NYSE: DOOR
Laurel, Mississippi Plant Tour
Management Presentation
Safe Harbor / Non-GAAP Financial Measure
SAFE HARBOR / FORWARD LOOKING STATEMENTS
This investor presentation contains forw...
① Company Overview
② Residential Interior Door Facings
③ NA Residential Door Opportunity
④ Key Focus Areas
⑤ Summary
⑥ Q&A...
4
 Net Sales of $1.7 billion and approximately 32 million
doors sold in 2013.
 An extensive global footprint with 65 man...
5
JELD-
WEN
Steve’s
and Sons
Therma-
Tru Plastpro Andersen Pella
VT
Industries Graham
Eggers
Industries
Residential
Interi...
6
Baillargeon
BirchwoodMarshfield
Algoma
Ledco
Lifetime
India
Lemieux
Algoma
Marshfield
Door
Components
Residential
Doors
...
7
Company Overview
Residential Interior Molded Doors – Raw Materials to Slabs
Residential Interior Molded Doors
Today’s To...
8
Residential Interior Molded Doors
Step #3 Step #4 Step #5
Wholesale Distributors Independent & Dealers
Finished Door Sla...
① Company Overview
② Residential Interior Door Facings
③ NA Residential Door Opportunity
④ Key Focus Areas
⑤ Summary
⑥ Q&A...
Residential Interior Door Facings
Key Questions
What does global interior residential molded door facings
capacity look li...
11
Residential Interior Door Facings
Question #1: Global Facings Network
There Are A Limited Number of Facilities on the G...
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
We Believe Masonite & Jeld-Wen Own the Largest Facilities With the Highest Qual...
Masonite facilities
13
Industry Capacity Has Decreased in Recent Years Through Closed Facings Facilities
Since 2010, Three...
Residential Interior Door Facings
Key Questions
What does global interior residential molded door facings
capacity look li...
15
Residential Interior Door Facings
Question #2: Market Entry
Each Step of Production Poses Unique Challenges
Die Plates
...
16
A timeline of ~4 years to ramp to meaningful production*
Facings Production Facilities are Multiyear Construction Proje...
17
• Vertical Integration in the Design and
Fabrication of Production Tooling Provides
Several Competitive Advantages:
– C...
18
Residential Interior Door Facings
Question #2: Market Entry – Interior Slab Assembly
10 Assembly Plants x $20 Million P...
Residential Interior Door Facings
Question #2: Market Entry – Pre-Finishing & Pre-Hanging
Pre-Finishing
0
5
10
15
20
25
30...
Masonite Provides the Broadest Product Offering in the Industry
Residential Interior Door Facings
Question #2: Market Entr...
21
Residential Interior Door Facings
Question #2: Market Entry – Distribution
Masonite Believes Its Distribution Network i...
Residential Interior Door Facings
Key Questions
What does global interior residential molded door facings
capacity look li...
23
Residential Interior Door Facings
Question #3: Independent NA Door Slab Assemblers
Only Masonite & Jeld-Wen Service the...
24
Estimated Scale of Door Slab Assembly and Sales Companies (Interior Doors)*
(*) - Masonite estimates
Masonite & Jeld-We...
① Company Overview
② Residential Interior Door Facings
③ NA Residential Door Opportunity
④ Key Focus Areas
⑤ Summary
⑥ Q&A...
26
North American Residential Door Opportunity
Market Growth – U.S. Housing Starts
U.S. Housing Starts (1959-Present)
-
1....
27
Residential
Doors
SteelStile & RailMolded/Flush Fiberglass
ExteriorInterior
North American Residential Door Opportunity...
Steel vs. Fiberglass Flush vs. Molded Hollow Core vs. Solid Core Stile & Rail
Stile & Rail was
~10% of 2013 NA
Residential...
North American Residential Door Opportunity
Pricing – Industry is not Capturing Sufficient Value
Masonite ROA2013 Avg Glob...
North American Residential Door Opportunity
Pricing – “First Steps” Have Been Successfully Taken
30
Q4’13Q1’13
North Ameri...
(AUPGrowth%,yearoveryear)
31
Masonite Is Committed to Capturing Fair Value for the Products & Services We Provide
-6.0%
-4...
North American Residential Door Opportunity
Volume, Mix & Pricing = Enhanced Returns
Reported 2013 EBITDA
In 2013, Masonit...
① Company Overview
② Residential Interior Door Facings
③ NA Residential Door Opportunity
④ Key Focus Areas
⑤ Summary
⑥ Q&A...
34
Key Focus Areas
Capabilities Designed to Create Shareholder Value
Automation
Product Line Leadership
Electronic Enablem...
Facings Feeding Station
Frame Assembly Stations
• Improved Safety
• Increased Productivity
• Higher Quality
• Better Servi...
36
Key Focus Areas
Automation – New Commercial Door Machining Center
Multiple Opportunities Exist Across Masonite to Accel...
Key Focus Areas
Product Line Leadership – Good/Better/Best
BETTER
BETTERGOOD
BEST
37
Key Focus Areas
Electronic Enablement – Max Express Configurator
Max Update – E-commerce
Masonite Max Express Configurator...
39
Consumer Friendly Packaging In-Store Merchandising
Key Focus Areas
Sales & Marketing Excellence – Consumer Education
In...
40
• Based in Nottingham, United Kingdom
• Specializes in fiberglass exterior doors
• Leading e-commerce platform with 3-d...
① Company Overview
② Residential Interior Door Facings
③ NA Residential Door Opportunity
④ Key Focus Areas
⑤ Summary
⑥ Q&A...
42
Summary
Positioning the Company for a Sustained Recovery
 Advantageous Market Position
 One of only two vertically in...
Summary
Creating a Business Not Easy to Replicate
New Products
AutomationE-Commerce
Vertical Integration
Masonite’s replac...
Q&A
Appendix
46
Appendix
Reconciliation to GAAP Measures
In thousands, except ratios 2013 2012 2011
Net income (loss) (8,362)$ (21,802)...
Laurel presentation final
Upcoming SlideShare
Loading in …5
×

Laurel presentation final

690 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
690
On SlideShare
0
From Embeds
0
Number of Embeds
239
Actions
Shares
0
Downloads
19
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Laurel presentation final

  1. 1. NYSE: DOOR Laurel, Mississippi Plant Tour Management Presentation
  2. 2. Safe Harbor / Non-GAAP Financial Measure SAFE HARBOR / FORWARD LOOKING STATEMENTS This investor presentation contains forward-looking information and other forward-looking statements within the meaning of applicable Canadian and/or U.S. securities laws, including our discussion of improvements in the housing market and related markets and the effects of our pricing and other strategies. When used in this Investor Presentation, such forward-looking statements may be identified by the use of such words as “may,” might, “could,” “will,” would,” “should,” “expect,” “believes,” “outlook,” “predict,” “forecast,” “objective,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “project,” “targeting,” or the negative of these terms or other similar terminology. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Masonite, or industry results, to be materially different from any future plans, goals, targets, objectives, results, performance or achievements expressed or implied by such forward- looking statements. As a result, such forward-looking statements should not be read as guarantees of future performance or results, should not be unduly relied upon, and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements include, but are not limited to, general economic, market and business conditions; levels of residential new construction, residential repair, renovation and remodeling and non-residential building construction activity; competition; our ability to successfully implement our business strategy; our ability to manage our operations including integrating our recent acquisitions and companies or assets we acquire in the future; our ability to generate sufficient cash flows to fund our capital expenditure requirements and to meet our debt service obligations, including our obligations under our senior notes and our senior secured asset-backed credit facility; labor relations (i.e., disruptions, strikes or work stoppages), labor costs, and availability of labor; increases in the costs of raw materials or any shortage in supplies; our ability to keep pace with technological developments; the actions by, and the continued success of, certain key customers; our ability to maintain relationships with certain customers; new contractual commitments; our ability to generate the benefits of our restructuring activities; retention of key management personnel; environmental and other government regulations; limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and senior secured asset-based credit facility; and other factors publicly disclosed by the company from time to time. NON-GAAP FINANCIAL MEASURE Adjusted EBITDA is a measure used by management to measure operating performance. It is defined as net income (loss) attributable to Masonite plus depreciation, amortization of intangible assets, restructuring costs, loss (gain) on sale of property, plant and equipment, impairment of property, plant and equipment, registration and listing fees, interest expense, net, other expense (income), net, income tax expense (benefit), loss (income) from discontinued operations, net of tax, net income attributable to non-controlling interest and share based compensation expense. Adjusted EBITDA is not a measure of financial condition or profitability under GAAP, and should not be considered as an alternative to (i) net income (loss) or net income (loss) attributable to Masonite determined in accordance with GAAP or (ii) operating cash flow determined in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not include certain cash requirements such as interest payments, tax payments and debt service requirements. We believe that the inclusion of Adjusted EBITDA in this press release is appropriate to provide additional information to investors about our operating performance. Not all companies use identical calculations, and as a result, this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Moreover, Adjusted EBITDA as presented for financial reporting purposes herein, although similar, is not the same as similar terms in the applicable covenants in our ABL Facility or our senior notes. Adjusted EBITDA, as calculated under our ABL Facility or senior notes would also include, among other things, additional add-backs for amounts related to: cost savings projected by us in good faith to be realized as a result of actions taken or expected to be taken prior to or during the relevant period; fees and expenses in connection with certain plant closures and layoffs; and the amount of any restructuring charges, integration costs or other business optimization expenses or reserve deducted in the relevant period in computing consolidated net income, including any one-time costs incurred in connection with acquisitions. The appendix sets forth a reconciliation of Adjusted EBITDA to net income (loss) attributable to Masonite for the periods indicated. 2
  3. 3. ① Company Overview ② Residential Interior Door Facings ③ NA Residential Door Opportunity ④ Key Focus Areas ⑤ Summary ⑥ Q&A Today’s Agenda
  4. 4. 4  Net Sales of $1.7 billion and approximately 32 million doors sold in 2013.  An extensive global footprint with 65 manufacturing facilities spread across 11 countries.  Serve more than 7,000 customers in over 80 countries.  One of only two vertically integrated residential molded door manufacturers and the only vertically integrated commercial door manufacturer in North America.  Established leadership positions in all targeted product categories in North America. Manufacturing Headquarters Company Overview Masonite is a Global Building Products Company 2013 Sales by Segment 2013 NA End-Markets North America, 76% Europe, Asia & Latin America, 20% S. Africa, 4% Residential RRR, 44% Residential new const., 35% Non-residential building const., 21%
  5. 5. 5 JELD- WEN Steve’s and Sons Therma- Tru Plastpro Andersen Pella VT Industries Graham Eggers Industries Residential Interior           Residential Exterior           Residential Door Facings and Components           Non-Residential Interior           Non-Residential Exterior #          Non-Residential Door Facings and Components          ~ The Only Vertically Integrated Residential AND Commercial Door Manufacturer in NA. (#) – Steel & Glass exterior doors are not a strategic focus area for Masonite. (~) – We believe Eggers has veneer production capacity, but no door core. Source: Company Websites, Deutsche Bank. Company Overview Masonite has the Broadest Product Offering in NA
  6. 6. 6 Baillargeon BirchwoodMarshfield Algoma Ledco Lifetime India Lemieux Algoma Marshfield Door Components Residential Doors SteelStile & RailMolded Non-Residential Fiberglass ExteriorInterior Door Core Veneers / Facings Interior Wood Steel & Glass Leadership Position Leadership Position Leadership Position Leadership Position Leadership Position Leadership Position Leadership Position 2010-2014 acquisitions. Limited Masonite presence. Defined as #1 or #2 in NA (based on internal estimates). Chile Door-Stop Company Overview Masonite has Established Leadership Positions
  7. 7. 7 Company Overview Residential Interior Molded Doors – Raw Materials to Slabs Residential Interior Molded Doors Today’s Tour Showcased Steps #1 & #2 Step #1 Key Inputs Acquired Molded Door Facings Produced Door Slab Assembly Step #2 Step #3  Manual or fully automated (Denmark)  Manual: ~8 hours, automated ~4 min.  Plans for 3 NA fully automated units  Molded doors “nest” well for shipping  Have capacity for 1.5M U.S. starts  Do not sell facings within key NA market  Laurel uses 27 acres of timber / day  Masonite has > 1,000 dies (~$75M USD)*  5 facings plants replacement value ~$1B (*) – Includes interior and exterior molded dies.
  8. 8. 8 Residential Interior Molded Doors Step #3 Step #4 Step #5 Wholesale Distributors Independent & Dealers Finished Door Slabs Shipped Directly to one or two step Distribution Customers Finished Door Slabs Additional Value Added Services Masonite Customers Pre-Hanging Pre-Finishing Retail Customers Masonite Believes Vertical Integration is a Competitive Advantage Company Overview Residential Interior Molded Doors Slabs – Path to Market
  9. 9. ① Company Overview ② Residential Interior Door Facings ③ NA Residential Door Opportunity ④ Key Focus Areas ⑤ Summary ⑥ Q&A Today’s Agenda
  10. 10. Residential Interior Door Facings Key Questions What does global interior residential molded door facings capacity look like today? What would it take for a new entrant to come into the market? How many independent door slab assemblers are in North America—and where do they get their facings? What is the N.A. Residential Door Market opportunity going forward from market growth, share gains, pricing & mix? 10
  11. 11. 11 Residential Interior Door Facings Question #1: Global Facings Network There Are A Limited Number of Facilities on the Global Network Masonite & Jeld-Wen Have Approximately 75% of Global Facings Capacity* Masonite facilities Jeld-Wen facilities Other (*) - Management’s estimate
  12. 12. 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 We Believe Masonite & Jeld-Wen Own the Largest Facilities With the Highest Quality Production Facings Production Capacity by Mill* (in millions of facings) Size & Production Quality* • Masonite & Jeld-Wen operate 8 of the 9 largest facing mills in the world: Masonite: ~80 million facings Jeld-Wen: ~75 million facings All others: ~55 million facings • Total global industry capacity utilization is currently estimated between 60 to 70%. • Masonite and Jeld-Wen are the only two owners of facings production facilities in the western hemisphere. • We believe Masonite and Jeld-Wen produce higher quality facings (lower cost of quality). Masonite facilities Jeld-Wen facilities Other Residential Interior Door Facings Question #1: Global Facings Network 12(*) - Management’s estimates
  13. 13. Masonite facilities 13 Industry Capacity Has Decreased in Recent Years Through Closed Facings Facilities Since 2010, Three Facing Mills Have Closed or Been Converted and One Has Opened JW facilities Craft Master (CMI) facility 2010 2014 Masonite facilities JW facilities Residential Interior Door Facings Question #1: Global Facings Network Closures: White Swan, Washington (~12mm) & Marion, North Carolina (~13mm). Conversions: Dubuque, Iowa (~7mm). Openings: Dodson, Louisiana ~18mm.
  14. 14. Residential Interior Door Facings Key Questions What does global interior residential molded door facings capacity look like today? What would it take for a new entrant to come into the market? How many independent door slab assemblers are in North America—and where do they get their facings? What is the N.A. Residential Door Market opportunity going forward from market growth, share gains, pricing & mix? 14
  15. 15. 15 Residential Interior Door Facings Question #2: Market Entry Each Step of Production Poses Unique Challenges Die Plates Slab Assembly Facing Plant Pre-Finishing Pre-Hanging Full Product Line & Distribution ~$100 - $150 million per line ~$75 million investment* ~$20 - $25 million per plant ~$9 - $10 million per plant Note: $ are approximate management estimates. (*) – Masonite has >1,000 dies with approximate value of $75 million. Includes interior and exterior molded dies.
  16. 16. 16 A timeline of ~4 years to ramp to meaningful production* Facings Production Facilities are Multiyear Construction Projects Site Selection, Planning & Permitting ~12 months Construction ~24 months Startup, Qualification ~12 months 0 1 2 3 4  Wood species perform differently • Access to wood basket • Requires significant testing • High initial cost of quality  Multiple environmental concerns • Bio-scrubbers • MACT compliance  Production flexibility • # of press openings • Change over times • Cycle time Production Hurdles (years) Residential Interior Door Facings Question #2: Market Entry – Facings Plant (*) - Management’s estimates Laurel consumes the equivalent of ~10,000 trucks / year of fiber or ~27 acres of timber daily.
  17. 17. 17 • Vertical Integration in the Design and Fabrication of Production Tooling Provides Several Competitive Advantages: – Cost savings – Prioritization of die schedule – Protection of confidentiality – Rapid response to changing market needs – Quality control Residential Interior Door Facings Question #2: Market Entry – Die Plates
  18. 18. 18 Residential Interior Door Facings Question #2: Market Entry – Interior Slab Assembly 10 Assembly Plants x $20 Million Per Plant = $200 Million Investment* Assembly Facilities Are Strategically Located to Service a Large Geographic Area (*) - Our facility in Monterrey, Mexico has interior assembly, exterior assembly and dorFAB capabilities that primarily services the Mexican market.
  19. 19. Residential Interior Door Facings Question #2: Market Entry – Pre-Finishing & Pre-Hanging Pre-Finishing 0 5 10 15 20 25 30 35 40 2011 2012 2013 Pre-Finishing & Pre-Hanging sites Pre-Hanging sites only ($ in millions) Pre-Finishing & Pre-Hanging Sites - 2009 19 Pre-Finishing SalesPre-Finishing & Pre-Hanging Sites - 2014 Pre-Hanging
  20. 20. Masonite Provides the Broadest Product Offering in the Industry Residential Interior Door Facings Question #2: Market Entry – Full Product LineInteriorDoors Flush Primed Molded Flush Veneer West End Safe ‘N Sound Palazzo Bolection MDF Wood Stile & Rail French Doors 11 designs 2 textures 3 species 3 designs All flush and molded 3 designs Engineered core Unlimited designs Unlimited designs 18 species 63 glass options 18 species ~$500+~$22 ExteriorDoors Utility Steel HD Steel Belleville Fiberglass Barrington Fiberglass AvantGuard Torrefied Wood 3 door designs 15 door designs 18 door designs 3 wood grains plus smooth 18 door designs 2 wood grains 2 wood species 9 door designs 4 species Unlimited designs ~$1,000+~$125 20 Note: Prices reflect estimated retail price in U.S. market.
  21. 21. 21 Residential Interior Door Facings Question #2: Market Entry – Distribution Masonite Believes Its Distribution Network is a Competitive Advantage Retail Wholesale Distributors Builders Contractors & Architects Independent & Pro Dealers Remodelers
  22. 22. Residential Interior Door Facings Key Questions What does global interior residential molded door facings capacity look like today? What would it take for a new entrant to come into the market? How many independent door slab assemblers are in North America—and where do they get their facings? What is the N.A. Residential Door Market opportunity going forward from market growth, share gains, pricing & mix? 22
  23. 23. 23 Residential Interior Door Facings Question #3: Independent NA Door Slab Assemblers Only Masonite & Jeld-Wen Service the Entire North American Market Competing Door Assembly Companies Are Smaller in Size and Regionally Focused (*) – We estimate Steve’s, Haley Bros., ABS, and Lynden Door represent ~15% of the door market.
  24. 24. 24 Estimated Scale of Door Slab Assembly and Sales Companies (Interior Doors)* (*) - Masonite estimates Masonite & Jeld-Wen Are the Only Two Vertically Integrated Players in North America Vertically Integrated Regional Assemblers C&S Door (2005) Florida Made Door (2004) Illinois Flush Door (2010) Ledco Door (2010) Lifetime Door (2010) CMI (2012) Residential Interior Door Facings Question #3: Independent NA Door Slab Assemblers Market Exits (Since 2004) We believe Masonite & Jeld-Wen’s interior residential door business is approximately the same size
  25. 25. ① Company Overview ② Residential Interior Door Facings ③ NA Residential Door Opportunity ④ Key Focus Areas ⑤ Summary ⑥ Q&A Today’s Agenda
  26. 26. 26 North American Residential Door Opportunity Market Growth – U.S. Housing Starts U.S. Housing Starts (1959-Present) - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Housing as a % of U.S. GDP Source: U.S. Census Bureau Source: NAHB 0 500 1,000 1,500 2,000 2,500 50-year average of housing starts = 1.5mm 4.7% average since 1975 (in millions) Housing Activity Remains Far Below Historical Averages
  27. 27. 27 Residential Doors SteelStile & RailMolded/Flush Fiberglass ExteriorInterior North American Residential Door Opportunity Market Growth – Masonite is Well Positioned Today Masonite Sold ~26 Million Doors in North America During 2013 – 95% Residential* (*) – Masonite sold ~32 million doors globally during 2013 vs. ~50 million doors during 2006. Interior Exterior Molded Flush Stile & Rail Steel Fiberglass Frames Wood Entry Note: Charts are based on door volume
  28. 28. Steel vs. Fiberglass Flush vs. Molded Hollow Core vs. Solid Core Stile & Rail Stile & Rail was ~10% of 2013 NA Residential Interior Sales Steel was ~65% of 2013 NA Residential Exterior Sales Flush was ~20% of 2013 NA Residential Interior Sales Hollow Core was ~90% of 2013 NA Residential Interior Sales 28 North American Residential Door Opportunity Mix – Consumer Trade-Up is Expected to Accelerate As Markets Recover, Trade-Up Should Increase
  29. 29. North American Residential Door Opportunity Pricing – Industry is not Capturing Sufficient Value Masonite ROA2013 Avg Global Door Selling Price: ~$55 Materials: ~48% Overhead: ~15% Direct Labor: ~12% Distribution: ~9% SG&A: ~10% Adj. EBITDA: ~6% ~$3 per door 29 Masonite ROE Note: All numbers shown are Masonite’s global consolidated figures. See appendix for non-GAAP reconciliations. (*) - Net income from continuing operations. 2013: Net Income = ($0.37)/share, Return on Assets = (0.5%), Return on Equity = (1.0%)* -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 2011 2012 2013 -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 2011 2012 2013
  30. 30. North American Residential Door Opportunity Pricing – “First Steps” Have Been Successfully Taken 30 Q4’13Q1’13 North America Retail & U.S. Wholesale Mid-High Single Digit* Increase Across Interior & Exterior Doors Q1’14 25% 15% 2013 NA Price Increases Affected a Limited Percentage of Masonite’s Total Global Business^ 55% 2014 NA Price Increases Have Been Broader Based^ U.S. Wholesale Mid Single Digit Increase on Molded & Flush Interior Doors U.S. Wholesale Mid Single Digit Increase on Certain Interior & Exterior Doors, Door Lites & Components (^) – Percentages of net sales are approximate and based on management estimates of net sales. (*) – The 2014 impact of North American retail pricing is expected to be up low-mid single digits once prior year price concessions are taken into account. Masonite Has Taken Three North American Price Increases Over Five Quarters
  31. 31. (AUPGrowth%,yearoveryear) 31 Masonite Is Committed to Capturing Fair Value for the Products & Services We Provide -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 (*) – Management believes the majority, but not all, of this incremental pricing will be accretive. Impact of Recent Pricing*NA Average Unit Price is Increasing Pro-Forma, Pricing adds ~$1.36/share Adj. EBITDANA AUP Has Increased 4 Consecutive Quarters $- $5 $10 $15 Q2 '14 Q3 '14 Q4 '14 Q1 '15 ~$10 Million of Pricing Expected Q2’14 – Q1’15 ~$40 Million of Annual Price ~29.3 Million Shares Plus ~$1.36 in Adj. EBITDA per share North American Residential Door Opportunity Pricing – “First Steps” Have Been Successfully Taken
  32. 32. North American Residential Door Opportunity Volume, Mix & Pricing = Enhanced Returns Reported 2013 EBITDA In 2013, Masonite reported Adjusted EBITDA of $105.9 million 32 Pro Forma 2013 EBITDA Applying the peer industry #1 and #2 median ROE of 14.5% to Masonite’s financial performance would imply an Adj. EBITDA of $299.4 million in 2013. This translates to an Adj. EBITDA margin of 17.3% in 2013. Masonite is Committed to Capturing Fair Value for the Products & Services We Provide Wall Board Roofing Note: See appendix for Non-GAAP reconciliations. Numbers are for companies’ consolidated financial results. Eagle Materials fiscal year end is March 31, 2014. (1) Net income represents tax-effected adjusted EBIT. EBIT adjustments include segment related restructuring, impairment and other one-time expenses. (2) Owens Corning’s total company ROE is used as a proxy for their roofing business. ROE Peer Industry #1 ROE Peer Industry #2 7.5% 12.5% 2.2% 15.8% 5.9% 14.0% 0% 10% 20% 30% 40% OC CSL 2011 2012 2013 (9.7%) 4.5% (0.1%) 8.5% 34.4% 15.1% -20% -10% 0% 10% 20% 30% 40% CBPX EXP 2011 2012 2013
  33. 33. ① Company Overview ② Residential Interior Door Facings ③ NA Residential Door Opportunity ④ Key Focus Areas ⑤ Summary ⑥ Q&A Today’s Agenda
  34. 34. 34 Key Focus Areas Capabilities Designed to Create Shareholder Value Automation Product Line Leadership Electronic Enablement Sales and Marketing Excellence Strategic Tuck-In Acquisitions 34 Goal: Grow Share & Expand Margins Beyond Macro Economic Recovery
  35. 35. Facings Feeding Station Frame Assembly Stations • Improved Safety • Increased Productivity • Higher Quality • Better Service Automating the Assembly Process 35 Key Focus Areas Automation – Automated Door Slab Assembly Frame Assembly
  36. 36. 36 Key Focus Areas Automation – New Commercial Door Machining Center Multiple Opportunities Exist Across Masonite to Accelerate Automation Current Process Future Process 12 outdated stations Batch Processing 43 FTEs Latest CNC* technology Automated Robotic Solution 27 FTEs (*) – Computer Numerical Control.  Reduces staffing by ~1/3rd.  Improves quality and consistency.  Single piece flow.  One automated CNC* machine with single piece flow (5 machines vs. 12).  From 1,200 to 1,750 doors per day.
  37. 37. Key Focus Areas Product Line Leadership – Good/Better/Best BETTER BETTERGOOD BEST 37
  38. 38. Key Focus Areas Electronic Enablement – Max Express Configurator Max Update – E-commerce Masonite Max Express Configurator Quote Velocity is Beginning to Accelerate 38
  39. 39. 39 Consumer Friendly Packaging In-Store Merchandising Key Focus Areas Sales & Marketing Excellence – Consumer Education Interior Exterior Traditional Displays Interactive Displays Consumer Education Helps Drive Customer Satisfaction and Facilitates Trade-Up
  40. 40. 40 • Based in Nottingham, United Kingdom • Specializes in fiberglass exterior doors • Leading e-commerce platform with 3-day delivery • High average unit prices, double-digit margins and strong EBITDA to cash conversion • United Kingdom housing starts accelerating Pre Acquisition $7.6M TTM Adjusted EBITDA ~6.5x Pre Synergy Adjusted EBITDA Acquisition Details ~$50 mm net purchase price* UK Housing Market is Accelerating (in 000s) Source: UK Office of National Statistics (Autumn 2013) (*) – Net of cash acquired. Key Focus Areas Strategic Tuck-in Acquisitions – Door-Stop International 100 110 120 130 140 2011 2012 2013 2014
  41. 41. ① Company Overview ② Residential Interior Door Facings ③ NA Residential Door Opportunity ④ Key Focus Areas ⑤ Summary ⑥ Q&A Today’s Agenda
  42. 42. 42 Summary Positioning the Company for a Sustained Recovery  Advantageous Market Position  One of only two vertically integrated residential molded door manufactures in North America  Only vertically integrated commercial door manufacturer in North America  Established leadership positions in all targeted product categories in our largest market (North America)  A Business Footprint Not Easy to Replicate  Insured replacement value of residential interior molded door facings facilities in excess of $1 billion  Strategic footprint of assembly facilities to service large geographic area  Market Opportunity for Continued Growth  U.S. new housing expected to experience double digit growth in 2014+ (NAHB)  Repair, Renovation and Remodeling expected to increase mid-single digits (HIRI)  Commercial door activity expected to increase in 2015+ (McGraw Hill)  Long-term, demographically driven demand characteristics remain strong  Key Focus Areas to Accelerate Growth  Automation  Product Line Leadership  Electronic Enablement  Sales & Marketing Excellence  Strategic Tuck-in Acquisitions
  43. 43. Summary Creating a Business Not Easy to Replicate New Products AutomationE-Commerce Vertical Integration Masonite’s replacement insurance value on our facing production facilities alone is in excess of $1.0 billion. Die Fabrication Facings Production Slab Assembly Pre-Finishing Pre-Hanging 43
  44. 44. Q&A
  45. 45. Appendix
  46. 46. 46 Appendix Reconciliation to GAAP Measures In thousands, except ratios 2013 2012 2011 Net income (loss) (8,362)$ (21,802)$ (4,152)$ Total assets 1,591,145 1,645,948 1,528,056 Return on assets -0.5% -1.3% -0.3% Net income (loss) (8,362)$ (21,802)$ (4,152)$ Total equity 825,562 837,815 848,483 Return on equity -1.0% -2.6% -0.5% Total equity 825,562$ Median peer return on equity 14.5% Pro forma net income based on implied return on equity 120,086 Pro forma income taxexpense (at 26.4%) 43,074 Depreciation 62,080 Amortization of intangible assets 17,058 Share based compensation expense 7,752 Loss (gain) on disposal of property, plant and equipment (1,775) Impairment of property, plant and equipment 1,904 Registration and listing fees 2,421 Restructuring costs 10,630 Interest expense (income), net 33,230 Other expense (income), net 2,316 Loss (income) fromdiscontinued operations, net of tax 598 Pro forma Adjusted EBITDA based on implied return on equity 299,374$ Masonite International Corporation

×