JELD-WEN Reports Mixed Q3 Results, Cuts FY21 Adjusted EBITDA Outlook Citing Inflation

  • JELD-WEN Holding Inc JELD reported third-quarter revenue growth of 3% year-over-year to $1.147 billion, driven by a 2% increase in core revenue, missing the consensus of $1.17 billion. Price realization accelerated to 7%, including 10% in the North America segment.
  • North America revenue $676.8 million (+2.1% Y/Y), and Adjusted EBITDA margin was 11.4%. Europe revenue increased $322.6 million (+3.7% Y/Y), and the Adjusted EBITDA margin was 7.4%. Australasia revenue $147.2 million (+5.8% Y/Y), and Adjusted EBITDA margin was 11.9%.
  • Adjusted EPS decreased to $0.45 from $0.52 in 3Q20, beating the consensus of $0.40. The gross margin declined 6.9% to $228.1 million. The gross margin contracted by 211 bps to 19.9%.
  • The operating income decreased 12.8% Y/Y to $53.7 million, and the margin contracted by 85 bps to 4.7%. Adjusted EBITDA declined 24.4% Y/Y to $98.9 million, and margin contracted by 312 bps to 8.6%. Adjusted EBITDA margin declined due to the deleverage impact of lower revenue volume, reduced labor efficiency, and higher inflation, partially offset by higher pricing.
  • The company repurchased ~8 million shares in the quarter for $221.1 million.
  • JELD-WEN held $443.9 in cash and cash equivalents. It generated adjusted cash from operating activities year-to-date of $181.6 million versus $227.5 million a year ago. Adjusted free cash flow was $107.9 million.
  • "Demand remains robust in each of our end markets with strong order and backlog growth, including accelerating order activity through the quarter in our North America segment. With a favorable housing backdrop ahead, I remain confident that we will deliver on the growth plans and financial targets we set forth in our inaugural investor day in May," said Gary S. Michel, chairman, president, and CEO.
  • FY21 Outlook: JELD-WEN's net revenue growth outlook of 10%-12% unchanged. It expects an Adjusted EBITDA of $465 million - $480 million (prior $470 million - $490 million) due to higher material and freight inflation.
  • "While inflation remains a headwind, we expect that our pricing actions will more than offset material and freight inflation in both the fourth quarter and full year 2021," Michel added.
  • Price Action: JELD shares closed higher by 0.59% at $27.41 on Friday.
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