CHARLOTTE, N.C., Aug. 7, 2023 /PRNewswire/ -- JELD-WEN Holding, Inc. (NYSE: JELD) ("JELD-WEN" or the "Company") today announced results for the three and six months ended July 1, 2023. Comparability is to the same period in the prior year and all periods presented reflect the Company's Australasia segment as a discontinued operation, unless otherwise noted. The Company is raising its full-year guidance for continuing operations to reflect its solid second quarter results.
Second Quarter Highlights
- Net revenues from continuing operations of $1,125.8 million decreased 4.5% in the second quarter driven by a (4%) decline in Core Revenue. The Core Revenue decline was driven by (11%) lower volume/mix partially offset by +7% price realization.
- Net income from continuing operations was $22.5 million or $0.26 per share, compared to net income from continuing operations of $35.0 million or $0.40 per share during the same quarter a year ago. Operating income margin was 5.0% and 4.1% for the quarters ended July 1, 2023 and June 25, 2022, respectively.
- Adjusted EPS from continuing operations was $0.44, compared to Adjusted EPS of $0.45 in the same quarter a year ago. Adjusted EPS includes net after-tax charges of $15.3 million or $0.18 per share, compared to net after-tax charges of $4.6 million or $0.05 per share during the same quarter a year ago.
- Adjusted EBITDA from continuing operations was $108.9 million, compared to $108.3 million during the same quarter a year ago. Adjusted EBITDA Margin from continuing operations increased by 50 basis points year-over-year to 9.7%.
- On July 2, 2023, the Company completed the sale of its Australasia segment (previously announced on April 17, 2023) for approximately $446 million in net proceeds. On August 3, 2023, the Company repaid $450 million of senior notes funded by the divestiture proceeds.
"In the second quarter, our global associates continued to execute against our near-term goals of simplifying and strengthening JELD-WEN while improving profitability and generating strong cash flow," said Chief Executive Officer William J. Christensen. "While our end markets remained dynamic with volume declining in line with our expectations, we achieved year-over-year improvements in both margin and cash flow. In addition, we remained focused on delivering on our commitments including closing the sale of our Australasia business in early July. This important milestone allows us to focus on our core businesses and strengthen our balance sheet."
Christensen continued, "For the remainder of 2023, we expect continued macroeconomic uncertainty and weak demand across our markets that we are mitigating with ongoing cost reductions. As our second quarter results were above our expectations, we are narrowing the ranges and raising the midpoints of our 2023 Revenue and Adjusted EBITDA guidance."
Second Quarter 2023 Results (Continuing Operations)
Net revenue for the three months ended July 1, 2023 decreased $53.4 million, or 4.5%, to $1,125.8 million, compared to $1,179.2 million for the same period last year. The decrease in net revenue was driven by a (4%) Core Revenue decline composed of lower volume/mix (11%) partially offset by price realization of +7%.
Net income was $22.5 million in the second quarter, compared to net income of $35.0 million in the same period last year, a decrease of $12.5 million. Despite an improvement in operating income, net income was lower due to negative impacts from accelerated depreciation, higher selling, general and administrative expense and lower other income. Adjusted Net Income from continuing operations for the second quarter decreased $1.8 million, to $37.8 million, compared to $39.6 million in the same period last year.
Earnings per share ("EPS") for the second quarter was $0.26, compared to $0.40 for the same quarter last year. Adjusted EPS from continuing operations for the second quarter was $0.44 compared to Adjusted EPS of $0.45 in the same quarter last year.
Adjusted EBITDA from continuing operations increased $0.6 million, to $108.9 million, compared to the same quarter last year. Adjusted EBITDA Margin from continuing operations increased 50 basis points to 9.7%, as positive price/cost was partially offset by lower volume/mix, higher selling, general and administrative expenses and a reduction in other income.
On a segment basis for the second quarter of 2023, compared to the same period last year:
- North America - Net revenue decreased $22.0 million, or (2.6%), to $817.1 million, driven by a (2%) decline in Core Revenue which was due to lower volume/mix (8%) partially offset by increased price realization +6%. Net income decreased $18.6 million to $51.3 million. Operating income margin was 9.1% for the quarter ended July 1, 2023 and 8.4% for the quarter ended June 25, 2022. Adjusted EBITDA from continuing operations increased $15.3 million to $108.8 million, while Adjusted EBITDA Margin from continuing operations increased 220 basis points to 13.3%.
- Europe - Net revenue decreased $31.3 million, or (9.2%), to $308.7 million, due to a (9%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (17%) partially offset by price realization of +8%. Net income increased $7.6 million to $10.7 million. Operating income margin was 4.9% for the quarter ended July 1, 2023 and 1.7% for the quarter ended June 25, 2022. Adjusted EBITDA from continuing operations increased $3.9 million to $23.9 million, while Adjusted EBITDA Margin from continuing operations increased by 180 basis points to 7.7%.
Cash Flow(1)
Net cash flow provided by operations was $153.4 million during the first half of 2023, a $319.1 million improvement compared to net cash flow used in operations of ($165.7) million during the same period a year ago. The primary driver to the increased operating cash flow was a $284.3 million improvement in cash flow from working capital. Net working capital generated $2.8 million of cash flow in the first half of 2023 compared to a use of cash of $281.5 million in the prior year period.
Capital expenditures in the first half of 2023 increased by $12.1 million to $46.9 million, up from $34.8 million in the first half of 2022.
Free Cash Flow provided in the first half of 2023 was $106.4 million, compared to Free Cash Flow used in the first half of 2022 of ($200.5) million. This $306.9 million improvement is primarily due to higher net cash flow from operations.
(1) Cash flow includes the Australasia segment.
Updated Full Year 2023 Guidance (Continuing Operations)
JELD-WEN is raising its guidance to reflect the solid second quarter performance.
The Company now expects 2023 net revenue of $4.2 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 price realization partially offsets lower market demand.
Further, the Company now expects 2023 Adjusted EBITDA from continuing operations to be within the range of $350 to $370 million driven by lower year-over-year volumes and a reduction in other income partially offset by solid price/cost results and ongoing cost reductions.
| Revenue | Adjusted EBITDA from
continuing operations |
May 2023 Guidance | $4.0B to $4.4B | $330M to $370M |
Updated Guidance | $4.2B to $4.4B | $350M 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, potential new COVID-19 lockdowns or restrictions, 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 divestiture of the Australasia business.
Conference Call Information
JELD-WEN management will host a conference call on August 8, 2023, at 8 a.m. ET, to discuss the Company's financial results. Interested investors and other parties can access the call either via webcast by visiting the Investor Relations section of the Company's website at https://investors.jeld-wen.com, or by dialing 888-330-2446 from the United States or +1-240-789-2732 internationally and using ID 1285715. A slide presentation highlighting the Company's results is available on the Investor Relations section of the Company's website.
For those unable to listen to the live event, a webcast replay will be available approximately two hours following completion of the call. To learn more about JELD-WEN, please visit the Company's website at https://investors.jeld-wen.com.
Note: See "Non-GAAP Financial Information" section for definitions and reconciliation of non-GAAP financial measures. |
About JELD-WEN Holding, Inc.
JELD-WEN is a leading global designer, manufacturer and distributor of high-performance interior and exterior doors, windows, and related building products serving the new construction and repair and remodeling sectors. Headquartered in Charlotte, N.C., the company operates facilities in 16 countries in North America and Europe and employs approximately 18,000 people. Since 1960, the JELD-WEN team has been committed to making quality products that create safe and sustainable environments for customers, associates and local communities. The JELD-WEN family of brands includes JELD-WEN® worldwide; LaCantina™ and VPI™ in North America; and Swedoor® and DANA® in Europe. For more information, visit www.jeld-wen.com.
Investor Relations Contact:
James Armstrong
Vice President, Investor Relations
704-378-5731
jarmstrong@jeldwen.com
Media Contact:
Colleen Penhall
Vice President, Corporate Communications
980-322-2681
cpenhall@jeldwen.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts are forward-looking statements, including statements regarding our business strategies and ability to execute on our plans, market potential, future financial performance, customer demand, the potential of our categories, brands and innovations, the impact of our footprint rationalization and modernization program, the impact of acquisitions and divestitures on our business and our ability to maximize value and integrate operations, our pipeline of productivity projects, the estimated impact of tax reform on our results, litigation outcomes, and our expectations, beliefs, plans, objectives, prospects, assumptions, or other future events, all of which involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and uncertainties, please refer to our Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q filed in 2023 and our other filings with the U.S. Securities and Exchange Commission.
The forward-looking statements included in this release are made as of the date hereof, and we undertake no obligation to update any forward-looking statements, except as required by law.
Non-GAAP Financial Information
This press release presents certain "non-GAAP" financial measures, including Adjusted EBITDA from continuing operations, Adjusted EBITDA Margin from continuing operations, Adjusted Net Income from continuing operations, Adjusted EPS from continuing operations, Free Cash Flow, and Net Debt Leverage. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). A reconciliation of non-GAAP financial measures used in this press release to their nearest comparable GAAP financial measures is included in the tables at the end of this press release. The Company provides certain guidance solely on a non-GAAP basis because the Company cannot predict certain elements that are included in certain reported GAAP results. While management is not able to provide a reconciliation of items for forward-looking non-GAAP measures without unreasonable effort, management bases the estimated ranges of non-GAAP measures for future periods on its reasonable estimates of certain items such as assumed effective tax rate, assumed interest expense, and other assumptions about capital requirements for future periods. The variability of these items may have a significant impact on our future GAAP results.
Other companies may compute these measures differently. The non-U.S. GAAP information has limitations as an analytical tool and should not be considered in isolation from or as a substitute for U.S. GAAP information. It does not purport to represent any similarly titled U.S. GAAP information and is not an indicator of our performance under U.S. GAAP.
We use Adjusted EBITDA from continuing operations, Adjusted EBITDA Margin from continuing operations, Adjusted Net Income from continuing operations, and Adjusted EPS because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations are helpful in highlighting trends because they exclude certain items outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. We use Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations to measure our financial performance in reporting our results to our Board of Directors. Further, our executive incentive compensation is based in part on Adjusted EBITDA from continuing operations. Adjusted EBITDA from continuing operations should not be considered as an alternative to net income as a measure of financial performance or to cash flows from operations as a liquidity measure.
We define Adjusted EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted for the following items: income tax expense (benefit); depreciation and amortization; interest expense, net; and certain special items consisting of non-recurring legal and professional expenses and settlements; restructuring and asset related charges; facility closure, consolidation, and other related costs and adjustments; M&A related costs; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; and other special items.
Adjusted Net Income from continuing operations represents net income from continuing operations adjusted for the after-tax impact of certain special items used to calculate Adjusted EBITDA from continuing operations as described above. Where applicable, the specifically identified items are tax effected at the applicable jurisdictional tax rate and tax expense is adjusted to remove the effect of discrete tax items.
Adjusted EPS from continuing operations represents net income from continuing operations per diluted share adjusted to exclude the estimated per share impact of the same specifically identified items used to calculate Adjusted Net Income from continuing operations as described above.
Adjusted EBITDA Margin from continuing operations represents Adjusted EBITDA from continuing operations as a percentage of net revenues.
We present several financial metrics in "Core" terms, which exclude the impact of foreign exchange, acquisitions and divestitures completed in the last twelve months. We define Core Revenue as net revenue excluding the impact of foreign exchange, and acquisitions and divestitures completed in the last twelve months. The use of "Core" metrics assists management, investors, and analysts in understanding the organic performance of the operations.
We present Free Cash Flow because we believe this metric assists investors and analysts in determining the quality of our earnings. Free Cash Flow is defined as net cash (used in) provided by operating activities less capital expenditures (including purchases of intangible assets). Free Cash Flow should not be considered alternatives to net cash (used in) provided by operating activities as a liquidity measure. We also present Net Debt Leverage because it is a key financial metric that is used by management to assess the balance sheet risk of the Company. We define Net Debt Leverage as Net Debt (total principal debt outstanding less unrestricted cash) divided by Adjusted EBITDA from continuing operations for the last twelve month period.
Due to rounding, numbers presented throughout this release may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures.
JELD-WEN Holding, Inc. Consolidated Statements of Operations (Unaudited) (In millions, except share and per share data) |
|
|
| Three Months Ended |
|
|
|
| July 1, 2023 |
| June 25, 2022 |
| % Variance |
Net revenues |
| $ 1,125.8 |
| $ 1,179.2 |
| (4.5) % |
Cost of sales |
| 900.2 |
| 972.5 |
| (7.4) % |
Gross margin |
| 225.6 |
| 206.6 |
| 9.2 % |
Selling, general and administrative |
| 162.5 |
| 152.4 |
| 6.6 % |
Restructuring and asset related charges |
| 6.8 |
| 5.3 |
| 29.4 % |
Operating income |
| 56.3 |
| 48.9 |
| 15.0 % |
Interest expense, net |
| 20.9 |
| 20.2 |
| 3.3 % |
Other expense (income), net |
| 2.2 |
| (17.1) |
| (112.6) % |
Income from continuing operations before taxes |
| 33.3 |
| 45.8 |
| (27.4) % |
Income tax expense |
| 10.8 |
| 10.9 |
| (0.9) % |
Income from continuing operations, net of tax |
| 22.5 |
| 35.0 |
| (35.6) % |
Income from discontinued operations, net of tax |
| 15.8 |
| 10.9 |
| 45.2 % |
Net income |
| $ 38.3 |
| $ 45.8 |
| (16.5) % |
Diluted Net income per share from continuing operations |
| $ 0.26 |
| $ 0.40 |
|
|
Diluted Net income per share from discontinued operations |
| 0.18 |
| 0.12 |
|
|
Diluted Net income per share |
| $ 0.45 |
| $ 0.52 |
|
|
Diluted Shares |
| 85,764,785 |
| 87,967,049 |
|
|
Other financial data: |
|
|
|
|
|
|
Operating income margin |
| 5.0 % |
| 4.1 % |
|
|
Adjusted EBITDA from continuing operations (1) |
| $ 108.9 |
| $ 108.3 |
| 0.5 % |
Adjusted EBITDA Margin from continuing operations (1) |
| 9.7 % |
| 9.2 % |
|
|
|
|
(1) | Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations, see above under the heading "Non-GAAP Financial Information." |
JELD-WEN Holding, Inc. Consolidated Statements of Operations (Unaudited) (In millions, except share and per share data) |
|
|
| Six Months Ended |
|
|
|
| July 1, 2023 |
| June 25, 2022 |
| % Variance |
Net revenues |
| $ 2,206.3 |
| $ 2,224.8 |
| (0.8) % |
Cost of sales |
| 1,788.9 |
| 1,846.5 |
| (3.1) % |
Gross margin |
| 417.3 |
| 378.3 |
| 10.3 % |
Selling, general and administrative |
| 315.2 |
| 320.0 |
| (1.5) % |
Restructuring and asset related charges, net |
| 16.1 |
| 5.2 |
| 206.6 % |
Operating income |
| 86.0 |
| 53.0 |
| 62.3 % |
Interest expense, net |
| 42.3 |
| 38.5 |
| 9.9 % |
Other income, net |
| (1.5) |
| (26.2) |
| (94.2) % |
Income from continuing operations before taxes |
| 45.2 |
| 40.6 |
| 11.3 % |
Income tax expense |
| 14.2 |
| 9.2 |
| 54.0 % |
Income from continuing operations, net of tax |
| 31.0 |
| 31.4 |
| (1.3) % |
Income from discontinued operations, net of tax |
| 22.4 |
| 13.9 |
| 61.3 % |
Net income |
| $ 53.4 |
| $ 45.3 |
| 17.9 % |
Diluted Net income per share from continuing operations |
| $ 0.36 |
| $ 0.35 |
|
|
Diluted Net income per share from discontinued operations |
| 0.26 |
| 0.16 |
|
|
Diluted Net income per share |
| $ 0.63 |
| $ 0.51 |
|
|
Diluted Shares |
| 85,417,344 |
| 89,557,956 |
|
|
Other financial data: |
|
|
|
|
|
|
Operating income margin |
| 3.9 % |
| 2.4 % |
|
|
Adjusted EBITDA from continuing operations(1) |
| $ 188.2 |
| $ 176.3 |
| 6.7 % |
Adjusted EBITDA Margin from continuing operations (1) |
| 8.5 % |
| 7.9 % |
|
|
|
|
(1) | Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations, see above under the heading "Non-GAAP Financial Information." |
JELD-WEN Holding, Inc. Consolidated Balance Sheets (Unaudited) (In millions, except share and per share data) |
|
| July 1, 2023 |
| December 31, 2022 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents | $ 188.9 |
| $ 164.5 |
Restricted cash | 0.6 |
| 1.5 |
Accounts receivable, net | 596.3 |
| 531.2 |
Inventories | 547.8 |
| 594.5 |
Other current assets | 65.0 |
| 73.5 |
Assets held for sale | 132.9 |
| 125.7 |
Current assets of discontinued operations | 230.7 |
| 204.7 |
Total current assets | 1,762.2 |
| 1,695.6 |
Property and equipment, net | 628.9 |
| 642.0 |
Deferred tax assets | 182.7 |
| 182.2 |
Goodwill | 383.7 |
| 382.0 |
Intangible assets, net | 140.2 |
| 148.1 |
Operating lease assets, net | 126.5 |
| 129.0 |
Other assets | 29.0 |
| 25.8 |
Non-current assets of discontinued operations | 292.7 |
| 296.8 |
Total assets | $ 3,545.8 |
| $ 3,501.4 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities |
|
|
|
Accounts payable | $ 313.5 |
| $ 287.0 |
Accrued payroll and benefits | 136.3 |
| 107.0 |
Accrued expenses and other current liabilities | 242.6 |
| 247.9 |
Current maturities of long-term debt | 47.3 |
| 34.1 |
Liabilities held for sale | 7.6 |
| 6.0 |
Current liabilities of discontinued operations | 109.9 |
| 104.6 |
Total current liabilities | 857.2 |
| 786.6 |
Long-term debt | 1,638.7 |
| 1,712.8 |
Unfunded pension liability | 34.3 |
| 31.1 |
Operating lease liability | 101.3 |
| 105.1 |
Deferred credits and other liabilities | 89.5 |
| 95.9 |
Deferred tax liabilities | 7.8 |
| 7.9 |
Non-current liabilities of discontinued operations | 34.7 |
| 38.4 |
Total liabilities | 2,763.5 |
| 2,777.8 |
Shareholders' equity |
|
|
|
Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no
shares issued and outstanding | — |
| — |
Common Stock: 900,000,000 shares authorized, par value $0.01 per share,
85,048,937 and 84,347,712 shares issued and outstanding as of July 1, 2023 and
December 31, 2022, respectively. | 0.9 |
| 0.8 |
Additional paid-in capital | 743.3 |
| 734.9 |
Retained earnings | 183.9 |
| 130.5 |
Accumulated other comprehensive loss | (145.7) |
| (142.6) |
Total shareholders' equity | 782.4 |
| 723.5 |
Total liabilities and shareholders' equity | $ 3,545.8 |
| $ 3,501.4 |
JELD-WEN Holding, Inc. Consolidated Statements of Cash Flows (Unaudited) (In millions) |
|
|
| Six Months Ended |
|
| July 1, 2023 |
| June 25, 2022 |
OPERATING ACTIVITIES |
|
|
|
|
Net income |
| $ 53.4 |
| $ 45.3 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: |
|
|
|
|
Depreciation and amortization |
| 71.8 |
| 65.1 |
Deferred income taxes |
| (0.9) |
| (2.2) |
Net loss on disposition of assets |
| 0.1 |
| 0.2 |
Adjustment to carrying value of assets |
| 3.2 |
| 0.5 |
Amortization of deferred financing costs |
| 1.6 |
| 1.5 |
Stock-based compensation |
| 9.7 |
| 11.3 |
Amortization of U.S. pension expense |
| 0.3 |
| 0.7 |
Recovery of cost from interest received on impaired notes |
| (1.7) |
| (13.4) |
Other items, net |
| (8.0) |
| 27.2 |
Net change in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
| (75.9) |
| (170.1) |
Inventories |
| 50.1 |
| (126.9) |
Other assets |
| 6.7 |
| (32.2) |
Accounts payable and accrued expenses |
| 44.5 |
| 37.6 |
Change in short term and long-term tax liabilities |
| (1.4) |
| (10.3) |
Net cash provided by (used in) operating activities |
| 153.4 |
| (165.7) |
INVESTING ACTIVITIES |
|
|
|
|
Purchases of property and equipment |
| (42.0) |
| (31.5) |
Proceeds from sale of property and equipment |
| 0.4 |
| 0.2 |
Purchase of intangible assets |
| (5.0) |
| (3.3) |
Recovery of cost from interest received on impaired notes |
| 1.7 |
| 13.4 |
Cash received for notes receivable |
| 0.1 |
| 0.1 |
Cash received from insurance proceeds |
| 3.2 |
| — |
Change in securities for deferred compensation plan |
| (0.7) |
| (0.2) |
Net cash used in investing activities |
| (42.2) |
| (21.4) |
FINANCING ACTIVITIES |
|
|
|
|
Change in long-term debt |
| (70.3) |
| 186.6 |
Common stock issued for exercise of options |
| 0.1 |
| 2.0 |
Common stock repurchased |
| — |
| (105.2) |
Payments to tax authorities for employee share-based compensation |
| (0.6) |
| (2.4) |
Net cash (used in) provided by financing activities |
| (70.8) |
| 81.1 |
Effect of foreign currency exchange rates on cash |
| 2.2 |
| (17.0) |
Net increase (decrease) in cash and cash equivalents |
| 42.6 |
| (123.0) |
Cash, cash equivalents and restricted cash, beginning |
| 220.9 |
| 396.9 |
Cash, cash equivalents and restricted cash, ending |
| $ 263.4 |
| $ 273.9 |
Balances included in the Consolidated Balance Sheets: |
|
|
|
|
Cash, cash equivalents, and restricted cash |
| $ 189.6 |
| $ 243.2 |
Cash and cash equivalents included in current assets of discontinued operations |
| 73.9 |
| 30.7 |
Cash and cash equivalents at end of period |
| $ 263.4 |
| $ 273.9 |
JELD-WEN Holding, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In millions) |
|
| Three Months Ended |
| Six Months Ended |
| July 1, 2023 |
| June 25, 2022 |
| July 1, 2023 |
| June 25, 2022 |
Income from continuing operations, net of tax | $ 22.5 |
| $ 35.0 |
| $ 31.0 |
| $ 31.4 |
Income tax expense | 10.8 |
| 10.9 |
| 14.2 |
| 9.2 |
Depreciation and amortization(1) | 38.2 |
| 27.6 |
| 66.6 |
| 55.3 |
Interest expense, net | 20.9 |
| 20.2 |
| 42.3 |
| 38.5 |
Special items: |
|
|
|
|
|
|
|
Legal and professional expenses and settlements(2) | 4.4 |
| 0.7 |
| 6.2 |
| 2.5 |
Restructuring and asset related charges(3) | 6.8 |
| 5.3 |
| 16.1 |
| 5.2 |
Facility closure, consolidation, and other related costs and adjustments(4) | 1.3 |
| 5.1 |
| 2.6 |
| 5.2 |
M&A related costs(5) | 1.3 |
| 2.5 |
| 4.0 |
| 5.8 |
Share-based compensation expense(6) | 4.7 |
| 1.3 |
| 8.9 |
| 10.5 |
Non-cash foreign exchange transaction/translation loss (income)(7) | 0.4 |
| 3.1 |
| (1.2) |
| 7.0 |
Other special items (8) | (2.4) |
| (3.3) |
| (2.5) |
| 5.6 |
Adjusted EBITDA from continuing operations | $ 108.9 |
| $ 108.3 |
| $ 188.2 |
| $ 176.3 |
|
|
(1) | Depreciation and amortization expense in the three and six months ended July 1, 2023 includes accelerated depreciation of $9.1 million in North America from reviews of equipment capacity optimization. |
(2) | Legal and professional expenses and settlements primarily related to litigation and transformation initiatives. |
(3) | Represents severance, accelerated depreciation charges, and other expenses directly incurred as a result of restructuring events, including equipment relocation expenses. Restructuring charges related to closure of Atlanta facility in the three and six months ended July 31, 2023 were $5.2 million and $13.3 million, respectively. |
(4) | Facility closure, consolidation, and other related costs and adjustments primarily related to winding down certain facilities scheduled to close in 2023 as well as certain facilities closed in 2022. |
(5) | M&A related costs consists primarily of legal and professional expenses related to the potential disposition of Towanda. |
(6) | Represents non-cash equity-based compensation expense related to the issuance of share-based awards. |
(7) | Non-cash foreign exchange transaction/translation loss (income) primarily consists of losses (gains) associated with fair value adjustments of foreign currency derivatives and revaluation of intercompany balances. |
(8) | Other special items not core to ongoing business activity include: (i) in the three months ended July 1, 2023 ($2.8) million in compensation and non-income taxes associated with exercises of legacy equity awards; (ii) in the three months ended June 25, 2022 (1) ($4.4) million in adjustments related to fire damage and downtime at one of our facilities in North America, and (2) $1.0 million unrealized mark-to-market losses from commodity derivatives; (iii) in the six months ended July 1, 2023 ($2.8) million in compensation and non-income taxes associated with exercises of legacy equity awards; and (iv) in the six months ended June 25, 2022 (1) $2.4 million in expenses related to fire damage and downtime at one of our facilities in North America, (2) $1.9 million compensation and non-income taxes associated with exercises of legacy equity awards, and (3) $1.0 million unrealized mark-to-market losses from commodity derivatives. |
|
To conform with current period presentation, certain amounts in prior period information have been reclassified. |
|
| Three Months Ended |
| Six Months Ended |
(amounts in millions, except share and per share data) |
| July 1, 2023 |
| June 25, 2022 |
| July 1, 2023 |
| June 25, 2022 |
Income from continuing operations, net of tax |
| $ 22.5 |
| $ 35.0 |
| $ 31.0 |
| $ 31.4 |
Special items:(1) |
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| 4.4 |
| 0.7 |
| 6.2 |
| 2.5 |
Restructuring and asset related charges |
| 6.8 |
| 5.3 |
| 16.1 |
| 5.2 |
Facility closure, consolidation, and other related costs
and adjustments |
| 1.3 |
| 5.1 |
| 2.6 |
| 5.2 |
M&A related costs |
| 1.3 |
| 2.5 |
| 4.0 |
| 5.8 |
Share-based compensation expense |
| 4.7 |
| 1.3 |
| 8.9 |
| 10.5 |
Non-cash foreign exchange transactions/translation loss
(income) |
| 0.4 |
| 3.1 |
| (1.2) |
| 7.0 |
Other special items |
| (2.4) |
| (3.3) |
| (2.5) |
| 5.6 |
Tax impact of special items(2) |
| (3.4) |
| (3.7) |
| (8.8) |
| (11.6) |
Tax special items |
| 2.1 |
| (6.4) |
| 3.2 |
| (6.4) |
Adjusted Net Income from continuing operations |
| $ 37.8 |
| $ 39.6 |
| $ 59.4 |
| $ 55.2 |
|
|
|
|
|
|
|
|
|
Diluted income per share from continuing operations |
| $ 0.26 |
| $ 0.40 |
| $ 0.36 |
| $ 0.35 |
Special items:(1) |
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| 0.05 |
| 0.01 |
| 0.07 |
| 0.03 |
Restructuring and asset related charges |
| 0.08 |
| 0.06 |
| 0.19 |
| 0.06 |
Facility closure, consolidation, and other related costs
and adjustments |
| 0.01 |
| 0.06 |
| 0.03 |
| 0.06 |
M&A related costs |
| 0.01 |
| 0.03 |
| 0.05 |
| 0.06 |
Share-based compensation expense |
| 0.06 |
| 0.02 |
| 0.10 |
| 0.12 |
Non-cash foreign exchange transactions/translation loss
(income) |
| 0.01 |
| 0.03 |
| (0.01) |
| 0.08 |
Other special items |
| (0.03) |
| (0.04) |
| (0.03) |
| 0.06 |
Tax impact of special items (2) |
| (0.04) |
| (0.04) |
| (0.10) |
| (0.13) |
Tax special items |
| 0.02 |
| (0.07) |
| 0.04 |
| (0.07) |
Adjusted Net Income per share from continuing operations |
| $ 0.44 |
| $ 0.45 |
| $ 0.70 |
| $ 0.62 |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares used in adjusted EPS
calculation represent the fully dilutive shares for the three
and six months ended July 1, 2023 and June 25, 2022,
respectively. |
| 85,764,785 |
| 87,967,049 |
| 85,417,344 |
| 89,557,956 |
|
Adjusted net income from continuing operations per share may not sum due to rounding. |
|
|
(1) | Refer to the calculation of Adjusted EBITDA from continuing operations for the definitions of the Special items listed above. |
(2) | Except as otherwise noted, adjustments to net income and net income per share are tax-effected at the jurisdictional statutory tax rate. |
|
To conform with current period presentation, certain amounts in prior period information have been reclassified. |
|
| Three Months Ended July 1, 2023 |
(amounts in millions) |
| North
America |
| Europe |
| Total
Operating
Segments |
| Corporate
and
Unallocated
Costs |
| Total
Consolidated |
Income (loss) from continuing operations, net of tax |
| $ 51.3 |
| $ 10.7 |
| $ 61.9 |
| $ (39.4) |
| $ 22.5 |
Income tax expense (benefit) |
| 21.1 |
| 3.1 |
| 24.2 |
| (13.5) |
| 10.8 |
Depreciation and amortization(1) |
| 27.7 |
| 7.5 |
| 35.2 |
| 3.0 |
| 38.2 |
Interest expense, net |
| 0.8 |
| 0.4 |
| 1.2 |
| 19.7 |
| 20.9 |
Special items:(1) |
|
|
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| — |
| 2.4 |
| 2.4 |
| 2.0 |
| 4.4 |
Restructuring charges and asset related charges |
| 5.7 |
| 0.5 |
| 6.2 |
| 0.6 |
| 6.8 |
Facility closure, consolidation, and other related costs and adjustments |
| — |
| 1.3 |
| 1.3 |
| — |
| 1.3 |
M&A related costs |
| 0.3 |
| — |
| 0.3 |
| 0.9 |
| 1.3 |
Share-based compensation expense |
| 1.5 |
| 0.5 |
| 2.0 |
| 2.8 |
| 4.7 |
Non-cash foreign exchange transaction/translation (income) loss |
| (0.1) |
| 0.6 |
| 0.4 |
| — |
| 0.4 |
Other special items |
| 0.6 |
| (3.0) |
| (2.4) |
| — |
| (2.4) |
Adjusted EBITDA from continuing operations |
| $ 108.8 |
| $ 23.9 |
| $ 132.7 |
| $ (23.8) |
| $ 108.9 |
|
(1) Refer to the calculation of Adjusted EBITDA from continuing operations for the definitions of the Special items listed above. |
|
| Three Months Ended June 25, 2022 |
(amounts in millions) |
| North
America |
| Europe |
| Total
Operating
Segments |
| Corporate
and
Unallocated
Costs |
| Total
Consolidated |
Income (loss) from continuing operations, net of tax |
| $ 69.8 |
| $ 3.1 |
| $ 73.0 |
| $ (38.0) |
| $ 35.0 |
Income tax expense(1) |
| 2.0 |
| 3.1 |
| 5.1 |
| 5.7 |
| 10.9 |
Depreciation and amortization |
| 16.9 |
| 7.6 |
| 24.5 |
| 3.2 |
| 27.6 |
Interest expense, net |
| 0.8 |
| 2.1 |
| 2.8 |
| 17.4 |
| 20.2 |
Special items:(2) |
|
|
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| — |
| — |
| — |
| 0.7 |
| 0.7 |
Restructuring charges and asset-related charges |
| 4.8 |
| 0.5 |
| 5.3 |
| — |
| 5.3 |
Facility closure, consolidation, and other related costs and adjustments |
| — |
| 5.1 |
| 5.1 |
| — |
| 5.1 |
M&A related costs |
| 0.1 |
| — |
| 0.1 |
| 2.4 |
| 2.5 |
Share-based compensation expense |
| — |
| 0.4 |
| 0.5 |
| 0.9 |
| 1.3 |
Non-cash foreign exchange transaction/translation loss (income) |
| 0.1 |
| (0.6) |
| (0.5) |
| 3.5 |
| 3.1 |
Other special items |
| (1.0) |
| (1.4) |
| (2.4) |
| (0.9) |
| (3.3) |
Adjusted EBITDA from continuing operations |
| $ 93.5 |
| $ 20.0 |
| $ 113.5 |
| $ (5.2) |
| $ 108.3 |
|
|
(1) | Income tax expense in Corporate and unallocated costs includes the tax impact of US Operations. |
(2) | Refer to the calculation of Adjusted EBITDA from continuing operations for the definitions of the Special items listed above. |
|
To conform with current period presentation, certain amounts in prior period information have been reclassified. |
|
| Six Months Ended July 1, 2023 |
(amounts in millions) |
| North
America |
| Europe |
| Total
Operating
Segments |
| Corporate
and
Unallocated
Costs |
| Total
Consolidated |
Income (loss) from continuing operations, net of tax |
| $ 86.5 |
| $ 18.0 |
| $ 104.5 |
| $ (73.5) |
| $ 31.0 |
Income tax expense (benefit) |
| 35.7 |
| 4.5 |
| 40.2 |
| (25.9) |
| 14.2 |
Depreciation and amortization |
| 45.5 |
| 14.9 |
| 60.4 |
| 6.1 |
| 66.6 |
Interest expense, net |
| 3.6 |
| 0.5 |
| 4.1 |
| 38.2 |
| 42.3 |
Special items:(1) |
|
|
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| — |
| 2.5 |
| 2.5 |
| 3.8 |
| 6.2 |
Restructuring charges and asset-related charges |
| 13.5 |
| 1.8 |
| 15.3 |
| 0.8 |
| 16.1 |
Facility closure, consolidation, and other related costs and adjustments |
| — |
| 2.6 |
| 2.6 |
| — |
| 2.6 |
M&A related costs |
| 0.6 |
| — |
| 0.6 |
| 3.4 |
| 4.0 |
Share-based compensation expense |
| 2.5 |
| 1.0 |
| 3.4 |
| 5.4 |
| 8.9 |
Non-cash foreign exchange transaction/translation (income) loss |
| (0.3) |
| (1.2) |
| (1.5) |
| 0.3 |
| (1.2) |
Other special items |
| 0.6 |
| (3.1) |
| (2.6) |
| 0.1 |
| (2.5) |
Adjusted EBITDA from continuing operations |
| $ 188.0 |
| $ 41.5 |
| $ 229.5 |
| $ (41.3) |
| $ 188.2 |
|
(1) Refer to the calculation of Adjusted EBITDA from continuing operations for the definitions of the Special items listed above. |
|
| Six Months Ended June 25, 2022 |
(amounts in millions) |
| North
America |
| Europe |
| Total
Operating
Segments |
| Corporate
and
Unallocated
Costs |
| Total
Consolidated |
Income (loss) from continuing operations, net of tax |
| $ 107.9 |
| $ 2.5 |
| $ 110.4 |
| $ (79.0) |
| $ 31.4 |
Income tax expense(1) |
| 3.0 |
| 4.5 |
| 7.5 |
| 1.7 |
| 9.2 |
Depreciation and amortization |
| 33.5 |
| 15.5 |
| 49.0 |
| 6.3 |
| 55.3 |
Interest expense, net |
| 1.9 |
| 3.9 |
| 5.8 |
| 32.7 |
| 38.5 |
Special items:(2) |
|
|
|
|
|
|
|
|
|
|
Legal and professional expenses and settlements |
| — |
| — |
| — |
| 2.5 |
| 2.5 |
Restructuring charges and asset-related charges |
| 4.8 |
| 0.5 |
| 5.3 |
| — |
| 5.2 |
Facility closure, consolidation, and other related costs and adjustments |
| — |
| 5.2 |
| 5.2 |
| — |
| 5.2 |
M&A related costs |
| 0.3 |
| — |
| 0.3 |
| 5.5 |
| 5.8 |
Share-based compensation expense |
| 2.1 |
| 1.3 |
| 3.4 |
| 7.2 |
| 10.5 |
Non-cash foreign exchange transaction/translation loss (income) |
| 0.4 |
| (4.2) |
| (3.8) |
| 10.8 |
| 7.0 |
Other special items |
| 6.7 |
| 5.5 |
| 12.2 |
| (6.6) |
| 5.6 |
Adjusted EBITDA from continuing operations |
| $ 160.6 |
| $ 34.7 |
| $ 195.3 |
| $ (19.0) |
| $ 176.3 |
|
|
(1) | Income tax expense in Corporate and unallocated costs includes the tax impact of US Operations. |
(2) | Refer to the calculation of Adjusted EBITDA from continuing operations for the definitions of the Special items listed above. |
|
| Six Months Ended |
|
| July 1, 2023 |
| June 25, 2022 |
Net cash provided by (used in) operating activities (1) |
| $ 153.4 |
| $ (165.7) |
Less capital expenditures (1) |
| 46.9 |
| 34.8 |
Free Cash Flow (1)(2) |
| $ 106.4 |
| $ (200.5) |
|
|
(1) | Cash flow information is inclusive of cash flows from the Australasia segment as discontinued operations. |
(2) | Free Cash Flow is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Free Cash Flow, see above under the heading "Non-GAAP Financial Information". |
|
|
|
|
| July 1, 2023 |
| December 31, 2022 |
Total debt |
| $ 1,686.0 |
| $ 1,746.9 |
Less cash and cash equivalents |
| 188.9 |
| 164.5 |
Net Debt (1) |
| $ 1,497.1 |
| $ 1,582.4 |
Divided by trailing twelve months Adjusted EBITDA from continuing operations (2) |
| 360.7 |
| 348.8 |
Net Debt Leverage (1) |
| 4.1x |
| 4.5x |
|
|
(1) | Net Debt and Net Debt Leverage are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Net Debt Leverage, see above under the heading "Non-GAAP Financial Information". |
(2) | Trailing twelve months Adjusted EBITDA from continuing operations for both periods. Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA from continuing operations, see above under the heading "Non-GAAP Financial Information". |
Segment Results (Unaudited) (In millions) |
|
|
| Three Months Ended |
|
|
|
| July 1, 2023 |
| June 25, 2022 |
|
|
Net revenues from external customers |
|
|
|
|
| % Variance |
North America |
| $ 817.1 |
| $ 839.1 |
| (2.6) % |
Europe |
| 308.7 |
| 340.0 |
| (9.2) % |
Total Consolidated |
| $ 1,125.8 |
| $ 1,179.2 |
| (4.5) % |
Adjusted EBITDA from continuing operations (1) |
|
|
|
|
|
|
North America |
| $ 108.8 |
| $ 93.5 |
| 16.4 % |
Europe |
| 23.9 |
| 20.0 |
| 19.1 % |
Corporate and unallocated costs |
| (23.8) |
| (5.2) |
| 356.4 % |
Total Consolidated |
| $ 108.9 |
| $ 108.3 |
| 0.5 % |
|
|
(1) | Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA from continuing operations, see above under the heading "Non-GAAP Financial Information". |
|
| Six Months Ended |
|
|
|
| July 1, 2023 |
| June 25, 2022 |
|
|
Net revenues from external customers |
|
|
|
|
| % Variance |
North America |
| $ 1,585.1 |
| $ 1,561.5 |
| 1.5 % |
Europe |
| 621.1 |
| 663.3 |
| (6.4) % |
Total Consolidated |
| $ 2,206.3 |
| $ 2,224.8 |
| (0.8) % |
Adjusted EBITDA from continuing operations (1) |
|
|
|
|
|
|
North America |
| $ 188.0 |
| $ 160.6 |
| 17.1 % |
Europe |
| 41.5 |
| 34.7 |
| 19.5 % |
Corporate and unallocated costs |
| (41.3) |
| (19.0) |
| 117.5 % |
Total Consolidated |
| $ 188.2 |
| $ 176.3 |
| 6.7 % |
|
|
(1) | Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA from continuing operations, see above under the heading "Non-GAAP Financial Information". |
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SOURCE JELD-WEN Holding, Inc.