Highlights:
- Net revenues for the fourth quarter increased 0.3% on five fewer shipping days, bringing the full year total increase in net revenues to 2.6%
-
Net loss for the fourth quarter amounted to
$93.7 million , impacted by non-cash tax charges and expenses related to the December debt refinancing -
Diluted earnings (loss) per share ("EPS") for the fourth quarter was a
loss of
$(0.89) and adjusted EPS amounted to$0.26 -
Adjusted EBITDA for the fourth quarter amounted to
$103.1 million , bringing the full year total adjusted EBITDA to$437.6 million , an increase of 11.2% over the prior year -
Full year 2017 cash flow from operations improved
$64.1 million , or 31.8%, over the prior year and free cash flow improved$80.6 million , or 66.0%, over the prior year - Previously announced acquisition of Domoferm closed on February 19, 2018
-
Outlook for 2018 includes net revenue growth of 8.0% to 11.0% and
adjusted EBITDA of
$500 million to$530 million
“JELD-WEN completed 2017 by delivering another consecutive quarter of earnings growth and margin improvement. Strong execution and margin improvement in most of our portfolio was offset by continued operational headwinds in specific product lines. Based on our continued progress with JEM in the fourth quarter, I have confidence we are on the right path towards consistent future execution and expect to see sequential improvement throughout 2018,” said Mark Beck, president and chief executive officer. “Our recent acquisitions continue to perform ahead of plan. We remain enthusiastic about our pipeline and our ability to create value through strategic M&A."
Fourth Quarter 2017 Results
Net revenues for the three months ended December 31, 2017 increased
Net loss was
EPS for the fourth quarter was a loss of
Adjusted EBITDA increased
On a segment basis for the fourth quarter of 2017, compared to the same period last year:
North America - Net revenues decreased$18.9 million , or (3.3)%, to$550.3 million , due to a decrease in core revenues of 7%, partially offset by a 4% contribution from recent acquisitions. The decrease in core revenues was primarily due to the volume impact of five fewer shipping days in the quarter and the impact of the business line rationalization inFlorida . Adjusted EBITDA decreased$4.5 million , or 6.9%, to$61.1 million . Adjusted EBITDA margin declined by 40 basis points to 11.1%. Margins declined primarily due to higher freight costs and operating inefficiencies in ourNorth America windows product line.Europe - Net revenues increased$19.9 million , or 7.8%, to$276.4 million , primarily due to a 7% favorable impact from foreign exchange and 3% from the contribution of recent acquisitions, offset by a 2% decrease in core revenues. The decrease in core revenues was primarily due to the volume impact of reduced shipping days. Adjusted EBITDA increased$3.1 million , or 9.7%, to$35.3 million . Adjusted EBITDA margin increased by 30 basis points to 12.8%.Australasia - Net revenues increased$1.9 million , or 1.3%, to$149.2 million , primarily due to the contribution from recent acquisitions of 4% and the favorable impact of foreign exchange of 2%, offset by a decrease in core revenues of 5%. The decrease in core revenues was primarily due to the volume impact of reduced shipping days. Adjusted EBITDA increased$2.7 million , or 14.6%, to$21.2 million . Adjusted EBITDA margin expanded by 160 basis points to 14.2%.
Full Year 2017 Results
Net revenues for the twelve months ended December 31, 2017 increased
Net income decreased
EPS was
Adjusted EBITDA increased
Balance Sheet and Cash Flow
Cash and cash equivalents as of December 31, 2017 were
Cash flow from operations improved
Domoferm Acquisition
On February 19, 2018, the company completed its acquisition of the
Domoferm Group of companies (“Domoferm”) from holding company Domoferm
International GmbH, which was previously announced on October 11, 2017.
Domoferm is a leading European provider of steel doors, steel door
frames, and fire doors for commercial and residential markets. Domoferm
is based in Gänserndorf,
Annual Outlook for 2018
For full year 2018 compared to full year 2017, the company expects net
revenue growth of 8.0% to 11.0%. The outlook for net revenue growth
assumes core revenue growth of approximately 3%, based on expectations
for favorable demand drivers in the
The company's outlook for 2018 adjusted EBITDA is
Capital expenditures are expected to be in the range of
“Looking forward into 2018, we are well positioned for core revenue growth, supported by constructive end market demand and our continued investments in new products and innovation," stated Beck. "We are confident that our JEM initiatives will continue to drive self-help margin improvement. We will also remain disciplined as we use our healthy balance sheet to continue executing on our pipeline of M&A opportunities."
Adjustments to Previously Reported Financial Information
During the year, we identified errors related to the tax treatment of
our share-based compensation expense and the inter-quarter allocation of
a tax benefit associated with the release of a valuation allowance in a
foreign jurisdiction reported for the year ended December 31, 2016. The
amounts are not material to the periods impacted, and we have elected to
revise our previously issued consolidated financial statements in our
upcoming filings to correct the prior periods. In addition to the tax
corrections, we also revised the financial statements for other
accumulated misstatements impacting the period. The cumulative impact of
the corrections for the three months ended December 31, 2016 was an
increase in cost of sales of
Conference Call Information
JELD-WEN management will host a conference call today, February 21, 2018, at 8 a.m. EST, to discuss the company’s financial results. The conference call can be accessed by dialing (877) 407-9208 (domestic) or (201) 493-6784 (international). A telephonic replay will be available approximately two hours after the call by dialing (844) 512-2921, or for international callers, (412) 317-6671. The passcode for the replay is 13675654. The replay will be available until 11:59 p.m. EST on March 8, 2018.
Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the company’s website at http://investors.jeld-wen.com. The online replay will be available for 30 days on the same website immediately following the call. A slide presentation highlighting the company’s results will also be available on the Investor Relations section of the company’s website.
To learn more about JELD-WEN, please visit the company’s website at http://investors.jeld-wen.com.
About JELD-WEN
JELD-WEN, founded in 1960, is one of the world’s largest door and window
manufacturers, operating over 120 manufacturing facilities in 19
countries located primarily in
Forward-Looking Statements
This press release contains certain “forward-looking statements” regarding business strategies, market potential, future financial performance, the potential of our categories and brands, our outlook for 2018, and our expectations, beliefs, plans, objectives, prospects, assumptions, or other future events. Forward-looking statements are generally identified by our use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “seek”, or “should”, or the negative thereof or other variations thereon or comparable terminology. 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, expectations, assumptions, estimates, and projections of our management. Although we believe that these statements are based on reasonable expectations, assumptions, estimates and projections, they are only predictions and involve known and unknown risks, many of which are beyond our control that could cause actual outcomes and results to be materially different from those indicated in such statements.
Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including the factors discussed in our Annual Reports on Form 10-K, and our Quarterly Reports on Form 10-Q, both filed with the Securities and Exchange Commission.
The assumptions underlying the guidance provided for 2018 include the achievement of anticipated improvements in end markets, competitive position, and product portfolio; stable macroeconomic factors; no changes in foreign currency exchange and tax rates; favorable interest expense due to the recent debt reduction; and our future business plans. The forward-looking statements included in this release are made as of the date hereof, and except as required by law, 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 release.
Non-GAAP Financial Information
This press release presents certain “non-GAAP” financial measures. The
components of these non-GAAP measures are computed by using amounts that
are determined in accordance with accounting principles generally
accepted in
We use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, 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 and Adjusted EBITDA margin are helpful in highlighting trends because they exclude the results of decisions that are 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 and Adjusted EBITDA margin to measure our financial performance and also to report our results to our board of directors. Further, our executive incentive compensation is based in part on Adjusted EBITDA. In addition, we use Adjusted EBITDA as calculated herein for purposes of calculating compliance with our debt covenants in certain of our debt facilities. Adjusted EBITDA 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 as net income (loss), eliminating the impact of the following items: loss from discontinued operations, net of tax; (gain) loss on sale of discontinued operations, net of tax; equity (earnings) loss of non-consolidated entities; income tax; depreciation and amortization; interest expense, net; impairment and restructuring charges; (gain) loss on sale of property and equipment; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; other non-cash items; non-recurring, extraordinary items; other items; and costs related to debt restructuring, debt refinancing, and the Onex investment. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenues.
We present free cash flow because we believe it assists investors and analysts in determining the quality of our earnings. We also use free cash flow to measure our financial performance and to report to our board of directors. In addition, our executive incentive compensation is based in part on free cash flow. We define free cash flow as cash flow from operations less capital expenditures (including purchases of intangible assets). Free cash flow should not be considered as an alternative to cash flows from operations as a liquidity measure.
Adjusted net income represents net income adjusted for the after-tax impact of i) non-cash foreign currency (gains) losses, ii) impairment and restructuring charges, and iii) other non-recurring expenses associated with certain matters such as our initial public offering, secondary offering, mergers, and litigation. Adjusted EPS represents net income per diluted share adjusted to exclude the estimated per share impact of the same specifically identified items used to calculate adjusted net income as described above. All such items are tax-effected at our estimated annual effective tax rate.
Other companies may compute these measures differently. No non-GAAP metric should be considered as an alternative to any other measure derived in accordance with GAAP.
Due to rounding, numbers presented throughout this document may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures.
JELD-WEN Holding, Inc. | ||||||||||||||
| Three Months Ended | ||||||||||||||
December 31, | December 31, | % Variance | ||||||||||||
| Net revenues | $ | 976.0 | $ | 973.2 | 0.3 | % | ||||||||
| Cost of sales | 770.3 | 764.2 | 0.8 | % | ||||||||||
| Gross margin | 205.7 | 209.0 | (1.6 | )% | ||||||||||
| Selling, general and administrative | 151.3 | 173.1 | (12.6 | )% | ||||||||||
| Impairment and restructuring charges | 9.0 | 4.8 | 88.2 | % | ||||||||||
| Operating income | 45.3 | 31.0 | 46.0 | % | ||||||||||
| Interest expense, net | 17.4 | 23.9 | (27.1 | )% | ||||||||||
| Loss on debt extinguishment | 23.3 | — | 100.0 | % | ||||||||||
| Other income | (6.2 | ) | (3.9 | ) | 61.4 | % | ||||||||
| Income before taxes, equity earnings and discontinued operations | 10.9 | 11.0 | (1.3 | )% | ||||||||||
| Income tax expense (benefit) | 105.6 | (246.3 | ) | (142.9 | )% | |||||||||
| (Loss) income from continuing operations, net of tax | (94.7 | ) | 257.3 | (136.8 | )% | |||||||||
| Equity earnings of non-consolidated entities | 1.0 | 1.3 | (24.7 | )% | ||||||||||
| Loss from discontinued operations, net of tax | — | (0.5 | ) | NM | ||||||||||
| Net (loss) income | $ | (93.7 | ) | $ | 258.2 | (136.3 | )% | |||||||
| Other financial data: | ||||||||||||||
| Adjusted EBITDA(1) | $ | 103.1 | $ | 101.8 | 1.3 | % | ||||||||
| Adjusted EBITDA Margin | 10.6 | % | 10.5 | % | ||||||||||
(1) | Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see above under the heading “Non-GAAP Financial Information”. | |
JELD-WEN Holding, Inc. | ||||||||||||||
| Twelve Months Ended | ||||||||||||||
December 31, | December 31, | % Variance | ||||||||||||
| Net revenues | $ | 3,763.9 | $ | 3,666.8 | 2.6 | % | ||||||||
| Cost of sales | 2,915.7 | 2,892.2 | 0.8 | % | ||||||||||
| Gross margin | 848.2 | 774.6 | 9.5 | % | ||||||||||
| Selling, general and administrative | 585.1 | 565.6 | 3.4 | % | ||||||||||
| Impairment and restructuring charges | 13.1 | 13.8 | (5.7 | )% | ||||||||||
| Operating income | 250.1 | 195.1 | 28.2 | % | ||||||||||
| Interest expense, net | 79.0 | 77.6 | 1.9 | % | ||||||||||
| Loss on debt extinguishment | 23.3 | — | 100.0 | % | ||||||||||
| Other expense (income) | 2.0 | (12.8 | ) | NM | ||||||||||
| Income before taxes, equity earnings and discontinued operations | 145.8 | 130.3 | 11.8 | % | ||||||||||
| Income tax expense (benefit) | 138.6 | (246.4 | ) | NM | ||||||||||
| Income from continuing operations, net of tax | 7.2 | 376.7 | (98.1 | )% | ||||||||||
| Equity earnings of non-consolidated entities | 3.6 | 3.8 | (4.0 | )% | ||||||||||
| Loss from discontinued operations, net of tax | — | (3.3 | ) | NM | ||||||||||
| Net income | $ | 10.8 | $ | 377.2 | (97.1 | )% | ||||||||
| Other financial data: | ||||||||||||||
| Adjusted EBITDA(1) | $ | 437.6 | $ | 393.7 | 11.2 | % | ||||||||
| Adjusted EBITDA Margin | 11.6 | % | 10.7 | % | ||||||||||
(1) | Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see above under the heading“Non-GAAP Financial Information”. | |
JELD-WEN Holding, Inc. | ||||||||||
December 31, | December 31, | |||||||||
| Consolidated balance sheet data: | ||||||||||
| Cash, cash equivalents | $ | 220.2 | $ | 102.7 | ||||||
| Accounts receivable, net | 453.3 | 407.2 | ||||||||
| Inventories | 405.4 | 334.6 | ||||||||
| Total current assets | 1,145.2 | 877.5 | ||||||||
| Total assets | 2,862.9 | 2,536.0 | ||||||||
| Accounts payable | 259.9 | 188.9 | ||||||||
| Total current liabilities | 577.5 | 513.2 | ||||||||
| Total debt | 1,273.7 | 1,620.0 | ||||||||
| Redeemable convertible preferred stock | — | 151.0 | ||||||||
| Total shareholders’ equity | 792.0 | 61.6 | ||||||||
| Twelve Months Ended | ||||||||||
| Statement of cash flows data: | December 31, | December 31, | ||||||||
| Net cash flow provided by (used in): | ||||||||||
| Operating activities | $ | 265.8 | $ | 201.7 | ||||||
| Investing activities | (189.8 | ) | (156.8 | ) | ||||||
| Financing activities | 64.1 | (52.0 | ) | |||||||
JELD-WEN Holding, Inc. | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
| Net (loss) income | $ | (93.7 | ) | $ | 258.2 | $ | 10.8 | $ | 377.2 | |||||||||||
| Loss from discontinued operations, net of tax | — | 0.5 | — | 3.3 | ||||||||||||||||
| Equity earnings of non-consolidated entities | (1.0 | ) | (1.3 | ) | (3.6 | ) | (3.8 | ) | ||||||||||||
| Income tax expense (benefit) | 105.6 | (246.3 | ) | 138.6 | (246.4 | ) | ||||||||||||||
| Depreciation and intangible amortization | 30.7 | 30.5 | 111.3 | 108.0 | ||||||||||||||||
| Interest expense, net(1) | 17.4 | 23.9 | 79.0 | 77.6 | ||||||||||||||||
| Impairment and restructuring charges(2) | 9.0 | 6.2 | 13.1 | 18.4 | ||||||||||||||||
| Gain on sale of property and equipment | (0.1 | ) | — | (0.3 | ) | (3.3 | ) | |||||||||||||
| Stock-based compensation expense | 3.9 | 6.7 | 19.8 | 22.5 | ||||||||||||||||
| Non-cash foreign exchange transaction/translation (income) loss | (7.5 | ) | (1.4 | ) | (2.2 | ) | 5.7 | |||||||||||||
| Other non-cash items(3) | — | (0.2 | ) | 0.5 | 2.8 | |||||||||||||||
| Other items(4) | 15.4 | 24.1 | 47.0 | 30.6 | ||||||||||||||||
| Costs relating to debt restructuring and refinancing | 23.4 | 1.1 | 23.7 | 1.1 | ||||||||||||||||
| Adjusted EBITDA(5) | $ | 103.1 | $ | 101.8 | $ | 437.6 | $ | 393.7 | ||||||||||||
| (1) | For the twelve months ended December 31, 2017, interest expense
includes the write-off of | |
| (2) | Impairment and restructuring charges consist of (i) impairment
and restructuring charges that are included in our consolidated
statements of operations plus (ii) additional charges of (1) | |
| (3) | Other non-cash items include among other things, (i) charges of
| |
| (4) | Other items not core to business activity include: (i) in the
three months ended December 31, 2017, (1) | |
| (5) | Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see above under the heading “Non-GAAP Financial Information”. | |
Three Months | Twelve Months | |||||||||
(amounts in millions, except share and per share data) | December 31, | December 31, | ||||||||
| Net (loss) income attributable to common shareholders | $ | (93.7 | ) | $ | 0.3 | |||||
| Undeclared preferred stock dividends related to pre-IPO share capitalization | — | 10.5 | ||||||||
| Legal and professional fees | 6.7 | 24.4 | ||||||||
| Non-cash foreign exchange transactions/translation (income) loss | (5.4 | ) | (1.6 | ) | ||||||
| Impairment and restructuring charges | 6.5 | 9.4 | ||||||||
| Write-off of OID and debt issuance costs | — | 4.4 | ||||||||
| Loss on extinguishment of debt | 16.7 | 16.7 | ||||||||
|
Impact of | 97.7 | 97.7 | ||||||||
| Adjusted net income | $ | 28.5 | $ | 161.8 | ||||||
| Diluted net (loss) income per share | $ | (0.89 | ) | $ | — | |||||
| Undeclared preferred stock dividends related to pre-IPO share capitalization | — | 0.10 | ||||||||
| Impact of additional dilutive shares on the reported dilutive loss per share | 0.03 | (0.01 | ) | |||||||
| Legal and professional fees | 0.06 | 0.22 | ||||||||
| Non-cash foreign exchange transactions/translation (income) loss | (0.05 | ) | (0.01 | ) | ||||||
| Impairment and restructuring charges | 0.06 | 0.09 | ||||||||
| Write-off of OID and debt issuance costs | — | 0.04 | ||||||||
| Loss on extinguishment of debt | 0.15 | 0.15 | ||||||||
|
Impact of | 0.90 | 0.90 | ||||||||
| Adjusted net income per share | $ | 0.26 | $ | 1.48 | ||||||
Diluted shares used in adjusted EPS calculation represent the
fully dilutive shares for the | 109,209,218 | 109,209,218 | ||||||||
NOTE:Where applicable, adjustments to net income (loss) and net income (loss) per share are tax-effected at 28.0% for the three and twelve months ended December 31, 2017.
| Twelve Months Ended | |||||||||
December 31, | December 31, | ||||||||
| Net cash provided by operating activities | $ | 265.8 | $ | 201.7 | |||||
| Less capital expenditures | 63.0 | 79.5 | |||||||
| Free cash flow | $ | 202.7 | $ | 122.2 | |||||
JELD-WEN Holding, Inc. | ||||||||||||||
| Three Months Ended | ||||||||||||||
December 31, | December 31, | |||||||||||||
| Net revenues from external customers | % Variance | |||||||||||||
| $ | 550.3 | $ | 569.3 | (3.3 | )% | |||||||||
| 276.4 | 256.5 | 7.8 | % | |||||||||||
| 149.2 | 147.4 | 1.3 | % | |||||||||||
| Total Consolidated | $ | 976.0 | $ | 973.2 | 0.3 | % | ||||||||
| Adjusted EBITDA(1) | ||||||||||||||
| $ | 61.1 | $ | 65.6 | (6.9 | )% | |||||||||
| 35.3 | 32.2 | 9.7 | % | |||||||||||
| 21.2 | 18.5 | 14.6 | % | |||||||||||
| Corporate and unallocated costs | (14.5 | ) | (14.5 | ) | (0.4 | )% | ||||||||
| Total Consolidated | $ | 103.1 | $ | 101.8 | 1.3 | % | ||||||||
| (1) | Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see above under the heading “Non-GAAP Financial Information”. | |
JELD-WEN Holding, Inc. | ||||||||||||||
| Twelve Months Ended | ||||||||||||||
December 31, | December 31, | |||||||||||||
| Net revenues from external customers | % Variance | |||||||||||||
| $ | 2,158.1 | $ | 2,149.2 | 0.4 | % | |||||||||
| 1,042.8 | 1,008.7 | 3.4 | % | |||||||||||
| 563.1 | 508.9 | 10.6 | % | |||||||||||
| Total Consolidated | $ | 3,763.9 | $ | 3,666.8 | 2.6 | % | ||||||||
| Adjusted EBITDA(1) | ||||||||||||||
| $ | 273.6 | $ | 251.8 | 8.6 | % | |||||||||
| 132.9 | 122.6 | 8.4 | % | |||||||||||
| 74.7 | 59.5 | 25.5 | % | |||||||||||
| Corporate and unallocated costs | (43.6 | ) | (40.2 | ) | 8.4 | % | ||||||||
| Total Consolidated | $ | 437.6 | $ | 393.7 | 11.2 | % | ||||||||
| (1) | Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see above under the heading “Non-GAAP Financial Information”. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20180221005311/en/
Source: JELD-WEN Holding, Inc.