JELD-WEN Reports Fourth Quarter 2023 Results and Establishes 2024 Guidance

CHARLOTTE, N.C., Feb. 19, 2024 /PRNewswire/ — JELD-WEN Holding, Inc. (NYSE:JELD) (“JELD-WEN” or the “Company”) today announced results for the quarter and year ended December 31, 2023 and established its full-year 2024 guidance. Comparability is to the same period in the prior year and all periods presented reflect the Company’s Australasia segment as a discontinued operation, as appropriate and unless otherwise noted.

Fourth Quarter Highlights

Net revenues from continuing operations of $1,021.1 million decreased (13.4%) in the fourth quarter driven by a (15%) decline in Core Revenue. The Core Revenue decline was mostly due to (16%) lower volume/mix.
Net loss from continuing operations was $(22.6) million or $(0.27) per share, compared to net income from continuing operations of $25.9 million or $0.31 per share during the same quarter a year ago. Operating income margin was 0.7% and 2.0% for the quarters ended December 31, 2023 and December 31, 2022, respectively.
Adjusted EPS from continuing operations was $0.37, compared to Adjusted EPS of $0.34 in the same quarter a year ago. Adjusted EPS for the fourth quarter of 2023 excludes net after-tax charges of $54.3 million, or $0.63 per share, of which $29.6 million, or $0.35 per share, relates to discrete tax charges. Adjusted EPS for the fourth quarter of 2022 excludes net after-tax charges of $3.0 million or $0.03 per share.
Adjusted EBITDA from continuing operations increased $8.5 million to $86.5 million, compared to $78.0 million during the same quarter a year ago. Adjusted EBITDA Margin from continuing operations increased by 190 basis points year-over-year to 8.5%.

Full Year 2023 Highlights

Net revenues from continuing operations of $4,304.3 million decreased (5.3%) driven by a (5%) decline in Core Revenue. The Core Revenue decline was due to (10%) lower volume/mix, partially offset by a 5% increase in price realization.
Net income from continuing operations was $25.2 million or $0.29 per share, compared to $12.2 million or $0.14 per share in the prior year. Operating income margin was 3.3% and 1.3% for the years ended December 31, 2023 and December 31, 2022, respectively.
Adjusted EPS from continuing operations was $1.59, compared to Adjusted EPS of $1.33 a year ago. Adjusted EPS excludes net after-tax charges of $111.4 million or $1.30 per share, compared to net after-tax charges of $103.6 million or $1.19 per share in the prior year.
Adjusted EBITDA from continuing operations increased $31.6 million to $380.4 million, compared to $348.8 million a year ago. Adjusted EBITDA Margin from continuing operations increased by 110 basis points year-over-year to 8.8%.
On July 2, 2023, the Company completed the sale of its Australasia segment for approximately $446 million in net proceeds and recognized an after-tax gain on sale of $15.7 million. On August 3, 2023, the Company repaid $450 million of senior notes funded by the divestiture proceeds.

2024 Full-Year Guidance

Net revenues of $4.0 to $4.3 billion
Adjusted EBITDA of $370 to $420 million

“In the fourth quarter of 2023, our team continued to execute actions to strengthen the foundation of our business,” said Chief Executive Officer William J. Christensen. “We increased profitability and generated strong cash flows, despite challenging macroeconomic conditions. We continue our disciplined approach to delivering improved financial results and are investing in the future to unlock significant value for JELD-WEN shareholders. In 2024, we anticipate that uncertainty in the markets will remain. However, we expect to mitigate the impact from potential weaker demand with benefits from our ongoing activities to reduce operating costs.”

Fourth Quarter 2023 Results

Net revenues from continuing operations for the three months ended December 31, 2023 decreased $(157.9) million, or (13.4%), to $1,021.1 million, compared to $1,179.0 million for the same period last year. The decrease in net revenues was driven by a (15%) Core Revenue decline mostly due to (16%) lower volume/mix.

Net loss from continuing operations was $(22.6) million in the fourth quarter, compared to $25.9 million of net income from continuing operations in the same period last year, a decrease of $(48.5) million. The decrease was mostly driven by discrete tax charges of $29.6 million that primarily relate to a valuation allowance. Adjusted Net Income from continuing operations for the fourth quarter increased $2.8 million, to $31.7 million, compared to $28.9 million in the same period last year. 

Net loss per share from continuing operations for the fourth quarter was $(0.27), compared to EPS of $0.31 in the same quarter last year. Adjusted EPS from continuing operations for the fourth quarter was $0.37 compared to Adjusted EPS of $0.34 in the same quarter last year. 

Adjusted EBITDA from continuing operations increased $8.5 million, to $86.5 million, compared to $78.0 million during the same quarter last year. Adjusted EBITDA Margin from continuing operations increased 190 basis points to 8.5%, as productivity improvements and positive price/cost were partially offset by lower volume/mix.

On a segment basis for the fourth quarter of 2023, compared to the same period last year:

North America – Net revenue decreased $(115.1) million, or (13.3%), to $747.6 million, driven by a (13%) decline in Core Revenue due to (14%) lower volume/mix. Net income decreased $(22.7) million to $49.0 million. Operating income margin was 7.8% for the quarter ended December 31, 2023 and 7.3% for the quarter ended December 31, 2022. Adjusted EBITDA increased $7.2 million to $94.2 million, while Adjusted EBITDA Margin increased by 250 basis points to 12.6%.
Europe – Net revenue decreased $(42.8) million, or (13.5%), to $273.4 million, due to an (18%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (20%) partially offset by higher price realization of 2%. Net income decreased $(32.4) million to a net loss of $(32.0) million. Operating income margin was 1.4% for the quarter ended December 31, 2023 and 0.6% for the quarter ended December 31, 2022. Adjusted EBITDA decreased $(6.0) million to $15.5 million, while Adjusted EBITDA Margin decreased by (110) basis points to 5.7%.

Full Year 2023 Results

Net revenues from continuing operations for the full year ended December 31, 2023 decreased $(239.5) million, or (5.3%), to $4,304.3 million, compared to $4,543.8 million in the prior year. The decrease in net revenues was driven by a (5%) Core Revenue decline due to (10%) lower volume/mix partially offset by increased price realization of 5%.

Net income from continuing operations was $25.2 million in full year 2023, compared to $12.2 million of net income from continuing operations in full year 2022, an increase of $13.0 million. The increase was driven by higher operating income, including a non-recurring goodwill impairment in the prior year, partially offset by higher income tax expense and lower other income. Adjusted Net Income from continuing operations for 2023 increased $20.8 million, to $136.7 million, compared to $115.9 million in the prior year. 

Earnings per share from continuing operations for full year 2023 was $0.29, compared to $0.14 in the prior year. Adjusted EPS from continuing operations in 2023 was $1.59, compared to Adjusted EPS of $1.33 in 2022. 

Adjusted EBITDA from continuing operations increased $31.6 million, to $380.4 million, compared to last year. Adjusted EBITDA Margin from continuing operations increased 110 basis points to 8.8%, as positive price/cost and productivity improvements were partially offset by lower volume/mix.

On a segment basis for full year 2023, compared to the prior year:

North America – Net revenue decreased $(136.3) million, or (4.2%), to $3,123.1 million, driven by a (4%) decline in Core Revenue which was due to lower volume/mix (8%) partially offset by increased price realization of 4%. Net income decreased $(84.6) million to $176.0 million. Operating income margin was 8.2% for the year ended December 31, 2023 and 7.8% for the prior year. Adjusted EBITDA increased $29.3 million to $382.2 million, while Adjusted EBITDA Margin increased by 140 basis points to 12.2%.
Europe – Net revenue decreased $(103.2) million, or (8.0%), to $1,181.3 million, due to a (9%) decline in Core Revenue. Core Revenue declined due to lower volume/mix (15%) partially offset by higher price realization of 7%. Net loss improved by $47.5 million to $(3.3) million. Operating income margin was 3.5% for the year ended December 31, 2023 and (3.4%) for the prior year. Adjusted EBITDA increased $7.1 million to $81.5 million, while Adjusted EBITDA Margin increased by 110 basis points to 6.9%.

Cash Flow(1)

Net cash flow provided by operations was $345.2 million for full year 2023, a $314.9 million improvement compared to net cash flow provided by operations of $30.3 million in 2022. The primary driver to the increased operating cash flow was a $342.5 million improvement in cash flow from working capital. Net working capital was a source of $108.0 million of cash flow in full year 2023 compared to a use of cash of $(234.5) million in the prior year.

Capital expenditures in 2023 increased by $18.7 million to $110.9 million, up from $92.2 million in 2022.

Free Cash Flow provided in 2023 was $234.3 million, compared to Free Cash Flow used in 2022 of $(61.9) million. This $296.2 million improvement was due to higher net cash flow from operations.

(1)  Cash flow includes the Australasia segment through the divestiture date of July 2, 2023.

Full Year 2024 Guidance

JELD-WEN is initiating its 2024 revenue guidance of $4.0 to $4.3 billion which reflects Core Revenues that are flat to down 7% compared to 2023. This outlook reflects the continuing uncertain macro environment across the company’s portfolio of products and geographies in North America and Europe.

Further, the Company expects that 2024 Adjusted EBITDA will be within the range of $370 to $420 million as ongoing productivity improvements mitigate the impact of potential volume declines.

As part of the Company’s plan to improve its financial results in 2024 and future years, JELD-WEN expects to use a portion of 2024 operating cash flows to invest in itself with capital expenditures increasing to approximately 4% of sales as well as non-recurring cash expenses of approximately $100 million.

Conference Call Information

JELD-WEN management will host a conference call on February 20, 2024 at 8 a.m. ET, to discuss the Company’s financial results. Interested investors and other parties can access the call either via webcast by visiting the Investor Relations section of the Company’s website at https://investors.jeld-wen.com, or by dialing 888-330-2446 from the United States or +1-240-789-2732 internationally and using ID 1285715. A slide presentation highlighting the Company’s results is available on the Investor Relations section of the Company’s website.

For those unable to listen to the live event, a webcast replay will be available approximately two hours following completion of the call. To learn more about JELD-WEN, please visit the Company’s website at https://investors.jeld-wen.com.

Note: See “Non-GAAP Financial Information” section for definitions and reconciliation of non-GAAP financial measures.

About JELD-WEN Holding, Inc.

JELD-WEN Holding, Inc. (NYSE:JELD) is a leading global designer, manufacturer and distributor of high-performance interior and exterior doors, windows, and related building products serving the new construction and repair and remodeling sectors. Based in Charlotte, North Carolina, the company operates facilities in 15 countries primarily in North America and Europe and employs approximately 18,000 associates dedicated to bringing beauty and security to the spaces that touch our lives. The JELD-WEN family of brands includes JELD-WEN® worldwide, LaCantina™ and VPI™ in North America, and Swedoor® and DANA® in Europe.  For more information, visit corporate.JELD-WEN.com. 

Investor Relations Contact:
James Armstrong
Vice President, Investor Relations
704-378-5731
jarmstrong@jeldwen.com

Media Contact:
Colleen Penhall
Vice President, Corporate Communications
980-322-2681
cpenhall@jeldwen.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts are forward-looking statements, including statements regarding our business strategies and ability to execute on our plans, market potential, future financial performance, customer demand, the potential of our categories, brands and innovations, the impact of our footprint rationalization, cost reduction and modernization initiatives, the impact of acquisitions and divestitures on our business and our ability to maximize value and integrate operations, our pipeline of productivity projects, the estimated impact of tax reform on our results, litigation outcomes, and our expectations, beliefs, plans, objectives, prospects, assumptions, or other future events, all of which involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and uncertainties, please refer to our Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q filed in 2023 and our other filings with the U.S. Securities and Exchange Commission.

The forward-looking statements included in this release are made as of the date hereof, and we undertake no obligation to update any forward-looking statements, except as required by law.

Non-GAAP Financial Information

This press release presents certain “non-GAAP” financial measures, including Adjusted EBITDA from continuing operations, Adjusted EBITDA Margin from continuing operations, Adjusted Net Income from continuing operations, Adjusted EPS from continuing operations, Free Cash Flow, and Net Debt Leverage. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of non-GAAP financial measures used in this press release to their nearest comparable GAAP financial measures is included in the tables at the end of this press release.

The Company provides certain guidance solely on a non-GAAP basis because the Company cannot predict certain elements that are included in certain reported GAAP results. While management is not able to provide a reconciliation of items for forward-looking non-GAAP measures without unreasonable effort, management bases the estimated ranges of non-GAAP measures for future periods on its reasonable estimates of certain items such as assumed effective tax rate, assumed interest expense, and other assumptions about capital requirements for future periods. Although the Company believes the assumptions reflected in the range of its 2024 guidance are reasonable, actual results could vary substantially given the uncertainty regarding the future performance of the global economy, ongoing geopolitical conflicts, disruptions in supply chains, and changes in raw material prices and other costs as well as other risks and uncertainties, including those described below. In addition, the guidance ranges provided for 2024 do not include the impact of potential acquisitions or divestitures. The variability of these items may have a significant impact on our future GAAP results.

Other companies may compute these measures differently. The non-U.S. GAAP information has limitations as an analytical tool and should not be considered in isolation from or as a substitute for U.S. GAAP information. It does not purport to represent any similarly titled U.S. GAAP information and is not an indicator of our performance under U.S. GAAP.

We present several financial metrics in “Core” terms, which exclude the impact of foreign exchange, acquisitions and divestitures completed in the last twelve months. We define Core Revenue as net revenue excluding the impact of foreign exchange, and acquisitions and divestitures completed in the last twelve months. The use of “Core” metrics assists management, investors, and analysts in understanding the organic performance of the operations.

We use Adjusted EBITDA from continuing operations, Adjusted EBITDA Margin from continuing operations, Adjusted Net Income from continuing operations, and Adjusted EPS because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations are helpful in highlighting trends because they exclude certain items outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. We use Adjusted EBITDA from continuing operations and Adjusted EBITDA Margin from continuing operations to measure our financial performance in reporting our results to our Board of Directors. Further, our executive incentive compensation is based in part on Adjusted EBITDA from continuing operations. Adjusted EBITDA from continuing operations should not be considered as an alternative to net income as a measure of financial performance or to cash flows from operations as a liquidity measure.

We define Adjusted EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted for the following items: income tax expense (benefit); depreciation and amortization; interest expense, net; and certain special items consisting of non-recurring net legal and professional expenses and settlements; goodwill impairment; restructuring and asset related charges; other facility closure, consolidation, and related costs and adjustments; M&A related costs; net (gain) loss on sale of property and equipment; loss on extinguishment of debt; share-based compensation expense; pension settlement charges; non-cash foreign exchange transaction/translation (income) loss; and other special items.

Adjusted Net Income from continuing operations represents net income from continuing operations adjusted for the after-tax impact of certain special items used to calculate Adjusted EBITDA from continuing operations as described above. Where applicable, the specifically identified items are tax effected at the applicable jurisdictional tax rate and tax expense is adjusted to remove the effect of discrete tax items.

Adjusted EPS from continuing operations represents net income from continuing operations per diluted share adjusted to exclude the estimated per share impact of the same specifically identified items used to calculate Adjusted Net Income from continuing operations as described above.

Adjusted EBITDA Margin from continuing operations represents Adjusted EBITDA from continuing operations as a percentage of net revenues.

We present Free Cash Flow because we believe this metric assists investors and analysts in determining the quality of our earnings. Free Cash Flow is defined as net cash (used in) provided by operating activities less capital expenditures (including purchases of intangible assets). Free Cash Flow should not be considered as an alternative to net cash (used in) provided by operating activities as a liquidity measure. We also present Net Debt Leverage because it is a key financial metric that is used by management to assess the balance sheet risk of the Company. We define Net Debt Leverage as Net Debt (total principal debt outstanding less unrestricted cash) divided by Adjusted EBITDA from continuing operations for the last twelve month period.

Due to rounding, numbers presented throughout this release may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures.

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