EAGAN, MN -Norcraft Companies, Inc. kitchen and bathroom cabinetry manufacturer reported a 17.6% sales gain for 2013 to $339.7 million. Fourth quarter sales rose 13% - slower than the overall growth rate for the year - and charges to extinguish debt following a public stock offering debt drove the cabinetmaker to a $15 million loss for the period and the year.
Norcraft said that a move to higher margin cabinetry hurt four quarter sales, which grew at a slower pace than the year as a whole.
Norcraft cabinets operations shared in the rising home remodeling and home construction markets, says Mark Buller, Chairman and CEO, and the Norcraft IPO, which raised $106.5 million, will help them move to profitability.
“We successfully completed our IPO, eliminated $17.3 million of annualized interest expense and grew our business," says Buller. "We are encouraged by our team’s ability to increase profitability amid modest material cost inflation."
Norcraft fourth quarter sales increased $9.3 million, or 13.0%, to $80.5 million; but net income rose 42.0% - $1.4 million - for the period. The increase was mainly attributable to higher sales on fixed manufacturing costs, lower freight costs and labor efficiencies from increased production. Buller said first quarter 2014 results will be impact by the cold weather that dampened customer traffic in stores.
During an earnings call, Buller said, "Eighteen months ago we decided to move away from lower margin business. That's been going relatively well. We are trying to focus in on the higher margin products. Obviously that hurt us a little bit in Q4. As we look forward we are going to continue with that strategy and focus in on higher margin business."
For the full year of 2013, net sales increased $50.9 million. Norcraft markets its products through seven main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry, Brookwood and Urban Effects.
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