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. ① Company / Industry Overview
② Financial Review
③ Summary / Q&A
4. 4
Established leadership positions in all targeted
product categories in our largest market (United
States).
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 NA.
Manufacturing Headquarters
Company / Industry 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. -
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 2012 2013 Q1'14
5
Company / Industry Overview
Masonite Has Transformed Itself in Recent Years
-
5,000
10,000
15,000
20,000
2006 2013 Q1'14
Pre-Acquisitions Acquisitions
Cumulative Global Plant Closures
Warehouses Manufacturing
Strengthened the Core Business:
• Lean sigma deployed and $100+
million of benefits since 2006
• 57 manufacturing/distribution facilities
closed since 2006
• Reduced total headcount by
approximately 40% since 2006
• Automation: Residential interior door
plant in Denmark, South Carolina
Drive Organic Growth:
• Product Line Leadership
• Electronic Enablement
Strategic Tuck-in Acquisitions:
• Acquisitions: Twelve strategic tuck-ins
since March 2010, designed to build
leadership positions and strengthen
vertical integration across all
targeted North American door
markets
Total HeadcountActions Taken
6. Company / Industry Overview
Interior Molded Doors – A New Normal Has Emerged
AssemblyFacings
Prior to 2001
Market Reality
2002 – 2012
The New Normal
Since Oct. 2012
AssemblyFacings AssemblyFacings
(^) – Premdor purchased Masonite from International Paper in 2001. Premdor converted to the Masonite brand across all geographies except for France.
(#) – The Towanda PA facing plant was divested as part of a government imposed condition for completing the sale of Masonite by International Paper to Premdor.
Through this divestiture CMI (as a stand alone business) was first formed.
(*) – ONEX acquired Jeld-Wen in October 2011 & Jeld-Wen acquired CMI in October 2012.
Including what
would become
Market
Expectations
AssemblyFacings
*
#
6
7. Company / Industry Overview
Residential Int. Molded Facings & Assembly Consolidation
7
NA Residential Interior Molded Facings*
3 Players 2 Players
#
(^) – There are only two residential molded interior wood door manufacturers with a
full North American footprint / distribution capability. Both have been actively
consolidating smaller, regional players.
(#) – ONEX acquired JW in October 2011 & JW acquired CMI in October
2012. CMI previously acquired Illinois Flush Door in February 2010.
(*) – Full vertically integrated operations.
NA Residential Interior Doors
6 Players 2 Players^
#
2010
2010
2012
2012
2010
8. Company / Industry Overview
Non-Residential & Specialty Door Consolidation
8
NA Residential Specialty (Stile & Rail)
4 Players* 2 Players
NA Non-Residential Interior Wood
7 Players^ 4 Players
2012
2012
2011
2012
2013
(^) – Management estimate of seven largest North American Commercial
& Architectural interior wood door manufacturers.
(*) – Management estimate of the four largest Residential Stile & Rail door
manufacturers serving the North American market.
Select assets of:
9. 9
Company / Industry Overview
Established Leadership Positions
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 (based on internal estimates).
Chile
Door-Stop
10. Company / Industry Overview
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-Hanging
Pre-Finishing
10
11. Company / Industry Overview
Residential Pricing Environment Improving
11
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 is Committed to Capturing Value for the Products & Services We Provide
12. Company / Industry Overview
North American Average Unit Price Has Been Improving
North American Average Unit Price Increasing
U.S. Wholesale Price Increases*
• Mid single digit price increases
in Q1’13 & Q4’13.
• Mid to high single digit price
increases in Q1’14.
NA Retail Price Increases*
Mid to high single digit price
increases in Q1 2014.
Product Mix
More specialized products with
higher average unit prices, like
Stile & Rail, are helping increase
average unit price.
Key Drivers
(AUPGrowth%,yearoveryear)
12
NA Average Unit Price Has Increased for 4 Consecutive Quarters
-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
(*) – Net of 2013 retail price concessions, the 2014 net impact of NA pricing is estimated at mid single digits across ~55% of global revenue for the remaining three quarters in 2014.
13. Company / Industry Overview
Improved Pricing Environment & Core Focus Areas
13
Goal: Grow Share & Expand Margins Beyond Macro Economic Recovery
$2 / Door
+~$60 MM
$3 / Door
+~$90 MM
$1 / Door
+~$30 MM
Hypothetical increase in Adjusted EBITDA
per $1/door increase^
Masonite sold approx. 32 million doors
globally in 2013 with an AUP of ~$55/door
(^) – Assuming no change in mix, input costs, etc.
Automation
Product Line Leadership
Electronic Enablement
Sales and Marketing Excellence
Industry Structure
14. Company / Industry Overview
Positive Construction Indicators in 2014
14
0
200
400
600
800
1000
2009 2010 2011 2012 2013
0
100
200
300
400
500
600
700
800
900
1000
2009 2010 2011 2012 2013
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013
2014 Building Expectations Are PositiveU.S. New Housing Starts
• National Association of Homebuilders forecasts
New Housing Starts of 1,038,000 in 2014
12% year over year growth
• Home Improvement Research Institute (HIRI)
forecasts Home Improvement spend of $308
billion in 2014
6.5% year over year growth
• McGraw Hill Construction estimates 943K square
feet of non-residential construction in 2014
11.6% year over year growth
U.S. Non-Residential ConstructionU.S. Repair, Renovation & Remodel
Source: U.S. Census Bureau (Mar 2014)
Source: HIRI (Mar 2014) Source: McGraw-Hill (1Q14)
2014 Outlook is Positive for Building Activity
15. ① Company / Industry Overview
② Financial Review
③ Summary / Q&A
16. $21.7
$19.7
$15.0
$20.0
$25.0
$30.0
Q1'13 Q1'14
$424.5 $422.5
$250.0
$300.0
$350.0
$400.0
$450.0
$500.0
Q1'13 Q1'14
8.1
7.8
5.0
6.0
7.0
8.0
9.0
10.0
Q1'13 Q1'14
Net Sales Adj. EBITDA*Door Volume^
(in millions) (millions of USD) (millions of USD)
Q1’13 Q1’14 Q1’13 Q1’14 Q1’13 Q1’14
(^) – Does not include South Africa segment.
(*) – See appendix for non-GAAP reconciliations.
(#) – Including $4.5 million net recovery related to the final resolution of the Marshfield business interruption insurance claim, Q1’13 Adj. EBITDA was $26.2mm.
2014 First Quarter Financial Results
Door Volume, Net Sales and Adjusted EBITDA
16
Harsh Winter Impacted Door Volume, Net Sales & Adjusted EBITDA
#
17. (*) – See appendix for non-GAAP reconciliations
(^) – Excluding the $4.5 million net recovery related to the final resolution of the Marshfield business interruption insurance claim, SG&A and SG&A%,
were up 12.1% and 160 bps., respectively; and Adj. EBITDA and Adj. EBITDA % were down 9.2% and 40 bps., respectively.
(#) – SG&A increase includes increases of $1.5mm salaries & benefits, $1.1mm professional fees, $1.0mm loss on disposals of
PP&E, $0.8mm SG&A costs related to Door Stop and $0.6mm bad debt expense.
Net Sales
Gross Profit
Gross Profit %
SG&A#
SG&A %
Adj EBITDA*
Adj EBITDA %
Q1’14
$422.5
$53.0
12.5%
$57.8
13.7%
$19.7
4.7%
Q1’13
$424.5
$50.4
11.9%
$47.0^
11.1%^
$26.2^
6.2%^
Change
-0.5%
+5.2%
+60 bps.
+23.0%
+260 bps.
-24.8%
-150 bps.
2014 First Quarter Financial Results
Consolidated P&L Information
17
Improving Gross Margin Despite Lower Net Sales
(Millions of USD)
18. Q1’13 Net Sales
Volume*
Avg. Unit Price
Other
FX
Q1’14 Net Sales
North America
$319.3
($14.2)
$17.9
($2.2)
($6.4)
$314.4
Europe/ROW
$88.7
($0.9)
$2.4
$1.6
$2.8
$94.6
South Africa
$16.5
($4.0)
$3.8
$0.0
($2.9)
$13.4
Total
$424.5
($19.1)
$24.1
($0.6)
($6.4)
$422.5
(4.5%)
5.7%
(0.1%)
(1.5%)
(0.5%)
(*) - Includes the incremental impact of our 2013 & 2014 acquisitions and the loss of Lowe’s business announced in 4Q12.
(Millions of USD)
-1.5% +6.7% -18.8%
% Change
2014 First Quarter Financial Results
Net Sales Reconciliation by Reportable Segment
Average Unit Price Increased in All 3 Reportable Segments
18
19. 3.7
3.4
3.3
3.6
5.2
2.6 2.6
2.3
2.6
3.5
3.1 3.3
3.6
3.2
2.8
1.9 2.0 2.1
1.8
1.5
1.0
2.0
3.0
4.0
5.0
6.0
3/31/13 6/30/13 9/29/13 12/29/2013 3/30/2014
Total Debt / Adj. EBITDA Net Debt / Adj. EBITDA
Adj. EBITDA / Interest (Adj. EBITDA - Capex) / Interest
Financial Policy & Coverage Ratios
Selected Cash Flow Data Q1’14 Q1’13
Cash flow from continuing operations ($10.6) ($4.0)
Additions to property, plant & equipment ($8.4) ($6.4)
Cash used in acquisitions ($50.3) $0.0
Gross Proceeds from issuance of long-
term debt
$138.7 $0.0
Payment of financing costs ($1.9) $0.0
Increase (decrease) in cash & cash
equivalents
$65.4 ($12.7)
Target
financial
leverage
range
Unrestricted Cash $166.3
ABL Borrowing Base $108.0
AR Purchase Agreement $12.3
Total Available Liquidity $286.6
Liquidity at Mar 30, 2014 (millions of USD)
LTM Adj. EBITDA^ $99.4
LTM Interest Expense $35.0
Total Debt $513.6
Net Debt $347.3
2014 First Quarter Financial Results
Liquidity, Credit and Debt Profile
Debt Issuance History
8.25% Senior Unsecured Notes due 2021
(*) - Adjusted for Door-Stop acquisition and Jan 2014 $125mm debt add-on
4.8 *
$0
$100
$200
$300
$400
$500
2011 2012 2013 2014
3.2*
19(^) – See appendix for non-GAAP reconciliations.
2.6*
20. ① Company / Industry Overview
② Financial Review
③ Summary / Q&A
21. 21
Summary
Positioning the Company for a Sustained Recovery
Pricing Trends Improving
North America average unit price has increased for 4 consecutive quarters
U.S. Wholesale & NA Retail mid to high single digit price increases
Price increases in U.K. and France helping Europe / ROW pricing trends
Strong Volume Growth and Positive Mix Impact From Stile & Rail
Lemieux and Chile Stile & Rail acquisitions are proceeding according to plan
Footprint optimization and synergy capture for Stile & Rail operations underway
Market Indicators Remain Positive
U.S. new housing expected to experience continued growth in 2014
U.S. Home Improvement market expected to display steady growth in 2014
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
