CARY, N.C., Nov. 6, 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 September 28, 2019.
Financial and Operational Highlights for the Third
Quarter:
- Net sales of $1,285.0
million
- Gross profit of $309.8 million,
or 24.1% of net sales
- Net income of $25.2 million with
basic and diluted earnings per share of $0.20
- Adjusted EBITDA of $180.8
million, or 14.1% of net sales
- Net debt leverage reduction from 6.2x to 5.9x in the
quarter
Strategic Highlights for the Third Quarter:
- Realized 240 basis point expansion in gross profit margin to
24.1% compared to 21.7% in the pro forma prior year period
- Achieved the expected merger synergies and cost initiatives
during the quarter bringing the 2019 year-to-date total to
$72.0 million of realized
savings
Commenting on the Company's third quarter performance,
Cornerstone Building Brands' Chairman and Chief Executive Officer,
James S. Metcalf said, "During the
third quarter, our operational initiatives including procurement,
continuous improvement, cost initiatives and merger savings drove
significant margin expansion across our windows, siding and
commercial businesses, despite lower year-over-year market volumes.
With a concentration on pricing discipline and cost management, we
were able to successfully deliver a strong quarter at the upper end
of our Adjusted EBITDA guidance range."
"We also generated $97.7 million
in operating cash flows for the quarter, which allowed the Company
to pay down a net $50.0 million on
our ABL facility. By de-levering and strengthening the balance
sheet, the improvements actioned and delivered by our cost savings
programs are exceeding expectations. Operationally, we remain
focused on providing a premier level of quality and service with a
broad suite of building products solutions to all our customers,"
Mr. Metcalf concluded.
Third 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 merger with
Ply Gem, which was completed on November 16,
2018 (the "Ply Gem Merger"), the financial results for the
third quarter 2019 are not directly comparable to the third quarter
of fiscal year 2018.
Consolidated net sales in the three months ended
September 28, 2019 were $1,285.0
million, compared to $548.5
million in the three months ended July 29, 2018. The
year-over-year improvement was primarily driven by the additional
net sales from Ply Gem and Environmental StoneWorks ("ESW"), which
was acquired on February 20,
2019.
Gross profit was $309.8 million in
the three months ended September 28, 2019, compared to
$133.4 million in the three months
ended July 29, 2018. Gross profit margins were 24.1% in the
three months ended September 28, 2019, compared to 24.3% in
the three months ended July 29, 2018.
Selling, general and administrative ("SG&A") expenses were
$154.0 million in the three months
ended September 28, 2019 compared to $79.0 million in the three months ended
July 29, 2018. The increase in SG&A expense reflects the
additions of Ply Gem and ESW. As a percentage of net sales,
SG&A expenses were 12.0% in the three months ended
September 28, 2019 compared to 14.4% in the three months ended
July 29, 2018.
Operating income in the three months ended September 28,
2019 was $95.6 million, compared to
operating income of $54.5 million in
the three months ended July 29, 2018. Operating income in the
2019 period reflects the additions of Ply Gem and ESW in the three
months ended September 28, 2019 offset by $42.3 million in increased amortization expense
associated with the intangibles from the Ply Gem Merger and the ESW
acquisition, $10.5 million of
additional strategic development and acquisition related costs, and
$5.0 million of additional
restructuring and impairment charges. Adjusted Operating Income, a
non-GAAP financial measure which excludes certain items, was
$112.9 million in three months ended
September 28, 2019, compared to $52.0
million in the three months ended July 29, 2018.
Net income applicable to common shares in the three months ended
September 28, 2019 was $24.8
million, or $0.20 per diluted
common share, compared to $35.8
million, or $0.54 per diluted
common share in the three months ended July 29, 2018. Net
income was impacted by the special items mentioned above for
operating income, partially offset by the $4.8 million tax effect associated with these
items. Excluding the impact of these special items, Adjusted Net
Income, a non-GAAP measure, was $38.0
million, or $0.30 per diluted
common share in the three months ended September 28, 2019,
compared to $34.1 million, or
$0.51 per diluted common share, in
the three months ended July 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 $180.8
million in the three months ended September 28, 2019,
compared to $63.5 million in the
three months ended July 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 September 28, 2019 were
$105.2 million. As of
September 28, 2019, the Company had $170.0 million drawn on its $611.0 million asset-based lending ("ABL")
facility reflecting $50.0 million in
net payments made during the three months ended September 28, 2019.
Third Quarter 2019 Segment Performance
Net sales in the Windows segment were $504.3 million during the three months ended
September 28, 2019, which included $108.8 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 September 28, 2019 was $98.3 million. As a percent of net sales, the
Windows segment's gross profit was 19.5%. Operating income was
$34.4 million in the three months
ended September 28, 2019.
The Siding segment generated $315.8
million in net sales during the three months ended
September 28, 2019, which included $45.4 million from ESW. Gross profit in the three
months ended September 28, 2019 was $90.6 million and 28.7% as a percent of net
sales. Operating income was $37.1
million in the three months ended September 28,
2019.
Net sales in the Commercial segment were $464.9 million in the three months ended
September 28, 2019 compared to $548.5
million in the three months ended July 29, 2018. The
year-over-year decrease was primarily a result of lower industry
volumes. Gross profit was $120.9
million in the three months ended September 28, 2019,
compared to $133.4 million in the
three months ended July 29, 2018. As a percent of net sales,
gross profit was 26.0%, an increase of 170 basis points, compared
to 24.3% in the three months ended July 29, 2018. The increase
was driven by pricing discipline combined with benefits from cost
reduction initiatives and merger synergies. Operating income was
$59.3 million during the three months
ended September 28, 2019, compared to $80.0 million in the three months ended
July 29, 2018. Operating income in the current three months
ended September 28, 2019 was impacted
by a change to the allocation of costs that had previously been in
Corporate to the Commercial segment.
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 $135 to $150 million for the fourth 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 third quarter fiscal 2019 conference call is
scheduled for Wednesday, November 6,
2019 at 9:00am 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 13695073# when prompted. The taped
replay will be available two hours after the call through
November 20, 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 22,000 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 other 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 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 and other 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
|
|
Nine Months
Ended
|
|
September
28,
2019
|
|
July 29,
2018
|
|
September
28,
2019
|
|
July 29,
2018
|
|
Net sales
|
$
|
1,285,043
|
|
|
$
|
548,525
|
|
|
$
|
3,645,332
|
|
|
$
|
1,426,943
|
|
|
Cost of
sales
|
975,240
|
|
|
415,124
|
|
|
2,844,949
|
|
|
1,097,542
|
|
|
Gross
profit
|
309,803
|
|
|
133,401
|
|
|
800,383
|
|
|
329,401
|
|
|
24.1
|
%
|
|
24.3
|
%
|
|
22.0
|
%
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
154,034
|
|
|
79,039
|
|
|
466,368
|
|
|
228,231
|
|
|
Intangible asset
amortization
|
44,725
|
|
|
2,412
|
|
|
132,699
|
|
|
7,237
|
|
|
Restructuring and
impairment charges, net
|
4,984
|
|
|
(439)
|
|
|
15,522
|
|
|
1,143
|
|
|
Strategic development
and acquisition related costs
|
10,500
|
|
|
3,642
|
|
|
36,668
|
|
|
5,503
|
|
|
Loss (gain) on
disposition of business
|
—
|
|
|
(1,013)
|
|
|
—
|
|
|
5,673
|
|
|
Gain on insurance
recovery
|
—
|
|
|
(4,741)
|
|
|
—
|
|
|
(4,741)
|
|
|
Income from
operations
|
95,560
|
|
|
54,501
|
|
|
149,126
|
|
|
86,355
|
|
|
Interest
income
|
155
|
|
|
48
|
|
|
491
|
|
|
118
|
|
|
Interest
expense
|
(56,549)
|
|
|
(4,572)
|
|
|
(173,134)
|
|
|
(16,913)
|
|
|
Foreign exchange gain
(loss)
|
(616)
|
|
|
(258)
|
|
|
1,084
|
|
|
(92)
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,875)
|
|
|
Other income,
net
|
717
|
|
|
345
|
|
|
665
|
|
|
1,072
|
|
|
Income (loss) before
income taxes
|
39,267
|
|
|
50,064
|
|
|
(21,768)
|
|
|
48,665
|
|
|
Provision (benefit)
for income taxes
|
14,103
|
|
|
14,078
|
|
|
(4,448)
|
|
|
13,114
|
|
|
35.9
|
%
|
|
28.1
|
%
|
|
20.4
|
%
|
|
26.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
25,164
|
|
|
35,986
|
|
|
(17,320)
|
|
|
35,551
|
|
|
Net income allocated
to participating securities
|
(374)
|
|
|
(221)
|
|
|
—
|
|
|
(248)
|
|
|
Net income (loss)
applicable to common shares
|
$
|
24,790
|
|
|
$
|
35,765
|
|
|
$
|
(17,320)
|
|
|
$
|
35,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.20
|
|
|
$
|
0.54
|
|
|
$
|
(0.14)
|
|
|
$
|
0.53
|
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
0.54
|
|
|
$
|
(0.14)
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
125,557
|
|
|
66,335
|
|
|
125,526
|
|
|
66,361
|
|
|
Diluted
|
125,558
|
|
|
66,438
|
|
|
125,526
|
|
|
66,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in net
sales
|
134.3
|
%
|
|
16.9
|
%
|
|
155.5
|
%
|
|
11.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses percentage of net sales
|
12.0
|
%
|
|
14.4
|
%
|
|
12.8
|
%
|
|
16.0
|
%
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
September
28,
2019
|
|
October
28,
2018
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
105,244
|
|
$
|
54,272
|
|
|
Restricted
cash
|
3,872
|
|
245
|
|
|
Accounts receivable,
net
|
594,681
|
|
233,297
|
|
|
Inventories,
net
|
467,916
|
|
254,531
|
|
|
Income taxes
receivable
|
27,641
|
|
1,012
|
|
|
Investments in debt
and equity securities, at market
|
3,569
|
|
5,285
|
|
|
Prepaid expenses and
other
|
74,882
|
|
34,821
|
|
|
Assets held for
sale
|
5,018
|
|
7,272
|
|
|
Total current
assets
|
1,282,823
|
|
590,735
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
643,844
|
|
236,240
|
|
|
Lease right-of-use
assets
|
308,256
|
|
—
|
|
|
Goodwill
|
1,677,929
|
|
148,291
|
|
|
Intangible assets,
net
|
1,784,937
|
|
127,529
|
|
|
Deferred income
taxes
|
—
|
|
982
|
|
|
Other assets,
net
|
10,667
|
|
6,598
|
|
|
Total
assets
|
$
|
5,708,456
|
|
$
|
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
|
235,247
|
|
170,663
|
|
|
Accrued compensation
and benefits
|
84,951
|
|
65,136
|
|
|
Accrued
interest
|
31,996
|
|
1,684
|
|
|
Accrued income
taxes
|
18,137
|
|
11,685
|
|
|
Current portion of
lease liabilities
|
68,993
|
|
—
|
|
|
Other accrued
expenses
|
254,833
|
|
81,884
|
|
|
Total current
liabilities
|
744,517
|
|
335,699
|
|
|
|
|
|
|
|
Long-term
debt
|
3,267,646
|
|
403,076
|
|
|
Deferred income
taxes
|
244,062
|
|
2,250
|
|
|
Long-term lease
liabilities
|
243,624
|
|
—
|
|
|
Other long-term
liabilities
|
280,722
|
|
39,085
|
|
|
Total long-term
liabilities
|
4,036,054
|
|
444,411
|
|
|
|
|
|
|
|
Common
stock
|
1,257
|
|
663
|
|
|
Additional paid-in
capital
|
1,247,026
|
|
523,788
|
|
|
Accumulated
deficit
|
(283,159)
|
|
(186,291)
|
|
|
Accumulated other
comprehensive loss, net
|
(36,139)
|
|
(6,708)
|
|
|
Treasury stock, at
cost
|
(1,100)
|
|
(1,187)
|
|
|
Total stockholders'
equity
|
927,885
|
|
330,265
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
5,708,456
|
|
$
|
1,110,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended
|
|
September
28,
2019
|
|
July 29,
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
$
|
(17,320)
|
|
$
|
35,551
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
191,485
|
|
30,974
|
|
Non-cash interest
expense
|
6,233
|
|
1,140
|
|
Loss on extinguishment
of debt
|
—
|
|
21,875
|
|
Share-based
compensation expense
|
10,613
|
|
8,909
|
|
Loss on disposition of
business, net
|
—
|
|
5,092
|
|
Gain on insurance
recovery
|
—
|
|
(4,741)
|
|
Non-cash fair value
premium on purchased inventory
|
16,249
|
|
—
|
|
Gains on asset sales,
net
|
(335)
|
|
(875)
|
|
Provision for doubtful
accounts
|
(492)
|
|
(177)
|
|
Deferred income
taxes
|
(45,192)
|
|
(1,676)
|
|
Changes in operating
assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
Accounts
receivable
|
(138,329)
|
|
(13,512)
|
|
Inventories
|
63,327
|
|
(64,882)
|
|
Income
taxes
|
1,256
|
|
2,446
|
|
Prepaid expenses and
other
|
(4,374)
|
|
(3,686)
|
|
Accounts
payable
|
8,486
|
|
34,567
|
|
Accrued
expenses
|
(21,005)
|
|
6,088
|
|
Other, net
|
(2,783)
|
|
(185)
|
|
Net cash provided by
operating activities
|
67,819
|
|
56,908
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(179,184)
|
|
—
|
|
Capital
expenditures
|
(86,364)
|
|
(34,867)
|
|
Proceeds from sale of
property, plant and equipment
|
873
|
|
6,338
|
|
Business disposition,
net
|
—
|
|
(1,426)
|
|
Proceeds from
insurance
|
—
|
|
4,741
|
|
Net cash used in
investing activities
|
(264,675)
|
|
(25,214)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from stock
options exercised
|
—
|
|
1,279
|
|
Proceeds from ABL
facility
|
290,000
|
|
85,000
|
|
Payments on ABL
facility
|
(120,000)
|
|
(85,000)
|
|
Proceeds from term
loan
|
—
|
|
415,000
|
|
Payments on term
loan
|
(12,810)
|
|
(145,184)
|
|
Payments on senior
notes
|
—
|
|
(265,470)
|
|
Payments on note
payable
|
—
|
|
(1,245)
|
|
Payments of financing
costs
|
—
|
|
(6,521)
|
|
Payments related to
tax withholding for share-based compensation
|
(231)
|
|
(5,048)
|
|
Purchases of treasury
stock
|
—
|
|
(46,705)
|
|
Net cash provided by
(used in) financing activities
|
156,959
|
|
(53,894)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
1,406
|
|
(92)
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(38,491)
|
|
(22,292)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
147,607
|
|
65,794
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
109,116
|
|
$
|
43,502
|
|
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
|
|
Nine Months
Ended
|
|
September
28,
2019
|
|
July 29,
2018
|
|
September
28,
2019
|
|
July 29,
2018
|
|
Net income (loss)
per diluted common share, GAAP basis
|
$
|
0.20
|
|
$
|
0.54
|
|
$
|
(0.14)
|
|
$
|
0.53
|
|
Restructuring and
impairment charges, net
|
0.04
|
|
(0.01)
|
|
0.12
|
|
0.01
|
|
Strategic development
and acquisition related costs
|
0.08
|
|
0.06
|
|
0.29
|
|
0.08
|
|
Loss (gain) on
disposition of business
|
—
|
|
(0.02)
|
|
—
|
|
0.09
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
0.33
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
—
|
|
—
|
|
0.07
|
|
Gain on insurance
recovery
|
—
|
|
(0.07)
|
|
—
|
|
(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
|
|
—
|
|
0.03
|
|
—
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(0.04)
|
|
0.01
|
|
(0.15)
|
|
(0.14)
|
|
Adjusted net
income per diluted common share(2)
|
$
|
0.30
|
|
$
|
0.51
|
|
$
|
0.28
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
28,
2019
|
|
July 29,
2018
|
|
September
28,
2019
|
|
July 29,
2018
|
|
Net income (loss)
applicable to common shares, GAAP basis
|
$
|
24,790
|
|
$
|
35,765
|
|
$
|
(17,320)
|
|
$
|
35,303
|
|
Restructuring and
impairment charges, net
|
4,984
|
|
(439)
|
|
15,522
|
|
1,143
|
|
Strategic development
and acquisition related costs
|
10,500
|
|
3,642
|
|
36,668
|
|
5,503
|
|
Loss (gain) on
disposition of business
|
—
|
|
(1,013)
|
|
—
|
|
5,673
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
21,875
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
—
|
|
—
|
|
4,600
|
|
Gain on insurance
recovery
|
—
|
|
(4,741)
|
|
—
|
|
(4,741)
|
|
Non cash loss (gain) on
foreign currency transactions
|
616
|
|
258
|
|
(1,084)
|
|
92
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
—
|
|
16,249
|
|
—
|
|
Customer inventory
buybacks
|
159
|
|
—
|
|
576
|
|
—
|
|
Other, net
|
1,699
|
|
—
|
|
3,780
|
|
(323)
|
|
Tax effect of
applicable non-GAAP adjustments(1)
|
(4,795)
|
|
626
|
|
(19,147)
|
|
(9,322)
|
|
Adjusted net
income applicable to common shares(2)
|
$
|
37,953
|
|
$
|
34,098
|
|
$
|
35,244
|
|
$
|
59,803
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Nine Months
Ended
|
|
September
28,
2019
|
|
July 29,
2018
|
|
September
28,
2019
|
|
July 29,
2018
|
|
Operating income,
GAAP
|
$
|
95,560
|
|
$
|
54,501
|
|
$
|
149,126
|
|
$
|
86,355
|
|
Restructuring and
impairment charges, net
|
4,984
|
|
(439)
|
|
15,522
|
|
1,143
|
|
Strategic development
and acquisition related costs
|
10,500
|
|
3,642
|
|
36,668
|
|
5,503
|
|
Loss (gain) on
disposition of business
|
—
|
|
(1,013)
|
|
—
|
|
5,673
|
|
Acceleration of CEO
retirement benefits
|
—
|
|
—
|
|
—
|
|
4,600
|
|
Gain on insurance
recovery
|
—
|
|
(4,741)
|
|
—
|
|
(4,741)
|
|
Non cash charge of
purchase price allocated to inventories
|
—
|
|
—
|
|
16,249
|
|
—
|
|
Customer inventory
buybacks
|
159
|
|
—
|
|
576
|
|
—
|
|
Other, net
|
1,699
|
|
—
|
|
3,780
|
|
—
|
|
Adjusted operating
income
|
112,902
|
|
51,950
|
|
221,921
|
|
98,533
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
717
|
|
345
|
|
665
|
|
1,072
|
|
Depreciation and
amortization
|
64,009
|
|
10,174
|
|
191,485
|
|
30,974
|
|
Share-based
compensation expense
|
3,134
|
|
1,041
|
|
10,613
|
|
5,309
|
|
Adjusted
EBITDA
|
$
|
180,762
|
|
$
|
63,510
|
|
$
|
424,684
|
|
$
|
135,888
|
|
CORNERSTONE
BUILDING BRANDS, INC.
|
|
BUSINESS
SEGMENTS
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September 28,
2019
|
|
July 29,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
464,906
|
36.2
|
%
|
|
$
|
548,525
|
100.0
|
%
|
|
(15.2)
|
%
|
|
Siding
|
315,799
|
24.6
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
504,338
|
39.2
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Total net
sales
|
$
|
1,285,043
|
100.0
|
%
|
|
$
|
548,525
|
100.0
|
%
|
|
134.3
|
%
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
120,876
|
26.0
|
%
|
|
$
|
133,401
|
24.3
|
%
|
|
(9.4)
|
%
|
|
Siding
|
90,608
|
28.7
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
98,319
|
19.5
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Total
gross profit
|
$
|
309,803
|
24.1
|
%
|
|
$
|
133,401
|
24.3
|
%
|
|
132.2
|
%
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
59,317
|
12.8
|
%
|
|
$
|
79,964
|
14.6
|
%
|
|
(25.8)
|
%
|
|
Siding
|
37,063
|
11.7
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
34,446
|
6.8
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Corporate
|
(35,266)
|
—
|
|
|
(25,463)
|
—
|
%
|
|
(38.5)
|
%
|
|
Total
operating income
|
$
|
95,560
|
7.4
|
%
|
|
$
|
54,501
|
9.9
|
%
|
|
75.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September 28,
2019
|
|
July 29,
2018
|
|
|
|
|
% of
Net Sales
|
|
|
% of
Net Sales
|
|
% Change
|
|
Net
Sales
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
1,370,152
|
37.6
|
%
|
|
$
|
1,426,943
|
100.0
|
%
|
|
(4.0)
|
%
|
|
Siding
|
840,601
|
23.1
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
1,434,579
|
39.3
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Total net
sales
|
$
|
3,645,332
|
100.0
|
%
|
|
$
|
1,426,943
|
100.0
|
%
|
|
155.5
|
%
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
332,711
|
24.3
|
%
|
|
$
|
329,401
|
23.1
|
%
|
|
1.0
|
%
|
|
Siding
|
208,826
|
24.8
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
258,846
|
18.0
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Total
gross profit
|
$
|
800,383
|
22.0
|
%
|
|
$
|
329,401
|
23.1
|
%
|
|
143.0
|
%
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
Commercial
|
$
|
142,436
|
10.4
|
%
|
|
$
|
157,785
|
11.1
|
%
|
|
(9.7)
|
%
|
|
Siding
|
51,346
|
6.1
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Windows
|
62,039
|
4.3
|
%
|
|
—
|
—
|
%
|
|
100.0
|
%
|
|
Corporate
|
(106,695)
|
—
|
|
|
(71,430)
|
—
|
%
|
|
(49.4)
|
%
|
|
Total
operating income
|
$
|
149,126
|
4.1
|
%
|
|
$
|
86,355
|
6.1
|
%
|
|
72.7
|
%
|
View original
content:http://www.prnewswire.com/news-releases/cornerstone-building-brands-reports-third-quarter-2019-results-300952392.html
SOURCE Cornerstone Building Brands, Inc.