4q17 earnings presentation · this investor presentation contains forward-looking information and...
TRANSCRIPT
4Q17 EARNINGS PRESENTATION
NYSE: DOOR
2 2
Safe Harbor / Non-GAAP Financial Measures
SAFE HARBOR / FORWARD LOOKING STATEMENT
This investor presentation contains forward-looking information and other forward-looking statements within the meaning of applicable Canadian and/or U.S. securities laws, including our discussion of
our 2018 outlook, housing and other markets, and the effects of our strategic initiatives. When used in this investor presentation, such forward-looking statements may be identified by the use of such
words as “may,” “might,” “could,” “will,” “would,” “should,” “expect,” “believes,” “outlook,” “predict,” “forecast,” “objective,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “project,”
“targeting,” or the negative of these terms or other similar terminology. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of Masonite, or industry results, to be materially different from any future plans, goals, targets, objectives, results, performance or achievements expressed
or implied by such forward-looking statements. As a result, such forward-looking statements should not be read as guarantees of future performance or results, should not be unduly relied upon, and
will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking
statements include, but are not limited to, our ability to successfully implement our business strategy; general economic, market and business conditions; levels of residential new construction;
residential repair, renovation and remodeling; and non-residential building construction activity; the United Kingdom's formal trigger of the two year process for its exit from the European Union and
related negotiations; competition; our ability to manage our operations including integrating our recent acquisitions and companies or assets we acquire in the future; our ability to generate sufficient
cash flows to fund our capital expenditure requirements, to meet our pension obligations, and to meet our debt service obligations, including our obligations under our senior notes and our ABL Facility;
labor relations (i.e., disruptions, strikes or work stoppages), labor costs and availability of labor; increases in the costs of raw materials or any shortage in supplies; our ability to keep pace with
technological developments; the actions taken by, and the continued success of, certain key customers; our ability to maintain relationships with certain customers; the ability to generate the benefits of
our restructuring activities; retention of key management personnel; environmental and other government regulations; and limitations on operating our business as a result of covenant restrictions under
our existing and future indebtedness, including our senior notes and our ABL Facility.
NON-GAAP FINANCIAL MEASURES
Our management reviews net sales and Adjusted EBITDA (as defined below) to evaluate segment performance and allocate resources. Net assets are not allocated to the reportable segments.
Adjusted EBITDA is a non-GAAP financial measure which does not have a standardized meaning under GAAP and is unlikely to be comparable to similar measures used by other companies. Adjusted
EBITDA should not be considered as an alternative to either net income or operating cash flows determined in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of
free cash flow for management's discretionary use, as it does not include certain cash requirements such as interest payments, tax payments and debt service requirements. Beginning with the fourth
quarter of 2015, we revised our calculation of Adjusted EBITDA to separately exclude loss (gain) on disposal of subsidiaries. This definition of Adjusted EBITDA differs from the definitions of EBITDA
contained in the indenture governing the 2023 Notes and the credit agreement governing the ABL Facility. Adjusted EBITDA, as calculated under our ABL Facility or senior notes would also include,
among other things, additional add-backs for amounts related to: cost savings projected by us in good faith to be realized as a result of actions taken or expected to be taken prior to or during the
relevant period; fees and expenses in connection with certain plant closures and layoffs; and the amount of any restructuring charges, integration costs or other business optimization expenses or
reserve deducted in the relevant period in computing consolidated net income, including any one-time costs incurred in connection with acquisitions. The tables in the appendix to this presentation
reconcile Adjusted EBITDA to net income (loss) attributable to Masonite for the periods indicated. We are not providing a quantitative reconciliation of our Adjusted EBITDA or diluted Adjusted EPS
outlook to the corresponding GAAP information because the GAAP measures that we exclude from our Adjusted EBITDA outlook are difficult to predict and are primarily dependent on future
uncertainties.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by Net Sales. Management believes this measure provides supplemental information on how successfully we operate our business.
Adjusted EPS is diluted earnings per common share attributable to Masonite (EPS) less asset impairment charges, loss (gain) on disposal of subsidiaries, and other items, if any, that do not relate to
Masonite’s underlying business performance (each net of related tax expense (benefit)). Beginning in the fourth quarter of 2017, we revised our calculation of Adjusted EPS to exclude the beneficial
impact of the deferred tax revaluation recognized as a result of The Tax Cuts and Jobs Act of 2017 and the release of a valuation allowance in Canada as such tax assets are likely to be realized in
future periods. The revision to this definition had no impact on our reported Adjusted EPS for the three months or year ended January 1, 2017. Management uses this measure to evaluate the overall
performance of the Company and believes this measure provides investors with helpful supplemental information regarding the underlying performance of the Company from period to period. This
measure may be inconsistent with similar measures presented by other companies.
3
Agenda
• Year in Review
• 2017 Financial Results
• Financial Outlook
• Summary / Q&A
4
YEAR IN REVIEW
5 5
Key Milestones
Achieved 7th consecutive year of positive AUP
Successful Masonite brand re-launch
Architectural transformation on track, with significantly improved margins
UK business recovery as post-Brexit currency headwinds abated
Re-energized our MVantage lean operating system focus
Highest new product vitality index in over a decade
Successfully completed $150 million bond add-on
Continued opportunistic share repurchase program
Executed margin-accretive tuck-in M&A
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
6 6
2017 Margin Drivers
Operational Headwinds Focused Recovery Actions
Minimal volume leverage on low single
digit growth in North America end
markets
Tightening labor availability
Rising inflationary environment
Wage inflation
Increasing materials inflation
Operational inefficiencies
Cost to serve retail business
Reduced 1H labor productivity
Elevated distribution costs
Higher freight rates and fuel costs
Distribution inefficiencies
Improved operational performance in 2H17 - More to accomplish in 2018
Improved plant labor productivity
Reduced plant headcount by over
400 (7%)
Optimized shift schedules
Plant layout changes and equipment
investments to improve throughput
Optimized internal supply chain
Rebalanced internal facings supply
for cost efficiency
Repositioned inventory to improve
material flow
Remain focused on logistics savings
via packaging, freight lane changes
Additional pricing actions taken
7 7
Quarterly Improvement Trend
$58.2
$52.9
$68.5 $68.5 $65.1
$69.7
$60.6
$64.5
1Q '16 1Q '17 2Q '16 2Q '17 3Q '16 3Q '17 4Q '16 4Q '17
YoY Adjusted EBITDA* Trend
1H Comp = (4%) 2H Comp = +7%
(in millions) Full Year 2017 Net
Sales increased 3%
Full Year 2017 Adjusted
EBITDA* increased 1%
Improved YoY Adjusted
EBITDA growth as year
progressed
Operational actions
began to take hold
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
8 8
Market leading tech-enabled manufacturer of
premium composite doors and window
components
Complements and expands Masonite UK
portfolio and further strengthens our position
in the Repair & Remodel channel
Similar door business to DSI, with B2B sales
to installers and home improvement
fabricators
DW3 Acquisition
~$60M TTM 2017
Net Sales
~$11M TTM 2017 Adj. EBITDA
~8.5x Pre Synergy Adj. EBITDA*
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
9
2017 FINANCIAL RESULTS
10 10
4Q17 Consolidated P&L Metrics
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix
for non-GAAP reconciliations
Adjusted EBITDA* Bridge
Adj. EPS* excludes approximately $1.77 of tax benefits
($ in millions) 4Q17 4Q16 B/(W)
Net Sales $508.5 $481.0 5.7%
Gross Profit $100.1 $96.5 3.7%
Gross Profit % 19.7% 20.1% (40 bps)
SG&A $59.6 $63.5 6.1%
SG&A % 11.7% 13.2% 140 bps
Adj. EBITDA* $64.5 $60.6 6.4%
Adj. EBITDA %* 12.7% 12.6% 10 bps
Adj. EPS* $0.71 $0.55 29.1%
$1
-$5
-$2
-$6
$3
$13
SG&A
Distribution
Factory
Materials
Fx
Vol/AUP
11
North American Residential
4Q net sales increased due to higher retail volume,
pricing actions, and Canadian Dollar Fx benefit
Sales volume and AUP increased across all channels
Adj. EBITDA* negatively impacted by higher distribution
costs, due largely to higher freight costs
Elevated freight rates persisted post-hurricanes
More costly mix of freight lanes continued to be managed
down across the quarter
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
($ in millions) 2017 B/(W) 2017 B/(W)
Net Sales $358.8 6.6% $1,428.9 5.7%
Adj. EBITDA* $50.5 1.2% $200.2 (5.8%)
Adj. EBITDA Margin* 14.1% (70bps) 14.0% (170bps)
Fourth Quarter Full Year
12
Europe
4Q net sales growth largely explained by stronger GBP
Foreign exchange benefitted 4Q while remaining a headwind
on full year results
Strong AUP growth driven by pricing actions fully offset
slightly weaker volumes and drove Adj. EBITDA* growth
Growth in merchant and remodel channels offset by softer
volumes in builder channel
Stronger GBP vs. Euro in 4Q helped mitigate strong material
inflation headwinds
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
($ in millions) 2017 B/(W) 2017 B/(W)
Net Sales $73.3 7.3% $291.9 (3.1%)
Adj. EBITDA* $8.7 10.1% $33.6 (13.4%)
Adj. EBITDA Margin* 11.9% 30bps 11.5% (140bps)
Fourth Quarter Full Year
13
Architectural
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
Significant Adjusted EBITDA* and margin improvement
Strong AUP gains driven by pricing actions
Benefit of rationalized manufacturing footprint
A&F Wood Products exceeding
management’s expectations Adj. EBITDA* Margins
8.3% 7.3%
10.2%
11.8% 12.4%
Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17
Product line consolidation and
operational integration complete;
2018 focus shifts to growing volume
growth via improved service levels
+170 bps YoY
+240 bps YoY
+30 bps YoY +130
bps YoY
+410 bps YoY
($ in millions) 2017 B/(W) 2017 B/(W)
Net Sales $69.6 (0.9%) $288.5 (3.2%)
Adj. EBITDA* $8.6 48.3% $30.1 19.4%
Adj. EBITDA Margin* 12.4% 410bps 10.4% 200bps
Fourth Quarter Full Year
14 14
2017 Consolidated P&L Metrics
Adjusted EBITDA* Bridge
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix
for non-GAAP reconciliations
($ in millions) 2017 2016 B/(W)
Net Sales $2,032.9 $1,974.0 3.0%
Gross Profit $406.9 $409.6 (0.7%)
Gross Profit % 20.0% 20.8% (80 bps)
SG&A $246.9 $260.4 5.2%
SG&A % 12.1% 13.2% 110 bps
Adj. EBITDA* $255.5 $252.5 1.2%
Adj. EBITDA %* 12.6% 12.8% (20 bps)
Adj. EPS* $3.33 $3.03 9.9%
Continued focus on operations to drive improvement in 2018
$6
-$23
-$18
-$10
-$2
$50
SG&A
Distribution
Factory
Materials
Fx
Vol/AUP
15 15
Liquidity, Credit & Debt Profile
Credit & Debt (millions of USD)
TTM Adj. EBITDA* $255.6 $252.5
TTM Interest Expense $30.2 $28.2
Total Debt $625.7 $470.7
Net Debt^ $449.0 $399.0
4Q17 4Q16
12 months ended
12/31/2017
12 months ended
1/1/2017
Unrestricted cash $176.7 $71.7
Total available liquidity $338.8 $222.8
Cash flow from operations $173.5 $174.0
Capital expenditures $73.8 $82.3
Share repurchases $119.9 $109.2
Liquidity & Cash Flow (millions of USD)
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
(^) – Net debt equals total debt less unrestricted cash
S&P Upgrade to BB+ on 2/12/18
16 16
Key Reform Elements Expected Impact to Masonite
Corporate Rate US Corporate Rate
reduced to 21% in 2018 Favorable Masonite revenue/profit
footprint oriented to US
jurisdiction
Transition Tax One-time tax on
cumulative foreign
earnings, paid over 8 yrs. Not Applicable
Masonite a Canada
domiciled company
Capital
Expenditures
Immediate write-off of
qualified property
acquisitions thru 2022 Favorable
Masonite capex geared
primarily to qualifying
capital assets
Interest Expense
Limitation Deductibility of interest
expense now capped Unknown Awaiting IRS regulations
to clarify deductibility
guidelines
Compensation
Deductions
Performance based comp
now included in deduction
limitations Unfavorable
Significant portion of
equity incentives are
performance based
U.S. Tax Reform Update
17 17
2018 Viewpoints*
Continued U.S. housing market growth
Expect mid single digit growth in U.S.
housing starts and completions
Expect low single digit growth in the
U.S. RRR market
Expect recent currency recovery to
largely remain
Price increases taken in all business
segments
New products and value-added
services support continued AUP growth
Tightening labor market in U.S.
Increased hiring costs and wages
Increasing inflationary pressures in both
commodities and logistics
Previously announced Retail PLR loss
will temper North America growth
General uncertainty in UK economy
and timing for new housing growth
Tailwinds Headwinds
(*) – Our 2018 viewpoints are a forward-looking statement and subject to risks and uncertainties. See "Safe Harbor/Forward Looking Statement”
18 18
2018 Outlook*
2018 P&L Metrics (includes recent acquisitions)
Net Sales
Adjusted EPS^
+6% - 8% / +5% - 7% (ex Fx)
$3.70 - $4.20
Adjusted EBITDA^ $280 - $300M
Capital Expenditures $75 - $80M
Tax Rate 23% – 27%
Cash Taxes $9 - $12M
Other Key Items
(*) –Our 2018 outlook is a forward-looking statement and subject to risks and uncertainties. See "Safe Harbor/Forward Looking Statement”
( )̂ – See definition of non-GAAP financial measures on page 2. We are not providing a quantitative reconciliation of our Adjusted EBITDA or Adjusted EPS outlook to the
corresponding GAAP information because the GAAP measures that we exclude from our Adjusted EBITDA and Adjusted EPS outlook are difficult to predict and are
primarily dependent on future uncertainties.
19
SUMMARY
20
SUMMARY
Performance momentum in 2H 2017
Higher sales volume, AUP and SG&A savings
offset by inflation and operational inefficiencies
Capital allocation focused on improving returns
Internal investments to improve operational
performance and efficiency
Margin accretive M&A
Opportunistic share repurchase
Remain focused on achieving mid to high teen
Adjusted EBITDA* margin in the longer term
2018 Investor day to be held on March 2, 2018 at
the New York Stock Exchange
(*) – See safe harbor/non-GAAP financial measures on page 2 for definitions and other information and appendix for non-GAAP reconciliations
21
APPENDIX
22 22
Segment Sales Walks
($ in millions) NA Residential Europe Architectural C&O Consolidated6
4Q16 Net Sales $336.7 $68.3 $70.2 $5.9 $481.0
Foreign Exchange $3.9 $5.2 $0.4 $0.1 $9.6
Volume $12.9 ($2.2) ($3.1) $0.7 $8.3
AUP $6.1 $2.6 $1.9 $0.0 $10.6
Other ($0.8) ($0.6) $0.2 $0.1 ($1.0)
4Q17 Net Sales $358.8 $73.3 $69.6 $6.8 $508.5
23 23
Segment Sales Walks
($ in millions) NA Residential Europe Architectural C&O Consolidated6
2016 Net Sales $1,351.3 $301.2 $297.9 $23.6 $1,974.0
Foreign Exchange $5.0 ($12.1) $0.6 ($0.1) ($6.6)
Volume $44.0 $0.3 ($23.2) $0.8 $21.9
AUP $30.5 $5.6 $11.3 $0.0 $47.4
Other ($1.9) ($3.1) $1.9 ($0.7) ($3.8)
2017 Net Sales $1,428.9 $291.9 $288.5 $23.6 $2,032.9
24 24
Reconciliation of Adj. EPS to net income
(loss) attributable to Masonite
Three Months Ended Year Ended
(In thousands)
December 31, 2017
January 1,
2017
December 31, 2017
January 1,
2017
Net income (loss) attributable to Masonite $ 71,812 $ 15,430
$ 151,739
$ 98,622
Add: Asset impairment — 1,511
—
1,511
Add: Loss (gain) on disposal of subsidiaries — —
212
(6,575 )
Add: Income tax benefit as a result of U.S. Tax Reform (27,138 ) —
(27,138 ) —
Add: Income tax benefit as a result of the release of valuation allowances * (24,069 ) —
(25,396 ) —
Income tax impact of adjustments — —
—
737
Adjusted net income (loss) attributable to Masonite $ 20,605
$ 16,941
$ 99,417
$ 94,295
Diluted earnings (loss) per common share attributable to Masonite ("EPS") $ 2.48
$ 0.50
$ 5.09
$ 3.17
Diluted adjusted earnings (loss) per common share attributable to Masonite ("Adjusted EPS") $ 0.71
$ 0.55
$ 3.33
$ 3.03
Shares used in computing diluted EPS and diluted Adjusted EPS 28,969,630
31,010,490
29,814,659
31,101,076
* Full year results for the year ended December 31, 2017, were reclassified from the previously-presented amounts in order to conform to the current basis of presentation.
25 25
Reconciliation of Adj. EBITDA to net income
(loss) attributable to Masonite Three Months Ended April 2, 2017
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 44,937 $ 7,674 $ 5,214 $ (4,966 ) $ 52,859
Less (plus):
Depreciation 7,484
1,810
2,370
2,360 14,024
Amortization 993
1,667
2,161
1,149 5,970
Share based compensation expense —
—
—
2,427 2,427
Loss (gain) on disposal of property, plant and equipment (399 ) 140
(27 ) 12
(274 )
Restructuring costs —
—
271
22 293
Interest expense (income), net —
—
—
7,024 7,024
Other expense (income), net —
93
—
(342 ) (249 )
Income tax expense (benefit) —
—
—
(1,679 ) (1,679 )
Loss (income) from discontinued operations, net of tax —
—
—
245
245
Net income (loss) attributable to non-controlling interest 917
—
—
596
1,513
Net income (loss) attributable to Masonite $ 35,942 $ 3,964 $ 439 $ (16,780 ) $ 23,565
Three Months Ended April 3, 2016
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 51,375 $ 10,118 $ 4,431 $ (7,683 ) $ 58,241
Less (plus):
Depreciation 7,920
2,076
2,507
2,067 14,570
Amortization 1,158
2,396
2,147
763 6,464
Share based compensation expense —
—
—
3,728 3,728
Loss (gain) on disposal of property, plant and equipment 91
31
41
(31 ) 132
Restructuring costs —
21
—
(2 ) 19
Interest expense (income), net —
—
—
7,232 7,232
Other expense (income), net —
71
—
715 786
Income tax expense (benefit) —
—
—
6,210 6,210
Loss (income) from discontinued operations, net of tax —
—
—
188
188
Net income (loss) attributable to non-controlling interest 838
—
—
246
1,084
Net income (loss) attributable to Masonite $ 41,368 $ 5,523 $ (264 ) $ (28,799 ) $ 17,828
26 26
Reconciliation of Adj. EBITDA to net income
(loss) attributable to Masonite
Three Months Ended July 2, 2017
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 54,606 $ 8,937 $ 7,495 $ (2,501 ) $ 68,537
Less (plus):
Depreciation 7,296 3,394 2,414 2,173 15,277
Amortization 642 2,028 2,155 771 5,596
Share based compensation expense — — — 3,527 3,527
Loss (gain) on disposal of property, plant and equipment 196
129
(166 ) 256
415
Restructuring costs — (96 ) 503 (1,107 ) (700 )
Loss (gain) on disposal of subsidiaries — 212 — — 212
Interest expense (income), net — — — 7,112 7,112
Other expense (income), net — (80 ) — 58 (22 )
Income tax expense (benefit) — — — 8,932 8,932
Loss (income) from discontinued operations, net of tax —
—
—
134
134
Net income (loss) attributable to non-controlling interest 925
—
—
245
1,170
Net income (loss) attributable to Masonite $ 45,547 $ 3,350 $ 2,589 $ (24,602 ) $ 26,884
Three Months Ended July 3, 2016
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 55,666 $ 12,839 $ 7,672 $ (7,661 ) $ 68,516
Less (plus):
Depreciation 8,126 2,480 2,076 2,131 14,813
Amortization 1,225 2,393 2,064 836 6,518
Share based compensation expense — — — 4,782 4,782
Loss (gain) on disposal of property, plant and equipment 199
—
61
—
260
Restructuring costs — — — (103 ) (103 )
Loss (gain) on disposal of subsidiaries — (1,431 ) — — (1,431 )
Interest expense (income), net — — — 6,933 6,933
Other expense (income), net — 22 — (823 ) (801 )
Income tax expense (benefit) — — — 2,855 2,855
Loss (income) from discontinued operations, net of tax —
—
—
184
184
Net income (loss) attributable to non-controlling interest 858
—
—
293
1,151
Net income (loss) attributable to Masonite $ 45,258 $ 9,375 $ 3,471 $ (24,749 ) $ 33,355
27 27
Reconciliation of Adj. EBITDA to net income
(loss) attributable to Masonite
Three Months Ended October 1, 2017
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 50,126 $ 8,219 $ 8,692 $ 2,669 $ 69,706
Less (plus):
Depreciation 7,871 2,008 2,081 2,214 14,174
Amortization 869 2,061 2,075 1,211 6,216
Share based compensation expense — — — 2,740 2,740
Loss (gain) on disposal of property, plant and equipment 877
244
33
234
1,388
Restructuring costs — 69 1,378 (54 ) 1,393
Interest expense (income), net — — — 7,213 7,213
Other expense (income), net — (23 ) — (163 ) (186 )
Income tax expense (benefit) — — — 5,989 5,989
Loss (income) from discontinued operations, net of tax —
—
—
139
139
Net income (loss) attributable to non-controlling interest 844
—
—
318
1,162
Net income (loss) attributable to Masonite $ 39,665 $ 3,860 $ 3,125 $ (17,172 ) $ 29,478
Three Months Ended October 2, 2016
(In thousands)
North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 55,648 $ 7,933 $ 7,229 $ (5,703 ) $ 65,107
Less (plus):
Depreciation 7,666 1,952 2,242 2,135 13,995
Amortization 1,130 2,283 2,015 789 6,217
Share based compensation expense — — — 3,412 3,412
Loss (gain) on disposal of property, plant and equipment 552
142
4
—
698
Restructuring costs — — — 215 215
Loss (gain) on disposal of subsidiaries — — — (5,144 ) (5,144 )
Interest expense (income), net — — — 6,985 6,985
Other expense (income), net — 53 — (1,252 ) (1,199 )
Income tax expense (benefit) — — — 6,526 6,526
Loss (income) from discontinued operations, net of tax —
—
—
236
236
Net income (loss) attributable to non-controlling interest 926
—
—
231
1,157
Net income (loss) attributable to Masonite $ 45,374 $ 3,503 $ 2,968 $ (19,836 ) $ 32,009
28 28
Reconciliation of Adj. EBITDA to net income
(loss) attributable to Masonite Three Months Ended December 31, 2017
(In thousands) North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 50,510 $ 8,734 $ 8,649 $ (3,427 ) $ 64,466
Less (plus):
Depreciation 7,147
2,376 2,167
2,363
14,053
Amortization 865
2,111 2,351
1,266
6,593
Share based compensation expense —
— —
2,950
2,950
Loss (gain) on disposal of property, plant and equipment 96
(220 ) 488
—
364
Restructuring costs —
— 242
(378 ) (136 )
Interest expense (income), net —
— —
8,804
8,804
Other expense (income), net —
(14 ) — (620 ) (634 )
Income tax expense (benefit) —
— —
(40,802 ) (40,802 )
Loss (income) from discontinued operations, net of tax —
—
—
65
65
Net income (loss) attributable to non-controlling interest 833
—
—
564
1,397
Net income (loss) attributable to Masonite $ 41,569
$ 4,481
$ 3,401
$ 22,361
$ 71,812
Three Months Ended January 1, 2017
(In thousands) North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 49,930 $ 7,905 $ 5,828 $ (3,014 ) $ 60,649
Less (plus):
Depreciation 7,447
1,972 2,797
2,010
14,226
Amortization 870
1,997 1,773
888
5,528
Share based compensation expense —
— —
6,868
6,868
Loss (gain) on disposal of property, plant and equipment 252
391
378
—
1,021
Restructuring costs —
(2 ) 1,313 3
1,314
Asset impairment —
— 1,511
—
1,511
Interest expense (income), net —
— —
7,028
7,028
Other expense (income), net —
411 —
(1,156 ) (745 )
Income tax expense (benefit) —
— —
6,196
6,196
Loss (income) from discontinued operations, net of tax —
—
—
144
144
Net income (loss) attributable to non-controlling interest 767
—
—
1,361
2,128
Net income (loss) attributable to Masonite $ 40,594
$ 3,136
$ (1,944 ) $ (26,356 ) $ 15,430
29 29
Reconciliation of Adj. EBITDA to net income
(loss) attributable to Masonite Year Ended December 31, 2017
(In thousands) North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 200,179 $ 33,564 $ 30,050 $ (8,225 ) $ 255,568
Less (plus):
Depreciation 29,798
9,588 9,032
9,110
57,528
Amortization 3,369
7,867 8,742
4,397
24,375
Share based compensation expense —
— —
11,644
11,644
Loss (gain) on disposal of property, plant and equipment 770
293
328
502
1,893
Restructuring costs —
(27 ) 2,394 (1,517 ) 850
Loss (gain) on disposal of subsidiaries —
212 —
—
212
Interest expense (income), net —
— —
30,153
30,153
Other expense (income), net —
(24 ) — (1,067 ) (1,091 )
Income tax expense (benefit) —
— —
(27,560 ) (27,560 )
Loss (income) from discontinued operations, net of tax —
—
—
583
583
Net income (loss) attributable to non-controlling interest 3,519
—
—
1,723
5,242
Net income (loss) attributable to Masonite $ 162,723
$ 15,655
$ 9,554
$ (36,193 ) $ 151,739
Year Ended January 1, 2017
(In thousands) North American
Residential Europe Architectural Corporate &
Other Total
Adjusted EBITDA $ 212,619 $ 38,795 $ 25,160 $ (24,061 ) $ 252,513
Less (plus):
Depreciation 31,159
8,480 9,622
8,343
57,604
Amortization 4,383
9,069 7,999
3,276
24,727
Share based compensation expense —
— —
18,790
18,790
Loss (gain) on disposal of property, plant and equipment 1,094
564
484
(31 ) 2,111
Restructuring costs —
19 1,313
113
1,445
Asset impairment —
— 1,511
—
1,511
Loss (gain) on disposal of subsidiaries —
(1,431 ) — (5,144 ) (6,575 )
Interest expense (income), net —
— —
28,178
28,178
Other expense (income), net —
557 —
(2,516 ) (1,959 )
Income tax expense (benefit) —
— —
21,787
21,787
Loss (income) from discontinued operations, net of tax —
—
—
752
752
Net income (loss) attributable to non-controlling interest 3,389
—
—
2,131
5,520
Net income (loss) attributable to Masonite $ 172,594
$ 21,537
$ 4,231
$ (99,740 ) $ 98,622