JELD-WEN(JELD)2025-02-20 22:02Financial Performance - The company reported net revenues of $3,776 million for the year ended December 31, 2024[27]. - Net revenues decreased by $528.7 million, or 12.3%, to $3,775.6 million for the year ended December 31, 2024, compared to $4,304.3 million in 2023[228]. - Net revenues decreased by $239.5 million, or 5.3%, to $4,304.3 million in the year ended December 31, 2023, compared to $4,543.8 million in 2022, driven by a 5% decrease in Core Revenues[239]. - The company reported a net loss from continuing operations of $(187,580) for the year ended December 31, 2024[257]. - The effective tax rate for the year ended December 31, 2023, was 71.5%, significantly higher than 59.6% in 2022, primarily due to a $32.7 million net valuation allowance[247]. - The company reported a net income of $62.4 million in 2023, compared to $45.7 million in 2022, reflecting an increase of 36.6%[238]. Revenue Sources - Door sales accounted for 63% of net revenues, while window sales contributed 20% and other products accounted for 17%[33]. - Approximately 46% of the company's net revenues in 2024 came from its top ten customers, with The Home Depot and Lowe's representing 16% and 12% of consolidated net revenues, respectively[52]. - The percentage of total consolidated net revenues from North America was 71.7% in 2024, down from 72.6% in 2023[261]. Cost and Expenses - Gross margin decreased by $143.6 million, or 17.3%, to $689.0 million, with a gross margin percentage of 18.2% in 2024, down from 19.3% in 2023[229]. - SG&A expenses decreased by $2.8 million, or 0.4%, to $652.5 million, with SG&A as a percentage of net revenues increasing to 17.3% in 2024 from 15.2% in 2023[230]. - Restructuring and asset-related charges increased by $32.4 million, or 90.5%, to $68.1 million in 2024, primarily due to facility closures in North America and Europe[232]. Market Conditions - The North America segment is expected to face headwinds in 2025 due to high interest rates and inflation in labor, freight, and raw materials[40]. - The European market is anticipated to experience softness in residential and non-residential markets in 2025 due to economic weakness and high interest rates[41]. Operational Insights - The company operates 79 manufacturing and distribution facilities across 14 countries, focusing on optimizing its global footprint to enhance performance and profit margins[29]. - The company has a diversified business model serving both new construction and repair and remodel sectors[25]. - The company’s manufacturing processes are vertically integrated, which enhances capabilities and quality control while providing supply chain savings[31]. - The company has made significant investments in innovation and product development to meet customer needs and market trends[34]. - The company is focused on disciplined capital allocation and working capital management to maximize shareholder returns[35]. Environmental and Regulatory Matters - The company is subject to extensive environmental, health, and safety laws and regulations across its global operations, which may impact financial position[65]. - The company’s operations involve handling hazardous wastes, exposing it to potential liabilities and claims associated with contamination[66]. - The company has been involved in environmental regulatory actions, but does not expect these to materially affect its financial position[67]. - The company continues to evaluate and modify its manufacturing processes to further reduce environmental impact[64]. Employee Engagement and Development - The company is committed to employee engagement and development, with various programs aimed at attracting and retaining talent[61]. - The company’s organizational health is measured annually through a global employee survey, focusing on employee experiences and engagement levels[63]. Cash Flow and Liquidity - Total liquidity as of December 31, 2024, was $566.7 million, a decrease from $750.6 million as of December 31, 2023, primarily due to lower cash balances[274]. - Net cash provided by operating activities decreased by $239.0 million to $106.2 million in the year ended December 31, 2024, compared to $345.2 million in 2023[287]. - Net cash used in investing activities was $153.3 million in the year ended December 31, 2024, compared to cash provided by investing activities of $279.2 million in 2023, primarily due to $365.6 million proceeds related to the sale of JW Australia in 2023[289]. Debt and Financing - Outstanding debt balance as of December 31, 2024, was $1,192.0 million, with estimated interest payments of $72.9 million due in 2025 and $280.4 million due in 2026 and thereafter[285]. - In August 2024, the company issued $350.0 million of Senior Notes at 7.00% interest, proceeds used to repay $150.0 million of the Term Loan Facility and redeem $200.0 million of 4.63% Senior Notes[283]. Goodwill and Impairment - Goodwill impairment charges totaled $94.8 million in 2024, including $63.4 million related to the Europe reporting unit and $31.4 million for North America[231]. - The carrying amount of the Europe reporting unit exceeded its fair value, resulting in a goodwill impairment charge of $63.4 million in the third quarter of 2024[305]. - The company recorded a goodwill impairment charge of $54.9 million for the Europe reporting unit during the year ended December 31, 2022[303]. Currency and Hedging - The company held foreign currency derivative contracts with a total notional amount of $148.4 million as of December 31, 2024, to manage exchange fluctuations[326]. - The average exchange rate for the U.S. dollar strengthened against the Canadian dollar and the Euro by 9% and 6%, respectively, impacting Adjusted EBITDA by (1%)[324]. - The company has implemented a hedging program to manage potential changes in value associated with raw material purchases denominated in foreign currencies[327].