Speaker 1 00:00:04 Welcome to the Clear Impact Podcast, brought to you by pg t I University. Thanks for joining us today. My name is Sherry Connor and I am your host.
Speaker 0 00:00:17 Good morning.
Speaker 1 00:00:18 We are here on the Clear Impact Podcast and today is a very special episode because it is our 100th episode and today we are in the series executive updates and who better to bring us some updates than Jeff Jackson himself. So welcome back to the studio. Jeff.
Speaker 2 00:00:35 Thank you for having me. Looking forward to it. Yeah,
Speaker 1 00:00:38 This is gonna be a great conversation. So we just came off of a three day weekend and hopefully got some rest and um, some relaxation in and so we're back at it this morning. I noticed I was looking in the showroom on the board. You've been the CEO here since 2014, which is nearly a decade. And last year was our biggest year yet. What is a highlight for you From 2022?
Speaker 2 00:01:04 Yeah, I can't believe it's been almost a decade there. Yeah. Uh, Sherry, yeah, if you look back in 2012, which is 10 years ago, we were 175 million in sales and last year we closed almost 1.5 billion. So it's been a pretty good run the last 10 years. And uh, time does fly. Looking back into 2022, I'd have to say, you know, we had certain targets, growth targets we wanted to achieve and we put together a plan over eight years ago really, and we've marched to that strategic plan over time and to see it accumulate after a certain number of years, five years, we hit our billion target. The next three years we're at a billion and a half. So it ramped up quite a bit, uh, the last few years, mainly through acquisitions as we know, and also organic growth. But if you look back last year, it just had it, so much of its share of challenges, both from a hurricane perspective, hurricane Ian just devastating our coast and a lot of our employees were impacted.
Speaker 2 00:02:04 So if I look back at the biggest thing that happened last year, it'd have to be that seeing our folks in need and working food lines, we had, you know, we ran various food options, Don and his team put together. I think we fed well over a thousand of our team members over time. And to see the long lines of cars and to go by and shake people's hands and just see how they're doing. And then of course the right after the aftermath of the storm, we ran relief efforts both here in our main plant and also done in Fort Meyers. And so to go to see that, it just really reminds you of the uh, sheer devastation these storms can have on folks and then there are folks, right? So it made it even, you know, more I revealing if you will. And it was definitely, I would say an impact on 2022
Speaker 1 00:02:50 And how amazing to work for a company that actually does things like that where we're not just telling people to fend for themselves and you know, when are you coming back and like understanding they've got tarps on their roof, they don't have a place to live, their kids are not in school right now. Like all of those things are not lost on the leadership here. So as an employee, I really appreciate that.
Speaker 2 00:03:11 Well thank you. Thank you. Again, it's part of our serving, leading, thriving, right? Clean serving. You gotta serve those around you. Yeah. And especially those that are part of the P G T I family
Speaker 1 00:03:21 And a good reminder for the rest of the people that are new to Florida like, hey, this is what a hurricane will do and can do. And it was pretty significant here. So I know we've been in high acquisition mode several companies in the last two to three years just since I've been here. I don't know if you can even answer this, I don't wanna give away too many of our secrets, but what do you look for when you're considering a new family member?
Speaker 2 00:03:44 Yeah, this is really no secrets to give away. We've really laid out certain criteria accompanying needs to meet, but first and foremost what we look for is cultural integration. Can they be a part of the PGT culture that we've developed over time? And when I say that, I don't mean can they just give up their culture and join ours? It's not how it works, but can their culture add to our agriculture? And as a result, we all grow together. And how has the company ran? What's the spirit of the company as leadership strong? Did they empower their folks? Is the brand we looked at the brand, the status of the brand, the power of the brand is, is it known in the community by both the homeowner and the dealer distributor base? How do they go to market? These are just some of the things we look at.
Speaker 2 00:04:29 Actually, probably one of the biggest one is geographic. So as we look to expand, we wanted to expand in what we call the destination states or the smile, as you probably heard it referred to. I don't know when that we coined that back in the day. But, uh, so as, as we look to develop, we want to move and redeploy our resources and our investments into where we think people are gonna live long term. And those places are typically in the south, southeast, up to the west, the Arizona area. And so as I'm looking for acquisitions, they gotta really fit within that smile destination. That doesn't mean they have to necessarily be located there, even though all of 'em have been so far. Mm-hmm <affirmative>, they can service those markets. Swiss key. And then of course margin, I've always said this, we're not just a window door company, we're an innovation company.
Speaker 2 00:05:14 It's in our title. And so I look for what that company does from an innovation standpoint, what makes it different. Not just your standard vinyl window or you know, not just your standard opening fill, but what do they bring different to the table? What does that brand equity bring? And it could mean you know, the customers they serve, upend, middle customers, it could be the territories or markets they serve. You know, Lin's a prime example we acquired Lin in I think in October of 2021 in California is a tough market to do business in, constantly changing regulations. They have Title 24 that's coming on 'em and basically it's gonna make houses energy neutral over time. So that requires again, innovation to make that happen. You know, you're just not flopping in a a double pane window, you know, vinyl window and, and you move on. You're putting into an opening something that matters to the energy efficiency of that house. And so that's what we look for. Innovation, cultural fit, geographic location, margin profile. You know, we want 'em to make money. Believe in the window and door company you can make money in this industry and what do they bring to the table, you know, in terms of that,
Speaker 1 00:06:24 Be sure to tune in for upcoming episodes to help you understand the fest station industry, what you need to know when buying windows and doors and other related topics. You can find out more about
[email protected]. You can also find us on Facebook and LinkedIn. Well I know I've had some interactions with the folks at Western and folks at Lin and they do seem to be a really good fit for us. So I've read through some of their mission statements and things like that and they believe in people first as well. So it's really a beautiful thing to see those companies come together. So we are about halfway through 2023 and hurricane season starts later this week. And so are we on pace for what you hope for for this year?
Speaker 2 00:07:08 Yeah, I think so. I mean June 1st, hurricane seasons just here again, it seems like it just left us right the devastation in Fort Meyers and you can still see it. People are still waiting for those insurance checks to you know, come through. So you know, from that end, this year's panned out pretty well for us as a company. We didn't put out annual guidance just cuz of the uncertainty in the market sea from banking to uh, construction to, you know, what's the federal government gonna do on interest rates and debt ceilings and whatnot, right? It seems like there's one crisis after another. So you know, this year we were a little bit more cautious on our guidance and what we said we would do this year, but what we've been doing is giving quarterly guidance. So you know, the first quarter we gave guidance and we beat it, we came in well ahead of expectations and then we laid out the second quarter guidance and you know, I think uh, we're still holding firm to that uh, at this point.
Speaker 2 00:07:57 So I think as you look forward to this year, you know it's gonna have its share of challenges no doubt. The biggest question is the Fed finished raising interest rates. Uh, you know, they just took an interest raise this last Wednesday. And so I personally think there probably reached their stopping point. Inflection, you look back, inflation seems to be under control now or at least coming down. Price of gas is a gallon, a dollar cheaper gallon than it wasn't this time last year. Our aluminum, our input cost are pretty flat year over year and even decrease in some areas. So we're starting to see the impact of the economy slowing down and prices starting to stabilize and actually come down. And I think that's what they were looking for is how do we stop this rampant inflation? And so we've seen that happen. So as you look through this year, I would argue, uh, you were gonna, we're gonna see a recession, we probably are already in it, you know, just, it's just not bad enough yet given the strong job market we all uh, still experience but you know, the things that's going on with the banking issues.
Speaker 2 00:08:56 I think again for the first time in probably history, the Federal Reserve has slowed down the economy without totally crashing it yet <laugh>. So, which is all positive, all positive news. But as we continue to look through this year, I think in Florida the markets we've targeted, like I'd mentioned earlier, these destination states, people are still moving there. People wanna live in the outdoors. Indoor outdoor living's still gonna be popular. Arizona, you know, Nevada, Utah, all the Texas, all these areas are still growing and even though they're not growing at the rate they were cuz people have to adjust at what kind of house they can buy given the change in rates, they're still growing. And so as you look at Florida, I'd say 70% of our business is in Florida. So Florida is the state people are still moving to, we're still growing in population.
Speaker 2 00:09:41 It's very popular state to be a part of and that's uh, in part cuz of tax structure helps to have no income tax here in Florida. And also just the newness, it's always something going on. It's the beaches, it's the vibe that you get when you move here. So that's still very, very popular and thank goodness again our state legislature passed that sales tax incentive. So basically to repair your home here in Florida is still sales tax free for another year. So, you know, there's a lot of good momentum in the r and r market here in Florida. And so I, I feel pretty good about, you know, the rest of the year. One thing you can't change is what's coming at us over the next five years is demographics. People are gonna get older, you know, you got the millennials, they're having kids, they're moving into homes and that's a huge section of the population and that's not gonna change no matter what the interest rates do, no matter what the economy does. Those individuals, that whole generation is growing older and so as they grow older they'll want more homes, they'll want yards, they'll want bigger homes as the families grow. So all that's gonna continue to happen. Well it's slow down, you know, couple of quarters no doubt. But I don't see anything long term that's gonna impact us for the long haul like it did back in the great housing resection y you know that which I was a part of here. <laugh>. Yeah
Speaker 1 00:10:56 I was not part of this industry during that time but it was rough.
Speaker 2 00:10:59 It was very rough. Uh, yeah especially, uh, again we were in Florida I would say ground zero for speculation and you know, home overbuilding, you know the amount of home supply uh, was several, you know, almost 16 months at one point. So yeah, it just got way outta whack here, especially in Florida. And are there certain areas like Las Vegas and Arizona even so these certain areas, it's just not like that. Now what's happening is this dynamic of, with the raise and rates, a lot of people have locked in their 30 year mortgages at like below 4%, you know, four and a half or less. And so those individuals given now it's six and a half to seven, they're not going anywhere. So they're kind of staying put. Well if they stay put, guess what? That happens. People fix up their homes, right? So the r and r market actually helps, but a lot of people don't think about it this way either. If there's less homes for sale in the rehome sale market cuz people are staying put, they got these mortgages that helps the new construction market. So if you want a home, there's less homes available for resale so you gotta go to the new home market. And I think that's the some of the dynamics we're seeing in the economy in in in the housing industry. That's why you see a lot of the uh, national builders still putting up pretty good numbers cuz people have to have homes.
Speaker 1 00:12:13 Yeah, no we all have to live somewhere. Yeah, I know it's fun to think, wow, I can sell this house for twice as much as I paid for it, but then where do I live? <laugh>. That's
Speaker 2 00:12:21 Exactly right, <laugh>.
Speaker 1 00:12:22 That's exactly right. I still have to have a roof over my head unless I'm, you know, heading to North Carolina or somewhere like that. But yeah, Florida's been a home for me for like 30 years now and I love it here. It's amazing. So what can you share with our dealers regarding the longer vision and direction for PPG T innovations?
Speaker 2 00:12:40 You know, long term we're still gonna march down our strategic plan. We review it every year with my team and some folks underneath them, some direct reports underneath them. And we've laid out I think an incredible growth strategy both in what we currently do in windows and doors, but also in adjacent markets. Now as you know, we acquired LAN several years ago in California that really got us into that vinyl world and that complimented Western who was already in that aluminum world. That whole process then accumulated really into going into garage doors. If you think about it, we wanna fill the whole openings of home. So windows, doors, garage doors. So that's a big area I see in the future for us as we continue to grow is the ability to expand to the garage door industry with our dealers or our home builders that we have these national contracts with.
Speaker 2 00:13:26 I also see the ability to take our new glass technology, which I think we've touched on before, and that's the both diamond glass and the thin triple glass that we're coming out with. And you know, here, here we're actually gonna be building a plant, another glass plant. The schedule is do it somewhere out west. And so as we build into the glass industry, you'll see us start to actually sell glass to third parties. You know, so again, that's another kind of adjacent market still in the, you know, glass window type industry. So it's not totally out of our core, but it's another area we've never really sold into. So as you see PGT grow in the next say three to five years, I think glass sells to third parties will be a big part of that. And as well as extension into the, you know, the garage doors.
Speaker 1 00:14:09 No, we've got an episode coming up with Bob Keller where he talks about that a little bit and it's pretty exciting stuff. I get to host some showroom tours and plant tours and things like that and it's so fun to show off that display that we have with a diamond glass with the weight of that pain. Yeah. And people are just blown away by that. So it's gonna really revolutionize the impact space and also the energy space. I'm excited about that.
Speaker 2 00:14:34 Yeah, with the energy space, you gotta think with the energy star seven coming at us I think in this October is when it's official, in order to maintain that energy rating, that energy star seven rating, you have to meet certain thresholds and the current insulated unit doesn't meet those thresholds. It'll require a triple pane. Okay? That triple pane will in essence require every window indoor company in the US to redesign their products to fit that triple pane in it. It's just thicker piece of glass. And folks don't wanna do that. They have to go through codes, they have to go through testing, they have to go through a tons of work retooling. So if they can have some kind of innovative glass that can fit into their current makeup of portfolio of products, it just makes all the sense. And we have that solution, you know, our thin triple will meet energy star seven ratings put into their current products. So it's like nothing ever happened. They just keep going with their current portfolio of products, just dropping a different kind of glass into it to meet that energy star seven requirements. And you know, while not everyone wants to meet that, that is how you get the federal tax credits. That was part of the Biden administration, they passed, you know, the bill that basically says you get almost 30% of that home value, the r and r value back to the homeowner if they meet Energy Star seven,
Speaker 1 00:15:47 That's some pretty great incentives. Oh
Speaker 2 00:15:48 Yeah, definitely. All
Speaker 1 00:15:49 Right. Anything else? You know,
Speaker 2 00:15:51 Just again, humbled, it's been this long, it's been a long ride. I've been with the company now 18 years and I've seen a lot of growth, a lot of opportunity, a lot of good folks have come in, are still here. Some have left us unfortunately, you know, over time and grown into other industries. Uh, lot of great dealers. We do the e tp, the Excellence Group partnership annually, and it's just incredible to touch base with some of the folks and and see how they've grown as well. Just like PGT Innovations has over time. And as we've added these new customers and new companies over time, they have similar relationships with their dealers and distributors. So that's been a remarkable event to kind of be a part of and get to know even a new set of customers, you know, as the company grows and quite frankly the addition of New South Window and doors.
Speaker 2 00:16:39 We have five retail stores in Texas now and so, you know, I'm going there for a grand opening I think in July for a couple of stores. So again, it's, it's very exciting. Lots of different stuff going on and it seems like we're always trying to advance the company with the dealer, distributor, homeowner in mind and be innovative, you know, whether it's in glass or whether it's in the products. We come out with indoor outdoor living to the impact products we have and it just makes it fun. I think people in general have fun and that's very important. Yeah,
Speaker 1 00:17:10 No, this is an amazing organization and obviously you're surrounded by a lot of talented people and, but you give them the room to run and do what they need to do. And I mean, my goodness, there's 5,600 employees now and um, multiple locations and you know, you're probably traveling more than most I'm sure, but it's an exciting time to be here for sure.
Speaker 2 00:17:30 Good. Thank you.
Speaker 1 00:17:31 Awesome. Thanks for a great conversation and cheers to hurricane season. You bet,
Speaker 2 00:17:35 <laugh>. Take
Speaker 1 00:17:36 Care. Take care. P G T I University is the customer education team for an entire family of brands. We began with the original Easy Breeze, porch en closure line, then became P G t, America's leading brand of impact resistant windows and doors. We then added cgi, CGI I c Window, Western Windows Systems, new South Windows, echo windows and doors and land, windows and doors, and our latest acquisition Martin Garage doors. We create products built to withstand major storms, keeping people safe, secure, and prepared. Our exceptional brands give you the protection you need without compromising design or functionality. PPG t i University is here to educate you, our listener, so that you can be a more informed consumer of window and door products.
