PGT Reports Solid Growth Despite COVID-19 Outbreak in First QuarterMay 16th, 2020 by Emmariah Holcomb
The first quarter in 2020 has concluded for several industry businesses including PGT Innovations Inc. (PGT) who recently reported its gains for the three month period, which ended April 4, 2020. The report highlighted its net sales growth, which increased by 27%, which represents $220 million.
“We started the year by achieving significant sales growth, reflecting the overall strength of our brands in the housing market going into 2020,” said Jeff Jackson, PGT CEO and president, when reflecting on the company’s first quarter.
According to the company’s financial report, its net income increased by 89%, to $16 million. Jackson noted the company’s organic growth of 18% in its Southeast business unit during a financial conference. Meanwhile, the company reported a 14% growth for its Western business unit, which PGT noted included an extra selling week within the first quarter.
“Additionally, the newest addition to our Company, NewSouth Window Solutions, which we acquired on February 1, 2020, has started off strong, growing orders more than 50% compared to the prior year quarter,” Jackson said. “We saw strong momentum in new order entries across our entire business throughout most of the first quarter, prior to the change in the macro environment caused by the global COVID-19 pandemic.”
The window and door company was classified as essential, according to Jackson, because of its impact-resistant offerings. He also mentioned the company experienced a 10% decline in its order entries for the month of April in its Florida markets, when compared to the same time period in 2019. According to the financial report, the company adjusted its operations to meet the new demand.
“In some areas with more stringent building restrictions related to the pandemic, such as California, Texas and Nevada, we are seeing softer order patterns, down 20-30% for April as compared to the prior year, but sequentially down over 40% versus the first quarter growth rate,” Jackson said. “Despite a great start to the year, the uncertainty of the duration and extent of the pandemic and the unfavorable economic environment it has created has limited our ability to forecast the remainder of the year. Assuming our markets do not experience any significant increases in COVID-19 cases and their economies continue to reopen, we do expect to see a modest recovery in order trends and related sales as we move throughout the year, with our Florida markets expected to achieve year-over-year growth by year-end.”
The global virus was also a factor in PGT’s previous announcement of
consolidating its Orlando, Fla., manufacturing facility in June 2020. The consolidation will further improve the company’s operational efficiency, according to the financial report.
“We continue to focus on maintaining ample liquidity, finishing the quarter with total liquidity of $144 million, including a cash balance of $68 million and undrawn revolver capacity of $76 million,” said Sherri Baker, senior vice president and chief financial officer. “Given the potentially challenging economic outlook, we have taken several actions intended to preserve cash by reducing discretionary costs and carefully prioritizing capital expenditures, while continuing to deliver the products needed by our customers.”
Company leaders recognized its employees throughout the financial report for their consistency.
“I am extremely proud of our employees for continuing to deliver the high-quality products and service our customers expect, while maintaining as a top priority the safety and health of our team members, customers and communities,” said Jackson. “We believe we are well positioned to manage through the current economic challenges and remain positive about our competitive position in our industry over the longer term.”