Jeld-Wen, Masonite Optimistic About First-Quarter Results

May 11th, 2023 by Travis Rains

With the first fiscal quarter of 2023 in the books, financial reports are trickling in from door and window manufacturers, including Jeld-Wen and Masonite. Jeld-Wen CEO William Christensen reports “solid first quarter results” for the company, while Masonite reports results that were “ahead of expectations” despite a year-over-year decline from Q1 2022.

For the first three months of 2023, Jeld-Wen reports net income at $15.1 million and a 4.4% increase in net revenue to more than $1.2 billion. The company reports that an increase is the result of core revenue growth at 7%. Adjusted EBITDA increased $13.3 million over the same period last year to $93.5 million.

“We made progress in the first quarter to simplify and strengthen Jeld-Wen which, combined with more favorable than expected market conditions, resulted in improved financial performance,” Christensen says. “During this time of weaker demand, our associates carefully controlled costs while continuing to deliver on our customers’ expectations.”

In North America, net revenue increased by $45.7 million, or 6.3%, to $768 million. However, net income fell by $2.8 million to $35.2 million. Europe saw net revenue decrease by 3.3% to $312.5 million, which the company attributes to a -6% adverse impact from foreign exchange. Net income increased by $7.9 million to $7.3 million. For Australasia, net revenue increased by more than 13% to $142.1 million, thanks to a 20% increase in core revenue. Net income increased $3.3 million to $5.3 million.

“In addition, to further simplify our global operations, we recently announced the sale of our Australasia business to Platinum Equity which will allow us to focus on our two largest regions and strengthen our balance sheet by paying down debt,” Christensen continues.
Jeld-Wen expects 2023 net revenue of between $4 billion and $4.4 billion.

“Driven by our solid first-quarter results, ongoing cost reduction activities and the move of our Australasia segment to discontinued operations, we are raising our 2023 guidance on the remaining business,” Christensen says. “However, with the continued macro-economic uncertainty in North America and Europe, we are taking a pragmatic view of the market and our financial outlook for the year.”

Masonite reports consolidated net sales at $726 million for the first quarter of 2023, or flat year-over-year performance. According to the company, that’s a result of a 10% increase in average unit price and an 8% increase from the company’s acquisition of Endura. However, it also takes into account a 16% decrease in volume and a combined 2% decrease from “unfavorable foreign exchange and lower component sales.”

Masonite recorded a gross profit of $170 million, a 7% decrease from Q1 2022, and net income at $38 million, a 43% decrease. According to the company, that decrease is the result of lower gross profit and restructuring actions. Selling, general and administration expenses rose 22% to $102 million, which the company attributes to the acquisition of Endura and “higher professional fees to support strategic initiatives.”

“The early benefits from implementation of our 2023 playbook initiatives allowed us to deliver financial results in Q1 that were ahead of expectations although down year-over-year given the exceptionally strong first quarter we had in 2022,” says Howard Heckes, president and CEO.

North American residential net sales were $569 million, or flat year over year, driven by an 11% increase from the Endura acquisition as well as an 8% increase in average unit price. However, the company notes that figure was partially offset by a 17% decrease in volume and a combined 2% decrease from unfavorable foreign exchange and lower component sales.

Sales for Europe in the first quarter came in at $64 million, a 21% decrease, resulting from a 15% decrease in volume as well as unfavorable foreign exchange and lower component sales. That figure was also offset by a 4% increase in average unit price.

“While end-market demand remains soft, trends are generally in line with our full-year planning assumptions,” Heckes says. “The continued execution of our cost actions, combined with strategic growth investments position us for accelerated margin growth as volumes return.”

The second financial quarter of 2023 concludes June 30, 2023.

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