MasterBrand (MBC) Q4 2024 earnings summary

Executive summary

• Fourth quarter net sales were $668 million, down 1% year-over-year, with softness in repair and remodel and a 6% volume decline in legacy business; full year net sales reached $2.7 billion, down 1%.

• Supreme Cabinetry Brands acquisition contributed 9% to Q4 and 4% to full year net sales, partially offsetting volume and price declines.

• Adjusted EBITDA for Q4 was $75 million (margin 11.2%), down 150 bps year-over-year; full year Adjusted EBITDA was $363.6 million (margin 13.5%), down 60 bps.

• Net income for Q4 was $14 million, down from $36.1 million last year; full year net income was $125.9 million, down 31% year-over-year.

• Net income margin fell to 2.1% in Q4 and 4.7% for the year, reflecting lower gross profit, acquisition-related costs, and higher interest and depreciation.

Financial highlights

• Q4 gross profit was $203.3 million, down 9% year-over-year; gross margin fell from 32.9% to 30.4%.

• Adjusted diluted EPS for Q4 was $0.21 (vs. $0.35 prior year); full year adjusted diluted EPS was $1.37 (vs. $1.58 prior year).

• Net debt at year-end was $887.2 million; net debt-to-Adjusted EBITDA leverage ratio was 2.4x, down from 2.5x last quarter.

• Operating cash flow for 2024 was $292 million; capital expenditures were $80.9 million, up from $57.3 million last year.

• Free cash flow for 2024 was $211 million, in line with the goal of exceeding net income.

Outlook and guidance

• 2025 overall market demand expected to be down low single digits year-over-year, but net sales projected to rise mid-single digits due to Supreme acquisition and share gains.

• Adjusted EBITDA guidance for 2025 is $380–$410 million, with margins of 13.5%–14.3%.

• Adjusted diluted EPS for 2025 expected in the range of $1.40–$1.57.

• Capital expenditures planned at $85–$95 million, excluding $27 million for Supreme integration and footprint realignment.

• Free cash flow expected to exceed net income for 2025; leverage ratio to rise in Q1 but targeted below 2x by year-end.