First Quarter 2022 Financial Results

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6 of 20

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Industrial

Published

2022

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#1FIRST QUARTER 2022 FINANCIAL RESULTS MAY 12, 2022 PGT INNOVATIONS INVENT. BUILD. DELIVER.#2FORWARD LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "assume," "believe," "could," "estimate," "expect," "guidance," "intend," "many," "positioned," "potential," "project," "think," "should," "target," "will," "would" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our acquisition of Anlin; pricing actions benefitting margins; improvement of our operations and business integration; and our Sales and EBITDA guidance. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the impact of the COVID-19 pandemic (the "COVID-19 pandemic" or "Pandemic") and related measures taken by governmental or regulatory authorities to combat the Pandemic, including the impact of the Pandemic and these measures on the economies and demand for our products in the states where we sell them, and on our customers, suppliers, labor force, business, operations and financial performance; unpredictable weather and macroeconomic factors that may negatively impact the repair and remodel and new construction markets and the construction industry generally, especially in the state of Florida and the western United States, where the substantial portion of our sales are currently generated, and in the U.S. generally; changes in raw material prices, especially for aluminum, glass and vinyl, including, price increases due to the implementation of tariffs and other trade-related restrictions, Pandemic-related supply chain interruptions, or interruptions from the conflict in Ukraine; our dependence on a limited number of suppliers for certain of our key materials; our dependence on our impact-resistant product lines, which increased with the acquisition of Eco Enterprises, LLC ("Eco"), and contemporary indoor/outdoor window and door systems, and on consumer preferences for those types and styles of products; the effects of increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our recent acquisitions, including our acquisitions of Anlin Windows & Doors ("Anlin"), and Eco; our level of indebtedness, which increased in connection with our recent acquisitions, including our acquisitions of Anlin and Eco; increases in credit losses from obligations owed to us by our customers in the event of a downturn in the home repair and remodel or new home construction channels in our core markets and our inability to collect such obligations from such customers; the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of Anlin and Eco may not be fully realized or may take longer to realize than expected or that our actual integration costs may exceed our estimates; increases in transportation costs, including increases in fuel prices; our dependence on our limited number of geographically concentrated manufacturing facilities, which increased further due to our acquisition of Eco; sales fluctuations to and changes in our relationships with key customers; federal, state and local laws and regulations, including unfavorable changes in local building codes and environmental and energy code regulations; risks associated with our information technology systems, including cybersecurity-related risks, such as unauthorized intrusions into our systems by "hackers" and theft of data and information from our systems, and the risks that our information technology systems do not function as intended or experience temporary or long-term failures to perform as intended; product liability and warranty claims brought against us; in addition to our acquisitions of Anlin and Eco, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected when we acquired it; and the other risks and uncertainties discussed under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended January 1, 2022, and our other filings with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. PGT INVENT. BUILD. DELIVER. 2#3#4#5#6STRATEGIC FRAMEWORK FOR PROFITABLE GROWTH 01. Drive brand recognition and loyalty through CUSTOMER-CENTRIC INNOVATION to expand our diversified family of premium brands PGT IDEETATIONE INVENT BUILD. DELIVER. 02. Invest in our employees to attract and retain talented, DEDICATED LEADERS to drive our business and SUPPORT SUSTAINABILITY TRENDS reshaping the future of our world 03. Transform our manufacturing operations to SCALE OUR BUSINESS to capture increasing long-term demand S 04. Strategically allocate FREE CASH FLOW primarily to support profitable growth in desirable markets and geographies A 6#7#8BALANCE SHEET AND LIQUIDITY UPDATE NET LEVERAGE Total Debt Outstanding¹ Less: Cash¹1 Net Debt¹ Run-Rate LTM Adj EBITDA¹ Net Debt to run-rate Adj EBITDA¹ ● ● $635.0M PGT $103.6M $531.4M $196.4M 2.7x LIQUIDITY PROFILE COMMENTARY Strong and flexible balance sheet provides significant optionality to scale Expense mitigation resulting in elevated free cash flow profile • Net debt to adjusted EBITDA¹ ratio of 2.9x¹ before addition of run-rate adjustment Cash Unused Credit Capacity Total Available Liquidity Senior Notes (Oct 2029) Term Loan (Oct 2024) Total Debt Outstanding $103.6M $74.3M $177.9M $575.0M $60.0M $635.0M Debt Maturity Schedule ($M) as of 4/2/2022 2022 INVENT. BUILD. DELIVER. 1. Refer to reconciliation to GAAP on slide 16 for calculations of the ratios of net debt to run-rate adjusted EBITDA and net debt to adjusted EBITDA. 2023 Term Loan $60 2024 Senior Notes $575 2029 8#9STRONG BALANCE SHEET 3.4x $47 2014 ACQUIRED Impact Resistant Cor Windows & Doors PGT $69 2.1x 2015 Adjusted EBITDA¹,3 and Leverage Ratio2,3 INVENT. BUILD. DELIVER. $77 2.9x 2016 ACQUIRED WINDOOR $86 C 2.2x 2017 $127 2.6x 2018 ACQUIRED Adjusted EBITDA2 western window systems $128 2.2x 2019 Leverage Ratio $150 2.2x 2020 ACQUIRED NewSouth $184 2.9x 2021 ACQUIRED ECO eco window systems ACQUIRED Anlin Windows Doors $196 2.7x Q1 2022 TTM HIGHLIGHTS ● Proven track record of deleveraging acquisitions • Net debt to trailing 12-month adjusted EBITDA1,3 within target range ● Strong Adj. EBITDA and cash flow growth reduce financial risk 1.Refer to reconciliation to GAAP. 2. Leverage ratio defined as net debt divided by trailing-twelve-month adjusted EBITDA. 3. Refer to reconciliation to GAAP on slide 16 for 2021 and TTM Q1 2022, and on slide 19 for periods prior to 2021. 9#10LONG-TERM CAPITAL ALLOCATION PRIORITIES PGT INTERNAL INVESTMENT Investment in continuous improvement expected to drive margin growth Strategic selling initiatives and marketing enhancements driving sales Capex target: 3-4% of sales ● ● ● DEBT REDUCTION Expect to maintain a strong balance sheet and conservative capital structure Long-term target Leverage Ratio of 2x - 3x ● STRATEGIC ACQUISITIONS Aligned with growth priorities and expected to grow shareholder value over the long-term Expansion into new regions, channels or products • Addition of technologies, enhanced manufacturing or supply chain capabilities ● ● INVENT. BUILD. DELIVER. A 10#11#12#13#14#15#16#17#18#19

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