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Masonite International Corporation Reports Third Quarter Sales and Earnings Growth

General News
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Masonite International Corporation (“Masonite” or “the Company”) announced results for the three and nine months ended October 2, 2022.

  • Net sales up 12% year over year on strong execution in North American Residential segment
  • Net income attributable to Masonite up 51% year over year and Adjusted EBITDA* up 7% year over year
  • Accelerating Doors That Do More strategy with pending acquisition of high-performance door system components manufacturer, Endura Products

“Our core North American Residential business continued to deliver outstanding results this quarter, allowing Masonite to achieve double digit net sales growth despite significant macroeconomic headwinds in our European segment,” said Howard Heckes, President and CEO. “The pending acquisition of Endura Products, a U.S. manufacturer of innovative door system components, will drive further momentum and fuel our Doors That Do More™ strategy. As we enter the fourth quarter, our teams remain focused on disciplined execution of our strategy and utilizing our Mvantage operating system to adapt to evolving end markets and deliver another year of revenue and earnings growth.”

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

Third Quarter 2022 Discussion

Consolidated net sales were $728 million in the third quarter of 2022, a 12% increase from $652 million in the third quarter of 2021. The increase resulted from a 21% increase in average unit price (AUP), partially offset by a 6% decrease in volume, a 2% decrease from unfavorable foreign exchange and a 1% impact from lower component sales.

  • North American Residential net sales were $579 million, a 19% increase compared to the third quarter of 2021, driven by a 23% increase in AUP, partially offset by a 3% decrease in volume and a combined 1% decrease due to unfavorable foreign exchange and lower component sales.
  • Europe net sales were $66 million, a 22% decrease compared to the third quarter of 2021, attributable to a 21% decrease in volume, a 13% decrease due to unfavorable foreign exchange and a 1% impact from lower component sales, partially offset by a 13% increase in AUP.
  • Architectural net sales were $78 million, a 3% increase compared to the third quarter of 2021, driven by a 13% increase in AUP, partially offset by an 8% decrease in volume and a 2% impact from lower component sales.

Total company gross profit was $167 million in the third quarter of 2022, an increase of 8.5% compared to $154 million in the third quarter of 2021. Gross profit margin decreased 60 basis points to 23.0%, as higher AUP was more than offset by the impact of inflation on raw materials and logistics costs, higher manufacturing wages and energy costs and lower volume in our Europe and Architectural segments.

Selling, general and administration (SG&A) expenses were $83 million in the third quarter of 2022, an increase of 8% compared to $77 million in the third 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 11.4%, 30 basis points lower as compared to the third quarter of 2021.

Net income attributable to Masonite was $57 million in the third quarter of 2022 compared to $38 million in the third quarter of 2021. The increase was primarily driven by higher gross profit as discussed above, as well as the absence of $11 million in charges related to the loss on extinguishment of debt and actions taken as part of our previously announced restructuring plans, each of which were incurred in the third quarter of 2021.

Adjusted EBITDA* of $112 million in the third quarter of 2022 increased 7% from $105 million in the third quarter of 2021. Diluted earnings per share were $2.54 in the third quarter of 2022, an increase of 65% compared to $1.54 in the comparable 2021 period. Diluted adjusted earnings per share* were $2.53 in the third quarter of 2022 compared to $1.99 in the comparable 2021 period, which excludes $11 million in charges related to the loss on extinguishment of debt 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 $504 million, inclusive of $251 million in unrestricted cash and $253 million of availability under our ABL Facility and our AR Sales Program.

Cash provided by operations was $83 million for the nine months ended October 2, 2022, as compared to $100 million in the prior year period. Capital expenditures were $66 million for the nine months ended October 2, 2022, an increase from $47 million in the comparable period of 2021.

Pending Acquisition of Endura Products

On November 3, 2022, the Company announced that it had signed a definitive agreement to acquire Endura Products, a leading innovator and manufacturer of high-performance door frames and door system components. The acquisition is expected to enable the combined organization to accelerate innovation across the entire door system, unlock the value of fully integrated products and propel growth into new and existing markets in line with the Masonite Doors That Do More strategy. The Company expects the transaction to close near the end of 2022 pending regulatory approval and the satisfaction of customary closing conditions.

For the full third quarter results, click here.

About Masonite

Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors and door systems 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 and Treasurer – rleland@masonite.com – (813) 739-1808

Source: Masonite International Corporation