Cornerstone Building Brands Reports Strong First-Quarter 2022 Results

  • Posted record first-quarter net sales of $1,567 million, growth of 23.7 percent from the same quarter last year
  • Generated earnings of $0.79 per diluted common share; $0.66 adjusted net income per diluted common share
  • Improved net operating cash flow to $190 million and net debt leverage to 3.3x
  • Announced divestiture of coil coatings business for $500 million

CARY, N.C.--()--Cornerstone Building Brands, Inc. (NYSE: CNR) (“Cornerstone Building Brands” or the “Company”), the largest manufacturer of exterior building products in North America, today reported strong financial results for the first quarter of 2022.

First-Quarter 2022 Financial Highlights

Net sales for the first quarter were $1,566.8 million, an increase of 23.7 percent from the same quarter last year. The growth was primarily driven by favorable price actions across all segments in response to rising commodity costs and other inflationary impacts coupled with $45.1 million from strategic acquisitions net of divestitures from portfolio optimization actions.

Net income applicable to common shares was $101.5 million or $0.79 per diluted common share compared to a loss of $1.7 million or a loss of $0.01 per diluted common share in the prior year. Adjusted net income applicable to common shares1 was $84.4 million or $0.66 per diluted common share, an improvement of 121 percent over the prior year. Included in net income was $58.7 million of proceeds from a legal settlement.

Pro forma Adjusted EBITDA1 for the first quarter of 2022 was $193.9 million, an increase of 41.5 percent over the same pro forma period a year ago. The improvement was primarily driven by disciplined price actions taken to offset inflationary impacts partially offset by lower volume across all segments, manufacturing inefficiencies as a result of supply chain disruptions and labor constraints, and higher SG&A expenses.

“Our team's focus on disciplined execution delivered record net sales and profitability,” said Rose Lee, President and Chief Executive Officer. “We continue to make significant progress towards becoming a premier exterior solutions provider by leveraging the strengths of our business model and optimizing our portfolio.”

Segment Results Versus Prior Year

Due to the timing of the Company’s fiscal calendar, first-quarter 2022 had one fewer fiscal day than first-quarter 2021.

  • Windows segment net sales for the quarter were $702.1 million, an increase of 33.2 percent versus the same period last year. On a pro forma basis, net sales1 increased 19.9 percent. Disciplined price actions in response to rising commodity costs and other inflationary impacts drove a 22.4 percent increase in pro forma net sales as compared to the same periods last year. Volumes were 2.5 percent lower, partially impacted by one fewer fiscal day in first-quarter 2022 compared with first-quarter 2021. Operating income was $46.2 million for the quarter, an increase of $16.9 million or 57.5 percent from the prior-year quarter. Pro forma Adjusted EBITDA1 was a record $82.4 million, an increase of 21.9 percent, primarily due to positive price mix net of inflation partially offset by manufacturing inefficiencies and an increase in SG&A expenses. Pro forma Adjusted EBITDA1 as a percentage of pro forma net sales1 was 11.7 percent, as compared to 11.5 percent in the same period last year, a record first-quarter return.
  • Siding segment net sales for the quarter were $333.0 million, an increase of 5.2 percent versus first-quarter 2021 primarily due to disciplined price actions which more than offset lower volume. Operating income was $27.4 million for the quarter, which was relatively flat to last year. Adjusted EBITDA1 was $56.5 million or 17.0 percent of net sales, as compared to $57.1 million or 18.1 percent of net sales in the prior year.
  • Commercial segment net sales for the quarter were $531.7 million, an increase of 25.6 percent versus the same period last year. On a pro forma basis, net sales1 were 37.4 percent higher than the same period a year ago, driven by disciplined price actions to mitigate rising steel costs of approximately 53.7 percent partially offset by lower volumes of 16.3 percent. Operating income was $80.9 million for the quarter, an increase of $39.4 million from the prior year primarily due to positive price mix net of inflation, which more than offset the manufacturing impacts from supply chain disruptions and higher costs to serve our customers. Pro forma Adjusted EBITDA1 was $89.6 million or 16.8 percent of pro forma net sales1, an increase of 100.2 percent over the same quarter last year, primarily due to favorable price mix net of commodity and other inflation impacts of 184.0 percent, partially offset by lower volume and higher manufacturing and SG&A expenses.

Balance Sheet and Liquidity

During the first quarter, Cornerstone Building Brands generated strong cash flow from operations of $190.1 million, an increase of $170.1 million from the prior year. The improvement was driven by legal settlement proceeds, higher earnings generation, and effective working capital management.

Unrestricted cash on hand was approximately $542 million and liquidity was approximately $1,222 million as of April 2, 2022. The Company’s net debt leverage ratio improved to 3.3x at the end of the first-quarter 2022 compared with 4.6x at the end of the first-quarter 2021.

Transaction with Clayton, Dubilier & Rice

On March 5, 2022, the Company entered into a definitive agreement to be acquired by affiliates of Clayton, Dubilier & Rice, LLC (“CD&R”). The proposed transaction will result in the Company becoming a private company, and its common stock will no longer be listed on any public market. The transaction is subject to approval by holders of a majority of the shares not owned by CD&R and its affiliates and is expected to close in the second or third quarter of 2022, subject to customary closing conditions. The waiting period under the Hart-Scott-Rodino Act of 1976, as amended, applicable to the proposed CD&R transaction expired on April 18, 2022. Additional details regarding the proposed CD&R transaction will be set forth in the Company’s Definitive Proxy Statement on Schedule 14A that will be filed with the SEC.

Divestiture of the Coil Coatings Business

On April 10, 2022, the Company announced it had entered into a definitive agreement to sell its coil coatings business to BlueScope Steel Limited (“BlueScope”) in an all-cash transaction for $500 million, subject to customary adjustments. The transaction includes products sold under the Metal Coaters and Metal Prep brands. For the twelve months ended April 2, 2022, the coil coatings business had net sales of approximately $232.3 million, which was reported in the Company’s Commercial segment.

In connection with the transaction, BlueScope and the Company will enter into long-term supply agreements to secure continued supply of light gauge coil coating and painted hot roll steel at favorable service levels, reaffirming Cornerstone Building Brands as a preferred solutions provider for metal buildings and roofing.

The transaction is expected to close in 2022, subject to customary closing conditions, including regulatory approvals.

Suspension of Guidance

Due to the announced transaction with CD&R, the Company will not be hosting a conference call in connection with its first-quarter financial results and will not provide financial guidance for the second quarter of fiscal year 2022.

(1)

Adjusted and pro forma financial metrics used in this release, including net debt leverage ratio, adjusted net income and adjusted EBITDA, are non-GAAP measures. See reconciliations of GAAP results to non-GAAP and pro forma adjusted results in the accompanying tables.

About Cornerstone Building Brands

Cornerstone Building Brands is the largest manufacturer of exterior building products for residential and low-rise non-residential buildings in North America. Headquartered in Cary, N.C., we serve residential and commercial customers across the new construction and repair and remodel markets. Our market-leading portfolio of products spans vinyl windows, vinyl siding, stone veneer, metal roofing, metal wall systems and metal accessories. Cornerstone Building Brands’ broad, multichannel distribution platform and expansive national footprint includes over 22,000 employees at manufacturing, distribution and office locations throughout North America. Corporate stewardship and environmental, social and governance (ESG) responsibility are embedded in our culture, and we are committed to contributing positively to the communities where we live, work and play. For more information, visit us at www.cornerstonebuildingbrands.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “anticipate,” “guidance,” “plan,” “potential,” “expect,” “should,” “will,” “forecast,” “target” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/ or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company’s actual performance to differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially include, but are not limited to, our ability to complete the proposed CD&R Merger and the proposed Coil Coatings Transaction on the terms and timeline anticipated, or at all, and the effect of the announcement, pendency and completion of the CD&R Merger and the Coil Coatings Transaction on our ability to maintain relationships with customers and other third parties, on management’s attention to ongoing business concerns, and other risks and uncertainties related to the proposed CD&R Merger and the Coil Coatings Transaction that may affect future results, industry cyclicality, seasonality of the business and adverse weather conditions, challenging economic conditions affecting the residential, non-residential and repair and remodeling construction industry and markets, commodity price volatility and/or limited availability of raw materials, including polyvinyl chloride (“PVC”) resin, glass, aluminum, natural gas, and steel due to supply chain disruptions, our ability to identify and develop relationships with a sufficient number of qualified suppliers to mitigate risk in the event a significant supplier experiences a significant production or supply chain interruption, the increasing difficulty of consumers and builders in obtaining credit or financing, increase in the macroeconomic inflationary environment, ability to successfully achieve price increases to offset cost increases, ability to successfully implement operational efficiency initiatives, including automation, ability to successfully integrate our acquired businesses, ability to attract and retain employees, including through various initiatives and actions, volatility in the United States (“U.S.”) and international economies and in the credit markets, the severity, duration and spread of the COVID-19 pandemic, as well as actions that may be taken by the Company or governmental authorities to contain the COVID-19 pandemic or to treat its impact and the resulting impact on supply chain and labor pressures, macroeconomic uncertainty and market volatility resulting from geopolitical concerns, including Russia’s invasion of Ukraine, an impairment of our goodwill and/or intangible assets, our ability to successfully develop new products or improve existing products, our ability to retain and replace key personnel, enforcement and obsolescence of our intellectual property rights, costs related to compliance with, violations of or liabilities under environmental, health and safety laws, competitive activity and pricing pressure in our industry, our ability to make strategic acquisitions accretive to earnings and dispositions at favorable prices and terms, our ability to fund operations, provide increased working capital necessary to support our strategy and acquisitions using available liquidity, our ability to carry out our restructuring plans and to fully realize the expected cost savings, global climate change, including compliance with new laws or regulations relating thereto, breaches of our information system security measures, damage to our computer infrastructure and software systems, necessary maintenance or replacements to our enterprise resource planning technologies, potential personal injury, property damage or product liability claims or other types of litigation, including stockholder litigation related to the proposed CD&R Merger, compliance with certain laws related to our international business operations, increases in labor costs, labor market pressures, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers, significant changes in factors and assumptions used to measure certain of our defined benefit plan obligations and the effect of actual investment returns on pension assets, ability to compete effectively against competitors with substitutable products, additional costs from new regulations which relate to the utilization or manufacturing of our products or services, including changes in building codes and standards, our ability to realize the anticipated benefits of acquisitions and dispositions and to use the proceeds from dispositions, volatility of the Company’s stock price, substantial governance and other rights held by the Investors, the effect on our common stock price caused by transactions engaged in by the Investors, our directors or executives, our substantial indebtedness and our ability to incur substantially more indebtedness, limitations that our debt agreements place on our ability to engage in certain business and financial transactions, our ability to obtain financing on acceptable terms, exchange rate fluctuations, downgrades of our credit ratings, the effect of increased interest rates on our ability to service our debt. See also the “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on March 1, 2022, and the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2022, to be filed with the SEC on the date hereof, and other risks described in documents subsequently filed by the Company from time to time with the SEC, which identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release.

Additional Information and Where to Find It

This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In connection with the proposed CD&R transaction, the Company will file relevant materials with the SEC, including a proxy statement on Schedule 14A (the “Proxy Statement”), and the Company and affiliates of CD&R will jointly file a transaction statement on Schedule 13e-3 (the “Schedule 13e-3”). This communication is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transaction. THE COMPANY URGES YOU TO READ THE PROXY STATEMENT, THE SCHEDULE 13E-3 AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors will be able to obtain a free copy of the Proxy Statement, the Schedule 13e-3 and other related documents (when available) filed by the Company with the SEC at the website maintained by the SEC at www.sec.gov. Investors also will be able to obtain a free copy of the Proxy Statement, the Schedule 13e-3 and other documents (when available) filed by the Company with the SEC by accessing the Investors section of the Company’s website at https://investors.cornerstonebuildingbrands.com/investor-home/default.aspx.

Participants in the Solicitation

The Company and certain of its directors, executive officers and employees may be considered to be participants in the solicitation of proxies from the Company’s stockholders in connection with the proposed CD&R transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the stockholders of the Company in connection with the proposed CD&R transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, will be included in the Proxy Statement when it is filed with the SEC. You may also find additional information about the Company’s directors and executive officers in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 1, 2022, as amended by Amendment No. 1, which was filed with the SEC on May 2, 2022 and in other documents filed by the Company with the SEC. You can obtain free copies of these documents from the Company using the contact information above.

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

 

April 2,
2022

 

April 3,
2021

Net sales

 

$

1,566,838

 

 

$

1,267,032

 

Cost of sales

 

 

1,232,931

 

 

 

1,007,303

 

Gross profit

 

 

333,907

 

 

 

259,729

 

 

 

 

21.3

%

 

 

20.5

%

 

 

 

 

 

Selling, general and administrative expenses

 

 

176,536

 

 

 

153,168

 

Intangible asset amortization

 

 

49,008

 

 

 

46,202

 

Restructuring and impairment charges, net

 

 

831

 

 

 

1,838

 

Strategic development and acquisition related costs

 

 

4,791

 

 

 

3,313

 

Gain on legal settlements

 

 

(76,575

)

 

 

 

Income from operations

 

 

179,316

 

 

 

55,208

 

Interest income

 

 

32

 

 

 

117

 

Interest expense

 

 

(44,106

)

 

 

(56,499

)

Foreign exchange gain (loss)

 

 

1,444

 

 

 

(26

)

Other income (expense), net

 

 

(37

)

 

 

337

 

Income (loss) before income taxes

 

 

136,649

 

 

 

(863

)

Provision for income taxes

 

 

34,366

 

 

 

792

 

 

 

 

25.1

%

 

 

(91.8

) %

 

 

 

 

 

Net income (loss)

 

 

102,283

 

 

 

(1,655

)

Net income allocated to participating securities

 

 

(757

)

 

 

 

Net income (loss) applicable to common shares

 

$

101,526

 

 

$

(1,655

)

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

Basic

 

$

0.80

 

 

$

(0.01

)

Diluted

 

$

0.79

 

 

$

(0.01

)

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

Basic

 

 

127,129

 

 

 

125,506

 

Diluted

 

 

128,466

 

 

 

125,506

 

 

 

 

 

 

Increase in sales

 

 

23.7

%

 

 

13.8

%

 

 

 

 

 

Selling, general and administrative expenses percentage of net sales

 

 

11.3

%

 

 

12.1

%

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

April 2,
2022

 

December 31,
2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

542,035

 

$

394,447

 

Restricted cash

 

2,211

 

 

2,211

 

Accounts receivable, net

 

708,340

 

 

685,316

 

Inventories, net

 

817,715

 

 

748,732

 

Income taxes receivable

 

3,502

 

 

14,514

 

Investments in debt and equity securities, at market

 

2,301

 

 

2,759

 

Prepaid expenses and other

 

99,777

 

 

135,701

 

Assets held for sale

 

3,400

 

 

3,400

 

Total current assets

 

2,179,281

 

 

1,987,080

 

 

 

 

 

Property, plant and equipment, net

 

625,106

 

 

612,295

 

Lease right-of-use assets

 

295,692

 

 

322,608

 

Goodwill

 

1,355,161

 

 

1,358,056

 

Intangible assets, net

 

1,477,430

 

 

1,524,635

 

Deferred income taxes

 

2,055

 

 

1,839

 

Other assets, net

 

96,931

 

 

20,947

 

Total assets

$

6,031,656

 

$

5,827,460

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

26,000

 

$

26,000

 

Accounts payable

 

396,408

 

 

311,737

 

Accrued compensation and benefits

 

82,790

 

 

101,164

 

Accrued interest

 

12,186

 

 

19,775

 

Accrued income taxes

 

39,094

 

 

3,220

 

Current portion of lease liabilities

 

57,477

 

 

73,150

 

Other accrued expenses

 

281,376

 

 

320,389

 

Total current liabilities

 

895,331

 

 

855,435

 

 

 

 

 

Long-term debt

 

3,005,873

 

 

3,010,843

 

Deferred income taxes

 

248,726

 

 

252,173

 

Long-term lease liabilities

 

238,134

 

 

251,061

 

Other long-term liabilities

 

284,469

 

 

281,609

 

Total long-term liabilities

 

3,777,202

 

 

3,795,686

 

 

 

 

 

Common stock

 

1,273

 

 

1,270

 

Additional paid-in capital

 

1,287,237

 

 

1,279,931

 

Accumulated earnings (deficit)

 

3,457

 

 

(98,826

)

Accumulated other comprehensive income (loss), net

 

67,156

 

 

(5,612

)

Treasury stock, at cost

 

 

 

(424

)

Total stockholders’ equity

 

1,359,123

 

 

1,176,339

 

 

 

 

 

Total liabilities and stockholders’ equity

$

6,031,656

 

$

5,827,460

 

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Cash flows from operating activities:

 

 

 

Net income (loss)

$

102,283

 

 

$

(1,655

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

 

73,932

 

 

 

72,615

 

Non-cash interest expense

 

8,928

 

 

 

2,314

 

Share-based compensation expense

 

11,451

 

 

 

3,302

 

Asset impairment

 

368

 

 

 

493

 

Provision for credit losses

 

242

 

 

 

676

 

Deferred income taxes

 

(15,749

)

 

 

(9,729

)

Changes in operating assets and liabilities, net of effect of acquisitions:

 

 

 

Accounts receivable

 

(23,628

)

 

 

(47,157

)

Inventories

 

(68,857

)

 

 

(62,028

)

Income taxes

 

11,012

 

 

 

7,976

 

Prepaid expenses and other

 

36,446

 

 

 

(7,755

)

Accounts payable

 

84,726

 

 

 

49,424

 

Accrued expenses

 

(28,312

)

 

 

8,597

 

Other, net

 

(2,736

)

 

 

2,958

 

Net cash provided by operating activities

 

190,106

 

 

 

20,031

 

Cash flows from investing activities:

 

 

 

Acquisitions, net of cash acquired

 

4,396

 

 

 

(180

)

Capital expenditures

 

(33,306

)

 

 

(21,230

)

Proceeds from sale of property, plant and equipment

 

 

 

 

715

 

Net cash used in investing activities

 

(28,910

)

 

 

(20,695

)

Cash flows from financing activities:

 

 

 

Payments on term loan

 

(6,500

)

 

 

(6,404

)

Payments on derivative financing obligations

 

(3,282

)

 

 

 

Other

 

(3,718

)

 

 

(1,055

)

Net cash used in financing activities

 

(13,500

)

 

 

(7,459

)

Effect of exchange rate changes on cash and cash equivalents

 

(108

)

 

 

585

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

147,588

 

 

 

(7,538

)

Cash, cash equivalents and restricted cash at beginning of period

 

396,658

 

 

 

680,478

 

Cash, cash equivalents and restricted cash at end of period

$

544,246

 

 

$

672,940

 

Supplemental disclosure of cash flow information

 

 

 

Interest paid, net of amounts capitalized

$

45,879

 

 

$

40,913

 

Taxes paid, net

$

1,562

 

 

$

1,949

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME (LOSS) PER DILUTED COMMON SHARE AND

NET INCOME (LOSS) COMPARISON

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

 

April 2,
2022

 

April 3,
2021

Net income (loss) per diluted common share, GAAP basis

 

$

0.79

 

 

$

(0.01

)

Restructuring and impairment charges, net

 

 

0.01

 

 

 

0.01

 

Strategic development and acquisition related costs

 

 

0.04

 

 

 

0.03

 

Gain on legal settlements

 

 

(0.60

)

 

 

 

Non-cash loss (gain) on foreign currency transactions

 

 

(0.01

)

 

 

 

Intangible asset amortization

 

 

0.38

 

 

 

0.37

 

Other, net

 

 

 

 

 

0.02

 

Tax effect of applicable non-GAAP adjustments(1)

 

 

0.05

 

 

 

(0.12

)

Adjusted net income (loss) per diluted common share(2)

 

$

0.66

 

 

$

0.30

 

 

 

 

 

 

 

 

Three Months Ended

 

 

April 2,
2022

 

April 3,
2021

Net income (loss) applicable to common shares, GAAP basis

 

$

101,526

 

 

$

(1,655

)

Restructuring and impairment charges, net

 

 

831

 

 

 

1,838

 

Strategic development and acquisition related costs

 

 

4,791

 

 

 

3,313

 

Gain on legal settlements

 

 

(76,575

)

 

 

 

Non-cash loss (gain) on foreign currency transactions

 

 

(1,444

)

 

 

26

 

Intangible asset amortization

 

 

49,008

 

 

 

46,202

 

Other, net

 

 

206

 

 

 

2,535

 

Tax effect of applicable non-GAAP adjustments(1)

 

 

6,028

 

 

 

(14,016

)

Adjusted net income (loss) applicable to common shares(2)

 

$

84,371

 

 

$

38,243

 

(1)

 

The Company calculated the tax effect of non-GAAP adjustments by applying the applicable federal and state statutory tax rate for the period to each applicable non-GAAP item.

   

(2)

 

The Company discloses a tabular comparison of Adjusted Net Income (Loss) per diluted common share and Adjusted Net Income (Loss) applicable to common shares, which are non-GAAP measures, because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period. Adjusted Net Income (Loss) per diluted common share and Adjusted Net Income (Loss) applicable to common shares should not be considered in isolation or as a substitute for Net Income (Loss) per diluted common share and Net Income (Loss) applicable to common shares as reported on the face of our consolidated statements of operations.

 

Certain amounts in this release have been subject to rounding adjustments. Accordingly, amounts shown as totals may not be the arithmetic aggregation of the individual amounts that comprise or precede them.

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Three Months Ended

 

 

April 2,
2022

 

April 3,
2021

Net sales

 

$

1,566,838

 

 

$

1,267,032

 

Impact of acquisitions and divestitures(1)

 

 

 

 

 

21,982

 

Pro forma net sales

 

$

1,566,838

 

 

$

1,289,014

 

 

 

 

 

 

Gross profit

 

$

333,907

 

 

$

259,729

 

 

 

 

21.3

%

 

 

20.5

%

 

 

 

 

 

Operating income, GAAP

 

$

179,316

 

 

$

55,208

 

Restructuring and impairment charges, net

 

 

831

 

 

 

1,838

 

Strategic development and acquisition related costs

 

 

4,791

 

 

 

3,313

 

Gain on legal settlements

 

 

(76,575

)

 

 

 

Other, net

 

 

206

 

 

 

2,535

 

Adjusted operating income

 

 

108,569

 

 

 

62,894

 

 

 

 

 

 

Other income (expense), net

 

 

(37

)

 

 

337

 

Depreciation and amortization

 

 

73,932

 

 

 

72,615

 

Share-based compensation expense

 

 

11,451

 

 

 

3,302

 

Adjusted EBITDA

 

 

193,915

 

 

 

139,148

 

 

 

 

 

 

Impact of acquisitions and divestitures(1)

 

 

 

 

 

(2,093

)

Pro Forma Adjusted EBITDA

 

$

193,915

 

 

$

137,055

 

Adjusted EBITDA as a % of Net Sales

 

 

12.4

%

 

 

11.0

%

Pro forma Adjusted EBITDA as a % of Pro Forma Net Sales

 

 

12.4

%

 

 

10.6

%

(1)

 

Reflects the impact of the net sales and Adjusted EBITDA of Prime Windows LLC, Cascade Windows Inc., and Union Corrugating Company Holdings, Inc,, which were acquired on April 30, 2021, August 20, 2021 and December 3, 2021, respectively, and reflects the impact of the divestitures of the insulated metal panels (“IMP”) and roll-up sheet doors (“DBCI”) businesses through the divestiture dates of August 9, 2021 and August 18, 2021, respectively.

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

Windows

 

 

 

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net Sales

$

702,110

 

 

$

527,263

 

Impact of acquisitions(1)

 

 

 

 

58,421

 

Pro forma net sales

$

702,110

 

 

$

585,684

 

 

 

 

 

Gross profit

$

123,187

 

 

$

92,534

 

 

 

17.5

%

 

 

17.5

%

 

 

 

 

Operating income, GAAP

$

46,245

 

 

$

29,362

 

Restructuring and impairment charges, net

 

212

 

 

 

932

 

Strategic development and acquisition related costs

 

554

 

 

 

 

Other, net

 

202

 

 

 

 

Adjusted operating income

 

47,213

 

 

 

30,294

 

 

 

 

 

Other income (expense), net

 

36

 

 

 

(87

)

Depreciation and amortization

 

35,130

 

 

 

30,798

 

Adjusted EBITDA

 

82,379

 

 

 

61,005

 

 

 

 

 

Impact of acquisitions(1)

 

 

 

 

6,582

 

Pro Forma Adjusted EBITDA

$

82,379

 

 

$

67,587

 

Adjusted EBITDA as a % of Net Sales

 

11.7

%

 

 

11.6

%

Pro Forma Adjusted EBITDA as a % of Pro Forma Net Sales

 

11.7

%

 

 

11.5

%

 

 

 

 

(1)

 

Reflects the impact of the net sales and Adjusted EBITDA of Prime Windows LLC and Cascade Windows Inc., which were acquired on April 30, 2021 and August 20, 2021, respectively.

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

Siding

 

 

 

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net Sales

$

332,990

 

 

$

316,391

 

 

 

 

 

Gross profit

$

77,607

 

 

$

75,999

 

 

 

23.3

%

 

 

24.0

%

 

 

 

 

Operating income, GAAP

$

27,423

 

 

$

27,528

 

Restructuring and impairment charges, net

 

208

 

 

 

141

 

Strategic development and acquisition related costs

 

 

 

 

323

 

Other, net

 

4

 

 

 

13

 

Adjusted operating income

 

27,635

 

 

 

28,005

 

 

 

 

 

Other income (expense), net

 

(225

)

 

 

(32

)

Depreciation and amortization

 

29,062

 

 

 

29,148

 

Adjusted EBITDA

$

56,472

 

 

$

57,121

 

 

 

 

 

Adjusted EBITDA as a % of Net Sales

 

17.0

%

 

 

18.1

%

 

 

 

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

Three Months Ended

 

April 2,
2022

 

April 3,
2021

Net Sales

$

531,738

 

 

$

423,378

 

Impact of acquisition and divestitures(1)

 

 

 

 

(36,439

)

Pro forma net sales

$

531,738

 

 

$

386,939

 

 

 

 

 

Gross profit

$

133,113

 

 

$

91,196

 

 

 

25.0

%

 

 

21.5

%

 

 

 

 

Operating income, GAAP

$

80,943

 

 

$

41,585

 

Restructuring and impairment charges, net

 

159

 

 

 

672

 

Strategic development and acquisition related costs

 

 

 

 

58

 

Other, net

 

(75

)

 

 

(611

)

Adjusted operating income

 

81,027

 

 

 

41,704

 

 

 

 

 

Other income (expense), net

 

373

 

 

 

354

 

Depreciation and amortization

 

8,168

 

 

 

11,360

 

Adjusted EBITDA

 

89,568

 

 

 

53,418

 

 

 

 

 

Impact of acquisition and divestitures(1)

 

 

 

 

(8,675

)

Pro Forma Adjusted EBITDA

$

89,568

 

 

$

44,743

 

Adjusted EBITDA as a % of Net Sales

 

16.8

%

 

 

12.6

%

Pro Forma Adjusted EBITDA as a % of Pro Forma Net Sales

 

16.8

%

 

 

11.6

%

 

 

 

 

(1)

 

Reflects the net adjustments of IMP and DBCI, which were divested on August 9, 2021 and August 18, 2021, respectively; and reflects the impact of the net sales and Adjusted EBITDA of Union Corrugating Company Holdings, Inc, which was acquired on December 3, 2021.

 

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

April 2,
2022

 

April 3,
2021

ABL Revolver

$

 

$

Cash Revolver

 

 

 

Term Loan

 

2,574

 

 

2,492

Senior Notes

 

500

 

 

1,145

Total Debt

$

3,074

 

$

3,637

Less Cash

 

542

 

 

667

Net Debt

$

2,532

 

$

2,970

 

 

 

 

Leverage Ratio

 

 

 

LTM pro forma Adj EBITDA

$

777

 

$

650

Net Debt Leverage Ratio

3.3x

 

4.6x

 

Contacts

Investor Relations
Tina Beskid
Vice President, Finance and Investor Relations
1-866-419-0042
info@investors.cornerstonebuildingbrands.com

Release Summary

Cornerstone Building Brands Reports Strong First-Quarter 2022 Results

Contacts

Investor Relations
Tina Beskid
Vice President, Finance and Investor Relations
1-866-419-0042
info@investors.cornerstonebuildingbrands.com