On August 5, 2024, JELD-WEN Holding Inc (JELD, Financial) released its 8-K filing for the second quarter of 2024. The company, a leading manufacturer of doors and windows, reported a significant decline in both revenue and earnings, missing analyst estimates.
Company Overview
JELD-WEN Holding Inc is engaged in the design, production, and distribution of interior and exterior building products, including doors, windows, and walls. The company's products are used in residential and non-residential buildings, with operations primarily in North America, Europe, and Australasia. The majority of its revenue is generated from North America.
Q2 2024 Financial Performance
JELD-WEN reported net revenues from continuing operations of $986.0 million for the second quarter, a 12.4% decrease compared to $1,125.8 million in the same period last year. This decline was driven by a 12% drop in Core Revenue due to lower volume/mix amid weak macro-economic conditions and a shift in demand towards lower-priced products.
The company posted a net loss from continuing operations of $18.5 million, or $0.22 per share, compared to net income of $22.5 million, or $0.26 per share, in the same quarter last year. Adjusted EBITDA from continuing operations was $84.8 million, down from $108.9 million, with an Adjusted EBITDA Margin of 8.6%, a decline of 110 basis points year-over-year.
Segment Performance
In North America, net revenue was $710.6 million, a 13.0% decrease from the previous year. The segment's net income was $30.7 million, down $20.6 million year-over-year, with an operating income margin of 6.3%. Adjusted EBITDA for North America was $75.6 million, a decline of $33.2 million, while the Adjusted EBITDA Margin decreased by 270 basis points to 10.6%.
In Europe, net revenue was $275.4 million, a 10.8% decrease from the previous year. The segment reported a net loss of $5.0 million, a decline of $15.7 million year-over-year, with an operating income margin of -2.2%. Adjusted EBITDA for Europe was $20.4 million, a decline of $3.4 million, while the Adjusted EBITDA Margin decreased by 30 basis points to 7.4%.
Cash Flow and Balance Sheet
Net cash flow provided by operations was $40.4 million during the first half of 2024, a decrease of $113.0 million compared to the same period last year. Capital expenditures increased by $27.2 million to $74.1 million. Free Cash Flow used in the first half of 2024 was $33.8 million, compared to Free Cash Flow provided in the first half of 2023 of $106.4 million.
CEO Commentary
We continue to make strides in our transformation journey, positioning JELD-WEN for improved performance," said Chief Executive Officer William J. Christensen. "In the second quarter, even as market demand weakened further, we made notable progress in streamlining our operations. I am proud of how our associates stayed focused on meeting our goals and diligently implementing the necessary foundational changes."
Analysis and Outlook
JELD-WEN's performance in Q2 2024 reflects the challenges posed by weak macro-economic conditions and shifting demand patterns. The company's efforts to streamline operations and reduce costs are evident, but the impact of lower volumes and increased operating expenses has weighed heavily on financial results.
For the full year 2024, JELD-WEN is maintaining its revenue guidance in the range of $3.9 to $4.1 billion, with Adjusted EBITDA expected to be between $340 to $380 million. However, both metrics are trending towards the lower end of the range due to increasing macroeconomic weakness.
Investors and analysts will be closely monitoring JELD-WEN's ability to navigate these challenges and achieve its transformation goals in the coming quarters. For more detailed insights and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from JELD-WEN Holding Inc for further details.
