TAMPA, Fla.- Masonite International Corporation ("Masonite") (NYSE: DOOR) today announced results for the three months and fiscal year ended December 28, 2014.

Executive Summary

  • Net sales increased $28.4 million, or 6.8%, to $448.9 million and $106.6 million, or 6.2%, to $1,837.7 million for the fourth quarter and fiscal year, respectively, over the comparable 2013 periods. Excluding the unfavorable impact of foreign exchange, net sales would have increased by 9.7% to $461.1 million and 7.5% to $1,861.3 million for the fourth quarter and fiscal year, respectively.
  • Gross profit increased $16.1 million, or 31.3%, to $67.6 million and $39.9 million, or 17.7%, to $265.4 million for the fourth quarter and fiscal year over the comparable 2013 periods.
  • Net loss attributable to Masonite increased $8.8 million to $16.4 million, or $0.55 per diluted share, and increased $26.3 million to $37.3 million, or $1.26 per diluted share in the fourth quarter and fiscal year, respectively, versus the comparable 2013 periods. Excluding $18.2 million of asset impairment charges, Masonite would have recorded net income of $0.06 per diluted share in the fourth quarter and a net loss of $0.65 per diluted share in the fiscal year.
  • Adjusted EBITDA1 increased $19.9 million, or 111.8%, to $37.7 million and $31.2 million, or 29.5%, to $137.1 million in the fourth quarter and fiscal year versus the comparable 2013 periods.

“Profitable growth accelerated during 2014, despite considerable foreign exchange headwinds, as our pricing actions in the North American residential business and the strategic acquisition of Door-Stop in the U.K. drove Adjusted EBITDA growth of nearly 30 percent,” said Fred Lynch, President and CEO. “Looking forward, we continue to invest in new, innovative products and electronic enablement tools to enhance the customer experience throughout the entire value chain which, when combined with our expectation for modest unit volume growth and steady improvements in average unit prices, should help us grow Adjusted EBITDA by a similar percentage in 2015.”

1 See "Non-GAAP Financial Measure and Related Information" for definition and reconciliation to net income (loss) attributable to Masonite.

Fourth Quarter 2014 Discussion

Net sales increased 6.8% to $448.9 million in the three months ended December 28, 2014, from $420.5 million in the comparable period of 2013. Excluding the unfavorable impact of foreign exchange, net sales would have increased by 9.7% to $461.1 million. The reported increase was primarily due to a $33.6 million improvement in average unit price and $9.0 million of higher unit volumes, partially offset by $12.2 million of negative foreign exchange and a $2.0 million decrease in net sales of other products.

Total company gross profit increased to $67.6 million in the three months ended December 28, 2014, from $51.5 million in the three months ended December 29, 2013. Gross profit margin increased 290 basis points to 15.1% of net sales in the fourth quarter of 2014, from 12.2% of net sales in the fourth quarter of 2013, primarily due to price increases to North American residential customers.

Selling, general and administrative expenses (SG&A) as a percentage of net sales decreased 100 basis points in the fourth quarter of 2014 to 12.0%, from 13.0% in the fourth quarter of 2013. SG&A expenses decreased $0.8 million to $53.9 million in the fourth quarter of 2014, from $54.7 million in the fourth quarter of 2013, driven by a decline in personnel costs of $3.5 million and a reduction due to foreign exchange of $1.0 million.

In addition, Masonite received $2.7 million of business interruption insurance proceeds related to the explosion at the Estcourt Mill in South Africa. Those funds were recorded as a reduction in SG&A in the fourth quarter of 2014. The decreases were partially offset by an increase of $1.5 million related to losses on disposal of property, plant and equipment, an increase in professional fees of $1.4 million, and depreciation and amortization of $0.9 million in the fourth quarter of 2014 compared to the same period in 2013.

During the fourth quarter of 2014 the company recorded a non-cash asset impairment charge of $18.2 million related to its operations in France and India. Of this amount, $15.0 million related to property, plant and equipment and $3.2 million was related to definite-lived intangible assets. The asset impairment in France was primarily the result of deteriorating market conditions while the impairment in India was primarily related to reorganizing the business.

Net loss attributable to Masonite increased $8.8 million to $16.4 million, or $0.55 per diluted share, in the fourth quarter of 2014 from $7.6 million, or $0.25 per diluted share, in the fourth quarter of 2013. Net loss attributable to Masonite in the fourth quarter of 2014 included $18.2 million of asset impairment charges. Excluding the asset impairment charges, Masonite would have recorded net income of $1.8 million or $0.06 for the period.

Adjusted EBITDA increased 111.8% to $37.7 million for the three months ended December 28, 2014, from $17.8 million in the comparable period of 2013. Excluding the net impact of the $2.7 million business interruption insurance claim, Adjusted EBITDA would have increased by 96.6% to $35.0 million in the three months ended December 28, 2014.

Full Year 2014 Discussion

Net sales increased 6.2% to $1,837.7 million in the fiscal year ended December 28, 2014, from $1,731.1 million in 2013. Excluding the unfavorable impact of foreign exchange, net sales would have increased by 7.5% to $1,861.3 million. The increase was primarily due to a $103.3 million improvement in average unit prices and a $32.7 million increase in unit volumes, primarily from growth in North America and our Door-Stop acquisition. These increases were partially offset by $23.6 million of negative foreign exchange impact and a $5.8 million decrease in net sales of other products.

Total company gross profit increased to $265.4 million in the fiscal year ended December 28, 2014, from $225.5 million in the fiscal year ended December 29, 2013. Gross profit margin increased 140 basis points to 14.4% of net sales in the fiscal year ended December 28, 2014, from 13.0% of net sales in the fiscal year ended December 29, 2013, primarily due to price increases at North American residential customers.

Selling, general and administrative expenses increased $16.9 million to $224.1 million, from $207.2 million in the fiscal year ended December 29, 2013. The increase was partially driven by $7.4 million of SG&A incurred in connection with the company's acquired entity, Door-Stop during the fiscal year ended December 28, 2014. Also contributing to the increase was $5.7 million of losses on disposal of property, plant and equipment, $3.1 million in professional fees, primarily from expenses related to Sarbanes-Oxley compliance and the acquisition of Door-Stop, and $1.9 million of share based compensation expense. These increases were partially offset by a decrease in $4.2 million of personnel costs. Overall selling, general and administrative expenses as a percentage of net sales increased 20 basis points in the fiscal year ended December 28, 2014 to 12.2%, from 12.0% in 2013.

Net loss attributable to Masonite increased $26.3 million to $37.3 million, or $1.26 per diluted share, in the fiscal year ended December 28, 2014, from $11.0 million, or $0.39 per diluted share, in the fiscal year ended December 29, 2013. Net loss attributable to Masonite in 2014 included $18.2 million of asset impairment charges. Excluding the asset impairment charges, Masonite would have recorded a net loss of $19.1 million or $0.65 per diluted share in the fiscal year.

Adjusted EBITDA increased 29.5% to $137.1 million for the fiscal year ended December 28, 2014, from $105.9 million in the comparable period of 2013.

About Masonite

Masonite International Corporation is a leading global designer and manufacturer of interior and exterior doors for the residential new construction; the residential repair, renovation and remodeling; and the non-residential building construction markets. Since 1925, Masonite has provided its customers with innovative products and superior service at compelling values. Masonite currently serves more than 7,000 customers in 80 countries. Additional information about Masonite can be found at www.masonite.com.

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