Masonite International Corp. announced results for the three and nine months ended Oct. 1, 2023. Total company gross profit was $166 million in the third quarter of 2023, down 1% as positive contributions from price-cost management initiatives and the Endura acquisition were more than offset by impacts of lower volumes. Gross profit margin, however, increased 60 basis points to 23.6%.
Key takeaways
- Net sales declined 4% year over year amid challenging market conditions.
- Maintained strict focus on price-cost management to support margins.
- Delivered strong year-to-date operating cash flow of $310 million.
- Announced strategic acquisition of Fleetwood, a premium provider of glass door systems.
Consolidated net sales were $702 million in the third quarter of 2023, a 4% decrease resulting from a 13% decline in volume partially offset by an 8% increase from the Endura acquisition and a 1% increase in average unit price.
- North American residential net sales were $553 million, a 5% decrease driven by a 14% decline in volume and a 1% decrease in AUP, partially offset by a 10% increase from the Endura acquisition.
- Europe net sales were $65 million, a 2% decrease driven by a 7% decline in volume and a 2% decrease from lower AUP, partially offset by a 7% increase from favorable foreign exchange.
- Architectural net sales were $81 million, a 4% increase driven by an 18% increase in AUP, partially offset by a 10% decline in volume and a 4% decrease from lower component sales.
Selling, general and administration (SG&A) expenses were $99 million in the third quarter of 2023, an increase of 19% due primarily to incremental SG&A from Endura and an increase in acquisition and due diligence-related costs. SG&A as a percentage of net sales increased 260 basis points to 14% compared to the third quarter of 2022.
Net income attributable to Masonite was $41 million in the third quarter of 2023, a decrease of 27% primarily driven by higher depreciation, amortization, interest expense and costs associated with previously announced restructuring plans offset by lower income tax expense.
Adjusted EBITDA was $107 million in the third quarter of 2023, a decrease of 4% driven primarily by the impact of volume declines. Diluted earnings per share were $1.86, a decrease of 27% compared to $2.54 in the comparable 2022 period. Diluted adjusted earnings per share were $2.04 compared to $2.53 in the comparable 2022 period.
Masonite's response
“In the face of constrained end-market demand I am proud of our team's execution and ability to preserve margins and deliver record cash flow,” says Howard Heckes, president and CEO. “While maintaining sharp discipline on price-cost and working capital management, we are also delivering meaningful progress on our Doors That Do More strategic initiatives. Subsequent to the quarter end, we were pleased to announce the acquisition of Fleetwood, a leading manufacturer of high-end glass doors for luxury homes. The Fleetwood product portfolio extends the reach of Masonite product offerings to the top end of the good, better, best spectrum and allows us to tap into new areas of long-term growth.”
