0000883902-20-000039.txt : 20200512 0000883902-20-000039.hdr.sgml : 20200512 20200512164707 ACCESSION NUMBER: 0000883902-20-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20200512 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200512 DATE AS OF CHANGE: 20200512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cornerstone Building Brands, Inc. CENTRAL INDEX KEY: 0000883902 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 760127701 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14315 FILM NUMBER: 20869726 BUSINESS ADDRESS: STREET 1: 5020 WESTON PARKWAY STREET 2: SUITE 400 CITY: CARY STATE: NC ZIP: 27513 BUSINESS PHONE: (888) 975-9436 MAIL ADDRESS: STREET 1: 5020 WESTON PARKWAY STREET 2: SUITE 400 CITY: CARY STATE: NC ZIP: 27513 FORMER COMPANY: FORMER CONFORMED NAME: NCI BUILDING SYSTEMS INC DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL COMPONENTS INCORPORATED DATE OF NAME CHANGE: 19600201 8-K 1 cnr-20200512.htm 8-K cnr-20200512
0000883902false00008839022020-05-122020-05-12

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
 
FORM 8-K
________________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 12, 2020
 cnr-20200512_g1.jpg
Cornerstone Building Brands, Inc.
(Exact name of registrant as specified in its charter)
________________

Delaware1-1431576-0127701
(State or other jurisdiction of
incorporation)
(Commission File Number)(I.R.S. Employer
Identification Number)

5020 Weston ParkwaySuite 400CaryNC27513
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code: (866) 419-0042
________________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock $.01 par value per shareCNRNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £




Forward-Looking Information

Certain statements made in this Form 8-K, including any statements as to future results of operations and financial projections, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors. Additional information regarding these factors is contained in Cornerstone Building Brands, Inc.'s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K.

Item 2.02. Results of Operations and Financial Condition.
On May 12, 2020, Cornerstone issued a press release (the “Press Release”) announcing Cornerstone’s financial results for the fiscal quarter ended April 4, 2020. A copy of the Press Release is attached as Exhibit 99.1.
Additionally, the slide presentation being used in connection with the Company’s previously announced May 12, 2020 webcast and conference call to discuss its first quarter 2020 results (the "Supplemental Presentation") is available in the Investor Relations section of the Company’s website at www.cornerstonebuildingbrands.com.
Cornerstone’s Press Release and Supplemental Presentation include Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income (Loss) Applicable to Common Shares, Adjusted Net Income (Loss) Per Diluted Common Share, Pro Forma Net Sales, Pro Forma Gross Profit, and Pro Forma Adjusted EBITDA which are non-GAAP financial measures. Adjusted EBITDA excludes restructuring and impairment charges, strategic development and acquisition related costs, goodwill impairment, COVID-19 related costs, non-cash gain on foreign currency transactions, non-cash charges of purchase price allocation to inventory, customer inventory buybacks, and share-based compensation. Adjusted Operating Income excludes restructuring and impairment charges, strategic development and acquisition related costs, goodwill impairment, COVID-19 related costs, non-cash charges of purchase price allocation to inventory, and customer inventory buybacks. Adjusted Net Income (Loss) Applicable to Common Shares and Adjusted Net Income (Loss) Per Diluted Common Share exclude restructuring and impairment charges, strategic development and acquisition related costs, goodwill impairment, COVID-19 related costs, non-cash gain (loss) on foreign currency transactions, non-cash charges of purchase price allocation to inventory, customer inventory buybacks, and the tax effect of the applicable non-GAAP adjustments. Adjusted EBITDA is calculated based on the terms contained in Cornerstone’s term loan credit agreement.
Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income (Loss) Applicable to Common Shares, Adjusted Net Income (Loss) Per Diluted Common Share, Pro Forma Net Sales, Pro Forma Gross Profit, and Pro Forma Adjusted EBITDA are measures used by management and, therefore, provided to investors to provide comparability between periods of underlying operational results. Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income (Loss) Applicable to Common Shares, Adjusted Net Income (Loss) Per Diluted Common Share, Pro Forma Net Sales, Pro Forma Gross Profit, and Pro Forma Adjusted EBITDA should not be considered in isolation or as substitutes for net income (loss), operating income (loss), net income (loss) applicable to common shares, net income (loss) per diluted common share or revenue determined in accordance with generally accepted accounting principles in the United States. The non-GAAP financial measures and reconciliations thereof to the most directly comparable measures prepared in accordance with generally accepted accounting principles are included in the Press Release furnished as Exhibit 99.1 hereto.
The information in this Item 2.02 and in Exhibit 99.1 which is attached to this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall they be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except in the event that Cornerstone expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such filing.





Item 9.01. Financial Statements and Exhibits.
 
(d)Exhibits.
 
Exhibit
Number
Description
99.1
104  Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
  



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
CORNERSTONE BUILDING BRANDS, INC.
By:/s/ Jeffrey S. Lee
Name:Jeffrey S. Lee
Title:Executive Vice President and Chief Financial Officer
 
Date: May 12, 2020
 


EX-99.1 2 a20200512exhibit991.htm EX-99.1 Document





cnrlogo011.jpg
NEWS RELEASE
Cornerstone Building Brands Announces First-Quarter 2020 Results
Exceeded expectations and delivered third consecutive quarter of margin expansion in all segments
Ample liquidity with $476 million of cash and cash equivalents and no near-term debt maturities
Decisive actions taken in response to COVID-19 to ensure safety of employees and business continuity
Implemented meaningful initiatives to adjust the Company’s cost structure
Financial discipline and long-term fundamentals position the Company for a strong recovery

CARY, NC, May 12, 2020 - Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), a leading provider of exterior building products, today reported first-quarter 2020 net sales of $1,113.8 million, up 4.6 percent from the same period a year ago. Adjusted for acquisitions, first-quarter 2020 pro forma net sales1 were $1,122.2 million as compared to pro forma net sales1 of $1,088.7 million for first-quarter 2019. The increase was primarily driven by positive price/mix and higher volume.
In the first quarter of 2020, the Company recorded a net loss of $542.1 million, including a non-cash pre-tax goodwill impairment accounting adjustment of $503.2 million related to the COVID-19 pandemic. Excluding the accounting adjustment, first-quarter 2020 net loss was $38.9 million, a 35.2 percent improvement from the net loss of $60.0 million during first-quarter 2019.
Pro forma Adjusted EBITDA1 was $98.1 million or 8.7 percent of pro forma net sales1, an improvement of 210 basis points from the same pro forma period a year ago. The improvement was primarily driven by favorable price/mix, net of inflation partially offset by higher direct labor and other compensation and benefits costs.
"Our team’s focus on executing our strategy delivered profitability that exceeded our guidance expectations for the first quarter," said James S. Metcalf, Chairman and Chief Executive Officer. "Price leadership and continuous improvement are core competencies of our business model that have driven margin expansion in all segments for three consecutive quarters.”
“Now, as we navigate the uncertainty of the COVID-19 pandemic, we have been focused on taking decisive actions to protect the health and safety of our employees and customers, and the ongoing strength of our Company. Our extensive operating footprint provides us with the flexibility to manage production schedules to ensure that our customers continue to receive quality products without disruption. We have also taken necessary actions to safeguard our solid financial position, strengthen liquidity, and improve cash generation. While it remains unclear how long this pandemic and the related economic challenges will last, I believe in the resiliency of Cornerstone Building Brands, and I am confident that the actions we are taking will help us emerge even stronger than before,” Metcalf concluded.

Segment Results
During the first-quarter of 2020, there were four additional ship days contributing to the favorable year-over-year variance:
Windows segment net sales increased 6.4 percent and gross profit as a percent of net sales improved 170 basis points primarily from favorable price/mix, net of inflation, within the U.S. Windows business and achieved cost savings in manufacturing.
Siding segment net sales increased 10.4 percent and gross profit as a percent of net sales improved 930 basis points. Adjusted for acquisition impacts, Siding segment net sales increased 3.0 percent and gross margin expanded 230 basis points primarily from favorable price/mix, net of inflation.
Commercial segment net sales were about flat and gross profit as a percent of net sales improved 180 basis points primarily from favorable price/mix, net of inflation, partially offset by higher manufacturing expenses.

(1)Adjusted financial metrics used in this release are non-GAAP measures and refer to the results for 2020 and 2019. Pro forma financial metrics used in this release for results in 2020 and 2019 are also non-GAAP measures and adjust for other items affecting comparability. See reconciliations of GAAP results to adjusted results and pro forma results in the accompanying tables.





COVID-19 Response and Update
The health and safety of our employees, customers, and communities is our number one priority. Throughout this pandemic, Cornerstone Building Brands has been adhering to mandates and other guidance from local governments and health authorities, including the World Health Organization and the Centers for Disease Control and Prevention. The Company has taken extraordinary measures and invested in practices to protect employees and reduce the risk of spreading the virus, while continuing to operate where permitted and to the extent possible. These actions include additional cleaning of our facilities, staggering crews, incorporating visual cues to reinforce social distancing, providing face coverings and gloves, as well as implementing daily health validation at our manufacturing and office facilities.
Across all of our businesses, our teams are in constant communication with customers, along with suppliers and government officials, to maintain business continuity without disruption. The Company has continued operations as an essentialbusiness, delivering quality products to our customers. Cornerstone Building Brands has remained flexible, effectively managing production schedules in response to short-term shutdowns for extensive cleaning, and changes in demand due to the pandemic.
Additionally, the Company has been taking prudent and precautionary actions to maintain financial flexibility and enhance liquidity by:
Rationalizing facility and organizational structures
Reducing discretionary and non-essential expenses
Lowering 2020 capital expenditures
Effectively managing working capital
Drawing on its asset-based revolving credit facility and cash flow revolver

Balance Sheet and Liquidity
Cornerstone Building Brands has sufficient liquidity to meet its needs with $475.7 million of unrestricted cash and cash equivalents on the balance sheet as of April 4, 2020, no near-term debt maturities and a covenant-lite structure. Additionally, the Company had excess availability of $118.0 million on its asset-based revolving credit facility as of April 4, 2020.

Outlook
Given the continued uncertainty surrounding COVID-19, the Company has suspended its practice of providing segment sales and earnings guidance. Cornerstone Building Brands is anticipating net sales for second-quarter 2020 to be in line with, or better than, April 2020 net sales, which were 25 percent lower than pro forma net sales for the same period last year. The Company expects to maintain financial flexibility and enhance liquidity from the following significant cash generating actions:
Structural cost reduction initiatives totaling $80 million to $100 million
Near-term expense management actions totaling $40 million to $60 million in savings
Capital expenditure reduction of approximately $30 million
Effective working capital management of $100 million to $120 million
The Company plans to reinstate quarterly financial guidance at the earliest reasonable opportunity.






Conference Call Information
The Company will host a conference call at 9:00 a.m. EST on Wednesday, May 13 to discuss its financial performance with investors and securities analysts. The call will be webcast on the Company’s website, www.cornerstonebuildingbrands.com, in the Events & Presentations section of the Investors Page. The dial-in number for the conference call is 1-833-380-0405. After the live webcast, a telephonic replay of the call will be available until May 27, 2020. The replay dial-in number is 1-800-585-8367 and the replay code is 1196945. Additionally, the slide presentation to be used in connection with the Company’s webcast and conference call is available in the Investor Relations section of the Company’s website at www.cornerstonebuildingbrands.com.
About Cornerstone Building Brands
Cornerstone Building Brands is a leading manufacturer of exterior building products in North America. Headquartered in Cary, North Carolina, the Company serves residential and commercial customers across new construction and the repair & remodel markets. As the #1 manufacturer of windows, vinyl siding, insulated metal panels, metal roofing and wall systems and metal accessories, Cornerstone Building Brands combines a comprehensive portfolio of products with an expansive national footprint that includes approximately 20,000 employees at manufacturing, distribution and office locations throughout North America. For more information, visit us at www.cornerstonebuildingbrands.com.
Investor Relations
Tina Beskid
1-866-419-0042
info@investors.cornerstonebuildingbrands.com










Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “anticipate," “guidance,” “plan,” “potential,” “expect,” “should,” “will,” “forecast,” “target” and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and performance expectations. Among the factors that could cause actual results to differ materially include, but are not limited to, industry cyclicality and seasonality and adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; downturns in the residential new construction and repair and remodeling end markets, or the economy or the availability of consumer credit; volatility in the United States (“U.S.”) economy and abroad, generally, and in the credit markets; the outbreak of a health epidemic or pandemic, including the coronavirus disease 2019 (“COVID-19”) pandemic; precautions taken due to the recent COVID-19 pandemic that could harm our business; impairment of goodwill and/or intangible assets; our ability to successfully develop new products or improve existing products; the effects of manufacturing or assembly realignments; seasonality of the business and other external factors beyond our control; commodity price volatility and/or limited availability of raw materials, including steel, PVC resin, glass and aluminum; our ability to identify and develop relationships with a sufficient number of qualified suppliers and to avoid a significant interruption in our supply chains; retention and replacement of key personnel; enforcement and obsolescence of our intellectual property rights; costs related to compliance with, violations of or liabilities under environmental, health and safety laws; changes in building codes and standards; competitive activity and pricing pressure in our industry; our ability to make strategic acquisitions accretive to earnings; our ability to carry out our restructuring plans and to fully realize the expected cost savings; global climate change, including legal, regulatory or market responses thereto; breaches of our information system security measures; damage to our computer infrastructure and software systems; necessary maintenance or replacements to our enterprise resource planning technologies; potential personal injury, property damage or product liability claims or other types of litigation; compliance with certain laws related to our international business operations; increases in labor costs, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers; significant changes in factors and assumptions used to measure certain of our defined benefit plan obligations and the effect of actual investment returns on pension assets; the cost and difficulty associated with integrating and combining acquired businesses; volatility of the Company’s stock price; substantial governance and other rights held by the Investors; the effect on our common stock price caused by transactions engaged in by the Investors, our directors or executives; our substantial indebtedness and our ability to incur substantially more indebtedness; limitations that our debt agreements place on our ability to engage in certain business and financial transactions; our ability to obtain financing on acceptable terms; downgrades of our credit ratings; and the effect of increased interest rates on our ability to service our debt. See also the “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and other risks described in documents subsequently filed by the Company from time to time with the SEC, which identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release.







CORNERSTONE BUILDING BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended
 April 4,
2020
March 30,
2019
Net sales$1,113,811  $1,064,832  
Cost of sales882,924  878,915  
Gross profit230,887  185,917  
20.7 %17.5 %
Selling, general and administrative expenses164,954  154,306  
Intangible asset amortization44,861  41,463  
Restructuring and impairment charges, net13,835  3,431  
Strategic development and acquisition related costs4,857  14,082  
Goodwill impairment503,171  —  
Loss from operations(500,791) (27,365) 
Interest income338  215  
Interest expense(54,835) (58,286) 
Foreign exchange gain (loss)(4,137) 1,177  
Other income (expense), net(662) 345  
Loss before income taxes(560,087) (83,914) 
Benefit for income taxes(18,014) (23,897) 
3.2 %28.5 %
Net loss(542,073) (60,017) 
Net income allocated to participating securities—  —  
Net loss applicable to common shares$(542,073) $(60,017) 
Loss per common share:  
Basic$(4.30) $(0.48) 
Diluted$(4.30) $(0.48) 
Weighted average number of common shares outstanding:  
Basic126,093  125,503  
Diluted126,093  125,503  
Increase in sales4.6 %152.7 %
Selling, general and administrative expenses percentage of net sales14.8 %14.5 %







CORNERSTONE BUILDING BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 April 4,
2020
December 31,
2019
ASSETS  
Current assets:
Cash and cash equivalents$475,701  $98,386  
Restricted cash7,924  3,921  
Accounts receivable, net476,779  491,740  
Inventories, net460,405  439,194  
Income taxes receivable35,774  48,466  
Investments in debt and equity securities, at market
2,891  3,776  
Prepaid expenses and other76,098  78,516  
Assets held for sale2,564  1,750  
     Total current assets1,538,136  1,165,749  
Property, plant and equipment, net651,800  652,841  
Lease right-of-use assets301,332  316,155  
Goodwill1,183,432  1,669,594  
Intangible assets, net1,704,371  1,740,700  
Deferred income taxes1,292  7,510  
Other assets, net12,066  11,797  
     Total assets$5,392,429  $5,564,346  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:
Current portion of long-term debt$25,600  $25,600  
Accounts payable219,300  205,629  
Accrued compensation and benefits62,279  92,130  
Accrued interest34,478  19,070  
Accrued income taxes5,523  —  
Current portion of lease liabilities69,307  72,428  
Other accrued expenses213,044  233,687  
     Total current liabilities629,531  648,544  
Long-term debt3,612,610  3,156,924  
Deferred income taxes234,112  291,987  
Long-term lease liabilities232,660  243,780  
Other long-term liabilities335,628  287,793  
     Total long-term liabilities4,415,010  3,980,484  
Common stock1,262  1,261  
Additional paid-in capital1,251,252  1,248,787  
Accumulated deficit(823,980) (281,229) 
Accumulated other comprehensive loss, net(80,137) (32,398) 
Treasury stock, at cost(509) (1,103) 
     Total stockholders’ equity347,888  935,318  
     Total liabilities and stockholders’ equity$5,392,429  $5,564,346  







CORNERSTONE BUILDING BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Three Months Ended
 April 4,
2020
March 30,
2019
Cash flows from operating activities:
Net loss$(542,073) $(60,017) 
Adjustments to reconcile net loss to net cash used in operating activities:  
Depreciation and amortization69,769  59,947  
Non-cash interest expense2,274  2,672  
Share-based compensation expense3,387  4,005  
Non-cash fair value premium on purchased inventory—  16,249  
Goodwill impairment503,171  —  
Asset impairment3,079  —  
Provision for doubtful accounts725  (189) 
Deferred income taxes(35,734) (7,434) 
Changes in operating assets and liabilities, net of effect of acquisitions: 
Accounts receivable20,532  (43,635) 
Inventories(20,724) 16,704  
Income taxes18,212  (34,090) 
Prepaid expenses and other1,554  18,524  
Accounts payable12,461  (7,216) 
Accrued expenses(40,662) (12,373) 
Other, net1,805  (1,869) 
Net cash used in operating activities(2,224) (48,722) 
Cash flows from investing activities:  
Acquisitions, net of cash acquired(39,857) (182,418) 
Capital expenditures(27,567) (27,190) 
Net cash used in investing activities(67,424) (209,608) 
Cash flows from financing activities:  
Proceeds from ABL facility345,000  220,000  
Proceeds from cash flow revolver115,000  —  
Payments on term loan(6,405) (6,405) 
Payments related to tax withholding for share-based compensation(327) (156) 
Net cash provided by financing activities453,268  213,439  
Effect of exchange rate changes on cash and cash equivalents(2,302) 911  
Net increase (decrease) in cash, cash equivalents and restricted cash381,318  (43,980) 
Cash, cash equivalents and restricted cash at beginning of period102,307  147,607  
Cash, cash equivalents and restricted cash at end of period$483,625  $103,627  







CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED NET LOSS PER DILUTED COMMON SHARE AND
NET LOSS COMPARISON
(In thousands, except per share data)
(Unaudited)
 Three Months Ended
 April 4,
2020
March 30,
2019
Net loss per diluted common share, GAAP basis$(4.30) $(0.48) 
Restructuring and impairment charges, net0.11  0.03  
Strategic development and acquisition related costs0.04  0.11  
Non cash loss (gain) on foreign currency transactions0.03  (0.01) 
Non cash charge of purchase price allocated to inventories—  0.13  
Goodwill impairment3.99  —  
Customer inventory buybacks—  —  
COVID-19(3)
0.01  —  
Other, net0.01  0.01  
Tax effect of applicable non-GAAP adjustments(1)
(1.09) (0.07) 
Adjusted net loss per diluted common share(2)
$(1.20) $(0.28) 
Three Months Ended
April 4,
2020
March 30,
2019
Net loss applicable to common shares, GAAP basis$(542,073) $(60,017) 
Restructuring and impairment charges, net13,992  3,431  
Strategic development and acquisition related costs4,857  14,082  
Non cash loss (gain) on foreign currency transactions4,137  (1,177) 
Non cash charge of purchase price allocated to inventories—  16,249  
Goodwill impairment503,171  —  
Customer inventory buybacks120  242  
COVID-19(3)
1,230  —  
Other, net1,138  724  
Tax effect of applicable non-GAAP adjustments(1)
(137,448) (8,727) 
Adjusted net loss applicable to common shares(2)
$(150,876) $(35,193) 
(1)The Company calculated the tax effect of non-GAAP adjustments by applying the applicable federal and state statutory tax rate for the period to each applicable non-GAAP item.
(2)The Company discloses a tabular comparison of Adjusted net income (loss) per diluted common share and Adjusted net income (loss) applicable to common shares, which are non-GAAP measures, because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period. Adjusted net income (loss) per diluted common share and Adjusted net income (loss) applicable to common shares should not be considered in isolation or as a substitute for net income (loss) per diluted common share and net income (loss) applicable to common shares as reported on the face of our consolidated statements of operations.
(3)Costs included within the COVID-19 line item for the three months ended April 4, 2020 include incremental labor costs due to quarantine related absenteeism, incremental facility cleaning costs, pandemic related supplies and personal protective equipment for employees among other costs.
Certain amounts in this release have been subject to rounding adjustments. Accordingly, amounts shown as totals may not be the arithmetic aggregation of the individual amounts that comprise or precede them.






CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Three Months Ended
April 4,
2020
March 30,
2019
Operating loss, GAAP$(500,791) $(27,365) 
Restructuring and impairment charges, net13,992  3,431  
Strategic development and acquisition related costs4,857  14,082  
Non cash charge of purchase price allocated to inventories—  16,249  
Goodwill impairment503,171  —  
Customer inventory buybacks120  242  
COVID-191,230  —  
Other, net1,138  724  
Adjusted operating income23,717  7,363  
Other income (expense), net(662) 345  
Depreciation and amortization69,769  59,947  
Share-based compensation expense3,387  4,005  
Adjusted EBITDA96,211  71,660  
Impact of Environmental Stoneworks and Kleary acquisitions(1)
1,869  481  
Pro Forma Adjusted EBITDA$98,080  $72,141  
(1)Reflects the Adjusted EBITDA of Environmental Stoneworks for the period January 1, 2019 to the acquisition date of February 20, 2019 and Kleary Masonry, Inc. for the periods January 1, 2019 to March 30, 2019 and January 1, 2020 to March 1, 2020.






CORNERSTONE BUILDING BRANDS, INC.
BUSINESS SEGMENTS
(In thousands)
(Unaudited)
Three Months Ended
April 4, 2020March 30, 2019
% of
Net Sales
% of
Net Sales
% Change
Net Sales   
Windows$448,450  40.3 %$421,594  39.6 %6.4 %
Siding241,043  21.6 %218,277  20.5 %10.4 %
Commercial424,318  38.1 %424,961  39.9 %(0.2)%
Total net sales$1,113,811  100.0 %$1,064,832  100.0 %4.6 %
Gross Profit
Windows$74,001  16.5 %$62,340  14.8 %18.7 %
Siding59,042  24.5 %33,176  15.2 %78.0 %
Commercial97,844  23.1 %90,401  21.3 %8.2 %
Total gross profit$230,887  20.7 %$185,917  17.5 %24.2 %
Operating Income (Loss)  
Windows$(313,190) (69.8)%$(4,319) (1.0)%7,151.4 %
Siding(168,867) (70.1)%(11,654) (5.3)%1,349.0 %
Commercial16,841  4.0 %24,310  5.7 %(30.7)%
Corporate(35,575) —  (35,702) — %(0.4)%
Total operating loss  $(500,791) (45.0)%$(27,365) (2.6)%1,730.0 %







CORNERSTONE BUILDING BRANDS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
RECONCILIATION OF PRO FORMA SEGMENT INFORMATION
(In thousands)
(Unaudited)
ReportedAcquisitions (1)(2)Pro Forma
Three months ended March 30, 2019
Net Sales
Windows$421,594  $—  $421,594  
Siding218,277  23,909  242,186  
Commercial424,961  —  424,961  
Total Net Sales$1,064,832  $23,909  $1,088,741  
Gross Profit% of Net Sales
Windows$62,340  $—  $62,340  14.8 %
Siding33,176  20,870  54,046  22.3 %
Commercial90,401  —  90,401  21.3 %
Total Gross Profit$185,917  $20,870  $206,787  19.0 %
ReportedAcquisitions (1)Pro Forma
Three months ended April 4, 2020
Net Sales
Windows$448,450  $—  $448,450  
Siding241,043  8,358  249,401  
Commercial424,318  —  424,318  
Total Net Sales$1,113,811  $8,358  $1,122,169  
Gross Profit% of Net Sales
Windows$74,001  $—  $74,001  16.5 %
Siding59,042  2,300  61,342  24.6 %
Commercial97,844  —  97,844  23.1 %
Total Gross Profit$230,887  $2,300  $233,187  20.8 %
(1)Acquisitions reflect the estimated impact for Environmental Stoneworks and Kleary Masonry, Inc.
(2)Gross margin adjustment for the non-cash inventory fair value step-up of $16.2 million associated with the Ply Gem merger and Environmental Stoneworks acquisition.

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Cover
May 12, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 12, 2020
Entity Registrant Name Cornerstone Building Brands, Inc.
Entity Central Index Key 0000883902
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 1-14315
Entity Tax Identification Number 76-0127701
Entity Address, Address Line One 5020 Weston Parkway
Entity Address, Address Line Two Suite 400
Entity Address, City or Town Cary
Entity Address, State or Province NC
Entity Address, Postal Zip Code 27513
City Area Code 866
Local Phone Number 419-0042
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock $.01 par value per share
Trading Symbol CNR
Security Exchange Name NYSE
Entity Emerging Growth Company false
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