Masonite ends 'important year' with $222.1 million of liquidity, cash totaling $100.9 million

By Lisa Kerner

Charlotte, N.C., Feb. 24 - Masonite International Corp. president and chief executive officer Fred Lynch said 2013 was an "important year" for the company for a variety of reasons.

While new home starts slowed in the second half of the year, two U.S. residential wholesale price increases allowed North American average unit price to turn positive for the first time in several years, he said.

The Mississauga, Ont.-based door manufacturer exited its business in Poland in 2013 and in September started trading its shares on the New York Stock Exchange under the ticker symbol "DOOR," said Lynch during the company's fourth-quarter and full-year earnings conference call on Monday.

Also on Monday, Masonite completed its acquisition of U.K.-based Door-Stop International.

Masonite ended the year on Dec. 29 with available liquidity of $222.1 million, which includes a $108.2 million undrawn ABL facility, a $13 million accounts receivable purchase agreement and unrestricted cash totaling $100.9 million. Liquidity was about 12.8% of sales, said chief financial officer Mark Erceg on the call.

Total debt and net debt to trailing 12-month adjusted EBITDA was 3.6 times and 2.6 times, respectively.

The company had an interest coverage ratio of 3.2 times and a fixed-charge coverage ratio of 1.8 times at year-end, according to Erceg.

Cash flow from operations was down for the year at $46.1 million compared to $55.7 million for full-year 2012.

Subsequent to year-end, Masonite issued and sold $125 million of 8¼% senior notes due 2021. The add-on notes priced at 108.75 plus accrued interest from Oct. 15, 2013, resulting in a yield to worst of 5.704% and proceeds of about $137 million, Erceg said.

A portion of the proceeds were used to fund the Door-Stop acquisition. The purchase price for 100% of the outstanding shares of the company was about $50 million, net of cash acquired, according to a company news release.

Remaining proceeds will be used for general corporate purposes, which may include funding future acquisitions.

Financial highlights

Masonite's net sales were up 0.5% at $420.5 million for the quarter and up 3.3% for the full year at about $1.73 billion.

The company reported a net loss of $7.6 million, or $0.25 per diluted share, for the quarter and a net loss of $11 million, or $0.39 per diluted share for 2013.

Fourth-quarter adjusted EBITDA decreased 30.5% to $17.8 million, while full-year adjusted EBITDA rose 8.8% to $105.9 million.

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