Masonite International Corporation Reports Second Quarter Sales and Earnings Growth and Reiterates Confidence in Full Year 2022 Outlook

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

• Net Sales up 15% year over year driven by steady demand and strong operational performance in the North American Residential segment
• Net income attributable to Masonite up 67% year over year and Adjusted EBITDA* up 7% year over year
• Completed the previously announced accelerated share repurchase agreement, which retired a total of approximately 1.2 million common shares

($ in millions, except per share amounts)	2Q22		2Q21		% Change		YTD 2022		YTD 2021		% Change
Net Sales	$762		$662		+15.0%		$1,488		$1,309		+13.7%
Net income attributable to Masonite	$59		$35		+67.0%		$126		$82		+53.7%
Diluted earnings per share	$2.58		$1.41		+83.0%		$5.47		$3.30		+65.8%
Adjusted EPS*	$2.58		$2.23		+15.7%		$5.47		$4.16		+31.5%
Adjusted EBITDA*	$118		$111		+6.8%		$243		$213		+14.2%
Adjusted EBITDA* Margin	15.5%		16.7%		(120 bps)		+16.3%		16.2%		+10 bps

“Masonite delivered another solid quarter of year-over-year net sales and Adjusted EBITDA* growth driven by steady demand and strong execution in our North American Residential segment,” said Howard Heckes, President and CEO. “We have started shipments from two new door production facilities, in line with our strategy to deliver consistent and reliable supply. We also introduced new products and marketing initiatives aimed at supporting further growth and favorable mix. We believe that these initiatives, combined with thoughtful price-cost management, will allow us to effectively navigate near-term macro-economic headwinds and make continued progress toward our 2025 Centennial Plan^.”

* See “Non-GAAP Financial Measures and Related Information” for definition and reconciliation of non-GAAP measures.
^ The Company’s 2025 Centennial Plan is a forward-looking statement and subject to risks and uncertainties. See “Forward-looking Statements”

Second Quarter 2022 Discussion

Consolidated net sales were $762 million in the second quarter of 2022, a 15% increase from $662 million in the second quarter of 2021. The increase resulted from a 19% increase in average unit price (AUP), partially offset by a 2% decrease from unfavorable foreign exchange, a 1% decrease in volume, and a 1% decrease due to a prior year divestiture.

• North American Residential net sales were $608 million, a 23% increase compared to the second quarter of 2021, driven by a 21% increase in AUP and a 3% increase in volume, partially offset by a 1% decrease due to unfavorable foreign exchange.
• Europe net sales were $74 million, down 16% compared to the second quarter of 2021 attributable to a 10% decrease due to unfavorable foreign exchange and a 6% decrease due to a prior year divestiture, as a 16% decrease in volume was fully offset by a 16% increase in AUP.
• Architectural net sales were $75 million, a 1% decrease compared to the second quarter of 2021, driven by a 13% decrease in volume as well as a 1% impact from lower component sales and unfavorable foreign exchange, largely offset by a 13% increase in AUP.

Total company gross profit was $179 million in the second quarter of 2022, an increase of 9% compared to $164 million in the second quarter of 2021. Gross profit margin decreased 120 basis points to 23.6%, as higher AUP was offset by the impact of inflation on raw materials and logistics costs, higher manufacturing wages and lower volume in our Europe and Architectural segments.

Selling, general and administration (SG&A) expenses were $90 million in the second quarter of 2022, an increase of approximately 10% compared to $83 million in the second quarter of 2021 primarily due to higher personnel costs, which includes increased incentive compensation, wage and benefit inflation and resources to support growth. SG&A as a percentage of net sales was 11.9%, 60 basis points lower as compared to the second quarter of 2021.

Net income attributable to Masonite was $59 million in the second quarter of 2022 compared to $35 million in the second quarter of 2021. The increase was primarily driven by higher gross profit as discussed above, as well as the absence of $18 million in charges incurred in the second quarter of 2021 related to our previously announced restructuring plans and a loss on the disposal of our Czech business.

Adjusted EBITDA* of $118 million in the second quarter of 2022 increased approximately 7% from $111 million in the second quarter of 2021. Diluted earnings per share were $2.58 in the second quarter of 2022, an increase of 83% compared to $1.41 in the comparable 2021 period. Diluted adjusted earnings per share* were $2.58 in the second quarter of 2022 compared to $2.23 in the comparable 2021 period, which excludes $18 million in charges as discussed above.

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

Balance Sheet, Cash Flow and Capital Allocation

At the end of the quarter, total available liquidity was $482 million, inclusive of $232 million in unrestricted cash and $251 million of availability under our ABL Facility and our AR Sales Program.

Cash provided by operations was $34 million for the six months ended July 3, 2022, as compared to $33 million in the prior year period. Capital expenditures were $40 million for the six months ended July 3, 2022, an increase from $30 million in the comparable period of 2021.

During the second quarter, Masonite completed the previously announced accelerated share repurchase agreement (the “ASR Agreement”) and received the final delivery of approximately 320 thousand common shares. Combined with the initial delivery of 848 thousand common shares, the $100 million ASR transaction resulted in the retirement of nearly 1.2 million common shares at a volume-weighted average price of $85.63 per share.

Full Year 2022 Outlook

The Company affirmed its full year Net Sales and Adjusted EBITDA* outlook and increased Adjusted EPS* expectations as follows:

Net Sales Growth	+6% – 10% YoY	+8% – 12% ex. FX YoY
Adjusted EBITDA*	$445 – $475M	+8% – 15% YoY
Adjusted EPS*	$9.60 – $10.60	+18% – 30% YoY

“We are pleased with the strong results our team delivered in the first half of this year.” said Russ Tiejema, Executive Vice President and CFO. “Looking forward, we are closely monitoring the demand outlook for the North American Residential markets in the second half, but given the progress we have already made in executing our growth strategy we remain confident in our ability to meet or exceed our full year outlook for Net Sales and Adjusted EBITDA*. As a result of our shareholder return initiatives, we are increasing our full year outlook for Adjusted EPS* to a range of $9.60 to $10.60 to reflect a lower share count, partially offset by a higher anticipated tax rate.”

A quantitative reconciliation of Adjusted EBITDA* and Adjusted EPS* 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