A combination of factors has driven MasterBrand's (NYSE: MBC ) stock price down over 36%. The company is experiencing the difficulties of operating in a historically weak housing environment. Additionally, following its acquisition of Supreme Cabinetry Brands, MasterBrand nowSpencer Chrisman is a Certified Public Accountant (CPA) with several years of experience in structured finance, capital markets, and credit risk. Spencer follows a value-oriented investment approach by identifying businesses that meet t ...

Both companies have earned a year-long opportunity for access to a distinguished life-science incubator in San Francisco along with the invaluable expertise provided by Astellas to advance their research endeavors Award helps biotech startups accelerate early research effortsNORTHBROOK, Ill., May 21, 2025 /PRNewswire/ -- Astellas Pharma U.S. Inc. (Head of Commercial: Mike Petroutsas, "Astellas"), and MBC BioLabs, a premier launchpad for early-stage life-science companies, today announced DeepSeq.AI, Inc. & ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-41545 MasterBrand, Inc. (Exact name of registrant as specified in its charter) Delaware 88-3479920 (State or other jurisdiction of incorporation or organiz ...

MasterBrand (MBC) Q1 2025 Earnings Call May 06, 2025 04:30 PM ET Company Participants Farand Pawlak - Vice President of Investor Relations & External CommunicationsDave Banyard - President & CEOAndi Simon - EVP & CFOGarik Shmois - Managing DirectorAdam Baumgarten - Managing Director Conference Call Participants Tom Mahoney - Senior Research Analyst - Partner Operator Welcome to Master Brands First Quarter twenty twenty five Earnings Conference Call. During the company's prepared remarks, all participants wi ...

MasterBrand (MBC) Q1 2025 Earnings Call May 06, 2025 04:30 PM ET Speaker0 Welcome to Master Brands First Quarter twenty twenty five Earnings Conference Call. During the company's prepared remarks, all participants will be in a listen only mode. Following management's closing remarks, callers are invited to participate in a question and answer session. Please note that this conference call is being recorded. I would now like to turn the call over to your host, Farron Pollak, Vice President of Investor Relati ...

Financial Performance - Net sales for Q1 2025 were $660.3 million, a 3% increase year-over-year, driven by a 10% contribution from the Supreme acquisition and a 2% increase from average selling price improvements[4] - Net income decreased 65% year-over-year to $13.3 million, resulting in a net income margin of 2.0%, down from 5.9% in the prior year[5] - Adjusted EBITDA was $67.1 million, a decrease from $79.4 million in Q1 2024, with an adjusted EBITDA margin of 10.2%, down 220 basis points year-over-year[6] - The company reported a diluted earnings per share of $0.10, compared to $0.29 in the prior year, and adjusted diluted earnings per share of $0.18, down from $0.31[6] - Operating income fell to $37.1 million, a decline of 41.0% from $62.8 million in the previous year[26] - Net income for the period was $13.3 million, a significant decrease of 64.5% compared to $37.5 million in the same quarter last year[26] - Adjusted EBITDA was $67.1 million, down from $79.4 million, reflecting a margin of 10.2% compared to 12.4% in the prior year[29] - Basic and diluted earnings per share were both $0.10, down from $0.30 and $0.29 respectively in the previous year[29] Debt and Cash Flow - As of March 30, 2025, total debt was $1,058.2 million, with a net debt to adjusted EBITDA ratio of 2.7x[8] - Free cash flow was negative $41.2 million for the thirteen weeks ended March 30, 2025, compared to positive $11.7 million for the same period in 2024[8] - The company reported a net debt of $944.7 million, an increase from $554.3 million year-over-year, with a net debt to adjusted EBITDA ratio of 2.7x[38] - Free cash flow for the quarter was negative at $(41.2) million, compared to positive free cash flow of $11.7 million in the same quarter last year[40] - Cash and cash equivalents decreased to $113.5 million from $153.7 million year-over-year[38] Future Outlook - The company expects organic net sales performance to outperform the underlying market in 2025, driven by new products and pricing actions[9] - Adjusted EBITDA for 2025 is projected to be in the range of $315 to $365 million, with an adjusted EBITDA margin of approximately 12.0% to 13.5%[12] - The company plans to focus on preserving margins through cost actions and facility rightsizing amid economic uncertainty[11] Shareholder Actions - MasterBrand repurchased approximately 839 thousand shares of common stock for about $11.4 million during the first quarter[8] Profitability Metrics - Gross profit decreased to $202.2 million, resulting in a gross profit margin of 30.6%, down from 32.1% in the prior year[26] - The company incurred restructuring charges of $4.7 million, significantly higher than $0.4 million in the prior year[29]

Core Insights - MasterBrand Cabinets (NYSE: MBC) reported a quarter that was contextually acceptable, but sales are continuing to decline due to unexpected softness, leading to a decrease in share price to the mid-$14 range post-earnings [1] Company Performance - The company experienced a decline in sales, which was described as "unexpected" softness, impacting overall performance [1] - Following the earnings report, shares of MasterBrand Cabinets traded down, reflecting market reaction to the sales trend [1] Valuation Concerns - The primary concern regarding valuation is linked to the ongoing sales decline, raising questions about the company's future performance and market position [1]

Core Insights - Astellas Pharma U.S. Inc. and MBC BioLabs have launched the Astellas Future Innovator Prize to support early-stage life-science companies and entrepreneurial scientists by providing access to state-of-the-art facilities and Astellas' expertise [2][3][4] Group 1: Prize Details - The Astellas Future Innovator Prize offers up to two awards for innovative research ideas that align with Astellas' focus areas, including Blindness & Beyond, Genetic Regulation, Immuno-Oncology, Cell Therapy, and Targeted Protein Degradation [5][6] - Awardees will receive one year of priority access to MBC BioLabs' facilities and Astellas' research and development resources [6] Group 2: Application Process - The application period for the Astellas Future Innovator Prize runs from February 27 to April 1, 2025, requiring participants to submit a non-confidential company presentation and a one-page executive summary [4][6] - The selection process for the prize is solely at Astellas' discretion, with no appeals allowed [6] Group 3: Company Background - Astellas is a global life sciences company focused on developing transformative therapies in areas such as oncology, ophthalmology, urology, immunology, and women's health, addressing high unmet medical needs [8] - MBC BioLabs has supported over 350 startups since its inception in October 2013, facilitating 176 clinical trials and the introduction of 71 products to market, raising nearly $20 billion in funding [10]

Company Overview - MasterBrand is the largest manufacturer of residential cabinets in North America, leveraging superior product quality and innovative design to drive value[170]. - Following the Separation from Fortune Brands, MasterBrand became an independent publicly-traded company on December 15, 2022, with 128.0 million shares issued[174]. - The Separation allows MasterBrand to focus on strategic growth opportunities and operational effectiveness tailored to its industry[175]. Acquisition and Expansion - The company completed the acquisition of Supreme on July 10, 2024, enhancing its portfolio of premium cabinetry and expanding its dealer network[171]. - The acquisition was funded through cash on hand and proceeds from a revolving credit facility, indicating a strategic approach to capital deployment[171]. - The acquisition of Supreme contributed $121.2 million in incremental sales in the second half of 2024[184]. Financial Performance - Net sales for fiscal 2024 were $2,700.4 million, a decrease of $25.8 million or 0.9% compared to $2,726.2 million in fiscal 2023[183]. - Gross profit decreased by $24.4 million or 2.7% to $877.0 million in 2024 from $901.4 million in 2023[183]. - Operating income fell to $235.7 million, down $70.6 million or 23.0% from $306.3 million in the previous year[183]. - Net income for 2024 was $125.9 million, a decline of $56.1 million or 30.8% compared to $182.0 million in 2023[183]. - Selling, general and administrative expenses increased by $33.4 million or 5.9% to $603.1 million in 2024, primarily due to acquisition-related costs[187]. - Interest expense rose to $74.0 million in 2024, an increase of $8.8 million or 13.5% from $65.2 million in 2023[189]. - The effective tax rate for 2024 was 25.2%, up from 23.8% in 2023, primarily due to increased valuation allowance and nondeductible transaction costs[193]. Cash Flow and Liquidity - Net cash provided by operating activities decreased to $292.0 million in 2024, down from $405.6 million in 2023, primarily due to a decrease in net income from $182.0 million in 2023 to $125.9 million in 2024[209]. - Net cash used in investing activities increased significantly to $580.8 million in 2024, compared to $56.9 million in 2023, largely due to the acquisition of Supreme for $514.5 million[210]. - Net cash provided by financing activities was $269.6 million in 2024, a turnaround from net cash used of $299.9 million in 2023, aided by a refinancing transaction[211]. - The company maintained a minimum interest coverage ratio of 3.00 to 1.00 as per the 2024 Credit Agreement, with a net leverage ratio not exceeding 3.50 to 1.00 for fiscal quarters ending on or prior to December 31, 2024[204]. Debt and Obligations - The company refinanced its debt in June 2024, issuing $700.0 million of Senior Notes due 2032 to fund the acquisition of Supreme and repay existing debt[198]. - As of December 29, 2024, the company had $1,007.8 million in outstanding third-party borrowings, net of deferred financing fees[206]. - Total contractual cash obligations as of December 29, 2024, amounted to $1,636.9 million, including $1,020.0 million in debt payments and $486.8 million in interest payments[217]. Operational Efficiency - MasterBrand's operational model emphasizes standardization and lean manufacturing capabilities to enhance efficiency and cost management[180]. - The company aims to utilize technology and data to improve the consumer experience from visualization to delivery and installation[170]. - MasterBrand's financial condition and liquidity are underpinned by a tailored capital structure that enhances operational flexibility and resource allocation[180]. Inventory and Impairment - Inventory provision was recorded at $17.0 million as of December 29, 2024, compared to $15.9 million as of December 31, 2023, indicating an increase in provisions for obsolete or slow-moving inventory[233]. - An impairment charge of $26.0 million was recognized for an indefinite-lived tradename in Q2 2022, followed by an additional charge of $12.8 million in Q4 2022 due to shifts in forecasted revenue growth rates[240]. - The carrying value of the impaired indefinite-lived tradename was $46.2 million as of December 29, 2024, and December 31, 2023[240]. - A second indefinite-lived tradename incurred an impairment charge of $7.6 million in Q4 2022, with a carrying value of $19.1 million as of December 29, 2024, and December 31, 2023[241]. - The fair values of impaired tradenames were measured using the relief-from-royalty approach, with significant assumptions including forecasted revenue growth rates and market-participant discount rates[242]. Risk Management - The company does not enter into derivatives for trading or speculative purposes but uses financial instruments to manage foreign currency exchange rate risks[249]. - The estimated potential loss under foreign exchange contracts from movement in foreign exchange rates would not have a material impact on the company's results of operations[252]. - The company assesses goodwill for impairment at least annually, with qualitative and quantitative tests based on market conditions and operational performance[234]. - Future changes in market-participant discount rates or projected cash flows could lead to significant adjustments in the estimated fair values of intangible assets and goodwill[232].

Financial Data and Key Metrics Changes - The company reported net sales of $668 million in Q4 2024, a decrease of 1% compared to the same period last year [8][37] - Adjusted EBITDA for Q4 was $75 million, with a margin of 11.2%, down 150 basis points year-over-year [13][46] - Full year 2024 net sales totaled $2.7 billion, also down 1% from the previous year [46] - Net income for Q4 was $14 million, a decline from $36.1 million in the same period last year [42] - Diluted earnings per share were $0.11 in Q4 2024, down from $0.28 in the prior year [45] Business Line Data and Key Metrics Changes - The repair and remodel business experienced a year-over-year volume decline of 6% in the legacy business during Q4 [9] - The acquisition of Supreme Cabinetry Brands contributed a 9% year-over-year increase to net sales [13] - Gross profit for Q4 was $203.3 million, down 9% compared to $223.1 million in the same period last year [38] Market Data and Key Metrics Changes - The U.S. single-family new construction market was estimated to be slightly up year-over-year in Q4, with expectations of flat to low single-digit declines for the full year 2025 [18][20] - The Canadian market saw low single-digit declines across both new construction and repair and remodel markets [23] Company Strategy and Development Direction - The company is focusing on three strategic initiatives: Align to Grow, Lead Through Lean, and Tech Enabled, with plans to invest an incremental $15 million in the Tech Enabled initiative in 2025 [30][64] - Cost reduction measures have been identified, including targeted headcount reductions and reduced discretionary spending [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the market remained choppy throughout Q4, with expectations of continued choppiness through at least the first half of 2025 [22] - The company anticipates overall market demand to be down low single-digits in 2025, but expects annual net sales to be up mid-single-digits due to the Supreme acquisition [58][60] Other Important Information - The company ended the year with $120.6 million in cash and a net debt to adjusted EBITDA leverage ratio of 2.4 times [54][55] - Capital expenditures for 2024 were $80.9 million, an increase from $57.3 million in the prior year [56] Q&A Session Summary Question: Can you elaborate on the 2025 guidance regarding revenue and margins? - Management indicated that while the first half of 2025 may be softer, February showed a return to normal demand levels, providing confidence for the year [78][80] Question: What is the status of pricing increases? - Pricing increases have been mostly delayed, with the dealer network realizing prices quicker than other channels [84][85] Question: How did the Supreme business perform during the recent market fluctuations? - The Supreme business was more resilient during the late November through January period compared to other segments [87] Question: Can you clarify the impact of mix on pricing? - The mix was primarily responsible for pricing declines, with a shift towards lower price point products affecting overall pricing [92][93] Question: What recent improvements have been observed in the market? - The repair and remodel segment has shown signs of recovery in February, returning to pre-holiday levels [97][100]