Jeffrey Jackson – Chief Financial Officer Rodney Hershberger – President and Chief Executive Officer

Sam Darkatsh – Raymond James Keith Hughes – SunTrust Robinson Humphrey Nishu Sood – Deutsche Bank Securities Michael Rehaut – JP Morgan Robert Kelly – Sidoti & Co James Wilson – JMP Securities Jonathan Sacks – Stonehill Capital

Welcome to the PGT Inc. 2009 earnings conference call. I would now like to turn the call over to Mr. Jeff Jackson.

I'm Jeff Jackson, CFO, and I'm joined today by Rod Hershberger, President and CEO. We will represent PTG on this morning's call. Before we begin, let me remind everyone that today's conference call may contain statements concerning the company's future prospects, business strategies, and industry trends. Such statements are considered to be forward-looking statements and under the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations are subject to risk and uncertainty. Actual results may vary materially from those contained in the forward-looking statements. Please refer to yesterday's press release and our most recently filed Form 10-K with the SEC. We undertake no obligations to publicly update or revise any forward-looking statements. A copy of our press release is posted on the investor relations section of our corporate website at www.pgte.com. Included in the press release are the unaudited consolidated balance sheets and statements of operation prepared in accordance with GAAP and pro forma information, which was quantitatively reconciled to GAAP. Our company uses non-GAAP measurements as key metrics for evaluating performance internally. A detailed explanation of these non-GAAP measurements can be found in our Form 8-K filed yesterday with the SEC. These non-GAAP measurements are not intended to replace the presentation of financial results in accordance with GAAP. Rather we believe the presentation of non-GAAP measurements provides additional information to investors to facilitate the comparison of past and present performance. For today's call Rod will provide and overview of our performance for the first quarter. Then I'll discuss our results in more detail. After our prepared remarks we'll take your questions. With that, let me turn the call over to Rod Hershberger.

As I mentioned in our press release, the downward pressure on the home building industry continued during the first quarter as new home construction remains at historically low levels. Housing starts in our core market were done 50% in the first quarter compared to last year's first quarter. In the face of this market our sales decreased 24%. Low home prices and interest rates plus the tax incentives for first time home buyers provided some beneficial economic effects during the quarter, but continuing increases in unemployment and home foreclosures have eroded consumer confidence. Compared to the first quarter of 2008, sales into the repair and remodeling market were down 14%, while sales into the new construction market were down 45%. As a percentage of total sales for the first quarter of 2009, R&R sales accounted for 69% and new construction sales accounted for 31% of sales, compared to the first quarter of 2008 when R&R sales accounted for 59% of sales and new construction represented 41%. As talked about in previous calls, our plan for managing through prolonged housing downturn includes driving sales, particularly in out of state markets and growing our dominant share in our core market, Florida. We began taking orders on our new R&R targeted non-impact vinyl window line in March. Reception to the product line has exceeded our expectation and we expect our new product line to provide geographic sales growth as we continue to focus on increasing our distribution network in targeted states outside Florida. In the first quarter of 2009 out of state sales, including in the Florida panhandle, were up nearly 40% compared to last year. Together with our joint venture partner, AFI limited, we signed another unitized curtain wall project estimated to generate 3.2 million in sales in total revenue over 2009 and 2010. And with the JV we continue to bid on numerous opportunities both inside and outside of Florida. We think the housing market conditions in the economy will remain difficult during the rest of 2009. While the new federal stimulus package contains measures to increase homeownership and additional measures to drive the purchase of energy efficient windows and doors, it remains too early to predict the economic impact on 2009. On a positive note, the economy began to show signs of stabilization recently as housing starts increased in April and there have been signs of rising builder confidence. Also, the decline in home value slowed and stock prices have surged since March. Because the downturn has been so long and severe, any recovery will take time, but stabilization is the first step to a recovery. We recently took further restructuring action to better align costs with recent sales levels that we estimate will save $10 million annually. We are optimistic about our long-term growth as we continue to grow sales out of Florida and to gain market share in Florida, but in the near-term we remain focused on controlling costs and conserving cash. Comparing the first quarter of 2009 to the fourth quarter of 2008, gross margin decreased $4.6 million from the fourth quarter of 2008 due mainly to lower unit volumes in our aluminum WinGuard product line, which was down 16%, as well as our non-impact aluminum product line, which was down 15%. SG&A costs decreased $1.2 million from the fourth quarter of 2008. Excluding restructuring costs in the first quarter of 2009, SG&A decreased $2.4 million driven by decreases in personnel and selling and advertising costs. Adjusted EBITDA decreased to $2 million in the first quarter of 2009 from $3 million in the fourth quarter of 2008. The decrease was driven by lower sales but partially offset by the benefit of cost savings initiatives. Primarily driven by restructuring costs of $3 million, but also by a loss of operating leverage due to lower sales, we had a net loss of $6.7 million for the first quarter. Adjusting for the restructuring costs, our net loss was $3.7 million for the first quarter of 2009 compared to an adjusted net loss of $2.3 million for the fourth quarter of 2008. Adjusted net loss per diluted share was $0.11 for the first quarter of this year compared to an adjusted net loss of $0.06 for the fourth quarter of 2008. With that, I will turn the call over to Jeff who will review the results for the quarter in greater detail.

Let me give you more detail regarding our first quarter. We reported net sales of $41.5 million for the first quarter, a decrease of 24.3% versus prior year quarter. As Rod mentioned, new housing starts in our core market were down 50% with Florida single-family home starts coming in at 4,654 starts for the quarter. This was the lowest number of single-family home starts we have ever seen. The first quarter decrease was mainly driven by new construction sales down 45% versus prior year first quarter. Our WinGuard product sales led our sales representing approximately 67% of sales for the first quarter. Breaking down our sales drives for the first quarter compared to 2008's first quarter we have WinGuard impact sales at $27.8 million versus $38.8 million down 28%, aluminum non-impact product sales $6.2 million versus $9.4 million down 34%, architectural system sales were flat at $3.3 million for both periods. Vinyl non-impact and other product sales were $4.2 million versus $3.3 million up 27%. The increase in vinyl sales was due to our continued focus on increasing our distribution network in targeted states outside Florida, which contributed approximately $1 million to the increase in vinyl sales and which has helped us reduce our concentration of sales in Florida to 86% on the total in the first quarter versus 90% last year. When compared to our sequential quarter, our sales decreased 16% from $49.3 million to $41.5 million. This is in the face of sequential housing start decrease of 24%. Our new construction sales decreased 26% while sales into the R&R market deceased 11% when compared to our fourth quarter of 2008. Single-family housing starts showed no signs of improvement in the first quarter averaging just 1,550 per month compared to 1,750 in the fourth quarter of 2008. Any recovery in the housing industry is difficult to predict, but we think the challenges we currently face will continue through our 2009 fiscal year. Our gross margin in the first quarter was 23.8% versus 29.3% in the first quarter of 2008d down 550 basis points. Our decrease in gross margin percentage compared to prior year quarter was driven by the impact of our decrease in sales, which reduced our margin by 820 basis points. A change in mix and pricing pressures, which reduced our margins by another 360 basis points, partially offset by our spending reductions from our cost saving initiatives, which helped improve margins by 630 basis points compared to prior year. On the material side, our average cost of aluminum was approximately $2382 per metric ton during the first quarter and substantially all of our needs were hedged. This compares to the first quarter 2008 average of $2629 per metric ton. Cash prices of aluminum to ton during mid-2008 were over $3300 per metric ton. Since the end of the third quarter of 2008, the cash price for aluminum has fallen dramatically. April 2009's average cash per aluminum was just $1421 per metric ton. As of today, we are hedged approximately 73% of our estimated needs for the rest of 2009 at an average of $2200 per metric ton and 46% of our estimated needs in 2010 at an average of $2064 per metric ton. Our selling, general, and administrative expenses were $15 million, down $1.3 million compared to prior year's first quarter. Excluding restructuring costs of $1.6 million in the first quarter of 2009 and $680,000 in the first quarter of 2008, selling, general, and administrative expenses decreased $2.2 million driven by lower personnel related costs of $1.9 million, lower distribution costs of $300,000, and overall lower spending in various other categories of approximately $400,000. Offsetting these lower costs in the quarter was an increase of $400,000 in our bad debt reserve as we added to our allowance for bad debt. This increase related to two specific customers which we are currently working on collecting these accounts but wanted to take a more conservative view in our reserves. Excluding the previously discussed restructuring costs, SG&A as a percent of sales was 32.2% in the first quarter of 2009 compared to 28.4% in prior year's first quarter, up 380 basis points. The cost savings from restructuring initiatives we've undertaken were more than offset by loss of leverage from lower sales and an increase in our bad debt reserve. Interest expense for the first quarter was $1.6 million compared to $2.7 million in the first quarter of 2008. The difference primarily relates to lower debt compared to our prior year as we were able to prepay $40 million of our long-term debt via proceeds received from our REIF offering and cash from operations, and a decrease in our interest rate on our debt from an average rate of 8.4% in the first quarter of 2008 to 6.3% in 2009. Interest rate on our bank debt is based on our new credit agreement and its tiered interest rate structure. For the first quarter, our effective tax rate was zero compared to an effective tax benefit of 36.6% in the first quarter of 2008. In the fourth quarter of 2008, we provided a valuation allowance on all our deferred tax assets because their realization in this difficult economy cannot be assured. Deferred tax assets created as a result of generating additional net operating loss carry-forwards in the first quarter were equally offset by an increase in the valuation allowance. Excluding the change in valuation allowance, the effective tax rate in the first quarter of 2009 would have been a tax benefit of 38%. Going forward, we anticipate our tax rate to range in the 38% to 39% absent any further adjustment in the valuation allowance. As we become more profitable, we will be in a good position to realize our deferred tax assets by offsetting it against future incomes. Our net loss for the first quarter was $6.7 million versus a net loss of $1.8 million in the first quarter of prior year resulting in a net loss of $0.19 per diluted share compared to a net loss of $0.06 per diluted share for the same period last year. Adjusting the first quarters in both 2009 and 2008 for the restructuring costs in each period, our adjusted net loss for the first quarter of 2009 was $3.7 million or a loss of $0.11 per share compared to last year's adjusted net loss of $780,000 or $0.02 per diluted share. Also note that this year's first quarter adjusted net loss did not include any benefit from tax effects. Adjusting the restructuring costs, EBITDA was $2 million or 4.8% of sales for the first quarter versus $5.8 million or 10.7% of sales for the first quarter of 2008. As additional information, first quarter 2009 depreciation and amortization totaled $4.1 million. A reconciliation of the adjusted net loss and the adjusted EBITDA is included in our earnings release for your reference. Turning to the balance sheet, at quarter end our networking capital excluding cash decreased $576,000 compared to the end of 2008. This decrease in networking capital was driven by a decrease of $250,000 in accounts receivable and a net decrease of $325,000 in other current assets. In reviewing free cash flow for the quarter, we had an adjusted EBITDA of $2 million. We had first quarter 2009 capital additions of $700,000, cash paid for interest of $1.4 million, and an insurance recovery and a partial tax refund which provided additional cash in the quarter of about $800,000. This resulted in operating net cash of approximately $700,000 in the first quarter. We used an additional $1.2 million in cash for margin calls on our aluminum hedges and $2.8 million in cash related to our first quarter restructuring actions, resulting in our cash on hand at quarter-end or $16.3 million compared to $19.6 million at the end of 2008. Our net debt at the end of the quarter for 2008 was approximately $79 million. As Rod mentioned earlier, we took restructuring actions during the first quarter which included reductions in our workforces and changes in our healthcare benefit plan. These actions resulted in a 17% reduction in our workforce which we estimate will result in labor savings of approximately $9 million annualized and generate annual savings of $1 million in healthcare costs. We have implemented a temporary 16% pay reduction for all our salary employees that went into effect at the beginning of our 2009 second quarter. We do not take lightly impacting our employees with these types of events. We realize the difficult times we are currently in in the economy and these actions were necessary for the long-term health of the company. We continue to believe in the long-term outlook of housing and our abilities to expand both geographically and into new markets. Our operating strategies and long-term vision for PGT remain the same. We'll continue to be the dominant impact window and door company in Florida, the largest market in the nation, and aggressively expand outside the state. With that, let me turn the call back over to Rod.

As Jeff said, we are still in difficult market conditions that negatively affect our business in the overall economy but, as I mentioned earlier, we see signs of economic stabilization as the government's efforts for housing and revised lending are beginning to take hold. But it will take additional time to spur growth as the economy continues to shed jobs. As I previously outlined, we instituted several measures to stimulate sales as well as to reduce operating costs to counteract the current market conditions and will continue to monitor these conditions closely. The federal stimulus package is putting much needed dollars into the credit markets and has provided energy programs and tax rebates that may prove beneficial in 2009. But the continued uncertainty and negative effects on consumer confidence due to the continued rise in unemployment mean the home construction industry is still facing a long recovery period. Long-term, we believe the U.S. impact resistant market will continue to grow and we will expand our presence in this market. Our new products in our vinyl and architectural system streams have been received well and we continue to add new distribution. We are actively seeking new markets in other geographic areas as well as developing new aluminum products in our flagship WinGuard product line, and we will continue to opportunistically review acquisition candidates as they arise. During this market downturn, we've been able to leverage our value proposition we've improved our customer service and maintained our internal structure to quickly take advantage of opportunities when market conditions improve. I thank all our employees for believing in us, committing to our strategy, and outperforming our expectations. With that, I'll conclude and Jeff and I will happy to answer your questions.

(Operator Instructions) Our first question comes from Sam Darkatsh – Raymond James. Sam Darkatsh – Raymond James: Rod, you mentioned in your last remarks that you started to see some economic stabilization or you expect some. Was that indicative with respect to sales trends on a year-on-year basis? As the quarter progressed did March and perhaps April look better than January and February, excluding the normal seasonal effect?

Yes, we've talked many times about the seasonal effect and it seems like we always see a relatively slow January as things come back from the holidays. The second quarter traditionally, if you go back over our almost 30-year history, tends to be stronger than the first quarter. We're seeing those same trends again this year so that's really not different than what we've seen in almost every other year since we've been in business. It's hard to quantify. Things feel a little bit better out there, but I don't know if we can quantify that. A lot of that is due to second quarter is traditionally a little stronger than the first quarter. Sam Darkatsh – Raymond James: On a year-on-year basis that would account for the seasonality, were you seeing better year-on-year trends March versus January and February?

Sam, I don't know if I could say I see better trends in March versus January and February. What I can say is that the phone's ringing a little bit more. The bids are a little bit more robust, but it hasn't necessarily translated into sales. Sam Darkatsh – Raymond James: Second questions, your R&R was down 14% and I'm guessing in Florida it was down a little bit more than that. It looks like existing home sales in Florida have improved, at least in terms of units. How are you gauging market share? It looks like existing home sales are now even up on a year-on-year basis. How are you determining your performance in the market place?

It's an inexact science at this point, Sam. We look at, new construction is pretty easy. We've talked about that many times, you can get starts and average number of openings per house and tell that pretty well. The remodeling market, we look at a lot of different types of data. Some of it is big box data, how much product they're selling, how that compares to previous years. And then we hire a third party to go out and take a look at, they pull permits, they look at what's being put in. We see a little bit of additional R&R it's always a little stronger in the impact market, tends to get a little bit stronger as we get closer to hurricane season because it's driven by insurance and code. But that market because of the housing prices and the value of housing has been impacted to a considerable amount also. So a little bit of what we're seeing is going into the field, talking to our customers, looking at the number of products going in. And then we haven't gotten all of our third party data back yet to say that this is our exact market share at this point. Sam Darkatsh – Raymond James: Two more just clarification questions for Jeff. Jeff, what was the approximate drag on the P&L from North Carolina facility in the first quarter and how do you expect that drag to look over the next couple of quarters.

We've looked at the North Carolina and to try to look at it on a standalone is difficult obviously because you've got the corporate allocations we do do from here. Considering the allocations that we normally do, we've estimated North Carolina is probably on an EBITDA basis it's at a loss of about $4.5 million to $5 million. But again that's with allocations from corporate to it. As we move forward, the growth we've seen has been in vinyl. I think Rod mentioned that in his comments earlier. We are establishing new distribution networks outside the state. We do anticipate that trend to continue and we have seen that trend elevate here as we enter into the second quarter. So I'm feeling better about North Carolina. I don't think we've seen the potential that plant has yet just because we haven't put the volume in there yet. But I do feel better than ever that that's coming. Not trying to be too optimistic in the down market that we're in, but we've got such a low base there that literally if you double the dollar amount, it's a huge percentage gain. But we are starting to definitely open up some channels there. So looking forward I expect North Carolina to ultimately be a breakeven in the $40 million to $45 million sales range coming out of that plant based off its current cost structure. But again as we ramp up, we'll add costs, we'll try to leverage appropriately and look forward to the future of that.

Sam, just an additional point that joint venture contract that we signed, that's coming out of our North Carolina plant also. Sam Darkatsh – Raymond James: And last question you mentioned I believe in your prepared remarks that the savings in the first quarter from restructuring was offset by your under-absorption rates from the lower volumes. Do you have a sense of the quantification of the restructuring savings and how did that play out versus your original expectations?

Yes, if you look at 2008 when we took the initial major restructuring I think we've been able to realize almost $23 million of savings during 2008 alone. If you consider from '07 to '08 our volume decreased almost $60 million in top line sales. And we're about a 50% contribution margin so that would say it we should be down in EBITDA by 50% of that, or close to $30 million. We ended up with EBITDA of $24.5 million versus $31.6 million in 2007. So we definitely didn't see the impact of that decrease in sales because of our cost reductions. If you net out what we should have been, in 2008 our EBITDA should have been closer to $2 million without those cost reductions. We came in at $24.5 million. So I feel comfortable we got a good $22 million, $23 million worth of savings in 2008. As we go into the first quarter here, if you roll that forward from our fourth quarter, our EBITDA really given our sales fall, in the fourth quarter our sales were $49 million and in the first quarter $41.5 million, so that would imply about with a 50% contribution about a $3.5 million EBITDA cut from the fourth quarter. Well fourth quarter's EBIDTA was $3 million so without the cost reductions again this past time, we should have been closer to about a $500,000 loss on EBITDA. We came in at $2 million profit. So we have definitely seen the benefit of those January reductions. I'll remind everyone we actually had two restructurings, one in January and another follow on in March. So we've seen the benefit of the January restructuring, as well as a partial benefit of that March restructuring in the $2 million we've reported in the first quarter.

The healthcare side of things that we talked about didn't take effect until Q2 so that benefit will be seen going forward, but it wasn't there for Q1. Sam Darkatsh – Raymond James: It was $2.5 million in sequential savings. That also adjusts for any receivable write-downs or any other one-off items. That $2.5 million is a clean sequential savings rate from restructuring. Is that what you're saying, Jeff.

Yes, that's what I'm saying.

Our next question comes from Keith Hughes – SunTrust Robinson Humphrey. Keith Hughes – SunTrust Robinson Humphrey: You had talked in the prepared comments about 630 basis points improvement cost actions. Does that include the benefit from aluminum being a positive year-over-year?

No, Keith, the cost actions were related just to the labor savings and other actions we got from our suppliers in terms of price cuts. If we do renegotiate contracts, we do include that in cost savings initiatives, but the sheer price of drops in aluminum we do not count that in terms of our annual savings. Keith Hughes – SunTrust Robinson Humphrey: Can you give us any idea how much that was year-over-year?

It was in dollars, it was a little over $300,000 quarter one last year, quarter one this year, $320,000. Keith Hughes – SunTrust Robinson Humphrey: And given how you fix the price that's basically what we're going to see every quarter for the rest of the year? Is that correct?

Pretty much, it depends on volume. Obviously, the more volume you get the more cash buys we're going to be having. Fortunately, or unfortunately, the cash buy being at $1,400, $1,500 level more cash buys will bring that average price down so it could be more beneficial. But it shouldn't be any more detrimental. Keith Hughes – SunTrust Robinson Humphrey: What was the gross margin for WinGuard in the quarter?

It was 36%. Keith Hughes – SunTrust Robinson Humphrey: And you had talked a minute ago about the North Carolina facility. You had a nice uptick in the vinyl non-impact in the quarter. Will those sales be coming out of North Carolina?

The actual product is shipped out of North Carolina. Those sales could actually, most of them are out of state, but also they're in the northern part of Florida as well. Keith Hughes – SunTrust Robinson Humphrey: That was my question, being shipped out of North Carolina, so when I see increases in vinyl non-impact it would be coming out of that plant. Is that correct?

That is correct. Keith Hughes – SunTrust Robinson Humphrey: And final question you talked about North Carolina being breakeven at $45 million in sales. What kind of sales level, what kind of run rate are you at right now do you think?

Probably close to $30 million to $35 million.

Our next question comes from Nishu Sood – Deutsche Bank Securities [Rob] in for Nishu Sood – Deutsche Bank Securities: It's actually [Rob] on for Nishu. On the 14% of sales outside of Florida, I just wanted to see, get an idea of what percent was inside the states versus in the Caribbean and etc.

Well our international sales, which we call Caribbean was approximately $2.7 million in the quarter. inside the state of Florida, it was $35.6 million, so that can give you kind of dollars and then outside of the state of course, $3.2 million to get to our total $41.5 million in sales. [Rob] in for Nishu Sood – Deutsche Bank Securities: I think you mentioned that CapEx was around $700,000 this quarter. Is that a good run rate for the rest of the year? I think you had mentioned around $4 million to $5 million previously, so it looks like you're going to come in a lot below that.

Yes, it'll probably be a little higher than that as we move forward in terms of a run rate. It's going to be in that $4.5 million for the year still, that's what we estimating.

Our next question comes from Michael Rehaut – JP Morgan [Ray Wong] in for Michael Rehaut - JP Morgan: This is actually [Ray Wong] on for Mike. Just wondering if you guys could drill down to the sales a little bit more. I mean they were down 24% this quarter versus starts down 50% and then last quarter they were only down 9% versus starts down 38%. So I'm just wondering if you can give any additional color on what impacted sales or the drivers and also just anecdotally what are you seeing in terms of the competitive landscape in your markets.

I think when you look at the two quarters in comparison, we've been pretty candid by saying we generally outperform ours and start spiking a 20% to 30%, and some of that's driven by the repair and remodeling market and how strong that market is. I think in both those quarters we could use that same standard and it varies from a high to a low. So that's pretty consistent with how we've performed looking at housing starts. I think I would anticipate that going forward. We believe strongly that we still are able to take additional market share, so as market comes back we think that will help us out. I think the wild card there again, we talked to Sam a little bit about it is that R&R market and how strong the R&R market is going to be going forward, particularly this time of year. Again, it seems like it, looks like according to the data that we get that housing prices may not have bottomed, but the decline is definitely not near as steep now as what it was in the past. And we'll see what the money on the sidelines does as they look at those houses and attractive buys that are in place right now.

I think another thing impacting sales this quarter more so than it did last year's quarter was discounts. We had to win larger projects. We went to having to give a higher discount in some cases to get those projects or products into the market. We would rather obviously at this point, have the volume into our plants to help with overhead absorption. We do monitor those. Obviously, we're not going to take anything that loses money. But we will use price if we have to to win a larger project, especially if it hurts our competition. What we found is a lot of the local guys try to come in and bid projects low because they're hurting and really they can't stand to lose the volume, much less the project itself. So we've taken that opportunity to go in ourselves and underbid to get the project in anticipation of driving them out of business. [Ray Wong] in for Michael Rehaut - JP Morgan: Can you give us a sense of what the typical discount you guys are offering on those projects now?

Let me just add a little bit more to that because I don't know that we can give you a typical discount. We have not had to go in and lower our discounts across the board to any of our customers. Our standard discounts are still in place. But we will bid projects on a one-off basis based on what we need to get the project. So it's hard to give you just a set answer that we're going to go in and bid a project at 10% less or 5% less or even a bigger number than that. We'll look at the project and we'll do a cost up basis and see what it costs us to do the project and make sure that we can pull it off and make a profit on that project. So it depends on the type of product going in, the size of the product, the ability to manufacture it. And I would say if you looked at it across the board, it would drive a couple points off of the discount, total discount.

Yes, and also that just to keep in mind too as we sign new distribution channels outside the state, we'll have to fill those channels initially with potentially samples that also comes into play on top line and impacts our top line because we do the samples via a discounted product is basically what it is. So as we sign more and more distribution, that'll impact top line as well. But if you really look, Sam had asked earlier in terms of the trend versus last year and how we saw it progress during the quarter, I'd say nothing unusual. It did increase over the months as we anticipated. As we enter in to the second quarter, again second quarter being our stronger quarter. Our average weekly sales have increased. It went from I'd say an average, you can do the math on Q1, our average sales was about $3.2 million. Here in the beginning of the second quarter, that average is closer to $3.6 million, $3.7 million, so we have started to see the second quarter bump coming in. And we see that as being driven by that out of state initiative as well as Florida. So top line things to just think about going forward would be the discounts we are giving at times as well as the samples as we start to expand outside the state in the different markets and the traditional trend we've seen historically we are seeing. [Ray Wong] in for Michael Rehaut - JP Morgan: Just one quick follow up, I guess some other billing product companies have started to raise capital through the debt markets. I was wondering if that's something that you guys have been looking at or is that something you'd consider.

At this point, we went back to the equity markets last year and did the rights offering and raised $30 million of capital. Our cash has remained fairly strong, I know it's down from year-end but it's down literally because of the restructuring payout we made $2.8 million, as well as some margin calls we've had of $1.2 million. If you take that into account from an operational basis, we're not using cash, minimal if at all during the worst quarter we've had in terms of sales and performance has been this first quarter and we basically broke even in cash. So right now, we're feeling pretty good with $16 million on our balance sheet. We think that will grow. Obviously if we're thinking this is our worst quarter, we think from here on seasonality, we'd say second quarter would be better. We think we can potentially add to cash, obviously keeping in mind our capital expenditures we're going to do and working capital needs. But we think we're okay for now in terms of going back out, it wouldn't be something we'd pursue at this point.

Our next question comes from Robert Kelly – Sidoti & Company Robert Kelly - Sidoti & Company: You had alluded to kind of breakeven sales run rate in the past. If we now count the new round of restructuring, what do you think your new breakeven level is?

Well in terms of EBITDA, we've got to figure we've got to cover basically interest and taxes, I mean, sorry interest and depreciation. So depreciating and amortization was $4.1 million and interest was $1.4 million, $1.5 million, so that would mean we need an EBITDA of about 5.6 million to 6 million to breakeven. The sales to generate that, we'd have to back in to that based off mix, product mix and customer mix but it would probably be in that $46 million range, $45 million range, again, it depends on discounts and there's so many factors right now, Robert, that affect it. But I would be comfortable with about $46 million sales would get us to a breakeven. Robert Kelly - Sidoti & Company: And then just on your debt to EBITDA covenant that you need to maintain, is that a net debt to adjusted EBITDA or total debt?

Well it's actually total gross debt so we do have cash on hand we could use to pay down debt if we had to. But we look at it and every quarter when we start to close the books, we look at our gross debt not taking into account our cash and compare it to our trailing 12 months of EBTIDA and assessing whether or not we need pay down cash or we think we're fine. Robert Kelly - Sidoti & Company: So at this point, I mean do you have to go pay down debt or are you fine?

No, I mean, we closed out the first quarter and we were comfortable. Obviously we didn't make a debt payment during the first quarter. Robert Kelly - Sidoti & Company: Then maybe a point of clarification, you talked about the margin calls being a drain of cash in 1Q, does that get worse or does that ease as we go to the back part of the year with the cash cost being so much lower than where you're hedged, I'm just not totally clear on that.

I'm sorry, Robert, would you repeat that? Robert Kelly - Sidoti & Company: You had the margin calls for the aluminum draining cash during the quarter you said $1.2 million.

That largely fluctuate as the cash or the spot buy for aluminum changes. We're covered at certain percentage for '09 and 2010. So those four contracts are in essence revalued every day based off the current spot price. So for instance just yesterday we got wired $200,000 because aluminum actually went up. So they sent us back $200,000. And actually today I think I saw a wire for $150,000 because aluminum was up again today. So since the quarter end, I know we've actually received over $300,000 back, but that's a back and forth. You know that's not set. If aluminum goes down tomorrow we maybe wiring that $200,000 back to them. Robert Kelly - Sidoti & Company: So rising prices benefit your hedge?

Yes.

Rising prices benefit the cash portion of the hedge, but it hurts the cash portion of the buy.

And right now with our volume rising prices benefit us. That kind of sounds wild but we're hedged at 96% I think it was in the first quarter. So it actually benefits us.

Our next call comes from James Wilson – JMP Securities. James Wilson – JMP Securities: Well, I guess the first question Jeff, I just was wondering the margins for WinGuard and then how that compares and what it will look for the other businesses, other business lines.

Gross margin for WinGuard was 36% and all other was right at 9%. James Wilson – JMP Securities: So the commodities have been holding in and WinGuard seen a little bit of pressure but I guess not too bad.

Yes, a little bit of pressure but, again, nothing unexpected in this market we're in. James Wilson – JMP Securities: How much was this 16% pay reduction, how much is labor kind of total operating costs.

If you look at our total expenses, labor's probably close to 36% of our total expenses here. Material being the next highest at a close 35% to 36% as well but labor is our highest cost. James Wilson – JMP Securities: So that can have a pretty meaningful impact near-term on some cost savings?

Yes.

Our next question comes from Jonathan Sacks – Stonehill Capital. Jonathan Sacks – Stonehill Capital: Can you just relate again the timing of the cost reductions that you made in the first quarter and what portion of the benefit of that was actually realized in the first quarter?

Yes, the first cost reduction we made was the first week of January. We had approximately $6 million in annualized savings from the first restructuring. We realized pretty much all of that benefit. If you put that on a quarterly basis, that's about $1.5 million we definitely see in the first quarter because again, we took in the first week back from the New Year. The next restructuring was in the first week of March, and we recognized again another probably $4 million of people-related savings related to that. So, $1 million of that being the health that Rod mentioned earlier so probably recognize a portion of say $3 million but only one month's worth of that quarter. So again I'd say probably $2 million in total cost savings for the new one.

Yes, and any time that you do that especially toward the end of the quarter, you get the disruptive effect, that takes place for a week or two so even though we see a month's worth of benefit, we don't really realize the entire month's worth of benefit that first month.

Yes, that's true. Jonathan Sacks – Stonehill Capital: This other one is on the question of covenants, can you just remind me what is your leverage of covenant and does that decline and where are you on that now.

Our covenant, we've got several. The leverage one is actually fives times our debt, which our debt is currently at $90 million.

Ninety million gross, about 79, I think.

So it's five times our debt. That's the one we monitor. It's trailing EBITDA, trailing 12 months EBITDA. Jonathan Sacks – Stonehill Capital: Is that five times requirement? Is that tighten labor in the year or is that steady.

No, that's actually been locked in. When we went out and did our [REIT] offering last year we at the same time renegotiated our bank facility. We locked in that five times requirement through the end of the first quarter of 2010. So basically another year, it's locked. Jonathan Sacks – Stonehill Capital: Do you know what the next step down is from that?

I think it steps down a quarter a point, 4.75 if I recall. I'd have to go look. That's actually filed in terms of it being out there available. I don't have it with me but I'm pretty sure it steps down a quarter.

Yes, it's a quarter point. Jonathan Sacks – Stonehill Capital: Just on CapEx, I think you said this year it's going to be around $4.5 million. I know in years prior when the whole business was obviously running at a much higher rate, the CapEx was much higher. Can you give us a sense to what you think is sort of sustainable long-term CapEx and at the current level are you sort of under spending what you need of the be on a long-term basis.

There is the maintenance side of the CapEx which is going to be in the – it's gone down a little bit but it's going to be in the $2 million to $3 million range. So that's going to be necessary to make sure that we're just maintaining what we're doing. As we look at any other CapEx spending, we have changed our philosophy slightly. In the past, I mean we've been well known for rolling out new products and new product lines. New product launch is anywhere from nine months to 2 years depending on how significant that product line and how complicated that product line is. We really haven't rolled out, other than the R&R product that we started on over a year ago and has really been well received, we haven't rolled out new product lines as much as we're looking at opportunistic product changes driven more by large projects where we may have to spend a $100,000 or maybe a few hundred thousand dollars to tweak or change a product. Then in turn it brings in a $1 million job or gets a bid on a couple of different jobs that will pay for that project pretty quickly. So I don't think we've been quite as aggressive on the product line side of things and that's what brought some of our capital spending down. But we've been equally or more aggressive on the product change side of things to make sure that we're producing the right product for the market.

I guess I'd just add to that as we look to the maintenance part of that, it will depend on the year. Last year we put on roof, had to redo our roof and that was almost $2 million just for the roof, okay. And we're not doing that this year so our maintenance is probably instead 2 to 3, it's probably closer to 1.5 to 2. Again it depends on what's needed during that year. Obviously we don't let our equipment go without its required repair and maintenance. The other part of that is we are spending on areas that will hopefully improve efficiencies and generate return. We do look at all of our projects in terms of a pay back whether that system related projects or lines to build a natural product. I think the last thing I'd add is as we look to sign new distribution and get into new markets, if a product is warranted in that market that we think we can make or utilization of our current equipment to a certain degree but may have to add in order to increase capacity or add a new feature to a product or what have you, we will do that. As we march through vinyl process here we will be going out with probably more product offerings in vinyl in the future. Assuming we get the distribution and base to support that, we would be going out with more vinyl related projects in the future on top of what we said earlier. Jonathan Sacks – Stonehill Capital: Do you think CapEx spend of $4 million to $5 million absent any surprises is a sustainable level for the next few years if it needed to be?

Honestly if it needed to be, yes, but I think with a growing company, when this market turns around and like I said as we go into new distribution territories outside this state, we'll have to come up and service those areas with new products. We will be having some CapEx I would see as closer, on a normal year, $8 million to $10 million of CapEx, which is what we said prior to all the downturn. This was what we tried to run the company at was an 8 to 10 level. Obviously, historically we hit $20 million before when we bought the plant in North Carolina. The year we did the IPO I think we were at $16 million. We've since brought it down.

Exactly when we look at our market and our geographic growth in our really dominant share that we have in the Florida market, I would not anticipate us running at $4 million in CapEx spending. There is a lot of opportunity and we see that opportunity and we're approached with it quite a bit. We'll have to measure that opportunity very well. Obviously the market is not what it was years ago but when we see a pretty quick pay back and pretty strong commitment whether it's outside or inside the state, those are opportunities that we'll look at extremely closely with our management team, with our board and make that type of decision. So again in a company if you look at the history of our company I would not anticipate as we continue to grow market share, angiographic markets, us staying at that level. But to answer your question directly, if we had to stay at that level because markets dictate it, we could stay at that level for a few years but I think it would damage our long-term growth. Jonathan Sacks – Stonehill Capital: One last question which is a very basic question, what actually motivates an R&R window sale? Is that a house is damaged and someone is replacing it, as someone that's upgrading? Is that a builder who buys a house to renovate and flip it? Or is it just someone who's just upgrading their own home. Just a little insight would be helpful.

When you look at WinGuard product line, our impact product line whether its vinyl or aluminum, it's driven a lot by code and insurance. So you've got to have a product that protects the homeowner. People understand it, particularly in hurricane prone areas. There is a lot of knowledge and a lot of education that's gone on. So that driven a lot by education, code, and insurance. There has been new via American, via the ARRA and I can't tell you what that acronym stands for accurately right now, but there is a tax rebate for putting more energy efficient and there some really stringent levels that you have to meet for the energy efficiency, but you can get a tax rebate you change your product out. That's in effect for 2009 and 2010. And our new R&R product line a bunch of those products meet that so we're seeing some sales driven by tax rebates. Then there's a comfort level. Drafty windows, old windows, frost on the windows, various things, security, and safety. People will change out that product. Then you kind of nailed that last one also. There are some houses being sold, prices have come down quite a bit. Traditionally, you'll see a lot of, especially again in the hurricane or code driven areas, you'll see window replacement. You'll see roof replacement. Then you see the normal things like kitchen replacements or kitchen updates and bath updates. In a code driven area, the structural part usually trumps the esthetic part on the inside. Jonathan Sacks – Stonehill Capital: But when you say the WinGuard sales are driven by code and insurance, if it's an existing house that means they didn't have it before so what's prompting someone to replace the windows to bring them up new code, one of the other factors?

Yes, a number of things. If you're in a particularly, depending on who you're insured with and depending on the value of your house, in order to keep that insurance, you might have to have it upgraded. You might have to have impact protection in place. There are insurance companies that require that and it's a sliding scale from the first of 2009 through the first of 2010. So it may be driven where you want to be insured, you have to put impact protection in place. The code in almost every code driven area, the code says if you replace 25% of your windows, you have to upgrade all your windows to impact resistance. So whether that's driven by energy or structural load or impact, the code is going to drive that additional window replacement in those types of markets. So when I talk about code and insurance driving it, there are insurance rebates for having impact protection in place. There's insurance requirement to have impact protection in place and there is code for 25% of your windows being replaced that would drive the change.

With no further questions, I'll turn the call back over to Mr. Jackson for any additional remarks.

Thank you for joining us today. We look forward to speaking with you again next quarter. If you have any further questions, please feel free to call me. Thank you. Have a good day.

That concludes today's conference. Thank you for your participation.