MasterBrand Reports Fourth Quarter and Full Year 2023 Financial Results
- Net sales decreased by 14% and 17% year-over-year for 4Q and full year 2023, reaching $677.1 million and $2.7 billion, respectively.
- Net income increased by 134% and 17% year-over-year for 4Q and full year 2023, totaling $36.1 million and $182.0 million, respectively.
- Adjusted EBITDA margin increased by 20 basis points and 150 basis points year-over-year for 4Q and full year 2023, reaching 12.7% and 14.1%, respectively.
- Operating cash flow for the full year 2023 was $405.6 million, with free cash flow of $348.3 million.
- Introduced 2024 financial outlook includes adjusted EPS and anticipates a decline in net sales but stable adjusted EBITDA and EPS.
- Company repurchased shares during the fourth quarter and full year 2023.
- The company remains optimistic about driving operational efficiencies and achieving long-term growth targets.
- Net sales saw a significant decline for both 4Q and full year 2023.
- Adjusted EBITDA decreased for both 4Q and full year 2023 compared to the prior year.
- The company experienced a decrease in gross profit for the full year 2023.
- Higher interest expense related to debt impacted the full year 2023 financials.
Insights
Analyzing MasterBrand's recent financial results reveals a dichotomy between declining net sales and increasing net income. A 14% decrease in 4Q net sales and a 17% decrease for the full year reflect market challenges, potentially including reduced consumer spending or increased competition. However, the company's net income growth, 134% in 4Q and 17% for the full year, indicates effective cost management and possibly a one-time benefit from the absence of prior-year asset impairment charges.
Their adjusted EBITDA margin expansion, despite softer demand, suggests that operational efficiencies and cost-saving initiatives are bearing fruit. The 550 basis point increase in gross profit margin for 4Q and a 440 basis point increase for the full year are significant, as they outpace typical industry improvements, which are generally in the low single-digit percentage points.
From a liquidity perspective, MasterBrand's operating cash flow and free cash flow have shown substantial improvement, which is indicative of a strong cash conversion cycle and efficient capital management. This is particularly impressive given the net sales decline and it's a positive signal to investors about the company's financial health.
MasterBrand's performance in the context of the residential cabinet manufacturing industry suggests a strategic resilience. The company's ability to expand its gross profit margin in a year of declining sales volume is noteworthy and could be attributed to its strategic pricing, supply chain optimization and cost control measures.
Their financial outlook for 2024, forecasting a low single-digit percentage to flat sales decline, aligns with broader market expectations of a challenging economic environment. However, their anticipated adjusted EBITDA margin of 14.0 to 14.5 percent indicates confidence in maintaining operational efficiency.
The focus on flexible manufacturing capacity and continuous improvement suggests that MasterBrand is adapting to market conditions by optimizing production and potentially reducing fixed costs, a strategy that could benefit them in both downturns and recoveries.
The contrast between MasterBrand's decreasing sales and increasing profitability can be partially explained by macroeconomic factors. Softening end-market demand could be symptomatic of broader economic slowdowns, which often lead to reduced consumer spending on home improvements.
However, MasterBrand's financial results indicate a successful adaptation to these conditions. The company's operational efficiencies and cost reductions have allowed it to mitigate the impact of lower sales volumes. Their net debt to adjusted EBITDA ratio of 1.5x is a healthy leverage level, suggesting that the company is not overburdened by debt relative to its earnings before interest, taxes, depreciation and amortization.
The company's proactive measures, such as working capital reduction plans and share repurchases, reflect a strategic approach to capital allocation that supports shareholder value in uncertain economic climates.
-
4Q and full year 2023 net sales decreased
14% and17% year-over-year to$677.1 million $2.7 billion -
4Q and full year net income increased
134% and17% year-over-year to$36.1 million $182.0 million -
4Q and full year adjusted EBITDA1 margin increased 20 basis points and 150 basis points year-over-year to
12.7% and14.1% , respectively -
Full year operating cash flow was
$405.6 million $348.3 million - Introduces 2024 financial outlook, including adjusted EPS
“We delivered another solid quarter, finishing off a strong first year as a standalone public company. With net sales at the high-end of our internal expectations, and our operations performing well, we were able to achieve our fifth consecutive quarter of year-over-year adjusted EBITDA1 margin expansion, despite market headwinds,” said Dave Banyard, President and Chief Executive Officer. “These results are a testament to our continued execution on the Company’s strategic initiatives, our disciplined use of The MasterBrand Way and the dedication of our associates across the organization.”
“Our full year 2023 performance demonstrates the power of our business model and culture. As we enter 2024, we believe we can continue to drive operational efficiencies, allowing us to invest for growth at an even higher pace and achieve the long-term targets introduced at our 2022 Investor Day,” Banyard continued.
Fourth Quarter 2023
Net sales were
Net income was
Adjusted EBITDA1 was
Full Year 2023
Net sales were
Net income was
Adjusted EBITDA1 was
Balance Sheet, Cash Flow and Share Repurchases
As of December 31, 2023, the Company had
Operating cash flow was
During the fourth quarter and full year 2023, the Company repurchased approximately 527 thousand shares of common stock and approximately 1.9 million shares of common stock, respectively.
2024 Financial Outlook
For full year 2024, the Company expects:
- Net sales year-over-year decline of low single-digit percentage to flat
-
Adjusted EBITDA1,2 in the range of
$370 million $400 million -
Adjusted EPS1,2 in the range of
$1.40 $1.60
The Company expects net sales performance to be in line with the underlying market demand, and initiatives designed to gain share to more than offset trade down and continued soft market demand. The ability to flex manufacturing, due to the success of the common box initiative, coupled with further execution on strategic initiatives and continuous improvement efforts should allow for flat to slightly higher full year adjusted EBITDA margins.
“We are well positioned to address the varying dynamics we expect across our end markets in 2024. We launched new products and channel-specific packages late last year, tailored to capture share in portions of the market best positioned for growth,” said Andi Simon, Executive Vice President and Chief Financial Officer. “We also expect The MasterBrand Way to drive continuous improvement savings and our flexible manufacturing capacity to deliver results in 2024.”
Conference Call Details
The Company will hold a live conference call and webcast at 4:30 p.m. ET today, February 26, 2024, to discuss the financial results and business outlook. Telephone access to the live call will be available at (877) 407-4019 (
A telephone replay will be available approximately one hour following completion of the call through March 11, 2024. To access the replay, please dial 877-660-6853 (
Non-GAAP Financial Measures
To supplement the financial information presented in accordance with generally accepted accounting principles in
We use EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted diluted earnings per share (“adjusted EPS”), free cash flow, and net debt, which are all non-GAAP financial measures. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We evaluate the performance of our business based on income before income taxes, but also look to EBITDA as a performance evaluation measure because interest expense is related to corporate functions, as opposed to operations. For that reason, we believe EBITDA is a useful metric to investors in evaluating our operating results. Adjusted EBITDA is calculated by removing the impact of non-operational results and special items from EBITDA. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net sales. Adjusted EPS is a measure of our diluted earnings per share excluding non-operational results and special items. These non-GAAP measures are useful to investors as they are representative of our core operations and are used in the management of our business, including decisions concerning the allocation of resources and assessment of performance.
Free cash flow is defined as cash flow from operations less capital expenditures. We believe that free cash flow is a useful measure to investors because it is a meaningful indicator of cash generated from operating activities available for the execution of our business strategy, and is used in the management of our business, including decisions concerning the allocation of resources and assessment of performance. Net debt is defined as total balance sheet debt less cash and cash equivalents. We believe this measure is useful to investors as it provides a measure to compare debt less cash and cash equivalents across periods on a consistent basis. Net debt to adjusted EBITDA is calculated by dividing net debt by the trailing twelve months adjusted EBITDA. Net debt to adjusted EBITDA is used by management to assess our financial leverage and ability to service our debt obligations.
As required by SEC rules, see the financial statement section of this earnings release for detailed reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure. We have not provided a reconciliation of our fiscal 2024 adjusted EBITDA, adjusted EBITDA margin and adjusted EPS guidance because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred, including gains and losses associated with our defined benefit plans and restructuring and other charges, which are excluded from adjusted EBITDA, adjusted EBITDA margin and adjusted EPS. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company’s accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions.
About MasterBrand:
MasterBrand, Inc. (NYSE: MBC) is the largest manufacturer of residential cabinets in
Forward-Looking Statements:
This Press Release contains “forward-looking statements” regarding business strategies, market potential, future financial performance, and other matters. Statements preceded by, followed by or that otherwise include the word “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could,” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those listed under “Risk Factors” in Part I, Item 1A of our Form 10-K for the fiscal year ended December 25, 2022, and other filings with the SEC.
The forward-looking statements included in this document are made as of the date of this Press Release and, except pursuant to any obligations to disclose material information under the federal securities laws, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this Press Release.
Some of the important factors that could cause our actual results to differ materially from those projected in any such forward-looking statements include:
- Our ability to develop and expand our business;
- Our anticipated financial resources and capital spending;
- Our ability to manage costs;
- The impact of our dependence on third parties with respect to sourcing our raw materials;
- Our ability to accurately price our products;
- Our anticipated future revenues and expectations of operational performance;
- The effects of competition and consolidation of competitors in our industry;
- Costs of complying with evolving tax and other regulatory requirements and the effect of actual or alleged violations of tax, environmental or other laws;
- The effect of climate change and unpredictable seasonal and weather factors;
- Failure to realize the anticipated benefits of the Separation;
-
Conditions in the housing market in
the United States andCanada ; - The expected strength of our existing customers and consumers;
- Worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis;
- The effects of the COVID-19 pandemic or another public health crisis or other unexpected event; and
- Other statements contained in this Press Release regarding items that are not historical facts or that involve predictions.
1 - See "Non-GAAP Financial Measures" and the corresponding financial tables at the end of this press release for definitions and reconciliations of non-GAAP measures. |
2 - We have not provided a reconciliation of our fiscal 2024 adjusted EBITDA, adjusted EBITDA margin and adjusted EPS guidance because the information needed to reconcile these measures is unavailable due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and which may be excluded from adjusted EBITDA, adjusted EBITDA margin and adjusted EPS. Additionally, estimating such GAAP measures and providing a meaningful reconciliation for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking non-GAAP measures are estimated consistent with the relevant definitions and assumptions. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
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|
|
|
|
|
|
|
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||||||||
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|
(Unaudited) |
|
|
|
|
||||||||||
|
|
14 Weeks Ended |
|
13 Weeks Ended |
|
53 Weeks Ended |
|
52 Weeks Ended |
||||||||
( |
|
December 31,
|
|
December 25,
|
|
December 31,
|
|
December 25,
|
||||||||
NET SALES |
|
$ |
677.1 |
|
|
$ |
784.4 |
|
|
$ |
2,726.2 |
|
|
$ |
3,275.5 |
|
Cost of products sold |
|
|
454.0 |
|
|
|
569.4 |
|
|
|
1,824.8 |
|
|
|
2,335.0 |
|
GROSS PROFIT |
|
|
223.1 |
|
|
|
215.0 |
|
|
|
901.4 |
|
|
|
940.5 |
|
Gross Profit Margin |
|
|
32.9 |
% |
|
|
27.4 |
% |
|
|
33.1 |
% |
|
|
28.7 |
% |
Selling, general and administrative expenses |
|
|
152.4 |
|
|
|
161.3 |
|
|
|
569.7 |
|
|
|
648.5 |
|
Amortization of intangible assets |
|
|
3.7 |
|
|
|
4.0 |
|
|
|
15.3 |
|
|
|
17.2 |
|
Asset impairment charges |
|
|
— |
|
|
|
20.4 |
|
|
|
— |
|
|
|
46.4 |
|
Restructuring charges |
|
|
6.0 |
|
|
|
14.2 |
|
|
|
10.1 |
|
|
|
25.1 |
|
OPERATING INCOME |
|
|
61.0 |
|
|
|
15.1 |
|
|
|
306.3 |
|
|
|
203.3 |
|
Related party interest income, net |
|
|
— |
|
|
|
(5.6 |
) |
|
|
— |
|
|
|
(12.9 |
) |
Interest expense |
|
|
15.3 |
|
|
|
2.2 |
|
|
|
65.2 |
|
|
|
2.2 |
|
Other expense (income), net |
|
|
2.5 |
|
|
|
(0.9 |
) |
|
|
2.4 |
|
|
|
0.6 |
|
INCOME BEFORE TAXES |
|
|
43.2 |
|
|
|
19.4 |
|
|
|
238.7 |
|
|
|
213.4 |
|
Income tax expense |
|
|
7.1 |
|
|
|
4.0 |
|
|
|
56.7 |
|
|
|
58.0 |
|
NET INCOME |
|
$ |
36.1 |
|
|
$ |
15.4 |
|
|
$ |
182.0 |
|
|
$ |
155.4 |
|
Average Number of Shares of Common Stock Outstanding |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
126.8 |
|
|
|
128.0 |
|
|
|
127.8 |
|
|
|
128.0 |
|
Diluted |
|
|
129.9 |
|
|
|
129.1 |
|
|
|
129.9 |
|
|
|
129.1 |
|
Earnings Per Common Share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.28 |
|
|
$ |
0.12 |
|
|
$ |
1.42 |
|
|
$ |
1.21 |
|
Diluted |
|
$ |
0.28 |
|
|
$ |
0.12 |
|
|
$ |
1.40 |
|
|
$ |
1.20 |
|
SUPPLEMENTAL INFORMATION - Quarter-to-date |
|||||||
(Unaudited) |
|||||||
|
|||||||
|
14 Weeks Ended |
|
13 Weeks Ended |
||||
|
December 31, |
|
December 25, |
||||
( |
2023 |
|
2022 |
||||
1. Reconciliation of Net Income to EBITDA to ADJUSTED EBITDA |
|
|
|
||||
Net income (GAAP) |
$ |
36.1 |
|
|
$ |
15.4 |
|
Related party interest income, net |
|
— |
|
|
|
(5.6 |
) |
Interest expense |
|
15.3 |
|
|
|
2.2 |
|
Income tax expense |
|
7.1 |
|
|
|
4.0 |
|
Depreciation expense |
|
14.1 |
|
|
|
12.2 |
|
Amortization expense |
|
3.7 |
|
|
|
4.0 |
|
EBITDA (Non-GAAP Measure) |
$ |
76.3 |
|
|
$ |
32.2 |
|
[1] Net cost savings as standalone company |
|
— |
|
|
|
12.8 |
|
[2] Separation costs |
|
0.1 |
|
|
|
11.7 |
|
[3] Restructuring charges |
|
6.0 |
|
|
|
14.2 |
|
[4] Restructuring-related charges |
|
0.5 |
|
|
|
6.3 |
|
[5] Asset impairment charges |
|
— |
|
|
|
20.4 |
|
[6] Recognition of actuarial losses |
|
2.9 |
|
|
|
0.2 |
|
Adjusted EBITDA (Non-GAAP Measure) |
$ |
85.8 |
|
|
$ |
97.8 |
|
|
|||||||
2. Reconciliation of Net Income to Adjusted Net Income |
|
|
|
||||
Net Income (GAAP) |
$ |
36.1 |
|
|
$ |
15.4 |
|
[1] Net cost savings as standalone company |
|
— |
|
|
|
12.8 |
|
[2] Separation costs |
|
0.1 |
|
|
|
11.7 |
|
[3] Restructuring charges |
|
6.0 |
|
|
|
14.2 |
|
[4] Restructuring-related charges |
|
0.5 |
|
|
|
6.3 |
|
[5] Asset impairment charges |
|
— |
|
|
|
20.4 |
|
[6] Recognition of actuarial losses |
|
2.9 |
|
|
|
0.2 |
|
[7] Income tax impact of adjustments |
|
(1.6 |
) |
|
|
(13.5 |
) |
Adjusted Net Income (Non-GAAP Measure) |
$ |
44.0 |
|
|
$ |
67.5 |
|
|
|||||||
3. Earnings per Share Summary |
|
|
|
||||
Diluted EPS (GAAP) |
$ |
0.28 |
|
|
$ |
0.12 |
|
Impact of adjustments |
$ |
0.06 |
|
|
$ |
0.40 |
|
Adjusted Diluted EPS (Non-GAAP Measure) |
$ |
0.34 |
|
|
$ |
0.52 |
|
|
|||||||
Weighted average diluted shares outstanding |
|
129.9 |
|
|
|
129.1 |
|
|
|
|
|
||||
4. Profit Margins |
|
|
|
||||
Net Sales |
$ |
677.1 |
|
|
$ |
784.4 |
|
Gross Profit |
$ |
223.1 |
|
|
$ |
215.0 |
|
Gross Profit Margin % |
|
32.9 |
% |
|
|
27.4 |
% |
Adjusted EBITDA Margin % |
|
12.7 |
% |
|
|
12.5 |
% |
SUPPLEMENTAL INFORMATION - Year-to-date |
|||||||
(Unaudited) |
|||||||
|
|||||||
|
53 Weeks Ended |
|
52 Weeks Ended |
||||
|
December 31, |
|
December 25, |
||||
( |
2023 |
|
2022 |
||||
1. Reconciliation of Net Income to EBITDA to ADJUSTED EBITDA |
|
|
|
||||
Net income (GAAP) |
$ |
182.0 |
|
|
$ |
155.4 |
|
Related party interest income, net |
|
— |
|
|
|
(12.9 |
) |
Interest expense |
|
65.2 |
|
|
|
2.2 |
|
Income tax expense |
|
56.7 |
|
|
|
58.0 |
|
Depreciation expense |
|
49.0 |
|
|
|
47.3 |
|
Amortization expense |
|
15.3 |
|
|
|
17.2 |
|
EBITDA (Non-GAAP Measure) |
$ |
368.2 |
|
|
$ |
267.2 |
|
[1] Net cost savings as standalone company |
|
— |
|
|
|
44.4 |
|
[2] Separation costs |
|
2.4 |
|
|
|
15.4 |
|
[3] Restructuring charges |
|
10.1 |
|
|
|
25.1 |
|
[4] Restructuring-related (adjustments) charges |
|
(0.2 |
) |
|
|
12.7 |
|
[5] Asset impairment charges |
|
— |
|
|
|
46.4 |
|
[6] Recognition of actuarial losses |
|
2.9 |
|
|
|
0.2 |
|
Adjusted EBITDA (Non-GAAP Measure) |
$ |
383.4 |
|
|
$ |
411.4 |
|
|
|||||||
2. Reconciliation of Net Income to Adjusted Net Income |
|
|
|
||||
Net Income (GAAP) |
$ |
182.0 |
|
|
$ |
155.4 |
|
[1] Net cost savings as standalone company |
|
— |
|
|
|
44.4 |
|
[2] Separation costs |
|
2.4 |
|
|
|
15.4 |
|
[3] Restructuring charges |
|
10.1 |
|
|
|
25.1 |
|
[4] Restructuring-related (adjustments) charges |
|
(0.2 |
) |
|
|
12.7 |
|
[5] Asset impairment charges |
|
— |
|
|
|
46.4 |
|
[6] Recognition of actuarial losses |
|
2.9 |
|
|
|
0.2 |
|
[7] Income tax impact of adjustments |
|
(3.6 |
) |
|
|
(39.2 |
) |
Adjusted Net Income (Non-GAAP Measure) |
$ |
193.6 |
|
|
$ |
260.4 |
|
|
|||||||
3. Earnings per Share Summary |
|
|
|
||||
Diluted EPS (GAAP) |
$ |
1.40 |
|
|
$ |
1.20 |
|
Impact of adjustments |
$ |
0.09 |
|
|
$ |
0.82 |
|
Adjusted Diluted EPS (Non-GAAP Measure) |
$ |
1.49 |
|
|
$ |
2.02 |
|
|
|||||||
Weighted average diluted shares outstanding |
|
129.9 |
|
|
|
129.1 |
|
|
|
|
|
||||
4. Profit Margins |
|
|
|
||||
Net Sales |
$ |
2,726.2 |
|
|
$ |
3,275.5 |
|
Gross Profit |
$ |
901.4 |
|
|
$ |
940.5 |
|
Gross Profit Margin % |
|
33.1 |
% |
|
|
28.7 |
% |
Adjusted EBITDA Margin % |
|
14.1 |
% |
|
|
12.6 |
% |
TICK LEGEND:
[1] Prior to the separation from Fortune Brands in 4Q 2022, our historical consolidated financial statements included expense allocations for certain corporate functions performed on our behalf by Fortune Brands, including information technology, finance, executive, human resources, supply chain, internal audit and legal services. As a standalone public company, we expect that the costs we incur on a standalone basis for such expenses previously allocated to us by Fortune Brands and new costs relating to our public company reporting and compliance obligations will be less than the expense allocations from Fortune Brands within our historical financial statements.
The costs of MasterBrand we plan to incur are based on our expected organizational structure and expected cost structure as a standalone company. In order to determine the impact of the synergies and dis-synergies, MasterBrand prepared a detailed assessment of personnel costs based on the estimated resources and associated costs required as a baseline to stand up MasterBrand as a standalone company.
In addition to personnel costs, estimated non-personnel third party support costs in each function were considered, which included business support functions and corporate overhead charges previously shared with Fortune Brands. Estimated non personnel third party support costs were determined by estimating third party spend in each function, and include the costs associated with outside services supporting information technology, finance, executive, human resources, supply chain, internal audit and legal services. This process was used by all functions resulting in expected net cost savings when compared to the corporate allocations from Fortune Brands included in the historical financial statements.
[2] Separation costs represent one-time costs incurred directly by MasterBrand related to the separation from Fortune Brands.
[3] Restructuring charges are nonrecurring costs incurred to implement significant cost reduction initiatives and may consist of workforce reduction costs, facility closure costs, and other costs to maintain certain facilities where operations have ceased, but which we are still responsible for. The restructuring charges for the periods presented are comprised primarily of workforce reduction costs and facility closure costs.
[4] Restructuring-related charges are expenses directly related to restructuring initiatives that do not represent normal, recurring expenses necessary to operate the business, but cannot be reported as restructuring under GAAP. Such costs may include losses on disposal of inventories from exiting product lines, accelerated depreciation expense, and gains/losses on the sale of facilities closed as a result of restructuring actions. Restructuring-related (adjustments) are recoveries of previously recorded restructuring-related charges resulting from changes in estimates of accruals recorded in prior periods. Restructuring-related charges/(adjustments) for the periods presented are related primarily to the reserves for losses on disposal of inventories.
[5] The quarter and year-ended December 25, 2022, included
[6] We exclude the impact of actuarial gains and losses related to our
[7] In order to calculate Adjusted Net Income, each of the items described in Items [1] - [6] above were tax effected based upon the effective tax rates for the respective periods. The effective tax rate was calculated by dividing income tax expense by income before taxes for the respective periods.
|
14 Weeks Ended |
|
13 Weeks Ended |
|
53 Weeks Ended |
|
52 Weeks Ended |
||||||||
|
December 31, |
|
December 25, |
|
December 31, |
|
December 25, |
||||||||
( |
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Income taxes (a) |
$ |
7.1 |
|
|
$ |
4.0 |
|
|
$ |
56.7 |
|
|
$ |
58.0 |
|
Income before taxes (b) |
|
43.2 |
|
|
|
19.4 |
|
|
|
238.7 |
|
|
|
213.4 |
|
Effective income tax rate (a)/(b) |
|
16.4 |
% |
|
|
20.6 |
% |
|
|
23.8 |
% |
|
|
27.2 |
% |
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
|
|
|
|
||||
|
|
December 31, |
|
December 25, |
||||
( |
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
148.7 |
|
|
$ |
101.1 |
|
Accounts receivable, net |
|
|
203.0 |
|
|
|
289.6 |
|
Inventories |
|
|
249.8 |
|
|
|
373.1 |
|
Other current assets |
|
|
75.7 |
|
|
|
66.2 |
|
TOTAL CURRENT ASSETS |
|
|
677.2 |
|
|
|
830.0 |
|
Property, plant and equipment, net |
|
|
356.6 |
|
|
|
352.6 |
|
Operating lease right-of-use assets, net |
|
|
60.1 |
|
|
|
52.3 |
|
Goodwill |
|
|
925.1 |
|
|
|
924.2 |
|
Other intangible assets, net |
|
|
335.5 |
|
|
|
349.8 |
|
Other assets |
|
|
27.2 |
|
|
|
20.5 |
|
TOTAL ASSETS |
|
$ |
2,381.7 |
|
|
$ |
2,529.4 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable |
|
$ |
151.4 |
|
|
$ |
219.2 |
|
Current portion of long-term debt |
|
|
17.6 |
|
|
|
17.5 |
|
Current operating lease liabilities |
|
|
16.1 |
|
|
|
13.9 |
|
Other current liabilities |
|
|
164.3 |
|
|
|
160.5 |
|
TOTAL CURRENT LIABILITIES |
|
|
349.4 |
|
|
|
411.1 |
|
Long-term debt |
|
|
690.2 |
|
|
|
961.5 |
|
Deferred income taxes |
|
|
83.6 |
|
|
|
87.3 |
|
Pension and other postretirement plan liabilities |
|
|
7.9 |
|
|
|
12.2 |
|
Operating lease liabilities |
|
|
46.3 |
|
|
|
40.7 |
|
Other non-current liabilities |
|
|
10.5 |
|
|
|
7.4 |
|
TOTAL LIABILITIES |
|
|
1,187.9 |
|
|
|
1,520.2 |
|
Stockholders' equity |
|
|
1,193.8 |
|
|
|
1,009.2 |
|
TOTAL EQUITY |
|
|
1,193.8 |
|
|
|
1,009.2 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
2,381.7 |
|
|
$ |
2,529.4 |
|
|
|
|
|
|
||||
Reconciliation of Net Debt |
|
|
|
|
||||
Current portion of long-term debt |
|
$ |
17.6 |
|
|
$ |
17.5 |
|
Long-term debt |
|
|
690.2 |
|
|
|
961.5 |
|
Less: Cash and cash equivalents |
|
|
(148.7 |
) |
|
|
(101.1 |
) |
Net Debt |
|
$ |
559.1 |
|
|
$ |
877.9 |
|
Adjusted EBITDA (for full fiscal year) |
|
$ |
383.4 |
|
|
$ |
411.4 |
|
Net Debt to Adjusted EBITDA |
|
1.5 x |
|
2.1 x |
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
|
53 Weeks Ended |
|
52 Weeks Ended |
||||
|
|
December 31, |
|
December 25, |
||||
( |
|
2023 |
|
2022 |
||||
OPERATING ACTIVITIES |
|
|
|
|
||||
Net income |
|
$ |
182.0 |
|
|
$ |
155.4 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
|
|
49.0 |
|
|
|
47.3 |
|
Amortization of intangibles |
|
|
15.3 |
|
|
|
17.2 |
|
Restructuring charges, net of cash payments |
|
|
(9.4 |
) |
|
|
13.0 |
|
Amortization of finance fees |
|
|
2.2 |
|
|
|
— |
|
Stock-based compensation |
|
|
17.8 |
|
|
|
10.9 |
|
Asset impairment charges |
|
|
— |
|
|
|
46.4 |
|
Recognition of actuarial losses |
|
|
2.9 |
|
|
|
0.9 |
|
Deferred taxes |
|
|
(5.7 |
) |
|
|
2.3 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
88.1 |
|
|
|
13.5 |
|
Inventories |
|
|
123.6 |
|
|
|
(70.1 |
) |
Other current assets |
|
|
2.1 |
|
|
|
(5.3 |
) |
Accounts payable |
|
|
(69.4 |
) |
|
|
18.3 |
|
Accrued expenses and other current liabilities |
|
|
17.2 |
|
|
|
1.8 |
|
Other items |
|
|
(10.1 |
) |
|
|
(16.0 |
) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
405.6 |
|
|
|
235.6 |
|
INVESTING ACTIVITIES |
|
|
|
|
||||
Capital expenditures |
|
|
(57.3 |
) |
|
|
(55.9 |
) |
Proceeds from the disposition of assets |
|
|
0.4 |
|
|
|
— |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(56.9 |
) |
|
|
(55.9 |
) |
FINANCING ACTIVITIES |
|
|
|
|
||||
Issuance of long-term and short-term debt |
|
|
255.0 |
|
|
|
985.0 |
|
Repayments of long-term and short-term debt |
|
|
(527.5 |
) |
|
|
— |
|
Repurchase of common stock |
|
|
(22.0 |
) |
|
|
— |
|
Payments of employee taxes withheld from share-based awards |
|
|
(4.0 |
) |
|
|
(0.1 |
) |
Net cash activity with Fortune Brands |
|
|
— |
|
|
|
(249.6 |
) |
Dividend to Fortune Brands |
|
|
— |
|
|
|
(940.0 |
) |
Payment of financing fees |
|
|
— |
|
|
|
(10.1 |
) |
Other items |
|
|
(1.4 |
) |
|
|
(0.5 |
) |
NET CASH USED IN FINANCING ACTIVITIES |
|
|
(299.9 |
) |
|
|
(215.3 |
) |
Effect of foreign exchange rate changes on cash and cash equivalents |
|
|
(1.2 |
) |
|
|
(4.7 |
) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
$ |
47.6 |
|
|
$ |
(40.3 |
) |
Cash and cash equivalents at beginning of period |
|
$ |
101.1 |
|
|
$ |
141.4 |
|
Cash and cash equivalents at end of period |
|
$ |
148.7 |
|
|
$ |
101.1 |
|
|
|
|
|
|
||||
Reconciliation of Free Cash Flow |
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
405.6 |
|
|
$ |
235.6 |
|
Less: Capital expenditures |
|
|
(57.3 |
) |
|
|
(55.9 |
) |
Free cash flow |
|
$ |
348.3 |
|
|
$ |
179.7 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226115646/en/
Investor Relations:
Investorrelations@masterbrand.com
Media Contact:
Media@masterbrand.com
Source: MasterBrand, Inc.
FAQ
What was the percentage decrease in net sales for MasterBrand (MBC) in 4Q 2023?
How much did net income increase year-over-year for MasterBrand (MBC) in full year 2023?
What was the adjusted EBITDA margin for MasterBrand (MBC) in full year 2023?
What was the operating cash flow for MasterBrand (MBC) in the full year 2023?
What is the 2024 financial outlook for MasterBrand (MBC)?
Did MasterBrand (MBC) repurchase any shares in the full year 2023?
What initiatives does MasterBrand (MBC) plan to focus on in 2024?
