Masonite International Corporation Reports Third Quarter Results

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

($ 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 More^TM 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.

For the complete press release, click here.

About Masonite

Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors 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 more than 7,000 customers globally. Additional information about Masonite can be found at www.masonite.com.

Contact:

Richard Leland – Vice President, Finance and Treasurer – rleland@masonite.com – (813) 739-1808

Source: Masonite International Corporation