Masonite Announces Second-Quarter 2008 Financials

Masonite International Inc. today announced second-quarter 2008 sales of $507.8 million, a decline of 13.8 percent compared to sales of $588.9 million in the second quarter of 2007. Operating EBITDA decreased 48.0 percent to $46.1 million from $88.6
million in the second quarter of 2007. Adjusted EBITDA, calculated pursuant to the company's credit agreement, declined 43.5 percent to $56.0 million in the second quarter of 2008, compared to $99.1 million in the prior year period, according to a release issued by the company this morning.

Masonite attributes the decrease in its second-quarter results to the deterioration in the U.S. housing market.

"Lower operating volumes led to margin compression that was further exacerbated by significant inflation in our raw material, energy and transportation costs", says Fred Lynch, president and chief executive officer. "It is our current belief that market
conditions will deteriorate further in both the United States and the United Kingdom through the second half of 2008. In response, we continue to address every lever at our disposal; adjusting staffing and production capacities in line with demand, driving additional operating efficiencies through lean sigma implementation, and pricing our products to appropriately reflect their value in this inflationary climate. These difficult but necessary actions will help position Masonite for greater success when the market rebounds."

In the second quarter, the company completed the closure of three manufacturing sites in North America. The company recorded a restructuring charge of $6.9 million in the second quarter of 2008 in connection with these closures and other actions. In connection with additional facility closures that are anticipated to occur in the third and fourth quarter of 2008, the Company also recorded charges relating to goodwill, intangibles and fixed asset impairment in the amount of $10.8 million in the quarter. Further restructuring charges are anticipated to be required in the future as these closures are completed.

CLICK HERE to view the full text of the release from Masonite.

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