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PGTI Reports Fourth Quarter and Record Fiscal Year 2023 Results

VENICE, Fla., February 20, 2024--(BUSINESS WIRE)--PGT Innovations, Inc. (NYSE: PGTI), a national leader in premium windows and doors, including impact-resistant products, garage doors, and products designed to unify indoor/outdoor living spaces, today announced financial results for its fourth quarter ended December 30, 2023.

Financial Highlights for Fourth Quarter 2023

(All results reflect comparison to prior-year period; Cash on hand is compared to prior-year end)

  • Net sales totaled $343 million, an increase of less than 1 percent.

  • Net income was $5 million, a decrease of 38 percent.

  • Adjusted net income* was $14 million, a decrease of 17 percent.

  • Adjusted EBITDA* was $46 million, a decrease of 5 percent.

  • Net income per common share attributable to common shareholders, diluted, was $0.08, a decrease of 56 percent.

  • Adjusted net income per diluted share* was $0.25, a decrease of 11 percent.

  • Total liquidity* at the end of the fourth quarter was $229 million, including cash of $33 million and revolver availability of $196 million.

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Financial Highlights for Fiscal Year 2023

  • Net sales totaled $1.50 billion, an increase of 1 percent.

  • Net income was $110 million, a decrease of 12 percent.

  • Adjusted net income* was $120 million, an increase of 4 percent.

  • Adjusted EBITDA* was $268 million, an increase of 6 percent.

  • Net income per common share attributable to common shareholders, diluted, was $1.83, an increase of 12 percent.

  • Adjusted net income per diluted share* was $2.05, an increase of 7 percent.

  • Cash flow from operations was $197 million, an increase of $1 million.

* Adjusted net income, Adjusted net income per diluted share, Adjusted EBITDA, and Liquidity are non-GAAP measures. Please see "Use of Non-GAAP Financial Measures" below for more information.

"For the full year 2023, PGT Innovations delivered record financial results, driven by operational execution, balanced price/cost relationships, and strong cost discipline amid a continued dynamic macroeconomic environment," said Jeff Jackson, President and Chief Executive Officer. "The performance is a testament to the power of our product lines, our geographic footprint, and the best team in the industry. We believe these foundations provide a strong basis for future profitable growth," added Jackson.

"In the fourth quarter, we delivered net sales of $343 million, a slight increase from the prior year quarter. Our sales growth was driven by our Southeast region growing at six percent, partially offset by a 13 percent decline in our Western region. The sales growth was due primarily to prior price actions, as fourth-quarter unit volumes were flat with the prior year quarter. We are seeing positive signs of recovery in Western region demand trends, as well as continued demand growth in our Southeast region," concluded Jackson.

"The Company delivered increasing profitability in the fourth quarter, with gross margins of 36.7 percent, up 120 basis points over the prior year quarter," said Craig Henderson, Senior Vice President and Chief Financial Officer. "Our selling, general and administrative expenses increased over the prior year quarter, as we invested in marketing, sales and other spending to support our 2024 growth initiatives, as well as timing impact of incentive compensation."

"In the fourth quarter of 2023, we generated $57 million of operating cash flow, which enabled a reduction in our revolver borrowings of $20 million. Additionally, we returned $7 million of capital to our shareholders through share repurchases, for year-to-date repurchases of $82 million," added Henderson.

"Due to the transaction with MITER Brands announced on January 17, 2024, we will not be holding a conference call or providing 2024 guidance. Refer to our proxy statement for additional information," concluded Henderson.

About PGT Innovations, Inc.

PGT Innovations manufactures and supplies premium windows, doors, and garage doors. Its highly engineered and technically advanced products can withstand some of the toughest weather conditions on Earth and are revolutionizing the way people live by unifying indoor and outdoor living spaces.

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

The PGT Innovations’ family of brands include CGI®, PGT® Custom Windows and Doors, WinDoor®, Western Window Systems, Anlin Windows & Doors, Eze-Breeze®, Eco Window Systems®, NewSouth Window Solutions® and Martin Door®. The company’s brands, in their respective markets, are a preferred choice of architects, builders, and homeowners throughout North America and the Caribbean. Their high-quality products are available in custom and standard sizes with massive dimensions that allow for unlimited design possibilities in residential, multi-family, and commercial projects. For additional information, visit https://pgtinnovations.com/.

Forward-Looking Statements

This press release 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," "expect," "guidance," "intend," "many," "positioned," "potential," "project," "think," "should," "target," "will," "would" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future profitable growth and demand trends.

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:

  • adverse effects on our business and financial condition that may result if we fail to complete the merger;

  • 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, vinyl, and steel, including, price increases due to the implementation of tariffs and other trade-related restrictions, Pandemic-related supply chain interruptions, or interruptions from the conflict in Ukraine;

  • 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 acquisition of Eco Enterprises, LLC ("Eco"), 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 recent acquisitions, including our acquisitions of Martin Door Holdings, Inc. ("Martin") and Anlin Windows & Doors ("Anlin");

  • our level of indebtedness, which increased in connection with our recent acquisitions, including our acquisitions of Martin and Anlin;

  • increases in credit losses from obligations 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 obligations from such customers;

  • the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of Martin and Anlin 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 acquisition of Eco;

  • 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 acquisitions of Martin and Anlin, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected when we acquired it; and

  • the other risks and uncertainties discussed under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, and our other filings with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release 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.

Use of Non-GAAP Financial Measures

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

Adjusted net income consists of GAAP net income adjusted for the items included in the accompanying reconciliation. Adjusted net income per share consists of GAAP net income per share adjusted for the items included in the accompanying reconciliation.

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

Liquidity consists of net revolver capacity plus cash and cash equivalents. Net revolver capacity is calculated as total revolver capacity, less revolver borrowings and off-balance-sheet outstanding letter-of-credit commitments.

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

We are not able to provide a reconciliation of projected Adjusted EBITDA to the most directly comparable expected GAAP results due to the unknown effect, timing and potential significance of the effects of legal matters, tax considerations, and income and expense from changes in fair value of contingent consideration from acquisitions. Expenses associated with legal matters, tax consequences, and income and expense from changes in fair value of contingent consideration from acquisitions have in the past, and may in the future, significantly affect GAAP results in a particular period.

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(unaudited - in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

Dec. 30,

 

 

Dec. 31,

 

 

Dec. 30,

 

 

Dec. 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

342,547

 

 

$

340,934

 

 

$

1,504,241

 

 

$

1,491,954

 

Cost of sales

 

 

216,860

 

 

 

219,790

 

 

 

913,600

 

 

 

921,285

 

Gross profit

 

 

125,687

 

 

 

121,144

 

 

 

590,641

 

 

 

570,669

 

Selling, general and administrative expenses

 

 

106,403

 

 

 

95,100

 

 

 

404,193

 

 

 

402,886

 

Impairment of trade name

 

 

5,500

 

 

 

7,423

 

 

 

5,500

 

 

 

7,423

 

Restructuring costs and charges, net

 

 

 

 

 

 

 

 

1,722

 

 

 

 

Income from operations

 

 

13,784

 

 

 

18,621

 

 

 

179,226

 

 

 

160,360

 

Interest expense, net

 

 

7,435

 

 

 

7,755

 

 

 

31,077

 

 

 

28,879

 

Debt extinguishment costs

 

 

 

 

 

410

 

 

 

 

 

 

410

 

Income before income taxes

 

 

6,349

 

 

 

10,456

 

 

 

148,149

 

 

 

131,071

 

Income tax expense

 

 

1,598

 

 

 

2,756

 

 

 

38,010

 

 

 

32,666

 

Net income

 

 

4,751

 

 

 

7,700

 

 

 

110,139

 

 

 

98,405

 

Less: Net income attributable to redeemable
non-controlling interest

 

 

 

 

 

(189

)

 

 

(1,101

)

 

 

(1,523

)

Net income attributable to the Company

 

$

4,751

 

 

$

7,511

 

 

$

109,038

 

 

$

96,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of net income per common share
attributable to PGT Innovations, Inc.
common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the Company

 

$

4,751

 

 

$

7,511

 

 

$

109,038

 

 

$

96,882

 

Change in redemption value of redeemable
non-controlling interest

 

 

 

 

 

3,514

 

 

 

(1,637

)

 

 

2,000

 

Net income attributable to PGT Innovations,
Inc. common shareholders

 

$

4,751

 

 

$

11,025

 

 

$

107,401

 

 

$

98,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to
PGT Innovations, Inc. common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

 

$

0.18

 

 

$

1.84

 

 

$

1.65

 

Diluted

 

$

0.08

 

 

$

0.18

 

 

$

1.83

 

 

$

1.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

57,062

 

 

 

59,980

 

 

 

58,363

 

 

 

59,926

 

Diluted

 

 

57,507

 

 

 

60,441

 

 

 

58,700

 

 

 

60,319

 

 

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(unaudited - in thousands)

 

 

 

 

 

 

 

 

December 30,

 

 

December 31,

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

32,708

 

 

$

66,548

 

Accounts receivable, net

 

117,617

 

 

 

160,107

 

Inventories

 

111,781

 

 

 

112,672

 

Contract assets, net

 

37,733

 

 

 

47,919

 

Prepaid expenses and other current assets

 

28,446

 

 

 

28,295

 

Total current assets

 

328,285

 

 

 

415,541

 

Property, plant and equipment, net

 

238,126

 

 

 

208,354

 

Operating lease right-of-use asset, net

 

124,012

 

 

 

104,121

 

Intangible assets, net

 

415,245

 

 

 

447,052

 

Goodwill

 

462,630

 

 

 

460,415

 

Other assets, net

 

9,581

 

 

 

4,766

 

Total assets

$

1,577,879

 

 

$

1,640,249

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST,

 

 

 

 

 

AND SHAREHOLDERS' EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

$

113,820

 

 

$

168,961

 

Current portion of operating lease liability

 

20,368

 

 

 

16,393

 

Total current liabilities

 

134,188

 

 

 

185,354

 

Long-term debt

 

612,102

 

 

 

642,134

 

Operating lease liability, less current portion

 

114,030

 

 

 

95,159

 

Deferred income taxes, net

 

52,685

 

 

 

47,407

 

Other liabilities

 

5,007

 

 

 

7,459

 

Total liabilities

 

918,012

 

 

 

977,513

 

Commitments and contingencies

 

 

 

 

 

Redeemable non-controlling interest

 

 

 

 

34,721

 

Total shareholders' equity

 

659,867

 

 

 

628,015

 

Total liabilities, redeemable non-controlling interest
and shareholders' equity

$

1,577,879

 

 

$

1,640,249

 

 

PGT INNOVATIONS, INC.

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

(unaudited - in thousands)

 

 

 

 

 

 

 

 

Year Ended

 

 

December 30,

 

 

December 31,

 

 

2023

 

 

2022

 

 

(unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

Net income

$

110,139

 

 

$

98,405

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

Depreciation

 

35,991

 

 

 

34,048

 

Amortization

 

26,307

 

 

 

26,150

 

Impairment of trade name

 

5,500

 

 

 

7,423

 

Other asset impairments

 

 

 

 

2,131

 

Non-cash portion of restructuring costs and charges

 

1,679

 

 

 

 

Provision for allowance for credit losses

 

3,132

 

 

 

10,979

 

Stock-based compensation

 

12,240

 

 

 

9,670

 

Amortization of deferred financing costs, debt discount and premium

 

1,320

 

 

 

1,242

 

Debt extinguishment costs

 

 

 

 

410

 

Deferred income taxes

 

6,752

 

 

 

(11,340

)

Loss (gain) on sales of assets

 

406

 

 

 

(240

)

Change in operating assets and liabilities (net of effects of acquisitions):

 

 

 

 

 

Accounts receivable

 

37,452

 

 

 

(20,622

)

Inventories

 

527

 

 

 

(12,017

)

Contract assets, net, prepaid expenses, other current and other assets

 

26,158

 

 

 

12,826

 

Accounts payable, accrued and other liabilities

 

(70,717

)

 

 

37,309

 

Net cash provided by operating activities

 

196,886

 

 

 

196,374

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(69,509

)

 

 

(45,377

)

Investment in and acquisition of business

 

(744

)

 

 

(188,580

)

Proceeds from sales of assets

 

1,167

 

 

 

37

 

Net cash used in investing activities

 

(69,086

)

 

 

(233,920

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Payment of fair value of contingent consideration in Anlin Acquisition

 

(4,348

)

 

 

(2,362

)

Redemption of redeemable non-controlling interest

 

(37,459

)

 

 

 

Proceeds from amounts drawn under revolving credit facility

 

50,000

 

 

 

160,000

 

Payments of borrowing under revolving credit facility

 

(81,352

)

 

 

(83,648

)

Payments of term loan debt

 

 

 

 

(60,000

)

Payments of financing costs

 

 

 

 

(1,526

)

Purchases of treasury stock under repurchase program

 

(82,349

)

 

 

(1,565

)

Income taxes paid from stock withheld relating to vesting of equity awards

 

(7,240

)

 

 

(1,888

)

Distribution to redeemable non-controlling interest

 

 

 

 

(1,665

)

Proceeds from issuance of common stock under ESPP

 

1,108

 

 

 

602

 

Net cash (used in) provided by financing activities

 

(161,640

)

 

 

7,948

 

Net decrease in cash and cash equivalents

 

(33,840

)

 

 

(29,598

)

Cash and cash equivalents at beginning of period

 

66,548

 

 

 

96,146

 

Cash and cash equivalents at end of period

$

32,708

 

 

$

66,548

 

 

PGT INNOVATIONS, INC.

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO THEIR

 

MOST DIRECTLY COMPARABLE GAAP EQUIVALENTS

 

(unaudited - in thousands, except per share amounts and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

Dec. 30,

 

 

Dec. 31,

 

 

Dec. 30,

 

 

Dec. 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Reconciliation to Adjusted Net Income and

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,751

 

 

$

7,700

 

 

$

110,139

 

 

$

98,405

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

 

 

Insurance recovery of business wind-down costs (1)

 

 

-

 

 

 

-

 

 

 

(2,897

)

 

 

-

 

Restructuring costs and charges, net (2)

 

 

-

 

 

 

-

 

 

 

1,722

 

 

 

-

 

Acquisition- and merger-related costs (3)

 

 

5,687

 

 

 

3,523

 

 

 

6,738

 

 

 

4,773

 

Executive severance costs (4)

 

 

-

 

 

 

-

 

 

 

942

 

 

 

-

 

Cyberattack recovery costs (5)

 

 

-

 

 

 

415

 

 

 

206

 

 

 

415

 

Trade name impairment charges (6)

 

 

5,500

 

 

 

7,423

 

 

 

5,500

 

 

 

7,423

 

Triple Diamond Glass start-up costs (7)

 

 

1,386

 

 

 

-

 

 

 

1,386

 

 

 

-

 

Other corporate costs (8)

 

 

321

 

 

 

-

 

 

 

321

 

 

 

-

 

Asset impairment charges (9)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,131

 

Adjustments to contingent consideration (10)

 

 

-

 

 

 

381

 

 

 

-

 

 

 

5,432

 

Hurricane Ian-related costs (11)

 

 

-

 

 

 

20

 

 

 

-

 

 

 

1,868

 

Tax gross-up payment (12)

 

 

-

 

 

 

(59

)

 

 

-

 

 

 

368

 

CGI Commercial relocation costs (13)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

277

 

Debt extinguishment costs (14)

 

 

-

 

 

 

410

 

 

 

-

 

 

 

410

 

Product line rationalization and transition costs (15)

 

 

-

 

 

 

682

 

 

 

-

 

 

 

682

 

Tax effect of reconciling items

 

 

(3,399

)

 

 

(3,339

)

 

 

(3,669

)

 

 

(6,194

)

Adjusted net income

 

$

14,246

 

 

$

17,156

 

 

$

120,388

 

 

$

115,990

 

Weighted-average diluted shares

 

 

57,507

 

 

 

60,441

 

 

 

58,700

 

 

 

60,319

 

Adjusted net income per share - diluted

 

$

0.25

 

 

$

0.28

 

 

$

2.05

 

 

$

1.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

$

15,889

 

 

$

15,114

 

 

$

62,298

 

 

$

60,198

 

Interest expense, net

 

 

7,435

 

 

 

7,755

 

 

 

31,077

 

 

 

28,879

 

Income tax expense

 

 

1,598

 

 

 

2,756

 

 

 

38,010

 

 

 

32,666

 

Reversal of tax effect of reconciling items for
adjusted net income above

 

 

3,399

 

 

 

3,339

 

 

 

3,669

 

 

 

6,194

 

Stock-based compensation expense

 

 

3,186

 

 

 

2,032

 

 

 

12,240

 

 

 

9,670

 

Adjusted EBITDA

 

$

45,753

 

 

$

48,152

 

 

$

267,682

 

 

$

253,597

 

Adjusted EBITDA as percentage of net sales

 

13.4%

 

 

14.1%

 

 

17.8%

 

 

17.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents an insurance recovery gain relating to the wind-down of the commercial portion of our New South acquisition. Proceeds from the insurance recovery totaled $5.0 million. We previously recorded an other receivable of $2.1 million, representing the low end of our range of estimated recovery amounts, resulting in a gain of $2.9 million, classified within selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023.

(2) Represents net costs and charges relating to our management-approved plan to exit the North Carolina market relating to our NewSouth brand. As a result, we determined to close our NewSouth showrooms in Raleigh-Durham and Charlotte, North Carolina, which resulted in net restructuring costs and charges, net, totaling $1.7 million, including $2.5 million in the second quarter of 2023, partially offset by a gain of $0.8 million in the third quarter of 2023 relating to the forgiveness of a portion of the operating lease liability by the landlord of the Charlotte, NC location, which we satisfied in the third quarter of 2023. Of the $2.5 million in restructuring costs and charges in the second quarter of 2023, $2.0 million represents the total impairments of the right-of-use assets of the leases of the Raleigh-Durham and Charlotte, North Carolina showroom facilities, and $0.4 relates to write-offs of the related leasehold improvements. The remainder represents personnel-related costs, which were paid by the end of the 2023 second quarter.

(3) In 2023, represents acquisition-related costs, including expenses totaling $5.6 million relating to the terminated merger agreement with Masonite, transfer taxes assessed to the Company in 2023 relating to the Anlin acquisition in the first quarter of 2023, and costs relating to the redemption of the 25% non-controlling interest in Eco, classified within selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023. In 2022, represents costs relating to the Martin acquisition.

(4) Represents severance costs relating to the termination of the employment of our former Chief Financial Officer, which was effective close of business February 27, 2023. These costs were paid in and are classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 30, 2023.

(5) In 2023, represents additional cyberattack recovery costs incurred in the second quarter of 2023, classified as selling, general and administrative expense in the accompanying consolidated statement of operations for the year ended December 30, 2023. In 2022, represents cyberattack recovery costs, classified as selling, general and administrative expense in the accompanying condensed statement of operations for the three-months and year ended December 31, 2022. We previously disclosed this event by Current Report on Form 8-K, filed with the SEC on November 7, 2022, and updated the status of this event by Current Report on Form 8-K, filed with the SEC on April 6, 2023.

(6) In 2023, represents impairment charge relating to our Martin trade name classified as impairment of trade name in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023. In 2022, represents impairment charge relating to our WinDoor trade name classified as impairment of trade name in the accompanying consolidated statements of operations for the three-months and year ended December 31, 2022.

(7) Represents start-up costs relating to our previously announced Diamond Glass Thin Triple glass fabrication facility in Prince George County, Virginia, classified as selling, general and administrative expenses in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023.

(8) Represents third-party consulting costs relating to addressing certain personnel matters at our ECO facility in Medley, FL, classified as selling, general and administrative expenses in the accompanying consolidated statements of operations for the three-months and year ended December 30, 2023.

(9) Represents write-offs of property, equipment and other impaired assets, classified as selling, general and administrative expense in the accompanying consolidated statements of operations for the three-months and year ended December 31, 2022.

(10) Represents adjustments to contingent consideration associated with our Anlin Acquisition, classified as selling, general and administrative expenses in the accompanying consolidated statement of operations for the three-months and year ended December 31, 2022.

(11) Represents disruption and recovery costs caused by Hurricane Ian in late-September 2022, of which $1.1 million is classified within cost of sales, and $747 thousand is classified within selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022.

(12) Represents tax gross-up payment required to be made to the non-controlling interest relating to our acquisition of Eco, which we initially estimated to be $1.5 million, but which was ultimately determined to be $1.8 million, a difference of $368 thousand, which is classified within selling, general and administrative expenses in the accompanying consolidated statements of operations for the year ended December 31, 2022.

(13) Represents additional costs relating to the relocation of our CGI Commercial business to a new location in the Miami, FL area, being shared with our Eco Enterprises entity, classified as cost of sales in the accompanying consolidated statement of operations for the year ended December 31, 2022.

(14) In 2022, represents debt extinguishment costs relating to the refinancing of our 2016 Credit Agreement and repayment, in full, of the then existing term loan, classified as debt extinguishment costs in the accompanying consolidated statement of operations for the year ended December 31, 2022.

(15) Represents costs relating to product line rationalizations and transitions, classified within cost of sales in the accompanying consolidated statement of operations for the year ended December 31, 2022.

 

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Contacts

PGT Innovations Contacts:

Investor Relations:
Craig Henderson, 941-480-1600
Senior Vice President and CFO
CHenderson@PGTInnovations.com

Media Relations:
Stephanie Cz, 941-480-1600
Corporate Communications Manager