MasterBrand Reports Fourth Quarter and Full Year 2024 Financial Results

MasterBrand, Inc. (“Company,” or “MasterBrand”), the largest residential cabinet manufacturer in North America, announced fourth quarter and full year 2024 financial results.

• Fourth quarter and full year net sales decreased 1% and 1% year-over-year to $667.7 million and $2.7 billion, respectively
• Fourth quarter and full year net income decreased 61% and 31% year-over-year to $14.0 million and $125.9 million, respectively
• Fourth quarter and full year net income margin decreased 320 basis points and 200 basis points year-over-year to 2.1% and 4.7%, respectively
• Fourth quarter and full year adjusted EBITDA margin¹ decreased 150 basis points and 60 basis points year-over-year to 11.2% and 13.5%, respectively
• Fourth quarter and full year diluted earnings per share was $0.11 and $0.96, compared to $0.28 and $1.40 in the prior year, respectively; fourth quarter and full year adjusted diluted earnings per share¹ was $0.21 and $1.37, compared to $0.35 and $1.58 in the prior year, respectively
• Operating cash flow for the fifty-two weeks ended December 29, 2024 was $292.0 million with free cash flow¹ of $211.1 million
• The Supreme acquisition contributed 9% and 4% to net sales in the fourth quarter and full year, respectively
• Company introduces 2025 financial outlook

“End market choppiness increased throughout the holiday season resulting in unanticipated volume declines which delayed the realization of previously implemented price increases and limited our ability to sufficiently flex operations in the quarter,” said Dave Banyard, President and Chief Executive Officer. “Despite market headwinds, we continued to make great strides as an organization, with our Supreme acquisition integration proceeding as planned and further progress across all our strategic initiatives, specifically Tech Enabled. These efforts, coupled with our continuous improvement culture, should help position the Company for future growth when stronger demand returns.”

“As an organization, we are committed to delivering superior financial returns to our shareholders. We believe our business model, strategy and planned investments in the Company will allow us to outperform our end markets in 2025 and beyond,” Banyard continued.

Fourth Quarter 2024

Net sales were $667.7 million, a decrease of 1% compared to the fourth quarter of 2023, driven by volume declines of 6% and lower net average selling price (ASP) of 4%. These declines were largely offset by 9% growth from our Supreme acquisition. Gross profit was $203.3 million, compared to $223.1 million in the prior year. Gross profit margin decreased 250 basis points to 30.4% on lower net ASP and volumes, $4.2 million of discrete items in the prior year quarter that did not repeat, and increased depreciation. This was partially offset by the addition of Supreme, favorable variable compensation, and additional cost savings from our ongoing strategic initiatives and continuous improvement programs.

Net income was $14.0 million, compared to $36.1 million in the fourth quarter of 2023, primarily due to lower gross profit margin as discussed above, discrete acquisition-related costs, higher interest expense, and increased depreciation, partially offset by reduced variable compensation, a gain on asset sale, positive net income contribution from Supreme and lower income taxes. Net income margin was 2.1% compared to 5.3% in the prior year.

Adjusted EBITDA¹ was $74.6 million, compared to $85.8 million in the fourth quarter of 2023. Adjusted EBITDA margin¹ decreased 150 basis points to 11.2%, driven by a decrease in gross profit margin.

Diluted earnings per share was $0.11 compared to $0.28 in the fourth quarter of 2023. Adjusted diluted earnings per share¹ was $0.21 compared to $0.35 in the fourth quarter of 2023.

Full Year 2024

Net sales were $2.7 billion, a decrease of 1% compared to 2023, driven by lower net ASP of 4% and volume declines of 1%. These declines were largely offset by 4% growth from our Supreme acquisition. Gross profit was $877.0 million, compared to $901.4 million in the prior year. Gross profit margin decreased 60 basis points to 32.5% on lower net ASP and volumes due to a softer end market environment. This was partially offset by lower variable compensation, savings from continuous improvement efforts and cost actions.

Net income was $125.9 million, compared to $182.0 million in 2023, primarily due to acquisition-related costs, lower gross profit, restructuring charges, higher interest expense, incremental investments in our strategic initiatives, and higher depreciation and amortization expense, more than offsetting lower variable compensation, net income contribution from Supreme and continuous improvement efforts. Net income margin was 4.7% compared to 6.7% in the prior year.

Adjusted EBITDA¹ was $363.6 million, compared to $383.4 million in 2023. Adjusted EBITDA margin¹ decreased 60 basis points to 13.5%, compared to 14.1% in the prior year.

Diluted earnings per share was $0.96 compared to $1.40 in 2023. Adjusted diluted earnings per share¹ was $1.37 compared to $1.58 in 2023.

Balance Sheet, Cash Flow and Capital Allocation

As of December 29, 2024, the Company had $120.6 million in cash and $405.4 million of availability under its revolving credit facility. Total debt was $1,007.8 million and our ratio of total debt to net income from the most recent trailing twelve months was 8.0x as of December 29, 2024. For the same period, net debt¹ was $887.2 million and our ratio of net debt to adjusted EBITDA¹ was 2.4x.

Operating cash flow was $292.0 million for the fifty-two weeks ended December 29, 2024, compared to $405.6 million in the fifty-three weeks ended December 31, 2023. This decline was due to a benefit in the prior year from a strategic inventory build release, which more than offset the benefit from working capital improvements in fiscal 2024. Free cash flow¹ was $211.1 million for the fifty-two weeks ended December 29, 2024, compared to $348.3 million for the fifty-three weeks ended December 31, 2023.

During the fifty-two weeks ended December 29, 2024, the Company repurchased approximately 371 thousand shares of common stock for approximately $6.5 million. No shares were repurchased in the quarter ended December 29, 2024.

2025 Financial Outlook

For full year 2025, the Company expects the following:

• Net sales year-over-year increase of mid single-digit percentage
  • Organic net sales flat
  • Acquisition-related net sales increase of mid single-digit percentage
• Adjusted EBITDA^1,2in the range of $380 to $410 million, with related adjusted EBITDA margin^1,2 of roughly 13.5% to 14.3%
• Adjusted diluted earnings per share^1,2in the range of $1.40 to $1.57

The Company expects organic net sales performance to outperform the underlying market demand of down low single-digits year-over-year, as new products and channel specific offerings, and previously implemented price actions gain traction.

This 2025 Financial Outlook only reflects the impact of those tariffs in effect as of the date of this release. It does not reflect any other potential tariff impacts on Company costs or end market demand. The Company believes the dynamic nature of the tariffs, specifically the uncertainty of implementation, potential timing and duration, limits the usefulness of estimating this information. Should other tariff impacts become more certain, the Company expects to update its outlook accordingly.

“Our full year 2025 guidance reflects our commitment to growth, with year-on-year net sales increases driven by our Supreme acquisition and share gains in our core business,” said Andi Simon, Executive Vice President and Chief Financial Officer. “Given the continued softness in our end markets, we have thoroughly reviewed and prioritized our investment spending, with the goal of preserving both near-term financial performance and progress on our long-term financial targets. We believe this approach, coupled with targeted cost reductions and further continuous improvement savings, will allow us to resume adjusted EBITDA margin expansion for the full year 2025.”

1 – See “Non-GAAP Financial Measures” and the corresponding financial tables at the end of this press release for definitions and reconciliations of non-GAAP measures.

2 – We have not provided a reconciliation of our fiscal 2025 adjusted EBITDA, adjusted EBITDA margin and adjusted diluted EPS guidance because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and which may be excluded from adjusted EBITDA, adjusted EBITDA margin and adjusted diluted EPS. Additionally, estimating such GAAP measures and providing a meaningful reconciliation for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions used for historical non-GAAP measures.

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About MasterBrand

MasterBrand, Inc. (NYSE: MBC) is the largest manufacturer of residential cabinets in North America and offers a comprehensive portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home. MasterBrand products are available in a wide variety of designs, finishes and styles and span the most attractive categories of the cabinets market: stock, semi-custom and premium cabinetry. These products are delivered through an industry-leading distribution network of over 4,500 dealers, major retailers and builders. MasterBrand employs over 13,600 associates across more than 20 manufacturing facilities and offices. Additional information can be found at www.masterbrand.com.

Source: Masterbrand, Inc.