Third-Quarter Results Show Challenges for Door and Window CompaniesNovember 13th, 2023 by Drew Vass, Executive Editor
Publicly traded door and window companies released their third-quarter financial results in recent weeks, showing mixed outcomes across net sales and income.
PGT Innovations (PGTI) represented a bright spot, showing a year-over-year increase in net sales of 4% at $400 million. PGTI’s success comes as the company returned nearly $30 million of capital to its shareholders through share repurchases, for total year-to-date repurchases of $75 million. According to Reuters, the company also declined a $1.9 billion acquisition offer from Miter Brands.
Jeld-Wen reported that net revenue in its North America sector decreased by 5.4%, or $44.8 million, to $790.3 million. In Europe, the company’s net revenue decreased by 6.0%, to $286.7 million.
Masonite reported consolidated net sales of $702 million, marking a 4% decrease. The company’s North American residential net sales decreased by 5% to $553 million. Officials said the decrease was driven by a 14% decline in volume, partially offset by a 10% increase from the acquisition of Endura. During the third quarter, Masonite repurchased approximately 106,329 shares of its stock for $10 million.
In terms of how those changes impacted net incomes, PGTI showed an increase of 29%, to $39 million; Jeld-Wen reported $43.8 million; and Masonite reported $41 million, which is 27% lower than the same quarter last year.
Masonite delivered strong year-to-date operating cash flow of $310 million, officials said.
“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,” said Howard Heckes, the company’s 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.”
Officials for Masonite said decreases in consolidated sales resulted from a 13% decline in volume, though that was partially offset by an 8% increase from the acquisition of Endura.
In some cases, manufacturers cited price increases for helping to preserve or drive profits—in most cases of around 2%, as they look to overcome current market challenges. Officials for Masonite said the company maintained a strict focus on price-cost management to support its margins. Decreased sales for Jeld-Wen in its North American sector were driven by a 5% decline in core revenue, officials said, following lower volume/mix at 7%. At the same time, those numbers were partially offset by increased price realization of 2%.
Despite the company’s third-quarter success, officials for PGTI cited a “continuing dynamic macro environment.” Despite challenges, in the third quarter the company “delivered record operating cash flow of $80 million, which enabled a reduction in our revolver borrowings of $39 million,” said Craig Henderson, PGTI’s senior vice president and chief financial officer.
Regarding their fourth-quarter outlooks, officials for PGTI said they expect more uphill progress, predicting an increase in net sales from $325 million to $350 million.
Jeld-Wen now expects 2023 net revenue of $4.25 to $4.35 billion, reflecting a low double-digit decline in volume/mix across its portfolio of products and geographies in North America and Europe. Core revenues for Jeld-Wen are expected to be down by 4% to 6% in the fourth quarter, partially offset by price realization.
“In the fourth quarter of 2023, we anticipate that the current uncertain operating environment will continue but expect to mitigate the impact from weaker demand with benefits from our ongoing cost reductions,” said CEO William Christensen. “As our third quarter results were above our expectations, we are raising the midpoint of our 2023 Adjusted EBITDA guidance.”