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About Cornerstone Building Brands
Cornerstone Building Brands is the largest manufacturer of exterior building products in North America. Headquartered in Cary, North Carolina, the organization 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 more than 21,000 employees at manufacturing, distribution and office locations throughout North America.
The image below shows a map of affiliated builders for Cornerstone Building Brands.
The image below shows a map of affiliated builders for Cornerstone Building Brands.
Financial overview of Cornerstone's latest earnings report
The numbers we are interested in (for the quarter):
- Net sales of $1,295.5 million
- Gross profit of $304.7 million, or 23.5% of net sales
- Net income of $17.5 million
- Diluted income per share: $0.14
- Diluted number of shares outstanding: 125.256 million
- Cash and cash equivalents: $87.496 million
- Cash and cash equivalents per share: $0.69
- Cash and cash equivalents makes up 1.55% of Cornerstone's total assets
- Cash and cash equivalents makes up 15.11% of Cornerstone's current market capital
- Accounts receivable: $589.610 million
- Accounts receivable makes up 10.4% of Cornerstone's total assets
- Inventories: $502.125 million
- Inventories makes up 8.8% of Cornerstone's total assets
- Stockholders equity: $908.204 million
- Stockholders equity per share: $7.24
Cornerstone's management commentary on the results and earnings guidance
Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products in North America, today reported financial results for the quarter ended June 29, 2019.
Financial and Operational Highlights for the Second Quarter:
Commenting on Cornerstone Building Brands’ second quarter performance, Chairman and Chief Executive Officer James S. Metcalf stated, “During the second quarter, we made continued progress on our strategic, operational, and financial objectives, achieving Adjusted EBITDA margin expansion in each of our business segments. Although most of our end use markets experienced lower year-over-year volumes, through price discipline and cost management, we delivered solid performance during the period. Pricing actions taken at the beginning of the year combined with continued integration and cost improvement initiatives, have offset higher raw material, freight and labor costs, and are driving bottom line margin expansion.”
Mr. Metcalf continued, “Our cost savings and integration initiatives remain on track. Across all our businesses, we have line of sight to achieving our cost savings target for this year and in 2020. During the quarter, we finalized a majority of the steps necessary to complete the integrations of the Atrium and Silver Line businesses into our Windows segment, a key milestone for the Company.”
Guidance
The Company’s key economic indicators are tracking toward low growth in the residential new construction and repair & remodel markets and a moderate contraction in the commercial construction markets. Based on these market indicators and the synergies and cost initiatives, the Company expects Adjusted EBITDA to be in the range of $170 to $185 million for the third quarter of fiscal 2019.
Financial and Operational Highlights for the Second Quarter:
- Realized 20 basis point expansion in gross profit margin to 23.5% compared to 23.3% in the pro forma prior year period
- Attained merger synergies of $12.6 million and cost improvement initiatives of $14.3 million during the quarter bringing the 2019 cumulative synergies and cost improvement initiatives achieved to $42.4 million
- Made significant progress in the integrations of the Atrium and Silver Line businesses into the Windows segment and Environmental StoneWorks (“ESW”) into the Siding segment during the quarter
Commenting on Cornerstone Building Brands’ second quarter performance, Chairman and Chief Executive Officer James S. Metcalf stated, “During the second quarter, we made continued progress on our strategic, operational, and financial objectives, achieving Adjusted EBITDA margin expansion in each of our business segments. Although most of our end use markets experienced lower year-over-year volumes, through price discipline and cost management, we delivered solid performance during the period. Pricing actions taken at the beginning of the year combined with continued integration and cost improvement initiatives, have offset higher raw material, freight and labor costs, and are driving bottom line margin expansion.”
Mr. Metcalf continued, “Our cost savings and integration initiatives remain on track. Across all our businesses, we have line of sight to achieving our cost savings target for this year and in 2020. During the quarter, we finalized a majority of the steps necessary to complete the integrations of the Atrium and Silver Line businesses into our Windows segment, a key milestone for the Company.”
Guidance
The Company’s key economic indicators are tracking toward low growth in the residential new construction and repair & remodel markets and a moderate contraction in the commercial construction markets. Based on these market indicators and the synergies and cost initiatives, the Company expects Adjusted EBITDA to be in the range of $170 to $185 million for the third quarter of fiscal 2019.
Cornerstone (NYSE: CNR) stock price history
The image below, obtained from Google shows the stock price performance of Cornerstone over the last 5 years. And its been a pretty volatile and largely negative period for the group, with the stock price declining from around $20 a share 5 years ago to the $4.57 it is trading at now. The stock is also trading a lot closer to its 52 week low than it is to its 52 week high which shows short term sentiment towards the stock is negative.
Cornerstone (NYSE: CNR) latest stock valuation
So what are Cornerstone Building Brands stock worth based on their latest earnings report published? For the quarter they made a profit per stock, but for the 6 months they are still making a loss per stock. And it is always hard to value a loss making entity. As a general rule o thumb we would go and look at the stockholders equity per share. As this gives an idea of what stockholders would get out of they sell all their assets and pay off all their liabilities and distribute the rest to stockholders. In this case its $7.24 a stock.
And in the absence of positive cash generated from operations and a loss per share our default valuation is the stockholders equity per share. We therefore value the group at their stockholders equity of $7.24. But investing in Cornerstone Building Brands is not recommended at this point in time. The environment they are operating in is facing headwinds and they not profitable at this point.
And in the absence of positive cash generated from operations and a loss per share our default valuation is the stockholders equity per share. We therefore value the group at their stockholders equity of $7.24. But investing in Cornerstone Building Brands is not recommended at this point in time. The environment they are operating in is facing headwinds and they not profitable at this point.