Cornerstone Building Brands Announces Fourth-Quarter and Full-Year 2020 Results; Expects Strong Growth in 2021
Cornerstone Building Brands (CNR) reported Q4 2020 net sales of $1,191.4 million and net income of $1.9 million, matching the previous year's income but with a slight sales decline from $1,244.4 million. Adjusted EBITDA for the quarter was $158.1 million, representing a margin of 13.3%, marking seven consecutive quarters of margin expansion despite lower non-residential demand. Full-year net sales dropped 5.6% to $4,617.4 million, largely due to the pandemic's impact. However, cash flow improved, with free cash flow at $226.6 million, facilitating debt repayment and strengthening financial flexibility.
- Adjusted EBITDA margin improved to 13.3%, with $158.1 million in Q4 2020.
- Seven consecutive quarters of year-over-year Adjusted EBITDA margin expansion.
- Significant cash flow generated, with free cash flow increasing by 108.8% to $226.6 million.
- Lower cash interest expenses and favorable tax benefits contributed to cash generation.
- Improved liquidity with $1,317 million in total liquidity at year-end.
- Net sales for 2020 declined by 5.6%, primarily due to lower end market demand.
- Loss from operations was $266.5 million, including a $503.2 million goodwill impairment.
- Non-residential market demand adversely impacted overall sales performance.
Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products, today reported fourth-quarter 2020 net sales of
Adjusted EBITDA1 for the fourth quarter of 2020 was
“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
Pro forma net sales1 were
“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
Free cash flow2 of
During the year, the Company issued
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 |
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https://event.on24.com/wcc/r/2947400/F3D9A2AE5F2573255A3FF97E0A1A5760 |
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Replay dial-in will be available through March 18, 2021 |
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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,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
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,
|
|
December 31,
|
||||
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,
|
December 31,
|
|||||
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,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||
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,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||
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,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
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,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
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,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
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,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
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,
|
|
December 31,
|
||||
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 version on businesswire.com: https://www.businesswire.com/news/home/20210303006035/en/
FAQ
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