Masonite International Corporation Reports 2021 Second Quarter Financial Results

Masonite International Corporation (“Masonite” or “the Company”) announced results for the three and six months ended July 4, 2021.

Executive Summary – 2Q21 versus 2Q20

– Net sales increased 33% to $662 million versus $500 million.
– Net income attributable to Masonite increased to $35 million from $34 million.
– Diluted earnings per share increased to $1.41 from $1.38 per share and adjusted earnings per share* increased to $2.23 from $1.50.
– Adjusted EBITDA* increased to $111 million from $92 million.
– Repurchased 283,712 shares of Masonite stock in the second quarter for approximately $32 million.

“Robust demand in our residential end markets and solid execution allowed us to achieve strong Net Sales and Adjusted EBITDA* growth despite strengthening inflation headwinds in the quarter,” said Howard Heckes, President and CEO. “I am extremely proud of this organization’s ability to navigate what was an increasingly difficult backdrop with respect to our supply chain and labor availability. Despite these near-term challenges, we continued to invest in the business for long-term growth and still anticipate full year 2021 Adjusted EBITDA* Margin expansion.”

* See “Non-GAAP Financial Measures and Related Information” for definition and reconciliation of non-GAAP measures.

Second Quarter 2021 Discussion

Net sales were $662 million in the second quarter of 2021, a 33% increase from $500 million in the comparable period of 2020. The increase in net sales was the result of a 19% increase in base volume, a 7% increase in average unit price (AUP), a 5% increase due to favorable foreign exchange and a 2% increase in the sale of components and other products.

– North American Residential net sales were $493 million, a 29% increase compared to the second quarter of 2020, driven by a 19% increase in base volume, a 7% increase in AUP and a combined 3% increase due to favorable foreign exchange and the sale of components and other products.
– Europe net sales were $88 million, a 194% increase compared to the second quarter of 2020 due to our UK and Ireland operations being idled for approximately one-half of the prior year period. The increase was driven by a 134% increase in base volume, a 33% increase due to favorable foreign exchange, a 21% increase in AUP and a 7% increase in the sale of components and other products, partially offset by a 1% decrease from the impact of a divestiture.
– Architectural net sales were $76 million, an 11% decrease compared to the second quarter of 2020, driven by a 16% decrease in base volume, partially offset by a 4% increase in AUP and a 1% increase due to favorable foreign exchange.

Total company gross profit was $164 million in the second quarter of 2021, an increase of 21% compared to $136 million in the second quarter of 2020. Gross profit margin decreased 250 basis points to 24.8%, due to the impact of higher inflation and tariffs on raw materials, rising logistics costs, higher manufacturing wages and benefits and increased investment in the business, partially offset by higher AUP.

Selling, general and administration (SG&A) expenses were $83 million in the second quarter of 2021, an increase of 12% compared to $73 million in the second quarter of 2020. The increase in SG&A was primarily due to higher personnel costs, which includes resources to support growth. SG&A as a percentage of net sales was 12.5%, a 220 basis point decrease compared to the second quarter of 2020.

Net income attributable to Masonite was $35 million in the second quarter of 2021, an increase of 3% compared to $34 million in the second quarter of 2020. Adjusted EBITDA* of $111 million in the second quarter of 2021 increased 20% from $92 million in the second quarter of 2020.

Diluted earnings per share were $1.41 in the second quarter of 2021 compared to $1.38 in the comparable 2020 period. Diluted adjusted earnings per share* were $2.23 in the second quarter of 2021 compared to $1.50 in the comparable 2020 period. Diluted adjusted earnings per share* excludes $20 million in charges related to actions taken as part of our previously announced restructuring plans, the loss on disposal of our Czech business and the UK tax rate change incurred in the second quarter of 2021 and $3 million in charges related to the loss on disposal of our India subsidiary and restructuring in the second quarter of 2020.

Masonite repurchased 283,712 shares of stock in the second quarter of 2021 for $32 million, at an average price of $114.28.

Year to Date 2021 Discussion

Net sales were $1,309 million in the first six months of 2021, a 25% increase from $1,051 million in the comparable period of 2020. The increase in net sales was a result of an 11% increase in AUP, a 9% increase in base volume, a 3% increase due to favorable foreign exchange and a 2% increase in the sale of components and other products.

– North American Residential net sales were $970 million, a 27% increase compared to the first six months of 2020, driven by a 12% increase in AUP, a 12% increase in base volume, a 2% increase due to foreign exchange and a 1% increase in the sale of components and other products.
– Europe net sales were $176 million, a 75% increase compared to the first six months of 2020, driven by a 45% increase in base volume, a 16% increase due to favorable foreign exchange, an 11% increase from higher AUP and a 4% increase in the sale of components and other products, partially offset by a less than 1% decrease from the impact of a divestiture.
– Architectural net sales were $151 million, a 15% decrease compared to the first six months of 2020, driven by a 19% decrease in base volume and a 1% decrease in the sale of components and other products, partially offset by a 4% increase in AUP and a 1% increase due to favorable foreign exchange.

Total company gross profit was $323 million in the first six months of 2021, an increase of 19% compared to $271 million in the first six months of 2020. Gross profit margin decreased 110 basis points to 24.7%, due to the impact of higher inflation and tariffs on raw materials, rising logistics costs, higher manufacturing wages and benefits and increased investment in the business, partially offset by higher AUP.

Selling, general and administration (SG&A) expenses were $166 million in the first six months of 2021, an increase of 8% compared to $154 million in the first six months of 2020. The increase was due to higher personnel costs, which includes resources to support growth. SG&A as a percentage of net sales was 12.7%, a 190 basis point decrease compared to the first six months of 2020.

Net income attributable to Masonite was $82 million in the first six months of 2021, an increase of 28% compared to $64 million in the first six months of 2020. Adjusted EBITDA* of $213 million in the first six months of 2021 increased 23% from $173 million in the first six months of 2020.

Diluted earnings per share were $3.30 in the first six months of 2021 compared to $2.56 in the comparable 2020 period. Diluted adjusted earnings per share* were $4.16 in the first six months of 2021 compared to $2.74 in the comparable 2020 period. Diluted adjusted earnings per share* excludes $22 million in charges related to actions taken as part of our previously announced restructuring plans, the loss on the disposal of our Czech business and the UK tax rate change incurred in the first six months of 2021 and $4 million in charges related to the loss on disposal of our India subsidiary and restructuring incurred in the first six months of 2020.

Masonite repurchased 368,695 shares of stock in the first six months of 2021 for $42 million, at an average price of $113.98.

Updated 2021 Outlook

The Company now expects full-year 2021 net sales growth in the range of 17 to 20 percent, reflecting sustained residential demand, pricing actions taken in response to rapidly changing inflation and the expectation that current foreign exchange tailwinds may continue throughout the year.

The Company’s expectations for 2021 Adjusted EBITDA* remain unchanged at a range of $435 million to $455 million and diluted adjusted earnings per share* of $8.00 to $8.60.

“Based on the continued strength of our residential end markets and additional pricing actions taken to mitigate inflation, we have updated our outlook to reflect even stronger Net Sales growth for the year,” Mr. Heckes concluded.

A quantitative reconciliation of Adjusted EBITDA* and diluted adjusted earnings per share* to the corresponding GAAP information is not provided for the 2021 outlook because it is difficult to predict the GAAP measures that are excluded from Adjusted EBITDA* such as restructuring costs, asset impairments, share based compensation expense and gains/losses on sales of subsidiaries and PP&E.

For the full second quarter results, click here.

About Masonite

Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors 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 7,600 customers in 60 countries. Additional information about Masonite can be found at www.masonite.com.

Contact:

Farand Pawlak – Director of Investor Relations – fpawlak@masonite.com – (813) 371-5839

Source: Masonite International Corporation