JELD-WEN Over Delivers First Quarter 2021 Growth and Margin Expansion and Raises Full Year Outlook
JELD-WEN Holding, Inc. announced results for the three months ended March 27, 2021, including first quarter net revenue of $1,092.4 million, net income of $25.5 million, adjusted EBITDA of $97.9 million, earnings per share (“EPS”) of $0.25, and adjusted EPS of $0.27. Comparability is to the same period in the prior year, unless otherwise noted. References to “core” financial results exclude the impact of foreign exchange and acquisitions completed in the last twelve months.
–Net revenue increased by 11.6% to $1,092.4 million, including a 6% increase in core revenue
–Core revenue increased in all three reporting segments, driven by favorable price and volume/mix
–Adjusted EBITDA increased by 31.4% to $97.9 million, while adjusted EBITDA margins expanded 140 basis points
–Core adjusted EBITDA margin increased 160 basis points, including margin expansion in all three reporting segments
–Repurchased 809,884 shares in the quarter for $23.1 million
–Increased full year outlook for revenue and adjusted EBITDA
“JELD-WEN delivered a strong start to 2021, building on continued operating momentum and disciplined execution, generating significant improvement in revenue, margin, and cash flow,” said Gary S. Michel, president and chief executive officer. “The rigorous deployment of our business operating system, the JELD-WEN Excellence Model (“JEM”), throughout the organization is producing consistent growth and margin expansion, which in the first quarter included favorable price, volume/mix, and productivity in each of our geographic segments. Our multi-faceted growth platform is delivering revenue growth, improved earnings, and compounding cash flow. We remain optimistic on performance for the remainder of the year driven by the cadence and quality of operational initiatives currently underway and supportive market fundamentals for both residential new construction and repair and remodel activity.”
First Quarter 2021 Results
–Core revenue growth across all three segments, led by North America core revenue growth of 9%
–North America core margin expanded 420 basis points, the fourth straight quarter of core margin expansion
–Europe core margin expanded 30 basis points, the seventh consecutive quarter of core margin expansion
–Australasia core margin expanded 200 basis points, an acceleration from the fourth quarter of 2020
Net revenue for the three months ended March 27, 2021 increased $113.2 million, or 11.6%, to $1,092.4 million, compared to $979.2 million for the same period last year. The increase in net revenue was primarily driven by 6% core revenue growth and a 5% positive impact from foreign exchange. Core revenue growth was driven by a 4% pricing benefit and a 2% positive contribution from volume/mix. The first quarter of 2021 had approximately 3% fewer shipping days than the first quarter of 2020. Normalizing for fewer shipping days, first quarter core revenue growth was approximately 9% to 10%.
Net income was $25.5 million during the first quarter, compared to a net loss of $0.2 million in the same quarter last year, an increase of $25.7 million. The increase in net income was primarily due to higher gross profit from improved price realization, operating leverage from volume/mix and operational improvements, partially offset by higher SG&A. The effective book income tax rate during the quarter was 28.9%. Adjusted net income for the first quarter increased $14.8 million, or 113.0%, to $27.9 million, compared to $13.1 million in the same quarter last year.
EPS for the first quarter was $0.25, compared to $0.00 for the same quarter last year. Adjusted EPS was $0.27, compared to $0.13 a year ago.
Adjusted EBITDA increased $23.4 million, or 31.4%, to $97.9 million, compared to the same quarter last year. Adjusted EBITDA margin of 9.0% increased by 140 basis points compared to the prior year.
On a segment basis for the first quarter of 2021, compared to the same period last year:
–North America – Net revenue increased $52.9 million, or 9.0%, to $639.6 million, due to a 9% increase in core revenue. Core revenue increased due to a 6% pricing benefit and a 3% increase in volume/mix. Adjusted EBITDA margin expanded by 420 basis points to 12.5%.
–Europe – Net revenue increased $39.0 million, or 13.9%, to $320.5 million, due to a 10% positive impact from foreign exchange and 4% increase in core revenue. Core revenue increased primarily due to a 2% pricing benefit and a 2% increase in volume/mix. Adjusted EBITDA margin expanded 70 basis points to 9.0%.
–Australasia – Net revenue increased $21.3 million, or 19.2%, to $132.3 million, due to a 17% favorable impact from foreign exchange and a 2% increase in core revenue. Core revenue increased primarily due to a 2% increase in volume/mix. Adjusted EBITDA increased $4.5 million, while adjusted EBITDA margins increased 210 basis points to 10.0%.
Cash Flow and Balance Sheet
–Cash flow used in operations of $64.9 million in the first quarter of 2021, improved by $11.7 million
–Free cash flow use of $85.9 million in the first quarter of 2021, improved by $20.8 million
Cash flow used in operations totaled $64.9 million in the first quarter of 2021, compared to cash flow used in operations of $76.5 million during the same period a year ago. The improvement in cash flow used in operations was primarily due to the increase in earnings. Free cash flow used in the first quarter of 2021 improved $20.8 million to $85.9 million, from $106.7 million a year ago, due to higher earnings and a reduction in capital expenditures.
Cash and cash equivalents as of March 27, 2021 were $612.8 million, compared to $735.8 million as of December 31, 2020. Total debt as of March 27, 2021 was $1.759 billion, compared to $1.768 billion as of December 31, 2020. The company repurchased 809,884 shares in the quarter for $23.1 million.
Total liquidity, including cash and cash equivalents and undrawn committed credit facilities, was $992.7 million as of March 27, 2021, compared to total liquidity of $1,121.5 million as of December 31, 2020.
Updated 2021 Outlook
–Net revenue growth expected to be within a range of 8.0% to 11.0%, compared to 4.0% to 7.0% previously
–Adjusted EBITDA anticipated to be within a range of $505 million to $535 million, up from $480 million to $520 million previously
–Projected capital expenditures are expected to be within a range of $130 million to $140 million, down from $135 million to $145 million previously
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Headquartered in Charlotte, N.C., JELD-WEN is a leading global manufacturer of high-performance interior and exterior building products, offering one of the broadest selections of windows, interior and exterior doors, and wall systems. JELD-WEN delivers a differentiated customer experience, providing construction professionals with durable, energy-efficient products and labor-saving services that help them maximize productivity and create beautiful, secure spaces for all to enjoy. The JELD-WEN team is driven by innovation and committed to creating safe, sustainable environments for customers, associates, and local communities. The JELD-WEN family of brands includes JELD-WEN® worldwide; LaCantina™ and VPI™ in North America; Swedoor® and DANA® in Europe; and Corinthian®, Stegbar®, and Breezway® in Australia. Visit jeld-wen.com for more information.
Source: JELD-WEN Holding, Inc.