CARY, N.C., March 3, 2020 /PRNewswire/ -- Cornerstone
Building Brands, Inc. (NYSE: CNR) (the "Company"), a leading
provider of exterior building products, today reported
fourth-quarter and full-year 2019 financial results.
"I am pleased with both our financial and operational
performance," said James S. Metcalf,
Chairman and Chief Executive Officer. "Our results demonstrate our
ability to drive shareholder value by leveraging our strong market
leadership position, delivering meaningful cost savings and
improving the balance sheet."
GAAP performance for the fourth quarter and full year 2019 was
impacted by the merger between NCI Building Systems, Inc. and Ply
Gem Parent, LLC, which was completed on November 16, 2018 (the "Ply Gem Merger").
Fourth-Quarter 2019 Results
- On a GAAP basis, net sales increased 116.9 percent to
$1,244.4 million, and gross profit
increased 116.1 percent to $288.0
million, or 23.1 percent of net sales, compared to the prior
year period.
- Net sales declined 1.8 percent from the fourth quarter 2018, on
a pro forma basis. Net sales were impacted by softening market
demand in the Commercial segment which was partially offset by
strength in the Windows segment.
- Gross profit of $288.0 million or
23.1 percent as a percent of net sales improved 230 basis points
over the pro forma fourth quarter 2018 gross profit as a percent of
net sales. The increase was primarily driven by positive price, mix
and realization of cost savings, which more than offset lower
manufacturing leverage from reduced volumes.
- GAAP net income was $1.9 million,
or $0.02 per diluted share, down from
$27.4 million, or $0.41 per diluted common share in the fourth
quarter of 2018. Net income was impacted by $42.5 million of increased amortization expense
associated with the intangibles from the Ply Gem Merger and the
Environmental Stoneworks acquisition, $13.5
million of strategic development and acquisition related
costs, and $2.5 million of
restructuring and impairment charges, partially offset by the
$4.2 million tax effect associated
with these items.
- Adjusted EBITDA1 was $158.9
million or 12.8 percent of net sales compared to pro forma
Adjusted EBITDA1 of $128.6
million or 10.1 percent of pro forma net sales for the
fourth quarter 2018. The 270 basis points improvement was primarily
driven by favorable price and mix, net of inflation of $26.0 million, cost savings and synergies of
$37.5 million, which more than offset
the manufacturing leverage impact of lower volumes and increased
SG&A from variable incentive compensation.
Full-Year Fiscal 2019 Results
- On a GAAP basis, net sales increased 144.4 percent to
$4,889.7 million as compared to
$2,000.6 million in 2018. On a pro
forma basis, net sales declined 4.2 percent to $4,906.0 million as compared to $5,119.5 million in 2018.
- GAAP net loss was $15.4 million
or ($0.12) per diluted share,
compared with net income applicable to common shares of
$62.7 million or $0.94 per diluted share in 2018.
- Pro forma Adjusted EBITDA1 was $581.9 million, or 11.9 percent of net sales,
representing an improvement of 130 basis points, compared with pro
forma Adjusted EBITDA1 for 2018. The improvement is
primarily due to price discipline, cost management efforts and
realized merger synergies.
- Total merger synergies and cost savings captured during 2019
were approximately $110 million,
$10 million better than target.
- Reduced net debt to LTM Adjusted pro forma EBITDA1
to 5.4x, approximately a quarter turn better than
expectations.
Fourth-Quarter 2019 Results by Segment
Windows
- On a GAAP basis, net sales were $495.9
million, which included $108.0
million attributable to Silver Line. Ply Gem's acquisition
of Silver Line was completed on October 14,
2018.
- Gross profit was $94.2 million,
or 19.0 percent of net sales compared to $80.3 million of gross profit or 17.0 percent of
net sales, on a pro forma basis for the fourth quarter of
2018.
- The 200 basis point gross margin improvement was driven by
favorable price and mix, net of inflation and realized savings,
which more than offset the lower volumes and related manufacturing
impacts.
Siding
- On a GAAP basis, net sales were $270.8
million, and gross profit was $68.8
million, or 25.4 percent of net sales.
- Net sales were $267.1 million,
and gross profit of $65.0 million or
24.3 percent of net sales, on a pro forma basis for the fourth
quarter of 2018.
- The 110 basis point gross margin improvement was mostly driven
by realized cost savings.
Commercial
- On a GAAP basis, net sales were $477.7
million, and gross profit was $125.0
million, or 26.2 percent of net sales.
- Net sales were $528.6 million,
and gross profit was $118.3 million,
or 22.4 percent of net sales, on a pro forma basis for the fourth
quarter of 2018.
- The 380 basis point gross margin improvement was driven by
favorable spread and cost savings.
Guidance
First-Quarter 2020 Guidance
- The Company anticipates mid single-digit growth in net sales
over pro forma first quarter 2019 in the combined Windows and
Siding segments and about flat net sales in the Commercial
segment.
- Adjusted EBITDA1 is expected to be between
$75 million and $90 million.
Additional Fiscal Year 2020 Guidance
We expect:
- Capital expenditures to be between 2.0 percent and 2.5 percent
of net sales.
- Cash interest of approximately $200
million.
- Effective tax rate of approximately 30 percent; cash taxes of
approximately $60 million.
- Benefits from primary working capital improvement to generate
approximately $50 million of
cash.
- To incur approximately $25
million of restructuring costs to achieve $60 million of savings.
(1)
|
Adjusted financial
metrics used in this release for results in 2019 and 2018 are
non-GAAP measures and refer to the results for 2019 and 2018.
Pro forma financial metrics used in this release for results in
2018 are also non-GAAP measures and assume the Ply Gem Merger
occurred on January 1, 2018 and adjust for other items affecting
comparability. See the reconciliations of GAAP results to
adjusted results and pro forma results in the accompanying
tables.
|
Conference Call
The Company will host a conference call at 9:00 a.m. EST on Wednesday, March 4 to discuss
its financial performance with investors and securities analysts.
The call will be webcast on the Company's website,
www.cornerstonebuildingbrands.com, in the Events &
Presentations section of the Investors Page. The dial-in
number for the conference call is 1-201-389-0872. After the live
webcast, a telephonic replay of the call will be available until
March 18, 2020. The replay dial-in
number is 1-201-612-7415 and the replay code is 13698973.
Additionally, the slide presentation to be used in connection with
the Company's webcast and conference call is available in the
Investor Relations section of the Company's website at
www.cornerstonebuildingbrands.com.
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 more than 20,000 employees at manufacturing, distribution
and office locations throughout North
America. For more information, visit us at
www.cornerstonebuildingbrands.com.
Investor Relations
Tina Beskid
919-694-2781
tina.beskid@cornerstone-bb.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 performance expectations. 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, 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 our sponsor
investors, the effect on our common stock price caused by
transactions engaged in by our sponsor 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, to be filed with the SEC on the date hereof, 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.
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
2019
|
|
October
28,
2018
|
|
December
31,
2019
|
|
October
28,
2018
|
Sales
|
$
|
1,244,415
|
|
|
$
|
573,634
|
|
|
$
|
4,889,747
|
|
|
$
|
2,000,577
|
|
Cost of
sales
|
956,379
|
|
|
440,353
|
|
|
3,801,328
|
|
|
1,537,895
|
|
Gross profit
|
288,036
|
|
|
133,281
|
|
|
1,088,419
|
|
|
462,682
|
|
|
23.1
|
%
|
|
23.2
|
%
|
|
22.3
|
%
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
161,493
|
|
|
78,875
|
|
|
627,861
|
|
|
307,106
|
|
Intangible asset
amortization
|
44,878
|
|
|
2,411
|
|
|
177,577
|
|
|
9,648
|
|
Restructuring and
impairment charges, net
|
2,538
|
|
|
769
|
|
|
18,060
|
|
|
1,912
|
|
Strategic development
and acquisition related costs
|
13,517
|
|
|
11,661
|
|
|
50,185
|
|
|
17,164
|
|
Loss on disposition
of business
|
—
|
|
|
—
|
|
|
—
|
|
|
5,673
|
|
Gain on insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,741)
|
|
Income from
operations
|
65,610
|
|
|
39,565
|
|
|
214,736
|
|
|
125,920
|
|
Interest
income
|
183
|
|
|
22
|
|
|
674
|
|
|
140
|
|
Interest
expense
|
(56,128)
|
|
|
(4,895)
|
|
|
(229,262)
|
|
|
(21,808)
|
|
Foreign exchange gain
(loss)
|
970
|
|
|
(152)
|
|
|
2,054
|
|
|
(244)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,875)
|
|
Other income
(expense), net
|
518
|
|
|
(110)
|
|
|
1,183
|
|
|
962
|
|
Income (loss) before
income taxes
|
11,153
|
|
|
34,430
|
|
|
(10,615)
|
|
|
83,095
|
|
Provision for income
taxes
|
9,223
|
|
|
6,875
|
|
|
4,775
|
|
|
19,989
|
|
|
82.7
|
%
|
|
20.0
|
%
|
|
(45.0)
|
%
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
1,930
|
|
|
$
|
27,555
|
|
|
$
|
(15,390)
|
|
|
$
|
63,106
|
|
Net income allocated
to participating securities
|
(27)
|
|
|
(138)
|
|
|
—
|
|
|
(412)
|
|
Net income (loss)
applicable to common shares
|
$
|
1,903
|
|
|
$
|
27,417
|
|
|
$
|
(15,390)
|
|
|
$
|
62,694
|
|
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
(0.12)
|
|
|
$
|
0.95
|
|
Diluted
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
(0.12)
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
125,722
|
|
|
66,262
|
|
|
125,576
|
|
|
66,260
|
|
Diluted
|
125,761
|
|
|
66,326
|
|
|
125,576
|
|
|
66,362
|
|
|
|
|
|
|
|
|
|
Increase in
sales
|
116.9
|
%
|
|
17.4
|
%
|
|
144.4
|
%
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses percentage of net sales
|
13.0
|
%
|
|
13.8
|
%
|
|
12.8
|
%
|
|
15.4
|
%
|
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
December
31,
2019
|
|
December
31,
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
98,386
|
|
|
$
|
143,847
|
|
Restricted
cash
|
3,921
|
|
|
3,760
|
|
Accounts receivable,
net
|
491,740
|
|
|
438,505
|
|
Inventories,
net
|
439,194
|
|
|
536,675
|
|
Income taxes
receivable
|
48,466
|
|
|
1,027
|
|
Investments in debt
and equity securities, at market
|
3,776
|
|
|
3,414
|
|
Prepaid expenses and
other
|
78,516
|
|
|
69,291
|
|
Assets held for
sale
|
1,750
|
|
|
7,272
|
|
Total current
assets
|
1,165,749
|
|
|
1,203,791
|
|
|
|
|
|
Property, plant and
equipment, net
|
652,841
|
|
|
614,007
|
|
Lease right-of-use
assets
|
316,155
|
|
|
—
|
|
Goodwill
|
1,669,594
|
|
|
1,640,211
|
|
Intangible assets,
net
|
1,740,700
|
|
|
1,669,901
|
|
Deferred income
taxes
|
7,510
|
|
|
1,198
|
|
Other assets,
net
|
11,797
|
|
|
12,079
|
|
Total
assets
|
$
|
5,564,346
|
|
|
$
|
5,141,187
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
$
|
25,600
|
|
|
$
|
25,600
|
|
Payable pursuant to a
tax receivable agreement
|
—
|
|
|
24,760
|
|
Accounts
payable
|
205,629
|
|
|
220,857
|
|
Accrued compensation
and benefits
|
92,130
|
|
|
72,630
|
|
Accrued
interest
|
19,070
|
|
|
41,185
|
|
Current portion of
lease liabilities
|
72,428
|
|
|
—
|
|
Other accrued
expenses
|
233,687
|
|
|
265,138
|
|
Total current
liabilities
|
648,544
|
|
|
650,170
|
|
|
|
|
|
Long-term
debt
|
3,156,924
|
|
|
3,085,163
|
|
Deferred income
taxes
|
291,987
|
|
|
295,675
|
|
Long-term lease
liabilities
|
243,780
|
|
|
—
|
|
Other long-term
liabilities
|
287,793
|
|
|
150,197
|
|
Total long-term
liabilities
|
3,980,484
|
|
|
3,531,035
|
|
|
|
|
|
Common stock
|
1,261
|
|
|
1,256
|
|
Additional paid-in
capital
|
1,248,787
|
|
|
1,237,056
|
|
Accumulated
deficit
|
(281,229)
|
|
|
(265,839)
|
|
Accumulated other
comprehensive loss, net
|
(32,398)
|
|
|
(10,813)
|
|
Treasury stock, at
cost
|
(1,103)
|
|
|
(1,678)
|
|
Total stockholders'
equity
|
935,318
|
|
|
959,982
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
5,564,346
|
|
|
$
|
5,141,187
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
Year
Ended
|
|
December
31,
2019
|
|
October
28,
2018
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(15,390)
|
|
|
$
|
63,106
|
|
Adjustments to
reconcile net income (loss) to net cash from operating
activities:
|
|
|
|
Depreciation and
amortization
|
263,764
|
|
|
42,325
|
|
Non-cash interest
expense
|
8,504
|
|
|
1,501
|
|
Loss on extinguishment
of debt
|
—
|
|
|
21,875
|
|
Share-based
compensation expense
|
14,078
|
|
|
11,638
|
|
Loss on disposition of
business, net
|
—
|
|
|
5,092
|
|
Gain on insurance
recovery
|
—
|
|
|
(4,741)
|
|
Non-cash fair value
premium on purchased inventory
|
16,249
|
|
|
—
|
|
Losses (gains) on
asset sales, net
|
321
|
|
|
(502)
|
|
Provision for doubtful
accounts
|
2,035
|
|
|
(491)
|
|
Deferred income
taxes
|
(6,085)
|
|
|
(889)
|
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
Accounts
receivable
|
(38,242)
|
|
|
(35,397)
|
|
Inventories
|
91,822
|
|
|
(58,534)
|
|
Income
taxes
|
(32,719)
|
|
|
2,605
|
|
Prepaid expenses and
other
|
(10,279)
|
|
|
(5,479)
|
|
Accounts
payable
|
(21,141)
|
|
|
24,465
|
|
Accrued
expenses
|
(40,403)
|
|
|
16,284
|
|
Other, net
|
(2,906)
|
|
|
(395)
|
|
Net cash provided by
operating activities
|
229,608
|
|
|
82,463
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions, net of
cash acquired
|
(179,184)
|
|
|
—
|
|
Capital
expenditures
|
(121,085)
|
|
|
(47,827)
|
|
Proceeds from sale of
property, plant and equipment
|
5,511
|
|
|
6,338
|
|
Business disposition,
net
|
—
|
|
|
(1,426)
|
|
Proceeds from
insurance
|
—
|
|
|
4,741
|
|
Net cash used in
investing activities
|
(294,758)
|
|
|
(38,174)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from stock
options exercised
|
—
|
|
|
1,279
|
|
Proceeds from ABL
facility
|
290,000
|
|
|
100,000
|
|
Payments on ABL
facility
|
(220,000)
|
|
|
(100,000)
|
|
Proceeds from term
loan
|
—
|
|
|
415,000
|
|
Payments on term
loan
|
(25,620)
|
|
|
(146,221)
|
|
Payments on senior
notes
|
—
|
|
|
(265,470)
|
|
Payments on note
payable
|
—
|
|
|
(1,742)
|
|
Payments of financing
costs
|
—
|
|
|
(6,546)
|
|
Payments related to
tax withholding for share-based compensation
|
(1,934)
|
|
|
(5,068)
|
|
Purchases of treasury
stock
|
—
|
|
|
(46,705)
|
|
Payments on tax
receivable agreement
|
(24,906)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
17,540
|
|
|
(55,473)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
2,310
|
|
|
(93)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(45,300)
|
|
|
(11,277)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
147,607
|
|
|
65,794
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
102,307
|
|
|
$
|
54,517
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
|
ADJUSTED NET
INCOME PER DILUTED COMMON SHARE AND
|
NET INCOME (LOSS)
COMPARISON
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
2019
|
|
October
28,
2018
|
|
December
31,
2019
|
|
October
28,
2018
|
Net income (loss)
per diluted common share, GAAP basis
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
(0.12)
|
|
|
$
|
0.94
|
|
Restructuring and
impairment charges, net
|
0.02
|
|
|
0.01
|
|
|
0.14
|
|
|
0.03
|
|
Strategic development
and acquisition related costs
|
0.11
|
|
|
0.18
|
|
|
0.40
|
|
|
0.26
|
|
Loss on disposition of
business
|
—
|
|
|
—
|
|
|
—
|
|
|
0.08
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
0.33
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
Gain on insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.07)
|
|
Non cash loss (gain)
on foreign currency transactions
|
(0.01)
|
|
|
—
|
|
|
(0.02)
|
|
|
—
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
0.13
|
|
|
—
|
|
Customer inventory
buybacks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other, net
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(0.03)
|
|
|
(0.05)
|
|
|
(0.18)
|
|
|
(0.19)
|
|
Adjusted net
income per diluted common share(2)
|
$
|
0.11
|
|
|
$
|
0.55
|
|
|
$
|
0.39
|
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
2019
|
|
October
28,
2018
|
|
December
31,
2019
|
|
October
28,
2018
|
Net income (loss)
applicable to common shares, GAAP basis
|
$
|
1,903
|
|
|
$
|
27,417
|
|
|
$
|
(15,390)
|
|
|
$
|
62,694
|
|
Restructuring and
impairment charges, net
|
2,538
|
|
|
769
|
|
|
18,060
|
|
|
1,912
|
|
Strategic development
and acquisition related costs
|
13,517
|
|
|
11,661
|
|
|
50,185
|
|
|
17,164
|
|
Loss on disposition of
business
|
—
|
|
|
—
|
|
|
—
|
|
|
5,673
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
21,875
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
4,600
|
|
Gain on insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,741)
|
|
Non cash loss (gain)
on foreign currency transactions
|
(970)
|
|
|
152
|
|
|
(2,054)
|
|
|
244
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
16,249
|
|
|
—
|
|
Customer inventory
buybacks
|
—
|
|
|
—
|
|
|
576
|
|
|
—
|
|
Other, net
|
946
|
|
|
—
|
|
|
4,726
|
|
|
(323)
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(4,168)
|
|
|
(3,460)
|
|
|
(22,813)
|
|
|
(12,850)
|
|
Adjusted net
income applicable to common shares(2)
|
$
|
13,766
|
|
|
$
|
36,539
|
|
|
$
|
49,539
|
|
|
$
|
96,248
|
|
|
|
(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.
|
|
|
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)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
2019
|
|
October
28,
2018
|
|
December
31,
2019
|
|
October
28,
2018
|
Operating income,
GAAP
|
$
|
65,610
|
|
|
$
|
39,565
|
|
|
$
|
214,736
|
|
|
$
|
125,920
|
|
Restructuring and
impairment charges, net
|
2,538
|
|
|
769
|
|
|
18,060
|
|
|
1,912
|
|
Strategic development
and acquisition related costs
|
13,517
|
|
|
11,661
|
|
|
50,185
|
|
|
17,164
|
|
Loss on disposition of
business
|
—
|
|
|
—
|
|
|
—
|
|
|
5,673
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
4,600
|
|
Gain on insurance
recovery
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,741)
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
16,249
|
|
|
—
|
|
Customer inventory
buybacks
|
—
|
|
|
—
|
|
|
576
|
|
|
—
|
|
Other, net
|
946
|
|
|
—
|
|
|
4,726
|
|
|
(323)
|
|
Adjusted operating
income
|
82,611
|
|
|
51,995
|
|
|
304,532
|
|
|
150,205
|
|
|
|
|
|
|
|
|
|
Other income (loss),
net
|
518
|
|
|
(110)
|
|
|
1,183
|
|
|
962
|
|
Depreciation and
amortization
|
72,279
|
|
|
11,351
|
|
|
263,764
|
|
|
42,325
|
|
Share-based
compensation expense
|
3,465
|
|
|
2,729
|
|
|
14,078
|
|
|
8,038
|
|
Adjusted
EBITDA
|
$
|
158,873
|
|
|
$
|
65,965
|
|
|
$
|
583,557
|
|
|
$
|
201,530
|
|
|
|
|
|
|
|
|
|
Impact of
Environmental Stoneworks acquisition(1)
|
—
|
|
|
—
|
|
|
(1,679)
|
|
|
—
|
|
Impact of other
acquisitions(2)
|
—
|
|
|
78,771
|
|
|
—
|
|
|
349,049
|
|
Change in fiscal
period(3)(4)
|
—
|
|
|
(16,161)
|
|
|
—
|
|
|
(10,612)
|
|
Pro Forma Adjusted
EBITDA
|
$
|
158,873
|
|
|
$
|
128,575
|
|
|
$
|
581,878
|
|
|
$
|
539,967
|
|
|
|
|
|
|
|
|
|
(1) Reflects
the Adjusted EBITDA of Environmental Stoneworks for the period
January 1, 2019 to the acquisition date of February 20,
2019.
|
(2)
Acquisitions reflect the estimated impact of combining Ply Gem,
Atrium, Silver Line and Environmental Stoneworks.
|
(3) The change
in fiscal period reflects the estimated impact from moving from a
52/53 week fiscal year-end to a four-four-five week calendar
year.
|
(4) Includes
change to FX gain/loss recognition.
|
CORNERSTONE
BUILDING BRANDS, INC.
|
BUSINESS
SEGMENTS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2019
|
|
October 28,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
Net
Sales
|
|
|
|
|
|
|
|
Commercial
|
$
|
477,741
|
|
38.4
|
%
|
|
$
|
573,634
|
|
100.0
|
%
|
|
(16.7)
|
%
|
Siding
|
270,806
|
|
21.8
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
495,868
|
|
39.8
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total net
sales
|
$
|
1,244,415
|
|
100.0
|
%
|
|
$
|
573,634
|
|
100.0
|
%
|
|
116.9
|
%
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
Commercial
|
$
|
125,036
|
|
26.2
|
%
|
|
$
|
133,281
|
|
23.2
|
%
|
|
(6.2)
|
%
|
Siding
|
68,757
|
|
25.4
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
94,243
|
|
19.0
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total gross
profit
|
$
|
288,036
|
|
23.1
|
%
|
|
$
|
133,281
|
|
23.2
|
%
|
|
116.1
|
%
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
Commercial
|
$
|
58,637
|
|
12.3
|
%
|
|
$
|
72,580
|
|
12.7
|
%
|
|
(19.2)
|
%
|
Siding
|
14,927
|
|
5.5
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
30,499
|
|
6.2
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Corporate
|
(38,453)
|
|
—
|
|
|
(33,015)
|
|
—
|
%
|
|
(16.5)
|
%
|
Total operating
income
|
$
|
65,610
|
|
5.3
|
%
|
|
$
|
39,565
|
|
6.9
|
%
|
|
65.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December 31,
2019
|
|
October 28,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
Net
Sales
|
|
|
|
|
|
|
|
Commercial
|
$
|
1,847,893
|
|
37.8
|
%
|
|
$
|
2,000,577
|
|
100.0
|
%
|
|
(7.6)
|
%
|
Siding
|
1,111,407
|
|
22.7
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
1,930,447
|
|
39.5
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total net
sales
|
$
|
4,889,747
|
|
100.0
|
%
|
|
$
|
2,000,577
|
|
100.0
|
%
|
|
144.4
|
%
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
Commercial
|
$
|
457,747
|
|
24.8
|
%
|
|
$
|
462,682
|
|
23.1
|
%
|
|
(1.1)
|
%
|
Siding
|
277,583
|
|
25.0
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
353,089
|
|
18.3
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total gross
profit
|
$
|
1,088,419
|
|
22.3
|
%
|
|
$
|
462,682
|
|
23.1
|
%
|
|
135.2
|
%
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
Commercial
|
$
|
201,073
|
|
10.9
|
%
|
|
$
|
230,365
|
|
11.5
|
%
|
|
(12.7)
|
%
|
Siding
|
66,273
|
|
6.0
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
92,538
|
|
4.8
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Corporate
|
(145,148)
|
|
—
|
|
|
(104,445)
|
|
—
|
%
|
|
(39.0)
|
%
|
Total operating
income
|
$
|
214,736
|
|
4.4
|
%
|
|
$
|
125,920
|
|
6.3
|
%
|
|
70.5
|
%
|
CORNERSTONE
BUILDING BRANDS, INC.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
|
RECONCILIATION OF
PRO FORMA SEGMENT INFORMATION
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Acquisitions
(1)
|
|
Change in
Fiscal
Period (2)
|
|
Pro
Forma
|
|
% of
Net Sales
|
Three months ended
October 28, 2018
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
573,634
|
|
|
$
|
—
|
|
|
$
|
(45,024)
|
|
|
$
|
528,610
|
|
|
|
Siding
|
|
—
|
|
|
267,118
|
|
|
—
|
|
|
267,118
|
|
|
|
Windows
|
|
—
|
|
|
471,825
|
|
|
—
|
|
|
471,825
|
|
|
|
Total Net
Sales
|
|
$
|
573,634
|
|
|
$
|
738,943
|
|
|
$
|
(45,024)
|
|
|
$
|
1,267,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
133,281
|
|
|
$
|
—
|
|
|
$
|
(14,938)
|
|
|
$
|
118,343
|
|
|
22.4
|
%
|
Siding
|
|
—
|
|
|
64,973
|
|
|
—
|
|
|
64,973
|
|
|
24.3
|
%
|
Windows
|
|
—
|
|
|
80,316
|
|
|
—
|
|
|
80,316
|
|
|
17.0
|
%
|
Total Gross
Profit
|
|
$
|
133,281
|
|
|
$
|
145,289
|
|
|
$
|
(14,938)
|
|
|
$
|
263,632
|
|
|
20.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
2,000,577
|
|
|
$
|
—
|
|
|
$
|
14,376
|
|
|
$
|
2,014,953
|
|
|
|
Siding
|
|
—
|
|
|
1,127,331
|
|
|
—
|
|
|
1,127,331
|
|
|
|
Windows
|
|
—
|
|
|
1,977,203
|
|
|
—
|
|
|
1,977,203
|
|
|
|
Total Net
Sales
|
|
$
|
2,000,577
|
|
|
$
|
3,104,534
|
|
|
$
|
14,376
|
|
|
$
|
5,119,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
462,682
|
|
|
$
|
—
|
|
|
$
|
(3,660)
|
|
|
$
|
459,022
|
|
|
22.8
|
%
|
Siding
|
|
—
|
|
|
284,123
|
|
|
—
|
|
|
284,123
|
|
|
25.2
|
%
|
Windows
|
|
—
|
|
|
347,950
|
|
|
—
|
|
|
347,950
|
|
|
17.6
|
%
|
Total Gross
Profit
|
|
$
|
462,682
|
|
|
$
|
632,073
|
|
|
$
|
(3,660)
|
|
|
$
|
1,091,095
|
|
|
21.3
|
%
|
|
|
Reported
|
|
Acquisitions
(1)(3)
|
|
Pro
Forma
|
|
% of Net
Sales
|
Year Ended
December 31, 2019
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
1,847,893
|
|
|
$
|
—
|
|
|
$
|
1,847,893
|
|
|
|
Siding
|
|
1,111,407
|
|
|
16,229
|
|
|
1,127,636
|
|
|
|
Windows
|
|
1,930,447
|
|
|
—
|
|
|
1,930,447
|
|
|
|
Total Net
Sales
|
|
$
|
4,889,747
|
|
|
$
|
16,229
|
|
|
$
|
4,905,976
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
457,747
|
|
|
$
|
—
|
|
|
$
|
457,747
|
|
|
24.8
|
%
|
Siding
|
|
277,583
|
|
|
18,015
|
|
|
295,598
|
|
|
26.2
|
%
|
Windows
|
|
353,089
|
|
|
—
|
|
|
353,089
|
|
|
18.3
|
%
|
Total Gross
Profit
|
|
$
|
1,088,419
|
|
|
$
|
18,015
|
|
|
$
|
1,106,434
|
|
|
22.6
|
%
|
|
|
|
|
|
|
|
|
|
(1) Acquisitions
reflect the estimated impact of combining Ply Gem, Atrium, Silver
Line and Environmental Stoneworks.
|
(2) Change in fiscal
period reflects the estimated impact from moving from a 52/53 week
fiscal year-end to a four-four-five calendar year.
|
(3) 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 original
content:http://www.prnewswire.com/news-releases/cornerstone-building-brands-announces-fourth-quarter-and-full-year-2019-results-301015811.html
SOURCE Cornerstone Building Brands, Inc.