PGT Innovations, Inc.

Good day and welcome to the PGT Innovations, Inc. First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Brad West, Senior Vice President of Corporate Development and Treasurer. Please go ahead.

Thank you. Good morning and welcome to the PGT Innovations first quarter 2022 investor conference call. With me on the call today are President and CEO Jeff Jackson and our Chief Financial Officer John Coons. On the investor section of our company website, You will find the earnings press release issued earlier today, as well as the slide presentation we have posted to accompany today's discussion. This webcast is being recorded and will be available for replay on the company's website. Before we begin our prepared remarks, please direct your attention to the disclosure statement on slide two of the presentation, as well as the disclaimers included in the earnings press release and our SEC filings that discuss forward-looking statements. Today's remarks contain forward-looking statements including statements about our 2022 financial performance outlook. Those statements involve risks, uncertainties, and other factors that could cause actual results to differ materially. Additional information on factors that could cause actual results to differ from expected results is available in the company's most recent SEC filings. Additionally, on slide three, note that we report results using non-GAAP financial measures, which we believe provide additional information to help investors compare prior and present performance. A reconciliation to the most directly comparable gap measures is included in the tables attached to the earnings release and in the appendix of the slide presentation. At this time, I will now hand over the call to our company's CEO and president, Jeff Jackson.

Thank you, Brad, and good morning, everyone, and thank you for joining us on today's call. We started off the year by delivering a record quarter. I'm very proud of the PGT Innovations team and everyone's efforts to go above and beyond to service our customers. Our growth each quarter is the result of our steady efforts to improve PGT Innovations. From our hiring and training, supply chain management, manufacturing, and automation processes, we have done this while never losing sight of safety for our team members as our number one goal. Turning to the key messages for the quarter on slide four. We hit the ground running in 2022, carrying forward this strong growth momentum from the past year. Our net sales increased 32 percent to a record $359 million in the first quarter compared to the prior year. This includes organic growth of 17 percent, reflecting the strength of our existing brands, while our latest acquisition, Anlan Windows and Doors, added another $32 million and closed a record quarter. performing above our internal acquisition model estimates. Despite inflationary pressures on material and labor costs and overall supply chain challenges, we were able to expand adjusted EBITDA margins by 90 basis points compared to the first quarter of 2021. The main drivers of our improvement include a series of pricing actions taken throughout 2021 including six to 12% price increases for new orders that originated after November 1st of last year. Our operating performance improved substantially during the quarter, with a 25% reduction in lead times for certain brands. As always, we work to control cost whenever possible through a consistent focus on marketing spend, quality, and our manufacturing processes. Additionally, our ability to increase production while improving margins would not have been possible without the successful management of our supply chain. We have worked hard to obtain required volumes of aluminum, and our hedging programs help minimize the impacts of pricing on an extremely volatile market. Our teams continue to monitor this closely and will take pricing actions to offset any sharp increases in spot prices. Additionally, our echo acquisition has provided additional glass manufacturing capacity, minimizing the impact of the shortages of glass we've seen in our industry. We ended the first quarter with a cash balance of $104 million and an adjusted run rate net leverage of 2.7 times. Our balance sheet strength gives us the flexibility to effectively allocate capital as we look to continue to grow both organically and through strategic acquisitions. We are well positioned to meet strong demand across our key markets and will continue our growth over the balance of 2022 and beyond. Slide five presents our first quarter sales trends. Organic sales for the quarter grew 14 percent in our southeast region, while organic sales in our western region grew 39 percent versus the prior year quarter. New South continues to perform very well with sales growth of 17%. Our three new stores opened in 2021 help contribute to this growth. We are currently in various stages of opening new stores in Atlanta, Dallas, Fort Worth, and San Antonio. This will bring total store count at the end of the year to 17. For both our Dallas and Fort Worth stores, leases have been signed and store operators are finishing up their training. Our Atlanta store has already taken orders of $2.7 million, and we are planning our official ribbon cutting in July. While our focus on improving manufacturing performance has allowed us to decrease our average lead times and improve our on-time and full metrics, continued strong demand has resulted in a backlog of $347 million, down slightly from our $356 million backlog at the end of the fourth quarter. Our backlog decline during the quarter is mostly a result of continued improved operations resulting in shorter lead times. In the Florida region, we did see a reduction in order growth rate during Q1, primarily due to the impact of a prior year price increase pulling forward demand into Q1 of 2021. We are seeing strong recovery in Q2 of 2022, ahead of our most recent price increase. Our Q2 quarter to date orders are up 30%. Perhaps one of the most exciting pieces of information I would like to share with you today is last week, Florida Governor Ron DeSantis signed House Bill 7071. This bill provides tax relief in Florida for a number of building product categories. For the first time ever, Floridians will receive a two-year sales tax exemption for impact-resistant windows and doors and garage doors, among other items. This important home hardening initiative provides tax relief to homeowners, allowing them to harden their homes against the devastating storms by installing impact-resistant products. I want to also thank Florida CFO Jimmy Petronas. I first mentioned this concept to him over two years ago. He worked with us to get this approved in both the Florida Senate and House. This is a great benefit for homeowners in Florida to improve the safety and value of their homes, and we think this program will be incremental positive for impact-resistant building products in the Florida R&R market. Slide six summarizes our strategic and operational framework for profitable growth as we seek to create long-term value for shareholders while servicing our customers and communities. Our first pillar is customer-centric innovation. which allows us to offer products with the features, performance, and value our builders and customers demand. Our second pillar is investing in talent. And since the beginning of 2021, we have invested heavily in bringing new team members on board. We support our new hires by providing the training to enable them to be successful by working safely and meeting our high quality standards. Having the right team members in the right manufacturing locations is a consistent focus in today's tight labor market. We continue to attract and retain talent by offering competitive benefits and maintaining a culture where employees know they are valued. Over the past 12 months, we have increased our average starting hourly rate by 14 percent. Given the significant inflation our country is experiencing, This helps our team members maintain a good quality of life. During the quarter, we launched a new training location for our Venice team, which provides a controlled learning environment for our team members. All new Venice team members will start their PGC Innovations careers at Coopy World, named for George Coopy, a long-time leader who started our first training programs back in the 1990s. We believe this facility will result in a higher level of job satisfaction, improved quality, and greater safety. In addition, we expanded our partnership with our local Venice high school. Our Pathways to PGTI program provides an opportunity for students to explore potential career paths and gain skilled trade experiences in the manufacturing environment by partnering with PGTI mentors. We are excited about the program's potential to help our high school students, and we are in the process of rolling out this program at all our locations. Our third pillar is scaling our business. For several quarters, we have been intently focused on improving our manufacturing processes so that we can reduce our lead times and meet growing demand. Just this quarter, this has resulted in lower lead times, more efficient warehousing operations, and less back orders. will have experienced a 50% improvement in our Venice sites. Our fourth pillar is allocating free cash flow to achieve profitable growth. We are consistently evaluating opportunities to grow through new product development, improved production processes, or the right strategic acquisitions. We will continue to be disciplined in our capital deployment this year as we look for creative opportunities to grow our business while delivering above-market results. Currently, we are evaluating a number of possible acquisitions. All our acquisition targets have come from relationships built over time as part of our strategic planning processes. Now, I'd like to turn the call over to John to review our first quarter results in greater detail. John?