- \n
- \nNet sales increased 3% year-over-year to $660.3 million\n<\/li>\n
- \nNet income decreased 65% year-over-year to $13.3 million\n<\/li>\n
- \nNet income margin decreased 390 basis points year-over-year to 2.0%\n<\/li>\n
- \nAdjusted EBITDA margin1<\/sup> decreased 220 basis points year-over-year to 10.2%\n<\/li>\n
- \nDiluted earnings per share was $0.10 compared to $0.29 in the prior year period; adjusted diluted earnings per share1<\/sup> was $0.18, compared to $0.31 in the prior year period\n<\/li>\n
- \nCompany updates 2025 financial outlook\n<\/li>\n<\/ul>\n
BEACHWOOD, Ohio.–(BUSINESS WIRE<\/a>)–
\nMasterBrand, Inc. (NYSE: MBC, the \u201cCompany,\u201d or \u201cMasterBrand\u201d), the largest residential cabinet manufacturer in North America, today announced first quarter 2025 financial results.\n<\/p>\n\n\u201cEnd market demand was weaker than anticipated, as a slow start to the Spring selling season negatively impacted our customers servicing the new construction and the repair and remodel markets,\u201d said Dave Banyard, President and Chief Executive Officer. \u201cSofter demand put pressure on margins, as we continued to work on aligning production with the current environment, including execution of our Supreme integration plans and other facility consolidations. While we anticipate near-term pressure on margins, we believe these changes to our manufacturing network, along with further continuous improvement savings, proactive cost reductions, and thoughtful investment spending, will allow us to deliver competitive full year adjusted EBITDA margins.\u201d\n<\/p>\n
First Quarter 2025<\/span><\/b><\/p>\n
\nNet sales were $660.3 million, an increase of 3% compared to the first quarter of 2024, driven by a positive contribution of 10% growth from our Supreme acquisition and 2% growth from the flow through of our anticipated net average selling price (ASP) improvements, partially offset by volume declines of 9% in our base business, specifically with our customers servicing the repair and remodel market. Gross profit was $202.2 million, compared to $204.7 million in the prior year period. Gross profit margin decreased 150 basis points to 30.6% on lower volume and unfavorable fixed cost leverage, partially offset by the positive contribution from Supreme, continuous improvement efforts net of inflation, and higher net ASP.\n<\/p>\n
\nNet income was $13.3 million, compared to $37.5 million in the first quarter of 2024, due to higher SG&A expenses, increased interest expense, restructuring costs and the amortization of intangible assets, all of which were primarily driven by our Supreme acquisition. These increases were partially offset by lower income tax expense. Net income margin was 2.0% compared to 5.9% in the prior year period.\n<\/p>\n
\nAdjusted EBITDA1<\/sup> was $67.1 million, compared to $79.4 million in the first quarter of 2024. Adjusted EBITDA margin1<\/sup> decreased 220 basis points to 10.2%, on lower volume and unfavorable fixed cost leverage, which more than offset the benefit of anticipated net ASP improvements, savings from our continuous improvement efforts net of inflation, and contributions from Supreme.\n<\/p>\n
\nDiluted earnings per share were $0.10 compared to $0.29 in the first quarter of 2024. Adjusted diluted earnings per share1<\/sup> were $0.18 compared to $0.31 in the first quarter of 2024.\n<\/p>\n
Balance Sheet, Cash Flow and Capital Allocation<\/span><\/b><\/p>\n
\nAs of March 30, 2025, the Company had $113.5 million in cash and $358.6 million of availability under its revolving credit facility. Total debt was $1,058.2 million and our ratio of total debt to net income from the most recent trailing twelve months was 10.4x as of March 30, 2025. For the same period, net debt1<\/sup><\/b> was $944.7 million and our ratio of net debt to adjusted EBITDA1<\/sup> was 2.7x.\n<\/p>\n
\nNet cash used in operating activities was $31.4 million for the thirteen weeks ended March 30, 2025, compared to net cash provided by operating activities of $18.7 million for the thirteen weeks ended March 31, 2024. This decline was due to lower net income coupled with higher inventory because of choppy demand and bond interest payments. Free cash flow1<\/sup> was negative $41.2 million for the thirteen weeks ended March 30, 2025, compared to positive $11.7 million for the thirteen weeks ended March 31, 2024.\n<\/p>\n
\nDuring the thirteen weeks ended March 30, 2025, the Company repurchased approximately 839 thousand shares of common stock for approximately $11.4 million.\n<\/p>\n
2025 Financial Outlook<\/span><\/b><\/p>\n
\nFor full year 2025, the Company expects the following:\n<\/p>\n
- \n
- \nNet sales year-over-year decrease of low single-digit percentage<\/p>\n
- \n
- \nOrganic net sales decrease of mid single-digit percentage\n<\/li>\n
- \nAcquisition-related net sales increase of mid single-digit percentage\n<\/li>\n<\/ul>\n<\/li>\n
- \nAdjusted EBITDA1,2<\/sup> in the range of $315 to $365 million, with related adjusted EBITDA margin1,2 <\/sup>of roughly 12.0% to 13.5%\n<\/li>\n
- \nAdjusted diluted earnings per share1,2<\/sup> in the range of $1.03 to $1.32\n<\/li>\n<\/ul>\n
\nThe Company continues to expect organic net sales performance to outperform the underlying market, as new products and channel specific offerings, and previously implemented price actions gain traction.\n<\/p>\n
\nThis 2025 Financial Outlook only reflects the impact of those tariffs in effect as of the date of this release. It does not reflect any other potential tariff impacts on Company costs or end market demand. The Company believes the dynamic nature of the tariffs, specifically the uncertainty of implementation, potential timing and duration, limits the usefulness of estimating this information. We undertake no obligation to update this outlook as circumstances evolve.\n<\/p>\n
\n\u201cOur revised guidance reflects the negative impact of general economic uncertainty on our end market demand, as well as the net impact of enacted tariffs on our profitability,\u201d said Andi Simon, Executive Vice President and Chief Financial Officer. \u201cWith 2025 shaping up to be another year of softer demand, we remain focused on preserving margins through various cost actions, including facility and resource rightsizing, and swift tariff remediation. These actions should enable us to generate solid free cash flow and maintain a strong balance sheet with the financial flexibility to continue our targeted growth investments.\u201d\n<\/p>\n
- \nAdjusted diluted earnings per share1,2<\/sup> in the range of $1.03 to $1.32\n<\/li>\n<\/ul>\n
- \nDiluted earnings per share was $0.10 compared to $0.29 in the prior year period; adjusted diluted earnings per share1<\/sup> was $0.18, compared to $0.31 in the prior year period\n<\/li>\n
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