View all news

Cornerstone Building Brands Announces Fourth-Quarter and Full-Year 2021 Results

March, 01, 2022
  • Posted fourth-quarter and full-year net sales growth of 23.5% and 20.9% over the prior year, respectively
  • Generated full-year earnings of $5.19 per diluted common share; $2.10 adjusted earnings per diluted common share
  • Reported net debt leverage of 3.7x, 1.2x lower than the prior year
  • Completed acquisition of Union Corrugating Company; expands metal roof offering to the residential market

CARY, N.C.--(BUSINESS WIRE)-- Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products in North America, today reported fourth-quarter 2021 net sales of $1,471.6 million and net income of $38.1 million or twenty-nine cents per diluted share. This compares with net sales of $1,191.4 million and net income of $1.9 million or one cent per diluted share in the same quarter last year.

Pro Forma Adjusted EBITDA1 for the fourth quarter of 2021 was $184.2 million, 25.3 percent higher than the same quarter last year. The improvement was primarily due to favorable price mix net of inflation of $94 million partially offset by higher SG&A expense and manufacturing costs related to supply chain disruptions and labor constraints.

2021 Full Year Results and Highlights

Net sales for 2021 were $5,583.1 million and net income was $665.9 million or $5.19 per diluted share. This compares with net sales of $4,617.4 million and net loss of $482.8 million or loss per diluted share of $3.84.

Pro forma net sales1 were $5,483.9 million, a 23.0 percent increase over prior year. The growth was primarily driven by favorable price actions across all segments and strong underlying market demands.

Pro forma Adjusted EBITDA1 for 2021 was $688.0 million or 12.5 percent of pro forma net sales1, an improvement of 24.1 percent or ten basis points from the same pro forma period a year ago. The increase was primarily driven by an increase in price mix net of inflation of 37.9 percent and higher volumes of $85.0 million over the same pro forma period last year. Additionally, we experienced higher manufacturing costs to serve our customers as a result of supply chain disruptions and labor constraints. Increases in SG&A of $69.3 million were primarily the result of the return of near-term costs, such as variable compensation and professional service expenses.

“We delivered strong financial results in 2021,” said Rose Lee, President and Chief Executive Officer. “For the second consecutive year, we realized record pro forma net sales and pro forma Adjusted EBITDA while navigating challenging supply chain distributions and changing market conditions. In addition to our strong performance, we remained focused on enhancing long-term growth by taking actions to optimize our portfolio. During the year, we divested the Insulated Metal Panels and Roll-Up Door businesses, which immediately unlocked shareholder value and enabled investments that furthered growth in the large, deep windows market and high growth residential metal roofing market.”

Segment Results Versus Prior Year

Due to the timing of the Company’s fiscal calendar, the fourth quarter of 2021 had two, or approximately 3 percent, more ship days than the fourth quarter of 2020.

  • Windows segment net sales for the quarter were $618.8 million, an increase of 21.0 percent versus the same period last year. On a pro forma basis, net sales1 for the quarter increased 8.5 percent driven by positive price mix of 12.9 percent partially offset by 4.4 percent lower volume. Operating income was $16.8 million, a decrease of $12.3 million or 42.3 percent, from the prior-year quarter. Adjusted EBITDA1 was $54.4 million or 8.8 percent of net sales, a decrease of 22.5 percent compared to pro forma Adjusted EBITDA1 from the prior year quarter, primarily due to manufacturing inefficiencies and lower volume associated with market-driven labor shortages and supply chain disruptions. Disciplined price actions in response to rising commodity costs and other inflationary impacts resulted in positive price mix net of inflation of $11 million. SG&A costs for the quarter were $5 million higher than pro forma SG&A in fourth-quarter 2020 primarily due to the return of near-term costs, such as variable compensation and professional service expenses.
  • Siding segment net sales for the quarter were $327.6 million, an increase of 11.5 percent versus the fourth-quarter 2020. For the quarter, increase in price mix of 17.0 percent was partially offset by lower volume. Operating income was $10.8 million, a decrease of $20.2 million or 65.3 percent from the prior year quarter, primarily due to $13.9 million of asset impairment related a discontinued product line. Adjusted EBITDA1 was $53.9 million or 16.4 percent of net sales, a decrease of 13.2 percent primarily due to lower volume, increased manufacturing costs to serve the customers and return of near-term costs (such as variable compensation and professional service expenses) in SG&A offset by positive price mix net of inflation of 15.4 percent.
  • Commercial segment net sales for the quarter were $525.2 million, an increase of 36.0 percent over the prior year quarter, including $21.9 million of sales from the Union Corrugating Company acquisition. Pro forma net sales1 increased 79.5 percent, driven by disciplined price actions of approximately 67.0 percent taken to mitigate rising steel costs partially offset by lower volume. Operating income was $101.0 million, an increase of $51.0 million from the prior-year quarter. Pro forma Adjusted EBITDA1 was $113.1 million or 21.5 percent of pro forma net sales1, an increase of $71.1 million or 169.6 percent over the same quarter last year, primarily due to positive price mix net of commodity and other inflationary impacts of $73 million. Partially offsetting the favorability was lower volumes caused by raw material constraints. Included in pro forma Adjusted EBITDA1 is $2.2 million related to the acquisition of Union Corrugating Company, which closed on December 3, 2021 and furthers our presence in the high-growth residential metal roofing market.

Balance Sheet and Liquidity

The Company's cash flow used in operations during 2021 was $215.9 million, primarily for investments in net working capital to support demand and increased valuations from rising commodity costs and other inflationary impacts. Capital expenditures were $114.7 million, with approximately 50 percent invested in innovative product offerings and process automation that are expected to generate profitable growth in the future.

The Company continued to strengthen the balance sheet and improve its leverage position in 2021. As previously disclosed, during the second quarter, the Company fully redeemed its $645 million, 8.00% Senior Notes due April 2026 using available cash from the balance sheet and net proceeds from its extended and upsized senior term loan facility. The Company also refinanced its credit facilities, meaningfully extending its debt maturities and reducing annual interest costs by more than $50 million a year. The Company ended the year with approximately $394 million of unrestricted cash on hand and $1,075 million of liquidity. Additionally, the net debt leverage ratio1 improved from 4.9x at the end of fiscal year 2020 to 3.7x at the end of fiscal year ended 2021.

Suspension of Guidance and Strategic Update

As previously announced on February 14, 2022, the Company is in receipt of a non-binding, best and final proposal from funds affiliated with Clayton, Dubilier & Rice, LLC (“CD&R”) to acquire all of the Company’s outstanding shares of common stock that CD&R does not already own for $24.65 in cash per share. The Company’s board of directors previously formed a special committee of independent directors (the “Special Committee”) to evaluate and consider any potential or actual proposal from CD&R and any other alternative proposals or other strategic alternatives that may be available to the Company. The Special Committee’s evaluation is ongoing and it expects to make an announcement regarding the outcome of its review upon completion. In light of the proposal and the Special Committee’s ongoing review, the Company will not be hosting a conference call in connection with its fourth quarter financial results and will not provide financial guidance for the first quarter of fiscal year 2022.

(1)

Adjusted and pro forma financial metrics used in this release, including pro forma net sales, Adjusted EBITDA and pro forma Adjusted EBITDA are non-GAAP measures. See reconciliations of GAAP results to adjusted results and pro forma results in the accompanying tables. See "Non-GAAP Financial Measures" below.

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 approximately 21,700 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 atwww.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, those relating to the CD&R Offer, including whether any definitive offer will be made, whether the definitive offer will be accepted and approved, whether any agreement will be executed, or whether this or any other transaction will be consummated, industry cyclicality and seasonality and adverse weather conditions, challenging economic conditions affecting the nonresidential construction industry, downturns in the residential new construction and repair and remodeling end markets, or the economy or the availability of consumer credit, volatility in the United States (“U.S.”) economy and abroad, generally, 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 COVID-19 or to treat its impact; an impairment of our goodwill and/or intangible assets; our ability to successfully develop new products or improve existing products, the effects of manufacturing or assembly realignments, seasonality of the business and other external factors beyond our control, commodity price volatility and/or limited availability of raw materials, including steel, PVC resin, glass and aluminum, our ability to identify and develop relationships with a sufficient number of qualified suppliers and to avoid a significant interruption in our supply chains, retention and replacement of 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, changes in building codes and standards, competitive activity and pricing pressure in our industry, our ability to make strategic acquisitions accretive to earnings, our ability to carry out our restructuring plans and to fully realize the expected cost savings, global climate change, including legal, regulatory or market responses 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, compliance with certain laws related to our international business operations, increases in labor costs, 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, the cost and difficulty associated with integrating and combining acquired businesses, volatility of the Company’s stock price, substantial governance and other rights held by our sponsor investors, the effect on our common stock price caused by transactions engaged in by our sponsor 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, downgrades of our credit ratings, and 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, 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.

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

Net sales

$

1,471,579

 

 

$

1,191,369

 

 

$

5,583,137

 

 

$

4,617,369

 

Cost of sales

 

1,153,457

 

 

 

924,169

 

 

 

4,384,062

 

 

 

3,567,049

 

Gross profit

 

318,122

 

 

 

267,200

 

 

 

1,199,075

 

 

 

1,050,320

 

 

 

21.6

%

 

 

22.4

%

 

 

21.5

%

 

 

22.7

%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

171,652

 

 

 

142,625

 

 

 

649,472

 

 

 

579,200

 

Intangible asset amortization

 

50,810

 

 

 

45,447

 

 

 

189,488

 

 

 

180,994

 

Restructuring and impairment charges, net

 

18,786

 

 

 

1,956

 

 

 

26,247

 

 

 

34,120

 

Strategic development and acquisition related costs

 

2,373

 

 

 

5,791

 

 

 

27,875

 

 

 

19,341

 

Gain on divestitures

 

 

 

 

 

 

 

(831,252

)

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

503,171

 

Income (loss) from operations

 

74,501

 

 

 

71,381

 

 

 

1,137,245

 

 

 

(266,506

)

Interest income

 

(6

)

 

 

357

 

 

 

205

 

 

 

1,364

 

Interest expense

 

(43,613

)

 

 

(54,872

)

 

 

(191,301

)

 

 

(213,610

)

Foreign exchange gain (loss)

 

(2,682

)

 

 

2,368

 

 

 

(3,749

)

 

 

1,068

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

(42,234

)

 

 

 

Other income, net

 

494

 

 

 

494

 

 

 

1,661

 

 

 

469

 

Income (loss) before income taxes

 

28,694

 

 

 

19,728

 

 

 

901,827

 

 

 

(477,215

)

Provision for income taxes

 

(9,358

)

 

 

17,848

 

 

 

235,968

 

 

 

5,563

 

 

 

(32.6

)%

 

 

90.5

%

 

 

26.2

%

 

 

(1.2

)%

 

 

 

 

 

 

 

 

Net income (loss)

$

38,052

 

 

$

1,880

 

 

$

665,859

 

 

$

(482,778

)

Net income allocated to participating securities

 

(467

)

 

 

(25

)

 

 

(7,815

)

 

 

 

Net income (loss) applicable to common shares

$

37,585

 

 

$

1,855

 

 

$

658,044

 

 

$

(482,778

)

 

 

 

 

 

 

 

 

Income (loss) per common share:

 

 

 

 

 

 

 

Basic

$

0.30

 

 

$

0.01

 

 

$

5.22

 

 

$

(3.84

)

Diluted

$

0.29

 

 

$

0.01

 

 

$

5.19

 

 

$

(3.84

)

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

Basic

 

126,725

 

 

 

125,271

 

 

 

126,058

 

 

 

125,562

 

Diluted

 

127,645

 

 

 

125,310

 

 

 

126,795

 

 

 

125,562

 

 

 

 

 

 

 

 

 

Increase (decrease) in sales

 

23.5

%

 

 

(4.3

)%

 

 

20.9

%

 

 

(5.6

)%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses percentage of net sales

 

11.7

%

 

 

12.0

%

 

 

11.6

%

 

 

12.5

%

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

December 31,
2021

 

December 31,
2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

394,447

 

 

$

674,255

 

Restricted cash

 

2,211

 

 

 

6,223

 

Accounts receivable, net

 

685,316

 

 

 

554,649

 

Inventories, net

 

748,732

 

 

 

431,937

 

Income taxes receivable

 

14,514

 

 

 

39,379

 

Investments in debt and equity securities, at market

 

2,759

 

 

 

2,333

 

Prepaid expenses and other

 

135,701

 

 

 

77,751

 

Assets held for sale

 

3,400

 

 

 

4,644

 

Total current assets

 

1,987,080

 

 

 

1,791,171

 

 

 

 

 

Property, plant and equipment, net

 

612,295

 

 

 

631,821

 

Lease right-of-use assets

 

322,608

 

 

 

264,107

 

Goodwill

 

1,358,056

 

 

 

1,194,729

 

Intangible assets, net

 

1,524,635

 

 

 

1,584,604

 

Deferred income taxes

 

1,839

 

 

 

1,867

 

Other assets, net

 

20,947

 

 

 

10,191

 

Total assets

$

5,827,460

 

 

$

5,478,490

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

26,000

 

 

$

25,600

 

Accounts payable

 

311,737

 

 

 

211,441

 

Accrued compensation and benefits

 

101,164

 

 

 

81,548

 

Accrued interest

 

19,775

 

 

 

25,485

 

Accrued income taxes

 

3,220

 

 

 

5,060

 

Current portion of lease liabilities

 

73,150

 

 

 

70,125

 

Other accrued expenses

 

320,389

 

 

 

247,893

 

Total current liabilities

 

855,435

 

 

 

667,152

 

 

 

 

 

Long-term debt

 

3,010,843

 

 

 

3,563,429

 

Deferred income taxes

 

252,173

 

 

 

269,792

 

Long-term lease liabilities

 

251,061

 

 

 

198,875

 

Other long-term liabilities

 

281,609

 

 

 

337,437

 

Total long-term liabilities

 

3,795,686

 

 

 

4,369,533

 

 

 

 

 

Common stock

 

1,270

 

 

 

1,255

 

Additional paid-in capital

 

1,279,931

 

 

 

1,257,262

 

Accumulated deficit

 

(98,826

)

 

 

(764,685

)

Accumulated other comprehensive loss, net

 

(5,612

)

 

 

(51,517

)

Treasury stock, at cost

 

(424

)

 

 

(510

)

Total stockholders’ equity

 

1,176,339

 

 

 

441,805

 

 

 

 

 

Total liabilities and stockholders’ equity

$

5,827,460

 

 

$

5,478,490

 

CORNERSTONE BUILDING BRANDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

38,052

 

 

$

1,880

 

 

$

665,859

 

 

$

(482,778

)

Adjustments to reconcile net income (loss) to net cash from operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

75,945

 

 

 

72,189

 

 

 

292,901

 

 

 

284,602

 

Non-cash interest expense

 

8,865

 

 

 

2,641

 

 

 

28,722

 

 

 

9,589

 

Share-based compensation expense

 

12,057

 

 

 

4,488

 

 

 

29,003

 

 

 

17,056

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

42,234

 

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

503,171

 

Asset impairment

 

18,119

 

 

 

1,415

 

 

 

22,210

 

 

 

4,905

 

Gain on divestitures

 

 

 

 

 

 

 

(831,252

)

 

 

 

Loss on asset sales, net

 

 

 

 

(1,962

)

 

 

 

 

 

(1,252

)

Provision for credit losses

 

1,315

 

 

 

1,628

 

 

 

3,604

 

 

 

5,390

 

Deferred income taxes

 

(36,069

)

 

 

22,733

 

 

 

(59,510

)

 

 

(4,319

)

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

 

 

 

 

 

 

 

Accounts receivable

 

(18,642

)

 

 

22,333

 

 

 

(156,066

)

 

 

(61,976

)

Inventories

 

(70,174

)

 

 

(23,053

)

 

 

(311,242

)

 

 

7,927

 

Income taxes

 

(2,903

)

 

 

(2,740

)

 

 

24,865

 

 

 

14,146

 

Prepaid expenses and other

 

(15,413

)

 

 

(2,831

)

 

 

(56,768

)

 

 

3,415

 

Accounts payable

 

(28,142

)

 

 

(18,006

)

 

 

72,260

 

 

 

4,663

 

Accrued expenses

 

5,390

 

 

 

(4,644

)

 

 

36,944

 

 

 

8,276

 

Other, net

 

(20,647

)

 

 

(4,530

)

 

 

(19,651

)

 

 

(4,398

)

Net cash provided by (used in) operating activities

 

(32,247

)

 

 

71,541

 

 

 

(215,887

)

 

 

308,417

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

(197,240

)

 

 

 

 

 

(528,250

)

 

 

(41,841

)

Capital expenditures

 

(39,532

)

 

 

(19,316

)

 

 

(114,715

)

 

 

(81,851

)

Proceeds from divestitures, net of cash divested

 

 

 

 

 

 

 

1,187,307

 

 

 

 

Proceeds from sale of property, plant and equipment

 

509

 

 

 

2,031

 

 

 

5,124

 

 

 

3,569

 

Net cash provided by (used in) investing activities

 

(236,263

)

 

 

(17,285

)

 

 

549,466

 

 

 

(120,123

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from ABL facility

 

 

 

 

 

 

 

190,000

 

 

 

345,000

 

Payments on ABL facility

 

 

 

 

 

 

 

(190,000

)

 

 

(415,000

)

Proceeds from cash flow revolver

 

 

 

 

 

 

 

 

 

 

115,000

 

Payments on cash flow revolver

 

 

 

 

 

 

 

 

 

 

(115,000

)

Proceeds from term loan

 

 

 

 

 

 

 

108,438

 

 

 

 

Payments on term loan

 

(6,500

)

 

 

(6,405

)

 

 

(25,905

)

 

 

(25,620

)

Proceeds from senior notes

 

 

 

 

 

 

 

 

 

 

500,000

 

Payments on senior notes

 

 

 

 

 

 

 

(670,800

)

 

 

 

Payments of financing costs

 

 

 

 

174

 

 

 

(13,187

)

 

 

(6,731

)

Purchases of treasury stock

 

 

 

 

 

 

 

 

 

 

(6,428

)

Payments on derivative financing obligations

 

(3,246

)

 

 

 

 

 

(9,377

)

 

 

 

Other

 

(5,118

)

 

 

(1,088

)

 

 

(6,418

)

 

 

(1,566

)

Net cash provided by (used in) financing activities

 

(14,864

)

 

 

(7,319

)

 

 

(617,249

)

 

 

389,655

 

Effect of exchange rate changes on cash and cash equivalents

 

634

 

 

 

(285

)

 

 

(150

)

 

 

222

 

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

 

(282,740

)

 

 

46,652

 

 

 

(283,820

)

 

 

578,171

 

Cash, cash equivalents and restricted cash at beginning of period

 

679,398

 

 

 

633,826

 

 

 

680,478

 

 

 

102,307

 

Cash, cash equivalents and restricted cash at end of period

$

396,658

 

 

$

680,478

 

 

$

396,658

 

 

$

680,478

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

Interest paid, net of amounts capitalized

$

29,305

 

 

$

58,445

 

 

$

178,330

 

 

$

196,770

 

Taxes paid (refunded), net

$

34,664

 

 

$

(1,435

)

 

$

267,399

 

 

$

(3,316

)

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

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

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

$

0.29

 

 

$

0.01

 

 

$

5.19

 

 

$

(3.84

)

Restructuring and impairment charges, net

 

0.15

 

 

 

0.02

 

 

 

0.21

 

 

 

0.27

 

Strategic development and acquisition related costs

 

0.02

 

 

 

0.05

 

 

 

0.22

 

 

 

0.15

 

Gain on divestitures

 

 

 

 

 

 

 

(6.56

)

 

 

 

Non cash loss (gain) on foreign currency transactions

 

0.02

 

 

 

(0.02

)

 

 

0.03

 

 

 

(0.01

)

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

4.01

 

Intangible asset amortization(1)

 

0.40

 

 

 

0.36

 

 

 

1.49

 

 

 

1.44

 

Customer inventory buybacks

 

 

 

 

 

 

 

 

 

 

0.01

 

COVID-19(2)

 

 

 

 

0.01

 

 

 

 

 

 

0.10

 

Other, net(3)

 

 

 

 

 

 

 

0.43

 

 

 

0.01

 

Tax effect of applicable non-GAAP adjustments(4)

 

(0.15

)

 

 

(0.11

)

 

 

1.09

 

 

 

(1.56

)

Adjusted net income (loss) per diluted common share(5)

$

0.73

 

 

$

0.33

 

 

$

2.10

 

 

$

0.58

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

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

$

37,585

 

 

$

1,855

 

 

$

658,044

 

 

$

(482,778

)

Restructuring and impairment charges, net

 

18,786

 

 

 

1,956

 

 

 

26,247

 

 

 

34,120

 

Strategic development and acquisition related costs

 

2,373

 

 

 

5,791

 

 

 

27,875

 

 

 

19,341

 

Gain on divestitures

 

 

 

 

 

 

 

(831,252

)

 

 

 

Non cash loss (gain) on foreign currency transactions

 

2,682

 

 

 

(2,368

)

 

 

3,749

 

 

 

(1,068

)

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

503,171

 

Intangible asset amortization(1)

 

50,810

 

 

 

45,447

 

 

 

189,488

 

 

 

180,994

 

Customer inventory buybacks

 

 

 

 

188

 

 

 

 

 

 

641

 

COVID-19(2)

 

2

 

 

 

1,874

 

 

 

(391

)

 

 

12,508

 

Other, net(3)

 

90

 

 

 

(214

)

 

 

54,945

 

 

 

1,245

 

Tax effect of applicable non-GAAP adjustments(4)

 

(19,433

)

 

 

(13,695

)

 

 

137,628

 

 

 

(195,288

)

Adjusted net income (loss) applicable to common shares(5)

$

92,895

 

 

$

40,834

 

 

$

266,333

 

 

$

72,886

 

(1)

Effective July 3, 2021, we revised the definition of Adjusted Net Income to exclude intangible amortization expense.

(2)

Costs included within the COVID-19 line item include incremental labor costs due to quarantine related absenteeism, incremental facility cleaning costs, pandemic related supplies and personal protective equipment for employees, among other costs.

(3)

Costs with the Other, net line item for the year ended December 31, 2021 primarily included $11.6 million of non-capitalizable debt issuance costs and $42.2 million of loss on extinguishment of debt.

(4)

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.

(5)

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 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

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2019

 

December 31,
2021

 

December 31,
2020

 

December 31,
2019

Net sales

$

1,471,579

 

 

$

1,191,369

 

 

$

1,244,415

 

 

$

5,583,137

 

 

$

4,617,369

 

 

$

4,889,747

 

Impact of acquisitions and divestitures(1)

 

 

 

 

(34,843

)

 

 

(54,115

)

 

 

(99,206

)

 

 

(160,264

)

 

 

(196,319

)

Pro forma net sales

$

1,471,579

 

 

$

1,156,526

 

 

$

1,190,300

 

 

$

5,483,931

 

 

$

4,457,105

 

 

$

4,693,428

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

$

318,122

 

 

$

267,200

 

 

$

288,036

 

 

$

1,199,075

 

 

$

1,050,320

 

 

$

1,088,419

 

 

 

21.6

%

 

 

22.4

%

 

 

23.1

%

 

 

21.5

%

 

 

22.7

%

 

 

22.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss), GAAP

$

74,501

 

 

$

71,381

 

 

$

65,610

 

 

$

1,137,245

 

 

$

(266,506

)

 

$

214,736

 

Restructuring and impairment charges, net

 

18,786

 

 

 

1,956

 

 

 

2,538

 

 

 

26,247

 

 

 

34,277

 

 

 

18,060

 

Strategic development and acquisition related costs

 

2,373

 

 

 

5,791

 

 

 

13,517

 

 

 

27,875

 

 

 

19,341

 

 

 

50,185

 

Gain on divestitures

 

 

 

 

 

 

 

 

 

 

(831,252

)

 

 

 

 

 

 

Non-cash charge of purchase price allocated to inventories

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,249

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

503,171

 

 

 

 

Customer inventory buybacks

 

 

 

 

188

 

 

 

 

 

 

 

 

 

641

 

 

 

576

 

COVID-19

 

2

 

 

 

1,874

 

 

 

 

 

 

(391

)

 

 

12,508

 

 

 

 

Other, net

 

94

 

 

 

(214

)

 

 

946

 

 

 

12,711

 

 

 

1,245

 

 

 

4,726

 

Adjusted operating income

 

95,756

 

 

 

80,976

 

 

 

82,611

 

 

 

372,435

 

 

 

304,677

 

 

 

304,532

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (loss), net

 

429

 

 

 

494

 

 

 

518

 

 

 

1,596

 

 

 

469

 

 

 

1,183

 

Depreciation and amortization

 

75,945

 

 

 

72,189

 

 

 

72,279

 

 

 

292,901

 

 

 

284,602

 

 

 

263,764

 

Share-based compensation expense

 

12,057

 

 

 

4,488

 

 

 

3,465

 

 

 

29,003

 

 

 

17,056

 

 

 

14,078

 

Adjusted EBITDA

$

184,187

 

 

$

158,147

 

 

$

158,873

 

 

$

695,935

 

 

$

606,804

 

 

$

583,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of acquisitions and divestitures(1)

 

 

 

 

(11,132

)

 

 

(16,108

)

 

 

(7,953

)

 

 

(52,223

)

 

 

(60,789

)

Pro forma Adjusted EBITDA

$

184,187

 

 

$

147,015

 

 

$

142,765

 

 

$

687,982

 

 

$

554,581

 

 

$

522,768

 

Adjusted EBITDA as a % of net sales

 

12.5

%

 

 

13.3

%

 

 

12.8

%

 

 

12.5

%

 

 

13.1

%

 

 

11.9

%

Pro forma Adjusted EBITDA as a % of pro forma net sales

 

12.5

%

 

 

12.7

%

 

 

12.0

%

 

 

12.5

%

 

 

12.4

%

 

 

11.1

%

(1)

Reflects the acquisition impact of the net sales and Adjusted EBITDA of Environmental Stoneworks through February 19, 2019, Kleary Masonry, Inc. through March 1, 2020, Prime Windows LLC through April 29, 2021 and Cascade Windows Inc. through August 19, 2021; and reflects the impact of the divestitures of the IMP and 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

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

Net sales

$

618,784

 

 

$

511,586

 

 

$

2,322,277

 

 

$

1,889,625

 

Impact of acquisitions(1)

 

 

 

 

58,689

 

 

 

132,141

 

 

 

206,639

 

Pro forma net sales

$

618,784

 

 

$

570,275

 

 

$

2,454,418

 

 

$

2,096,264

 

 

 

 

 

 

 

 

 

Gross profit

$

90,656

 

 

$

90,367

 

 

$

371,854

 

 

$

347,856

 

 

 

14.7

%

 

 

17.7

%

 

 

16.0

%

 

 

18.4

%

 

 

 

 

 

 

 

 

Operating income (loss), GAAP

$

16,824

 

 

$

29,148

 

 

$

100,725

 

 

$

(223,646

)

Restructuring and impairment charges, net

 

39

 

 

 

310

 

 

 

1,252

 

 

 

7,499

 

Strategic development and acquisition related costs

 

831

 

 

 

 

 

 

2,976

 

 

 

16

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

320,990

 

COVID-19

 

 

 

 

921

 

 

 

 

 

 

6,844

 

Other, net

 

 

 

 

349

 

 

 

 

 

 

601

 

Adjusted operating income

 

17,694

 

 

 

30,728

 

 

 

104,953

 

 

 

112,304

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(52

)

 

 

8

 

 

 

(88

)

 

 

(107

)

Depreciation and amortization

 

36,778

 

 

 

30,840

 

 

 

134,626

 

 

 

121,519

 

Adjusted EBITDA

 

54,420

 

 

 

61,576

 

 

 

239,491

 

 

 

233,716

 

 

 

 

 

 

 

 

 

Impact of acquisitions(1)

 

 

 

 

8,644

 

 

 

15,314

 

 

 

25,740

 

Pro forma Adjusted EBITDA

$

54,420

 

 

$

70,220

 

 

$

254,805

 

 

$

259,456

 

Adjusted EBITDA as a % of net sales

 

8.8

%

 

 

12.0

%

 

 

10.3

%

 

 

12.4

%

Pro forma Adjusted EBITDA as a % of pro forma net sales

 

8.8

%

 

 

12.3

%

 

 

10.4

%

 

 

12.4

%

(1)

Reflects the impact of the net sales and Adjusted EBITDA of Prime Windows LLC through April 29, 2021 and Cascade Windows Inc. through August 19, 2021.

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Siding

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

Net sales

$

327,632

 

 

$

293,756

 

 

$

1,364,080

 

 

$

1,141,946

 

Impact of acquisition(1)

 

 

 

 

 

 

 

 

 

 

8,358

 

Pro forma net sales

$

327,632

 

 

$

293,756

 

 

$

1,364,080

 

 

$

1,150,304

 

 

 

 

 

 

 

 

 

Gross profit

$

75,563

 

 

$

78,405

 

 

$

346,360

 

 

$

308,466

 

 

 

23.1

%

 

 

26.7

%

 

 

25.4

%

 

 

27.0

%

 

 

 

 

 

 

 

 

Operating income (loss), GAAP

$

10,753

 

 

$

30,986

 

 

$

137,772

 

 

$

(61,930

)

Restructuring and impairment charges, net

 

13,939

 

 

 

65

 

 

 

14,226

 

 

 

2,966

 

Strategic development and acquisition related costs

 

(80

)

 

 

2,043

 

 

 

(2,974

)

 

 

10,158

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

176,774

 

Customer inventory buybacks

 

 

 

 

188

 

 

 

 

 

 

641

 

COVID-19

 

2

 

 

 

14

 

 

 

28

 

 

 

81

 

Other, net

 

 

 

 

138

 

 

 

30

 

 

 

(1,213

)

Adjusted operating income

 

24,614

 

 

 

33,434

 

 

 

149,082

 

 

 

127,477

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

49

 

 

 

(22

)

 

 

(71

)

 

 

(32

)

Depreciation and amortization

 

29,219

 

 

 

28,669

 

 

 

116,660

 

 

 

113,737

 

Adjusted EBITDA

 

53,882

 

 

 

62,081

 

 

 

265,671

 

 

 

241,182

 

 

 

 

 

 

 

 

 

Impact of acquisition(1)

 

 

 

 

 

 

 

 

 

 

1,869

 

Pro forma Adjusted EBITDA

$

53,882

 

 

$

62,081

 

 

$

265,671

 

 

$

243,051

 

Adjusted EBITDA as a % of net sales

 

16.4

%

 

 

21.1

%

 

 

19.5

%

 

 

21.1

%

Pro forma Adjusted EBITDA as a % of pro forma net sales

 

16.4

%

 

 

21.1

%

 

 

19.5

%

 

 

21.1

%

(1)

Reflects the impact of the net sales and Adjusted EBITDA of Kleary Masonry, Inc. through March 1, 2020.

CORNERSTONE BUILDING BRANDS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,
2021

 

December 31,
2020

 

December 31,
2021

 

December 31,
2020

Net sales

$

525,163

 

 

$

386,027

 

 

$

1,896,780

 

 

$

1,585,798

 

Impact of divestitures(1)

 

 

 

 

(93,532

)

 

 

(231,347

)

 

 

(375,261

)

Pro forma net sales

$

525,163

 

 

$

292,495

 

 

$

1,665,433

 

 

$

1,210,537

 

 

 

 

 

 

 

 

 

Gross profit

$

151,903

 

 

$

98,428

 

 

$

480,861

 

 

$

393,998

 

 

 

28.9

%

 

 

25.5

%

 

 

25.4

%

 

 

24.8

%

 

 

 

 

 

 

 

 

Operating income, GAAP

$

100,962

 

 

$

49,944

 

 

$

1,104,335

 

 

$

159,586

 

Restructuring and impairment charges, net

 

4,412

 

 

 

(157

)

 

 

10,131

 

 

 

20,270

 

Strategic development and acquisition related costs

 

8

 

 

 

 

 

 

3,103

 

 

 

(262

)

Gain on divestitures

 

 

 

 

 

 

 

(831,252

)

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

5,407

 

COVID-19

 

 

 

 

60

 

 

 

(774

)

 

 

2,645

 

Other, net

 

90

 

 

 

76

 

 

 

362

 

 

 

1,021

 

Adjusted operating income

 

105,472

 

 

 

49,923

 

 

 

285,905

 

 

 

188,667

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

320

 

 

 

243

 

 

 

1,346

 

 

 

680

 

Depreciation and amortization

 

7,267

 

 

 

11,549

 

 

 

36,282

 

 

 

45,213

 

Adjusted EBITDA

 

113,059

 

 

 

61,715

 

 

 

323,533

 

 

 

234,560

 

 

 

 

 

 

 

 

 

Impact of divestitures(1)

 

 

 

 

(19,776

)

 

 

(23,267

)

 

 

(79,832

)

Pro forma Adjusted EBITDA

$

113,059

 

 

$

41,939

 

 

$

300,266

 

 

$

154,728

 

Adjusted EBITDA as a % of net sales

 

21.5

%

 

 

16.0

%

 

 

17.1

%

 

 

14.8

%

Pro forma Adjusted EBITDA as a % of pro forma net sales

 

21.5

%

 

 

14.3

%

 

 

18.0

%

 

 

12.8

%

(1)

Reflects the net adjustments of IMP and DBCI 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)

 

 

 

 

 

Year Ended

 

December 31,
2021

 

December 31,
2020

Net cash provided by (used in) operating activities

$

(215,887

)

 

$

308,417

 

Less: Capital expenditures

 

(114,715

)

 

 

(81,851

)

Free cash flow

$

(330,602

)

 

$

226,566

 

 

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

Source: Cornerstone Building Brands, Inc.

Multimedia Files:

Categories: Press Releases
View all news