Exhibit 99.1
MASONITE INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On July 31, 2015, we completed the sale of all of the capital stock of Premdor S.A.S. ("Premdor"), Masonite's French door business, to an investment fund managed by Perceva S.A.S., a Paris-based independent investment firm (the "Buyer"). Pursuant to a stock purchase agreement dated July 16, 2015, the Buyer acquired all of Masonite's French door manufacturing and distribution business for nominal consideration. Masonite will continue to sell door facings to Premdor and will provide certain transition services to the business after closing. The following unaudited pro forma condensed consolidated financial statements are presented to show the effects of the divestiture on our consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America.
The unaudited pro forma condensed consolidated balance sheet as of June 28, 2015, has been prepared as if the divestiture occurred on that date. The unaudited pro forma condensed consolidated statements of operations for the three and six months ended June 28, 2015, and June 29, 2014, and for the year ended December 28, 2014, have been prepared as if the divestiture occurred on December 30, 2013, the first day of fiscal year 2014.
The unaudited pro forma condensed consolidated financial statements are presented based on currently available information, are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had the divestiture been completed on the dates assumed. Furthermore, they are not necessarily indicative of our future results of operations or financial condition.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the accompanying notes to the unaudited pro forma condensed consolidated financial statements, (ii) the audited consolidated financial statements and notes thereto as of and for the year ended December 28, 2014, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K filed with the SEC on February 27, 2015, and (iii) the unaudited condensed consolidated financial statements and the notes thereto as of and for the three and six months ended June 28, 2015, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q.
MASONITE INTERNATIONAL CORPORATION
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 28, 2015
(In thousands of U.S. dollars, except share amounts)
ASSETS | Masonite Historical | Pro Forma Adjustments (1) | Masonite Pro Forma | |||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 136,305 | $ | 9,782 | $ | 126,523 | ||||||
Restricted cash | 17,045 | 3,866 | 13,179 | |||||||||
Accounts receivable, net | 247,145 | 888 | 246,257 | |||||||||
Inventories, net | 243,514 | 12,114 | 231,400 | |||||||||
Prepaid expenses | 26,554 | 4,540 | 22,014 | |||||||||
Income taxes receivable | 1,936 | 702 | 1,234 | |||||||||
Current deferred income taxes | 23,215 | — | 23,215 | |||||||||
Total current assets | 695,714 | 31,892 | 663,822 | |||||||||
Property, plant and equipment, net | 553,665 | 15,914 | 537,751 | |||||||||
Investment in equity investees | 7,982 | — | 7,982 | |||||||||
Goodwill | 99,217 | — | 99,217 | |||||||||
Intangible assets, net | 192,852 | 819 | 192,033 | |||||||||
Long-term deferred income taxes | 15,991 | — | 15,991 | |||||||||
Other assets, net | 17,205 | 233 | 16,972 | |||||||||
Total assets | $ | 1,582,626 | $ | 48,858 | $ | 1,533,768 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 106,686 | $ | 7,997 | $ | 98,689 | ||||||
Accrued expenses | 137,216 | 12,908 | 124,308 | |||||||||
Income taxes payable | 2,137 | — | 2,137 | |||||||||
Total current liabilities | 246,039 | 20,905 | 225,134 | |||||||||
Long-term debt | 468,173 | — | 468,173 | |||||||||
Long-term deferred income taxes | 118,887 | 3,230 | 115,657 | |||||||||
Other liabilities | 51,628 | 1,661 | 49,967 | |||||||||
Total liabilities | 884,727 | 25,796 | 858,931 | |||||||||
Commitments and contingencies | ||||||||||||
Equity: | ||||||||||||
Share capital: unlimited shares authorized, no par value, 30,143,534 shares issued and outstanding | 661,364 | — | 661,364 | |||||||||
Additional paid-in capital | 227,023 | — | 227,023 | |||||||||
Accumulated deficit | (5) | (115,127 | ) | 31,201 | (146,328 | ) | ||||||
Accumulated other comprehensive income (loss) | (101,359 | ) | (8,139 | ) | (93,220 | ) | ||||||
Total equity attributable to Masonite | 671,901 | 23,062 | 648,839 | |||||||||
Equity attributable to non-controlling interests | 25,998 | — | 25,998 | |||||||||
Total equity | 697,899 | 23,062 | 674,837 | |||||||||
Total liabilities and equity | $ | 1,582,626 | $ | 48,858 | $ | 1,533,768 |
See accompanying notes to the pro forma condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(In thousands of U.S. dollars, except per share amounts)
Three months ended June 28, 2015 | Three months ended June 29, 2014 | ||||||||||||||||||||||||
Masonite Historical | Pro Forma Adjustments (2) | Masonite Pro Forma | Masonite Historical | Pro Forma Adjustments (2) | Masonite Pro Forma | ||||||||||||||||||||
Net sales | $ | 476,428 | $ | 25,444 | $ | 450,984 | $ | 490,176 | $ | 34,701 | $ | 455,475 | |||||||||||||
Cost of goods sold | 381,394 | 21,916 | 359,478 | 411,569 | 30,626 | 380,943 | |||||||||||||||||||
Gross profit | 95,034 | 3,528 | 91,506 | 78,607 | 4,075 | 74,532 | |||||||||||||||||||
Selling, general and administration expenses | 58,818 | 3,671 | 55,147 | 58,519 | 4,740 | 53,779 | |||||||||||||||||||
Restructuring costs | 988 | 455 | 533 | 560 | — | 560 | |||||||||||||||||||
Operating income (loss) | 35,228 | (598 | ) | 35,826 | 19,528 | (665 | ) | 20,193 | |||||||||||||||||
Interest expense (income), net | (3 | ) | 6,787 | 316 | 6,471 | 10,594 | 799 | 9,795 | |||||||||||||||||
Other expense (income), net | (4 | ) | (635 | ) | 285 | (920 | ) | 1,306 | 510 | 796 | |||||||||||||||
Income (loss) from continuing operations before income tax expense (benefit) | 29,076 | (1,199 | ) | 30,275 | 7,628 | (1,974 | ) | 9,602 | |||||||||||||||||
Income tax expense (benefit) | 15,013 | 135 | 14,878 | 1,379 | (625 | ) | 2,004 | ||||||||||||||||||
Income (loss) from continuing operations | 14,063 | (1,334 | ) | 15,397 | 6,249 | (1,349 | ) | 7,598 | |||||||||||||||||
Less: net income (loss) attributable to non-controlling interest | 381 | — | 381 | 499 | — | 499 | |||||||||||||||||||
Income (loss) from continuing operations attributable to Masonite | $ | 13,682 | $ | (1,334 | ) | $ | 15,016 | $ | 5,750 | $ | (1,349 | ) | $ | 7,099 | |||||||||||
Earnings (loss) per common share from continuing operations attributable to Masonite: | |||||||||||||||||||||||||
Basic | $ | 0.45 | $ | 0.50 | $ | 0.20 | $ | 0.24 | |||||||||||||||||
Diluted | $ | 0.43 | $ | 0.47 | $ | 0.19 | $ | 0.23 | |||||||||||||||||
Six months ended June 28, 2015 | Six months ended June 29, 2014 | ||||||||||||||||||||||||
Net sales | $ | 910,893 | $ | 51,690 | $ | 859,203 | $ | 912,636 | $ | 69,173 | $ | 843,463 | |||||||||||||
Cost of goods sold | 742,550 | 44,828 | 697,722 | 781,043 | 61,650 | 719,393 | |||||||||||||||||||
Gross profit | 168,343 | 6,862 | 161,481 | 131,593 | 7,523 | 124,070 | |||||||||||||||||||
Selling, general and administration expenses | 116,979 | 7,614 | 109,365 | 116,294 | 9,097 | 107,197 | |||||||||||||||||||
Restructuring costs | 3,344 | 1,615 | 1,729 | 1,281 | — | 1,281 | |||||||||||||||||||
Operating income (loss) | 48,020 | (2,367 | ) | 50,387 | 14,018 | (1,574 | ) | 15,592 | |||||||||||||||||
Interest expense (income), net | (3 | ) | 18,540 | 862 | 17,678 | 20,587 | 1,554 | 19,033 | |||||||||||||||||
Loss on extinguishment of debt | 28,046 | — | 28,046 | — | — | — | |||||||||||||||||||
Other expense (income), net | (4 | ) | (1,819 | ) | 306 | (2,125 | ) | 1,487 | 510 | 977 | |||||||||||||||
Income (loss) from continuing operations before income tax expense (benefit) | 3,253 | (3,535 | ) | 6,788 | (8,056 | ) | (3,638 | ) | (4,418 | ) | |||||||||||||||
Income tax expense (benefit) | 18,277 | 225 | 18,052 | 1,398 | (634 | ) | 2,032 | ||||||||||||||||||
Income (loss) from continuing operations | (15,024 | ) | (3,760 | ) | (11,264 | ) | (9,454 | ) | (3,004 | ) | (6,450 | ) | |||||||||||||
Less: net income (loss) attributable to non-controlling interest | 2,117 | — | 2,117 | 1,240 | — | 1,240 | |||||||||||||||||||
Income (loss) from continuing operations attributable to Masonite | $ | (17,141 | ) | $ | (3,760 | ) | $ | (13,381 | ) | $ | (10,694 | ) | $ | (3,004 | ) | $ | (7,690 | ) | |||||||
Earnings (loss) per common share from continuing operations attributable to Masonite: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.57 | ) | $ | (0.44 | ) | $ | (0.36 | ) | $ | (0.26 | ) |
See accompanying notes to the pro forma condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(In thousands of U.S. dollars, except per share amounts)
Year ended December 28, 2014 | |||||||||||||
Masonite Historical | Pro Forma Adjustments (2) | Masonite Pro Forma | |||||||||||
Net sales | $ | 1,837,700 | $ | 127,475 | $ | 1,710,225 | |||||||
Cost of goods sold | 1,572,301 | 115,526 | 1,456,775 | ||||||||||
Gross profit | 265,399 | 11,949 | 253,450 | ||||||||||
Selling, general and administration expenses | 224,077 | 18,098 | 205,979 | ||||||||||
Restructuring costs | 11,137 | 45 | 11,092 | ||||||||||
Asset impairment | 18,202 | 14,020 | 4,182 | ||||||||||
Operating income (loss) | 11,983 | (20,214 | ) | 32,197 | |||||||||
Interest expense (income), net | (3 | ) | 41,525 | 2,519 | 39,006 | ||||||||
Other expense (income), net | (4 | ) | (587 | ) | 609 | (1,196 | ) | ||||||
Income (loss) from continuing operations before income tax expense (benefit) | (28,955 | ) | (23,342 | ) | (5,613 | ) | |||||||
Income tax expense (benefit) | 4,533 | (4,094 | ) | 8,627 | |||||||||
Income (loss) from continuing operations | (33,488 | ) | (19,248 | ) | (14,240 | ) | |||||||
Less: net income (loss) attributable to non-controlling interest | 3,222 | — | 3,222 | ||||||||||
Income (loss) from continuing operations attributable to Masonite | $ | (36,710 | ) | $ | (19,248 | ) | $ | (17,462 | ) | ||||
Earnings (loss) per common share from continuing operations attributable to Masonite, basic and diluted | $ | (1.24 | ) | $ | (0.59 | ) |
See accompanying notes to the pro forma condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The unaudited pro forma condensed consolidated financial statements give effect to the sale of the Premdor business divested through sale of 100% of the then outstanding equity in Premdor. The unaudited pro forma condensed consolidated statements of operations for the three and six months ended June 28, 2015, and June 29, 2014, and for the year ended December 28, 2014, are presented as if the sale occurred on December 30, 2013, the first day of fiscal year 2014. The anticipated after-tax loss on the sale is not reflected in the pro forma condensed consolidated statements of operations. The unaudited pro forma condensed consolidated balance sheet as of June 28, 2015, is presented as if the sale occurred on that date, including the after-tax loss on sale calculated as of that date.
The pro forma adjustments include the following:
(1) | The elimination of the historical assets and liabilities of the Premdor business, |
(2) | The elimination of the historical results of operations of the Premdor business, |
(3) | A systematic allocation of consolidated interest expense related to our senior unsecured borrowings based on percentage of net assets, |
(4) | Corporate allocations of shared costs consisting of certain costs of human resources, legal, finance and information technology, and |
(5) | The estimated after-tax loss on sale based upon events that are factually supportable and directly attributable to the sale of Premdor of approximately $31 million, calculated as if the sale had occurred on June 28, 2015. |
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