EX-99.2 3 a20210809exh992.htm EX-99.2 Document

Exhibit 99.2

Summary of Unaudited Pro Forma Financial Information
On August 9, 2021, Cornerstone Building Brands, Inc. (the “Company”) closed the sale of its Insulated Metal Panels (“IMP”) business to Nucor Insulated Panel Group, Inc. and Vulcraft Canada, Inc. (collectively, the “Purchasers”) in a cash transaction for $1 billion, subject to customary adjustments. The sale included products sold under the Metl-Span and CENTRIA brands. The results of the IMP business were previously reported in the Commercial segment.
The unaudited pro forma consolidated statements of operations for the year ended December 31, 2020 and the six months ended July 3, 2021 give effect to the sale as if it had occurred on January 1, 2020. The unaudited pro forma consolidated balance sheet as of July 3, 2021 assumes the sale occurred on July 3, 2021.
The unaudited pro forma consolidated financial statements have been derived from historical financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are presented based upon information currently available and certain assumptions the Company believes are reasonable. The unaudited pro forma consolidated financial statements are presented to comply with Article 11 of Regulation S-X and follow prescribed SEC regulations. The unaudited condensed consolidated pro forma financial statements do not purport to present what the Company’s results would have been had the disposition actually occurred on the dates indicated or to project what the Company’s results of operations or financial position would have been for any future period. The prescribed regulations limit pro forma adjustments to those that are directly attributable to the disposition on a factually supported basis. Consequently, the Company was not permitted within the pro forma consolidated financial statements to allocate to the IMP business any indirect corporate overhead or costs, such as administrative corporate functions. As a result, such costs are not reflected in the pro forma adjustments. The pro forma adjustments are described in the notes to the unaudited consolidated pro forma financial statements.
The unaudited condensed consolidated pro forma financial statements have been prepared for informational purposes and should be read together with the historical consolidated financial statements and related notes of Cornerstone Building Brands, Inc. included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and its Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2021.






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CORNERSTONE BUILDING BRANDS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 3, 2021
 Cornerstone Building BrandsPro Forma AdjustmentsCornerstone Building Brands Pro Forma
ASSETS 
Current assets:
Cash and cash equivalents$88,978 $1,000,000 (a)$1,088,978 
Restricted cash6,224 — 6,224 
Accounts receivable, net613,193 — 613,193 
Inventories, net549,736 — 549,736 
Income taxes receivable46,358 — 46,358 
Investments in debt and equity securities, at market2,695 — 2,695 
Prepaid expenses and other88,942 — 88,942 
Assets held for sale390,025 (357,330)(b)32,695 
     Total current assets1,786,151 642,670 2,428,821 
Property, plant and equipment, net568,901 — 568,901 
Lease right-of-use assets272,366 — 272,366 
Goodwill1,107,758 — 1,107,758 
Intangible assets, net1,488,426 — 1,488,426 
Deferred income taxes2,178 — 2,178 
Other assets, net28,283 — 28,283 
     Total assets$5,254,063 $642,670 $5,896,733 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current liabilities:
Current portion of long-term debt$26,000 $— $26,000 
Accounts payable266,067 — 266,067 
Accrued compensation and benefits75,966 — 75,966 
Accrued interest21,406 — 21,406 
Accrued income taxes6,560 211,629 (d)218,189 
Current portion of lease liabilities68,198 — 68,198 
Other accrued expenses280,236 14,084 (c)294,320 
Liabilities held for sale75,927 (65,756)(b)10,171 
Total current liabilities820,360 159,957 980,317 
Long-term debt3,180,759 — 3,180,759 
Deferred income taxes233,602 — 233,602 
Long-term lease liabilities205,530 — 205,530 
Other long-term liabilities334,565 — 334,565 
     Total long-term liabilities3,954,456 — 3,954,456 
Stockholders’ equity:
Common stock1,261 — 1,261 
Additional paid-in capital1,265,887 — 1,265,887 
Accumulated deficit(757,413)482,713 (d)(274,700)
Accumulated other comprehensive loss, net(30,064)— (30,064)
Treasury stock, at cost(424)— (424)
     Total stockholders’ equity479,247 482,713 961,960 
     Total liabilities and stockholders’ equity$5,254,063 $642,670 $5,896,733 

 





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CORNERSTONE BUILDING BRANDS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Six Months Ended July 3, 2021
 Cornerstone Building BrandsPro Forma AdjustmentsCornerstone Building Brands Pro Forma
Net sales$2,667,153 $(155,287)(e)$2,511,866 
Cost of sales2,095,696 (127,483)(e)1,968,213 
Gross profit571,457 (27,804)543,653 
Selling, general and administrative expenses316,686 (20,310)(e)296,376 
Intangible asset amortization93,011 (3,220)(e)89,791 
Restructuring and impairment charges, net6,490 (193)(e)6,297 
Strategic development and acquisition related costs3,252 13,316 (c),(e)16,568 
Income from operations152,018 (17,397)134,621 
Interest income140 (48)(e)92 
Interest expense(103,957)— (103,957)
Foreign exchange gain (loss)203 (427)(e)(224)
Loss on extinguishment of debt(42,234)— (42,234)
Other income (expense), net830 (241)(e)589 
Income before taxes7,000 (18,113)(11,113)
Benefit for income taxes(272)(4,642)(f)(4,914)
Net income (loss)7,272 (13,471)(6,199)
Net income allocated to participating securities(93)— — 
Net income (loss) applicable to common shares$7,179 $(13,471)$(6,199)
Income (loss) per common share: 
Basic$0.06 $(0.05)
Diluted$0.06 $(0.05)
Weighted average number of common shares outstanding: 
Basic125,683 125,683 
Diluted126,469 126,469 

















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CORNERSTONE BUILDING BRANDS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Year Ended December 31, 2020
 Cornerstone Building BrandsPro Forma AdjustmentsCornerstone Building Brands Pro Forma
Net sales$4,617,369 $(309,844)(e)$4,307,525 
Cost of sales3,567,049 (211,678)(e)3,355,371 
Gross profit 1,050,320 (98,166)952,154 
Selling, general and administrative expenses579,200 (39,047)(e)540,153 
Intangible asset amortization180,994 (8,661)(e)172,333 
Restructuring and impairment charges, net34,120 (2,069)(e)32,051 
Strategic development and acquisition related costs19,341 416 (e)19,757 
Goodwill impairment503,171 — 503,171 
Income (loss) from operations(266,506)(48,805)(315,311)
Interest income1,364 (98)(e)1,266 
Interest expense(213,610)(3)(e)(213,613)
Foreign exchange gain (loss)1,068 (337)(e)731 
Other income (expense), net469 (594)(e)(125)
Income (loss) before income taxes(477,215)(49,837)(527,052)
Provision (benefit) for income taxes5,563 (12,725)(f)(7,162)
Net income (loss)(482,778)(37,112)(519,890)
Net income allocated to participating securities— — — 
Net income (loss) applicable to common shares$(482,778)$(37,112)$(519,890)
Income (loss) per common share: 
Basic$(3.84)$(4.14)
Diluted$(3.84)$(4.14)
Weighted average number of common shares outstanding: 
Basic125,562 125,562 
Diluted125,562 125,562 
Notes to pro forma consolidated financial statements
(a)Reflects proceeds received upon closing of the IMP Sale.
(b)Reflects the disposition of the assets and liabilities of the IMP business (see the Assets and Liabilities Held for Sale schedule below).
(c)Reflects the fee payable for the advisory services that was contingent upon the close of the IMP Sale.
(d)Reflects the preliminary gain on the IMP Sale of approximately $708.4 million ($496.8 million, net of tax) less the advisory fee of approximately $14.1 million described in (c) above.





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July 3, 2021
(in thousands)
Proceeds from sale of the IMP business $1,000,000 
Net assets (see Assets and Liabilities Held for Sale schedule below) (291,574)
Preliminary gain on sale708,426 
Accrued income taxes(211,629)
Preliminary gain on sale, net of tax496,797 
Advisory fee(14,084)
Amount recorded in accumulated deficit $482,713 
(e)Reflects the elimination of revenues and expenses directly attributable to the IMP Sale.
(f)Reflects the estimated income tax effect of the pro forma adjustments using an annual effective tax rate of approximately 25.6% and 25.5% for the six months ended July 3, 2021 and fiscal year ended December 31, 2020, respectively.
Assets and Liabilities Held for Sale
July 3, 2021
(in thousands)
Carrying amounts of major classes of assets held for sale:
Accounts receivable, net$56,166 
Inventories, net52,995 
Prepaid expenses and other5,561 
Total current assets114,722 
  Property, plant and equipment, net49,423 
  Lease right-of-use assets9,841 
  Goodwill121,464 
  Intangible assets, net60,623 
  Other assets1,257 
Total assets held for sale$357,330 
 
Carrying amounts of major classes of liabilities held for sale:
Accounts payable$15,955 
Accrued compensation and benefits6,138 
Short-term lease liabilities2,685 
Other accrued expenses16,416 
Total current liabilities41,194 
  Deferred income taxes13,606 
  Long-term lease liabilities8,490 
  Other long-term liabilities2,466 
Total non-current liabilities24,562 
  Total liabilities held for sale$65,756 
Net assets $291,574 





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