Masonite International Corporation Reports Exceptional Start to 2022

Masonite International Corporation (“Masonite” or “the Company”) announced results for the three months ended April 3, 2022.

• Net Sales up 12% year over year to $726 million
• Net income attributable to Masonite up 44% year over year to $68 million and Adjusted EBITDA up 22% year over year to $125 million
• Adjusted EBITDA Margin expanded both sequentially and year-over-year
• Deployed $140 million to repurchase shares in the first quarter

($ in millions, except per share amounts)	1Q22		1Q21		% Change
Net Sales	$726		$646		+12.4%
Net income attributable to Masonite	$68		$47		+43.8%
Diluted earnings per share	$2.89		$1.89		+52.9%
Adjusted EPS	$2.89		$1.93		+49.7%
Adjusted EBITDA	$125		$102		+22.3%
Adjusted EBITDA Margin	17.2%		15.8%		+140 bps

“Masonite is off to a great start in 2022, delivering quarterly net sales and Adjusted EBITDA growth that exceeded our expectations,” said Howard Heckes, President and CEO. “I am proud of our execution in driving price-cost recovery across all our business segments and increasing production for our North American Residential segment following the Omicron spike in January. While the longer-term macro environment presents some uncertainty, we have an experienced team in place that is focused on carefully managing business performance and executing on our Doors That Do More™ Strategy. I believe Masonite is well positioned in the current environment and making significant progress towards achieving our 2025 Centennial Plan financial goals.”

First Quarter 2022 Discussion

Consolidated net sales were $726 million in the first quarter of 2022, a 12% increase from $646 million in the first quarter of 2021. The increase resulted from a 15% increase in average unit price (AUP), partially offset by a 1% decrease in base volume, a 1% decrease due to a prior year divestiture and a 1% impact from unfavorable foreign exchange.

• North American Residential net sales were $569 million, a 19% increase compared to the first quarter of 2021, principally driven by a 17% increase in AUP and a 3% increase in base volume.
• Europe net sales were $80 million, a 9% decrease compared to the first quarter of 2021, driven by a 16% decrease in base volume, a 7% decrease due to a prior year divestiture and a 3% decrease due to unfavorable foreign exchange, partially offset by a 16% increase in AUP and a 1% increase in the sale of components.
• Architectural net sales were $71 million, a 5% decrease compared to the first quarter of 2021, driven by an 10% decrease in base volume and a 4% decrease in the sale of components, partially offset by a 9% increase in AUP.

Total company gross profit was $184 million in the first quarter of 2022, an increase of 16% compared to $159 million in the first quarter of 2021. Gross profit margin increased 90 basis points to 25.4%, as higher AUP offset the impact of inflation on raw materials and logistics costs, higher manufacturing wages and benefits and the impact of lower overall volume.

Selling, general and administration (SG&A) expenses were $83 million in the first quarter of 2022, down slightly from the prior year quarter primarily due to the positive impacts of a gain on sale of PP&E and a gain on our deferred compensation assets partially offset by higher wages and benefits. SG&A as a percentage of net sales was 11.5%, 140 basis points lower as compared to the first quarter of 2021.

Net income attributable to Masonite was $68 million in the first quarter of 2022 compared to $47 million in the first quarter of 2021. The increase was primarily driven by higher gross profit as discussed above.

Adjusted EBITDA of $125 million in the first quarter of 2022 increased 22% from $102 million in the first quarter of 2021. Diluted earnings per share were $2.89 in the first quarter of 2022, an increase of 53% compared to $1.89 in the comparable 2021 period. Diluted adjusted earnings per share were $2.89 in the first quarter of 2022 compared to $1.93 in the comparable 2021 period, which excluded $1 million in charges related to restructuring.

Balance Sheet, Cash Flow and Capital Allocation

At the end of the quarter, total available liquidity was $443 million, inclusive of $184 million in unrestricted cash and $260 million of availability under our ABL Facility and our AR Sales Program.

Cash used in operations was $38 million for the three months ended April 3, 2022, as compared to $14 million in the prior year period. The increase was primarily driven by changes in net working capital, partially offset by higher net income. Capital expenditures were approximately $19 million for the three months ended April 3, 2022, an increase from $14 million in the comparable period of 2021.

During the first quarter, Masonite repurchased approximately 388 thousand common shares in the open market for $40 million, at an average price of $103.03. In addition, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) in the quarter and received an initial delivery of approximately 848 thousand common shares in exchange for a prepayment of $100 million. The specific number of common shares that Masonite ultimately will repurchase pursuant to the ASR Agreement will be based on the daily volume-weighted average share price of Masonite common shares over the term of the ASR Agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement.

Full Year 2022 Outlook

“We are very encouraged by our strong financial performance in the first quarter but recognize that the macro environment in both North America and Europe is rapidly evolving,” said Russ Tiejema, Executive Vice President and CFO. “The entire Masonite team is focused on optimizing our operations while driving forward our Doors That Do More™ Strategy. At this time, we are optimistic that we can meet or exceed the 2022 full year outlook we provided in February.”

A quantitative reconciliation of Adjusted EBITDA and diluted adjusted earnings per share to the corresponding GAAP information is not provided for the 2022 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 complete press release, 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 7,000 customers globally. Additional information about Masonite can be found at www.masonite.com.

Contact:

Richard Leland – Vice President Finance & Treasurer – rleland@masonite.com – (813) 739-1808

Source: Masonite International Corporation