MasterBrand(MBC) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net sales were $644.6 million, a decrease of 3.5% compared to the fourth quarter of 2024, while full year net sales increased 1.3% to $2.7 billion[4][9] - Gross profit for the fourth quarter was $167.5 million, with a gross profit margin of 26.0%, down 440 basis points year-over-year due to lower volume and unfavorable fixed cost leverage[5] - The company reported a net loss of $(42.0) million in the fourth quarter, resulting in a net loss margin of (6.5)%, compared to a net income margin of 2.1% in the prior year[6][7] - Adjusted EBITDA for the fourth quarter was $35.1 million, with an adjusted EBITDA margin of 5.4%, down 580 basis points year-over-year[8] - Net sales for the 13 weeks ended December 28, 2025, were $644.6 million, a decrease of 3.1% compared to $667.7 million for the same period in 2024[34] - Gross profit margin decreased to 26.0% for the 13 weeks ended December 28, 2025, down from 30.4% in the prior year[34] - Operating loss for the 13 weeks ended December 28, 2025, was $(27.1) million, compared to an operating income of $37.5 million for the same period in 2024[34] - Net loss for the 13 weeks ended December 28, 2025, was $(42.0) million, compared to net income of $14.0 million in the prior year[34] - Adjusted EBITDA for the 13 weeks ended December 28, 2025, was $35.1 million, down from $74.6 million for the same period in 2024[37] - For the 52 weeks ended December 28, 2025, net sales were $2,734.7 million, an increase of 1.2% from $2,700.4 million in 2024[40] - Adjusted net income for the 52 weeks ended December 28, 2025, was $117.9 million, compared to $183.1 million in the previous year[40] - Diluted earnings per share (EPS) for the 52 weeks ended December 28, 2025, was $0.21, down from $0.96 in 2024[40] - The company reported a net income margin of 1.0% for the 52 weeks ended December 28, 2025, compared to 4.7% in the prior year[40] - The company reported a net income of $26.7 million for the 52 weeks ended December 28, 2025, a decrease of 78.8% compared to $125.9 million for the same period in 2024[59] - Adjusted EBITDA for the full fiscal year was $298.2 million, down from $363.6 million in 2024, representing a decrease of 18.0%[56] Debt and Cash Management - As of December 28, 2025, total debt was $974.5 million, with a net debt to adjusted EBITDA ratio of 2.7x[13] - The company’s net debt decreased to $791.2 million in 2025 from $887.2 million in 2024, a reduction of 10.8%[56] - The company’s long-term debt was $974.5 million as of December 28, 2025, down from $1,007.8 million in 2024, a decrease of 3.3%[56] - Cash and cash equivalents rose to $183.3 million in 2025, compared to $120.6 million in 2024, marking an increase of 52.0%[56] Future Outlook - The company plans to implement $30 million in targeted cost actions expected to be realized in 2026[7][15] - For the first quarter of 2026, the company anticipates a mid-single-digit to high-single-digit percentage decrease in net sales year-over-year[17] - Adjusted EBITDA for the first quarter of 2026 is projected to be in the range of $23 to $33 million, with an adjusted EBITDA margin between 3.9% and 5.3%[17] - The company expects gross tariff costs to be approximately 5-6% of 2026 net sales[17] - The company anticipates challenges in managing costs and competition, which may impact future performance[31] Asset Management - Total assets increased to $3,100.4 million as of December 28, 2025, up from $2,929.8 million in 2024, reflecting a growth of 5.8%[56] Acquisition Costs - The company incurred acquisition-related costs of $3.6 million and $4.3 million for the thirteen and fifty-two weeks ended December 28, 2025, respectively[42] Provision for Bad Debt - The company recognized a provision for bad debt of $17.8 million in 2025, significantly higher than $0.4 million in 2024[59] Non-Operating Income - The company reported a gain of $4.3 million from the sale of assets on December 12, 2024, contributing to non-operating income[50]