Imperial Capital
6th Annual Global Opportunities Conference
September 19, 2012
Forward-Looking Statements This presentation and related remarks made by representatives of PGT, Inc. and its affiliates (“PGT”) in connection herewith contain confidential and proprietary information regarding PGT. By accepting this presentation and participating in the related discussion, the recipient agrees not to divulge any such information to any other party and will return this presentation together with any copies or descriptions thereof (in any media) to PGT immediately upon request therefore.
The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and beliefs, as well as a number of assumptions concerning future events. These statements are subject to risks, uncertainties, assumptions and other important factors. You are cautioned not to put undue reliance on such forward-looking statements because actual results may vary materially from those expressed or implied. PGT, Inc., assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. PGT makes no representation or warranty, express or implied as to the accuracy or completeness of the information contained in this presentation, and nothing contained herein or in related remarks made by representatives of PGT in connection herewith is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Any recipient hereof should conduct its own independent analysis of PGT and the data contained or referenced to herein.
Management Presenters • Co-founder of PGT in 1980
• 30 years with PGT in a variety of strategic and operating positions
• Joined PGT in 2005
• 18 years of financial and accounting experience with various Fortune 500 companies
• Background in public reporting, operations, human resources, logistics and manufacturing
PGT is led by a strong and experienced management team 7 Executive Team Members – combined have over 100 years window experience
Jeff Jackson Executive Vice President
and Chief Financial Officer
Rod Hershberger President and CEO
Nasdaq Ticker: PGTI
Recent Price $3.26 as of close August 28, 2012
Shares Outstanding: 53.70M as of close August 28, 2012
Analyst Coverage: Deutsche Bank, JMP Securities,
Ladenburg, Raymond James
PGT Overview
Aluminum
12% Vinyl
8% Arch Systems
3%
Eze-
Breeze/Other
6%
WinGuard
(Impact
Resistant)66%
PremierVue5%
2011 Sales$167.3 million
30-year history of quality and innovation Clear market leader
Pioneered impact-resistant market in 1992 following Hurricane Andrew
Offers the broadest line of impact-resistant windows and doors.
Complete line of premium aluminum and vinyl windows and doors
Provides maximum customer service Custom, make-to-order products
Minimal lead times and on-time delivery
Outstanding before and after-sale support
Highly fragmented industry
PGT is the nation’s leading manufacturer of residential impact-resistant window and doors
PremierVue 4%
Aluminum12% Vinyl
7%Arch
Systems1%
Eze-Breeze/
Other
7%
WinGuard (Impact
Resistant)
69%
First Half of 2012$84.7 million
Expansive Product Offering • PGT offers premium brands across a diverse
and comprehensive line of products
Note: 2005 percentages pro forma for the divestiture of NatureScape.
Windows and Doors Porch
Enclosures
Product Category WinGuard Architectural
Systems Aluminum Vinyl PremierVue Eze-Breeze
PGT Branding
Product Description Impact-resistant windows and doors Combine heavy-duty frames (aluminum and vinyl) with special laminated glass
Heavy duty aluminum frame construction Designed for increased wind and water loads required for taller buildings
Aluminum frame windows and doors Target markets with warmer/humid climates due to strength and durability
Vinyl frame windows and doors Energy efficient product for any climate; meets 30/30 requirement of 09 ARRA
Newest product offering; heavy duty vinyl frame impact window for high end residential and commercial First R-5 impact window in the industry
Lighter-weight non-glass porch enclosure products Used for repair/remodel additions and enclosures
% of 2011 Sales 66% 3% 12% 8% 5% 6%
% of first half 2012 Sales 69% 1% 12% 7% 4% 7%
Impact sales increased as a percentage of total sales from 61% in 2005 to 74% in 2011
PGT is the Clear Leader in the Impact- Resistant Window and Door Market
WinGuard brand is synonymous with impact-resistant windows and doors
Target markets in hurricane-prone coastal states with increasingly stringent building codes
Dominant market share in our core Florida market
Over 3 million WinGuard units installed with zero reported impact failures
Additional advantages: Superior performance, ease-of-use, insurance incentives, security features, noise reduction, etc.
Protection always in place
First R-5 impact window
Meets DOE requirements for government projects
DOE/EPA pushing for R-5 (U.20) as “the standard” by 2015-2020
Grown from 1 product to 44 in 4 product lines
Aluminum residential
Aluminum commercial
Vinyl residential
PremierVue
PGT WinGuard vs. The “Competition”
Superior performance
Ease of use
Improved aesthetics
Insurance incentives
Security features
Noise reduction
WinGuard has a number of competitive advantages:
Impact-Resistant Market Provides Long-Term Growth Opportunity
“Passive” (window) protection vs. “active” (shutter) protection
$1.5 – 2.0 billion total market opportunity
Market expanding along Eastern seaboard and Gulf Coast as states adopt and enforce code
International markets/Caribbean increasingly demanding impact-resistant products
Insurance companies providing incentives to ensure impact protection always in place
NOAA forecasts a 10-20 year active storm cycle
(1) Building codes require structures to withstand wind speeds in these ranges * Impact protection required
Impact-Resistant Market
Wind Speeds (mph)(1)
130 to 150 *
120 to 130 *
110 to 120 *
100 to 110 *
90 – 100
Less than 90
PGT’s Core Geographic Market
is in Early Stages of Recovery • Florida’s downturn in new home construction has been significantly more pronounced than in other parts of the U.S.
– Since 2005 peak levels, single-family starts are down nearly 85%
– Since hitting trough levels in 2009, starts have recovered modestly in the last two years; however, starts remain well below normalized levels
• Based on average single-family starts per thousand since 1990, normalized annual starts are estimated to be over 100,000 versus 31,888 starts in 2011
• Given the overbuild that occurred in Florida, we anticipate a prolonged period of time to revert to start levels consistent with longer-term historical averages
0
40
80
120
160
200
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P
Florida Single-Family Housing Starts (in thousands)
FL Single-Family Starts
FL Population (in thousands)
Start per Thousand
31,888
19,057
1.7
31,543
18,496
1.7
25,730
18,496
1.4
39,269
18,389
2.1
63,953
18,251
3.5
132,635
18,058
7.3
193,111
17,736
10.9
172,408
17,343
9.9
146,692
16,959
8.6
122,546
16,668
7.4
107,615
16,349
6.6
97,697
16,049
6.1
99,188
15,111
6.6
95,299
14,908
6.4
86,260
14,683
5.9
87,252
14,427
6.0
79,016
14,185
5.6
93,316
13,962
6.7
89,713
13,714
6.5
80,873
13,505
6.0
68,296
13,289
5.1
81,965
12,938
6.3
35,477
-
-
Leader In Technical Expertise PGT’s expertise is unmatched in the industry and provides a significant competitive advantage
Viewed as the industry expert dating back to early 1990s
Actively involved in the creation of testing standards and building codes
Provide leadership roles in key industry association that drive and/or influence code
Possess more Miami-Date County Notice of Acceptances (NOA’s) than any competitor
Built and tested first impact window in U.S. – Developed first R-5 impact window
Complete in-house product design and testing
Unmatched Manufacturing Capabilities
• Vertically integrated manufacturing (including glass plant and truck fleet) provides a strong competitive advantage
• Cost savings
• Lower lead times
• Outstanding customer service and support
• Synchronous flow manufacturing enables efficient delivery of fully customizable, premium windows
• Every unit is custom made-to-order
• PGT’s culture focuses on growth and continuous improvement to drive output and manufacturing efficiencies
Diverse Distribution Channels
Broad distribution allows PGT to effectively serve its
large customer base and manage demand fluctuations – Highly loyal distribution base with over 1,300 customers
• PGT University has trained approximately 31,000 customers
– Largest customer represents only 2% of 2011 sales
– Top 10 customers represent 16% of 2011 sales
2011 Sales Breakdown End Market Breakdown
Aluminum
Contractors
3%
Distributors and
Lumberyards
48%
Eze-Breeze
Dealers
4%
Window
Replacement
45%
3%
6%
11%
20%
26%27% 27%
0%
5%
10%
15%
20%
25%
30%
1999 2001 2003 2005 2007 2009 2011
Penetration of Impact-Resistant Windows & Doors is Continuing
• Impact-resistant windows and doors gaining penetration from 3% in 1999 to 27% in 2011
– Approximately 75% of impact-resistant market is still using shutters and other “active” protection
• Increased penetration largely due to greater awareness of benefits of impact-resistant windows and doors versus shutters among consumers, builders and contractors
– Superior performance and ease-of-use
– Improved aesthetics
– Insurance incentives (ranging from 20% to 40% savings)
– Security features
– Noise reduction
– Energy efficiency
Impact-Resistant Windows and Doors Penetration
Note: Based on units.
Recent Financial Performance 2011 represented a year of transition for PGT Company further drove efficiency and savings by consolidating all operations into the Florida facility
In 2012, PGT is expected to further benefit from the consolidation of Company operations and an increased focus on top line growth despite continued weakness in the housing market
($ in millions) FY 2009 FY2010 FY 2011 LTM 6/30/12 6M of 2011 6M of 2012
Revenue $166,001 $175,741 $167,276 $166,046 $85,816 $84,586
Y-O-Y Growth (%)
- 5.9% (4.8)% - - (1.4%)
Gross Profit $47,440 $51,223 $46,851 $58,033 $17,234 $28,416
Margin (%) 28.6% 29.1% 28.0% 34.9% 20.1% 33.6%
*Adj. EBITDA $15,101 $16,838 $14,462 $19,431 $6,161 $11,130
Margin (%) 9.1% 9.6% 8.6% 11.7% 7.2% 13.2%
Capital Expenditures
$2,330 $3,197 $3,496 $4,195 $1,652 $2,351
% of sales 1.4% 1.8% 2.1% 2.5% 1.9% 2.8%
*Adjusted for non recurring items including restructuring and consolidation costs, as well as non-cash stock compensation and impairment charges
Gross Margin Near Top of Industry *
36.9%
33.6% 30.9%
26.5% 25.9%
21.7%
18.8%
13.8% 13.5% 13.3% 12.2% 11.7%
0.0%
10.0%
20.0%
30.0%
40.0%
TREX PGTI FBHS HW MAS AWI LEG OC USG LPX AMWD UFPI
*Based on most recent quarterly public filing
Maintaining a Healthy Balance Sheet
($ in millions) Year End 2011 .
First Half 2012 .
Cash & cash equivalents $10.9 $15.7
Working Capital $16.5 $22.6
Capital Assets $48.6 $42.7
Intangibles $51.8 $48.6
Total Debt $45.5 $43.5
Shareholder’s Equity $67.4 $71.0
LTM EBITDA/Total Debt 3.1 2.3
DSO 39 34
Focused Growth Strategy Given the market opportunities and PGT’s strong competitive position, the
Company has engaged a new executive to lead sales and marketing initiatives, including a three-pronged growth strategy:
Increase market share in SE/SW Florida, our two largest markets
Capitalize on end-user shift from “active” to “passive” protection
Leverage PGT’s market-leading position and high barriers to entry
Greater awareness of PGT branded products
> WinGuard
> SpectraGuard
> PremierVue
Leverage sound/security benefits
Continue Growing in Existing Markets
1
Coastline from Mexico to Long Island, with a specific focus on the Gulf Coast and the Carolinas
Aggressive expansion in energy efficient markets
Team members reorganized to drive international growth
New team focused on expanding Eze-Breeze sales and distribution channels
Expand to New Markets
2
Two recent SGD launches, one aluminum and one vinyl, won consecutive Crystal Achievement Awards
PremierVue
> Vinyl framed impact window for high-end residential and commercial
> First R-5 impact window in the industry
SpectraGuard
> Energy efficient new construction and replacement vinyl window
Introduce New Products
3
Investment Update • Despite challenging housing market conditions: –Significant upside exists once the housing market rebounds
–Paid down long term gross debt from $320M in 2006 to $40.5M currently
–Recognized leader in structural and energy code development
• PGT is well positioned to drive strong growth in revenue and profitability:
–Attractive long-term industry fundamentals
–Strengthening housing market environment
–Market-leading position with a 50%+ national market share
–Outstanding manufacturing capabilities
–Multiple growth strategies, including new product introductions
Why Invest in PGT
Market Leader in Core Markets
Competitive Barriers through Superior Brand
Awareness and Technical Expertise
History of Solid Financial Performance
Irrespective of Housing Market
Extensive and Loyal Distribution Channels
Across Balanced End-Markets
Manufacturing Excellence and Continuous Improvement Culture
Focused Growth Strategy