Masonite Innovations to Bring Power and Connectivity to Doors

TAMPA, Fla.–(BUSINESS WIRE)–Today, Masonite International Corporation (NYSE: DOOR), a leading global designer, manufacturer, marketer and distributor of interior and exterior doors, announced patent-pending technology to integrate power and internet connectivity into residential doors. This groundbreaking innovation marks the company’s most significant advance in research and development since the founding of the company nearly a century ago.

Masonite plans to leverage this revolutionary technology through relationships with Ring and Yale Home. These collaborations will explore opportunities for product development to integrate new lifestyle and security functionality into doors that provide additional value and peace of mind for homeowners.

We believe power and connectivity will create expanded capabilities for homeowners,” said Cory Sorice, Masonite Senior Vice President and Chief Innovation Officer. “We’re pleased to build relationships with Ring and Yale to transform what people can expect their doors to do, as we continue to innovate and deliver doors that do more.”

We’re excited to be a part of this innovative step forward in smart home connectivity,” said Jamie Siminoff, Founder and Chief Inventor at Ring. “The seamless integration of our Ring Video Doorbell technology and the Yale smart lock into the Masonite door is an example of how we can add technology in smart ways to make customers’ homes work harder for them.”

For most people, security and peace of mind start at the front door. We’ve seen this firsthand at Yale for the last 180 years,” said Jason Williams, President of Smart Residential Group U.S., ASSA ABLOY. “As smart security rapidly evolves, it’s a logical next step for doors to become directly integrated with the technology themselves. With Masonite and Ring, we look forward to driving this innovation and helping bring about a new era of home security.”

The Masonite story began nearly a century ago, when founder William H. Mason developed a method to turn large quantities of waste wood into useful products. That spirit of innovation continues to thrive at Masonite today. The Masonite Innovation Center (MIC), located in West Chicago, Illinois, is the largest private research and development center in the world focused on doors and door technologies. The MIC is designed to give Masonite an industry-leading edge in developing new products to meet the needs of today’s homeowners.

For more information on Masonite innovation or to submit a collaboration request, visit masonite.com/innovation. Follow Masonite on LinkedIn, Twitter, Instagram, and Facebook.

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 approximately 7,600 customers in 60 countries. Additional information about Masonite can be found at www.masonite.com.

ABOUT RING

Since its founding in 2013, Ring has been on a mission to make neighborhoods safer. From the video doorbell, to Ring Alarm, which was named #1 in Customer Satisfaction for DIY Home Security Systems by J.D. Power, Ring’s smart home security product line, as well as the Neighbors App, offer users affordable whole-home and neighborhood security. At Ring, we are committed to making home and neighborhood security accessible and effective for everyone — while working hard to bring communities together. Ring is an Amazon company. For more information, visit www.ring.com. With Ring, you’re always home.

ABOUT YALE

At 180 years strong, Yale is a leading security brand that protects the people, places and things we love most. It secures millions of homes and businesses worldwide with its innovative mechanical locks, safes and smart locks for front doors, interior doors, cabinets, package deliveries and more. Yale is part of the ASSA ABLOY Group, the global leader in access solutions. Every day, we help billions of people experience a more open world. For more information, visit US.yalehome.com.

View Source

A Rundown School for Palestinian Children Awaits U.S. Aid

JABA, West Bank — When Joe Biden was elected president, residents of the tiny hilltop village of Jaba in the occupied West Bank cheered.

They hope the new American president will restore funding to a project to transform a rundown school in their village into a modern facility by adding an impressive three-story building with a library, a new science lab, more classrooms, an office for social workers and a shaded basketball court.

Work on the project stopped in 2019 after the Trump administration effectively ended aid to the Palestinians.

Jaba, home to about 1,300 residents near Bethlehem, is set on a series of small rolling hills that straddle Israel and a string of settlements. It has few businesses; its sole medical clinic operates one day a week; and its streets are narrow. It also suffers from a housing shortage because it is in an area where Israel rarely allows new construction.

The original plan to expand the school would have represented one of the village’s most significant upgrades in the past decade. It would have allowed it to increase its student body from 80 to 250, including 50 girls.

“We hope Biden will find a way to rectify the cruel decision to halt funding to the school,” said Jaba’s mayor, Diab Mashala, sipping coffee in his spacious living room. “It is vital to the future of our children.”

Many Jaba residents were excited about the school’s expansion because it would have made grades 11 and 12 available in the village. Students in those two grades must now travel to a larger school in the neighboring village of Surif, a one-and-a-half-mile journey that parents complain can be dangerous because of occasional assaults by ultranationalist settlers.

“I would feel much less anxious if my son could learn in our village,” said Muheeb Abu Louha whose son studies in Surif.

Along the trek between the villages, students must bypass a large roadblock — an orange gate surrounded by piles of burned trash and mounds of dirt — and then walk the rest of the way or hail a taxi or minibus. The only other option is a circuitous 30-minute car ride.

Humam al-Tos, a senior, said settlers have hurled stones at him more than once.

“It’s terrifying,” said Mr. al-Tos, 18, who hopes to study mechanical engineering in Turkey. “When the army comes, they stop them. But when the army isn’t in the area, they do what they want.”

The Israeli military would not say whether it was aware of settlers attacking students between Jaba and Surif, but said it “does not stand by” when it witnesses violence. And on a warm day in mid-February uniformed boys and girls walked along the narrow road without incident.

The roadblock has not been removed, Israeli security officials said, because the road does not meet Israel’s safety requirements and the Palestinian Authority must submit to Israel a plan to repair it before any efforts to reopen the road can begin.

Palestinian officials did not respond to requests for comment.

The school itself is a symbol — one example of how the Palestinians hope the United States will restore relations with them.

During a recent tour of the partially built structure in Jaba, layers of dirt, dust and trash were collecting in its interior, rebar protruded from its rooftop and walls of exposed concrete blocks appeared to be weathered.

In late February, the United Nations Development Program and the Education Cannot Wait fund solicited bids for completing a small part of the project, but program officials said while they would work to make an 11th-grade classroom available, there were no funds to construct a 12th-grade one. It also said it would install a multipurpose room and a canteen.

For handicapped students, the project is crucial because it would be much easier not to have to travel to Surif. “Finishing high school here would be a difference-maker for me,” said Khader Abu Latifa, 14, a ninth grader who has a muscle-related disease.

Khader started walking at the age of eight but he still struggles to take steps. He said he hoped his father would drive him to Surif when he entered 12th grade, but worried the older man would not always be available to give him a ride.

And for a handful of girls, the school project embodies their only hope to obtain an education.

Several religiously conservative families in the village refuse to allow their daughters to study in other towns, forcing them to drop out before completing high school, said Mr. Mashala. “Giving these girls the option to complete their studies could be transformative for them,” he said.

But while a number of people in Jaba say they are optimistic that the Biden administration will restore the needed funding, bipartisan legislation known as the Taylor Force Act, signed into law by Mr. Trump in 2018, could complicate efforts to do that.

The act restricts the U.S. government’s ability to disburse aid that “directly benefits” the Palestinian Authority as long as the authority pays salaries to families of Palestinian security prisoners and slain attackers.

Analysts, however, said that what “directly benefits” the Palestinian Authority must be defined by Secretary of State Antony Blinken.

“Would funding construction of this school, which is controlled by the Palestinian government, be considered direct support of the Palestinian Authority? It may or may not be,” said Joel Branould, an expert on U.S. law surrounding foreign aid to the Palestinians. “It is up to the secretary of state to decide.”

A State Department official, who spoke on condition of anonymity, said the U.S. looks forward to resuming economic and humanitarian aid to the Palestinians, but would do so in a manner consistent with relevant U.S. law.

The Palestinian Authority hasn’t announced plans for any significant reforms to its highly popular payment system in the coming months.

Mr. Mashala, who has been mayor since 2017, questioned the logic of holding students accountable for policies they had no part in developing.

“Our kids have nothing to do with politics,” he said. “They are totally innocent. Why should they pay the price for something they have nothing to do with?”

View Source

Cornerstone Building Brands Announces Fourth-Quarter and Full-Year 2020 Results; Expects Strong Growth in 2021

CARY, N.C.–(BUSINESS WIRE)–Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products, today reported fourth-quarter 2020 net sales of $1,191.4 million and net income of $1.9 million or one cent per diluted share. This compares with net sales of $1,244.4 million and net income of $1.9 million or two cents per diluted share in the same quarter last year.

Adjusted EBITDA1 for the fourth quarter of 2020 was $158.1 million or 13.3 percent of net sales, an improvement of 40 basis points from the same pro forma period a year ago, with 5 percent fewer ship days. The improvement was primarily due to effective structural cost reductions and better price/mix, partially offset by the impacts from lower non-residential demand. These results represent the seventh consecutive quarter of year-over-year Adjusted EBITDA1 margin expansion for the Company.

“We delivered strong fourth-quarter results, rounding out a year of record performance despite a challenging market environment,” said James S. Metcalf, Chairman and Chief Executive Officer. “The resilience of our business model and strength of our dedicated team helped us deliver on our strategic priorities. I am proud of the Cornerstone Building Brands team, which is made up of people from many backgrounds, each unique, and valued as part of our organization.”

2020 Full Year Results and Highlights

Net sales for 2020 were $4,617.4 million, 5.6 percent lower than in 2019. The decline was primarily driven by lower end market demand across all segments as a result of the COVID-19 pandemic. Loss from operations was $266.5 million, including a non-cash, pre-tax goodwill impairment accounting adjustment of $503.2 million.

Pro forma net sales1 were $4,625.7 million, a 6.5 percent decrease over prior year. Pro forma Adjusted EBITDA1 for 2020 was $608.7 million or 13.2 percent of pro forma net sales1, an improvement of 2.6 percent or 120 basis points from the same pro forma period a year ago. The improvement was due to structural cost reductions, effective near-term expense management, and strong price/mix, net of inflation partially offset by the impacts from lower demand and shift in product mix as a result of the COVID-19 pandemic.

“Our focus on our customer partnerships, expanding our product offerings and developing innovative solutions, positions us to expand our market leadership as residential markets continue their strong recovery.” Metcalf continued. “Moving forward, we will continue to execute on our priorities which include maintaining price discipline, driving operational excellence and investing in growth opportunities to deliver enhanced profitability and value to our stakeholders.”

Segment Results Versus Prior Year

All segments delivered consecutive margin expansion over the prior year as a result of the quick and effective management of near-term expenses and acceleration of the Company’s strategy to permanently improve its highly variable cost structure.

Due to the timing of the Company’s fiscal calendar, the fourth quarter of 2020 had three fewer ship days than the fourth quarter of 2019, which was approximately 5 percent less ship days.

  • Windows segment net sales for the quarter were $511.6 million, an increase of 3.2 percent from the prior-year quarter. Effective price discipline coupled with volume leverage on higher demand from both distribution and retail channels supporting single family new home construction and repair and remodel were the primary drivers of the increase. Adjusted EBITDA1 was $61.6 million or 12.0 percent of net sales, an improvement of 20 basis points. For the full year, Adjusted EBITDA margin1 improved 140 basis points, while net sales were 2.1 percent lower.
  • Siding segment net sales for the quarter were $293.8 million an increase of 4.4 percent versus the pro forma1 fourth-quarter 2019. Adjusted EBITDA1 was $62.1 million or 21.1 percent of net sales, an improvement of 180 basis points. For the full year, pro forma Adjusted EBITDA margin1 improved 220 basis points, while pro forma net sales1 were 1.8 percent lower than in the prior year. Effective price discipline coupled with cost management contributed to the favorable year-over-year variances.
  • Commercial segment net sales for the quarter were $386.0 million, a decrease of 19.2 percent from the prior-year quarter. Adjusted EBITDA1 was $61.7 million or 16.0 percent of net sales, an improvement of 20 basis points. For the full year, Adjusted EBITDA margin1 improved 60 basis points, while net sales were 14.2 percent lower. Delays in construction activity and shifts in product mix toward less complex projects because of the impact of the COVID-19 pandemic were more than offset by effective management of price with declining steel costs, and execution of cost savings initiatives.

Balance Sheet and Liquidity

The Company generated strong cash flow in 2020, with cash from operations of $308.4 million, a cash generation improvement of $78.8 million over 2019. Capital expenditures were $81.9 million, with approximately 50 percent invested in innovative product offerings and process automation that are expected to generate profitable growth in the future.

Free cash flow2 of $226.6 million was an increase of 108.8 percent over 2019. The improvement was primarily driven by lower cash interest expenses, net cash tax benefits from the CARES Act and other COVID-19 related government stimulus programs, and reduced capital spend.

During the year, the Company issued $500 million of senior unsecured notes due January 2029 bearing interest at 6.125% per year. The proceeds were used to repay debt under the asset-based revolving credit facility and cash flow revolver, and to pay transaction fees. The transaction improved liquidity, strengthened the Company’s financial flexibility, and advanced our deleveraging strategy. The Company ended the year with approximately $674 million of unrestricted cash on hand and $1,317 million of liquidity. Additionally, the net debt leverage ratio1 improved to 4.9x at the end of 2020 compared with 5.3x at the end of 2019.

Outlook

First-Quarter 2021 Guidance

  • The first quarter of fiscal 2021 will have three fewer ship days; 64 ship days as compared to 67 ship days in the first quarter of 2020
  • The Company expects net sales to be between $1,195 million and $1,240 million as a result of:

    • Strong single-family housing end-market momentum; expect double digit growth in residential businesses over prior year
    • Improving non-residential end-markets
  • Gross Profit is anticipated to be between $250 million and $265 million.
  • Adjusted EBITDA1 is expected to be between $110 million and $125 million based on the following assumption:

    • Disciplined price leadership to more than offset increasing raw material costs

Additional Fiscal Year 2021 Guidance

  • Cost savings initiatives of $75 million to $80 million
  • Return of near-term costs of approximately $20 million to $30 million
  • Capital spending is projected to be approximately 2.5% of net sales
  • Cash interest expense is expected to be approximately $215 million
  • Cash tax rate expected to be approximately 30%
  • Expect to improve net debt leverage by 3/4 to one turn

(1)

Adjusted and pro forma financial metrics used in this release, including Adjusted EBITDA, are non-GAAP measures. See reconciliations of GAAP results to adjusted results and pro forma results in the accompanying tables. A reconciliation of the forecasted range for the first quarter of 2021 is not included in this release. See “Non-GAAP Financial Measures” below.

(2)

Free cash flow is defined as net cash provided by operating activities less capital expenditures.

Conference Call

The Company will host a conference call at 9:00 a.m. EST on Thursday, March 4 to discuss its financial performance with investors and securities analysts. The financial results and supplemental information will be available online at investors.cornerstonebuildingbrands.com.

To register, please use this link http://www.directeventreg.com/registration/event/5127615. After registering, an email confirmation will be sent providing dial-in details and a unique code for entry. Registration is open throughout the live call, however, to ensure you are connected for the entirety, please register a day in advance or at least 10 minutes before the start of the call. Additional call participation options are as follows:

By Webcast:

Cornerstone Building Brands 4Q and Full Year 2020 Earnings Call

 

Date:

Thursday, March 4, 2021

 

Time:

9:00 a.m. Eastern Standard Time

 

Access link:

Visit the Events & Presentations section of the Investors Page on the website at

investors.cornerstonebuildingbrands.com or access directly at

https://event.on24.com/wcc/r/2947400/F3D9A2AE5F2573255A3FF97E0A1A5760

 

Replay dial-in will be available through March 18, 2021

Dial-in number:  855-859-2056
Replay code:

 5127615

About Cornerstone Building Brands

Cornerstone Building Brands is the largest manufacturer of exterior building products for residential and low-rise non-residential buildings in North America. Headquartered in Cary, North Carolina, the organization serves residential and commercial customers across new construction and repair and remodel markets. As the #1 manufacturer of vinyl windows, vinyl siding, insulated metal panels, metal roofing and wall systems and metal accessories, Cornerstone Building Brands combines an expansive portfolio of strong brands and quality products with a broad multi-channel distribution platform that includes approximately 20,500 employees at manufacturing, distribution and branch office locations throughout North America. At Cornerstone Building Brands, corporate stewardship is a responsibility that is deeply embedded in our 75-year history. We are committed to our purpose of contributing positively to the communities where we live, work and play. For more information, visit us at www.cornerstonebuildingbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “anticipate,” “guidance,” “plan,” “potential,” “expect,” “should,” “will,” “forecast,” “target” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/ or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company’s actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and performance expectations, including our first quarter 2021 forecasted net sales, gross profit, and Adjusted EBITDA, and our fiscal year 2021 forecasted capital spending, cash interest expense, cash tax rate and other consolidated financial performance guidance. Among the factors that could cause actual results to differ materially include, but are not limited to, industry cyclicality and seasonality and adverse weather conditions, challenging economic conditions affecting the nonresidential construction industry, downturns in the residential new construction and repair and remodeling end markets, or the economy or the availability of consumer credit, volatility in the United States (“U.S.”) economy and abroad, generally, and in the credit markets, the severity, duration and spread of the COVID-19 pandemic, as well as actions that may be taken by the Company or governmental authorities to contain COVID-19 or to treat its impact; an impairment of our goodwill and/or intangible assets; our ability to successfully develop new products or improve existing products, the effects of manufacturing or assembly realignments, seasonality of the business and other external factors beyond our control, commodity price volatility and/or limited availability of raw materials, including steel, PVC resin, glass and aluminum, our ability to identify and develop relationships with a sufficient number of qualified suppliers and to avoid a significant interruption in our supply chains, retention and replacement of key personnel, enforcement and obsolescence of our intellectual property rights, costs related to compliance with, violations of or liabilities under environmental, health and safety laws, changes in building codes and standards, competitive activity and pricing pressure in our industry, our ability to make strategic acquisitions accretive to earnings, our ability to carry out our restructuring plans and to fully realize the expected cost savings, global climate change, including legal, regulatory or market responses thereto, breaches of our information system security measures, damage to our computer infrastructure and software systems, necessary maintenance or replacements to our enterprise resource planning technologies, potential personal injury, property damage or product liability claims or other types of litigation, compliance with certain laws related to our international business operations, increases in labor costs, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers, significant changes in factors and assumptions used to measure certain of our defined benefit plan obligations and the effect of actual investment returns on pension assets, the cost and difficulty associated with integrating and combining acquired businesses, volatility of the Company’s stock price, substantial governance and other rights held by our sponsor investors, the effect on our common stock price caused by transactions engaged in by our sponsor investors, our directors or executives, our substantial indebtedness and our ability to incur substantially more indebtedness, limitations that our debt agreements place on our ability to engage in certain business and financial transactions, our ability to obtain financing on acceptable terms, downgrades of our credit ratings, and the effect of increased interest rates on our ability to service our debt. See also the “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, to be filed with the SEC on the date hereof, and other risks described in documents subsequently filed by the Company from time to time with the SEC, which identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release. A reconciliation of the forecasted range for Adjusted EBITDA for the first quarter of 2021 is not included in this release due to the number of variables in the projected range and because we are currently unable to quantify accurately certain amounts that would be required to be included in the GAAP measure or the individual adjustments for such reconciliation. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net sales

$

1,191,369

 

 

$

1,244,415

 

 

$

4,617,369

 

 

$

4,889,747

 

Cost of sales

924,169

 

 

956,379

 

 

3,567,049

 

 

3,801,328

 

Gross profit

267,200

 

 

288,036

 

 

1,050,320

 

 

1,088,419

 

 

22.4

%

 

23.1

%

 

22.7

%

 

22.3

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

142,625

 

 

161,493

 

 

579,200

 

 

627,861

 

Intangible asset amortization

45,447

 

 

44,878

 

 

180,994

 

 

177,577

 

Restructuring and impairment charges, net

1,956

 

 

2,538

 

 

34,120

 

 

18,060

 

Strategic development and acquisition related costs

5,791

 

 

13,517

 

 

19,341

 

 

50,185

 

Goodwill impairment

 

 

 

 

503,171

 

 

 

Income (loss) from operations

71,381

 

 

65,610

 

 

(266,506

)

 

214,736

 

Interest income

357

 

 

183

 

 

1,364

 

 

674

 

Interest expense

(54,872

)

 

(56,128

)

 

(213,610

)

 

(229,262

)

Foreign exchange gain

2,368

 

 

970

 

 

1,068

 

 

2,054

 

Other income, net

494

 

 

518

 

 

469

 

 

1,183

 

Income (loss) before income taxes

19,728

 

 

11,153

 

 

(477,215

)

 

(10,615

)

Provision for income taxes

17,848

 

 

9,223

 

 

5,563

 

 

4,775

 

 

90.5

%

 

82.7

%

 

(1.2

)%

 

(45.0

)%

 

 

 

 

 

 

 

 

Net income (loss)

$

1,880

 

 

$

1,930

 

 

$

(482,778

)

 

$

(15,390

)

Net income allocated to participating securities

(25

)

 

(27

)

 

 

 

 

Net income (loss) applicable to common shares

$

1,855

 

 

$

1,903

 

 

$

(482,778

)

 

$

(15,390

)

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

Basic

$

0.01

 

 

$

0.02

 

 

$

(3.84

)

 

$

(0.12

)

Diluted

$

0.01

 

 

$

0.02

 

 

$

(3.84

)

 

$

(0.12

)

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

125,271

 

 

125,722

 

 

125,562

 

 

125,576

 

Diluted

125,310

 

 

125,761

 

 

125,562

 

 

125,576

 

 

 

 

 

 

 

 

 

Increase (decrease) in sales

(4.3

)%

 

116.9

%

 

(5.6

)%

 

144.4

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses percentage of net sales

12.0

%

 

13.0

%

 

12.5

%

 

12.8

%

 

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

December 31,
2020

 

December 31,
2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

674,255

 

 

$

98,386

 

Restricted cash

6,223

 

 

3,921

 

Accounts receivable, net

554,649

 

 

491,740

 

Inventories, net

431,937

 

 

439,194

 

Income taxes receivable

39,379

 

 

48,466

 

Investments in debt and equity securities, at market

2,333

 

 

3,776

 

Prepaid expenses and other

77,751

 

 

78,516

 

Assets held for sale

4,644

 

 

1,750

 

Total current assets

1,791,171

 

 

1,165,749

 

 

 

 

 

Property, plant and equipment, net

631,821

 

 

652,841

 

Lease right-of-use assets

264,107

 

 

316,155

 

Goodwill

1,194,729

 

 

1,669,594

 

Intangible assets, net

1,584,604

 

 

1,740,700

 

Deferred income taxes

1,867

 

 

7,510

 

Other assets, net

10,191

 

 

11,797

 

Total assets

$

5,478,490

 

 

$

5,564,346

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

25,600

 

 

$

25,600

 

Accounts payable

211,441

 

 

205,629

 

Accrued compensation and benefits

81,548

 

 

92,130

 

Accrued interest

25,485

 

 

19,070

 

Accrued income taxes

5,060

 

 

 

Current portion of lease liabilities

70,125

 

 

72,428

 

Other accrued expenses

247,893

 

 

233,687

 

Total current liabilities

667,152

 

 

648,544

 

 

 

 

 

Long-term debt

3,563,429

 

 

3,156,924

 

Deferred income taxes

269,792

 

 

291,987

 

Long-term lease liabilities

198,875

 

 

243,780

 

Other long-term liabilities

337,437

 

 

287,793

 

Total long-term liabilities

4,369,533

 

 

3,980,484

 

 

 

 

 

Common stock

1,255

 

 

1,261

 

Additional paid-in capital

1,257,262

 

 

1,248,787

 

Accumulated deficit

(764,685

)

 

(281,229

)

Accumulated other comprehensive loss, net

(51,517

)

 

(32,398

)

Treasury stock, at cost

(510

)

 

(1,103

)

Total stockholders’ equity

441,805

 

 

935,318

 

 

 

 

 

Total liabilities and stockholders’ equity

$

5,478,490

 

 

$

5,564,346

 

 

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Year Ended

 

December 31,
2020

December 31,
2019

Cash flows from operating activities:

 

 

Net loss

$

(482,778

)

$

(15,390

)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

Depreciation and amortization

284,602

 

263,764

 

Non-cash interest expense

9,589

 

8,504

 

Share-based compensation expense

17,056

 

14,078

 

Non-cash fair value premium on purchased inventory

 

16,249

 

Goodwill impairment

503,171

 

 

Asset impairment

4,905

 

 

Losses (gains) on asset sales, net

(1,252

)

321

 

Provision for doubtful accounts

5,390

 

2,035

 

Deferred income taxes

(4,319

)

(6,085

)

Changes in operating assets and liabilities, net of effect of acquisitions:

 

 

Accounts receivable

(61,976

)

(38,242

)

Inventories

7,927

 

91,822

 

Income taxes

14,146

 

(32,719

)

Prepaid expenses and other

3,415

 

(10,279

)

Accounts payable

4,663

 

(21,141

)

Accrued expenses

8,276

 

(40,403

)

Other, net

(4,398

)

(2,906

)

Net cash provided by operating activities

308,417

 

229,608

 

Cash flows from investing activities:

 

 

Acquisitions, net of cash acquired

(41,841

)

(179,184

)

Capital expenditures

(81,851

)

(121,085

)

Proceeds from sale of property, plant and equipment

3,569

 

5,511

 

Net cash used in investing activities

(120,123

)

(294,758

)

Cash flows from financing activities:

 

 

Proceeds from ABL facility

345,000

 

290,000

 

Payments on ABL facility

(415,000

)

(220,000

)

Proceeds from cash flow revolver

115,000

 

 

Payments on cash flow revolver

(115,000

)

 

Payments on term loan

(25,620

)

(25,620

)

Proceeds from senior notes

500,000

 

 

Payments of financing costs

(6,731

)

 

Payments related to tax withholding for share-based compensation

(1,566

)

(1,934

)

Purchases of treasury stock

(6,428

)

 

Payments on tax receivable agreement

 

(24,906

)

Net cash provided by financing activities

389,655

 

17,540

 

Effect of exchange rate changes on cash and cash equivalents

222

 

2,310

 

Net increase (decrease) in cash, cash equivalents and restricted cash

578,171

 

(45,300

)

Cash, cash equivalents and restricted cash at beginning of period

102,307

 

147,607

 

Cash, cash equivalents and restricted cash at end of period

$

680,478

 

$

102,307

 

Supplemental disclosure of cash flow information

 

 

Interest paid, net of amounts capitalized

$

196,770

 

$

240,063

 

Taxes paid (refunded), net (excluding tax receivable agreement payments)

$

(3,316

)

$

51,001

 

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND

NET INCOME (LOSS) COMPARISON

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

Three Months Ended

Year Ended

 

December 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

Net income (loss) per diluted common share, GAAP basis

$

0.01

 

$

0.02

 

$

(3.84

)

$

(0.12

)

Restructuring and impairment charges, net

0.02

 

0.02

 

0.27

 

0.14

 

Strategic development and acquisition related costs

0.05

 

0.11

 

0.15

 

0.40

 

Non cash gain on foreign currency transactions

(0.02

)

(0.01

)

(0.01

)

(0.02

)

Non cash charge of purchase price allocated to inventories

 

 

 

0.13

 

Goodwill impairment

 

 

4.01

 

 

Customer inventory buybacks

 

 

0.01

 

 

COVID-19

0.01

 

 

0.10

 

 

Other, net

 

0.01

 

0.01

 

0.04

 

Tax effect of applicable non-GAAP adjustments(1)

(0.01

)

(0.03

)

(1.18

)

(0.18

)

Adjusted net income per diluted common share(2)

$

0.06

 

$

0.11

 

$

(0.48

)

$

0.39

 

 

 

 

 

 

 

Three Months Ended

Year Ended

 

December 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019

Net income (loss) applicable to common shares, GAAP basis

$

1,855

 

$

1,903

 

$

(482,778

)

$

(15,390

)

Restructuring and impairment charges, net

1,956

 

2,538

 

34,120

 

18,060

 

Strategic development and acquisition related costs

5,791

 

13,517

 

19,341

 

50,185

 

Non cash gain on foreign currency transactions

(2,368

)

(970

)

(1,068

)

(2,054

)

Non cash charge of purchase price allocated to inventories

 

 

 

16,249

 

Goodwill impairment

 

 

503,171

 

 

Customer inventory buybacks

188

 

 

641

 

576

 

COVID-19

1,874

 

 

12,508

 

 

Other, net

(214

)

946

 

1,245

 

4,726

 

Tax effect of applicable non-GAAP adjustments(1)

(1,879

)

(4,168

)

(148,230

)

(22,813

)

Adjusted net income applicable to common shares(2)

$

7,203

 

$

13,766

 

$

(61,050

)

$

49,539

 

(1)

The Company calculated the tax effect of non-GAAP adjustments by applying the applicable federal and state statutory tax rate for the period to each applicable non-GAAP item.

(2)

The Company discloses a tabular comparison of Adjusted net income (loss) per diluted common share and Adjusted net income (loss) applicable to common shares, which are non-GAAP measures, because they are instrumental in comparing the results from period to period. Adjusted net income (loss) per diluted common share and Adjusted net income (loss) applicable to common shares should not be considered in isolation or as a substitute for net income (loss) per diluted common share and net income (loss) applicable to common shares as reported on the face of our consolidated statements of operations.

 

 

Certain amounts in this release have been subject to rounding adjustments. Accordingly, amounts shown as totals may not be the arithmetic aggregation of the individual amounts that comprise or precede them.

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net sales

$

1,191,369

 

 

$

1,244,415

 

 

$

4,617,369

 

 

$

4,889,747

 

Impact of Environmental Stoneworks and Kleary acquisitions(1)

 

 

10,561

 

 

8,358

 

 

59,464

 

Pro forma net sales

$

1,191,369

 

 

$

1,254,976

 

 

$

4,625,727

 

 

$

4,949,211

 

 

 

 

 

 

 

 

 

Gross profit

$

267,200

 

 

$

288,036

 

 

$

1,050,320

 

 

$

1,088,419

 

 

22.4

%

 

23.1

%

 

22.7

%

 

22.3

%

 

 

 

 

 

 

 

 

Operating income, GAAP

$

71,381

 

 

$

65,610

 

 

$

(266,506

 

$

214,736

 

Restructuring and impairment charges, net

1,956

 

 

2,538

 

 

34,277

 

 

18,060

 

Strategic development and acquisition related costs

5,791

 

 

13,517

 

 

19,341

 

 

50,185

 

Non cash charge of purchase price allocated to inventories

 

 

 

 

 

 

16,249

 

Goodwill impairment

 

 

 

 

503,171

 

 

 

Customer inventory buybacks

188

 

 

 

 

641

 

 

576

 

COVID-19

1,874

 

 

 

 

12,508

 

 

 

Other, net

(214

 

946

 

 

1,245

 

 

4,726

 

Adjusted operating income

80,976

 

 

82,611

 

 

304,677

 

 

304,532

 

 

 

 

 

 

 

 

 

Other income (loss), net

494

 

 

518

 

 

469

 

 

1,183

 

Depreciation and amortization

72,189

 

 

72,279

 

 

284,602

 

 

263,764

 

Share-based compensation expense

4,488

 

 

3,465

 

 

17,056

 

 

14,078

 

Adjusted EBITDA

$

158,147

 

 

$

158,873

 

 

$

606,804

 

 

$

583,557

 

 

 

 

 

 

 

 

 

Impact of Environmental Stoneworks and Kleary acquisitions(1)

 

 

2,638

 

 

1,869

 

 

9,626

 

Pro forma Adjusted EBITDA

$

158,147

 

 

$

161,511

 

 

$

608,673

 

 

$

593,183

 

Pro forma Adjusted EBITDA as a % of pro forma net sales

13.3

%

 

12.9

%

 

13.2

%

 

12.0

%

(1)

Reflects the Adjusted EBITDA of Environmental Stoneworks for the period January 1, 2019 to the acquisition date of February 20, 2019 and Kleary Masonry, Inc. for the period January 1, 2019 to March 1, 2020.

 
 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Windows

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net sales

$

511,586

 

 

$

495,868

 

 

$

1,889,625

 

 

$

1,930,447

 

 

 

 

 

 

 

 

 

Gross profit

$

90,367

 

 

$

94,243

 

 

$

347,856

 

 

$

353,089

 

 

17.7

%

 

19.0

%

 

18.4

%

 

18.3

%

 

 

 

 

 

 

 

 

Operating income (loss), GAAP

$

29,148

 

 

$

30,499

 

 

$

(223,646

 

$

92,538

 

Restructuring and impairment charges, net

310

 

 

339

 

 

7,499

 

 

1,865

 

Strategic development and acquisition related costs

 

 

2,893

 

 

16

 

 

19,947

 

Goodwill impairment

 

 

 

 

320,990

 

 

 

COVID-19

921

 

 

 

 

6,844

 

 

 

Other, net

349

 

 

2,905

 

 

601

 

 

3,442

 

Adjusted operating income

30,728

 

 

36,636

 

 

112,304

 

 

117,792

 

 

 

 

 

 

 

 

 

Other income (expense), net

8

 

 

(385

 

(107

 

(838

Depreciation and amortization

30,840

 

 

22,134

 

 

121,519

 

 

94,737

 

Adjusted EBITDA

$

61,576

 

 

$

58,385

 

 

$

233,716

 

 

$

211,691

 

Adjusted EBITDA as a % of net sales

12.0

%

 

11.8

%

 

12.4

%

 

11.0

%

 

 

 

 

 

 

 

 

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Siding

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net sales

$

293,756

 

 

$

270,806

 

 

$

1,141,946

 

 

$

1,111,407

 

Impact of Environmental Stoneworks and Kleary acquisitions(1)

 

 

10,561

 

 

8,358

 

 

59,464

 

Pro forma net sales

293,756

 

 

281,367

 

 

1,150,304

 

 

1,170,871

 

 

 

 

 

 

 

 

 

Gross profit

$

78,405

 

 

$

68,757

 

 

$

308,466

 

 

$

277,583

 

 

26.7

%

 

25.4

%

 

27.0

%

 

25.0

%

 

 

 

 

 

 

 

 

Operating income (loss), GAAP

$

30,986

 

 

$

14,927

 

 

$

(61,930

 

$

66,273

 

Restructuring and impairment charges, net

65

 

 

599

 

 

2,966

 

 

8,761

 

Strategic development and acquisition related costs

2,043

 

 

 

 

10,158

 

 

 

Non-cash charge of purchase price allocated to inventories

 

 

 

 

 

 

16,249

 

Goodwill impairment

 

 

 

 

176,774

 

 

 

Customer inventory buybacks

188

 

 

 

 

641

 

 

576

 

COVID-19

14

 

 

 

 

81

 

 

 

Other, net

138

 

 

(1,458

 

(1,213

 

(1,195

Adjusted operating income

33,434

 

 

14,068

 

 

127,477

 

 

90,664

 

 

 

 

 

 

 

 

 

Other income (expense), net

(22

 

264

 

 

(32

 

(52

Depreciation and amortization

28,669

 

 

37,435

 

 

113,737

 

 

121,004

 

Adjusted EBITDA

62,081

 

 

51,767

 

 

241,182

 

 

211,616

 

 

 

 

 

 

 

 

 

Impact of Environmental Stoneworks and Kleary acquisitions(1)

 

 

2,638

 

 

1,869

 

 

9,626

 

Pro forma Adjusted EBITDA

$

62,081

 

 

$

54,405

 

 

$

243,051

 

 

$

221,242

 

Pro forma Adjusted EBITDA as a % of pro forma net sales

21.1

%

 

19.3

%

 

21.1

%

 

18.9

%

(1)

Reflects the Adjusted EBITDA of Environmental Stoneworks for the period January 1, 2019 to the acquisition date of February 20, 2019 and Kleary Masonry, Inc. for the periods January 1, 2019 to September 28, 2019 and January 1, 2020 to March 1, 2020.

 
 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2020

 

December 31,
2019

 

December 31,
2020

 

December 31,
2019

Net sales

$

386,027

 

 

$

477,741

 

 

$

1,585,798

 

 

$

1,847,893

 

 

 

 

 

 

 

 

 

Gross profit

$

98,428

 

 

$

125,036

 

 

$

393,998

 

 

$

457,747

 

 

25.5

%

 

26.2

%

 

24.8

%

 

24.8

%

 

 

 

 

 

 

 

 

Operating income, GAAP

$

49,944

 

 

$

58,637

 

 

$

159,586

 

 

$

201,073

 

Restructuring and impairment charges, net

(157

 

823

 

 

20,270

 

 

2,790

 

Strategic development and acquisition related costs

 

 

4,041

 

 

(262

 

10,534

 

Goodwill impairment

 

 

 

 

5,407

 

 

 

COVID-19

60

 

 

 

 

2,645

 

 

 

Other, net

76

 

 

345

 

 

1,021

 

 

2,636

 

Adjusted operating income

49,923

 

 

63,846

 

 

188,667

 

 

217,033

 

 

 

 

 

 

 

 

 

Other income (expense), net

243

 

 

(102

 

680

 

 

753

 

Depreciation and amortization

11,549

 

 

11,591

 

 

45,213

 

 

44,550

 

Adjusted EBITDA

$

61,715

 

 

$

75,335

 

 

$

234,560

 

 

$

262,336

 

Adjusted EBITDA as a % of net sales

16.0

%

 

15.8

%

 

14.8

%

 

14.2

%

 
 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

Year Ended

 

December 31,
2020

 

December 31,
2019

Net cash provided by operating activities

$

308,417

 

 

$

229,608

 

Less: Capital expenditures

(81,851

 

(121,085

Free cash flow

$

226,566

 

 

$

108,523

 

 

View Source