Comparability is to the same period in the prior year, unless otherwise noted. References to "core" financial results exclude the impact of foreign exchange and acquisitions completed in the last twelve months.
Highlights
- Net revenue increased 6.8% for the second quarter driven by 11% core revenue growth
- Eighth consecutive quarter of core revenue growth; core revenue grew in each segment, led by
North America segment - Realized 12% pricing to mitigate significant cost inflation
- Adjusted EBITDA decreased 15.1% in the second quarter to
$125.8 million - Repurchased 5.2 million shares in the first six months or approximately 6% of total shares outstanding at year-end 2021
- The board of directors approved new
$200 million share repurchase authorization
"Significant cost inflation and softening retail demand in
"Even with the impact of these aggressive cost savings decisions, we have adjusted our full year expectations for revenue growth and adjusted EBITDA, as market headwinds are likely to persist through year-end," continued Michel. "We are confident in our strategy to deliver profitable growth and we remain focused on operational excellence, world-class innovation and exceptional customer service that will create long-term value for our shareholders."
Second Quarter 2022 Results
Net revenue for the three months ended June 25, 2022 increased
Net income was
EPS for the second quarter was
Adjusted EBITDA decreased
On a segment basis for the second quarter of 2022, compared to the same period last year:
North America - Net revenue increased$99.0 million , or 13.4%, to$839.1 million , due to a 14% increase in core revenue. Core revenue increased due to price (+14%). Adjusted EBITDA margin was 11.1%.Europe - Net revenue decreased$9.7 million , or 2.8%, to$340.0 million , due to a 12% adverse impact from foreign exchange, partially offset by a 9% increase in core revenue. Core revenue increased due to price (+11%), partially offset by lower volume/mix (2%). Adjusted EBITDA margin was 5.9%.Australasia - Net revenue decreased$4.1 million , or 2.6%, to$151.8 million , due to a 7% adverse impact from foreign exchange, partially offset by a 4% increase in core revenue. Core revenue increased due to price (+8%), partially offset by lower volume/mix (4%). Adjusted EBITDA margin was 10.5%.
Cash Flow and Balance Sheet
Net cash flow used in operations was
The company repurchased 3,430,006 shares in the second quarter for
Total liquidity, including cash and cash equivalents and undrawn committed credit facilities, was
Revised 2022 Outlook
- Core revenue growth remains at approximately 10%, but due to foreign exchange translation headwinds, revenue growth is revised to a range of 4% to 6% from a previous range of 7% to 10%.
- Adjusted EBITDA is lowered to a range of
$430 million to$450 million from previous outlook of$520 million to$565 million . - Full year 2022 capital expenditures are expected to be within a range of
$90 million to$110 million , compared to the previous outlook of$130 million to$150 million .
Share Repurchase Authorization
On July 28, 2022, the board of directors approved a new share repurchase authorization to purchase up to
Conference Call Information
JELD-WEN management will host a conference call on August 1, 2022, at 8 a.m. ET, to discuss the company's financial results. Interested investors and other parties can access the call either via webcast by visiting the Investor Relations section of the company's website at http://investors.jeld-wen.com, or by dialing (888) 330-2446 and using ID 1285715. A slide presentation highlighting the company's results will also be available on the Investor Relations section of the company's website.
For those unable to listen to the live event, a webcast replay will be available approximately two hours following completion of the call. To learn more about JELD-WEN, please visit the company's website at http://investors.jeld-wen.com.
About JELD-WEN
Headquartered in
Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements by our CEO and statements regarding our business strategies and ability to execute on our plans, market potential, future financial performance, customer demand, the potential of our categories, brands and innovations, the impact of our footprint rationalization and modernization program, the impact of acquisitions and divestitures on our business and our ability to maximize value and integrate operations, our pipeline of productivity projects, the estimated impact of tax reform on our results, litigation outcomes, and our expectations, beliefs, plans, objectives, prospects, assumptions, or other future events. 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.
The assumptions underlying the guidance provided for 2022 include revenue impact from increased pricing; softening demand; product mix; headwind from foreign exchange; and margin expansion from volume, pricing, and productivity, offset by higher expenses related to material and freight inflation and SG&A expense. Additionally, the outlook does not include the impact of potential acquisitions or divestitures and assumes no new COVID-19 lockdowns or restrictions, which could unfavorably impact our operations, labor availability, and supply chain continuity.
Risks and uncertainties that could cause actual results to differ materially from such statements include risks associated with the impact of the COVID-19 pandemic on the company and our employees, customers, and suppliers, and other factors, including the factors discussed in our Annual Reports on Form 10-K and our other filings with the Securities and Exchange Commission.
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 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), adjusted for the following items: loss from discontinued operations, net of tax; equity earnings of non-consolidated entities; income tax (benefit) expense; depreciation and amortization; interest expense, net; impairment and restructuring charges; gain on previously held shares of equity investment; (gain) loss on sale of property and equipment; share-based compensation expense; non-cash foreign exchange transaction/translation (income) loss; other non-cash items; other items; and costs related to debt restructuring and debt refinancing. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenues.
We present several financial metrics in "core" terms, which exclude the impact of foreign exchange and acquisitions completed in the last twelve months. We use core adjusted EBITDA, which we define as adjusted EBITDA excluding the impact of foreign exchange and acquisitions completed in the last twelve months. We define core revenue as net revenue excluding the impact of foreign exchange and acquisitions completed in the last twelve months. Our use of core margin is defined as core adjusted EBITDA divided by core revenue. These "core" metrics assist management, investors, and analysts in understanding the organic performance of the operations.
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. We also present net debt leverage because it is a key financial metric that is used by management to assess the balance sheet risk of the company. We define net debt leverage as net debt (total principal debt outstanding less unrestricted cash) divided by adjusted EBITDA for the last twelve month period.
Adjusted net income represents net income adjusted for certain items as presented in our reconciliation of non-GAAP, including the after-tax impact of i) non-cash foreign currency (gains) losses, ii) impairment and restructuring charges, iii) one-time non-cash gains, and iv) other non-recurring expenses associated with mergers and acquisitions 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. Where applicable, such items are tax-effected at our estimated annual adjusted effective tax rate.
Other companies may compute these measures differently. Non-GAAP metrics should not be considered as alternatives to any other measures derived in accordance with GAAP.
Due to rounding, numbers presented throughout this release may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures.
JELD-WEN Holding, Inc. | ||||||
Three Months Ended | ||||||
June 25, 2022 | June 26, 2021 | % Variance | ||||
Net revenues | $ 1,331.0 | $ 1,245.8 | 6.8 % | |||
Cost of sales | 1,084.8 | 953.9 | 13.7 % | |||
Gross margin | 246.2 | 291.9 | (15.7) % | |||
Selling, general and administrative | 180.5 | 188.7 | (4.3) % | |||
Impairment and restructuring charges | 5.3 | 1.1 | 362.5 % | |||
Operating income | 60.4 | 102.1 | (40.8) % | |||
Interest expense, net | 20.2 | 18.9 | 7.2 % | |||
Other (income) expense | (20.9) | 0.2 | (13,841.4) % | |||
Income before taxes | 61.0 | 83.1 | (26.5) % | |||
Income tax expense | 15.2 | 22.4 | (31.9) % | |||
Net income | $ 45.8 | $ 60.7 | (24.5) % | |||
Other financial data: | ||||||
Adjusted EBITDA(1) | $ 125.8 | $ 148.2 | (15.1) % | |||
Adjusted EBITDA Margin(1) | 9.5 % | 11.9 % | ||||
(1) | Adjusted EBITDA and Adjusted EBITDA margin are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA and Adjusted EBITDA Margin, see above under the heading "Non-GAAP Financial Information." |
Six Months Ended | ||||||
June 25, 2022 | June 26, 2021 | % Variance | ||||
Net revenues | $ 2,502.0 | $ 2,338.2 | 7.0 % | |||
Cost of sales | 2,052.5 | 1,810.3 | 13.4 % | |||
Gross margin | 449.5 | 527.9 | (14.9) % | |||
Selling, general and administrative | 373.5 | 380.2 | (1.8) % | |||
Impairment and restructuring charges | 5.3 | 2.1 | 155.6 % | |||
Operating income | 70.7 | 145.5 | (51.4) % | |||
Interest expense, net | 38.6 | 37.3 | 3.4 % | |||
Other income | (28.2) | (10.7) | 164.0 % | |||
Income before taxes | 60.3 | 118.9 | (49.3) % | |||
Income tax expense | 15.0 | 32.7 | (54.1) % | |||
Net income | $ 45.3 | $ 86.2 | (47.4) % | |||
Other financial data: | ||||||
Adjusted EBITDA(1) | $ 206.0 | $ 246.2 | (16.3) % | |||
Adjusted EBITDA Margin(1) | 8.2 % | 10.5 % | ||||
(1) | Adjusted EBITDA and Adjusted EBITDA margin are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA and Adjusted EBITDA Margin, see above under the heading "Non-GAAP Financial Information." |
JELD-WEN Holding, Inc. | ||||
June 25, 2022 | December 31, 2021 | |||
Consolidated balance sheet data: | ||||
Cash and cash equivalents | $ 272.5 | $ 395.6 | ||
Accounts receivable, net | 698.9 | 552.0 | ||
Inventories | 723.3 | 616.0 | ||
Total current assets | 1,909.0 | 1,739.9 | ||
Total assets | 3,815.3 | 3,738.7 | ||
Accounts payable | 420.9 | 418.8 | ||
Total current liabilities | 893.3 | 888.9 | ||
Total debt | 1,898.7 | 1,706.3 | ||
Total shareholders' equity | 736.5 | 842.2 | ||
Six Months Ended | ||||
Consolidated statement of cash flows data: | June 25, 2022 | June 26, 2021 | ||
Net cash flow provided by (used in): | ||||
Operating activities | $ (165.7) | $ 40.7 | ||
Investing activities | (21.4) | (41.5) | ||
Financing activities | 81.1 | (110.3) | ||
JELD-WEN Holding, Inc. | |||||||
Three Months Ended | Six Months Ended | ||||||
(amounts in millions) | June 25, 2022 | June 26, 2021 | June 25, 2022 | June 26, 2021 | |||
Net income | $ 45.8 | $ 60.7 | $ 45.3 | $ 86.2 | |||
Income tax expense | 15.2 | 22.4 | 15.0 | 32.7 | |||
Depreciation and amortization | 32.5 | 35.5 | 65.1 | 69.7 | |||
Interest expense, net | 20.2 | 18.9 | 38.6 | 37.3 | |||
Impairment and restructuring charges (1) | 5.3 | 1.4 | 5.3 | 2.3 | |||
Loss on sale of property and equipment | 0.1 | 1.3 | 0.2 | 0.4 | |||
Share-based compensation expense | 1.6 | 7.5 | 11.3 | 14.4 | |||
Non-cash foreign exchange transaction/translation loss (income) | 0.1 | (2.0) | 6.3 | (13.5) | |||
Other items (2) | 3.9 | 2.6 | 18.0 | 16.6 | |||
Other non-cash items (3) | 1.0 | — | 1.0 | — | |||
Adjusted EBITDA | $ 125.8 | $ 148.2 | $ 206.0 | $ 246.2 | |||
(1) | Impairment and restructuring charges consist of (i) impairment and restructuring charges that are included in our accompanying unaudited consolidated statements of operations plus (ii) additional charges relating to inventory and/or manufacturing of our products that are included in cost of sales in our accompanying unaudited consolidated statements of operations were |
(2) | Other non-recurring items not core to ongoing business activity include: (i) in the three months ended June 25, 2022 (1) |
(3) | Other non-cash items include |
Three Months Ended | Six Months Ended | |||||||
(amounts in millions, except share and per share data) | June 25, 2022 | June 26, 2021 | June 25, 2022 | June 26, 2021 | ||||
Net income | $ 45.8 | $ 60.7 | $ 45.3 | $ 86.2 | ||||
Legal costs and professional expenses | 3.1 | 1.5 | 8.1 | 15.3 | ||||
Non-cash foreign exchange transactions/translation loss | 0.1 | (2.0) | 6.3 | (13.5) | ||||
Impairment and restructuring charges | 5.3 | 1.4 | 5.3 | 2.3 | ||||
Facility closure, consolidation, and startup costs | 5.2 | 0.7 | 5.5 | 0.8 | ||||
Acquisition and integration charges | — | 0.2 | — | 0.2 | ||||
Adjusted tax impact(1) | (9.3) | (2.2) | (12.5) | (3.1) | ||||
Adjusted net income | $ 50.2 | $ 60.3 | $ 58.0 | $ 88.2 | ||||
Diluted net income per share | $ 0.52 | $ 0.60 | $ 0.51 | $ 0.84 | ||||
Legal costs and professional expenses | 0.04 | 0.02 | 0.09 | 0.15 | ||||
Non-cash foreign exchange transactions/translation loss (income) | — | (0.02) | 0.07 | (0.13) | ||||
Impairment and restructuring charges | 0.06 | 0.01 | 0.06 | 0.02 | ||||
Facility closure, consolidation, and startup costs | 0.06 | 0.01 | 0.06 | 0.01 | ||||
Adjusted tax impact(1) | (0.11) | (0.03) | (0.14) | (0.03) | ||||
Adjusted net income per share | $ 0.57 | $ 0.59 | $ 0.65 | $ 0.86 | ||||
Diluted shares used in adjusted EPS calculation represent | 87,967,049 | 101,670,624 | 89,557,956 | 102,141,889 | ||||
(1) | Except as otherwise noted, adjustments to net income and net income per share are tax-effected at an adjusted tax rate of 25.3% for the three and six months ended June 25, 2022 and June 26, 2021, respectively. |
Six Months Ended | ||||
June 25, 2022 | June 26, 2021 | |||
Net cash (used in) provided by operating activities | $ (165.7) | $ 40.7 | ||
Less capital expenditures | 34.8 | 44.7 | ||
Free cash flow (1) | $ (200.5) | $ (4.0) | ||
(1) | Free cash flow is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of free cash flow, see above under the heading "Non-GAAP Financial Information." |
June 25, 2022 | December 31, 2021 | |||
Total debt | $ 1,898.7 | $ 1,706.3 | ||
Less cash and cash equivalents | 272.5 | 395.6 | ||
Net debt | $ 1,626.2 | $ 1,310.7 | ||
Divided by trailing twelve months adjusted EBITDA | 425.0 | 465.1 | ||
Net debt leverage(1) | 3.8x | 2.8x | ||
(1) | Net debt leverage is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of net debt leverage, see above under the heading "Non-GAAP Financial Information." |
JELD-WEN Holding, Inc. | ||||||
Three Months Ended | ||||||
June 25, 2022 | June 26, 2021 | |||||
Net revenues from external customers | % Variance | |||||
$ 839.1 | $ 740.1 | 13.4 % | ||||
340.0 | 349.7 | (2.8) % | ||||
151.8 | 155.9 | (2.6) % | ||||
Total Consolidated | $ 1,331.0 | $ 1,245.8 | 6.8 % | |||
Adjusted EBITDA(1) | ||||||
$ 93.5 | $ 115.3 | (18.9) % | ||||
20.0 | 39.8 | (49.6) % | ||||
15.9 | 18.0 | (11.8) % | ||||
Corporate and unallocated costs | (3.6) | (24.9) | (85.6) % | |||
Total Consolidated | $ 125.8 | $ 148.2 | (15.1) % | |||
(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." |
Six Months Ended | ||||||
June 25, 2022 | June 26, 2021 | |||||
Net revenues from external customers | % Variance | |||||
$ 1,561.5 | $ 1,379.7 | 13.2 % | ||||
663.3 | 670.3 | (1.0) % | ||||
277.2 | 288.2 | (3.8) % | ||||
Total Consolidated | $ 2,502.0 | $ 2,338.2 | 7.0 % | |||
Adjusted EBITDA(1) | ||||||
$ 160.6 | $ 195.1 | (17.7) % | ||||
34.7 | 68.6 | (49.3) % | ||||
26.2 | 31.2 | (15.9) % | ||||
Corporate and unallocated costs | (15.5) | (48.7) | (68.2) % | |||
Total Consolidated | $ 206.0 | $ 246.2 | (16.3) % | |||
(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." |
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SOURCE JELD-WEN Holding, Inc.