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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cornerstone Building Brands Inc | NYSE:CNR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.66 | 0 | 01:00:00 |
Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), a leading provider of exterior building products, today reported second-quarter 2020 net sales of $1,084.9 million and net income of $26.5 million or 21 cents per diluted share. This compares with net sales of $1,295.5 million and net income of $17.3 million or 14 cents per diluted share in the same quarter last year. Adjusted for the March 2020 acquisition of Kleary Masonry, Inc. first-half 2020 pro forma net sales1 were $2,207.1 million, down 7.9 percent compared with pro forma net sales1 for first-half 2019. The decrease was driven by lower volumes as a result of the COVID-19 pandemic.
Adjusted EBITDA1 for the second quarter of 2020 was $159.1 million or 14.7 percent of net sales, an improvement of 130 basis points from the same pro forma period a year ago. The improvement was due to effective near-term expense management and structural cost reductions partially offset by the impacts from lower demand as a result of the COVID-19 pandemic. For the first-half 2020, pro forma Adjusted EBITDA1 was $257.2 million or 11.7 percent of pro forma net sales1, an improvement of 4 percent or 140 basis points from the same pro forma period a year ago.
"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. As a result of their efforts, we continue to foster a safe work environment while delivering quality products to our customers every day,” said James S. Metcalf, Chairman and Chief Executive Officer.
“Our culture of continuous improvement delivered the fifth consecutive quarter of Adjusted EBITDA margin expansion in all segments. We generated positive cash flow and structurally reduced our operating cost structure during this unprecedented market environment,” Metcalf continued.
“At the same time, we're also pushing forward with our growth strategy that is centered around our differentiated and profitable products and services, securing our leadership position in exterior building products. While it remains unclear how long this pandemic and the related economic challenges will last, I believe in the resiliency of Cornerstone Building Brands and I remain confident that the actions we are taking will make us a stronger Company,” Metcalf concluded.
Segment Results Versus Prior Year
Following are the Company’s results by segment for the second quarter of 2020 and year to date. 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, despite the challenges in end-markets due to the COVID-19 pandemic.
COVID-19 Response and Update
The health and safety of our employees, customers, and communities are our number one priority. We remain flexible and adjust our cost structure as we navigate the uncertainties created by the pandemic. Across all businesses, our teams are in constant communication with customers, along with suppliers and government officials, to maintain business continuity without disruption. The Company operates as an “essential” business, delivering quality products to our customers. We believe Cornerstone Building Brands’ broad and diverse product mix, extensive operating footprint, and resilient business model positions us well to continue to navigate the uncertainty in the current environment and emerge stronger than before.
Balance Sheet and Liquidity
In the second quarter of 2020, the Company generated strong cash flow from operations of $69.1 million compared with $18.8 million for the same period last year, a cash generation improvement of $50.3 million. Capital expenditures were $20.0 million, as the Company remains committed to investing in innovative product offerings and process automation that are expected to generate profitable growth in the future. During the second quarter, we commissioned an automated glass line at the Toledo, Ohio Window’s facility, that doubled operating capacity and improved productivity by 50 percent.
Free cash flow was $49.1 million during the second quarter of 2020 compared with free cash flow usage of $11.2 million during the second quarter of 2019. The improvement was driven by net cash tax benefits from the CARES Act and other COVID-19 related government stimulus programs as well as effective working capital management.
The Company ended the quarter with approximately $483.5 million of unrestricted cash on hand and $145.8 million of excess availability on its asset-based revolving credit facility. Additionally, the net debt leverage ratio1 improved to 5.3x at the end of the second quarter of 2020 compared with 6.1x for the same period last year. We believe our liquidity is sufficient to weather the economic uncertainty related to the ongoing impact of the COVID-19 pandemic while providing the Company flexibility needed to continue executing our growth strategy.
Outlook
Third-Quarter 2020 Guidance
Additional Fiscal Year 2020 Guidance
(1)
Adjusted financial metrics used in this release are non-GAAP measures and refer to the results for 2020 and 2019. Pro forma financial metrics used in this release for results in 2020 and 2019 are also non-GAAP measures and adjust for other items affecting comparability. See reconciliations of GAAP results to adjusted results and pro forma results in the accompanying tables.
(2)
Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of the forecasted range for the third quarter of 2020 is not included in this release. See "Non-GAAP Financial Measures" below.
Conference Call Information
The Company will host a conference call at 9:00 a.m. EDT on Wednesday, August 12 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/8147407. 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 2Q20 Earnings Call
Date:
Wednesday, August 12, 2020
Time:
9:00 a.m. Eastern Daylight Time
Access link:
Visit the Events & Presentations section of the Investors Page at investors.cornerstonebuildingbrands.com or access directly at https://event.on24.com/wcc/r/2403452/DFF10E9EA779D4793B94879DCAA90D0E
Replay dial-in will be available through August 26, 2020
Dial-in number:
855-859-2056
Replay code:
8147407
About Cornerstone Building Brands
Cornerstone Building Brands is a leading manufacturer of exterior building products in North America. Headquartered in Cary, North Carolina, the Company serves residential and commercial customers across new construction and the repair & remodel markets. As the #1 manufacturer of windows, vinyl siding, insulated metal panels, metal roofing and wall systems and metal accessories, Cornerstone Building Brands combines a comprehensive portfolio of products with an expansive national footprint that includes approximately 20,000 employees at manufacturing, distribution and office locations throughout North America. 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 expectations for residential and non-residential end markets and our financial outlook and guidance, including our third quarter 2020 forecasted net sales, gross profit and Adjusted EBITDA, and our fiscal year 2020 forecasted capital spending, cash interest expense, cash tax expense, benefits from primary working capital, cash restructuring costs 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 outbreak of a health epidemic or pandemic, including the coronavirus disease 2019 (“COVID-19”) pandemic; precautions taken due to the recent COVID-19 pandemic that could harm our business; impairment of 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 the Investors; the effect on our common stock price caused by transactions engaged in by the 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, 2019, Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2020 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 third quarter of 2020 is not included in this presentation 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
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net sales
$
1,084,936
$
1,295,457
$
2,198,747
$
2,360,289
Cost of sales
830,205
990,794
1,713,129
1,869,709
Gross profit
254,731
304,663
485,618
490,580
23.5
%
23.5
%
22.1
%
20.8
%
Selling, general and administrative expenses
134,371
158,028
299,325
312,334
Intangible asset amortization
45,240
46,511
90,101
87,974
Restructuring and impairment charges, net
15,411
7,107
29,246
10,538
Strategic development and acquisition related costs
784
12,086
5,641
26,168
Goodwill impairment
—
—
503,171
—
Income (loss) from operations
58,925
80,931
(441,866
)
53,566
Interest income
341
121
679
336
Interest expense
(52,384
)
(58,299
)
(107,219
)
(116,585
)
Foreign exchange gain (loss)
2,025
523
(2,112
)
1,700
Other income (expense), net
660
(397
)
(2
)
(52
)
Income (loss) before income taxes
9,567
22,879
(550,520
)
(61,035
)
Provision (benefit) for income taxes
(17,332
)
5,346
(35,346
)
(18,551
)
(181.2
)
%
23.4
%
6.4
%
30.4
%
Net income (loss)
26,899
17,533
(515,174
)
(42,484
)
Net income allocated to participating securities
(442
)
(270
)
—
—
Net income (loss) applicable to common shares
$
26,457
$
17,263
$
(515,174
)
$
(42,484
)
Income (loss) per common share:
Basic
$
0.21
$
0.14
$
(4.09
)
$
(0.34
)
Diluted
$
0.21
$
0.14
$
(4.09
)
$
(0.34
)
Weighted average number of common shares outstanding:
Basic
125,754
125,516
125,927
125,510
Diluted
125,755
125,516
125,927
125,510
Increase (decrease) in sales
(16.3
)
%
183.4
%
(6.8
)
%
168.7
%
Selling, general and administrative expenses percentage of net sales
12.4
%
12.2
%
13.6
%
13.2
%
CORNERSTONE BUILDING BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 4, 2020
December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
483,497
$
98,386
Restricted cash
6,223
3,921
Accounts receivable, net
522,612
491,740
Inventories, net
402,994
439,194
Income taxes receivable
36,741
48,466
Investments in debt and equity securities, at market
3,531
3,776
Prepaid expenses and other
67,933
78,516
Assets held for sale
2,646
1,750
Total current assets
1,526,177
1,165,749
Property, plant and equipment, net
644,284
652,841
Lease right-of-use assets
300,849
316,155
Goodwill
1,187,788
1,669,594
Intangible assets, net
1,665,591
1,740,700
Deferred income taxes
1,272
7,510
Other assets, net
11,884
11,797
Total assets
$
5,337,845
$
5,564,346
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt
$
25,600
$
25,600
Accounts payable
198,936
205,629
Accrued compensation and benefits
54,590
92,130
Accrued interest
20,126
19,070
Accrued income taxes
501
—
Current portion of lease liabilities
71,294
72,428
Other accrued expenses
222,425
233,687
Total current liabilities
593,472
648,544
Long-term debt
3,578,341
3,156,924
Deferred income taxes
221,078
291,987
Long-term lease liabilities
226,371
243,780
Other long-term liabilities
340,371
287,793
Total long-term liabilities
4,366,161
3,980,484
Common stock
1,252
1,261
Additional paid-in capital
1,249,852
1,248,787
Accumulated deficit
(797,081
)
(281,229
)
Accumulated other comprehensive loss, net
(75,300
)
(32,398
)
Treasury stock, at cost
(511
)
(1,103
)
Total stockholders’ equity
378,212
935,318
Total liabilities and stockholders’ equity
$
5,337,845
$
5,564,346
CORNERSTONE BUILDING BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
July 4, 2020
June 29, 2019
Cash flows from operating activities:
Net loss
$
(515,174
)
$
(42,484
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
140,480
127,476
Non-cash interest expense
4,593
3,954
Share-based compensation expense
8,543
7,479
Non-cash fair value premium on purchased inventory
—
16,249
Goodwill impairment
503,171
—
Asset impairment
3,490
—
Loss (gain) on asset sales, net
169
(277
)
Provision for doubtful accounts
252
(205
)
Deferred income taxes
(48,190
)
(48,515
)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable
(24,844
)
(133,820
)
Inventories
36,872
29,430
Income taxes
12,226
2,245
Prepaid expenses and other
9,782
(706
)
Accounts payable
(7,818
)
15,079
Accrued expenses
(53,834
)
(2,952
)
Other, net
(2,756
)
(2,867
)
Net cash provided by (used in) operating activities
66,962
(29,914
)
Cash flows from investing activities:
Acquisitions, net of cash acquired
(41,841
)
(179,184
)
Capital expenditures
(47,609
)
(57,220
)
Proceeds from sale of property, plant and equipment
114
873
Net cash used in investing activities
(89,336
)
(235,531
)
Cash flows from financing activities:
Proceeds from ABL facility
345,000
270,000
Payments on ABL facility
(30,000
)
(50,000
)
Proceeds from cash flow revolver
115,000
—
Payments on term loan
(12,810
)
(12,810
)
Payments related to tax withholding for share-based compensation
(467
)
(167
)
Purchases of treasury stock
(6,428
)
—
Net cash provided by financing activities
410,295
207,023
Effect of exchange rate changes on cash and cash equivalents
(508
)
2,300
Net increase (decrease) in cash, cash equivalents and restricted cash
387,413
(56,122
)
Cash, cash equivalents and restricted cash at beginning of period
102,307
147,607
Cash, cash equivalents and restricted cash at end of period
$
489,720
$
91,485
CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME (LOSS) PER DILUTED COMMON SHARE AND
NET INCOME (LOSS) COMPARISON
(In thousands, except per share data)
(Unaudited)
Three Months Ended
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net income (loss) per diluted common share, GAAP basis
$
0.21
$
0.14
$
(4.09
)
$
(0.34
)
Restructuring and impairment charges, net
0.12
0.06
0.23
0.08
Strategic development and acquisition related costs
0.01
0.10
0.04
0.21
Non cash loss (gain) on foreign currency transactions
(0.02
)
—
0.02
(0.01
)
Non cash charge of purchase price allocated to inventories
—
—
—
0.13
Goodwill impairment
—
—
4.00
—
Customer inventory buybacks
—
—
—
—
COVID-19(3)
0.05
—
0.06
—
Other, net
—
0.01
0.01
0.02
Tax effect of applicable non-GAAP adjustments(1)
(0.04
)
(0.04
)
(1.14
)
(0.11
)
Adjusted net income (loss) per diluted common share(2)
$
0.34
$
0.26
$
(0.86
)
$
(0.02
)
Three Months Ended
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net income (loss) applicable to common shares, GAAP basis
$
26,457
$
17,263
$
(515,174
)
$
(42,484
)
Restructuring and impairment charges, net
15,411
7,107
29,403
10,538
Strategic development and acquisition related costs
784
12,086
5,641
26,168
Non cash loss (gain) on foreign currency transactions
(2,025
)
(523
)
2,112
(1,700
)
Non cash charge of purchase price allocated to inventories
—
—
—
16,249
Goodwill impairment
—
—
503,171
—
Customer inventory buybacks
193
175
313
417
COVID-19(3)
6,805
—
8,035
—
Other, net
474
1,357
1,612
2,081
Tax effect of applicable non-GAAP adjustments(1)
(5,627
)
(5,396
)
(143,075
)
(14,357
)
Adjusted net income (loss) applicable to common shares(2)
$
42,914
$
32,069
$
(107,962
)
$
(3,088
)
(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 referred to in the text of our press releases and 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.
(3)
Costs included within the COVID-19 line item for the three and six months ended July 4, 2020 include incremental labor costs due to quarantine related absenteeism, incremental facility cleaning costs, pandemic related supplies and personal protective equipment for employees, among other costs.
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
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Operating income (loss), GAAP
$
58,925
$
80,931
$
(441,866
)
$
53,566
Restructuring and impairment charges, net
15,411
7,107
29,403
10,538
Strategic development and acquisition related costs
784
12,086
5,641
26,168
Non cash charge of purchase price allocated to inventories
—
—
—
16,249
Goodwill impairment
—
—
503,171
—
Customer inventory buybacks
193
175
313
417
COVID-19
6,805
—
8,035
—
Other, net
474
1,357
1,612
2,081
Adjusted operating income
82,592
101,656
106,309
109,019
Other income (expense), net
660
(397
)
(2
)
(52
)
Depreciation and amortization
70,711
67,529
140,480
127,476
Share-based compensation expense
5,156
3,474
8,543
7,479
Adjusted EBITDA
159,119
172,262
255,330
243,922
Impact of Environmental Stoneworks and Kleary acquisitions(1)
—
2,676
1,869
3,157
Pro Forma Adjusted EBITDA
$
159,119
$
174,938
$
257,199
$
247,079
(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 June 29, 2019 and January 1, 2020 to March 1, 2020.
Windows
Three Months Ended
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net Sales
$
428,275
$
508,647
$
876,725
$
930,241
Operating income (loss), GAAP
$
23,101
$
31,912
$
(290,089
)
$
27,593
Restructuring and impairment charges, net
4,184
900
5,650
1,021
Strategic development and acquisition related costs
—
8,052
16
12,061
Goodwill impairment
—
—
320,990
—
COVID-19
3,964
—
4,892
—
Other, net
(785
)
(424
)
—
(40
)
Adjusted operating income
30,464
40,440
41,459
40,635
Other income (expense), net
—
(411
)
—
(738
)
Depreciation and amortization
30,182
24,848
60,035
48,825
Adjusted EBITDA
$
60,646
$
64,877
$
101,494
$
88,722
Adjusted EBITDA as a % of Net Sales
14.2
%
12.8
%
11.6
%
9.5
%
CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Siding
Three Months Ended
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net Sales
$
285,249
$
306,525
$
526,292
$
524,802
Pro Forma Net Sales
285,249
318,255
534,650
560,441
Operating income (loss), GAAP
$
30,638
$
25,937
$
(138,229
)
$
14,283
Restructuring and impairment charges, net
2,524
5,544
3,615
5,631
Strategic development and acquisition related costs
955
—
976
—
Non cash charge of purchase price allocated to inventories
—
—
—
16,249
Goodwill impairment
—
—
176,774
—
Customer inventory buybacks
193
175
313
417
COVID-19
43
—
43
—
Other, net
412
1,202
—
1,435
Adjusted operating income
34,765
32,858
43,492
38,015
Other income (expense), net
(6
)
(750
)
(6
)
(1,016
)
Depreciation and amortization
28,514
30,415
56,521
54,765
Adjusted EBITDA
63,273
62,523
100,007
91,764
Impact of Environmental Stoneworks and Kleary acquisitions(1)
—
2,676
1,869
3,157
Pro Forma Adjusted EBITDA
$
63,273
$
65,199
$
101,876
$
94,921
Pro Forma Adjusted EBITDA as a % of Pro Forma Net Sales
22.2
%
20.5
%
19.1
%
16.9
%
(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 June 29, 2019 and January 1, 2020 to March 1, 2020.
Commercial
Three Months Ended
Six Months Ended
July 4, 2020
June 29, 2019
July 4, 2020
June 29, 2019
Net Sales
$
371,412
$
480,285
$
795,730
$
905,246
Operating income, GAAP
$
36,664
$
58,809
$
53,505
$
83,119
Restructuring and impairment charges, net
7,364
132
19,069
1,165
Strategic development and acquisition related costs
(149
)
733
(254
)
6,255
Goodwill impairment
—
—
5,407
—
COVID-19
1,220
—
1,522
—
Other, net
289
1,082
1,100
1,082
Adjusted operating income
45,388
60,756
80,349
91,621
Other income (expense), net
123
213
237
708
Depreciation and amortization
11,020
11,399
21,921
22,174
Adjusted EBITDA
$
56,531
$
72,368
$
102,507
$
114,503
Net Sales as a % of Adjusted EBITDA
15.2
%
15.1
%
12.9
%
12.6
%
CORNERSTONE BUILDING BRANDS, INC.
BUSINESS SEGMENTS
(In thousands)
(Unaudited)
Three Months Ended
July 4, 2020
June 29, 2019
% of Net Sales
% of Net Sales
% Change
Net Sales
Windows
$
428,275
39.5
%
$
508,647
39.2
%
(15.8
)
%
Siding
285,249
26.3
%
306,525
23.7
%
(6.9
)
%
Commercial
371,412
34.2
%
480,285
37.1
%
(22.7
)
%
Total net sales
$
1,084,936
100.0
%
$
1,295,457
100.0
%
(16.3
)
%
Gross Profit
Windows
$
84,363
19.7
%
$
98,187
19.3
%
(14.1
)
%
Siding
78,137
27.4
%
85,042
27.7
%
(8.1
)
%
Commercial
92,231
24.8
%
121,434
25.3
%
(24.0
)
%
Total gross profit
$
254,731
23.5
%
$
304,663
23.5
%
(16.4
)
%
Operating Income (Loss)
Windows
$
23,101
5.4
%
$
31,912
6.3
%
(27.6
)
%
Siding
30,638
10.7
%
25,937
8.5
%
18.1
%
Commercial
36,664
9.9
%
58,809
12.2
%
(37.7
)
%
Corporate
(31,478
)
—
(35,727
)
—
%
(11.9
)
%
Total operating income
$
58,925
5.4
%
$
80,931
6.2
%
(27.2
)
%
Six Months Ended
July 4, 2020
June 29, 2019
% of Net Sales
% of Net Sales
% Change
Net Sales
Windows
$
876,725
39.9
%
$
930,241
39.4
%
(5.8
)
%
Siding
526,292
23.9
%
524,802
22.2
%
0.3
%
Commercial
795,730
36.2
%
905,246
38.4
%
(12.1
)
%
Total net sales
$
2,198,747
100.0
%
$
2,360,289
100.0
%
(6.8
)
%
Gross Profit
Windows
$
158,364
18.1
%
$
160,527
17.3
%
(1.3
)
%
Siding
137,179
26.1
%
118,218
22.5
%
16.0
%
Commercial
190,075
23.9
%
211,835
23.4
%
(10.3
)
%
Total gross profit
$
485,618
22.1
%
$
490,580
20.8
%
(1.0
)
%
Operating Income (Loss)
Windows
$
(290,089
)
(33.1
)
%
$
27,593
3.0
%
(1,151.3
)
%
Siding
(138,229
)
(26.3
)
%
14,283
2.7
%
(1,067.8
)
%
Commercial
53,505
6.7
%
83,119
9.2
%
(35.6
)
%
Corporate
(67,053
)
—
(71,429
)
—
%
(6.1
)
%
Total operating income (loss)
$
(441,866
)
(20.1
)
%
$
53,566
2.3
%
(924.9
)
%
CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
RECONCILIATION OF PRO FORMA SEGMENT INFORMATION
(In thousands)
(Unaudited)
Reported
Acquisitions (1)
Pro Forma
Three months ended June 29, 2019
Net Sales
Windows
$
508,647
$
—
$
508,647
Siding
306,525
11,730
318,255
Commercial
480,285
—
480,285
Total Net Sales
$
1,295,457
$
11,730
$
1,307,187
Gross Profit
% of Net Sales
Windows
$
98,187
$
—
$
98,187
19.3
%
Siding
85,042
3,569
88,611
27.8
%
Commercial
121,434
—
121,434
25.3
%
Total Gross Profit
$
304,663
$
3,569
$
308,232
23.6
%
Reported
Acquisitions
Pro Forma
Three months ended July 4, 2020
Net Sales
Windows
$
428,275
$
—
$
428,275
Siding
285,249
—
285,249
Commercial
371,412
—
371,412
Total Net Sales
$
1,084,936
$
—
$
1,084,936
Gross Profit
% of Net Sales
Windows
$
84,363
$
—
$
84,363
19.7
%
Siding
78,137
—
78,137
27.4
%
Commercial
92,231
—
92,231
24.8
%
Total Gross Profit
$
254,731
$
—
$
254,731
23.5
%
(1)
Acquisitions reflect the estimated impact for Kleary Masonry, Inc.
CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
RECONCILIATION OF PRO FORMA SEGMENT INFORMATION
(In thousands)
(Unaudited)
Reported
Acquisitions (1)(2)
Pro Forma
Six months ended June 29, 2019
Net Sales
Windows
$
930,241
$
—
$
930,241
Siding
524,802
35,639
560,441
Commercial
905,246
—
905,246
Total Net Sales
$
2,360,289
$
35,639
$
2,395,928
Gross Profit
% of Net Sales
Windows
$
160,527
$
—
$
160,527
17.3
%
Siding
118,218
24,439
142,657
25.5
%
Commercial
211,835
—
211,835
23.4
%
Total Gross Profit
$
490,580
$
24,439
$
515,019
21.5
%
Reported
Acquisitions (1)
Pro Forma
Six months ended July 04, 2020
Net Sales
Windows
$
876,725
$
—
$
876,725
Siding
526,292
8,358
534,650
Commercial
795,730
—
795,730
Total Net Sales
$
2,198,747
$
8,358
$
2,207,105
Gross Profit
% of Net Sales
Windows
$
158,364
$
—
$
158,364
18.1
%
Siding
137,179
2,300
139,479
26.1
%
Commercial
190,075
—
190,075
23.9
%
Total Gross Profit
$
485,618
$
2,300
$
487,918
22.1
%
(1)
Acquisitions reflect the estimated impact for Environmental Stoneworks and Kleary Masonry, Inc.
(2)
Gross margin adjustment for the non-cash inventory fair value step-up of $16.2 million associated with the Ply Gem merger and Environmental Stoneworks acquisition.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200811005816/en/
Investor Relations Tina Beskid 1-866-419-0042 info@investors.cornerstonebuildingbrands.com
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