Company to Release Full 2018 Fourth Quarter and Full Year Results
and 2019 Outlook on February 18, 2019
TAMPA, Fla.--(BUSINESS WIRE)--
Masonite International Corporation ("Masonite" or "the Company") (NYSE:
DOOR) today announced select preliminary unaudited results for the full
year ended December 30, 2018.
Executive Summary – Preliminary Full Year 2018
versus Full Year 2017
-
Net sales increased 7% to approximately $2,170 million versus $2,033
million.
-
Income before taxes decreased 7% to $120 million versus $129 million.
-
Adjusted EBITDA* increased 5% to approximately $268 million versus
$255 million.
-
Adjusted EBITDA* was previously expected to be near or at the low-end
of the Company's original $280 million to $300 million outlook range.
-
Repurchased 1,306,984 shares during the fourth quarter, resulting in
total year-to-date purchases of 2,771,684 shares for $167 million.
-
Conference call at 9:00am EST on Friday, February 1, 2019 to discuss
the select preliminary unaudited results.
"Our results for the quarter did not meet our expectations, as sales
volumes were lighter than anticipated, particularly in the month of
December," said Fred Lynch, President and Chief Executive Officer. "This
led to higher relative factory costs given the lack of fixed cost
leverage and inability to concurrently reduce variable direct labor
costs. Our previously announced pricing actions took effect near the end
of December, too late to offset continued material cost inflation that
we experienced throughout the quarter. Revenue growth resumed in
January, and we enter 2019 with previously announced price increases
fully implemented and actions underway to continue to reduce our cost
structure."
Commenting more specifically on the operational performance of the
company, Lynch added, "As discussed on previous calls, we have been
working to optimize both our manufacturing footprint and product
portfolio. As part of this optimization, we continue to shift capacity
to lower cost operations and restructure the business to exit non-core
product offerings. The continued uncertainty in housing markets and
construction-related demand emphasizes the importance of moving with
urgency to execute those plans. We plan to discuss these actions further
during our detailed 2018 fourth quarter and full year earnings call."
* See "Non-GAAP Financial Measures and Related Information" for
definition and reconciliation of non-GAAP measures.
Masonite Select Preliminary Unaudited 2018 Full
Year Earnings Conference Call
The Company will hold a live conference call on Friday, February 1,
2019. The live audio webcast will begin at 9:00 a.m. EST and can be
accessed on the Masonite website at www.masonite.com.
Telephone access to the live call will be available at 877-407-8289 (in
the U.S.) or by dialing 201-689-8341 (outside the U.S.).
A telephone replay will be available approximately one hour following
completion of the call through February 15, 2019. To access the replay,
please dial 877-660-6853 (in the U.S.) or 201-612-7415 (outside U.S.).
Enter Conference ID #13687155.
Masonite 2018 Fourth Quarter and Full Year
Earnings Conference Call
The Company will hold a live conference call on Tuesday, February 19,
2019. The live audio webcast will begin at 9:00 a.m. EST and can be
accessed on the Masonite website at www.masonite.com.
Telephone access to the live call will be available at 877-407-8289 (in
the U.S.) or by dialing 201-689-8341 (outside the U.S.).
A telephone replay will be available approximately one hour following
completion of the call through March 5, 2019. To access the replay,
please dial 877-660-6853 (in the U.S.) or 201-612-7415 (outside U.S.).
Enter Conference ID #13687239.
About Masonite
Masonite International Corporation is a leading global designer and
manufacturer of interior and exterior doors for the residential new
construction; the residential repair, renovation and remodeling; and the
non-residential building construction markets. Since 1925, Masonite has
provided its customers with innovative products and superior service at
compelling values. Masonite currently serves approximately 9,000
customers in 64 countries. Additional information about Masonite can be
found at www.masonite.com.
Forward-looking Statements
This press release contains forward-looking information and other
forward-looking statements within the meaning of applicable Canadian
and/or U.S. securities laws, including our discussion of, and the
effects of, our restructuring and strategic initiatives. When used in
this press release, such forward-looking statements may be identified by
the use of such words as “may,” “might,” “could,” “will,” “would,”
“should,” “expect,” “believes,” “outlook,” “predict,” “forecast,”
“objective,” “remain,” “anticipate,” “estimate,” “potential,”
“continue,” “plan,” “project,” “targeting,” or the negative of these
terms or other similar terminology. Forward-looking statements involve
significant known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of
Masonite, or industry results, to be materially different from any
future plans, goals, targets, objectives, results, performance or
achievements expressed or implied by such forward-looking statements. As
a result, such forward-looking statements should not be read as
guarantees of future performance or results, should not be unduly relied
upon, and will not necessarily be accurate indications of whether or not
such results will be achieved. Factors that could cause actual results
to differ materially from the results discussed in the forward-looking
statements include, but are not limited to, downward trends in our end
markets and in economic conditions; reduced levels of residential new
construction; residential repair, renovation and remodeling; and
non-residential building construction activity due to increases in
mortgage rates, changes in mortgage interest deductions and related tax
changes and reduced availability of financing; competition; the
continued success of, and our ability to maintain relationships with,
certain key customers in light of customer concentration and
consolidation; new tariffs and evolving trade policy between the United
States and other countries, including China; increases in prices of raw
materials and fuel; increases in labor costs, the availability of labor,
or labor relations (i.e., disruptions, strikes or work stoppages); our
ability to manage our operations including anticipating demand for our
products, managing disruptions in our operations, managing manufacturing
realignments, managing customer credit risk and successful integration
of acquisitions; the continuous operation of our information technology
and enterprise resource planning systems and management of potential
cyber security threats and attacks; our ability to generate sufficient
cash flows to fund our capital expenditure requirements, to meet our
pension obligations, and to meet our debt service obligations, including
our obligations under our senior notes and our ABL Facility; political,
economic and other risks that arise from operating a multinational
business; the United Kingdom's formal trigger of the two-year process
for its exit from the European Union, and related negotiations;
fluctuating exchange and interest rates; our ability to innovate and
keep pace with technological developments; product liability claims and
product recalls; retention of key management personnel; environmental
and other government regulations, including the FCPA, and any changes in
such regulations; and limitations on operating our business as a result
of covenant restrictions under our existing and future indebtedness,
including our senior notes and our ABL Facility.
In addition, our expectations about full year 2018 results are based on
preliminary unaudited information about the full year and are subject to
revision. Although the fourth quarter is now completed, we are still in
the process of our standard financial reporting closing procedures.
Accordingly, following completion of our normal year-end closing and
review processes, it may turn out that actual results differ materially
from these preliminary results. Factors that could cause our actual
results for the full year 2018 to differ materially from our preliminary
results include, but are not limited to, inaccurate assumptions,
unrecorded expenses, changes in estimates or judgments, and facts or
circumstances affecting the application of our critical accounting
policies.
Non-GAAP Financial Measures and Related
Information
Adjusted EBITDA is a non-GAAP financial measure which does not have a
standardized meaning under GAAP and is unlikely to be comparable to
similar measures used by other companies. Adjusted EBITDA should not be
considered as an alternative to either net income or operating cash
flows determined in accordance with GAAP. Additionally, Adjusted EBITDA
is not intended to be a measure of free cash flow for management's
discretionary use, as it does not include certain cash requirements such
as interest payments, tax payments and debt service requirements.
Adjusted EBITDA is defined as net income (loss) attributable to Masonite
adjusted to exclude the following items: depreciation; amortization;
share based compensation expense; loss (gain) on disposal of property,
plant and equipment; registration and listing fees; restructuring costs;
asset impairment; loss (gain) on disposal of subsidiaries; interest
expense (income), net; loss on extinguishment of debt; other expense
(income), net; income tax expense (benefit); loss (income) from
discontinued operations, net of tax; and net income (loss) attributable
to non-controlling interest. This definition of Adjusted EBITDA differs
from the definitions of EBITDA contained in the indentures governing the
2026 and 2023 Notes and the credit agreement governing the ABL Facility.
Adjusted EBITDA, as calculated under our ABL Facility or senior notes
would also include, among other things, additional add-backs for amounts
related to: cost savings projected by us in good faith to be realized as
a result of actions taken or expected to be taken prior to or during the
relevant period; fees and expenses in connection with certain plant
closures and layoffs; and the amount of any restructuring charges,
integration costs or other business optimization expenses or reserve
deducted in the relevant period in computing consolidated net income,
including any one-time costs incurred in connection with acquisitions.
Adjusted EBITDA is used to evaluate and compare the performance of the
segments and it is one of the primary measures used to determine
employee incentive compensation. Intersegment transfers are negotiated
on an arm’s length basis, using market prices. We believe that Adjusted
EBITDA, from an operations standpoint, provides an appropriate way to
measure and assess segment performance. Our management team has
established the practice of reviewing the performance of each segment
based on the measures of net sales and Adjusted EBITDA. Net assets are
not allocated to the reportable segments. We believe that Adjusted
EBITDA is useful to users of the consolidated financial statements
because it provides the same information that we use internally to
evaluate and compare the performance of the segments and it is one of
the primary measures used to determine employee incentive compensation.
The table below sets forth a reconciliation of Adjusted EBITDA to income
before income tax expense (benefit) for the period indicated. We have
reconciled Adjusted EBITDA to income before income tax expense (benefit)
instead of net income attributable to Masonite, as our jurisdictional
income tax provision calculation, and thus net income attributable to
Masonite for the period, is not yet completed. Accordingly, we cannot
accurately depict the total for our income tax expense, and thus net
income attributable to Masonite for the period.
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MASONITE INTERNATIONAL CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
TO GAAP FINANCIAL MEASURE
(In thousands of U.S. dollars)
(Unaudited)
|
|
|
|
|
|
|
|
Year Ended
|
(In thousands)
|
|
|
December 30, 2018
|
|
|
December 31, 2017
|
Adjusted EBITDA
|
|
|
$
|
267,936
|
|
|
|
$
|
254,506
|
|
Less (plus):
|
|
|
|
|
|
|
Depreciation
|
|
|
59,089
|
|
|
|
57,528
|
|
Amortization
|
|
|
28,583
|
|
|
|
24,375
|
|
Share based compensation expense
|
|
|
7,681
|
|
|
|
11,644
|
|
Loss on disposal of property, plant and equipment
|
|
|
3,470
|
|
|
|
1,893
|
|
Restructuring costs
|
|
|
1,624
|
|
|
|
850
|
|
Asset impairment
|
|
|
5,243
|
|
|
|
—
|
|
Loss on disposal of subsidiaries
|
|
|
—
|
|
|
|
212
|
|
Interest expense, net
|
|
|
39,008
|
|
|
|
30,153
|
|
Loss on extinguishment of debt
|
|
|
5,414
|
|
|
|
—
|
|
Other income, net of expense
|
|
|
(2,533
|
)
|
|
|
(1,570
|
)
|
Income before income tax expense (benefit)
|
|
|
$
|
120,357
|
|
|
|
$
|
129,421
|
|
|
|
|
|
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View source version on businesswire.com:
https://www.businesswire.com/news/home/20190131005928/en/
Joanne Freiberger, CPA, CTP, IRC
VP, TREASURER
jfreiberger@masonite.com
813.739.1808
Farand Pawlak, CPA
DIRECTOR, INVESTOR RELATIONS
fpawlak@masonite.com
813.371.5839
Source: Masonite International Corporation