JELD-WEN Holding, Inc. (JELD) Misses Q3 EPS by 11c, Revenues In-Line

JELD-WEN Holding, Inc. (NYSE: JELD) reported Q3 EPS of $0.26, $0.11 worse than the analyst estimate of $0.37. Revenue for the quarter came in at $1.09 billion versus the consensus estimate of $1.09 billion.

Highlights:

• Results were in line with preliminary results announced on October 10, 2019
• Net revenues for the third quarter decreased 3.9% year-over-year to $1.092 billion, driven primarily by a 5% headwind from volume/mix
• Adjusted EBITDA for the third quarter decreased by $23.7 million year-over-year to $108.9 million; adjusted EBITDA margin decreased by 170 basis points to 10.0%
• Core adjusted EBITDA margins expanded by 120 basis points in Europe, the first quarter of core margin expansion in Europe since early 2018; overall, core margins decreased by 170 basis points
• Cash flow from operations for the nine months ended September 28, 2019 improved $76.9 million year-over-year to $164.9 million
• The board of directors renewed the company\'s share repurchase program, which authorizes the repurchase of up to $175 million of common shares

“During the third quarter, we continued to execute against our key strategic priorities - driving price in excess of cost inflation, generating positive net productivity in our operations through deployment of the JELD-WEN Excellence Model or JEM, and investing to modernize and reduce complexity in our operations,” said Gary S. Michel, president and chief executive officer. "Although results in our North America windows business were lower than expected, primarily due to our inability to effectively adjust our cost structure to match retail channel order patterns for vinyl windows, these inefficiencies were seasonal in nature and confined to a small number of manufacturing locations. Utilizing JEM tools, our teams have worked to expedite orders and improve our demand planning process, and as a result we expect to see operational improvements in the near future."

"While the demand environment in 2019 has been more challenging than originally expected, I can see transformation taking hold across our organization," said Mr. Michel. "Despite the impact from volume headwinds, our associates have utilized JEM tools to deliver positive productivity in our core operations and have developed an extensive backlog of projects to drive future cost savings. The initial phase of our facility modernization and rationalization plan remains on track and we are now actively reducing latent capacity. I am confident in our strategy and believe that our ongoing deployment of JEM will improve our operations, allow us to better serve our customers, and drive long-term value creation for our shareholders."

Outlook for 2019

• Updated outlook for 2019 consistent with detail provided in preliminary third quarter results on October 10, reflecting revised expectations for market demand in Australasia and North America and the impact of abnormal order patterns in the North America retail channel

As previously reported with the company's preliminary financial results for the third quarter, the company anticipates full year 2019 revenue to decline by approximately 2% compared to full year 2018. Adjusted EBITDA in 2019 is now expected to be within a range of $419 million to $429 million, compared to adjusted EBITDA of $459.2 million in 2018.

Full year 2019 projected capital expenditures is now expected to be within the range of $130 million to $155 million, compared to capital expenditures of $118.7 million in 2018.

For earnings history and earnings-related data on JELD-WEN Holding, Inc. (JELD) click here.

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