Q4 2021 PGT Innovations Inc Earnings Call

Speaker 1: Good morning and welcome to the PGP Innovations 4th Quarter 2021 earnings conference call. All participants will be in 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.

Good morning, and welcome to the P. G T innovations fourth quarter 2021 earnings conference call. All participants will be in 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 your Touchtone 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 Corporate development. Please go ahead.

Speaker 1: To ask a question, you may press star then one on your touch tone phone. To withdraw your question, please press star then.

Speaker 1: Please note this event is being recorded. I would now like to turn the conference over to Brad West, Senior Vice President, Corporate Development. Please go ahead.

Speaker 2: Thank you and good morning and welcome to the PGT innovations fourth quarter and fiscal year 2021 investor conference call. With me on the call today our president and CEO Jeff Jackson and chief financial officer John Coon.

Thank you and good morning, and welcome to the PTT innovations fourth quarter and fiscal year 2021 Investor Conference call.

With me on the call today are president and CEO , Jeff Jackson, and Chief Financial Officer, John Collins.

Speaker 2: On the investors 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.

On the investors section of our company website, you'll find the earnings press release issued earlier today as well as the slide presentation, we have posted to accompany today's discussion.

Speaker 2: This webcast is being recorded and will be available for replay on the company's website.

This webcast is being recorded and will be available for replay on the company's website.

Speaker 2: 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 board looking statements.

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 discuss forward looking statements.

Today's remarks contain forward looking statements, including statements about our 2022 financial performance outlook and the potential future impact of the COVID-19 pandemic on our business.

Speaker 2: Today's remarks contain forward-looking statements, including statements about our 2022 financial performance outlook and the potential future impact of the COVID-19 pandemic on our business.

Speaker 2: those statements involve risks, uncertainties, and other factors that could cause actual results to different materials.

Those statements involve risks uncertainties and other factors that could cause actual results to differ materially.

Speaker 2: Additional information on factors that could cause accurate results to differ than expected results is available in the company's most recent SEC file.

Additional information on factors that could cause actual results to differ than expected result is available in the company's most recent SEC filings.

Speaker 2: 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 to performance.

Additionally on slide three.

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 GAAP measures is included in the tables attached to the earnings release and in the appendix of the slide presentation.

Speaker 2: A reconciliation to the most directly comparable GAAP measures is included in the tables attached to the earnings release and in the appendix of the slide presentation.

Speaker 2: At this time, I would like to introduce our new Chief Financial Officer, John Coons, who joined us in January .

At this time I would like to introduce our new Chief Financial Officer, John Coons, who joined US in January .

Thank you Brad let me begin by saying how honored I am joined the management team of <unk> innovation at this stage of our evolution I am looking forward to working with Jeff Laborde and the rest of the PTT innovations team continuing to grow the company and shareholder returns.

Speaker 3: Thank you, Brad. Let me begin by saying how honored I am to have joined the management team of PGT innovations at this stage of our evolution. I am looking forward to working with Jeff, the board and the rest of the PGT innovations team in continuing to grow the company and shareholder return. I will now hand the call over to our company CEO and President, Jeff Jackson.

I'll now hand, the call over to our company as CEO and President Jeff Jackson.

Thank you John and good morning, everyone and thank you for joining us on today's call.

Speaker 2: Thank you, John , and good morning, everyone, and thank you for joining us on today's call.

Speaker 2: First I would like to say I'm very pleased I am to welcome John to the PGT Innovations team. John has tremendous financial and accounting leadership experience and a thorough understanding of key business drivers within the construction industry.

First I would like to say I'm very pleased I am to welcome John to the <unk> innovations team.

John has tremendous financial and accounting leadership experience and a thorough understanding of key business drivers within the construction industry.

Speaker 2: Additionally, I want to thank Brad West for his leadership during his tenure as interim CFO and for his continued leadership as he returns to his primary role of focusing on strategy and corporate development.

Additionally, I want to thank Brad West for his leadership during his tenure as interim CFO .

<unk> continued leadership as he returns to his primary role will focusing on strategy and corporate development.

I'm very proud of our entire <unk> innovations team for their efforts over the past year and an operating environment that continues to be challenging complex and unpredictable.

Speaker 2: I'm very proud of our entire PGT Innovations team for their efforts over the past year in an operating environment that continues to be challenging, complex, and unpredictable.

Speaker 2: And I want to thank our PGT team members, dealers, and distributors who continue to go above and beyond to service our customers.

And I want to thank our <unk> team members dealers and distributors, who continue to go above and beyond to service our customers today.

Speaker 2: Today we will recap our business results for the fourth quarter before providing feedback for 2022. Turning to our key message for the quarter.

Today, we will recap our business results for the fourth quarter before providing feedback for 2022.

Turning to our key message for the quarter on slide four.

Speaker 2: We have an extraordinary quarter, one which we grew sales 37% from the prior year period to a record 304 million, including organic growth of 17%.

We had an extraordinary quarter, one, which we grew sales 37% from the prior year period to a record $304 million.

Including organic growth of 17%.

Speaker 2: Fourth quarter sales benefited from solid growth that cost all our core market.

Fourth quarter sales benefited from solid growth across all our core markets.

Speaker 2: with especially strong growth from our new South and Western window brands, which increase 33 and 45% respect.

Especially strong growth from our new cell and western window brands, which increased 33 and 45% respectively.

We have been able to increase production to meet demand we were able to do this in large part because of the actions we took throughout 2021.

Speaker 2: we have been able to increase production to meet demand. We were able to do this in large part because of the actions we took throughout 2021. These actions included.

These actions included.

Speaker 2: Increased hiring, especially in our Florida facilities, implemented operating improvements in manufacturing and distribution, expanded our manufacturing footprint, and managing our supply of key inputs such as glass and aluminum.

Increased hiring, especially in our Florida facilities implemented operating improvements in manufacturing and distribution expanded our manufacturing footprint and managing our supply of key inputs, such as glass and aluminum.

Speaker 2: Increased bookings during the year translated into higher product shipments as we worked through our backlog and decreased our lead time.

Increased bookings during the year translated into higher product shipments as we work through our backlog and decreased our lead times.

Speaker 2: Now we are well positioned to meet strong demand across our key markets and continue our growth trajectory into 2022 and beyond.

Now we are well positioned to meet strong demand across our key markets and continue our growth trajectory into 2022 and beyond.

Speaker 2: Our recent acquisitions are performing very well. With 2021 sales contributions of 107 million from Ammon Windows and Doors and Echo Windows System.

Our recent acquisitions are performing very well with 2021 sales contributions of $107 million from Ameren windows and doors and Echo Windows systems.

Speaker 2: Echo expanded our premium product lines in the high growth multi-family market here in Florida, while Anne-Lynn helped build out our footprint on the West Coast. In addition, our Echo Glass Manufacturing capabilities have allowed us to lower our glass of cross across our Florida brands and shore our supply constraints we felt from our main glass supplier throughout 2021.

<unk> expanded our premium product lines and the high growth multifamily market here in Florida, while aniline help build out our footprint on the West Coast. In addition, our echo glass manufacturing capabilities have allowed us to lower our Glasscock cross across our Florida brands and Shaw our supply constraints we.

From our main glass supplier throughout 2021, we.

Speaker 2: We believe these actions will be accreted in your one and important to our overall growth strategy for years to come.

We believe these actions will be accretive in year, one and important to our overall growth strategy for years to come.

Speaker 2: Despite inflationary pressures on input materials and labor costs, we were able to expand EBITDA margins by 110 basis points year over year.

Despite inflationary pressures on input materials and labor costs, we were able to expand EBITDA margins by 110 basis points year over year.

Speaker 2: We took several pricing actions throughout 2021, including a 6-12% price increase on new orders that originated after Nov. 1.

We took several pricing actions throughout 2021, including a 6% to 12% price increases on new orders that originated after November one.

Speaker 2: These actions are already contributing to top line growth and should be fully in effect in the second quarter of 2022.

These actions are already contributing to top line growth and should be fully in effect in the second quarter of 2022.

Speaker 2: One particular area of focus we needed to offset through crossing actions was aluminum, which is used in about 60%.

One particular area of focus we need to offset through pricing actions was aluminum.

Which is used in about 60% of our product sales.

Speaker 2: We saw all-time high-spot prices in the late summer of 2021, and currently, the prices are near those same levels.

We saw all time high spot prices in the late summer of 2021 and currently the prices are near those same levels.

Speaker 2: While our hedging program provides some relief, our uncovered supply continues to impact Q1, and we expect this will continue to some degree through the balance of 2022.

While our hedging program provides some relief are uncovered supply continues to impact Q1, and we expect this will continue to some degree through the balance of 2022.

In addition to price increases our strong focus on cost control and operational efficiencies helped partially offset inflation in the fourth quarter.

Speaker 2: In addition to price increases, our strong focus on cost control and operational efficiencies helped partially offset inflation in the four quarters.

Speaker 2: and are expected to deliver continued margin improvement as we navigate ongoing labor and supply chain challenge.

And are expected to deliver continued margin improvement as we navigate ongoing labor and supply chain challenges.

Speaker 2: Furthermore, our backlog provides runway for top-line growth into 2022, while continued expansion in both our core geographies and product offerings provides us with the capacity to meet the robust demand we've seen over the past 18 months and expect to continue into 2022.

Furthermore, our backlog provides runway for top line growth into 2022, while continued expansion in both our core geographies and product offerings provides us with the capacity to meet the robust demand we've seen over the past 18 months and expect to continue into 2022.

Speaker 2: Our revenue and margin strengths are key to our strong recurrent cash flow. We ended 2021 with a cash balance of 96 million and leverage within our targeted range. Our strong balance sheet provides a flexibility to effectively allocate capital as we look to continue both organic and acquisition growth.

Our revenue and margin strengths are key to our strong recurring cash flow. We ended 2021 with a cash balance of $96 million and leverage within our targeted range. Our strong balance sheet provides the flexibility to effectively allocate capital as we look to continue both organic and acquisition growth.

All of these factors position us to generate robust top line and adjusted EBITDA growth in 2022.

Speaker 2: All of these factors positioned us to generate rule bus top line and adjust the diva dog growth in 2022.

Speaker 2: Turning to slide five, which reflects our fourth quarter sales trend.

Turning to slide five which reflects our fourth quarter sales trends.

Organic sales for the quarter grew 12% in our southeast region, while sales in our Western region grew 45%.

Speaker 2: Organic sales for the quarter group 12% in our Southeast region, while sales in our Western region grew 45%.

Speaker 2: both OR and R and new construction markets continue this growth.

Both R&R and new construction markets continue this growth.

Speaker 2: Additionally, we saw growth across several or a key states, including Florida, Texas, and Arizona.

Additionally, we saw growth across several of our key states.

Including Florida, Texas and Arizona.

Speaker 2: New South grew sales by 33% and is poised for another strong year in 2022 as we anticipate four new store openings. These store openings are targeted towards key growth markets and include Atlanta, Dallas, Fort Worth, and Nashville. This will bring total store count and end of the year to 17.

New South grew sales by 33% and is poised for another strong year in 2022, as we anticipate four new store openings.

These store openings are targeted towards key growth markets and included Atlanta, Dallas Fort worth to Nashville.

This will bring total store count at the end of the year to 17.

Speaker 2: Heading into 2022, that a man in our core market of Florida continues to be strong.

Heading into 2022, the demand in our core market of Florida continues to be strong.

Speaker 2: While we saw impressive growth demand in 2021, both in new construction and repair remodeling.

While we saw impressive growth demand in 2021, both in new construction and repair and remodeling.

We also know that housing inventory remains tight and demand continues to outpace supply.

Speaker 2: We also know that housing inventory remains tight and demand continues to outpace supply.

Speaker 2: Similar trends in Arizona and Texas and all our key markets continue to experience net growth and residents.

Similar trends in Arizona, and Texas, and all our key markets continue to experience net growth and residents. We will continue to invest to ensure PTT innovations can meet the strong demand.

Speaker 2: We will continue to invest in short PGT innovations can meet this strong demand.

While our investments in production capacity have allowed us to decrease average lead times continued strong demand has resulted in a backlog of $356 million at the end of 2021 compared to $200 million at the end of 2020.

Speaker 2: While our investments in production capacity have allowed us decrease average lead times, continued strong demand has resulted in a backlog of $356 million at the end of 2021, compared to $200 million at the end of 2020.

Speaker 2: Slide 6 summarizes our strategic operational framework for profitable growth as we seek to create long-term value for shareholders while servicing our customers and communities.

Slide six summarizes our strategic operational framework for profitable growth as we seek to create long term value for shareholders, while servicing our customers and communities.

Speaker 2: Our first pillar is customer centric innovation, which allows us to offer products with a features, performance, and value demanded by builders and customers.

Our first pillar is customer centric innovation, which allows us to offer products with features performance and value demanded by builders and customers, our aniline and echo acquisitions in 2021 or two examples of how we can expand our diversified portfolio of innovative products are.

Speaker 2: Our Anilin and Echo acquisitions in 2021 are two examples of how we can expand our diversified portfolio of innovative products. Our second pillar.

Second pillar is investing in talent.

Speaker 2: Clearly having the right team members with the right skill set to excel at our company and in the right Geographies is important given today's tight labor market

<unk>, having the right team members with the right skill set to excel at our company and in the right geographies is important given today's tight labor market.

Speaker 2: we were able to attract and retain talent through a series of actions, such as compensation packages that included long-term incentives.

We were able to attract and retain talent through a series of actions such as compensation packages that included long term incentives.

Speaker 2: proactive communications, an emphasis on a safe workplace, and a culture where employees know they are valued as team members and not just us.

Proactive communications and.

An emphasis on a safe workplace and a culture, where employees know they are valued as team members and not just objects.

Accordingly during the year, we increased our team member head count by approximately 1825, including team members Echo and location and include improved employee retention versus 2020.

Speaker 2: Accordingly, during the year, we increased our team member head count by approximately 1,825, including team members, echo, and and the location, and improved employee retention versus 2020. Our third pillar is...

Our third pillar is scaling our business.

Speaker 2: As mentioned last year, we've focused on increasing our manufacturing capacity and operational capabilities to meet increased demand for our premium products and make key acquisitions to support long-term demand growth.

As mentioned last year, we focused on increasing our manufacturing capacity and operational capabilities to meet increased demand for our premium products and made key acquisitions to support long term demand growth.

Speaker 2: For example, our echo acquisition allowed us to diversify our glass supply chain with addition of another glass facility. And our anemone acquisition expanded our reach into the R&R premium vinyl window and door market on the west coast.

For example, our EKO acquisition allowed us to diversify our glass supply chain with the addition of another glass facility and our aniline acquisition expanded our reach into the R&R premium vinyl window and door market on the West coast.

Speaker 2: Together, we expect these investments will enable PGT innovations to meet increased demand and lead to continue top and bottom line growth in 2022.

Together, we expect these investments will enable PGP innovations to meet increased demand and lead to continued top and bottom line growth in 2022.

Speaker 2: Our fourth pillar is allocating free cash flow to achieve profitable growth. This has included finding the right strategic accreted acquisitions, investing in new product development, and production capacity.

Our fourth pillar is allocating free cash flow to achieve profitable growth.

This has included finding the right strategic accretive acquisitions investing in new product development and production capacity.

Speaker 2: We will continue to be careful stewards of capital in 2022 as we look for opportunities to expand our business while delivering robust results. Now I'd like to turn the call back over to John to review our fourth quarter results in greater detail. John . Thank you, Jeff.

We will continue to be careful stewards of capital in 2022, as we look for opportunities to expand our business, while delivering robust results now I would like to turn the call back over to John to review, our fourth quarter results in greater detail John .

Thank you, Jeff turning to slide seven.

Speaker 2: We reported net sales of 304 million for the quarter, a 37% increase over the prior year quarter.

We reported net sales of $304 million for the quarter, a 37% increase over the prior year quarter.

Speaker 3: This includes 17% organic growth from our legacy businesses, including substantial growth within our new South business, which continues to increase orders and installations.

This includes 17% organic growth from our legacy businesses, including substantial growth within our new South business, which continues to increased orders and installations.

Speaker 2: We also subgrow from our newest acquisitions. ECHO Windows Systems and Anilin Windows Endora.

We also saw growth from our newest acquisitions Echo windows systems, and aniline windows and doors.

Speaker 2: In the fourth quarter, our sales breakdown finished at 59% R&R and 41% new construction.

In the fourth quarter, our sales breakdown finished at 59% R&R and 41% new construction.

Speaker 2: Our organic R&R sales grew 8% compared to the fourth quarter of 2020, and organic new construction sales grew 28% from the strength of our legacy brands. Additionally, Echo and Anilin generated sales of $41 million during the course.

Our organic R&R sales grew 8% compared to the fourth quarter of 2020.

And organic new construction sales grew 28% from the strength of our legacy brands. Additionally, echo and aniline generated sales of $41 million.

During the quarter.

Yeah.

Gross profit for the quarter was $108 million or 37% increase from the prior year quarter, reflecting increased sales, partially offset by cost headwinds from labor and input materials included in gross margin is $1 3 million in costs related to SKU rationalization, and our wind door lock.

Speaker 2: Gross profit for the quarter was $108 million, a 37% increase from the prior year quarter, reflecting increased sales partially offset by headwinds from labor and input materials.

Speaker 3: Included in Gross Margin is 1.3 million in cost related to SKU rationalization in our Windor lines. This rationalization will allow us to gain efficiencies and better serve our customers with more streamlined offerings as well as benefit from 600,000 in cost related to the consolidation of two facilities in our Miami operations.

This rationalization will allow us to gain efficiencies and better serve our customers with more streamline offerings as well as benefit from 600000 in costs related to the consolidation of two facilities in our Miami operations.

Speaker 2: Fourth quarter growth margin was 35.6 percent equal to the prior year quarter and a 90 base of point increase from the third quarter of 2021, driven by operational efficiencies, recent price increases in revenue growth.

Quarter gross margin was 35, 6% equal to the prior year quarter, and a 90 basis point increase from the third quarter of 2021, driven by operational efficiencies recent price increases and revenue growth as.

Speaker 2: As we mentioned in previous calls, we invested heavily in our workforce in the second and third quarter.

As we mentioned in previous calls we invested heavily in our workforce in the second and third quarters we.

Speaker 2: We also increased headcount to meet demand, increased wage rates, and invested in onboarding and training costs. These investments help generate improved operational efficiency in gross margin when compared to the third quarter. Looking into 2022, we expect to more fully realize the benefit from these actions in our gross margins during our second and third quarters. Typically, our seasonal, our higher seasonal months.

We also increased head count to meet demand increased wage rates and invested in Onboarding and training costs. These investments helped generate improved operational efficiency and gross margin when compared to the third quarter looking into 2022, we expect to more fully realize the benefit from these actions in our gross margins during March.

Second and third quarters typically our seasonal.

Higher seasonal months.

With regard to aluminum costs and hedging last quarter, we were hedged at 73% of our needs during the quarter, which helped in mitigating overall cost pressure.

Speaker 2: With regard to aluminum costs and hedging last quarter, we were hedged at 73% of our needs during the quarter, which helped in mitigating overall cost pressure. As of today, we have contracted approximately 38% of our estimated aluminum needs for 2022. All at levels below current market price.

As of today, we have contracted approximately 38% of our estimated aluminum needs for 2022, all at levels below current market pricing.

Speaker 2: We have seen sharp increases in volatility in the price of aluminum, and our coverage program helps to mitigate a portion of these aluminum cost pressures. We will continue to monitor aluminum and other input cost and will take further pricing actions that needed.

We have seen sharp increases in volatility in the price of aluminum and our coverage program helps to mitigate a portion of these aluminum cost pressures, we will continue to monitor aluminum and other input costs and we will take further pricing actions as needed.

Speaker 2: selling general and administrative expenses as a percent of sales decreased by 100 basis points compared to the prior year quarter. The higher costs in the quarter reflect primarily increased SGNA costs from our acquisitions as well as non-cash amortization expense.

Selling general and administrative expenses as a percentage of sales decreased by 100 basis points compared to the prior year quarter, the higher costs in the quarter reflect primarily increased SG&A costs from our acquisitions as well as noncash amortization expense distribution costs increased.

Speaker 2: Distribution costs increased as we work to expand our South Eastern operations, which we expect will begin to normalize as efficiencies are gained. We expect to leverage these costs, these fixed costs, in the coming quarter.

As we work to expand our southeastern operation, which we expect will begin to normalize as efficiencies are gained we expect to leverage these costs. These fixed costs in the coming quarters.

Speaker 2: Our adjusted EVA DA was 48.2 million. Our tax expense in the quarter came in at 26% in line with our expectation.

Our adjusted EBITDA was $48 2 million our tax expense in the quarter came in at 26% in line with our expectations.

Speaker 2: We reported adjusted net income of 18.8 million or 31 cents per duty share in the fourth quarter of 2021 compared to 10.8 million or 18 cents per duty share in the fourth quarter of 2020 an increase of 72%.

We reported adjusted net income of $18 8 million or <unk> 31 per diluted share in the fourth quarter of 2021 compared to $10 8 million or <unk> 18 per diluted share in the fourth quarter of 2020, an increase of 72%.

Now turning to slide eight.

Speaker 2: For the full year, we reported sales of 1.16 billion, a 32% increase from full year 2020. This included 107 million of sales contribution from Echo and Allen, which were acquired during the year. Organic sales were up 19%, driven by a 17% increase in our Southeast business and a 26% increase from our Western business.

For the full year, we reported sales of 1.1 dollars 6 billion, a 32% increase from full year 2020. This.

This included $107 million of sales contribution from echoing aniline, which were acquired during the year.

Organic sales were up 19% driven by a 17% increase in our southeast business and a 26% increase from our western business gross profit for 2021 grew 26% as a result of the increased sales our gross margin decreased to 34, 7% due to the inflationary pressures.

Speaker 2: Gross profit for 2021 grew 26%. As a result of the increased sales, a gross margin decrease, the 34.7% due to the inflationary pressures that hit during the year before our pricing actions were realized. As well as the onboarding and training costs related to increasing our team member head count and manufacturing capability.

During the year before our pricing actions were realized as well as the onboarding and training costs related to increasing our team member head count and manufacturing capabilities.

Speaker 2: Adjusted EBITDA for the year was 169 million or 14.6% of sales. Adjusted earnings per devoted share was a dollar three cents for 2021 compared to 97 cents in the prior year. Now turning to our bounds.

Adjusted EBITDA for the year was $169 million or 14, 6% of sales adjusted earnings per diluted share was $1 <unk> for 2021 compared to <unk> 97 in the prior year.

Now turning to our balance sheet on slide nine.

Speaker 3: We ended the year with net debt of 539 million.

We ended the year with net debt of $539 million.

Speaker 3: As of year end, we had total liquidity of 170.5 million, including a cash balance of 96.1 million, and 74.4 million of unused capacity owner revolver.

As of year end, we had total liquidity of $175 million, including a cash balance of $96 1 million and $74 4 million of unused capacity on our revolver.

Speaker 2: In light of our recent acquisitions, our trailing 12 month run rate net debt to adjusted EBITDA ratio was approximately 2.9 times at the end of 2021.

In light of our recent acquisitions, our trailing 12 month run rate net debt to adjusted EBITDA ratio was approximately two nine times at the end of 2021.

Speaker 3: Next, on slide 10, you can see that we have grown EBITDA, both through acquisitions in organic growth, while maintaining a conservative leverage profile during the most challenging supply chain in environment in our history. We have done this through a track record of generating strong cash flow.

Next on Slide 10, you can see that we have grown EBITDA, both through acquisitions and organic growth, while maintaining a conservative leverage profile during the most challenging supply chain environment in our history. We have done this through a track record of generating strong cash flows.

Speaker 2: On slide 11, I would like to discuss PGT innovation's capital allocation priority.

On slide 11, I would like to discuss PGP innovations capital allocation priorities. Our first priority is to reinvest in the business and to allocate capital to projects, we expect will increase revenue.

Speaker 3: First priority is to reinvest in the business into allocating capital to projects we expect will increase revenues, including through expanded capacity and product enhancements as well as improved efficiency that enhances more.

Including through expanded capacity and product enhancements as well as improved efficiency and enhances margins.

Speaker 2: Another important priority is our commitment to maintaining a strong balance sheet and conservative capital structure, like continuing to lever after acquisition.

Another important priority is our commitment to maintaining a strong balance sheet and conservative capital structure by continuing to Delever after acquisitions.

Speaker 2: Finally, we use capital for strategic acquisitions that are expected to be accreted and generate strong returns over the long term.

Finally, we use capital for strategic acquisitions that are expected to be accretive and generate strong returns over the long term.

Speaker 2: We look for opportunities that will enable us to expand into new regions, channels, or products such as Annlin, or that would give us access to technologies, enhanced manufacturing, or supply chain capabilities, such as our past acquisition of ECO.

We look for opportunities that will enable us to expand into new regions channels or products, such as Alan or that would give us access to technologies enhanced manufacturing or supply chain capabilities, such as our past acquisition of Echo we continue to work to integrate our newest acquisitions and carefully evaluate other possible app.

Speaker 2: We continue to work to integrate our newest acquisitions and carefully evaluate other possible acquisition opportunities as part of our overall strategic plan while focusing on deliveraging as we have done in the past. And now I would like to turn the call.

Acquisition opportunities as part of our overall strategic plan, while focusing on Delevering deleveraging as we have done in the past.

And now I would like to turn the call back over to Jeff.

Speaker 2: Thanks John . Next I'll share our outlook for 2022 on slide 12.

Thanks, John next I will share our outlook for 2022 on slide 12.

Speaker 2: For the full year of 2022, we expect next sales in the range of 1.35 billion to 1.45 billion and adjusted EBITDA in the range of 220 million to 250 million.

For the full year of 2022, we expect net sales in the range of 135 billion to $1 four 5 billion.

And adjusted EBITDA in the range of $220 million to $250 million.

Speaker 2: So far, January has shown continued operational improvements, resulting in increased sales and profitability. At this time, we believe we will see improved EBITDA margins of 20 to 50 basis points into one over Q4.

So far January has shown continued operational improvements, resulting in increased sales and profitability.

At this time, we believe we will see improved EBITDA margins of 20 to 50 basis points in Q1 over Q4.

Speaker 2: We will see these continued improvements in the remaining quarters do mainly to the effect of pricing actions taken in Q4.

We will see these continued improvements in the remaining quarters due mainly to the effect of pricing actions taken in Q4.

Speaker 2: improved leverage from higher sales during seasonal R&R summer months. And lastly, our new South Stores opened over the past 12 months gaining track.

Improved leverage from higher sales during seasonal R&R summer months, and lastly, our new south stores opened over the past 12 months gaining traction.

Speaker 2: For your reference, we've included additional modeling assumptions in the left-hand column of slide 12, which are embedded in our 2022 guidance estimates, and which can assist you in your calculations if your projective results.

For your reference we've included additional modeling assumptions in the left hand column on slide 12, which are embedded in our 2022 guidance estimates.

And which can assist you in your calculations youre projected results.

Speaker 2: To close, I want to remind you why I'm very excited about our future, and why we believe PGT Innovations has never been in a better position to execute on our strategy to create long-term value for our shareholders.

To close I want to remind you why I'm very excited about our future and while we believe PTT innovation has never been in a better position to execute on our strategy to create long term value for our shareholders.

Speaker 2: First, we are a national leader with strong brands, which have been further boosted by recent acquisitions. Our products are in growing categories in the fastest-growing regions in the US.

First we are a national leader with strong brands, which have been further boosted by recent acquisitions our products are in growing categories and the fastest growing regions in the U S.

Speaker 2: Next, our product portfolio is diversified and poised to capture profitable growth in both the new construction and R&R channels.

Next our product portfolio is diversified and poised to capture profitable growth in both the new construction and R&R channels.

Speaker 2: Third, we are always focused on continually improving our operations, which drives long-term margin expansion. We were successful in those efforts during the fourth quarter, and we believe the processes we put in place will help us balance strong demand growth and supply chain challenges in 2022. As we continue to grow, we will build upon our programs to improve efficiency and gain the required capacity to leverage our fixed costs.

Third we are always focused on continually improving our operations, which drives long term margin expansion. We were successful in those efforts during the fourth quarter and we believe the processes. We put in place will help us balance strong demand growth and supply chain challenges in 2022 as.

As we continue to grow we will build upon our programs to improve efficiency and gain the required capacity to leverage our fixed costs.

Speaker 2: Fourth, we have a long history of new product development that provides customers with innovative premium products to meet their challenging needs.

We have a long history of new product development that provides customers with innovative premium products to meet their challenging needs.

Speaker 2: And lastly, sustainability has always been a part of our company culture. Looking ahead, we'll seek to further elevate our commitment to conduct business in a social and environmentally responsible manner.

And lastly, sustainability has always been a part of our company culture. Looking ahead, we will seek to further elevate our commitment.

To conduct business in a socially and environmentally responsible manner.

Speaker 2: At this time, let me bring the operator in for Q&A, operator.

At this time, let me bring the operator in for Q&A operator.

Speaker 1: We will now begin the question and answer session. To ask a question, you may press star than one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

Speaker 1: Our first question is from Phil Ng of Jefferies. Please go ahead.

My first question is from Phil <unk> of Jefferies. Please go ahead.

<unk>.

Speaker 4: Hey, good morning guys. This is Maggie on for Phil. Morning, Maggie.

Hey, Good morning, guys. This is Maggie on for Phil.

Good morning Nathan.

Speaker 4: Yeah, can you talk about where you ended the year on price costs? Was that neutral or positive? And then with the inflation expectations for $22, Jeff, you called out aluminum. How are you thinking about price costs trending through the year? And does the $22 guide assume any incremental pricing or just what you've already in?

Yeah can you talk about where you ended the year on price cost was that neutral or positive and then with the inflation expectations for 'twenty till Jesse you called out alumina on how are you thinking about price cost trending through the year and does the 22 guide assume any.

Incremental pricing or just what you've already implemented.

Speaker 2: Yeah, I'll speak high level on that and I'll let Brad and maybe even John add a few things. But, you know, we did into the year, first of all, 2021.

Yeah, I'll speak high level on that and then I'll, let Brad and maybe even John add a few things but.

We did enter the year.

First of all 2021.

Speaker 2: The different print price costing was our biggest challenge.

The difference between price costing was our biggest challenge.

Speaker 2: obviously with our backlog throughout the year it almost to three hundred million in any given time prices increased literally within a week we couldn't take price increase our all set that for you know three months

Obviously with our backlog throughout the year almost $300 million in any given time.

Prices increased literally within a week, we couldnt take price increase are all set that for three months.

Speaker 2: It was definitely challenging near between cost input and the ability to price.

It was it was definitely a challenging year between cost input and the ability to price we did in the year. However, closer that they were still somewhat.

Speaker 2: We did in the year however closer that there were still somewhat off slight difference between the two. We did take pricing in November , like I mentioned in my comments opening remarks. And that pricing we think will finally level bring the two together. And we expect to see that probably, I would say, the end of March.

Slight difference between the two.

We did take pricing in November like I mentioned in my comments opening remarks.

That pricing, we think will finally level, bringing the two together and we expect to see that.

<unk> I would say the end of March.

Speaker 2: So we will still experience a little off between pricing costs in the first quarter not as much as we saw last year That's why I'm confident we're going to continue to increase our EBITDA percentage anywhere from like I said 20 to 50 bills six versus

So we will still experience a little off between price and cost in the first quarter not as much as we saw last year.

That's why I'm confident we're going to continue to increase our EBITDA.

Percentage anywhere from like I said 20 to 50 bps six versus fourth quarter. So.

Speaker 2: So we are narrowing that gap and we are both from an operational standpoint, reducing our lead times, making it less of an issue into 2022 as our goal. And it looks like we're actually accomplishing that so far. Brad, you've got to come in. Yeah, the...

Our narrowing that gap and we both from an operational standpoint, reducing our lead times, making it less of an issue in 2022 is our goal and it looks like we're actually accomplishing that so far.

Income yes.

Speaker 2: Parts of a loan, particularly, was something that was continuing to spike even to the back half of the year, which kind of was the main reason for the price increase that we had in November . Right now, that is the relatively...

Price of aluminum, particularly with something that was continuing to spike even to the back half of the year, which kind of is the main.

Main reason for the price increase that we had in November right now that is a relatively.

Speaker 2: Similar number for aluminum so the pricing increase that when it goes in the effects should make that an offset

Similar number for aluminum silver price increase when it goes in effect should make that an offset.

Speaker 2: But I would say that the guys for 2022 assumes that from that point forward, we have a good match, but this was all things that we have to...

I would say that the guidance for 2022 assumes that from that point forward, we have a good match, but as with all things we have to consider another price increase because of inflation from this point going up from here, we'd be in position to do that and I think we are better suited because we've learned some things from the past about how to implement those price increases are they all.

Speaker 2: consider another price increase because of inflation from this point going up from here, you know, we'd be in position to do that. And I think we're better suited because we've learned some things from the past. I'll have to implement those price increases so they don't take as long or lead times lower now. Then they were last year at this time. And we've also changed kind of the way we implement price increases. So it wouldn't be as much of a delay as we've seen in the past.

Take Azlon our lead times are lower now than they were last year at this time and we've also changed the way we implement price increases so it wouldn't be as much of the delays we've seen in the past.

Got it okay, that's really helpful.

Speaker 4: got it. Okay, that's really helpful. And then my next question, it seems like the labor issues are really behind you now in your well positioned for 22 demand. But are there any short-term impacts particularly from Omokran in one queue that we should be mindful of?

Then my next question it seems like the labor issues are really behind you now and you're well positioned for.

On 22 demand, but are there any short term impacts, particularly from OMA crime.

In one queue that we should be mindful of.

Speaker 5: Yeah, thank you. In your right labor, we've done an incredible job. The team here, throughout the company, has done an incredible job last year bringing on labor. We made that investment choice.

Yes. Thank you and you are right labor, we've done an incredible job the team here.

The company has done an incredible job last year, bringing on labor, we made that investment choice to really increase our head count increased hourly wage.

Speaker 5: to really increase our head count, increase our early wage, focus on training, and obviously workplace safety is our normal priority. So we were able to add 1,800 plus folks. So labor number wise is not an issue for us right now.

<unk> focus on training and obviously workplace safety is our no more priority. So so we were able to add.

800, plus folks.

So labor number wise is not an issue for us right now.

Speaker 5: So, and I think as we go through 2022, we're gonna continue to reap the benefits of that. And you'll see that in direct labor, which improves that sub-sup-sup-sup-quarter. If you look at our Q4 versus Q3, our direct labor presents improved. So you're gonna start seeing that benefit even more play out of the PNL into 2022.

So and I think as you as we go through 2022, we're going to continue to reap the benefits of that and Youll see that in direct labor, which improves.

If you look at our Q4 versus Q3, our direct labor percentages improve so youre going to youre going to start seeing that benefit even more play out in the P&L in 2022.

Speaker 5: In terms of COVID, yeah, is it still out there? I think it's gonna be, in my opinion, it's gonna be a new norm. We're gonna have to learn how to work with it. Like we've demonstrated we can.

In terms of Covid.

It's still out there I think it's going to be in my opinion is going to be a new norm, we're going to we're going to have to learn how to work with it.

We've demonstrated we can.

Speaker 5: We have people out today that's, you know, just deposited throughout the company. And, you know, we have our procedures and processes in place to identify early and mitigate that impact on the lines. We did not shut down any lines, you know, in the back half of the year like we did at the beginning of the year.

We have people out today.

Tested positive throughout the company.

And we have our procedures and processes in place.

Two identify it early and mitigate that impact on the lines, we did not shut down any lines.

In the back half of the year like we did at the beginning of the year.

Speaker 5: So we have gotten definitely better at operation, operating our facility within this unfortunate environment of COVID.

So we have gotten definitely better at operation operating our facilities within this unfortunate environment of Covid.

Speaker 5: I do not see it really being a big impact in 2022. You know, again, as more people get vaccinated, quite frankly, our herd immunity as more people actually get COVID takes place, we're seeing it less of an impact. Okay, great.

I do not see it really being a big impact in 2022.

As more people get vaccinated quite frankly, our herd immunity as more people actually get.

Covid takes place.

We're seeing it less and less of an impact.

Okay, great. Thank you very much you bet.

Speaker 1: The next question is from Ken's Center of Keybank Capital Markets. Please go ahead.

The next question is from Ken Zenner of Keybanc capital markets. Please go ahead.

Speaker 3: Good morning, gentlemen. John , welcome. Good morning.

Good morning, gentlemen, John Walt Good morning, good morning.

I'm driving III studying Florida here, so go to your backlog.

Speaker 3: driving through sunny Florida here. So, give your backlog, you know, it's high. If I just think about your company.

If I just think about your company bigger.

Bigger picture.

Speaker 3: He said 1800 new employees last year. I mean, that's a lie. It doesn't, it sounds like your direct labor is actually.

In terms of 1800 employees last year.

I mean, that's a lot of it doesn't it sounds like your direct labor is actually.

Speaker 3: under control your margin guide and to appreciate how you guys are letting out kind of.

Under control your margin guidance and appreciate how you guys are laying out guidance suggests.

Speaker 3: just, you know, you're pretty comfortable with, you know, when your West Coast operations are.

Suggests.

Yes, you are pretty comfortable with your west coast operations are.

Speaker 3: What you know, and you're bringing the glass production, is it the

What you're bringing the glass production is at CES.

These variables that.

Speaker 3: make you really comfortable in terms of your guidance.

Thank you really comfortable in terms of.

Your guidance versus.

Prior years, where you have the labor kind of bitumen in terms of the efficiency alumina might go up.

Speaker 3: prior years where the labor could have been chained in the butt in terms of the efficiency. A woman might go up and get right now that their price is very good.

Right now that your pricing was very good.

So could you make a little I guess a contract by your direct labors by your feeling so good about that.

Speaker 3: So did you make a little, I guess, a concept why you're direct flavors, why you're feeling so good about that?

Obviously.

Speaker 3: And I obviously demand curve is very high, but didn't pass as always that neighbor please

The demand curve is very high but in the past it was always that labor piece.

Seem to get you guys a lot.

Yes, Ken I'll touch on that direct labor a little bit obviously, we made a significant investment in the second quarter of 2021, and then really into the third quarters. We kept training individuals. It takes about a good six months quite frankly for someone to get up to speed manufacturing want us to become what I would.

Speaker 5: Yeah, Ken, I'll touch on that, Derek, later a little bit. Obviously, we made a significant investment in the second quarter of 2021. And it really ended the third quarter as we kept training individuals. It takes about a good six a month, quite frankly, for someone to get up to speed, manufacturing wise to become what I would consider efficient in the plant.

Consider efficient in the plant.

Speaker 5: And so what we're starting to see, obviously, especially beginning even this first quarter with whether we're improving in direct labor, we literally saw in January .

So what we're starting to see obviously, especially the beginning even this first quarter with weather improved in <unk>.

Dark labor, we literally saw in January .

Speaker 5: uh... we're starting to see that efficiency start to come through now we have much more uh... room to go and i think we've demonstrated we can do that even in our past uh... if you look back into you know nineteen and twenty you know our even amount is with north of seventeen percent so as we look into twenty twenty two and we guide to a low-end even a margin of uh... sixteen point three we feel very comfortable uh... with that kind of guidance actually we think that's that's so

We're starting to see that efficiency start to come through now we have much more.

Room to go and I think we've demonstrated we can do that even in our past. If you look back into <unk> 19, and <unk> <unk>, our EBITDA margins were north of 17%. So as we look into 2022, when we guide to a low end EBITDA margin of 16, three we feel very comfortable.

Would that kind of guidance actually we think.

Our low and conservative and so we will continue to reap the benefits of the investments in labor, we did and I will say out of that 825 team members. We added you got to remember that two or via acquisitions, we added aniline.

Speaker 5: And so we will continue to reap the benefits of the investments in labor we did. And I will say out of that 1825 team members we added, you got to remember that two were via acquisitions. We added Annlin individuals and team members to the family and we also added echo. So some of that was additions via acquisitions. Some of it was literally hiring folks, the big hiring push we had in Q2 of last year. All in that way turnover, which is another key indicator, our turnover has improved. So we're starting to retain.

Individuals and team members to this family and we also added echo. So some of that was additions via acquisition. Some of it was literally hiring folks the big hiring push we had in Q2 of last year, all evaluate turnover, which is another key indicator our turnover has improved so.

We're starting to retain a lot of individuals with higher again, making me more comfortable we will be able to produce and increase our capacity that we're seeing and Jeff I just want to add to that.

Speaker 5: a lot of the individuals we've hired, again, making me more comfortable will be able to produce an increased our capacities that we're seeing. And Jeff, I just want to add to that.

The.

Speaker 2: kind of inflation mismatch that we talked about with aluminum and some of the materials also did exist in direct labor. So we early last year went out and increased our labor wage rates and stuff like that. That's, you know, the pricing didn't necessarily come to offset that until later in the year and for this year. So thank you. Have a thing. Correct. Right. Right. No, it's going to be a good question. If you were to force rank, you know, the margin contributors to your rate.

Kind of inflation mismatch that we talked about with aluminum and some of the materials also did exist in direct labor. So.

Early last year.

And increased our labor wage rates and stuff like that that the pricing didn't necessarily come to offset that until later in the year and for this year. So thank you Jonathan.

Correct.

Right right.

Thank you Barton.

If you were to force rank them.

Margin contributors.

To your growth.

I apologize.

Cytosorb MSA.

Speaker 3: Can you bet a force rank, you know, how you're thinking about, you know, the material and the direct labor?

So can you kind of force rank.

How you are thinking about you know the material and direct labor, perhaps operational improvements.

Speaker 3: perhaps operational improvements and the legacy of West Coast business. Is there way to kind of force what's contributing to your margin gain?

I have a bet legacy West Coast business is there way you can kind of force right.

Contributing to your margin gains thank you.

Speaker 5: Thank you. Even though margin, I'm assuming on that one. And yes, sure, that's a great question. The biggest contributor obviously is pricing. You know, even as late as the November pricing actions we took in the market, which is well received and all our competitors are doing the same thing. So we feel very comfortable and we've seen that stick. So the biggest contributor will be the effect annual last effect of pricing.

On a margin EBITDA margin I'm, assuming on that one then yes sure Greg.

Question the biggest contributor obviously is pricing.

Even as related to November pricing.

Actions, we took in the market, which is well received in all of our competitors are doing the same thing. So we feel very comfortable in what we've seen that stick.

So the biggest contributor will be the effect annualized effective pricing.

Speaker 5: And then if you look to the acquisition, you know, even on margins.

And then as you look to the acquisition EBITDA margins.

Speaker 5: uh... if you perform uh... the impact of anlone uh... into uh... year-over-year you're gonna you're gonna get about a fifteen at at least a fifteen million pick up from anlone any but uh... alone so pricing at the low end which say a seventy million pick up related to pricing you know anlone adding another fifteen uh... and then general volume uh... that obviously offset by some inflationary pressures we we've had to price for uh... mainly aluminum and labor .

If you pro forma the impact of aniline into.

Into year over year, you're going to you're going to get about a 15 at least 15 million pickup from aniline and EBITDA alone. So screen pricing at the low end, we'd say, a 70 million pick up related to pricing and then adding another 15.

And then general volume.

That obviously offset by some of the inflationary pressures.

Had to price for mainly.

Mainly aluminum and labor.

Speaker 5: You get a nice flow in terms of margin build up on the low end again. We've got a low in a high.

You get a nice flow in terms of margin buildup.

On the low end again, we've got a low and a high all those items.

Speaker 5: items obviously are in the high end as well, just a little bit more aggressive targets. Thank you very much. You're welcome.

<unk>, obviously are in the high end as well, it's a little bit more aggressive targets.

Thank you very much.

Okay.

Again, if you have a question. Please press Star then one.

Speaker 1: The next question is from Michael Rehots of Gapy Morgan. Please go ahead.

Our next question is from Michael Rehaut Jpmorgan. Please go ahead.

Speaker 6: Hi, Doug Woodlaw for my own rehearsals. I just want to ask about the acquisition pipeline and what types of targets are looking for or the other needs to be available on.

Hi, Doug.

For.

I just wanted to ask about the acquisition pipeline what types of targets, we're looking for.

Okay.

Larger.

Right.

Speaker 5: You know, I will say we're always quote looking. It's got to obviously meet deploying our capital. We don't take it lightly. We try to make sure we do that in the linus with our long-term goals of growing the company and in certain regions, in certain geographic areas, and our product line.

I will say we're always.

Looking it's got to obviously meet deploying our capital we don't take lightly we try to make sure we do that and align us with our long term goals of growing the company and in certain regions and certain geographic areas or product lines. So as we look to potentially add.

Speaker 5: So as we look to potentially add another acquisition, the pipeline is there, you know, quite frankly, a lot of smaller players, a couple of mid-sized players.

Another acquisition pipeline is there quite frankly, a lot of smaller players a couple of mid sized players.

Speaker 5: and you know we're in contact constantly with them. You know we've had seven acquisition over the last five years. Those came through relationships that were built over time.

And.

We're in contact constantly with them.

Had seven acquisitions over the last five years.

Those came through relationships that were built over time so.

Speaker 5: There was still being built as we speak for the ones we had to acquire.

Those are still being built as we speak for the ones we hadn't acquired.

Speaker 5: And again, we'll look for, I think product expansion, you know, new products is gonna be key. The products we may not have, such as wood, for example, or wood cloud type product.

And.

Again, we will look for.

I think product expansion and new products is going to be key.

Products, we may not have such as wood for example, our wood clad type product.

Speaker 5: or and or geographic. We want to continue to grow out west into the Nevada, California, Arizona, and even in Texas, obviously, those areas we feel are important to our future growth as well. So we'll be looking into those areas.

Our <unk> geographic we want to continue to grow out west into the Nevada, California, Arizona.

And even into Texas, obviously those areas, we feel are important to our future growth as well so we'll be looking in those areas.

Speaker 5: I would say those are probably the two top things. And yes, the pipelines there. We'll lower the comment on who that is or the process, but we'll continue to look. And grow organically. That's also incredibly important, obviously, here in Florida. Our organic growth helps drive the ship.

I would say those are probably the two top things and yes, the pipelines there.

Let me comment on who that is or the process.

We'll continue to look and grow organically. That's also incredibly important obviously here in Florida.

Our organic growth helps drive that.

Throughout the ship.

Awesome. Thank you.

You bet.

The next question is from Judy Merrick of true. It. Please go ahead.

Speaker 1: The next question is from Judy Merrick of Truist. Please go ahead.

Speaker 1: Thank you. This is Judy and for Keith Hughes. You noted that your lead time should decrease your exiting 2021. Give me a little bit about where you're at in your lead time now. And is that, anyway, we can kind of frame how you're thinking about the shape of the year with that impact, kind of the shape of the year given the wide sales guide.

Thank you this is judy in for Keith Hughes.

You noted that your lead times have decreased.

In 2021.

Give me that about how you're where you're at in your lead times now and is that.

Any way, we can kind of frame, how youre thinking about the shape of the year would that impact.

Kind of the shape of the year given the wide sales guidance. Thanks.

Speaker 5: Sure. Yeah. You really have to look at lead times mainly about product brands, for instance, the biggest challenge for lead times in 2020.

Sure. Yes, you really have to look at lead times, mainly product brands for instance, the biggest challenge for lead times in 2020.

Speaker 5: One was our PGT brand here here mainly in Venice

One was our PTT brand here mainly in Venice.

Speaker 5: Those lead times have improved substantially. You know, aluminum lead times range from, again, certain customers, loyal customers, bigger customers from seven weeks to as high as 15 weeks on aluminum. And the vinyl lead times we've gotten down to 10 weeks at the low end for, again, our major customers.

Those lead times have improved substantially our aluminum lead times range from again certain customers loyal customers bigger customers from seven weeks to as high as 15 weeks on aluminum and vinyl lead times, we've gotten down to 10 weeks at the low end.

Again, our major customers.

Speaker 5: and i guess you say it's high twenty for some some individuals uh... but i'll contrast that to cgi which is another incredible and we have this the growth engine for us we've been able to get those lead times down to as low as four to six weeks

And I guess, you could say as high as 20 for some individuals.

And I'll contrast that to CGI, which is another incredibly important brand we have been a growth engine for us we've been able to get those lead times down to as low as four to six weeks.

Speaker 5: And so, you know, we've actually implemented marketing initiatives in 2022. You'll see that in the first quarter. Guidance are results when we talk about 2022. We're going to start running ads and start being more aggressive on the marketing side for certain brands like CGI. And then there's the lead times with our retail front with new staff.

So we've actually implemented marketing initiatives into 2022, you'll see that in the first quarter Guy.

<unk> our results when we talk about 2022, we're going to start running ads and start being more aggressive on the marketing side for certain brands like CGI and then Theres the lead times with our retail front with new staff.

Speaker 5: They've been proved last year because we had a capacity. And so we really controlled that internally because again, we're the manufacturer, you know, obviously it's as well as the installer on that end. So as we add four new stores, which are incredibly great growth markets at Atlanta, it gets on fire, Nashville.

They've remained they've been proved last year, because we added capacity and so we really control that internally because again, we are the manufacturer.

Honestly, it as well as installer on that and so as we add four new stores, which are incredibly growth great growth markets Atlanta.

Fire Nashville.

Speaker 5: is an incredible market to be in. So as we add these new stores, obviously that will impact...

Incredible market to be and so as we add these new stores, obviously that will impact.

Speaker 5: capacity at New South, but we feel those lead times we can maintain or improve them as well. And then there's Western. Western has really not had a problem with lead times throughout this process. They've been able to increase capacity. We've actually recently signed a new addition to about $75,000 for the addition to the lead.

Capacity at new South, but we feel those lead times, we can maintain or improve them as well and then theres western western.

<unk> not had a problem with lead times throughout this process <unk> been able to increase capacity. We've actually recently signed a new addition to about a 75000 square foot addition to the lease facility there to expand the window line of Western just because of sheer demand. So we think we're in a good shape capital investments.

Speaker 5: facility there to expand the window line of westerns because she demand so we think we're in good shape the capital uh... investments in our actions we've taken here in twenty at the end of 2021 to really leverage well in the twenty twenty two uh... with the times coming down even more and uh... capacity

And our actions we've taken here in 2000 at the end of 2021 to really leverage well into 2022 with lead times coming down even more.

And capacity is increasing.

Speaker 2: And I think I would add that, you know, there's still an expectation for an R&R type season. You know, last year, a couple of years, the quarterly flow of sales has been a little tricky. Some of that's COVID, some of that.

And I think I would add there's still an expectation for an R&R type season.

Last last year, a couple of years.

Quarterly flow of sales has been a little tricky some of thats covered some of that.

Speaker 2: You know, backlog or what have you, but I think this year...

Backlog or what have you, but I think this year.

Speaker 2: we're anticipating a little bit more historical trend where our sales and Q2 and Q3 tend to be higher, Gernion, our season, particularly here in Florida. Yeah, and I would say also just to add to that, biggest impactor, I think, going forward for lead times will be the distribution or dealer base we sell out into.

Anticipating a little bit more historical trend, where our sales in Q2, and Q3 were tend to be higher during the R&R season, particularly here in Florida.

I'd say also just to add to that biggest impact I think going forward for lead times will be the.

Distribution and our dealer base, we sell out into.

Speaker 5: uh... you know it's they have to also have the ability to install uh... right now we feel with the capacity improvements made uh... operation improvement lately that it uh... we can produce more uh... we can produce enough to meet market demand and so our dealer based throughout the uh... channel

They have to also have the ability to install right now we feel with the capacity improvements we've made the operational improvements that lately we've added.

Can produce more.

We can produce enough to meet market demand and so our dealer base throughout the <unk>.

Speaker 5: has to have the ability to keep up with that demand. And that impacts lead times as well. And I know they're heavily investing in crews and trying to add installers and increase their bandwidth as well. Yeah. Yeah. Watch

Panels.

Has to have the ability to keep up with that demand and that impacts lead times as well and I know they are heavily investing in crews and trying to add installers and increase their bandwidth as well.

Okay. That's helpful. Thank you.

Thank you Mike.

Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to John Coons for closing room.

This concludes our question and answer session I would like to turn the conference back over to John King for closing remarks.

Speaker 7: Thank you for joining us on our fourth quarter and four year earnings call today.

Thank you for joining us on our fourth quarter and full year earnings call today.

Speaker 7: We appreciate your questions and your interest in the company. We look forward to your participation on our first quarter results called later this spring. Thank you very much.

We appreciate your questions and your interest in the company. We look forward to your participation on our first quarter results call. Later this spring. Thank you very much.

Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may not.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.