Masonite International Corporation (NYSE:DOOR) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 09:00 am ET

Previous

Masonite International Corporation (NYSE:DOOR) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Welcome to Masonite's Third Quarter 2019 Earnings Conference Call. During the presentation all participants will be in a listen-only mode. After management's prepared remarks, investors are invited to participate in a question-and-answer session. Please note that this conference call is being recorded.

I would now like to turn the call over to Joanne Freiberger, Vice President and Treasurer. Thank you. You may begin.

Executive
Joanne Freiberger

Thank you, Rob, and good morning, everyone. We appreciate you joining us today. With me on the call today are Howard Heckes, Masonite's President and Chief Executive Officer; and Russ Tiejema, Masonite's Executive Vice President and Chief Financial Officer. We also have Tony here, our President of Global Residential joining us for our Q&A session. We issued a press release and WebEx presentation late yesterday afternoon sharing our third quarter 2019 results. These documents are available on our website at masonite.com.

Before we begin, I would like to remind you that this call will include forward-looking statements. Each forward-looking statements contained in this call is subject to risks and uncertainties that could cause material -- could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears in the section entitled forward-looking statements in the press release we issued yesterday. More information about risks can be found under the heading Risk Factors in Masonite's most recently filed Annual Report on Form 10-K and our Form 10-Q anticipated to be filed with the SEC later today. Our SEC filings are available at sec.gov and on our website at masonite.com. The forward-looking statements in this call speak only as of today and we undertake no obligation to update or revise any of these statements. Our earnings released in today's discussion includes certain non-GAAP financial measures. Please refer to the reconciliations which are in the press release and the appendix of the WebEx presentation.

Our agenda for today's call include a business overview from Howard, followed by a review of the third quarter financial results from Russ and closing remarks from Howard with a question-and-answer session.

And with that, let me turn the call over to Howard.

Executive
Howard Carl Heckes

Thanks, Joanne. Good morning and welcome everyone. As Joanne mentioned, late yesterday, we released our third quarter 2019 financial results. I am pleased that we delivered a third consecutive quarter of both year-on-year adjusted EBITDA growth and adjusted EBITDA margin expansion, with all three business segments delivering higher margins than the prior year. At a consolidated level, this was primarily driven by higher average unit price or AUP along with continued operational productivity improvements, which were partially offset by the impact of lower volume and higher SG&A.

Net sales decreased approximately 1% in the third quarter as compared to the prior year. Despite continued strength in AUP across all business segments, the impact of declines from lower base volumes, foreign exchange headwinds and a decrease in the sale of components and other products more than offset the growth. Base volume declines were due to continued softness in