MasterBrand (MBC) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $676.5 million, down 2.7% year-over-year, with softness in repair/remodel markets but growth in new construction.

• Net income for Q2 2024 was $45.3 million, down 11.5% year-over-year, impacted by lower sales, higher SG&A, and acquisition costs.

• Adjusted EBITDA margin increased 20 basis points year-over-year to 15.5%, and adjusted diluted EPS rose to $0.45 from $0.44.

• Acquisition of Supreme Cabinetry Brands for $520 million closed post-quarter, funded by new debt and cash, expected to drive synergies and enhance the premium portfolio.

• Operating cash flow for the first half of 2024 was $96.1 million, with free cash flow of $77.8 million, both down year-over-year.

Financial highlights

• Q2 2024 net sales: $676.5M (down 2.7% YoY); first half 2024 net sales: $1,314.6M (down 4.2% YoY).

• Adjusted EBITDA for Q2 was $105.1 million, margin 15.5%; adjusted net income for Q2 was $58.3 million, up from $57.0 million last year.

• Diluted EPS for Q2 2024: $0.35 (down from $0.39 YoY); adjusted diluted EPS: $0.45 (up from $0.44).

• Gross margin expanded to 34.1%–34.2%, up 10–50 basis points year-over-year.

• Free cash flow for the first half was $77.8 million, down from $182.6 million last year due to prior year inventory release.

Outlook and guidance

• Full-year 2024 organic net sales expected to be down low single digits; combined net sales (including Supreme) to increase low single digits.

• Adjusted EBITDA guidance raised to $385–$405 million, with margins of 14%–14.5%.

• Adjusted diluted EPS expected in the range of $1.50–$1.62.

• Capital expenditures for 2024 expected at $65–$75 million, including integration costs.

• Anticipates $28 million in annual run-rate cost synergies from Supreme Cabinetry Brands by year three.