Masonite(DOOR) - 2024 Q2 - Quarterly Report

Financial Performance - Net sales for Q2 2023 were $741.884 million, a decrease of 2.9% compared to $761.874 million in Q2 2022[14] - Gross profit for the six months ended July 2, 2023, was $348.858 million, down from $363.734 million in the same period last year, reflecting a decline of 4.1%[14] - Operating income decreased to $76.556 million in Q2 2023, down 14.2% from $89.216 million in Q2 2022[14] - Net income attributable to Masonite for Q2 2023 was $48.245 million, a decrease of 17.5% compared to $58.515 million in Q2 2022[14] - Basic earnings per share attributable to Masonite were $2.19 for Q2 2023, down from $2.60 in Q2 2022, representing a decline of 15.8%[14] - Net income for the six months ended July 2, 2023, was $88.4 million, a decrease of 30.9% compared to $128.1 million for the same period in 2022[20] - Adjusted EBITDA for the three months ended July 2, 2023, was $118.5 million, slightly up from $118.1 million in the same period last year[82] - Adjusted EBITDA for the six months ended July 2, 2023, was $224.6 million, down from $242.9 million for the same period in 2022[82] Assets and Liabilities - Total assets increased to $2.683 billion as of July 2, 2023, compared to $2.248 billion at the beginning of the year, marking a growth of 19.4%[16] - Long-term debt rose to $1.067 billion as of July 2, 2023, up from $866.116 million at the start of the year, an increase of 23.2%[16] - Cash and cash equivalents increased to $317.157 million as of July 2, 2023, compared to $296.922 million at the beginning of the year, a rise of 6.8%[16] - Total accrued expenses as of July 2, 2023, were $227.8 million, slightly up from $223.0 million on January 1, 2023, indicating an increase of about 2.5%[38] - Long-term debt, excluding the current portion, increased to $1,067.2 million as of July 2, 2023, compared to $866.1 million on January 1, 2023, representing a rise of approximately 23.2%[39] Cash Flow - Net cash flow provided by operating activities increased significantly to $217.8 million from $34.1 million year-over-year[20] - The company reported a net cash flow used in investing activities of $404.3 million, primarily due to the acquisition of businesses[20] - Cash, cash equivalents, and restricted cash at the end of the period totaled $328.7 million, up from $242.6 million at the beginning of the period[20] - Cash provided by operating activities was $217.8 million during the six months ended July 2, 2023, compared to $34.1 million in the same period of 2022, reflecting a $183.7 million increase[157] - Cash used in investing activities increased to $404.3 million, primarily due to a $354.4 million increase in cash used for the acquisition of Endura[158] Acquisitions and Strategic Initiatives - The company completed the acquisition of EPI Holdings, Inc. for approximately $408.1 million, aimed at enhancing its product offerings and growth potential[28] - The strategic acquisition of Endura for approximately $408.1 million is aimed at accelerating growth potential and enhancing product offerings[107] - The company is actively reviewing strategic alternatives for its Architectural segment, including a potential sale, which could lead to material impairment charges[32] - The company is continuously evaluating strategic acquisitions, divestitures, and joint ventures to enhance shareholder value[154] Expenses and Costs - The company reported restructuring costs of $3.065 million in Q2 2023, compared to a benefit of $0.061 million in Q2 2022[14] - Selling, general and administrative expenses increased to $98.7 million, or 13.3% of net sales, compared to 11.9% in the same quarter of 2022[109] - Interest expense related to consolidated indebtedness for the six months ended July 2, 2023, was $29.5 million, compared to $20.7 million for the same period in 2022, marking an increase of about 42.5%[39] - The company experienced lower end market demand and negative impacts from macro-economic conditions, including rising interest rates and unfavorable consumer sentiment[96] Market Performance - North American Residential segment net sales were $585.0 million, down $22.8 million or 3.8% from $607.8 million in the prior year, with a significant impact from lower base volume[114] - European segment net sales decreased by $7.9 million or 10.7% to $66.0 million, primarily due to lower demand in the UK market[115] - Architectural segment net sales increased by $12.4 million or 16.4% to $87.8 million, driven by a 24.4% increase in average unit price[116] Shareholder Returns - The company completed a $100 million accelerated share repurchase transaction in the second quarter of 2022, resulting in the repurchase of 1,167,765 common shares[77] - The company repurchased 327,668 common shares at an aggregate cost of $29.1 million during the six months ended July 2, 2023[160] - The company has $217.8 million available for repurchase under its share repurchase programs as of July 2, 2023[187]