MasterBrand(MBC) - 2023 Q4 - Annual Results

Financial Performance - Fourth quarter 2023 net sales were $677.1 million, a decrease of 14% year-over-year from $784.4 million in Q4 2022[4] - Full year 2023 net sales totaled $2.7 billion, down 16.8% from $3.3 billion in 2022[8] - Fourth quarter gross profit increased to $223.1 million, with a gross profit margin of 32.9%, up 550 basis points year-over-year[4] - Full year net income rose to $182.0 million, a 17.1% increase compared to $155.4 million in 2022[9] - Operating income for the 14 weeks ended December 31, 2023, was $61.0 million, significantly higher than $15.1 million for the same period last year[29] - Net income for the 14 weeks ended December 31, 2023, was $36.1 million, compared to $15.4 million for the 13 weeks ended December 25, 2022, representing a 134.4% increase[29][31] - The company reported an adjusted net income of $193.6 million for the 53 weeks ended December 31, 2023, compared to $260.4 million for the prior year[33] EBITDA and Margins - Adjusted EBITDA for Q4 2023 was $85.8 million, with an adjusted EBITDA margin of 12.7%, up 20 basis points from the previous year[6] - Full year adjusted EBITDA was $383.4 million, with an adjusted EBITDA margin of 14.1%, an increase of 150 basis points year-over-year[10] - Adjusted EBITDA for the 14 weeks ended December 31, 2023, was $85.8 million, while the adjusted EBITDA margin was 12.7%[31] - Adjusted EBITDA for the full fiscal year was $383.4 million in 2023, down from $411.4 million in 2022, a decline of about 6.8%[44] Cash Flow and Debt - Operating cash flow for 2023 was $405.6 million, significantly up from $235.6 million in the prior year[10] - Net cash provided by operating activities rose significantly to $405.6 million in 2023, compared to $235.6 million in 2022, an increase of approximately 72.0%[45] - Free cash flow improved to $348.3 million in 2023, up from $179.7 million in 2022, marking a growth of about 93.9%[45] - Net debt decreased from $877.9 million in 2022 to $559.1 million in 2023, a reduction of approximately 36.3%[44] - The net debt to adjusted EBITDA ratio improved from 2.1x in 2022 to 1.5x in 2023, indicating better leverage[44] - Long-term debt decreased significantly from $961.5 million in 2022 to $690.2 million in 2023, a decline of about 28.2%[44] Assets and Liabilities - Total assets decreased from $2,529.4 million in 2022 to $2,381.7 million in 2023, a decline of approximately 5.8%[44] - Current liabilities decreased from $411.1 million in 2022 to $349.4 million in 2023, a reduction of approximately 15.0%[44] - Cash and cash equivalents increased from $101.1 million at the beginning of the period to $148.7 million at the end of the period in 2023[45] Future Outlook - For 2024, the company expects adjusted EBITDA in the range of $370 million to $400 million, with adjusted EBITDA margins of approximately 14.0% to 14.5%[13] - New products and channel-specific packages were launched to capture market share in growth areas[15] Earnings Per Share and Tax Rate - Diluted earnings per share (EPS) for the 14 weeks ended December 31, 2023, was $0.28, up from $0.12 in the same period last year[31] - The effective income tax rate for the 14 weeks ended December 31, 2023, was 16.4%, down from 20.6% in the prior year[42] Restructuring Charges - The company incurred restructuring charges of $6.0 million for the 14 weeks ended December 31, 2023, compared to $14.2 million for the same period last year[29][31]