Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 29, 2020 | May 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-11796 | |
Entity Registrant Name | Masonite International Corporation | |
Entity Tax Identification Number | 98-0377314 | |
Entity Address, Address Line One | 2771 Rutherford Road | |
Entity Address, City or Town | Concord | |
Entity Address, State or Province | ON | |
Entity Address, Postal Zip Code | L4K 2N6 | |
Entity Address, Country | CA | |
City Area Code | 800 | |
Local Phone Number | 895-2723 | |
Title of 12(b) Security | Common Stock (no par value) | |
Trading Symbol | DOOR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,449,287 | |
Entity Central Index Key | 0000893691 | |
Current Fiscal Year End Date | --01-03 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | A1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net sales | $ 551,228 | $ 530,311 |
Cost of goods sold | 416,947 | 418,207 |
Gross profit | 134,281 | 112,104 |
Selling, general and administration expenses | 80,333 | 78,100 |
Restructuring costs | 1,941 | 3,740 |
Asset impairment | 0 | 10,625 |
Loss on disposal of subsidiaries | 0 | 4,605 |
Operating income | 52,007 | 15,034 |
Interest expense, net | 11,282 | 11,127 |
Other expense (income), net | 49 | (1,130) |
Income before income tax expense | 40,676 | 5,037 |
Income tax expense | 9,639 | 58 |
Net income | 31,037 | 4,979 |
Less: net income attributable to non-controlling interests | 1,152 | 1,190 |
Net income attributable to Masonite | $ 29,885 | $ 3,789 |
Basic earnings per common share attributable to Masonite (in dollars per share) | $ 1.20 | $ 0.15 |
Diluted earnings per common share attributable to Masonite (in dollars per share) | $ 1.19 | $ 0.15 |
Other comprehensive income (loss): | ||
Net income | $ 31,037 | $ 4,979 |
Foreign currency translation gain (loss) | (38,687) | 13,991 |
Amortization of actuarial net losses | 173 | 404 |
Income tax expense related to other comprehensive income | (89) | (93) |
Other comprehensive income (loss), net of tax | (38,603) | 14,302 |
Comprehensive income (loss) | (7,566) | 19,281 |
Less: comprehensive income attributable to non-controlling interests | 573 | 1,406 |
Comprehensive income (loss) attributable to Masonite | $ (8,139) | $ 17,875 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 114,375 | $ 166,964 |
Restricted cash | 10,644 | 10,644 |
Accounts receivable, net | 303,111 | 276,208 |
Inventories, net | 240,975 | 242,230 |
Prepaid expenses | 33,137 | 33,190 |
Income taxes receivable | 3,492 | 4,819 |
Total current assets | 705,734 | 734,055 |
Property, plant and equipment, net | 612,304 | 625,585 |
Operating lease right-of-use assets | 123,925 | 121,367 |
Investment in equity investees | 17,011 | 16,100 |
Goodwill | 179,386 | 184,192 |
Intangible assets, net | 171,684 | 184,532 |
Deferred income taxes | 24,355 | 25,945 |
Other assets | 43,650 | 44,808 |
Total assets | 1,878,049 | 1,936,584 |
Current liabilities: | ||
Accounts payable | 97,501 | 84,912 |
Accrued expenses | 145,342 | 180,405 |
Income taxes payable | 1,537 | 2,350 |
Total current liabilities | 244,380 | 267,667 |
Long-term debt | 791,190 | 790,984 |
Long-term operating lease liabilities | 112,691 | 110,497 |
Deferred income taxes | 88,504 | 83,465 |
Other liabilities | 45,028 | 47,109 |
Total liabilities | 1,281,793 | 1,299,722 |
Commitments and Contingencies (Note 7) | ||
Equity: | ||
Share capital: unlimited shares authorized, no par value, 24,446,987 and 24,869,921 shares issued and outstanding as of March 29, 2020, and December 29, 2019, respectively | 551,983 | 558,514 |
Additional paid-in capital | 212,826 | 216,584 |
Accumulated deficit | (12,203) | (20,047) |
Accumulated other comprehensive loss | (168,193) | (130,169) |
Total equity attributable to Masonite | 584,413 | 624,882 |
Equity attributable to non-controlling interests | 11,843 | 11,980 |
Total equity | 596,256 | 636,862 |
Total liabilities and equity | $ 1,878,049 | $ 1,936,584 |
Shares outstanding | 24,446,987 | 24,869,921 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Mar. 29, 2020 | Dec. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Shares issued | 24,446,987 | 24,869,921 |
Shares outstanding | 24,446,987 | 24,869,921 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Equity Attributable to Noncontrolling Interests |
Opening Balance, Value at Dec. 30, 2018 | $ 622,305 | $ 575,207 | $ 218,988 | $ (30,836) | $ (152,919) | $ 11,865 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards, Value | 6,152 | (6,152) | ||||
Common shares issued under employee stock purchase plan, value | 517 | (132) | ||||
Common shares repurchased and retired, Value | (14,386) | (18,805) | ||||
Share based compensation expense | 2,680 | |||||
Common shares withheld to cover income taxes payable due to delivery of share based awards | (1,090) | |||||
Net income | 4,979 | 3,789 | 1,190 | |||
Other comprehensive income (loss), net of tax | 14,302 | 14,086 | 216 | |||
Dividends to noncontrolling interests | 0 | |||||
Ending Balance, Value at Mar. 31, 2019 | 610,370 | $ 567,490 | 214,294 | (45,852) | (138,833) | 13,271 |
Opening Balance, Shares at Dec. 30, 2018 | 25,835,664 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards, Shares | 116,252 | |||||
Common shares issued under employee stock purchase plan | 9,036 | |||||
Common shares repurchased and retired, Shares | (646,102) | |||||
Ending Balance, Shares at Mar. 31, 2019 | 25,314,850 | |||||
Opening Balance, Value at Dec. 29, 2019 | 636,862 | $ 558,514 | 216,584 | (20,047) | (130,169) | 11,980 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards, Value | 5,490 | (5,490) | ||||
Common shares issued under employee stock purchase plan, value | 708 | (311) | ||||
Common shares repurchased and retired, Value | (12,729) | (22,041) | ||||
Share based compensation expense | 3,470 | |||||
Common shares withheld to cover income taxes payable due to delivery of share based awards | (1,427) | |||||
Net income | 31,037 | 29,885 | 1,152 | |||
Other comprehensive income (loss), net of tax | (38,603) | (38,024) | (579) | |||
Dividends to noncontrolling interests | (710) | |||||
Ending Balance, Value at Mar. 29, 2020 | $ 596,256 | $ 551,983 | $ 212,826 | $ (12,203) | $ (168,193) | $ 11,843 |
Opening Balance, Shares at Dec. 29, 2019 | 24,869,921 | 24,869,921 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards, Shares | 134,911 | |||||
Common shares issued under employee stock purchase plan | 9,426 | |||||
Common shares repurchased and retired, Shares | (567,271) | |||||
Ending Balance, Shares at Mar. 29, 2020 | 24,446,987 | 24,446,987 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 31,037 | $ 4,979 |
Adjustments to reconcile net income to net cash flow provided by operating activities: | ||
Loss on disposal of subsidiaries | 0 | 4,605 |
Depreciation | 16,018 | 18,285 |
Amortization | 6,459 | 7,597 |
Share based compensation expense | 3,470 | 2,680 |
Deferred income taxes | 6,160 | (3,708) |
Unrealized foreign exchange loss (gain) | 94 | 272 |
Share of income from equity investees, net of tax | (911) | (898) |
Pension and post-retirement funding, net of expense | (1,900) | (1,661) |
Non-cash accruals and interest | 427 | (562) |
Loss on sale of property, plant and equipment | 1,622 | 2,913 |
Asset impairment | 0 | 10,625 |
Accounts receivable | (37,990) | (6,587) |
Inventories | (5,388) | (5,902) |
Prepaid expenses | (491) | 1,986 |
Accounts payable and accrued expenses | (15,163) | (16,193) |
Other assets and liabilities | 2,602 | 80 |
Net cash flow provided by operating activities | 6,046 | 18,511 |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (17,246) | (20,422) |
Cash used in acquisitions, net of cash acquired | 0 | (219) |
Proceeds from sale of subsidiaries, net of cash disposed | 0 | (230) |
Proceeds from sale of property, plant and equipment | 15 | 88 |
Other investing activities | (587) | (418) |
Net cash flow used in investing activities | (17,818) | (21,201) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (57) | (6) |
Tax witholding on share based awards | (1,427) | (1,090) |
Distributions to non-controlling interests | (710) | 0 |
Repurchases of common shares | (34,770) | (33,191) |
Net cash flow used in financing activities | (36,964) | (34,287) |
Net foreign currency translation adjustment on cash | (3,853) | 1,463 |
Decrease in cash, cash equivalents and restricted cash | (52,589) | (35,514) |
Cash, cash equivalents and restricted cash, beginning of period | 177,608 | 126,141 |
Cash, cash equivalents and restricted cash, at end of period | $ 125,019 | $ 90,627 |
Business Overview and Significa
Business Overview and Significant Accounting Policies | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
Business Overview and Significant Accounting Policies | Business Overview and Significant Accounting Policies Unless we state otherwise or the context otherwise requires, references to "Masonite," "we," "our," "us" and the "Company" in these notes to the condensed consolidated financial statements refer to Masonite International Corporation and its subsidiaries. Description of Business Masonite International Corporation is one of the largest manufacturers of doors in the world, with significant market share in both interior and exterior door products. Masonite operates 63 manufacturing and distribution facilities in eight countries and sells doors to customers throughout the world with our largest markets being the United States, Canada and the United Kingdom. Basis of Presentation We prepare these unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019, as filed with the SEC. Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. In a 52-week year, each fiscal quarter consists of 13 weeks. For ease of disclosure, the 13-week periods are referred to as three-month periods. Our 2020 fiscal year, which ends on January 3, 2021, will contain 53 weeks of operating results, with the additional week occurring in the fourth quarter. Changes in Accounting Standards and Policies There have been no changes in the significant accounting policies from those that were disclosed in the fiscal year 2019 audited consolidated financial statements, other than as noted below. Adoption of Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”, which replaced the incurred loss methodology for recognizing credit losses with a current expected credit losses model. This standard applied to most financial assets, including trade receivables. Our prior accounts receivable policy is described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. We have adopted the new guidance using a modified retrospective approach as of December 30, 2019, the beginning of fiscal year 2020, and the adoption did not have a material impact on our financial statements and no adjustment was necessary to retained earnings on December 30, 2019. The adoption of the standard resulted in a change in accounting policy for accounts receivable. Our new accounting policy for accounts receivable is presented below. Accounts Receivable We record accounts receivable as our products are received by our customers. Our customers are primarily retailers, distributors and contractors. We record an allowance for credit losses at the time that accounts receivable are initially recorded based on our historical write-off experience and the current economic environment as well as our expectations of future economic conditions. We reassess the allowance at each reporting date. When it becomes apparent, based on age or customer circumstances, that such amounts will not be collected, they are charged to the allowance. Payments subsequently received are credited to the credit loss expense account included within selling, general and administration expenses in the consolidated statements of comprehensive income. Generally, we do not require collateral for our accounts receivable. Other Recent Accounting Pronouncements not yet Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating this guidance to determine the impact it may have on our financial statements. In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans," which amended ASC 715, "Compensation—Retirement Benefits." This standard is applicable for employers that sponsor defined benefit pension or other postretirement plans, and eliminates disclosures no longer considered cost beneficial, clarifies specific disclosure requirements for entities that provide aggregate disclosures for two or more plans and adds requirements for explanations for significant gains and losses related to changes in benefit obligations. The guidance will be effective for annual periods ending after December 15, 2020; early adoption is permitted and retrospective application is required. We are in the process of evaluating this guidance to determine the impact it may have on our financial statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 29, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Disposition | Acquisitions and Divestitures Acquisitions Top Doors On August 29, 2019, we completed the acquisition of TOPDOORS, s.r.o. ("Top Doors") based in the Czech Republic for cash consideration of $1.8 million, net of cash acquired. Top Doors is a specialist manufacturer of door frames. The excess purchase price over the fair value of net assets acquired of $1.1 million was allocated to goodwill in our Europe segment. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for Top Doors are not presented as they were not material for any period presented. Divestitures Window Widgets On December 13, 2019, we completed the sale of all of the capital stock of Window Widgets Limited ("WW") for consideration of $1.2 million, net of cash disposed. We have had no continuing involvement with WW subsequent to the sale. The divestiture of this business resulted in a loss on disposal of subsidiaries of $9.7 million, which was recognized in the fourth quarter of 2019 in the Europe segment. The total charge consists of $8.3 million relating to the write-off of the assets sold and other professional fees and $1.4 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss. Performance Doorset Solutions Limited On March 21, 2019, we completed the sale of all of the capital stock of Performance Doorset Solutions Limited ("PDS") for nominal consideration. We have had no continuing involvement with PDS subsequent to the sale, and the purchasers are not considered to be a related party. The divestiture of this business resulted in a loss on disposal of subsidiaries of $4.6 million, which was recognized in the first quarter of 2019 in the Europe segment. The total charge consists of $3.6 million relating to the write-off of the net assets sold and other professional fees and $1.0 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 29, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Our customers consist mainly of wholesale distributors, dealers and retail home centers. Our ten largest customers accounted for 53.7% and 44.9% of total accounts receivable as of March 29, 2020, and December 29, 2019, respectively. Our largest customer, The Home Depot, Inc., accounted for more than 10% of the consolidated gross accounts receivable balance as of March 29, 2020, and December 29, 2019. The allowance for doubtful accounts balance was $2.2 million and $1.8 million as of March 29, 2020, and December 29, 2019, respectively.We maintain an accounts receivable sales program with a third party (the "AR Sales Program"). Under the AR Sales Program, we can transfer ownership of eligible trade accounts receivable of certain customers. Receivables are sold outright to a third party who assumes the full risk of collection, without recourse to us in the event of a loss. Transfers of receivables under this program are accounted for as sales. Proceeds from the transfers reflect the face value of the accounts receivable less a discount. Receivables sold under the AR Sales Program are excluded from trade accounts receivable in the condensed consolidated balance sheets and are included in cash flows from operating activities in the condensed consolidated statements of cash flows. The discounts on the sales of trade accounts receivable sold, if any, under the AR Sales Program were not material for any of the periods presented and were recorded in selling, general and administration expense within the condensed consolidated statements of comprehensive income. |
Inventories
Inventories | 3 Months Ended |
Mar. 29, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The amounts of inventory on hand were as follows as of the dates indicated: (In thousands) March 29, 2020 December 29, 2019 Raw materials $ 175,775 $ 179,155 Finished goods 72,693 70,211 Provision for obsolete or aged inventory (7,493) (7,136) Inventories, net $ 240,975 $ 242,230 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 29, 2020 | |
Accrued Expenses [Abstract] | |
Accrued expenses | Accrued Expenses The details of our accrued expenses were as follows as of the dates indicated: (In thousands) March 29, 2020 December 29, 2019 Accrued payroll $ 43,864 $ 60,876 Accrued rebates 30,971 33,556 Current portion of operating lease liabilities 21,559 20,980 Accrued interest 5,420 16,913 Other accruals 43,528 48,080 Total accrued expenses $ 145,342 $ 180,405 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 29, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt (In thousands) March 29, 2020 December 29, 2019 5.375% senior unsecured notes due 2028 $ 500,000 $ 500,000 5.750% senior unsecured notes due 2026 300,000 300,000 Debt issuance costs (9,662) (9,985) Other long-term debt 852 969 Total long-term debt $ 791,190 $ 790,984 Interest expense related to our consolidated indebtedness under senior unsecured notes was $11.3 million for both the three months ended March 29, 2020, and March 31, 2019. 5.375% Senior Notes due 2028 On July 25, 2019, we issued $500.0 million aggregate principal senior unsecured notes (the "2028 Notes"). The 2028 Notes bear interest at 5.375%, payable in cash semiannually in arrears on February 1 and August 1 of each year and are due February 1, 2028. The 2028 Notes were issued at par. The net proceeds from issuance of the 2028 Notes, together with available cash balances, were used to redeem the remaining $500.0 million aggregate principal amount of similar senior unsecured notes, including the payment of related premiums, fees and expenses. Information concerning obligations under the 2028 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the indenture governing the 2028 Notes. 5.750% Senior Notes due 2026 On August 27, 2018, we issued $300.0 million aggregate principal senior unsecured notes (the "2026 Notes"). The 2026 Notes bear interest at 5.750% per annum, payable in cash semiannually in arrears on March 15 and September 15 of each year and are due September 15, 2026. The 2026 Notes were issued at par. Information concerning obligations under the 2026 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the indenture governing the 2026 Notes. ABL Facility On January 31, 2019, we and certain of our subsidiaries entered into a $250.0 million asset-based revolving credit facility (the "ABL Facility") maturing on January 31, 2024, which replaced the previous facility. Borrowings under the ABL Facility bear interest at a rate equal to, at our option, (i) the United States, Canadian or United Kingdom Base Rate (each as defined in the credit agreement relating to the ABL Facility, the "Amended and Restated Credit Agreement") plus a margin ranging from 0.25% to 0.50% per annum, or (ii) the Adjusted LIBO Rate or BA Rate (each as defined in the Amended and Restated Credit Agreement), plus a margin ranging from 1.25% to 1.50% per annum. In addition to paying interest on any outstanding principal under the ABL Facility, a commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter. The ABL Facility contains various customary representations, warranties by us and covenants that are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the credit agreement governing the ABL Facility. We had availability of $185.3 million under our ABL Facility and there were no amounts outstanding as of March 29, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The following discussion describes material developments in previously disclosed legal proceedings that occurred since December 29, 2019. Refer to Note 10. Commitments and Contingencies in the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2019, for a full description of the previously disclosed legal proceedings. Class Action Proceedings With respect to the putative antitrust class action cases pending in the Eastern District of Virginia, the parties are in the midst of class certification briefing and expert discovery. Due to the ongoing coronavirus pandemic, on March 17, 2020, the Court extended all case deadlines by 60 days at the parties’ request. Expert discovery is now expected to close in June 2020. Briefing on class certification discovery is expected to be completed by June 9, 2020. Briefing on dispositive motions is expected to be completed by September 7, 2020. The Court has reset the presumptive trial date as January 11, 2021. On May 4, 2020, the Court ruled on Defendants’ December 16, 2019, partial motion to dismiss plaintiffs’ reinstated claims, granting it in part and denying it in part. By granting the motion in part, the Court dismissed the indirect purchasers' claims under Kansas, Utah and Virginia consumer protection laws and it also limited the time period during which indirect purchasers from Hawaii, Kansas, Maine, New Hampshire, North Dakota, Utah, Virginia, West Virginia and Wisconsin could claim damages. In addition, from time to time, we are involved in various claims and legal actions. In the opinion of management, the ultimate disposition of these matters, individually and in the aggregate, will not have a material effect on our financial condition, results of operations or cash flows. |
Share Based Compensation Plans
Share Based Compensation Plans | 3 Months Ended |
Mar. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share Based Compensation Plans | Share Based Compensation Plans Share based compensation expense was $3.5 million and $2.7 million for the three months ended March 29, 2020, and March 31, 2019, respectively. As of March 29, 2020, the total remaining unrecognized compensation expense related to share based compensation amounted to $24.5 million, which will be amortized over the weighted average remaining requisite service period of 1.9 years. Equity Incentive Plans Our equity incentive plans under the 2009 Plan and the 2012 Plan are described in detail and defined in our Annual Report on Form 10-K for the year ended December 29, 2019. The aggregate number of common shares that can be issued with respect to equity awards under the 2012 Plan cannot exceed 2,000,000 shares plus the number of shares subject to existing grants under the 2009 Plan that may expire or be forfeited or canceled. As of March 29, 2020, there were 675,354 shares of common stock available for future issuance under the 2012 Plan. Deferred Compensation Plan We offer to certain of our employees and directors a Deferred Compensation Plan, which is further described in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, the liability and asset relating to deferred compensation had a fair value of $5.1 million and $4.9 million, respectively. As of March 29, 2020, participation in the deferred compensation plan is limited and no restricted stock awards have been deferred into the deferred compensation plan. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework. Stock Appreciation Rights We have granted Stock Appreciation Rights ("SARs") to certain employees under both the 2009 Plan and the 2012 Plan, which entitle the recipient to the appreciation in value of a number of common shares over the exercise price over a period of time, each as specified in the applicable award agreement. The exercise price of any SAR granted may not be less than the fair market value of our common shares on the date of grant. The compensation expense for the SARs is measured based on the fair value of the SARs at the date of grant and is recognized over the requisite service period. The SARs vest over a maximum of three years, have a life of ten years and settle in common shares. It is assumed that all time-based SARs will vest. We recognize forfeitures of SARs in the period in which they occur. The total fair value of SARs vested was $0.9 million and $1.1 million during the three months ended March 29, 2020, and March 31, 2019, respectively. Three Months Ended March 29, 2020 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 404,447 $ 7,615 $ 53.62 4.7 Granted 29,522 87.18 Exercised (44,850) 2,155 31.82 Forfeited (4,613) 57.52 Outstanding, end of period 384,506 $ 986 $ 58.70 5.2 Exercisable, end of period 241,134 $ 986 $ 55.14 3.3 The value of SARs granted is determined using the Black-Scholes-Merton valuation model, and the corresponding expense is recognized over the average requisite service period of 2.0 years for all periods presented. Expected volatility is based upon the historical volatility of our common shares amongst other considerations. The expected term is calculated using the simplified method, due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated: 2020 Grants SAR value (model conclusion) $ 21.51 Risk-free rate 1.3 % Expected dividend yield 0.0 % Expected volatility 22.4 % Expected term (years) 6.0 Restricted Stock Units We have granted Restricted Stock Units ("RSUs") to directors and certain employees under both the 2009 Plan and the 2012 Plan. The RSUs confer the right to receive shares of our common stock at a specified future date or when certain conditions are met. The compensation expense for the RSUs awarded is based on the fair value of the RSUs at the date of grant and is recognized over the requisite service period. The RSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted. It is assumed that all time-based RSUs will vest. We recognize forfeitures of RSUs in the period in which they occur. Three Months Ended March 29, 2020 Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 523,207 $ 59.58 Granted 177,866 81.91 Performance adjustment (1) (59,936) 67.50 Delivered (79,449) Withheld to cover (2) (8,235) Forfeited (17,572) Outstanding, end of period 535,881 $ 65.46 ____________ (1) Performance-based RSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These awards are settled with payouts ranging from zero to 200% of the target award value depending on achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target. (2) A portion of the vested RSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting. Approximately two-thirds of the RSUs granted during the three months ended March 29, 2020, vest at specified future dates with only service requirements, while the remaining portion of the RSUs vest based on both performance and service requirements. The expense for RSUs granted during the three months ended March 29, 2020, is being recognized over the weighted average requisite service period of 2.5 years. 87,684 RSUs vested during the three months ended March 29, 2020, at a fair value of $5.6 million. |
Restructuring Costs
Restructuring Costs | 3 Months Ended |
Mar. 29, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs In February 2019, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce across all of our reportable segments and in our head offices. The reorganization of our manufacturing capacity involves specific plants in the North American Residential and Architectural segments and costs associated with the closure of these plants and related headcount reductions began taking place in the first quarter of 2019 (collectively, the "2019 Plan"). Costs associated with the 2019 Plan include severance, retention and closure charges and will continue through 2020. Additionally, the plan to divest non-core assets was determined to be a triggering event requiring a test of the carrying value of the definite-lived assets relating to the divestitures, as further described in Note 10. As of March 29, 2020, we expect to incur approximately $5 million to $6 million of additional charges related to the 2019 Plan. During the fourth quarter of 2018, we began implementing a plan to reorganize and consolidate certain aspects of our United Kingdom head office function and optimize our portfolio by divesting non-core assets to enable more effective and consistent business processes in the Europe segment. In addition, in the North American Residential segment we announced a new facility that will optimize and expand capacity through increased automation, which resulted in the closure of one existing facility and related headcount reductions beginning in the second quarter of 2019 (collectively, the "2018 Plan"). Costs associated with the 2018 Plan include severance, retention and closure charges and continued throughout 2019. As of March 29, 2020, we do not expect to incur any material future charges related to the 2018 Plan. The following table summarizes the restructuring charges recorded for the periods indicated: Three Months Ended March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 728 $ (37) $ 862 $ 267 $ 1,820 2018 Plan 121 — — — 121 Total Restructuring Costs $ 849 $ (37) $ 862 $ 267 $ 1,941 Three Months Ended March 31, 2019 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 1,459 $ 331 $ 604 $ 394 $ 2,788 2018 Plan 421 531 — — 952 Total Restructuring Costs $ 1,880 $ 862 $ 604 $ 394 $ 3,740 Cumulative Amount Incurred Through March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 6,187 $ 359 $ 1,368 $ 1,286 $ 9,200 2018 Plan 1,866 2,275 — — 4,141 Total Restructuring Costs $ 8,053 $ 2,634 $ 1,368 $ 1,286 $ 13,341 The changes in the accrual for restructuring by activity were as follows for the periods indicated: (In thousands) December 29, 2019 Severance Closure Costs Cash Payments March 29, 2020 2019 Plan $ 1,535 $ 187 $ 1,633 $ (2,769) $ 586 2018 Plan — 103 18 (121) — Total $ 1,535 $ 290 $ 1,651 $ (2,890) $ 586 (In thousands) December 30, 2018 Severance Closure Costs Cash Payments March 31, 2019 2019 Plan $ — $ 2,770 $ 18 $ (1,035) $ 1,753 2018 Plan 596 983 (31) (546) 1,002 Other 58 — — (17) 41 Total $ 654 $ 3,753 $ (13) $ (1,598) $ 2,796 |
Asset Impairment
Asset Impairment | 3 Months Ended |
Mar. 29, 2020 | |
Asset Impairment Charges [Abstract] | |
Asset Impairment | Asset ImpairmentDuring the three months ended March 31, 2019, we recognized asset impairment charges of $10.6 million related to two asset groups in the North American Residential segment, as a result of announced plant closures under the 2019 Plan. This amount was determined based upon the excess of the asset groups' carrying values of property, plant and equipment and operating lease right-of-use assets over the respective fair values of such assets, determined using a discounted cash flows approach for each asset group. Each of these valuations was performed on a non-recurring basis and is categorized as having Level 3 valuation inputs as established by the FASB's Fair Value Framework. The Level 3 unobservable inputs include an estimate of future cash flows and the salvage value for each of the asset groups. The fair value of the asset groups was determined to be $11.3 million, compared to a book value of $21.9 million, with the difference representing the asset impairment charges recorded in the condensed consolidated statements of comprehensive income. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate differs from the Canadian statutory rate of 26.7% primarily due to mix of earnings in foreign jurisdictions that are subject to tax rates which differ from the Canadian statutory rate and changes in our valuation allowances. In addition, we recognized $0.7 million of income tax benefit due to the exercise and delivery of share-based awards during the three months ended March 29, 2020, compared to $0.1 million of income tax benefit during the three months ended March 31, 2019. We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Due to the uncertainties stemming from the impact of the COVID-19 pandemic on our operations, we have used a discrete effective tax rate method to calculate taxes for the three months ended March 29, 2020. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareBasic earnings per share ("EPS") is calculated by dividing earnings attributable to Masonite by the weighted average number of our common shares outstanding during the period. Diluted EPS is calculated by dividing earnings attributable to Masonite by the weighted average number of common shares plus the incremental number of shares issuable from non-vested and vested RSUs and SARs outstanding during the period. (In thousands, except share and per share information) Three Months Ended March 29, 2020 March 31, 2019 Net income attributable to Masonite $ 29,885 $ 3,789 Shares used in computing basic earnings per share 24,861,442 25,574,910 Effect of dilutive securities: Incremental shares issuable under share compensation plans 353,322 376,574 Shares used in computing diluted earnings per share 25,214,764 25,951,484 Basic earnings per common share attributable to Masonite $ 1.20 $ 0.15 Diluted earnings per common share attributable to Masonite $ 1.19 $ 0.15 Anti-dilutive instruments excluded from diluted earnings per common share 258,773 235,650 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our reportable segments are organized and managed principally by end market: North American Residential, Europe and Architectural. The North American Residential reportable segment is the aggregation of the Wholesale and Retail operating segments. The Europe reportable segment is the aggregation of the Europe Interior and Europe Exterior operating segments. The Architectural reportable segment consists solely of the Architectural operating segment. The Corporate & Other category includes unallocated corporate costs and the results of immaterial operating segments which were not aggregated into any reportable segment. Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Our management reviews net sales and Adjusted EBITDA (as defined below) to evaluate segment performance and allocate resources. Net assets are not allocated to the reportable segments. Adjusted EBITDA is a non-GAAP financial measure which does not have a standardized meaning under GAAP and is unlikely to be comparable to similar measures used by other companies. Adjusted EBITDA should not be considered as an alternative to either net income or operating cash flows determined in accordance with GAAP. Adjusted EBITDA is defined as net income (loss) attributable to Masonite adjusted to exclude the following items: • depreciation; • amortization; • share based compensation expense; • loss (gain) on disposal of property, plant and equipment; • registration and listing fees; • restructuring costs; • asset impairment; • loss (gain) on disposal of subsidiaries; • interest expense (income), net; • loss on extinguishment of debt; • other expense (income), net; • income tax expense (benefit); • loss (income) from discontinued operations, net of tax; and • net income (loss) attributable to non-controlling interest. This definition of Adjusted EBITDA differs from the definitions of EBITDA contained in the indentures governing the 2028 Notes and 2026 Notes and the credit agreement governing the ABL Facility. Although Adjusted EBITDA is not a measure of financial condition or performance determined in accordance with GAAP, it is used to evaluate and compare the operating performance of the segments and it is one of the primary measures used to determine employee incentive compensation. Intersegment sales are recorded using market prices. Certain information with respect to segments is as follows for the periods indicated: Three Months Ended March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total Net sales $ 384,445 $ 71,156 $ 94,555 $ 5,427 $ 555,583 Intersegment sales (588) (430) (3,337) — (4,355) Net sales to external customers $ 383,857 $ 70,726 $ 91,218 $ 5,427 $ 551,228 Adjusted EBITDA $ 71,696 $ 9,679 $ 10,582 $ (10,440) $ 81,517 Three Months Ended March 31, 2019 (In thousands) North American Residential Europe Architectural Corporate & Other Total Net sales $ 354,802 $ 84,739 $ 88,353 $ 6,728 $ 534,622 Intersegment sales (1,077) (472) (2,762) — (4,311) Net sales to external customers $ 353,725 $ 84,267 $ 85,591 $ 6,728 $ 530,311 Adjusted EBITDA $ 53,621 $ 9,997 $ 7,614 $ (5,753) $ 65,479 A reconciliation of our net income (loss) attributable to Masonite to consolidated Adjusted EBITDA is set forth as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Net income attributable to Masonite $ 29,885 $ 3,789 Plus: Depreciation 16,018 18,285 Amortization 6,459 7,597 Share based compensation expense 3,470 2,680 Loss on disposal of property, plant and equipment 1,622 2,913 Restructuring costs 1,941 3,740 Asset impairment — 10,625 Loss on disposal of subsidiaries — 4,605 Interest expense, net 11,282 11,127 Other expense (income), net 49 (1,130) Income tax expense 9,639 58 Net income attributable to non-controlling interest 1,152 1,190 Adjusted EBITDA $ 81,517 $ 65,479 |
Other Comprehensive Income and
Other Comprehensive Income and Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 29, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss) A rollforward of the components of accumulated other comprehensive loss is as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Accumulated foreign currency translation losses, beginning of period $ (113,336) $ (129,930) Foreign currency translation gain (loss) (38,687) 12,990 Income tax benefit (expense) on foreign currency translation gain (44) 12 Cumulative translation adjustment recognized upon deconsolidation of subsidiary — 1,001 Less: foreign currency translation gain (loss) attributable to non-controlling interest (579) 216 Accumulated foreign currency translation losses, end of period (151,488) (116,143) Accumulated pension and other post-retirement adjustments, beginning of period (16,833) (22,989) Amortization of actuarial net losses 173 404 Income tax expense on amortization of actuarial net losses (45) (105) Accumulated pension and other post-retirement adjustments (16,705) (22,690) Accumulated other comprehensive loss $ (168,193) $ (138,833) Other comprehensive income (loss), net of tax $ (38,603) $ 14,302 Less: other comprehensive income (loss) attributable to non-controlling interest (579) 216 Other comprehensive income (loss) attributable to Masonite $ (38,024) $ 14,086 Cumulative translation adjustments are reclassified out of accumulated other comprehensive loss into loss on disposal of subsidiaries in the condensed consolidated statements of comprehensive income. Actuarial net losses are reclassified out of accumulated other comprehensive loss into cost of goods sold in the condensed consolidated statements of comprehensive income. Foreign currency translation losses as a result of translating our foreign assets and liabilities into U.S. dollars during the three months ended March 29, 2020, were $38.7 million primarily driven by the weakening of the Pound Sterling, the Canadian Dollar and the Mexican Peso in comparison to the U.S. Dollar. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 29, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Certain cash and non-cash transactions were as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Transactions involving cash: Interest paid $ 22,662 $ 23,785 Interest received 641 672 Income taxes paid 3,030 1,308 Income tax refunds 392 — Cash paid for operating lease liabilities 6,835 6,290 Cash paid for finance lease liabilities 317 — Non-cash transactions from operating activities: Right-of-use assets acquired under operating leases 3,863 20,289 The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated: March 29, 2020 December 29, 2019 Cash and cash equivalents $ 114,375 $ 166,964 Restricted cash 10,644 10,644 Total cash, cash equivalents and restricted cash $ 125,019 $ 177,608 Property, plant and equipment additions in accounts payable were $4.6 million and $6.3 million as of March 29, 2020, and December 29, 2019, respectively. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short-term maturity of those instruments. The estimated fair values and carrying values of our long-term debt instruments were as follows for the periods indicated: March 29, 2020 December 29, 2019 (In thousands) Fair Value Carrying Value Fair Value Carrying Value 5.375% senior unsecured notes due 2028 $ 487,668 $ 493,835 $ 529,105 $ 493,648 5.750% senior unsecured notes due 2026 $ 293,249 $ 296,503 318,846 296,367 These estimates are based on market quotes and calculations based on current market rates available to us and are categorized as having Level 2 valuation inputs as established by the FASB's Fair Value Framework. Market quotes used in these calculations are based on bid prices for our debt instruments and are obtained from and corroborated with multiple independent sources. The market quotes obtained from independent sources are within the range of management's expectations. |
Business Overview and Signifi_2
Business Overview and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 29, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | Adoption of Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”, which replaced the incurred loss methodology for recognizing credit losses with a current expected credit losses model. This standard applied to most financial assets, including trade receivables. Our prior accounts receivable policy is described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. We have adopted the new guidance using a modified retrospective approach as of December 30, 2019, the beginning of fiscal year 2020, and the adoption did not have a material impact on our financial statements and no adjustment was necessary to retained earnings on December 30, 2019. The adoption of the standard resulted in a change in accounting policy for accounts receivable. Our new accounting policy for accounts receivable is presented below. Accounts Receivable We record accounts receivable as our products are received by our customers. Our customers are primarily retailers, distributors and contractors. We record an allowance for credit losses at the time that accounts receivable are initially recorded based on our historical write-off experience and the current economic environment as well as our expectations of future economic conditions. We reassess the allowance at each reporting date. When it becomes apparent, based on age or customer circumstances, that such amounts will not be collected, they are charged to the allowance. Payments subsequently received are credited to the credit loss expense account included within selling, general and administration expenses in the consolidated statements of comprehensive income. Generally, we do not require collateral for our accounts receivable. Other Recent Accounting Pronouncements not yet Adopted In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating this guidance to determine the impact it may have on our financial statements. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The amounts of inventory on hand were as follows as of the dates indicated: (In thousands) March 29, 2020 December 29, 2019 Raw materials $ 175,775 $ 179,155 Finished goods 72,693 70,211 Provision for obsolete or aged inventory (7,493) (7,136) Inventories, net $ 240,975 $ 242,230 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Expenses | The details of our accrued expenses were as follows as of the dates indicated: (In thousands) March 29, 2020 December 29, 2019 Accrued payroll $ 43,864 $ 60,876 Accrued rebates 30,971 33,556 Current portion of operating lease liabilities 21,559 20,980 Accrued interest 5,420 16,913 Other accruals 43,528 48,080 Total accrued expenses $ 145,342 $ 180,405 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | (In thousands) March 29, 2020 December 29, 2019 5.375% senior unsecured notes due 2028 $ 500,000 $ 500,000 5.750% senior unsecured notes due 2026 300,000 300,000 Debt issuance costs (9,662) (9,985) Other long-term debt 852 969 Total long-term debt $ 791,190 $ 790,984 |
Share Based Compensation Plans
Share Based Compensation Plans (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock appreciation rights award activity | Three Months Ended March 29, 2020 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 404,447 $ 7,615 $ 53.62 4.7 Granted 29,522 87.18 Exercised (44,850) 2,155 31.82 Forfeited (4,613) 57.52 Outstanding, end of period 384,506 $ 986 $ 58.70 5.2 Exercisable, end of period 241,134 $ 986 $ 55.14 3.3 |
Schedule of Share-based Compensation, Stock Appreciation Rights, Valuation Assumptions | The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated: 2020 Grants SAR value (model conclusion) $ 21.51 Risk-free rate 1.3 % Expected dividend yield 0.0 % Expected volatility 22.4 % Expected term (years) 6.0 |
Restricted stock units award activity | Three Months Ended March 29, 2020 Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 523,207 $ 59.58 Granted 177,866 81.91 Performance adjustment (1) (59,936) 67.50 Delivered (79,449) Withheld to cover (2) (8,235) Forfeited (17,572) Outstanding, end of period 535,881 $ 65.46 ____________ (1) Performance-based RSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These awards are settled with payouts ranging from zero to 200% of the target award value depending on achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target. (2) A portion of the vested RSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Restructuring and Related Activities [Abstract] | |
Total restructuring costs by plan | The following table summarizes the restructuring charges recorded for the periods indicated: Three Months Ended March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 728 $ (37) $ 862 $ 267 $ 1,820 2018 Plan 121 — — — 121 Total Restructuring Costs $ 849 $ (37) $ 862 $ 267 $ 1,941 Three Months Ended March 31, 2019 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 1,459 $ 331 $ 604 $ 394 $ 2,788 2018 Plan 421 531 — — 952 Total Restructuring Costs $ 1,880 $ 862 $ 604 $ 394 $ 3,740 Cumulative Amount Incurred Through March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2019 Plan $ 6,187 $ 359 $ 1,368 $ 1,286 $ 9,200 2018 Plan 1,866 2,275 — — 4,141 Total Restructuring Costs $ 8,053 $ 2,634 $ 1,368 $ 1,286 $ 13,341 |
Schedule of restructuring reserve by type of cost | The changes in the accrual for restructuring by activity were as follows for the periods indicated: (In thousands) December 29, 2019 Severance Closure Costs Cash Payments March 29, 2020 2019 Plan $ 1,535 $ 187 $ 1,633 $ (2,769) $ 586 2018 Plan — 103 18 (121) — Total $ 1,535 $ 290 $ 1,651 $ (2,890) $ 586 (In thousands) December 30, 2018 Severance Closure Costs Cash Payments March 31, 2019 2019 Plan $ — $ 2,770 $ 18 $ (1,035) $ 1,753 2018 Plan 596 983 (31) (546) 1,002 Other 58 — — (17) 41 Total $ 654 $ 3,753 $ (13) $ (1,598) $ 2,796 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | (In thousands, except share and per share information) Three Months Ended March 29, 2020 March 31, 2019 Net income attributable to Masonite $ 29,885 $ 3,789 Shares used in computing basic earnings per share 24,861,442 25,574,910 Effect of dilutive securities: Incremental shares issuable under share compensation plans 353,322 376,574 Shares used in computing diluted earnings per share 25,214,764 25,951,484 Basic earnings per common share attributable to Masonite $ 1.20 $ 0.15 Diluted earnings per common share attributable to Masonite $ 1.19 $ 0.15 Anti-dilutive instruments excluded from diluted earnings per common share 258,773 235,650 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Certain information with respect to segments is as follows for the periods indicated: Three Months Ended March 29, 2020 (In thousands) North American Residential Europe Architectural Corporate & Other Total Net sales $ 384,445 $ 71,156 $ 94,555 $ 5,427 $ 555,583 Intersegment sales (588) (430) (3,337) — (4,355) Net sales to external customers $ 383,857 $ 70,726 $ 91,218 $ 5,427 $ 551,228 Adjusted EBITDA $ 71,696 $ 9,679 $ 10,582 $ (10,440) $ 81,517 Three Months Ended March 31, 2019 (In thousands) North American Residential Europe Architectural Corporate & Other Total Net sales $ 354,802 $ 84,739 $ 88,353 $ 6,728 $ 534,622 Intersegment sales (1,077) (472) (2,762) — (4,311) Net sales to external customers $ 353,725 $ 84,267 $ 85,591 $ 6,728 $ 530,311 Adjusted EBITDA $ 53,621 $ 9,997 $ 7,614 $ (5,753) $ 65,479 |
Reconciliation of consolidated Adjusted EBITDA to net income (loss) attributable to Masonite | A reconciliation of our net income (loss) attributable to Masonite to consolidated Adjusted EBITDA is set forth as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Net income attributable to Masonite $ 29,885 $ 3,789 Plus: Depreciation 16,018 18,285 Amortization 6,459 7,597 Share based compensation expense 3,470 2,680 Loss on disposal of property, plant and equipment 1,622 2,913 Restructuring costs 1,941 3,740 Asset impairment — 10,625 Loss on disposal of subsidiaries — 4,605 Interest expense, net 11,282 11,127 Other expense (income), net 49 (1,130) Income tax expense 9,639 58 Net income attributable to non-controlling interest 1,152 1,190 Adjusted EBITDA $ 81,517 $ 65,479 |
Other Comprehensive Income an_2
Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive income (loss) | A rollforward of the components of accumulated other comprehensive loss is as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Accumulated foreign currency translation losses, beginning of period $ (113,336) $ (129,930) Foreign currency translation gain (loss) (38,687) 12,990 Income tax benefit (expense) on foreign currency translation gain (44) 12 Cumulative translation adjustment recognized upon deconsolidation of subsidiary — 1,001 Less: foreign currency translation gain (loss) attributable to non-controlling interest (579) 216 Accumulated foreign currency translation losses, end of period (151,488) (116,143) Accumulated pension and other post-retirement adjustments, beginning of period (16,833) (22,989) Amortization of actuarial net losses 173 404 Income tax expense on amortization of actuarial net losses (45) (105) Accumulated pension and other post-retirement adjustments (16,705) (22,690) Accumulated other comprehensive loss $ (168,193) $ (138,833) Other comprehensive income (loss), net of tax $ (38,603) $ 14,302 Less: other comprehensive income (loss) attributable to non-controlling interest (579) 216 Other comprehensive income (loss) attributable to Masonite $ (38,024) $ 14,086 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash and non-cash transactions | Certain cash and non-cash transactions were as follows for the periods indicated: Three Months Ended (In thousands) March 29, 2020 March 31, 2019 Transactions involving cash: Interest paid $ 22,662 $ 23,785 Interest received 641 672 Income taxes paid 3,030 1,308 Income tax refunds 392 — Cash paid for operating lease liabilities 6,835 6,290 Cash paid for finance lease liabilities 317 — Non-cash transactions from operating activities: Right-of-use assets acquired under operating leases 3,863 20,289 |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated: March 29, 2020 December 29, 2019 Cash and cash equivalents $ 114,375 $ 166,964 Restricted cash 10,644 10,644 Total cash, cash equivalents and restricted cash $ 125,019 $ 177,608 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 29, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short-term maturity of those instruments. The estimated fair values and carrying values of our long-term debt instruments were as follows for the periods indicated: March 29, 2020 December 29, 2019 (In thousands) Fair Value Carrying Value Fair Value Carrying Value 5.375% senior unsecured notes due 2028 $ 487,668 $ 493,835 $ 529,105 $ 493,648 5.750% senior unsecured notes due 2026 $ 293,249 $ 296,503 318,846 296,367 |
Business Overview and Signifi_3
Business Overview and Significant Accounting Policies (Details) | Mar. 29, 2020facilityCountry |
Accounting Policies [Abstract] | |
Number of manufacturing locations | facility | 63 |
Number of countries | Country | 8 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Narrative) (Details) - USD ($) $ in Thousands | Dec. 13, 2019 | Aug. 29, 2019 | Mar. 29, 2020 | Dec. 29, 2019 | Mar. 31, 2019 | Mar. 21, 2019 |
Business Acquisition [Line Items] | ||||||
Cash consideration, net of cash acquired | $ 0 | $ 219 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal of subsidiaries | $ 0 | (4,605) | ||||
Window Widgets | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Consideration, net of cash disposed | $ 1,200 | |||||
Loss on disposal of subsidiaries | $ 9,700 | |||||
Net assets | $ 8,300 | |||||
Cumulative translation adjustment | $ 1,400 | |||||
Performance Doorset Solutions | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal of subsidiaries | 4,600 | |||||
Net assets | $ 3,600 | |||||
Cumulative translation adjustment | $ 1,000 | |||||
Top Doors | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration, net of cash acquired | $ 1,800 | |||||
Goodwill acquired during period | $ 1,100 |
Accounts Receivable (Details)
Accounts Receivable (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 29, 2020USD ($)Customer | Dec. 29, 2019USD ($)Customer | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ | $ 2.2 | $ 1.8 |
Accounts Receivable | Customer Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk, customers | Customer | 10 | 10 |
Concentration risk, percent | 53.70% | 44.90% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 175,775 | $ 179,155 |
Finished goods | 72,693 | 70,211 |
Provision for obsolete or aged inventory | (7,493) | (7,136) |
Inventories, net | $ 240,975 | $ 242,230 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Accrued Expenses [Abstract] | ||
Accrued payroll | $ 43,864 | $ 60,876 |
Accrued rebates | 30,971 | 33,556 |
Current portion of operating lease liabilities | 21,559 | 20,980 |
Accrued interest | 5,420 | 16,913 |
Other accruals | 43,528 | 48,080 |
Total accrued expenses | $ 145,342 | $ 180,405 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Debt Instrument [Line Items] | ||
Other long-term debt | $ 852 | $ 969 |
Total long-term debt | 791,190 | 790,984 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | (9,662) | (9,985) |
Debt Issuance Costs, Net | 9,662 | 9,985 |
Senior Notes | Senior Notes Due 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 300,000 | 300,000 |
Senior Notes | Senior Notes Due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500,000 | $ 500,000 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | Aug. 10, 2019 | Mar. 29, 2020 | Mar. 31, 2019 | Jul. 25, 2019 | Jan. 31, 2019 | Aug. 27, 2018 |
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Interest expense | $ 11,300,000 | $ 11,300,000 | ||||
Senior Notes | Senior Notes Due 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal | $ 500,000,000 | |||||
Interest rate stated percentage | 5.375% | |||||
Senior Notes | Senior Notes Due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal | $ 300,000,000 | |||||
Interest rate stated percentage | 5.75% | |||||
Senior Notes | Senior Notes Due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of debt | $ 500,000,000 | |||||
Revolving Credit Facility | ABL Facility 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000,000 | |||||
Revolving credit facility availability | $ 185,300,000 | |||||
Revolving credit facilities | $ 0 | |||||
Minimum | Revolving Credit Facility | ABL Facility 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Unutilized commitment fee percentage | 0.25% | |||||
Minimum | Revolving Credit Facility | ABL Facility 2024 | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.25% | |||||
Minimum | Revolving Credit Facility | ABL Facility 2024 | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.25% | |||||
Maximum | Revolving Credit Facility | ABL Facility 2024 | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 0.50% | |||||
Maximum | Revolving Credit Facility | ABL Facility 2024 | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.50% |
Share Based Compensation Plan_2
Share Based Compensation Plans Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Jul. 12, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 3,470 | $ 2,680 | |
Share based compensation unrecognized | $ 24,500 | ||
Weighted average remaining requisite service period | 1 year 10 months 24 days | ||
Deferred compensation liability | $ 5,100 | ||
Deferred compensation asset | $ 4,900 | ||
2012 Plan | Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity awards not to exceed | 2,000,000 | ||
Common stock available for future issuance | 675,354 | ||
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Plan term | 10 years | ||
Award vesting period | 3 years | ||
Vested, fair value | $ 900 | $ 1,100 | |
Average requisite service period | 2 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Average requisite service period | 2 years 6 months | ||
Units vested | 87,684 | ||
Fair value of shares vested | $ 5,600 | ||
Service Requirement | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 65.00% | ||
Service and Performance Requirements | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 35.00% |
Share Based Compensation Plan_3
Share Based Compensation Plans (SARs) (Details) - Stock Appreciation Rights (SARs) - USD ($) $ / shares in Units, $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 | Mar. 29, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning of period, shares | 404,447 | ||
Granted, shares | 29,522 | ||
Exercised, shares | (44,850) | ||
Forfeited, shares | 4,613 | ||
Outstanding, end of period, shares | 384,506 | 404,447 | 384,506 |
Exercisable, shares | 241,134 | 241,134 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value & Average Remaining Contractual Life [Abstract] | |||
Outstanding, beginning of period, aggregate intrinsic value | $ 7,615 | ||
Exercised, aggregate intrinsic value | 2,155 | ||
Outstanding, end period, aggregate intrinsic value | $ 986 | $ 7,615 | 986 |
Exercisable, aggregate intrinsic value | $ 986 | $ 986 | |
Outstanding, beginning of period, weighted average remaining contractual term | 5 years 2 months 12 days | 4 years 8 months 12 days | |
Outstanding, end of period, weighted average remaining contractual term | 5 years 2 months 12 days | 4 years 8 months 12 days | |
Exercisable, weighted average remaining contractual term | 3 years 3 months 18 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding, beginning of period, weighted average exercise price | $ 53.62 | ||
Granted, weighted average exercise price | 87.18 | ||
Exercised, weighted average exercise price | 31.82 | ||
Forfeited, weighted average exercise price | 57.52 | ||
Outstanding, end of period, weighted average exercise price | $ 58.70 | $ 53.62 | 58.70 |
Exercisable, weighted average exercise price | $ 55.14 | $ 55.14 |
Share Based Compensation Plan_4
Share Based Compensation Plans (Weighted Average Grant Date Assumptions) (Details) - Stock Appreciation Rights (SARs) | 3 Months Ended |
Mar. 29, 2020$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
SAR Value (model conclusion) | $ 21.51 |
Risk-free rate | 1.30% |
Expected dividend yield | 0.00% |
Expected volatility | 22.40% |
Expected term (years) | 6 years |
Share Based Compensation Plan_5
Share Based Compensation Plans (RSUs) (Details) | 3 Months Ended |
Mar. 29, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award Equity Instruments Other Than Options Vested and Undelivered Performance adjustment Weighted Average Grant Date Fair Value | $ / shares | $ 67.50 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding, beginning of period (shares) | 523,207 |
Granted (shares) | 177,866 |
Performance adjustment (shares) | 59,936 |
Delivered (shares) | (79,449) |
Withheld to cover (shares) | (8,235) |
Forfeited (shares) | (17,572) |
Outstanding, end of period (shares) | 535,881 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding, beginning of period (weighted average grant date fair value) | $ / shares | $ 59.58 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 81.91 |
Outstanding, end of period (weighted average grant date fair value) | $ / shares | $ 65.46 |
Restructuring Costs (Restructur
Restructuring Costs (Restructuring Costs by Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | Dec. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 1,941 | $ 3,740 | ||
Cumulative amount incurred to date | 13,341 | |||
Restructuring Reserve | 586 | 2,796 | $ 1,535 | $ 654 |
Payments for Restructuring | 2,890 | 1,598 | ||
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 290 | 3,753 | ||
Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1,651 | (13) | ||
2019 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1,820 | 2,788 | ||
Cumulative amount incurred to date | 9,200 | |||
Restructuring Reserve | 586 | 1,753 | 1,535 | 0 |
Payments for Restructuring | 2,769 | 1,035 | ||
2019 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 187 | 2,770 | ||
2019 Plan | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1,633 | 18 | ||
2019 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 728 | 1,459 | ||
2019 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | (37) | 331 | ||
2019 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 862 | 604 | ||
2019 Plan | Corporate & Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 267 | 394 | ||
2018 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 121 | 952 | ||
Cumulative amount incurred to date | 4,141 | |||
Restructuring Reserve | 0 | 1,002 | $ 0 | 596 |
Payments for Restructuring | 121 | 546 | ||
2018 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 103 | 983 | ||
2018 Plan | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 18 | (31) | ||
2018 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 121 | 421 | ||
2018 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 531 | ||
2018 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 0 | ||
2018 Plan | Corporate & Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 0 | ||
Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | 41 | $ 58 | ||
Payments for Restructuring | 17 | |||
Other | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | |||
Other | Facility Closing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | |||
Operating Segments | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 849 | 1,880 | ||
Cumulative amount incurred to date | 8,053 | |||
Operating Segments | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | (37) | 862 | ||
Cumulative amount incurred to date | 2,634 | |||
Operating Segments | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 862 | 604 | ||
Cumulative amount incurred to date | 1,368 | |||
Operating Segments | Corporate & Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 267 | $ 394 | ||
Cumulative amount incurred to date | 1,286 | |||
Operating Segments | 2019 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 6,187 | |||
Operating Segments | 2019 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 359 | |||
Operating Segments | 2019 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 1,368 | |||
Operating Segments | 2019 Plan | Corporate & Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 1,286 | |||
Operating Segments | 2018 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 1,866 | |||
Operating Segments | 2018 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 2,275 | |||
Operating Segments | 2018 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | 0 | |||
Operating Segments | 2018 Plan | Corporate & Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date | $ 0 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 1,535 | $ 654 |
Restructuring charges | 1,941 | 3,740 |
Cash payments | (2,890) | (1,598) |
Restructuring reserve, ending balance | 586 | 2,796 |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 290 | 3,753 |
Facility Closing | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 1,651 | (13) |
2019 Plan | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 1,535 | 0 |
Restructuring charges | 1,820 | 2,788 |
Cash payments | (2,769) | (1,035) |
Restructuring reserve, ending balance | 586 | 1,753 |
2019 Plan | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 187 | 2,770 |
2019 Plan | Facility Closing | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 1,633 | 18 |
2018 Plan | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 0 | 596 |
Restructuring charges | 121 | 952 |
Cash payments | (121) | (546) |
Restructuring reserve, ending balance | 0 | 1,002 |
2018 Plan | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 103 | 983 |
2018 Plan | Facility Closing | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 18 | (31) |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 58 | |
Cash payments | (17) | |
Restructuring reserve, ending balance | 41 | |
Other | Severance | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | 0 | |
Other | Facility Closing | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 0 | |
Minimum | 2019 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost Remaining | 5,000 | |
Maximum | 2019 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Expected Cost Remaining | $ 6,000 |
Asset Impairment (Details)
Asset Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset impairment | $ 0 | $ 10,625 |
Book value of asset group | 21,900 | |
Level 3 | Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of asset group based on estimated discounted future cash flows, including salvage values or market values | $ 11,300 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Canadian federal statutory rate | 26.70% | |
Income tax benefit due to the exercise and delivery of share-based awards | $ 0.7 | $ 0.1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income attributable to Masonite | $ 29,885 | $ 3,789 |
Shares used in computing basic earnings per share | 24,861,442 | 25,574,910 |
Effect of dilutive securities: | ||
Incremental shares issuable under share compensation plans | 353,322 | 376,574 |
Shares used in computing diluted earnings per share | 25,214,764 | 25,951,484 |
Basic earnings per common share attributable to Masonite (in dollars per share) | $ 1.20 | $ 0.15 |
Diluted earnings per common share attributable to Masonite (in dollars per share) | $ 1.19 | $ 0.15 |
Stock Appreciation Rights (SARs) | ||
Effect of dilutive securities: | ||
Anti-dilutive instruments excluded from diluted earnings per common share | 258,773 | 235,650 |
Segment Information (Geographic
Segment Information (Geographic Segments Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 551,228 | $ 530,311 |
Adjusted EBITDA | 81,517 | 65,479 |
Operating Segments | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 555,583 | 534,622 |
Intersegment Eliminations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | (4,355) | (4,311) |
North American Residential | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 383,857 | 353,725 |
Adjusted EBITDA | 71,696 | 53,621 |
North American Residential | Operating Segments | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 384,445 | 354,802 |
North American Residential | Intersegment Eliminations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | (588) | (1,077) |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 70,726 | 84,267 |
Adjusted EBITDA | 9,679 | 9,997 |
Europe | Operating Segments | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 71,156 | 84,739 |
Europe | Intersegment Eliminations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | (430) | (472) |
Architectural | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 91,218 | 85,591 |
Adjusted EBITDA | 10,582 | 7,614 |
Architectural | Operating Segments | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 94,555 | 88,353 |
Architectural | Intersegment Eliminations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | (3,337) | (2,762) |
Corporate & Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 5,427 | 6,728 |
Adjusted EBITDA | (10,440) | (5,753) |
Corporate & Other | Operating Segments | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 5,427 | 6,728 |
Corporate & Other | Intersegment Eliminations | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 0 | $ 0 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Consolidated Adjusted EBITDA to Net Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | |
Segment Reporting [Abstract] | ||
Adjusted EBITDA | $ 81,517 | $ 65,479 |
Depreciation | 16,018 | 18,285 |
Amortization | 6,459 | 7,597 |
Share based compensation expense | 3,470 | 2,680 |
Loss on disposal of property, plant and equipment | 1,622 | 2,913 |
Restructuring costs | 1,941 | 3,740 |
Asset impairment | 0 | 10,625 |
Loss on disposal of subsidiaries | 0 | 4,605 |
Interest expense, net | 11,282 | 11,127 |
Other expense (income), net | 49 | (1,130) |
Income tax expense | 9,639 | 58 |
Net income attributable to non-controlling interest | 1,152 | 1,190 |
Net income attributable to Masonite | $ 29,885 | $ 3,789 |
Other Comprehensive Income an_3
Other Comprehensive Income and Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Accumulated Foreign Currency Translation Gains (Losses) [Roll Forward] | |||
Accumulated foreign currency translation gains (losses), beginning of period | $ (113,336) | $ (129,930) | |
Foreign currency translation gain (loss) | (38,687) | 12,990 | |
Income tax benefit (expense) on foreign currency translation gain (loss) | (44) | 12 | |
Cumulative translation adjustment recognized upon deconsolidation of subsidiary | 0 | (1,001) | |
Less: foreign currency translation gain (loss) attributable to non-controlling interest | (579) | 216 | |
Accumulated foreign currency translation gains (losses), end of period | (151,488) | (116,143) | |
Accumulated Amortization of Actuarial Net Losses [Roll Forward] | |||
Accumulated pension and other post-retirement adjustments, beginning of period | (16,833) | (22,989) | |
Amortization of actuarial net losses | 173 | 404 | |
Income tax expense on amortization of actuarial net losses | (45) | (105) | |
Accumulated pension and other post-retirement adjustments | (16,705) | (22,690) | |
Accumulated other comprehensive loss | (168,193) | (138,833) | $ (130,169) |
Other comprehensive income (loss), net of tax | (38,603) | 14,302 | |
Less: other comprehensive income (loss) attributable to non-controlling interest | (579) | 216 | |
Other comprehensive income (loss) attributable to Masonite | (38,024) | 14,086 | |
Foreign currency translation gain (loss) | $ (38,687) | $ 13,991 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2020 | Mar. 31, 2019 | Dec. 29, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |||
Property, Plant and Equipment, Additions | $ 4,600 | $ 6,300 | |
Transactions involving cash: | |||
Interest paid | 22,662 | $ 23,785 | |
Interest received | 641 | 672 | |
Income taxes paid | 3,030 | 1,308 | |
Income tax refunds | 392 | 0 | |
Cash paid for operating lease liabilities | 6,835 | 6,290 | |
Cash paid for finance lease liabilities | 317 | 0 | |
Non-cash transactions from operating activities: | |||
Right-of-use assets acquired in under operating leases | $ 3,863 | $ 20,289 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 | Mar. 31, 2019 | Dec. 30, 2018 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 114,375 | $ 166,964 | ||
Restricted cash | 10,644 | 10,644 | ||
Total cash, cash equivalents and restricted cash | $ 125,019 | $ 177,608 | $ 90,627 | $ 126,141 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Senior Notes - Fair Value, Inputs, Level 2 - USD ($) $ in Thousands | Mar. 29, 2020 | Dec. 29, 2019 |
Senior Notes Due 2028 | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | $ 487,668 | $ 529,105 |
Senior Notes Due 2028 | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | 493,835 | 493,648 |
Senior Notes Due 2026 | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | 293,249 | 318,846 |
Senior Notes Due 2026 | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | $ 296,503 | $ 296,367 |