Cancel OK

JELD-WEN Reports Strong Demand and Price Realization with Third Quarter 2021 Results

General News
Jeld-Wen Logo - Manufacturer

JELD-WEN Holding, Inc. (“JELD-WEN”) announced results for the three and nine months ended September 25, 2021, including third quarter net revenue of $1,146.6 million, net income of $40.5 million, adjusted EBITDA of $98.9 million, net cash flow from operations of $135.3 million, earnings per share (“EPS”) of $0.41, and adjusted EPS of $0.45. 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.

Highlights

– Net revenue increased by 3.0% to $1,146.6 million, driven by a 2% increase in core revenue
– Price realization accelerated to 7%, including 10% in the North America segment
– Year-to-date gross margin expanded 40 basis points
– Strong order and backlog growth in each segment, and record book-to-bill in North America segment
– Repurchased approximately 8 million shares in the quarter for $221.1 million
– Re-affirmed outlook for full year 2021 revenue growth and updated assumptions for adjusted EBITDA range

“I am proud of our associates globally, who moved swiftly this quarter to meet high customer demand, overcoming the impact of wide-spread labor constraints, supply chain challenges and COVID-19 operating restrictions,” said Gary S. Michel, chairman, president and chief executive officer. “Through the disciplined deployment of our business operating system, the JELD-WEN Excellence Model (“JEM”), our commercial and operational excellence programs continue to generate industry leading order fulfillment, deliver positive price realization, alleviate pressure from unprecedented labor and supply chain constraints and drive new business opportunity.”

“Demand remains robust in each of our end markets with strong order and backlog growth, including accelerating order activity through the quarter in our North America segment,” said Michel. “With a favorable housing backdrop ahead, I remain confident that we will deliver on the growth plans and financial targets we set forth in our inaugural investor day in May.”

Third Quarter 2021 Results

– Core revenue increased in each reporting segment
– Over twelve consecutive quarters of price realization ahead of raw material inflation
– Net income increased $15.1 million

Net revenue for the three months ended September 25, 2021 increased $33.7 million, or 3.0%, to $1,146.6 million, compared to $1,112.9 million for the same period last year. The increase in net revenue was primarily driven by 2% core revenue growth and a 1% positive impact from foreign exchange. Core revenue growth was driven by a 7% pricing benefit, partially offset by a 5% volume/mix headwind due to labor and supply chain constraints and operating restrictions in certain markets related to COVID-19 mandates and adverse weather events.

Net income for the third quarter increased $15.1 million to $40.5 million, compared to net income of $25.5 million in the same period last year. The increase in net income was largely due to lower litigation related expenses and reduced income tax expense, partially offset by lower gross margin. In the third quarter, the impact of income tax was a benefit of $2.9 million primarily due to discrete items related to the election of the high tax exclusion of the GILTI provision of U.S. tax reform legislation. Adjusted net income for the third quarter decreased $8.5 million, or 16.3%, to $44.0 million, compared to $52.6 million in the same quarter last year.

EPS for the third quarter was $0.41, compared to $0.25 for the same quarter last year. Adjusted EPS was $0.45, compared to $0.52 a year ago.

Adjusted EBITDA decreased $31.9 million, or 24.4%, to $98.9 million, compared to the same quarter last year. Adjusted EBITDA margin declined due to the deleverage impact of lower revenue volume, reduced labor efficiency, and higher inflation, partially offset by higher pricing.

On a segment basis for the third quarter of 2021, compared to the same period last year:

North America – Net revenue increased $14.1 million, or 2.1%, to $676.8 million, due to a 2% increase in core revenue. Core revenue increased due to a 10% pricing benefit, partially offset by an 8% decrease in volume/mix. Adjusted EBITDA margin was 11.4%.

Europe – Net revenue increased $11.6 million, or 3.7%, to $322.6 million, due to a 2% positive impact from foreign exchange and a 2% increase in core revenue. Core revenue increased primarily due to a 4% pricing benefit, partially offset by a 2% headwind from volume/mix. Adjusted EBITDA margin was 7.4%.

Australasia – Net revenue increased $8.0 million, or 5.8%, to $147.2 million, due to a 3% favorable foreign exchange impact and a 3% increase in core revenue. Core revenue increased primarily due to a 2% pricing benefit. Adjusted EBITDA margin was 11.9%.

Cash Flow and Balance Sheet

– Adjusted operating cash flow was $181.6 million year-to-date, a decrease of $45.9 million
– Adjusted free cash flow totaled $107.9 million year-to-date, a decrease of $52.7 million

Net cash flow from operations declined $75.3 million to $135.3 million year-to-date due to higher working capital investment, cash taxes, and litigation settlements. Adjusted operating cash flow totaled $181.6 million year-to-date, compared to adjusted operating cash flow of $227.5 million during the same period a year ago. The decrease in adjusted operating cash flow was primarily due to higher working capital investment and higher cash taxes. Adjusted free cash flow decreased to $107.9 million year-to-date, from $160.6 million a year ago, due to lower adjusted operating cash flow and an increase in capital expenditures.

The company repurchased 7,762,169 shares in the quarter for $221.1 million. Year-to-date share repurchases total 9,749,810 shares for $278.0 million.

Total liquidity, including cash and cash equivalents and undrawn committed credit facilities, was $832.8 million as of September 25, 2021, compared to total liquidity of $1,121.5 million as of December 31, 2020.

2021 Outlook

– Full year 2021 net revenue growth expected to be within a range of 10% to 12%, unchanged from the previous outlook
– Adjusted EBITDA expected to be within a range of $465 million to $480 million, revised from the previous outlook of $470 million to $490 million due to higher material and freight inflation
– Full year 2021 capital expenditures are expected to be within a range of $100 million to $110 million, compared to the previous outlook of $130 million to $140 million

“Our healthy backlog, accelerating order activity, and improving throughput give us confidence that we will deliver revenue and earnings growth in the fourth quarter, consistent with our updated full year outlook,” said Michel. “While inflation remains a headwind, we expect that our pricing actions will more than offset material and freight inflation in both the fourth quarter and full year 2021. Looking into 2022, we believe we are well-positioned to accelerate growth given favorable end market demand and our internal investments in innovation and new product offerings.”

For the full third quarter results, click here.

About JELD-WEN

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.