BEACHWOOD, Ohio - MasterBrand, Inc. (NYSE: MBC) announced its fourth-quarter financial results, surpassing analyst expectations with an adjusted earnings per share (EPS) of $0.28, a slight edge over the consensus estimate of $0.27. The company's revenue for the quarter also exceeded forecasts, coming in at $677.1 million against the anticipated $666.7 million.
The leading North American residential cabinet manufacturer reported a 14% decline in net sales for the fourth quarter compared to the same period last year, which totaled $784.4 million. Despite the drop in sales, the company's net income saw a significant increase of 134% to $36.1 million, compared to $15.4 million in the fourth quarter of the prior year. This increase in net income is attributed primarily to higher operating income, which benefited from the absence of $20.4 million in asset impairment charges that were recorded in the previous year's quarter.
Gross profit for the quarter stood at $223.1 million with a gross profit margin of 32.9%, showing a substantial improvement from the 27.4% margin in the fourth quarter of 2022. The company attributes this margin expansion to savings from strategic initiatives, particularly in supply chain efforts, continuous improvement, and cost actions, which more than offset the negative impacts of lower volumes and personnel inflation.
For the full year 2023, MasterBrand reported a 17% decrease in net sales to $2.7 billion, while net income rose by 17% to $182.0 million. The adjusted EBITDA margin also increased, going up by 150 basis points to 14.1%.
In their financial outlook for 2024, MasterBrand anticipates a net sales year-over-year decline of low single-digit percentage to flat and projects an adjusted EBITDA in the range of $370 million to $400 million. The adjusted EPS is expected to be between $1.40 and $1.60.
President and CEO Dave Banyard commented on the company's performance, stating, "We delivered another solid quarter, finishing off a strong first year as a standalone public company." He also expressed confidence in the company's business model and culture, which he believes will continue to drive operational efficiencies and allow for growth investments.
MasterBrand did not report any significant stock movement following the earnings release, and no specific driver of the move was provided. The company's full-year operating cash flow was robust at $405.6 million, with free cash flow of $348.3 million.
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