Fourth-Quarter and Year-End Results Mostly Positive, Despite Challenging Year

February 27th, 2023 by Drew Vass, Executive Editor

Four publicly traded door and window companies released financial results last week, showing mostly solid fourth-quarter and year-end results. Despite a housing market that slumped throughout 2022, net sales were up for Masonite and PGT Innovations in the fourth quarter. Meanwhile, reports from Fortune Brands Innovations (including Therma-Tru, Larson and Master Lock) weren’t as strong, posting a 2% drop in net sales in the fourth quarter and a 7% drop for continuing operations (after shedding its cabinets sector). Jeld-Wen reported a 7.5% increase in net revenue for the year, despite what company officials labeled “significant change and a challenging macroeconomic backdrop.” In North America, the company’s net revenue increased by 11.7%, to $862.8 million.

Quarterly Results

After announcing a stock buyback in recent weeks, Jeff Jackson, president and chief executive officer for PGT Innovations praised his company’s strong quarterly results, including year-over-year net sales growth of 12%. The company’s performance “showed recovery” from impacts of Hurricane Ian and a ransomware incident, Jackson said. Despite obstacles, “We were able to offset new construction demand weakness from macro-economic headwinds, including higher inflation and interest rates through solid execution across the enterprise,” he said.

Among the driving factors in his company’s success, Jackson pointed to acquisitions made over the past five years, including Western Window Systems, NewSouth Window Solutions, Eco, Anlin and Martin.

Net sales increased across most brands for the fourth quarter, including a 12% increase for PGTI, compared to the same quarter a year prior, advancing to $341 million. Despite those increases, PGTI registered a 54% drop in net income for the fourth quarter, landing at $8 million.

Both Jeld-Wen and Masonite registered higher sales in the fourth quarter, compared to a year earlier, marking increases of 11.7% and 7%, respectively.

Fortune Brands posted a decrease of 2% in fourth-quarter net sales, though after spinning off its cabinets business, net sales for continued operations posted a steeper 7% drop. Despite decreases, Nicholas Fink, CEO of Fortune Brands, praised the company’s margins.

“Our teams delivered impressive fourth-quarter and full-year results in the face of a challenging environment, while executing several transformative initiatives,” Fink said. “Our fourth-quarter margin results demonstrate that we can protect margins even in a declining market.”

Adjusted EBITDA for most companies remained on par with results posted for the fourth quarter of 2021, though Masonite managed a 4% increase.

Full-Year Results

Full-year results were also predominately positive, with most companies reporting increases in net sales. PGTI registered a 28% increase, while Masonite reported an 11% increase. Net incomes were up for both companies, by 127% and 180%, respectively. Adjusted EBITDA for both companies also increased, with PGTI leaping by 50%.

The exceptions to year-end successes included Fortune Brands, which, based on continued operations, registered a drop in net sales of 2%, though the full brand plus cabinets increased by 4%.

Regarding 2023, most companies acknowledge a housing market that continues to struggle, with several indicating they expect more of the same for the months ahead.

“As we look ahead in 2023, we expect softening demand in most of our end markets,” said William Christensen, CEO of Jeld-Wen.

Officials for Fortune Brands said they’re expecting a total global market decline of 6.5% to 8.5%, including similar declines in the U.S. market. As a result, the company expects full-year sales to be down between 5% and 7%.

“We are currently taking a cautious view of end-market demand in 2023 and proactively managing costs in order to protect our margins in the near term, while continuing strategic investments that position the business for enhanced growth when demand recovers,” said Russ Tiejema, executive vice president and chief financial officer for Masonite.

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