JELD-WEN Holding, Inc. JELD, a leading global building products manufacturer, announced the sale of its Towanda facility, PA and related assets to Woodgrain Inc. for approximately $115 million.
This transaction is part of a court-ordered divestiture process. The sale is expected to close by Dec. 31, 2024, subject to adjustments and closing conditions.
JELD’s Transformation and Impact of Towanda Facility Sale
JELD-WEN sees strong opportunities to improve its operations and drive long-term success through this transformation effort. The company remains committed to taking the necessary steps to unlock its full potential.
Although the future financial impact on JELD-WEN remains uncertain due to factors such as the assignment of customer contracts and obligations under transition services and supply agreements, it estimates the sale of the Towanda facility will reduce annual revenues by $150 million to $200 million and EBITDA by $25 million to $50 million in the 12 months after the closing of the deal. The company also expects a non-cash pre-tax impairment charge of $25 million to $35 million and anticipates the divestiture will have a neutral impact on net debt leverage.
JELD Moves Ahead With Towanda Divestiture
The company has reached a significant stage in the court-ordered sale of its Towanda facility. After a thorough review, JELD has decided to proceed with closing the transaction, considering this the best option for the company and its stakeholders.
JELD remains focused on providing reliable service to its customers. Despite the court’s decision, the company is committed to its transformation efforts by focusing on cost reduction and long-term growth.
JELD Navigates Market Shifts With Strategic Moves
Shares of JELD have plunged 33.4% in the past three months against the Zacks Building Products - Wood industry’s growth of 4.9%. The company has faced challenges as consumers delay large-scale remodeling projects that typically involve windows and doors. Despite resilient housing starts in the third quarter of 2024, a sharp decline in multifamily and higher-end home construction has negatively impacted its VPI and LaCantina businesses. Additionally, quality and delivery issues across several manufacturing units have hindered growth opportunities.
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In response to these challenges, JELD-WEN has implemented several cost-reduction initiatives to enhance efficiency and better adapt to market conditions. The company has successfully right-sized its SG&A spending and fast-tracked programs to reduce costs due to a weaker product mix. Additionally, JELD-WEN has made significant strides in addressing quality issues, particularly in door skin production, showing notable improvement in the past quarter.
JELD-WEN is further strengthening its position by streamlining operations through footprint consolidation. During the quarter, the company announced the closure of its Wedowee, AL and Logstor, Denmark facilities, alongside strategic moves to optimize production in the United Kingdom by transitioning more manufacturing to JELD’s efficient Penrith facility. These actions are expected to improve capacity and the cost structure, positioning JELD-WEN for long-term profitability as market conditions improve.
The Zacks Consensus Estimate for JELD’s 2025 earnings per share (EPS) indicates an increase of 48.8% from a year ago.
JELD’s Zacks Rank & Key Picks
JELD-WEN currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Zacks Construction sector are:
Sterling Infrastructure, Inc. STRL presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter earnings surprise of 21.5%, on average. Shares of STRL have gained 46.8% in the past six months. The Zacks Consensus Estimate for STRL’s 2025 sales and EPS implies an increase of 7.3% and 8.1%, respectively, from the prior-year levels.
Comfort Systems USA, Inc. FIX currently flaunts a Zacks Rank of 1. FIX delivered a trailing four-quarter earnings surprise of 14.7%, on average. The stock has gained 41.5% in the past six months.
The consensus estimate for FIX’s 2025 sales and EPS indicates an increase of 7.9% and 20.8%, respectively, from a year ago.
MasTec, Inc. MTZ presently sports a Zacks Rank of 1. MTZ delivered a trailing four-quarter earnings surprise of 40.2%, on average. The stock has gained 26.3% in the past six months.
The Zacks Consensus Estimate for MTZ’s 2025 sales and EPS indicates an increase of 8.6% and 45.5%, respectively, from a year ago.
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