MasterBrand Reports Fourth Quarter and Full Year 2022 Financial Results

MasterBrand, Inc. (NYSE: MBC, the “Company”, or “MasterBrand”), the largest residential cabinet manufacturer in North America, today announced fourth quarter and full year 2022 financial results.

“I am pleased with our strong finish in 2022, with another quarter of solid financial and operational performance,” said Dave Banyard, President and Chief Executive Officer. “The team delivered year-over-year net sales growth and adjusted EBITDA* margin expansion in the fourth quarter. Our culture, centered on the established tools of The MasterBrand Way, enables us to continue delivering on our strategy. We made tangible progress on our three key initiatives, Align to Grow, Lead through Lean and Tech Enabled, which gives us confidence in our ability to continue to create value for all stakeholders in a challenging market.”

Fourth Quarter 2022

Net sales were $784.4 million, compared to $744.8 million in the fourth quarter of 2021, an increase of 5%. Gross profit was $215.0 million, compared to $187.9 million in the comparable period of the prior year, an increase of 14%. Gross profit margin expanded 220 basis points to 27.4%, compared to 25.2% in the fourth quarter of 2021.

Net income was $15.4 million, compared to $35.2 million in the fourth quarter of 2021, a decrease of 56%, primarily due to separation costs, inclusive of net cost savings as a standalone public company, of $25 million, restructuring charges and restructuring-related items of $21 million and trade name impairments of $20 million in the quarter. Diluted net income per share was $0.12, compared to pro forma diluted net income per share* of $0.27 in the comparable period of the prior year. Adjusted diluted earnings per share* were $0.52, compared to adjusted pro forma diluted earnings per share* of $0.32 in the same period last year.

Adjusted EBITDA* was $97.8 million, compared to $66.7 million in the fourth quarter of 2021. Adjusted EBITDA* margin expanded 350 basis points to 12.5%, compared to 9.0% in the comparable period of the prior year.

Full Year 2022

Net sales were $3.3 billion, compared to $2.9 billion in 2021, an increase of 15%. Gross profit was $940.5 million, compared to $783.9 million in the prior year, a 20% increase. Gross profit margin expanded 120 basis points to 28.7%, compared 27.5% in 2021.

Net income was $155.4 million, compared to $182.6 million in 2021, a decrease of 15%, primarily due to separation costs, inclusive of net cost savings as a standalone public company, of $60 million, trade name impairments of $46 million and restructuring charges and restructuring-related items of $38 million in the year. Diluted earnings per share were $1.20, compared to pro forma diluted earnings per share* of $1.43 in the prior year. Adjusted diluted earnings per share* were $2.02, compared to adjusted pro forma diluted earnings per share* of $1.56 last year.

Adjusted EBITDA* was $411.4 million, compared to $318.1 million in 2021. Adjusted EBITDA* margin expanded 150 basis points to 12.6%, compared to 11.1% in the prior year.

Balance Sheet and Cash Flow

At the end of 2022, the Company had $101.1 million in cash and $265 million of availability under its revolving credit facility. Net debt* was $877.9 million and net debt to adjusted EBITDA* was 2.1x.

Full year operating cash flow was $235.6 million, compared to $148.2 million last year. Free cash flow* was $179.7 million, compared to $96.6 million last year.

2023 Financial Outlook

For full year 2023, the Company expects:

• Net sales year-over-year decline of mid teens, based on market declines of low teens
• Adjusted EBITDA* in the range of $305 million to $335 million, with related adjusted EBITDA* margins of roughly 11 to 12 percent

The Company expects to continue outperforming the underlying market. Year-over-year net sales performance will be impacted by lower backlog at the beginning 2023 than the prior year due to strong service and delivery in 2022.

“As we progress through 2023, we are focused on driving growth and cost savings by leveraging our uniquely flexible operating platform,” said Andi Simon, Executive Vice President and Chief Financial Officer. “The MasterBrand Way and our strategic transformation have positioned us to manage a dynamic macroeconomic environment. Coupled with balance sheet flexibility to invest in the business and our strategic initiatives, we believe we are ideally situated to deliver strong financial results in the near-term as well as our long-term goals discussed at our recent investor day.”

For the complete press release, click here.

Source: MasterBrand, Inc.