Revenue: Reported $959.1M, a decline of 11.2% year-over-year, falling short of estimates of $964.55M.
Net Loss: Reported $(27.7)M from continuing operations, compared to a net income of $8.5M in the prior year, significantly below the estimated net income of $14.71M.
Earnings Per Share (EPS): Reported $(0.32) from continuing operations, a decrease from $0.10 in the same quarter last year, significantly below the estimated EPS of $0.18.
Adjusted EBITDA: Reported $68.7M from continuing operations, down by $10.6M from the previous year.
Free Cash Flow: Used $(45.7)M in Q1 2024, compared to $(24.3)M used in Q1 2023, indicating increased cash burn.
Full Year Guidance: Lowered 2024 revenue projections to $3.9B-$4.1B and Adjusted EBITDA to $340M-$380M, reflecting softer market conditions.
Capital Expenditures: Increased to $34.7M in Q1 2024 from $23.6M in Q1 2023, as part of ongoing investments in operational improvements.
JELD-WEN Holding Inc (NYSE:JELD), a global leader in the design, production, and distribution of high-performance building products, released its 8-K filing on May 6, 2024, detailing its financial results for the first quarter ended March 30, 2024. The company reported a decline in net revenues and adjusted its full-year guidance downwards, reflecting the ongoing challenges in the macro-economic environment.
Company Overview
JELD-WEN operates primarily in North America, Europe, and Australasia, focusing on the manufacturing of doors and windows. The company’s products are essential in both residential and non-residential construction sectors. JELD-WEN’s performance is closely tied to the global construction market, influencing its operational results significantly.
First Quarter Financial Performance
The reported net revenues for Q1 2024 were $959.1 million, a decrease of 11.2% from $1,080.5 million in the same period last year. This decline was primarily due to a 12% drop in core revenue, driven by a similar decrease in volume/mix, which the company attributes to weakening macro-economic conditions. This revenue figure fell short of analyst expectations, which had estimated revenues to be around $964.55 million.
The net loss from continuing operations was stark, standing at $27.7 million, or $(0.32) per share, a significant downturn from a net income of $8.5 million, or $0.10 per share, in Q1 2023. Adjusted EBITDA from continuing operations also saw a decline, dropping by $10.6 million to $68.7 million, with the adjusted EBITDA margin slightly decreasing by 10 basis points to 7.2%.
Segment Performance and Challenges
In North America, JELD-WEN’s largest market, net revenue decreased by 11.5% to $680.0 million, with a net income drop of $19.0 million year-over-year. The operating income margin in this segment also decreased significantly from 7.0% to 2.9%. The European segment didn’t fare much better, with a 10.7% revenue decline and a net income drop to zero, compared to $7.3 million in the prior year.
The company’s CEO, William J. Christensen, commented on the results, stating,
In the first quarter, despite the challenging demand environment, we made good progress on streamlining operations and improving customer experience. I am proud of how our associates remained focused on meeting our customers’ expectations while working diligently to implement the necessary changes to fix our foundation.”
Updated Full-Year 2024 Guidance
Reflecting the ongoing challenges, JELD-WEN has revised its full-year revenue guidance to $3.9 to $4.1 billion, down from the previous forecast of $4.0 to $4.3 billion. This adjustment aligns with an expected core revenue decline of 5% to 9%. Adjusted EBITDA expectations for the year have also been lowered to a range of $340 to $380 million.
Financial Position and Cash Flow
The company’s cash and cash equivalents stood at $234.5 million as of March 30, 2024. Net cash used in operations increased to $11.0 million, up from $0.7 million in the prior year, primarily due to lower net income and a decline in accrued expenses. Capital expenditures rose to $34.7 million, reflecting ongoing investments in the business despite the challenging economic backdrop.
Conclusion
JELD-WEN’s Q1 2024 results underscore the impact of adverse macro-economic conditions on the construction sector. While the company is taking steps to streamline operations and improve customer experience, the lowered guidance suggests that challenges may persist throughout the year. Investors and stakeholders will likely keep a close watch on how JELD-WEN navigates these headwinds in the coming quarters.
Explore the complete 8-K earnings release (here) from JELD-WEN Holding Inc for further details.
This article first appeared on GuruFocus.
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