CARY, N.C., Aug. 7, 2019 /PRNewswire/ -- Cornerstone
Building Brands, Inc. (NYSE: CNR) (the "Company"), the largest
manufacturer of exterior building products in North America, today reported financial
results for the quarter ended June 29, 2019.
Financial and Operational Highlights for the Second
Quarter:
- Net sales of $1,295.5
million
- Gross profit of $304.7 million,
or 23.5% of net sales
- Net income of $17.5 million and
adjusted net income of $32.1
million
- Adjusted EBITDA of $172.3
million, or 13.3% of net sales
Strategic Highlights for the Second Quarter:
- Realized 20 basis point expansion in gross profit margin to
23.5% compared to 23.3% in the pro forma prior year period
- Attained merger synergies of $12.6
million and cost improvement initiatives of $14.3 million during the quarter bringing the
2019 cumulative synergies and cost improvement initiatives achieved
to $42.4 million
- Made significant progress in the integrations of the Atrium and
Silver Line businesses into the Windows segment and Environmental
StoneWorks ("ESW") into the Siding segment during the quarter
Commenting on Cornerstone Building Brands' second quarter
performance, Chairman and Chief Executive Officer James S. Metcalf stated, "During the second
quarter, we made continued progress on our strategic, operational,
and financial objectives, achieving Adjusted EBITDA margin
expansion in each of our business segments. Although most of our
end use markets experienced lower year-over-year volumes, through
price discipline and cost management, we delivered solid
performance during the period. Pricing actions taken at the
beginning of the year combined with continued integration and cost
improvement initiatives, have offset higher raw material, freight
and labor costs, and are driving bottom line margin expansion."
Mr. Metcalf continued, "Our cost savings and integration
initiatives remain on track. Across all our businesses, we have
line of sight to achieving our cost savings target for this year
and in 2020. During the quarter, we finalized a majority of
the steps necessary to complete the integrations of the Atrium and
Silver Line businesses into our Windows segment, a key milestone
for the Company."
Second Quarter 2019 Results
In December 2018, the Company
announced a change to its fiscal year end from a 52/53 week year
ending in October to a four-four-five week calendar year end
reporting structure. As a result of this change and the Ply Gem
Merger, the financial results for the second quarter 2019 are not
directly comparable to the second quarter of fiscal year 2018.
Consolidated net sales in the three months ended June 29,
2019 were $1,295.5 million, compared
to $457.1 million in the three months
ended April 29, 2018. The year-over-year improvement was
primarily driven by the addition of Ply Gem's and ESW's net
sales.
Gross profit was $304.7 million in
the three months ended June 29, 2019, compared to $104.1 million in the three months ended
April 29, 2018. Gross profit margins were 23.5% in the three
months ended June 29, 2019, compared to 22.8% in the three
months ended April 29, 2018. The gross profit percentage
increase was driven by the combination of margin expansion in the
Commercial segment and the addition of historically higher Ply Gem
gross profit margins, including the Siding segment that generated
higher margins in the period.
Selling, general and administrative ("SG&A") expenses were
$158.0 million in the three months
ended June 29, 2019 compared to $74.4
million in the three months ended April 29, 2018. The
increased year-over-year SG&A expense reflects the addition of
Ply Gem and ESW, which was acquired on February 20, 2019. As a percentage of
net sales, SG&A expenses were 12.2% in the three months ended
June 29, 2019 compared to 16.3% in the three months ended
April 29, 2018.
Operating income in the three months ended June 29, 2019
was $80.9 million, compared to
operating income of $19.0 million in
the three months ended April 29, 2018. The operating income in
the 2019 period reflects the addition of Ply Gem's and ESW's
operating income in the three months ended June 29, 2019
offset by $44.1 million in increased
amortization expense associated with the intangibles from the Ply
Gem Merger and ESW acquisitions, $11.0
million of additional strategic development and acquisition
related costs, and $6.6 million of
additional restructuring and impairment charges. Adjusted Operating
Income, a non-GAAP financial measure which excludes certain items,
was $101.7 million in three months
ended June 29, 2019, compared to $27.3
million in the three months ended April 29, 2018.
Net income applicable to common shares in the three months ended
June 29, 2019 was $17.3 million,
or $0.14 per diluted common share,
compared to a net loss of $5.7
million, or ($0.09) per
diluted common share in the three months ended April 29,
2018.
Adjusted EBITDA, a non-GAAP financial measure, defined in
accordance with the Company's credit agreement as earnings before
interest, taxes, depreciation and amortization, and certain other
cash and non-cash items, was $172.3
million in the three months ended June 29, 2019,
compared to $40.0 million in the
three months ended April 29, 2018. Please see the
reconciliations of Adjusted Operating Income, Adjusted Net Income
and Adjusted EBITDA to the nearest financial measures prepared in
accordance with GAAP in the accompanying financial tables.
Cash and cash equivalents as of June 29, 2019 were
$87.5 million. As of June 29,
2019, the Company had $220.0 million
drawn on its $611.0 million
asset-based lending ("ABL") facility.
Second Quarter 2019 Segment Performance
Net sales in the Commercial segment were $480.3 million in the three months ended
June 29, 2019 compared to $457.1
million in the three months ended April 29, 2018. The
year-over-year increase was primarily a result of changes to the
segment's fiscal quarter comparable period, with second quarter of
2019 results including May and June, which are historically
stronger periods when compared to the legacy quarter ended
April 29, 2018. Gross profit was
$121.4 million in the three months
ended June 29, 2019, compared to $104.1
million in the three months ended April 29, 2018. As a
percent of net sales, gross profit was 25.3%, an increase of 250
basis points, compared to 22.8% in the three months ended
April 29, 2018. The increase was driven by the change in
fiscal calendar noted above combined with benefits from cost
initiatives and merger synergies. Operating income was $58.8 million during the three months ended
June 29, 2019, compared to $40.0
million in the three months ended April 29, 2018.
The Siding segment generated $306.5
million in net sales during the three months ended
June 29, 2019, which included $43.4
million from ESW. Gross profit in the three months ended
June 29, 2019 was $85.0 million
and 27.7% as a percent of net sales. Operating income was
$25.9 million in the three months
ended June 29, 2019.
Net sales in the Windows segment were $508.6 million during the three months ended
June 29, 2019, which included $112.1
million attributable to Silver Line. Ply Gem's acquisition
of a portfolio of products sold under the Silver Line and American
Craftsman brands, certain manufacturing plants and associated
distribution and support services was completed on October 14, 2018. Gross profit in the three
months ended June 29, 2019 was $98.2
million. As a percent of net sales, the Window segment's
gross profit was 19.3%. Operating income was $31.9 million in the three months ended
June 29, 2019.
Guidance
The Company's key economic indicators are tracking toward low
growth in the residential new construction and repair & remodel
markets and a moderate contraction in the commercial construction
markets. Based on these market indicators and the synergies
and cost initiatives, the Company expects Adjusted EBITDA to
be in the range of $170 to
$185 million for the third quarter of
fiscal 2019.
The Company has provided additional detailed financial guidance
in the quarterly investor presentation that can be found
at www.cornerstonebuildingbrands.com under the
"Investors" section.
Conference Call Information
The Company's second quarter fiscal 2019 conference call is
scheduled for Wednesday, August 7,
2019 at 9:00 a.m. ET. Please
dial 1-412-902-0003 or 1-877-407-0672 (toll-free) to participate in
the call. To listen to a live broadcast of the call over the
Internet or to review the archived call, please visit the Company's
website at www.cornerstonebuildingbrands.com. To access the taped
telephone replay, please dial 1-201-612-7415 or 1-877-660-6853
(toll-free) and the passcode of 13692112# when prompted. The taped
replay will be available two hours after the call through
August 14, 2019. A replay of the
webcast will be available on the Company's website under the Event
Calendar, Calls & Webcast section of the Investor Relations
page of the website for approximately 90 days.
About Cornerstone Building Brands
Cornerstone Building Brands is the largest manufacturer of
exterior building products in North
America. Headquartered in Cary,
North Carolina, the organization 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 21,000 employees at manufacturing, distribution
and office locations throughout North
America. For more information, visit us at
www.cornerstonebuildingbrands.com.
Contact:
K. Darcey Matthews
Vice President, Investor Relations
281-897-7785
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" 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, including our expectations with respect to the
Company's estimated cost savings initiatives following the Ply Gem
Merger. Among the factors that could cause actual results to differ
materially include, but are not limited to, risks and uncertainties
relating 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; inability to
successfully develop new products or improve existing products; the
effects of manufacturing or assembly realignments; changes in laws
or regulations; the effects of certain external domestic or
international factors that we may not be able to control, including
war, civil conflict, terrorism, natural disasters and public health
issues; our ability to obtain financing on acceptable terms;
recognition of goodwill or asset impairment charges; commodity
price volatility and/or limited availability of raw materials,
including steel, PVC resin and aluminum; retention and replacement
of key personnel; increases in union organizing activity and work
stoppages at our facilities or the facilities of our suppliers; our
ability to employ, train and retain qualified personnel at a
competitive cost; enforcement and obsolescence of our intellectual
property rights; changes in foreign currency exchange and interest
rates; costs and liabilities related to compliance with
environmental laws and environmental clean-ups; changes in building
codes and standards; potential product liability claims, including
class action claims and warranties, relating to products we
manufacture; competitive activity and pricing pressure in our
industry; the credit risk of our customers; the dependence on a
core group of significant customers in our Windows and Siding
segments; operational problems or disruptions at any of our
facilities, including natural disasters; volatility of the
Company's stock price; our ability to make strategic acquisitions
accretive to earnings; to fully realize expected cost savings and
synergies, including those identified as a result of the Ply Gem
Merger; significant changes in factors and assumptions used to
measure certain of Ply Gem Parent LLC's defined benefit plan
obligations and the effect of actual investment returns on pension
assets; volatility in transportation, energy and freight prices;
the adoption of climate change legislation; limitations on our net
operating losses, interest deductibility and payments under the tax
receivable agreement; breaches of our information system security
measures; damage to our major information management 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; the effect of tariffs on steel imports; the cost and
difficulty associated with integrating and combining acquired
businesses; potential write-downs or write-offs, restructuring and
impairment or other charges required in connection with the
Ply Gem merger ; potential claims arising from the operations of
our various businesses arising from periods prior to the dates they
were acquired; 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; the effect of increased interest rates on
our ability to service our debt and downgrades of our credit
ratings. See also the "Risk Factors" in the Company's Annual Report
on Form 10-K for the fiscal year ended October 28, 2018, our Transition Report on Form
10-QT for the transition period from October
29, 2018 to December 31, 2018
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.
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 29,
2019
|
|
April 29,
2018
|
|
June 29,
2019
|
|
April 29,
2018
|
Net sales
|
$
|
1,295,457
|
|
|
$
|
457,069
|
|
|
$
|
2,360,289
|
|
|
$
|
878,418
|
|
Cost of
sales
|
990,794
|
|
|
352,986
|
|
|
1,869,709
|
|
|
682,418
|
|
Gross
profit
|
304,663
|
|
|
104,083
|
|
|
490,580
|
|
|
196,000
|
|
|
23.5
|
%
|
|
22.8
|
%
|
|
20.8
|
%
|
|
22.3
|
%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
158,028
|
|
|
74,406
|
|
|
312,334
|
|
|
149,192
|
|
Intangible asset
amortization
|
46,511
|
|
|
2,413
|
|
|
87,974
|
|
|
4,825
|
|
Restructuring and
impairment charges, net
|
7,107
|
|
|
488
|
|
|
10,538
|
|
|
1,582
|
|
Strategic development
and acquisition related costs
|
12,086
|
|
|
1,134
|
|
|
26,168
|
|
|
1,861
|
|
Loss on disposition
of business
|
—
|
|
|
6,686
|
|
|
—
|
|
|
6,686
|
|
Income from
operations
|
80,931
|
|
|
18,956
|
|
|
53,566
|
|
|
31,854
|
|
Interest
income
|
121
|
|
|
37
|
|
|
336
|
|
|
70
|
|
Interest
expense
|
(58,299)
|
|
|
(4,849)
|
|
|
(116,585)
|
|
|
(12,341)
|
|
Foreign exchange gain
(loss)
|
523
|
|
|
(305)
|
|
|
1,700
|
|
|
166
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(21,875)
|
|
|
—
|
|
|
(21,875)
|
|
Other income
(expense), net
|
(397)
|
|
|
270
|
|
|
(52)
|
|
|
727
|
|
Income (loss) before
income taxes
|
22,879
|
|
|
(7,766)
|
|
|
(61,035)
|
|
|
(1,399)
|
|
Provision (benefit)
for income taxes
|
5,346
|
|
|
(2,082)
|
|
|
(18,551)
|
|
|
(964)
|
|
|
23.4
|
%
|
|
26.8
|
%
|
|
30.4
|
%
|
|
68.9
|
%
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
17,533
|
|
|
(5,684)
|
|
|
(42,484)
|
|
|
(435)
|
|
Net income allocated
to participating securities
|
(270)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income (loss)
applicable to common shares
|
$
|
17,263
|
|
|
$
|
(5,684)
|
|
|
$
|
(42,484)
|
|
|
$
|
(435)
|
|
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.01)
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
125,516
|
|
|
66,210
|
|
|
125,510
|
|
|
66,311
|
|
Diluted
|
125,516
|
|
|
66,210
|
|
|
125,510
|
|
|
66,311
|
|
|
|
|
|
|
|
|
|
Increase in net
sales
|
183.4
|
%
|
|
8.7
|
%
|
|
168.7
|
%
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses percentage of net sales
|
12.2
|
%
|
|
16.3
|
%
|
|
13.2
|
%
|
|
17.0
|
%
|
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
June 29,
2019
|
|
October 28,
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
87,496
|
|
|
$
|
54,272
|
|
Restricted
cash
|
3,989
|
|
|
245
|
|
Accounts receivable,
net
|
589,610
|
|
|
233,297
|
|
Inventories,
net
|
502,125
|
|
|
254,531
|
|
Income taxes
receivable
|
20,233
|
|
|
1,012
|
|
Investments in debt
and equity securities, at market
|
3,709
|
|
|
5,285
|
|
Prepaid expenses and
other
|
70,046
|
|
|
34,821
|
|
Assets held for
sale
|
5,018
|
|
|
7,272
|
|
Total current
assets
|
1,282,226
|
|
|
590,735
|
|
|
|
|
|
Property, plant and
equipment, net
|
634,599
|
|
|
236,240
|
|
Lease right-of-use
assets
|
282,793
|
|
|
—
|
|
Goodwill
|
1,611,213
|
|
|
148,291
|
|
Intangible assets,
net
|
1,830,821
|
|
|
127,529
|
|
Deferred income
taxes
|
—
|
|
|
982
|
|
Other assets,
net
|
12,088
|
|
|
6,598
|
|
Total
assets
|
$
|
5,653,740
|
|
|
$
|
1,110,375
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
$
|
25,600
|
|
|
$
|
4,150
|
|
Note
payable
|
—
|
|
|
497
|
|
Payable pursuant to a
tax receivable agreement
|
24,760
|
|
|
—
|
|
Accounts
payable
|
241,808
|
|
|
170,663
|
|
Accrued compensation
and benefits
|
82,804
|
|
|
65,136
|
|
Accrued
interest
|
47,237
|
|
|
1,684
|
|
Accrued income
taxes
|
11,720
|
|
|
11,685
|
|
Current portion of
lease liabilities
|
69,837
|
|
|
—
|
|
Other accrued
expenses
|
252,367
|
|
|
81,884
|
|
Total current
liabilities
|
756,133
|
|
|
335,699
|
|
|
|
|
|
Long-term
debt
|
3,315,550
|
|
|
403,076
|
|
Deferred income
taxes
|
265,464
|
|
|
2,250
|
|
Long-term lease
liabilities
|
217,968
|
|
|
—
|
|
Other long-term
liabilities
|
190,421
|
|
|
39,085
|
|
Total long-term
liabilities
|
3,989,403
|
|
|
444,411
|
|
|
|
|
|
Common
stock
|
1,256
|
|
|
663
|
|
Additional paid-in
capital
|
1,243,897
|
|
|
523,788
|
|
Accumulated
deficit
|
(308,323)
|
|
|
(186,291)
|
|
Accumulated other
comprehensive loss, net
|
(27,419)
|
|
|
(6,708)
|
|
Treasury stock, at
cost
|
(1,207)
|
|
|
(1,187)
|
|
Total stockholders'
equity
|
908,204
|
|
|
330,265
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
5,653,740
|
|
|
$
|
1,110,375
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
Six Months
Ended
|
|
June 29,
2019
|
|
April 29,
2018
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
|
(42,484)
|
|
|
$
|
(435)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
127,476
|
|
|
20,800
|
|
Non-cash interest
expense
|
3,954
|
|
|
781
|
|
Loss on
extinguishment of debt
|
—
|
|
|
21,875
|
|
Share-based
compensation expense
|
7,479
|
|
|
7,868
|
|
Loss on disposition
of business, net
|
—
|
|
|
6,192
|
|
Non-cash fair value
premium on purchased inventory
|
16,249
|
|
|
—
|
|
Gains on asset sales,
net
|
(277)
|
|
|
(250)
|
|
Provision for
doubtful accounts
|
(205)
|
|
|
(44)
|
|
Deferred income
taxes
|
(48,515)
|
|
|
(1,676)
|
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
Accounts
receivable
|
(133,820)
|
|
|
17,060
|
|
Inventories
|
29,430
|
|
|
(24,920)
|
|
Income
taxes
|
2,245
|
|
|
(2,822)
|
|
Prepaid expenses and
other
|
(706)
|
|
|
(4,182)
|
|
Accounts
payable
|
15,079
|
|
|
12,686
|
|
Accrued
expenses
|
(2,952)
|
|
|
(12,016)
|
|
Other, net
|
(2,867)
|
|
|
(931)
|
|
Net cash provided by
(used in) operating activities
|
(29,914)
|
|
|
39,986
|
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions, net of
cash acquired
|
(179,184)
|
|
|
—
|
|
Capital
expenditures
|
(57,220)
|
|
|
(16,897)
|
|
Proceeds from sale of
property, plant and equipment
|
873
|
|
|
2,678
|
|
Business disposition,
net
|
—
|
|
|
(4,415)
|
|
Net cash used in
investing activities
|
(235,531)
|
|
|
(18,634)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from stock
options exercised
|
—
|
|
|
1,040
|
|
Proceeds from ABL
facility
|
270,000
|
|
|
65,000
|
|
Payments on ABL
facility
|
(50,000)
|
|
|
(65,000)
|
|
Proceeds from term
loan
|
—
|
|
|
415,000
|
|
Payments on term
loan
|
(12,810)
|
|
|
(144,147)
|
|
Payments on senior
notes
|
—
|
|
|
(265,470)
|
|
Payments on note
payable
|
—
|
|
|
(441)
|
|
Payments of financing
costs
|
—
|
|
|
(6,275)
|
|
Payments related to
tax withholding for share-based compensation
|
(167)
|
|
|
(4,612)
|
|
Purchases of treasury
stock
|
—
|
|
|
(46,705)
|
|
Net cash provided by
(used in) financing activities
|
207,023
|
|
|
(51,610)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
2,300
|
|
|
(24)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(56,122)
|
|
|
(30,282)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
147,607
|
|
|
65,794
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
91,485
|
|
|
$
|
35,512
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
|
ADJUSTED NET
INCOME (LOSS) PER DILUTED COMMON SHARE AND
NET INCOME (LOSS)
COMPARISON
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 29,
2019
|
|
April 29,
2018
|
|
June 29,
2019
|
|
April 29,
2018
|
Net income (loss)
per diluted common share, GAAP basis
|
$
|
0.14
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.01)
|
|
Restructuring and
impairment charges, net
|
0.06
|
|
|
0.01
|
|
|
0.08
|
|
|
0.02
|
|
Strategic development
and acquisition related costs
|
0.10
|
|
|
0.02
|
|
|
0.21
|
|
|
0.03
|
|
Loss on disposition of
business
|
—
|
|
|
0.10
|
|
|
—
|
|
|
0.10
|
|
Loss on extinguishment
of debt
|
—
|
|
|
0.33
|
|
|
—
|
|
|
0.33
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
Non cash loss (gain) on
foreign currency transactions
|
—
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
0.13
|
|
|
—
|
|
Customer inventory
buybacks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other, net
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(0.04)
|
|
|
(0.12)
|
|
|
(0.11)
|
|
|
(0.15)
|
|
Adjusted net
income (loss) per diluted common share(2)
|
$
|
0.26
|
|
|
$
|
0.25
|
|
|
$
|
(0.02)
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 29,
2019
|
|
April 29,
2018
|
|
June 29,
2019
|
|
April 29,
2018
|
Net income (loss)
applicable to common shares, GAAP basis
|
$
|
17,263
|
|
|
$
|
(5,684)
|
|
|
$
|
(42,484)
|
|
|
$
|
(435)
|
|
Restructuring and
impairment charges, net
|
7,107
|
|
|
488
|
|
|
10,538
|
|
|
1,582
|
|
Strategic development
and acquisition related costs
|
12,086
|
|
|
1,134
|
|
|
26,168
|
|
|
1,861
|
|
Loss on disposition of
business
|
—
|
|
|
6,686
|
|
|
—
|
|
|
6,686
|
|
Loss on extinguishment
of debt
|
—
|
|
|
21,875
|
|
|
—
|
|
|
21,875
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
4,600
|
|
Non cash loss (gain) on
foreign currency transactions
|
(523)
|
|
|
305
|
|
|
(1,700)
|
|
|
(166)
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
16,249
|
|
|
—
|
|
Customer inventory
buybacks
|
175
|
|
|
—
|
|
|
417
|
|
|
—
|
|
Other, net
|
1,357
|
|
|
—
|
|
|
2,081
|
|
|
(323)
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(5,396)
|
|
|
(8,140)
|
|
|
(14,357)
|
|
|
(9,838)
|
|
Adjusted net
income (loss) applicable to common
shares(2)
|
$
|
32,069
|
|
|
$
|
16,664
|
|
|
$
|
(3,088)
|
|
|
$
|
25,842
|
|
|
|
(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
|
|
Six Months
Ended
|
|
June 29,
2019
|
|
April 29,
2018
|
|
June 29,
2019
|
|
April 29,
2018
|
Operating income,
GAAP
|
$
|
80,931
|
|
|
$
|
18,956
|
|
|
$
|
53,566
|
|
|
$
|
31,854
|
|
Restructuring and
impairment
|
7,107
|
|
|
488
|
|
|
10,538
|
|
|
1,582
|
|
Strategic development
and acquisition related costs
|
12,086
|
|
|
1,134
|
|
|
26,168
|
|
|
1,861
|
|
Loss on disposition of
business
|
—
|
|
|
6,686
|
|
|
—
|
|
|
6,686
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
4,600
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
|
—
|
|
|
16,249
|
|
|
—
|
|
Customer inventory
buybacks
|
175
|
|
|
—
|
|
|
417
|
|
|
—
|
|
Other, net
|
1,357
|
|
|
—
|
|
|
2,081
|
|
|
—
|
|
Adjusted operating
income
|
101,656
|
|
|
27,264
|
|
|
109,019
|
|
|
46,583
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
(397)
|
|
|
270
|
|
|
(52)
|
|
|
727
|
|
Depreciation and
amortization
|
67,529
|
|
|
10,442
|
|
|
127,476
|
|
|
20,800
|
|
Share-based
compensation expense
|
3,474
|
|
|
1,998
|
|
|
7,479
|
|
|
4,268
|
|
Adjusted
EBITDA
|
$
|
172,262
|
|
|
$
|
39,974
|
|
|
$
|
243,922
|
|
|
$
|
72,378
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
BUSINESS
SEGMENTS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June 29,
2019
|
|
April 29,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
Net
Sales
|
|
|
|
|
|
|
|
Commercial
|
$
|
480,285
|
|
37.1
|
%
|
|
$
|
457,069
|
|
100.0
|
%
|
|
5.1
|
%
|
Siding
|
306,525
|
|
23.7
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
508,647
|
|
39.2
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total net
sales
|
$
|
1,295,457
|
|
100.0
|
%
|
|
$
|
457,069
|
|
100.0
|
%
|
|
183.4
|
%
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
Commercial
|
$
|
121,434
|
|
25.3
|
%
|
|
$
|
104,083
|
|
22.8
|
%
|
|
16.7
|
%
|
Siding
|
85,042
|
|
27.7
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
98,187
|
|
19.3
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total gross
profit
|
$
|
304,663
|
|
23.5
|
%
|
|
$
|
104,083
|
|
22.8
|
%
|
|
192.7
|
%
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
Commercial
|
$
|
58,809
|
|
12.2
|
%
|
|
$
|
40,022
|
|
8.8
|
%
|
|
46.9
|
%
|
Siding
|
25,937
|
|
8.5
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
31,912
|
|
6.3
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Corporate
|
(35,727)
|
|
—
|
|
|
(21,066)
|
|
—
|
%
|
|
(69.6)
|
%
|
Total operating
income
|
$
|
80,931
|
|
6.2
|
%
|
|
$
|
18,956
|
|
4.1
|
%
|
|
326.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June 29,
2019
|
|
April 29,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
Net
Sales
|
|
|
|
|
|
|
|
Commercial
|
$
|
905,246
|
|
38.4
|
%
|
|
$
|
878,418
|
|
100.0
|
%
|
|
3.1
|
%
|
Siding
|
524,802
|
|
22.2
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
930,241
|
|
39.4
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total net
sales
|
$
|
2,360,289
|
|
100.0
|
%
|
|
$
|
878,418
|
|
100.0
|
%
|
|
168.7
|
%
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
Commercial
|
$
|
211,835
|
|
23.4
|
%
|
|
$
|
196,000
|
|
22.3
|
%
|
|
8.1
|
%
|
Siding
|
118,218
|
|
22.5
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
160,527
|
|
17.3
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Total gross
profit
|
$
|
490,580
|
|
20.8
|
%
|
|
$
|
196,000
|
|
22.3
|
%
|
|
150.3
|
%
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
Commercial
|
$
|
83,119
|
|
9.2
|
%
|
|
$
|
77,821
|
|
8.9
|
%
|
|
6.8
|
%
|
Siding
|
14,283
|
|
2.7
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Windows
|
27,593
|
|
3.0
|
%
|
|
—
|
|
—
|
%
|
|
100.0
|
%
|
Corporate
|
(71,429)
|
|
—
|
|
|
(45,967)
|
|
—
|
%
|
|
(55.4)
|
%
|
Total operating
income
|
$
|
53,566
|
|
2.3
|
%
|
|
$
|
31,854
|
|
3.6
|
%
|
|
68.2
|
%
|
View original
content:http://www.prnewswire.com/news-releases/cornerstone-building-brands-reports-second-quarter-2019-results-300897495.html
SOURCE Cornerstone Building Brands, Inc.