PGTI Announces Private Placement of Senior Notes

Rhea-AI Summary

PGT Innovations, Inc. (NYSE: PGTI) announced plans to offer $515 million in additional senior notes due 2029, subject to market conditions. The proceeds will fund the Anlin Acquisition, set to close in Q4 2021, and redeem $425 million of existing senior notes due 2026, along with repaying $54 million in loans. The notes will be offered to qualified institutional buyers, exempt from registration under the Securities Act. PGTI also highlights potential risks, including market conditions and integration challenges following acquisitions.

Positive

• Plans to offer $515 million in senior notes to finance acquisitions and reduce debt.
• Intended use of proceeds includes redeeming $425 million in senior notes and repaying $54 million in loans.

Negative

• Market conditions may affect the timing and terms of the notes offering.
• Integration risks associated with the Anlin Acquisition could divert management's focus.

NORTH VENICE, Fla.--(BUSINESS WIRE)-- PGT Innovations, Inc. (NYSE: PGTI) ("PGTI" or the "Company"), a national leader in premium windows and doors, including impact-resistant products and products designed to unify indoor/outdoor living spaces, announced today that it intends to offer $515 million aggregate principal amount of additional senior notes due 2029 (the " Notes"), subject to market conditions, in an offering that will be exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act").

The Notes are being offered to finance, together with any borrowings under the Company’s credit agreement, the purchase price of the acquisition (the "Anlin Acquisition") by Western Window Holding LLC, a newly formed Delaware limited liability company and indirect wholly owned subsidiary of the Company, of all of the assets, properties and rights owned, used or held for use in the business, as operated by Anlin Industries, a California corporation (“Anlin”). The Anlin Acquisition was announced on September 2, 2021, and is expected to close in the fourth quarter of 2021. PGTI also intends to use the proceeds of the Notes to redeem in full $425.0 million in aggregate principal amount of the Company’s 6.75% Senior Notes due 2026, plus accrued and unpaid interest thereon, (iii) to repay the entire $54.0 million outstanding amount under its existing term loan credit facility and to pay fees and expenses related to the offering.

The Notes will be guaranteed, jointly and severally, by each existing and future domestic restricted subsidiary of the Company, other than any unrestricted subsidiary and any restricted subsidiary of the Company that does not guarantee the Company's existing senior secured credit facilities or any permitted refinancing thereof (the "Guarantors"). In this regard, Eco Enterprises, LLC and its subsidiaries are unrestricted subsidiaries under the indenture and the credit agreement governing the Company’s existing senior secured credit facilities and are not Guarantors of the Notes.

The Notes and related guarantees will be offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act, and to non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act. The Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This notice is being issued pursuant to and in accordance with Rule 135c under the Act.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are statements other than historical fact, and include statements relating to the offering of Notes, including the use of proceeds therefrom. These "forward­ looking statements" involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward- looking terminology, such as "may," "expect," "expectations," "outlook," "forecast," "guidance," "intend." "believe," "could." "project," "estimate," "anticipate," "should" and similar terminology.

These risks and uncertainties include factors such as:

• market conditions and our ability to consummate the expected offering of the Notes on the terms or timeline currently contemplated, or at all;
• the impact of the COVID-19 pandemic (the “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;
• the ability to successfully integrate the operations of Anlin into our existing operations and the diversion of management’s attention from ongoing business and regular business responsibilities to effect such integration;
• 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;
• 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 our acquisition of 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 acquisitions of NewSouth and Eco;
• our level of indebtedness, which increased in connection with our acquisition of NewSouth, and increased further in connection with our acquisition of Eco;
• increases in bad debt 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 debt;
• the risks that the anticipated cost savings, synergies, revenue enhancement strategies and other benefits expected from our acquisitions of NewSouth 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;
• the 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 acquisition of New South, Eco and Anlin, our ability to successfully integrate businesses we may acquire in the future, or that any business we acquire may not perform as we expected at the time we acquired it; and
• the other risks and uncertainties discussed in our other filings with the SEC.

Statements in this press release that are forward-looking statements include, without limitation, our expectations regarding the expected Anlin Acquisition and the expected offering of the Notes, including the timing and terms thereof. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, we undertake no obligation to update these forward- looking statements to reflect subsequent events or circumstances after the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210910005306/en/

Investor Relations:

Brad West, 941-480-1600

Interim Chief Financial Officer and SVP, Corporate Development and Treasurer

BWest@PGTinnovations.com

Media Relations:

Stephanie Cz, 941-480-1600

Corporate Communications and PR Manager

SCz@PGTinnovations.com

Source: PGT Innovations, Inc.

FAQ

What is PGT Innovations planning with the $515 million notes offering?

PGT Innovations intends to use the proceeds from the $515 million notes offering to finance the Anlin Acquisition, redeem existing senior notes, and repay loans.

When is the expected closure date for the Anlin Acquisition?

The Anlin Acquisition is expected to close in the fourth quarter of 2021.

What are the risks associated with PGT Innovations' recent press release?

Risks include market conditions affecting the notes offering and management diversion due to the integration of Anlin.

What will PGT Innovations do with the proceeds from the notes offering?

The proceeds will be used to redeem $425 million of senior notes, repay a $54 million loan, and fund the Anlin Acquisition.