8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 8-K

________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 9, 2021

 

Cornerstone Building Brands, Inc.

(Exact name of registrant as specified in its charter)

________________

Delaware	1-14315	76-0127701
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

5020 Weston Parkway	Suite 400	Cary	NC	27513
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (866) 419-0042

________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock $.01 par value per share	CNR	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company     ☐

If an emerging growth company, indicate by check mark 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. £

Item 2.01. Completion of Acquisition or Disposition of Assets.

On August 9, 2021, Cornerstone Building Brands, Inc. (the “Company”) completed the previously announced sale of the Company’s Insulated Metal Panels business (the “IMP Sale”) to Nucor Insulated Panel Group Inc (“Purchaser”) and Vulcraft Canada Inc. (“Canada Purchaser”) for an aggregate purchase price of $1 billion in cash, subject to customary adjustments, in accordance with the terms of the Securities Purchase Agreement, dated as of June 5, 2021, by and among Purchaser, Canada Purchaser and the Company (the “Transaction Agreement”).

The foregoing description of the Transaction Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Transaction Agreement, which was filed with the Securities and Exchange Commission on August 4, 2021 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2021, and is incorporated herein by reference. The Company classified the IMP business as held for sale in its consolidated balance sheet in its Quarterly Report on Form 10-Q for the fiscal quarter ended July 3, 2021.

Item 7.01. Regulation FD Disclosure.

The Company issued a press release on August 9, 2021 announcing the closing of the IMP Sale. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01 and Exhibit 99.1 are furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Exchange Act or the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(b)     Pro forma financial information.

The Unaudited Pro Forma Financial Statements of the Company reflecting the closing of the IMP Sale are filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.

(d)     Exhibits.

Exhibit No.	Description
99.1	Press Release dated August 9, 2021
99.2	Unaudited Pro Forma Consolidated Financial Statements of Cornerstone Building Brands, Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

CORNERSTONE BUILDING BRANDS, INC.
By:	/s/ Alena S. Brenner
	Alena S. Brenner
	Executive Vice President, General Counsel and Corporate Secretary

Date: August 9, 2021

EX-99.1

Exhibit 99.1

NEWS RELEASE

Cornerstone Building Brands Completes Divestiture of its Insulated Metal Panels Business for $1 Billion, Accelerates Long-term Value Creation

CARY, NC, August 9, 2021 - Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products in North America, announced today that it completed the previously announced sale of its Insulated Metal Panels (“IMP”) business to Nucor Insulated Panel Group, Inc. and certain of its subsidiaries (collectively, “Nucor”) in a cash transaction for $1 billion, subject to customary adjustments. The Company expects post-tax transaction proceeds to be used to pay down a portion of its secured credit facilities, invest in organic growth and efficiency projects and strategic acquisitions.

This strategic transaction positions the Company for further growth in large, deep markets and strengthens its financial flexibility. We continually evaluate our portfolio, taking actions that will result in a more focused and simplified portfolio, which we believe will enhance Cornerstone Building Brands’ value proposition, fueling growth and value creation.

About Cornerstone Building Brands

Cornerstone Building Brands is the largest manufacturer of exterior building products for residential and low-rise non-residential buildings in North America. Headquartered in Cary, N.C., we serve residential and commercial customers across the new construction and repair and remodel markets. Our market leading portfolio of products spans vinyl windows, vinyl siding, stone veneer, metal roofing, metal wall systems and metal accessories. Cornerstone Building Brands’ broad, multichannel distribution platform and expansive national footprint includes more than 20,000 employees at manufacturing, distribution and office locations throughout North America. Corporate stewardship and environmental, social and governance (ESG) responsibility are deeply embedded in our culture, and we are committed to contributing positively to the communities where we live, work and play. For more information, visit us atwww.cornerstonebuildingbrands.com.

Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “will,” “believe,” “anticipate,” “guidance,” “plan,” “potential,” “should,” “forecast,” “target” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company’s actual performance to differ materially from that projected in such statements. Such forward-looking statements include statements concerning our use of the proceeds from the transaction. Among the factors that could cause actual results to differ materially include, but are not limited to, those described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and other filings with the Securities and Exchange Commission. The Company expressly disclaims any obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:

Tina Beskid – Investor Relations

Jennifer Minx – Media Relations

1-866-419-0042

info@investors.cornerstonebuildingbrands.com

EX-99.2

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 Brands		Pro Forma Adjustments			Cornerstone Building Brands Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	88,978	$	1,000,000	(a)	$	1,088,978
Restricted cash	6,224		—			6,224
Accounts receivable, net	613,193		—			613,193
Inventories, net	549,736		—			549,736
Income taxes receivable	46,358		—			46,358
Investments in debt and equity securities, at market	2,695		—			2,695
Prepaid expenses and other	88,942		—			88,942
Assets held for sale	390,025		(357,330)		(b)	32,695
Total current assets	1,786,151		642,670			2,428,821
Property, plant and equipment, net	568,901		—			568,901
Lease right-of-use assets	272,366		—			272,366
Goodwill	1,107,758		—			1,107,758
Intangible assets, net	1,488,426		—			1,488,426
Deferred income taxes	2,178		—			2,178
Other assets, net	28,283		—			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 payable	266,067		—			266,067
Accrued compensation and benefits	75,966		—			75,966
Accrued interest	21,406		—			21,406
Accrued income taxes	6,560		211,629		(d)	218,189
Current portion of lease liabilities	68,198		—			68,198
Other accrued expenses	280,236		14,084		(c)	294,320
Liabilities held for sale	75,927		(65,756)		(b)	10,171
Total current liabilities	820,360		159,957			980,317
Long-term debt	3,180,759		—			3,180,759
Deferred income taxes	233,602		—			233,602
Long-term lease liabilities	205,530		—			205,530
Other long-term liabilities	334,565		—			334,565
Total long-term liabilities	3,954,456		—			3,954,456
Stockholders’ equity:
Common stock	1,261		—			1,261
Additional paid-in capital	1,265,887		—			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’ equity	479,247		482,713			961,960
Total liabilities and stockholders’ equity	$	5,254,063	$	642,670		$	5,896,733

2

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 Brands		Pro Forma Adjustments			Cornerstone Building Brands Pro Forma
Net sales	$	2,667,153	$	(155,287)	(e)	$	2,511,866
Cost of sales	2,095,696		(127,483)		(e)	1,968,213
Gross profit	571,457		(27,804)			543,653
Selling, general and administrative expenses	316,686		(20,310)		(e)	296,376
Intangible asset amortization	93,011		(3,220)		(e)	89,791
Restructuring and impairment charges, net	6,490		(193)		(e)	6,297
Strategic development and acquisition related costs	3,252		13,316		(c),(e)	16,568
Income from operations	152,018		(17,397)			134,621
Interest income	140		(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), net	830		(241)		(e)	589
Income before taxes	7,000		(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:
Basic	125,683					125,683
Diluted	126,469					126,469

3

CORNERSTONE BUILDING BRANDS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
	Year Ended December 31, 2020
	Cornerstone Building Brands		Pro Forma Adjustments			Cornerstone Building Brands Pro Forma
Net sales	$	4,617,369	$	(309,844)	(e)	$	4,307,525
Cost of sales	3,567,049		(211,678)		(e)	3,355,371
Gross profit	1,050,320		(98,166)			952,154
Selling, general and administrative expenses	579,200		(39,047)		(e)	540,153
Intangible asset amortization	180,994		(8,661)		(e)	172,333
Restructuring and impairment charges, net	34,120		(2,069)		(e)	32,051
Strategic development and acquisition related costs	19,341		416		(e)	19,757
Goodwill impairment	503,171		—			503,171
Income (loss) from operations	(266,506)		(48,805)			(315,311)
Interest income	1,364		(98)		(e)	1,266
Interest expense	(213,610)		(3)		(e)	(213,613)
Foreign exchange gain (loss)	1,068		(337)		(e)	731
Other income (expense), net	469		(594)		(e)	(125)
Income (loss) before income taxes	(477,215)		(49,837)			(527,052)
Provision (benefit) for income taxes	5,563		(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:
Basic	125,562					125,562
Diluted	125,562					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.

4

	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 sale	708,426
Accrued income taxes	(211,629)
Preliminary gain on sale, net of tax	496,797
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, net	52,995
Prepaid expenses and other	5,561
Total current assets	114,722
Property, plant and equipment, net	49,423
Lease right-of-use assets	9,841
Goodwill	121,464
Intangible assets, net	60,623
Other assets	1,257
Total assets held for sale	$	357,330
Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	15,955
Accrued compensation and benefits	6,138
Short-term lease liabilities	2,685
Other accrued expenses	16,416
Total current liabilities	41,194
Deferred income taxes	13,606
Long-term lease liabilities	8,490
Other long-term liabilities	2,466
Total non-current liabilities	24,562
Total liabilities held for sale	$	65,756
Net assets	$	291,574

5

XML

Cover	Aug. 09, 2021
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 09, 2021
Entity Registrant Name	Cornerstone Building Brands, Inc.
Entity Central Index Key	0000883902
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity File Number	1-14315
Entity Tax Identification Number	76-0127701
Entity Address, Address Line One	5020 Weston Parkway
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Cary
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27513
City Area Code	866
Local Phone Number	419-0042
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock $.01 par value per share
Trading Symbol	CNR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false