MasterBrand Announces Q4 and Full Year 2024 Financial Results
MasterBrand, North America’s largest residential cabinet manufacturer, has released its financial results for the fourth quarter and full year 2024.
CEO’s Perspective
Dave Banyard, President and Chief Executive Officer, commented on the challenges faced during the holiday season, noting unexpected volume declines due to increased market volatility. This impacted the realization of prior price adjustments and constrained operational flexibility. Despite these headwinds, MasterBrand continued to advance its strategic initiatives, including the integration of Supreme and efforts to enhance its Tech Enabled operations.
Banyard emphasized the Company’s commitment to delivering strong financial returns and highlighted confidence in its business model and strategic investments, which position MasterBrand for long-term success.
Fourth Quarter 2024 Financial Performance
MasterBrand reported net sales of $667.7 million, reflecting a 1% decline compared to Q4 2023. This decline was driven by a 6% drop in volume and a 4% reduction in net average selling price (ASP). However, these were partially offset by a 9% growth contribution from the Supreme acquisition.
Gross profit for the quarter stood at $203.3 million, down from $223.1 million in the previous year. The gross profit margin contracted by 250 basis points to 30.4%, impacted by lower ASP and volumes, as well as increased depreciation and the absence of $4.2 million in discrete benefits realized in Q4 2023. The Supreme acquisition, variable compensation adjustments, and cost-saving initiatives helped mitigate some of these pressures.
Net income fell to $14.0 million from $36.1 million in Q4 2023, reflecting the effects of margin contraction, acquisition-related costs, higher interest expenses, and increased depreciation. A gain on asset sales and lower income taxes provided some offset. The net income margin declined to 2.1% from 5.3%.
Adjusted EBITDA1 was $74.6 million, compared to $85.8 million in Q4 2023. The adjusted EBITDA margin declined 150 basis points to 11.2%, reflecting the lower gross profit margin.
Earnings per share (EPS) for Q4 2024 was $0.11, down from $0.28 in Q4 2023. Adjusted diluted EPS1 was $0.21, compared to $0.35 in Q4 2023.
Full Year 2024 Financial Performance
For the full year, MasterBrand reported net sales of $2.7 billion, a 1% decrease from 2023. The decline was driven by a 4% reduction in net ASP and a 1% drop in volume, partially offset by a 4% sales increase from the Supreme acquisition.
Gross profit for the year was $877.0 million, compared to $901.4 million in 2023. The gross profit margin decreased by 60 basis points to 32.5%, primarily due to a softer market environment. Cost-saving measures and lower variable compensation partially mitigated the decline.
Net income was $125.9 million, down from $182.0 million in 2023. The decline resulted from lower gross profit, acquisition-related costs, restructuring charges, higher interest expenses, and increased strategic investments. However, savings from continuous improvement efforts and contributions from Supreme helped offset some of these costs. The net income margin fell to 4.7% from 6.7%.
Adjusted EBITDA1 was $363.6 million, compared to $383.4 million in 2023. The adjusted EBITDA margin declined 60 basis points to 13.5%.
Diluted EPS was $0.96, compared to $1.40 in 2023. Adjusted diluted EPS1 was $1.37, down from $1.58 in 2023.
Balance Sheet, Cash Flow, and Capital Allocation
As of December 29, 2024, MasterBrand had $120.6 million in cash and $405.4 million in available credit. Total debt stood at $1.007 billion, with a net debt1 of $887.2 million. The net debt to adjusted EBITDA1 ratio was 2.4x.
Operating cash flow for 2024 was $292.0 million, compared to $405.6 million in 2023. The decline was largely due to prior-year benefits from a strategic inventory build release. Free cash flow1 for 2024 was $211.1 million, down from $348.3 million in 2023.
MasterBrand repurchased approximately 371,000 shares of common stock for $6.5 million during 2024 but did not repurchase shares in the fourth quarter.
2025 Financial Outlook
For 2025, MasterBrand expects:
- A mid-single-digit percentage increase in net sales
- Flat organic net sales
- Mid-single-digit percentage sales growth from acquisitions
- Adjusted EBITDA1,2 between $380 million and $410 million, with a margin of 13.5% to 14.3%
- Adjusted diluted EPS1,2 between $1.40 and $1.57
The Company anticipates outperforming market demand, which is expected to decline slightly year-over-year. Contributions from new products, channel-specific offerings, and price actions are expected to drive growth.
MasterBrand’s guidance does not account for potential new tariffs beyond those already in effect. The Company acknowledges the uncertainty surrounding tariff implementation and its potential impact on costs and demand. If significant changes occur, the Company will update its outlook accordingly.
Andi Simon, Executive Vice President and Chief Financial Officer, emphasized that the 2025 outlook reflects the Company’s strategic focus on growth, disciplined investment, and cost efficiency. MasterBrand aims to enhance financial performance while maintaining progress toward long-term targets.
Conference Call and Webcast Information
MasterBrand will host a live conference call and webcast at 4:30 p.m. ET on February 18, 2025, to discuss its financial results and business outlook. Investors can access the call via telephone at (877) 407-4019 (U.S.) or (201) 689-8337 (international). A live webcast will be available on the “Investors” section of the MasterBrand website (www.masterbrand.com).
A replay will be accessible one hour after the call and will be available until March 3, 2025. The replay can be accessed by dialing (877) 660-6853 (U.S.) or (201) 612-7415 (international) with the passcode 13751055. An archived version of the webcast will also be available on the Company’s website.
Non-GAAP Financial Measures
MasterBrand has included non-GAAP financial measures in this release to enhance understanding of its financial performance. These measures, including adjusted EBITDA, adjusted net income, adjusted EPS, and free cash flow, provide insight into the Company’s core operations. Detailed reconciliations to the most comparable GAAP measures can be found in the financial statement section of this release.
MasterBrand does not provide reconciliations for forward-looking non-GAAP measures due to the inherent difficulty in forecasting certain expenses. The Company estimates these measures based on historical definitions and assumptions.
This earnings release provides a comprehensive overview of MasterBrand’s financial performance and outlook. Despite market challenges, the Company remains focused on executing its strategic initiatives and positioning itself for long-term success. Through disciplined capital allocation, cost efficiency, and investment in high-growth areas, MasterBrand is well-positioned to navigate economic fluctuations while maintaining profitability and delivering value to shareholders.
