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PGT Innovations' (PGTI) Q3 Earnings & Sales Beat, Stock Up
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PGT Innovations, Inc. reported its third-quarter 2022 (ended Oct 1, 2022) results. Both earnings and net sales surpassed the Zacks Consensus Estimate and increased year over year.
Despite the impact of Hurricane Ian, the tight labor market, rising interest rates and intense inflation, solid organic growth, accretive acquisitions, focus on operational improvements and pricing actions drove the result.
Shares of this national leader in premium windows and doors jumped more than 3% in the pre-market trading session on Nov 10.
John Kunz, senior vice president and chief financial officer of PGTI, stated, “Our previous fiscal year 2022 guidance did not contemplate the impacts of Hurricane Ian, the previously disclosed cybersecurity incident, or our acquisition of Martin Door. Our facilities did not sustain damage from the storm, but our employees could not safely travel to work, limiting our ability to produce in October. Additionally, the cybersecurity incident we experienced on November 5th impacted our ability to process orders and produce in November. As such, we are updating fiscal year 2022 guidance for net sales in the range of $1.460 billion to $1.490 billion and for Adjusted EBITDA in the range of $245 million to $255 million.”
Inside the Headline Numbers
The company reported adjusted earnings of 55 cents per share, surpassing the consensus mark of 53 cents by 3.8% and increasing 111.5% year over year.
Its net sales of $385.84 million surpassed the consensus mark of $384.89 million by 0.3% and grew 28.4% year over year. This was driven by strong organic growth of 17%, of which Southeast reported 13% growth and Western recorded a 38% year-over-year rise. Anlin Windows & Doors contributed $35 million to total net sales.
Quarter ending Open Order backlog of $282 million was down from $356 million reported at the end of third-quarter 2021 due to shortened delivery lead times.
Margins
The company’s gross profit increased 43.8% year over year to $149.8 million. Also, a gross margin of 39% expanded 410 basis-point (bps) year over year. Adjusted EBITDA increased 57.7% from the prior-year quarter’s levels to $68.1 million and margin surged 320 bps to 17.6%.
Balance Sheet
As of Oct 1, 2022, PGT Innovations had cash and cash equivalents of $218.8 million compared with $96.1 million at the fiscal 2021-end. Long-term debt was $626.6 million compared with $625.7 million at fiscal 2021-end.
Net cash provided by operating activities was $152.1 million in the first nine months versus $19.8 million a year ago.
2022 Guidance Updated
The company now expects net sales within $1.46-$1.49 billion versus the prior projection of $1.45-$1.525 billion. This reflects year-over-year growth of 26-28%. Owing to the continued economic woes, PGTI now anticipates adjusted EBITDA in the range of $245-$255 million from $250-$260 million expected earlier. The new projection reflects 45-51% year-over-year growth.
For the fourth quarter, the company expects depreciation and amortization to be within $14-$15 million, interest expense of approximately $8 million, stock-based compensation of nearly $3 million, capital expenditure (as a percentage of net sales) in 3-4% range and a tax rate of 25%.
Recent Activity
Post third quarter end, the company acquired Martin Door, expanding its product lines in the adjacent garage door market category. Headquartered in Salt Lake City, UT, Martin is a manufacturer of the “World’s finest, safest garage doors”, and is a leading custom manufacturer of premium overhead garage doors and hardware serving the Western U.S. residential and commercial markets.
Additionally, PGT Innovations entered into a new five-year $250 million revolving credit facility to fund the Martin transaction and cash on hand. Also, it extended maturities to create more liquidity to support growth.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. However, sales declined from the year-ago quarter’s figure and lagged the consensus mark.
For 2022, OTIS expects adjusted net sales to be within $13.4-$13.5 billion, lower than the $13.6-$13.8 billion projected earlier. Adjusted earnings per share are anticipated to be $3.11-$3.15, suggesting 5-7% year-over-year growth. This is down from the prior projection of $3.17-$3.21 per share.
TopBuild Corp. (BLD - Free Report) reported stellar results for third-quarter 2022. Its earnings and revenues surpassed their respective Zacks Consensus Estimate and improved significantly on a year-over-year basis. Solid contributions from all three end markets that BLD serves (residential, commercial and industrial), along with operational efficiency, drove the results.
For 2022, TopBuild expects sales between $4.95 billion and $5 billion versus $4.8-$4.9 billion expected earlier. The estimated figure indicates an increase from $3.49 billion. Adjusted EBITDA is projected within $915-$935 million compared with $860-$900 million projected earlier. This suggests growth from $605.9 million reported in 2021.
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PGT Innovations' (PGTI) Q3 Earnings & Sales Beat, Stock Up
PGT Innovations, Inc. reported its third-quarter 2022 (ended Oct 1, 2022) results. Both earnings and net sales surpassed the Zacks Consensus Estimate and increased year over year.
Despite the impact of Hurricane Ian, the tight labor market, rising interest rates and intense inflation, solid organic growth, accretive acquisitions, focus on operational improvements and pricing actions drove the result.
Shares of this national leader in premium windows and doors jumped more than 3% in the pre-market trading session on Nov 10.
John Kunz, senior vice president and chief financial officer of PGTI, stated, “Our previous fiscal year 2022 guidance did not contemplate the impacts of Hurricane Ian, the previously disclosed cybersecurity incident, or our acquisition of Martin Door. Our facilities did not sustain damage from the storm, but our employees could not safely travel to work, limiting our ability to produce in October. Additionally, the cybersecurity incident we experienced on November 5th impacted our ability to process orders and produce in November. As such, we are updating fiscal year 2022 guidance for net sales in the range of $1.460 billion to $1.490 billion and for Adjusted EBITDA in the range of $245 million to $255 million.”
Inside the Headline Numbers
The company reported adjusted earnings of 55 cents per share, surpassing the consensus mark of 53 cents by 3.8% and increasing 111.5% year over year.
PGT, Inc. Price, Consensus and EPS Surprise
PGT, Inc. price-consensus-eps-surprise-chart | PGT, Inc. Quote
Its net sales of $385.84 million surpassed the consensus mark of $384.89 million by 0.3% and grew 28.4% year over year. This was driven by strong organic growth of 17%, of which Southeast reported 13% growth and Western recorded a 38% year-over-year rise. Anlin Windows & Doors contributed $35 million to total net sales.
Quarter ending Open Order backlog of $282 million was down from $356 million reported at the end of third-quarter 2021 due to shortened delivery lead times.
Margins
The company’s gross profit increased 43.8% year over year to $149.8 million. Also, a gross margin of 39% expanded 410 basis-point (bps) year over year. Adjusted EBITDA increased 57.7% from the prior-year quarter’s levels to $68.1 million and margin surged 320 bps to 17.6%.
Balance Sheet
As of Oct 1, 2022, PGT Innovations had cash and cash equivalents of $218.8 million compared with $96.1 million at the fiscal 2021-end. Long-term debt was $626.6 million compared with $625.7 million at fiscal 2021-end.
Net cash provided by operating activities was $152.1 million in the first nine months versus $19.8 million a year ago.
2022 Guidance Updated
The company now expects net sales within $1.46-$1.49 billion versus the prior projection of $1.45-$1.525 billion. This reflects year-over-year growth of 26-28%. Owing to the continued economic woes, PGTI now anticipates adjusted EBITDA in the range of $245-$255 million from $250-$260 million expected earlier. The new projection reflects 45-51% year-over-year growth.
For the fourth quarter, the company expects depreciation and amortization to be within $14-$15 million, interest expense of approximately $8 million, stock-based compensation of nearly $3 million, capital expenditure (as a percentage of net sales) in 3-4% range and a tax rate of 25%.
Recent Activity
Post third quarter end, the company acquired Martin Door, expanding its product lines in the adjacent garage door market category. Headquartered in Salt Lake City, UT, Martin is a manufacturer of the “World’s finest, safest garage doors”, and is a leading custom manufacturer of premium overhead garage doors and hardware serving the Western U.S. residential and commercial markets.
Additionally, PGT Innovations entered into a new five-year $250 million revolving credit facility to fund the Martin transaction and cash on hand. Also, it extended maturities to create more liquidity to support growth.
Zacks Rank & Peer Releases
PGT Innovations currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Rentals, Inc. (URI - Free Report) reported third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
URI also lifted its full-year guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in third-quarter 2022. Its earnings surpassed the Zacks Consensus Estimate and rose on a year-over-year basis. However, sales declined from the year-ago quarter’s figure and lagged the consensus mark.
For 2022, OTIS expects adjusted net sales to be within $13.4-$13.5 billion, lower than the $13.6-$13.8 billion projected earlier. Adjusted earnings per share are anticipated to be $3.11-$3.15, suggesting 5-7% year-over-year growth. This is down from the prior projection of $3.17-$3.21 per share.
TopBuild Corp. (BLD - Free Report) reported stellar results for third-quarter 2022. Its earnings and revenues surpassed their respective Zacks Consensus Estimate and improved significantly on a year-over-year basis. Solid contributions from all three end markets that BLD serves (residential, commercial and industrial), along with operational efficiency, drove the results.
For 2022, TopBuild expects sales between $4.95 billion and $5 billion versus $4.8-$4.9 billion expected earlier. The estimated figure indicates an increase from $3.49 billion. Adjusted EBITDA is projected within $915-$935 million compared with $860-$900 million projected earlier. This suggests growth from $605.9 million reported in 2021.