JELD-WEN Reports Fourth Quarter 2023 Results and Establishes 2024 Guidance

JELD-WEN Holding, Inc. (“JELD-WEN” or the “Company”) announced results for the quarter and year ended December 31, 2023 and established its full-year 2024 guidance. Comparability is to the same period in the prior year and all periods presented reflect the Company’s Australasia segment as a discontinued operation, as appropriate and unless otherwise noted.

Fourth Quarter Highlights

• Net revenues from continuing operations of $1,021.1 million decreased (13.4%) in the fourth quarter driven by a (15%) decline in Core Revenue. The Core Revenue decline was mostly due to (16%) lower volume/mix.
• Net loss from continuing operations was $(22.6) million or $(0.27) per share, compared to net income from continuing operations of $25.9 million or $0.31 per share during the same quarter a year ago. Operating income margin was 0.7% and 2.0% for the quarters ended December 31, 2023 and December 31, 2022, respectively.
• Adjusted EPS from continuing operations was $0.37, compared to Adjusted EPS of $0.34 in the same quarter a year ago. Adjusted EPS for the fourth quarter of 2023 excludes net after-tax charges of $54.3 million, or $0.63 per share, of which $29.6 million, or $0.35 per share, relates to discrete tax charges. Adjusted EPS for the fourth quarter of 2022 excludes net after-tax charges of $3.0 million or $0.03 per share.
• Adjusted EBITDA from continuing operations increased $8.5 million to $86.5 million, compared to $78.0 million during the same quarter a year ago. Adjusted EBITDA Margin from continuing operations increased by 190 basis points year-over-year to 8.5%.

Full Year 2023 Highlights

• Net revenues from continuing operations of $4,304.3 million decreased (5.3%) driven by a (5%) decline in Core Revenue. The Core Revenue decline was due to (10%) lower volume/mix, partially offset by a 5% increase in price realization.
• Net income from continuing operations was $25.2 million or $0.29 per share, compared to $12.2 million or $0.14 per share in the prior year. Operating income margin was 3.3% and 1.3% for the years ended December 31, 2023 and December 31, 2022, respectively.
• Adjusted EPS from continuing operations was $1.59, compared to Adjusted EPS of $1.33 a year ago. Adjusted EPS excludes net after-tax charges of $111.4 million or $1.30 per share, compared to net after-tax charges of $103.6 million or $1.19 per share in the prior year.
• Adjusted EBITDA from continuing operations increased $31.6 million to $380.4 million, compared to $348.8 million a year ago. Adjusted EBITDA Margin from continuing operations increased by 110 basis points year-over-year to 8.8%.
• On July 2, 2023, the Company completed the sale of its Australasia segment for approximately $446 million in net proceeds and recognized an after-tax gain on sale of $15.7 million. On August 3, 2023, the Company repaid $450 million of senior notes funded by the divestiture proceeds.

2024 Full-Year Guidance

• Net revenues of $4.0 to $4.3 billion
• Adjusted EBITDA of $370 to $420 million

“In the fourth quarter of 2023, our team continued to execute actions to strengthen the foundation of our business,” said Chief Executive Officer William J. Christensen. “We increased profitability and generated strong cash flows, despite challenging macroeconomic conditions. We continue our disciplined approach to delivering improved financial results and are investing in the future to unlock significant value for JELD-WEN shareholders. In 2024, we anticipate that uncertainty in the markets will remain. However, we expect to mitigate the impact from potential weaker demand with benefits from our ongoing activities to reduce operating costs.”

Fourth Quarter 2023 Results

Net revenues from continuing operations for the three months ended December 31, 2023 decreased $(157.9) million, or (13.4%), to $1,021.1 million, compared to $1,179.0 million for the same period last year. The decrease in net revenues was driven by a (15%) Core Revenue decline mostly due to (16%) lower volume/mix.

Net loss from continuing operations was $(22.6) million in the fourth quarter, compared to $25.9 million of net income from continuing operations in the same period last year, a decrease of $(48.5) million. The decrease was mostly driven by discrete tax charges of $29.6 million that primarily relate to a valuation allowance. Adjusted Net Income from continuing operations for the fourth quarter increased $2.8 million, to $31.7 million, compared to $28.9 million in the same period last year. 

Net loss per share from continuing operations for the fourth quarter was $(0.27), compared to EPS of $0.31 in the same quarter last year. Adjusted EPS from continuing operations for the fourth quarter was $0.37 compared to Adjusted EPS of $0.34 in the same quarter last year. 

Adjusted EBITDA from continuing operations increased $8.5 million, to $86.5 million, compared to $78.0 million during the same quarter last year. Adjusted EBITDA Margin from continuing operations increased 190 basis points to 8.5%, as productivity improvements and positive price/cost were partially offset by lower volume/mix.

On a segment basis for the fourth quarter of 2023, compared to the same period last year:

• North America – Net revenue decreased $(115.1) million, or (13.3%), to $747.6 million, driven by a (13%) decline in Core Revenue due to (14%) lower volume/mix. Net income decreased $(22.7) million to $49.0 million. Operating income margin was 7.8% for the quarter ended December 31, 2023 and 7.3% for the quarter ended December 31, 2022. Adjusted EBITDA increased $7.2 million to $94.2 million, while Adjusted EBITDA Margin increased by 250 basis points to 12.6%.
• Europe – Net revenue decreased $(42.8) million, or (13.5%), to $273.4 million, due to an (18%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (20%) partially offset by higher price realization of 2%. Net income decreased $(32.4) million to a net loss of $(32.0) million. Operating income margin was 1.4% for the quarter ended December 31, 2023 and 0.6% for the quarter ended December 31, 2022. Adjusted EBITDA decreased $(6.0) million to $15.5 million, while Adjusted EBITDA Margin decreased by (110) basis points to 5.7%.

Full Year 2023 Results

Net revenues from continuing operations for the full year ended December 31, 2023 decreased $(239.5) million, or (5.3%), to $4,304.3 million, compared to $4,543.8 million in the prior year. The decrease in net revenues was driven by a (5%) Core Revenue decline due to (10%) lower volume/mix partially offset by increased price realization of 5%.

Net income from continuing operations was $25.2 million in full year 2023, compared to $12.2 million of net income from continuing operations in full year 2022, an increase of $13.0 million. The increase was driven by higher operating income, including a non-recurring goodwill impairment in the prior year, partially offset by higher income tax expense and lower other income. Adjusted Net Income from continuing operations for 2023 increased $20.8 million, to $136.7 million, compared to $115.9 million in the prior year. 

Earnings per share from continuing operations for full year 2023 was $0.29, compared to $0.14 in the prior year. Adjusted EPS from continuing operations in 2023 was $1.59, compared to Adjusted EPS of $1.33 in 2022. 

Adjusted EBITDA from continuing operations increased $31.6 million, to $380.4 million, compared to last year. Adjusted EBITDA Margin from continuing operations increased 110 basis points to 8.8%, as positive price/cost and productivity improvements were partially offset by lower volume/mix.

On a segment basis for full year 2023, compared to the prior year:

• North America – Net revenue decreased $(136.3) million, or (4.2%), to $3,123.1 million, driven by a (4%) decline in Core Revenue which was due to lower volume/mix (8%) partially offset by increased price realization of 4%. Net income decreased $(84.6) million to $176.0 million. Operating income margin was 8.2% for the year ended December 31, 2023 and 7.8% for the prior year. Adjusted EBITDA increased $29.3 million to $382.2 million, while Adjusted EBITDA Margin increased by 140 basis points to 12.2%.
• Europe – Net revenue decreased $(103.2) million, or (8.0%), to $1,181.3 million, due to a (9%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (15%) partially offset by higher price realization of 7%. Net loss improved by $47.5 million to $(3.3) million. Operating income margin was 3.5% for the year ended December 31, 2023 and (3.4%) for the prior year. Adjusted EBITDA increased $7.1 million to $81.5 million, while Adjusted EBITDA Margin increased by 110 basis points to 6.9%.

Cash Flow⁽¹⁾

Net cash flow provided by operations was $345.2 million for full year 2023, a $314.9 million improvement compared to net cash flow provided by operations of $30.3 million in 2022. The primary driver to the increased operating cash flow was a $342.5 million improvement in cash flow from working capital. Net working capital was a source of $108.0 million of cash flow in full year 2023 compared to a use of cash of $(234.5) million in the prior year.

Capital expenditures in 2023 increased by $18.7 million to $110.9 million, up from $92.2 million in 2022.

Free Cash Flow provided in 2023 was $234.3 million, compared to Free Cash Flow used in 2022 of $(61.9) million. This $296.2 million improvement was due to higher net cash flow from operations.

(1)  Cash flow includes the Australasia segment through the divestiture date of July 2, 2023.

Full Year 2024 Guidance

JELD-WEN is initiating its 2024 revenue guidance of $4.0 to $4.3 billion which reflects Core Revenues that are flat to down 7% compared to 2023. This outlook reflects the continuing uncertain macro environment across the company’s portfolio of products and geographies in North America and Europe.

Further, the Company expects that 2024 Adjusted EBITDA will be within the range of $370 to $420 million as ongoing productivity improvements mitigate the impact of potential volume declines.

As part of the Company’s plan to improve its financial results in 2024 and future years, JELD-WEN expects to use a portion of 2024 operating cash flows to invest in itself with capital expenditures increasing to approximately 4% of sales as well as non-recurring cash expenses of approximately $100 million.

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About JELD-WEN Holding, Inc.

JELD-WEN Holding, Inc. (NYSE: JELD) is a leading global designer, manufacturer and distributor of high-performance interior and exterior doors, windows, and related building products serving the new construction and repair and remodeling sectors. Based in Charlotte, North Carolina, the company operates facilities in 15 countries in North America and Europe and employs approximately 18,000 associates dedicated to bringing beauty and security to the spaces that touch our lives. The JELD-WEN family of brands includes JELD-WEN® worldwide, LaCantina™ and VPI™ in North America, and Swedoor® and DANA® in Europe.  For more information, visit corporate.JELD-WEN.com or follow LinkedIn.

Contact:

Colleen Penhall – Vice President, Corporate Communications – cpenhall@jeldwen.com – (980) 322-2681

Source: JELD-WEN Holding, Inc.