JELD-WEN Reports Third Quarter 2023 Results and Updates Full-Year Guidance

JELD-WEN Holding, Inc. (“JELD-WEN” or the “Company”) announced results for the three and nine months ended September 30, 2023. The Company is raising its full-year guidance for continuing operations to reflect its solid third quarter results. Comparability is to the same period in the prior year and all periods presented reflect the Company’s Australasia segment as a discontinued operation, as appropriate and unless otherwise noted.

Third Quarter Highlights

• Net revenues from continuing operations of $1,077.0 million decreased (5.5%) in the third quarter driven by a (7%) decline in Core Revenue. The Core Revenue decline was a (10%) lower volume/mix partially offset by a 3% increase in price realization.
• Net income from continuing operations was $16.9 million or $0.20 per share, compared to a net loss from continuing operations of ($45.1) million or ($0.53) per share during the same quarter a year ago. Operating income margin was 4.5% and (1.5%) for the quarters ended September 30, 2023 and September 24, 2022, respectively.
• Adjusted EPS from continuing operations was $0.53, compared to Adjusted EPS of $0.37 in the same quarter a year ago. Adjusted EPS includes net after-tax charges of $28.7 million or $0.33 per share, compared to net after-tax charges of $76.9 million or $0.90 per share during the same quarter a year ago.
• Adjusted EBITDA from continuing operations was $105.7 million, compared to $94.5 million during the same quarter a year ago. Adjusted EBITDA Margin from continuing operations increased by 150 basis points year-over-year to 9.8%.
• 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 and recognized an after tax gain on sale of $26.1 million. On August 3, 2023, the Company repaid $450 million of senior notes funded by the divestiture proceeds.

“In the third quarter, our team continued to take actions to strengthen the foundation of our business which generated year-over-year increased profitability and strong cash flows, despite challenging macroeconomic conditions,” said Chief Executive Officer William J. Christensen. “We are taking the next steps to continue improving and sustaining our performance to unlock significant value for JELD-WEN shareholders.”

Christensen continued, “In the fourth quarter of 2023, we anticipate that the current uncertain operating environment will continue but expect to mitigate the impact from weaker demand with benefits from our ongoing cost reductions. As our third quarter results were above our expectations, we are raising the midpoint of our 2023 Adjusted EBITDA guidance.”

Third Quarter 2023 Results

Net revenue for the three months ended September 30, 2023 decreased ($63.0) million, or (5.5%), to $1,077.0 million, compared to $1,140.0 million for the same period last year. The decrease in net revenue was driven by a (7%) Core Revenue decline composed of lower volume/mix (10%) partially offset by higher price realization of 3%.

Net income from continuing operations was $16.9 million in the third quarter, compared to a ($45.1) million net loss in the same period last year, an increase of $62.0 million. The increase was driven by a non-recurring goodwill impairment in the prior year period and higher operating income. Adjusted Net Income from continuing operations for the third quarter increased $13.8 million, to $45.6 million, compared to $31.8 million in the same period last year. 

Earnings per share (“EPS”) for the third quarter was $0.20, compared to ($0.53) for the same quarter last year. Adjusted EPS  from continuing operations for the third quarter was $0.53 compared to Adjusted EPS of $0.37 in the same quarter last year. 

Adjusted EBITDA from continuing operations increased $11.2 million, to $105.7 million, compared to the same quarter last year. Adjusted EBITDA Margin from continuing operations increased 150 basis points to 9.8%, as positive price/cost and productivity improvements were partially offset by lower volume/mix.

On a segment basis for the third quarter of 2023, compared to the same period last year:

• North America – Net revenue decreased ($44.8) million, or (5.4%), to $790.3 million, driven by a (5%) decline in Core Revenue which was due to lower volume/mix (7%) partially offset by increased price realization of 2%. Net income from continuing operations decreased ($40.5) million to $40.5 million. Operating income margin was 8.8% for the quarter ended September 30, 2023 and 9.8% for the prior year’s third quarter. Adjusted EBITDA from continuing operations decreased ($5.3) million to $100.0 million, while Adjusted EBITDA Margin from continuing operations was unchanged at 12.6%.
• Europe – Net revenue decreased ($18.2) million, or (6.0%), to $286.7 million, due to an (11%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (17%) partially offset by higher price realization of 6%. Net income from continuing operations increased $64.4 million to $10.7 million. Operating income margin was 6.0% for the quarter ended September 30, 2023 and (18.4%) for the prior year’s third quarter. Adjusted EBITDA from continuing operations increased $6.4 million to $24.5 million, while Adjusted EBITDA Margin from continuing operations increased by 260 basis points to 8.5%.

Cash Flow⁽¹⁾

Net cash flow provided by operations was $273.0 million during the first nine months of 2023, a $346.4 million improvement compared to net cash flow used in operations of ($73.4) million during the same period a year ago. The primary driver to the increased operating cash flow was a $374.7 million improvement in cash flow from working capital. Net working capital generated $55.0 million of cash flow in the first nine months of 2023 compared to a use of cash of ($319.7) million in the prior year period.

Capital expenditures in the first nine months of 2023 increased by $22.9 million to $80.4 million, up from $57.5 million in the first nine months of 2022.

Free Cash Flow provided in the first nine months of 2023 was $192.6 million, compared to Free Cash Flow used in the first nine months of 2022 of ($130.9) million. This $323.5 million improvement is primarily due to higher net cash flow from operations.

(1) Cash flow includes the Australasia segment through the divestiture date of July 2, 2023.

Updated Full Year 2023 Guidance

JELD-WEN is raising its guidance to reflect the solid third quarter performance.

The Company now expects 2023 net revenue of $4.25 to $4.35 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 6% 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 $365 to $375 million driven by solid price/cost results and ongoing cost reductions partially offset by lower year-over-year volumes and a reduction in other income.

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, ongoing global conflicts, new COVID-19 lockdowns or restrictions, disruptions in global supply chains, and 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.

For the full third quarter results, click here.

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.

Contact:

James Armstrong – Vice President, Investor Relations – jarmstrong@jeldwen.com – (704) 378-5731

Source: JELD-WEN Holding, Inc.