Tampa, FL, August 7, 2013) - Masonite International Corporation (“Masonite”) today announced results for the three and six months ended June 30, 2013.

Executive Summary

Net sales increased $20.3 million or 4.7% to $453.1 million in the second quarter of 2013 over the second quarter of 2012. Excluding the impact of foreign exchange, net sales would have increased by $23.6 million or 5.5%.

Adjusted EBITDA1 increased $6.6 million or 24.5% to $33.5 million in the second quarter of 2013 over the second quarter of 2012. Excluding the impact of foreign exchange, Adjusted EBITDA would have increased by $6.9 million or 25.7%.

In July 2013, Masonite completed the acquisition of the door manufacturing operations of Masisa S.A., a Chilean based manufacturer of stile and rail and French doors primarily for the North American residential door market.

“Second quarter results reflect a strengthening U.S. housing market and on-going benefits from our strategic tuck-in acquisition program,” stated Fred Lynch, President and CEO of Masonite. “Pricing actions taken in the first quarter led to improvements in the average unit price achieved in North America. Also, our decision to proactively discontinue certain unprofitable product lines and exit select markets in Europe also contributed meaningfully to second quarter results.”

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

Second Quarter 2013 Discussion

Net sales increased 4.7% to $453.1 million in the three months ended June 30, 2013, from $432.8 million in the comparable period of 2012. Excluding the unfavorable impact of foreign exchange, net sales would have increased by 5.5% to $456.4 million. This increase was primarily due to a $16.3 million increase in net sales related to improvements in our average unit price and $8.5 million related to an increase in unit volumes in the three months ended June 30, 2013 versus the comparable period in 2012.

Adjusted EBITDA increased 24.5% to $33.5 million for the three months ended June 30, 2013, from $26.9 million in the comparable period of 2012. Excluding a $0.3 million unfavorable impact of foreign exchange, Adjusted EBITDA would have increased by 25.7% or $6.9 million in the three months ended June 30, 2013 versus the comparable period in 2012.

Net sales in the North America segment increased 9.4% to $346.7 million in the three months ended June 30, 2013, from $317.0 million in the three months ended June 30, 2012. The quarterly results were not significantly impacted by foreign exchange. Results in the quarter were primarily driven by improvements in unit volumes and average unit prices which were slightly offset by lower external sales of door components.

Net sales in the Europe, Asia and Latin America segment decreased 6.5% to $87.6 million in the three months ended June 30, 2013, from $93.7 million in the three months ended June 30, 2012. Excluding a favorable foreign exchange impact, net sales would have decreased 6.6% to $87.5 million. This decrease in net sales was primarily the result of lower unit volumes due to the broader economic conditions in Europe, our decision to proactively discontinue certain unprofitable product lines in France and our exit from Romania and Hungary.

Net sales in the Africa segment decreased 14.9% to $18.8 million in the three months ended June 30, 2013, from $22.1 million in the three months ended June 30, 2012. This decrease was driven by a $3.3 million unfavorable impact of foreign exchange rates. Excluding the impact of foreign exchange, net sales were flat as a decline in average unit price was offset by an increase in unit volume.

Total company gross profit increased to $64.7 million in the three months ended June 30, 2013, from $60.6 million in the three months ended June 30, 2012. Gross profit margin increased 30 basis points to 14.3% of net sales in the second quarter of 2013, from 14.0% of net sales in the second quarter of 2012.

In the three months ended June 30, 2013, selling, general and administrative expenses increased $1.4 million to $56.0 million, from $54.6 million in the three months ended June 30, 2012. The increase was due primarily to impairment and losses on sales of property, plant and equipment of $2.4 million and other increases of $0.4 million. These increases were partially offset by a reduction in bad debt expense of $1.4 million. Overall selling, general and administrative expenses as a percentage of net sales decreased 20 basis points in the second quarter of 2013 to 12.4%, from 12.6% in 2012.

Year to date 2013 Discussion

Net sales increased 5.4% to $877.6 million in the six months ended June 30, 2013, from $832.9 million in the comparable period of 2012. Excluding the unfavorable impact of foreign exchange, net sales would have increased by 6.1% to $883.4 million. This increase was due to $42.8 million in net sales related to improvements in unit volumes and $11.5 million in net sales from improvements in average unit prices during the six months ended June 30, 2013 versus the comparable period in 2012.

Adjusted EBITDA increased $12.9 million, or 27.6%, to $59.6 million in the six months ended June 30, 2013, from $46.7 million in the six months ended June 30, 2012. Adjusted EBITDA included a $4.5 million net recovery related to the final resolution of the Marshfield business interruption insurance claim. Excluding the net impact of the business interruption insurance claim, Adjusted EBITDA would have increased by 18.0% to $55.1 million in the six months ended June 30, 2013, when compared to the same period in 2012.

Net sales in the North America segment increased 11.3% to $666.0 million in the six months ended June 30, 2013, from $598.6 million in the six months ended June 30, 2012. The results for the six months ended were not significantly impacted by foreign exchange. The results were primarily driven by an increase in net sales from recent acquisitions, improvements in average unit prices and higher volumes, partially offset by lower external sales of door components.

Net sales in the Europe, Asia and Latin America segment decreased 8.4% to $176.3 million in the six months ended June 30, 2013, from $192.4 million in the six months ended June 30, 2012. Excluding the favorable impact of foreign exchange, net sales would have decreased 8.5% to $176.1 million. The decrease in net sales was primarily the result of lower unit volumes due to the broader economic conditions in Europe, our decision to proactively discontinue certain unprofitable product lines in France and our exit from Romania and Hungary.

Net sales in the Africa segment decreased 15.8% to $35.3 million in the six months ended June 30, 2013, from $41.9 million in the six months ended June 30, 2012. This decrease was primarily driven by a $5.9 million unfavorable impact of foreign exchange rates. Additionally, net sales were impacted by a lower average unit price and partially offset by improvements in unit volumes.

Total company gross profit increased to $115.1 million in the six months ended June 30, 2013, from $108.0 million in the six months ended June 30, 2012. Gross profit margin increased 10 basis points to 13.1% of net sales in the six months ended June 30, 2013 from 13.0% of net sales in the six months ended June 30, 2012.

Selling, general and administrative expenses remained flat at $103.0 million in the six months ended June 30, 2013 and 2012. Excluding the favorable impact of foreign exchange, selling, general and administrative expenses increased $0.2 million. Selling, general and administrative expenses increased in the six month period due to increases in depreciation, amortization and impairment and losses on sales of property, plant and equipment. These increases were partially offset by a net business interruption insurance claim recovery and by a reduction in bad debt expense. Overall, selling, general and administrative expenses as a percentage of net sales decreased 70 basis points in the six months ended June 30, 2013 to 11.7%, from 12.4% in the six months ended June 30, 2012.

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 6,000 customers in 70 countries. Additional information about Masonite can be found at www.masonite.com.

Have something to say? Share your thoughts with us in the comments below.