JELD-WEN Reports Second Quarter 2023 Results and Updates Full-Year Guidance

JELD-WEN Holding, Inc. (“JELD-WEN” or the “Company”) announced results for the three and six months ended July 1, 2023. Comparability is to the same period in the prior year and all periods presented reflect the Company’s Australasia segment as a discontinued operation, unless otherwise noted. The Company is raising its full-year guidance for continuing operations to reflect its solid second quarter results.

Second Quarter Highlights

• Net revenues from continuing operations of $1,125.8 million decreased 4.5% in the second quarter driven by a (4%) decline in Core Revenue. The Core Revenue decline was driven by (11%) lower volume/mix partially offset by +7% price realization.
• Net income from continuing operations was $22.5 million or $0.26 per share, compared to net income from continuing operations of $35.0 million or $0.40 per share during the same quarter a year ago. Operating income margin was 5.0% and 4.1% for the quarters ended July 1, 2023 and June 25, 2022, respectively.
• Adjusted EPS from continuing operations was $0.44, compared to Adjusted EPS of $0.45 in the same quarter a year ago. Adjusted EPS includes net after-tax charges of $15.3 million or $0.18 per share, compared to net after-tax charges of $4.6 million or $0.05 per share during the same quarter a year ago.
• Adjusted EBITDA from continuing operations was $108.9 million, compared to $108.3 million during the same quarter a year ago. Adjusted EBITDA Margin from continuing operations increased by 50 basis points year-over-year to 9.7%.
• On July 2, 2023, the Company completed the sale of its Australasia segment (previously announced on April 17, 2023) for approximately $446 million in net proceeds. On August 3, 2023, the Company repaid $450 million of senior notes funded by the divestiture proceeds.

“In the second quarter, our global associates continued to execute against our near-term goals of simplifying and strengthening JELD-WEN while improving profitability and generating strong cash flow,” said Chief Executive Officer William J. Christensen. “While our end markets remained dynamic with volume declining in line with our expectations, we achieved year-over-year improvements in both margin and cash flow. In addition, we remained focused on delivering on our commitments including closing the sale of our Australasia business in early July. This important milestone allows us to focus on our core businesses and strengthen our balance sheet.”

Christensen continued, “For the remainder of 2023, we expect continued macroeconomic uncertainty and weak demand across our markets that we are mitigating with ongoing cost reductions. As our second quarter results were above our expectations, we are narrowing the ranges and raising the midpoints of our 2023 Revenue and Adjusted EBITDA guidance.”

Second Quarter 2023 Results (Continuing Operations)

Net revenue for the three months ended July 1, 2023 decreased $53.4 million, or 4.5%, to $1,125.8 million, compared to $1,179.2 million for the same period last year. The decrease in net revenue was driven by a (4%) Core Revenue decline composed of lower volume/mix (11%) partially offset by price realization of +7%.

Net income was $22.5 million in the second quarter, compared to net income of $35.0 million in the same period last year, a decrease of $12.5 million. Despite an improvement in operating income, net income was lower due to negative impacts from accelerated depreciation, higher selling, general and administrative expense and lower other income. Adjusted Net Income from continuing operations for the second quarter decreased $1.8 million, to $37.8 million, compared to $39.6 million in the same period last year. 

Earnings per share (“EPS”) for the second quarter was $0.26, compared to $0.40 for the same quarter last year. Adjusted EPS  from continuing operations for the second quarter was $0.44 compared to Adjusted EPS of $0.45 in the same quarter last year. 

Adjusted EBITDA from continuing operations increased $0.6 million, to $108.9 million, compared to the same quarter last year. Adjusted EBITDA Margin from continuing operations increased 50 basis points to 9.7%, as positive price/cost was partially offset by lower volume/mix, higher selling, general and administrative expenses and a reduction in other income.

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

• North America – Net revenue decreased $22.0 million, or (2.6%), to $817.1 million, driven by a (2%) decline in Core Revenue which was due to lower volume/mix (8%) partially offset by increased price realization +6%. Net income decreased $18.6 million to $51.3 million. Operating income margin was 9.1% for the quarter ended July 1, 2023 and 8.4% for the quarter ended June 25, 2022. Adjusted EBITDA from continuing operations increased $15.3 million to $108.8 million, while Adjusted EBITDA Margin from continuing operations increased 220 basis points to 13.3%.
• Europe – Net revenue decreased $31.3 million, or (9.2%), to $308.7 million, due to a (9%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (17%) partially offset by price realization of +8%. Net income increased $7.6 million to $10.7 million. Operating income margin was 4.9% for the quarter ended July 1, 2023 and 1.7% for the quarter ended June 25, 2022. Adjusted EBITDA from continuing operations increased $3.9 million to $23.9 million, while Adjusted EBITDA Margin from continuing operations increased by 180 basis points to 7.7%.

Cash Flow⁽¹⁾

Net cash flow provided by operations was $153.4 million during the first half of 2023, a $319.1 million improvement compared to net cash flow used in operations of ($165.7) million during the same period a year ago. The primary driver to the increased operating cash flow was a $284.3 million improvement in cash flow from working capital. Net working capital generated $2.8 million of cash flow in the first half of 2023 compared to a use of cash of $281.5 million in the prior year period.

Capital expenditures in the first half of 2023 increased by $12.1 million to $46.9 million, up from $34.8 million in the first half of 2022.

Free Cash Flow provided in the first half of 2023 was $106.4 million, compared to Free Cash Flow used in the first half of 2022 of ($200.5) million. This $306.9 million improvement is primarily due to higher net cash flow from operations.

(1)  Cash flow includes the Australasia segment.

Updated Full Year 2023 Guidance (Continuing Operations)

JELD-WEN is raising its guidance to reflect the solid second quarter performance.

The Company now expects 2023 net revenue of $4.2 to $4.4 billion which reflects a low double digit decline in volume/mix across its portfolio of products and geographies in North America and Europe. Core Revenues are forecasted to be down 4% to 8% as price realization partially offsets lower market demand. 

Further, the Company now expects 2023 Adjusted EBITDA from continuing operations to be within the range of $350 to $370 million driven by lower year-over-year volumes and a reduction in other income partially offset by solid price/cost results and ongoing cost reductions.

	Revenue	Adjusted EBITDA from continuing operations
May 2023 Guidance	$4.0B to $4.4B	$330M to $370M
Updated Guidance	$4.2B to $4.4B	$350M to $370M

Although the Company believes the assumptions reflected in the range of guidance are reasonable, actual results could vary substantially given the uncertainty regarding the future performance of the global economy, the continuing conflict in Ukraine, potential new COVID-19 lockdowns or restrictions, ongoing disruptions in global supply chains, and potential changes in raw material prices and other costs as well as other risks and uncertainties, including those described below. In addition, the guidance ranges provided for 2023 do not include the impact of potential acquisitions or divestitures, except the divestiture of the Australasia business.

To view the full second quarter results, click here.

About JELD-WEN Holding, Inc.

JELD-WEN 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. Headquartered in Charlotte, N.C., the company operates facilities in 16 countries in North America and Europe and employs approximately 18,000 people. Since 1960, the JELD-WEN team has been committed to making quality products that create safe and sustainable environments for customers, associates and local communities. 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 www.jeld-wen.com.

Contact:

James Armstrong – Vice President, Investor Relations – jarmstrong@jeldwen.com – (704) 378-5731

Source: JELD-WEN Holding, Inc.