EAGAN, Minn.--Norcraft Companies, Inc. (the “Company” or “Norcraft”) (NYSE:NCFT), a leading manufacturer of kitchen and bathroom cabinetry in the United States and Canada, today reported financial results for the fourth quarter and full year ended December 31, 2013.
“We are pleased to announce a fourth consecutive year of accelerating growth with sales up 17.6% to $339.7 million in 2013 from $288.8 million in 2012,” stated Mark Buller, Chairman and Chief Executive Officer of the Company. “The continued expansion of our operations reflects improving industry demand for quality cabinetry and continued execution on our strategy to expand our presence in our core dealer channel, deliver new products and realize price/mix gains across all our divisions.”
Mark Buller continued, “During the fourth quarter, we successfully completed our IPO, eliminated $17.3 million of annualized interest expense and grew our business. Our adjusted EBITDA increased 30.0% on net sales up 13.0% in the fourth quarter as we leveraged our cost base and implemented additional productivity enhancements.
"Furthermore, we are encouraged by our team’s ability to increase profitability amid modest material cost inflation and some competitiveness within the industry that persisted through the fourth quarter. As we move forward in 2014, we are closely managing our pricing, promotional activities and costs and expect to continue building on the progress we have been making.”
Fourth Quarter of 2013 Compared with Fourth Quarter of 2012
In the fourth quarter of 2013, net sales increased $9.3 million, or 13.0%, to $80.5 million as compared to $71.2 million in the fourth quarter of 2012. Sales increased in nearly all of the Company’s divisions, driven largely by industry growth, mix/price gains and promotional activity during the quarter.
Income from operations in the fourth quarter of 2013 increased $1.4 million, or 42.0%, to $4.6 million from $3.2 million for the fourth quarter of 2012. The increase was mainly attributable to higher sales on the Company’s fixed manufacturing costs, lower freight costs and labor efficiencies associated with increased production. These positive factors were partly offset by moderately higher material costs and $0.5 million of additional corporate expenses related to the Company’s recently completed initial public offering as compared to the comparable quarter in 2012.
The net loss of $15.4 million in the fourth quarter of 2013 represented an increase of $11.5 million from the $3.9 million net loss in the fourth quarter of 2012. The net loss in the fourth quarter of 2013 included a $12.5 million loss on debt extinguishment related to the Company's previously announced redemption of senior notes.
Adjusted EBITDA in the fourth quarter of 2013 increased $2.1 million, or 30.0%, to $8.9 million as compared to $6.8 million for the same quarter of 2012 (Adjusted EBITDA is a non-GAAP measure defined in the table below).
At December 31, 2013, the Company had cash of $39.1 million and total long-term debt of $150.0 million, as compared to cash of $23.0 million and total long-term debt of $240.0 million at December 31, 2012. In November 2013, the Company completed its initial public offering, raising net proceeds of approximately $107.3 million. In connection with the offering, the Company entered into a new $150.0 million senior secured term loan facility, which matures in 2020. In December 2013, the Company completed the redemption of $240.0 million of outstanding senior secured notes, funded in part with a full draw of the senior term loan facility and the remainder funded with proceeds from the Company's initial public offering. The Company expects these transactions to lower cash interest expense by approximately $17.3 million annually.
Full Year of 2013 Compared with Full Year of 2012
For the full year of 2013, net sales increased $50.9 million, or 17.6%, to $339.7 million from $288.8 million for the full year of 2012. Income from operations of $26.6 million in the full year of 2013 increased by $7.3 million, or 37.2%, from $19.3 million in the full year of 2012. The net loss of $15.2 million in the full year of 2013 increased $5.6 million from $9.6 million in the full year of 2012.
Adjusted EBITDA of $42.5 million in the full year of 2013 increased $8.8 million, or 26.2%, compared to $33.7 million for the full year of 2012.
ABOUT NORCRAFT COMPANIES
Norcraft is a leading manufacturer of kitchen and bathroom cabinetry in the United States and Canada. Norcraft provides its customers with a single source for a broad range of high-quality cabinetry, including stock and semi-custom cabinets manufactured in both framed and frameless (full access) construction. Norcraft markets its products through seven main brands: Mid Continent Cabinetry, Norcraft Cabinetry, UltraCraft, StarMark Cabinetry, Fieldstone Cabinetry, Brookwood and Urban Effects.
Have something to say? Share your thoughts with us in the comments below.