Hurricane Irma Put a $13 Million Hole In PGT’s SalesNovember 2nd, 2017 by Editor
The effects of Hurricane Irma decreased sales for PGT Innovations by $13 million in the third quarter of 2017 and added $1.1 million in operating costs, according to the company’s latest financial report, which was released this week. It’s the first major look at the busy hurricane season’s direct economic impact on the fenestration industry.
PGT saw net sales of $126.9 million, a decrease of $2.9 million, or 2 percent, compared to the same period in 2016.
“During our third quarter, we delivered solid results through July and August, with sales up 5 percent compared to the same two-month period last year,” said Rod Hershberger, CEO of PGT Innovations. “Additionally, our adjusted EBITDA margin during this period was approximately 19.3 percent, compared to 17.9 percent during our second quarter of this year.
But on September 10, Hurricane Irma, a Category 4 storm with sustained 130-mph winds, made landfall in the Florida Keys.
“Impacts from this 400-mile-wide storm were felt over the entire state of Florida, which represents 90 percent of our consolidated sales,” Hershberger said.
Disruptions caused by Irma, including plant closures that lasted nearly a week, were a big part of the $13 million sales drop. The $1.1 million increase in operating costs included the company’s community outreach efforts to help those affected by the storm.
Despite that, Hershberger expressed relief that the strong storm didn’t do more damage.
“We are thankful none of our team members were hurt, and there was minimal damage to our facilities,” Hershberger said. “I am incredibly proud of how our over 2,800 team members at our facilities in Miami, Venice, and Orlando, who serve our vast network of over 1,300 dealers, responded to such an intense weather event. It is a testament to our culture and a wonderful example of how we can rise above great challenges.”
Hurricane Irma killed 134 people and caused more than $68 billion in damages across the Caribbean and Florida.
Jeff Jackson, president of PGT Innovations, said the company was on track for record sales in the third quarter before Irma hit.
“As Irma advanced towards Florida, daily order levels began to decrease, dropping by as much as 50 percent as many customers suspended operations,” he said. “At our facilities, we were forced to cease operations for a period of up to six days in certain locations, during which we did not ship or produce any products.”
However, Jackson said the situation improved dramatically in October as repair orders started rolling in.
“While the first two weeks of October showed continued signs of Hurricane Irma’s impact, stronger order levels in the second half of October resulted in sales for the month of $41.5 million, up 12 percent over October 2016,” he said. “Additionally, our customers have confirmed a sustained increase in call volume while they work to return to normal operations post-storm.”
Jackson said the impact of Hurricane Irma could push homeowners to take storm preparation more seriously in the future.
“This hurricane season has certainly heightened awareness for consumers that have never experienced a hurricane and has invigorated new conversation within our communities about being better prepared for these types of storms,” Jackson said. “As leaders in the industry, we know how critical impact-resistant products are to ensure the safety of people and property during severe weather, and we plan to make additional advertising investments in the fourth quarter, and into 2018, to be on the forefront of that renewed awareness to help better educate consumers and builders.”
And despite the storm damage, the company expects to finish 2017 within the previous guidance range for consolidated sales of $490 million to $500 million, he said.
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