Press Release Details

Press Release Details

Masonite International Corporation Reports Third Quarter Results Featuring Margin Resilience and Strong Operating Cash Flow

November 7, 2023
  • Net sales declined 4% year over year amid challenging market conditions
  • Maintained strict focus on price-cost management to support margins
  • Delivered strong year-to-date operating cash flow of $310 million
  • Announced strategic acquisition of Fleetwood, a premium provider of glass door systems

Masonite International Corporation ("Masonite" or the "Company") (NYSE: DOOR) today announced results for the three and nine months ended October 1, 2023.

($ in millions, except per share amounts)

3Q23

 

3Q22

 

% Change

 

YTD 2023

 

YTD 2022

 

% Change

Net sales

$702

 

$728

 

(4%)

 

$2,170

 

$2,216

 

(2%)

Net income attributable to Masonite

$41

 

$57

 

(27%)

 

$128

 

$183

 

(30%)

% of net sales

5.9%

 

7.8%

 

(190 bps)

 

5.9%

 

8.3%

 

(240 bps)

Diluted earnings per share

$1.86

 

$2.54

 

(27%)

 

$5.73

 

$8.01

 

(28%)

Adjusted EPS*

$2.04

 

$2.53

 

(19%)

 

$6.23

 

$8.00

 

(22%)

Adjusted EBITDA*

$107

 

$112

 

(4%)

 

$332

 

$355

 

(6%)

% of net sales

15.3%

 

15.4%

 

(10 bps)

 

15.3%

 

16.0%

 

(70 bps)

“In the face of constrained end-market demand I am proud of our team's execution and ability to preserve margins and deliver record cash flow,” said Howard Heckes, President and CEO. “While maintaining sharp discipline on price-cost and working capital management, we are also delivering meaningful progress on our Doors That Do MoreTM strategic initiatives. Subsequent to the quarter end, we were pleased to announce the acquisition of Fleetwood, a leading manufacturer of high-end glass doors for luxury homes. The Fleetwood product portfolio extends the reach of Masonite product offerings to the top end of the good, better, best spectrum and allows us to tap into new areas of long-term growth.”

Third Quarter 2023 Discussion

(All references to percent increase or decrease in the discussion below compare current third quarter 2023 results to those realized in the third quarter of 2022 unless otherwise noted.)

Consolidated net sales were $702 million in the third quarter of 2023, a 4% decrease resulting from a 13% decline in volume partially offset by an 8% increase from the Endura acquisition and a 1% increase in average unit price (AUP).

  • North American Residential net sales were $553 million, a 5% decrease driven by a 14% decline in volume and a 1% decrease in AUP, partially offset by a 10% increase from the Endura acquisition.
  • Europe net sales were $65 million, a 2% decrease driven by a 7% decline in volume and a 2% decrease from lower AUP, partially offset by a 7% increase from favorable foreign exchange.
  • Architectural net sales were $81 million, a 4% increase driven by an 18% increase in AUP, partially offset by a 10% decline in volume and a 4% decrease from lower component sales.

Total Company gross profit was $166 million in the third quarter of 2023, down 1% as positive contributions from price-cost management initiatives and the Endura acquisition were more than offset by impacts of lower volumes. Gross profit margin, however, increased 60 basis points to 23.6%.

Selling, general and administration (SG&A) expenses were $99 million in the third quarter of 2023, an increase of 19% due primarily to incremental SG&A from Endura and an increase in acquisition and due diligence-related costs. SG&A as a percentage of net sales increased 260 basis points to 14% compared to the third quarter of 2022.

Net income attributable to Masonite was $41 million in the third quarter of 2023, a decrease of 27% primarily driven by higher depreciation, amortization, interest expense and costs associated with previously announced restructuring plans offset by lower income tax expense.

Adjusted EBITDA* was $107 million in the third quarter of 2023, a decrease of 4% driven primarily by the impact of volume declines. Diluted earnings per share were $1.86, a decrease of 27% compared to $2.54 in the comparable 2022 period. Diluted adjusted earnings per share* were $2.04 compared to $2.53 in the comparable 2022 period.

Balance Sheet, Cash Flow and Capital Allocation

At the end of the third quarter, total available liquidity was $663 million, inclusive of $360 million in unrestricted cash and $303 million of availability under our ABL Facility and AR Sales Program.

Cash provided by operations was $310 million for the nine months ended October 1, 2023, as compared to $83 million in the prior year period. Capital expenditures were $86 million for the nine months ended October 1, 2023, an increase from $66 million in the comparable period of 2022.

During the third quarter, Masonite repurchased approximately 106,329 shares of stock for $10 million, at an average price of $94.05.

Acquisition of Fleetwood

On October 19, 2023, the Company announced that its U.S. subsidiary had acquired Fleetwood Aluminum Products LLC (Fleetwood), a leading designer and manufacturer of premium, aluminum-framed glass door and window solutions for luxury homes, for $285 million in cash. Fleetwood is expected to contribute approximately $150 million of incremental full-year revenue to Masonite in 2024. Net of expected tax benefits attributable to the acquisition, the purchase price would equate to approximately $255 million, equivalent to approximately 7 times Fleetwood's anticipated 2024 EBITDA. Additional information about Fleetwood can be found at www.fleetwoodusa.com.

Masonite Earnings Conference Call

The Company will hold a live conference call and webcast on November 8, 2023. The live audio webcast will begin at 9:00 a.m. Eastern Time and can be accessed, together with the presentation, on the Masonite website 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 November 22, 2023. To access the replay, please dial 877-660-6853 (in the U.S.) or 201-612-7415 (outside the U.S.). Enter Conference ID #13741857.

* See "Non-GAAP Financial Measures and Related Information" for definition and reconciliation of non-GAAP measures.

About Masonite

Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors, door system components and door systems for the new construction and repair, renovation and remodeling sectors of the residential and 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 7,000 customers globally. 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 ability to support our margins, our acquisition activity, our product offerings, our ability to tap into new areas of long-term growth, and anticipated financial results related to Fleetwood. 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," "progressing," "potential," "continue," "plan," "project," "showing," "yielding," "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; our ability to accurately anticipate demand for our products; impacts on our business from weather and climate change; our ability to successfully consummate and integrate acquisitions and to effectuate dispositions; changes in prices of raw materials and fuel; tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing duties; 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 potential disruptions, manufacturing realignments (including related restructuring charges) and customer credit risk; product liability claims and product recalls; our ability to generate sufficient cash flows to fund our capital expenditure requirements and to meet our debt service obligations, including our obligations under our senior notes, our term loan credit agreement (the "Term Loan Facility") and our asset-based revolving credit facility (the "ABL Facility"); limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes, the Term Loan Facility and the ABL Facility; fluctuating foreign exchange and interest rates; the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks and data privacy requirements; political, economic and other risks that arise from operating a multinational business; retention of key management personnel; environmental and other government regulations, including the United States Foreign Corrupt Practices Act ("FCPA"), and any changes in such regulations; the scale and scope of public health issues and their impact on our operations, customer demand and supply chain; and our ability to replace our expiring patents and to innovate and keep pace with technological developments. For additional information on identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, see Masonite’s reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC from time to time. Masonite undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Non-GAAP Financial Measures and Related Information

Our management reviews net sales and Adjusted EBITDA (as defined below) to evaluate segment performance and allocate resources. Net assets are not allocated to the reportable segments. 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 attributable to Masonite adjusted to exclude the following items, as applicable: 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); other items; 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 2028 and 2030 Notes and the credit agreements governing the ABL Facility and Term Loan 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 sales are recorded 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. 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 tables below set forth a reconciliation of net income (loss) attributable to Masonite to Adjusted EBITDA for the periods indicated.

Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales. Management believes this measure provides supplemental information on how successfully we operate our business.

Adjusted EPS is diluted earnings per common share attributable to Masonite (EPS) less restructuring costs, asset impairment charges, loss (gain) on disposal of subsidiaries, loss on extinguishment of debt and other items, if any, that do not relate to Masonite’s underlying business performance (each net of related tax expense (benefit)). Management uses this measure to evaluate the overall performance of the Company and believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This measure may be inconsistent with similar measures presented by other companies.

Certain amounts in the Condensed Consolidated Financial Statements and associated tables may not foot due to rounding. All percentages have been calculated using unrounded amounts.

MASONITE INTERNATIONAL CORPORATION

SALES RECONCILIATION AND ADJUSTED EBITDA BY REPORTABLE SEGMENT

(In millions of U.S. dollars)

(Unaudited)

 

 

North
American
Residential

 

Europe

 

Architectural

 

Corporate
and Other

 

Total

 

% Change

Third quarter 2022 net sales

$

579.4

 

 

$

65.7

 

 

$

77.8

 

 

$

4.6

 

 

$

727.6

 

 

 

Acquisitions, net of divestitures

 

59.7

 

 

 

 

 

 

 

 

 

 

 

 

59.7

 

 

8.2

%

Volume

 

(81.0

)

 

 

(4.3

)

 

 

(7.8

)

 

 

 

 

 

(93.1

)

 

(12.8

%)

Average unit price

 

(3.9

)

 

 

(1.1

)

 

 

14.0

 

 

 

(0.7

)

 

 

8.1

 

 

1.1

%

Components

 

0.6

 

 

 

(0.4

)

 

 

(3.0

)

 

 

0.3

 

 

 

(2.6

)

 

(0.4

%)

Foreign exchange

 

(1.8

)

 

 

4.7

 

 

 

(0.3

)

 

 

(0.1

)

 

 

2.5

 

 

0.3

%

Third quarter 2023 net sales

$

553.0

 

 

$

64.6

 

 

$

80.7

 

 

$

4.1

 

 

$

702.2

 

 

 

Year over year change, net sales

 

(4.6

%)

 

 

(1.7

%)

 

 

3.7

%

 

 

(10.9

%)

 

 

(3.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third quarter 2022 Adjusted EBITDA

$

115.1

 

 

$

3.9

 

 

$

(0.2

)

 

$

(6.8

)

 

$

111.9

 

 

 

Third quarter 2023 Adjusted EBITDA

 

109.0

 

 

 

3.7

 

 

 

5.1

 

 

 

(10.6

)

 

 

107.2

 

 

 

Year over year change, Adjusted EBITDA

 

(5.3

%)

 

 

(5.1

%)

 

 

2,443.4

%

 

nm

 

 

(4.2

%)

 

 

 
 

 

North
American
Residential

 

Europe

 

Architectural

 

Corporate
and Other

 

Total

 

% Change

Year to date 2022 net sales

$

1,755.8

 

 

$

220.0

 

 

$

224.3

 

 

$

15.6

 

 

$

2,215.7

 

 

 

Acquisitions, net of divestitures

 

178.9

 

 

 

 

 

 

 

 

 

 

 

 

178.9

 

 

8.1

%

Volume

 

(293.4

)

 

 

(23.7

)

 

 

(11.0

)

 

 

 

 

 

(328.1

)

 

(14.8

%)

Average unit price

 

74.0

 

 

 

2.2

 

 

 

52.0

 

 

 

1.2

 

 

 

129.3

 

 

5.8

%

Components

 

0.9

 

 

 

(2.6

)

 

 

(7.3

)

 

 

(4.2

)

 

 

(13.2

)

 

(0.6

%)

Foreign exchange

 

(9.2

)

 

 

(1.6

)

 

 

(1.6

)

 

 

(0.1

)

 

 

(12.5

)

 

(0.6

%)

Year to date 2023 net sales

$

1,707.0

 

 

$

194.3

 

 

$

256.4

 

 

$

12.5

 

 

$

2,170.1

 

 

 

Year over year growth, net sales

 

(2.8

%)

 

 

(11.7

%)

 

 

14.3

%

 

 

(19.9

%)

 

 

(2.1

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to date 2022 Adjusted EBITDA

$

367.7

 

 

$

24.3

 

 

$

(3.0

)

 

$

(34.2

)

 

$

354.8

 

 

 

Year to date 2023 Adjusted EBITDA

 

334.5

 

 

 

11.5

 

 

 

17.8

 

 

 

(31.9

)

 

 

331.9

 

 

 

Year over year growth, Adjusted EBITDA

 

(9.0

%)

 

 

(52.5

%)

 

nm

 

nm

 

 

(6.5

%)

 

 

MASONITE INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share and per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

October 1, 2023

 

October 2, 2022

 

October 1, 2023

 

October 2, 2022

Net sales

$

702,247

 

 

$

727,626

 

 

$

2,170,115

 

 

$

2,215,717

 

Cost of goods sold

 

536,548

 

 

 

560,442

 

 

 

1,655,558

 

 

 

1,684,799

 

Gross profit

 

165,699

 

 

 

167,184

 

 

 

514,557

 

 

 

530,918

 

Gross profit as a % of net sales

 

23.6

%

 

 

23.0

%

 

 

23.7

%

 

 

24.0

%

 

 

 

 

 

 

 

 

Selling, general and administration expenses

 

98,625

 

 

 

82,690

 

 

 

299,076

 

 

 

256,266

 

Selling, general and administration expenses as a % of net sales

 

14.0

%

 

 

11.4

%

 

 

13.8

%

 

 

11.6

%

 

 

 

 

 

 

 

 

Restructuring costs (benefit)

 

1,900

 

 

 

(141

)

 

 

8,643

 

 

 

(221

)

Operating income

 

65,174

 

 

 

84,635

 

 

 

206,838

 

 

 

274,873

 

Interest expense, net

 

11,913

 

 

 

10,266

 

 

 

39,653

 

 

 

31,098

 

Other (income) expense, net

 

(1,083

)

 

 

211

 

 

 

(1,581

)

 

 

(1,604

)

Income before income tax expense

 

54,344

 

 

 

74,158

 

 

 

168,766

 

 

 

245,379

 

Income tax expense

 

12,041

 

 

 

16,376

 

 

 

38,074

 

 

 

59,502

 

Net income

 

42,303

 

 

 

57,782

 

 

 

130,692

 

 

 

185,877

 

Less: net income attributable to non-controlling interests

 

817

 

 

 

745

 

 

 

2,470

 

 

 

2,743

 

Net income attributable to Masonite

$

41,486

 

 

$

57,037

 

 

$

128,222

 

 

$

183,134

 

 

 

 

 

 

 

 

 

Basic earnings per common share attributable to Masonite

$

1.89

 

 

$

2.56

 

 

$

5.81

 

 

$

8.09

 

Diluted earnings per common share attributable to Masonite

$

1.86

 

 

$

2.54

 

 

$

5.73

 

 

$

8.01

 

 

 

 

 

 

 

 

 

Shares used in computing basic earnings per share

 

21,992,513

 

 

 

22,267,684

 

 

 

22,082,416

 

 

 

22,624,830

 

Shares used in computing diluted earnings per share

 

22,339,173

 

 

 

22,491,874

 

 

 

22,389,678

 

 

 

22,873,027

 

MASONITE INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share amounts)

(Unaudited)

 

ASSETS

October 1, 2023

 

January 1, 2023

Current assets:

 

 

 

Cash and cash equivalents

$

360,482

 

 

$

296,922

 

Restricted cash

 

11,926

 

 

 

11,999

 

Accounts receivable, net

 

354,995

 

 

 

375,918

 

Inventories, net

 

364,181

 

 

 

406,828

 

Prepaid expenses and other assets

 

65,305

 

 

 

55,051

 

Income taxes receivable

 

24,703

 

 

 

16,922

 

Total current assets

 

1,181,592

 

 

 

1,163,640

 

Property, plant and equipment, net

 

734,567

 

 

 

652,329

 

Operating lease right-of-use assets

 

190,840

 

 

 

160,695

 

Investment in equity investees

 

19,366

 

 

 

16,111

 

Goodwill

 

253,871

 

 

 

69,868

 

Intangible assets, net

 

247,763

 

 

 

136,056

 

Deferred income taxes

 

23,401

 

 

 

16,133

 

Other assets

 

34,506

 

 

 

33,346

 

Total assets

$

2,685,906

 

 

$

2,248,178

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

140,310

 

 

$

111,526

 

Accrued expenses

 

213,920

 

 

 

223,046

 

Income taxes payable

 

6,728

 

 

 

14,361

 

Current portion of long-term debt

 

37,500

 

 

 

 

Total current liabilities

 

398,458

 

 

 

348,933

 

Long-term debt

 

1,058,210

 

 

 

866,116

 

Long-term operating lease liabilities

 

178,009

 

 

 

151,242

 

Deferred income taxes

 

118,394

 

 

 

79,590

 

Other liabilities

 

76,116

 

 

 

59,515

 

Total liabilities

 

1,829,187

 

 

 

1,505,396

 

Commitments and Contingencies

 

 

 

Equity:

 

 

 

Share capital: unlimited shares authorized, no par value, 21,903,821 and 22,155,035 shares issued and outstanding as of October 1, 2023, and January 1, 2023, respectively

 

525,709

 

 

 

520,003

 

Additional paid-in capital

 

226,950

 

 

 

226,514

 

Retained earnings

 

227,298

 

 

 

127,826

 

Accumulated other comprehensive loss

 

(134,201

)

 

 

(142,224

)

Total equity attributable to Masonite

 

845,756

 

 

 

732,119

 

Equity attributable to non-controlling interests

 

10,963

 

 

 

10,663

 

Total equity

 

856,719

 

 

 

742,782

 

Total liabilities and equity

$

2,685,906

 

 

$

2,248,178

 

MASONITE INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars, except share amounts)

(Unaudited)

 

 

Nine Months Ended

Cash flows from operating activities:

October 1, 2023

 

October 2, 2022

Net income

$

130,692

 

 

$

185,877

 

Adjustments to reconcile net income to net cash flow provided by operating activities:

 

 

 

Depreciation

 

67,355

 

 

 

51,977

 

Amortization

 

21,915

 

 

 

13,164

 

Share based compensation expense

 

17,439

 

 

 

16,251

 

Deferred income taxes

 

(13,618

)

 

 

(4,675

)

Unrealized foreign exchange (gain) loss

 

(312

)

 

 

859

 

Share of income from equity investees, net of tax

 

(3,186

)

 

 

(3,944

)

Dividend from equity investee

 

3,150

 

 

 

4,500

 

Pension and post-retirement funding, net of expense

 

(1,446

)

 

 

140

 

Non-cash accruals and interest

 

3,384

 

 

 

199

 

Loss (gain) on sale of property, plant and equipment

 

3,319

 

 

 

(1,245

)

Changes in assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

30,972

 

 

 

(70,530

)

Inventories

 

88,087

 

 

 

(101,305

)

Prepaid expenses and other assets

 

(20,714

)

 

 

85

 

Accounts payable and accrued expenses

 

1,512

 

 

 

(3,307

)

Other assets and liabilities

 

(18,138

)

 

 

(5,127

)

Net cash flow provided by operating activities

 

310,411

 

 

 

82,919

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

 

(86,172

)

 

 

(65,792

)

Acquisition of businesses, net of cash acquired

 

(352,886

)

 

 

 

Proceeds from sale of property, plant and equipment

 

56

 

 

 

6,393

 

Proceeds from repayment of note receivable

 

12,000

 

 

 

 

Other investing activities

 

(5,886

)

 

 

(2,068

)

Net cash flow used in investing activities

 

(432,888

)

 

 

(61,467

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of long-term debt

 

250,000

 

 

 

 

Repayments of long-term debt

 

(18,750

)

 

 

 

Payment of debt issuance costs

 

(3,628

)

 

 

 

Proceeds from borrowings on revolving credit facilities

 

100,000

 

 

 

 

Repayments of borrowings on revolving credit facilities

 

(100,000

)

 

 

 

Tax withholding on share based awards

 

(2,257

)

 

 

(3,332

)

Distributions to non-controlling interests

 

(2,243

)

 

 

(2,500

)

Repurchases of common shares

 

(39,132

)

 

 

(140,000

)

Net cash flow provided by (used in) financing activities

 

183,990

 

 

 

(145,832

)

Net foreign currency translation adjustment on cash

 

1,974

 

 

 

(4,421

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

63,487

 

 

 

(128,801

)

Cash, cash equivalents and restricted cash, beginning of period

 

308,921

 

 

 

391,505

 

Cash, cash equivalents and restricted cash, at end of period

$

372,408

 

 

$

262,704

 

MASONITE INTERNATIONAL CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

(In thousands of U.S. dollars, except share and per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

(In thousands)

October 1, 2023

 

October 2, 2022

 

October 1, 2023

 

October 2, 2022

Net income attributable to Masonite

$

41,486

 

 

$

57,037

 

 

$

128,222

 

 

$

183,134

 

 

 

 

 

 

 

 

 

Add: Adjustments to net income attributable to Masonite:

 

 

 

 

 

 

 

Restructuring costs (benefit)

 

1,900

 

 

 

(141

)

 

 

8,643

 

 

 

(221

)

Other items (1)

 

3,760

 

 

 

 

 

 

6,349

 

 

 

 

Income tax impact of adjustments

 

(1,676

)

 

 

36

 

 

 

(3,788

)

 

 

56

 

Adjusted net income attributable to Masonite

$

45,470

 

 

$

56,932

 

 

$

139,426

 

 

$

182,969

 

 

 

 

 

 

 

 

 

Diluted earnings per common share attributable to Masonite ("EPS")

$

1.86

 

 

$

2.54

 

 

$

5.73

 

 

$

8.01

 

Diluted adjusted earnings per common share attributable to Masonite ("Adjusted EPS")

$

2.04

 

 

$

2.53

 

 

$

6.23

 

 

$

8.00

 

 

 

 

 

 

 

 

 

Shares used in computing EPS and Adjusted EPS

 

22,339,173

 

 

 

22,491,874

 

 

 

22,389,678

 

 

 

22,873,027

 

____________

(1)

Other items include $3,760 and $6,349 in acquisition and due diligence related costs in the three and nine months ended October 1, 2023, respectively, and were recorded in selling, general and administration expenses within the condensed consolidated statements of income and comprehensive income.

The weighted average number of shares outstanding utilized for the diluted EPS and diluted Adjusted EPS calculation contemplates the exercise of all currently outstanding SARs and the conversion of all RSUs. The dilutive effect of such equity awards is calculated based on the weighted average share price for each fiscal period using the treasury stock method. For all periods presented, common shares issuable for stock instruments which would have had an anti-dilutive impact under the treasury stock method have been excluded from the computation of diluted earnings per share.

 

Three Months Ended October 1, 2023

(In thousands)

North
American
Residential

 

Europe

 

Architectural

 

Corporate
& Other

 

Total

Net income (loss) attributable to Masonite

$

87,508

 

 

$

(2,305

)

 

$

1,718

 

 

$

(45,435

)

 

$

41,486

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation

 

13,936

 

 

 

2,692

 

 

 

3,002

 

 

 

3,259

 

 

 

22,889

 

Amortization

 

3,353

 

 

 

3,062

 

 

 

367

 

 

 

670

 

 

 

7,452

 

Share based compensation expense

 

 

 

 

 

 

 

 

 

 

4,282

 

 

 

4,282

 

Loss on disposal of property, plant and equipment

 

1,723

 

 

 

6

 

 

 

50

 

 

 

 

 

 

1,779

 

Restructuring costs

 

1,898

 

 

 

 

 

 

 

 

 

2

 

 

 

1,900

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

11,913

 

 

 

11,913

 

Other expense (income), net

 

40

 

 

 

243

 

 

 

 

 

 

(1,366

)

 

 

(1,083

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

12,041

 

 

 

12,041

 

Other items (1)

 

 

 

 

 

 

 

(5

)

 

 

3,765

 

 

 

3,760

 

Net income attributable to non-controlling interest

 

541

 

 

 

 

 

 

 

 

 

276

 

 

 

817

 

Adjusted EBITDA

$

108,999

 

 

$

3,698

 

 

$

5,132

 

 

$

(10,593

)

 

$

107,236

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

552,979

 

 

$

64,559

 

 

$

80,658

 

 

$

4,051

 

 

$

702,247

 

Adjusted EBITDA margin

 

19.7

%

 

 

5.7

%

 

 

6.4

%

 

nm

 

 

15.3

%

____________

(1)

Other items include $3,760 in acquisition and due diligence related costs in the three months ended October 1, 2023, and were recorded in selling, general and administration expenses within the condensed consolidated statements of income and comprehensive income

 

Three Months Ended October 2, 2022

(In thousands)

North
American
Residential

 

Europe

 

Architectural

 

Corporate
& Other

 

Total

Net income (loss) attributable to Masonite

$

103,589

 

 

$

(1,116

)

 

$

(3,486

)

 

$

(41,950

)

 

$

57,037

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation

 

10,443

 

 

 

2,127

 

 

 

2,959

 

 

 

1,932

 

 

 

17,461

 

Amortization

 

442

 

 

 

2,985

 

 

 

278

 

 

 

551

 

 

 

4,256

 

Share based compensation expense

 

 

 

 

 

 

 

 

 

 

5,556

 

 

 

5,556

 

Loss on disposal of property, plant and equipment

 

136

 

 

 

 

 

 

7

 

 

 

12

 

 

 

155

 

Restructuring (benefit) costs

 

(178

)

 

 

 

 

 

23

 

 

 

14

 

 

 

(141

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

10,266

 

 

 

10,266

 

Other (income) expense, net

 

 

 

 

(98

)

 

 

 

 

 

309

 

 

 

211

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

16,376

 

 

 

16,376

 

Net income attributable to non-controlling interest

 

660

 

 

 

 

 

 

 

 

 

85

 

 

 

745

 

Adjusted EBITDA

$

115,092

 

 

$

3,898

 

 

$

(219

)

 

$

(6,849

)

 

$

111,922

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

579,440

 

 

 

65,718

 

 

 

77,843

 

 

 

4,625

 

 

 

727,626

 

Adjusted EBITDA margin

 

19.9

%

 

 

5.9

%

 

 

(0.3

)%

 

nm

 

 

15.4

%

 

Nine Months Ended October 1, 2023

(In thousands)

North
American
Residential

 

Europe

 

Architectural

 

Corporate
& Other

 

Total

Net income (loss) attributable to Masonite

$

270,820

 

 

$

(5,332

)

 

$

6,779

 

 

$

(144,045

)

 

$

128,222

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation

 

41,472

 

 

 

7,307

 

 

 

8,959

 

 

 

9,617

 

 

 

67,355

 

Amortization

 

10,407

 

 

 

8,781

 

 

 

840

 

 

 

1,887

 

 

 

21,915

 

Share based compensation expense

 

 

 

 

 

 

 

 

 

 

17,439

 

 

 

17,439

 

Loss on disposal of property, plant and equipment

 

2,782

 

 

 

61

 

 

 

327

 

 

 

149

 

 

 

3,319

 

Restructuring costs

 

7,153

 

 

 

 

 

 

863

 

 

 

627

 

 

 

8,643

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

39,653

 

 

 

39,653

 

Other expense (income), net

 

13

 

 

 

723

 

 

 

 

 

 

(2,317

)

 

 

(1,581

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

38,074

 

 

 

38,074

 

Other items (1)

 

 

 

 

 

 

 

 

 

 

6,349

 

 

 

6,349

 

Net income attributable to non-controlling interest

 

1,804

 

 

 

 

 

 

 

 

 

666

 

 

 

2,470

 

Adjusted EBITDA

$

334,451

 

 

$

11,540

 

 

$

17,768

 

 

$

(31,901

)

 

$

331,858

 

 

 

 

 

 

 

 

 

 

 

Net sales to external customers

$

1,706,987

 

 

$

194,263

 

 

$

256,378

 

 

$

12,487

 

 

$

2,170,115

 

Adjusted EBITDA margin

 

19.6

%

 

 

5.9

%

 

 

6.9

%

 

nm

 

 

15.3

%

____________

(1)

Other items include $6,349 in acquisition and due diligence related costs in the nine months ended October 1, 2023, and were recorded in selling, general and administration expenses within the condensed consolidated statements of income and comprehensive income

 

Nine Months Ended October 2, 2022

(In thousands)

North
American
Residential

 

Europe

 

Architectural

 

Corporate
& Other

 

Total

Net income (loss) attributable to Masonite

$

333,233

 

 

$

8,062

 

 

$

(9,354

)

 

$

(148,807

)

 

$

183,134

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation

 

30,394

 

 

 

6,640

 

 

 

8,602

 

 

 

6,341

 

 

 

51,977

 

Amortization

 

1,528

 

 

 

9,314

 

 

 

679

 

 

 

1,643

 

 

 

13,164

 

Share based compensation expense

 

 

 

 

 

 

 

 

 

 

16,251

 

 

 

16,251

 

Loss (gain) on disposal of property, plant and equipment

 

1,873

 

 

 

(13

)

 

 

(3,037

)

 

 

(68

)

 

 

(1,245

)

Restructuring (benefit) costs

 

(359

)

 

 

 

 

 

71

 

 

 

67

 

 

 

(221

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

31,098

 

 

 

31,098

 

Other (income) expense, net

 

(792

)

 

 

304

 

 

 

 

 

 

(1,116

)

 

 

(1,604

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

59,502

 

 

 

59,502

 

Net income attributable to non-controlling interest

 

1,856

 

 

 

 

 

 

 

 

 

887

 

 

 

2,743

 

Adjusted EBITDA

$

367,733

 

 

$

24,307

 

 

$

(3,039

)

 

$

(34,202

)

 

$

354,799

 

 

 

 

 

 

 

 

 

 

 

Net sales to external customers

$

1,755,780

 

 

$

220,039

 

 

$

224,257

 

 

$

15,641

 

 

$

2,215,717

 

Adjusted EBITDA margin

 

20.9

%

 

 

11.0

%

 

nm

 

nm

 

 

16.0

%

 

Richard Leland
VP, FINANCE AND TREASURER
rleland@masonite.com
813.739.1808

Marcus Devlin
DIRECTOR, INVESTOR RELATIONS
mdevlin@masonite.com
813.371.5839

Source: Masonite International Corporation