Masonite International Corporation Reports Solid Start to 2023
Masonite International Corporation (“Masonite” or the “Company”) (NYSE: DOOR) today announced results for the three months ended April 2, 2023.
- Net sales remained flat year over year as strong AUP and contribution from Endura acquisition offset softer end-market demand
- Delivered positive operating cash flow of $56 million in part from working capital initiatives
- On schedule to deliver full year benefits from cost actions and restructuring
- Repaid $100 million of debt and deployed $15 million to repurchase shares in Q1
|($ in millions, except per share amounts)||1Q23||1Q22||% Change|
|Net income attributable to Masonite||$38||$68||(43%)|
|% of net sales||5.3%||9.3%||(400 bps)|
|Diluted earnings per share||$1.71||$2.89||(41%)|
|% of net sales||14.6%||17.2%||(260 bps)|
“The early benefits from implementation of our 2023 Playbook initiatives allowed us to deliver financial results in Q1 that were ahead of expectations although down year over year given the exceptionally strong first quarter we had in 2022,” said Howard Heckes, President and CEO. “While end-market demand remains soft, trends are generally in line with our full-year planning assumptions. The continued execution of our cost actions, combined with strategic growth investments position us for accelerated margin growth as volumes return. Based on our proactive approach and successful execution by our teams, we remain confident in our ability to deliver on our full year 2023 outlook.”
* See “Non-GAAP Financial Measures and Related Information” for definition and reconciliation of non-GAAP measures.
First Quarter 2023 Discussion
(All references to percent increase or decrease in the discussion below compare current first quarter 2023 results to those realized in the first quarter of 2022 unless otherwise noted.)
Consolidated net sales were $726 million in the first quarter of 2023, or flat year over year, resulting from a 10% increase in average unit price (AUP) and an 8% increase from the Endura acquisition, partially offset by a 16% decrease in volume and a combined 2% decrease from unfavorable foreign exchange and lower component sales.
- North American Residential net sales were $569 million, or flat year over year, driven by an 11% increase from the Endura acquisition and an 8% increase in AUP, partially offset by a 17% decrease in volume and a combined 2% decrease from unfavorable foreign exchange and lower component sales.
- Europe net sales were $64 million, a 21% decrease driven by a 15% decrease in volume, an 8% decrease due to unfavorable foreign exchange and a 2% impact from lower component sales, partially offset by a 4% increase in AUP.
- Architectural net sales were $88 million, a 24% increase driven by a 28% increase in AUP, partially offset by a 2% decrease in volume and a combined 2% decrease from unfavorable foreign exchange and lower component sales.
Total Company gross profit was $170 million in the first quarter of 2023, a decrease of 7%. Gross profit margin decreased 190 basis points to 23.5%, as higher AUP was more than offset by the impacts of inflation, lower volumes, the dilutive effect of the Endura acquisition and targeted investments in strategic initiatives.
Selling, general and administration (SG&A) expenses were $102 million in the first quarter of 2023, an increase of 22% primarily due to incremental SG&A from Endura and higher professional fees to support strategic initiatives as well as the absence of a previous year gain on sale of PP&E. SG&A as a percentage of net sales was 14.0%, a 250 basis point increase compared to the first quarter of 2022.
Net income attributable to Masonite was $38 million in the first quarter of 2023, a decrease of 43% primarily driven by lower gross profit as discussed above, as well as the actions taken as part of our previously announced restructuring plans which were incurred in the first quarter of 2023.
Adjusted EBITDA* of $106 million in the first quarter of 2023 decreased 15% from $125 million in the first quarter of 2022. Diluted earnings per share were $1.71 in the first quarter of 2023, a decrease of 41% compared to $2.89 in the comparable 2022 period. Diluted adjusted earnings per share* were $1.88 in the first quarter of 2023 compared to $2.89 in the comparable 2022 period.
Balance Sheet, Cash Flow and Capital Allocation
At the end of the first quarter, total available liquidity was $542 million, inclusive of $331 million of availability under our ABL Facility and our AR Sales Program and $211 million in unrestricted cash.
Cash provided by operations was $56 million for the three months ended April 2, 2023, as compared to cash used in operations of $38 million in the prior year period. Capital expenditures were $28 million for the three months ended April 2, 2023, an increase from $19 million in the comparable period of 2022.
During the first quarter, Masonite repurchased approximately 168,523 shares of stock for $15 million, at an average price of $87.33.
For the complete press release, click here.
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.
Richard Leland – Vice President, Finance and Treasurer – firstname.lastname@example.org – (813) 739-1808
Source: Masonite International Corporation