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PGT Innovations (PGTI) Q1 Earnings Top, Revenues Lag Estimates
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PGT Innovations, Inc. reported mixed results for first-quarter fiscal 2023 (ended Apr 1, 2023). Earnings surpassed the Zacks Consensus Estimate but net sales missed the same. Yet, both the metrics grew year over year, backed by strong operational execution, solid pricing actions taken to offset materials and wage inflation, and cost containment measures.
Following the results, shares of this national leader in premium windows and doors plunged about 3% during the trading session on May 11. Investors’ sentiments might have been hurt by the tepid Q2 guidance.
Nonetheless, the company’s backlog grew compared to last quarter, thanks to a solid repair & remodel channel, which offset the softness in housing demand.
Jeff Jackson, PGTI’s president and chief executive officer, stated, “For the total Company, we saw a contraction in new construction demand versus prior year but are cautiously optimistic that new construction will rebound in the coming quarters based on recent industry reports. Fortunately, the strength in our repair and remodel channel has allowed us to offset softness in new construction.”
Inside the Headline Numbers
The company reported adjusted earnings of 56 cents per share, which surpassed the consensus mark of 44 cents by 27.3% and increased 33.3% year over year.
Its net sales of $376.8 million missed the consensus mark of $379 million by 0.5% but grew 5% year over year. This was driven by strong organic growth of 3%. The Southeast segment reported 3.8% net sales growth. The Western segment recorded a 9.1% year-over-year rise.
Total Open Order backlog of $236 million was sequentially up from $235 million on strong R&R demand, partially offset by lower new construction demand. Orders in the Southeast region grew 15% year over year. Western region organic orders declined 16% from the previous year due to wet weather in California and Arizona.
Margins
The company’s gross profit increased 10.9% year over year to $149.2 million. Also, gross margin of 39.6% expanded 210 basis points (bps) year over year. Adjusted EBITDA increased 18.4% from the prior-year quarter’s levels to $70 million and adjusted EBITDA margin surged 210 bps to 18.6%.
Balance Sheet
As of Apr 1, 2023, PGT Innovations had cash and cash equivalents of $48.3 million compared with $66.5 million at fiscal 2022-end. Also, it had a revolver availability of nearly $163 million. Long-term debt was $645.1 million compared with $642.1 million at fiscal 2022-end.
Net cash provided by operating activities was $23.9 million in the first three months of fiscal 2023 compared with $17.3 million a year ago.
In the fiscal first quarter, it repurchased $25.9 million worth of shares under a $250.0 million share repurchase plan.
Q2 Guidance
The company expects net sales within $380-$400 million, down from $407 million reported in the prior year quarter. Owing to the persisting material inflation and market softness, PGTI anticipates adjusted EBITDA in the range of $70-$75 million, down from $78 million reported in the prior year period.
For the second quarter, the company expects depreciation and amortization to be within $15-$16 million, interest expense of approximately $8 million, stock-based compensation of nearly $3 million, capital expenditure (as a percentage of net sales) in the 4%-5% range and a tax rate between 25% and 26%.
PulteGroup Inc. (PHM - Free Report) reported first-quarter 2023 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
PHM witnessed solid gross orders, closings and margins in the first quarter and posted a 28% increase in earnings per share and a 12-month return on equity of 32%.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2023) results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate.
Although earnings and revenues declined on a year-over-year basis on prevailing softness in the market, DHI highlighted that net sales orders increased 73% from the fiscal first quarter, defying the prevailing higher mortgage rates and inflationary pressure.
Meritage Homes Corporation (MTH - Free Report) reported better-than-expected results for first-quarter 2023. Both earnings and total closing revenues surpassed the Zacks Consensus Estimate.
The metrics, however, declined from the year-ago quarter’s levels owing to ongoing macroeconomic woes. Impressively, MTH paid its first-ever cash dividend of 27 cents per share in the first quarter, totaling $9.9 million.
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PGT Innovations (PGTI) Q1 Earnings Top, Revenues Lag Estimates
PGT Innovations, Inc. reported mixed results for first-quarter fiscal 2023 (ended Apr 1, 2023). Earnings surpassed the Zacks Consensus Estimate but net sales missed the same. Yet, both the metrics grew year over year, backed by strong operational execution, solid pricing actions taken to offset materials and wage inflation, and cost containment measures.
Following the results, shares of this national leader in premium windows and doors plunged about 3% during the trading session on May 11. Investors’ sentiments might have been hurt by the tepid Q2 guidance.
Nonetheless, the company’s backlog grew compared to last quarter, thanks to a solid repair & remodel channel, which offset the softness in housing demand.
Jeff Jackson, PGTI’s president and chief executive officer, stated, “For the total Company, we saw a contraction in new construction demand versus prior year but are cautiously optimistic that new construction will rebound in the coming quarters based on recent industry reports. Fortunately, the strength in our repair and remodel channel has allowed us to offset softness in new construction.”
Inside the Headline Numbers
The company reported adjusted earnings of 56 cents per share, which surpassed the consensus mark of 44 cents by 27.3% and increased 33.3% year over year.
PGT, Inc. Price, Consensus and EPS Surprise
PGT, Inc. price-consensus-eps-surprise-chart | PGT, Inc. Quote
Its net sales of $376.8 million missed the consensus mark of $379 million by 0.5% but grew 5% year over year. This was driven by strong organic growth of 3%. The Southeast segment reported 3.8% net sales growth. The Western segment recorded a 9.1% year-over-year rise.
Total Open Order backlog of $236 million was sequentially up from $235 million on strong R&R demand, partially offset by lower new construction demand. Orders in the Southeast region grew 15% year over year. Western region organic orders declined 16% from the previous year due to wet weather in California and Arizona.
Margins
The company’s gross profit increased 10.9% year over year to $149.2 million. Also, gross margin of 39.6% expanded 210 basis points (bps) year over year. Adjusted EBITDA increased 18.4% from the prior-year quarter’s levels to $70 million and adjusted EBITDA margin surged 210 bps to 18.6%.
Balance Sheet
As of Apr 1, 2023, PGT Innovations had cash and cash equivalents of $48.3 million compared with $66.5 million at fiscal 2022-end. Also, it had a revolver availability of nearly $163 million. Long-term debt was $645.1 million compared with $642.1 million at fiscal 2022-end.
Net cash provided by operating activities was $23.9 million in the first three months of fiscal 2023 compared with $17.3 million a year ago.
In the fiscal first quarter, it repurchased $25.9 million worth of shares under a $250.0 million share repurchase plan.
Q2 Guidance
The company expects net sales within $380-$400 million, down from $407 million reported in the prior year quarter. Owing to the persisting material inflation and market softness, PGTI anticipates adjusted EBITDA in the range of $70-$75 million, down from $78 million reported in the prior year period.
For the second quarter, the company expects depreciation and amortization to be within $15-$16 million, interest expense of approximately $8 million, stock-based compensation of nearly $3 million, capital expenditure (as a percentage of net sales) in the 4%-5% range and a tax rate between 25% and 26%.
Zacks Rank & Recent Construction Releases
PGTI currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PulteGroup Inc. (PHM - Free Report) reported first-quarter 2023 results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
PHM witnessed solid gross orders, closings and margins in the first quarter and posted a 28% increase in earnings per share and a 12-month return on equity of 32%.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2023) results, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate.
Although earnings and revenues declined on a year-over-year basis on prevailing softness in the market, DHI highlighted that net sales orders increased 73% from the fiscal first quarter, defying the prevailing higher mortgage rates and inflationary pressure.
Meritage Homes Corporation (MTH - Free Report) reported better-than-expected results for first-quarter 2023. Both earnings and total closing revenues surpassed the Zacks Consensus Estimate.
The metrics, however, declined from the year-ago quarter’s levels owing to ongoing macroeconomic woes. Impressively, MTH paid its first-ever cash dividend of 27 cents per share in the first quarter, totaling $9.9 million.