MasterBrand(MBC) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter 2024 net sales were $667.7 million, a decrease of 1$2.7 billion, also a decrease of 1% compared to 2023, with a 4% decline in net ASP and a 1% decline in volume, partially offset by 4% growth from the Supreme acquisition [5] - Fourth quarter net income decreased 61% year-over-year to $14.0 million, resulting in a net income margin of 2.1$125.9 million, a decrease of 31% compared to 2023, with a net income margin of 4.7%, down from 6.7% [8] - Adjusted EBITDA for the fourth quarter was $74.6 million, with an adjusted EBITDA margin of 11.2$363.6 million, with an adjusted EBITDA margin of 13.5%, down 60 basis points from the previous year [9] - Net income for the 52 weeks ended December 29, 2024, was $125.9 million, compared to$182.0 million for the 53 weeks ended December 31, 2023, reflecting a net income margin of 4.7% [30] - Adjusted EBITDA for the 52 weeks ended December 29, 2024, was $363.6 million, down from$383.4 million for the 53 weeks ended December 31, 2023 [30] - The company reported an adjusted diluted EPS of $1.37 for the 52 weeks ended December 29, 2024, compared to$1.58 for the prior year [30] Acquisition Impact - The Supreme acquisition contributed 9% to net sales in the fourth quarter and 4% for the full year [5] - Acquisition-related costs associated with the acquisition of Supreme Cabinetry Brands, Inc. amounted to $25.4 million for the 52 weeks ended December 29, 2024 [31] Cash Flow and Debt - The company had$120.6 million in cash and $405.4 million available under its revolving credit facility as of December 29, 2024, with total debt of$1,007.8 million [10] - Free cash flow for the fifty-two weeks ended December 29, 2024, was $211.1 million, down from$348.3 million in the prior year [10] - The company’s net debt rose to $887.2 million in 2024, compared to$559.1 million in 2023, indicating an increase of approximately 58.7% [42] - Free cash flow for the year was $211.1 million, down from$348.3 million in the prior year, reflecting a decrease of approximately 39.4% [43] Operational Challenges - The company anticipates challenges in managing costs and maintaining product quality due to dependence on third-party suppliers and fluctuations in raw material costs [24] Asset and Liability Changes - Total assets increased to $2,929.8 million in 2024, up from$2,381.7 million in 2023, reflecting a growth of about 22.9% [42] - The company’s total current liabilities increased to $395.4 million in 2024, up from$349.4 million in 2023, reflecting an increase of about 13.2% [42] - The company’s goodwill increased to $1,125.8 million in 2024, compared to$925.1 million in 2023, representing a growth of approximately 21.7% [42] Capital Expenditures - Capital expenditures for the year totaled $80.9 million, compared to$57.3 million in the previous year, indicating an increase of approximately 41.0% [43] Other Financial Metrics - Gross profit for the 52 weeks ended December 29, 2024, was $877.0 million, down from$901.4 million for the 53 weeks ended December 31, 2023, resulting in a gross profit margin of 32.5% [26] - Operating income for the 13 weeks ended December 29, 2024, was $37.5 million, a decline of 38.7$61.0 million in the prior year [26] - The company incurred a non-cash settlement charge of $2.9 million related to the termination of its defined benefit pension plan [37] - Restructuring charges for the 52 weeks ended December 29, 2024, totaled$18.0 million, compared to $10.1 million in the previous year [30] - Adjusted EBITDA for the full fiscal year was reported at$363.6 million, a decrease from $383.4 million in the previous year, representing a decline of about 5.0$4.3 million from the sale of facilities and land, contributing to non-operating income [36]