JELD-WEN Reports First Quarter 2023 Results and Updates Full-Year Guidance

JELD-WEN Holding, Inc. (NYSE: JELD) (“JELD-WEN” or the “Company”) today announced results for the three months ended April 1, 2023. Comparability is to the same period in the prior year, unless otherwise noted. After taking into account reporting the Australasia segment as discontinued operations, the Company is raising its full-year guidance on the remaining business to reflect its first quarter results and ongoing cost reduction activities.

First Quarter Highlights

• Net revenue of $1,222.6 million increased +4.4% in the first quarter driven by +7% Core Revenue growth. Core Revenue growth included +10% of price realization driven by continuing cost inflation and lower volume/mix (-3%).
• Net income was $15.1 million or $0.18 per share, compared to net loss of ($0.5) million or ($0.01) per share during the same quarter a year ago. Operating income margin was 3.1% as of April 1, 2023.
• Adjusted EPS was $0.35, compared to Adjusted EPS of $0.24 in the same quarter a year ago. Adjusted EPS includes net after-tax charges of $14.5 million or $0.17 per share, compared to net after-tax charges of $22.3 million or $0.25 per share during the same quarter a year ago. Adjusted Net Income and Adjusted EPS for the quarter ended March 26, 2022 have been revised to conform to current period presentation and revise the adjusted tax impact. A further reconciliation of these charges for both periods can be found in the tables at the end of this release.
• Adjusted EBITDA was $93.5 million, compared to $80.2 million during the same quarter a year ago. Adjusted EBITDA Margin increased by 80 basis points year-over-year to 7.7%.
• On April 17, 2023, the Company announced the sale of its Australasia segment for AU$688 million and intent to use majority of the proceeds to repay debt.

“We made progress in the first quarter to simplify and strengthen JELD-WEN which, combined with more favorable than expected market conditions, resulted in improved financial performance,” said Chief Executive Officer William J. Christensen.  “During this time of weaker demand, our associates carefully controlled costs while continuing to deliver on our customers’ expectations. In addition, to further simplify our global operations, we recently announced the sale of our Australasia business to Platinum Equity which will allow us to focus on our two largest regions and strengthen our balance sheet by paying down debt.”

Christensen continued, “Driven by our solid first quarter results, ongoing cost reduction activities and the move of our Australasia segment to discontinued operations, we are raising our 2023 guidance on the remaining business. However, with the continued macro-economic uncertainty in North America and Europe, we are taking a pragmatic view of the market and our financial outlook for the year.”

First Quarter 2023 Results 

Net revenue for the three months ended April 1, 2023 increased $51.6 million, or +4.4%, to $1,222.6 million, compared to $1,171.0 million for the same period last year. The increase in net revenue was driven by +7% Core Revenue growth, partially offset by a -3% adverse foreign exchange impact. Core Revenue growth was driven by price realization of +10% mostly related to prior year increases and continuing cost inflation partially offset by lower volume/mix (-3%).

Net income was $15.1 million in the first quarter, compared to net loss of ($0.5) million in the same period last year, an increase of $15.7 million. The growth in net income was driven by positive price/cost, partially offset by lower volume/mix. Adjusted Net Income for the first quarter increased $7.8 million, to $29.6 million, compared to $21.8 million in the same period last year. 

Earnings per share (“EPS”) for the first quarter was $0.18, compared to net loss per share of ($0.01) for the same quarter last year. Adjusted EPS for the first quarter was $0.35 compared to Adjusted EPS of $0.24 in the same quarter last year. 

Adjusted EBITDA increased $13.3 million, to $93.5 million, compared to the same quarter last year. Adjusted EBITDA Margin increased 80 basis points to 7.7%, as positive price/cost was partially offset by lower volume/mix. 

On a segment basis for the first quarter of 2023, compared to the same period last year:

• North America – Net revenue increased $45.7 million, or +6.3%, to $768.0 million, driven by a +7% increase in Core Revenue which was higher due to price realization of +10% partially offset by lower volume/mix (-3%). Net income decreased $2.8 million to $35.2 million. Operating income margin was 7.0% as of April 1, 2023. Adjusted EBITDA increased $12.1 million to $79.2 million, while Adjusted EBITDA Margin increased 100 basis points to 10.3%.
• Europe – Net revenue decreased $10.8 million, or -3.3%, to $312.5 million, due to a -6% adverse impact from foreign exchange, slightly offset by a +3% increase in Core Revenue. Core Revenue increased due to price realization of +10%, partially offset by lower volume/mix (-7%). Net income increased $7.9 million to $7.3 million. Operating income margin was 1.7% as of April 1, 2023. Adjusted EBITDA increased $2.9 million to $17.6 million, while Adjusted EBITDA Margin increased by 110 basis points to 5.6%.
• Australasia – Net revenue increased $16.7 million, or +13.3%, to $142.1 million, due to a +20% increase in Core Revenue, partially offset by a -7% adverse impact from foreign exchange. Core Revenue increased due to higher volume/mix of +11% and strong price realization of +9%. Net income increased $3.3 million to $5.3 million. Operating income margin was 5.6% as of April 1, 2023. Adjusted EBITDA increased $2.2 million to $12.6 million, while Adjusted EBITDA Margin increased 60 basis points to 8.9%.

Cash Flow and Balance Sheet

Net cash flow used in operations was ($0.7) million during the first quarter of 2023, a $186.2 million improvement compared to net cash flow used in operations of ($186.9) million during the same period a year ago. Net income in the first quarter of 2023 improved $15.7 million compared to the same period a year ago. Net working capital consumed ($41.1) million in the first quarter of 2023, a $186.5 million improvement compared to the prior year.

Capital expenditures in the first quarter of 2023 increased by $7.2 million to $23.6 million, up from $16.4 million in the first quarter of 2022.

Free Cash Flow used in the first quarter of 2023 was ($24.3) million, compared to Free Cash Flow used in the first quarter of 2022 of ($203.2) million. This $179.0 million improvement is primarily due to higher net cash flow from operations.

Total liquidity, including cash and cash equivalents and undrawn committed credit facilities, was $618.9 million as of April 1, 2023, compared to total liquidity of $645.5 million as of December 31, 2022.

Updated Full Year 2023 Guidance

JELD-WEN is updating its guidance to reflect the solid first quarter performance, ongoing cost reduction actions and the impact of the Australasia segment moving to discontinued operations following the April 17, 2023 announcement of the agreement to sell the segment.

The Company now expects 2023 net revenue of $4.0 to $4.4 billion which reflects a low double digit decline in volume/mix across its portfolio of products and geographies in North America and Europe. Core Revenues are forecasted to be down 4% to 8% as carry-forward price realization partially offsets lower market demand. 

Further, the Company now expects 2023 Adjusted EBITDA to be within the range of $330 to $370 million driven by lower year-over-year volumes and the non-recurrence of certain Other Income items partially offset by improved productivity and cost reductions.

	Revenue	Adjusted EBITDA
Original Guidance	$4.5B to $4.9B	$360M to $400M
Original Guidance Without Australasia	$3.9B to $4.3B	$300M to $340M
Updated Guidance	$4.0B to $4.4B	$330M to $370M

Although the Company believes the assumptions reflected in the range of guidance are reasonable, actual results could vary substantially given the uncertainty regarding the future performance of the global economy, the continuing conflict in Ukraine, ongoing disruptions in global supply chains, and potential changes in raw material prices and other costs as well as other risks and uncertainties, including those described below. In addition the guidance ranges provided for 2023 do not include the impact of potential acquisitions or divestitures, except the announced divestiture of the Australasia business, and assume no new COVID-19 lockdowns or restrictions, which could unfavorably impact our operations, labor availability, and supply chain continuity.

For the complete press release, 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.