in addition to any other rights it may have, at Employer's cost, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Employer will not be obligated to post bond or other security in seeking such relief.

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         9.2 Covenants of Sections 7 and 8 are Essential and Independent. The covenants by the Employee in Section 7 and Section 8 are essential elements of this Agreement, and without the Employee's agreement to comply with such covenants, the Employer would not have entered into this Agreement, offered continued employment to the Employee or offered the Employee the Salary and Benefits and other consideration provided hereunder. The Employee's covenants in Section 7 and Section 8 are independent covenants and the existence of any claim by the Employee against the Employer under this Agreement or otherwise, or against any Affiliate of Employer, will not excuse the Employee's breach of any covenant in Section 7 or Section 8. If the Employee's employment hereunder expires or is terminated, this Agreement will continue in full force and effect as is necessary or appropriate to enforce the covenants and agreements of the Employee in Section 7 and Section 8.

         9.3 Representations and Warranties by the Employee. The Employee represents and warrants to the Employer that the execution and delivery by the Employee of this Agreement do not, and the performance by the Employee of the Employee's obligations hereunder will not, with or without the giving of notice or the passage of time, or both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or governmental agency applicable to the Employee; or (b) conflict with, result in the breach of any provisions of or the termination of, or constitute a default under, any agreement to which the Employee is a party or by which the Employee is or may be bound.

         9.4 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.

         9.5 Binding Effect; Delegation of Employee's Duties Prohibited.This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, heirs, and legal representatives, including any Affiliate to which Employer may assign this Agreement or any entity with which the Employer may merge or consolidate or to which all or substantially all of its assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be delegated or assigned.

         9.6 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered by certified U.S. mail, return receipt requested, to the address(es) below, or (b) one business day after deposit with a nationally recognized overnight delivery service (receipt and next day delivery requested),

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in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

          If to Employer:   PGT Industries

                              1070 Technology Drive

                              Nokomis, Florida 34275

                              Attention: Senior Vice President, Human Resources

          If to Employee:   521 South Shore Drive

  Osprey, Florida 34229

         9.7 Entire Agreement; Amendments. This Agreement, as it may be amended from time to time, contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior employment arrangements (as the same may have been amended from time to time) and other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the parties hereto.

         9.8 Governing Law; Venue and Jurisdiction. This Agreement shall be governed by and construed under Florida law, without regard to conflict of laws principles. The parties agree that any lawsuit between them arising under this Agreement shall be filed in any state or federal court located in Sarasota County, Florida or Tampa, Florida, and each of the parties hereby agrees, acknowledges and submits itself to the exclusive jurisdiction and venue of such courts for the purposes of such lawsuit and agrees to accept service of process in accordance with the provisions for delivery of notice set forth in Section 9.6 hereof.

         9.9 Section Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement unless otherwise specified.  All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the

word "including" does not limit the preceding words or terms.

         9.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

         9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

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[SIGNATURE PAGE FOLLOWS]

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          IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement on the date first written above.

PGT INNOVATIONS, INC.

(“Employer”)

                                            By:  ________________________________

                                            Printed Name:  Debbie LaPinska

                                            Title:  Sr. Vice President, Human Resources

____________________________________

                                            Printed Name:  Robert Keller

                                            ("Employee")

 

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EX-10.2

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into effective as of January 1, 2021, by and between PGT Innovations, Inc., a Delaware corporation (the "Employer"), and Brad West, an individual and resident of the State of Florida (the "Employee").

RECITALS:

          Employer desires to continue to employ Employee upon the terms and conditions set forth herein, and the Employee wishes to accept such continued employment upon the terms and conditions set forth herein including, without limitation, the nondisclosure and noncompetition covenants and agreements of the Employee set forth in Sections 7 and 8 hereof, in order to cause Employer to provide Employee the Compensation (as defined herein) and any right to Termination Pay pursuant to Section 6.2 hereof.

AGREEMENT

          In consideration of the foregoing and the mutual promises and covenants set forth herein, the parties, intending to be legally bound, agree as follows:

     1.   Definitions.

          For the purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.

          "Affiliate(s)" means any Person, directly or indirectly controlled by, or under common control with, the Employer or any other referenced Person.

          "Agreement" means this Employment Agreement.

          "Annual Performance Bonus" has the meaning set forth in Section 3.2 of this Agreement.

          "Benefits" has the meaning set forth in Section 3.1(b).

          "Board of Directors” means the board of directors of PGT Innovations, Inc. .

          "Cause" means the occurrence of any of the following events during the Employment Period: (a) conduct amounting to fraud or dishonesty against the Employer or any Affiliate of the Employer; (b) the Employee's intentional misconduct, refusal or failure to follow the lawful directions of the Chief Executive Officer (“CEO”) of the Company, or such other senior officer as the Employee may report to from time to time (collectively, the “Senior Managers”) or a

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breach of this Agreement; (c)  intoxication with alcohol or drugs while on the Employer's property or while carrying out the business of the Employer; (d) a conviction or plea of guilty or nolo contendere to a felony or to a misdemeanor involving charges of embezzlement, fraud, stealing or theft, or assault or battery to others; (e) a material breach or violation of the Company’s code of conduct, employee handbook or similar policies or rules, including without limitation, due to sexual or other forms of prohibited harassment;  or (f) the Employee's failure to observe and comply with the requirements in Sections 7 or 8 hereof.

“Change of Control” means a “Change in Control” as defined in Section 12 of the Employer’s 2019 Equity and Incentive Compensation Plan, provided that such “Change in Control” constitutes a change in control event for purposes of Section 409A of the Internal Reveue Code of 1986, as amended.

          "Compensation” means Salary and Benefits.

          "Confidential Information” means any and all:

               (a) trade secrets concerning the business and affairs of the Employer or any Affiliate of the Employer, product or service specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing, marketing or distribution methods and processes, customer lists, prospective customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures, and architectures (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas,  designs, methods and information), and any other information, however documented, that is a "trade secret" either under common law or as such term is defined by statute under the laws of any applicable jurisdiction;

               (b) information concerning the business and affairs of the Employer or its Affiliates (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and

               (c) notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer or Affiliates of the Employer, containing or based, in whole or in part, on any information included in the foregoing.

          "Disability” has the meaning set forth in Section 6.3.

          "Employee Invention” means any idea, invention, technique, modification, process, or improvement (whether patentable or not), and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee, either solely or in conjunction with others, during the Employment Period, or a period that includes a portion of the Employment Period, that relates in any way to, or is useful in any manner in, the

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business then being conducted or proposed to be conducted by the Employer or any Affiliate of the Employer, and any such item created by the Employee, either solely or in conjunction with others, following termination of the Employee's employment with the Employer, that is based upon or uses Confidential Information; provided, however, that any item so created by the Employee that is based upon or uses Confidential Information that the Employee demonstrates was or became generally available to the public, other than as a result of a disclosure by the Employee, will not be deemed to be an Employee Invention for any purposes.

          "Employer” is the entity identified on the first page of this Agreement and its successors and assigns.

          "Employment Period” means the term of the Employee's employment with the Employer.

          "Good Reason” means the occurrence of any of the following events during the Employment Period: (a) a material diminution of the duties or responsibilities of the Employee; or (b) the assignment of the Employee to a worksite outside of a fifty (50) mile radius from the Employer's current headquarters; provided, however, that none of the foregoing events or conditions will constitute “Good Reason” unless: (i) Employee provides the Employer with written objection to the event or condition within thirty (30) days following the occurrence thereof, (ii) the Employer does not reverse or otherwise cure the event or condition within thirty (30) days of receiving that written objection, and (iii) Employee resigns his employment within thirty (30) days following the expiration of that cure period.

“Incentive Amount” means the target amount payable to the Employee under the Employer’s Annual Incentive Plan for the award period ending in the year in which the termination of employment occurs.

          "Noncompetition Agreement" means the agreements and covenants of the Employee found in Section 8.2.

          "Noncompetition Period” means a period of time equal to the Employment Period plus two (2) years, unless this Agreement is terminated by the Employer without Cause or by the Employee with Good Reason, in which case the Noncompetition Period will be for a period of time equal to the Employment Period plus one (1) year.

          "Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or governmental body.

          "Proprietary Items” has the meaning set forth in Section 7.2(a)(iv).

          "Salary” has the meaning set forth in Section 3.1(a).

    2.Employment Term and Duties.

          2.1 Employment. The Employer hereby continues the employment of the Employee, effective as of the date hereof, and the Employee shall accept such continued employment by the

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Employer, effective as of the date hereof, upon the terms and conditions set forth in this Agreement.

          2.2 Term. Subject to the provisions of Section 6, the term of the Employee's employment under this Agreement shall  continue until terminated in accordance with Section 6.

          2.3 Duties. The Employee will continue to serve as the Senior Vice President of Corporate Development and Treasuer, and will also serve as the Interim Chief Financial Officer, of the Employer, with duties and responsibilities associated with and related to such position, and such other duties and responsibilities as the Employee may be requested to perform by the Employer’s CEO or such other Senior Manager as the CEO may designate from time to time. The Employee will (a) devote the Employee's business effort, time, energy and skill (vacations and reasonable absences due to illness excepted) as is necessary to fulfill the duties of his position and those assigned by the Senior Managers, (b) use his best efforts to promote the success of the business, and (c) cooperate fully with the lawful requests of the Senior Managers in the advancement of the best interests of the Employer and its Affiliates. During the Employment Period, the Employee shall not be engaged in or provide services to any other business or enterprise which interferes with the Employee's performance of the Employee’s job duties, and other obligations under this Agreement.

     3.   Compensation.

          3.1  Basic Compensation.

               (a) Salary. The Employer shall pay to the Employee an annualized salary at a rate of $300,000 per year, subject to the provisions of Section 6 and adjusted as provided below (the "Salary"), which Salary will be payable in equal periodic installments in accordance with the Employer's customary payroll practices. The Salary will be reviewed by the President and CEO of PGT Innovations, Inc. at least once each year and may be adjusted by the Employer following such review and the approval of any such adjustment by the Board of Directors or the Board’s designated committee. Any such adjustment in the Salary shall be made by, and at the sole discretion and approval of, the President and CEO and the Board of Directors or the Board’s designated committee, as the case may be, and, as adjusted, shall become the Employee's new "Salary" hereunder (unless and until further adjusted).

               (b) Benefits. The Employee will be entitled to participate in such life insurance, hospitalization and medical plans or insurance coverage, disability, and other employee benefit plans, programs and policies of the Employer in effect from time to time (collectively, the "Plans"), vacation and holidays (as further provided in Section 5 below), and any other plan which may be made available by the Employer to its key management employees from time to time in the future, if, and to the extent that, the Employee is eligible under the terms of such Plans. All of the plans, agreements, and undertakings of Employer set forth above shall be called, collectively, the "Benefits." Any Benefits hereunder shall be subject to such local, state or federal tax reporting requirements as maybe in effect from time to time.  This Agreement will not limit the Employer’s ability to amend, modify or terminate such Plans at any time for any reason.  

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3.2  Annual Performance Bonus.

          As additional incentive compensation for the services to be rendered by the Employee pursuant to this Agreement, the Employee shall be eligible, each calendar year, to receive a bonus (the "Annual Performance Bonus"), if and to the extent that the performance metrics or other requirements that must be satisfied in order for the Employee to receive the Annual Performacne Bonus have been achieved. The determination of whether to pay an Annual Performance Bonus, if any, and the amount of any such Annual Performance Bonus, shall be determined by the Company’s  Board of Directors or the Board’s designated committee, in their discretion, and for 2021 shall be at a target value equal to 60% of the Employee’s Salary.  Any Annual Performance Bonus that is due to the Employee hereunder shall be paid as soon as practicable, but in no event later than 30 days following completion of the Employer's audited financial statements of the year to which the Annual Performance Bonus relates.

   3.3Annual Equity Grant

During the first fiscal quarter of each year, or such other time as the Board, in its discretion, may determine, the Employee will receive an annual equity grant with a target value, measured as of the grant date, equal to the percentage of the Employee’s Salary determined by the Board or its designated committee, which for 2021 shall be 65% (the “Annual Equity Grant”).  One-half of the Annual Equity Grant is expected to be in the form of restricted stock units or restricted share units with no performance restrictions or metrics associated with them, and which are expected to vest in three equal increments on each of the first, second and third anniversaries of the grant date.  The other one-half of the Annual Equity Grant is expected to be in the form of performance shares or performance restricted stock units, which will have Board-determined performance restrictions and metrics associated with them.  The determination of how many of those performance shares or performance restricted stock units have been earned will be made by the Board on or about the first anniversary of the grant date, based on the financial performance of the Company during the prior fiscal year, and any performance shares or performance stock units deemed by the Board to be earned are expected to vest in two equal increments on or about each of the second and third anniversaries of the grant date. Notwithstanding any other provision of this Agreement to the contrary, the determination of whether and when to make any Annual Equity Grant to Employee, and the design, nature and amount of any such Annual Equity Grant, shall be determined by the  Board in its discretion.  All Annual Equity Grants to Employee shall be subject to the terms of the grant agreement between Employer and Employee.  In the event of a Change of Control, the Board or its designated committee will determine the manner in which any unvested restricted shares, performance shares, restricted stock units or other unvested equity grants will be treated, with respect to the amount and timing of the vesting of such unvested equity, to the extent that the same is not already addressed in the terms of the applicable grant agreement between the Employer and Employee.

     4.   Facilities and Expenses.

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          The Employer will furnish the Employee with office space, equipment, supplies, computer and facsimile equipment, telephones (including cellular telephone), and such other facilities, support staff and personnel as the Employer deems necessary or appropriate for the performance of the Employee's duties under this Agreement. The Employer will reimburse the Employee for reasonable business expenses incurred by him on behalf of the Employer in the performance of his duties; provided, that Employee furnishes to Employer documentation of such expenses as is required by the Internal Revenue Service and the Employer’s internal policies, as well as such other documentation as the Employer may request. In addition, the Employer will reimburse the Employee or otherwise provide and pay for all professional affiliation expenses incurred by the Employee that have been pre-approved by the Employer. The Employee must file authorization requests, to the extent required by the Employer's employment policies and, in all instances, expense reports with respect to such expenses in accordance with the Employer's policies.

     5.   Vacations and Holidays.

          The Employee will be entitled to four weeks paid vacation each year or such other amount of paid vacation as may be provided for in the Employer's written vacation policy, if greater. Such vacation shall be taken in accordance with the vacation policies of the Employer in effect for its senior managers from time to time. Vacation must be taken by the Employee at such time or times as mutually agreed by the Employee and the Employer. The Employee will also be entitled to any paid holidays expressly provided for in the Employer's policies.

6.   Termination.

          6.1  Events of Termination.

               (a) Death; Disability. In the event of the Employee's death or Disability, the Employee’s employment with the Employer shall be deemed terminated as of the end of the month in which such death occurs or such Disability is determined, and all rights, duties and obligations of the parties hereunder shall thereupon cease, except for the Employee's obligations under Section 7 and Section 8 hereof (in the case of a termination due to Disability), and the Employer's obligations under Sections 6.2(a) and 6.2(b) hereof, as the case may be.

               (b) By The Employer for Cause. The Employee's employment with the Employer may be terminated at the option of and by written notice from the Employer if the Senior Managers finds Cause. Upon any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease (including, but not limited to, the payment by the Employer of all Compensation), except for the Employee's obligations under Section 7 and Section 8 hereof.

               (c) By The Employer Without Cause. The Employer may also terminate the Employee's employment at any time upon not less than ten (10) days advance written notice without Cause. Upon expiration of such notice period, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(c). The Employer mayaccelerate the effective date of such termination if, in lieu of such notice, and in addition to the payments required by Section 6.2(c) below, Employer continues to pay Salary to Employee for a

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number of days equal to the number of days by which Employer accelerated the effective date of Employee's termination.

               (d) Voluntary Termination without Good Reason By Employee. The Employee may terminate his employment with the Employer without Good Reason upon not less than thirty (30) days advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(d).

               (e) Termination with Good Reason by the Employee. The Employee may terminate his employment with the Employer with Good Reason upon advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(e).

          6.2 Termination Pay. Upon cessation of Employee’s employment with Employer, the Employer will be obligated to pay the Employee (or, in the event of his death, his designated beneficiary) only such compensation, if any, as is provided in this Section 6.2. For purposes of this Section 6.2, the Employee's designated beneficiary will be such individual beneficiary or trust, located at such address, as the Employee may designate by notice to the Employer from time to time or, if the Employee fails to give notice to the Employer of such a beneficiary, the Employee's estate.

               (a) Termination by Death. If the Employee’s employment terminates because of the Employee's death, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, pay to the Employee's designated beneficiary the Employee's Salary for a period of six (6) months.

               (b) Termination upon Disability. If the Employee’s employment is terminated by either party as a result of the Employee's Disability, as determined under Section 6.3, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, continue to pay to the Employee his Salary for a period of twelve 12) months following the effective date of such termination.

               (c) Termination by the Employer Without Cause. If the Employer terminates the Employee's employment without Cause, the Employer will (i) pay to Employee his Salary, in accordance with normal payroll practice, for a period of twelve (12) months, commencing no later than the tenth business day following sixty (60) days after the date of Employee’s separation from service; (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twelve (12) months; (iii) pay 100% of Employee’s Incentive Amount, in a lump-sum payment payable no later then the

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tenth business day following the date of Employee’s separation from services.Notwithstanding the preceding provisions of this Section 6.2(c), in the event the Employee’s employment is terminated by the Employer (or the successor employer to the Employer) without Cause at the time of or within twelve months after the effective date of a Change of Control, the Employer (or successor employer to the Employer following the Change of Control) will (i) pay to Employee an amount equal to his Salary for a period of  twenty-four (24) months, in a lump sum  payable on the 60^th day following the date of Employee’s separation from service (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twenty-four (24) months; and (iii) pay 200% of Employee’s Incentive Amount, in a lump-sum payment payable on the 60^th day following the date of Employee’s separation from service; provided, however. that to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended,  the amounts described in (i) and (iii) of this sentence will be paid on the same schedule as set forth in the first sentence of this paragraph. For purposes of the preceding sentence, Salary and the Incentive Amount shall be the greater of (i) Salary and the Incentive Amount as determined at the time of the Employee’s separation from service and (ii) Salary and the Incentive Amount as determined assuming a separation from service immediately prior to the effective date of the Change in Control.

               (d) Termination by the Employee without Good Reason. If the Employee terminates his employment other than with Good Reason, the Employer shall continue to pay to the Employee his Salary for the shorter of: (i) thirty (30) days; or (ii) the notice period provided by the Employee with respect to his termination.

  (e) Termination by the Employee with Good Reason. If the Employee terminates the Employee's employment with Good Reason, he will be entitled to the same payments and benefits described above in Section 6.2(c), including where Employee terminates his employment with Good Reason at the time of or following a Change of Control, within twelve months after the effective date of such Change of Control.

6.3Definition of Disability. For purposes of this Agreement, “Disability” has the meaning defined in Treas. Reg. § 1.409A-3(i)(4).

6.4Release Required as a Condition of Severance.  Notwithstanding any other provision of this Agreement, payments under Section 6.2, above, are conditioned on the Employee’s (a) immediate resignation, upon Employer’s request, from all employee and director positions with the Employer and its affiliates;  (b) execution and delivery to the Employer, within the applicable review period (e.g., 45 days or 21 days, depending on the context in which the termination occurs) following the termination of his employment, and non-revocation of, a general release of claims against the Employer and its affiliates in such form as the Employer may reasonably require (the “Release”); and (c) the Emplyoee’s full compliance with the provisions of this Agreement following the termination of his employment, including Sections 7 and 8 hereof. For avoidance of doubt, the payments and benefits described in this Section 6.2 are in lieu of, and not in addition to, any other severance arrangement maintained by the Employer.

     7.   Non-Disclosure Covenant; Employee Inventions.

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          7.1 Acknowledgments by the Employee. The Employee acknowledges that (a) during the Employment Period and as a part of his employment, the Employee will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an adverse effect on the Employer and its business; (c) since the Employee possesses substantial expertise and skill with respect to the Employer's business, the Employer desires to obtain exclusive ownership of each Employee Invention, and the Employer will be at a substantial competitive disadvantage if it fails to acquire exclusive ownership of each Employee Invention; (d) the Compensation provided to Employee hereunder constitutes good and sufficient consideration for the Employee's agreements and covenants in this Section 7; and (e) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information and to provide the Employer with exclusive ownership of all Employee Inventions.

          7.2 Agreements of the Employee. In consideration of the Compensation to be paid or provided to the Employee by the Employer under this Agreement, the Employee covenants as follows:

               (a) Confidentiality.

                    (i) During and at all times following the Employment Period, the Employee will hold in confidence the Confidential Information and will not disclose it to any person except with the specific prior written consent of the Employer or except as otherwise expressly permitted by the terms of this Agreement.

                    (ii) Any trade secrets of the Employer will be entitled to all of the protections and benefits under applicable trade secret laws. If any information that the Employer deems to be a trade secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this Agreement, such information will, nevertheless, be considered Confidential Information for

purposes of this Agreement. The Employee hereby waives any requirement that the Employer submit proof of the economic value of any trade secret or post a bond or other security.

                    (iii) None of the foregoing obligations and restrictions apply to any part of the Confidential Information that the Employee demonstrates was or became generally available to the public other than as a result of a disclosure by the Employee.

                    (iv) The Employee will not remove from the Employer's (or any Affiliate's) premises (except to the extent such removal is for purposes of the performance of the Employee's duties at home or while traveling, or except as otherwise specifically authorized by the Employer in writing) any document, record, notebook, plan, model, component, device, or computer software or code, whether embodied in a disk or in any other form (collectively, the "Proprietary Items").  The Employee recognizes that, as between the Employer and the Employee, all of the Proprietary Items, whether or not developed by the Employee, are the exclusive property of the Employer. Upon termination of this Agreement by either party, the Employee will return to the Employer all of the Proprietary Items in the Employee's possession or subject to the Employee's control, and the Employee shall not retain any copies, abstracts, sketches, or other physical embodiment of any of the Proprietary Items.

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               (b) Employee Inventions. Each Employee Invention will belong exclusively to the Employer. The Employee acknowledges that all of the Employee's writing, works of authorship, creations, designs, layouts and methods related to the fabrication, manufacture, processing and production of the Company’s products, sales and marketing plans and strategies, and other Employee Inventions are works made for hire and the property of the Employer, including any copyrights, patents, or other intellectual property rights pertaining thereto. If it is

determined that any such works are not works made for hire, the Employee hereby assigns to the Employer all of the Employee's right, title, and interest, including all rights of copyright, patent, and other intellectual property rights, to or in such Employee Inventions. The Employee covenants that he will promptly:

                    (i) disclose to the Employer in writing any Employee Invention;

                    (ii) assign to the Employer or to a party designated by the Employer, at the Employer's request and without additional compensation, all of the Employee's right to the Employee Invention for the United States and all foreign jurisdictions;

                    (iii) execute and deliver to the Employer such applications, assignments, and other documents as the Employer may request in order to apply for and obtain patents or other registrations with respect to any Employee Invention in the United States and any foreign jurisdictions;

                    (iv) sign all other papers necessary to carry out the above obligations; and

                    (v) give testimony and render any other assistance at Employer's expense, in support of the Employer's rights to any Employee Invention.

          7.3 Disputes or Controversies. The Employee recognizes that should a dispute or controversy arising from or relating to this Agreement be submitted for adjudication to any court, arbitration panel, or other third party, the preservation of the secrecy of Confidential Information may be jeopardized. All pleadings, documents, testimony, and records relating to any such adjudication will be maintained in secrecy and will be available for inspection by the Employer, the Employee, and their respective attorneys and experts, who will agree, in advance and in writing, to receive and maintain all such information in secrecy, except as may be limited by written agreement among them.

8. Non-Competition and Non-Interference.

8.1Acknowledgments By the Employee. The Employee acknowledges that:  the services to be performed by Employee under this Agreement are of a special, unique and unusual character; and (b) the Compensation provided to the Employee hereunder constitutes good and sufficient consideration for the Employee’s agreements and covenants in this Section 8; and (c) the provisions of this Section 8 are reasonable and necessary to protect the Employer’s business.

8.2Covenants of the Employee. In consideration of the acknowledgments by the Employee, and in consideration of the Compensation to be paid or provided to the Employee by the Employer, the Employee covenants that  the Employee will not, directly or indirectly:

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(a)during the Noncompetition Period, (i) solicit business from, or compete with the Employer for the business of, any customer of the Employer where the Employee is doing so in the same or similar business as the business conducted by the Employer (i.e., the manufacturing, marketing and sales of either impact-resistant or non-impact resistant commercial and/or residential windows and doors, and vinyl patio or porch enclosures); (ii) own, operate, control, finance, manage, advise, be employed or engaged by, perform any services for, invest in or otherwise become associated in any capacity with, any business, company, partnership, organization, proprietorship, or other entity, whose activities compete in whole or in part with the activities of the Employer or any of its Affiliates in any state of the United States in which the Employer or any of its Affiliates conducted or conducts the manufacturing, marketing, distribution and/or sales of completed commercial and/or residential windor and door products (a “Competitive Business”); or (iii) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant; provided, however, that the Employee may purchase or otherwise acquire up to (but not more than) three percent (3%) of any class of securities of any Competitive Business (but without otherwise participating in the activities of such Competitive Business) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or

(b)whether for the Employee’s own account or the account of any other person (i) solicit or induce, directly or indirectly, whether or not for consideration, any employee or agent of the Employer to terminate his or his relationship with the Employer; or (ii) induce or attempt to induce any customer, supplier, service provider, vendor, consultant or contractor of the Employer to terminate or adversely change its relationship with the Employer or otherwise interfere with any relationship between the Employer and any of the Employer’s customers, prospective customers, suppliers, service providers or contractors.

8.3Enforceability; Notice. If any covenant in Section 8.2 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against the Employee. The period of time applicable to any covenant in Section 8.2 will be extended by the duration of any violation by the Employee of such covenant. The Employee will, while the covenant under Section 8.2 is in effect, give notice to the Employer, within ten (10) days after accepting any other employment, of the identity of the Employee’s employer. Employer may notify such employer that the Employee is bound by this Agreement and, at the Employer’s election, furnish such employer with a copy of this Agreement or relevant portions thereof.

     9. General Provisions.

          9.1 Injunctive Relief and Additional Remedy. The Employee acknowledges that the injury that would be suffered by the Employer as a result of a breach of the provisions of this Agreement (including any provision of Section 7 and Section 8) would be irreparable and that an award of monetary damages to the Employer for such a breach would be an inadequate remedy.

Consequently, the Employer will have the right, in addition to any other rights it may have, at Employer's cost, to obtain injunctive relief to restrain any breach or threatened breach or

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otherwise to specifically enforce any provision of this Agreement, and the Employer will not be obligated to post bond or other security in seeking such relief.

         9.2 Covenants of Sections 7 and 8 are Essential and Independent. The covenants by the Employee in Section 7 and Section 8 are essential elements of this Agreement, and without the Employee's agreement to comply with such covenants, the Employer would not have entered into this Agreement, offered continued employment to the Employee or offered the Employee the Salary and Benefits and other consideration provided hereunder. The Employee's covenants in Section 7 and Section 8 are independent covenants and the existence of any claim by the Employee against the Employer under this Agreement or otherwise, or against any Affiliate of Employer, will not excuse the Employee's breach of any covenant in Section 7 or Section 8. If the Employee's employment hereunder expires or is terminated, this Agreement will continue in full force and effect as is necessary or appropriate to enforce the covenants and agreements of the Employee in Section 7 and Section 8.

         9.3 Representations and Warranties by the Employee. The Employee represents and warrants to the Employer that the execution and delivery by the Employee of this Agreement do not, and the performance by the Employee of the Employee's obligations hereunder will not, with or without the giving of notice or the passage of time, or both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or governmental agency applicable to the Employee; or (b) conflict with, result in the breach of any provisions of or the termination of, or constitute a default under, any agreement to which the Employee is a party or by which the Employee is or may be bound.

         9.4 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.

         9.5 Binding Effect; Delegation of Employee's Duties Prohibited.This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, heirs, and legal representatives, including any Affiliate to which Employer may assign this Agreement or any entity with which the Employer may merge or consolidate or to which all or substantially all of its assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be delegated or assigned.

         9.6 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered by

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certified U.S. mail, return receipt requested, to the address(es) below, or (b) one business day after deposit with a nationally recognized overnight delivery service (receipt and next day delivery requested), in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

          If to Employer:   PGT Industries

                              1070 Technology Drive

                              Nokomis, Florida 34275

                              Attention: Senior Vice President, Human Resources

          If to Employee:   13523 Brown Thrasher Pike

  Bradenton, Florida 34202

         9.7 Entire Agreement; Amendments. This Agreement, as it may be amended from time to time, contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior employment arrangements (as the same may have been amended from time to time) and other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the parties hereto.

         9.8 Governing Law; Venue and Jurisdiction. This Agreement shall be governed by and construed under Florida law, without regard to conflict of laws principles. The parties agree that any lawsuit between them arising under this Agreement shall be filed in any state or federal court located in Sarasota County, Florida or Tampa, Florida, and each of the parties hereby agrees, acknowledges and submits itself to the exclusive jurisdiction and venue of such courts for the purposes of such lawsuit and agrees to accept service of process in accordance with the provisions for delivery of notice set forth in Section 9.6 hereof.

         9.9 Section Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement unless otherwise specified.  All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the

word "including" does not limit the preceding words or terms.

         9.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

         9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

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[SIGNATURE PAGE FOLLOWS]

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          IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement on the date first written above.

PGT INNOVATIONS, INC.

(“Employer”)

                                            By:  ________________________________

                                            Printed Name:  Debbie LaPinska

                                            Title:  Sr. Vice President, Human Resources

____________________________________

                                            Printed Name:  Brad West

                                            ("Employee")

 

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EX-10.3

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into effective as of January 1, 2021, by and between PGT Innovations, Inc., a Delaware corporation (the "Employer"), and Brent C. Boydston, an individual and resident of the State of Florida (the "Employee").

RECITALS:

          Employer desires to continue to employ Employee upon the terms and conditions set forth herein, and the Employee wishes to accept such continued employment upon the terms and conditions set forth herein including, without limitation, the nondisclosure and noncompetition covenants and agreements of the Employee set forth in Sections 7 and 8 hereof, in order to cause Employer to provide Employee the Compensation (as defined herein) and any right to Termination Pay pursuant to Section 6.2 hereof.

AGREEMENT

          In consideration of the foregoing and the mutual promises and covenants set forth herein, the parties, intending to be legally bound, agree as follows:

     1.   Definitions.

          For the purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.

          "Affiliate(s)" means any Person, directly or indirectly controlled by, or under common control with, the Employer or any other referenced Person.

          "Agreement" means this Employment Agreement.

          "Annual Performance Bonus" has the meaning set forth in Section 3.2 of this Agreement.

          "Benefits" has the meaning set forth in Section 3.1(b).

          "Board of Directors” means the board of directors of PGT Innovations, Inc. .

          "Cause" means the occurrence of any of the following events during the Employment Period: (a) conduct amounting to fraud or dishonesty against the Employer or any Affiliate of the Employer; (b) the Employee's intentional misconduct, refusal or failure to follow the lawful directions of the Chief Executive Officer (“CEO”) of the Company, or such other senior officer as the Employee may report to from time to time (collectively, the “Senior Managers”) or a

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breach of this Agreement; (c)  intoxication with alcohol or drugs while on the Employer's property or while carrying out the business of the Employer; (d) a conviction or plea of guilty or nolo contendere to a felony or to a misdemeanor involving charges of embezzlement, fraud, stealing or theft, or assault or battery to others; (e) a material breach or violation of the Company’s code of conduct, employee handbook or similar policies or rules, including without limitation, due to sexual or other forms of prohibited harassment;  or (f) the Employee's failure to observe and comply with the requirements in Sections 7 or 8 hereof.

“Change of Control” means a “Change in Control” as defined in Section 12 of the Employer’s 2019 Equity and Incentive Compensation Plan, provided that such “Change in Control” constitutes a change in control event for purposes of Section 409A of the Internal Reveue Code of 1986, as amended.

          "Compensation” means Salary and Benefits.

          "Confidential Information” means any and all:

               (a) trade secrets concerning the business and affairs of the Employer or any Affiliate of the Employer, product or service specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing, marketing or distribution methods and processes, customer lists, prospective customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures, and architectures (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas,  designs, methods and information), and any other information, however documented, that is a "trade secret" either under common law or as such term is defined by statute under the laws of any applicable jurisdiction;

               (b) information concerning the business and affairs of the Employer or its Affiliates (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and

               (c) notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer or Affiliates of the Employer, containing or based, in whole or in part, on any information included in the foregoing.

          "Disability” has the meaning set forth in Section 6.3.

          "Employee Invention” means any idea, invention, technique, modification, process, or improvement (whether patentable or not), and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee, either solely or in conjunction with others, during the Employment Period, or a period that includes a portion of the Employment Period, that relates in any way to, or is useful in any manner in, the

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business then being conducted or proposed to be conducted by the Employer or any Affiliate of the Employer, and any such item created by the Employee, either solely or in conjunction with others, following termination of the Employee's employment with the Employer, that is based upon or uses Confidential Information; provided, however, that any item so created by the Employee that is based upon or uses Confidential Information that the Employee demonstrates was or became generally available to the public, other than as a result of a disclosure by the Employee, will not be deemed to be an Employee Invention for any purposes.

          "Employer” is the entity identified on the first page of this Agreement and its successors and assigns.

          "Employment Period” means the term of the Employee's employment with the Employer.

          "Good Reason” means the occurrence of any of the following events during the Employment Period: (a) a material diminution of the duties or responsibilities of the Employee; or (b) the assignment of the Employee to a worksite outside of a fifty (50) mile radius from the Employer's current headquarters; provided, however, that none of the foregoing events or conditions will constitute “Good Reason” unless: (i) Employee provides the Employer with written objection to the event or condition within thirty (30) days following the occurrence thereof, (ii) the Employer does not reverse or otherwise cure the event or condition within thirty (30) days of receiving that written objection, and (iii) Employee resigns his employment within thirty (30) days following the expiration of that cure period.

“Incentive Amount” means the target amount payable to the Employee under the Employer’s Annual Incentive Plan for the award period ending in the year in which the termination of employment occurs.

          "Noncompetition Agreement" means the agreements and covenants of the Employee found in Section 8.2.

          "Noncompetition Period” means a period of time equal to the Employment Period plus two (2) years, unless this Agreement is terminated by the Employer without Cause or by the Employee with Good Reason, in which case the Noncompetition Period will be for a period of time equal to the Employment Period plus one (1) year.

          "Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or governmental body.

          "Proprietary Items” has the meaning set forth in Section 7.2(a)(iv).

          "Salary” has the meaning set forth in Section 3.1(a).

    2.Employment Term and Duties.

          2.1 Employment. The Employer hereby continues the employment of the Employee, effective as of the date hereof, and the Employee shall accept such continued employment by the

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Employer, effective as of the date hereof, upon the terms and conditions set forth in this Agreement.

          2.2 Term. Subject to the provisions of Section 6, the term of the Employee's employment under this Agreement shall  continue until terminated in accordance with Section 6.

          2.3 Duties. The Employee will continue to serve as the Senior Vice President of Sales and Innovation of the Employer, with duties and responsibilities associated with and related to such position, and such other duties and responsibilities as the Employee may be requested to perform by the Employer’s CEO or such other Senior Manager as the CEO may designate from time to time. The Employee will (a) devote the Employee's business effort, time, energy and skill (vacations and reasonable absences due to illness excepted) as is necessary to fulfill the duties of his position and those assigned by the Senior Managers, (b) use his best efforts to promote the success of the business, and (c) cooperate fully with the lawful requests of the Senior Managers in the advancement of the best interests of the Employer and its Affiliates. During the Employment Period, the Employee shall not be engaged in or provide services to any other business or enterprise which interferes with the Employee's performance of the Employee’s job duties, and other obligations under this Agreement.

     3.   Compensation.

          3.1  Basic Compensation.

               (a) Salary. The Employer shall pay to the Employee an annualized salary at a rate of $325,000 per year, subject to the provisions of Section 6 and adjusted as provided below (the "Salary"), which Salary will be payable in equal periodic installments in accordance with the Employer's customary payroll practices. The Salary will be reviewed by the President and CEO of PGT Innovations, Inc. at least once each year and may be adjusted by the Employer following such review and the approval of any such adjustment by the Board of Directors or the Board’s designated committee. Any such adjustment in the Salary shall be made by, and at the sole discretion and approval of, the President and CEO and the Board of Directors or the Board’s designated committee, as the case may be, and, as adjusted, shall become the Employee's new "Salary" hereunder (unless and until further adjusted).

               (b) Benefits. The Employee will be entitled to participate in such life insurance, hospitalization and medical plans or insurance coverage, disability, and other employee benefit plans, programs and policies of the Employer in effect from time to time (collectively, the "Plans"), vacation and holidays (as further provided in Section 5 below), and any other plan which may be made available by the Employer to its key management employees from time to time in the future, if, and to the extent that, the Employee is eligible under the terms of such Plans. All of the plans, agreements, and undertakings of Employer set forth above shall be called, collectively, the "Benefits." Any Benefits hereunder shall be subject to such local, state or federal tax reporting requirements as maybe in effect from time to time.  This Agreement will not limit the Employer’s ability to amend, modify or terminate such Plans at any time for any reason.  

    3.2  Annual Performance Bonus.

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          As additional incentive compensation for the services to be rendered by the Employee pursuant to this Agreement, the Employee shall be eligible, each calendar year, to receive a bonus (the "Annual Performance Bonus"), if and to the extent that the performance metrics or other requirements that must be satisfied in order for the Employee to receive the Annual Performacne Bonus have been achieved. The determination of whether to pay an Annual Performance Bonus, if any, and the amount of any such Annual Performance Bonus, shall be determined by the Company’s  Board of Directors or the Board’s designated committee, in their discretion, and for 2021 shall be at a target value equal to 60% of the Employee’s Salary.  Any Annual Performance Bonus that is due to the Employee hereunder shall be paid as soon as practicable, but in no event later than 30 days following completion of the Employer's audited financial statements of the year to which the Annual Performance Bonus relates.

  3.3Annual Equity Grant

During the first fiscal quarter of each year, or such other time as the Board, in its discretion, may determine, the Employee will receive an annual equity grant with a target value, measured as of the grant date, equal to the percentage of the Employee’s Salary determined by the Board or its designated committee, which for 2021 shall be 75% (the “Annual Equity Grant”).  One-half of the Annual Equity Grant is expected to be in the form of restricted stock units or restricted share units with no performance restrictions or metrics associated with them, and which are expected to vest in three equal increments on each of the first, second and third anniversaries of the grant date.  The other one-half of the Annual Equity Grant is expected to be in the form of performance shares or performance restricted stock units, which will have Board-determined performance restrictions and metrics associated with them.  The determination of how many of those performance shares or performance restricted stock units have been earned will be made by the Board on or about the first anniversary of the grant date, based on the financial performance of the Company during the prior fiscal year, and any performance shares or performance stock units deemed by the Board to be earned are expected to vest in two equal increments on or about each of the second and third anniversaries of the grant date. Notwithstanding any other provision of this Agreement to the contrary, the determination of whether and when to make any Annual Equity Grant to Employee, and the design, nature and amount of any such Annual Equity Grant, shall be determined by the  Board in its discretion.  All Annual Equity Grants to Employee shall be subject to the terms of the grant agreement between Employer and Employee.  In the event of a Change of Control, the Board or its designated committee will determine the manner in which any unvested restricted shares, performance shares, restricted stock units or other unvested equity grants will be treated, with respect to the amount and timing of the vesting of such unvested equity, to the extent that the same is not already addressed in the terms of the applicable grant agreement between the Employer and Employee.

     4.   Facilities and Expenses.

          The Employer will furnish the Employee with office space, equipment, supplies, computer and facsimile equipment, telephones (including cellular telephone), and such other facilities, support staff and personnel as the Employer deems necessary or appropriate for the performance of the Employee's duties under this Agreement. The Employer will reimburse the Employee for

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reasonable business expenses incurred by him on behalf of the Employer in the performance of his duties; provided, that Employee furnishes to Employer documentation of such expenses as is required by the Internal Revenue Service and the Employer’s internal policies, as well as such other documentation as the Employer may request. In addition, the Employer will reimburse the Employee or otherwise provide and pay for all professional affiliation expenses incurred by the Employee that have been pre-approved by the Employer. The Employee must file authorization requests, to the extent required by the Employer's employment policies and, in all instances, expense reports with respect to such expenses in accordance with the Employer's policies.

     5.   Vacations and Holidays.

          The Employee will be entitled to four weeks paid vacation each year or such other amount of paid vacation as may be provided for in the Employer's written vacation policy, if greater. Such vacation shall be taken in accordance with the vacation policies of the Employer in effect for its senior managers from time to time. Vacation must be taken by the Employee at such time or times as mutually agreed by the Employee and the Employer. The Employee will also be entitled to any paid holidays expressly provided for in the Employer's policies.

6.   Termination.

          6.1  Events of Termination.

               (a) Death; Disability. In the event of the Employee's death or Disability, the Employee’s employment with the Employer shall be deemed terminated as of the end of the month in which such death occurs or such Disability is determined, and all rights, duties and obligations of the parties hereunder shall thereupon cease, except for the Employee's obligations under Section 7 and Section 8 hereof (in the case of a termination due to Disability), and the Employer's obligations under Sections 6.2(a) and 6.2(b) hereof, as the case may be.

               (b) By The Employer for Cause. The Employee's employment with the Employer may be terminated at the option of and by written notice from the Employer if the Senior Managers finds Cause. Upon any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease (including, but not limited to, the payment by the Employer of all Compensation), except for the Employee's obligations under Section 7 and Section 8 hereof.

               (c) By The Employer Without Cause. The Employer may also terminate the Employee's employment at any time upon not less than ten (10) days advance written notice without Cause. Upon expiration of such notice period, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(c). The Employer mayaccelerate the effective date of such termination if, in lieu of such notice, and in addition to the payments required by Section 6.2(c) below, Employer continues to pay Salary to Employee for a number of days equal to the number of days by which Employer accelerated the effective date of Employee's termination.

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               (d) Voluntary Termination without Good Reason By Employee. The Employee may terminate his employment with the Employer without Good Reason upon not less than thirty (30) days advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(d).

               (e) Termination with Good Reason by the Employee. The Employee may terminate his employment with the Employer with Good Reason upon advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(e).

          6.2 Termination Pay. Upon cessation of Employee’s employment with Employer, the Employer will be obligated to pay the Employee (or, in the event of his death, his designated beneficiary) only such compensation, if any, as is provided in this Section 6.2. For purposes of this Section 6.2, the Employee's designated beneficiary will be such individual beneficiary or trust, located at such address, as the Employee may designate by notice to the Employer from time to time or, if the Employee fails to give notice to the Employer of such a beneficiary, the Employee's estate.

               (a) Termination by Death. If the Employee’s employment terminates because of the Employee's death, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, pay to the Employee's designated beneficiary the Employee's Salary for a period of six (6) months.

               (b) Termination upon Disability. If the Employee’s employment is terminated by either party as a result of the Employee's Disability, as determined under Section 6.3, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, continue to pay to the Employee his Salary for a period of twelve 12) months following the effective date of such termination.

               (c) Termination by the Employer Without Cause. If the Employer terminates the Employee's employment without Cause, the Employer will (i) pay to Employee his Salary, in accordance with normal payroll practice, for a period of twelve (12) months, commencing no later than the tenth business day following sixty (60) days after the date of Employee’s separation from service; (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twelve (12) months; (iii) pay 100% of Employee’s Incentive Amount, in a lump-sum payment payable no later then the tenth business day following the date of Employee’s separation from services.  Notwithstanding the preceding provisions of this Section 6.2(c), in the event the Employee’s employment is terminated by the Employer (or the successor employer to the Employer) without Cause at the

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time of or within twelve months after the effective date of a Change of Control, the Employer (or successor employer to the Employer following the Change of Control) will (i) pay to Employee an amount equal to his Salary for a period of  twenty-four (24) months, in a lump sum  payable on the 60^th day following the date of Employee’s separation from service (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twenty-four (24) months; and (iii) pay 200% of Employee’s Incentive Amount, in a lump-sum payment payable on the 60^th day following the date of Employee’s separation from service; provided, however. that to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended,  the amounts described in (i) and (iii) of this sentence will be paid on the same schedule as set forth in the first sentence of this paragraph. For purposes of the preceding sentence, Salary and the Incentive Amount shall be the greater of (i) Salary and the Incentive Amount as determined at the time of the Employee’s separation from service and (ii) Salary and the Incentive Amount as determined assuming a separation from service immediately prior to the effective date of the Change in Control.

               (d) Termination by the Employee without Good Reason. If the Employee terminates his employment other than with Good Reason, the Employer shall continue to pay to the Employee his Salary for the shorter of: (i) thirty (30) days; or (ii) the notice period provided by the Employee with respect to his termination.

  (e) Termination by the Employee with Good Reason. If the Employee terminates the Employee's employment with Good Reason, he will be entitled to the same payments and benefits described above in Section 6.2(c), including where Employee terminates his employment with Good Reason at the time of or following a Change of Control, within twelve months after the effective date of such Change of Control.

6.3Definition of Disability. For purposes of this Agreement, “Disability” has the meaning defined in Treas. Reg. § 1.409A-3(i)(4).

6.4Release Required as a Condition of Severance.  Notwithstanding any other provision of this Agreement, payments under Section 6.2, above, are conditioned on the Employee’s (a) immediate resignation, upon Employer’s request, from all employee and director positions with the Employer and its affiliates;  (b) execution and delivery to the Employer, within the applicable review period (e.g., 45 days or 21 days, depending on the context in which the termination occurs) following the termination of his employment, and non-revocation of, a general release of claims against the Employer and its affiliates in such form as the Employer may reasonably require (the “Release”); and (c) the Emplyoee’s full compliance with the provisions of this Agreement following the termination of his employment, including Sections 7 and 8 hereof. For avoidance of doubt, the payments and benefits described in this Section 6.2 are in lieu of, and not in addition to, any other severance arrangement maintained by the Employer.

     7.   Non-Disclosure Covenant; Employee Inventions.

          7.1 Acknowledgments by the Employee. The Employee acknowledges that (a) during the Employment Period and as a part of his employment, the Employee will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an

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adverse effect on the Employer and its business; (c) since the Employee possesses substantial expertise and skill with respect to the Employer's business, the Employer desires to obtain exclusive ownership of each Employee Invention, and the Employer will be at a substantial competitive disadvantage if it fails to acquire exclusive ownership of each Employee Invention; (d) the Compensation provided to Employee hereunder constitutes good and sufficient consideration for the Employee's agreements and covenants in this Section 7; and (e) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information and to provide the Employer with exclusive ownership of all Employee Inventions.

          7.2 Agreements of the Employee. In consideration of the Compensation to be paid or provided to the Employee by the Employer under this Agreement, the Employee covenants as follows:

               (a) Confidentiality.

                    (i) During and at all times following the Employment Period, the Employee will hold in confidence the Confidential Information and will not disclose it to any person except with the specific prior written consent of the Employer or except as otherwise expressly permitted by the terms of this Agreement.

                    (ii) Any trade secrets of the Employer will be entitled to all of the protections and benefits under applicable trade secret laws. If any information that the Employer deems to be a trade secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this Agreement, such information will, nevertheless, be considered Confidential Information for

purposes of this Agreement. The Employee hereby waives any requirement that the Employer submit proof of the economic value of any trade secret or post a bond or other security.

                    (iii) None of the foregoing obligations and restrictions apply to any part of the Confidential Information that the Employee demonstrates was or became generally available to the public other than as a result of a disclosure by the Employee.

                    (iv) The Employee will not remove from the Employer's (or any Affiliate's) premises (except to the extent such removal is for purposes of the performance of the Employee's duties at home or while traveling, or except as otherwise specifically authorized by the Employer in writing) any document, record, notebook, plan, model, component, device, or computer software or code, whether embodied in a disk or in any other form (collectively, the "Proprietary Items").  The Employee recognizes that, as between the Employer and the Employee, all of the Proprietary Items, whether or not developed by the Employee, are the exclusive property of the Employer. Upon termination of this Agreement by either party, the Employee will return to the Employer all of the Proprietary Items in the Employee's possession or subject to the Employee's control, and the Employee shall not retain any copies, abstracts, sketches, or other physical embodiment of any of the Proprietary Items.

               (b) Employee Inventions. Each Employee Invention will belong exclusively to the Employer. The Employee acknowledges that all of the Employee's writing, works of authorship, creations, designs, layouts and methods related to the fabrication, manufacture, processing and

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production of the Company’s products, sales and marketing plans and strategies, and other Employee Inventions are works made for hire and the property of the Employer, including any copyrights, patents, or other intellectual property rights pertaining thereto. If it is

determined that any such works are not works made for hire, the Employee hereby assigns to the Employer all of the Employee's right, title, and interest, including all rights of copyright, patent, and other intellectual property rights, to or in such Employee Inventions. The Employee covenants that he will promptly:

                    (i) disclose to the Employer in writing any Employee Invention;

                    (ii) assign to the Employer or to a party designated by the Employer, at the Employer's request and without additional compensation, all of the Employee's right to the Employee Invention for the United States and all foreign jurisdictions;

                    (iii) execute and deliver to the Employer such applications, assignments, and other documents as the Employer may request in order to apply for and obtain patents or other registrations with respect to any Employee Invention in the United States and any foreign jurisdictions;

                    (iv) sign all other papers necessary to carry out the above obligations; and

                    (v) give testimony and render any other assistance at Employer's expense, in support of the Employer's rights to any Employee Invention.

          7.3 Disputes or Controversies. The Employee recognizes that should a dispute or controversy arising from or relating to this Agreement be submitted for adjudication to any court, arbitration panel, or other third party, the preservation of the secrecy of Confidential Information may be jeopardized. All pleadings, documents, testimony, and records relating to any such adjudication will be maintained in secrecy and will be available for inspection by the Employer, the Employee, and their respective attorneys and experts, who will agree, in advance and in writing, to receive and maintain all such information in secrecy, except as may be limited by written agreement among them.

8. Non-Competition and Non-Interference.

8.1Acknowledgments By the Employee. The Employee acknowledges that:  the services to be performed by Employee under this Agreement are of a special, unique and unusual character; and (b) the Compensation provided to the Employee hereunder constitutes good and sufficient consideration for the Employee’s agreements and covenants in this Section 8; and (c) the provisions of this Section 8 are reasonable and necessary to protect the Employer’s business.

8.2Covenants of the Employee. In consideration of the acknowledgments by the Employee, and in consideration of the Compensation to be paid or provided to the Employee by the Employer, the Employee covenants that  the Employee will not, directly or indirectly:

(a)during the Noncompetition Period, (i) solicit business from, or compete with the Employer for the business of, any customer of the Employer where the Employee is doing so in

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the same or similar business as the business conducted by the Employer (i.e., the manufacturing, marketing and sales of either impact-resistant or non-impact resistant commercial and/or residential windows and doors, and vinyl patio or porch enclosures); (ii) own, operate, control, finance, manage, advise, be employed or engaged by, perform any services for, invest in or otherwise become associated in any capacity with, any business, company, partnership, organization, proprietorship, or other entity, whose activities compete in whole or in part with the activities of the Employer or any of its Affiliates in any state of the United States in which the Employer or any of its Affiliates conducted or conducts the manufacturing, marketing, distribution and/or sales of completed commercial and/or residential windor and door products (a “Competitive Business”); or (iii) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant; provided, however, that the Employee may purchase or otherwise acquire up to (but not more than) three percent (3%) of any class of securities of any Competitive Business (but without otherwise participating in the activities of such Competitive Business) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or

(b)whether for the Employee’s own account or the account of any other person (i) solicit or induce, directly or indirectly, whether or not for consideration, any employee or agent of the Employer to terminate his or his relationship with the Employer; or (ii) induce or attempt to induce any customer, supplier, service provider, vendor, consultant or contractor of the Employer to terminate or adversely change its relationship with the Employer or otherwise interfere with any relationship between the Employer and any of the Employer’s customers, prospective customers, suppliers, service providers or contractors.

8.3Enforceability; Notice. If any covenant in Section 8.2 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against the Employee. The period of time applicable to any covenant in Section 8.2 will be extended by the duration of any violation by the Employee of such covenant. The Employee will, while the covenant under Section 8.2 is in effect, give notice to the Employer, within ten (10) days after accepting any other employment, of the identity of the Employee’s employer. Employer may notify such employer that the Employee is bound by this Agreement and, at the Employer’s election, furnish such employer with a copy of this Agreement or relevant portions thereof.

     9. General Provisions.

          9.1 Injunctive Relief and Additional Remedy. The Employee acknowledges that the injury that would be suffered by the Employer as a result of a breach of the provisions of this Agreement (including any provision of Section 7 and Section 8) would be irreparable and that an award of monetary damages to the Employer for such a breach would be an inadequate remedy.

Consequently, the Employer will have the right, in addition to any other rights it may have, at Employer's cost, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Employer will not be obligated to post bond or other security in seeking such relief.

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         9.2 Covenants of Sections 7 and 8 are Essential and Independent. The covenants by the Employee in Section 7 and Section 8 are essential elements of this Agreement, and without the Employee's agreement to comply with such covenants, the Employer would not have entered into this Agreement, offered continued employment to the Employee or offered the Employee the Salary and Benefits and other consideration provided hereunder. The Employee's covenants in Section 7 and Section 8 are independent covenants and the existence of any claim by the Employee against the Employer under this Agreement or otherwise, or against any Affiliate of Employer, will not excuse the Employee's breach of any covenant in Section 7 or Section 8. If the Employee's employment hereunder expires or is terminated, this Agreement will continue in full force and effect as is necessary or appropriate to enforce the covenants and agreements of the Employee in Section 7 and Section 8.

         9.3 Representations and Warranties by the Employee. The Employee represents and warrants to the Employer that the execution and delivery by the Employee of this Agreement do not, and the performance by the Employee of the Employee's obligations hereunder will not, with or without the giving of notice or the passage of time, or both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or governmental agency applicable to the Employee; or (b) conflict with, result in the breach of any provisions of or the termination of, or constitute a default under, any agreement to which the Employee is a party or by which the Employee is or may be bound.

         9.4 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.

         9.5 Binding Effect; Delegation of Employee's Duties Prohibited.This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, heirs, and legal representatives, including any Affiliate to which Employer may assign this Agreement or any entity with which the Employer may merge or consolidate or to which all or substantially all of its assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be delegated or assigned.

         9.6 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered by certified U.S. mail, return receipt requested, to the address(es) below, or (b) one business day after deposit with a nationally recognized overnight delivery service (receipt and next day

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delivery requested), in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

          If to Employer:   PGT Industries

                              1070 Technology Drive

                              Nokomis, Florida 34275

                              Attention: Senior Vice President, Human Resources

          If to Employee:   4910 Hidden Oaks Trail

  Sarasota, Florida 34232

         9.7 Entire Agreement; Amendments. This Agreement, as it may be amended from time to time, contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior employment arrangements (as the same may have been amended from time to time) and other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the parties hereto.

         9.8 Governing Law; Venue and Jurisdiction. This Agreement shall be governed by and construed under Florida law, without regard to conflict of laws principles. The parties agree that any lawsuit between them arising under this Agreement shall be filed in any state or federal court located in Sarasota County, Florida or Tampa, Florida, and each of the parties hereby agrees, acknowledges and submits itself to the exclusive jurisdiction and venue of such courts for the purposes of such lawsuit and agrees to accept service of process in accordance with the provisions for delivery of notice set forth in Section 9.6 hereof.

         9.9 Section Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement unless otherwise specified.  All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the

word "including" does not limit the preceding words or terms.

         9.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

         9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

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[SIGNATURE PAGE FOLLOWS]

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          IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement on the date first written above.

PGT INNOVATIONS, INC.

(“Employer”)

                                            By:  ________________________________

                                            Printed Name:  Debbie LaPinska

                                            Title:  Sr. Vice President, Human Resources

____________________________________

                                            Printed Name:  Brent Boydston

                                            ("Employee")

 

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EX-10.4

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into effective as of January 1, 2021, by and between PGT Innovations, Inc., a Delaware corporation (the "Employer"), and Michael Wothe, an individual and resident of the State of Florida (the "Employee").

RECITALS:

          Employer desires to continue to employ Employee upon the terms and conditions set forth herein, and the Employee wishes to accept such continued employment upon the terms and conditions set forth herein including, without limitation, the nondisclosure and noncompetition covenants and agreements of the Employee set forth in Sections 7 and 8 hereof, in order to cause Employer to provide Employee the Compensation (as defined herein) and any right to Termination Pay pursuant to Section 6.2 hereof.

AGREEMENT

          In consideration of the foregoing and the mutual promises and covenants set forth herein, the parties, intending to be legally bound, agree as follows:

     1.   Definitions.

          For the purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.

          "Affiliate(s)" means any Person, directly or indirectly controlled by, or under common control with, the Employer or any other referenced Person.

          "Agreement" means this Employment Agreement.

          "Annual Performance Bonus" has the meaning set forth in Section 3.2 of this Agreement.

          "Benefits" has the meaning set forth in Section 3.1(b).

          "Board of Directors” means the board of directors of PGT Innovations, Inc. .

          "Cause" means the occurrence of any of the following events during the Employment Period: (a) conduct amounting to fraud or dishonesty against the Employer or any Affiliate of the Employer; (b) the Employee's intentional misconduct, refusal or failure to follow the lawful directions of the Chief Executive Officer (“CEO”) of the Company, or such other senior officer as the Employee may report to from time to time (collectively, the “Senior Managers”) or a

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breach of this Agreement; (c)  intoxication with alcohol or drugs while on the Employer's property or while carrying out the business of the Employer; (d) a conviction or plea of guilty or nolo contendere to a felony or to a misdemeanor involving charges of embezzlement, fraud, stealing or theft, or assault or battery to others; (e) a material breach or violation of the Company’s code of conduct, employee handbook or similar policies or rules, including without limitation, due to sexual or other forms of prohibited harassment;  or (f) the Employee's failure to observe and comply with the requirements in Sections 7 or 8 hereof.

“Change of Control” means a “Change in Control” as defined in Section 12 of the Employer’s 2019 Equity and Incentive Compensation Plan, provided that such “Change in Control” constitutes a change in control event for purposes of Section 409A of the Internal Reveue Code of 1986, as amended.

          "Compensation” means Salary and Benefits.

          "Confidential Information” means any and all:

               (a) trade secrets concerning the business and affairs of the Employer or any Affiliate of the Employer, product or service specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research and development, current and planned manufacturing, marketing or distribution methods and processes, customer lists, prospective customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures, and architectures (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas,  designs, methods and information), and any other information, however documented, that is a "trade secret" either under common law or as such term is defined by statute under the laws of any applicable jurisdiction;

               (b) information concerning the business and affairs of the Employer or its Affiliates (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials), however documented; and

               (c) notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer or Affiliates of the Employer, containing or based, in whole or in part, on any information included in the foregoing.

          "Disability” has the meaning set forth in Section 6.3.

          "Employee Invention” means any idea, invention, technique, modification, process, or improvement (whether patentable or not), and any work of authorship (whether or not copyright protection may be obtained for it) created, conceived, or developed by the Employee, either solely or in conjunction with others, during the Employment Period, or a period that includes a portion of the Employment Period, that relates in any way to, or is useful in any manner in, the

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business then being conducted or proposed to be conducted by the Employer or any Affiliate of the Employer, and any such item created by the Employee, either solely or in conjunction with others, following termination of the Employee's employment with the Employer, that is based upon or uses Confidential Information; provided, however, that any item so created by the Employee that is based upon or uses Confidential Information that the Employee demonstrates was or became generally available to the public, other than as a result of a disclosure by the Employee, will not be deemed to be an Employee Invention for any purposes.

          "Employer” is the entity identified on the first page of this Agreement and its successors and assigns.

          "Employment Period” means the term of the Employee's employment with the Employer.

          "Good Reason” means the occurrence of any of the following events during the Employment Period: (a) a material diminution of the duties or responsibilities of the Employee; or (b) the assignment of the Employee to a worksite outside of a fifty (50) mile radius from the Employer's current headquarters; provided, however, that none of the foregoing events or conditions will constitute “Good Reason” unless: (i) Employee provides the Employer with written objection to the event or condition within thirty (30) days following the occurrence thereof, (ii) the Employer does not reverse or otherwise cure the event or condition within thirty (30) days of receiving that written objection, and (iii) Employee resigns his employment within thirty (30) days following the expiration of that cure period.

“Incentive Amount” means the target amount payable to the Employee under the Employer’s Annual Incentive Plan for the award period ending in the year in which the termination of employment occurs.

          "Noncompetition Agreement" means the agreements and covenants of the Employee found in Section 8.2.

          "Noncompetition Period” means a period of time equal to the Employment Period plus two (2) years, unless this Agreement is terminated by the Employer without Cause or by the Employee with Good Reason, in which case the Noncompetition Period will be for a period of time equal to the Employment Period plus one (1) year.

          "Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or governmental body.

          "Proprietary Items” has the meaning set forth in Section 7.2(a)(iv).

          "Salary” has the meaning set forth in Section 3.1(a).

    2.Employment Term and Duties.

          2.1 Employment. The Employer hereby continues the employment of the Employee, effective as of the date hereof, and the Employee shall accept such continued employment by the

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Employer, effective as of the date hereof, upon the terms and conditions set forth in this Agreement.

          2.2 Term. Subject to the provisions of Section 6, the term of the Employee's employment under this Agreement shall  continue until terminated in accordance with Section 6.

          2.3 Duties. The Employee will continue to serve as the President of the Western Business Unit of the Employer, with duties and responsibilities associated with and related to such position, and such other duties and responsibilities as the Employee may be requested to perform by the Employer’s CEO or such other Senior Manager as the CEO may designate from time to time. The Employee will (a) devote the Employee's business effort, time, energy and skill (vacations and reasonable absences due to illness excepted) as is necessary to fulfill the duties of his position and those assigned by the Senior Managers, (b) use his best efforts to promote the success of the business, and (c) cooperate fully with the lawful requests of the Senior Managers in the advancement of the best interests of the Employer and its Affiliates. During the Employment Period, the Employee shall not be engaged in or provide services to any other business or enterprise which interferes with the Employee's performance of the Employee’s job duties, and other obligations under this Agreement.

     3.   Compensation.

          3.1  Basic Compensation.

               (a) Salary. The Employer shall pay to the Employee an annualized salary at a rate of $375,000 per year, subject to the provisions of Section 6 and adjusted as provided below (the "Salary"), which Salary will be payable in equal periodic installments in accordance with the Employer's customary payroll practices. The Salary will be reviewed by the President and CEO of PGT Innovations, Inc. at least once each year and may be adjusted by the Employer following such review and the approval of any such adjustment by the Board of Directors or the Board’s designated committee. Any such adjustment in the Salary shall be made by, and at the sole discretion and approval of, the President and CEO and the Board of Directors or the Board’s designated committee, as the case may be, and, as adjusted, shall become the Employee's new "Salary" hereunder (unless and until further adjusted).

               (b) Benefits. The Employee will be entitled to participate in such life insurance, hospitalization and medical plans or insurance coverage, disability, and other employee benefit plans, programs and policies of the Employer in effect from time to time (collectively, the "Plans"), vacation and holidays (as further provided in Section 5 below), and any other plan which may be made available by the Employer to its key management employees from time to time in the future, if, and to the extent that, the Employee is eligible under the terms of such Plans. All of the plans, agreements, and undertakings of Employer set forth above shall be called, collectively, the "Benefits." Any Benefits hereunder shall be subject to such local, state or federal tax reporting requirements as maybe in effect from time to time.  This Agreement will not limit the Employer’s ability to amend, modify or terminate such Plans at any time for any reason.  

    3.2  Annual Performance Bonus.

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          As additional incentive compensation for the services to be rendered by the Employee pursuant to this Agreement, the Employee shall be eligible, each calendar year, to receive a bonus (the "Annual Performance Bonus"), if and to the extent that the performance metrics or other requirements that must be satisfied in order for the Employee to receive the Annual Performacne Bonus have been achieved. The determination of whether to pay an Annual Performance Bonus, if any, and the amount of any such Annual Performance Bonus, shall be determined by the Company’s  Board of Directors or the Board’s designated committee, in their discretion, and for 2021 shall be at a target value equal to 60% of the Employee’s Salary.  Any Annual Performance Bonus that is due to the Employee hereunder shall be paid as soon as practicable, but in no event later than 30 days following completion of the Employer's audited financial statements of the year to which the Annual Performance Bonus relates.

   3.3Annual Equity Grant

During the first fiscal quarter of each year, or such other time as the Board, in its discretion, may determine, the Employee will receive an annual equity grant with a target value, measured as of the grant date, equal to the percentage of the Employee’s Salary determined by the Board or its designated committee, which for 2021 shall be 80% (the “Annual Equity Grant”).  One-half of the Annual Equity Grant is expected to be in the form of restricted stock units or restricted share units with no performance restrictions or metrics associated with them, and which are expected to vest in three equal increments on each of the first, second and third anniversaries of the grant date.  The other one-half of the Annual Equity Grant is expected to be in the form of performance shares or performance restricted stock units, which will have Board-determined performance restrictions and metrics associated with them.  The determination of how many of those performance shares or performance restricted stock units have been earned will be made by the Board on or about the first anniversary of the grant date, based on the financial performance of the Company during the prior fiscal year, and any performance shares or performance stock units deemed by the Board to be earned are expected to vest in two equal increments on or about each of the second and third anniversaries of the grant date. Notwithstanding any other provision of this Agreement to the contrary, the determination of whether and when to make any Annual Equity Grant to Employee, and the design, nature and amount of any such Annual Equity Grant, shall be determined by the  Board in its discretion.  All Annual Equity Grants to Employee shall be subject to the terms of the grant agreement between Employer and Employee.  In the event of a Change of Control, the Board or its designated committee will determine the manner in which any unvested restricted shares, performance shares, restricted stock units or other unvested equity grants will be treated, with respect to the amount and timing of the vesting of such unvested equity, to the extent that the same is not already addressed in the terms of the applicable grant agreement between the Employer and Employee.

     4.   Facilities and Expenses.

          The Employer will furnish the Employee with office space, equipment, supplies, computer and facsimile equipment, telephones (including cellular telephone), and such other facilities, support staff and personnel as the Employer deems necessary or appropriate for the performance of the Employee's duties under this Agreement. The Employer will reimburse the Employee for

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reasonable business expenses incurred by him on behalf of the Employer in the performance of his duties; provided, that Employee furnishes to Employer documentation of such expenses as is required by the Internal Revenue Service and the Employer’s internal policies, as well as such other documentation as the Employer may request. In addition, the Employer will reimburse the Employee or otherwise provide and pay for all professional affiliation expenses incurred by the Employee that have been pre-approved by the Employer. The Employee must file authorization requests, to the extent required by the Employer's employment policies and, in all instances, expense reports with respect to such expenses in accordance with the Employer's policies.

     5.   Vacations and Holidays.

          The Employee will be entitled to four weeks paid vacation each year or such other amount of paid vacation as may be provided for in the Employer's written vacation policy, if greater. Such vacation shall be taken in accordance with the vacation policies of the Employer in effect for its senior managers from time to time. Vacation must be taken by the Employee at such time or times as mutually agreed by the Employee and the Employer. The Employee will also be entitled to any paid holidays expressly provided for in the Employer's policies.

6.   Termination.

          6.1  Events of Termination.

               (a) Death; Disability. In the event of the Employee's death or Disability, the Employee’s employment with the Employer shall be deemed terminated as of the end of the month in which such death occurs or such Disability is determined, and all rights, duties and obligations of the parties hereunder shall thereupon cease, except for the Employee's obligations under Section 7 and Section 8 hereof (in the case of a termination due to Disability), and the Employer's obligations under Sections 6.2(a) and 6.2(b) hereof, as the case may be.

               (b) By The Employer for Cause. The Employee's employment with the Employer may be terminated at the option of and by written notice from the Employer if the Senior Managers finds Cause. Upon any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease (including, but not limited to, the payment by the Employer of all Compensation), except for the Employee's obligations under Section 7 and Section 8 hereof.

               (c) By The Employer Without Cause. The Employer may also terminate the Employee's employment at any time upon not less than ten (10) days advance written notice without Cause. Upon expiration of such notice period, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(c). The Employer mayaccelerate the effective date of such termination if, in lieu of such notice, and in addition to the payments required by Section 6.2(c) below, Employer continues to pay Salary to Employee for a number of days equal to the number of days by which Employer accelerated the effective date of Employee's termination.

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               (d) Voluntary Termination without Good Reason By Employee. The Employee may terminate his employment with the Employer without Good Reason upon not less than thirty (30) days advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(d).

               (e) Termination with Good Reason by the Employee. The Employee may terminate his employment with the Employer with Good Reason upon advance written notice to the Employer; provided, however, that after the receipt of such notice, the Employer may, in its discretion accelerate the effective date of such termination at any time by written notice to the Employee. Upon the effective date of any such termination, all rights, obligations and duties of the parties hereunder shall immediately cease, except for the Employee's obligations under Section 7 and Section 8 hereof and the Employer's obligations under Section 6.2(e).

          6.2 Termination Pay. Upon cessation of Employee’s employment with Employer, the Employer will be obligated to pay the Employee (or, in the event of his death, his designated beneficiary) only such compensation, if any, as is provided in this Section 6.2. For purposes of this Section 6.2, the Employee's designated beneficiary will be such individual beneficiary or trust, located at such address, as the Employee may designate by notice to the Employer from time to time or, if the Employee fails to give notice to the Employer of such a beneficiary, the Employee's estate.

               (a) Termination by Death. If the Employee’s employment terminates because of the Employee's death, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, pay to the Employee's designated beneficiary the Employee's Salary for a period of six (6) months.

               (b) Termination upon Disability. If the Employee’s employment is terminated by either party as a result of the Employee's Disability, as determined under Section 6.3, in addition to the Benefits otherwise due the Employee, the Employer will, in accordance with normal payroll practice, continue to pay to the Employee his Salary for a period of twelve 12) months following the effective date of such termination.

               (c) Termination by the Employer Without Cause. If the Employer terminates the Employee's employment without Cause, the Employer will (i) pay to Employee his Salary, in accordance with normal payroll practice, for a period of twelve (12) months, commencing no later than the tenth business day following sixty (60) days after the date of Employee’s separation from service; (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twelve (12) months; (iii) pay 100% of Employee’s Incentive Amount, in a lump-sum payment payable no later then the tenth business day following the date of Employee’s separation from services.  Notwithstanding the preceding provisions of this Section 6.2(c), in the event the Employee’s employment is terminated by the Employer (or the successor employer to the Employer) without Cause at the

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time of or within twelve months after the effective date of a Change of Control, the Employer (or successor employer to the Employer following the Change of Control) will (i) pay to Employee an amount equal to his Salary for a period of  twenty-four (24) months, in a lump sum  payable on the 60^th day following the date of Employee’s separation from service (ii) waive the applicable COBRA continuation coverage for Employee (and, if applicable his spouse and eligible dependents) for a period of twenty-four (24) months; and (iii) pay 200% of Employee’s Incentive Amount, in a lump-sum payment payable on the 60^th day following the date of Employee’s separation from service; provided, however. that to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended,  the amounts described in (i) and (iii) of this sentence will be paid on the same schedule as set forth in the first sentence of this paragraph. For purposes of the preceding sentence, Salary and the Incentive Amount shall be the greater of (i) Salary and the Incentive Amount as determined at the time of the Employee’s separation from service and (ii) Salary and the Incentive Amount as determined assuming a separation from service immediately prior to the effective date of the Change in Control.

               (d) Termination by the Employee without Good Reason. If the Employee terminates his employment other than with Good Reason, the Employer shall continue to pay to the Employee his Salary for the shorter of: (i) thirty (30) days; or (ii) the notice period provided by the Employee with respect to his termination.

  (e) Termination by the Employee with Good Reason. If the Employee terminates the Employee's employment with Good Reason, he will be entitled to the same payments and benefits described above in Section 6.2(c), including where Employee terminates his employment with Good Reason at the time of or following a Change of Control, within twelve months after the effective date of such Change of Control.

6.3Definition of Disability. For purposes of this Agreement, “Disability” has the meaning defined in Treas. Reg. § 1.409A-3(i)(4).

6.4Release Required as a Condition of Severance.  Notwithstanding any other provision of this Agreement, payments under Section 6.2, above, are conditioned on the Employee’s (a) immediate resignation, upon Employer’s request, from all employee and director positions with the Employer and its affiliates;  (b) execution and delivery to the Employer, within the applicable review period (e.g., 45 days or 21 days, depending on the context in which the termination occurs) following the termination of his employment, and non-revocation of, a general release of claims against the Employer and its affiliates in such form as the Employer may reasonably require (the “Release”); and (c) the Emplyoee’s full compliance with the provisions of this Agreement following the termination of his employment, including Sections 7 and 8 hereof. For avoidance of doubt, the payments and benefits described in this Section 6.2 are in lieu of, and not in addition to, any other severance arrangement maintained by the Employer.

     7.   Non-Disclosure Covenant; Employee Inventions.

          7.1 Acknowledgments by the Employee. The Employee acknowledges that (a) during the Employment Period and as a part of his employment, the Employee will be afforded access to Confidential Information; (b) public disclosure of such Confidential Information could have an

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adverse effect on the Employer and its business; (c) since the Employee possesses substantial expertise and skill with respect to the Employer's business, the Employer desires to obtain exclusive ownership of each Employee Invention, and the Employer will be at a substantial competitive disadvantage if it fails to acquire exclusive ownership of each Employee Invention; (d) the Compensation provided to Employee hereunder constitutes good and sufficient consideration for the Employee's agreements and covenants in this Section 7; and (e) the provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure of Confidential Information and to provide the Employer with exclusive ownership of all Employee Inventions.

          7.2 Agreements of the Employee. In consideration of the Compensation to be paid or provided to the Employee by the Employer under this Agreement, the Employee covenants as follows:

               (a) Confidentiality.

                    (i) During and at all times following the Employment Period, the Employee will hold in confidence the Confidential Information and will not disclose it to any person except with the specific prior written consent of the Employer or except as otherwise expressly permitted by the terms of this Agreement.

                    (ii) Any trade secrets of the Employer will be entitled to all of the protections and benefits under applicable trade secret laws. If any information that the Employer deems to be a trade secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this Agreement, such information will, nevertheless, be considered Confidential Information for

purposes of this Agreement. The Employee hereby waives any requirement that the Employer submit proof of the economic value of any trade secret or post a bond or other security.

                    (iii) None of the foregoing obligations and restrictions apply to any part of the Confidential Information that the Employee demonstrates was or became generally available to the public other than as a result of a disclosure by the Employee.

                    (iv) The Employee will not remove from the Employer's (or any Affiliate's) premises (except to the extent such removal is for purposes of the performance of the Employee's duties at home or while traveling, or except as otherwise specifically authorized by the Employer in writing) any document, record, notebook, plan, model, component, device, or computer software or code, whether embodied in a disk or in any other form (collectively, the "Proprietary Items").  The Employee recognizes that, as between the Employer and the Employee, all of the Proprietary Items, whether or not developed by the Employee, are the exclusive property of the Employer. Upon termination of this Agreement by either party, the Employee will return to the Employer all of the Proprietary Items in the Employee's possession or subject to the Employee's control, and the Employee shall not retain any copies, abstracts, sketches, or other physical embodiment of any of the Proprietary Items.

               (b) Employee Inventions. Each Employee Invention will belong exclusively to the Employer. The Employee acknowledges that all of the Employee's writing, works of authorship, creations, designs, layouts and methods related to the fabrication, manufacture, processing and

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production of the Company’s products, sales and marketing plans and strategies, and other Employee Inventions are works made for hire and the property of the Employer, including any copyrights, patents, or other intellectual property rights pertaining thereto. If it is

determined that any such works are not works made for hire, the Employee hereby assigns to the Employer all of the Employee's right, title, and interest, including all rights of copyright, patent, and other intellectual property rights, to or in such Employee Inventions. The Employee covenants that he will promptly:

                    (i) disclose to the Employer in writing any Employee Invention;

                    (ii) assign to the Employer or to a party designated by the Employer, at the Employer's request and without additional compensation, all of the Employee's right to the Employee Invention for the United States and all foreign jurisdictions;

                    (iii) execute and deliver to the Employer such applications, assignments, and other documents as the Employer may request in order to apply for and obtain patents or other registrations with respect to any Employee Invention in the United States and any foreign jurisdictions;

                    (iv) sign all other papers necessary to carry out the above obligations; and

                    (v) give testimony and render any other assistance at Employer's expense, in support of the Employer's rights to any Employee Invention.

          7.3 Disputes or Controversies. The Employee recognizes that should a dispute or controversy arising from or relating to this Agreement be submitted for adjudication to any court, arbitration panel, or other third party, the preservation of the secrecy of Confidential Information may be jeopardized. All pleadings, documents, testimony, and records relating to any such adjudication will be maintained in secrecy and will be available for inspection by the Employer, the Employee, and their respective attorneys and experts, who will agree, in advance and in writing, to receive and maintain all such information in secrecy, except as may be limited by written agreement among them.

8. Non-Competition and Non-Interference.

8.1Acknowledgments By the Employee. The Employee acknowledges that:  the services to be performed by Employee under this Agreement are of a special, unique and unusual character; and (b) the Compensation provided to the Employee hereunder constitutes good and sufficient consideration for the Employee’s agreements and covenants in this Section 8; and (c) the provisions of this Section 8 are reasonable and necessary to protect the Employer’s business.

8.2Covenants of the Employee. In consideration of the acknowledgments by the Employee, and in consideration of the Compensation to be paid or provided to the Employee by the Employer, the Employee covenants that  the Employee will not, directly or indirectly:

(a)during the Noncompetition Period, (i) solicit business from, or compete with the Employer for the business of, any customer of the Employer where the Employee is doing so in

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the same or similar business as the business conducted by the Employer (i.e., the manufacturing, marketing and sales of either impact-resistant or non-impact resistant commercial and/or residential windows and doors, and vinyl patio or porch enclosures); (ii) own, operate, control, finance, manage, advise, be employed or engaged by, perform any services for, invest in or otherwise become associated in any capacity with, any business, company, partnership, organization, proprietorship, or other entity, whose activities compete in whole or in part with the activities of the Employer or any of its Affiliates in any state of the United States in which the Employer or any of its Affiliates conducted or conducts the manufacturing, marketing, distribution and/or sales of completed commercial and/or residential windor and door products (a “Competitive Business”); or (iii) engage in any practice the purpose or effect of which is to intentionally evade the provisions of this covenant; provided, however, that the Employee may purchase or otherwise acquire up to (but not more than) three percent (3%) of any class of securities of any Competitive Business (but without otherwise participating in the activities of such Competitive Business) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934; or

(b)whether for the Employee’s own account or the account of any other person (i) solicit or induce, directly or indirectly, whether or not for consideration, any employee or agent of the Employer to terminate his or his relationship with the Employer; or (ii) induce or attempt to induce any customer, supplier, service provider, vendor, consultant or contractor of the Employer to terminate or adversely change its relationship with the Employer or otherwise interfere with any relationship between the Employer and any of the Employer’s customers, prospective customers, suppliers, service providers or contractors.

8.3Enforceability; Notice. If any covenant in Section 8.2 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against the Employee. The period of time applicable to any covenant in Section 8.2 will be extended by the duration of any violation by the Employee of such covenant. The Employee will, while the covenant under Section 8.2 is in effect, give notice to the Employer, within ten (10) days after accepting any other employment, of the identity of the Employee’s employer. Employer may notify such employer that the Employee is bound by this Agreement and, at the Employer’s election, furnish such employer with a copy of this Agreement or relevant portions thereof.

     9. General Provisions.

          9.1 Injunctive Relief and Additional Remedy. The Employee acknowledges that the injury that would be suffered by the Employer as a result of a breach of the provisions of this Agreement (including any provision of Section 7 and Section 8) would be irreparable and that an award of monetary damages to the Employer for such a breach would be an inadequate remedy.

Consequently, the Employer will have the right, in addition to any other rights it may have, at Employer's cost, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Agreement, and the Employer will not be obligated to post bond or other security in seeking such relief.

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         9.2 Covenants of Sections 7 and 8 are Essential and Independent. The covenants by the Employee in Section 7 and Section 8 are essential elements of this Agreement, and without the Employee's agreement to comply with such covenants, the Employer would not have entered into this Agreement, offered continued employment to the Employee or offered the Employee the Salary and Benefits and other consideration provided hereunder. The Employee's covenants in Section 7 and Section 8 are independent covenants and the existence of any claim by the Employee against the Employer under this Agreement or otherwise, or against any Affiliate of Employer, will not excuse the Employee's breach of any covenant in Section 7 or Section 8. If the Employee's employment hereunder expires or is terminated, this Agreement will continue in full force and effect as is necessary or appropriate to enforce the covenants and agreements of the Employee in Section 7 and Section 8.

         9.3 Representations and Warranties by the Employee. The Employee represents and warrants to the Employer that the execution and delivery by the Employee of this Agreement do not, and the performance by the Employee of the Employee's obligations hereunder will not, with or without the giving of notice or the passage of time, or both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or governmental agency applicable to the Employee; or (b) conflict with, result in the breach of any provisions of or the termination of, or constitute a default under, any agreement to which the Employee is a party or by which the Employee is or may be bound.

         9.4 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.

         9.5 Binding Effect; Delegation of Employee's Duties Prohibited.This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, heirs, and legal representatives, including any Affiliate to which Employer may assign this Agreement or any entity with which the Employer may merge or consolidate or to which all or substantially all of its assets may be transferred. The duties and covenants of the Employee under this Agreement, being personal, may not be delegated or assigned.

         9.6 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given (a) when delivered by certified U.S. mail, return receipt requested, to the address(es) below, or (b) one business day after deposit with a nationally recognized overnight delivery service (receipt and next day

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delivery requested), in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

          If to Employer:   PGT Industries

                              1070 Technology Drive

                              Nokomis, Florida 34275

                              Attention: Senior Vice President, Human Resources

          If to Employee:   6910 South Star Drive

  Gilbert, Arizona 85298

         9.7 Entire Agreement; Amendments. This Agreement, as it may be amended from time to time, contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior employment arrangements (as the same may have been amended from time to time) and other agreements or understandings, oral or written, between the parties hereto with respect to the subject matter hereof. This Agreement may not be amended orally, but only by an agreement in writing signed by the parties hereto.

         9.8 Governing Law; Venue and Jurisdiction. This Agreement shall be governed by and construed under Florida law, without regard to conflict of laws principles. The parties agree that any lawsuit between them arising under this Agreement shall be filed in any state or federal court located in Sarasota County, Florida or Tampa, Florida, and each of the parties hereby agrees, acknowledges and submits itself to the exclusive jurisdiction and venue of such courts for the purposes of such lawsuit and agrees to accept service of process in accordance with the provisions for delivery of notice set forth in Section 9.6 hereof.

         9.9 Section Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Agreement unless otherwise specified.  All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the

word "including" does not limit the preceding words or terms.

         9.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

         9.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

13

[SIGNATURE PAGE FOLLOWS]

14

          IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement on the date first written above.

PGT INNOVATIONS, INC.

(“Employer”)

                                            By:  ________________________________

                                            Printed Name:  Debbie LaPinska

                                            Title:  Sr. Vice President, Human Resources

____________________________________

                                            Printed Name:  Michael Wothe

                                            ("Employee")

 

15

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Jeffrey T. Jackson, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended April 3, 2021, of PGT Innovations, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Jeffrey T. Jackson

Jeffrey T. Jackson

President and Chief Executive Officer

Date: May 13, 2021

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Brad West, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended April 3, 2021, of PGT Innovations, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Brad West

Brad West

Interim Chief Financial Officer and Senior Vice President of Corporate Development and Treasurer

Date: May 13, 2021

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the quarterly report on Form 10-Q of PGT Innovations, Inc. (the “Company”) for the quarterly period ended April 3, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey T. Jackson, as President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeffrey T. Jackson

Jeffrey T. Jackson

President and Chief Executive Officer

Date: May 13, 2021

A signed original of this written statement required by Section 906 has been provided to PGT Innovations, Inc. and will be retained by PGT Innovations, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350

(Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the quarterly report on Form 10-Q of PGT Innovations, Inc. (the “Company”) for the quarterly period ended April 3, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brad West, as Interim Chief Financial Officer and Senior Vice President of Corporate Development and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brad West

Brad West

Interim Chief Financial Officer and Senior Vice President of Corporate Development and Treasurer

Date: May 13, 2021

A signed original of this written statement required by Section 906 has been provided to PGT Innovations, Inc. and will be retained by PGT Innovations, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Apr. 03, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 03, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Trading Symbol	PGTI
Entity Registrant Name	PGT Innovations, Inc.
Entity Central Index Key	0001354327
Current Fiscal Year End Date	--01-01
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
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
Entity Common Stock, Shares Outstanding		59,544,807
Title of 12(b) Security	Common stock, par value $0.01 per share
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Income Statement [Abstract]
Net sales	$ 271,092	$ 220,204
Cost of sales	177,130	139,077
Gross profit	93,962	81,127
Selling, general and administrative expenses	69,766	54,220
Income from operations	24,196	26,907
Interest expense, net	7,457	7,169
Income before income taxes	16,739	19,738
Income tax expense	3,944	4,138
Net income	12,795	15,600
Less: Net income attributable to redeemable non-controlling interest	411
Net income attributable to the Company	12,384	15,600
Change in redemption value of redeemable non-controlling interest	0	0
Net income attributable to common shareholders	$ 12,384	$ 15,600
Net income per common share attributable to common shareholders:
Basic	$ 0.21	$ 0.27
Diluted	$ 0.21	$ 0.26
Weighted average number of common shares outstanding:
Basic	59,286	58,668
Diluted	59,894	59,121

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 12,795	$ 15,600
Other comprehensive income (loss) before tax:
Change in fair value of derivatives	8,288	(5,213)
Reclassification to earnings	(1,775)	612
Other comprehensive income (loss) before tax	6,513	(4,601)
Income tax expense (benefit) related to other comprehensive income	1,618	(1,151)
Other comprehensive income (loss), net of tax	4,895	(3,450)
Comprehensive income	17,690	12,150
Less: Comprehensive income attributable to redeemable non-controlling interest	411
Comprehensive income attributable to the Company	$ 17,279	$ 12,150

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 58,979	$ 100,320
Accounts receivable, net	117,239	92,844
Inventories	72,352	60,317
Contract assets, net	49,225	28,723
Prepaid expenses	10,627	8,357
Other current assets	17,916	11,111
Total current assets	326,338	301,672
Property, plant and equipment, net	160,129	135,155
Operating lease right-of-use asset, net	65,763	38,567
Intangible assets, net	324,458	256,507
Goodwill	359,746	329,695
Other assets, net	3,224	925
Total assets	1,239,658	1,062,521
Current liabilities:
Accounts payable and accrued liabilities	111,892	84,344
Current portion of operating lease liability	8,682	6,132
Total current liabilities	120,574	90,476
Long-term debt	474,265	412,098
Operating lease liability, less current portion	60,140	35,130
Deferred income taxes	29,947	28,329
Other liabilities	10,971	11,354
Total liabilities	695,897	577,387
Redeemable non-controlling interest	34,495
Shareholders' equity:
Preferred stock; par value $.01 per share; 10,000 shares authorized; no shares outstanding
Common stock; par value $.01 per share; 200,000 shares authorized; 63,106 and 62,542 shares issued and 59,461 and 58,999 shares outstanding at April 3, 2021 and January 2, 2021, respectively	631	625
Additional paid-in-capital	427,210	420,202
Accumulated other comprehensive income	7,615	2,720
Retained earnings	92,119	79,896
Treasury stock at cost	(18,309)	(18,309)
Total shareholders' equity	509,266	485,134
Total liabilities, redeemable non-controlling interest and shareholders' equity	$ 1,239,658	$ 1,062,521

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 03, 2021	Jan. 02, 2021
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, Shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, Shares authorized	200,000,000	200,000,000
Common stock, shares issued	63,106,000	62,542,000
Common stock, shares outstanding	59,461,000	58,999,000

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Cash flows from operating activities:
Net income	$ 12,795	$ 15,600
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation	6,697	5,186
Amortization	4,749	4,742
Provision for allowance for doubtful accounts	2,411	646
Stock-based compensation	1,750	1,530
Amortization of deferred financing costs, debt discount and premium	230	311
Loss (gain) on sales of assets	67	(82)
Change in operating assets and liabilities (net of effects of acquisition):
Accounts receivable	(24,980)	(17,857)
Inventories	(4,307)	(4,039)
Contract assets, net, prepaid expenses, other current and other assets	(20,898)	(1,029)
Accounts payable, accrued and other liabilities	20,039	5,916
Net cash (used in) provided by operating activities	(1,447)	10,924
Cash flows from investing activities:
Purchases of property, plant and equipment	(6,512)	(2,327)
Investment in and acquisition of businesses	(94,321)	(90,145)
Proceeds from sales of assets	7	82
Net cash used in investing activities	(100,826)	(92,390)
Cash flows from financing activities:
Proceeds from issuance of senior notes	63,300	53,188
Payments of financing costs	(1,363)	(1,266)
Purchases of common stock relating to tax withholdings on employee equity awards	(1,005)	(815)
Proceeds from exercise of stock options		549
Proceeds from issuance of common stock under employee stock purchase plan (ESPP)		119
Net cash provided by financing activities	60,932	51,775
Net decrease in cash and cash equivalents	(41,341)	(29,691)
Cash and cash equivalents at beginning of period	100,320	97,243
Cash and cash equivalents at end of period	58,979	67,552
Non-cash activity:
Issuance of common stock in Eco Acquisition	6,108
Establish right-of-use asset	29,490	14,605
Establish operating lease liability	(29,490)	(14,605)
Property, plant and equipment additions in accounts payable	$ 1,022	$ 119

XML

Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	Treasury Stock [Member]
Beginning Balance at Dec. 28, 2019	$ 431,548	$ 619	$ 414,688	$ (238)	$ 34,788	$ (18,309)
Beginning Balance, Shares at Dec. 28, 2019		58,504,734
Vesting of restricted stock, Shares		175,824
Grants of restricted stock		$ 6	(6)
Forfeitures of restricted stock		$ (1)	1
Purchases of treasury stock	(815)					(815)
Purchases of treasury stock, Shares		(51,479)
Retirement of treasury stock		$ (1)	(814)			815
Stock-based compensation	1,530		1,530
Change in redemption value of redeemable non-controlling interest	0
Exercise of stock options	549	$ 3	546
Exercise of stock options, Shares		274,353
Common stock issued under ESPP	119		119
Common stock issued under ESPP, Shares		15,191
Net income attributable to the Company	15,600				15,600
Other comprehensive income (loss)	(3,450)			(3,450)
Ending Balance at Apr. 04, 2020	445,081	$ 626	416,064	(3,688)	50,388	(18,309)
Ending Balance, Shares at Apr. 04, 2020		58,918,623
Beginning Balance at Jan. 02, 2021	485,134	$ 625	420,202	2,720	79,896	(18,309)
Beginning Balance, Shares at Jan. 02, 2021		58,998,711
Vesting of restricted stock, Shares		147,106
Grants of restricted stock		$ 3	(3)
Forfeitures of restricted stock		$ (1)	1
Purchases of treasury stock	(1,005)					(1,005)
Purchases of treasury stock, Shares		(42,414)
Retirement of treasury stock			(844)		(161)	1,005
Stock-based compensation	1,750		1,750
Issuance in acquisition of Eco	6,108	$ 4	6,104
Issuance in acquisition of Eco, Shares		357,797
Change in redemption value of redeemable non-controlling interest	0
Net income attributable to the Company	12,384				12,384
Other comprehensive income (loss)	4,895			4,895
Ending Balance at Apr. 03, 2021	$ 509,266	$ 631	$ 427,210	$ 7,615	$ 92,119	$ (18,309)
Ending Balance, Shares at Apr. 03, 2021		59,461,200

XML

Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Statement Of Stockholders Equity [Abstract]
Income tax (benefit) expense related to components of other comprehensive income (loss)	$ 1,618	$ (1,151)

XML

Description of Business and Basis of Presentation

3 Months Ended

Apr. 03, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business and Basis of Presentation

NOTE 1.  DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

About PGT Innovations, Inc.

The accompanying unaudited condensed consolidated financial statements include the accounts of PGT Innovations, Inc. and its direct and indirect wholly-owned subsidiaries, including, PGT Industries, Inc., CGI Window and Door Holdings, Inc. (“CGI”), CGI Commercial, Inc. (“CGIC”), WinDoor, Incorporated, Coyote Acquisition Co., WWS Acquisition LLC (formerly known as GEF WW Parent LLC) (“WWS”), and with their acquisition by PGT Innovations, Inc. effective on February 1, 2020, NewSouth Window Solutions LLC, and NewSouth Window Solutions of Orlando LLC (“NewSouth”), as well as, as of and for the period from February 1, 2021 through April 3, 2021, the accounts of Eco Enterprises, LLC (formerly New Eco Windows Holding, LLC), and its subsidiaries Eco Windows Systems, LLC, Eco Glass Production, LLC, and Unity Windows, LLC (together “Eco”), relating to our acquisition of a 75% ownership stake in Eco Enterprises on February 1, 2021 (the “Eco Acquisition”), after elimination of intercompany accounts and transactions (collectively, the “Company”).

PGT Innovations, Inc. (“PGTI,” “we,” or the “Company”), formerly named PGT, Inc., manufactures and supplies premium windows and doors. Our highly-engineered products can withstand some of the toughest weather conditions on earth and unify indoor/outdoor living spaces. We are also the nation’s largest manufacturer of impact-resistant windows and doors. Our family of brands include CGI®, PGT® Custom Windows & Doors, WinDoor®, Western Window Systems®, CGI Commercial®, Eze-Breeze®, NewSouth Window Solutions®, and Eco Windows Systems®. Our products other than NewSouth products are sold through an authorized dealer and distributor network. Our NewSouth products are sold directly to the end-user consumer through store-front locations throughout Florida, and through direct-to-homeowner door-to-door sales. We are also opening NewSouth store-front locations in other states as part of our strategy of expanding NewSouth’s geographic presence, including new locations opened in 2020 in Charleston, South Carolina, Pensacola, Florida, and Houston, Texas.

The majority of our sales are to customers in the state of Florida, which further increased with our acquisition of Eco, but we sell products to customers in many states, including the western United States through WWS. We also have sales in the Caribbean, Canada, and in South and Central America. See Note 6 for a discussion of the Eco Acquisition.

We were incorporated in the state of Delaware on December 16, 2003, as JLL Window Holdings, Inc., with primary operations in North Venice, Florida. On February 15, 2006, our Company was renamed PGT, Inc. On December 14, 2016, we announced that we changed our name to PGT Innovations, Inc. and, effective on December 28, 2016, the listing of our common stock was transferred to the New York Stock Exchange (“NYSE”) from the NASDAQ Global Market (NASDAQ), and began trading on the NYSE under its existing ticker symbol of “PGTI”. We have six window manufacturing operations in Florida, and one in Arizona. Our manufacturing facilities in Florida include one in North Venice, four in the greater Miami area, which includes two as a result of our investment in Eco, and one in Tampa with the acquisition of NewSouth. Our Arizona operations are in Phoenix. Regarding glass processing, we have two glass tempering and laminating plants and one insulation glass plant, all located in North Venice. Our Eco investment also has a glass processing facility in the greater Miami, Florida area.

All references to PGTI or our Company apply to the consolidated financial statements of PGT Innovations, Inc. unless otherwise noted.

COVID-19 Pandemic

During March 2020, a global pandemic (the “Pandemic”) was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The Pandemic has resulted in a significant number of infections, hospitalizations and deaths in several of our key markets, including Arizona, California, Florida and Texas. The Pandemic has significantly affected economic conditions in those markets, and in the United States in general, and internationally, including due to federal, state and local governments and employers reacting to the public health crisis with mitigation measures, and also due to the general fear and uncertainty created by the Pandemic, all of which has resulted in workforce, supply chain and production disruptions, along with reduced demand and spending in many industries and markets, including in our core markets in the western United States (“U.S.”), creating significant uncertainties in the U.S. economy. Although many of the government-mandated restrictions on economic and social activities that were put in place as part of the initial response to the Pandemic have been lifted, and vaccines with high degrees of efficacy have been approved, with others pending approval, by the United States Food and Drug Administration, or when the nation-wide program of vaccination will result in herd immunity to the coronavirus in the United States or globally, which is being impacted by several factors, including vaccine hesitancy or resistance, it is still currently unclear when, or if, social, business, occupational, educational and economic conditions will return to pre-Pandemic conditions. The extent to which the continuing

circumstances around the Pandemic could affect our future business, operations and financial results will depend upon numerous evolving factors that we are not able to accurately predict, including the timing of any relief that may come from the current program of nationwide vaccinations and its effect on the duration of the continuing economic and market disruptions related to the Pandemic, and whether such vaccines are effective against any new variants of coronavirus, and the nature, amounts and duration of any additional government stimulus measures designed to bolster the economy. As such, we continue to be unable to accurately predict the impact the Pandemic and the challenges it has created for the U.S. and global economies, will have on our financial performance and operations going forward due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, when or if herd immunity is achieved in the United States, especially in our key markets, actions that may be taken by governmental authorities to attempt to control the Pandemic, the impact to our customers’ and suppliers’ businesses and other factors identified in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on March 2, 2021. We will continue to evaluate the nature and extent of the impact of the Pandemic to our business, consolidated results of operations, and financial condition.

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the remainder of the current year or for any future periods. The Company’s fiscal first quarter in 2021 ended April 3, 2021, consisted of 13 weeks, and our fiscal first quarter in 2020 ended April 4, 2020, consisted of 14 weeks.

The condensed consolidated balance sheet as of January 2, 2021, is derived from the audited consolidated financial statements, but does not include all disclosures required by GAAP. The condensed consolidated balance sheet as of January 2, 2021, and the unaudited condensed consolidated financial statements as of and for the periods ended April 3, 2021 and April 4, 2020, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended January 2, 2021, included in the Company’s most recent Annual Report on Form 10-K. The accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

As described above, the extent to which the COVID-19 pandemic and resulting measures that may be taken by the Company and/or its customers or suppliers and/or by governmental entities will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. Management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic.

We have two reportable segments: the Southeast segment and the Western segment. The Southeast reporting segment, which is also an operating segment, is composed of sales from our facilities in Florida. The Western reporting segment, also an operating segment, is composed of sales from our facility in Arizona. See Note 16 for segment disclosures.

Recently Adopted Accounting Pronouncements

Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles and also clarifies and amends existing guidance. This standard is effective beginning January 1, 2021, with early adoption permitted. The adoption of this standard did not have any impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in March 2021, subsequent amendment to the initial guidance, ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP

to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.

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Revenue Recognition and Contracts with Customers

3 Months Ended

Apr. 03, 2021

Revenue From Contract With Customer [Abstract]

Revenue Recognition and Contracts with Customers

NOTE 2.  REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS

Revenue Recognition Accounting Policy

The Company primarily manufactures fully customized windows and doors based on design specifications, measurements, colors, finishes, framing materials, glass-types, and other options selected by the customer at the point in time an order is received. The Company has an enforceable right to payment at the time an order is received and accepted at the agreed-upon sales prices contained in our agreements with our customers for all manufacturing efforts expended on behalf of its customers. Due to the customized build-to-order nature of these products, the Company’s assessment is that the substantial portion of its finished goods and certain unused glass components have no alternative use, and that control of these products and components passes to the customer over time during the manufacturing of the products in an order, or upon our receipt of certain pre-cut glass components from our supplier attributed to specific customer orders.

Based on these factors, the Company recognizes a substantial portion of revenue over time during the manufacturing process once customization begins, and for certain unused glass components on hand, at the end of a reporting period. Revenue on work-in-process at the end of a reporting period is recognized in proportion to costs incurred to total estimated cost of the product being manufactured. Except for the Western segment’s volume products, discussed in the section titled Disaggregation of Revenue from Contracts with Customers below, revenue recognized at a point in time is immaterial.

Disaggregation of Revenue from Contracts with Customers

As discussed in Note 1, we have two reportable segments: our Southeast segment and our Western segment. See Note 16 for more information. The following tables provide information about our net sales by reporting segment, product category and market for the three months ended April 3, 2021 and April 4, 2020 (dollars in millions):

	Three Months Ended
	April 3,		April 4,
Disaggregation of revenue (in millions):	2021		2020
Reporting segment:
Southeast	$	233.6	$	183.6
Western		37.5		36.6
Total net sales	$	271.1	$	220.2
Product category:
Impact-resistant window and door products	$	191.4	$	153.6
Non-impact window and door products		79.7		66.6
Total net sales	$	271.1	$	220.2
Market:
New construction	$	120.0	$	109.1
Repair and remodel		151.1		111.1
Total net sales	$	271.1	$	220.2

The Company’s Western segment includes both custom and volume products. This segment’s volume products are not made-to-order and are of standardized sizes and design specifications. Therefore, the Company’s assessment is that the Western segment’s volume products have alternative uses, and that control of these products passes to the customer at a point in time, which is typically when the product has been delivered to the customer. For the three months ended April 3, 2021 and April 4, 2020, the Western segment’s net sales of its volume products were $19.6 million and $15.2 million, respectively.

Contract Balances

Contract assets represent sales recognized in excess of billings related to finished goods not yet shipped and certain unused glass components not yet placed into the production process for which revenue is recognized over time as noted above. Contract liabilities relate to customer deposits at the end of reporting periods. At April 3, 2021 and January 2, 2021, those contract liabilities totaled $34.0 million and $22.8 million, respectively, of which $27.8 million and $18.1 million, respectively, are classified within accrued liabilities, and $6.2 million and $4.6 million, respectively, are classified as a reduction to the contract assets to which they relate.  Contract assets, net, totaled $49.2 million at April 3, 2021 and $28.7 million at January 2, 2021, in the accompanying condensed consolidated balance sheets.

Because of the short-term nature of our performance obligations, as discussed below, substantially all of our performance obligations are satisfied within the quarter following the end of a reporting period. As such, substantially all of the contract liabilities at January 2, 2021 were satisfied in the first quarter of 2021, and contract assets at January 2, 2021 were transferred to accounts receivable in the first quarter of 2021. Contract liabilities at April 3, 2021 represents cash received during the three-month period ended April 3, 2021, excluding amounts recognized as revenue during that period. Contract assets at April 3, 2021 represents revenue recognized during the three-month period ended April 3, 2021, excluding amounts transferred to accounts receivable during that period.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue as the performance obligation is satisfied. Our contracts with our customers generally represent an approved purchase order together with our standard terms and conditions. Our custom product contracts include distinct goods that are substantially the same and have the same pattern of transfer to the customer over time, and therefore represent a series of distinct goods accounted for as a single performance obligation. For volume products, we allocate the contract’s transaction price to each distinct performance obligation based on the estimated relative standalone selling price of each distinct good. Observable standalone sales are used to determine the standalone selling price. Certain customers are eligible for rebates based on their volume or purchases during an annual period. Rebates are recorded as a reduction to sales and were immaterial in all periods presented.

Performance obligations are satisfied over time, generally for our custom products, and as of a point in time for our volume products. Performance obligations are supported by contracts with customers, and we have elected not to disclose our unsatisfied performance obligations as of April 3, 2021 under the short-term contract exemption as we expect such performance obligations will be satisfied within the quarter following the end of a reporting period.

On February 1, 2021, we completed our investment in Eco. Eco’s contracts with customers include the manufacturing of goods and installation services related to those goods. Both the manufacturing of goods and installation services represent distinct and separate performance obligations of Eco. As the goods are custom in nature, and Eco ensures its ability to collect payment from the customer by collecting a substantial portion of the contract price before production begins, the performance obligations are satisfied over time, as opposed to a point in time. The contract transaction price is allocated to each performance obligation based on an estimate of stand-alone selling price. Because installation is performed shortly after completion of production, revenue on the total contract is recognized over a relatively short period of time.

Policies Regarding Shipping and Handling Costs and Commissions on Contract Assets

The Company has made a policy election to continue to recognize shipping and handling costs as a fulfillment activity. Treating shipping and handling as a fulfillment activity requires estimated shipping and handling costs for undelivered products and certain glass components on which we have recognized revenue and created a contract asset, to be accrued to match this cost with the recognized revenue. Sales taxes collected from customers are recorded on a net basis.

The Company utilizes the practical expedient which permits expensing of costs to obtain a contract when the expected amortization period is one year or less, which typically results in expensing commissions paid to employees. We expense sales commissions paid to employees as sales are recognized, including sales from the creation of contract assets, as the expected amortization period is less than one year.

Allowance for Doubtful Accounts

In the ordinary course of business, we extend credit to qualified dealers and distributors, generally on a non-collateralized basis. The Company maintains an allowance for doubtful accounts which is based on management’s assessments of the amount which may become uncollectible in the future and is determined through consideration of our write-off history, specific identification of uncollectible accounts based in part on the customer’s past due balance (based on contractual terms), and consideration of prevailing economic and industry conditions, and may include anticipated unfavorable impacts of the COVID-19 pandemic on the businesses of

our customers, such as dealers and distributors. Uncollectible accounts are written off after repeated attempts to collect from the customer have been unsuccessful. As of April 3, 2021 and January 2, 2021, the allowance for doubtful accounts was $4.6 million and $3.7 million, respectively.

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Warranty

3 Months Ended

Apr. 03, 2021

Guarantees And Product Warranties [Abstract]

Warranty

NOTE 3.  WARRANTY

Most of our manufactured products are sold with warranties. Warranty periods, which vary by product components, generally range from 1 to 10 years; however, the warranty period for a limited number of specifically identified components in certain applications is a lifetime. The majority of the products sold have warranties on components which range from 1 to 3 years. The amount charged to expense for warranties is based on management’s assessment of the cost per service call and the number of service calls expected to be incurred to satisfy warranty obligations on the current net sales.

During the three months ended April 3, 2021, we recorded warranty expense at a rate of approximately 2.6% of sales, which was higher than rate in the three months ended April 4, 2020 of 1.7% of sales. The increase in our warranty expense rate in the first three months of April 3, 2021 compared to April 4, 2020 is a result of costs associated with the wind-down of the commercial business of NewSouth in the three months ended April 3, 2021, which resulted in warranty costs incremental to those we would incur in the normal course of business.

The following table summarizes current period charges, adjustments to previous estimates, if necessary, as well as settlements, which represent actual costs incurred during the period for the three months ended April 3, 2021 and April 4, 2020. The reserve is determined through specific identification and assessing Company history. Expected future obligations are discounted to a current value using a risk-free rate for obligations with similar maturities. Of the accrued warranty reserve of $9.6 million at April 3, 2021, $7.8 million is classified within accrued expenses on the condensed consolidated balance sheet at April 3, 2021, with the remainder classified within other liabilities. Of the accrued warranty reserve of $8.0 million at January 2, 2021, $6.5 million is classified within accrued expenses on the condensed consolidated balance sheet at January 2, 2021, with the remainder classified within other liabilities.

	Beginning		Acquisition-		Charged								End of
Accrued Warranty	of Period		Related		to Expense		Adjustments			Settlements			Period
(in thousands)
Three months ended April 3, 2021	$	8,001	$	—	$	6,966	$	389		$	(5,713	)	$	9,643
Three months ended April 4, 2020	$	6,244	$	1,592	$	3,841	$	(20	)	$	(4,269	)	$	7,388

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Inventories

3 Months Ended

Apr. 03, 2021

Inventory Disclosure [Abstract]

Inventories

NOTE 4.  INVENTORIES

Inventories consist principally of raw materials purchased for the manufacture of our products. We have limited finished goods inventory since the substantial majority of our products are custom, made-to-order and the revenue on these products, as well as the related cost, has been fully recognized upon completion of the manufacturing process. Finished goods inventory and work-in-progress costs include direct materials, direct labor, and overhead. All inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Inventories consisted of the following:

	April 3,		January 2,
	2021		2021
	(in thousands)
Raw materials	$	66,179	$	55,916
Work-in-progress		5,718		4,058
Finished goods		455		343
	$	72,352	$	60,317

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Stock Based Compensation

3 Months Ended

Apr. 03, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

NOTE 5.  STOCK BASED-COMPENSATION

We record stock compensation expense over an equity award’s vesting period based on the award’s fair value at the date of grant. We recorded compensation expense for stock-based awards of $1.8 million for the three months ended April 3, 2021, and $1.5 million for the three months ended April 4, 2020. As of April 3, 2021, there was $11.2 million in total unrecognized compensation cost related entirely to restricted share awards. These costs are expected to be recognized in earnings on an accelerated basis over the weighted average remaining vesting period of 1.9 years at April 3, 2021.

Of the $1.8 million and $1.5 million in stock-based compensation expense in the three months ended April 3, 2021 and April 4, 2020, respectively, $1.5 million and $1.4 million, respectively, are classified within selling, general and administrative expense in the accompanying condensed consolidated statements of operations, with the remainders classified within cost of sales.

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Acquisitions

3 Months Ended

Apr. 03, 2021

Business Combinations [Abstract]

Acquisitions

NOTE 6.  ACQUISITIONS

ECO WINDOW SYSTEMS

On February 1, 2021, we completed an acquisition of a 75% ownership stake in Eco Enterprises and its related companies, Eco Windows Systems, LLC, Eco Glass Production, LLC, and Unity Windows, LLC (together “Eco”), for fair value consideration of $100.4 million, including $94.3 million in cash, which was after an estimated working capital adjustment in our favor of approximately $5.6 million received at the closing, and PGT Innovations, Inc. common stock with a then fair value estimated to be $6.1 million. The cash portion of the purchase price was financed by a second add-on issuance of $60.0 million aggregate principal amount of 6.75% senior notes to the 2018 Senior Notes due 2026 on January 25, 2021 (the “Second Additional Senor Notes”), issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million, together with cash on hand of $31.0 million. See Note 9 for a discussion of the Second Additional Senior Notes.

The common stock portion of the purchase price was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a closing price value of $21.34 per share on that date, or approximately $7.6 million based on that price. However, the seller of Eco, who is also the holder of the 25% redeemable non-controlling interest in Eco Enterprises, is restricted from selling these shares for a three-year period from the date of the acquisition. As such, we estimated that there was an approximately 20% discount for the lack of marketability of the shares. The fair value of the redeemable non-controlling interest in the acquisition has been preliminarily estimated to be $34.1 million, resulting in total fair value of the Eco business in the acquisition, including the redeemable non-controlling interest, of $134.5 million. The fair value of the redeemable non-controlling interest has been calculated as 25% of the initial estimated fair value of the entity at the acquisition date, less a 5% estimated discount for seller’s lack of control in the new entity. See Note 17 for more information regarding the redeemable non-controlling interest. Eco is a manufacturer and installer of aluminum, impact-resistant windows and doors, serving the South Florida region since 2009. Eco is headquartered in Medley, Florida, near Miami, Florida, and has three manufacturing locations in the region.

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, are as follows:

	Preliminary Allocation
Accounts receivable	$	5,031
Inventories		7,728
Contract assets, net		4,312
Prepaid expenses and other assets		1,706
Property and equipment		24,009
Operating lease right-of-use asset		27,864
Intangible assets		72,700
Goodwill		30,051
Total assets acquired		173,401
Accounts payable		(6,809	)
Accrued and other liabilities, including customer deposits		(4,215	)
Operating lease liability		(27,864	)
Total liabilities assumed		(38,888	)
Net assets acquired		134,513
Redeemable non-controlling interest		(34,084	)
Fair value of consideration transferred	$	100,429
Consideration:
Cash	$	94,321
PGTI common stock		6,108
Fair value of consideration transferred	$	100,429

The fair value of certain working capital related items, including Eco’s accounts receivable, prepaid and other expenses, and accounts payable and accrued liabilities, approximated their book values at the date of the Eco Acquisition. Subsequent to our initial allocation, we adjusted the fair value of certain acquired commercial receivable accounts based on a further post-acquisition assessment of their collectability. The fair value of inventory was estimated by major category, at net realizable value, which we believe approximates the price a market participant could achieve in a current sale. Substantially all of inventories at the acquisition date was composed of raw

materials. The fair value of property and equipment is being estimated with the assistance of a third-party valuation firm, using the indirect cost approach, which we consider to be Level 3 in the fair value hierarchy. Valuations of the intangible assets have been estimated using income and royalty relief approaches based on projections, which we consider to be Level 3 inputs, with the assistance of a third-party valuation firm.

We incurred acquisition costs totaling $1.7 million relating to legal expenses, representations and warranties insurance, diligence, accounting and printing services in the Eco Acquisition, which includes $1.0 million in the fourth quarter of 2020, and $0.7 million in first quarter of 2021, classified as selling, general and administrative expenses in the accompanying condensed consolidated statement of operations for the three months ended April 3, 2021.

The remaining consideration, after identified intangible assets and the net assets and liabilities recorded at fair value, has currently been estimated to be $30.1 million, classified as part of Southeast reporting unit goodwill, which we expect the portion of goodwill relating to our 75% investment to be deductible for tax purposes. In addition, we are currently evaluating the historical book and tax bases of assets and liabilities relating to the redeemable non-controlling interest, which may not be eligible for a step-up in basis, for any deferred tax assets and liabilities that may need to be recorded in the Eco Acquisition.

As of April 3, 2021, the purchase price allocation is still preliminary, and its finalization may result in changes to the preliminary estimate of goodwill. Goodwill represents the strengthening of our supply chain for glass through faster glass production, as well as diversification and expansion of product offerings in the high-growth commercial market, and an expansion of our dealer network with minimal overlap with our existing deal network.

Valuation of Identified Intangible Assets

The valuation of the identifiable intangible assets acquired in the Eco Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Preliminary		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	36,000	indefinite
Customer relationships		36,700	5 - 15
Intangible assets, net	$	72,700

Pro Forma Financial Information

The following unaudited pro forma financial information assumes the Eco Acquisition had occurred at the beginning of the earliest period presented that does not include Eco’s actual results for the entire period. Pro forma results have been prepared by adjusting our historical results to include the results of Eco adjusted for the following: amortization expense related to the estimated intangible assets arising from the acquisition and interest expense to reflect the Second Additional Senior Notes. The unaudited pro forma results below do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the earliest periods presented, nor does it indicate the results of operations in future periods. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(unaudited)
Net sales	$	279,044	$	231,353
Net income attributable to PGTI stockholders:	$	12,542	$	15,297
Net income per common share attributable to PGTI stockholders:
Basic	$	0.21	$	0.26
Diluted	$	0.21	$	0.26

Net sales of Eco included in the condensed consolidated statement of operations for the three months ended April 3, 2021, was nearly $16 million. The net income of Eco in the condensed consolidated statement of operations for the three months ended April 3, 2021, after allocation of interest expense and other corporate costs to Eco, was $1.6 million, including the portion attributable to the redeemable non-controlling interest of $411 thousand.

NEWSOUTH WINDOW SOLUTIONS

On February 1, 2020 (the “closing date”), we completed the acquisition of NewSouth Window Solutions LLC and NewSouth Window Solutions of Orlando LLC (together, “NewSouth”, and the “NewSouth Acquisition”), which became wholly-owned subsidiaries of PGT Innovations, Inc. The fair value of consideration transferred in the acquisition was $90.4 million. The acquisition was financed with proceeds of $53.2 million from an add-on issuance of $50.0 million in 2018 Senior Notes due 2026 (“First Additional Senior Notes”), including a premium of $3.2 million, and with $37.2 million in cash. See Note 9 for a discussion of the First Additional Senior Notes.

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, were as follows:

	Final Allocation
Accounts receivable	$	8,434
Inventories		2,936
Contract assets, net		4,413
Prepaid expenses and other assets		1,756
Property and equipment		7,433
Operating lease right-of-use asset		10,578
Intangible assets		27,370
Goodwill		52,094
Accounts payable		(6,621	)
Accrued and other liabilities		(7,447	)
Operating lease liability		(10,578	)
Purchase price	$	90,368
Consideration:
Cash	$	90,368
Total fair value of consideration	$	90,368

The fair value of certain working capital related items, including NewSouth’s retail accounts receivable, prepaid expenses, and accounts payable and accrued liabilities, approximated their book values at the date of the NewSouth Acquisition. Subsequent to our initial allocation, we adjusted the fair value of certain acquired commercial receivable accounts based on a further post-acquisition assessment of their collectability. The fair value of inventory was estimated by major category, at net realizable value. The substantial majority of inventories at the acquisition date was composed of raw materials. The fair value of property and equipment and remaining useful lives were estimated by management, with the assistance of a third-party valuation firm, using the cost approach. Valuations of the intangible assets were done using income and royalty relief approaches based on projections provided by management, which we consider to be Level 3 inputs, with the assistance of a third-party valuations firm.

We incurred acquisition costs totaling $2.4 million relating to legal expenses, representations and warranties insurance, diligence, accounting and printing services in the NewSouth Acquisition, which includes $0.9 million in 2020, and $1.5 million in 2019. Of the expenses in 2020, $0.5 million were incurred in the first quarter of 2020, and classified as selling, general and administrative expenses in the accompanying condensed consolidated statement of operations for the three months ended April 4, 2020.

The remaining consideration, after identified intangible assets and the net assets and liabilities recorded at fair value, has been determined to be $52.1 million, all of which we expected to be deductible for tax purposes. Goodwill represents the increased value of the combined entity through new direct-to-consumer sales channel opportunities, as well as NewSouth’s extensive advertising throughout Florida, and NewSouth’s market intelligence, which we expect to utilize.

Valuation of Identified Intangible Assets

The valuation of the identifiable intangible assets acquired in the NewSouth Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Final		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	22,200	15
Non-compete agreements		1,670	5
Developed technology		2,600	6
Customer-related intangible		900	<1
Intangible assets, net	$	27,370

Pro Forma Financial Information

The following unaudited pro forma financial information assumes the acquisition had occurred at the beginning of the earliest period presented that does not include NewSouth’s actual results for the entire period. Pro forma results have been prepared by adjusting our historical results to include the results of NewSouth adjusted for the following: amortization expense related to the intangible assets arising from the acquisition and interest expense to reflect the First Additional Senior Notes. The unaudited pro forma results below do not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the earliest periods presented, nor does it indicate the results of operations in future periods. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 4,
	2020
	(unaudited)
Net sales		227,956
Net income		15,830
Net income per common share:
Basic	$	0.27
Diluted	$	0.27

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Net Income Per Common Share

3 Months Ended

Apr. 03, 2021

Earnings Per Share [Abstract]

Net Income Per Common Share

NOTE 7. NET INCOME PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the dilutive effect of potential common shares from securities such as stock options and unvested stock awards.

There were no anti-dilutive securities excluded from the calculation of weighted average shares outstanding for the three months ended April 3, 2021, and 586 thousand for the three months ended April 4, 2020.

The table below presents the calculation of EPS and a reconciliation of weighted average common shares used in the calculation of basic and diluted EPS:

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(in thousands, except per share amounts)
Net income	$	12,795	$	15,600
Less:  Net income attributable to redeemable non-controlling interest		411		—
Net income attributable to the Company		12,384		15,600
Change in redemption value of redeemable non-controlling interest		—		—
Net income attributable to common shareholders	$	12,384	$	15,600
Weighted-average common shares - Basic		59,286		58,668
Add:  Dilutive shares from equity plans		608		453
Weighted-average common shares - Diluted		59,894		59,121
Net income per common share attributable to common shareholders:
Basic	$	0.21	$	0.27
Diluted	$	0.21	$	0.26

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Goodwill and Other Intangible Assets

3 Months Ended

Apr. 03, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

NOTE 8.  GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and intangible assets are as follows:

							Initial
	April 3,			January 2,			Useful Life
	2021			2021			(in years)
	(in thousands)
Goodwill	$	359,746		$	329,695		indefinite
Other intangible assets:
Trade names (indefinite-lived)	$	176,841		$	140,841		indefinite
Customer relationships and customer-related assets		238,247			201,547		<1-15
Trade name (amortizable)		22,200			22,200		15
Developed technology		5,600			5,600		6-10
Non-compete agreement		3,338			3,338		2-5
Software license		590			590		2
Less:  Accumulated amortization		(122,358	)		(117,609	)
Subtotal		147,617			115,666
Other intangible assets, net	$	324,458		$	256,507
Goodwill at January 2, 2021	$	329,695
Increase in goodwill from our investment in Eco		30,051
Goodwill at April 3, 2021	$	359,746
Trade names at January 2, 2021	$	140,841
Increase in trade names from our investment in Eco		36,000
Trade names at April 3, 2021	$	176,841

Estimated amortization of our amortizable intangible assets for future years is as follows:

(in thousands)	Total
Remainder of 2021	$	15,247
2022		19,342
2023		17,181
2024		17,135
2025		16,896
Thereafter		61,816
Total	$	147,617

Amortization expense relating to amortizable intangible assets for the three months ended April 3, 2021 and April 4, 2020, was $4.7 million and $4.7 million, respectively.

We perform our annual goodwill and indefinite-lived intangible asset impairment testing on the first day of our fiscal fourth quarter of each year, and at interim periods if needed based on occurrence of triggering events. During the three months ended April 3, 2021, we did not identify any events which we believe would trigger the need for tests for impairments of our indefinite-lived intangibles assets. As of April 3, 2021 and January 2, 2021, the carrying value of our Southeast reporting unit goodwill is $231.3 million and $201.3 million, respectively. As of April 3, 2021 and January 2, 2021, the carrying value of our Western reporting unit goodwill is $128.4 million and $128.4 million, respectively. Goodwill of our Southeast reporting unit includes the goodwill relating to Eco.

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Long-Term Debt

3 Months Ended

Apr. 03, 2021

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 9.  LONG-TERM DEBT

	April 3,			January 2,
	2021			2021
	(in thousands)
2018 Senior Notes due 2026, maturing in August 2026	$	425,000		$	365,000
2016 Credit Agreement due 2022, maturing in October 2022		54,000			54,000
Long-term debt		479,000			419,000
Fees, costs, discount and premium		(4,735	)		(6,902	)
Long-term debt, net	$	474,265		$	412,098

2018 Senior Notes due 2026

On August 10, 2018, we completed the issuance of $315.0 million aggregate principal amount of 6.75% senior notes (“2018 Senior Notes due 2026”), issued at 100% of their principal amount. The 2018 Senior Notes due 2026 are jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future restricted subsidiaries, other than any restricted subsidiary of the Company that does not guarantee the existing senior secured credit facilities or any permitted refinancing thereof. The 2018 Senior Notes due 2026 are senior unsecured obligations of the Company and the guarantors, respectively, and rank pari passu in right of payment with all existing and future senior debt and senior to all existing and future subordinated debt of the Company and the guarantors. The 2018 Senior Notes due 2026 were offered under Rule 144A of the Securities Act, and in transactions outside the United States under Regulation S of the Securities Act, and have not been, and will not be, registered under the Securities Act.

On January 24, 2020, we completed an add-on issuance of $50.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026, or the First Additional Senior Notes, issued at 106.375% of their principal amount, resulting in a premium to us of $3.2 million. The First Additional Senior Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the First Additional Senior Notes, including premium, were used, together with cash on hand, to pay the $90.4 million purchase price in the NewSouth Acquisition.

On January 25, 2021, we completed a second add-on issuance of $60.0 million aggregate principal amount of 6.75% 2018 Senior Notes due 2026, or the Second Additional Senior Notes, issued at 105.5% of their principal amount, resulting in a premium to us of $3.3 million. The Second Additional Notes are part of the same issuance of, and rank equally and form a single series with, the 2018 Senior Notes due 2026. Proceeds from the Second Additional Senior Notes, including premium, were used, together with $31.0

million in cash on hand, to pay the $94.3 million cash portion of the $100.4 million purchase price in the ECO Acquisition. The common stock portion of the purchase consideration was represented by the issuance of 357,797 shares of PGT Innovations, Inc. common stock on February 1, 2021, with a then current value of $21.34 per share, which we discounted by an estimate of 20% for lack of marketability, as they are legally restricted from being sold by the recipient for a three-year period from February 1, 2021.

The 2018 Senior Notes due 2026 mature on August 10, 2026. Interest on the 2018 Senior Notes due 2026 is payable semi-annually, in arrears, beginning on February 16, 2019, with interest accruing at a rate of 6.75% per annum from August 10, 2018. We incurred financing costs relating to bank fees and professional services costs relating to the offering and issuance of the 2018 Senior Notes due 2026 totaling $10.4 million, the First Additional Senior Notes totaling $1.3 million, offset by the $3.2 million premium on the First Additional Senior Notes, and the Second Additional Senior Notes totaling $1.4 million, offset by the $3.3 million premium on the Second Additional Senior Notes, all of which are being amortized under the effective interest method. See “Deferred Financing Costs” below.

As of April 3, 2021, the face value of debt outstanding under the 2018 Senior Notes due 2026 was $425.0 million, and accrued interest totaled $4.9 million.

The indenture for the 2018 Senior Notes due 2026 gives us the option to redeem some or all of the 2018 Senior Notes due 2026 at the redemption prices and on the terms specified in the indenture governing the 2018 Senior Notes due 2026. The indenture governing the 2018 Senior Notes due 2026 does not require us to make any mandatory redemptions or sinking fund payments. However, upon the occurrence of a change of control, as defined in the indenture, the Company is required to offer to repurchase the notes at 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

The indenture for the 2018 Senior Notes due 2026 includes certain covenants limiting the ability of the Company and any guarantors to, (i) incur additional indebtedness; (ii) pay dividends on or make distributions in respect of capital stock or make certain other restricted payments or investments; (iii) enter into agreements that restrict distributions from restricted subsidiaries; (iv) sell or otherwise dispose of assets; (v) enter into transactions with affiliates; (vi) create or incur liens; merge, consolidate or sell all or substantially all of the Company’s assets; (vii) place restrictions on the ability of subsidiaries to pay dividends or make other payments to the Company; and (viii) designate the Company’s subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications.

2016 Credit Agreement due 2022

On February 16, 2016, we entered into the 2016 Credit Agreement due 2022, among us, the lending institutions identified in the 2016 Credit Agreement due 2022, and Truist Financial Corporation (formerly known as SunTrust Bank), as Administrative Agent and Collateral Agent. The 2016 Credit Agreement due 2022 establishes senior secured credit facilities in an aggregate amount of $310.0 million, consisting of a $270.0 million Term B term loan facility originally maturing in February 2022 that amortizes on a basis of 1% annually during its six-year term, and a $40.0 million revolving credit facility originally maturing in February 2021 that includes a swing line facility and a letter of credit facility. Our obligations under the 2016 Credit Agreement due 2022 are, subject to exceptions, guaranteed by substantially all of our wholly-owned direct and indirect subsidiaries that are restricted subsidiaries and secured by substantially all of our assets as well as our direct and indirect restricted subsidiaries’ assets.

On March 16, 2018, we entered into an amendment of our 2016 Credit Agreement due 2022 (the “Second Amendment”). The Second Amendment, among other things, decreases the applicable interest rate margins for the Initial Term Loans (as defined in the 2016 Credit Agreement due 2022) from (i) 3.75% to 2.50%, in the case of the Base Rate Loans (as defined in the 2016 Credit Agreement due 2022), and (ii) 4.75% to 3.50%, in the case of the Eurodollar Loans (as defined in the 2016 Credit Agreement due 2022). On February 17, 2017, we entered into the first amendment to our 2016 Credit Agreement due 2022, which also resulted in decreases in the applicable margins, but which, unlike the Second Amendment, did not include any changes in lender positions.

On October 31, 2019, we entered into an amendment of our 2016 Credit Agreement due 2022 (“Third Amendment”). The Third Amendment provides for, among other things, (i) a three-year Term A loan in the then aggregate principal amount of $64.0 million (the “Initial Term A Loan”), maturing in October 2022, which refinances in full our existing Term B term loan facility under the 2016 Credit Agreement, and has no regularly scheduled amortization, and (ii) a new five-year revolving credit facility in an aggregate principal amount of up to $80.0 million (the “Revolving Facility”), maturing in October 2024, which replaced our then existing $40.0 million revolving credit facility under the 2016 Credit Agreement, and includes a swing-line facility and letter of credit facility. Our obligations under the 2016 Credit Agreement continue to be secured by substantially all of our assets, as well as our direct and indirect subsidiaries’ assets.

Pursuant to the Third Amendment, interest on all loans under the 2016 Credit Agreement is payable either quarterly or at the expiration of any LIBOR interest period applicable thereto. The Third Amendment decreases the applicable interest rate margins for the Initial Term Loan A from (i) 2.50% to a spread of 1.00% to 1.75% based on our first lien net leverage ratio, in the case of the Base Rate Loans (with a floor of 100 basis points), and (ii) 3.50% to a spread ranging from 2.00% to 2.75% based on our first lien leverage ratio, in the case of the Eurodollar Loans (with a floor of zero basis points).

Also, in connection with the Third Amendment, we will pay quarterly fees on the unused portion of the revolving credit facility equal to a percentage spread (ranging from 0.25% to 0.35%) based on our first lien net leverage ratio. The Third Amendment also modifies the springing financial covenant under the 2016 Credit Agreement to provide that such financial covenant will not be tested until the Initial Term A Loan is paid in full. As of April 3, 2021, there were $5.8 million in letters of credit outstanding and $74.2 million available under the Revolving Facility.

Fees and costs relating to the Third Amendment were $0.9 million, which are deferred and being amortized. In connection with the Third Amendment, certain existing lenders modified their positions in or exited the 2016 Credit Agreement. Deferred financing costs and original issue discount allocated to these lenders of $1.5 million were written-off and classified as debt extinguishment costs in our consolidated statement of operations for the year ended December 28, 2019. As of April 3, 2021, after making prepayments of borrowings totaling $10.0 million during the third quarter of 2020, the principal amount of debt outstanding under the 2016 Credit Agreement due 2022 was $54.0 million. Accrued interest at April 3, 2021 was $16 thousand.

The weighted average all-in interest rate for borrowings under the term-loan portion of the 2016 Credit Agreement due 2022 was 2.14% as of April 3, 2021, and was 2.15% at January 2, 2021.

Pursuant to the Third Amendment, the 2016 Credit Agreement due 2022 contains a springing financial covenant that would apply if we draw in excess of thirty-five percent (35%) of the revolving facility commitment (excluding $7.5 million of undrawn letters of credit and letters of credit and draws thereunder that are cash collateralized at 103% of the stated amount thereof from such availability test). To the extent in effect, the springing financial covenant would prohibit us from exceeding a maximum first lien net leverage ratio (based on the ratio of total first lien (less unrestricted cash) debt to EBITDA) as of the last day of each applicable fiscal quarter. To the extent the springing financial covenant is in effect, the first lien net leverage ratio currently cannot exceed 4.00:1.00 (4.50:1.00 during a significant acquisition period, as defined, which we are in as of April 3, 2021). We have not been required to test our first lien net leverage ratio because we have not exceeded 35% of our revolving capacity.

The 2016 Credit Agreement due 2022 also contains a number of affirmative and restrictive covenants, including limitations on the incurrence of additional debt, liens on property, acquisitions and investments, loans and guarantees, mergers, consolidations, liquidations and dissolutions, asset sales, dividends and other payments in respect of our capital stock, entry into restrictive agreements, prepayments of certain debt and transactions with affiliates, in each case, subject to exceptions and qualifications. The 2016 Credit Agreement due 2022 also contains customary events of default. Upon the occurrence of an event of default, the amounts outstanding under the 2016 Credit Agreement due 2022 may be accelerated and may become immediately due and payable.

Deferred Financing Costs

The activity relating to third-party fees and costs, lender fees, discount and premiums for the three months ended April 3, 2021, are as follows. All debt-related fees, costs, discount and premiums are classified as a reduction of the carrying value of long-term debt:

(in thousands)	Total
At beginning of year	$	6,902
Add: Deferred financing costs from the issuance of Second Additional Senior Notes		1,363
Less: Premium on the Second Additional Senior Notes		(3,300	)
Less: Amortization expense		(230	)
At end of period	$	4,735

Estimated amortization expense relating to third-party fees and costs, lender fees, discount and premiums for the years indicated as of April 3, 2021, is as follows:

(in thousands)	Total
Remainder of 2021	$	657
2022		905
2023		844
2024		889
2025		861
Thereafter		579
Total	$	4,735

As a result of prepayments of the 2016 Credit Agreement due 2022 totaling $214.0 million since its inception in February 2016 through April 3, 2021, we have no future scheduled repayments until the maturity of the facility on October 31, 2022. The contractual future maturities of long-term debt outstanding, as of April 3, 2021, are as follows (at face value):

(in thousands)
Remainder of 2021	$	—
2022		54,000
2023		—
2024		—
2025		—
Thereafter		425,000
Total	$	479,000

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Leases

3 Months Ended

Apr. 03, 2021

Leases [Abstract]

Leases

NOTE 10.  LEASES

We lease certain of our manufacturing facilities under operating leases. We also lease production equipment, vehicles, computer equipment, storage units and office equipment under operating leases. Our leases have remaining lease terms of 1 year to 9 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. All of our leases are operating leases. We did not recognize right-of-use assets or lease liabilities for certain short-term leases that are month-to-month leases. The lease expense relating to these leases is not significant.

The components of lease expense for the three months ended April 3, 2021 and April 4, 2020, are as follows. Certain amounts in the prior year period have been reclassified to conform to the current presentation (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Operating lease cost	$	2,879	$	2,104
Variable lease cost		2,200		786
Total lease cost	$	5,079	$	2,890

Other information relating to leases for the three months ended April 3, 2021 and April 4, 2020, are as follows (in thousands, except years and percentages):

	Three Months Ended
	April 3,			April 4,
	2021			2020
Supplemental cash flows information
Cash paid for amounts included in the   measurement of lease liabilities:
Operating cash flows relating to   operating leases	$	(2,764	)	$	(2,009	)
Right-of-use assets obtained in exchange   for lease obligations:
Operating leases	$	29,490		$	14,605
Weighted average remaining lease term in years
Operating leases		7.23			7.27
Weighted average discount rate
Operating leases		5.6	%		5.9	%

Future maturities under operating leases were as follows at April 3, 2021 and January 2, 2021 (in thousands):

	April 3,			January 2,
	2021			2021
Remainder of 2021	$	9,278		$	8,327
2022		11,830			7,626
2023		11,557			7,149
2024		11,286			6,748
2025		10,871			6,253
Thereafter		28,847			13,800
Total future minimum lease payments		83,669			49,903
Less:  Imputed interest		(14,847	)		(8,641	)
Operating lease liability - total	$	68,822		$	41,262
Reported as of April 3, 2021 and January 2, 2021:
Current portion of operating lease liability	$	8,682		$	6,132
Operating lease liability, less current portion		60,140			35,130
Operating lease liability - total	$	68,822		$	41,262

As of April 3, 2021, we had no additional operating or finance leases that have not yet commenced. Our operating leases expire at various times through 2030. Lease expense was $5.1 million for the three months ended April 3, 2021 and was $2.9 million for the three months ended April 4, 2020. Of the $5.1 million for the three months ended April 3, 2021, $2.2 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses. Of the $2.9 million for the three months ended April 4, 2020, $1.5 million is classified as cost of sales in the accompanying condensed consolidated statement of operations, with the remainder classified within selling, general and administrative expenses.

The $29.5 million in operating lease right-of-use assets obtained in exchange for operating lease obligations during the three months ended April 3, 2021 includes $27.9 million related to the Eco Acquisition. See Note 6 for additional information.

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Commitments and Contingencies

3 Months Ended

Apr. 03, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 11.  COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Our Company is a party to various legal proceedings in the ordinary course of business. Although the ultimate disposition of those proceedings cannot be predicted with certainty, management believes the outcome of any claim that is pending or threatened, either individually or in the aggregate, will not have a material adverse effect on our operations, financial position or cash flows.

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Income Taxes

3 Months Ended

Apr. 03, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12.  INCOME TAXES

Our income tax expense was $3.9 million for the three months ended April 3, 2021, compared with income tax expense of $4.1 million for the three months ended April 4, 2020. Our effective tax rate for the three months ended April 3, 2021, was an expense rate of 23.6%, and was an expense rate of 21.0% for the three months ended April 4, 2020. Our income tax expense for the three months ended April 3, 2021 includes $305 thousand relating to our 75% share of the pre-tax earnings of Eco.

Income tax expense in the three months ended April 3, 2021 included a minor discrete item of income tax benefit. The three months ended April 4, 2020 included excess tax benefits relating to exercises of stock options and lapses of restrictions on stock awards totaling $766 thousand. Excluding discrete items of income tax, the effective tax rates for the three months ended April 3, 2021, and April 4, 2020, would have been income tax expense rates of 24.1% and 24.8%, respectively.

We estimate that our annual effective tax rate for 2021, excluding discrete items, will approximate our current combined statutory federal and state rate of 24.7%.

We made no payments of estimated Federal or state income taxes during either of the three-month periods ended April 3, 2021 and April 4, 2020.

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Fair Value

3 Months Ended

Apr. 03, 2021

Fair Value Disclosures [Abstract]

Fair Value

NOTE 13.  FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is used to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The accounting guidance concerning fair value allows us to elect to measure financial instruments at fair value and report the changes in fair value through earnings. This election can only be made at certain specified dates and is irrevocable once made. We do not have a policy regarding specific assets or liabilities to elect to measure at fair value, but rather we make the election on an instrument-by-instrument basis as they are acquired or incurred.

During the three months ended April 3, 2021 or April 4, 2020, we did not make any transfers between Level 2 and Level 3 financial assets. We conduct reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure.

Fair Value of Financial Instruments

Our financial instruments include cash and cash equivalents, accounts and notes receivable, and accounts payable and accrued liabilities, whose carrying amounts approximate their fair values due to their short-term nature. Our financial instruments also include borrowings under our 2016 Credit Agreement due 2022, as well as the 2018 Senior Notes due 2026, both classified as long-term debt. The fair value of borrowings under the 2016 Credit Agreement due 2022 approximates its carrying value due to its variable-rate nature, and was approximately $54.0 million as of April 3, 2021, compared to a principal outstanding value of $54.0 million, and fair value of $54.0 million as of January 2, 2021, compared to a principal outstanding value of $54.0 million. The fair value of the 2018 Senior Notes due 2026 is based on debt with similar terms and characteristics and was approximately $450.5 million as of April 3, 2021, compared to a principal outstanding value of $425.0 million, which includes the Second Additional Senior Notes, and the fair value was approximately $387.8 million as of January 2, 2021, compared to a principal outstanding value of $365.0 million. Fair values were determined based on observed trading prices of our debt between domestic financial institutions, which we consider to be a Level 2 input.

Items Measured at Fair Value on a Recurring Basis

The following are measured in the condensed consolidated financial statements at fair value on a recurring basis and are categorized in the table below based upon the lowest level of significant input to the valuation (in thousands):

	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	April 3,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	5,885	$	—	$	5,885	$	—
MTP contracts		4,239		—		4,239		—
	$	10,124	$	—	$	10,124	$	—

	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	January 2,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	3,190	$	—	$	3,190	$	—
MTP contracts		421		—		421		—
	$	3,611	$	—	$	3,611	$	—

See Note 14 for a description of the methods and assumptions used in the determination of the fair values of our aluminum forward and Midwest Transaction Premium (“MTP”) contracts, as well as the basis for classifying these assets and liabilities as Level 2.

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Derivatives

3 Months Ended

Apr. 03, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 14.  DERIVATIVES

Aluminum Contracts and Midwest Transaction Premium

We enter into aluminum forward contracts to hedge the fluctuations in the purchase price of aluminum extrusion we use in production. Beginning late in the first quarter of 2020, we began entering into forward contracts to hedge the fluctuations in the price of the delivery component of our aluminum extrusion purchases, known as the Midwest Transaction Premium, or MTP. Our contracts are designated as cash flow hedges since they are highly effective in offsetting changes in the cash flows attributable to forecasted purchases of aluminum and the related MTP.

We record our aluminium hedge contracts at fair value, based on trading values for aluminum forward contracts. Aluminum forward contracts identical to those held by us trade on the London Metal Exchange (“LME”). The LME provides a transparent forum and is the world’s largest center for the trading of futures contracts for non-ferrous metals. The prices are used by the metals industry worldwide as the basis for contracts for the movement of physical material throughout the production cycle. Based on this high degree of volume and liquidity in the LME, we believe the valuation price at any measurement date for contracts with identical terms as to prompt date, trade date and trade price as those we hold at any time represents a contract’s exit price to be used for purposes of determining fair value.

We record our MTP hedge contracts at fair value based on the Platts MW US Transaction price per pound assessment, which has been a benchmark for decades in the North American aluminium industry. Platts surveys the North American market daily to capture trades, bids and offers on a delivered Midwest basis. Data is normalized to reflect the typical price per pound between the largest number of market participants, for delivery within 7 to 30 days from date of publication, net-30-day payment terms, for typical order quantities, chemistries and freight allowances. The survey is extensive and encompasses both domestic and offshore producers, traders and brokers that are varied in scope. Based on the extensive nature of this pricing mechanism, we believe the Platts MW US Transaction price at any time represents a contract’s exit price to be used for purposes of determining fair value.

Guidance under the Financial Instruments Topic 825 of the Codification requires us to record our hedge contracts at fair value and consider our credit risk for contracts in a liability position, and our counter-party’s credit risk for contracts in an asset position, in determining fair value. We assess our counter-party’s risk of non-performance when measuring the fair value of financial instruments in an asset position by evaluating their financial position, including cash on hand, as well as their credit ratings. We assess our risk of non-performance when measuring the fair value of our financial instruments in a liability position by evaluating our credit ratings, our current liquidity including cash on hand and availability under our revolving credit facility as compared to the maturities of the financial liabilities. We do not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting arrangement.

At April 3, 2021, the fair value of our aluminum forward contracts was in a asset position of $5.9 million. We had 25 outstanding forward contracts for the purchase of 33.7 million pounds of aluminum through June 2022, at an average price of $0.84 per pound, which excludes the Midwest premium, with maturity dates of between one month and fifteen months. At April 3, 2021, the fair value of our MTP contracts was in a net asset position of $4.2 million. We had 29 outstanding MTP contracts to hedge the Platt US MW Transaction price per pound for the delivery of 56.1 million pounds of aluminum through December 2022, at an average price of $0.12 per pound, with maturity dates of between one month and twenty-one months. We assessed the risk of non-performance of the Company and our counterparty to these contracts, as applicable, and determined it was immaterial and, therefore, did not record any adjustment to their fair values as of April 3, 2021.

We assess the effectiveness of our aluminum forward and MTP contracts by comparing the change in the fair value of the forward contract to the change in the expected cash to be paid for the hedged item. The effective portion of the gain or loss on our aluminum forward contracts is reported as a component of accumulated other comprehensive income (loss) and is reclassified into earnings in the same line item in the income statement as the hedged item in the same period or periods during which the transaction affects earnings. The amount of income, net, recognized in the “accumulated other comprehensive income (loss)” line item in the accompanying condensed consolidated balance sheet as of April 3, 2021, that we expect will be reclassified to earnings within the next twelve months, is approximately $8.7 million.

The fair values of our aluminum hedges and MTP contracts are classified in the accompanying condensed consolidated balance sheets at April 3, 2021 and January 2, 2021, as follows (in thousands):

	Derivative Assets			Derivative Liabilities
	April 3, 2021			April 3, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	5,714	Accrued liabilities	$	—
MTP contracts	Other current assets		3,010	Accrued liabilities		—
Aluminum contracts	Other assets		171	Other liabilities		—
MTP contracts	Other assets		1,229	Other liabilities		—
Total derivative instruments	Total derivative assets	$	10,124	Total derivative liabilities	$	—
	Derivative Assets			Derivative Liabilities
	January 2, 2021			January 2, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	3,243	Accrued liabilities	$	(28	)
MTP contracts	Other current assets		423	Accrued liabilities		(24	)
Aluminum contracts	Other assets		—	Other liabilities		(25	)
MTP contracts	Other assets		26	Other liabilities		(4	)
Total derivative instruments	Total derivative assets	$	3,692	Total derivative liabilities	$	(81	)

The ending accumulated balance for the aluminum forward and MTP contracts included in accumulated other comprehensive income (losses), net of tax, was an accumulated other comprehensive income of $7.6 million as of April 3, 2021, and was an accumulated other comprehensive income of $2.7 million at January 2, 2021. The income tax effects of accumulated comprehensive income (losses) are released as amounts are reclassified out of accumulated comprehensive income (losses) at the income tax rate used at the time those income tax effects were provided, which generally represents our blended statutory income tax rate.

The following represents the gains (losses) on derivative financial instruments, and their classifications within the accompanying condensed consolidated financial statements, for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Derivatives in Cash Flow Hedging Relationships
	Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives					Location of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income
	Three Months Ended						Three Months Ended
	April 3,		April 4,				April 3,		April 4,
	2021		2020				2021		2020
Aluminum contracts	$	4,083	$	(5,160	)	Cost of sales	$	1,388	$	(612	)
MTP contracts	$	4,205	$	(53	)	Cost of sales	$	387	$	—

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Apr. 03, 2021

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

NOTE 15.  ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table shows the components of accumulated other comprehensive income (loss) for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

Three months ended April 3, 2021	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at January 2, 2021	$	2,403		$	317		$	2,720
Change in fair value of derivatives		4,083			4,205			8,288
Amounts reclassified from other comprehensive loss		(1,388	)		(387	)		(1,775	)
Tax effect		(670	)		(948	)		(1,618	)
Net current-period other comprehensive income		2,025			2,870			4,895
Balance at April 3, 2021	$	4,428		$	3,187		$	7,615

Three months ended April 4, 2020	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at December 28, 2019	$	(238	)	$	-		$	(238	)
Change in fair value of derivatives		(5,160	)		(53	)		(5,213	)
Amounts reclassified from other comprehensive loss		612			—			612
Tax effect		1,138			13			1,151
Net current-period other comprehensive income		(3,410	)		(40	)		(3,450	)
Balance at April 4, 2020	$	(3,648	)	$	(40	)	$	(3,688	)

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Segments

3 Months Ended

Apr. 03, 2021

Segment Reporting [Abstract]

Segments

NOTE 16. SEGMENTS

We have two reportable segments: the Southeast segment and the Western segment. The Southeast reporting segment, which is also an operating segment, is composed of sales from our facilities in Florida, including the net sales of our recent investment in Eco. The Western reporting segment, also an operating segment. Results of the Western segment are composed of the results of WWS.

Centralized financial and operational oversight, including resource allocation and assessment of performance on an income (loss) from operations basis, is performed by our CEO, whom we have determined to be our chief operating decision maker (“CODM”), with oversight by the Board of Directors. Total asset information by segment is not included herein as asset information by segment is not presented to or reviewed by the CODM. The following table represents summary financial data attributable to our operating segments for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Net sales:
Southeast segment	$	233,638	$	183,641
Western segment		37,454		36,563
Total net sales	$	271,092	$	220,204
Income from operations:
Southeast segment	$	18,743	$	25,821
Western segment		5,453		1,086
Total income from operations		24,196		26,907
Interest expense, net		7,457		7,169
Total income before income taxes	$	16,739	$	19,738

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Reedemable Non-Controlling Interest

3 Months Ended

Apr. 03, 2021

Noncontrolling Interest [Abstract]

Reedemable Non-Controlling Interest

NOTE 17. REEDEMABLE NON-CONTROLLING INTEREST

On February 1, 2021, we completed an acquisition of a 75% ownership stake in Eco. The seller of Eco obtained 25% equity interest in the newly formed company, Eco Enterprises. The seller’s redeemable non-controlling interest was initially established at fair value.

The agreement between PGT Innovations, Inc. and the seller provides the Company with a call right for seller’s equity interest which the Company may exercise during the three-years following the date of the acquisition, and provides the seller with a put right which can be exercised during the 15-day period following the three-year anniversary of the date of the acquisition. Upon exercise of the put or call right, the purchase price is calculated based on a 10-multiple of the sum of Eco’s trailing twelve-month earnings before interest, taxes, depreciation and amortization (TTM EBITDA), and certain synergy-related TTM EBITDA which may result from our investment in Eco (both as more specifically defined in the operating agreement). The put option makes the non-controlling interest redeemable and, therefore, the redeemable non-controlling interest is classified as temporary equity outside of shareholders’ equity.

The Company calculates the redemption value of the non-controlling interest on a quarterly basis using a 10-multiple of TTM EBITDA as determined in accordance with the agreement as described above. After giving effect to the change from the net income (loss) attributable to the redeemable non-controlling interest, the redeemable non-controlling interest is adjusted to be reported at its currently calculated redemption value. Any resulting change in the redemption value of the redeemable non-controlling interest is offset against retained earnings and impacts earnings used in the calculation of earnings per share attributable to common shareholders.

For the three months ended April 3, 2021, based on the formula for determining the value of the seller’s put option in the operating agreement governing this transaction, the redemption value of the redeemable non-controlling interest was estimated to be less than $34.5 million, the value of the redeemable non-controlling interest before giving effect to seller’s put option, as of April 3, 2021. As such, there was no change in redemption value to be recorded relating to the redeemable non-controlling interest for the three months ended April 3, 2021. There was no redeemable non-controlling interest in the first quarter of 2020.

The following table presents the changes in the Company’s redeemable non-controlling interest for the period presented:

	Three Months Ended
	April 3,
(in thousands)	2021
Balance at beginning of period	$	—
Redeemable non-controlling interest in Eco at initially estimated fair value		34,084
Net income attributable to redeemable non-controlling interest		411
Change in value of redeemable non-controlling interest		—
Balance at end of period	$	34,495

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

Apr. 03, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the remainder of the current year or for any future periods. The Company’s fiscal first quarter in 2021 ended April 3, 2021, consisted of 13 weeks, and our fiscal first quarter in 2020 ended April 4, 2020, consisted of 14 weeks.

The condensed consolidated balance sheet as of January 2, 2021, is derived from the audited consolidated financial statements, but does not include all disclosures required by GAAP. The condensed consolidated balance sheet as of January 2, 2021, and the unaudited condensed consolidated financial statements as of and for the periods ended April 3, 2021 and April 4, 2020, should be read in conjunction with the more detailed audited consolidated financial statements for the year ended January 2, 2021, included in the Company’s most recent Annual Report on Form 10-K. The accounting policies used in the preparation of these unaudited condensed consolidated financial statements are consistent with the accounting policies described in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

As described above, the extent to which the COVID-19 pandemic and resulting measures that may be taken by the Company and/or its customers or suppliers and/or by governmental entities will impact the Company's business will depend on future developments, which are highly uncertain and cannot be precisely predicted at this time. Management's estimates and assumptions are highly dependent on estimates of future developments and may change significantly in the future due to unforeseen direct and indirect impacts of the COVID-19 pandemic.

We have two reportable segments: the Southeast segment and the Western segment. The Southeast reporting segment, which is also an operating segment, is composed of sales from our facilities in Florida. The Western reporting segment, also an operating segment, is composed of sales from our facility in Arizona. See Note 16 for segment disclosures.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes.” ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles and also clarifies and amends existing guidance. This standard is effective beginning January 1, 2021, with early adoption permitted. The adoption of this standard did not have any impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and in March 2021, subsequent amendment to the initial guidance, ASU 2021-01, “Reference Rate Reform (Topic 848): Scope” (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP

to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance generally can be applied from March 12, 2020 through December 31, 2022. We are currently assessing the impacts of the practical expedients provided in Topic 848 and which, if any, we will adopt.

Revenue Recognition Accounting Policy

Revenue Recognition Accounting Policy

The Company primarily manufactures fully customized windows and doors based on design specifications, measurements, colors, finishes, framing materials, glass-types, and other options selected by the customer at the point in time an order is received. The Company has an enforceable right to payment at the time an order is received and accepted at the agreed-upon sales prices contained in our agreements with our customers for all manufacturing efforts expended on behalf of its customers. Due to the customized build-to-order nature of these products, the Company’s assessment is that the substantial portion of its finished goods and certain unused glass components have no alternative use, and that control of these products and components passes to the customer over time during the manufacturing of the products in an order, or upon our receipt of certain pre-cut glass components from our supplier attributed to specific customer orders.

Based on these factors, the Company recognizes a substantial portion of revenue over time during the manufacturing process once customization begins, and for certain unused glass components on hand, at the end of a reporting period. Revenue on work-in-process at the end of a reporting period is recognized in proportion to costs incurred to total estimated cost of the product being manufactured. Except for the Western segment’s volume products, discussed in the section titled Disaggregation of Revenue from Contracts with Customers below, revenue recognized at a point in time is immaterial.

Shipping and Handling Cost and Commissions on Contract Assets

Policies Regarding Shipping and Handling Costs and Commissions on Contract Assets

The Company has made a policy election to continue to recognize shipping and handling costs as a fulfillment activity. Treating shipping and handling as a fulfillment activity requires estimated shipping and handling costs for undelivered products and certain glass components on which we have recognized revenue and created a contract asset, to be accrued to match this cost with the recognized revenue. Sales taxes collected from customers are recorded on a net basis.

The Company utilizes the practical expedient which permits expensing of costs to obtain a contract when the expected amortization period is one year or less, which typically results in expensing commissions paid to employees. We expense sales commissions paid to employees as sales are recognized, including sales from the creation of contract assets, as the expected amortization period is less than one year.

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Revenue Recognition and Contracts with Customers (Tables)

3 Months Ended

Apr. 03, 2021

Revenue From Contract With Customer [Abstract]

Net Sales by Reporting Segment, Product Category and Market

The following tables provide information about our net sales by reporting segment, product category and market for the three months ended April 3, 2021 and April 4, 2020 (dollars in millions):

	Three Months Ended
	April 3,		April 4,
Disaggregation of revenue (in millions):	2021		2020
Reporting segment:
Southeast	$	233.6	$	183.6
Western		37.5		36.6
Total net sales	$	271.1	$	220.2
Product category:
Impact-resistant window and door products	$	191.4	$	153.6
Non-impact window and door products		79.7		66.6
Total net sales	$	271.1	$	220.2
Market:
New construction	$	120.0	$	109.1
Repair and remodel		151.1		111.1
Total net sales	$	271.1	$	220.2

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Warranty (Tables)

3 Months Ended

Apr. 03, 2021

Guarantees And Product Warranties [Abstract]

Summary of Current Period Charges, Adjustments to Previous Estimates, Settlements representing Actual Costs Incurred with regard to Accrued Warranty

The following table summarizes current period charges, adjustments to previous estimates, if necessary, as well as settlements, which represent actual costs incurred during the period for the three months ended April 3, 2021 and April 4, 2020.

	Beginning		Acquisition-		Charged								End of
Accrued Warranty	of Period		Related		to Expense		Adjustments			Settlements			Period
(in thousands)
Three months ended April 3, 2021	$	8,001	$	—	$	6,966	$	389		$	(5,713	)	$	9,643
Three months ended April 4, 2020	$	6,244	$	1,592	$	3,841	$	(20	)	$	(4,269	)	$	7,388

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Inventories (Tables)

3 Months Ended

Apr. 03, 2021

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consisted of the following:

	April 3,		January 2,
	2021		2021
	(in thousands)
Raw materials	$	66,179	$	55,916
Work-in-progress		5,718		4,058
Finished goods		455		343
	$	72,352	$	60,317

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Acquisitions (Tables)

3 Months Ended

Apr. 03, 2021

ECO [Member]

Business Acquisition [Line Items]

Schedule of Fair Value of Assets and Liabilities Assumed

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, are as follows:

	Preliminary Allocation
Accounts receivable	$	5,031
Inventories		7,728
Contract assets, net		4,312
Prepaid expenses and other assets		1,706
Property and equipment		24,009
Operating lease right-of-use asset		27,864
Intangible assets		72,700
Goodwill		30,051
Total assets acquired		173,401
Accounts payable		(6,809	)
Accrued and other liabilities, including customer deposits		(4,215	)
Operating lease liability		(27,864	)
Total liabilities assumed		(38,888	)
Net assets acquired		134,513
Redeemable non-controlling interest		(34,084	)
Fair value of consideration transferred	$	100,429
Consideration:
Cash	$	94,321
PGTI common stock		6,108
Fair value of consideration transferred	$	100,429

Schedule for Valuation of Identifiable Intangible Assets Acquired and Estimate of Useful Lives

The valuation of the identifiable intangible assets acquired in the Eco Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Preliminary		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	36,000	indefinite
Customer relationships		36,700	5 - 15
Intangible assets, net	$	72,700

Summary of Unaudited Proforma Results

The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(unaudited)
Net sales	$	279,044	$	231,353
Net income attributable to PGTI stockholders:	$	12,542	$	15,297
Net income per common share attributable to PGTI stockholders:
Basic	$	0.21	$	0.26
Diluted	$	0.21	$	0.26

New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member]

Business Acquisition [Line Items]

Schedule of Fair Value of Assets and Liabilities Assumed

The estimated fair value of assets acquired, and liabilities assumed as of the closing date, were as follows:

	Final Allocation
Accounts receivable	$	8,434
Inventories		2,936
Contract assets, net		4,413
Prepaid expenses and other assets		1,756
Property and equipment		7,433
Operating lease right-of-use asset		10,578
Intangible assets		27,370
Goodwill		52,094
Accounts payable		(6,621	)
Accrued and other liabilities		(7,447	)
Operating lease liability		(10,578	)
Purchase price	$	90,368
Consideration:
Cash	$	90,368
Total fair value of consideration	$	90,368

Schedule for Valuation of Identifiable Intangible Assets Acquired and Estimate of Useful Lives

The valuation of the identifiable intangible assets acquired in the NewSouth Acquisition and our estimate of their respective useful lives are as follows:

			Initial
	Final		Useful Life
	Valuation		(in years)
(in thousands)
Trade name	$	22,200	15
Non-compete agreements		1,670	5
Developed technology		2,600	6
Customer-related intangible		900	<1
Intangible assets, net	$	27,370

Summary of Unaudited Proforma Results

The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the following unaudited pro forma results.

	Three Months Ended
	April 4,
	2020
	(unaudited)
Net sales		227,956
Net income		15,830
Net income per common share:
Basic	$	0.27
Diluted	$	0.27

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Net Income Per Common Share (Tables)

3 Months Ended

Apr. 03, 2021

Earnings Per Share [Abstract]

Calculation of EPS and Reconciliation of Weighted Average Common Shares Used in Calculation of Basic and Diluted EPS

The table below presents the calculation of EPS and a reconciliation of weighted average common shares used in the calculation of basic and diluted EPS:

	Three Months Ended
	April 3,		April 4,
	2021		2020
	(in thousands, except per share amounts)
Net income	$	12,795	$	15,600
Less:  Net income attributable to redeemable non-controlling interest		411		—
Net income attributable to the Company		12,384		15,600
Change in redemption value of redeemable non-controlling interest		—		—
Net income attributable to common shareholders	$	12,384	$	15,600
Weighted-average common shares - Basic		59,286		58,668
Add:  Dilutive shares from equity plans		608		453
Weighted-average common shares - Diluted		59,894		59,121
Net income per common share attributable to common shareholders:
Basic	$	0.21	$	0.27
Diluted	$	0.21	$	0.26

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Apr. 03, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Intangible Assets Net

Goodwill and intangible assets are as follows:

							Initial
	April 3,			January 2,			Useful Life
	2021			2021			(in years)
	(in thousands)
Goodwill	$	359,746		$	329,695		indefinite
Other intangible assets:
Trade names (indefinite-lived)	$	176,841		$	140,841		indefinite
Customer relationships and customer-related assets		238,247			201,547		<1-15
Trade name (amortizable)		22,200			22,200		15
Developed technology		5,600			5,600		6-10
Non-compete agreement		3,338			3,338		2-5
Software license		590			590		2
Less:  Accumulated amortization		(122,358	)		(117,609	)
Subtotal		147,617			115,666
Other intangible assets, net	$	324,458		$	256,507
Goodwill at January 2, 2021	$	329,695
Increase in goodwill from our investment in Eco		30,051
Goodwill at April 3, 2021	$	359,746
Trade names at January 2, 2021	$	140,841
Increase in trade names from our investment in Eco		36,000
Trade names at April 3, 2021	$	176,841

Estimated Amortization for Future Fiscal Year

Estimated amortization of our amortizable intangible assets for future years is as follows:

(in thousands)	Total
Remainder of 2021	$	15,247
2022		19,342
2023		17,181
2024		17,135
2025		16,896
Thereafter		61,816
Total	$	147,617

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Long-Term Debt (Tables)

3 Months Ended

Apr. 03, 2021

Debt Disclosure [Abstract]

Schedule of Long-term Debt

	April 3,			January 2,
	2021			2021
	(in thousands)
2018 Senior Notes due 2026, maturing in August 2026	$	425,000		$	365,000
2016 Credit Agreement due 2022, maturing in October 2022		54,000			54,000
Long-term debt		479,000			419,000
Fees, costs, discount and premium		(4,735	)		(6,902	)
Long-term debt, net	$	474,265		$	412,098

Activity Relating to Third-Party Fees and Costs, Lender Fees, Discount and Premiums

The activity relating to third-party fees and costs, lender fees, discount and premiums for the three months ended April 3, 2021, are as follows. All debt-related fees, costs, discount and premiums are classified as a reduction of the carrying value of long-term debt:

(in thousands)	Total
At beginning of year	$	6,902
Add: Deferred financing costs from the issuance of Second Additional Senior Notes		1,363
Less: Premium on the Second Additional Senior Notes		(3,300	)
Less: Amortization expense		(230	)
At end of period	$	4,735

Estimated Amortization Expense Relating to Third-Party Fees and Costs, Lender Fees, Discount and Premiums

Estimated amortization expense relating to third-party fees and costs, lender fees, discount and premiums for the years indicated as of April 3, 2021, is as follows:

(in thousands)	Total
Remainder of 2021	$	657
2022		905
2023		844
2024		889
2025		861
Thereafter		579
Total	$	4,735

Contractual Future Maturities of Long-Term Debt Outstanding

As a result of prepayments of the 2016 Credit Agreement due 2022 totaling $214.0 million since its inception in February 2016 through April 3, 2021, we have no future scheduled repayments until the maturity of the facility on October 31, 2022. The contractual future maturities of long-term debt outstanding, as of April 3, 2021, are as follows (at face value):

(in thousands)
Remainder of 2021	$	—
2022		54,000
2023		—
2024		—
2025		—
Thereafter		425,000
Total	$	479,000

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Leases (Tables)

3 Months Ended

Apr. 03, 2021

Leases [Abstract]

Components of Lease Expense

The components of lease expense for the three months ended April 3, 2021 and April 4, 2020, are as follows. Certain amounts in the prior year period have been reclassified to conform to the current presentation (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Operating lease cost	$	2,879	$	2,104
Variable lease cost		2,200		786
Total lease cost	$	5,079	$	2,890

Other Information Relating to Leases

Other information relating to leases for the three months ended April 3, 2021 and April 4, 2020, are as follows (in thousands, except years and percentages):

	Three Months Ended
	April 3,			April 4,
	2021			2020
Supplemental cash flows information
Cash paid for amounts included in the   measurement of lease liabilities:
Operating cash flows relating to   operating leases	$	(2,764	)	$	(2,009	)
Right-of-use assets obtained in exchange   for lease obligations:
Operating leases	$	29,490		$	14,605
Weighted average remaining lease term in years
Operating leases		7.23			7.27
Weighted average discount rate
Operating leases		5.6	%		5.9	%

Future Maturities under Operating Leases

Future maturities under operating leases were as follows at April 3, 2021 and January 2, 2021 (in thousands):

	April 3,			January 2,
	2021			2021
Remainder of 2021	$	9,278		$	8,327
2022		11,830			7,626
2023		11,557			7,149
2024		11,286			6,748
2025		10,871			6,253
Thereafter		28,847			13,800
Total future minimum lease payments		83,669			49,903
Less:  Imputed interest		(14,847	)		(8,641	)
Operating lease liability - total	$	68,822		$	41,262
Reported as of April 3, 2021 and January 2, 2021:
Current portion of operating lease liability	$	8,682		$	6,132
Operating lease liability, less current portion		60,140			35,130
Operating lease liability - total	$	68,822		$	41,262

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Fair Value (Tables)

3 Months Ended

Apr. 03, 2021

Fair Value Disclosures [Abstract]

Schedule of Fair Value on Recurring Basis

The following are measured in the condensed consolidated financial statements at fair value on a recurring basis and are categorized in the table below based upon the lowest level of significant input to the valuation (in thousands):

	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	April 3,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	5,885	$	—	$	5,885	$	—
MTP contracts		4,239		—		4,239		—
	$	10,124	$	—	$	10,124	$	—

	Fair Value Measurements
	Assets (Liabilities)
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable
	January 2,		Markets		Inputs		Inputs
		2021	(Level 1)		(Level 2)		(Level 3)
Description
Aluminum contracts	$	3,190	$	—	$	3,190	$	—
MTP contracts		421		—		421		—
	$	3,611	$	—	$	3,611	$	—

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Derivatives (Tables)

3 Months Ended

Apr. 03, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Summary of Fair Values of Hedges and MTP Contracts

The fair values of our aluminum hedges and MTP contracts are classified in the accompanying condensed consolidated balance sheets at April 3, 2021 and January 2, 2021, as follows (in thousands):

	Derivative Assets			Derivative Liabilities
	April 3, 2021			April 3, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	5,714	Accrued liabilities	$	—
MTP contracts	Other current assets		3,010	Accrued liabilities		—
Aluminum contracts	Other assets		171	Other liabilities		—
MTP contracts	Other assets		1,229	Other liabilities		—
Total derivative instruments	Total derivative assets	$	10,124	Total derivative liabilities	$	—
	Derivative Assets			Derivative Liabilities
	January 2, 2021			January 2, 2021
Derivatives designated as hedging
instruments under Subtopic 815-20:	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments:
Aluminum contracts	Other current assets	$	3,243	Accrued liabilities	$	(28	)
MTP contracts	Other current assets		423	Accrued liabilities		(24	)
Aluminum contracts	Other assets		—	Other liabilities		(25	)
MTP contracts	Other assets		26	Other liabilities		(4	)
Total derivative instruments	Total derivative assets	$	3,692	Total derivative liabilities	$	(81	)

Gains (Losses) on Derivative Financial Instruments

The following represents the gains (losses) on derivative financial instruments, and their classifications within the accompanying condensed consolidated financial statements, for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Derivatives in Cash Flow Hedging Relationships
	Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives					Location of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI(L) into Income
	Three Months Ended						Three Months Ended
	April 3,		April 4,				April 3,		April 4,
	2021		2020				2021		2020
Aluminum contracts	$	4,083	$	(5,160	)	Cost of sales	$	1,388	$	(612	)
MTP contracts	$	4,205	$	(53	)	Cost of sales	$	387	$	—

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Apr. 03, 2021

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The following table shows the components of accumulated other comprehensive income (loss) for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

Three months ended April 3, 2021	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at January 2, 2021	$	2,403		$	317		$	2,720
Change in fair value of derivatives		4,083			4,205			8,288
Amounts reclassified from other comprehensive loss		(1,388	)		(387	)		(1,775	)
Tax effect		(670	)		(948	)		(1,618	)
Net current-period other comprehensive income		2,025			2,870			4,895
Balance at April 3, 2021	$	4,428		$	3,187		$	7,615

Three months ended April 4, 2020	Aluminum			MTP
(in thousands)	Contracts			Contracts			Total
Balance at December 28, 2019	$	(238	)	$	-		$	(238	)
Change in fair value of derivatives		(5,160	)		(53	)		(5,213	)
Amounts reclassified from other comprehensive loss		612			—			612
Tax effect		1,138			13			1,151
Net current-period other comprehensive income		(3,410	)		(40	)		(3,450	)
Balance at April 4, 2020	$	(3,648	)	$	(40	)	$	(3,688	)

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Segments (Tables)

3 Months Ended

Apr. 03, 2021

Segment Reporting [Abstract]

Summary of Financial Data Attributable to Operating Segments

The following table represents summary financial data attributable to our operating segments for the three months ended April 3, 2021 and April 4, 2020 (in thousands):

	Three Months Ended
	April 3,		April 4,
	2021		2020
Net sales:
Southeast segment	$	233,638	$	183,641
Western segment		37,454		36,563
Total net sales	$	271,092	$	220,204
Income from operations:
Southeast segment	$	18,743	$	25,821
Western segment		5,453		1,086
Total income from operations		24,196		26,907
Interest expense, net		7,457		7,169
Total income before income taxes	$	16,739	$	19,738

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Reedemable Non-Controlling Interest (Tables)

3 Months Ended

Apr. 03, 2021

Noncontrolling Interest [Abstract]

Summary of Changes in Redeemable Non-Controlling Interest

The following table presents the changes in the Company’s redeemable non-controlling interest for the period presented:

	Three Months Ended
	April 3,
(in thousands)	2021
Balance at beginning of period	$	—
Redeemable non-controlling interest in Eco at initially estimated fair value		34,084
Net income attributable to redeemable non-controlling interest		411
Change in value of redeemable non-controlling interest		—
Balance at end of period	$	34,495

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Description of Business and Basis of Presentation - Additional Information (Detail)		3 Months Ended
	Feb. 01, 2021	Apr. 03, 2021 Operation Plant Segment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of reportable segments | Segment		2
Florida [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of manufacturing operations		6
North Venice, Florida [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of manufacturing operations		1
Greater Miami, Florida [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of manufacturing operations		4
Arizona [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of manufacturing operations		1
Tampa [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of manufacturing operations		1
Glass Tempering and Laminating Plant [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of plants | Plant		2
Glass Tempering and Laminating Plant [Member] | North Venice [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of plants | Plant		2
Insulation Glass Plants [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of plants | Plant		1
Insulation Glass Plants [Member] | North Venice [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of plants | Plant		1
ECO [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Business combination, percentage of ownership stake acquired	75.00%	75.00%
Business combination, effective date of acquisition	Feb. 01, 2021
Number of manufacturing operations		2

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Revenue Recognition and Contracts with Customers - Additional Information (Detail) $ in Thousands	3 Months Ended
	Apr. 03, 2021 USD ($) Segment	Apr. 04, 2020 USD ($)	Jan. 02, 2021 USD ($)
Disaggregation Of Revenue [Line Items]
Number of reportable segments | Segment	2
Net sales	$ 271,092	$ 220,204
Contract liabilities	34,000		$ 22,800
Contract assets, net	$ 49,225		28,723
Revenue recognition, practical expedient	true
Allowance for doubtful accounts	$ 4,600		3,700
NewSouth Window Solutions [Member]
Disaggregation Of Revenue [Line Items]
Business combination, effective date of acquisition	Feb. 01, 2021
Accrued Liabilities [Member]
Disaggregation Of Revenue [Line Items]
Contract liabilities	$ 27,800		18,100
Reduction to Contract Assets [Member]
Disaggregation Of Revenue [Line Items]
Contract liabilities	6,200		$ 4,600
Western Segment [Member]
Disaggregation Of Revenue [Line Items]
Net sales	37,454	36,563
Western Segment [Member] | Volume Products [Member] | Passes at Point in Time [Member]
Disaggregation Of Revenue [Line Items]
Net sales	$ 19,600	$ 15,200

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Revenue Recognition and Contracts with Customers - Net Sales by Reporting Segment, Product Category and Market (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Disaggregation Of Revenue [Line Items]
Net sales	$ 271,092	$ 220,204
Southeast Segment [Member]
Disaggregation Of Revenue [Line Items]
Net sales	233,638	183,641
Western Segment [Member]
Disaggregation Of Revenue [Line Items]
Net sales	37,454	36,563
Impact-Resistant Windows and Door Products [Member]
Disaggregation Of Revenue [Line Items]
Net sales	191,400	153,600
Non-Impact Window and Door Products [Member]
Disaggregation Of Revenue [Line Items]
Net sales	79,700	66,600
New Construction [Member]
Disaggregation Of Revenue [Line Items]
Net sales	120,000	109,100
Repair and Remodel [Member]
Disaggregation Of Revenue [Line Items]
Net sales	$ 151,100	$ 111,100

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Warranty - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020	Jan. 02, 2021
Product Warranty Liability [Line Items]
Warranty expense, average rate of sales	2.60%	1.70%
Warranty expense rate description	The increase in our warranty expense rate in the first three months of April 3, 2021 compared to April 4, 2020 is a result of costs associated with the wind-down of the commercial business of NewSouth in the three months ended April 3, 2021, which resulted in warranty costs incremental to those we would incur in the normal course of business.
Accrued warranty reserve	$ 9.6		$ 8.0
Accrued Expenses [Member]
Product Warranty Liability [Line Items]
Accrued warranty reserve	$ 7.8		$ 6.5
Minimum [Member]
Product Warranty Liability [Line Items]
Warranty periods	1 year
Warranty period of the majority of products sold	1 year
Maximum [Member]
Product Warranty Liability [Line Items]
Warranty periods	10 years
Warranty period of the majority of products sold	3 years

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Warranty - Summary of Current Period Charges, Adjustments to Previous Estimates, Settlements representing Actual Costs Incurred with regard to Accrued Warranty (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Guarantees And Product Warranties [Abstract]
Accrued Warranty, Beginning of Period	$ 8,001	$ 6,244
Accrued Warranty, Acquired		1,592
Accrued Warranty, Charged to Expense	6,966	3,841
Accrued Warranty, Adjustments	389	(20)
Accrued Warranty, Settlements	(5,713)	(4,269)
Accrued Warranty, End of Period	$ 9,643	$ 7,388

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Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 66,179	$ 55,916
Work-in-progress	5,718	4,058
Finished goods	455	343
Inventories	$ 72,352	$ 60,317

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Stock Based-Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense for stock based awards	$ 1,750	$ 1,530
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense for stock based awards	1,500	$ 1,400
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation	$ 11,200
Weighted-average period	1 year 10 months 24 days

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Acquisitions - Additional Information (Detail) $ / shares in Units, $ in Thousands						3 Months Ended			12 Months Ended
	Feb. 01, 2021 USD ($) Location $ / shares shares	Jan. 25, 2021 USD ($)	Feb. 01, 2020 USD ($)	Jan. 24, 2020 USD ($)	Aug. 10, 2018	Apr. 03, 2021 USD ($)	Jan. 02, 2021 USD ($)	Apr. 04, 2020 USD ($)	Jan. 02, 2021 USD ($)	Dec. 28, 2019 USD ($)
Business Acquisition [Line Items]
Aggregate principal amount issuance						$ 479,000	$ 419,000		$ 419,000
Net sales						271,092		$ 220,204
Net income including portion attributable to non-controlling interest						12,795		15,600
Net income portion attributable to redeemable non-controlling interest						411
Goodwill						359,746	329,695		329,695
Southeast Segment [Member]
Business Acquisition [Line Items]
Net sales						233,638		183,641
Goodwill						231,300	201,300		201,300
Common Stock [Member]
Business Acquisition [Line Items]
Business combination, number of shares issuance | shares	357,797
Sale of stock, price per share | $ / shares	$ 21.34
Percentage of discount in sale of stock price per share for lack of marketability	20.00%
2018 Senior Notes due 2026 [Member]
Business Acquisition [Line Items]
Aggregate principal amount issuance		$ 60,000				$ 425,000
Accrued Interest rate		6.75%		6.75%	6.75%
Percentage of principal amount issued		105.50%		106.375%	100.00%
Debt instrument premium		$ 3,300		$ 3,200
ECO [Member]
Business Acquisition [Line Items]
Business combination, effective date of acquisition	Feb. 01, 2021
Business combination, percentage of ownership stake acquired	75.00%					75.00%
Fair value of consideration	$ 100,429	100,400
Cash payment to acquire business	94,321	94,300
Working capital adjustment	5,600
Issue of common stock value to acquire business	$ 6,108
Sale of stock, price per share | $ / shares	$ 21.34
Business combination, value of shares issuance	$ 7,600
Percentage of holder of redeemable non-controlling interest restricted from selling shares from date of acquisition	25.00%
Period of holder of redeemable non-controlling interest restricted from selling shares from date of acquisition	3 years
Percentage of discount in sale of stock price per share for lack of marketability	20.00%
Estimated fair value of redeemable non-controlling interest	$ 34,084
Fair value of acquisition including non-controlling interest	$ 134,513
Percentage of estimated fair value of entity at acquisition date to calculate fair value of redeemable on controlling interest	25.00%
Percentage of estimated discount for lack of sellers voting control in new entity	5.00%
Number of manufacturing location | Location	3
Net sales						$ 16,000
Net income including portion attributable to non-controlling interest						1,600
Net income portion attributable to redeemable non-controlling interest						411
Goodwill	$ 30,051
ECO [Member] | Southeast Segment [Member]
Business Acquisition [Line Items]
Estimated amount of goodwill deductible for tax purposes						30,100
ECO [Member] | Selling, General and Administrative Expenses [Member]
Business Acquisition [Line Items]
Business combination, acquisition related costs	1,700					$ 700	$ 1,000
ECO [Member] | Common Stock [Member]
Business Acquisition [Line Items]
Issue of common stock value to acquire business	$ 6,100
Business combination, number of shares issuance | shares	357,797
ECO [Member] | 2018 Senior Notes due 2026 [Member]
Business Acquisition [Line Items]
Aggregate principal amount issuance	$ 60,000
Accrued Interest rate	6.75%
Percentage of principal amount issued	105.50%
Debt instrument premium	$ 3,300
ECO [Member] | Cash On Hand [Member]
Business Acquisition [Line Items]
Cash payment to acquire business	$ 94,300	$ 31,000
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member]
Business Acquisition [Line Items]
Business combination, effective date of acquisition			Feb. 01, 2020
Fair value of consideration			$ 90,368
Cash payment to acquire business			90,368
Business combination, acquisition related costs			2,400						$ 900	$ 1,500
Goodwill			52,094
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Selling, General and Administrative Expenses [Member]
Business Acquisition [Line Items]
Business combination, acquisition related costs								$ 500
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | 2018 Senior Notes due 2026 [Member]
Business Acquisition [Line Items]
Cash payment to acquire business			53,200
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Cash On Hand [Member]
Business Acquisition [Line Items]
Cash payment to acquire business			37,200
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Add-on Issuance [Member] | 2018 Senior Notes due 2026 [Member]
Business Acquisition [Line Items]
Cash payment to acquire business			50,000
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Premium [Member]
Business Acquisition [Line Items]
Cash payment to acquire business			$ 3,200

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Acquisitions - Schedule of Fair Value of Assets and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Feb. 01, 2021	Jan. 25, 2021	Feb. 01, 2020	Apr. 03, 2021	Jan. 02, 2021
Business Acquisition [Line Items]
Goodwill				$ 359,746	$ 329,695
ECO [Member]
Business Acquisition [Line Items]
Accounts receivable	$ 5,031
Inventories	7,728
Contract assets, net	4,312
Prepaid expenses and other assets	1,706
Property and equipment	24,009
Operating lease right-of-use asset	27,864			$ 27,900
Intangible assets	72,700
Goodwill	30,051
Total assets acquired	173,401
Accounts payable	(6,809)
Accrued and other liabilities, including customer deposits	(4,215)
Operating lease liability	(27,864)
Total liabilities assumed	(38,888)
Net assets acquired	134,513
Redeemable non-controlling interest	(34,084)
Fair value of consideration transferred	100,429
Cash	94,321	$ 94,300
PGTI common stock	6,108
Fair value of consideration transferred	$ 100,429	$ 100,400
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member]
Business Acquisition [Line Items]
Accounts receivable			$ 8,434
Inventories			2,936
Contract assets, net			4,413
Prepaid expenses and other assets			1,756
Property and equipment			7,433
Operating lease right-of-use asset			10,578
Intangible assets			27,370
Goodwill			52,094
Accounts payable			(6,621)
Accrued and other liabilities			(7,447)
Operating lease liability			(10,578)
Purchase price			90,368
Cash			90,368
Fair value of consideration transferred			$ 90,368

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Acquisitions - Schedule for Valuation of Identifiable Intangible Assets Acquired and Estimate of Useful Lives (Detail) - USD ($) $ in Thousands	Feb. 01, 2021	Feb. 01, 2020
ECO [Member]
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount	$ 72,700
ECO [Member] | Customer Relationships
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount	$ 36,700
ECO [Member] | Customer Relationships | Minimum [Member]
Business Acquisition [Line Items]
Useful Life (in years)	5 years
ECO [Member] | Customer Relationships | Maximum [Member]
Business Acquisition [Line Items]
Useful Life (in years)	15 years
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member]
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount		$ 27,370
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Customer Relationships
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount		$ 900
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Customer Relationships | Maximum [Member]
Business Acquisition [Line Items]
Useful Life (in years)		1 year
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Trade Name [Member]
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount		$ 22,200
Useful Life (in years)		15 years
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Noncompete Agreements [Member]
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount		$ 1,670
Useful Life (in years)		5 years
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member] | Developed Technology [Member]
Business Acquisition [Line Items]
Preliminary/Final Valuation Amount		$ 2,600
Useful Life (in years)		6 years
Trade Name [Member] | ECO [Member]
Business Acquisition [Line Items]
Preliminary or Final Valuation Amount	$ 36,000

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Acquisitions - Summary of Unaudited Proforma Results (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
ECO [Member]
Business Acquisition [Line Items]
Net sales	$ 279,044	$ 231,353
Net income	$ 12,542	$ 15,297
Net income per common share:
Basic	$ 0.21	$ 0.26
Diluted	$ 0.21	$ 0.26
New South Window Solutions LLC and New South Window Solutions of Orlando LLC [Member]
Business Acquisition [Line Items]
Net sales		$ 227,956
Net income		$ 15,830
Net income per common share:
Basic		$ 0.27
Diluted		$ 0.27

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Net Income Per Common Share - Additional Information (Detail) - shares	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Earnings Per Share [Abstract]
Anti-dilutive securities excluded from the calculation of weighted average shares outstanding	0	586,000

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Net Income Per Common Share - Calculation of EPS and Reconciliation of Weighted Average Common Shares Used in Calculation of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Earnings Per Share [Abstract]
Net income	$ 12,795	$ 15,600
Less: Net income attributable to redeemable non-controlling interest	411
Net income attributable to the Company	12,384	15,600
Change in redemption value of redeemable non-controlling interest	0	0
Net income attributable to common shareholders	$ 12,384	$ 15,600
Weighted-average common shares - Basic	59,286	58,668
Add: Dilutive shares from equity plans	608	453
Weighted-average common shares - Diluted	59,894	59,121
Net income per common share attributable to common shareholders:
Basic	$ 0.21	$ 0.27
Diluted	$ 0.21	$ 0.26

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Goodwill and Other Intangible Assets - Schedule of Goodwill and Intangible Assets Net (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Jan. 02, 2021
Indefinite-lived Intangible Assets [Line Items]
Less: Accumulated amortization	$ (122,358)	$ (117,609)
Subtotal	147,617	115,666
Other intangible assets, net	324,458	256,507
Goodwill at January 2, 2021	329,695
Goodwill at April 3, 2021	359,746
Eco Enterprises, LLC [Member]
Indefinite-lived Intangible Assets [Line Items]
Increase in goodwill from our investment in Eco	30,051
Trade Name [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	176,841	140,841
Increase in trade names from our investment in Eco	36,000
Customer Relationships and Customer-related Assets [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 238,247	201,547
Customer Relationships and Customer-related Assets [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	1 year
Customer Relationships and Customer-related Assets [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	15 years
Trade Name [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 22,200	22,200
Initial Useful Life (in years)	15 years
Developed Technology [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 5,600	5,600
Developed Technology [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	6 years
Developed Technology [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	10 years
Noncompete Agreements [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 3,338	3,338
Noncompete Agreements [Member] | Minimum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	2 years
Noncompete Agreements [Member] | Maximum [Member]
Indefinite-lived Intangible Assets [Line Items]
Initial Useful Life (in years)	5 years
Software License [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 590	$ 590
Initial Useful Life (in years)	2 years

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Goodwill and Other Intangible Assets - Estimated Amortization for Future Fiscal Year (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2021	$ 15,247
2022	19,342
2023	17,181
2024	17,135
2025	16,896
Thereafter	61,816
Subtotal	$ 147,617	$ 115,666

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Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020	Jan. 02, 2021
Indefinite-lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 4,700	$ 4,700
Goodwill	359,746		$ 329,695
Southeast Segment [Member]
Indefinite-lived Intangible Assets [Line Items]
Goodwill	231,300		201,300
Western Segment [Member]
Indefinite-lived Intangible Assets [Line Items]
Goodwill	$ 128,400		$ 128,400

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Long Term Debt - Schedule of Long-term Debt (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Debt Instrument [Line Items]
Long-term debt	$ 479,000	$ 419,000
Fees, costs, discount and premium	(4,735)	(6,902)
Long-term debt, net	474,265	412,098
2016 Credit Agreement due 2022, Maturing in October 2022 [Member]
Debt Instrument [Line Items]
Long-term debt	54,000	54,000
2018 Senior Notes due 2026, Maturing in August 2026 [Member]
Debt Instrument [Line Items]
Long-term debt	$ 425,000	$ 365,000

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Long-Term Debt - Additional Information (Detail) - USD ($)								1 Months Ended	3 Months Ended		12 Months Ended	62 Months Ended
	Feb. 01, 2021	Jan. 25, 2021	Jan. 24, 2020	Oct. 31, 2019	Aug. 10, 2018	Mar. 16, 2018	Feb. 16, 2016	Feb. 29, 2016	Apr. 03, 2021	Oct. 03, 2020	Dec. 28, 2019	Apr. 03, 2021	Jan. 02, 2021
Line of Credit Facility [Line Items]
Face value of debt outstanding									$ 479,000,000			$ 479,000,000	$ 419,000,000
Letters of credit outstanding									5,800,000			5,800,000
Fees and cost									4,735,000			4,735,000
2016 Credit Agreement due 2022 [Member]
Line of Credit Facility [Line Items]
Face value of debt outstanding									54,000,000			54,000,000	$ 54,000,000
Accrued interest									$ 16,000
Credit agreement date									Feb. 16, 2016
Total barrowings after making prepayments during period										$ 10,000,000.0
Prepayment of term loan												$ 214,000,000.0
Credit agreement inception year month								2016-02
Credit facility maturity date								Oct. 31, 2022
Senior Secured Credit Facilities [Member]
Line of Credit Facility [Line Items]
Amount available under credit facility							$ 310,000,000.0
Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Amount available under credit facility							$ 270,000,000.0
Maturity term of credit agreement							6 years
Credit facility amortization percentage							1.00%
Weighted average interest rate									2.14%			2.14%	2.15%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Amount available under credit facility							$ 40,000,000.0
Revolving Credit Facility [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Credit facility amortization percentage				0.35%
Revolving Credit Facility [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Credit facility amortization percentage				0.25%
Second Amendment [Member]
Line of Credit Facility [Line Items]
Interest rate terms									The Second Amendment, among other things, decreases the applicable interest rate margins for the Initial Term Loans (as defined in the 2016 Credit Agreement due 2022) from (i) 3.75% to 2.50%, in the case of the Base Rate Loans (as defined in the 2016 Credit Agreement due 2022), and (ii) 4.75% to 3.50%, in the case of the Eurodollar Loans (as defined in the 2016 Credit Agreement due 2022).
Second Amendment [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR						2.50%			3.75%
Second Amendment [Member] | Euro Dollar [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR						3.50%			4.75%
Third Amendment [Member]
Line of Credit Facility [Line Items]
Face value of debt outstanding				$ 64,000,000.0
Interest rate terms									The Third Amendment decreases the applicable interest rate margins for the Initial Term Loan A from (i) 2.50% to a spread of 1.00% to 1.75% based on our first lien net leverage ratio, in the case of the Base Rate Loans (with a floor of 100 basis points), and (ii) 3.50% to a spread ranging from 2.00% to 2.75% based on our first lien leverage ratio, in the case of the Eurodollar Loans (with a floor of zero basis points).
Term of credit facility				3 years
Fees and cost				$ 900,000
Expected written-off of deferred financing costs											$ 1,500,000
Maximum net leverage ratio									400.00%
Maximum net leverage ratio thereafter									450.00%
Current first lien net leverage ratio description									We have not been required to test our first lien net leverage ratio because we have not exceeded 35% of our revolving capacity.
Third Amendment [Member] | Letter of Credit [Member]
Line of Credit Facility [Line Items]
Excluded unused borrowing capacity from financial covenant leverage									$ 7,500,000			$ 7,500,000
Cash collateralized percentage for borrowings excluded from financial covenant leverage									103.00%
Third Amendment [Member] | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR									2.50%
Basis points, floor				1.00%
Third Amendment [Member] | Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR				1.75%
Third Amendment [Member] | Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR				1.00%
Third Amendment [Member] | Euro Dollar [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR									3.50%
Basis points, floor				0.00%
Third Amendment [Member] | Euro Dollar [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR				2.75%
Third Amendment [Member] | Euro Dollar [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on LIBOR				2.00%
Revolving Credit Facility due 2024 [Member]
Line of Credit Facility [Line Items]
Face value of debt outstanding									$ 40,000,000.0			40,000,000.0
Term of credit facility				5 years
Credit available under the credit facility									74,200,000			74,200,000
Revolving Credit Facility due 2024 [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Face value of debt outstanding				$ 80,000,000.0
Common Stock [Member]
Line of Credit Facility [Line Items]
Business combination, number of shares issuance	357,797
Sale of stock, price per share	$ 21.34
Percentage of discount in sale of stock price per share for lack of marketability	20.00%
ECO [Member]
Line of Credit Facility [Line Items]
Cash payment to acquire business	$ 94,321,000	$ 94,300,000
Fair value of consideration	$ 100,429,000	100,400,000
Sale of stock, price per share	$ 21.34
Percentage of discount in sale of stock price per share for lack of marketability	20.00%
ECO [Member] | Common Stock [Member]
Line of Credit Facility [Line Items]
Business combination, number of shares issuance	357,797
ECO [Member] | Cash On Hand [Member]
Line of Credit Facility [Line Items]
Cash payment to acquire business	$ 94,300,000	$ 31,000,000.0
2018 Senior Notes due 2026 [Member]
Line of Credit Facility [Line Items]
Long-term debt			$ 50,000,000.0		$ 315,000,000.0
Accrued Interest rate		6.75%	6.75%		6.75%
Percentage of principal amount issued		105.50%	106.375%		100.00%
Debt instrument premium		$ 3,300,000	$ 3,200,000
Face value of debt outstanding		60,000,000.0							425,000,000.0			$ 425,000,000.0
Debt instrument, maturity date					Aug. 10, 2026
Accrued interest									$ 4,900,000
Financing Costs			1,300,000		$ 10,400,000
Repurchase notes percentage of aggregate principal amount									101.00%			101.00%
2018 Senior Notes due 2026 [Member] | NewSouth Window Solutions [Member] | Cash On Hand [Member]
Line of Credit Facility [Line Items]
Cash payment to acquire business			$ 90,400,000
2018 Senior Notes due 2026 [Member] | ECO [Member]
Line of Credit Facility [Line Items]
Accrued Interest rate	6.75%
Percentage of principal amount issued	105.50%
Debt instrument premium	$ 3,300,000
Face value of debt outstanding	$ 60,000,000.0
Second Additional Senior Notes [Member]
Line of Credit Facility [Line Items]
Debt instrument premium		3,300,000
Financing Costs		$ 1,400,000

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Long-Term Debt - Activity Relating to Third-Party Fees and Costs, Lender Fees, Discount and Premiums (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Debt Instrument [Line Items]
At beginning of year	$ 6,902
Add: Deferred financing costs from the issuance of Second Additional Senior Notes	1,363	$ 1,266
Less: Amortization expense	(230)
At end of period	4,735
Second Additional Senior Notes [Member]
Debt Instrument [Line Items]
Add: Deferred financing costs from the issuance of Second Additional Senior Notes	1,363
Less: Premium on the Second Additional Senior Notes	$ (3,300)

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Long-Term Debt - Estimated Amortization Expense Relating to Third-Party Fees and Costs, Lender Fees, Discount and Premiums (Detail) $ in Thousands	Apr. 03, 2021 USD ($)
Debt Disclosure [Abstract]
Remainder of 2021	$ 657
2022	905
2023	844
2024	889
2025	861
Thereafter	579
Total	$ 4,735

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Long-Term Debt - Contractual Future Maturities of Long-Term Debt Outstanding (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Debt Disclosure [Abstract]
Remainder of 2021	$ 0
2022	54,000
2023	0
2024	0
2025	0
Thereafter	425,000
Total	$ 479,000	$ 419,000

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020	Feb. 01, 2021
Lessee Lease Description [Line Items]
Operating lease existence of option to extend	true
Operating lease extension period	5 years
Operating lease existence of option to terminate	true
Operating lease not yet commenced description	no additional operating or finance leases that have not yet commenced
Finance lease not yet commenced description	no additional operating or finance leases that have not yet commenced
Lease expenses	$ 5,100	$ 2,900
Operating lease expire description	Our operating leases expire at various times through 2030.
Operating lease right-of-use assets obtained in exchange for operating lease obligations	$ 29,490	14,605
ECO [Member]
Lessee Lease Description [Line Items]
Operating lease right-of-use asset	27,900		$ 27,864
Cost of Sales [Member]
Lessee Lease Description [Line Items]
Lease expenses	$ 2,200	$ 1,500
Minimum [Member]
Lessee Lease Description [Line Items]
Operating lease term	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease term	9 years
Operating lease termination period	1 year

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Leases - Components of Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Leases [Abstract]
Operating lease cost	$ 2,879	$ 2,104
Variable lease cost	2,200	786
Total lease cost	$ 5,079	$ 2,890

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Leases - Other Information Relating to Leases (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows relating to operating leases	$ (2,764)	$ (2,009)
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$ 29,490	$ 14,605
Weighted average remaining lease term in years
Operating leases	7 years 2 months 23 days	7 years 3 months 7 days
Weighted average discount rate
Operating leases	5.60%	5.90%

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Leases - Future Maturities under Operating Leases (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Leases [Abstract]
Remainder of 2021	$ 9,278
2022	11,830
2023	11,557
2024	11,286
2025	10,871
Thereafter	28,847
Total future minimum lease payments	83,669
Less: Imputed interest	(14,847)	$ (8,641)
Operating lease liability - total	68,822	41,262
Current portion of operating lease liability	8,682	6,132
Operating lease liability, less current portion	$ 60,140	35,130
Remainder of 2021		8,327
2022		7,626
2023		7,149
2024		6,748
2025		6,253
Thereafter		13,800
Total future minimum lease payments		$ 49,903

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Income Taxes - Additional Information (Detail) - USD ($)		3 Months Ended
	Dec. 22, 2017	Apr. 03, 2021	Apr. 04, 2020	Feb. 01, 2021
Income Taxes [Line Items]
Income tax expense		$ 3,944,000	$ 4,138,000
Effective tax rates	24.70%	23.60%	21.00%
Pre-tax earnings		$ 16,739,000	$ 19,738,000
Excess tax benefits relating to exercises of stock options and lapses of restrictions on stock awards			$ 766,000
Effective tax rates, excluding discrete item		24.10%	24.80%
Payment of estimated federal and state income taxes		$ 0	$ 0
ECO [Member]
Income Taxes [Line Items]
Percentage of ownership stake		75.00%		75.00%
Pre-tax earnings		$ 305,000

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Fair Value - Additional Information (Detail) - USD ($)	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020	Jan. 02, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of assets, level 2 to level 3 transfers	$ 0	$ 0
Principal outstanding value	479,000,000		$ 419,000,000
2016 Credit Agreement [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of current long-term debt	54,000,000.0		54,000,000.0
Principal outstanding value	54,000,000.0		54,000,000.0
Second Additional Senior Notes [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of current long-term debt	450,500,000		387,800,000
Principal outstanding value	$ 425,000,000.0		$ 365,000,000.0

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Fair Value - Schedule of Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	$ 10,124	$ 3,611
Aluminum Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	5,885	3,190
MTP Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	4,239	421
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	10,124	3,611
Significant Other Observable Inputs (Level 2) [Member] | Aluminum Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	5,885	3,190
Significant Other Observable Inputs (Level 2) [Member] | MTP Contracts [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets (Liabilities)	$ 4,239	$ 421

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Derivatives - Additional Information (Detail) $ in Thousands, lb in Millions	3 Months Ended
	Apr. 03, 2021 USD ($) ForwardContract lb $ / lb	Jan. 02, 2021 USD ($)
Derivative [Line Items]
Derivative assets, net	$ 10,124	$ 3,692
Fair Value of Derivative	$ 8,700
MTP Contracts [Member]
Derivative [Line Items]
Typical order quantities payment terms net	30 days
Derivative assets, net	$ 4,200
Number of outstanding forward contracts | ForwardContract	29
Derivative, amount of hedged item | lb	56.1
Derivative average price | $ / lb	0.12
Maturity period of contract, minimum	1 month
Maturity period of contract, maximum	21 months
Aluminum Contracts [Member]
Derivative [Line Items]
Derivative assets, net	$ 5,900
Number of outstanding forward contracts | ForwardContract	25
Derivative, amount of hedged item | lb	33.7
Derivative average price | $ / lb	0.84
Maturity period of contract, minimum	1 month
Maturity period of contract, maximum	15 months
Aluminum Contracts and MTP Contracts [Member]
Derivative [Line Items]
Accumulated other comprehensive income	$ 7,600	$ 2,700

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Derivatives - Summary of Fair Values of Hedges and MTP Contracts (Detail) - USD ($) $ in Thousands	Apr. 03, 2021	Jan. 02, 2021
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Assets	$ 10,124	$ 3,692
Total derivative instruments Liabilities		(81)
Aluminum Contracts [Member] | Other Current Assets [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Assets	5,714	3,243
Aluminum Contracts [Member] | Other Assets [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Assets	171
Aluminum Contracts [Member] | Accrued Liabilities [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Liabilities		(28)
Aluminum Contracts [Member] | Other Liabilities [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Liabilities		(25)
MTP Contracts [Member] | Other Current Assets [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Assets	3,010	423
MTP Contracts [Member] | Other Assets [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Assets	$ 1,229	26
MTP Contracts [Member] | Accrued Liabilities [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Liabilities		(24)
MTP Contracts [Member] | Other Liabilities [Member]
Derivative Instruments And Hedging Activities [Line Items]
Total derivative instruments Liabilities		$ (4)

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Derivatives - Gains (Losses) on Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives	$ 8,288	$ (5,213)
Aluminum Contracts [Member] | Inventory Classified as Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives	4,083	(5,160)
Derivatives in Cash Flow Hedging Relationships	1,388	(612)
MTP Contracts [Member] | Inventory Classified as Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in OCI(L) on Derivatives	4,205	$ (53)
Derivatives in Cash Flow Hedging Relationships	$ 387

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Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	$ 485,134
Change in fair value of derivatives	8,288	$ (5,213)
Amounts reclassified from other comprehensive loss	(1,775)	612
Tax effect	(1,618)	1,151
Other comprehensive income (loss), net of tax	4,895	(3,450)
Ending Balance	509,266
Accumulated Other Comprehensive Income (Loss) [Member]
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	2,720	(238)
Other comprehensive income (loss), net of tax	4,895	(3,450)
Ending Balance	7,615	(3,688)
Aluminum Contracts [Member]
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Change in fair value of derivatives	4,083	(5,160)
Amounts reclassified from other comprehensive loss	(1,388)	612
Tax effect	(670)	1,138
Other comprehensive income (loss), net of tax	2,025	(3,410)
Aluminum Contracts [Member] | Accumulated Other Comprehensive Income (Loss) [Member]
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	2,403	(238)
Ending Balance	4,428	(3,648)
MTP Contracts [Member]
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Change in fair value of derivatives	4,205	(53)
Amounts reclassified from other comprehensive loss	(387)
Tax effect	(948)	13
Other comprehensive income (loss), net of tax	2,870	(40)
MTP Contracts [Member] | Accumulated Other Comprehensive Income (Loss) [Member]
Components of Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance	317
Ending Balance	$ 3,187	$ (40)

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Segments - Additional Information (Detail)	3 Months Ended
	Apr. 03, 2021 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Segments - Summary of Financial Data Attributable to Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Net sales:
Total net sales	$ 271,092	$ 220,204
Income from operations:
Total income from operations	24,196	26,907
Interest expense, net	7,457	7,169
Total income before income taxes	16,739	19,738
Southeast Segment [Member]
Net sales:
Total net sales	233,638	183,641
Income from operations:
Total income from operations	18,743	25,821
Western Segment [Member]
Net sales:
Total net sales	37,454	36,563
Income from operations:
Total income from operations	$ 5,453	$ 1,086

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Reedemable Non-Controlling Interest - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended
	Feb. 01, 2021	Apr. 03, 2021	Apr. 04, 2020
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interest value		$ 34,500
Change in redemption value of redeemable non-controlling interest		$ 0	$ 0
Eco Enterprises, LLC [Member]
Redeemable Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by parent	75.00%
ECO [Member]
Redeemable Noncontrolling Interest [Line Items]
Sellers equity interest call right exercise period	3 years
Sellers equity interest put right exercise period following call right exercise period	15 days
Sellers equity interest put or call right exercise purchase price description	Upon exercise of the put or call right, the purchase price is calculated based on a 10-multiple of the sum of Eco’s trailing twelve-month earnings before interest, taxes, depreciation and amortization (TTM EBITDA), and certain synergy-related TTM EBITDA which may result from our investment in Eco (both as more specifically defined in the operating agreement).
ECO [Member] | Eco Enterprises, LLC [Member]
Redeemable Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by non controlling owners	25.00%

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Reedemable Non-Controlling Interest - Summary of Changes in Redeemable Non-Controlling Interest (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2021	Apr. 04, 2020
Noncontrolling Interest [Abstract]
Redeemable non-controlling interest in Eco at initially estimated fair value	$ 34,084
Net income portion attributable to redeemable non-controlling interest	411
Change in value of redeemable non-controlling interest	0	$ 0
Balance at end of period	$ 34,495