MasterBrand(MBC) - 2024 Q3 - Quarterly Results

Financial Performance - Net sales increased by 6.0% year-over-year to $718.1 million, driven by a 9% growth from the Supreme acquisition[1][3] - Net income decreased by 51.3% to $29.1 million, with a net income margin of 4.1% compared to 8.8% in the prior year[4] - Adjusted EBITDA was $104.5 million, with an adjusted EBITDA margin of 14.6%, down 160 basis points year-over-year[5] - Diluted earnings per share were $0.22, down from $0.46 in the prior year quarter; adjusted diluted earnings per share were $0.40 compared to $0.49[5] - Operating income for the quarter was $57.6 million, down from $92.2 million year-over-year, reflecting a decline of 37.5%[21] - Net income for the quarter was $29.1 million, a decrease of 51.2% from $59.7 million in the same quarter last year[21] - Year-to-date net income was $111.9 million, down from $145.9 million, reflecting a decline of 23.3%[25] - Year-to-date adjusted net income was $151.5 million, compared to $158.9 million in the previous year, a decrease of 4.3%[25] - Adjusted EBITDA for the quarter was $104.5 million, slightly down from $109.8 million in the prior year quarter, a decrease of 3.0%[23] Cash Flow and Debt - Operating cash flow for the thirty-nine weeks ended September 29, 2024, was $176.9 million, a decline from $336.5 million in the prior year[6] - Free cash flow for the same period was $142.3 million, down from $315.1 million year-over-year[6] - As of September 29, 2024, total debt was $1,062.3 million, with a net debt to adjusted EBITDA ratio of 2.5x[6] - Net debt increased to $953.9 million as of September 29, 2024, compared to $585.0 million a year earlier, reflecting a significant rise of 62.9%[36] - Long-term debt rose to $1,062.3 million from $699.3 million, an increase of approximately 52%[36] - The net cash provided by operating activities was $176.9 million, down from $336.5 million, a decrease of about 47.5%[38] - The company reported a net cash used in investing activities of $541.9 million, compared to $21.1 million in the previous year, showing a substantial increase in investment outflows[38] Acquisition and Integration - The integration of the Supreme acquisition is progressing as planned, with expectations for continued operational excellence[2][8] - The company incurred $15.0 million in acquisition-related costs associated with the acquisition of Supreme Cabinetry Brands, Inc.[23] - The company incurred $515.7 million in cash outflows for business acquisitions during the reporting period[38] Outlook and Market Performance - The company reiterates its 2024 financial outlook, expecting net sales to increase by a low single-digit percentage and adjusted EBITDA in the range of $385 million to $405 million[7][8] - The company anticipates organic net sales performance to align with underlying market demand as new products and previously implemented price actions gain traction[7] Asset Management - Total current assets increased to $686.9 million as of September 29, 2024, compared to $684.0 million on September 24, 2023[36] - Cash and cash equivalents decreased to $108.4 million from $122.5 million year-over-year, a decline of approximately 11.5%[36] - Capital expenditures amounted to $34.6 million, up from $21.4 million in the prior year, indicating an increase of 62.5%[38] Profitability Metrics - Gross profit margin decreased to 33.1% for the quarter ended September 29, 2024, compared to 35.1% in the prior year quarter[21] - The net income margin for the quarter was 4.1%, down from 8.8% in the prior year quarter[23]