JELD to Divest Towanda Facility in $115 Million Deal to Woodgrain

Core Viewpoint - JELD-WEN is undergoing a transformation process, highlighted by the sale of its Towanda facility to Woodgrain Inc. for approximately $115 million, as part of a court-ordered divestiture aimed at improving operations and long-term success [1][2][4]. Financial Impact - The sale of the Towanda facility is expected to reduce annual revenues by $150 million to $200 million and EBITDA by $25 million to $50 million within 12 months post-closure [3]. - A non-cash pre-tax impairment charge of $25 million to $35 million is anticipated as a result of the divestiture, which is expected to have a neutral impact on net debt leverage [3]. Market Performance - JELD-WEN's shares have decreased by 33.4% over the past three months, contrasting with a 4.9% growth in the Zacks Building Products - Wood industry [5]. - The company faces challenges due to consumer delays in large-scale remodeling projects and a decline in multifamily and higher-end home construction, negatively affecting its VPI and LaCantina businesses [5]. Operational Adjustments - In response to market challenges, JELD-WEN has implemented cost-reduction initiatives, including right-sizing SG&A spending and addressing quality issues in door skin production [6]. - The company is consolidating operations by closing its Wedowee, AL and Logstor, Denmark facilities, while optimizing production in the UK by transitioning more manufacturing to the Penrith facility [7]. Future Outlook - The Zacks Consensus Estimate for JELD-WEN's 2025 earnings per share (EPS) indicates a potential increase of 48.8% from the previous year [8]. - JELD-WEN currently holds a Zacks Rank of 4 (Sell), indicating a cautious outlook compared to other stocks in the construction sector [9].