Cornerstone Building Brands Inc.

05/08/2026 | Press release | Distributed by Public on 05/08/2026 14:04

Quarterly Report for Quarter Ending April 4, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following is management's discussion and analysis of certain significant factors that have affected our consolidated financial condition and results of operations during the periods presented (the "MD&A"). This information should be read in conjunction with the Condensed Consolidated Financial Statements included herein "Item 1. Condensed Consolidated Financial Statements" and the Condensed Consolidated Financial Statements and the Notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Form 10-K").
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. In some cases, our forward-looking statements can be identified by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "will," "target" or other similar words. We have based our forward-looking statements on management's beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these expectations and the related statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected. These risks, uncertainties and other factors include, but are not limited to:
•Challenging macroeconomic conditions affecting the residential new construction and the repair and remodel end markets and the commercial construction market;
•Commodity price volatility or limited availability of raw materials, including steel, polyvinyl chloride ("PVC") resin, aluminum, and glass due to supply chain disruptions, including the impact of recently imposed tariffs;
•The macroeconomic inflationary environment and the impact on demand for our products and services;
•Our ability to identify and develop relationships with a sufficient number of qualified suppliers to mitigate risk in the event a significant supplier experiences a significant production or supply chain interruption, or the supplier experiences quality and/or sourcing issues;
•Seasonality of the business and adverse weather conditions;
•The increasing difficulty for consumers and builders in obtaining credit or financing;
•Our ability to successfully implement operational efficiency initiatives and reduce costs while ensuring superior quality;
•Our ability to successfully achieve price increases to offset cost increases;
•Our ability to compete effectively against competitors;
•Our ability to successfully integrate our acquired businesses and to realize anticipated benefits;
•Our ability to employ, train and retain qualified personnel;
•Increases in labor costs, labor market pressures, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers;
•Increases in energy costs;
•Increases in freight and transportation costs, including as a result of volatility in the price and availability of fuel;
•Volatility in the United States ("U.S.") and international economies and in the credit markets;
•Additional impairments of our goodwill or intangible assets;
•Our ability to successfully develop new products or improve existing products;
•Enforcement and obsolescence of our intellectual property rights;
•Costs related to compliance with, violations of or liabilities under environmental, health and safety laws;
•Our ability to make strategic acquisitions accretive to earnings and dispositions at favorable prices and terms;
•Our ability to fund operations and provide increased working capital necessary to support our strategy and acquisitions using available liquidity;
•Global climate change, and compliance with new or changed laws or regulations relating to sustainability;
•Breaches of our information system security measures;
•Damage to our computer infrastructure and software systems or the unsuccessful adoption or incorporation of new technology, such as artificial intelligence;
•Implementation and necessary maintenance and/or replacement(s) to our enterprise resource planning technologies;
•Our ability to remediate a material weakness in our internal control over financial reporting and maintain an effective system of internal control over financial reporting;
•Challenges resulting from import and trade restrictions, including tariffs imposed by the second Trump administration, which may have varying impacts on our business and results of operations;
•Potential personal injury, property damage or product liability claims or other types of litigation;
•Compliance with certain laws related to our international business operations;
•Significant changes in factors and assumptions used to measure certain of our defined benefit plan obligations and the effect of actual investment returns on pension assets;
•Additional costs from new regulations which relate to the utilization or manufacturing of our products or services, including changes in building codes and standards;
•Our controlling stockholder's interests differing from the interests of holders of our indebtedness;
•Our substantial indebtedness and our ability to incur substantially more indebtedness;
•Limitations that our debt agreements place on our ability to engage in certain business and financial transactions;
•Our ability to obtain financing on acceptable terms;
•Exchange rate fluctuations;
•Downgrades of our credit ratings;
•The effect of increased interest rates on our ability to service our debt; and
•Other risks detailed under the caption "Risk Factors" in this Quarterly Report on Form 10-Q and in Part I, Item 1A in the 2025 Form 10-K and other filings we make with the Securities and Exchange Commission.
A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that assumed facts or bases almost always vary from actual results and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report, including those described under the caption "Risk Factors" in Item 1A in this Quarterly Report on Form 10-Q and in Part I, Item 1A in the 2025 Form 10-K and other filings we make with the Securities and Exchange Commission. We expressly disclaim any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in our expectations unless the securities laws require us to do so.
Company Overview
Our Company
Cornerstone Building Brands, Inc. ("Cornerstone Building Brands", together with its subsidiaries, unless the context requires otherwise, the "Company," "we," "us" or "our") is a holding company incorporated in the State of Delaware. We are a leading manufacturer of exterior building products in North America by sales and serve residential and commercial customers across both the new construction and repair and remodel markets.
Our operations are organized in three reportable segments, which are: Windows & Doors, Siding & Accessories and Metal Solutions. We have:
•One of the broadest product offerings in our industry. Our total addressable market is diverse and expands across multiple geographies, end markets, channels and customers providing us with significant benefits.
•A leading market position in various North American markets we serve, including, among others, vinyl windows, vinyl siding, stone veneer installations, metal accessories, metal roofing and wall systems and engineered metal building systems.
•An extensive coast-to-coast network of manufacturing, distribution and branch office facilities throughout North America.
•A vertically integrated manufacturing process that enables us to deliver better service and positions us to be a cost-advantaged manufacturer.
We are mindful of the impacts of global climate change and the contributions to climate change from our manufacturing operations, the transportation and distribution of our products, and the end-use of building products. We have made and continue to make progress on our work related to sustainability matters.
Tariffs
We are navigating through several external factors that create uncertainty and volatility in our operating environment, including, but not limited to, new tariffs and evolving trade policy. These rapidly changing policies and dynamics pose a risk to our supply chain and cost structure. Any new tariffs and/or trade restrictions that may be implemented could result in reduced overall economic activity and increased costs in operating our business, which, if unmitigated, could have a material adverse effect on our business, financial condition, and results of operations. We continue to evaluate opportunities to mitigate the impact of tariffs, including potential tariff exclusions and other trade programs; however, there can be no assurance that such efforts will be successful.
Results of Operations
The following table represents key results of operations on a consolidated basis for the interim periods indicated:
Three Months Ended
($ Amounts in thousands) April 4, 2026 March 29, 2025
Net sales $ 1,209,347 $ 1,175,334
Gross profit 160,099 236,535
% of net sales 13.2 % 20.1 %
Selling, general and administrative expenses 271,319 255,382
% of net sales 22.4% 21.7%
Loss from operations (111,220) (18,847)
% of net sales (9.2) % (1.6)%
Interest expense (125,929) (117,681)
Foreign exchange loss (1,061) (313)
Other income, net 5,900 427
Loss before income taxes (232,310) (136,414)
Income tax benefit (39,784) (25,790)
Net loss $ (192,526) $ (110,624)
Non-GAAP financial measure - Adjusted EBITDA* $ 1,071 $ 91,883
% of net sales 0.1 % 7.8 %
* Refer to Non-GAAP Financial Measures for further discussion.
Net sales increased $34.0 million, or 2.9%, for the three months ended April 4, 2026, compared to the comparable prior year period, mainly due to the strategic acquisition of Metal Sales Manufacturing Corporation ("Metal Sales") in September 2025, partially offset by lower volumes across all reportable segments due to constrained market conditions.
Gross profit as a percentage of net sales was 13.2% for the three months ended April 4, 2026, compared to 20.1% for the comparable prior year period. The decrease in margin was primarily driven by materials inflation cost and lower volumes across all reportable segments, partially offset by higher average selling price.
Selling, general and administrative expenses increased $15.9 million, for the three months ended April 4, 2026, compared to the comparable prior year period, primarily due to an increase in personnel costs, partially offset by a decrease in non-personnel costs driven by cost management efforts across all reportable segments and a reduction in sales and incentive compensation related costs due to reduced volumes, excluding acquisition impacts. The increase was also partially offset by a reduction in intangible amortization expense related to the completion of amortization for certain assets in 2025.
Interest expense increased by $8.2 million, or 7.0% for the three months ended April 4, 2026, compared to the comparable prior year period, primarily due to higher outstanding borrowings during the first quarter of 2026 compared to the first quarter of 2025.
The following table sets forth the components of interest expense:
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Interest on outstanding borrowings $ 104,103 $ 99,712
Cash impact of interest rate swaps (6,424) (8,850)
Amortization of interest rate swap fair value(1)
2,962 2,962
Amortization of debt discount, debt issuance costs and purchase accounting fair value adjustment(1)
25,232 23,209
Other 56 648
Total interest expense $ 125,929 $ 117,681
(1)The fair value adjustments were made in connection with the Merger in July 2022.
Foreign exchange loss for the three months ended April 4, 2026 and the three months ended March 29, 2025 are attributable to foreign exchange rate changes on intercompany loans based in Canadian currency.
Other income, net, increased $5.5 million for the three months ended April 4, 2026, compared to the comparable prior year period. This fluctuation is mainly due to an increase in the bargain purchase gain recognized related to the Metal Sales acquisition. See Note 3 in the Notes to the Condensed Consolidated Financial Statements for additional information.
Income tax benefit increased $14.0 million for the three-month period ended April 4, 2026 compared to the three months ended March 29, 2025. The change was mainly due to an increase in pre-tax book losses, partially offset by tax impacts from the valuation allowance on IRC Section 163(j) business interest during the three months ended April 4, 2026 compared to the three months ended March 29, 2025.
The One Big Beautiful Bill Act ("OBBBA") was enacted on July 4, 2025. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation, among other tax changes. Many of the tax provisions of the OBBBA are designed to accelerate tax deductions, which led to lower cash tax payments for 2025. The enactment did not have a material impact on our effective tax rate for the three-month period ended April 4, 2026.
Reportable Segment Results of Operations
The following table sets forth the results of continuing operations for our reportable segments:
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Reportable segment net sales:
Windows & Doors $ 549,778 $ 557,746
Siding & Accessories 247,488 240,679
Metal Solutions 414,480 378,068
Intersegment net sales (2,399) (1,159)
Total net sales $ 1,209,347 $ 1,175,334
Net sales, third party customers:
Windows & Doors $ 548,262 $ 557,610
Siding & Accessories 246,605 239,656
Metal Solutions 414,480 378,068
Total net sales $ 1,209,347 $ 1,175,334
Reportable segment adjusted EBITDA*
Windows & Doors $ (5,064) $ 42,367
Siding & Accessories 30,552 31,495
Metal Solutions 6,825 51,835
Corporate and Other (40,665) (40,793)
Depreciation and amortization (102,868) (103,751)
Loss from operations $ (111,220) $ (18,847)
* Refer to Non-GAAP Financial Measures for further discussion.
Windows & Doors
The following table sets forth the continuing results of operations for the Windows & Doors reportable segment:
Three Months Ended
($ Amounts in thousands) April 4, 2026 March 29, 2025
Reportable segment net sales: $ 549,778 $ 557,746
Net sales, third party customers: $ 548,262 $ 557,610
Reportable segment adjusted EBITDA* $ (5,064) $ 42,367
% of net sales (0.9) % 7.6 %
Depreciation and amortization $ 48,699 $ 43,959
* Refer to Non-GAAP Financial Measures for further discussion.
Reportable segment net sales for the three months ended April 4, 2026 decreased $8.0 million, or 1.4%, mainly driven by lower volumes, partially offset by favorable price.
Reportable segment adjusted EBITDA for the three months ended April 4, 2026 decreased $47.4 million, mainly driven by lower volumes, material inflation and higher fuel costs in addition to increased personnel and professional service costs.
Siding & Accessories
The following table sets forth the continuing results of operations for the Siding & Accessories reportable segment:
Three Months Ended
($ Amounts in thousands) April 4, 2026 March 29, 2025
Reportable segment net sales: $ 247,488 $ 240,679
Net sales, third party customers: $ 246,605 $ 239,656
Reportable segment adjusted EBITDA* $ 30,552 $ 31,495
% of net sales 12.4 % 13.1 %
Depreciation and amortization $ 26,359 $ 23,920
* Refer to Non-GAAP Financial Measures for further discussion.
Reportable segment net sales for the three months ended April 4, 2026 increased $6.8 million, or 2.8%, primarily driven by favorable price mix, partially offset by lower volumes.
Reportable segment adjusted EBITDA for the three months ended April 4, 2026 decreased $0.9 million, mainly driven by material inflation and increased selling, general and administrative expenses, partially offset by manufacturing net efficiencies and favorable selling price.
Metal Solutions
The following table sets forth the continuing results of operations for the Metal Solutions reportable segment:
Three Months Ended
($ Amounts in thousands) April 4, 2026 March 29, 2025
Reportable segment net sales: $ 414,480 $ 378,068
Net sales, third party customers: $ 414,480 $ 378,068
Reportable segment adjusted EBITDA* $ 6,825 $ 51,835
% of net sales 1.6 % 13.7 %
Depreciation and amortization $ 26,335 $ 34,684
* Refer to Non-GAAP Financial Measures for further discussion.
Reportable segment net sales for the three months ended April 4, 2026 increased $36.4 million, or 9.6%, mainly driven by the strategic acquisition of Metal Sales in September 2025.
Reportable segment adjusted EBITDA for the three months ended April 4, 2026 decreased $45.0 million, mainly due to weaker market conditions and materials inflation, partially offset by favorable selling price.
Corporate and Other
The following table sets forth the continuing operations for Corporate and Other:
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Corporate costs $ 31,242 $ 33,814
Strategic development and acquisition related costs (1)
4,115 5,283
Long-term incentive plan compensation (2)
(3,379) (3,543)
Amortization of acquisition related step-up adjustments (3)
1,732 1,843
Facility closure charges and employee separation (4)
5,242 1,062
Other 1,713 2,334
Total Corporate and Other $ 40,665 $ 40,793
(1)Costs related to strategic projects, acquisitions and merger activity.
(2)Represents charges related to the Company's equity-based compensation plans, including the effects of employee terminations.
(3)Costs associated with non-cash purchase accounting valuations for lease right-of-use assets and inventory.
(4)Represents charges related to the Company's manufacturing footprint and certain employee separation costs.
Depreciation and Amortization
The following table sets forth depreciation and amortization:
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Depreciation:
Cost of sales $ 45,296 $ 38,903
Selling, general and administrative expenses 14,727 11,574
Total depreciation 60,023 50,477
Amortization - Selling, general and administrative expenses 42,845 53,274
Total depreciation and amortization $ 102,868 $ 103,751
Depreciation and amortization decreased $0.9 million for the three months ended April 4, 2026, mainly due to a reduction in intangible amortization expense related to the completion of amortization for certain assets in 2025, partially offset by increased depreciation related to the acquisition of Metal Sales in September 2025.
Liquidity and Capital Resources
Our main liquidity and capital resource needs are payments to service our debt, ongoing operations and working capital requirements, capital expenditures and the cost of acquisitions. Our primary source of liquidity is cash generated from our continuing operations, and borrowings under our credit facilities. We believe that funds provided by these sources will be adequate to meet our liquidity and capital resource needs for at least the next 12 months under current operating conditions.
We may from time to time take steps to reduce our debt. These actions may include repurchases or opportunistic refinancing of debt. The amount of debt, if any, that may be repurchased or refinanced will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations. Our affiliates may also purchase our debt from time to time, through open market purchases or other transactions. In such cases, our debt may not be retired, in which case we would continue to pay interest in accordance with the terms of such debt, and we would continue to reflect the debt as outstanding in our Condensed Consolidated Balance Sheets.
The following table sets forth our total net liquidity position as of April 4, 2026:
(Amounts in thousands) Amount
Cash and cash equivalents $ 136,172
Revolving credit facilities:
Asset-based lending facility 850,000
First-in-last-out tranche asset-based lending facility 95,000
Cash flow revolving facility 92,000
Total revolving credit facilities 1,037,000
Less:
Debt issued under the facilities 625,000
Letters of credit outstanding 63,174
Borrowing base adjustments related to asset-based lending facility(1)
163,073
Net credit facility 185,753
Net liquidity $ 321,925
(1) The borrowing base under the ABL Facilities is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the previous month's value of eligible inventory, accounts receivable, less certain allowances and subject to certain other adjustments. As of April 4, 2026, the Company's total lender commitments under the asset-based lending facility and the first-in-last-out tranche asset-based lending facility were $945.0 million, however the borrowing base was less than the total commitments, which resulted in a borrowing base adjustment.
Cash Flows
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Net cash used in operating activities $ (107,587) $ (136,128)
Net cash used in investing activities $ (16,518) $ (36,269)
Net cash flows provided by financing activities $ 126,157 $ 170,000
Cash Flows Used in Operating Activities
Net cash used in operating activities was $107.6 million for the three months ended April 4, 2026, a decrease from the $136.1 million used in operations in the prior year. The decrease was driven by better working capital management primarily in accounts receivable and accounts payable, partially offset by lower earnings.
Cash Flows Used in Investing Activities
Our main uses of cash for investing activities are for payments for property and equipment and acquisitions of businesses.
Net cash used in investing activities was $16.5 million for the three months ended April 4, 2026 compared to $36.3 million used in investing activities for the three months ended March 29, 2025. The $19.8 million decrease is driven by reduced spending on capital expenditures during the current year compared to the prior year and $7.5 million of cash proceeds received during the first quarter of 2026 from post closing cash and working capital adjustments related to the acquisitions of Metal Sales and Cold Rolled Steel during the prior year,
Cash Flows From Financing Activities
Our main uses of cash for financing activities include activity to repurchase and make payments on our long-term debt and distributions to our direct parent Camelot Return Intermediate Holdings, LLC, ("Camelot Parent"). Our main sources of cash from financing activities include the proceeds from issuances of debt.
Net cash provided by financing activities was $126.2 million for the three months ended April 4, 2026 compared to $170.0 million provided by financing activities for the three months ended March 29, 2025. The decrease of $43.8 million in net cash provided is mainly driven by a $30.0 million decrease in net borrowings under our revolving credit facilities in the current year, $8.5 million of repayments of borrowings outstanding under our term loans during the first quarter of 2026 and $5.3 million related to the second and final payment of contingent consideration made during the first quarter of 2026 as part of the acquisition of MAC Metal.
Contingent Liabilities and Commitments
Leases
We have leases for certain manufacturing, warehouse, distribution locations, offices, vehicles and equipment. As of April 4, 2026 the Company had total future lease payments of $609.2 million, with $86.4 million payable within 12 months.
Debt
We have certain debt instruments outstanding. As of April 4, 2026 the Company had total future payments of $5.4 billion, with $34.0 million payable within 12 months. See Note 7 in the Notes to the Condensed Consolidated Financial Statements for additional information.
Non-GAAP Financial Measures
We use several measures derived from consolidated financial information, but not presented in our Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the U.S ("U.S. GAAP"). These measures are considered non-GAAP financial measures. Specifically, in this report, we refer to adjusted EBITDA, which is a non-GAAP financial measure. Our non-GAAP financial measure is not intended to replace the presentation of the comparable measure under U.S. GAAP. However, we believe the presentation of the non-GAAP financial measure, when considered together with the comparable U.S. GAAP financial measure, along with a reconciliation to its respective U.S. GAAP financial measure, assists investors in understanding the factors and trends affecting our underlying business that could not be obtained absent these disclosures. Additionally, we believe that the presentation of our non-GAAP financial measure enables investors to evaluate trends in the business excluding certain items which are not entirely a result of our base operations.
Furthermore, the presentation of this non-GAAP financial measure supplements other metrics we use to internally evaluate our business and facilitates the comparison of past and present operations. The non-GAAP financial measure we use may differ from non-GAAP financial measures used by other companies and other companies may not define non-GAAP financial measures we use in the same way.
Reconciliation of Net Loss to Adjusted EBITDA
The following table presents the reconciliation of net loss to Adjusted EBITDA:
Three Months Ended
(Amounts in thousands) April 4, 2026 March 29, 2025
Net loss $ (192,526) $ (110,624)
Interest expense 125,929 117,681
Foreign exchange loss 1,061 313
Other income, net (5,900) (427)
Income tax benefit (39,784) (25,790)
Loss from operations (111,220) (18,847)
Depreciation and amortization 102,868 103,751
Strategic development and acquisition related costs (1)
4,115 5,283
Long-term incentive plan compensation(2)
(3,379) (3,543)
Amortization of acquisition related step-up adjustments(3)
1,732 1,843
Facility closure charges and employee separation(4)
5,242 1,062
Other 1,713 2,334
Adjusted EBITDA $ 1,071 $ 91,883
(1)Costs related to strategic projects, acquisitions and merger activity.
(2)Represents charges related to the Company's equity-based compensation plans.
(3)Costs associated with non-cash purchase accounting valuations for lease right-of-use assets and inventory.
(4)Represents charges related to the Company's manufacturing footprint and certain employee separation costs.
See Part I, Item 1, "Condensed Consolidated Financial Statements", Note 14 included herein, for the reconciliation of reportable segment adjusted EBITDA to loss before income taxes. Reportable segment adjusted EBITDA is the only measure of segment profit used by our chief operating decision maker.
Critical Accounting Estimates
There have been no material changes in our critical accounting policies and estimates during the three months ended April 4, 2026. Refer to the 2025 Form 10-K for a description of the Company's critical accounting estimates.
Cornerstone Building Brands Inc. published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 08, 2026 at 20:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]