2024
ANNUAL REPORT
TO OUR CURRENT
AND PROSPECTIVE
SHAREHOLDERS,
This was a year of continued progress for
JELD-WEN as we focused on advancing our
transformation journey and strengthening our
foundation. As we drive these efforts, we are
committed to staying rooted in what made
JELD-WEN great from the very beginning:
striving to take care of our customers better
than anyone else.
Looking ahead, we are focused on growing our
sales, increasing our profitability, generating
strong cash flows and investing capital in
high-return projects, as well as maintaining a
strong balance sheet.
2024 FINANCIAL RESULTS
Our net revenue was $3.8 billion, a decrease
of 12% from the previous year. Adjusted
EBITDA from continuing operations was $275
million, compared to $380 million in 2023.
LETTER FROM THE CEO
“As we look to the future,
our multi-year commercial
plan will serve as the
framework for our efforts to
create a more efficient global
manufacturing network. We
are also making significant
investments to improve
utilization and quality while
enabling growth.“
* Represents net loss from continuing operations.
** Adjusted EBITDA from continuing operations and Adjusted Net Income from continuing operations
are non-GAAP financial measures. Please refer to investors.jeldwen.com for a reconciliation of our
non-GAAP financial measures.
NET LOSS*
($188M)
843%
ADJUSTED NET INCOME**
$67M
51%
ADJUSTED EBITDA**
$275M
28%
NET REVENUE
$3.8B
12%
JELD-WEN North America was recognized for sustainability.
OUR ROAD AHEAD
In the short term, strengthening the foundation of our
business is our priority. We have made progress optimizing
our network, reducing our operating costs and improving
customer service. As part of our strategy, we removed fixed
costs from our business through the consolidation/closure of
several facilities while realigning production to other plants.
As we look to the future, our multi-year commercial plan
will serve as the framework for our efforts to create a more
efficent global manufacturing network. We are also making
significant investments to improve utilization and quality
while enabling growth.
Across our organization, we’re building strategic clarity
and ensuring our collective organization is focused on
key priorities. Our Europe business launched a regional
strategy focused on rebalancing the business, improving
performance and driving focused growth. North America
outlined a refined go-to-market strategy supported by four
customer-centric pillars: right product and brand offering,
right cost, frictionless experience and disciplined planning
and execution.
Globally, through our ALL IN Transformation, our employee-
led change network sourced and executed improvement
opportunities in response to employee survey feedback.
Our culture and capabilities team continues our focus
to strengthen our organizational health through strategy
alignment and ownership behaviors.
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE (ESG)
Our 2023 ESG report, released in August 2024, detailed
progress on our long-term sustainability goals. We reported
that 90% of our window product lines in North America
(excluding LaCantina® Door product line) achieved an Energy
Star® certified option, and we shared a continued reduction
in our GHG emissions (scopes 1 and 2) year over year.
Our Second Nature™ Environmentally
Conscious Door Collection was honored
twice in 2024, with a Residential Excellence
in Design (RED) product award and an
Architectural Record Products of the Year
award. JELD-WEN and LaCantina Doors
clenched the top two spots on the Green
Matters “10 Best Energy Efficient Door and
Window Brands” list.
EXTERNAL RECOGNITION
We continued to garner attention from prominent external
organizations, as JELD-WEN was again named one of the
“Most Trustworthy Companies in America” by Newsweek
magazine and was again the top
windows and doors company in
the construction industry category.
Additionally, we were included on
Forbes’s list of America’s Best Large
Employers. JELD-WEN UK won the
Health and Safety award at the British
Woodworking Federation Awards,
and JELD-WEN France was awarded
Gold by EcoVadis in their annual
Sustainability Rating Assessment.
IN CLOSING
Our actions during the past year have positioned us
for growth and for continued investment in our future
that will deliver value to our stakeholders, especially
as the market improves. Most notably, I would like
to thank our employees for their contributions to our
achievements and our investors for your continued
support as JELD-WEN drives our purpose: to bring
beauty and security to the spaces that touch our lives.
Bill Christensen
CEO
March 13, 2025
Newsweek magazine recognized
JELD-WEN on their list of Most
Trustworthy Companies.
ecognized for sustainability.
[This page intentionally left blank]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-K
__________________________________
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 001-38000
__________________________________
JELD-WEN Holding, Inc.
(Exact name of registrant as specified in its charter)
__________________________________
Delaware
93-1273278
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2645 Silver Crescent Drive
Charlotte, North Carolina 28273
(Address of principal executive offices, zip code)
(704) 378-5700
(Registrant’s telephone number, including area code)
__________________________________
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock (par value $0.01 per share)
JELD
New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by checkmark 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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the common stock held by non-affiliates of the registrant was $1.1 billion as of the end of the registrant's second fiscal quarter (based on the closing sale price for the
common stock on the New York Stock Exchange on June 29, 2024). Shares of the registrant's voting stock held by each executive officer and director and by each entity or person that, to the
registrant's knowledge, owned 10% or more of the registrant's outstanding common stock as of June 29, 2024, have been excluded from this number in that these persons may be deemed affiliates of
the registrant.
The registrant had 84,849,974 shares of common stock, par value $0.01 per share, issued and outstanding as of February 14, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates by reference certain information from the registrant's Definitive Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the Securities
and Exchange Commission within 120 days after December 31, 2024.
JELD-WEN HOLDING, Inc.
– Table of Contents –
Page No.
PART I
Item 1.
Business
7
Item 1A.
Risk Factors
18
Item 1B.
Unresolved Staff Comments
32
Item 1C.
Cybersecurity
32
Item 2.
Properties
33
Item 3.
Legal Proceedings
34
Item 4.
Mine Safety Disclosures
34
PART II
Item 5.
Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
35
Item 6.
[Reserved]
36
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
36
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
57
Item 8.
Financial Statements and Supplementary Data
58
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
58
Item 9A.
Controls and Procedures
58
Item 9B.
Other Information
59
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
59
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
60
Item 11.
Executive Compensation
60
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
60
Item 13.
Certain Relationships and Related Transactions, and Director Independence
60
Item 14.
Principal Accounting Fees and Services
60
PART IV
Item 15.
Exhibits and Financial Statement Schedules
61
Item 16.
Form 10-K Summary
63
Signatures
64
Consolidated Financial Statements
F - 4
Glossary of Terms
When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
Form 10-K
Annual Report on Form 10-K for the fiscal year ended December 31, 2024
ABL Facility
Our $500 million asset-based loan revolving credit facility, dated as of October 15, 2014, and
as amended from time to time, with JWI (as hereinafter defined) and JELD-WEN of Canada,
Ltd., as borrowers, the guarantors party thereto, a syndicate of lenders, and Wells Fargo Bank,
N.A., as administrative agent
ABS
JWI d/b/a American Building Supply, Inc.
Adjusted EBITDA from continuing
operations
A supplemental non-GAAP financial measure of operating performance not based on a
standardized methodology prescribed by GAAP that we define as Adjusted EBITDA from
continuing operations as income (loss) from continuing operations, net of tax, adjusted for the
following items: income tax expense (benefit); depreciation and amortization; interest expense
(income), net; and certain special items consisting of non-recurring net legal and professional
expenses and settlements; goodwill impairment; restructuring and asset-related charges; M&A
related costs; net (gain) loss on sale of business, property, and equipment; loss on
extinguishment and refinancing of debt; share-based compensation expense; pension
settlement charges; non-cash foreign exchange transaction/translation (gain) loss; and other
special items.
AI
Artificial intelligence
AOCL
Accumulated Other Comprehensive Loss
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
AUD
Australian Dollar
Base rate
LIBOR portion of the interest rate. In June 2023, we amended the ABL Facility to replace
LIBOR with a Term SOFR based rate.
CAP
Cleanup Action Plan
CARES Act
Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020
CEO
Chief Executive Officer or principal executive officer
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act
CFO
Chief Financial Officer or principal financial officer
CIO
Chief Digital and Information Officer
CISO
Chief Information Security Officer
Charter
Amended and Restated Certificate of Incorporation of JELD-WEN Holding, Inc.
Class B-1 Common Stock
Shares of our Class B-1 common stock, par value $0.01 per share, all of which were converted
into shares of our Common Stock on February 1, 2017
CME
Chicago Mercantile Exchange
CMI
JWI d/b/a CraftMaster Manufacturing, Inc.
COA
Consent Order and Agreement
CODM
Chief Operating Decision Maker, who is our Chief Executive Officer
Common Stock
The 900,000,000 shares of common stock, par value $0.01 per share, authorized under our
Charter
Core Revenues
Net revenues excluding the impact of foreign exchange, divestitures, and acquisitions
completed in the last twelve months
Corporate Credit Facilities
Collectively, our ABL Facility and our Term Loan Facility
COVID-19
A novel strain of the 2019-nCov coronavirus
Credit Facilities
Collectively, our Corporate Credit Facilities and other acquired term loans and revolving credit
facilities
DKK
Danish Kroner
Domoferm
The Domoferm Group of companies
Dooria
Dooria AS
EH&S
Environmental Health and Safety
ESG
Environmental, Social, and Governance
EPA
The U.S. Environmental Protection Agency
ERC
Employee Retention Credit
3
ERP
Enterprise Resource Planning
E.U.
European Union
Exchange Act
Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standards Board
FCPA
U.S. Foreign Corrupt Practices Act
FIFO
First In, First Out
Free Cash Flow
A non-GAAP financial measure that we define as net cash (used in) provided by operating
activities less capital expenditures (including purchases of intangible assets)
GAAP
Generally Accepted Accounting Principles in the United States
GDPR
General Data Protection Regulation
GILTI
Global Intangible Low-Taxed Income
GloBE
Global Anti-Base Erosion Rules
IPO
The initial public offering of shares of our common stock, as further described in this report on
Form 10-K
JELD-WEN
JELD-WEN Holding, Inc., together with its consolidated subsidiaries where the context
requires
JW Australia
Our Australasia business
JWI
JELD-WEN, Inc., a Delaware corporation
Karona
Karona, Inc.
LaCantina
JWI d/b/a LaCantina Doors, Inc.
LIBOR
London Interbank Offered Rate
M&A
Mergers and acquisitions
Mattiovi
Mattiovi Oy
MMI Door
JWI d/b/a Milliken Millwork, Inc.
MD&A
Management’s Discussion and Analysis of Financial Condition and Results of Operations
NAV
Net asset value
NIST
National Institute of Standards and Technology
NOL
Net operating loss
NYSE
New York Stock Exchange
OECD
Organization for Economic Cooperation and Development
Omnibus Equity Plan
JELD-WEN Holding, Inc. 2017 Omnibus Equity Plan
Onex
Onex Partners III LP and certain affiliates
PaDEP
Pennsylvania Department of Environmental Protection
Pillar Two
The Pillar Two Global Anti-Base Erosion rules
PLP
Potential Liability Party
Preferred Stock
90,000,000 shares of Preferred Stock, par value $0.01 per share, authorized under our Charter
PSU
Performance Stock Unit
R&R
Repair and Remodel
ROIC
Return on Invested Capital
ROU assets
Right-of-use assets or operating lease assets
RSU
Restricted Stock Unit
Sarbanes-Oxley
Sarbanes-Oxley Act of 2002, as amended
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Senior Notes
$800.0 million of unsecured notes issued in December 2017 in a private placement in two
tranches: $400.0 million bearing interest at 4.63% and maturing in December 2025 ($200.0
million of which were redeemed in August 2023 and the remaining $200.0 million of which
were redeemed in September 2024) and $400.0 million bearing interest at 4.88% and maturing
in December 2027. $350.0 million of senior unsecured notes issued in August 2024 in a
private placement bearing interest at 7.00% and maturing in September 2032.
Senior Secured Notes
$250.0 million of senior secured notes issued in May 2020 in a private placement bearing
interest at 6.25% and redeemed in August 2023.
SOFR
Secured Overnight Financing Rate
4
SG&A
Selling, general, and administrative expenses
Steves
Steves and Sons, Inc.
Tax Act
Tax Cuts and Jobs Act
Term Loan Facility
Our term loan facility, dated as of October 15, 2014, and as amended from time to time with
JWI, as borrower, the guarantors party thereto, a syndicate of lenders, and Bank of America,
N.A., as administrative agent
TSR
Total Shareholder Return
Towanda
The Company’s Towanda, PA business and related assets
U.K.
United Kingdom of Great Britain and Northern Ireland
U.S.
United States of America
UTP
Uncertain Tax Position
VOC
Volatile Organic Compounds
VPI
JWI d/b/a VPI Quality Windows, Inc.
WADOE
Washington State Department of Ecology
Working Capital
Accounts receivable plus inventory less accounts payable
WTW
Willis Towers Watson
5
CERTAIN TRADEMARKS, TRADE NAMES, AND SERVICE MARKS
This report includes trademarks, trade names, and service marks owned by us. Our U.S. window and door trademarks include
JELD-WEN®, AuraLast®, LaCANTINA®, MMI Door®, Karona®, ImpactGard®, JW®, Aurora®, IWP®, True BLU®, ABSTM, Siteline®,
National Door®, Low-Friction Glider®, Hydrolock®, VPITM, FINISHIELD®, MILLENNIUM®, TRUFIT®, EPICVUE®, and EVELIN®.
Our trademarks are either registered or have been used as common law trademarks by us. The trademarks we use outside the U.S.
include the Swedoor®, Dooria®, DANA®, MattioviTM, Zargag®, Alupan®, Domoferm®, Kellpax®, and HSE™ marks in Europe.
ENERGY STAR® is a registered trademark of the U.S. Environmental Protection Agency. This report contains additional trademarks,
trade names, and service marks of others, which are, to our knowledge, the property of their respective owners. Solely for
convenience, trademarks, trade names, and service marks referred to in this report appear without the ®, ™ symbols, but such
references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the
right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use of other parties’
trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or
endorsement or sponsorship of us by, these other parties.
6
PART I - FINANCIAL INFORMATION
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Form 10-K contains “forward-looking statements” within the meaning of Section
27A of the federal Securities Act and Section 21E of the Exchange Act, which are subject to the “safe harbor” created by those
sections. All statements, other than statements of historical facts, included in this Annual Report on Form 10-K are forward-looking
statements. Forward-looking statements are generally identified by our use of forward-looking terminology, including the terms
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” or
“should,” and, in each case, their negative or other various or comparable terminology. In particular, statements about the markets in
which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects,
assumptions, or future events or performance under Item 7 - Management’s Discussion and Analysis of Financial Condition and
Results of Operations and Item 1 - Business are forward-looking statements. In addition, statements regarding the potential outcome
and impact of pending litigation are forward-looking statements.
We have based these forward-looking statements on our current expectations, assumptions, estimates, and projections. While
we believe these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only
predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other
important factors, including those discussed under the headings Item 1A - Risk Factors in this Form 10-K may cause our actual
results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied
by these forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or
implied by the forward-looking statements include:
•
negative trends in overall business, financial market and economic conditions, and/or activity levels in our end markets;
•
increases in interest rates, sustained periods of elevated interest rates, and reduced availability of financing for the
purchase of new homes and home construction and improvements;
•
declines in our relationships with and/or consolidation of our key customers;
•
our highly competitive business environment;
•
failure to successfully implement our strategic and transformation journey initiatives, including our productivity, cost
reduction and global footprint rationalization initiatives;
•
failure to retain and recruit executives, managers, and employees;
•
disruptions in our operations due to natural disasters, changes in weather patterns and related extreme weather events,
public health crises, and armed conflicts, including the ongoing conflict between Russia and Ukraine and instabilities in
the Middle East;
•
failure to timely identify or effectively respond to consumer needs, expectations, or trends;
•
manufacturing realignments and cost savings programs resulting in a decrease in short-term earnings;
•
seasonal business with varying revenue and profit;
•
fluctuations in the prices of raw materials used to manufacture our products;
•
changes to tariff, trade or investment policies or laws;
•
delays or interruptions in the delivery of raw materials, finished goods, or certain component parts;
•
economic and geopolitical uncertainty and risks that arise from operating a multinational business;
•
exchange rate fluctuations;
•
product liability claims, product recalls, or warranty claims;
•
adverse outcome of pending or future litigation;
•
acquisitions, divestitures, or investments in other businesses that may not be successful;
•
inability to protect our intellectual property;
•
increases in labor costs, potential labor disputes, and work stoppages at our facilities;
•
pension plan obligations;
•
security breaches and other cybersecurity incidents;
•
changes in building codes that could increase the cost of our products or lower the demand for our windows and doors;
7
•
compliance costs and liabilities under environmental, health, and safety laws and regulations;
•
lack of transparency, threat of fraud, public sector corruption, and other forms of criminal activity involving government
officials;
•
availability and cost of credit;
•
our current level of indebtedness and the effect of restrictive covenants under our existing or future indebtedness
including our Credit Facilities and Senior Notes; and
•
other risks and uncertainties, including those listed under Item 1A - Risk Factors.
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. Any
forward-looking statement in this Form 10-K speaks only as of the date of this Form 10-K. We do not undertake any obligation to
update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.
8
Item 1 - Business
Our Company
We are a leading global designer, manufacturer, and distributor of high-performance interior and exterior doors, windows,
and related building products, serving the new construction and R&R sectors.
The JELD-WEN family of brands includes JELD-WEN worldwide; LaCantina and VPI in North America; and Swedoor,
DANA, and Kellpex in Europe. Our customers include wholesale distributors and retailers as well as individual contractors and
consumers. Our business is highly diversified by distribution channel, geography, and construction application as illustrated below:
2024 Net Revenues $3,776 million
Channel
Geography
Construction Application(1)
Distribution
57%
Retail
39%
Direct
4%
North America
72%
Europe 28%
Residential
New
Construction
39%
Non-residential
15%
R&R
46%
(1)
The percentage of net revenues by construction application is management’s estimate based on the end markets into which our customers sell.
As a leading global manufacturer of interior and exterior building products, we have invested significant capital to build a
business platform that we believe is unique among our competitors. We operate 79 manufacturing and distribution facilities in 14
countries, located in North America and Europe. We are focused on optimizing our global footprint to enhance performance and
improve profit margins.
On July 2, 2023, we completed the sale of JW Australia. The net assets and operations of the disposal group met the criteria
to be classified as “discontinued operations” and are reported as such in all periods. Unless otherwise indicated, the description of our
business provided in Part I pertains to continuing operations only (refer to Note 1 - Description of Company and Summary of
Significant Accounting Policies and Note 2 - Discontinued Operations to our consolidated financial statements included in this Form
10-K for more information).
For many product lines, our manufacturing processes are vertically integrated, enhancing our range of capabilities, our ability
to innovate, and our quality control, as well as providing us with supply chain, transportation, and working capital savings. We believe
that our manufacturing network allows us to deliver our broad portfolio of products to a wide range of customers across the globe,
while improving our customer service and strengthening our market positions.
Our History
We were founded in 1960 by Richard L. Wendt, when he, together with four business partners, bought a millwork plant in
Oregon. The subsequent decades were a time of successful expansion and growth as we added different businesses and product
categories such as interior doors, exterior steel doors, and vinyl windows. Our first overseas acquisition was Norma Doors in Spain in
1992 and since then we have acquired or established numerous businesses in Europe and Canada, making JELD-WEN a global
company.
9
Our Business Strategy and Operating Model
We strive to achieve solid financial performance and shareholder returns through the systematic execution of our strategy
which includes:
•
streamlining and simplifying the business, refining our product and brand strategies, rationalizing our global
footprint, and strategically sourcing our raw materials;
•
enhancing performance and improving profit margins through strategic pricing, cost-reduction and
productivity initiatives, such as implementing targeted quality improvement programs, optimizing our sales
force, right-sizing and consolidating our manufacturing network, investing in automation, and leveraging our
scale to streamline sourcing;
•
disciplined capital allocation and working capital management designed to maximize shareholder returns, cash
flows, and return on invested capital in a balanced manner;
•
focused go-to-market growth strategies and industry-leading innovations to support profitable organic revenue
growth; and
•
continuing our journey to drive a high-performing, values-based culture enabled by strategic clarity, leadership
excellence, and a global recognition and incentives strategy.
Our Products
We provide a broad portfolio of interior and exterior doors, windows, and related building products manufactured from a
variety of wood, metal, and composite materials offered across a full spectrum of price points. In the year ended December 31, 2024,
our door sales accounted for 63% of net revenues, our window sales accounted for 20% of net revenues, and our other ancillary
products and services accounted for 17% of net revenues.
Doors
We are a leading global manufacturer of residential doors. We offer a full line of residential interior and exterior door
products, including patio doors and folding or sliding wall systems. Our non-residential door product offering is concentrated in
Europe, where we are a leading non-residential door provider by net revenues in Germany, Austria, Switzerland, and Scandinavia. We
also offer non-residential doors across North America in certain markets. To meet the design, durability, and energy efficiency
requirements of our customers, our product portfolio encompasses many types of materials, including wood veneer, composite wood,
steel, glass, and fiberglass that satisfy a range of price points from entry-level to high-end. Our highest volume products include
molded interior doors and door systems, which are made from two composite molded door skins joined by a wooden frame and filled
with a hollow honey-cell core or other solid core materials. These value doors are the most popular choice for interior residential
applications in North America, France and the U.K. In the U.S., we manufacture exterior doors primarily made from fiberglass and
steel. We also manufacturer stile and rail doors in our U.S. manufacturing facilities. In Europe, we also sell high performance
residential and non-residential doors, with features such as soundproofing, fire resistance, radiation resistance, security, and in
Scandinavia we design and manufacture doors which can withstand extreme environmental conditions in coastal and arctic
environments. Additionally, we offer profitable value-added distribution services for residential and non-residential products in all our
markets, including customizable configuration services, specialized component options, and multiple finishing options. These services
are valued by labor constrained customers and allow us to capture more profit from the sale of our door products. In the U.S., our
acquisitions of ABS and MMI Door are examples of our focus on value-added services.
10
Windows
We are a leading manufacturer of residential windows in North America. We manufacture a full line of residential wood and
vinyl windows in North America. Our window product lines comprise a full range of styles, features, and energy-saving options to
meet the varied needs of our customers in each of our regional end markets. For example, our high-performance wood and vinyl
windows with multi-pane glazing and superior energy efficiency properties are in greater demand in Canada and the northern U.S. In
addition, our value windows are popular with production builders and the remodel and replacement markets. In select coastal regions,
we offer impact windows that can withstand the impact of hurricane force winds and satisfy local building codes. Our wood windows
remain prevalent as a high-end option because they possess both insulating qualities and the beauty of natural wood. In North
America, our wood windows and patio doors include our proprietary AuraLast treatment, which is a unique water-based wood
protection process that provides protection against wood rot and decay. We believe AuraLast is unique in its ability to penetrate and
protect the wood through to the core, as opposed to being a shallow or surface-only treatment. With the acquisition of LaCantina
Doors, the Company added LaCantina’s innovative folding, multi-slide, and swing patio doors and wall systems to its already robust
windows product offering. We also offer a non-residential line of vinyl windows for a broad assortment of commercial applications.
With the acquisition of VPI, we added vinyl windows for mid-rise, multi-family, institutional, hospitality, and commercial properties
to our product lineup. We believe that our innovative energy-efficient windows position us to benefit from increasing environmental
awareness among consumers and from changes in local building codes. In recognition of our expansive energy-efficient product line,
we have been an ENERGY STAR partner since 1998. In 2024, we were recognized as ENERGY STAR Partner of the Year by the
EPA, and our Canada business received ENERGY STAR Canada Manufacturer of the year for windows and doors and has won 8
ENERGY STAR Canada Manufacturer of the Year Awards.
Other Ancillary Products and Services
In certain regions, we sell a variety of other products that are ancillary to our door and window offerings, which we do not
classify as door or window sales. These products include glass, hardware and locks, and window screens. We also sell molded door
skins to certain direct and indirect customers pursuant to long-term contracts, and these customers in turn use the molded door skins to
manufacture interior doors and compete directly against us in the marketplace. Miscellaneous installation and other services are also
included in this category.
Our Segments
We operate within the global market for residential and non-residential doors and windows with sales spanning
approximately 71 countries. While we operate globally, the markets for doors and windows are regionally distinct with suppliers
manufacturing finished goods in proximity to their customers. Finished doors and windows are generally bulky, expensive to ship,
and, in the case of windows, fragile. Designs and specifications of doors and windows also vary from country to country due to
differing construction methods, building codes, certification requirements, and consumer preferences. Customers also demand short
delivery times and can require special order customizations. We believe that we are well-positioned to meet the global demands of our
customers due to our strong brands, broad product line, and strategically located manufacturing and distribution facilities.
Our operations are managed and reported in two reportable segments, organized and managed principally in geographic
regions: North America and Europe. We report all other business activities in Corporate and unallocated costs. Factors considered in
determining the two reportable segments include the nature of business activities, the management structure accountable directly to the
CODM, the discrete financial information regularly provided to the CODM, and information presented to the Board of Directors and
investors.
North America
In our North America segment, we compete primarily in the new construction and R&R market for residential doors and
windows in the U.S. and Canada. We are the only manufacturer that offers a full line of interior and exterior door and window
products, allowing us to offer a more complete solution to our customer base. While we expect to realize some benefit from share
gains and continued growth from pricing strategies to offset inflation, our North American market is expected to continue to face
headwinds during 2025 primarily due to heightened interest rates and continued labor, freight, and raw material inflation. We believe
that our total market opportunity in North America will continue to include non-residential applications and other related building
products.
Europe
The European market for doors is highly fragmented, and we have the only platform in the industry capable of serving nearly
all European countries. In our Europe segment, we compete primarily in the market for residential and non-residential doors in
Germany, the U.K., France, Austria, Switzerland, and Scandinavia. During 2025, we expect softer markets in our residential and non-
residential markets in Germany, France, and Austria due to general economic weakness and interest rates that are expected to remain
high.
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Refer to Note 14 - Segment Information to our consolidated financial statements included in this Form 10-K for more
information about our segments.
Materials
We generally maintain a diversified supply base for the materials used in our manufacturing operations. The primary
materials used for our door business include wood, wood composites, steel, glass, internally produced door skins, fiberglass
compound, and hardware, as well as petroleum-based products such as resin and binders. The primary materials for our window
business include wood, wood components, glass, and hardware, as well as aluminum and vinyl extrusions. Wood components for our
window operations are sourced primarily from our own manufacturing plants, which allow us to improve margins and take advantage
of our proprietary technologies such as our AuraLast wood treatment process.
We track commodities in order to understand our vendors’ costs, realizing that our costs are determined by the broader
competitive market as well as by increases in the inputs to our vendors. To manage the risk in material costs, we develop strategic
relationships with suppliers, routinely evaluate substitute components, develop new products, vertically integrate, where applicable,
and seek alternative sources of supply from multiple vendors and often from multiple geographies.
Seasonality
In a typical year, our operating results are impacted by seasonality. Historically, peak season for home construction and
remodeling in our North America and Europe segments, generally corresponds with the second and third calendar quarters, and
therefore our sales volume is generally higher during those quarters. Seasonal variations in operating results may be impacted by
inclement weather conditions, such as cold or wet weather, which can delay construction projects.
Sales and Marketing
We actively market and sell our products directly to our customers around the world through our global sales force and
indirectly through our marketing and branding initiatives, which includes our enhanced social media presence. Our global sales force,
which is organized and managed regionally, focuses on building and maintaining relationships with key customers as well as
managing customer supply needs and arranging in-store promotional initiatives. In North America and Europe, we also have dedicated
teams that focus on our retail customers.
We continue to make investments in tools and technologies to enhance the effectiveness of our sales force and improve our
customers’ purchasing experience. For example, we are continuing to invest in and utilize Salesforce in North America and Europe to
enhance our customer relationships and support. We continue to leverage Salesforce for improved data management, service level
tracking, Ecommerce, and workflow enhancements. We have also made investments in North America to streamline and automate
order management and continue to expand post sales care through our virtual OnSite Applications and service scheduling. In Europe,
we have launched new door configuration software in select countries, with plans to extend this launch to additional markets. This
strategic investment aims to improve our customers' ordering experience with us, which will enhance our digital service offering and
has improved our Net Promoter Score. We believe these investments will increase sales force effectiveness, create pull-through
demand, and optimize sales force productivity.
We believe that our broad product portfolio of both doors and windows in North America is a competitive advantage as it
allows us to cross-sell our door and window products to our end customers, many of whom find it more efficient to choose one
supplier for their door and window needs on a given project.
Research and Development
A core aspect of our business strategy is the investment and innovation of new products and technologies. We believe that
leading the market in innovation will enhance demand for our products and allow us to sell a higher margin product mix. Our research
and development efforts encompass the development of new products and material inputs, derivative product development, as well as
value-added re-engineering of components used in our existing products leading to reduced costs and manufacturing efficiencies. We
have a governance process that prioritizes the most impactful projects, which is expected to improve the efficiency and quality of our
research and development efforts.
Although product specifications and certifications vary from country to country, the global nature of our operations allows us
to leverage our global innovation capabilities and create product platforms which enable us to share designs across our markets. We
believe that the global nature of our research and development capabilities is unique among our door and window competition.
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Customers
We sell our products worldwide and have well-established relationships with numerous customers throughout the door and
window distribution chain in each of our end markets, including retail home centers, wholesale distributors, and building product
dealers that supply homebuilders, contractors, and consumers. Our wholesale customers include such industry leaders as ProBuild/
Builders First Source, Saint-Gobain, and the Holzring group. Our home center customers include, among others, The Home Depot and
Lowe’s Companies in North America, and B&Q, Howdens, and Bauhaus in Europe. We have maintained relationships with the
majority of our top ten customers for over 25 years and believe that the strength and tenure of our customer relationships is based on
the total value we provide, including the quality and breadth of our product offering, our customer service, innovation, and delivery
capabilities. Our top ten customers together accounted for approximately 46%, 43% and 44% of our net revenues in the years ended
December 31, 2024, 2023 and 2022, respectively. The Home Depot, a customer of our North America segment, represents 16%, 15%,
and 16% of our consolidated net revenues during the years ended December 31, 2024, 2023 and 2022, respectively. Lowe’s
Companies, another customer of our North America segment, represents 12%, 11%, and 11% of our consolidated net revenues during
the years ended December 31, 2024, 2023 and 2022, respectively.
Competition
The door and window industry is highly competitive and includes several regional and international competitors. Competition
is largely based on the functional and aesthetic quality of products, service quality, distribution capability, and price. We believe that
we are well-positioned in our industry due to our leading brands, our broad product lines, our consistently high product quality and
service, our global manufacturing and distribution capabilities, and our extensive multi-channel distribution. For North American
interior doors, our major competitors include Masonite (a division of Owens Corning), Steves & Sons, Inc. and several smaller
independent door manufacturers. For North American exterior doors, competitors include Masonite (a division of Owens Corning),
Therma-Tru (a division of Fortune Brands), Plastpro and Steves & Sons, Inc. The North American window market is highly
fragmented, with sizable competitors including Andersen, Pella, Marvin, Ply-Gem (a division of Cornerstone Building Brands,
formerly NCI Building Systems), and Milgard (a division of MI Windows and Doors). The door manufacturers that we primarily
compete with in our European markets include Huga, Prüm/Garant (a division of Arbonia Group), Viljandi, Masonite (a division of
Owens Corning), Keyor, Herholz, and Hormann.
Intellectual Property
We rely primarily on patent, trademark, copyright, and trade secret laws and contractual commitments to protect our
intellectual property and other proprietary rights. Generally, registered trademarks have a perpetual life, if they are renewed on a
timely basis and continue to be used properly as trademarks. We intend to maintain the trademark registrations listed below so long as
they remain valuable to our business.
Our U.S. window and door trademarks include JELD-WEN®, AuraLast®, LaCANTINA®, MMI Door®, Karona®,
ImpactGard®, JW®, Aurora®, IWP®, True BLU®, ABSTM, Siteline®, National Door®, Low-Friction Glider®, Hydrolock®, VPITM,
FINISHIELD®, MILLENNIUM®, TRUFIT®, EPICVUE®, and EVELIN®. Our trademarks are either registered or have been used as
common law trademarks by us. The trademarks we use outside the U.S. include the Swedoor®, Dooria®, DANA®, MattioviTM,
Zargag®, Alupan®, Domoferm®, Kellpax®, and HSE™ marks in Europe.
Environmental, Social, and Governance Matters
Human Capital Management
We believe that the success of our mission is realized by the engagement and empowerment of our employees, and we are
committed to investing in our people. Our senior leadership team, including our CEO and our Executive Vice President, Chief Human
Resources Officer, is responsible for developing and executing our human capital strategy. This includes the attraction, retention,
development, and engagement of talent. In addition, our Executive Vice President, Chief Human Resources Officer regularly updates
senior management and our Board of Directors on the operation and status of our human capital management.
As of December 31, 2024, we employed approximately 16,000 people. Of our total number of employees, approximately
10,000 are employed in operations included in our North America segment and corporate operations, and approximately 6,000 are
employed in operations included in our Europe segment.
In total, approximately 800, or 8%, of our employees in the U.S. and Canada are unionized. One facility in the U.S.,
representing 8 employees, is covered by collective bargaining agreements. In Canada, approximately 72% of our employees work at
facilities covered by collective bargaining agreements. As is common in Europe, the majority of our facilities are covered by work
councils and/or labor agreements. We believe we have satisfactory relationships with our employees and our organized labor unions.
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Health and Safety
We strive to operate in a way that prioritizes the health and safety of our employees, business partners, and the communities
in which we operate. JELD-WEN's commitment to the EH&S of our associates is foundational and embedded in our values. Our
EH&S programs are designed around global policies and standards and a commitment to complying with or exceeding applicable
requirements within our manufacturing, service and install, and headquarter operations. We proactively implement management
systems consistent with ISO 14001 and 45001 requirements to prevent EH&S risks and to create a strong safety culture and improve
performance. We are committed to continuous improvement and continue to measure, refine, and improve on our performance. We
educate and train our employees to help ensure compliance with our policies, standards, and management systems. We also have
policies and procedures in place to encourage employees to stop work to address at-risk conditions without the threat of retaliation.
Our management and Board of Directors also periodically review our health and safety practices to address ongoing effectiveness and
compliance.
Employee Engagement and Cognitive Diversity
We believe that an engaged workforce provides a strong competitive advantage. To this end, the Company welcomes
employee contributions that maximize diversity of thought, promote authenticity in discussion, and challenge the status quo. Our
senior leadership team works to promote these goals in their respective organizations and our recruitment strategy reflects our
dedication to cognitive diversity. Furthermore, as part of our human capital strategy, we incorporate mentoring programs, support
employee resource groups, and maintain an open-door policy where employees are free to inject their ideas, concerns, and other
opinions for consideration into broader discussions around Company culture and strategy.
Training and Talent Development
We strive to not only attract and retain great talent but are committed to the continued development of our workforce. We
invest in formal leadership development programs that help prepare senior leaders for succession into executive roles, in regional
programs to accelerate the leadership conversion of mid-level managers, and in focused efforts to upskill our front-line leaders.
Retaining and developing early career talent is an additional focus. Across our teams, we welcome apprenticeship and work study
arrangements that seed talent into manufacturing and team lead roles. In our regions, we seek out, seed, and utilize financial grants and
social educational investment requirements to reinvest in the ongoing learning and development needs of our diverse global
workforce.
Internal job opportunities are posted for employees to review, and our internal mobility philosophy encourages employees to
apply for roles after they have passed twelve months on a job. As part of the annual performance management process, managers and
employees meet to review goals and performance and discuss actions for ongoing growth and development. The Company continues
to invest in its employees through global learning platforms, content libraries, and additional formal and informal training programs.
Organizational Health
We manage and measure our organizational health with a view to gaining insight into our employees’ experiences, levels of
workplace satisfaction, and feelings of engagement within the Company. Organizational health is driven through an “enterprise-
guided” approach that includes both global and local initiatives in line with the Company’s overall cultural vision and strategy. We
measure organizational health annually through our global employee survey and strive to continually develop our culture and
employee engagement. Results of the annual survey are communicated as global themes across the Company, with managers sharing
more detailed insights from their areas of the business directly with their teams. The senior leadership team demonstrates their
commitment to engagement through transparent communications in town halls and leadership team meetings; they also carry cultural
targets on their individual annual goal plans.
Environmental Sustainability
We strive to conduct our business in a manner that is environmentally sustainable and demonstrates environmental
stewardship. Toward that end, we pursue processes that are designed to minimize waste, maximize efficient utilization of materials,
and conserve resources, including using recycled and reused materials to produce portions of our products. We are taking steps to
mitigate climate change by measuring and reducing our GHG emissions, implementing renewable energy solutions and pursuing
efficiency projects. We offer a variety of products that contain pre-consumer recycled content, such as our vinyl windows, aluminum
cladding, and window glass. In January 2023, we launched a new primer formula developed by our coatings division designed to
decrease VOC emissions in coatings applied to interior door skins. Our U.S. produced pine wood windows and select patio doors and
door frames are made from AuraLast® pine, which is a proprietary, water-based wood protection process that results in a decrease of
VOCs released during production. In addition, we manufacture many products that meet local green building provisions and top
nationally recognized environmental programs. We continue to evaluate and modify our manufacturing and other processes on an
ongoing basis to further reduce our impact on the environment.
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Environmental Regulatory Actions
The geographic breadth of our facilities and the nature of our operations subject us to extensive environmental, health, and
safety laws and regulations in jurisdictions throughout the world. Such laws and regulations relate to, among other things, air
emissions, the treatment and discharge of wastewater, the discharge of hazardous materials into the environment, the handling,
storage, use and disposal of solid, hazardous and other wastes, worker health and safety, or otherwise relate to health, safety, and
protection of the environment. Many of our products are also subject to various laws and regulations, such as building and
construction codes, product safety regulations, and regulations and mandates related to energy efficiency.
The nature of our operations, which involve the handling, storage, use, and disposal of hazardous wastes, exposes us to the
risk of liability and claims associated with contamination at our current and former facilities or sites where we have disposed of or
arranged for the disposal of waste, or with the impact of our products on human health and safety and the environment. Laws and
regulations with respect to the investigation and remediation of contaminated sites can impose joint and several liability for releases or
threatened releases of hazardous materials upon statutorily defined parties, including us, regardless of fault or the lawfulness of the
original activity or disposal. We have been subject to claims, including having been named as a potentially responsible party, in
certain proceedings initiated pursuant to the CERCLA and similar state and foreign laws, regulations, and statutes, and may be named
a potentially responsible party in other similar proceedings in the future. Unforeseen expenditures or liabilities may arise in connection
with such matters.
We have also been the subject of certain environmental regulatory actions by the EPA and state regulatory agencies in the
U.S. and foreign governmental authorities in jurisdictions in which we operate and are obligated to make certain expenditures in
settlement of those actions. We do not expect expenditures for compliance with environmental laws and regulations to have a material
adverse effect on our financial position or competitive position. However, the discovery of a presently unknown environmental
condition, changes in environmental requirements or their enforcement, or other unanticipated events, may give rise to unforeseen
expenditures and liabilities which could be material.
In 2007, we were identified by the WADOE as a PLP with respect to our former manufacturing site in Everett, Washington.
In 2008, we entered into an Agreed Order with the WADOE to assess historic environmental contamination and remediation
feasibility at the site. As part of the order, we agreed to develop a CAP, arising from the feasibility assessment. In December 2020, we
submitted to the WADOE a draft feasibility assessment with an array of remedial alternatives, which we considered substantially
complete. During 2021, several comment rounds were completed as well as the identification of the Port of Everett and W&W Everett
Investment LLC as additional PLPs, with respect to this matter with each PLP being jointly and severally liable for the cleanup costs.
The WADOE received the final feasibility assessment on December 31, 2021, containing various remedial alternatives with its
preferred remedial alternatives totaling $23.4 million. Based on this study, we determined our range of possible outcomes to be
$11.8 million to $33.4 million. On March 1, 2022, we delivered a draft CAP consistent with the preferred alternatives which was
approved by WADOE in August 2023. The existing Agreed Order of 2008 was also modified with WADOE in July 2023 to support
the development of the associated CAP investigation, sampling and design components. With additional information gathered from the
CAP investigation during 2024, we determined the total range of possible remediation cost outcomes to be between $17.4 million to
$33.6 million. We retained a provision of $11.8 million within our financial statements which considers the range of possible outcome
costs and potential allocation of the responsibility between the identified PLPs, both of which could vary materially from our
estimates.
In December 2020, we entered into a COA with the PaDEP to remove a pile of wood fiber waste from our site in Towanda,
Pennsylvania, which we acquired in connection with our acquisition of CMI in 2012, by using it as fuel for a boiler at that site. The
COA replaced a 2018 Consent Decree between PaDEP and us. Under the COA, we are required to achieve certain periodic removal
objectives and ultimately remove the entire pile by August 31, 2025. As of December 31, 2024 and 2023, there was $1.4 million in
bonds posted in connection with these obligations. Failure to remove the pile by August 31, 2025, would have resulted in forfeiture of
the bonds and penalties by PaDEP. During December 2024, we removed the wood fiber waste pile from the site and our removal
obligations under the COA closed.
For more information regarding the risks associated with environmental, health, and safety laws and regulations, refer to Item
1A - Risk Factors.
Government Regulation
As a public company with global operations, we are subject to the laws and regulations of the United States and multiple
foreign jurisdictions. These regulations, which differ among jurisdictions, include those related to financial and other disclosures,
accounting standards, corporate governance, intellectual property, tax, trade, antitrust, employment, privacy, and anti-corruption, in
addition to the environmental laws and regulations described above.
For a more detailed description of the various laws and regulations that affect our business, refer to Item 1A - Risk Factors.
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Available Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to
reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. We are subject to the informational
requirements of the Exchange Act and file or furnish reports, proxy statements and other information with the SEC. Such reports and
other information filed by us with the SEC are available free of charge on our website at investors.jeld-wen.com when such reports are
made available and on the SEC’s website at www.sec.gov. The contents of these websites are not incorporated into this filing. Further,
our references to the URLs for these websites are intended to be inactive textual references only.
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Executive Officers of the Registrant
Set forth below is certain information about our executive officers. The ages are as of February 20, 2025. There are no family
relationships among the following executive officers.
William J. Christensen, Chief Executive Officer and Director. Mr. Christensen, age 52, joined the Company in April 2022 as
Executive Vice President and President, Europe. In December 2022, he was appointed to his current role as Chief Executive Officer
and Director of the Company. Prior to joining the Company, Mr. Christensen was Chief Executive Officer and Group Executive Board
Chair of REHAU AG, a Swiss-based global manufacturer, from 2018 to 2021. Prior to his appointment as Chief Executive Officer in
2018, Mr. Christensen served as REHAU AG’s Chief Marketing Officer from 2016 to 2018. Prior to joining REHAU AG, Mr.
Christensen was the President of innofund.vc, a venture capital investor, from 2016 to 2022. He was also the Chief Executive Officer
of AFG Arbonia-Foster-Holding AG, a Swiss-based global building products manufacturer from 2014 to 2015. In addition, he spent
ten years at Geberit International AG, a global plumbing manufacturer, in several executive roles including Group Executive Board
Member and Head of International Sales, as well as President and Chief Executive Officer of The Chicago Faucets Company. He also
served in various finance and business development roles at J.P. Morgan Securities and Rieter Automotive Systems. Mr. Christensen
earned a bachelor’s degree in economics from Rollins College and an MBA from the University of Chicago’s Booth School of
Business.
James S. Hayes, Executive Vice President, General Counsel and Corporate Secretary. Mr. Hayes, age 52, joined the Company in
August 2018 as Vice President, Deputy General Counsel. In August 2022, he was promoted to Senior Vice President, Deputy General
Counsel and Corporate Secretary. He was appointed to his current role in June 2023. Mr. Hayes leads the global legal team, providing
legal advice and guidance to the Board of Directors and the senior leadership team. Mr. Hayes earned a bachelor’s degree in English
and history from Emory University and a law degree from Villanova University School of Law.
Michael Leon, Senior Vice President and Chief Accounting Officer. Mr. Leon, age 44, joined the Company as Senior Vice President
and Chief Accounting Officer in March 2023. Prior to joining the Company, Mr. Leon was the Chief Accounting Officer and
Corporate Controller at Sealed Air, a global provider of packaging solutions, from June 2018 to March 2023, where he was also the
Assistant Corporate Controller from December 2014 to June 2018. Mr. Leon earned a master’s degree in accounting from the
University of South Carolina.
Wendy Livingston, Executive Vice President, Chief Human Resources Officer. Ms. Livingston, age 51, joined the Company as
Executive Vice President, Chief Human Resources Officer in June 2023. Prior to joining the Company, Ms. Livingston was the Chief
People Officer for Spreetail, a multinational e-commerce company, from August 2022 to June 2023 and the Senior Vice President and
Chief Human Resources Officer for Harsco Corporation (now Enviri Corporation), a global environmental services company, from
August 2020 to August 2022. She held leadership roles of increasing responsibility at The Boeing Company, a global aerospace
company, from 1996 to 2020, including interim Senior Vice President, Human Resources in 2020 and Vice President, Corporate
Human Resources from 2017 to 2020. Ms. Livingston earned a bachelor’s degree in business administration from Peru State College,
a master’s degree in human resource management from Lindenwood University and is certified by the Society for Human Resource
Management.
Matthew Meier, Executive Vice President, Chief Digital and Information Officer. Mr. Meier, age 52, joined the Company as
Executive Vice President, Chief Digital and Information Officer in January 2024. Previously, he was Executive Vice President, Chief
Digital and Data Officer at Driven Brands Holding, Inc., an automotive services company, from October 2021 to January 2024. Prior
to joining Driven Brands, Mr. Meier was employed at Whirlpool Corporation, a manufacturer of home appliances, as the Vice
President, Global Technology Value Streams from 2020 to 2021 and as Vice President, Chief Information Officer from 2016 to 2020.
Mr. Meier earned a bachelor’s degree in industrial engineering from Purdue University, a master’s degree in information systems
management from Carnegie Mellon University and an MBA from the Massachusetts Institute of Technology Sloan School of
Management.
Samantha Stoddard, Executive Vice President, Chief Financial Officer. Ms. Stoddard, age 41, joined the Company in December 2020
as Vice President, Operations Finance. In February 2022, she was promoted to North America Chief Financial Officer. In April 2024,
she expanded her responsibilities to include leading global Finance Planning and Analysis (FP&A) and assumed the additional role as
the Head of FP&A. Ms. Stoddard was appointed to her current role in July 2024. Prior to joining JELD-WEN, Ms. Stoddard held
various roles of increasing responsibility at Honeywell International, an American advanced-technology company, from April 2018 to
December 2020, serving as the Chief Financial Officer, Personal Protection Equipment, from May 2020 to December 2020 and the
Chief Financial Officer, Safety and Productivity Solutions Supply Chain, from February 2019 to April 2020. Ms. Stoddard earned a
bachelor’s degree in economics and political science from Wake Forest University and a master’s degree in accounting from The
University of Texas at Dallas.
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Gustavo Vianna, Executive Vice President and President, Europe. Mr. Vianna, age 56, joined the Company as Executive Vice
President and President, Europe in January 2024. Prior to joining the Company, Mr. Vianna was employed at Aliaxis Group SA, a
global manufacturer of advanced fluid management solutions, as Chief Executive Officer, EMEA from November 2020 to September
2022 and as Chief Business Officer from September 2019 to November 2020. Previously, he was the Chief Executive Officer, Pipe
Business for Saint-Gobain Europe du Nord, a manufacturer and distributor of construction materials, from September 2016 to
February 2019. Mr. Vianna earned a bachelor’s degree in electrical engineering from Pontifical Catholic University and a master’s
degree in business administration from Fundacão Getúlio Vargas.
Item 1A - Risk Factors
Investing in our Common Stock involves a high degree of risk. These risks include those described below and may include
additional risks and uncertainties not presently known to us or that we currently deem immaterial. You should carefully consider the
following factors, as well as other information contained or incorporated by reference in this Annual Report on Form 10-K, before
deciding to invest in shares of our Common Stock. Our business, financial condition, and results of operations could be materially
adversely affected by any of these risks, and the trading price of our Common Stock could decline due to any of these risks, and you
may lose all or part of your investment in our Common Stock.
Risks Relating to Our Business and Industry
Negative trends in overall business, financial market and economic conditions, and activity levels in our end markets may reduce
demand for our products, which could have a material adverse effect on our business, financial condition, and results of
operations.
Negative trends in overall business, financial market, and economic conditions globally or in the regions where we operate
may reduce demand for our doors and windows, which is tied to activity levels in the R&R and new residential and non-residential
construction end markets. In particular, the following factors may have a direct impact on our business in the regions where our
products are marketed and sold:
•
the strength of the economy;
•
employment rates, consumer confidence, and spending rates;
•
the availability and cost of credit;
•
interest rate fluctuations (including mortgage and credit card interest rates), sustained periods of elevated interest rates,
and the availability of financing for our customers and consumers;
•
the amount and type of residential and non-residential construction;
•
housing sales and home values;
•
the age of existing home stock, home vacancy rates, and foreclosures;
•
volatility in both debt and equity capital markets;
•
increases in the cost of raw materials or any shortage in supplies or labor, including as a result of tariffs or other trade
restrictions;
•
disruptions or delays to the global supply chain;
•
the effects of governmental regulation and initiatives to manage economic conditions;
•
geographical shifts in population and other changes in demographics; and
•
changes in weather patterns and extreme weather events.
While cyclicity in our new residential and non-residential construction end markets is moderated to a certain extent by R&R
activity, much R&R spending is discretionary and can be deferred or postponed entirely when economic conditions are poor. We have
experienced sales declines in all our end markets during recent economic downturns.
Uncertain economic and political conditions may make it difficult for us and our customers or suppliers to accurately forecast
and plan future business activities or may cause delays or cancellation of construction projects. For example, changes to policies
related to global trade and tariffs may result in uncertainty surrounding the future of the global economy which could have an adverse
impact on consumer spending as well as our input costs.
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The ability of consumers to finance home construction and improvements is affected by the ability of consumers to procure
third-party financing and the interest rates available for home mortgages, credit card debt, home equity or other lines of credit, and
other sources of third-party financing. Negative business, financial market, and economic conditions, including rising inflation,
interest rates and difficulty for consumers to procure financing, globally and within the industries or regions we compete in may
materially and adversely affect demand for or costs to produce our products which could have a material adverse effect on our
business, financial condition, and results of operations.
A decline in our relationships with our key customers, the amount of products they purchase from us, or a decline in our key
customers’ financial condition could have a material adverse effect on our business, financial condition, and results of operations.
Our business depends on our relationships with our key customers, which consist mainly of wholesale distributors and retail
home centers.
Our top ten customers together accounted for approximately 46%, 43% and 44% of our net revenues in the years ended
December 31, 2024, 2023 and 2022, respectively. The Home Depot, a customer of our North America segment, represented 16%,
15%, and 16% of our consolidated net revenues during the years ended December 31, 2024, 2023 and 2022, respectively. Lowe’s
Companies, another customer of our North America segment, represented 12%, 11%, and 11% of our consolidated net revenues
during the years ended December 31, 2024, 2023 and 2022, respectively. Although we have established and maintain significant long-
term relationships with our key customers, we cannot assure you that all these relationships will continue or will not diminish. Some
of our key customers are volume purchasers who are much larger than us and have strong bargaining power with their suppliers,
which limits our ability to recover cost increases through higher selling prices. We generally do not enter into long-term contracts with
our customers, and they generally do not have an obligation to purchase products from us. Accordingly, sales from customers that
have accounted for a significant portion of our sales in past periods, individually or as a group, may not continue in future periods, or
if continued, may not reach or exceed historical levels in any period. For example, certain of our large customers perform periodic line
reviews to assess their product offering, which have in the past and may in the future lead to loss of business and pricing pressures.
Some of our large customers may also experience economic difficulties or otherwise default on their obligations to us. Furthermore,
our pricing optimization strategy, which requires maintaining pricing discipline in order to improve or maintain profit margins, has in
the past and may in the future lead to the loss of certain customers, including key customers, who do not agree to our pricing terms.
The loss of, or a diminution in our relationship with, any of our largest customers could lower our sales volumes and could have a
material adverse effect on our business, financial condition, and results of operations.
We operate in a highly competitive business environment. Failure to compete effectively and any decrease in demand for our
products could have a material adverse effect on our business, financial condition, and results of operations.
We operate in a highly competitive business environment. Some of our competitors may have greater financial, marketing,
and distribution resources and may develop stronger relationships with customers in the markets where we sell our products. Some of
our competitors may be less leveraged than we are, providing them with more flexibility to invest in new facilities and processes and
making them better able to withstand adverse economic or industry conditions.
In addition, some of our competitors, regardless of their size or resources, may choose to compete in the marketplace by
adopting more aggressive sales policies, including price cuts, or by devoting greater resources to the development, promotion, and sale
of their products. This could result in our loss of customers and/or market share to these competitors, which may cause us to reduce
the prices at which we sell our products to remain competitive.
As a result of competitive bidding processes, we may have to provide pricing concessions to our significant customers in
order for us to keep their business. Reduced pricing would result in lower product margins on sales to those customers. There is no
guarantee that a reduction in prices would be offset by sufficient gains in market share and sales volume to those customers.
The loss of, or a reduction in orders from, any significant customers, or decreases in the prices of our products due to lower
demand, could have a material adverse effect on our business, financial condition, and results of operations.
Failure to implement our strategic cost reduction and productivity initiatives could adversely impact our business, financial
condition, and results of operations.
Our future financial performance depends in part on our management’s ability to successfully implement our strategic
initiatives, including our productivity, cost reduction, and global footprint rationalization initiatives. We cannot guarantee the
successful implementation of these initiatives and related strategies throughout the geographic regions in which we operate or that
such implementation will improve our operating results. Any failure to successfully implement these initiatives and related strategies
could adversely affect our business, financial condition, and results of operations, including increases in our restructuring and asset-
related charges. We may, in addition, decide to alter or discontinue certain aspects of our business strategy at any time.
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Our business will suffer if we are unable to retain and recruit executives, managers and employees at a competitive cost.
The success of our business depends upon the skills, experience, and efforts of our executives and other key employees. Our
senior management team has acquired specialized knowledge and skills with respect to our business, and the loss of any of these
individuals could harm our business, especially if we are not successful in developing adequate succession plans. In addition, we rely
on the specialized knowledge and experience of certain key technical employees. Our business also depends on our ability to continue
to recruit, train, and retain skilled employees. The loss of the services of these key executives and employees, or our inability to hire
new personnel with the requisite skills, could have a material adverse effect on our business, financial condition, and results of
operations. For example, our ability to develop new products or enhance existing products, sell products to our customers, or manage
our business effectively could be impaired if we are unable to retain and attract qualified personnel. In addition, a significant increase
in the wages paid by competing employers could result in a reduction of our qualified labor force, an increase in the wage rates that we
must pay, or both. Lastly, we may experience higher levels of attrition within our professional workforce for a variety of reasons in the
future, including if our compensation programs become uncompetitive or if the Company experiences significant disruption, including
an economic downturn. We may not be able to attract highly qualified employees to replace such key personnel, particularly if the
underlying reasons for the loss make the Company uncompetitive or attractive as an employer.
A disruption in our operations due to natural disasters, changes in weather patterns and related extreme weather events, public
health crises, unstable geopolitical conditions or armed conflicts could have a material adverse effect on our business, financial
condition, and results of operations.
We operate facilities worldwide. We have facilities located in areas that are vulnerable to hurricanes, earthquakes, wildfires,
and other natural disasters. Weather patterns may affect our operating results and our ability to maintain our sales volume throughout
the year. Because our customers depend on suitable weather to engage in construction projects, increased frequency or duration of
extreme weather conditions could have a material adverse effect on our financial results or financial condition. Also, we cannot predict
the effects that global climate change may have on our business. In addition to changes in weather patterns, it might, for example,
reduce the demand for construction, destroy forests (increasing the cost and reducing the availability of wood products used in
construction), and increase the cost and reduce the availability of raw materials and energy.
Our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could
harm our business and cause our operational results to suffer. In the event that a hurricane, earthquake, natural disaster, fire, public
health crisis, or other catastrophic event were to interrupt our operations for any extended period of time, it could delay shipment of
merchandise to our customers, damage our reputation, or otherwise have a material adverse effect on our business, financial condition,
and results of operations.
In addition, our operations may be interrupted by armed conflicts, terrorist attacks or other acts of violence or war. These
attacks may directly impact our suppliers’ or customers’ physical facilities. Furthermore, these attacks may make travel and the
transportation of our supplies and products more difficult and more expensive and ultimately have a material adverse effect on our
business, financial condition, and results of operations. Political and economic instability in some regions of the world may also
negatively impact the global economy and, therefore, our business. For instance, instabilities in the Middle East and the ongoing
conflict between Russia and Ukraine, including sanctions imposed on Russia, has had and could continue to have an adverse impact on
our business, such as shortages in materials and heightened inflation on materials, freight, and other variable costs, such as utilities.
The consequences of any of these armed conflicts are unpredictable, and we may not be able to foresee events that could have an
adverse effect on our business. More generally, any of these events could cause consumer confidence and spending to decrease or
result in increased volatility in the worldwide financial markets. They could also result in economic recessions. Any of these
occurrences could have a material adverse effect on our business, financial condition, and results of operations.
We may not identify or effectively respond to consumer needs, expectations, or trends in a timely fashion, which could adversely
affect our relationship with customers, our reputation, the demand for our brands, products, and services, and our market share.
Our business is subject to changing consumer and industry trends, demands and preferences that we must continually
anticipate and adapt to, such as the increasing use of technology by our customers. Consumers are increasingly using the internet and
mobile technology to research home improvement products and to inform and provide feedback on their purchasing and ownership
experience for these products. Trends towards online purchases could impact our ability to compete as we currently sell a significant
portion of our products through retail home centers, wholesale distributors, and building products dealers.
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Accordingly, the success of our business depends in part on our ability to maintain strong brands and identify and respond
promptly to evolving trends in demographics, consumer preferences, and expectations and needs, while also managing inventory
levels. It is difficult to successfully predict the products and services our customers will demand. Even if we are successful in
anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our
continued ability to develop and introduce innovative, high-quality products and acquire or develop the intellectual property necessary
to develop new products or improve our existing products. There can be no assurance that the products we develop, even those to
which we devote substantial resources, will be successful. While we continue to invest in innovation, brand building, and brand
awareness, and intend to increase our investments in these areas in the future, these initiatives may not be successful. Investment in a
product could divert our attention and resources from other projects that become more commercially viable in the future. Failure to
anticipate and successfully react to changing consumer preferences could have a material adverse effect on our business, financial
condition, and results of operations.
In addition, our competitors could introduce new or improved products that would replace or reduce demand for our products
or create new proprietary designs and/or changes in manufacturing technologies that may render our products obsolete or too
expensive for efficient competition in the marketplace. Our failure to competitively respond to changing consumer and customer
trends, demands, and preferences could cause us to lose market share, which could have a material adverse effect on our business,
financial condition, and results of operations.
Manufacturing realignments and cost savings programs may result in a decrease in our short-term earnings and operating
efficiency or expected benefits may not be achieved.
We continually review our manufacturing operations to address market changes and to implement efficiencies presented by
past acquisitions. Effects of periodic manufacturing integrations, realignments, and cost savings programs have in the past and could
in the future result in a decrease in our short-term earnings, cash flows, and operating efficiency until the expected results are
achieved. Such programs may include the consolidation, integration, and upgrading of facilities, functions, systems, and procedures.
Such programs involve substantial planning, often require capital investments, and may result in charges for fixed asset impairments
or obsolescence and substantial severance costs. We also cannot assure that we will achieve all of our cost savings. Our ability to
achieve cost savings and other benefits within expected time frames is subject to many estimates and assumptions. These estimates
and assumptions are subject to significant economic, competitive, and other uncertainties, some of which are beyond our control. If
these estimates and assumptions are incorrect, if we experience delays, or if other unforeseen events occur, our operations could
experience disruption, and our business, financial condition, and results of operations could be materially and adversely affected.
Our business is seasonal, and revenue and profit can vary significantly throughout the year, which may adversely impact the
timing of our cash flows and limit our liquidity at certain times of the year.
Our business is seasonal, and our net revenues and operating results can vary significantly from quarter to quarter based upon
the timing of the building season in our markets. Our sales typically follow seasonal new construction and R&R industry patterns. The
peak season for home construction and R&R activity in the majority of the geographies where we market and sell our products
generally corresponds with the second and third calendar quarters, and therefore our sales volume is typically higher during those
quarters. Our first and fourth quarter sales volumes are generally lower due to reduced R&R and new construction activity as a result
of less favorable climate conditions in the majority of our geographic end markets. Failure to effectively manage our inventory in
anticipation of or in response to seasonal fluctuations could negatively impact our liquidity profile during certain seasonal periods.
Prices and availability of raw materials, freight, energy and other critical inputs we use to manufacture our products are subject to
fluctuations due to inflation and other factors, and we may be unable to pass along to our customers the effects of any price
increases.
As a manufacturer, our sales and profitability are dependent on the availability and cost of raw materials, freight, energy and
other inputs. Prices and availability of our critical inputs fluctuate for a variety of reasons beyond our control, many of which cannot
be anticipated with any degree of reliability. The reasons for these fluctuations include, among other things, variable worldwide supply
and demand across different industries, speculation in commodities futures, general economic or environmental conditions, inflation,
political unrest and instability, such as the ongoing military conflict between Russia and Ukraine and instabilities in the Middle East,
labor costs, competition, import duties, tariffs, worldwide currency fluctuations, freight, regulatory costs, and product and process
evolutions that impact demand for the same materials. Our most significant raw materials include logs and lumber, vinyl extrusions,
glass, steel, and aluminum, each of which has been subject to periods of rapid and significant fluctuations in price. Changes in the
prices of critical inputs have, and may continue to have, a material adverse effect on our business, financial condition, and results of
operations.
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The U.S. has imposed tariffs on various imported products, particularly from China, as well as on certain steel and aluminum
products from other countries. In addition, in February 2025, the U.S. announced new and additional tariffs on foreign imports into the
U.S., including most relevant to us, an additional 25% tariff on all imports from Canada. These tariffs were suspended for 30 days to
facilitate negotiations. As of the date of this report, the proposed tariffs on all imports from Canada remain suspended. The imposition
of tariffs may impact the prices of materials purchased outside of the U.S. and include goods in transit as well as increasing the price
of domestically sourced materials, including, in particular, steel and aluminum. These changes in U.S. trade policy have resulted in,
and may continue to result in, one or more foreign governments adopting responsive trade policies that make it more difficult or costly
for us to do business in or import our products or components from those countries, or otherwise impact pricing and availability of raw
materials. As another example, as global demand for key chemicals increases, the limited number of suppliers and investment in
greater supply capacity drives increased global pricing. Additionally, anti-dumping and countervailing duty trade cases could impact
our business and results of operations. We cannot predict the extent to which the U.S. or other countries will impose new or additional
quotas, duties, tariffs, taxes or other similar restrictions upon the import or export of our products in the future, nor can we predict
future trade policy or the terms of any renegotiated trade agreements and their impact on our business.
We have short-term supply contracts with certain of our largest suppliers that limit our exposure to short-term fluctuations in
prices and the availability of our materials, but we are susceptible to longer-term fluctuations in prices. Generally, we do not hedge
against commodity price fluctuations but may from time to time. Significant increases in the prices of raw materials for finished
goods, including as a result of significant or protracted material shortages, may be difficult to pass through to customers and may
negatively impact our profitability and net revenues. We may attempt to modify products that use certain raw materials, but these
changes may not be successful.
Some of our manufacturing operations require the use of substantial amounts of electricity and natural gas, which may be
subject to significant price increases as the result of changes in overall supply and demand and the impacts of legislation and
regulatory action. The current conflict between Russia and Ukraine has, and may continue to, affect the price of oil and natural gas
throughout the world and impact the availability of energy supplies and other inputs at our manufacturing sites, particularly in Europe.
Such a disruption in the supply of natural gas could impact our ability to continue our operations at such sites at normal levels. We
have taken actions in an attempt to reduce the impact of energy price increases. However, these efforts may be insufficient to protect
us against fluctuations in energy prices or shortages of natural gas and we could suffer adverse effects to net income and cash flow
should we be unable to either offset or pass higher energy costs through to our customers in a timely manner or at all.
Our business may be affected by delays or interruptions in the delivery of raw materials, finished goods, and certain component
parts. A supply shortage or delivery chain interruption could have a material adverse effect on our business, financial condition,
and results of operations.
We rely upon regular deliveries of raw materials, finished goods, and certain component parts. For certain raw materials that
are used in our products, we depend on a single or limited number of suppliers for our materials, and we typically do not have long-
term contracts with our suppliers. If we are not able to accurately forecast our supply needs, our limited number of suppliers may make
it difficult to quickly obtain additional raw materials to respond to shifting or increased demand. In addition, a supply shortage could
occur as a result of unanticipated increases in market demand, including as a result of accelerated demand in reaction to the threat of
tariffs or trade restrictions; difficulties in production or delivery, including insufficient energy supply; financial difficulties; or
catastrophic events in the supply chain. Furthermore, because our products and the components of some of our products are subject to
regulation, changes to these regulations could cause delays in delivery of raw materials, finished goods, and certain component parts.
We have experienced impacts to our supply chain from economic and geopolitical uncertainties, including the ongoing
military conflict between Russia and Ukraine, which have resulted in delays in receiving materials, manufacturing downtime,
increased backlogs, and delayed out-bound freight.
Until we can make acceptable arrangements with alternate suppliers, any interruption or disruption could impact our ability to
ship orders on time and could idle some of our manufacturing capability for those products. This could result in a loss of revenues,
reduced margins, and damage to our relationships with customers, which could have a material adverse effect on our business,
financial condition, and results of operations.
We are exposed to political, economic, and other risks that arise from operating a multinational business.
We have operations in North America and Europe. In the year ended December 31, 2024, our North America segment
accounted for approximately 72% of net revenues and our Europe segment accounted for approximately 28% of net revenues. Further,
certain of our businesses obtain raw materials and finished goods from foreign suppliers. Accordingly, our business is subject to
political, economic, and other risks that are inherent in operating in numerous countries.
These risks include:
•
the difficulty of enforcing agreements, collecting receivables, and protecting assets through foreign legal systems;
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•
trade protection measures and import or export licensing requirements;
•
the imposition of, or increases in, tariffs or other trade restrictions;
•
required compliance with a variety of foreign laws and regulations, including the application of foreign labor regulations;
•
tax rates in foreign countries and the imposition of withholding requirements on foreign earnings;
•
difficulty in staffing and managing widespread operations;
•
difficulty in transporting materials, components, and products;
•
currency exchange rate fluctuations or the imposition of, or increases in, currency exchange controls; and
•
potential inflation and interest rate fluctuation in applicable non-U.S. economies.
The success of our business depends in part on our ability to anticipate and effectively manage these and other risks. We
cannot assure you that these and other factors will not have a material adverse effect on our international operations or ultimately on
our global business, financial condition, and results of operations.
Certain of our customers may expand through consolidation and internal growth, which may increase their buying power. The
increased size of our customers could have a material adverse effect on our business, financial condition, and results of operations.
Certain of our significant customers are large companies with strong buying power, and our customers may expand through
consolidation or internal growth. Consolidation could decrease the number of potential significant customers for our products and
increase our reliance on key customers. Further, the increased size of our customers could result in our customers seeking more
favorable terms, including pricing, for the products that they purchase from us. Accordingly, the increased size of our customers may
further limit our ability to maintain or raise prices in the future. This could have a material adverse effect on our business, financial
condition, and results of operations.
We are subject to the credit risk of our customers, suppliers, and other counterparties.
We are subject to the credit risk of our customers, because we provide credit to our customers in the normal course of
business. Any failure by our customers to meet their obligations to us may have a material adverse effect on our business, financial
condition, and results of operations. In addition, we may incur increased expenses related to collections in the future if we find it
necessary to take legal action to enforce the contractual obligations of a significant number of our customers.
Exchange rate fluctuations may impact our business, financial condition, and results of operations.
Our operations expose us to both transaction and translation exchange rate risks. In the year ended December 31, 2024, 34%
of our net revenues came from sales outside of the U.S., and we anticipate that our operations outside of the U.S. will continue to
represent a significant portion of our net revenues for the foreseeable future. In addition, the nature of our operations often requires
that we incur expenses in currencies other than those in which we earn revenue. In addition, if the effective price of our products were
to increase as a result of fluctuations in foreign currency exchange rates, demand for our products could decline, which could
adversely affect our business, financial condition, and results of operations. Also, because our financial statements are presented in
U.S. dollars, we must translate the financial statements of our foreign subsidiaries and affiliates into U.S. dollars at exchange rates in
effect during or at the end of each reporting period, and increases or decreases in the value of the U.S. dollar against other major
currencies will affect our reported financial results, including the amount of our outstanding indebtedness.
We may be the subject of product liability claims, or product recalls and we may not accurately estimate costs related to warranty
claims. Expenses associated with product liability claims and lawsuits and related negative publicity or warranty claims in excess
of our reserves could have a material adverse effect on our business, financial condition, and results of operations.
Our products are used in a wide variety of residential, non-residential, and architectural applications. We face the risk of
exposure to product liability or other claims, including class action lawsuits, in the event our products are alleged to be defective or
have resulted in harm to others or to property. We may in the future incur liability if product liability lawsuits against us are
successful. Moreover, any such lawsuits, whether or not successful, could result in adverse publicity to us, which could cause our sales
to decline materially. In addition, it may be necessary for us to recall defective products, which would also result in adverse publicity,
as well as resulting in costs connected to the recall and loss of sales. We maintain insurance coverage to protect us against product
liability claims, but that coverage may not be adequate to cover all claims that may arise, or we may not be able to maintain adequate
insurance coverage in the future at an acceptable cost. Any liability not covered by insurance could have a material adverse effect on
our business, financial condition, and results of operations.
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In addition, consistent with industry practice, we provide warranties on many of our products, and we may experience costs
associated with warranty claims if our products have defects in manufacture or design or they do not meet contractual specifications.
We estimate our future warranty costs based on historical trends and product sales, but we may fail to accurately estimate those costs
and thereby fail to establish adequate warranty reserves for them. If warranty claims exceed our estimates, it may have a material
adverse effect on our business, financial condition, and results of operations.
Our annual effective tax rate and the amount of taxes we pay can change materially as a result of changes in U.S. and foreign tax
laws, changes in the mix of our U.S. and foreign earnings, adjustments to our estimates for the potential outcome of any uncertain
tax issues, and audits by federal, state and foreign tax authorities.
As a large multinational corporation, we are subject to U.S. federal, state and local, and many foreign tax laws and
regulations, all of which are complex and subject to significant change and varying interpretations. Changes in these laws or
regulations, or any change in the position of taxing authorities regarding their application, administration or interpretation, could have
a material adverse effect on our business, consolidated financial condition or results of our operations. For example, in August 2022,
the U.S. government enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) into law, which includes a corporate
alternative minimum tax and an excise tax on corporate stock repurchases. Future changes in tax law could significantly impact our
provision for income taxes, the amount of taxes payable, and our deferred tax asset and liability balances.
The Company must make judgments about the application of these inherently complex tax laws when calculating the
provision for income taxes. The Company’s provision for income taxes also includes estimates of additional tax that may be incurred
for tax exposures and reflects various estimates and assumptions, including assessments of future earnings of the Company that could
impact the valuation of its deferred tax assets. The Company’s future results of operations and tax liability could be adversely affected
by changes in the overall profitability of the Company, changes in the valuation of deferred tax assets and liabilities, changes in our
effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, and ongoing assessments
of the Company’s tax exposures.
In addition, our products, and our customers’ products, are subject to import and excise duties and/or sales or value-added
taxes in many jurisdictions in which we operate. Increases in these indirect taxes could affect the affordability of our products and our
customers’ products, and, therefore, reduce demand.
Recently, international tax norms governing each country’s jurisdiction to tax cross-border international trade have evolved,
and are expected to continue to evolve, due in part to the Base Erosion and Profit Shifting project led by the OECD, which represents a
coalition of member countries including the United States, and supported by the G20. Changes in these laws and regulations, or any
change in the position of tax authorities regarding their application, administration or interpretation could adversely affect our
financial results. In addition, a number of countries are actively pursuing changes to their tax laws applicable to multinational
corporations.
Due to widely varying tax rates in the taxing jurisdictions applicable to our business, a change in income generation to higher
taxing jurisdictions or away from lower taxing jurisdictions may also have an adverse effect on our financial condition and results of
operations.
We make estimates of the potential outcome of uncertain tax issues based on our assessment of relevant risks and facts and
circumstances existing at the time, and we use these assessments to determine the adequacy of our provision for income taxes and
other tax-related accounts. These estimates are highly judgmental. Although we believe we adequately provide for any reasonably
foreseeable outcome related to these matters, future results may include favorable or unfavorable adjustments to estimated tax
liabilities, which may cause our effective tax rate to fluctuate significantly.
In addition, our income tax returns are subject to regular examination by domestic and foreign tax authorities. These taxing
authorities may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of
our transactions. If any tax authority were to successfully challenge the tax treatment or characterization of any of our transactions, it
could have a material adverse effect on our business, consolidated financial condition or results of our operations. Furthermore,
regardless of whether any such challenge is resolved in our favor, the final resolution of such matter could be expensive and time
consuming to defend and/or settle.
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We may make acquisitions, divestitures, or investments in other businesses, which may involve risks or may not be successful.
Generally, we may seek to acquire businesses that broaden our existing product lines and service offerings or expand our
geographic reach. There can be no assurance that we will be able to identify suitable acquisition candidates or that our acquisitions or
investments in other businesses will be successful. We may also seek to divest business that do not align with our goal to streamline
and simplify our operations. These acquisitions or investments in other businesses may also involve risks, many of which may be
unpredictable and beyond our control, and which may have a material adverse effect on our business, financial condition, and results
of operations, including risks related to:
•
the nature of the acquired company’s business;
•
any acquired business not performing as well as anticipated;
•
the potential loss of key employees of the acquired company;
•
our inability to retain the customers and partners of the acquired company;
•
any damage to our reputation as a result of performance or customer satisfaction problems relating to an acquired
business;
•
the failure of our due diligence procedures to detect material issues related to the acquired business, including exposure
to legal claims for activities of the acquired business prior to the acquisition;
•
unexpected liabilities resulting from the acquisition for which we may not be adequately indemnified;
•
our inability to enforce indemnification and non-compete agreements;
•
the integration of the personnel, operations, technologies, and products of the acquired business, and establishment of
internal controls, into the acquired company’s operations;
•
our failure to achieve projected synergies or cost savings;
•
additional stock-based compensation issued or assumed in connection with an acquisition, including the impact on
stockholder dilution and our results of operations;
•
our inability to establish uniform standards, controls, procedures, and policies;
•
any requirement that we make divestitures of operations or properties in connection with any acquisitions;
•
the diversion of management attention and financial resources;
•
our inability to obtain approvals from government authorities; and
•
any unforeseen management and operational difficulties, particularly if we acquire assets or businesses in new foreign
jurisdictions where we have little or no operational experience.
Our inability to achieve the anticipated benefits of acquisitions and other investments could materially and adversely affect
our business, financial condition, and results of operations. In addition, the means by which we finance an acquisition may have a
material adverse effect on our business, financial condition, and results of operations, including changes to our equity, debt, and
liquidity position. If we issue Convertible Preferred or Common Stock to pay for an acquisition, the ownership percentage of our
existing shareholders may be diluted. Using our existing cash may reduce our liquidity. Incurring additional debt to fund an
acquisition may result in higher debt service and a requirement to comply with additional financial and other covenants, including
potential restrictions on future acquisitions and distributions.
We may be unable to protect our intellectual property, and we may face claims of intellectual property infringement.
We rely on a combination of patent, copyright, trademark, and trade secret laws, as well as confidentiality agreements,
nondisclosure agreements, and other contractual commitments, to protect our intellectual property rights. However, these measures
may not be adequate or sufficient, and third parties may not always respect these legal protections even if they are aware of them. In
addition, our competitors may develop similar technologies and know-how without violating our intellectual property rights.
Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S.
The failure to obtain worldwide patent and trademark protection may result in other companies copying and marketing products based
on our technologies or under brand or trade names similar to ours outside the jurisdictions in which we are protected. This could
impede our growth in existing regions, create confusion among consumers, and result in a greater supply of similar products that could
erode prices for our protected products.
Litigation may be necessary to protect our intellectual property rights. Intellectual property litigation can result in substantial
costs, could distract our management, and could impinge upon other resources. Our failure to enforce and protect our intellectual
property rights may cause us to lose brand recognition and result in a decrease in sales of our products.
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Moreover, while we are not aware that any of our products or brands infringes upon the proprietary rights of others, third
parties may make such claims in the future. From time to time, third parties may claim that we have infringed upon their intellectual
property rights, and we may receive notices from such third parties asserting such claims. Any such infringement claims are
thoroughly investigated and, regardless of merit, could be time-consuming and result in costly litigation or damages, undermine the
exclusivity and value of our brands, decrease sales, or require us to enter into royalty or licensing agreements that may not be on
acceptable terms and that could have a material adverse effect on our business, financial condition, and results of operations.
Increases in labor costs, potential labor disputes, and work stoppages at our facilities or the facilities of our suppliers could have a
material adverse effect on our business, financial condition, and results of operations.
Our financial performance is affected by the availability of qualified personnel and the cost of labor. We have employees in
the U.S. and Canada that are unionized workers, and the majority of our workforce in other countries belong to work councils or are
otherwise subject to labor agreements. U.S. and Canada employees represented by these unions are subject to collective bargaining
agreements that are subject to periodic negotiation and renewal. If we are unable to enter into new, satisfactory labor agreements with
our unionized employees upon expiration of their agreements, we could experience a significant disruption of our operations, which
could cause us to be unable to deliver products to customers on a timely basis. Such disruptions could result in a loss of business and
an increase in our operating expenses, which could reduce our net revenues and profit margins. In addition, our non-unionized labor
force may become subject to labor union organizing efforts, which could cause us to incur additional labor costs and increase the
related risks that we now face.
We believe many of our direct and indirect suppliers also have unionized workforces. Strikes, work stoppages, or slowdowns
experienced by suppliers could result in slowdowns or closures of facilities where components of our products are manufactured or
delivered. Any interruption in the production or delivery of these components could reduce sales, increase costs, and have a material
adverse effect on us.
Our pension plan obligations are currently not fully funded, and we may have to make significant cash payments to these plans,
which would reduce the cash available for our businesses.
Although we have closed our U.S. pension plan to new participants and have frozen future benefit accruals for current
participants, we continue to have unfunded obligations under that plan. The funded levels of our pension plan depend upon many
factors, including returns on invested assets, certain market interest rates, and the discount rate used to determine pension obligations.
The projected benefit obligation and overfunded pension assets included in our consolidated financial statements as of December 31,
2024, for our U.S. pension plan were approximately $261.5 million and $0.9 million, respectively. Unfavorable returns on the plan
assets or unfavorable changes in applicable laws or regulations could materially change the timing and amount of required plan
funding, which would reduce the cash available for our operations. In addition, a decrease in the discount rate used to determine
pension obligations could increase the estimated value of our pension obligations, which would affect the reported funding status of
our pension plans and would require us to increase the amounts of future contributions. Additionally, we have foreign defined benefit
plans, some of which continue to be open to new participants. As of December 31, 2024, our foreign defined benefit plans had
unfunded pension liabilities of approximately $26.2 million.
Under the Employee Retirement Income Security Act of 1974, as amended, or “ERISA”, the U.S. Pension Benefit Guaranty
Corporation, or the “PBGC”, also has the authority to terminate an underfunded tax-qualified U.S. pension plan under certain
circumstances. In the event our tax-qualified U.S. pension plans were terminated by the PBGC, we could be liable to the PBGC for an
amount that exceeds the underfunding disclosed in our consolidated financial statements. In addition, because our U.S. pension plan
has unfunded obligations, if we have a substantial cessation of operations at a U.S. facility and, as a result of such cessation of
operations an event under ERISA Section 4062(e) is triggered, additional liabilities that exceed the amounts disclosed in our
consolidated financial statements could arise, including an obligation for us to provide additional contributions or alternative security
for a period of time after such an event occurs. Any such action could have a material adverse effect on our business, financial
condition, and results of operations.
26
Risks Relating to Cybersecurity and Data Privacy
We are highly dependent on information technology, the disruption of which could significantly impede our ability to do business.
Our operations depend on our network of information technology systems (whether our own or those of our third-party
service providers), each of which is vulnerable to damage from hardware failure, fire, power loss, telecommunications failure, and
impacts of cyber-attacks, terrorism, natural disasters, or other disasters. We rely on our information technology systems to accurately
maintain books and records, record transactions, provide information to management and prepare our financial statements. We may
not have sufficient redundant operations to cover a loss or failure in a timely manner. Any damage to our information technology
systems, regardless of the cause, could cause interruptions to our operations that materially adversely affect our ability to meet
customers’ requirements, resulting in an adverse impact to our business, financial condition, and results of operations. Periodically,
these systems need to be expanded, updated, or upgraded as our business needs change. We may not be able to successfully implement
changes in our information technology systems without experiencing difficulties, which could require significant financial and human
resources. Moreover, our increasing dependence on technology may exacerbate this risk.
Our systems and IT infrastructure have been and may continue to be subject to security breaches and other cybersecurity
incidents.
We rely on the accuracy, capacity, and security of digital technologies, including information systems, infrastructure, and
cloud applications, some of which are managed or hosted by third party service providers, and the sale of our products may involve
the transmission and/or storage of data, including in certain instances customers’ and employees’ business and personally identifiable
information. Maintaining the security of computers, computer networks, and data storage resources is a critical issue for us and our
customers, as security breaches, including computer viruses and malware, denial of service actions, misappropriation of data and
similar events through the internet, including via devices and applications connected to the internet, and through email attachments
and persons with access to these information systems could result in vulnerabilities and loss of and/or unauthorized access to
confidential information. The use of generative AI in our internal systems may create new vulnerabilities. Because generative AI is a
new field, understanding of security risks and protection methods continues to develop. We have experienced and could continue to
experience cybersecurity incidents, such as attempts by experienced hackers, cybercriminals, or others with authorized access to our
systems to misappropriate our proprietary information and technology, interrupt our business, and/or gain unauthorized access to
confidential information, some of which have been, and may continue to be, successful. If our IT systems or those managed or hosted
by third party service providers are breached, or cease to function as anticipated, we could suffer interruptions or inefficiencies in our
operations, harm to our reputation, or misappropriation of proprietary or confidential information, including personal information.
This could lead some customers to stop purchasing our products and reduce or delay future purchases of our products or use
competing products.
In addition, we could face enforcement actions by U.S. states, the U.S. federal government, or foreign governments, which
could result in fines, penalties, and/or other liabilities, which may cause us to incur legal fees and costs, and/or additional costs
associated with responding to the cyberattack. Increased regulation regarding cybersecurity may increase our costs of compliance,
including fines and penalties, as well as costs of cybersecurity audits and associated repairs or updates to infrastructure, physical
systems or data processing systems. Any of these actions could have a material adverse impact on our business and results of
operations. Although we maintain insurance coverage to protect us against some of the risks, those policies may be insufficient to
cover all losses or all types of claims that may arise in the event we experience a cybersecurity incident, data breach or disruption,
unauthorized access, or failure of systems.
In addition, we are subject to state, foreign, and international laws and regulations, as well as contractual obligations, that
apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data. These privacy and data-
protection related laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently
and existing laws and regulations subject to new or different interpretations. In particular, the E.U. GDPR, which became effective in
2018, poses increased compliance challenges both for companies operating within the E.U. and non-E.U. companies that administer or
process certain personal data of E.U. residents. It is not possible to predict the ultimate content, and therefore effect, of data protection
regulation over time, and efforts to comply with evolving regulation may result in additional costs.
We believe we have invested in industry-appropriate protections and monitoring practices for our data and information
technology to reduce these risks and continue to monitor our systems on an ongoing basis for compliance with applicable privacy
regulations and any current or potential threats. While we have not experienced any material breaches in security in our recent history,
there can be no assurance that our efforts will prevent breakdowns or breaches to databases or systems that could have a material
adverse effect on our business, financial condition, and results of operations, or that we will be subject to enforcement actions or
penalties in connection with a failure or alleged failure to comply with applicable laws.
27
Risks Relating to our Governmental and Regulatory Environment
Changes in building codes and standards, including ENERGY STAR standards, could increase the cost of our products, lower the
demand for our windows and doors, or otherwise adversely affect our business.
Our products and markets are subject to extensive and complex local, state, federal and foreign statutes, ordinances, rules,
and regulations. These mandates, including building design and safety and construction standards and zoning requirements, affect the
cost, selection, and quality requirements of building components like windows and doors.
These regulations often provide broad discretion to governmental authorities as to the types and quality specifications of
products used in new residential and non-residential construction and home renovations and improvement projects, and different
governmental authorities can impose different standards. Compliance with these standards and changes in such regulations may
increase the costs of manufacturing our products or may reduce the demand for certain of our products in the affected geographical
areas or product markets. Conversely, a decrease in product safety standards could reduce demand for our more modern products if
less expensive alternatives that did not meet higher standards became available for use in that market. All or any of these changes
could have a material adverse effect on our business, financial condition, and results of operations.
In addition, in order for our products to obtain the “ENERGY STAR” certification, they must meet certain requirements set
by the EPA. Changes in the energy efficiency requirements established by the EPA for the ENERGY STAR label could increase our
costs, and a lapse in our ability to label our products as such or to comply with the new standards, may have a material adverse effect
on our business, financial condition, and results of operations.
Domestic and foreign regulations, legislation and government policy, including those applicable to general business operations,
could increase the costs of operating our business and adversely affect our business.
We are subject to a variety of regulation, legislation and government policies from U.S. and foreign governmental authorities
relating to wage requirements, employee benefits, and other matters. While it is not possible to predict whether and when any changes
to the federal or administrative landscape will occur, changes at the local, state, and federal level could significantly impact our
business. For example, changes in local minimum or living wage requirements, rights of employees to unionize, healthcare
regulations, and other requirements relating to employee benefits could increase our labor costs, which would in turn increase our cost
of doing business. In addition, our international operations are subject to laws applicable to foreign operations, trade protection
measures, foreign labor relations, differing intellectual property rights, privacy regulations, other legal and regulatory constraints, and
currency regulations of the countries or regions in which we currently operate or where we may operate in the future. These factors
may restrict the sales of, or increase costs of, manufacturing and selling our products.
We may be subject to significant compliance costs, as well as liabilities under environmental, health, and safety laws and
regulations.
Our past and present operations, assets, and products are subject to extensive environmental laws and regulations at the
federal, state, and local level worldwide. These laws regulate, among other things, air emissions, the discharge or release of materials
into the environment, the handling and disposal of wastes, remediation of contaminated sites, worker health and safety, and the impact
of products on human health and safety and the environment. Under certain of these laws, liability for contaminated property may be
imposed on current or former owners or operators of the property or on parties that generated or arranged for waste sent to the
property for disposal. Liability under these laws may be joint and several and may be imposed without regard to fault or the legality of
the activity giving rise to the contamination. Notwithstanding our compliance efforts, we may still face material liability, limitations
on our operations, fines, or penalties for violations of environmental, health, and safety laws and regulations, including releases of
regulated materials and contamination by us or previous occupants at our current or former properties or at offsite disposal locations
we use.
The applicable environmental, health, and safety laws and regulations, and any changes to them or in their enforcement, may
require us to make material expenditures with respect to ongoing compliance with or remediation under these laws and regulations or
require that we modify our products or processes in a manner that increases our costs and/or reduces our profitability. For example,
additional pollution control equipment, process changes, or other environmental control measures may be needed at some of our
facilities to meet future requirements. In addition, the discovery of currently unknown or unanticipated soil or groundwater conditions
at our properties could result in significant liabilities and costs. Accordingly, we are unable to predict the exact future costs of
compliance with or liability under environmental, health, and safety laws and regulations.
28
Legal, regulatory or stakeholder preferences regarding climate change and ESG matters could have an adverse impact on the
Company’s business and results of operations.
Concerns over the long-term effects of climate change have led to, and may continue to lead to, governmental efforts around
the world to mitigate those effects. We will need to respond to any new laws and regulations as well as to consumer, investor and
business preferences resulting from climate change concerns, which may have an impact on our business, from the demand for our
customers’ products in various industries to our costs of compliance in the manufacturing and servicing of our customers’ products, all
of which may impact our results of operations and result in costs to us in order to comply with any new laws, regulations or
preferences. Overall, climate change, its effects and the resulting, unknown impact on government regulation, consumer, investor and
business preferences could have a long-term material adverse effect on our business and results of operations.
Heightened stakeholder focus on ESG issues related to our business requires continuous monitoring of various and evolving
laws, regulations, standards and expectations and the associated reporting requirements. There can be no certainty that we will
adequately or timely meet stakeholder expectations and reporting requirements, which may result in noncompliance with any imposed
regulations, the loss of business, reputational impacts, diluted market valuation, an inability to attract and retain customers, and an
inability to attract and retain top talent. In addition, our adoption and the reporting of certain standards or mandated compliance with
certain requirements could necessitate additional investments that could impact our profitability. The lack of economic and regulatory
certainty surrounding ESG may have an adverse impact on our business and results of operations. Such regulatory uncertainty could
adversely impact the demand for energy efficient products and could increase costs of compliance. Additionally, the extensive and
frequently changing legislation and regulations could impose increased liability for remediation costs and civil or criminal penalties in
cases of non-compliance.
Further, we have established and publicly disclosed ESG targets and goals and other sustainability commitments that are
subject to a variety of assumptions, risks and uncertainties. If we are unable to, or perceived to be unable to, meet these targets, goals
or commitments, our reputation, business and results of operations may be adversely impacted. In addition, not all our competitors
may seek to establish climate or other ESG targets and goals, or at a comparable level to ours, which could result in our competitors
achieving competitive advantages through lower supply chain or operating costs.
Changes to legislative and regulatory policies that currently promote home ownership may have a material adverse effect on our
business, financial condition, and results of operations.
Our markets are also affected by legislative and regulatory policies, such as U.S. tax rules, allowing for deductions of
mortgage interest and the mandate of government-sponsored entities like Freddie Mac and Fannie Mae to promote home ownership
through mortgage guarantees on certain types of home loans. The Tax Act passed in the U.S. in December 2017 made significant
changes to some of these historical benefits of home ownership. The specific changes which could affect our markets are, among
others, a reduction of the maximum amount of home mortgage indebtedness for which a tax deduction for interest paid may be
claimed, an elimination of the deduction for interest paid on home equity indebtedness, and a limitation on the amount of state and
local taxes allowed to be deducted annually as itemized deductions. These changes to the tax code and any future policy changes may
adversely impact demand for our products and have a material adverse effect on our business, financial condition, and results of
operations.
Lack of transparency, threat of fraud, public sector corruption, and other forms of criminal activity involving government officials
increases the risk of potential liability under anti-bribery/anti-corruption or anti-fraud legislation, including the FCPA, the U.K.
Bribery Act, and similar laws and regulations.
As a result of the international nature of our operations, we may enter from time to time into negotiations and contractual
arrangements with parties affiliated with foreign governments and their officials in the ordinary course of business. In connection with
these activities, we may be subject to anti-corruption laws in various jurisdictions, including the FCPA, the U.K. Bribery Act and other
anti-bribery laws applicable to jurisdictions where we do business that prohibit improper payments or offers of payments to foreign
government officials and political parties and others for the purpose of obtaining or retaining business, or otherwise receiving
discretionary favorable treatment of any kind, and require the maintenance of internal controls to prevent such payments. In particular,
we may be held liable for actions taken by agents in foreign countries where we operate, even though such parties are not always
subject to our control. We have established anti-bribery/anti-corruption policies and procedures and offer several channels for raising
concerns in an effort to comply with the laws and regulations applicable to us. However, there can be no assurance that our policies
and procedures will effectively prevent us from violating these laws and regulations in every transaction in which we may engage.
Allegations of violations of the FCPA or other anti-bribery or anti-corruption laws may result in internal, independent, or government
investigations. Any determination that we have violated the FCPA or other anti-bribery/anti-corruption laws (whether directly or
through acts of others, intentionally or through inadvertence) could result in severe criminal and civil sanctions and other liabilities
that could have a material adverse effect on our business, reputation, financial condition, and results of operations.
29
As we continue to expand our business globally, including through foreign acquisitions, we may have difficulty anticipating
and effectively managing these and other risks that our international operations may face, which may adversely impact our business
outside of the U.S. and our financial condition and results of operations. In addition, any acquisition of businesses with operations
outside of the U.S. may exacerbate this risk.
Risks Relating to our Indebtedness
Our failure to comply with the credit agreements governing our Credit Facilities and indentures governing the Senior Notes,
including as a result of events beyond our control, could trigger events of default and acceleration of our indebtedness. Defaults
under our debt agreements could have a material adverse effect on our business, financial condition, and results of operations.
If there were an event of default under the credit agreements governing our Credit Facilities, the indentures governing the
Senior Notes, or other indebtedness that we may incur, the holders of the defaulted indebtedness could cause all amounts outstanding
with respect to that indebtedness to be immediately due and payable. It is likely that our cash flows would not be sufficient to fully
repay borrowings under our Credit Facilities and principal amounts of the Senior Notes, if accelerated upon an event of default. If we
are unable to repay, refinance, or restructure our secured debt, the holders of such indebtedness may proceed against the collateral
securing that indebtedness.
Furthermore, any event of default or declaration of acceleration under one debt instrument may also result in an event of
default under one or more of our other debt instruments. In exacerbated or prolonged circumstances, one or more of these events could
result in our bankruptcy or liquidation. Accordingly, any default by us on our debt could have a material adverse effect on our
business, financial condition, and results of operations.
Our indebtedness could adversely affect our financial flexibility and our competitive position.
Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information
regarding our indebtedness.
Our level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect
of our indebtedness and could have other material consequences, including:
•
limiting our ability to obtain financing in the future for working capital, capital expenditures, acquisitions, or other
general corporate purposes;
•
requiring us to use a substantial portion of our available cash flow to service our debt, which will reduce the amount of
cash flow available for working capital, capital expenditures, acquisitions, and other general corporate purposes;
•
increasing our vulnerability to general economic downturns and adverse industry conditions;
•
limiting our flexibility in planning for, or reacting to, changes in our business and in our industry in general;
•
limiting our ability to invest in and develop new products;
•
placing us at a competitive disadvantage compared to our competitors that are not as highly leveraged, as we may be less
capable of responding to adverse economic conditions, general economic downturns, and adverse industry conditions;
•
restricting the way we conduct our business because of financial and operating covenants in the agreements governing
our existing and future indebtedness;
•
increasing the risk of our failing to satisfy our obligations with respect to borrowings outstanding under our Credit
Facilities and Senior Notes and/or being able to comply with the financial and operating covenants contained in our debt
instruments, which could result in an event of default under the credit agreements governing our Credit Facilities and the
agreements governing our other debt, including the indentures governing the Senior Notes, that, if not cured or waived,
could have a material adverse effect on our business, financial condition, and results of operations; and
•
increasing our cost of borrowing.
The credit agreements governing our Credit Facilities and the indentures governing the Senior Notes impose significant operating
and financial restrictions on us that may prevent us from capitalizing on business opportunities.
The credit agreements governing our Credit Facilities and the indentures governing the Senior Notes impose significant
operating and financial restrictions on us. These restrictions limit our ability, among other things, to:
•
incur or guarantee additional indebtedness;
•
make certain loans, investments, or restricted payments, including dividends to our shareholders;
•
repurchase or redeem capital stock;
30
•
engage in certain transactions with affiliates;
•
sell certain assets (including stock of subsidiaries) or merge with or into other companies; and
•
create or incur liens.
Under the terms of the ABL Facility, we will at times be required to comply with a specified fixed charge coverage ratio
when the amount of certain unrestricted cash balances of the U.S. and Canadian loan parties plus the amount available for borrowing
by the U.S. borrowers and Canadian borrowers is less than a specified amount. Our ability to meet the specified covenants could be
affected by events beyond our control, and our failure to meet these covenants will result in an event of default as defined in the
applicable facility.
In addition, our ability to borrow under the ABL Facility is limited by the amount of the borrowing base applicable to U.S.
dollar and Canadian dollar borrowings. Any negative impact on the elements of our borrowing base, such as eligible accounts
receivable and inventory, will reduce our borrowing capacity under the ABL Facility. Moreover, the ABL Facility provides discretion
to the agent bank acting on behalf of the lenders to impose additional requirements on what accounts receivable and inventory may be
counted toward the borrowing base availability and to impose other reserves, which could materially impair the amount of borrowings
that would otherwise be available to us. There can be no assurance that the agent bank will not impose such reserves or, were it to do
so, that the resulting impact of this action would not materially and adversely impair our liquidity.
As a result of these covenants and restrictions, we are limited in how we conduct our business, and we may be unable to raise
additional debt or equity financing to compete effectively or to take advantage of new business opportunities or engage in other
activities that may be in our long-term best interests. The terms of any future indebtedness we may incur could include more restrictive
covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do
so, we may be unable to obtain waivers from the lenders or amend the covenants.
We require a significant amount of liquidity to fund our operations, and borrowing may increase our vulnerability to negative
unforeseen events.
Our liquidity needs vary throughout the year. If our business experiences materially negative unforeseen events, we may be
unable to generate sufficient cash flow from operations to fund our needs or maintain sufficient liquidity to operate and remain in
compliance with our debt covenants, which could result in reduced or delayed purchases of raw materials, planned capital
expenditures, and other investments and adversely affect our financial condition or results of operations. Our ability to borrow under
the ABL Facility may be limited due to decreases in the borrowing base as described above.
Risks Relating to Ownership of Our Common Stock
The market price of our Common Stock may be highly volatile.
Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as other
general economic, market or political conditions, could reduce the market price of our shares in spite of our operating performance.
Various factors, including those listed in this Item 1A - Risk Factors section, may have a significant impact on the market price of our
Common Stock.
In addition, broad market and industry factors, including the trading prices of the securities of our publicly traded
competitors, may negatively affect the market price of our Common Stock, regardless of our actual operating performance, and factors
beyond our control may cause our stock price to decline rapidly and unexpectedly. Furthermore, the stock market has experienced
extreme volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies.
We may be subject to securities litigation, which is expensive and could divert management attention.
Our share price may be volatile and, in the past, companies that have experienced volatility in the market price of their stock
have been subject to securities class action litigation. We may be the target of this type of litigation. Litigation of this type could result
in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our
business, financial condition, and results of operations. Any adverse determination in litigation could also subject us to significant
liabilities and may negatively impact our share price.
31
Because we have no current plans to pay cash dividends on our shares of Common Stock, shareholders must rely on appreciation
of the value of our Common Stock for any return on their investment.
We currently anticipate that we will retain future earnings for the development, operation, and expansion of our business, to
repay debt and potentially repurchase shares, and have no current plans to declare or pay any cash dividends in the foreseeable future.
In addition, the terms of our Credit Facilities, Senior Notes, and any future debt agreements may preclude us from paying dividends.
As a result, we expect that only appreciation of the price of our Common Stock, if any, will provide a return to shareholders for the
foreseeable future.
Because we are a holding company with no operations of our own, we rely on dividends, distributions, and transfers of funds from
our subsidiaries, and we could be harmed if such distributions were not made in the future.
We are a holding company that conducts all our operations through subsidiaries and the majority of our operating income is
derived from JWI, our main operating subsidiary. Consequently, we rely on dividends or advances from our subsidiaries. We have no
current plans to declare or pay dividends on our Common Stock for the foreseeable future; however, to the extent that we determine in
the future to pay dividends on our Common Stock, none of our subsidiaries will be obligated to make funds available to us for the
payment of dividends. The ability of such subsidiaries to pay dividends to us is subject to applicable local law and may be limited due
to the terms of other contractual arrangements, including our indebtedness. Such laws and restrictions would restrict our ability to
continue operations. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of
our Common Stock.
Item 1B - Unresolved Staff Comments
None.
Item 1C - Cybersecurity
Risk Management and Strategy
We maintain a comprehensive process for assessing, identifying and managing material risks from cybersecurity threats as
part of our overall risk management system and processes. To that end, we regularly monitor the need and implementation of
enhancements to security infrastructure, legacy system replacement, emerging technology risk assessment and security integration.
Our cybersecurity risk management processes include the following:
a.
We leverage the NIST framework to help ensure the Company’s risk posture remains in alignment with the Company’s
overall risk appetite.
b.
The Company utilizes policies, software, training programs, hardware solutions and managed services to protect and
monitor our environment, including multifactor authentication on all critical systems, firewalls, intrusion detection and
prevention systems, vulnerability and penetration testing, identity and access management systems, cloud security
controls and monitoring, data backup and recovery systems and 24x7 security operations center.
c.
The Company’s approach to managing cybersecurity and digital risk is led by our CIO and CISO. Our CIO is supported
by the Company at the highest levels and regularly engages with cross-functional teams at the Company, including
Legal, Audit, Finance, Human Resources and Enterprise Risk Management.
d.
We also carry insurance that provides protection against the potential losses arising from a cybersecurity incident. Such
insurance may be insufficient to cover all losses or all types of claims that may arise.
e.
Our cybersecurity team conducts routine cyber awareness training for professional associates using an independent third-
party security training provider to educate best practices, policies and responsibilities pertaining to cybersecurity. We
also conduct periodic simulated phishing tests to generate awareness and run tabletop exercises to simulate a response to
a cybersecurity incident and use the findings to improve our practices, procedures and technologies.
f.
Our cybersecurity incident response plan coordinates the activities we take to prepare for, detect, respond to, and recover
from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate,
communicate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate
brand and reputational damage.
g.
Our cybersecurity team regularly conducts tests of our information security environment and controls through
vulnerability scanning, penetration testing and attack simulation testing.
32
Additionally, our cybersecurity risk management processes include review and assessment by external, independent third
parties, who assess the maturity of our cybersecurity program and identify areas for continued focus and improvement. Furthermore,
our Legal Department advises the Board about best practices for cybersecurity oversight by the Board, and the evolution of that
oversight over time.
Our cybersecurity risk management processes extend to the oversight and identification of threats associated with our use of
third-party service providers. Our cybersecurity team conducts third-party software security reviews for new software products being
implemented into our production environments. We also have a third-party risk management process that regularly assesses and
monitors risks, including cybersecurity, from vendors and suppliers.
As of the date of this Form 10-K, we do not believe any risk from any cybersecurity threats or incidents have had, or are
reasonably likely to have, a material impact on us; however, there is no guarantee that a future cybersecurity threat or incident will be
detected and remediated to not have a material adverse impact on our business, results of operations and financial condition. Refer to
Item 1A - Risk Factors of this Form 10-K for information on cybersecurity risks that may materially affect our business, results of
operations and financial condition.
Governance
The cybersecurity risk management processes described above are led by our CIO and CISO, each having more than 25 years
of information security experience. Our CIO reports to the CEO, and the CISO reports to the CIO. Our Board, Audit Committee,
senior management and the Enterprise Risk Management Committee (a management committee of senior representatives from
corporate functions and business lines) devote resources to cybersecurity and risk management processes. Cybersecurity and data
governance risks are aligned with our overall Enterprise Risk Management process to help ensure potential cyber threats are identified,
assessed and mitigated. Our top risks, such as cybersecurity, identified sub-risks and current and proposed mitigation strategies are
reviewed regularly by the Enterprise Risk Management Committee. The Audit Committee is primarily responsible for the oversight of
enterprise risk management and cybersecurity risks, including cybersecurity threats. To fulfill this responsibility, the Audit Committee
receives periodic reports from the CIO and CISO. These reports include information regarding updates on cybersecurity initiatives,
cybersecurity metrics, such as phishing results and attack volume metrics, results of any assessments performed by internal
stakeholders or external third-party advisors and updates on cybersecurity trends and insights. The CIO and CISO provide a
cybersecurity update to the full Board at least annually.
Item 2 - Properties
Our principal executive office is located in Charlotte, North Carolina. We lease administrative office space in Charlotte,
North Carolina and in Birmingham, U.K. We also own or lease other properties to support our primary operating activities, including
sales offices and administrative office space in Klamath Falls, Oregon.
Manufacturing
Distribution
North America
United States
35
12
Canada
4
2
Total North America
39
14
Europe
United Kingdom
2
—
France
2
—
Austria
3
—
Czech Republic
1
—
Switzerland
1
—
Hungary
1
—
Germany
4
1
Sweden
2
—
Denmark
2
—
Latvia
2
—
Estonia
3
—
Finland
2
—
Total Europe
25
1
Total JELD-WEN
64
15
33
Item 3 - Legal Proceedings
Refer to Note 25 - Commitments and Contingencies to our consolidated financial statements included in this Form 10-K for
information relating to this item.
Item 4 - Mine Safety Disclosures
Not applicable.
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PART II - OTHER INFORMATION
Item 5 - Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders
Our Common Stock has been listed and traded on the NYSE under the symbol “JELD” since January 27, 2017. Prior to that
time, there was no public trading market for our stock. As of February 14, 2025, there were approximately 1,080 shareholders of
record of our Common Stock. The number of record holders does not include a substantially greater number of holders whose shares
are held of record in nominee or “street name” accounts through banks, brokers, and other financial institutions.
Stock Performance Graph
The following graph depicts the total return to shareholders from December 31, 2019 through December 31, 2024, relative to
the performance of the Russell 3000 Index and our self-selected peer group(1). The graph assumes an investment of $100 in our
Common Stock and each index on December 31, 2019, and the reinvestment of dividends paid since that date. The Company chose to
replace the S&P 500 Index and S&P 1500 Building Products Index with the Russell 3000 Index because we believe it is a better
comparative index and will provide a meaningful comparison of our stock performance going forward. We chose to use a self-selected
peer group consisting of companies noted below to include in the performance graph as we believe this peer group aligns with our
markets and global exposure. The criteria used in determining this peer group included the size of the companies (measured in terms
of annual revenue and market capitalization), industries and geographies in which the companies operate, stock price correlation and
volatility relative to JELD-WEN, and increased representation of comparator companies used by shareholder advisory firms. The
stock performance shown in the graph is not necessarily indicative of future performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among JELD-WEN Holding, Inc., the Russell 3000 Index, the S&P 500 Index,
S&P 1500 Building Products Index, Self-Selected Peer Group
JELD-WEN Holding, Inc.
Russell 3000
S&P 500
S&P Composite 1500 Building Products
Self-Selected Peer Group
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
$0
$50
$100
$150
$200
$250
$300
*$100 invested on December 31, 2019, in stock or index, including reinvestment of dividends.
Fiscal year ended December 31.
35
December 31,
2019
December 31,
2020
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2024
JELD-WEN Holding, Inc.
$100.00
$108.33
$112.60
$41.22
$80.65
$34.99
Russell 3000
$100.00
$120.89
$151.91
$122.73
$154.59
$191.39
S&P 500
$100.00
$118.40
$152.39
$124.79
$157.59
$197.02
S&P Composite 1500 Building Products
$100.00
$128.34
$188.32
$144.32
$208.14
$250.36
Self-Selected Peer Group(1)
$100.00
$114.20
$143.18
$98.78
$141.59
$154.61
(1)
The self-selected peer group index is comprised of the following companies: American Woodmark Corporation; Fortune Brands
Innovations, Inc.; Interface Inc; Masco Corporation; Mohawk Industries, Inc.; and Owens Corning.
Equity Compensation Plans
Refer to Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters for
the information required by Item 201(d) of Regulation S-K regarding equity compensation plans.
Dividends
We do not currently expect to pay any cash dividends on our Common Stock for the foreseeable future. Instead, we intend to
retain future earnings, if any, for the future operation and expansion of our business, the repayment of debt, and potentially for share
repurchases. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon
our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws, and
other factors that our Board of Directors may deem relevant.
The terms of the agreements governing our existing or future indebtedness may limit our ability to pay dividends and make
distributions to our shareholders. Our business is conducted through our subsidiaries and dividends from, and cash generated by, our
subsidiaries will be our principal sources of cash to repay indebtedness, fund operations, and pay any dividends. Accordingly, our
ability to pay dividends to our shareholders is dependent on the earnings and distributions of funds from our subsidiaries (which
distributions may be restricted by the terms of our Corporate Credit Facilities and Senior Notes).
Item 6 - [Reserved]
Not applicable.
Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
This MD&A contains forward-looking statements that involve risks and uncertainties. Refer to “Forward-Looking
Statements” in Item 1 - Business and Item 1A - Risk Factors in this Form 10-K for a discussion of the uncertainties, risks and
assumptions associated with these statements. This discussion should be read in conjunction with our historical financial statements
and related notes thereto and the other disclosures contained elsewhere in this Form 10-K. The results of operations for the periods
reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ
materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those
listed under Item 1A- Risk Factors included in this Form 10-K.
This MD&A is a supplement to our financial statements and notes thereto included elsewhere in this Form 10-K and is
provided to enhance your understanding of our results of operations and financial condition. Our discussion of results of operations is
presented in millions throughout the MD&A and due to rounding may not sum or calculate precisely to the totals and percentages
provided in the tables. Our MD&A is organized as follows:
•
Company Overview. This section provides a general description of our Company and reportable segments, business and
industry trends, our key business strategies and background information on other matters discussed in this MD&A.
•
Consolidated Results of Operations and Operating Results by Business Segment. This section provides our analysis and
outlook for the significant line items on our consolidated statements of operations, as well as other information that we
deem meaningful to an understanding of our results of operations on both a consolidated basis and a business segment
basis.
•
Liquidity and Capital Resources. This section contains an overview of our financing arrangements and provides an
analysis of trends and uncertainties affecting liquidity, cash requirements for our business, and sources and uses of our
cash.
•
Critical Accounting Policies and Estimates. This section discusses the accounting policies that we consider important to
the evaluation and reporting of our financial condition and results of operations, and whose application requires
significant judgments or a complex estimation process.
36
Company Overview
We are a leading global designer, manufacturer, and distributor of high-performance interior and exterior doors, windows,
and related building products, serving the new construction and R&R sectors.
We operate manufacturing and distribution facilities in 14 countries, located primarily in North America and Europe. For
many product lines, our manufacturing processes are vertically integrated, enhancing our range of capabilities, our ability to innovate,
and our quality control as well as providing supply chain, transportation, and working capital savings.
Business Segments
Our business is organized in geographic regions to ensure integration across operations serving common end markets and
customers. We have two reportable segments: North America and Europe. Refer to Note 14 - Segment Information included in this
Form 10-K for more information about our segments.
Divestitures
During 2021, the Company ceased the appeal process for its litigation with Steves. As a result, we were required to divest our
Towanda facility and related assets, which occurred on January 17, 2025. As of December 31, 2024, and prior to the court-ordered
divestiture closing, we believed the court-ordered divestiture would occur within the next twelve months and qualifies for held for sale
accounting. We have reclassified certain assets and liabilities to assets held for sale in the accompanying financial statements. We
have reported Towanda within our North America operations through 2024. Refer to Note 25 - Commitments and Contingencies
included in this Form 10-K for more information on the Steves litigation and court-ordered divestiture.
On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum
Equity Advisors, LLC, to sell our Australasia business. On July 2, 2023, we completed the sale. The net assets and operations of the
disposal group met the criteria to be classified as “discontinued operations” and are reported as such in all periods presented unless
otherwise noted. The consolidated statements of cash flows include cash flows from discontinued operations through the divestiture
date of July 2, 2023. Refer to Note 2 - Discontinued Operations included in this Form 10-K for more information.
Factors and Trends Affecting Our Business
Components of Net Revenues
The key components of our net revenues include Core Revenues (which we define to include the impact of pricing and
volume/mix, as discussed further under the heading, “Product Pricing and Volume/Mix” below), contribution from acquisitions and
divestitures made within the prior twelve months, and the impact of foreign exchange. Net revenues reported in our financial
statements are impacted by the fluctuating currency values in the geographies in which we operate, which we refer to as the impact
from foreign exchange. Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
percentage changes in pricing are based on management schedules and are not derived directly from our accounting records.
Product Demand
General business, financial market, and economic conditions globally and in the regions where we operate influence overall
demand in our end markets and for our products. In particular, the following factors may have a direct impact on demand for our
products in the countries and regions where our products are marketed and sold:
•
the strength of the economy;
•
employment rates, consumer confidence, and spending rates;
•
the availability and cost of credit;
•
interest rate fluctuations (including mortgage and credit card interest rates), sustained periods of elevated interest rates,
and the availability of financing for our customers and consumers;
•
the amount and type of residential and non-residential construction;
•
housing sales and home values;
•
the age of existing home stock, home vacancy rates, and foreclosures;
•
volatility in both debt and equity capital markets;
•
increases in the cost of raw materials or any shortage in supplies or labor, including as a result of tariffs or other trade
restrictions;
•
disruptions or delays to the global supply chain;
37
•
the effects of governmental regulation and initiatives to manage economic conditions;
•
geographical shifts in population and other changes in demographics; and
•
changes in weather patterns and extreme weather events.
In addition, we seek to drive demand for our products through the implementation of various strategies and initiatives. We
believe we can enhance demand for our new and existing products by:
•
innovating and developing new products and technologies;
•
investing in branding and marketing strategies, including marketing campaigns in both print and social media, as well as
our investments in training curriculum, in-field training and technologies to facilitate remote learning; and
•
implementing channel initiatives to enhance our relationships with key channel partners and customers, including
optimizing growth through rebate programs in North America.
Product Pricing and Volume/Mix
The price and mix of products that we sell are important drivers of our net revenues and net income. Under the heading
“Results of Operations,” references to (i) “pricing” refer to the impact of price increases or decreases, as applicable, for particular
products between periods and (ii) “volume/mix” refer to the combined impact of both the number of products we sell in a particular
period and the types of products sold, in each case, on net revenues. While we operate in competitive markets, the demand for our
innovative products allows us to exercise pricing discipline, which is an important element of our strategy to achieve profitable growth
through improved margins. Our strategy also includes incentivizing our channel partners to sell our higher margin products, and we
believe a renewed focus on innovation and the development of new technologies will increase our sales volumes and the overall
profitability of our product mix.
Cost Reduction and Productivity Initiatives
Our senior management team has a proven track record of implementing operational excellence programs at various large,
global manufacturing businesses, and we believe the same successes can be realized at JELD-WEN. Key areas of focus of our
operational excellence, productivity, and footprint rationalization programs include:
•
reducing labor, overtime, and waste costs by reducing facility count while optimizing manufacturing capacity and
improving planning and manufacturing processes;
•
increasing rigor and alignment around capital expenditures with a clear linkage to our strategy and optimizing returns;
•
reducing or minimizing increases in material usage and costs through value-added engineering;
•
investing in logistics optimization programs to reduce freight costs and increase throughput;
•
redesigning our supply chain network to reduce lead times and optimize inventory levels to increase cash flow; and
•
reducing warranty costs by improving quality.
We continue to implement our strategic cost-reduction and productivity initiatives to develop the culture and processes of
operational excellence and continuous improvement. These cost reduction initiatives, which may include plant closures and
consolidations, headcount reductions, and other various initiatives aimed at lowering production and overhead costs, may not produce
the intended results within the intended timeframe.
Raw Material Costs
Commodities such as wood, steel, glass, fiberglass, aluminum and vinyl are major components in the production of our
products. Changes in the underlying prices of these commodities have a direct impact on the cost of goods sold. While we attempt to
pass on a substantial portion of such cost increases to our customers, we may not be successful in doing so. In addition, our results of
operations for individual quarters may be negatively impacted by a delay between the time of raw material cost increases and a
corresponding price increase. Conversely, our results of operations for individual quarters may be positively impacted by a delay
between the time of a raw material price decrease and a corresponding competitive pricing decrease.
38
Freight Costs
We incur freight and duty costs from third party logistics providers and port authorities to transport raw materials and work-
in-process inventory to our manufacturing facilities and to deliver finished goods to our customers. Changes in freight and duty rates
as well as the availability of freight services can have a significant impact on our cost of goods sold. Freight and duty costs are
variable due to several factors that have affected the supply and demand of trucking and port services, including increased regulation,
such as logging of miles, increases in general economic activity, labor shortages, and an aging workforce. We continue to monitor
these key market drivers and proactively mitigate these costs through various internal initiatives and carrier contracts.
Working Capital and Seasonality
Working capital fluctuates throughout the year and is affected by the seasonality of sales of our products and of customer
payment patterns. The peak season for home construction and remodeling in our North America and Europe segments generally
corresponds with the second and third calendar quarters, and therefore our sales volume is generally higher during those quarters.
Typically, working capital increases at the end of the first quarter and beginning of the second quarter in conjunction with, and in
preparation for, our peak season, and working capital decreases starting in the third quarter as inventory levels and accounts receivable
decline. Global supply markets and supply chains have been impacted by certain events, resulting in shortages and extended lead times
impacting our operations and profitability. We continue to apply a number of different strategies to mitigate the impact of these
challenges on our operations, including extending our demand planning, seeking alternative sources, utilizing substitute products and
leveraging our supplier relationships.
Foreign Currency Exchange Rates
We report our consolidated financial results in U.S. dollars. Due to our international operations, the weakening or
strengthening of foreign currencies against the U.S. dollar can affect our reported operating results and our cash flows as we translate
our foreign subsidiaries’ financial statements from their reporting currencies into U.S. dollars. Refer to Item 1A - Risk Factors- Risks
Relating to Our Business and Industry, Item 1A - Risk Factors - Exchange rate fluctuations may impact our business, financial
condition, and results of operations, and Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Exchange Rate Risk
included in this Form 10-K.
Components of our Operating Results
Net Revenues
Our net revenues are a function of sales volumes and selling prices, each of which is a function of product mix, and consist
primarily of:
•
sales of a wide variety of interior and exterior doors, including patio doors, for use in residential and non-residential
applications, with and without frames, to a broad group of wholesale and retail customers in both of our geographic
markets;
•
sales of a wide variety of windows for both residential and certain non-residential uses, to a broad group of wholesale
and retail customers in North America; and
•
other sales, including sales of glass, hardware and locks, and window screens. We also sell molded door skins to certain
direct and indirect customers pursuant to long-term contracts, and these customers in turn use the molded door skins to
manufacture interior doors and compete directly against us in the marketplace.
Net revenues do not include internal transfers of products between our component manufacturing, product manufacturing and
assembly, and distribution facilities.
Cost of Sales
Cost of sales consists primarily of material costs, direct labor and benefit costs, repair and maintenance, depreciation, utility,
rent and warranty expenses, outbound freight, insurance and benefits, supervision and tax expenses.
39
Material Costs. The single largest component of cost of sales is material costs, which include raw materials, components, and
finished goods purchased for use in manufacturing our products or for resale. Our most significant material costs include wood, wood
composites, wood components, steel, glass, internally produced door skins, fiberglass compound, hardware, petroleum-based products
such as resin and binders, as well as aluminum and vinyl extrusions. The cost of each of these items is impacted by global supply and
demand trends, both within and outside our industry, as well as commodity price fluctuations, conversion costs, energy costs, and
transportation costs. Material costs also include purchased finished goods. We have and may continue to experience inflation in our
material costs, including increased costs for inbound freight, due to supply chain challenges from economic and geopolitical
uncertainties, including the ongoing conflict between Russia and Ukraine. The imposition of new tariffs on imports, new trade
restrictions, or changes in tariff rates or trade restrictions may further impact material costs. Refer to Item 7A - Quantitative and
Qualitative Disclosures About Market Risk- Raw Materials Risk included in this Form 10-K.
Direct Labor and Benefit Costs. Direct labor and benefit costs reflect a combination of production hours, average headcount,
general wage levels, payroll taxes, and benefits provided to employees. Direct labor and benefit costs include wages, overtime, payroll
taxes, and benefits paid to hourly employees at our facilities that are involved in the production and/or distribution of our products.
These costs are generally managed by each facility and headcount is adjusted according to overall and seasonal production demand.
We run multi-shift operations in many of our facilities to maximize return on assets and utilization. Direct labor and benefit costs
fluctuate with headcount but generally tend to increase with inflation due to increases in wages and health benefit costs.
Repair and Maintenance, Depreciation, Utility, Rent, and Warranty Expenses.
•
Repairs and maintenance costs consist of equipment and facility maintenance expenses, purchases of maintenance
supplies, and the labor costs involved in performing maintenance on our equipment and facilities.
•
Depreciation includes depreciation expense associated with our production assets and plants.
•
Rent is predominantly comprised of lease costs for facilities we do not own as well as vehicle fleet and equipment lease
costs. Facility leases are typically multi-year and may include increases tied to certain measures of inflation.
•
Warranty expenses represent all costs related to servicing warranty claims and product issues and are mostly related to
our window and door products sold in the U.S. and Canada.
Outbound Freight. Outbound freight includes payments to third-party carriers for shipments of orders to our customers, as
well as driver, vehicle, and fuel expenses when we deliver orders to customers. Third-party carriers ship the majority of our products.
Insurance and Benefits, Supervision, and Tax Expenses.
•
Insurance and benefit costs are the expenses relating to our insurance programs, health benefits, retirement benefit
programs (including the pension plan), and other benefits for employees that are not included in direct labor and benefits
costs.
•
Supervision costs are the wages and bonus expenses related to plant managers. Both insurance and benefits and
supervision expenses tend to be influenced by headcount and wage levels.
•
Tax costs are mostly payroll taxes for employees not included in direct labor and benefit costs, and property taxes. Tax
expenses are impacted by changes in tax rates, headcount and wage levels, and the number and value of properties
owned.
In addition, an appropriate portion of each of the insurance and benefits, supervision and tax expenses are allocated to SG&A
expenses.
Selling, General, and Administrative Expenses
SG&A expenses primarily consist of research and development, sales and marketing, and general and administrative
expenses.
Research and Development. Research and development expenses consist primarily of personnel expenses related to research
and development, consulting and contractor expenses, tooling and prototype materials, and overhead costs allocated to such expenses.
Substantially all our research and development expenses are related to developing new products and services and improving our
existing products and services. To date, research and development expenses have been expensed as incurred, because the period
between achieving technological feasibility and the release of products and services for sale has been short and development costs
qualifying for capitalization have been insignificant.
40
Sales and Marketing. Sales and marketing expenses consist primarily of advertising and marketing promotions of our
products and services and related personnel expenses, as well as sales incentives, trade show and event costs, sponsorship costs,
consulting and contractor expenses, travel, display expenses, and related amortization. Sales and marketing expenses are generally
variable expenses.
General and Administrative. General and administrative expenses consist of personnel expenses for our finance, legal, human
resources, and administrative personnel, as well as the costs of professional services, any allocated overhead, information technology,
amortization of intangible assets acquired, and other administrative expenses.
Goodwill Impairment
Goodwill impairment consists of goodwill impairment charges associated with our Europe reporting unit during the years
ended December 31, 2022 and 2024. During the year ended December 31, 2024, goodwill impairment also consists of goodwill
impairment charges related to the court-ordered divestiture of Towanda. Refer to Note 6 - Goodwill included in this Form 10-K for
more information.
Restructuring and Asset Related Charges
Restructuring charges, net consist primarily of all salary-related severance and employee termination benefits that are accrued
and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of
management and the benefit is probable and reasonably estimable. In addition to salary-related costs, we incur other restructuring costs
and adjustments when facilities are closed, or capacity is realigned within the organization. Upon termination of an employment or
commercial contract we record liabilities and expenses pursuant to the terms of the relevant agreement. For non-contractual
restructuring activities, liabilities and expenses are measured and recorded at fair value in the period in which they are incurred. Asset
related charges consist of accelerated depreciation and amortization of assets due to changes in asset useful lives. Refer to Note 19.
Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more information.
Interest Expense, Net
Interest expense, net relates primarily to interest payments on our credit facilities and debt securities, as well as commitment
fees and amortization of any original issue discount or debt issuance costs. Debt issuance costs are included as an offset to long-term
debt in the accompanying consolidated balance sheets and are amortized to interest expense over the life of the related facility using
the effective interest method. Refer to Note 21 - Interest Expense, Net and Note 12 - Long-Term Debt to our consolidated financial
statements included in this Form 10-K for more information.
Other Income, Net
Other income, net, includes income and losses related to various miscellaneous non-operating expenses. Refer to Note 22 -
Other Income, Net to our consolidated financial statements included in this Form 10-K for more information.
Income Taxes
Income taxes are recorded using the asset and liability method of accounting for income taxes. Under this method, deferred
tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that
includes the date of enactment. We recognize the effect of income tax positions only if those positions are more likely than not of
being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized.
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Refer to Note 15 - Income
Taxes to our consolidated financial statements included in this Form 10-K for more information.
Results of Operations
The tables in this section summarize key components of our results of operations for the periods indicated, both in U.S.
dollars and as a percentage of our net revenues. Certain percentages presented in this section have been rounded to the nearest whole
number. Accordingly, totals may not equal the sum of the line items in the tables below.
We present several financial metrics in “Core” terms, such as Core Revenue, which excludes the impact of foreign exchange,
acquisitions and divestitures completed in the last twelve months. We believe Core Revenue assists management, investors, and
analysts in understanding the organic performance of our operations.
41
Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023
Year Ended December 31,
2024
2023
(amounts in thousands)
% of Net
Revenues
% of Net
Revenues
Net revenues
$
3,775,592
100.0 % $
4,304,334
100.0 %
Cost of sales
3,086,618
81.8 %
3,471,713
80.7 %
Gross margin
688,974
18.2 %
832,621
19.3 %
Selling, general and administrative
652,527
17.3 %
655,280
15.2 %
Goodwill impairment
94,801
2.5 %
—
— %
Restructuring and asset-related charges
68,092
1.8 %
35,741
0.8 %
Operating (loss) income
(126,446)
(3.3) %
141,600
3.3 %
Interest expense, net
67,237
1.8 %
72,258
1.7 %
Loss on extinguishment and refinancing of debt
1,908
0.1 %
6,487
0.2 %
Other income, net
(24,773)
(0.7) %
(25,719)
(0.6) %
(Loss) income from continuing operations before taxes
(170,818)
(4.5) %
88,574
2.1 %
Income tax expense
16,762
0.4 %
63,339
1.5 %
(Loss) income from continuing operations, net of tax
(187,580)
(5.0) %
25,235
0.6 %
(Loss) gain on sale of discontinued operations, net of tax
(1,440)
— %
15,699
0.4 %
Income from discontinued operations, net of tax
—
— %
21,511
0.5 %
Net (loss) income
$
(189,020)
(5.0) % $
62,445
1.5 %
Consolidated Results
Net Revenues – Net revenues decreased $528.7 million, or 12.3%, to $3,775.6 million in the year ended December 31, 2024,
from $4,304.3 million in the year ended December 31, 2023. The decrease in net revenues was primarily driven by a decrease in Core
Revenues of 12%. Core Revenues decreased due to a 12% decline in volume/mix.
Gross Margin – Gross margin decreased $143.6 million, or 17.3%, to $689.0 million in the year ended December 31, 2024,
from $832.6 million in the year ended December 31, 2023. Gross margin as a percentage of net revenues was 18.2% in the year ended
December 31, 2024, and 19.3% in the year ended December 31, 2023. The decrease in gross margin percentage was due to a
decremental impact of volume/mix, partially offset by an increase in productivity.
SG&A Expense – SG&A expense decreased $2.8 million, or 0.4%, to $652.5 million in the year ended December 31, 2024,
from $655.3 million in the year ended December 31, 2023. SG&A expense as a percentage of net revenues increased to 17.3% in the
year ended December 31, 2024, from 15.2% in the year ended December 31, 2023. The decrease in SG&A expense was primarily due
to decreased performance-based variable compensation expense partially offset by increased professional fees, including non-recurring
transformation journey expenses.
Goodwill Impairment – Goodwill impairment charges of $94.8 million in the year ended December 31, 2024, consist of a
$63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge
in our North America reporting unit related to the court-ordered divestiture of Towanda. Refer to Note 6 – Goodwill to our
consolidated financial statements included in this Form 10-K for more information.
Restructuring and Asset-Related Charges – Restructuring and asset-related charges increased $32.4 million, or 90.5% to
$68.1 million in the year ended December 31, 2024, from $35.7 million in the year ended December 31, 2023. The increase in
restructuring charges was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North
America and Europe segments and to transform the operating structure of our Europe segment. Refer to Note 19 - Restructuring and
Asset-Related Charges of our consolidated financial statements included in this Form 10-K for more information.
Interest Expense, Net – Interest expense, net, decreased $5.0 million, or 6.9%, to $67.2 million in the year ended December
31, 2024, from $72.3 million in the year ended December 31, 2023. The decrease was primarily due to lower long-term debt balances
resulting from the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes in the third quarter of
2023, and an increase in interest income from invested cash balances, partially offset by a decrease in interest income from interest
rate derivatives and a higher interest rate on our Senior Notes maturing in 2032 issued during the third quarter of 2024. Refer to Note
21 - Interest Expense, Net of our consolidated financial statements included in this Form 10-K for more information.
42
Loss on Extinguishment and Refinancing of Debt – The $1.9 million loss on extinguishment and refinancing of debt during
the year ended December 31, 2024, is related to the amendment of our Term Loan Facility as well as the redemption of the remaining
$200.0 million of our 4.63% Senior Notes. The loss on extinguishment and refinancing of debt of $6.5 million in the year ended
December 31, 2023, is related to the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes. Refer
to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K for more information.
Other Income, Net – Other income, net decreased $0.9 million, or 3.7%, to $24.8 million in the year ended December 31,
2024, from $25.7 million in the year ended December 31, 2023. Other income, net in the year ended December 31, 2024, consisted
primarily of cash received on investment in real estate of $7.9 million, income from the refund of deposits of China antidumping and
countervailing duties of $7.2 million, recovery of the JW Australia transition services costs incurred of $6.6 million, insurance
reimbursements of $1.7 million, and recovery of cost from receipts on impaired notes of $1.4 million, partially offset by pension
expense of $2.0 million. Other income, net in the year ended December 31, 2023, consisted primarily of recovery of the JW Australia
transition services costs incurred of $8.3 million, income from the refund of deposits from antidumping duties of $7.0 million, an ERC
from the U.S. government of $6.1 million, recovery of cost from interest received on impaired notes of $3.5 million, and income from
short-term investments and forward contracts related to the JW Australia divestiture of $3.1 million, partially offset by pension
expense of $6.5 million and a $4.3 million settlement loss associated with our U.S. defined benefit pension plan. Refer to Note 22 -
Other Income, Net of our consolidated financial statements included in this Form 10-K for more information.
Income Taxes – Income tax expense was $16.8 million in the year ended December 31, 2024, compared to $63.3 million in
the year ended December 31, 2023. The effective tax rate in the year ended December 31, 2024, was (9.8)%. The effective tax rate for
the year ended December 31, 2024, was driven primarily by the $24.6 million increase to valuation allowances on foreign and state
NOL and credit carryforwards, $7.1 million of tax expense attributed to nondeductible expenses, $20.2 million of tax expense
attributable to nondeductible goodwill impairment and $4.5 million of tax expense attributed to the expiration of U.S. attributes,
partially offset by $2.7 million of tax benefit attributable to research and development credits. The effective tax rate in the year ended
December 31, 2023, was 71.5%. The effective tax rate in the year ended December 31, 2023, was primarily driven by the effects of the
$32.7 million net valuation allowance recorded against our foreign and state NOLs as well as $7.2 million of tax expense attributed to
the expiration of our U.S. attributes. Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form
10-K for more information.
(Loss) Gain on Sale of Discontinued Operations – The $1.4 million loss and $15.7 million gain on sale of discontinued
operations in the years ended December 31, 2024 and 2023, respectively, are related to the July 2, 2023, sale of JW Australia. The
$1.4 million loss incurred in the year ended December 31, 2024, is related to settlement of an outstanding tax liability for JW
Australia. Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K for more
information.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022
Year Ended December 31,
2023
2022
(amounts in thousands)
% of Net
Revenues
% of Net
Revenues
Net revenues
$
4,304,334
100.0 % $
4,543,808
100.0 %
Cost of sales
3,471,713
80.7 %
3,757,888
82.7 %
Gross margin
832,621
19.3 %
785,920
17.3 %
Selling, general and administrative
655,280
15.2 %
654,077
14.4 %
Goodwill impairment
—
— %
54,885
1.2 %
Restructuring and asset-related charges
35,741
0.8 %
17,622
0.4 %
Operating income
141,600
3.3 %
59,336
1.3 %
Interest expense, net
72,258
1.7 %
82,505
1.8 %
Loss on extinguishment of debt
6,487
0.2 %
—
— %
Other income, net
(25,719)
(0.6) %
(53,433)
(1.2) %
Income from continuing operations before taxes
88,574
2.1 %
30,264
0.7 %
Income tax expense
63,339
1.5 %
18,041
0.4 %
Income from continuing operations, net of tax
25,235
0.6 %
12,223
0.3 %
Gain on sale of discontinued operations, net of tax
15,699
0.4 %
—
— %
Income from discontinued operations, net of tax
21,511
0.5 %
33,504
0.7 %
Net income
$
62,445
1.5 % $
45,727
1.0 %
43
Consolidated Results
Net Revenues – Net revenues decreased $239.5 million, or 5.3%, to $4,304.3 million in the year ended December 31, 2023,
from $4,543.8 million in the year ended December 31, 2022. The decrease was driven by a decrease in Core Revenues of 5% and a
nominal impact from foreign exchange. Core Revenues decreased 5% due to a 10% decrease in volume/mix, partially offset by a 5%
benefit from price realization.
Gross Margin – Gross margin increased $46.7 million, or 5.9%, to $832.6 million in the year ended December 31, 2023,
from $785.9 million in the year ended December 31, 2022. Gross margin as a percentage of net revenues was 19.3% in the year ended
December 31, 2023, and 17.3% in the year ended December 31, 2022. The increase in gross margin percentage was due primarily to
favorable price/cost, partially offset by accelerated depreciation in North America from reviews of equipment capacity optimization.
SG&A Expense – SG&A expense increased $1.2 million, or 0.2%, to $655.3 million in the year ended December 31, 2023,
from $654.1 million in the year ended December 31, 2022. SG&A expense as a percentage of net revenues increased to 15.2% in the
year ended December 31, 2023, from 14.4% in the year ended December 31, 2022. The increase in SG&A expense was primarily due
to increased performance-based variable compensation expenses and accelerated amortization of an ERP system that we intend to not
utilize upon completion of the JW Australia Transition Services Agreement period, partially offset by decreased labor expenses driven
by a reduction in headcount and lower bad debt expense in our North America segment due to improved collections.
Goodwill Impairment – Goodwill impairment charges of $54.9 million in the year ended December 31, 2022, relate to
goodwill impairment charges in our Europe reporting unit. Refer to Note 6 – Goodwill of our consolidated financial statements
included in this Form 10-K for more information.
Restructuring and Asset Related Charges – Restructuring and asset related charges of $35.7 million in the year ended
December 31, 2023, increased 102.8% from $17.6 million in the year ended December 31, 2022. The increase in restructuring charges
was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America segment. Refer to
Note 19 - Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more
information.
Interest Expense, Net – Interest expense, net, decreased $10.2 million, or 12.4%, to $72.3 million in the year ended December
31, 2023, from $82.5 million in the year ended December 31, 2022. The decrease was primarily due to higher interest income from
interest rate derivatives, the redemption of our Senior Secured Notes and partial redemption of our Senior Notes, and decreased
borrowings on our Revolving Credit Facilities during the year ended December 31, 2023, partially offset by an increase to the cost of
borrowing on our variable rate Term Loan Facility. Refer to Note 21 - Interest Expense, Net of our consolidated financial statements
included in this Form 10-K for more information.
Loss on Extinguishment of Debt – The $6.5 million loss on extinguishment of debt is related to the redemption of our Senior
Secured Notes and partial redemption of our Senior Notes during the year ended December 31, 2023. Refer to Note 12 - Long-Term
Debt of our consolidated financial statements included in this Form 10-K for more information.
Other Income, Net – Other income, net decreased $27.7 million, or 51.9%, to $25.7 million in the year ended December 31,
2023, from $53.4 million in the year ended December 31, 2022. Other income, net in the year ended December 31, 2023, primarily
consisted of recovery of the JW Australia transition services costs incurred of $8.3 million, income from the refund of deposits from
antidumping duties of $7.0 million, an ERC from the U.S. government of $6.1 million, recovery of cost from interest received on
impaired notes of $3.5 million, and income from short-term investments and forward contracts related to the JW Australia divestiture
of $3.1 million, partially offset by pension expense of $6.5 million and a $4.3 million settlement loss associated with our U.S. defined
benefit pension plan. Other income, net in the year ended December 31, 2022, primarily consisted of the recovery of cost from interest
received on impaired notes of $14.0 million, legal settlement income of $10.5 million, reimbursements from governmental assistance
and insurance of $8.0 million, pension income of $4.9 million, credit for overpayments of utility expenses of $2.0 million, and foreign
currency gains of $1.0 million. Refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form
10-K for more information.
Income Taxes – Income tax expense was $63.3 million and $18.0 million in the years ended December 31, 2023, and
December 31, 2022, respectively. The effective tax rate in the year ended December 31, 2023, was 71.5% compared to 59.6% in the
year ended December 31, 2022. The effective tax rate increased primarily due to the impacts of the $32.7 million net valuation
allowance recorded in the year ended December 31, 2023, partially offset by the $54.9 million non-deductible goodwill impairment
charge recorded for the year ended December 31, 2022, not recorded in the year ended December 31, 2023. Refer to Note 15 - Income
Taxes of our consolidated financial statements included in this Form 10-K for more information.
Gain on Sale of Discontinued Operations, net of tax – The $15.7 million gain on sale of discontinued operations, net of tax is
related to the July 2, 2023, sale of JW Australia. Refer to Note 2 - Discontinued Operations of our consolidated financial statements
included in this Form 10-K for more information.
44
Segment Results
We report our segment information in the same way management internally organizes the business in assessing performance
and making decisions regarding allocation of resources in accordance with ASC 280-10 - Segment Reporting. We define Adjusted
EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted for the following items: income
tax expense (benefit); depreciation and amortization; interest expense (income), net; and certain special items consisting of non-
recurring net legal and professional expenses and settlements; goodwill impairment; restructuring and asset-related charges; M&A
related costs; net (gain) loss on sale of business, property, and equipment; loss on extinguishment and refinancing of debt; share-based
compensation expense; pension settlement charges; non-cash foreign exchange transaction/translation (gain) loss; and other special
items. We use Adjusted EBITDA from continuing operations because we believe this measure assists investors and analysts in
comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are
indicative of our core operating performance. This non-GAAP financial measure should be viewed in addition to, and not as a
substitute for, the Company’s reported results prepared in accordance with GAAP.
We have two reportable segments, organized and managed principally in geographic regions: North America and Europe. We
report all other business activities in Corporate and unallocated costs.
Reconciliations of income (loss) from continuing operations, net of tax to Adjusted EBITDA from continuing operations by
segment are as follows:
Year Ended December 31, 2024
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Income (loss) from continuing operations, net of tax
$
82,836 $
(64,331) $
(206,085) $
(187,580)
Income tax expense (benefit)
18,676
8,066
(9,980)
16,762
Depreciation and amortization(1)
73,528
30,702
21,556
125,786
Interest expense, net
2,648
2,114
62,475
67,237
Special items:(2)
Net legal and professional expenses and settlements
2,921
4,740
55,061
62,722
Goodwill impairment
31,356
63,445
—
94,801
Restructuring and asset-related charges
42,817
23,729
1,546
68,092
M&A related costs
—
—
15,296
15,296
Net gain on sale of business, property, and equipment
(13,415)
(153)
(184)
(13,752)
Loss on extinguishment and refinancing of debt
—
—
1,908
1,908
Share-based compensation expense
3,087
1,261
11,117
15,465
Non-cash foreign exchange transaction/translation loss (gain)
315
(3,771)
355
(3,101)
Other special items
9,302
1,911
399
11,612
Adjusted EBITDA from continuing operations
$
254,071 $
67,713 $
(46,536) $
275,248
(1)
Corporate and unallocated depreciation and amortization expense includes software accelerated amortization of $14.1 million for
an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services
Agreement during the first quarter of 2024.
(2)
Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.
45
Year Ended December 31, 2023
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Income (loss) from continuing operations, net of tax
$
175,980 $
(3,335) $
(147,410) $
25,235
Income tax expense (benefit)(1)
79,210
44,095
(59,966)
63,339
Depreciation and amortization(2)
79,900
30,185
24,911
134,996
Interest expense, net
4,713
3,224
64,321
72,258
Special items:(3)
Net legal and professional expenses and settlements
946
3,726
23,512
28,184
Restructuring and asset-related charges
29,207
5,738
796
35,741
M&A related costs
759
—
5,816
6,575
Net loss (gain) on sale of property and equipment
1,223
(5,101)
(6,645)
(10,523)
Loss on extinguishment and refinancing of debt
—
—
6,487
6,487
Share-based compensation expense
5,121
1,890
10,466
17,477
Pension settlement charge
4,349
—
—
4,349
Non-cash foreign exchange transaction/translation (gain) loss
(261)
1,628
(772)
595
Other special items
1,042
(595)
(4,721)
(4,274)
Adjusted EBITDA from continuing operations
$
382,189 $
81,455 $
(83,205) $
380,439
(1)
Income tax expense in our Europe segment includes an increase in valuation allowance against our foreign net operating loss
carryforwards of $30.0 million.
(2)
Corporate and unallocated costs depreciation and amortization expense in the year ended December 31, 2023, includes
accelerated amortization of $14.1 million for an ERP system that we are no longer utilizing after we completed our related
obligations under the JW Australia Transition Services Agreement. North America depreciation and amortization expense in the
year ended December 31, 2023, includes accelerated depreciation of $9.1 million from reviews of equipment capacity
optimization.
(3)
Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.
To conform with the current period presentation, certain amounts in prior period information have been reclassified.
Year Ended December 31, 2022
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Income (loss) from continuing operations, net of tax
$
260,590 $
(50,796) $
(197,571) $
12,223
Income tax expense(1)
6,963
3,307
7,771
18,041
Depreciation and amortization
69,427
31,139
12,566
113,132
Interest expense, net
4,011
6,193
72,301
82,505
Special items:(2)
Net legal and professional expenses and settlements
12
1,674
(1,973)
(287)
Goodwill impairment
—
54,885
—
54,885
Restructuring and asset-related charges
7,338
6,042
4,242
17,622
M&A related costs
736
—
9,016
9,752
Net (gain) loss on sale of business, property, and equipment
(8,397)
354
7
(8,036)
Share-based compensation expense
4,870
2,729
6,978
14,577
Non-cash foreign exchange transaction/translation loss
148
876
11,413
12,437
Other special items
7,187
17,922
(3,113)
21,996
Adjusted EBITDA from continuing operations
$
352,885 $
74,325 $
(78,363) $
348,847
(1)
Income tax expense in Corporate and unallocated costs in the year ended December 31, 2022, includes the tax impact of U.S.
Operations.
(2)
Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.
46
Reconciliation of (loss) income from continuing operations, net of tax to Adjusted EBITDA from continuing operations on a
consolidated basis is as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
(Loss) income from continuing operations, net of tax
(187,580)
25,235 $
12,223
Income tax expense(1)
16,762
63,339
18,041
Depreciation and amortization(2)
125,786
134,996
113,132
Interest expense, net
67,237
72,258
82,505
Special items:
Net legal and professional expenses and settlements(3)
62,722
28,184
(287)
Goodwill impairment(4)
94,801
—
54,885
Restructuring and asset-related charges(5)(6)
68,092
35,741
17,622
M&A related costs(7)
15,296
6,575
9,752
Net gain on sale of business, property, and equipment(8)
(13,752)
(10,523)
(8,036)
Loss on extinguishment and refinancing of debt(9)
1,908
6,487
—
Share-based compensation expense(10)
15,465
17,477
14,577
Pension settlement charge(11)
—
4,349
—
Non-cash foreign exchange transaction/translation (gain) loss(12)
(3,101)
595
12,437
Other special items(13)
11,612
(4,274)
21,996
Adjusted EBITDA from continuing operations
$
275,248 $
380,439 $
348,847
(1)
Income tax expense in the year ended December 31, 2023, includes an increase in valuation allowance against foreign net
operating loss carryforwards of $30.0 million. Refer to Note 15 - Income Taxes of our consolidated financial statements included
in this Form 10-K for more information.
(2)
Depreciation and amortization expense includes accelerated amortization of $14.1 million in the years ended December 31, 2024
and 2023 in Corporate and unallocated costs for an ERP that we are no longer utilizing after we completed our related obligations
under the JW Australia Transition Services Agreement during the first quarter of 2024. In addition, depreciation and amortization
expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million in North America from reviews
of equipment capacity optimization.
(3)
Net legal and professional expenses and settlements include non-recurring transformation journey expenses of $59.2 million,
$26.1 million, and $3.8 million in the years ended December 31, 2024, 2023 and 2022, respectively. These expenses primarily
relate to the engagement of one transformation consultant for a period spanning from the third quarter of 2023 through the end of
2024, for which we incurred $40.7 million and $20.0 million in the years ended December 31, 2024 and 2023, respectively.
Additionally, net legal and professional expenses and settlements include amounts relating to litigation of historic legal matters of
$2.8 million and $1.8 million in the years ended December 31, 2024 and 2023, respectively, and ($10.5) million of income
resulting from a legal settlement, partially offset by $3.9 million in legal expenses relating primarily to litigation in the year
ended December 31, 2022.
(4)
Goodwill impairment charges in the year ended December 31, 2024, consist of a $63.4 million goodwill impairment charge
associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America segment related
to the court-ordered divestiture of Towanda. Goodwill impairment charges in the year ended December 31, 2022, consist of a
goodwill impairment charge of $54.9 million associated with our Europe reporting unit.
(5)
Represents severance, accelerated depreciation and amortization, equipment relocation and other expenses directly incurred as a
result of restructuring events. The restructuring charges primarily relate to charges incurred to change the operating structure,
eliminate certain roles, and close certain manufacturing facilities in our North America and Europe segments.
(6)
For the years ended December 31, 2024 and 2023, $11.8 million and $1.5 million, respectively, of product and inventory-related
charges related to announced facility closures were detrimental to Adjusted EBITDA.
(7)
M&A related costs consists primarily of legal and professional expenses related to the court-ordered divestiture of Towanda.
(8)
Net gain on sale of business, property, and equipment in the year ended December 31, 2024, primarily relates to the sale of our
business in St. Kitts and properties in Chile, Mexico, and Klamath Falls, Oregon. Net gain on sale of business, property and
equipment in the year ended December 31, 2023, primarily relates to the sale of properties in the United Kingdom, Australia, and
Klamath Falls, Oregon. Net gain on sale of business, property and equipment in the year ended December 31, 2022, primarily
relates to the sale of property in Phoenix, Arizona.
47
(9)
Loss on extinguishment and refinancing of debt of $1.9 million in the year ended December 31, 2024, associated with an
amendment of our Term Loan Facility and redemption of the remaining $200.0 million of our 4.63% Senior Notes. Loss on
extinguishment and refinancing of debt of $6.5 million in the year ended December 31, 2023, is related to the redemption of
$250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.
(10)
Represents non-cash equity-based compensation expense related to the issuance of share-based awards.
(11)
Represents a settlement loss associated with our U.S. defined benefit pension plan resulting from a one-time lump sum payment
offered to pension plan participants. Refer to Note 26 - Employee Retirement and Pension Benefits of our consolidated financial
statements included in this Form 10-K for more information.
(12)
Non-cash foreign exchange transaction/translation gain primarily associated with fair value adjustments of foreign currency
derivatives and revaluation of balances denominated in foreign currencies.
(13)
Other special items not core to ongoing business activity include: (i) in the year ended December 31, 2024, a loss of $4.8 million
of cumulative foreign currency translation adjustments related to the substantial liquidation of a foreign subsidiaries in Chile and
Mexico in our North America segment; (ii) in the year ended December 31, 2023, ($3.1) million in income from short-term
investments and forward contracts related to the JW Australia divestiture in Corporate and unallocated costs, ($2.8) million in
adjustments to compensation and non-income taxes associated with exercises of legacy equity awards in our Europe segment, and
$2.2 million in costs that do not meet the U.S. GAAP definition of restructuring, primarily related to the closure of certain facility
in our Europe segment; (iii) in the year ended December 31, 2022, $3.3 million relating primarily to exit costs for executives in
Corporate and unallocated costs, ($2.0) million relating to a credit received for overpayment of utility expenses in our North
America segment, and $2.6 million and $16.3 million in our North America and Europe segments, respectively, in costs that do
not meet the U.S. GAAP definition of restructuring, primarily related to the closure of certain facilities.
To conform with the current period presentation, certain amounts in prior period information have been reclassified.
Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023
Year Ended December 31,
(amounts in thousands)
2024
2023
Variance
Net revenues from external customers
North America
$
2,708,371
$ 3,123,056
(13.3) %
Europe
1,067,221
1,181,278
(9.7) %
Total Consolidated
$
3,775,592
$ 4,304,334
(12.3) %
Percentage of total consolidated net revenues
North America
71.7 %
72.6 %
Europe
28.3 %
27.4 %
Total Consolidated
100.0 %
100.0 %
Adjusted EBITDA from continuing operations(1)
North America
$
254,071
$
382,189
(33.5) %
Europe
67,713
81,455
(16.9) %
Corporate and unallocated costs
(46,536)
(83,205)
(44.1) %
Total Consolidated
$
275,248
$
380,439
(27.6) %
Adjusted EBITDA from continuing operations as a percentage of segment
net revenues
North America
9.4 %
12.2 %
Europe
6.3 %
6.9 %
Total Consolidated
7.3 %
8.8 %
(1)
Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP. Refer to
the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed above.
North America
Net revenues in North America decreased $414.7 million, or 13.3%, to $2,708.4 million in the year ended December 31,
2024, from $3,123.1 million in the year ended December 31, 2023. The decrease was primarily due to a decrease in Core Revenues of
13%. Core Revenues decreased due to an 13% unfavorable volume/mix driven by weaker market demand and a shift in demand to
lower priced products.
Adjusted EBITDA from continuing operations in North America decreased $128.1 million, or 33.5%, to $254.1 million in the
year ended December 31, 2024, from $382.2 million in the year ended December 31, 2023. The decrease was primarily due to
unfavorable volume mix and price/cost, partially offset by improved productivity.
48
Europe
Net revenues in Europe decreased $114.1 million, or 9.7%, to $1,067.2 million in the year ended December 31, 2024, from
$1,181.3 million in the year ended December 31, 2023. The decrease was primarily due to a decrease in Core Revenues of 10%. Core
Revenues decreased due to unfavorable volume/mix of 11% primarily due to market softness across the region, partially offset by a
1% benefit from price realization.
Adjusted EBITDA from continuing operations in Europe decreased $13.7 million, or 16.9%, to $67.7 million in the year
ended December 31, 2024, from $81.5 million in the year ended December 31, 2023. The decrease was primarily due to unfavorable
volume/mix and price/cost, partially offset by favorable productivity.
Corporate and unallocated costs
Corporate and unallocated costs decreased by $36.7 million, or 44.1%, to $46.5 million in the year ended December 31, 2024,
from $83.2 million in the year ended December 31, 2023. The decrease in cost was primarily due to a decrease in performance-based
variable compensation expense, lower insurance expense due to favorable claims experience, an increase in cash received on
investment in real estate, reduction in non-transformational professional fees and corporate function expense savings in the current
year, partially offset by an increase in cloud and software application costs.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022
Year Ended December 31,
(amounts in thousands)
2023
2022
% Variance
Net revenues from external customers
North America
$ 3,123,056
$ 3,259,353
(4.2) %
Europe
1,181,278
1,284,455
(8.0) %
Total Consolidated
$ 4,304,334
$ 4,543,808
(5.3) %
Percentage of total consolidated net revenues
North America
72.6 %
71.7 %
Europe
27.4 %
28.3 %
Total Consolidated
100.0 %
100.0 %
Adjusted EBITDA from continuing operations(1)
North America
$
382,189
$
352,885
8.3 %
Europe
81,455
74,325
9.6 %
Corporate and unallocated costs
(83,205)
(78,363)
6.2 %
Total Consolidated
$
380,439
$
348,847
9.1 %
Adjusted EBITDA from continuing operations as a percentage of segment
net revenues
North America
12.2 %
10.8 %
Europe
6.9 %
5.8 %
Total Consolidated
8.8 %
7.7 %
(1)
Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP. Refer to
the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed above.
North America
Net revenues in North America decreased $136.3 million, or 4.2%, to $3,123.1 million in the year ended December 31, 2023,
from $3,259.4 million in the year ended December 31, 2022. The decrease was primarily due to a decrease in Core Revenues of 4.0%.
Core Revenues decreased due to an 8% unfavorable volume/mix driven by weakened market demand, partially offset by a 4% benefit
from price realization.
Adjusted EBITDA from continuing operations in North America increased $29.3 million to $382.2 million, or 8.3%, in the
year ended December 31, 2023, from $352.9 million in the year ended December 31, 2022. The increase was primarily due to
favorable price/cost and positive productivity, partially offset by unfavorable volume/mix and higher SG&A. The increase in SG&A
was primarily driven by increased performance-based variable compensation and the impact of inflation on labor expenses, partially
offset by a reduction in bad debt expense due to improved collections. Additionally, a decrease in other income, net, was primarily
driven by net pension expense in the current period compared to gains in the same period last year, partially offset by income
recognized for a refund of deposits for antidumping duties and an ERC during the year ended December 31, 2023.
49
Europe
Net revenues in Europe decreased $103.2 million, or 8.0%, to $1,181.3 million in the year ended December 31, 2023, from
$1,284.5 million in the year ended December 31, 2022. The decrease was primarily due to a decrease in Core Revenues of 9%. Core
Revenues decreased due to unfavorable volume/mix of 15% primarily due to market softness across the region, partially offset by a
7% benefit from price realization.
Adjusted EBITDA from continuing operations in Europe increased $7.1 million, or 9.6%, to $81.5 million in the year ended
December 31, 2023, from $74.3 million in the year ended December 31, 2022. The increase was primarily due to favorable
productivity and positive price/cost, partially offset by unfavorable volume/mix.
Corporate and unallocated costs
Corporate and unallocated costs increased by $4.8 million, or 6.2%, to $83.2 million in the year ended December 31, 2023,
from $78.4 million in the year ended December 31, 2022. The increase in cost is primarily due to losses on foreign exchange
transactions in the current period compared to gains in the same period last year, and a reduction in the recovery of cost from interest
received on impaired notes, partially offset by lower labor costs due to reduced headcount.
Liquidity and Capital Resources
Overview
We have historically funded our operations through a combination of cash from operations, draws on our revolving credit
facilities, and the issuance of non-revolving debt such as our Term Loan Facility and our Senior Notes. We place a strong emphasis on
cash flow generation, which includes an operating discipline focused on working capital management. Working capital fluctuates
throughout the year and is impacted by inflation, the seasonality of our sales, customer payment patterns, supply availability, and the
translation of the balance sheets of our foreign operations into the U.S. dollar. Typically, working capital increases at the end of the
first quarter and beginning of the second quarter in conjunction with, and in preparation for, the peak season for home construction
and remodeling in our North America and Europe segments, and decreases starting in the fourth quarter as inventory levels and
accounts receivable decline. Inventories fluctuate for raw materials that have long delivery lead times, as we work through prior
shipments and take delivery of new orders.
As of December 31, 2024, we had total liquidity (a non-GAAP measure) of $566.7 million, consisting of $150.3 million in
unrestricted cash, $416.4 million available for borrowing under the ABL Facility, compared to total liquidity of $750.6 million as of
December 31, 2023. The decrease in total liquidity was primarily due to lower cash balances at December 31, 2024, compared to
December 31, 2023.
As of December 31, 2024, our cash balances, including $0.7 million of restricted cash, consisted of $48.6 million in cash
located in the U.S. and $102.4 million in cash located outside of the U.S. held by our non-U.S. subsidiaries.
Based on our current and forecasted level of operations and seasonality of our business, we believe that cash provided by
operations and other sources of liquidity, including cash, cash equivalents, and availability under our revolving credit facilities, will
provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, and debt service requirements
for at least the next twelve months.
We may, from time to time, refinance, reprice, extend, retire, or otherwise modify our outstanding debt to lower our interest
payments, reduce our debt, or otherwise improve our financial position. These actions may include repricing amendments, extensions,
and/or opportunistic refinancing of debt. The amount of debt that may be refinanced, repriced, extended, retired, or otherwise
modified, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and
other considerations.
We may, from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for
equity or debt, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if there are
any, will be on such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors. The amounts involved may be material.
Based on hypothetical variable rate debt that would have resulted from drawing each revolving credit facility up to the full
commitment amount, a 100-basis point decrease in interest rates would have reduced our interest expense by $8.3 million in the year
ended December 31, 2024. A 100-basis point increase in interest rates would have increased our interest expense by $8.4 million in the
same period. In certain instances, the impact of a hypothetical decrease would have been partially mitigated by interest rate floors that
apply to certain of our debt agreements.
50
Contractual Obligations
In addition to our discussion and analysis surrounding our liquidity and capital resources, we have significant contractual
obligations and commitments as of December 31, 2024, relating to the following:
•
Long-term debt and interest obligations – As of December 31, 2024, our outstanding debt balance was $1,192.0 million.
Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more
information regarding the timing of expected future principal payments. Interest on long-term debt is calculated based on
debt outstanding and interest rates in effect on December 31, 2024, taking into account scheduled maturities and
amortization payments. As of December 31, 2024, we estimate interest payments of $72.9 million due in 2025 and
$280.4 million due in 2026 and thereafter.
•
Finance and operating lease obligations – As of December 31, 2024, our remaining contractual commitments for finance
and operating leases was $176.6 million. Refer to Note 8 - Leases to our consolidated financial statements included in
this Form 10-K for additional details regarding the timing of expected future payments.
•
Purchase obligations – As of December 31, 2024, we have purchase obligations of $73.2 million due in 2025 and
$42.2 million due in 2026 and thereafter. These purchase obligations are primarily relating to software hosting services
and equipment purchase agreements. Purchase obligations are defined as purchase agreements that are enforceable and
legally binding and that specify all significant terms, including quantity, price, and the approximate timing of the
transaction.
Borrowings and Refinancings
In June 2023, we amended the Term Loan Facility to replace LIBOR with a Term SOFR based rate as the successor
benchmark rate and made certain other technical amendments and related conforming changes. All other material terms and conditions
were unchanged.
In August 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior
Notes. The Company recognized a pre-tax loss of $6.5 million on the redemption in year ended December 31, 2023, consisting of
$3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.
In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove
certain provisions no longer relevant to the parties, and make certain other technical amendments and related conforming changes.
Pursuant to the amendment, replacement term loans bear interest at SOFR plus a margin of 1.75% to 2.00% depending on JWI’s
corporate credit ratings, compared to a margin of 2.00% to 2.25% under the previous amendment. All other material terms and
conditions of the Term Loan Agreement were unchanged.
In August 2024, we issued $350.0 million of Senior Notes, bearing interest at 7.00%, the proceeds of which were utilized to
repay $150.0 million of the outstanding balance of our Term Loan Facility and redeemed the remaining $200.0 million of our 4.63%
Senior Notes in September 2024. The Company recognized a pre-tax loss of $0.5 million on the redemption resulting from accelerated
amortization of debt issuance costs.
In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark with principal
payments which began in 2018. In October 2024, we repaid the entire remaining principal balance of the mortgage notes of DKK
142.5 million ($20.7 million).
As of December 31, 2024, we were in compliance with the terms of all our Credit Facilities and the indentures governing the
Senior Notes.
Our results have been and will continue to be impacted by substantial changes in our net interest expense throughout the
periods presented and into the future. Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this
Form 10-K for more information.
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Cash Flows(1)
The following table summarizes the changes to our cash flows for the periods presented:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Cash provided by (used in):
Operating activities
$
106,214 $
345,188 $
30,337
Investing activities
(153,337)
279,174
(67,030)
Financing activities
(80,633)
(563,157)
(120,014)
Effect of changes in exchange rates on cash and cash equivalents
(10,344)
7,074
(19,315)
Net change in cash and cash equivalents
$
(138,100) $
68,279 $
(176,022)
(1)
Cash flow information for the year ended December 31, 2023 and 2022 is inclusive of cash flows from JW Australia as
discontinued operations through the divestiture date of July 2, 2023.
Cash Flow from Operations
Net cash provided by operating activities decreased $239.0 million to $106.2 million in the year ended December 31, 2024,
compared to $345.2 million in the year ended December 31, 2023. The decreased operating cash flow was primarily due to
unfavorable change in earnings of $251.5 million and an unfavorable impact from accrued expenses of $39.1 million, due primarily to
higher payments of annual variable compensation for 2023 performance, partially offset by a $9.4 million improvement in net cash
provided by our working capital accounts. The impact of accounts receivable, net of $91.4 million was favorable in the year ended
December 31, 2024, compared to the year ended December 31, 2023, which was primarily due to decreased sales and slightly
improved collections. The $28.1 million favorable impact from accounts payable is primarily due to improved payment terms with
suppliers. The $110.1 million unfavorable impact of inventory is primarily due to the prior year benefit from intentional, one-time
reductions not being repeated in the current year, as the current year began with a more normalized inventory level as compared to the
prior year. Further, the unfavorable impact of inventory was also driven by investments in inventory levels to aid in delivering
improved service levels and lead times to our customers.
Net cash provided by operating activities increased $314.9 million to a $345.2 million source of cash in the year ended
December 31, 2023, compared to a $30.3 million source of cash in the year ended December 31, 2022. The increase in cash provided
by operating activities was primarily due to a $342.5 million improvement in net cash provided by our working capital accounts. Cash
flow provided by inventory was $193.1 million favorable compared to the year ended December 31, 2022, primarily driven by
demand planning that drove lower inventory days on hand, which mitigated inflation on raw materials. Cash flow provided by
Accounts receivable, net of $90.6 million was favorable in the year ended December 31, 2023, compared to the year ended December
31, 2022, which was primarily due to decreased sales, partially offset by slightly deteriorated days sales outstanding. Cash flow
provided by Accounts payable was $58.8 million favorable compared to the year ended December 31, 2022, which was primarily due
to lower raw material inflation on purchases in the current year as compared to prior year, partially offset by demand planning that
drove moderated purchasing.
Cash Flow from Investing Activities
Net cash used in investing activities was $153.3 million in the year ended December 31, 2024, compared to cash provided by
investing activities of $279.2 million in the year ended December 31, 2023, primarily driven by $365.6 million proceeds (payments)
related to the sale of JW Australia during the year ended December 31, 2023, and an increase in capital expenditures of $62.8 million.
Net cash provided by (used in) investing activities improved to a $279.2 million source of cash in the year ended December
31, 2023, compared to a $67.0 million use of cash in the year ended December 31, 2022, primarily driven by $365.6 million in net
proceeds (payments) related to the sale of JW Australia, partially offset by an increase in capital expenditures of $18.7 million and a
decrease in cash received from the recovery of cost from interest received on impaired notes of $10.4 million.
Cash Flow from Financing Activities
Net cash used in financing activities decreased $482.5 million to $80.6 million in the year ended December 31, 2024,
compared to $563.2 million in the year ended December 31, 2023, primarily due to net debt payments and payments of debt
extinguishment costs of $55.2 million in the year ended December 31, 2024, compared to net debt payments and payments of debt
extinguishment costs of $561.3 million in the year ended December 31, 2023. This decrease is partially offset by the repurchases of
common stock of $24.3 million during the year ended December 31, 2024.
52
Net cash used in financing activities increased $443.1 million to $563.2 million in the year ended December 31, 2023,
compared to $120.0 million in the year ended December 31, 2022, primarily due to net debt payments and payments of debt
extinguishment costs of $561.3 million in the year ended December 31, 2023, compared to net debt borrowings of $12.7 million in the
year ended December 31, 2022, partially offset by the non-recurrence of repurchases of our Common Stock of $132.0 million in the
year ended December 31, 2022.
Holding Company Status
We are a holding company that conducts all our operations through subsidiaries, and we rely on dividends or advances from
our subsidiaries to fund the holding company. The majority of our operating income is derived from JWI, our main operating
subsidiary. The ability of our subsidiaries to pay dividends to us is subject to applicable local law and may be limited due to the terms
of other contractual arrangements, including our Credit Facilities and Senior Notes.
The amount of our consolidated net assets that were available to be distributed under our Credit Facilities as of December 31,
2024, was $931.7 million.
Critical Accounting Policies and Estimates
The following disclosure is provided to supplement the description of our accounting policies contained in Note 1 -
Description of Company and Summary of Significant Accounting Policies of our consolidated financial statements. Our MD&A is
based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these
consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We
base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which may differ from these estimates. The following discussion highlights the estimates we believe are
critical and should be read in conjunction with the consolidated financial statements included in this Form 10-K.
Acquisitions
We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets
acquired based on their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration
transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. If the fair value of the
acquired assets exceeds the purchase price the difference is recorded as a bargain purchase in other income, net. Such valuations
require us to make significant estimates and assumptions, especially with respect to intangible assets. As a result, during the
measurement period, which may be up to one year from the acquisition date, material adjustments must be reflected in the comparative
consolidated financial statements in the period in which the adjustment amount is determined. Upon the conclusion of the
measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequent adjustments are recorded to our consolidated statements of operations. Newly acquired entities are included in our results
from the date of their respective acquisitions.
Recoverability of Long-Lived and Intangible Assets
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate
the carrying amount of such asset groups may not be recoverable. Such events or circumstances include, but are not limited to, a
significant decrease in the fair value of the underlying business or a change in utilization of property and equipment.
We group assets to test for impairment at the lowest level for which identifiable cash flows are largely independent of the
cash flows of other groups of assets and liabilities. Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets.
When a triggering event is identified, we perform an impairment test by reviewing the expected undiscounted cash flows
generated from the anticipated use and eventual disposition of the asset group compared to the carrying value of the asset group. If the
expected undiscounted cash flows are less than the carrying value of the asset group, then we recognize an impairment loss, and the
carrying amount of the asset is adjusted to fair value based on the discounted estimated future net cash flows. For depreciable long-
lived assets and an amortizable intangible asset, the new cost basis will be amortized over the remaining useful life of the asset. Our
impairment loss calculations require management to apply judgments in estimating future cash flows to determine asset fair values,
including forecasting useful lives of the assets.
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Goodwill
Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests if indicators of
potential impairment exist. Current accounting guidance provides an entity with the option to perform a qualitative assessment to
determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we do not perform
a qualitative assessment, or if we determine that it is more likely than not that the fair value of the reporting unit is less than its
carrying amount, we perform a quantitative goodwill impairment test. Prior to 2023, the estimated fair values of reporting units were
derived using only an income approach (implied fair value measured on a non-recurring basis using Level 3 inputs). Beginning in
2023, the estimated fair values of our reporting units were derived using a combination of income and market approaches, both of
which yielded substantially equivalent indications of fair value. Absent an indication of fair value from a potential buyer or similar
specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair value. Fair
value computed by these models is arrived at using several factors and inputs. There are inherent uncertainties, however, related to fair
value models, the inputs, factors and our judgment in applying them to this analysis. Nonetheless, we believe that the combination of
these methods provides a reasonable approach to estimate the fair values of our reporting units.
Under the income approach, the fair value of a reporting unit is based on a discounted cash flow analysis of management's
short-term and long-term forecast of operating performance. This analysis contains significant assumptions and estimates including
revenue growth rates, expected EBITDA margins, discount rates, capital expenditures, income tax rates, and terminal growth rates.
Under the market approach, we utilized a guideline company method in which the fair value of the reporting unit is based on
weighting the financial multiples of comparable companies and applying a control premium. Changes in assumptions or estimates
used in our goodwill impairment testing could materially affect the determination of the fair value of a reporting unit, and therefore,
could eliminate the excess of fair value over carrying amount of a reporting unit and, in some cases, could result in impairment. Such
changes in assumptions could be caused by items such as prolonged deterioration in economic conditions, a further decline in
projected future cash flows, loss of one or more significant customers, failure to control cost increases above what can be recouped in
sale price increase, or increases in the discount rates. These types of changes would negatively affect our profits, revenues, and growth
over the long term and such a decline could significantly affect the fair value assessment of our reporting units and cause our goodwill
to become impaired.
Prior to 2023, we identified three reporting units for the purpose of conducting our goodwill impairment assessment: North
America, Europe and Australasia. After the divestiture of our Australasia reporting unit in the third quarter of 2023, we identified two
reporting units: North America and Europe. In determining our reporting units, we considered (i) whether an operating segment or a
component of an operating segment was a business, (ii) whether discrete financial information was available, and (iii) whether the
financial information is regularly reviewed by management of the operating segment.
During the year ended December 31, 2022, upon the results of our interim impairment analysis, we concluded that the
carrying amount of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million,
representing a partial impairment of goodwill assigned to the Europe reporting unit. In addition, we determined that our North
America reporting unit was not impaired.
We performed our annual impairment assessment during the fourth quarter of 2023 using a quantitative analysis for our North
America and Europe reporting units. No indication of goodwill impairment was identified. We determined that the fair value of our
North America reporting unit would have to decline significantly to be considered for potential impairment. We determined the fair
value of our Europe reporting unit would have to decline by approximately 3% to be considered for potential impairment.
During the third quarter of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect
anticipated macroeconomic conditions of prolonged elevated interest rates leading to reduced revenue growth expectations. The end of
the third fiscal quarter also marks the conclusion of our generally heavier seasonal sales period and our European net sales were
negatively impacted by weaker market demand. Accordingly, the Company determined that a triggering event occurred requiring an
interim goodwill impairment test for its European reporting unit as of September 28, 2024. Based upon the results of our interim
impairment assessment, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a
goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.
Following this partial impairment, the reporting unit’s carrying amount equaled the fair value.
54
We performed our annual impairment assessments during the fourth quarter. The Company elected to perform a qualitative
analysis as of the fourth quarter for the Europe reporting unit. Our analysis did not determine that it was more likely than not that the
carrying value of the Europe reporting unit exceeded the fair value. During the fourth quarter, we quantitatively determined that the
fair value of our North America reporting unit exceeded its net carrying amount and no goodwill impairment existed. We determined
that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired. We believe
that our Europe and North America reporting units are at risk of impairment in the near term if the reporting units’ operating
performance does not improve in line with management’s expectations, or if there is a change in the long-term outlook for the business
or in other factors, such as the discount rate. The current goodwill impairment analysis for our Europe and North America reporting
units incorporates mid-to-low market outlook growth assumptions and yielding the benefits of our transformation initiatives and
strategic footprint optimization.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. We evaluate both the positive and negative evidence that is relevant in assessing whether we will realize
the deferred tax assets. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not
be realized. This projected realization is directly related to our future projections of the performance of our business and
management’s planning initiatives at any point in time. As a result, valuation allowances are subject to change as proven business
trends and planning initiatives develop.
The tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the position
is more likely than not to be sustained, based on the technical merits of the position and the jurisdiction. We recognize the financial
statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position
following an audit and the tax related to the position would be due to the entity and not the owners. For tax positions meeting the more
likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50
percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. We apply this accounting standard to all
tax positions for which the statute of limitations remains open. Changes in recognition or measurement are reflected in the period in
which the change in judgment occurs.
We file a consolidated federal income tax return in the U.S. and various states. For financial statement purposes, we calculate
the provision for federal income taxes using the separate return method. Certain subsidiaries file separate tax returns in certain
countries and states. Any U.S. federal, state and foreign income taxes refundable and payable are reported in other current assets and
other current liabilities in the consolidated balance sheets as of December 31, 2024 and 2023. We record interest and penalties on
amounts due to tax authorities as a component of income tax expense in the consolidated statements of operations. We have elected to
account for the impact of GILTI in the period in which it is incurred.
The Company continues to monitor and evaluate legislative developments related to GloBE established by the OECD Pillar
Two framework. Several countries in which the Company’s subsidiaries operate have adopted those rules into legislation. The
Company continues to evaluate impacts as further guidance is released.
Contingent Liabilities
Contingent liabilities require significant judgment in estimating potential losses for legal and environmental claims. Each
quarter, we review significant new claims and litigation for the probability of an adverse outcome. Estimates are recorded as liabilities
when it is probable that a liability has been incurred, and the amount of the loss is reasonably estimable. Disclosure is required when
there is a reasonable possibility that the ultimate loss will materially exceed the recorded provision. Contingent liabilities are often
resolved over long time periods. Estimating probable losses requires analysis of multiple forecasts that often depend on judgments
about potential actions by third parties such as regulators, and the estimated loss can change materially as individual claims develop.
55
Share-based Compensation Plan
We have share-based compensation plans that provide compensation to employees through various grants of share-based
instruments. We apply the fair value method of accounting using the Black-Scholes option-pricing model to determine the
compensation expense for stock options. The compensation expense for RSUs awarded is based on the fair value of the RSU at the
date of grant. Compensation expense is recorded in the consolidated statements of operations and is recognized over the requisite
service period. The determination of obligations and compensation expense requires the use of several mathematical and judgmental
factors, including stock price, expected volatility, the anticipated life of the option, estimated risk-free rate, and the number of shares
or share options expected to vest. Any difference in the number of shares or share options that actually vest can affect future
compensation expense. Other assumptions are not revised after the original estimate.
The Black-Scholes option-pricing model requires the use of weighted average assumptions for estimated expected volatility,
estimated expected term of stock options, risk-free rate, estimated expected dividend yield, and the fair value of the underlying
common stock at the date of grant. We estimate the expected term of all stock options based on previous history of exercises. The risk-
free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock option. The expected
dividend yield rate is 0% which is consistent with the expected dividends to be paid on common stock.
For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted
performance measures of Adjusted EBITDA and Free Cash Flow, each as reported over the applicable three-year performance period
and is adjusted based upon a market condition measured by our TSR over the applicable three-year performance period as compared to
the TSR of the Russell 3000 index. For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout
factor consisting of equally weighted pre-set three-year performance targets on ROIC and TSR. The fair value of the award is
estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on
historical volatility, risk free rates of return, and correlation matrix.
We estimate forfeitures based on our historical analysis of actual stock option forfeitures. Actual forfeitures are recorded
when incurred and estimated forfeitures are reviewed and adjusted at least annually.
Employee Retirement and Pension Benefits
The obligations under our defined benefit pension plans are calculated using actuarial models and methods. The most critical
assumption and estimate used in the actuarial calculations is the discount rate for determining the current value of benefit obligations.
Other assumptions and estimates used in determining benefit obligations and plan expenses include expected return on plan assets,
inflation rates, and demographic factors such as retirement age, mortality, and turnover. These assumptions and estimates are
evaluated periodically and are updated accordingly to reflect our actual experience and expectations.
The discount rate used to determine the benefit obligations was computed through a projected benefit cash flow model. This
approach determines the discount rate as the rate that equates the present value of the cash flows (determined using that single rate) to
the present value of the cash flows where each cash flows' present value is determined using the spot rates from the WTW RATE:
Link 10:90 Yield Curve.
The discount rate utilized to calculate the projected benefit obligation at the measurement date for our U.S. pension plan
increased to 5.57% at December 31, 2024, from 5.05% at December 31, 2023. Lowering the discount rate by 25 bps would increase
the U.S. pension and post-retirement obligation at December 31, 2024, by approximately $6.2 million and would decrease estimated
fiscal year 2025 pension expense by approximately $0.3 million. Increasing the discount rate by 25 bps would decrease the U.S.
pension and post-retirement obligation at December 31, 2024, by approximately $6.0 million and would increase estimated fiscal year
2025 pension expense by approximately $0.3 million.
We determine the expected long-term rate of return on plan assets based on the plan assets’ historical long-term investment
performance, current asset allocation, and estimates of future long-term returns by asset class. Holding all other assumptions constant,
a 100 bps increase or decrease in the assumed rate of return on plan assets would decrease or increase, respectively, 2025 net periodic
pension expense by approximately $2.5 million.
The actuarial assumptions we use in determining our pension benefits may differ materially from actual results because of
changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. While we
believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions might materially affect
our financial position or results of operations.
Capital Expenditures
We expect that our capital expenditures will be focused on supporting our cost reduction and efficiency improvement projects
sustaining our current manufacturing operations. We are subject to health, safety, and environmental regulations that may require us to
make capital expenditures to ensure our facilities are compliant with those various regulations.
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Item 7A - Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the risk that our earnings, cash flows and equity could be adversely impacted by changes in foreign
exchange rates, interest rates and commodity prices. We maintain risk management controls and policies to monitor these risks and
take appropriate risk mitigation actions. We use certain derivative instruments, when available on a cost-effective basis, to hedge our
underlying economic exposures. Refer to Note 23 – Derivative Financial Instruments to our consolidated financial statements
included in this Form 10-K for more information on our financial instruments and hedging strategies.
Exchange Rate Risk
We have global operations and therefore enter into transactions denominated in various foreign currencies. To mitigate cross-
currency transaction risk, we analyze significant forecast exposures where we expect receipts or payments in a currency other than the
functional currency of our operations, and from time to time we may strategically enter into short-term foreign currency forward
contracts to lock in some or all of the cash flows associated with these transactions. In most of the countries in which we operate, the
exposure to foreign currency movements is limited because the operating revenues and expenses of our business units are substantially
denominated in the local currency. We also are subject to currency translation risk associated with converting our foreign operations’
financial statements into U.S. dollars. The exchange rates used to translate our foreign subsidiaries’ financial results for the year ended
December 31, 2024, compared to the year ended December 31, 2023, reflected, on average, the U.S. dollar strengthened against the
Canadian dollar and the Euro by 9% and 6%, respectively. Exchange rates had a nominal impact on our consolidated net revenues and
an adverse impact of (1%) on our Adjusted EBITDA from continuing operations in the year ended December 31, 2024, as compared
to a nominal impact on our consolidated net revenues and Adjusted EBITDA from continuing operations, respectively, in the year
ended December 31, 2023.
We cannot be certain that fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar
against major currencies, such as the Euro, the Canadian dollar, the British pound, or the currencies of large developing countries,
would not materially adversely affect our business, financial condition, and results of operations.
We use short-term foreign currency derivative contracts that are not designated as hedges to mitigate the impact of foreign
exchange fluctuations on consolidated earnings. As of December 31, 2024, we held foreign currency derivative contracts, with a total
notional amount of $148.4 million to manage the effect of exchange fluctuations on certain intercompany transactions and
intercompany loans and interest that are denominated in foreign currencies. We do not use derivative financial instruments for trading
or speculative purposes.
At the end of 2024, we implemented a hedging program to manage the potential changes in value associated with the
amounts payable on raw material purchases that are denominated in foreign currencies to minimize the impact of the changes in
foreign currencies. We have foreign currency derivative contracts, which qualify as cash flow hedges, with a total notional amount of
$163.3 million as of December 31, 2024. We record gains and losses for these contracts in other comprehensive (loss) income to the
extent that these hedges are effective and until we recognize the underlying transactions in net earnings, at which time we recognize
these gains and losses in cost of sales on our consolidated statements of operations.
By using derivative financial instruments to hedge exposures to foreign currency fluctuations, we are exposed to credit risk
and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value
of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative
contract is negative, we owe the counterparty and, therefore, we are not exposed to the counterparty’s credit risk in those
circumstances. We attempt to minimize counterparty credit risk in derivative instruments by entering into transactions with high-
quality counterparties whose credit rating is at least upper-medium investment grade. Our derivative instruments do not contain credit
risk-related contingent features.
Interest Rate Risk
We are exposed to interest rate market risk in connection with our long-term debt, some of which is based upon floating
interest rates. To manage our interest rate risk, we may enter into interest rate derivatives, such as interest rate swaps, caps, or collars
when we deem it to be appropriate. We do not use derivative financial instruments for trading or other speculative purposes and are
not a party to any leveraged derivative instruments. Our net exposure to interest rate risk would primarily be based on the difference
between outstanding variable rate debt and the notional amount of any interest rate derivatives. We assess interest rate risk by
identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating
hedging opportunities. We monitor interest rate risk attributable to our outstanding debt obligations, involving the use of analytical
techniques to determine the potential impact of interest rate volatility on future interest payments.
57
Raw Materials Risk
Our major raw materials include wood, wood composites, wood components, steel, glass, internally produced door skins,
fiberglass compound, hardware, petroleum-based products such as resin and binders, as well as aluminum and vinyl extrusions. Prices
of these materials can fluctuate significantly in response to, among other things, variable worldwide supply and demand across
different industries, speculation in commodities futures, general economic or environmental conditions, labor costs, competition,
import duties, tariffs, worldwide currency fluctuations, freight, regulatory costs, and product and process evolutions that impact
demand for the same materials. Increasing raw material prices directly impact our cost of sales and our ability to maintain margins
depends on implementing price increases in response to increasing raw material costs. The market for our products may or may not
accept price increases, and as such, there is no assurance that we can maintain margins in an environment of rising commodity prices.
Refer to Item 1A - Risk Factors - Prices and availability of the raw materials we use to manufacture our products are subject to
fluctuations and we may be unable to pass along to our customers the effects of any price increases.
We purchase from multiple geographically diverse companies to mitigate the adverse impact of higher prices for our raw
materials. Also, from time to time, we enter into derivatives to hedge commodity price fluctuations that are immaterial to the
consolidated financial statements. Refer to Note 23 – Derivative Financial Instruments to our consolidated financial statements
included in this Form 10-K for more information about our derivative asset and liabilities. We also maintain other strategies to
mitigate the impact of higher raw material, energy, and commodity costs, which typically offset only a portion of the adverse impact.
Item 8 - Financial Statements and Supplementary Data
See Index to Consolidated Financial Statements beginning on page F-1 of the Form 10-K.
Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A - Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act, which are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the
Exchange Act, including this Report, are recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms. These disclosure controls and procedures include controls and procedures designed to ensure that information
required to be disclosed by the Company under the Exchange Act is accumulated and communicated to the Company’s management,
including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management, including the Company’s CEO and CFO, conducted an evaluation of the effectiveness of the
Company’s disclosure controls and procedures as of the end of the period covered by this Report and, based on that evaluation, the
CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the Company’s most recently completed quarter ended December 31, 2024, that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).
The Company conducted an evaluation under the supervision and with the participation of the Company’s management,
including the Company’s CEO and CFO, of the effectiveness of the Company’s internal control over financial reporting. The
Company’s management used the framework in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations (COSO) to perform this evaluation. Based on this evaluation, management has concluded that our internal
control over financial reporting was effective as of December 31, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing under Item 8 -
Financial Statements and Supplementary Data.
58
Item 9B - Other Information
During the three months ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act)
of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term
is defined in Item 408(a) of Regulation S-K.
Item 9C - Disclosures Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
59
PART III
Item 10 - Directors, Executive Officers and Corporate Governance
The information required by this item with respect to our executive officers appears in Part I of this Form 10-K under the
heading, “Executive Officers of the Registrant”. Except as provided below, the other information required by this item is incorporated
by reference to the Company’s definitive Proxy Statement for its 2025 Annual Meeting of Stockholders to be held on April 24, 2025,
which will be filed with the SEC within 120 days of the Company’s fiscal year end covered by this Form 10-K (“Proxy Statement”).
Our Board has adopted a securities trading and disclosure policy governing the purchase, sale, and/or other dispositions of
our securities by our directors, officers, and employees that we believe is reasonably designed to promote compliance with insider
trading laws, rules, and regulations, and the exchange listing standards applicable to us. In addition, it is our policy to comply with
applicable securities and state laws, including insider trading laws, when engaging in transactions in our securities. A copy of our
securities trading and disclosure policy is filed as Exhibit 19.1 to this Form 10-K.
Item 11 - Executive Compensation
The information required by this item is incorporated by reference to the Proxy Statement, except as to information required
pursuant to Item 402(v) of SEC Regulation S-K relating to pay versus performance.
Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Equity Compensation Plan Information
The following table sets forth information with respect to shares of our Common Stock that may be issued under our existing
equity compensation plans, as of December 31, 2024:
(a)
(b)
(c)
Plan Category
Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants, and
Rights
Weighted Average
Exercise Price of
Outstanding Options,
Warrants, and Rights(1)
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
Equity compensation plans approved by
security holders
3,622,222(2)
$20.94
2,863,602(3)
Equity compensation plans not approved by
security holders
—
—
—
Total
3,622,222
$20.94
2,863,602
(1)
Excludes RSUs and PSUs, which have no exercise price.
(2)
Consists of shares underlying 1,296,666 stock options, 1,790,096 RSUs, and 535,460 PSUs outstanding under the 2011 Stock
Incentive Plan and 2017 Omnibus Equity Plan.
(3)
The number of securities remaining for future issuances includes only shares available under the 2017 Omnibus Equity Plan.
The other information required by this item is incorporated by reference to the Proxy Statement.
Item 13 - Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the Proxy Statement.
Item 14 - Principal Accounting Fees and Services
The information required by this item is incorporated by reference to the Proxy Statement.
60
PART IV
Item 15 - Exhibits and Financial Statement Schedules
1. Financial Statements
The financial statements are set forth under Item 8 - Financial Statements and Supplementary Data of this Form 10-K.
2. Financial Statement Schedules
All financial statements and schedules are omitted because they are not applicable, not required, or the information is
included in the financial statements or the notes thereto.
3. Exhibits
The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this Form 10-K and
such Exhibit Index is incorporated herein by reference.
2.1
Asset Purchase Agreement, dated October 11, 2024, by and between
JELD-WEN, Inc., WG Towanda LLC and Woodgrain Inc., effective
December 13, 2024.
8-K
001-38000
2.1
December 19, 2024
3.1
Second Amended and Restated Certificate of Incorporation of JELD-
WEN Holding, Inc.
8-K
001-38000
3.1
May 4, 2022
3.2
Fourth Amended and Restated Bylaws of JELD-WEN Holding, Inc.
8-K
001-38000
3.1
February 9, 2024
4.1
Description of Securities.
10-K
001-38000
4.1
February 22, 2022
4.2
Indenture, dated as of December 14, 2017, among JELD-WEN, Inc.,
the guarantors party thereto and Wilmington Trust, National
Association, as Trustee (including form of Note).
8-K
001-38000
4.1
December 14, 2017
4.3
First Supplemental Indenture, dated as of December 21, 2018, among
American Building Supply, Inc., J B L Hawaii, Limited and
Wilmington Trust, National Association, as Trustee.
8-K
001-38000
4.1
December 27, 2018
4.4
Second Supplemental Indenture, dated as of September 24, 2020,
among Milliken Millwork, Inc., VPI Quality Windows, Inc.,
subsidiaries of JELD-WEN, Inc. and Wilmington Trust, National
Association, as Trustee.
10-Q
001-38000
4.2
November 3, 2020
4.5
Third Supplemental Indenture, dated as of December 31, 2020, among
JELD-WEN, Inc., the guarantors party thereto and Wilmington Trust,
National Association, as Trustee.
10-K
001-38000
4.9
February 23, 2021
4.6
Indenture, dated as of August 22, 2024, among JELD-WEN Holding,
Inc., the guarantors party thereto and Truist Bank, as trustee (including
form of Notes).
8-K
001-38000
4.1
August 22, 2024
4.7
Guarantor Joinder Agreement, dated as of September 24, 2020, to the
Term Loan Credit Agreement, dated as of October 15, 2014 (as
amended on July 1, 2015, November 1, 2016, March 7, 2017,
December 14, 2017, September 20, 2019) among Milliken Millwork,
Inc., VPI Quality Windows, Inc., and Bank of America, N.A., as
Administrative Agent.
10-Q
001-38000
4.3
November 3, 2020
4.8
Borrower Joinder Agreement, dated as of September 24, 2020, to the
Revolving Credit Agreement, dated as of October 15, 2014 (as
amended on July 1, 2015, November 1, 2016, December 14, 2017,
December 21, 2018 and December 31, 2019) among Milliken
Millwork, Inc., VPI Quality Windows, Inc., and Wells Fargo Bank,
National Association, as Administrative Agent.
10-Q
001-38000
4.4
November 3, 2020
10.1
Credit Agreement, among JELD-WEN Holding, Inc., JELD-WEN,
Inc., JELD-WEN of Canada, Ltd., the other guarantors party thereto,
Wells Fargo Bank, National Association, and the lenders party thereto,
dated October 15, 2014.
S-1
333-211761
10.1
June 1, 2016
10.2
Amendment No. 1 to Credit Agreement, among JELD-WEN Holding,
Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., the subsidiary
guarantors party thereto, Wells Fargo Bank, National Association, and
the lenders party thereto, dated July 1, 2015.
S-1
333-211761
10.1.1
June 1, 2016
10.3
Amendment No. 2 to Credit Agreement, among JELD-WEN Holding,
Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., Karona, Inc., the
subsidiary guarantors party thereto, Wells Fargo Bank, National
Association, and the lenders party thereto, dated November 1, 2016.
S-1/A
333-211761
10.1.2
November 17, 2016
Exhibit No.
Exhibit Description
Form
File No.
Exhibit
Filing Date
61
10.4
Amendment No. 3 to Credit Agreement, among JELD-WEN, Inc.,
JELD-WEN Holding, Inc., JELD-WEN of Canada, Ltd., the other
borrowers party thereto, the subsidiary guarantors party thereto, the
lenders party thereto, Wells Fargo Bank, National Association, as
administrative agent, issuing bank and swingline lender and the other
parties thereto, dated as of December 14, 2017.
8-K
001-38000
10.1
December 15, 2017
10.5
Amendment No. 4, dated as of December 21, 2018, among JELD-
WEN, Inc., American Building Supply, Inc., J B L Hawaii, Limited,
the other borrowers party thereto, the subsidiary guarantors party
thereto, the lenders party thereto and Wells Fargo Bank, National
Association, as administrative agent.
8-K
001-38000
10.1
December 27, 2018
10.6
Amendment No. 5, dated as of December 31, 2019, among JELD-
WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd.,
the other borrowers and subsidiary guarantors party thereto, Wells
Fargo Bank, National Association, as administrative agent, and the
lenders party thereto.
8-K
001-38000
10.1
January 6, 2020
10.7
Amendment No. 6, dated as of July 28, 2021, among JELD-WEN
Holding, Inc., JELD_WEN, Inc., the subsidiary guarantors party
thereto, and Bank of America, N.A., as administrative agent.
10-Q
001-38000
10.2
August 2, 2021
10.8
Amendment No. 7 to Credit Agreement, dated as of June 15, 2023,
among JELD-WEN Holding, Inc., JELD-WEN, Inc., JELD-WEN of
Canada, Ltd., the other borrowers and subsidiary guarantors party
thereto, Wells Fargo Bank, National Association, as administrative
agent, and the lenders party thereto
8-K
001-38000
10.1
June 16, 2023
10.9
Term Loan Credit Agreement, among JELD-WEN Holding, Inc.,
JELD-WEN, Inc., Onex BP Finance LP, the other guarantors party
thereto, Bank of America, N.A. and the lenders party thereto, dated
October 15, 2014.
S-1
333-211761
10.2
June 1, 2016
10.10
Amendment No. 1 to Term Loan Credit Agreement, among JELD-
WEN Holding, Inc., JELD-WEN, Inc., Onex BP Finance LP, the
subsidiary guarantors party thereto, Bank of America, N.A., and the
lenders party thereto, dated July 1, 2015.
S-1
333-211761
10.2.1
June 1, 2016
10.11
Amendment No. 2 to Term Loan Credit Agreement, among JELD-
WEN Holding, Inc., JELD-WEN, Inc. the subsidiary guarantors party
thereto, Onex BP Finance LP, Bank of America, N.A., and the lenders
party thereto, dated November 1, 2016.
S-1/A
333-211761
10.2.2
November 17, 2016
10.12
Amendment No. 3 to Term Loan Credit Agreement, among JELD-
WEN Holding, Inc., JELD-WEN, Inc. the subsidiary guarantors party
thereto, Onex BP Finance LP, Bank of America, N.A., and the lenders
party thereto, dated March 7, 2017.
8-K
001-38000
10.1
March 8, 2017
10.13
Amendment No. 4, by and among JELD-WEN, Inc., JELD-WEN
Holding, Inc., the subsidiary guarantors party thereto, the lenders party
thereto, Bank of America, N.A., as administrative agent and the other
parties thereto, dated as of December 14, 2017.
8-K
001-38000
10.2
December 15, 2017
10.14
Amendment No. 5, dated as of September 20, 2019, among JELD-
WEN Holding, Inc., JELD-WEN, Inc., the subsidiary guarantors party
thereto, the lenders party thereto and Bank of America, N.A., as
administrative agent.
8-K
001-38000
10.1
September 20, 2019
10.15
Amendment No. 6, dated as of July 28, 2021, among JELD-WEN
Holding, Inc., JELD-WEN, Inc., JELD-WEN of Canada, Ltd., the
other borrowers and subsidiary guarantors party thereto, Wells Fargo
Bank, National Association, as administrative agent, and the lenders
party thereto.
10-Q
001-38000
10.3
August 2, 2021
10.16
Amendment No. 7 to Term Loan Credit Agreement, dated as of June
16, 2023, among JELD-WEN Holding, Inc., JELD-WEN, Inc., the
other guarantors party thereto, the lenders party thereto, Bank of
America, N.A., as administrative agent, and the other parties thereto.
8-K
001-38000
10.2
June 16, 2023
10.17
Amendment No. 8 to Term Loan Credit Agreement, dated as of
January 19, 2024, among JELD-WEN Holding, Inc., JELD-WEN,
Inc., the other guarantors party thereto, the lenders party thereto, Bank
of America, N.A., as administrative agent, and the other parties
thereto.
8-K
001-38000
10.1
January 19, 2024
10.18
Share Sale Agreement, dated April 17, 2023, by and between JW
International Holdings, Inc. and Aristotle Holding III Pty Limited
8-K
001-38000
2.1
April 18, 2023
10.19+
JELD-WEN Holding, Inc. 2017 Omnibus Equity Plan.
10-K
001-38000
10.18
February 22, 2022
10.20+
Amendment to Form of Nonqualified Stock Option Agreement under
JELD-WEN Holding, Inc. 2017 Omnibus Equity Plan.
10-Q
001-38000
10.2
April 30, 2021
10.21+
Form of Restricted Stock Unit Award Agreement under JELD-WEN
Holding, Inc. 2017 Omnibus Plan.
10-K
001-38000
10.20
February 22, 2022
Exhibit No.
Exhibit Description
Form
File No.
Exhibit
Filing Date
62
10.22+
Form of Performance Share Unit Award Agreement under JELD-
WEN Holding, Inc. 2017 Omnibus Plan.
10-K
001-38000
10.21
February 22, 2022
10.23+
Form of Nonqualified Stock Option Agreement under JELD-WEN
Holding, Inc. 2017 Omnibus Plan.
10-K
001-38000
10.26
February 20, 2024
10.24+
Form of Restricted Stock Unit Award Agreement under JELD-WEN
Holding, Inc. 2017 Omnibus Plan.
10-K
001-38000
10.27
February 20, 2024
10.25+
Form of Performance Share Unit Award Agreement under JELD-
WEN Holding, Inc. 2017 Omnibus Plan.
10-K
001-38000
10.28
February 20, 2024
10.26*+
Form of Nonqualified Stock Option Agreement Under JELD-WEN
Holding, Inc. 2017 Omnibus Plan (2025 and after grants).
10.27*+
Form of Restricted Stock Unit Agreement Under JELD-WEN
Holding, Inc. 2017 Omnibus Plan (2025 and after grants).
10.28*+
Form of Performance Share Unit Agreement Under JELD-WEN
Holding, Inc. 2017 Omnibus Plan (2025 and after grants).
10.29+
JELD-WEN Holding, Inc. 2025 Management Incentive Plan.
8-K
001-38000
10.1
February 11, 2025
10.30+
Form of Indemnification Agreement.
S-1
333-211761
10.25
June 1, 2016
10.31+
Form of Separation Agreement between JELD-WEN Holding, Inc. and
executive officers.
10-Q
001-38000
10.1
September 24, 2022
10.32+
Amendment to Executive Employment Agreement between JELD-
WEN, Holding, Inc. and Kevin C. Lilly, effective August 3, 2022.
10-Q
001-38000
10.2
September 24, 2022
10.33*+
Separation and Release Agreement with Kevin Lilly, effective January
3, 2025.
10.34+
Form of Executive Employment Agreement between JELD-WEN
Holding, Inc. and executive officers.
10-Q
001-38000
10.1
August 5, 2020
10.35+
The JELD-WEN Deferred Compensation Plan, effective April 1, 2022
8-K
001-38000
10.1
February 18, 2022
19.1
Securities Trading and Disclosure Policy
10-K
001-38000
19.1
February 20, 2024
21.1*
List of subsidiaries of JELD-WEN Holding, Inc.
22.1*
Subsidiary Guarantors and Issuers of Guaranteed Securities.
23.1*
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm.
24.1*
Power of Attorney (included on the signature page of this Annual
Report on Form 10-K).
31.1*
Certification of Periodic Report by Chief Executive Officer under
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Periodic Report by Chief Financial Officer under
Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Chief Executive Officer and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
97.1
JELD-WEN Holding, Inc. Incentive Compensation Clawback Policy
10-K
001-38000
97.1
February 20, 2024
101.INS*
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted in Inline XBRL and
contained in Exhibit 101).
*
Filed herewith.
+
Indicates management contract or compensatory plan.
Exhibit No.
Exhibit Description
Form
File No.
Exhibit
Filing Date
Item 16 - Form 10-K Summary
None.
63
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
JELD-WEN HOLDING, INC.
(Registrant)
By: /s/ Samantha L. Stoddard
Samantha L. Stoddard
Executive Vice President and Chief Financial Officer
Date: February 20, 2025
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints
Samantha L. Stoddard and James S. Hayes, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or
her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities and Exchange Act of 1934, this Annual Report on Form 10-K has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
64
/s/ William J. Christensen
Chief Executive Officer and Director
(Principal Executive Officer)
February 20, 2025
William J. Christensen
/s/ Samantha L. Stoddard
Chief Financial Officer
(Principal Financial Officer)
February 20, 2025
Samantha L. Stoddard
/s/ Michael A. Leon
Chief Accounting Officer
(Principal Accounting Officer)
February 20, 2025
Michael A. Leon
/s/ David G. Nord
Chair
February 20, 2025
David G. Nord
/s/ Antonella B. Franzen
Director
February 20, 2025
Antonella B. Franzen
/s/ Catherine A. Halligan
Director
February 20, 2025
Catherine A. Halligan
/s/ Michael F. Hilton
Director
February 20, 2025
Michael F. Hilton
/s/ Tracey I. Joubert
Director
February 20, 2025
Tracey I. Joubert
/s/ Cynthia G. Marshall
Director
February 20, 2025
Cynthia G. Marshall
/s/ Bruce M. Taten
Director
February 20, 2025
Bruce M. Taten
/s/ Roderick C. Wendt
Director
February 20, 2025
Roderick C. Wendt
/s/ Steven E. Wynne
Director
February 20, 2025
Steven E. Wynne
Signature
Title
Date
65
[This page intentionally left blank]
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238)
F-2
Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022
F-4
Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022
F-5
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-6
Consolidated Statements of Equity for the Years Ended December 31, 2024, 2023 and 2022
F-7
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
F-8
Notes to Consolidated Financial Statements
F-10
Note 1. Description of Company and Summary of Significant Accounting Policies
F-10
Note 2. Discontinued Operations
F-16
Note 3. Accounts Receivable
F-17
Note 4. Inventories
F-18
Note 5. Property and Equipment, Net
F-18
Note 6. Goodwill
F-19
Note 7. Intangible Assets, Net
F-20
Note 8. Leases
F-20
Note 9. Accrued Payroll and Benefits
F-22
Note 10. Accrued Expenses and Other Current Liabilities
F-22
Note 11. Warranty Liability
F-23
Note 12. Long-Term Debt
F-23
Note 13. Deferred Credits and Other Liabilities
F-25
Note 14. Segment Information
F-26
Note 15. Income Taxes
F-30
Note 16. Capital Stock
F-34
Note 17. Earnings Per Share
F-34
Note 18. Stock Compensation
F-35
Note 19. Restructuring and Asset-Related Charges
F-37
Note 20. Held for Sale
F-40
Note 21. Interest Expense, Net
F-41
Note 22. Other Income, Net
F-42
Note 23. Derivative Financial Instruments
F-42
Note 24. Fair Value of Financial Instruments
F-44
Note 25. Commitments and Contingencies
F-45
Note 26. Employee Retirement and Pension Benefits
F-49
Note 27. Supplemental Cash Flow Information
F-54
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of JELD-WEN Holding, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of JELD-WEN Holding, Inc. and its subsidiaries (the "Company") as
of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive (loss) income, of equity and
of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as
the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
F-2
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Interim and Annual Goodwill Impairment Assessments – Europe and North America Reporting Units
As described in Notes 1 and 6 to the consolidated financial statements, the Company’s consolidated goodwill balance was $315.2
million as of December 31, 2024, and the goodwill associated with the Europe and North America reporting units were $134.1 million
and $181.0 million, respectively. Management tests goodwill for impairment on an annual basis during the fourth quarter and between
annual tests if indicators of potential impairment exist. During the third quarter of 2024, management determined that a triggering
event occurred requiring an interim goodwill impairment test for the Europe reporting unit as of September 28, 2024. Based upon the
results of the interim impairment assessment, management concluded the carrying value of the Europe reporting unit exceeded its fair
value and recorded a goodwill impairment charge of $63.4 million. Management performed the annual impairment assessments during
the fourth quarter and quantitatively determined that the fair value of the North America reporting unit exceeded its net carrying
amount and no goodwill impairment existed. Management estimates the fair value of reporting units using a combination of the
income and market approaches. Under the income approach, the fair value of a reporting unit is based on a discounted cash flow
analysis that contains significant assumptions and estimates including revenue growth rates, expected EBITDA margins, discount
rates, capital expenditures, income tax rates, and terminal growth rates.
The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment
for the Europe reporting unit and the annual goodwill impairment assessment for the North America reporting unit is a critical audit
matter are (i) the significant judgment by management when developing the fair value estimates of the Europe and North America
reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s
significant assumptions related to (a) revenue growth rates, expected EBITDA margins, discount rates, and terminal growth rates for
the Europe and North America reporting units and (b) the capital expenditures and income tax rates for the Europe reporting unit; and
(iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s
goodwill impairment assessments, including controls over the valuation of the Europe and North America reporting units. These
procedures included, among others (i) testing management’s process for developing the fair value estimates of the Europe and North
America reporting units; (ii) evaluating the appropriateness of the discounted cash flow analyses used by management; (iii) testing the
completeness and accuracy of underlying data used in the discounted cash flow analyses; and (iv) evaluating the reasonableness of the
significant assumptions used by management related to (a) revenue growth rates, expected EBITDA margins, discount rates, and
terminal growth rates for the Europe and North America reporting units and (b) the capital expenditures and income tax rates for the
Europe reporting unit. Evaluating management’s assumptions related to (a) revenue growth rates and expected EBITDA margins for
the Europe and North America reporting units and (b) the capital expenditures and income tax rates for the Europe reporting unit
involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance
of the Europe and North America reporting units; (ii) the consistency with external market and industry data; and (iii) whether these
assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge
were used to assist in evaluating (i) the appropriateness of the discounted cash flow analyses and (ii) the reasonableness of
assumptions related to the discount rates and terminal growth rates.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 20, 2025
We have served as the Company’s auditor since 2000.
F-3
Item 1 - Financial Statements
JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Net revenues
$
3,775,592 $
4,304,334 $
4,543,808
Cost of sales
3,086,618
3,471,713
3,757,888
Gross margin
688,974
832,621
785,920
Selling, general and administrative
652,527
655,280
654,077
Goodwill impairment (Note 6)
94,801
—
54,885
Restructuring and asset-related charges (Note 19)
68,092
35,741
17,622
Operating (loss) income
(126,446)
141,600
59,336
Interest expense, net
67,237
72,258
82,505
Loss on extinguishment and refinancing of debt (Note 12)
1,908
6,487
—
Other income, net (Note 22)
(24,773)
(25,719)
(53,433)
(Loss) income from continuing operations before taxes
(170,818)
88,574
30,264
Income tax expense (Note 15)
16,762
63,339
18,041
(Loss) income from continuing operations, net of tax
(187,580)
25,235
12,223
(Loss) gain on sale of discontinued operations, net of tax (Note 2)
(1,440)
15,699
—
Income from discontinued operations, net of tax (Note 2)
—
21,511
33,504
Net (loss) income
$
(189,020) $
62,445 $
45,727
Weighted average common shares outstanding (Note 17):
Basic
84,989,963
84,995,515
86,374,499
Diluted
84,989,963
85,874,035
87,075,176
Net (loss) income per share from continuing operations
Basic
$
(2.21) $
0.30 $
0.14
Diluted
$
(2.21) $
0.29 $
0.14
Net (loss) income per share from discontinued operations
Basic
$
(0.02) $
0.44 $
0.39
Diluted
$
(0.02) $
0.43 $
0.38
Net (loss) income per share
Basic
$
(2.22) $
0.73 $
0.53
Diluted
$
(2.22) $
0.73 $
0.53
Year Ended December 31,
(amounts in thousands, except share and per share data)
2024
2023
2022
Net income per share may not sum due to rounding.
The accompanying notes are an integral part of these Consolidated Financial Statements.
F-4
JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Net (loss) income
$
(189,020) $
62,445 $
45,727
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net of tax (benefit) expense of
$(34), $2,301 and $1,502, respectively.
(37,336)
45,859
(71,811)
Foreign currency hedge adjustments, net of tax expense of $23, $0 and $0,
respectively.
314
—
—
Interest rate hedge adjustments, net of tax (benefit) expense of $(35),
$(4,076) and $3,268, respectively.
(103)
(12,159)
9,668
Defined benefit pension plans, net of tax expense of $2,462, $3,287 and
$4,104, respectively.
2,940
13,624
13,255
Total other comprehensive (loss) income, net of tax
(34,185)
47,324
(48,888)
Comprehensive (loss) income
$
(223,205) $
109,769 $
(3,161)
The accompanying notes are an integral part of these Consolidated Financial Statements.
F-5
JELD-WEN HOLDING, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
December 31,
2024
December 31,
2023
ASSETS
Current assets
Cash and cash equivalents
$
150,337
$
288,312
Restricted cash
710
835
Accounts receivable, net (Note 3)
388,415
516,674
Inventories (Note 4)
460,107
481,451
Other current assets
73,413
71,507
Assets held for sale (Note 20)
126,912
135,563
Total current assets
1,199,894
1,494,342
Property and equipment, net (Note 5)
681,439
644,242
Deferred tax assets (Note 15)
143,284
150,453
Goodwill (Note 6)
315,167
390,170
Intangible assets, net (Note 7)
101,987
123,910
Operating lease assets, net (Note 8)
126,256
146,931
Other assets
52,142
30,077
Total assets
$
2,620,169
$
2,980,125
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
264,947
$
269,322
Accrued payroll and benefits (Note 9)
89,600
132,550
Accrued expenses and other current liabilities (Note 10)
224,209
233,796
Current maturities of long-term debt (Note 12)
30,927
36,177
Liabilities held for sale (Note 20)
15,308
7,064
Total current liabilities
624,991
678,909
Long-term debt (Note 12)
1,152,449
1,190,075
Unfunded pension liability (Note 26)
21,615
26,502
Operating lease liability (Note 8)
105,499
121,993
Deferred credits and other liabilities (Note 13)
89,854
104,831
Deferred tax liabilities (Note 15)
5,699
7,170
Total liabilities
2,000,107
2,129,480
Commitments and contingencies (Note 25)
Shareholders’ equity
Preferred Stock, par value $0.01 per share, 90,000,000 shares authorized; no shares issued and
outstanding
—
—
Common Stock: 900,000,000 shares authorized, par value $0.01 per share, 84,653,408 and
85,309,220 shares issued and outstanding, respectively
846
853
Additional paid-in capital
769,064
752,171
(Accumulated deficit) retained earnings
(20,353)
192,931
Accumulated other comprehensive loss
(129,495)
(95,310)
Total shareholders’ equity
620,062
850,645
Total liabilities and shareholders’ equity
$
2,620,169
$
2,980,125
The accompanying notes are an integral part of these Consolidated Financial Statements.
F-6
JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF EQUITY
December 31, 2024
December 31, 2023
December 31, 2022
(amounts in thousands, except share and per share amounts)
Shares
Amount
Shares
Amount
Shares
Amount
Preferred stock, $0.01 par value per share
— $
—
— $
—
—
$
—
Common stock, $0.01 par value per share
Balance at beginning of period
85,309,220 $
853 84,347,712 $
843
90,193,550
$
902
Shares issued for exercise/vesting of share-based
compensation awards
1,030,848
10 1,069,969
11
1,128,181
11
Shares repurchased
(1,600,000)
(16)
—
—
(6,848,356)
(69)
Shares surrendered for tax obligations for employee
share-based transactions
(86,660)
(1) (108,461)
(1)
(125,663)
(1)
Balance at period end
84,653,408 $
846 85,309,220 $
853
84,347,712
$
843
Additional paid-in capital
Balance at beginning of period
$ 752,844
$ 735,526
$ 720,124
Shares issued for exercise/vesting of share-based compensation
awards
2,868
552
1,998
Shares surrendered for tax obligations for employee share-based
transactions
(1,440)
(1,637)
(2,764)
Amortization of share-based compensation
15,465
18,403
16,168
Balance at period end
769,737
752,844
735,526
Employee stock notes
Balance at beginning of period
(673)
(673)
(673)
Net issuances, payments and accrued interest on notes
—
—
—
Balance at period end
(673)
(673)
(673)
Balance at period end
$ 769,064
$ 752,171
$ 734,853
(Accumulated deficit) retained earnings
Balance at beginning of period
$ 192,931
$ 130,486
$ 215,611
Shares repurchased
(24,264)
—
(130,852)
Net (loss) income
(189,020)
62,445
45,727
Balance at period end
$ (20,353)
$ 192,931
$ 130,486
Accumulated other comprehensive loss
Balance at beginning of period
$ (95,310)
$ (142,634)
$ (93,746)
Foreign currency adjustments
(37,336)
45,859
(71,811)
Unrealized gain on foreign currency hedges
314
—
—
Unrealized (loss) gain on interest rate hedges
(103)
(12,159)
9,668
Net actuarial pension gain
2,940
13,624
13,255
Balance at period end
$ (129,495)
$ (95,310)
$ (142,634)
Total shareholders’ equity at period end
$ 620,062
$ 850,645
$ 723,548
The accompanying notes are an integral part of these Consolidated Financial Statements
F-7
JELD-WEN HOLDING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
OPERATING ACTIVITIES
Net (loss) income
$
(189,020) $
62,445
$
45,727
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization
125,786
140,192
131,754
Deferred income taxes
(16,984)
31,735
(4,394)
Net gain on sale of business, property and equipment
(13,752)
(10,472)
(7,969)
Goodwill impairment
94,801
—
54,885
Adjustment to carrying value of assets
22,715
7,862
2,375
Amortization of deferred financing costs
2,411
2,614
3,150
Loss on extinguishment and refinancing of debt
1,246
6,487
—
Loss on foreign currency translation adjustment related to the substantial
liquidation of a foreign subsidiary
4,809
—
—
Gain on sale of discontinued operations, net of tax
—
(23,982)
—
Share-based compensation expense
15,465
18,403
16,168
Amortization of U.S. pension expense
—
480
1,798
Recovery of cost from receipts on impaired notes
(1,389)
(3,514)
(13,953)
Other items, net
(5,295)
(7,439)
24,597
Net change in operating assets and liabilities:
Accounts receivable
102,275
10,862
(79,692)
Inventories
9,423
119,560
(73,575)
Other assets
(1,551)
11,595
(4,875)
Accounts payable and accrued expenses
(32,483)
(21,548)
(58,615)
Change in short-term and long-term tax liabilities
(12,243)
(92)
(7,044)
Net cash provided by operating activities
106,214
345,188
30,337
INVESTING ACTIVITIES
Purchases of property and equipment
(161,906)
(98,332)
(83,217)
Proceeds from sale of business, property and equipment
20,671
16,751
11,871
Purchase of intangible assets
(11,811)
(12,550)
(9,003)
Proceeds (payments) related to the sale of JW Australia(1)
—
365,555
—
Recovery of cost from receipts on impaired notes
1,389
3,514
13,953
Cash received for notes receivable
46
261
94
Cash received from insurance proceeds
1,655
5,115
—
Purchase of securities for deferred compensation plan
(3,381)
(1,140)
(728)
Net cash (used in) provided by investing activities
(153,337)
279,174
(67,030)
FINANCING ACTIVITIES
Change in long-term debt and payments of debt extinguishment costs
(55,178)
(561,338)
12,729
Common stock issued for exercise of options
2,878
563
2,009
Common stock repurchased
(24,280)
—
(131,987)
Payments to tax authorities for employee share-based compensation
(1,441)
(1,638)
(2,765)
Payments related to the sale of JW Australia
(2,612)
(744)
—
Net cash used in financing activities
(80,633)
(563,157)
(120,014)
Effect of foreign currency exchange rates on cash
(10,344)
7,074
(19,315)
Net (decrease) increase in cash and cash equivalents
(138,100)
68,279
(176,022)
Cash, cash equivalents and restricted cash, beginning
289,147
220,868
396,890
Cash, cash equivalents and restricted cash, ending
$
151,047
$
289,147
$
220,868
Balances included in the Consolidated Balance Sheets:
F-8
Cash, cash equivalents, and restricted cash
$
151,047
$
289,147
$
165,938
Cash and cash equivalents included in current assets of discontinued operations
—
—
54,930
Cash and cash equivalents at end of period
$
151,047
$
289,147
$
220,868
Refer to Note 27 - Supplemental Cash Flow for more information.
Cash flows from discontinued operations through the divestiture date of July 2, 2023, are
included in the above amounts and explained in Note 1 — Description of Company and
Summary of Significant Accounting Policies and Note 2 — Discontinued Operations.
(1) Includes proceeds from the sale of JW Australia, net of the $73.9 million of cash
divested.
The accompanying notes are an integral part of these Consolidated Financial Statements.
F-9
JELD-WEN HOLDING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Description of Company and Summary of Significant Accounting Policies
Nature of Business – JELD-WEN Holding, Inc., along with its subsidiaries, is a vertically integrated global manufacturer
and distributor of windows, doors, and other building products that derives substantially all its revenues from the sale of its door and
window products. Unless otherwise specified or the context otherwise requires, all references in these notes to “JELD-WEN,” “we,”
“us,” “our,” or the “Company” are to JELD-WEN Holding, Inc. and its subsidiaries.
We have facilities primarily located in the U.S., Canada, and Europe. Our products are marketed primarily under the JELD-
WEN brand name in the U.S. and Canada and under JELD-WEN and a variety of acquired brand names in Europe.
Our revenues are affected by the level of new housing starts, residential and non-residential building construction, and repair
and remodeling activity in each of our markets. Our sales typically follow seasonal new construction and repair and remodeling
industry patterns. The peak season for home construction and remodeling in many of our markets generally corresponds with the
second and third calendar quarters, and therefore, sales volume is typically higher during those quarters. Our first and fourth quarter
sales volumes are generally lower due to reduced repair and remodeling activity and reduced activity in the building and construction
industry as a result of colder and more inclement weather in certain areas of our geographic end markets.
Basis of Presentation – The accompanying consolidated financial statements have been prepared in accordance with GAAP
and pursuant to the rules and regulations of the SEC. All intercompany balances and transactions have been eliminated in
consolidation.
On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum
Equity Advisors, LLC, to sell JW Australia. On July 2, 2023, we completed the sale. The net assets and operations of the disposal
group met the criteria to be classified as “discontinued operations” and are reported as such in all periods presented unless otherwise
noted. The consolidated statements of cash flows include cash flows from discontinued operations through the divestiture date of July
2, 2023. Refer to Note 2 - Discontinued Operations for more information.
All U.S. dollar and other currency amounts, except per share amounts, are presented in thousands unless otherwise noted.
Share Repurchases – On July 28, 2022, the Board of Directors reduced our previous repurchase authorization of $400.0
million to a total aggregate value of $200.0 million with no expiration date. As of December 31, 2024, $175.7 million was remaining
under the repurchase program.
During the years ended December 31, 2024 and 2022, we paid $24.3 million and $132.0 million to repurchase 1,600,000 and
6,848,356 shares of our Common Stock, respectively. We did not repurchase shares of our Common Stock during the year ended
December 31, 2023. Refer to Note 16 - Capital Stock for more information.
Fiscal Year – We operate on a fiscal calendar year, and each interim quarter is comprised of two 4-week periods and one 5-
week period, with each week ending on a Saturday. Our fiscal year always begins on January 1 and ends on December 31. As a result,
our first and fourth quarters may have more, or fewer days included than a traditional 91-day fiscal quarter.
Use of Estimates – The preparation of consolidated financial statements in conformity with GAAP requires management to
make estimates, assumptions, and allocations that affect amounts reported in the consolidated financial statements and related notes.
Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets including
goodwill and other intangible assets, employee benefit obligations, income tax uncertainties, contingent assets and liabilities,
provisions for bad debt, inventory, warranty liabilities, legal claims, valuation of derivatives, environmental remediation, and claims
relating to self-insurance. Actual results could differ due to the uncertainty inherent in the nature of these estimates.
CARES Act – In March 2020, the United States government enacted the CARES Act to provide certain relief as a result of
the COVID-19 pandemic. The CARES Act provided for tax relief, along with other stimulus measures, including a provision that
allowed employers to defer the remittance of the employer portion of social security tax relating to 2020. The Company deferred $20.9
million of the employer portion of social security tax in 2020, all of which was paid in the year ended December 31, 2022. The
CARES Act also included a provision for an ERC designed to encourage businesses to retain employees during the COVID-19
pandemic. During the years ended December 31, 2024 and 2022 no ERC was recorded. During the year ended December 31, 2023, we
recorded an ERC from the U.S. government of $6.1 million in other income, net in the accompanying consolidated statements of
operations. The balance is included in other current assets in the accompanying consolidated balance sheets as of December 31, 2024
and 2023.
F-10
Segment Reporting – Our reportable segments are organized and managed principally by geographic region: North America
and Europe. We report all other business activities in Corporate and unallocated costs. We consider the following factors in
determining the reportable segments: the nature of business activities, the management structure accountable directly to the CODM,
the discrete financial information regularly provided to the CODM, and information presented to the Board of Directors and investors.
The CODM is the CEO. No operating segments have been aggregated for our presentation of reportable segments.
Cash and Cash Equivalents – We consider all highly-liquid investments purchased with an original or remaining maturity at
the date of purchase of ninety days or less to be cash equivalents. Our cash management system is designed to maintain zero bank
balances at certain banks. Checks written and not presented to these banks for payment are reflected as book overdrafts and are a
component of accounts payable.
Restricted Cash – Restricted cash consists primarily of cash required to meet certain bank guarantees.
Accounts Receivable – Accounts receivable are recorded at their net realizable value. Our customers are primarily retailers,
distributors, and contractors. Two customers, The Home Depot and Lowe’s Companies, each accounted for more than 10% of the
consolidated accounts receivable, net balance as of December 31, 2024 and 2023. We maintain allowances for credit losses resulting
from the inability of our customers to make required payments. We estimate the allowance for credit losses based on quantitative and
qualitative factors associated with the credit risk of our accounts receivable, including historical credit collections within each region
where we have operations. If the financial condition of a customer deteriorates or other circumstances occur that result in an
impairment of a customer’s ability to make payments, we record additional allowances as needed. We write off uncollectible trade
accounts receivable against the allowance for credit losses when collection efforts have been exhausted and/or any legal action taken
by us has concluded.
Inventories – Inventories in the accompanying consolidated balance sheets are valued at the lower of cost or net realizable
value and are determined by the FIFO or average cost methods. We record provisions to write down obsolete and excess inventory to
its estimated net realizable value. The process for evaluating obsolete and excess inventory requires us to evaluate historical inventory
usage and expected future production needs. Accelerating the disposal process or incorrect estimates may cause actual results to differ
from the estimates at the time such inventory is disposed or sold. We classify certain inventories that are available for sale directly to
external customers or used in the manufacturing of a finished good within raw materials.
Notes Receivable – Notes receivable are recorded at their net realizable value. The balance consists primarily of installment
notes and affiliate notes. The allowance for credit losses is based upon credit risks, historical loss trends, and specific reviews of
delinquent notes. We write off uncollectible note receivables against the allowance for credit losses when collection efforts have been
exhausted and/or any legal action taken by us has been concluded. Current maturities and interest, net of short-term allowance are
reported as other current assets.
Customer Displays – Customer displays include all costs to manufacture, ship, and install the displays of our products in
retail store locations. Capitalized display costs are included in other assets and are amortized over the life of the product lines,
typically 1 to 3 years. For the years ended December 31, 2024, 2023 and 2022, amortization associated with customer displays were
$5.8 million, $3.9 million and $1.4 million, respectively, and are included in SG&A expense in the accompanying consolidated
statements of operations.
Cloud Computing Arrangements –We capitalize qualified cloud computing implementation costs associated with the
application development stage and subsequently amortize these costs over the term of the hosting agreement and stated renewal
period, if it is reasonably certain we will renew, typically 3 to 5 years. Capitalized costs are included in other assets on the
consolidated balance sheet and amortization is included in SG&A expense in the accompanying consolidated statement of operations.
Property and Equipment – Property and equipment are recorded at cost. The cost of major additions and betterments are
capitalized and depreciated using the straight-line method over their estimated useful lives. Replacements, maintenance, and repairs
that do not improve or extend the useful lives of the related assets or adapt the property to a new or different use are expensed as
incurred. Interest over the construction period is capitalized as a component of cost of constructed assets. Upon sale or retirement of
property or equipment, cost and related accumulated depreciation are removed from the accounts and any gain or loss is charged to
income and included in SG&A expense in the accompanying statements of operations.
Leasehold improvements are amortized over the shorter of the useful life of the improvement, the lease term, or the life of the
building. Depreciation is generally provided over the following estimated useful service lives:
Land improvements
10 - 20 years
Buildings and improvements
10 - 45 years
Machinery and equipment
3 - 20 years
F-11
Intangible Assets – Definite lived intangible assets are amortized based on the pattern of economic benefit over the
following estimated useful lives:
Trademarks and trade names
10 - 40 years
Software
3 - 10 years
Patents, licenses and rights
5 - 25 years
Customer relationships
5 - 20 years
The lives of definite lived intangible assets are reviewed and reduced if necessary, whenever changes in their planned use
occur. Legal and registration costs related to internally developed patents and trademarks are capitalized and amortized over the lesser
of their expected useful life or the legal patent life. The carrying value of intangible assets is reviewed by management to assess the
recoverability of the assets when facts and circumstances indicate that the carrying value may not be recoverable. The recoverability
test requires us to first compare undiscounted cash flows expected to be generated by that definite lived intangible asset or asset group
to its carrying amount. If the carrying amounts of the definite lived intangible assets are not recoverable on an undiscounted cash flow
basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined
through various valuation techniques.
We capitalize certain qualified internal use software costs during the application development stage and subsequently
amortize these costs over the estimated useful life of the asset. Costs incurred during the preliminary project stage and post-
implementation operation stage are expensed as incurred.
Long-Lived Assets – Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of such assets or asset groups may not be recoverable. If a triggering event is identified,
we perform an impairment test by reviewing the expected undiscounted cash flows generated from the anticipated use and eventual
disposition of the asset group compared to the carrying value of the asset group. If the expected undiscounted cash flows are less than
the carrying value of the asset group, then an impairment charge is required to reduce the carrying value of the asset group to fair
value. Long-lived assets currently available for sale and expected to be sold within one year are classified as assets held for sale.
Leases – We lease certain warehouses, distribution centers, office spaces, land, vehicles, and equipment. We determine if an
arrangement is a lease at inception. A contract contains a lease if the contract conveys the right to control the use of identified
property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Amounts associated with
operating leases are included in ROU assets, net, accrued expense and other current liabilities and operating lease liability in our
consolidated balance sheet. Amounts associated with finance leases are included in property and equipment, net, current maturities of
long-term debt, and long-term debt in our consolidated balance sheet.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the
estimated present value of lease payments over the lease term.
If the lease does not provide an implicit rate, we use our incremental borrowing rate based on the information available at the
lease commencement date in determining the present value of lease payments. The incremental borrowing rate for operating leases
that commenced in the period is determined by using the prior quarter end’s incremental borrowing rates.
We have elected not to recognize an ROU asset and lease liability for leases with an initial term of twelve months or less as
well as any lease covering immaterial assets. We recognize lease expense for these leases on a straight-line basis over the lease term.
Variable lease payments that are dependent on usage, output, or may vary for other reasons, are excluded from lease payments in the
measurement of the ROU asset and lease liability and accordingly are recognized as lease expense in the period the obligation for
those payments is incurred. We combine lease and non-lease components for all agreements, except for building leases.
Certain leases include renewal and/or termination options, with renewal terms that can extend the lease term from 1 to 20
years or more, and the exercise of lease renewal options under these leases is at our sole discretion. These options are included in the
lease term used to determine ROU assets and corresponding liabilities when we are reasonably certain we will exercise the option. The
depreciable life of assets and leasehold improvements are limited by the expected lease term. Our lease agreements do not contain any
material residual value guarantees or material restrictive covenants.
F-12
Goodwill – Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests if
indicators of potential impairment exist. Current accounting guidance provides an entity with the option to perform a qualitative
assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we
do not perform a qualitative assessment, or if we determine that it is more likely than not that the fair value of the reporting unit is less
than its carrying amount, we perform a quantitative goodwill impairment test. Prior to 2023, the estimated fair values of reporting
units were derived using only an income approach (implied fair value measured on a non-recurring basis using Level 3 inputs).
Beginning in 2023, the estimated fair values of our reporting units were derived using a combination of income and market
approaches, both of which yielded substantially equivalent indications of fair value. Absent an indication of fair value from a potential
buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair
value. Fair value computed by these models is arrived at using several factors and inputs. There are inherent uncertainties, however,
related to fair value models, the inputs, factors and our judgment in applying them to this analysis. Nonetheless, we believe that the
combination of these methods provides a reasonable approach to estimate the fair values of our reporting units.
Under the income approach, the fair value of a reporting unit is based on a discounted cash flow analysis of management's
short-term and long-term forecast of operating performance. This analysis contains significant assumptions and estimates including
revenue growth rates, expected EBITDA margins, discount rates, capital expenditures, income tax rates, and terminal growth rates.
Under the market approach, we utilized a guideline company method in which the fair value of the reporting unit is based on
weighting the financial multiples of comparable companies and applying a control premium. Changes in assumptions or estimates
used in our goodwill impairment testing could materially affect the determination of the fair value of a reporting unit, and therefore,
could eliminate the excess of fair value over carrying amount of a reporting unit and, in some cases, could result in impairment. Such
changes in assumptions could be caused by items such as prolonged deterioration in economic conditions, a further decline in
projected future cash flows, loss of one or more significant customers, failure to control cost increases above what can be recouped in
sale price increase, or increases in the discount rates. These types of changes would negatively affect our profits, revenues, and growth
over the long term and such a decline could significantly affect the fair value assessment of our reporting units and cause our goodwill
to become impaired.
We identified two reporting units: North America and Europe. In determining our reporting units, we considered (i) whether
an operating segment or a component of an operating segment was a business, (ii) whether discrete financial information was
available, and (iii) whether the financial information is regularly reviewed by management of the operating segment.
Deferred Revenue – We record deferred revenue when we collect pre-payments from customers for performance obligations
we expect to fulfill through future performance of a service or delivery of a product. We classify our deferred revenue based on our
estimate as to when we expect to satisfy the related performance obligations. Deferred revenues are included in accrued expenses and
other current liabilities in the accompanying consolidated balance sheets.
Warranty Accrual – Warranty terms range primarily from one year to lifetime on certain window and door components.
Warranties are normally limited to replacement or service of defective components for the original customer. Some warranties are
transferable to subsequent owners and are generally limited to ten years from the date of manufacture or require pro-rata payments
from the customer. A provision for estimated warranty costs is recorded at the time of sale based on historical experience and we
periodically adjust these provisions to reflect actual experience.
Restructuring – Costs to exit or restructure certain activities of our internal operations are accounted for as one-time
termination and exit costs as required by the provisions of FASB ASC 420, Exit or Disposal Cost Obligations, and are accounted for
separately from any business combination. A liability for costs associated with an exit or disposal activity is recognized and measured
at its fair value in our consolidated statements of operations in the period in which the liability is incurred. When estimating the fair
value of restructuring activities, assumptions are applied, which can differ materially from actual results. This may require us to revise
our initial estimates, which may materially affect our results of operations and financial position in the period the revision is made.
F-13
Derivative Financial Instruments – Derivative financial instruments are used to manage interest rate risk associated with
our borrowings, exposures to certain commodities associated with our material costs and foreign currency exposures related to
transactions denominated in currencies other than the U.S. dollar, or in the case of our non-U.S. companies, transactions denominated
in a currency other than their functional currency. All derivatives are recorded as assets or liabilities in the consolidated balance sheets
at their respective fair values. As of December 31, 2024, 2023 and 2022, we had netting provisions in certain agreements with our
counterparties. We have elected to not offset the fair values of derivative assets and liabilities executed with the same counterparty that
are generally subject to enforceable netting agreements. Changes in a derivative’s fair value are recognized in earnings unless specific
hedge criteria are met, and we elect hedge accounting prior to entering into the hedge. If a derivative is designated as a fair value
hedge, the changes in fair value of both the derivative and the hedged item attributable to the hedged risks are recognized in the same
line item in the results of operations. If the derivative is designated as a cash flow or net investment hedge, changes in the fair value
related to the derivatives considered highly effective are initially recorded in accumulated other comprehensive income (loss) and
subsequently classified to the consolidated statements of operations when the hedged item impacts earnings, and in the same line item
on the consolidated statements of operations as the impact of the hedge transaction. Cash flows from all derivative instruments,
including those not designated as hedging instruments, are classified in the same category as the cash flows from the item being
hedged.
At the inception of a fair value, cash flow hedge or net investment hedge we formally document the hedge relationship and
the risk management objective for undertaking the hedge. In addition, for derivatives that qualify for hedge accounting, we assess,
both at inception of the hedge and on an ongoing basis, whether the derivative financial instrument is and will continue to be highly
effective in offsetting cash flows or fair value of the hedged item and whether it is probable that the hedged forecasted transaction will
occur. Changes in the fair value of derivatives that do not qualify for hedge accounting, or fail to meet the criteria, thereafter, are also
recognized in the consolidated statements of operations. Refer to Note 24 - Fair Value of Financial Instruments for more information
on the fair value of our derivative assets and liabilities.
Revenue Recognition – Revenue is recognized when obligations under the terms of a contract with our customer are
satisfied. Generally, this occurs with the transfer of control of our products or services. The transfer of control to the customer occurs
at a point in time, usually upon satisfaction of the shipping terms within the contract. Revenue is measured as the amount of
consideration we expect to receive in exchange for transferring goods or providing services. The taxes we collect are concurrent with
revenue-producing activities (e.g., sales tax, value-added tax, and other taxes) are excluded from revenue.
Shipping and handling costs are treated as fulfillment costs and are not considered a separate performance obligation.
Shipping and handling costs charged to customers and the related expenses are reported in revenues and cost of sales for all customers.
The expected costs associated with our base warranties and field service actions continue to be recognized as expense when the
products are sold. Refer to Note 11 - Warranty Liability for more information. Since payment is due at or shortly after the point of
sale, the contract asset is classified as a receivable.
We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect,
at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays
for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with
customers. Incidental items that are immaterial in the context of the contract are recognized as expense.
We disaggregate revenues based on geographical location. Refer to Note 14 - Segment Information for more information on
disaggregated revenue.
Advertising Costs – All costs of advertising our products and services are charged to expense as incurred. For the years
ended December 31, 2024, 2023 and 2022, advertising and promotion expenses were $27.9 million, $30.1 million and $27.1 million,
respectively, and are included in SG&A expense in the accompanying consolidated statements of operations.
Net Interest Expense and Extinguishment of Debt Costs – We record debt extinguishment costs separately from interest
expense, net within the consolidated statements of operations.
Foreign Currency Translation and Adjustments – Typically, our foreign subsidiaries maintain their accounting records in
their local currency. All the assets and liabilities of these subsidiaries (including long-term assets, such as goodwill) are converted to
U.S. dollars at the exchange rate in effect at the balance sheet date, income and expense accounts are translated at average rates for the
period, and shareholder’s equity accounts are translated at historical rates. The effects of translating financial statements of foreign
operations into our reporting currency are recognized as a cumulative translation adjustment in consolidated other comprehensive
income (loss). This balance is net of tax, where applicable.
The effects of translating financial statements of foreign operations in which the U.S. dollar is their functional currency are
included in the consolidated statements of operations. The effects of translating intercompany debt are recorded in the consolidated
statements of operations unless the debt is of a long-term investment nature in which case gains and losses are recorded in
consolidated other comprehensive income (loss).
F-14
Foreign currency transaction gains or losses are credited or charged to income as incurred.
Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. We evaluate both the positive and negative evidence that is relevant in assessing
whether we will realize the deferred tax assets. A valuation allowance is recorded when it is more likely than not that some of the
deferred tax assets will not be realized. The tax effects from an uncertain tax position can be recognized in the consolidated financial
statements, only if the position is more likely than not to be sustained, based on the technical merits of the position and the jurisdiction
taxes of the Company. We recognize the financial statement benefit of a tax position only after determining that the relevant tax
authority would more likely than not sustain the position following an audit and the tax related to the position would be due to the
entity and not the owners. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated
financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with
the relevant tax authority. We apply this accounting standard to all tax positions for which the statute of limitations remains open.
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
We file a consolidated federal income tax return in the U.S. and various states. For financial statement purposes, we calculate
the provision for federal income taxes using the separate return method. Certain subsidiaries file separate tax returns in certain
countries and states. Any U.S. federal, state, and foreign income taxes refundable and payable are reported in other current assets and
accrued expenses and other current liabilities in our consolidated balance sheet. We have non-current taxes receivable or payable at
December 31, 2024 - see Note 15 - Income Taxes for more information. We do not have any non-current taxes receivable or payable at
December 31, 2023.
We record interest and penalties on amounts due to tax authorities as a component of income tax expense in the consolidated
statements of operations. We have elected to account for the impact of GILTI in the period in which it is incurred.
Contingent Liabilities – Contingent liabilities arising from claims, assessments, litigation, fines, penalties, and other sources
require significant judgment in determining the probability of loss and the amount of the potential loss. Each quarter, we review
significant new claims and litigation for the probability of an adverse outcome. Estimates are recorded as liabilities when it is probable
that a liability has been incurred, and the amount of the loss is reasonably estimable. Disclosure is required when there is a reasonable
possibility that the ultimate loss will materially exceed the recorded provision. Contingent liabilities are often resolved over long time
periods. Estimating probable losses requires analysis of multiple forecasts that often depend on judgments about potential actions by
third parties, such as regulators, and the estimated loss can change materially as individual claims develop. Legal costs incurred in
connection with loss contingencies are expensed as incurred.
Employee Retirement and Pension Benefits – We have a defined benefit plan available to certain U.S. hourly employees
and several other defined benefit plans located outside of the U.S. that are country specific. The most significant of these plans is in
the U.S., which is no longer open to new employees. Amounts relating to these plans are recorded based on actuarial calculations,
which use various assumptions, such as discount rates and expected return on assets. Refer to Note 26 - Employee Retirement and
Pension Benefits for more information.
Recently Adopted Accounting Standards – In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform
(Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and
exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of
LIBOR or by another reference rate expected to be discontinued. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate
Reform (Topic 848): Scope, to clarify the scope of ASU No. 2020-04. In December 2022, the FASB issued ASU No. 2022-06,
Deferral of the Sunset Date of Topic 848, which extended the relief provisions under Topic 848 through December 31, 2024. In May
2020, we elected the expedient within ASC 848 which allowed us to assume that our hedged interest payments were probable to occur
regardless of any expected modifications in their terms related to reference rate reform. In addition, ASC 848 allowed for the option to
change the method of assessing effectiveness upon a change in critical terms of the derivative or the hedged transactions and upon the
end of relief under ASC 848. We elected to assess effectiveness as documented in the original hedge documentation and apply the
practical expedients related to probability to assume that the reference rate on a hypothetical derivative matched the reference rate on
the hedging instrument. In June 2023, we executed amendments to our Term Loan Facility, ABL Facility and interest rate derivative
agreements to replace LIBOR with a Term SOFR based rate. These contract amendments did not have a material impact on our
consolidated financial statements. Refer to Note 12 - Long-Term Debt and Note 23 - Derivative Financial Instruments for more
information.
F-15
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. ASU 2023-07
requires disclosure of significant segment expenses that are regularly provided to the CODM and included within the segment measure
of profit or loss, an amount and description of the composition for other segment items to reconcile to segment profit or loss, and the
title and position of the entity’s CODM. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. We adopted this guidance effective January 1, 2024, for annual
reporting and applied the amendments retrospectively to all prior periods presented in the Consolidated Financial Statements. The
amendments for interim periods will be adopted in our fiscal year beginning on January 1, 2025. Refer to Note 14 - Segment
Information for more information.
Recent Accounting Standards Not Yet Adopted – In December 2023, the FASB issued ASU 2023-09, Income Taxes
(Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 expands disclosures in an entity’s income tax rate reconciliation
table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The guidance is effective for annual periods beginning
after December 15, 2024, with early adoption permitted, and should be applied either prospectively to financial statements issued for
reporting dates after the effective date or retrospectively to any or all prior periods presented in the financial statements. We have not
elected to early adopt this standard. We are currently evaluating the impact of this guidance on the Company’s disclosures.
In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures: Disaggregation of Income
Statement Expenses. ASU 2024-03 requires disclosure of certain costs and expenses on a fiscal and interim basis in the notes to the
financial statements. ASU 2024-03 is effective for annual reporting periods in fiscal years beginning after December 15, 2026, and
interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and should be applied
either prospectively to financial statements issued for reporting dates after the effective date or retrospectively to any or all prior
periods presented in the financial statements. We are currently evaluating the impact of this guidance on the Company’s disclosures.
We have considered the applicability and impact of all ASUs. We have assessed ASUs not listed above and determined that
they were either not applicable or were not expected to have a material impact on our financial statements.
Note 2. Discontinued Operations
On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum
Equity Advisors, LLC, to sell JW Australia, for a purchase price of approximately AUD $688 million. On July 2, 2023, we completed
the sale, receiving net cash proceeds of approximately $446 million, including $3.3 million of cash received from the settlement of
certain forward contracts. Refer to Note 23 - Derivative Financial Instruments for more information.
In the year ended December 31, 2023, we recorded a net gain on sale of discontinued operations of $15.7 million related to
the July 2, 2023, sale of JW Australia. The net gain on sale includes $30.3 million of cumulative translation adjustments losses and
$1.0 million of accumulated net actuarial pension losses reclassified from other comprehensive income. The net gain on sale also
includes a $10.2 million loss recorded in the fourth quarter of 2023 in estimated taxes directly related to the sale transaction and return
to provision true ups for the period in which we owned JW Australia. We recorded a $1.4 million loss on sale of discontinued
operations in the year ended December 31, 2024, related to settlement of an outstanding tax liability for JW Australia.
This divestiture qualified as a discontinued operation as of April 17, 2023, since it represents a strategic shift for us and has a
major effect on our consolidated results of operations. Accordingly, the results of operations for the JW Australia reportable segment,
together with certain costs related to the sale, have been classified as discontinued operations within the consolidated statements of
operations for all periods presented.
After the completion of the sale, we entered into an agreement to provide certain transition services to JW Australia,
including providing information technology post-closing services, purchases under a supply agreement, and reimbursement for certain
costs to upgrade specific IT systems up to a capped amount. As of December 31, 2024, we had a liability of $3.2 million relating to
these matters, which was included in accrued expenses and other current liabilities in our consolidated balance sheet. As of December
31, 2023, our liability relating to these matters was $8.2 million, of which $6.1 million was included in accrued expenses and other
current liabilities, and the remaining was included in deferred credits and other liabilities in the accompanying consolidated balance
sheet.
F-16
Components of amounts reflected in the consolidated statements of operations related to discontinued operations are
presented in the table, as follows:
(amounts in thousands)
2023
2022
Net revenues
$
301,876 $
611,048
Cost of sales
211,575
451,542
Gross margin
90,301
159,506
Selling, general and administrative
62,263
112,015
Restructuring and asset-related charges
—
611
Operating income
28,038
46,880
Interest income, net
(685)
(445)
Other income, net
(2,274)
(1,448)
Income from discontinued operations before taxes
30,997
48,773
Income tax expense
9,486
15,269
Income from discontinued operations, net of tax
$
21,511 $
33,504
Year Ended December 31,
The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of
cash flows through the divestiture date of July 2, 2023. The following table presents cash flow and non-cash information related to
discontinued operations:
Year Ended December 31,
(amounts in thousands)
2023
2022
Depreciation and amortization
$
5,196 $
18,622
Capital expenditures
6,229
7,746
Share-based incentive compensation
926
1,591
Provision for bad debt
5,062
392
Note 3. Accounts Receivable
We sell our manufactured products to a large number of customers, primarily in the residential housing construction and
remodel sectors, broadly dispersed across many domestic and foreign geographic regions. We assess the credit risk relating to our
accounts receivable based on quantitative and qualitative factors, including historical credit collections within each region where we
have operations. We perform ongoing credit evaluations of our customers to minimize credit risk. We do not usually require collateral
for accounts receivable, but do require advance payment, guarantees, a security interest in the products sold to a customer, and/or
letters of credit in certain situations. Customer accounts receivable converted to notes receivable are collateralized by inventory or
other collateral. Two customers, The Home Depot and Lowe’s Companies, each accounted for more than 10% of the consolidated
accounts receivable, net balance as of December 31, 2024 and 2023.
The following is a roll forward of our allowance for credit losses:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Balance as of January 1,
$
(11,265) $
(15,429) $
(9,472)
Charges to (expense) income
(110)
1,870
(7,287)
Write-offs
1,253
2,466
941
Currency translation
517
(172)
389
Balance at period end
$
(9,605) $
(11,265) $
(15,429)
F-17
Note 4. Inventories
Inventories are stated at the lower of cost or net realizable value. Finished goods and work-in-process inventories include
material, labor, and manufacturing overhead costs.
(amounts in thousands)
December 31,
2024
December 31,
2023
Raw materials
$
380,277 $
404,360
Work in process
19,763
21,141
Finished goods
82,615
84,954
Inventory valuation reserves
(22,548)
(29,004)
Total inventories
$
460,107 $
481,451
To conform with the current period presentation, certain amounts in prior period information have been reclassified.
Note 5. Property and Equipment, Net
(amounts in thousands)
December 31,
2024
December 31,
2023
Land improvements
$
30,614 $
30,350
Buildings
463,273
459,516
Machinery and equipment
1,380,424
1,386,819
Total depreciable assets
1,874,311
1,876,685
Less: Accumulated depreciation
1,309,706
1,322,129
564,605
554,556
Land
26,399
28,262
Construction in progress
90,435
61,424
Total property and equipment, net
$
681,439 $
644,242
We recorded accelerated depreciation of our plant and equipment of $15.0 million, $7.4 million and $0.7 million during the
years ended December 31, 2024, 2023 and 2022, respectively, within restructuring and asset-related charges in the accompanying
consolidated statements of operations. Refer to Note 19 - Restructuring and Asset-Related Charges for more information.
Additionally, we recorded accelerated depreciation of $9.1 million during the year ended December 31, 2023, from reviews
of North America equipment capacity optimization. These charges were recorded within cost of sales in the accompanying
consolidated statements of operations.
The effect on our carrying value of property and equipment due to currency translations for foreign property and equipment,
net, was a decrease of $13.6 million and an increase of $7.9 million as of December 31, 2024 and 2023, respectively.
Depreciation expense was recorded as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Cost of sales
$
81,874 $
89,396 $
80,235
Selling, general and administrative
4,687
5,191
5,376
Total depreciation expense
$
86,561 $
94,587 $
85,611
F-18
Note 6. Goodwill
The following table summarizes the changes in goodwill by reportable segment:
(amounts in thousands)
North
America
Europe
Total
Reportable
Segments
Gross carrying amount at December 31, 2022
$
182,269 $
258,345 $
440,614
Currency translation
143
10,167
10,310
Gross carrying amount at December 31, 2023
182,412
268,512
450,924
Sale of business
(900)
—
(900)
Currency translation
(487)
(17,876)
(18,363)
Gross carrying amount at December 31, 2024
$
181,025 $
250,636 $
431,661
Accumulated impairment losses at December 31, 2022
$
— $
(58,661) $
(58,661)
Currency translation
—
(2,093)
(2,093)
Accumulated impairment losses at December 31, 2023
—
(60,754)
(60,754)
Impairment(1)
—
(63,445)
(63,445)
Currency translation
—
7,705
7,705
Accumulated impairment losses at December 31, 2024
$
— $
(116,494) $
(116,494)
Balance, net of impairment at December 31, 2024
$
181,025 $
134,142 $
315,167
(1)
During the fourth quarter of 2024, we recognized a $31.4 million impairment charge related to the court-ordered divestiture of
Towanda. As of December 31, 2024, 2023 and 2022, the assets and liabilities of Towanda qualify as held for sale and are not
included in the above reportable segments amount. Refer to Note 20 - Held for Sale for more information.
During the third quarter of 2022, management identified various qualitative and quantitative factors which collectively
indicated a triggering event had occurred within our North America and Europe reporting units. These factors included the
macroeconomic environment in each region including increasing interest rates, persistent inflation, and operational inefficiencies
attributable to ongoing global supply chain disruptions, the continuing geopolitical environment in Europe associated with the conflict
between Russia and Ukraine, and foreign exchange fluctuations. These factors have negatively impacted our business performance.
Based upon the results of our interim impairment analysis, we concluded that the carrying value of our Europe reporting unit exceeded
its fair value, and we recorded a goodwill impairment charge of $54.9 million, for the year ended December 31, 2022, representing a
partial impairment of goodwill assigned to the Europe reporting unit. In addition, we determined our North America reporting unit was
not impaired.
As previously disclosed, following our 2023 annual impairment test for our Europe reporting unit, we concluded that while
no impairment existed, the fair value of our reporting unit exceeded its carrying value by approximately 3%. During the third quarter
of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect anticipated macroeconomic
conditions of prolonged elevated interest rates leading to reduced revenue growth expectations. The end of the third fiscal quarter also
marks the conclusion of our generally heavier seasonal sales period and our European net sales were negatively impacted by weaker
market demand. Accordingly, the Company determined that a triggering event occurred requiring an interim goodwill impairment test
for its European reporting unit as of September 28, 2024. Based upon the results of our interim impairment assessment, we concluded
the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of
$63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit. Following this partial impairment,
the reporting unit’s carrying amount equaled the fair value.
We performed our annual impairment assessments during the fourth quarter. The Company elected to perform a qualitative
analysis as of the fourth quarter for the Europe reporting unit. Our analysis did not determine that it was more likely than not that the
carrying value of the Europe reporting unit exceeded the fair value. During the fourth quarter, we quantitatively determined that the
fair value of our North America reporting unit exceeded its net carrying amount and no goodwill impairment existed. We determined
that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired.
F-19
Note 7. Intangible Assets, Net
The cost and accumulated amortization values of our intangible assets were as follows:
December 31, 2024
(amounts in thousands)
Cost
Accumulated
Amortization
Net
Book Value
Customer relationships and agreements
$
119,674 $
(90,073) $
29,601
Software
76,048
(30,021)
46,027
Trademarks and trade names
31,384
(12,113)
19,271
Patents, licenses and rights
12,627
(5,539)
7,088
Total amortizable intangibles
$
239,733 $
(137,746) $
101,987
December 31, 2023
(amounts in thousands)
Cost
Accumulated
Amortization
Net
Book Value
Customer relationships and agreements
$
123,713 $
(84,281) $
39,432
Software
113,429
(58,424)
55,005
Trademarks and trade names
32,148
(10,802)
21,346
Patents, licenses and rights
12,666
(4,539)
8,127
Total amortizable intangibles
$
281,956 $
(158,046) $
123,910
We recorded accelerated amortization of $14.1 million during the years ended December 31, 2024 and 2023, for an ERP that
we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the
first quarter of 2024. The expense was recorded within SG&A expense in the accompanying consolidated statements of operations.
The effect on our carrying value of intangible assets due to currency translations for foreign intangible assets was a decrease
of $1.2 million and an increase of $0.7 million as of December 31, 2024 and 2023, respectively.
Amortization expense was recorded as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Amortization expense
$
33,383 $
36,523 $
26,141
Estimated future amortization expense:
(amounts in thousands)
2025
$
19,015
2026
18,039
2027
17,565
2028
16,372
2029
13,034
Thereafter
17,962
Total
$
101,987
Note 8. Leases
We lease certain warehouses, distribution centers, office spaces, land, vehicles, and equipment.
F-20
The Company’s ROU assets and lease liabilities were as follows:
(amounts in thousands)
Balance Sheet Location
December 31,
2024
December 31,
2023
Assets:
Operating
Operating lease assets, net
$
126,256 $
146,931
Finance
Property and equipment, net(1)
9,726
6,994
Total ROU assets
$
135,982 $
153,925
Liabilities:
Current:
Operating
Accrued expense and other current liabilities
$
32,738 $
32,477
Finance
Current maturities of long-term debt
2,296
2,407
Noncurrent:
Operating
Operating lease liability
105,499
121,993
Finance
Long-term debt
7,517
4,801
Total lease liability
$
148,050 $
161,678
(1)
Finance lease assets are recorded net of accumulated depreciation of $5.0 million and $5.1 million as of December 31, 2024 and
2023, respectively.
During the year ended December 31, 2024, we obtained $24.0 million in ROU assets in exchange for operating lease
liabilities, primarily relating to real estate. We obtained $52.5 million in ROU assets in exchange for operating lease liabilities,
primarily relating to real estate during the year ended December 31, 2023.
During the years ended December 31, 2024 and 2023, we obtained $5.6 million and $5.4 million in ROU assets, respectively,
in exchange for finance lease liabilities.
We recorded accelerated amortization on our ROU assets of $7.2 million, $0.5 million and $0.9 million during the years
ended December 31, 2024, 2023 and 2022, respectively, within restructuring and asset-related charges in the accompanying
consolidated statements of operations. Refer to Note 19 - Restructuring and Asset-Related Charges for more information.
The components of lease expense were as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Operating
$
43,031 $
41,942 $
42,616
Short term
10,497
13,324
13,816
Variable
7,546
6,571
7,287
Low value
2,198
1,600
1,723
Finance
536
313
139
Total lease expense
$
63,808 $
63,750 $
65,581
December 31,
2024
December 31,
2023
Weighted average remaining lease terms (in years):
Operating
5.3
5.7
Finance
4.7
4.1
Weighted average discount rate:
Operating
5.9%
5.6%
Finance
6.4%
6.4%
F-21
As of December 31, 2024, future minimum lease payment obligations under operating and finance leases are as follows for
each of the periods ending December 31:
(amounts in thousands)
Operating
Leases(1)
Finance
Leases
Total
2025
$
42,673 $
2,846 $
45,519
2026
32,735
2,552
35,287
2027
26,903
2,383
29,286
2028
20,926
1,706
22,632
2029
14,858
952
15,810
Thereafter
27,168
868
28,036
Total lease payments
165,263
11,307
176,570
Less: Interest
27,026
1,494
28,520
Present value of lease liability
$
138,237 $
9,813 $
148,050
(1)
Operating lease payments include $5.7 million related to options to extend lease terms that are reasonably certain of being
exercised.
Note 9. Accrued Payroll and Benefits
Accrued payroll and benefits consisted of the following:
(amounts in thousands)
December 31,
2024
December 31,
2023
Accrued payroll
$
28,451 $
30,018
Accrued vacation
26,877
31,510
Other accrued benefits
14,042
10,072
Accrued payroll taxes
11,240
13,898
Accrued bonuses and commissions
7,877
45,742
Non-U.S. defined contributions and other accrued benefits
1,113
1,310
Total accrued payroll and benefits
$
89,600 $
132,550
Note 10. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
(amounts in thousands)
December 31,
2024
December 31,
2023
Accrued sales and advertising rebates
$
74,043 $
82,732
Current portion of operating lease liability (Note 8)
32,738
32,477
Non-income related taxes
19,952
20,072
Current portion of warranty liability (Note 11)
18,394
22,819
Current portion of accrued claim costs relating to self-insurance programs
15,254
14,079
Accrued freight
15,174
18,963
Accrued expenses
10,783
15,758
Accrued interest payable
9,846
1,401
Current portion of restructuring accrual (Note 19)
7,605
3,375
Accrued income taxes payable
7,433
9,252
Deferred revenue and customer deposits
5,404
7,189
Legal claims provision (Note 25)
4,678
2,683
Current portion of derivative liability (Note 23)
2,905
2,996
Total accrued expenses and other current liabilities
$
224,209 $
233,796
The accrued sales and advertising rebates, accrued interest payable, accrued freight, and non-income related taxes can
significantly fluctuate period-over-period due to timing of payments.
F-22
Note 11. Warranty Liability
Warranty terms range from one year to lifetime on certain window and door components. Warranties are normally limited to
servicing or replacing defective components for the original customer. Product defects arising within six months of sale are classified
as manufacturing defects and are not included in the current period expense below. Some warranties are transferable to subsequent
owners and are either limited to 10 years from the date of manufacture or require pro rata payments from the customer. Estimated
warranty costs based on historical experience are recorded as a provision at the time of sale. The provision is adjusted periodically to
reflect actual experience.
An analysis of our warranty liability is as follows:
(amounts in thousands)
December 31,
2024
December 31,
2023
December 31,
2022
Balance as of January 1
$
53,247 $
52,389 $
53,367
Current period charges
25,719
30,667
28,935
Experience adjustments
634
599
772
Payments
(31,482)
(30,810)
(29,834)
Currency translation
(829)
402
(851)
Balance at period end
47,289
53,247
52,389
Current portion
(18,394)
(22,819)
(21,215)
Long-term portion
$
28,895 $
30,428 $
31,174
The most significant component of our warranty liability was in the North America segment. As of December 31, 2024, the
warranty liability in the North America segment totaled $40.9 million, after discounting future estimated cash flows at rates between
4.60% and 4.63%. Without discounting, the liability would have increased by approximately $3.7 million.
Note 12. Long-Term Debt
Our long-term debt, net of original issue discount and unamortized debt issuance costs, consisted of the following:
December 31, 2024
December 31,
2024
December 31,
2023
(amounts in thousands)
Interest Rate
Senior Notes
4.88% - 7.00%
$
750,000 $
600,000
Term Loan Facility
6.69%(1)
380,888
536,250
Finance leases and other financing arrangements
1.00% - 8.95%(1)
61,071
74,460
Mortgage notes
—
22,070
Total Debt
1,191,959
1,232,780
Unamortized debt issuance costs and original issue discounts
(8,583)
(6,528)
Current maturities of long-term debt
(30,927)
(36,177)
Long-term debt
$
1,152,449 $
1,190,075
(1)
Term Loan B and certain finance leases and other financing arrangements are subject to variable interest rates.
Summaries of our significant changes to outstanding debt agreements as of December 31, 2024, are as follows:
Senior Secured Notes and Senior Notes
In December 2017, we issued $800.0 million of Senior Notes in two tranches: $400.0 million bearing interest at 4.63% and
maturing in December 2025, and $400.0 million bearing interest at 4.88% and maturing in December 2027 in a private placement for
resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
In May 2020, we issued $250.0 million of Senior Secured Notes bearing interest at 6.25% and maturing in May 2025 in a
private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of
fees and expenses associated with debt issuance, including an underwriting fee of 1.25%. Interest is payable semiannually, in arrears,
each May and November.
On August 3, 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63%
Senior Notes. The Company recognized a pre-tax loss of $6.5 million on the redemption in the third quarter of 2023, consisting of
$3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.
F-23
In August 2024, we issued $350.0 million of Senior Notes bearing interest at 7.00% and maturing September 2032 in a
private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of
fees and expenses associated with debt issuance including an underwriting fee of 1.25%. We incurred debt issuance costs of
$5.5 million which will be amortized to interest expense over the life of the notes using the effective interest method. Interest is
payable semiannually, in arrears, each March and September.
In September 2024, we utilized a portion of the proceeds from the issuance of our 7.00% Senior Notes described above to
redeem the remaining $200.0 million of our 4.63% Senior Notes. The Company recognized a pre-tax loss of $0.5 million on the
redemption in the third quarter of 2024, consisting entirely in accelerated amortization of debt issuance costs.
Term Loan Facility
U.S. Facility - Initially executed in October 2014, we amended the Term Loan Facility in July 2021 to, among other things,
extend the maturity date from December 2024 to July 2028 and provide additional covenant flexibility. Pursuant to the amendment,
certain existing and new lenders advanced $550.0 million of replacement term loans, the proceeds of which were used to prepay in full
the amount outstanding under the previously existing term loans. The replacement term loans originally bore interest at LIBOR
(subject to a floor of 0.00%) plus a margin of 2.00% to 2.25% depending on JWI’s corporate credit ratings. In addition, the
amendment also modified certain other terms and provisions of the Term Loan Facility and adds language to address the replacement
of LIBOR with a SOFR basis upon the June 30, 2023, cessation of the publication of LIBOR. Voluntary prepayments of the
replacement term loans are permitted at any time, in certain minimum principal amounts, but were subject to a 1.00% premium during
the first six months. The amendment requires 0.25% of the initial principal to be repaid quarterly until maturity. As a result of this
amendment, we recognized debt extinguishment costs of $1.3 million, which included $1.0 million of unamortized debt issuance costs
and original discount fees.
In June 2023, we amended the Term Loan Facility to replace LIBOR with a Term SOFR based rate as the successor
benchmark rate and made certain other technical amendments and related conforming changes. All other material terms and conditions
were unchanged.
In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove
certain provisions no longer relevant to the parties, and make certain other technical amendments and related conforming changes.
Pursuant to the amendment, replacement term loans bear interest at SOFR plus a margin of 1.75% to 2.00% depending on JWI’s
corporate credit ratings, compared to a margin of 2.00% to 2.25% under the previous amendment. All other material terms and
conditions of the Term Loan Agreement were unchanged. As a result of this amendment, we recognized debt extinguishment and
refinancing costs of $1.4 million, which included $0.8 million of unamortized debt issuance costs and original discount fees.
In August 2024, we utilized a portion of the proceeds received from our issuance of $350.0 million of Senior Notes to repay
$150.0 million of the outstanding balance of our Term Loan Facility. As of December 31, 2024, the outstanding principal balance, net
of original issue discount, was $380.5 million.
In May 2020, we entered into interest rate swap agreements with a weighted average fixed rate of 0.395% paid against one-
month LIBOR floored at 0.00% with outstanding notional amounts aggregating to $370.0 million corresponding to that amount of the
debt outstanding under our Term Loan Facility. In June 2023, the interest rate swap agreements were amended to convert to a SOFR
basis on June 30, 2023, resulting in a weighted average fixed rate of 0.317% paid against one-month USD-SOFR CME Term floored
at (0.10)%. The interest rate swap agreements were designated as cash flow hedges of a portion of the interest obligations on our Term
Loan Facility borrowings and matured in December 2023. Refer to Note 23 - Derivative Financial Instruments for more information
on our derivative assets and liabilities.
In February 2024, we entered into interest rate collar agreements with a cap rate of 4.50% paid against one-month USD-
SOFR CME Term floored at 3.982% and 3.895% with outstanding notional amounts aggregating to $100.0 million corresponding to
that amount of the debt outstanding under our Term Loan Facility. The interest rate collar agreements were designated as cash flow
hedges of a portion of the interest obligations on our Term Loan Facility borrowings and mature in February 2026. Refer to Note 23 -
Derivative Financial Instruments for more information on our derivative assets and liabilities.
Revolving Credit Facility
ABL Facility - Initially executed in 2014, extensions of credit under our ABL Facility are limited by a borrowing base
calculated based on specified percentages of the value of eligible accounts receivable and inventory, subject to certain reserves and
other adjustments. We pay a fee of 0.25% on the unused portion of the commitments. The ABL Facility has a minimum fixed charge
coverage ratio that we are obligated to comply with under certain circumstances. The ABL Facility has various non-financial
covenants, including restrictions on liens, indebtedness, dividends, customary representations and warranties, and customary events of
defaults and remedies.
F-24
In July 2021, we amended the ABL Facility to, among other things, extend the maturity date from December 2022 to July
2026, increase the aggregate commitment to $500.0 million, provide additional covenant flexibility, conform certain terms and
provisions to the Term Loan Facility, and amend the interest rate grid applicable to the loans thereunder by adding language to address
the replacement of LIBOR with a SOFR basis upon the June 30, 2023 cessation of the publication of LIBOR. Pursuant to the
amendment, the amount allocated to U.S. borrowers was increased to $465.0 million. The amount allocated to Canadian borrowers
was maintained at $35.0 million. Borrowings under the ABL Facility bore, at the borrower’s option, interest at either a base rate plus a
margin of 0.25% to 0.50% depending on excess availability or LIBOR (subject to a floor of 0.00%) plus a margin of 1.25% to 1.50%
depending on excess availability. All other material terms and conditions were unchanged.
In June 2023, we amended the ABL Facility to replace LIBOR with a Term SOFR based rate as the successor benchmark rate
and made certain other technical amendments and related conforming changes. All other material terms and conditions were
unchanged.
As of December 31, 2024, we had no outstanding borrowings, $2.8 million in letters of credit and $416.4 million available
under the ABL Facility.
Mortgage Notes – In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark
with principal payments which began in 2018. In October 2024, we repaid the entire remaining principal balance of the mortgage
notes of DKK 142.5 million ($20.7 million).
Finance leases and other financing arrangements – In addition to finance leases, we include loans secured by equipment in
this category. As of December 31, 2024, we had $61.1 million outstanding in this category, with maturities ranging from 2024 to
2031.
As of December 31, 2024, we were in compliance with the terms of all our Credit Facilities and the indentures governing the
Senior Notes.
The future maturities of debt, excluding unamortized debt issuance costs and original issue discounts as of December 31,
2024, are as follows:
(amounts in thousands)
2025
$
30,927
2026
18,479
2027
414,994
2028
371,227
2029
3,377
Note 13. Deferred Credits and Other Liabilities
Included in deferred credits and other liabilities is the long-term portion of the following liabilities:
(amounts in thousands)
December 31,
2024
December 31,
2023
Warranty liability (Note 11)
$
28,895 $
30,428
Uncertain tax positions (Note 15)
23,545
36,804
Workers' compensation claims accrual
20,783
21,875
Environmental contingencies (Note 25)
11,500
11,500
Other liabilities
5,095
4,224
Long term derivative liability (Note 23)
36
—
Total deferred credits and other liabilities
$
89,854 $
104,831
F-25
Note 14. Segment Information
We report our segment information in the same way management internally organizes the business to assess performance and
make decisions regarding allocation of resources in accordance with ASC 280-10 - Segment Reporting. Management, inclusive of the
CODM, reviews net revenues and Adjusted EBITDA from continuing operations to evaluate segment performance and allocate
resources. We define Adjusted EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted
for the following items: income tax expense (benefit); depreciation and amortization; interest expense (income), net; and certain
special items consisting of non-recurring net legal and professional expenses and settlements; goodwill impairment; restructuring and
asset-related charges; M&A related costs; net (gain) loss on sale of business, property, and equipment; loss on extinguishment and
refinancing of debt; share-based compensation expense; pension settlement charges; non-cash foreign exchange transaction/translation
(gain) loss; and other special items. We use Adjusted EBITDA from continuing operations because we believe this measure assists
investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that
we do not believe are indicative of our core operating performance. For each of our segments, our CODM uses Adjusted EBITDA to
measure operational performance by comparing historical, actual and forecasted amounts on a regular basis, and to allocate resources
in the annual budget and forecasting process. Adjusted EBITDA is also a significant performance measure in our annual incentive
compensation.
We have two reportable segments, organized and managed principally in geographic regions: North America and Europe. We
report all other business activities in Corporate and unallocated costs. The Company’s two reportable segments are defined as follows:
North America – Within our North America segment, the Company supplies windows and doors for residential and
commercial markets, serving both new construction and repair & remodel projects. These products reach builders, repair and
replacement contractors, architects, and homebuilders through direct and indirect channels, including dealer and distribution networks.
Europe – Within our Europe Segment, the Company manufactures and supplies to retailers, merchants, house-builders and
construction companies’ interior doors, doorsets and door kits, in wood and steel, with both standard and high-performance features.
Factors considered in determining the two reportable segments include the nature of business activities, the management
structure accountable directly to the CODM, the discrete financial information regularly provided to the CODM, and information
presented to the Board of Directors and investors. The CODM is the CEO. No operating segments have been aggregated for our
presentation of reportable segments.
F-26
The following tables set forth certain information relating to our segments’ operations:
Year Ended December 31, 2024
(amounts in thousands)
North
America
Europe
Total
Revenues from external customers
$ 2,708,371 $ 1,067,221 $
3,775,592
Intersegment net revenues
130
7,664
7,794
Total segment net revenues
$ 2,708,501 $ 1,074,885 $
3,783,386
Reconciliation of Revenue
Elimination of intersegment net revenues
(7,794)
Total consolidated net revenues
$
3,775,592
Less:
Adjusted cost of sales
$ 2,232,991 $
848,021 $
3,081,012
Adjusted selling, general and administrative
301,739
179,053
480,792
Other segment items(1)
(80,430)
(27,566)
(107,996)
Adjusted EBITDA from continuing operations
$
254,071 $
67,713 $
321,784
Total Reportable Segment Adjusted EBITDA
$
321,784
Less:
Depreciation and amortization
125,786
Interest expense, net
67,237
Corporate and unallocated costs
46,536
Special items:
Net legal and professional expenses and settlements
62,722
Goodwill impairment
94,801
Restructuring and asset-related charges
68,092
M&A related costs
15,296
Net gain on sale of business, property, and equipment
(13,752)
Loss on extinguishment and refinancing of debt
1,908
Share-based compensation expense
15,465
Non-cash foreign exchange transaction/translation gain
(3,101)
Other special items
11,612
Loss from continuing operations, before tax
$
(170,818)
(1) Other segment items included depreciation and amortization which are included as a component of the significant expense categories regularly
provided to the CODM above but are not included in the measure of segment profit, as well as other items which are excluded from the categories
regularly provided to the CODM, which included:
North America - Refund of deposits for antidumping and countervailing duties on wood mouldings and millwork products purchased from
China from 2022 to 2023 and pension expense.
Europe - Foreign currency losses, pension expense and energy subsidies.
Year Ended December 31, 2024
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Depreciation and amortization
$
73,528 $
30,702 $
21,556 $
125,786
Capital expenditures
127,358
39,786
6,573
173,717
Segment assets
1,614,239
702,053
303,877
2,620,169
F-27
Year Ended December 31, 2023
(amounts in thousands)
North
America
Europe
Total
Revenues from external customers
$ 3,123,056 $ 1,181,278 $
4,304,334
Intersegment net revenues
214
5,840
6,054
Total segment net revenues
$ 3,123,270 $ 1,187,118 $
4,310,388
Reconciliation of Revenue
Elimination of intersegment net revenues
(6,054)
Total consolidated net revenues
$
4,304,334
Less:
Adjusted cost of sales
$ 2,520,427 $
950,962 $
3,471,389
Adjusted selling, general and administrative
308,333
184,168
492,501
Other segment items(1)
(87,893)
(35,307)
(123,200)
Adjusted EBITDA from continuing operations
$
382,189 $
81,455 $
463,644
Total Reportable Segment Adjusted EBITDA
$
463,644
Less:
Depreciation and amortization
134,996
Interest expense, net
72,258
Corporate and unallocated costs
83,205
Special items:
Net legal and professional expenses and settlements
28,184
Restructuring and asset-related charges
35,741
M&A related costs
6,575
Net gain on sale of business, property, and equipment
(10,523)
Loss on extinguishment and refinancing of debt
6,487
Share-based compensation expense
17,477
Pension settlement charge
4,349
Non-cash foreign exchange transaction/translation loss
595
Other special items
(4,274)
Income from continuing operations, before tax
$
88,574
(1) Other segment items included depreciation and amortization which are included as a component of the significant expense categories
regularly provided to the CODM above but are not included in the measure of segment profit, as well as other items which are excluded from the
categories regularly provided to the CODM, which include:
North America - Refund of deposits for antidumping and countervailing duties on wood mouldings and millwork products purchased from
China from 2020 to 2022, ERC from the U.S. government and pension expense.
Europe - Energy subsidies, foreign currency gains and pension expense.
Year Ended December 31, 2023
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Depreciation and amortization
$
79,900 $
30,185 $
24,911 $
134,996
Capital expenditures
72,582
25,630
6,441
104,653
Segment assets
1,694,201
944,963
340,961
2,980,125
F-28
Year Ended December 31, 2022
(amounts in thousands)
North
America
Europe
Total
Revenues from external customers
$ 3,259,353 $ 1,284,455 $
4,543,808
Intersegment net revenues
813
341
1,154
Total segment net revenues
$ 3,260,166 $ 1,284,796 $
4,544,962
Reconciliation of Revenue
Elimination of intersegment net revenues
(1,154)
Total consolidated net revenues
$
4,543,808
Less:
Adjusted cost of sales
$ 2,690,184 $ 1,060,552 $
3,750,736
Adjusted selling, general and administrative
295,513
191,602
487,115
Other segment items(1)
(79,229)
(42,024)
(121,253)
Adjusted EBITDA from continuing operations
$
352,885 $
74,325 $
427,210
Total Reportable Segment Adjusted EBITDA
$
427,210
Less:
Depreciation and amortization
113,132
Interest expense, net
82,505
Corporate and unallocated costs
78,363
Special items:
Net legal and professional expenses and settlements
(287)
Goodwill impairment
54,885
Restructuring and asset-related charges
17,622
M&A related costs
9,752
Net gain on sale of business, property, and equipment
(8,036)
Share-based compensation expense
14,577
Non-cash foreign exchange transaction/translation loss
12,437
Other special items
21,996
Income from continuing operations, before tax
$
30,264
(1) Other segment items included depreciation and amortization which are included as a component of the significant expense categories
regularly provided to the CODM above but are not included in the measure of segment profit, as well as other items which are excluded from the
categories regularly provided to the CODM, which include:
North America - Pension gain, credit for overpayments of utility expenses and facility rental income.
Europe - Pension expense, foreign currency losses and cash received from government pandemic assistance programs in Europe as a result
of COVID-19.
Year Ended December 31, 2022
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Depreciation and amortization
$
69,427 $
31,139 $
12,566 $
113,132
Capital expenditures
59,023
19,095
6,356
84,474
Segment assets
1,718,379
947,974
333,516
2,999,869
F-29
Net revenues by locality are as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Net revenues by location of external customer
U.S.
$
2,474,170 $
2,841,921 $
2,978,492
Europe
1,065,250
1,180,075
1,280,364
Canada
217,502
260,897
258,629
South America (including Mexico)
16,763
20,212
22,656
Africa and other
1,907
1,229
3,667
Total
$
3,775,592 $
4,304,334 $
4,543,808
Geographic information regarding property, plant, and equipment which exceed 10% of consolidated property, plant, and
equipment is as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
North America:
U.S.
$
452,644 $
412,195 $
422,428
Other
31,070
33,836
29,587
Total North America
483,714
446,031
452,015
Europe
181,088
180,822
170,346
Corporate:
U.S. and other
16,637
17,389
19,643
Total property and equipment, net
$
681,439 $
644,242 $
642,004
Note 15. Income Taxes
Income before taxes, is comprised of the following:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Domestic (loss) income
$
(133,002) $
11,217 $
63,130
Foreign (loss) income
(37,816)
77,357
(32,866)
Total (loss) income before taxes
$
(170,818) $
88,574 $
30,264
Our foreign (loss) income is historically driven by our subsidiaries in Canada, Germany, Denmark, and United Kingdom.
Significant components of the provision for income taxes are as follows:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Federal
$
231 $
(2,464) $
407
State
732
1,753
1,103
Foreign
32,783
40,452
19,558
Current taxes
33,746
39,741
21,068
Federal
(16,227)
4,220
14,075
State
668
7,757
(4,854)
Foreign
(1,425)
11,621
(12,248)
Deferred taxes
(16,984)
23,598
(3,027)
Total provision for income taxes
$
16,762 $
63,339 $
18,041
F-30
Reconciliation of the U.S. federal statutory income tax rate to our effective tax rate is as follows:
Year Ended December 31,
2024
2023
2022
(amounts in thousands)
Amount
%
Amount
%
Amount
%
Statutory rate
$
(35,860)
21.0%
$
18,601
21.0%
$
6,355
21.0%
State income tax, net of federal benefit
(3,093)
1.8%
1,959
2.2%
2,154
7.1%
Foreign source dividends and deemed
inclusions
945
(0.6)%
1,906
2.2%
(237)
(0.8)%
Valuation allowance
24,595
(14.4)%
32,666
36.9%
(11,256)
(37.2)%
Nondeductible expenses
5,883
(3.4)%
2,661
3.0%
2,097
6.9%
Goodwill impairment
20,163
(11.8)%
—
—%
12,735
42.1%
Equity based compensation
1,245
(0.7)%
4,086
4.6%
2,486
8.2%
Foreign tax rate differential
(3,770)
2.2%
(488)
(0.6)%
(1,365)
(4.5)%
Tax rate differences and credits
1,078
(0.6)%
3,675
4.1%
3,469
11.5%
Uncertain tax positions
(889)
0.5%
(174)
(0.2)%
2,966
9.8%
Tax effect on sale of business(1)
4,099
(2.4)%
—
—%
—
—%
Prior year provision to return adjustments
1,451
(0.8)%
(571)
(0.6)%
(789)
(2.6)%
Other
915
(0.6)%
(982)
(1.1)%
(574)
(1.9)%
Effective tax rate
$
16,762
(9.8)%
$
63,339
71.5%
$
18,041
59.6%
(1)
Tax effect on sale of business during the year ended December 31, 2024, primarily relates to the sale of our business in St. Kitts.
During the year ended December 31, 2024, we recognized an expense of $24.6 million from the increase to valuation
allowances on foreign and state NOL and credit carryforwards, $20.2 million of tax expense attributable to nondeductible goodwill
impairment, $7.1 million of tax expense attributed to nondeductible expenses, and $4.5 million of tax expense attributed to the
expiration of U.S. attributes partially offset by $2.7 million of tax benefit attributable to research and development credits.
During the year ended December 31, 2023, we recognized an expense of $32.7 million from the increase to valuation
allowances on foreign and state NOL and credit carryforwards, $6.7 million of tax expense attributed to nondeductible expenses, and
$7.2 million of tax expense attributed to the expiration of federal and state tax credit carryforwards partially offset by $3.8 million of
tax benefit attributable to research and development credits.
During the year ended December 31, 2022, we recognized benefit of $9.9 million from the reduction to state NOL and state
credits valuation allowance, and $1.9 million of tax benefit attributable to research and development tax credits, partially offset by
$12.7 million tax expense attributable to nondeductible goodwill impairment.
F-31
Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of our
assets, liabilities, and operating loss carryforwards. Significant deferred tax assets and liabilities are as follows:
(amounts in thousands)
December 31,
2024
December 31,
2023
Net operating loss and tax credit carryforwards
$
189,202
157,790
Operating lease liabilities
36,127
24,210
Employee benefits and compensation
20,096 $
24,894
Accrued liabilities and other
26,146
46,944
Inventory
5,418
7,255
Allowance for credit losses
3,092
3,789
Investments and marketable securities
283
522
Capitalized research and development expenses
39,329
31,782
Gross deferred tax assets
319,693
297,186
Valuation allowance
(78,136)
(54,786)
Deferred tax assets
241,557
242,400
Depreciation and amortization
(68,188)
(74,328)
Operating lease assets
(33,437)
(22,442)
Investment in subsidiaries
(2,347)
(2,347)
Deferred tax liabilities
(103,972)
(99,117)
Net deferred tax assets
$
137,585 $
143,283
Balance sheet presentation:
Non-current assets
$
143,284 $
150,453
Non-current liabilities
(5,699)
(7,170)
Net deferred tax assets
$
137,585 $
143,283
At December 31, 2024 and 2023 the Company had NOL in various federal, state, and foreign jurisdictions of approximately
$1,152.4 million and $1,130.2 million, respectively, which begin to expire in 2025. $252.6 million of such NOL carryforwards do not
expire. In addition, the Company had tax credit carryforwards of $44.3 million and $40.3 million at December 31, 2024 and 2023,
respectively, which begin to expire in 2025.
Valuation Allowance – The realization of deferred tax assets is based on historical tax positions and estimates of future
taxable income. We evaluate both the positive and negative evidence that we believe is relevant in assessing whether we will realize
the deferred tax assets. We consider historical taxable income, the scheduled reversal of deferred tax liabilities (including the effect in
available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment. A
valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. To
fully utilize the NOLs and tax credits carryforwards, we will need to generate sufficient future taxable income in each respective
jurisdiction before the expiration of the deferred tax assets governed by the applicable tax code.
Based on the level of historical taxable income and projections for future taxable income over the periods for which the
deferred tax assets are deductible, management believes that it is more likely than not that we will realize the benefits of these
deductible differences, net of existing valuation allowances at December 31, 2024. The amount of the deferred tax asset considered
realizable, however, could be reduced or increased in the near term if estimates of future taxable income during the carryforward
periods are reduced or exceeded.
Subsequently recognized tax benefits related to the valuation allowance for deferred tax assets as of December 31, 2024, will
be allocated to consolidated statement of operations.
We had a valuation allowance of $78.1 million and $54.8 million as of December 31, 2024 and 2023, respectively. The
increase was primarily driven by an increase of $19.2 million and an increase of $5.3 million against our foreign and state net
operating loss carryforwards, respectively.
We had a valuation allowance of $54.8 million and $21.0 million as of December 31, 2023 and 2022, respectively. The
increase was primarily driven by an increase of $30.0 million and $2.7 million against our foreign and state net operating loss
carryforwards, respectively.
F-32
The following is the activity in our valuation allowance:
(amounts in thousands)
2024
2023
2022
Balance as of January 1,
$
(54,786) $
(21,048) $
(31,825)
Valuation allowances established
(7)
11
(28)
Changes to existing valuation allowances
(24,462)
(32,830)
(31)
Release of valuation allowances
15
1
9,918
Currency translation
1,104
(920)
918
Balance at period end
$
(78,136) $
(54,786) $
(21,048)
Earnings of Foreign Subsidiaries – The Company continually evaluates its global cash needs. During 2021, the Company
removed its indefinite reinvestment assertion on a majority of unremitted earnings and certain other aspects of outside basis
differences in its foreign subsidiaries. Deferred tax expense of $5.0 million was recorded for withholding and income taxes which
would be owed if earnings were remitted to the U.S. parent. In 2023, the Company completed its sale of the Australasia business and
correspondingly reduced its deferred tax liability related to the Australasia unremitted earnings in 2023. As of December 31, 2024, we
have $2.3 million of deferred tax liability remaining on our balance sheet. The Company continued to make an indefinite reinvestment
assertion on other aspects of the outside basis difference in foreign subsidiaries that would attract a tax cost in excess of the
Company’s cost of capital.
The Company repatriated $71.3 million and $21.8 million from certain foreign jurisdictions for the years ended December 31,
2024 and 2023, respectively. The Company is asserting that its future earnings, in excess of previously taxed earnings, are
permanently reinvested as of December 31, 2024. The Company continues to make an indefinite reinvestment assertion on other
aspects of the outside basis differences in foreign subsidiaries that would attract a significant cost of capital. No additional deferred tax
expense is recorded on prospective earnings. We hold a combined book-over-tax outside basis difference of $187.5 million and
$245.1 million as of December 31, 2024 and 2023, respectively, in our investment in foreign subsidiaries on a continuing operations
basis and may incur up to $22.1 million of local country income and withholding taxes in case of distribution of unremitted earnings.
Dual-Rate Jurisdiction – Estonia and Latvia tax the corporate profits of resident corporations at different rates depending
upon whether the profits are distributed. The undistributed profits of resident corporations are exempt from taxation while any
distributed profits are subject to a 20% - 22% corporate income tax rate. The liability for the tax on distributed profits is recorded as an
income tax expense in the period in which a dividend is declared. The balance of retained earnings of our Estonian subsidiary which, if
distributed, would be subject to this tax was $87.3 million and $85.0 million as of December 31, 2024 and 2023, respectively. The
balance of retained earnings of our Latvian subsidiary which, if distributed, would be subject to this tax was $32.6 million and $32.8
million as of December 31, 2024 and 2023, respectively.
Tax Payments and Balances – We made tax payments of $48.1 million, $48.8 million and $46.8 million during the years
ended December 31, 2024, 2023 and 2022, respectively, primarily for foreign liabilities. We received tax refunds of $2.0 million, $0.7
million and $1.9 million during the years ended December 31, 2024, 2023 and 2022, respectively. Total receivables for tax refunds are
recorded in other current assets in the accompanying balance sheets and totaled $15.3 million and $14.2 million at December 31, 2024
and 2023, respectively. Foreign payables for taxes are recorded in accrued income taxes payable in the accompanying balance sheets
and totaled $7.4 million and $9.3 million at December 31, 2024 and 2023, respectively. We have $18.9 million of non-current taxes
receivable as of December 31, 2024. We do not have any non-current taxes receivable as of December 31, 2023. We do not have any
non-current taxes payable as of December 31, 2024 and 2023.
Accounting for Uncertain Tax Positions – A reconciliation of the beginning and ending amounts of unrecognized tax
benefits excluding interest and penalties is as follows:
(amounts in thousands)
2024
2023
2022
Balance as of January 1,
$
38,900 $
29,300 $
26,825
Increase for tax positions taken during the prior period
8,899
14,320
4,565
Decrease for tax positions taken during the prior period
(742)
—
—
Decrease for settlements with taxing authorities
(2,267)
(7,347)
(1,527)
Increase for tax positions taken during the current period
973
1,472
709
Decrease due to statute expiration
(307)
(159)
(75)
Currency translation
(1,673)
1,314
(1,197)
Balance at period end - unrecognized tax benefit
$
43,783 $
38,900 $
29,300
F-33
Unrecognized tax benefits were $43.8 million, $38.9 million and $29.3 million at December 31, 2024, 2023 and 2022,
respectively. The increase is primarily related to management’s assessment of a potential liability as a result of ongoing tax audit
discussions in Europe as well as uncertainty on prior years’ research and development tax credits in the U.S. The unrecognized tax
benefit recorded in the current year is partially offset by an increase in deferred tax assets expected to be recovered should these
liabilities be assessed. Interest and penalties related to UTPs are reported as a component of tax expense and included in the total UTP
balance within deferred credits and other liabilities in the accompanying consolidated balance sheets. There were amounts accrued
associated with interest and penalties of $3.7 million, $6.7 million and $9.8 million at December 31, 2024, 2023 and 2022,
respectively.
There were benefits of $6.6 million, $12.3 million and $18.1 million included in the balance of unrecognized tax benefits as
of December 31, 2024, 2023 and 2022, respectively, that would affect the effective tax rate if recognized. Such benefits, if recognized,
would be subject to a realizability assessment to the extent they increase our tax attributes. We cannot reasonably estimate the
conclusion of certain non-U.S. income tax examinations and its outcome at this time.
We operate in numerous U.S., state, and foreign tax jurisdictions and are generally open to examination for tax years 2012
and forward. As of December 31, 2024, the Company has subsidiaries in various state and foreign jurisdictions under audit for tax
years 2011 through 2022.
Note 16. Capital Stock
Preferred Stock - Our Board of Directors is authorized to issue Preferred Stock from time to time in one or more series and
with such rights, privileges, and preferences as the Board of Directors shall from time to time determine. We have not issued any
shares of Preferred Stock.
Common Stock - Common Stock includes the basis of shares outstanding plus amounts recorded as additional paid-in capital.
Shares outstanding exclude the shares issued to the Employee Benefit Trust that are considered similar to treasury shares and total
193,941 shares at December 31, 2024 and 2023 with a total original issuance value of $12.4 million.
We record share repurchases on their trade date and reduce shareholders’ equity and increase accounts payable. Repurchased
shares are retired, and the excess of the repurchase price over the par value of the shares is charged to retained earnings.
On July 28, 2022, the Board of Directors reduced our previous repurchase authorization of $400.0 million to a total aggregate
value of $200.0 million with no expiration date. As of December 31, 2024, $175.7 million was remaining under the repurchase
program.
During the years ended December 31, 2024, and 2022, we repurchased 1,600,000 and 6,848,356 shares of our Common
Stock at an average price of $15.18 and $19.12, respectively. We did not repurchase shares of our Common Stock during the year
ended December 31, 2023.
Note 17. Earnings Per Share
The basic and diluted income per share calculations were determined based on the following share data:
Year Ended December 31,
2024
2023
2022
Weighted average outstanding shares of Common Stock basic
84,989,963
84,995,515
86,374,499
Restricted stock units, performance share units and options to purchase
Common Stock
—
878,520
700,677
Weighted average outstanding shares of Common Stock diluted
84,989,963
85,874,035
87,075,176
For the year ended December 31, 2024, we had net losses from operations. As a result, no potentially dilutive securities were
included in the denominator for computing diluted loss per share as their inclusion would have been antidilutive.
The following table provides the securities that could potentially dilute basic earnings per share in the future but were not
included in the computation of diluted income per share as their inclusion would be anti-dilutive:
Year Ended December 31,
2024
2023
2022
Common Stock options
1,295,477
1,374,312
1,652,320
Restricted stock units
1,033,944
66,882
738,528
Performance share units
120,824
265,465
133,467
F-34
Note 18. Stock Compensation
In connection with our IPO, the Board adopted, and our shareholders approved, the Omnibus Equity Plan. Under the
Omnibus Equity Plan, equity awards may be made in respect of 9,900,000 shares of our Common Stock and may be granted in the
form of options, restricted stock, RSUs, stock appreciation rights, dividend equivalent rights, share awards, and performance-based
awards (including performance share units and performance-based restricted stock).
Share-based compensation expense included in SG&A expenses totaled $15.5 million, $17.5 million and $14.6 million in
December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, there was $11.3 million of total unrecognized
compensation expense related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the
remaining weighted-average vesting period of 1.4 years.
Stock Options – Generally, stock option awards vest ratably each year on the anniversary date over a three-year period, have
an exercise term of 10 years, and any vested options must be exercised within 90 days of the employee leaving the Company. The
compensation cost of option awards is charged to expense based upon the graded-vesting method over the vesting periods applicable
to the option awards. The graded-vesting method provides for vesting of portions of the overall awards at interim dates and results in
greater expense in earlier years than the straight-line method.
When options are granted, we calculate the fair value of common and Class B-1 Common Stock options using multiple
Black-Scholes option valuation models. Expected volatilities are based upon a selection of public guideline companies. The risk-free
rate was based upon U.S. Treasury rates.
Key assumptions used in the valuation models were as follows:
Year Ended December 31,
2024
2023
2022
Expected volatility
56.10% - 60.17%
55.06% - 58.73%
51.33% - 60.06%
Expected dividend yield rate
0.00%
0.00%
0.00%
Weighted average term (in years)
5.5 - 6.5
5.5 - 6.5
5.5 - 6.5
Weighted average grant date fair value
$7.47 - $10.87
$7.43 - $7.57
$5.69 - $11.96
Risk free rate
4.04% - 4.34%
3.67% - 3.81%
1.91% - 3.51%
The following table represents stock option activity:
Shares
Weighted
Average
Exercise Price
Per Share
Aggregate
Intrinsic
Value
(millions)
Weighted
Average
Remaining
Contract Term
in Years
Outstanding as of January 1, 2022
2,162,022
$
23.31
Granted
534,631
18.18
Exercised
(157,167)
11.89
Forfeited
(822,542)
25.99
Balance as of December 31, 2022
1,716,944
$
21.48
Granted
262,809
13.28
Exercised
(66,170)
8.58
Forfeited
(460,764)
22.00
Balance as of December 31, 2023
1,452,819
$
20.42
Granted
375,312
18.37
Exercised
(220,602)
13.03
Forfeited
(310,863)
21.00
Balance as of December 31, 2024
1,296,666
$
20.94 $
—
6.1
Exercisable as of December 31, 2024
860,744
$
23.25 $
—
4.7
F-35
RSUs – RSUs are subject to the continued service of the recipient through the vesting date, which is generally from issuance.
RSUs granted vest ratably each year on the anniversary date generally over a three-year period rather than at the end of the three-year
period. Once vested, the recipient will receive one share of Common Stock for each RSU. The grant-date fair value per share used for
RSUs was determined using the closing price of our Common Stock on the NYSE on the date of the grant. We apply this grant-date
fair value per share to the total number of shares that we anticipate will fully vest and amortize the fair value to compensation expense
over the vesting period using the straight-line method.
The following table represents RSU activity:
Shares
Weighted
Average
Grant-Date
Fair Value
Per Share
Outstanding as of January 1, 2022
1,826,392
$
23.37
Granted
1,540,246
20.32
Vested
(768,341)
22.31
Forfeited
(600,785)
23.14
Balance as of December 31, 2022
1,997,512
$
21.50
Granted
1,568,729
13.37
Vested
(1,003,799)
22.33
Forfeited
(337,800)
18.42
Balance as of December 31, 2023
2,224,642
$
15.86
Granted
1,043,317
18.04
Vested
(808,679)
17.44
Forfeited
(669,184)
16.27
Balance as of December 31, 2024
1,790,096
$
16.27
PSUs – PSUs are subject to continued employment of the recipient through the vesting date, which is on the third anniversary
of the grant. Once vested, the recipient will receive one share of Common Stock for each vested PSU.
For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted
performance measures of Adjusted EBITDA and Free Cash Flow, each as reported over the applicable three-year performance period
and is adjusted based upon a market condition measured by our TSR over the applicable three-year performance period as compared to
the TSR of the Russell 3000 index. For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout
factor consisting of equally weighted pre-set three-year performance targets on ROIC and TSR. The fair value of the award is
estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on
historical volatility, risk free rates of return, and correlation matrix.
F-36
The following table represents PSU activity for the awarded shares at target performance measures:
Shares
Weighted
Average
Grant-Date
Fair Value
Per Share
Outstanding as of January 1, 2022
704,263
$
25.39
Granted
158,587
29.24
Vested
(202,673)
22.20
Forfeited
(380,361)
27.79
Balance as of December 31, 2022
279,816
$
26.61
Granted
307,273
28.67
Forfeited
(329,293)
26.98
Balance as of December 31, 2023
257,796
$
28.59
Granted
433,735
22.27
Vested
(1,567)
30.70
Forfeited
(154,504)
25.59
Balance as of December 31, 2024
535,460
$
24.33
Note 19. Restructuring and Asset-Related Charges
We engage in restructuring activities focused on improving productivity and operating margins. Restructuring costs primarily
relate to costs associated with workforce reductions, plant consolidations and closures, and changes to the management structure to
align with our operations. Other restructuring associated costs primarily consist of equipment relocation and facility restoration costs.
Asset-related charges consist of accelerated depreciation and amortization of assets due to changes in asset useful lives.
The following table summarizes the restructuring and asset-related charges for the periods indicated:
(amounts in thousands)
North
America
Europe
Corporate
and
Unallocated
Costs
Total
Consolidated
Year Ended December 31, 2024
Restructuring severance and employee-related charges
$
14,146 $
16,347 $
1,350 $
31,843
Other restructuring associated costs, net
8,158
5,376
—
13,534
Asset-related charges
20,513
2,006
196
22,715
Other restructuring associated costs and asset-related
charges, net
28,671
7,382
196
36,249
Total restructuring and asset-related charges, net
$
42,817 $
23,729 $
1,546 $
68,092
Year Ended December 31, 2023
Restructuring severance and employee-related charges
$
11,156 $
6,074 $
796 $
18,026
Other restructuring associated costs, net
10,189
(684)
—
9,505
Asset-related charges
7,862
348
—
8,210
Other restructuring associated costs and asset-related
charges, net
18,051
(336)
—
17,715
Total restructuring and asset-related charges, net
$
29,207 $
5,738 $
796 $
35,741
Year Ended December 31, 2022
Restructuring severance and employee-related charges
$
6,842 $
3,773 $
3,223 $
13,838
Other restructuring associated costs, net
—
1,253
156
1,409
Asset-related charges
496
1,016
863
2,375
Other restructuring associated costs and asset-related
charges, net
496
2,269
1,019
3,784
Total restructuring and asset-related charges, net
$
7,338 $
6,042 $
4,242 $
17,622
F-37
The following is a summary of the restructuring accruals recorded and charges incurred:
(amounts in thousands)
2024
2023
2022
Balance as of January 1
$
3,375 $
5,021 $
153
Current period charges, net
45,377
27,531
15,247
Payments
(40,879)
(29,367)
(10,273)
Currency translation
(268)
190
(106)
Balance at period end
$
7,605 $
3,375 $
5,021
Restructuring accruals are expected to be paid within the next 12 months and are included within accrued expenses and other
current liabilities in the consolidated balance sheet.
On April 11, 2024, we announced plans to close two manufacturing facilities, located in Vista, California and Hawkins,
Wisconsin in a continuing effort to simplify our footprint and drive operational efficiencies. As of December 31, 2024, the remaining
restructuring accrual for these plans is $0.8 million and the remaining cash outlay is expected to be $4.4 million. We expect to
substantially complete the facility closures by the first quarter of 2025.
Costs and cash outlays associated with the plans:
(amounts in thousands)
December 31,
2024
Restructuring severance and employee-related charges, net(1)
$
6,800 $
6,825 $
6,825
Other restructuring associated costs(1)
7,000
4,511
4,511
Product-related cash charges(2)
6,000
5,985
5,985
Total cash charges
19,800
17,321
17,321
Asset-related charges(1)
12,300
12,261
12,261
Inventory and other product-related non-cash charges(3)
3,700
3,706
3,706
Total non-cash charges
16,000
15,967
15,967
Total costs
$
35,800 $
33,288 $
33,288
Total cash outlays(4)
$
26,300 $
21,852 $
21,852
North America: Vista, California (Vista Composite Facility) and Hawkins,
Wisconsin
Total
Estimated
Costs
Cumulative
Costs to-date
Costs in the
Year Ended
(1)
The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges, net in the
accompanying consolidated statement of operations.
(2)
$4.1 million and $1.9 million of the product-related cash charges incurred in the year ended December 31, 2024, were detrimental
to net sales and cost of sales, respectively, in the accompanying consolidated statement of operations.
(3)
The inventory and other product-related non-cash charges in the year ended December 31, 2024, were included in cost of sales in
the accompanying consolidated statement of operations.
(4)
Total cash outlays includes $5.5 million of estimated cash payments related to debt repayment for financed equipment.
During 2023, we announced plans to transform our European operations by changing the operating structure, eliminating
certain roles and rationalizing our manufacturing footprint. We plan to close two manufacturing facilities and transfer production to
other facilities within Europe. During the year ended December 31, 2024, we announced additional plans, increasing the total
estimated costs by approximately $3.3 million to $24.1 million, after identifying additional opportunities to optimize our European
operating structure. As of December 31, 2024, the remaining restructuring accrual for these plans is $4.0 million and the remaining
cash outlay is expected to be $5.3 million. We expect to substantially complete these initiatives by the end of 2025.
F-38
Costs and cash outlays associated with the plans:
Europe
Total
Estimated
Costs
Cumulative
Costs to-date
Costs in the
Year Ended
Costs in the
Year Ended
(amounts in thousands)
December 31,
2024
December 31,
2023
Restructuring severance and employee-related charges(1)
$
18,200 $
17,365 $
14,283 $
3,082
Other restructuring associated costs(1)
5,300
5,149
4,725
424
Total cash charges
23,500
22,514
19,008
3,506
Asset-related non-cash charges(1)
600
600
573
27
Total costs
$
24,100 $
23,114 $
19,581 $
3,533
Total cash outlays
$
23,500 $
18,200 $
16,100 $
2,100
(1)
The charges incurred in the years ended December 31, 2024 and 2023, were included in restructuring and asset-related charges in
the accompanying consolidated statements of operations.
In the third quarter of 2024, we announced plans to close two additional manufacturing facilities in Europe as part of our
footprint rationalization activities. As of December 31, 2024, the remaining restructuring accrual for these plans is $1.2 million and the
remaining cash outlay is expected to be $8.6 million. We expect to substantially complete the facility closures by the end of 2026.
Costs and cash outlays associated with the plans:
Europe: Sheffield, England and Logstor, Denmark
Total
Estimated
Costs
Cumulative
Costs to-date
Costs in the
Year Ended
(amounts in thousands)
December 31,
2024
Restructuring severance and employee-related charges(1)
$
5,300 $
2,142 $
2,142
Other restructuring associated costs(1)
4,900
665
665
Total cash charges
10,200
2,807
2,807
Asset-related non-cash charges(1)
1,700
837
837
Total costs
$
11,900 $
3,644 $
3,644
Total cash outlays
$
10,200 $
1,600 $
1,600
(1)
The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges in the
accompanying consolidated statement of operations.
In the third quarter of 2023, we announced plans to close two manufacturing facilities, located in Tijuana, Mexico and Vista,
California as part of our footprint rationalization activities. As of December 31, 2024, the remaining restructuring accrual for these
plans is $0.4 million and the remaining cash outlay is expected to be $0.5 million. We are substantially complete with the facility
closures by the end of 2024.
F-39
Costs and cash outlays associated with the plans:
North America: Tijuana, Mexico and Vista, California
(Vista Vinyl Facility)
Total
Estimated
Costs
Cumulative
Costs to-date
Costs in the
Year Ended
Costs in the
Year Ended
(amounts in thousands)
December 31,
2024
December 31,
2023
Restructuring severance and employee-related charges(1)
$
7,800 $
7,631 $
(182) $
7,813
Other restructuring associated costs(1)
2,700
2,633
2,032
601
Total cash charges
10,500
10,264
1,850
8,414
Asset-related charges(1)
6,600
6,628
2,919
3,709
Inventory and other product-related non-cash charges(2)
1,500
1,466
—
1,466
Total non-cash charges
8,100
8,094
2,919
5,175
Total costs
$
18,600 $
18,358 $
4,769 $
13,589
Total cash outlays
$
10,400 $
9,932 $
3,305 $
6,627
(1)
The charges incurred in the years ended December 31, 2024 and 2023, were included in restructuring and asset-related charges in
the accompanying consolidated statements of operations.
(2)
The inventory and other product-related non-cash charges incurred during 2023 were included in cost of sales in the consolidated
statement of operations.
In the third quarter of 2024, we announced to employees a restructuring plan to close a manufacturing facility in Wedowee,
Alabama in a continuing effort to simplify our footprint and drive operational efficiencies. As of December 31, 2024, the remaining
restructuring accrual for this plan is $0.1 million and the remaining cash outlay is expected to be $0.4 million. We expect to
substantially complete the facility closure by the first quarter of 2025.
Costs and cash outlays associated with the plans:
North America: Wedowee, Alabama
Total
Estimated
Costs
Cumulative
Costs to-date
Costs in the
Year Ended
(amounts in thousands)
December 31,
2024
Restructuring severance and employee-related charges(1)
$
1,000 $
986 $
986
Other restructuring associated costs(1)
500
249
249
Total cash charges
1,500
1,235
1,235
Inventory non-cash charges(2)
2,100
2,112
2,112
Total costs
$
3,600 $
3,347 $
3,347
Total cash outlays
$
1,500 $
1,112 $
1,112
(1)
The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges in the
accompanying consolidated statement of operations.
(2)
The inventory and other product-related non-cash charges in the year ended December 31, 2024, were included in cost of sales in
the accompanying consolidated statement of operations.
In the first quarter of 2023, we announced to employees a restructuring plan to close a manufacturing facility in Atlanta,
Georgia. We completed the plant closure during 2023, with total pre-tax restructuring expenses and other closure costs of
approximately $17.7 million, including $1.1 million of capital expenditures, and total cash outlays of approximately $12.9 million.
The primary expenses incurred were accelerated depreciation and amortization, equipment relocation costs, and restructuring
severance and employee-related charges.
Note 20. Held for Sale
During 2021, the Company ceased the appeal process for its litigation with Steves further described in Note 25 -
Commitments and Contingencies. As a result, we are required to divest the Company’s Towanda, PA operations. As of December 31,
2024 and 2023, the assets and liabilities associated with the court-ordered divestiture of Towanda qualify as held for sale. Since the
Company will continue manufacturing door skins for its internal needs, the court-ordered divestiture decision did not represent a
strategic shift thereby precluding the court-ordered divestiture as qualifying as a discontinued operation.
F-40
The Company records net assets held for sale at the lower of the carrying value or fair value less costs to sell. Effective
December 13, 2024, pursuant to an order issued by the United States District Court for the Eastern District of Virginia, Richmond
Division, JWI entered into an Asset Purchase Agreement to sell JWI’s Towanda, Pennsylvania business and related assets for a
purchase price of approximately $115 million, subject to certain adjustments and closing conditions.
Effective January 17, 2025, pursuant to an order issued by the United States District Court for the Eastern District of
Virginia, Richmond Division, and the previously announced Asset Purchase Agreement dated October 11, 2024 and effective
December 13, 2024, JWI completed the sale of its Towanda, Pennsylvania business. In connection with the Asset Purchase
Agreement, the Company recognized a $31.4 million goodwill impairment charge.
As of December 31, 2024 and 2023, the assets and liabilities classified as held for sale are those of Towanda.
As of December 31, 2024 and 2023, the related assets and liabilities included within the summary below were expected to be
disposed of within the next twelve months and are included in assets held for sale and liabilities held for sale in the accompanying
consolidated balance sheets.
(amounts in thousands)
December 31,
2024
December 31,
2023
Assets:
Accounts receivable, net(1)
$
9,072 $
—
Inventories
16,319
17,337
Other current assets
84
108
Property and equipment, net
64,661
50,672
Intangible assets, net
1,471
1,471
Goodwill
33,644
65,000
Operating lease assets, net
2,411
975
Allowance to reduce assets to estimated fair value, less costs to sell
(750)
—
Assets held for sale
$
126,912 $
135,563
Liabilities:
Accounts payable(1)
$
7,431 $
—
Accrued payroll and benefits
1,013
901
Accrued expenses and other current liabilities
5,959
6,126
Operating lease liability
905
37
Liabilities held for sale
$
15,308 $
7,064
(1)
The accounts receivable, net and accounts payable balances of Towanda will be assumed by the Purchaser upon closing per the
Asset Purchase Agreement.
Note 21. Interest Expense, Net
Interest expense, net is net of capitalized interest and interest income. Capitalized interest incurred during the construction
phase of significant property and equipment additions totaled $1.9 million, $1.1 million and $0.9 million for the years ended
December 31, 2024, 2023 and 2022, respectively. In the year ended December 31, 2024, we recognized increased interest income
from interest income on temporary invested cash. We recognized interest income of $19.0 million and $5.8 million in the years ended
December 31, 2023 and 2022, respectively, primarily from gains on our interest rate swap agreements reclassified to interest income.
Refer to Note 23 - Derivative Financial Instruments for more information. Interest expense, net also includes amortization of debt
issuance costs that are amortized using the effective interest method and amortization of original issue discounts.
F-41
Note 22. Other Income, Net
The table below summarizes the amounts included in other income, net in the accompanying consolidated statements of
operations:
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Cash received on investment in real estate
$
(7,888) $
—
$
—
Income from refund of deposits for China antidumping and countervailing
duties(1)
(7,166)
(6,984)
—
JW Australia Transition Services Agreement cost recovery
(6,569)
(8,281)
—
Pension expense (gain)
2,009
6,546
(4,940)
Insurance reimbursement
(1,655)
(2,531)
(6,343)
Recovery of cost from receipts on impaired notes
(1,389)
(3,514)
(13,953)
Governmental assistance(2)
(932)
(1,447)
(1,699)
Foreign currency losses (gains), net
553
(1,614)
(965)
Income from short-term investments and forward contracts related to the JW
Australia divestiture
—
(3,109)
—
Legal settlement income
—
—
(10,500)
U.S. Employee Retention Credit(3)
—
(6,073)
—
Pension plan settlement expense(4)
—
4,349
—
Credit for overpayments of utility expenses
—
—
(1,975)
Other items, net
(1,736)
(3,061)
(13,058)
Total other income, net
$
(24,773) $
(25,719) $
(53,433)
(1)
Represents the refund of deposits for antidumping and countervailing duties on wood mouldings and millwork products
purchased from China from 2020 to 2023.
(2)
Governmental assistance for the year ended December 31, 2024, consisted primarily of a grant received by our North America
business and energy subsidies received by our European businesses. Governmental assistance for the year ended December 31,
2023, consisted primarily of energy subsidies received by our European businesses. Governmental assistance for the year ended
December 31, 2022, consisted primarily of cash received from government pandemic assistance programs in Europe and North
America as a result of COVID-19. During the year ended December 31, 2022, we recognized $0.6 million of government
pandemic assistance within our Europe segment.
(3)
Represents an ERC from the U.S. government during the year ended December 31, 2023. The ERC is a refundable tax credit to
partially refund qualified wages paid to employees that were unable to work during the years ended December 31, 2020 and 2021
due to COVID-related government restrictions.
(4)
Represents a settlement loss associated with our U.S. defined benefit pension plan resulting from a one-time lump sum payment
offered to pension plan participants. Refer to Note 26 - Employee Retirement and Pension Benefits for more information.
Note 23. Derivative Financial Instruments
Foreign currency derivatives not designated as hedges – As a multinational corporation, we are exposed to the impact of
foreign currency fluctuations. To the extent borrowings, sales, purchases, or other transactions are not executed in the local currency
of the operating unit, we are exposed to foreign currency risk. In most of the countries in which we operate, the exposure to foreign
currency movements is limited because the operating revenues and expenses of our business units are substantially denominated in the
local currency. To mitigate the exposure, we may enter into a variety of foreign currency derivative contracts. To manage the effect of
exchange fluctuations on certain intercompany transactions and intercompany loans and interest that are denominated in foreign
currencies, we have foreign currency derivative contracts with a total notional amount of $148.4 million as of December 31, 2024. We
do not use derivative financial instruments for trading or speculative purposes. We record mark-to-market changes in the values of
these derivatives in other income, net. We recorded mark-to-market gains of $0.5 million, losses of $2.7 million and gains of
$1.1 million relating to foreign currency derivatives in the years ended December 31, 2024, 2023 and 2022, respectively.
Foreign currency derivatives designated as cash flow hedges – At the end of 2024 we implemented a hedging program to
manage the potential changes in value associated with the amounts payable on raw material purchases that are denominated in foreign
currencies to minimize the impact of the changes in foreign currencies. We have foreign currency derivative contracts, which qualify
as cash flow hedges, with a total notional amount of $163.3 million. We record gains and losses for these contracts in AOCL to the
extent that these hedges are effective and until we recognize the underlying transactions in net earnings, at which time we recognize
these gains and losses in cost of sales on our consolidated statements of operations.
F-42
Net unrealized pre-tax gains/losses related to foreign currency derivative contracts, which qualify as cash flow hedges
included in other comprehensive income (loss) were a $0.3 million gain for the year ended December 31, 2024. The unrealized
amount in other comprehensive income (loss) will fluctuate based on changes in the fair value of open contracts during each reporting
period.
As of December 31, 2024, approximately $0.3 million in gains is expected to be reclassified to earnings over the next 12
months.
Net investment hedges – On April 18, 2023, we entered into forward contracts to sell a total of AUD 420.0 million and
receive USD at exchange rates ranging from 0.6751 USD to 0.6759 USD to 1.0 AUD to mitigate the impact of the AUD currency
fluctuations on our net investment in JELD-WEN Australia Pty. Ltd. We designated the forward contracts as net investment hedges.
The contracts matured during the quarter ended September 30, 2023, and the gain, net of forward points, was included in the gain on
the sale of JW Australia. The net proceeds are included in the proceeds (payments) related to the sale of JW Australia within our
consolidated statements of cash flows. No portion of these contracts were deemed ineffective during the year ended December 31,
2023.
Interest rate derivatives – We are exposed to interest rate risk in connection with our variable rate long-term debt. In May
2020, we entered into interest rate swap agreements with notional amounts aggregating to $370.0 million to manage this risk. The
interest rate swap agreements matured in December 2023. Initially, the agreements had a weighted average fixed rate of 0.395%
swapped against one-month USD LIBOR floored at 0.00%. In June 2023, we amended the agreements to replace LIBOR with a Term
SOFR based rate. The amended agreements had a weighted average fixed rate of 0.317% swapped against one-month USD-SOFR
CME Term floored at (0.10)%. All other terms and conditions were unchanged. We designated the interest rate swap agreements as
cash flow hedges, and they effectively fixed the interest rate on a corresponding portion of the aggregate debt outstanding under our
Term Loan Facility.
In February 2024, we entered into interest rate collar agreements with a cap rate of 4.50% paid against one-month USD-
SOFR CME Term floored at 3.982% and 3.895% with outstanding notional amounts aggregating to $100.0 million corresponding to
that amount of the debt outstanding under our Term Loan Facility. The interest rate collar agreements were designated as cash flow
hedges of a portion of the interest obligations on our Term Loan Facility borrowings and are set to mature in February 2026.
No portion of these interest rate contracts were deemed ineffective during the year ended December 31, 2024. In other
comprehensive income (loss), we recorded pre-tax mark-to-market gains of $0.4 million, $1.2 million and $17.9 million during the
years ended December 31, 2024, 2023 and 2022, respectively. We reclassified gains of $0.5 million, $17.4 million and $5.0 million
previously recorded in other comprehensive income (loss) to interest income during the years ended December 31, 2024, 2023 and
2022, respectively.
As of December 31, 2024, a nominal loss is expected to be reclassified to interest income over the next 12 months.
Other derivative instruments – From time to time, we enter into other types of derivative instruments immaterial to the
consolidated financial statements. Unless otherwise disclosed, these instruments are not designated as hedging instruments and mark-
to-market adjustments are recorded in the statement of operations each period.
The fair values of derivative instruments held are as follows:
Derivative assets
(amounts in thousands)
Balance Sheet Location
December 31,
2024
December 31,
2023
Derivatives designated as hedging instruments:
Foreign currency forward contracts
Other current assets
$
469 $
—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts
Other current assets
$
1,302 $
1,186
Other derivative instruments
Other current assets
$
— $
38
F-43
Derivative liabilities
(amounts in thousands)
Balance Sheet Location
December 31,
2024
December 31,
2023
Derivatives designated as hedging instruments:
Foreign currency forward contracts
Accrued expenses and other current liabilities
$
135 $
—
Interest rate contracts
Accrued expenses and other current liabilities
$
101 $
—
Interest rate contracts
Deferred credits and other liabilities
$
36 $
—
Other derivative instruments
Accrued expenses and other current liabilities
$
185 $
—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts
Accrued expenses and other current liabilities
$
2,411 $
2,975
Other derivative instruments
Accrued expenses and other current liabilities
$
73
21
Note 24. Fair Value of Financial Instruments
We record financial assets and liabilities at fair value based on FASB guidance related to fair value measurements. The
guidance requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants at the measurement date. Three levels of inputs may be used to measure fair value:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Quoted market-based inputs or unobservable inputs that are corroborated by market data.
Level 3 – Unobservable inputs that are not corroborated by market data.
The recorded carrying amounts and fair values of these instruments were as follows:
December 31, 2024
(amounts in thousands)
Carrying
Amount
Total
Fair Value
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Assets:
Cash equivalents
$
53,935 $
53,935 $
53,935 $
— $
— $
—
Derivative assets, recorded in other current assets
1,771
1,771
—
1,771
—
—
Deferred compensation plan assets, recorded in
other assets
5,074
5,074
—
5,074
—
—
Pension plan assets:
Cash and short-term investments
12,446
12,446
12,446
—
—
—
U.S. Government and agency obligations
37,990
37,990
37,990
—
—
—
Corporate and foreign bonds
126,566
126,566
—
126,566
—
—
Asset-backed securities
26,309
26,309
—
26,309
—
—
Mutual funds
29,502
29,502
—
29,502
—
—
Common and collective funds
29,616
29,616
—
—
—
29,616
Liabilities:
Debt, recorded in long-term debt and current
maturities of long-term debt
$ 1,191,959 $ 1,145,817 $
— $ 1,145,817 $
— $
—
Derivative liabilities, recorded in accrued
expenses and other current liabilities
2,905
2,905
—
2,905
—
—
Derivative liabilities, recorded in deferred credits
and other liabilities
36
36
—
36
—
—
F-44
December 31, 2023
(amounts in thousands)
Carrying
Amount
Total
Fair Value
Level 1
Level 2
Level 3
Assets
measured
at NAV(1)
Assets:
Cash equivalents
$
71,139 $
71,139 $
71,139 $
— $
— $
—
Derivative assets, recorded in other current assets
1,224
1,224
—
1,224
—
—
Deferred compensation plan assets, recorded in other
assets
2,098
2,098
—
2,098
—
—
Pension plan assets:
Cash and short-term investments
17,317
17,317
17,317
—
—
—
U.S. Government and agency obligations
48,600
48,600
48,600
—
—
—
Corporate and foreign bonds
133,819
133,819
—
133,819
—
—
Asset-backed securities
6,885
6,885
—
6,885
—
—
Equity securities
—
—
—
—
—
—
Mutual funds
34,076
34,076
—
34,076
—
—
Common and collective funds
38,882
38,882
—
—
—
38,882
Liabilities:
Debt, recorded in long-term debt and current
maturities of long-term debt
$ 1,232,780 $ 1,209,961 $
— $ 1,209,961 $
— $
—
Derivative liabilities, recorded in accrued expenses
and other current assets
2,996
2,996
—
2,996
—
—
(1)
Certain pension assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not
been classified in the fair value hierarchy. These include investments in large cap equity and commingled real estate funds, which
are valued using the NAV provided by the administrator of the funds. Redemption of these funds is not subject to restriction.
Derivative assets and liabilities reported in level 2 primarily include: (1) as of December 31, 2024, foreign currency
derivative contracts and interest rate collar agreements; (2) as of December 31, 2023, foreign currency derivative contracts. Refer to
Note 23 - Derivative Financial Instruments for more information about our derivative assets and liabilities.
Deferred compensation plan assets reported in level 2 consist of mutual funds and corporate-owned life insurance.
There are no material non-financial assets or liabilities as of December 31, 2024 or December 31, 2023.
Note 25. Commitments and Contingencies
Litigation – We are involved in various legal proceedings, claims, and government audits arising in the ordinary course of
business. We record our best estimate of a loss when the loss is considered probable, and the amount of such loss can be reasonably
estimated. When a loss is probable and there is a range of estimated loss with no best estimate within the range, we record the
minimum estimated liability related to the lawsuit or claim. As additional information becomes available, we reassess the potential
liability and revise our accruals, if necessary. Because of uncertainties related to the resolution of lawsuits and claims, the ultimate
outcome may differ materially from our estimates.
Other than the matters described below, there were no proceedings or litigation matters involving the Company or its
property as of December 31, 2024 that we believe would have a material adverse effect on our consolidated financial position or cash
flows, although they could have a material adverse effect on our operating results for a particular reporting period.
Steves & Sons, Inc. v JELD-WEN, Inc. – We sell molded door skins to certain customers pursuant to long-term contracts, and
these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace.
We gave notice of termination of one of these contracts and, on June 29, 2016, the counterparty to the agreement, Steves & Sons, Inc.
(“Steves”) filed a claim against JWI in the U.S. District Court for the Eastern District of Virginia, Richmond Division (the “Eastern
District of Virginia”). The complaint alleged that our acquisition of CMI, a competitor in the molded door skins market, together with
subsequent price increases and other alleged acts and omissions, violated antitrust laws, and constituted a breach of contract and
breach of warranty. Specifically, the complaint alleged that our acquisition of CMI substantially lessened competition in the molded
door skins market. The complaint sought declaratory relief, ordinary and treble damages, and injunctive relief, including divestiture of
certain assets acquired in the CMI acquisition.
F-45
In February 2018, a jury in the Eastern District of Virginia returned a verdict that was unfavorable to JWI with respect to
Steves’ claims that our acquisition of CMI violated Section 7 of the Clayton Act, and found that JWI breached the supply agreement
between the parties (the “Original Action”). The verdict awarded Steves $12.2 million for past damages under both the Clayton Act
and breach of contract claims and $46.5 million in future lost profits under the Clayton Act claim.
During the course of the proceedings in the Eastern District of Virginia, we discovered certain facts that led us to conclude
that Steves, its principals, and certain former employees of the Company had misappropriated Company trade secrets, violated the
terms of various agreements between the Company and those parties, and violated other laws. On May 11, 2018, a jury in the Eastern
District of Virginia returned a verdict on our trade secrets claims against Steves and awarded damages in the amount of $1.2 million.
The presiding judge entered a judgment in our favor for those damages, and the entire amount has been paid by Steves. On August 16,
2019, the presiding judge granted Steves’ request for an injunction, prohibiting us from pursuing certain claims against individual
defendants pending in Bexar County, Texas (the “Steves Texas Trade Secret Theft Action”). On September 11, 2019, JWI filed a
notice of appeal of the Eastern District of Virginia’s injunction to the Fourth Circuit Court of Appeals (the “Fourth Circuit”).
On March 13, 2019, the presiding judge entered an Amended Final Judgment Order in the Original Action, awarding $36.5
million in past damages under the Clayton Act (representing a trebling of the jury’s verdict) and granted divestiture of certain assets
acquired in the CMI acquisition, subject to appeal. The judgment also conditionally awarded damages in the event the judgment was
overturned on appeal. Specifically, the court awarded $139.4 million as future antitrust damages in the event the divestiture order was
overturned on appeal and $9.9 million as past contract damages in the event both the divestiture and antitrust claims were overturned
on appeal.
On April 12, 2019, Steves filed a petition requesting an award of its fees and a bill of costs, seeking $28.4 million in
attorneys’ fees and $1.7 million in costs in connection with the Original Action. On November 19, 2019, the presiding judge entered
an order for further relief awarding Steves an additional $7.1 million in damages for pricing differences from the date of the
underlying jury verdict through May 31, 2019 (the “Pricing Action”). We also appealed that ruling. On April 14, 2020, Steves filed a
motion for further supplemental relief for pricing differences from the date of the prior order and going forward through the end of the
parties’ current supply agreement (the “Future Pricing Action”). We opposed that request for further relief.
JWI filed a supersedeas bond and notice of appeal of the judgment, which was heard by the Fourth Circuit on May 29, 2020.
On February 18, 2021, the Fourth Circuit issued its decision on appeal in the Original Action, affirming the Amended Final Judgment
Order in part and vacating and remanding in part. The Fourth Circuit vacated the Eastern District of Virginia’s alternative
$139.4 million lost-profits award, holding that award was premature because Steves has not suffered the purported injury on which its
claim for future lost profits rests. The Fourth Circuit also vacated the Eastern District of Virginia’s judgment for Sam Steves, Edward
Steves, and John Pierce on JWI’s trade secrets claims. The Fourth Circuit affirmed the Eastern District of Virginia’s finding of
antitrust injury and its award of $36.5 million in past antitrust damages. It also affirmed the Eastern District of Virginia’s divestiture
order, while clarifying that JWI retains the right to challenge the terms of any divestiture, including whether a sale to any particular
buyer will serve the public interest, and made clear that the Eastern District of Virginia may need to revisit its divestiture order if the
special master who has been appointed by the presiding judge cannot locate a satisfactory buyer. JWI then filed a motion for rehearing
en banc with the Fourth Circuit that was denied on March 22, 2021.
On May 1, 2024, JWI filed a motion to modify the Amended Final Judgment (the “Motion”) with the Eastern District of
Virginia to vacate all court orders requiring divestiture of the Company’s Towanda operations and certain related assets (“Towanda”)
in light of changed industry and market factors and conditions. The court-mandated divestiture process continued while the court
reviewed the Motion. On October 25, 2024, the Special Master submitted a Report and Recommendation to the court recommending
that the court approve the divestiture of Towanda to Woodgrain Inc. (“Woodgrain”) for approximately $115 million, subject to
customary closing adjustments. On November 14, 2024, JWI and Steves each filed certain objections to the Report and
Recommendation. On December 13, 2024, the court adopted the Special Master’s Report and Recommendation, denying JWI’s
Motion, overruling JWI’s objections, and sustaining in part and overruling in part Steves’ objections. The court-ordered divestiture
closed on January 17, 2025.
During the pendency of the Original Action, on February 14, 2020, Steves filed a complaint and motion for preliminary
injunction in the Eastern District of Virginia alleging that we breached the long-term supply agreement between the parties, including,
among other claims, by incorrectly calculating the allocation of door skins owed to Steves (the “Allocation Action”). Steves sought an
additional allotment of door skins and damages for violation of antitrust laws, tortious interference, and breach of contract. On April
10, 2020, the presiding judge granted Steves’ motion for preliminary injunction, and the parties settled the issues underlying the
preliminary injunction on April 30, 2020, and the Company reserved the right to appeal the ruling in the Fourth Circuit. The Company
believed all the claims lacked merit and moved to dismiss the antitrust and tortious interference claims.
F-46
On June 2, 2020, we entered into a settlement agreement with Steves to resolve the Pricing Action, the Future Pricing Action,
and the Allocation Action. As a result of the settlement, Steves filed a notice of satisfaction of judgment in the Pricing Action,
withdrew its Future Pricing Action with prejudice, and filed a stipulated dismissal with prejudice in the Allocation Action. The
Company also withdrew its appeal of the Pricing Action. The parties agreed to bear their own respective attorneys’ fees and costs in
these actions. In partial consideration of the settlement, JWI and Steves entered into an amended supply agreement satisfactory to both
parties that, by its terms, ended on September 10, 2021. This settlement had no effect on the Original Action between the parties
except to agree that certain specific terms of the Amended Final Judgment Order in the Original Action would apply to the amended
supply agreement during the pendency of the appeal of the Original Action. On April 2, 2021, JWI and Steves filed a stipulation
regarding the amended supply agreement in the Original Action, stating that regardless of whether the case remains on appeal as of
September 10, 2021, and absent further order of the court, the amended supply agreement would be extended until the divestiture of
Towanda is complete and Steves’ new supply agreement with the company that acquires Towanda is in effect.
We continue to believe the claims in the settled actions lacked merit and made no admission of liability in these matters.
On October 7, 2021, we entered into a settlement agreement with Steves to resolve the following: (i) Steves’ past and any
future claims for attorneys’ fees, expenses, and costs in connection with the Original Action, except that Steves and JWI each reserved
the right to seek attorneys’ fees arising out of any challenge of the divestiture process or the final divestiture order; (ii) the Steves
Texas Trade Secret Theft Action and the related Fourth Circuit appeal of the Eastern District of Virginia’s injunction in the Original
Action; (iii) the past damages award in the Original Action; and (iv) any and all claims and counterclaims, known or unknown, that
were asserted or could have been asserted against each other from the beginning of time through the date of the settlement agreement.
As a result of the settlement, the parties filed a stipulated notice of satisfaction of the past antitrust damages judgment and a stipulated
notice of settlement of Steves’ claim for attorneys’ fees, expenses, and costs against JWI in the Original Action, and Steves filed a
notice of withdrawal of its motion for attorneys’ fees and expenses and bill of costs in the Original Action. The Company also filed a
notice of dismissal with prejudice and agreed to take no judgment in the Steves Texas Trade Secret Theft Action, and the parties filed
a joint agreement for dismissal of the injunction appeal in the Fourth Circuit. On November 3, 2021, we paid $66.4 million to Steves
under the settlement agreement.
In re JELD-WEN Holding, Inc. Derivative Litigation – On February 2, 2021, Jason Aldridge, on behalf of the Company, filed
a derivative action in the U.S. District Court for the District of Delaware against certain current and former executives and directors of
the Company, alleging that the individual defendants breached their fiduciary duties by allowing the wrongful acts alleged in the
Steves and Cambridge actions, as well as violations of Section 14(a) and 20(a) of the Exchange Act, unjust enrichment, and waste of
corporate assets among other allegations (the “Aldridge Action”). The lawsuit sought compensatory damages, equitable relief, and an
award of attorneys’ fees and costs. The plaintiff filed an amended complaint on May 10, 2021.
On June 21, 2021, prior to a response from the Company in the Aldridge Action, Shieta Black and the Board of Trustees of
the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust, on behalf of the Company, filed a derivative action
in the U.S. District Court for the District of Delaware against certain current and former executives and directors of the Company and
Onex Corporation (“Onex”), alleging that the defendants breached their fiduciary duties by allowing the wrongful acts alleged in the
Steves and Cambridge actions, as well as insider trading, and unjust enrichment among other allegations (the “Black Action”). The
lawsuit sought compensatory damages, corporate governance reforms, restitution, equitable relief, and an award of attorneys’ fees and
costs. The court granted the Black and Aldridge plaintiffs in motion to consolidate the lawsuits on July 16, 2021.
On June 20, 2022, the parties entered into a settlement agreement of the consolidated matters, which was approved by the
Court on approval of the December 20, 2022, and the cases were dismissed with prejudice. In January 2023, the Company, as putative
plaintiff, received approximately $10.5 million after attorneys’ fees and costs were deducted as part of the settlement.
F-47
Canadian Antitrust Litigation – On May 15, 2020, Développement Émeraude Inc., on behalf of itself and others similarly
situated, filed a putative class action lawsuit against the Company and Masonite in the Superior Court of the Province of Quebec,
Canada, which was served on us on September 18, 2020 (“the Quebec Action”). The putative class consists of any person in Canada
who, since October 2012, purchased one or more interior molded doors from the Company or Masonite. The suit alleges an illegal
conspiracy between the Company and Masonite to agree on prices, the distribution of market shares and/or the production levels of
interior molded doors and that the plaintiffs suffered damages in that they were charged and paid higher prices for interior molded
doors than they would have had to pay but for the alleged anti-competitive conduct. The plaintiffs are seeking compensatory and
punitive damages, attorneys’ fees and costs. On September 9, 2020, Kate O’Leary Swinkels, on behalf of herself and others similarly
situated, filed a putative class action against the Company and Masonite in the Federal Court of Canada, which was served on us on
September 29, 2020 (the “Federal Court Action”). The Federal Court Action makes substantially similar allegations to the Quebec
Action and the putative class is represented by the same counsel. In February 2021, the plaintiff in the Federal Court Action issued a
proposed Amended Statement of Claim that replaced the named plaintiff, Kate O’Leary Swinkels, with David Regan. The plaintiff has
sought a stay of the Quebec Action while the Federal Court Action proceeds. On July 14, 2023, the Company entered into an
agreement in principle with class counsel to resolve both actions for an immaterial amount, which the Company recorded in the
second quarter of 2023. A formal settlement agreement was executed as of March 27, 2024, and remains subject to court approval.
The Company continues to believe the plaintiffs’ claims lack merit and denies any liability or wrongdoing for the claims made against
the Company.
We have evaluated the claims against us and recorded provisions based on management’s judgment about the probable
outcome of the litigation and have included our estimates in accrued expenses in the accompanying balance sheets. Refer to Note 10 -
Accrued Expenses and Other Current Liabilities for more information. While we expect a favorable resolution to these matters, the
dispute resolution process could be lengthy, and if the plaintiffs were to prevail completely or substantially in the respective matters
described above, such an outcome could have a material adverse effect on our operating results, consolidated financial position, or
cash flows.
Self-Insured Risk – We self-insure substantially all our domestic business liability risks including general liability, product
liability, warranty, personal injury, auto liability, workers’ compensation, and employee medical benefits. Excess insurance policies
from independent insurance companies generally cover exposures between $5.0 million and $200.0 million for domestic product
liability risk and exposures between $3.0 million and $200.0 million for auto, general liability, personal injury, and workers’
compensation. We estimate our provision for self-insured losses based upon an evaluation of current claim exposure and historical loss
experience. Actual self-insurance losses may vary significantly from these estimates. At December 31, 2024 and 2023, our accrued
liability for self-insured risks was $83.3 million and $89.2 million, respectively.
Indemnifications – At December 31, 2024, we had commitments related to certain representations made in contracts for sale
of businesses or property, including the divestiture of JW Australia. Our indemnity obligations under the relevant agreements may be
limited in terms of time, amount or scope. These representations primarily relate to past actions such as responsibility for transfer taxes
if they should be claimed, and the adequacy of recorded liabilities, warranty matters, employment benefit plans, income tax matters, or
environmental exposures. As it relates to certain income tax related liabilities, the relevant agreements may not provide any cap for
such liabilities, and the period in which we would be liable would lapse upon expiration of the statute of limitation for assessment of
the underlying taxes. Because of the conditional nature of these obligations and the unique facts and circumstances involved in each
particular agreement, we are unable to reasonably estimate the potential maximum exposure associated with these items. We are not
aware of any material amounts claimed or expected to be claimed under these indemnities.
From time to time and in limited geographic areas, we have entered into agreements for the sale of our products to certain
customers that provide additional indemnifications for liabilities arising from construction or product defects. We cannot estimate the
potential magnitude of such exposures, but to the extent specific liabilities have been identified related to product sales, liabilities have
been provided in the warranty accrual in the accompanying consolidated balance sheets.
Other Financing Arrangements – At times we are required to provide letters of credit, surety bonds, or guarantees to meet
various performance, legal, warranty, environmental, workers compensation, licensing, utility, and governmental requirements. Stand-
by letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for
contractual performance guarantees, advanced payments received from customers, and future funding commitments. The stated values
of these letters of credit agreements, surety bonds, and guarantees were $70.3 million and $68.7 million at December 31, 2024 and
2023, respectively.
F-48
Environmental Contingencies – We periodically incur environmental liabilities associated with remediating our current and
former manufacturing sites as well as penalties for not complying with environmental rules and regulations. We record a liability for
remediation costs when it is probable that we will be responsible for such costs and the costs can be reasonably estimated. These
environmental liabilities are estimated based on current available facts and current laws and regulations. Accordingly, it is likely that
adjustments to the estimated liabilities will be necessary as additional information becomes available. Short-term environmental
liabilities and settlements are recorded in accrued expenses and other current liabilities in the accompanying consolidated balance
sheets and totaled $0.1 million and $0.5 million at December 31, 2024 and 2023, respectively. Long-term environmental liabilities are
recorded in deferred credits and other liabilities in the accompanying consolidated balance sheets and totaled $11.8 million and $11.5
million at December 31, 2024 and 2023, respectively.
Everett, Washington WADOE Action – In 2007, we were identified by the WADOE as a PLP with respect to our former
manufacturing site in Everett, Washington. In 2008, we entered into an Agreed Order with the WADOE to assess historic
environmental contamination and remediation feasibility at the site. As part of the order, we agreed to develop a CAP, arising from the
feasibility assessment. In December 2020, we submitted to the WADOE a draft feasibility assessment with an array of remedial
alternatives, which we considered substantially complete. During 2021, several comment rounds were completed as well as the
identification of the Port of Everett and W&W Everett Investment LLC as additional PLPs, with respect to this matter with each PLP
being jointly and severally liable for the cleanup costs. The WADOE received the final feasibility assessment on December 31, 2021,
containing various remedial alternatives with its preferred remedial alternatives totaling $23.4 million. Based on this study, we
determined our range of possible outcomes to be $11.8 million to $33.4 million. On March 1, 2022, we delivered a draft CAP
consistent with the preferred alternatives which was approved by WADOE in August 2023. The existing Agreed Order of 2008 was
also modified with WADOE in July 2023 to support the development of the associated CAP investigation, sampling and design
components. With additional information gathered from the CAP investigation during 2024, we determined the total range of possible
remediation cost outcomes to be between $17.4 million to $33.6 million. We retained a provision of $11.8 million within our financial
statements which considers the range of possible outcome costs and potential allocation of the responsibility between the identified
PLPs, both of which could vary materially from our estimates.
Towanda, Pennsylvania Consent Order – In December 2020, we entered into a COA with the PaDEP to remove a pile of
wood fiber waste from our site in Towanda, Pennsylvania, which we acquired in connection with our acquisition of CMI in 2012, by
using it as fuel for a boiler at that site. The COA replaced a 2018 Consent Decree between the Company and PaDEP. Under the COA,
we are required to achieve certain periodic removal objectives and ultimately remove the entire pile by August 31, 2025. As of each of
December 31, 2024 and December 31, 2023, there was $1.4 million in bonds posted in connection with these obligations. Failure to
remove the pile by August 31, 2025, would have resulted in forfeiture of the bonds and penalties by PaDEP. During December 2024,
we removed the wood fiber waste pile from the site and our removal obligations under the COA closed.
Purchase Obligations - As of December 31, 2024, we have purchase obligations of $73.2 million due in 2025 and
$42.2 million due in 2026 and thereafter. These purchase obligations are primarily relating to software hosting services and equipment
purchase agreements. Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that
specify all significant terms, including quantity, price, and the approximate timing of the transaction.
Note 26. Employee Retirement and Pension Benefits
U.S. Defined Benefit Pension Plan
Certain U.S. hourly employees participate in our defined benefit pension plan. The plan is not open to new employees.
In 2020, we elected to utilize the alternative method when calculating the Pension Benefit Guarantee Corporation premiums
for 2020 and the succeeding four years. We use a spot rate yield curve to estimate the pension benefit obligation and net periodic
benefits costs.
During the fourth quarter of 2023, we completed a balance sheet risk mitigation action related to the U.S. defined benefit
pension plan by offering a one-time lump sum election option to terminated vested participants and active participants over the age of
59 1/2. As a result of lump sum elections made by participants, we settled $49.5 million of future obligations and recognized a pre-tax
pension settlement charge of $4.3 million in the fourth quarter of 2023. The settlement charge, primarily comprised of the recognition
of past actuarial losses, is recorded within other income, net in the consolidated statements of operations.
F-49
The components of net periodic benefit cost are summarized as follows:
Components of pension benefit expense - U.S. benefit plan
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Service cost
$
2,700 $
7,400 $
3,470
Interest cost
13,556
16,602
10,556
Expected return on plan assets
(15,377)
(18,860)
(21,424)
Amortization of net actuarial pension loss
—
480
1,798
Settlement loss
—
4,349
—
Pension benefit expense (income)
$
879 $
9,971 $
(5,600)
Discount rate used to determine benefit costs
5.05%
5.39%
2.88%
Expected long-term rate of return on assets
5.72%
6.20%
5.25%
Compensation increase rate
N/A
N/A
N/A
In October 2019, the Society of Actuaries released the PRI-2012 Mortality Tables (update to RP-2014 mortality tables),
which were adopted in 2019 and represent our best estimate of future experience for the base mortality table. The Society of Actuaries
has released annual updates to the mortality improvement projection scale that was first released in 2014, with the most recent annual
update being Scale MP-2020. We adopted the use of Scale MP-2020 as of December 31, 2020, as it represents our best estimate of
future mortality improvement projection experience as of the measurement dates.
We developed the discount rate based on the plan’s expected benefit payments using the WTW RATE: Link 10:90 Yield
Curve. Based on this analysis, we selected a 5.57% discount rate for our projected benefit obligation.
We maintain policies for investment of pension plan assets. The policies set forth stated objectives and a structure for
managing assets, which includes various asset classes and investment management styles that, in the aggregate, are expected to
produce a sufficient level of diversification and investment return over time and provide for the availability of funds for benefits as
they become due. The policies also provide guidelines for each investment portfolio that control the level of risk assumed in the
portfolio and ensure that assets are managed in accordance with stated objectives. The plan invests primarily in publicly traded equity
and debt securities as directed by the plan’s investment managers. The target asset allocation is determined by reference to the plan’s
funded status percentage. The target allocation of plan assets was 76.0% fixed income securities, 17.7% equity securities and 6.3%
other investments, as of December 31, 2024 and 2023. The pension plan’s expected return assumption is based on the weighted
average aggregate long-term expected returns of various actively managed asset classes corresponding to the plan’s asset allocation.
We have selected an expected return on plan assets based on a historical analysis of rates of return, our investment mix, market
conditions and other factors.
Change in fair value of plan assets - U.S. benefit plan
(amounts in thousands)
December 31,
2024
December 31,
2023
Balance as of January 1,
$
279,579 $
314,477
Actual return on plan assets
6,474
36,191
Benefits paid
(21,472)
(20,041)
Administrative expenses paid
(2,152)
(4,381)
Plan settlements
—
(46,667)
Balance at period end
$
262,429 $
279,579
F-50
The plan’s projected benefit obligation is determined by using weighted-average assumptions, as summarized below:
Change in projected benefit obligation - U.S. benefit plan
(amounts in thousands)
December 31,
2024
December 31,
2023
Balance as of January 1,
$
283,896 $
325,479
Service cost
2,700
7,400
Interest cost
13,556
16,602
Actuarial (gain) loss
(15,039)
8,296
Benefits paid
(21,472)
(20,041)
Administrative expenses paid
(2,151)
(4,381)
Plan settlements
—
(49,459)
Balance at period end
$
261,490 $
283,896
Discount rate
5.57%
5.05%
Compensation increase rate
N/A
N/A
As of December 31, 2024, the plan’s estimated benefit payments for the next ten years are as follows (amounts in thousands):
2025
$
18,632
2026
20,052
2027
20,169
2028
20,226
2029
20,232
2030-2034
98,712
The Company made no cash contributions to the plan for the years ended December 31, 2024 and 2023. During fiscal year
2025, no cash contributions are required to be made to the plan.
The plan’s accumulated benefit obligation of $261.5 million is determined by taking the projected benefit obligation and
removing the impact of the assumed compensation increases.
The plan’s funded status is as follows:
Long-term (overfunded) unfunded pension liability - U.S. benefit plan
(amounts in thousands)
December 31,
2024
December 31,
2023
Projected benefit obligation at end of period
$
261,490 $
283,896
Fair value of plan assets at end of period
(262,429)
(279,579)
(Overfunded) unfunded pension (asset) liability(1)
$
(939) $
4,317
(1)
The overfunded pension liability as of December 31, 2024, is recorded in long-term other assets in the accompanying
consolidated balance sheet.
Net actuarial pension losses are recorded in consolidated other comprehensive income (loss) are as follows:
Accumulated other comprehensive loss - U.S. benefit plan
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Net actuarial pension loss at beginning of period
$
26,458 $
43,113 $
52,832
Amortization of net actuarial loss
—
(480)
(1,798)
Net gain occurring during year
(6,135)
(11,826)
(7,921)
Settlement recognition of net actuarial loss
—
(4,349)
—
Net actuarial pension loss at end of period
$
20,323 $
26,458 $
43,113
Tax expense
13,773
11,113
8,059
Net actuarial pension loss at end of period, net of tax
$
34,096 $
37,571 $
51,172
F-51
Non-U.S. Defined Benefit Plans – We have several unfunded defined benefit plans located outside the U.S. that are country
specific. Some of these plans remain open to participants and others are closed. The expenses related to these plans are recorded in the
consolidated statements of operations and are determined by using weighted-average assumptions made on January 1 of each year as
summarized below:
Components of pension benefit expense - Non-U.S. benefit plans
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Service cost
$
1,222 $
1,275 $
1,842
Interest cost
864
879
349
Amortization of net actuarial pension loss
267
45
311
Pension benefit expense
$
2,353 $
2,199 $
2,502
Discount rate
2.6% - 3.4%
3.1% - 3.8%
3.3% - 3.7%
Compensation increase rate
0.0% - 3.0%
0.0% - 3.5%
0.0% - 3.5%
The projected benefit obligation for the non-U.S. plans is determined by using weighted-average assumptions as summarized
below:
Change in projected benefit obligation - Non-U.S. benefit plans
(amounts in thousands)
December 31,
2024
December 31,
2023
Balance as of January 1,
$
27,000 $
24,491
Service cost
1,222
1,275
Interest cost
864
879
Actuarial gain
1,107
1,162
Benefits paid
(1,990)
(1,892)
Cumulative translation adjustment
(2,050)
1,085
Balance at period end
$
26,153 $
27,000
Discount rate
2.6% - 3.4%
3.1% - 3.8%
Compensation increase rate
0.0% - 3.0%
0.0% - 3.5%
As of December 31, 2024, the estimated benefit payments for the non-U.S. plans over the next ten years are as follows:
(amounts in thousands)
Total
2025
$
1,441
2026
1,383
2027
1,572
2028
1,572
2029
1,725
2030-2034
8,779
The accumulated benefit obligations of $23.1 million for the non-U.S. plans are determined by taking the projected benefit
obligation and removing the impact of the assumed compensation increases. We expect to contribute $1.4 million to the non-U.S.
plans in 2025.
The funded status of these plans are as follows:
(amounts in thousands)
Unfunded pension liability - Non-U.S. benefit plans
December 31,
2024
December 31,
2023
Long-term unfunded pension liability
$
21,615 $
22,185
Current portion
4,538
4,815
Total unfunded pension liability
$
26,153 $
27,000
F-52
The current portion of the unfunded pension liability is recorded in accrued payroll and benefits in the accompanying
consolidated balance sheets.
Net actuarial pension losses are recorded in consolidated other comprehensive income (loss) are as follows:
(amounts in thousands)
Year Ended December 31,
Accumulated other comprehensive loss - Non-U.S. benefit plans
2024
2023
2022
Net actuarial pension loss at beginning of period
$
2,017 $
2,273 $
9,913
Amortization of net actuarial loss
(267)
(45)
(532)
Net loss (gain) occurring during year
1,107
1,163
(6,457)
Effect of curtailment
—
—
(167)
Divestiture of JW Australia benefit plans
—
(1,442)
—
Cumulative translation adjustment
(106)
68
(484)
Net actuarial pension loss at end of period
$
2,751 $
2,017 $
2,273
Tax benefit
(598)
(399)
(632)
Net actuarial pension loss at end of period, net of tax
$
2,153 $
1,618 $
1,641
Defined Contribution Benefit Plans – We have defined contribution benefit plans covering certain U.S. and non-U.S.
subsidiary employees, subject to eligibility requirements established in accordance with local statutory requirements. The total cost of
these plans was $36.6 million, $36.4 million and $39.0 million in the years ended December 31, 2024, 2023 and 2022, respectively.
F-53
Note 27. Supplemental Cash Flow Information
Year Ended December 31,
(amounts in thousands)
2024
2023
2022
Cash Operating Activities:
Operating leases
$
45,991 $
50,995 $
58,575
Interest payments on financing lease obligations
537
331
161
Cash paid for amounts included in the measurement of lease liabilities
$
46,528 $
51,326 $
58,736
Cash Investing Activities:
Purchases of securities for deferred compensation plan
$
(3,381) $
(1,206) $
(834)
Sale of securities for deferred compensation plan
—
66
106
Change in securities for deferred compensation plan
$
(3,381) $
(1,140) $
(728)
Issuances of notes receivable
$
(54) $
(58) $
(55)
Cash received on notes receivable
100
319
149
Change in notes receivable
$
46 $
261 $
94
Non-cash Investing Activities:
Property, equipment, and intangibles purchased in accounts payable
$
14,300 $
10,025 $
4,987
Property, equipment, and intangibles purchased with debt
9,707
14,045
9,779
Customer accounts receivable converted to notes receivable
504
293
49
Cash Financing Activities:
Proceeds from issuance of new debt
$
350,000 $
— $
—
Borrowings on long-term debt
1,225
127,336
779,977
Payments of long-term debt
(400,633)
(684,766)
(767,248)
Payments of debt issuance and extinguishment costs, including underwriting
fees
(5,770)
(3,908)
—
Change in long-term debt and payments of debt extinguishment costs
$
(55,178) $
(561,338) $
12,729
Cash paid for amounts included in the measurement of finance lease liabilities
$
2,468 $
1,880 $
1,792
Non-cash Financing Activities:
Prepaid insurance funded through short-term debt borrowings
$
— $
16,628 $
16,486
Accounts payable converted to installment notes
5
176
1,279
Other Supplemental Cash Flow Information:
Cash taxes paid, net of refunds
$
45,996 $
48,092 $
44,723
Cash interest paid
72,497
74,735
80,613
F-54
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WEBSITE
corporate.jeld-wen.com
EMAIL
investors@jeldwen.com
SUSTAINABILITY
We responsibly source raw materials,
managing sustainable practices
in our supply chain to minimize
our carbon footprint.
HEALTH AND SAFETY
JELD-WEN prioritizes health and safety
through a global policy that expresses
our commitment to associate safety.
Health and safety are embedded
in our daily operations.
DIVERSITY
AND INCLUSION
We believe that a diverse and
engaged workforce is a strong
competitive advantage.
GOVERNANCE
AND ETHICS
Our corporate governance practices
reflect our commitment to the
highest standards of ethics,
integrity and transparency.
RESPONSIBLE
SUPPLY CHAIN
Our Supplier Code of Conduct outlines
standards with regards to labor and
human rights, health and safety in the
workplace, environmental compliance
and ethical business practices.
BRUCE M. TATEN
Director
RODERICK C. WENDT
Director
STEVEN E. WYNNE
Director
EXECUTIVE OFFICERS
BOARD OF DIRECTORS
CORPORATE HEADQUARTERS
2645 Silver Crescent Drive
Charlotte, NC 28273
USA
GUSTAVO S. M. VIANNA
Executive Vice President
and President, Europe
MATTHEW C. MEIER
Executive Vice President,
Chief Digital and
Information Officer
SAMANTHA L.
STODDARD
Executive Vice President,
Chief Financial Officer
CYNTHIA G.
MARSHALL
Director
DAVID G. NORD
Chair of the Board
WILLIAM (BILL) J.
CHRISTENSEN
Director
ANTONELLA B.
FRANZEN
Director
WILLIAM (BILL) J.
CHRISTENSEN
Chief Executive Officer
JAMES S. HAYES
Executive Vice President,
General Counsel and
Corporate Secretary
WENDY A. LIVINGSTON
Executive Vice President,
Chief Human Resources
Officer
TRACEY I. JOUBERT
Director
MICHAEL F. HILTON
Director
CATHERINE A.
HALLIGAN
Director
We’re proud to be a leading global provider of windows, doors, wall systems and building
products. You’ll find our innovative solutions under the JELD-WEN name and in the
product collections of our global family of industry-leading brands.
02/21/25