PGT Innovations, Inc.

Good morning and welcome to PGT Innovation's second quarter 2023 earnings conference call. All participants are in listen-only mode. I'd now like to turn the conference over to PGT Innovation's Senior Vice President of Corporate Development and Treasurer, Brad West. Please go ahead.

Thank you and good morning. Welcome to the PGT Innovation's second quarter 2023 investor conference call. With me on the call today are President and CEO, Jeff Jackson, and our Interim Chief Financial Officer, Craig Henderson. On the investor relations 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 2023 financial performance outlook. Those statements involve risks, uncertainties, and other factors that could cause actual results to differ materially. Additional information on the factors that could cause actual results to differ from expected results is available in the company's most recent SEC file. Additionally, on slide three, note that we report results using non-GAAP financial measures, which we believe provide additional information to help investors compare performance between reporting periods. A reconciliation to the most directly comparable GAAP measures is included in the tables in the earnings release and in the slide presentation appendix. At this time, I will now hand over the call to our company CEO and President, Jeff Jackson.

Thank you, Brad. Good morning, everyone, and thanks for joining us on today's call. Our second quarter financial results released earlier today showcase the commitment of our team members and supplier partners to continue executing in an ever-changing microenvironment. Following record first quarter results, the company delivered sequential increases in both revenue and profitability despite continued economic uncertainty. Turning to slide four, we delivered total revenue of $385 million and adjusted EBITDA of $74 million or 19.1% in the second quarter. We were able to deliver strong probability in the quarter due to our continued focus on productivity and operational execution. Our sequential revenue grew 2%, driven by increases in unit volume, and our adjusted EBITDA increased 5% sequentially. The sequential growth was driven by a 6% increase in repair and remodeling channels, partially offset by continued weakness in the new construction, which declined 3% sequentially. The housing market continues to show signs of optimism. with new home construction activity partially offsetting the impact of the lock-in effect on existing home sales. We continue to maintain a normal price-cost relationship and are getting near standard lead times and delivery across all our brands. Next, on slide five, let's take a closer look at the second quarter, our sales trends, and key initiatives. During the quarter, we generated total revenue of $385 million. Sales in our Southeast segment were $288 million, an increase of $6 million versus the first quarter of 2023. Sales grew 2% sequentially and contracted 6% versus the prior year's second quarter. Our Southeast brands continue to show resilience in a down market. Our sequential revenue growth was driven by a 3% increase in R&R sales, partially offset by less than 1% decline in new construction sales. This is a record prior year quarter where the southeast sales grew 27%, R&R sales declined 1%, and new construction sales were off 15%. Our southeast year-over-year sales decline in the second quarter was primarily due to continued housing market volatility. We recently announced the acquisition of the remaining 25% of Echo Enterprises LLC. We first acquired the initial 75% ownership in Echo in 2021 to accelerate growth, expand margins, and strengthen our supply chain by adding additional glass production capacity. We have been able to leverage the glass capabilities of the Echo business to vertically integrate our other brands. and are excited to finalize the purchase of the remaining portion of the business. Sales in our western segment were $97 million, an increase of $2 million versus the first quarter of 2023. Sales in the west grew by 2% sequentially. Western organic sales contracted 12% versus the prior year quarter. The year-over-year comps out west were challenging due to cycling a 39% increase over organic sales in the second quarter of 2022, and the segment's bias towards a slower new construction market. We saw positive momentum in both all our Western segments in June and July. During the quarter, we relaunched our Western Series 7600 multi-slide door. This product provides extreme opening sizes, including max panel heights of 15 feet and is available in multiple configurations this new product continues to provide our leading edge performance but at much larger sizes our martin garage door acquisition which closed in late 2022 delivered strong sequential growth off a weather impacted first quarter We are actively committing resources to execute on our sales synergies plans across our western region and into our new south locations. Martin will be launching our new Keystone Pan Door in the third quarter, featuring a design using inline stamping with a minimal rib on the door face. This innovative new design provides the clear lines that homeowners desire. During the second quarter, we held grand openings for our New South retail showrooms in Dallas, Fort Worth, and San Antonio, Texas. These new locations offer all our custom New South products along with Martin Garage doors. Our Austin showroom will be opening later this year. We are excited about the expansion of the New South brand into major metro markets in Texas and look forward to adding Martin Garage doors to other New South locations later this year. Throughout this volatile macroeconomic environment, we remain focused on controlling cost and while delivering on our value proposition to customers. This commitment has allowed us to achieve and maintain strong profitability. We will continue to invest in our brands, our capacities, and automations, and our people to outperform the competition and deliver returns for our investors both in the near and long term. We continued our commitment to innovations, which is underlies everything we do. We are proud to announce that we will be launching our first product to feature diamond glass, our impact resistant glass using technology from our exclusive partnership with Corning in the third quarter. Our premium wind door brand will transition to diamond glass and will be the first to receive the improved clarity, lower weight, three times scratch resistant, and improved energy efficiency while maintaining the impact resistance that customers expect from our industry-leading impact brands. I'm excited to report Windor products featuring Diamond Glass will be available at no increase in price, bringing improved performance with no increased cost to our customers. As we scale up our operations at our glass facilities in Venice, we will be adding Diamond Glass as a premium option to our PGT-branded products. We continue to execute on our plan to deliver our thin triple insulated glass units to other window and door manufacturers in early 2024. We remain committed to delivering products with features, performance, and value demanded by our builders and customers. Our open order backlog is $247 million at the end of the quarter, up $11 million from the first quarter, primarily from demand in our southeast segment. Regarding our shareholder rights plan, the circumstances described in our March 30th press release necessitating the implementation of the plan continue to exist. We continue to engage in constructive dialogue with all our investors and we welcome all their perspectives. We are always open to opportunities to maximize shareholder value. We continue to execute on our plan to create long-term value for all our shareholders including our $250 million share repurchase program. During the second quarter, we invested $19.8 million in open market transactions to repurchase our shares for a total of $45.4 million in share repurchases year-to-date. Now I'd like to turn the call over to Craig Henderson to review our second quarter results in greater detail.