What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-06 · 189 added, 303 removed, 368 unchanged (57% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions, except per share amounts) September 29,

2024 September 24,

2023 September 29,

2024 September 24,

13 Weeks Ended

Dollars presented in millions, except per share amounts) March 30,

2025 March 31,

NET SALES $ 660.3 $ 638.1

6 unchanged sentences

Interest expense 19.4 14.1

Other income, net ( 1.8 ) ( 1.0 ) ( 5.0 ) ( 0.1 )

Other expense (income), net 0.4 ( 0.3 )

INCOME BEFORE TAXES 17.3 49.0

10 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29,

2024 September 24,

2023 September 29,

2024 September 24,

13 Weeks Ended

Dollars presented in millions) March 30,

2025 March 31,

NET INCOME $ 13.3 $ 37.5

Other comprehensive (loss) income, before tax:

Other comprehensive income, before tax:

Foreign currency translation adjustments 1.2 ( 1.1 )

Unrealized (losses) gains on derivatives:

Unrealized holding (losses) gains arising during period ( 4.1 ) 1.6 ( 8.0 ) 8.1

Unrealized gains on derivatives:

Unrealized holding gains arising during period 1.0 1.8

reclassification adjustment for losses (gains) included in net income 2.9 ( 0.5 )

Unrealized losses on derivatives ( 2.1 ) ( 1.5 ) ( 7.3 ) ( 0.5 )

Other comprehensive (loss) income, before tax ( 6.1 ) ( 3.5 ) ( 23.1 ) 7.1

Unrealized gains on derivatives 3.9 1.3

Defined benefit plans:

Pension settlement gain 5.6 —

Amortization of net actuarial loss 0.2 —

Defined benefit plans 5.8 —

Other comprehensive income, before tax 10.9 0.2

Income tax expense related to items of other comprehensive income ( 1.4 ) —

Other comprehensive (loss) income, net of tax ( 6.1 ) ( 3.5 ) ( 23.1 ) 7.1

Other comprehensive income, net of tax 9.5 0.2

COMPREHENSIVE INCOME $ 22.8 $ 37.7

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollars presented in millions) September 29,

Dollars presented in millions) March 30,

2025 December 29,

14 unchanged sentences

Accounts payable $ 182.4 $ 180.7

Current portion of long-term debt — 17.6

Current operating lease liabilities 19.2 19.5

10 unchanged sentences

authorized 750.0 million shares;

130.1 million issued and 127.1 million outstanding as of September 29, 2024 ;

131.7 million issued and 127.2 million outstanding as of March 30, 2025 ;

130.9 million issued and 127.6 million outstanding as of December 29, 2024)

9 unchanged sentences

13 Weeks Ended

Dollars presented in millions) September 29,

2024 September 24,

Dollars presented in millions) March 30,

2025 March 31,

OPERATING ACTIVITIES

Net income $ 13.3 $ 37.5

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation 16.4 12.2

1 unchanged sentence

Restructuring charges, net of cash payments 3.1 ( 0.8 )

Write-off and amortization of finance fees 8.2 1.7

Amortization of finance fees 0.7 0.5

Stock-based compensation 5.1 4.3

Recognition of pension settlement charge 0.3 —

Changes in operating assets and liabilities:

5 unchanged sentences

Other items ( 2.3 ) ( 0.5 )

NET CASH PROVIDED BY OPERATING ACTIVITIES 176.9 336.5

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES ( 31.4 ) 18.7

INVESTING ACTIVITIES

1 unchanged sentence

( 9.8 ) ( 7.0 )

Proceeds from the disposition of assets 8.4 0.3

Acquisition of business, net of cash acquired ( 515.7 ) —

NET CASH USED IN INVESTING ACTIVITIES ( 9.8 ) ( 7.0 )

1 unchanged sentence

Proceeds from revolving credit facility borrowings 95.0 —

Issuance of Senior Notes

Repayment of revolving credit facility borrowings ( 45.0 ) —

Repayment of term loan ( 712.5 ) ( 37.5 )

Payment of financing fees ( 17.8 ) —

Repurchase of common stock ( 11.4 ) ( 1.6 )

2 unchanged sentences

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 33.5 ( 7.1 )

Effect of foreign exchange rate changes on cash and cash equivalents ( 5.6 ) ( 1.9 )

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 0.2 0.4

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH $ ( 7.5 ) $ 5.0

4 unchanged sentences

Total cash, cash equivalents and restricted cash $ 114.1 $ 153.7

(a) Capital expenditures of $ 2.4 million and $ 3.7 million that have not been paid as of September 29, 2024 and September 24, 2023, respectively, were excluded from the condensed consolidated statements of cash flows.

(a) Capital expenditures of $ 4.6 million and $ 4.1 million that have not been paid as of March 30, 2025 and March 31, 2024, respectively, were excluded from the condensed consolidated statements of cash flows.

See notes to unaudited condensed consolidated financial statements

4 unchanged sentences

Comprehensive

(Loss) Income

Earnings Total

7 unchanged sentences

Stock repurchase program ( 0.1 ) — — ( 1.9 ) — — ( 1.9 )

Balance at September 24, 2023

Balance at March 31, 2024

127.2 $ 1.3 $ 22.1 $ ( 32.9 ) $ ( 3.5 ) $ 1,242.0 $ 1,229.0

3 unchanged sentences

Net income — — — — — 13.3 13.3

Other comprehensive loss — — — — ( 23.1 ) — ( 23.1 )

Other comprehensive income — — — — 9.5 — 9.5

Stock-based compensation 0.4 — 5.1 ( 4.5 ) — — 0.6

Stock repurchase program ( 0.8 ) — — ( 11.4 ) — — ( 11.4 )

Balance at September 29, 2024

Balance at March 30, 2025

127.2 $ 1.3 $ 44.8 $ ( 59.9 ) $ ( 23.2 ) $ 1,343.7 $ 1,306.7

8 unchanged sentences

Basis of Presentation Our consolidated financial statements are based on a 52- or 53-week fiscal year ending on the last Sunday in December in each calendar year.

Our fiscal 2024 will consist of 52 weeks ending on December 29, 2024, while our fiscal 2023 consisted of 53 weeks ended on December 31, 2023.

The condensed consolidated balance sheets as of September 29, 2024 and December 31, 2023 , as well as the related condensed consolidated statements of income, comprehensive income, cash flows, and equity for the thirteen and thirty-nine weeks ended September 29, 2024 and the thirteen and thirty-nine weeks ended September 24, 2023, are unaudited.

Our fiscal 2025 and 2024 consist of 52 weeks ending on December 28, 2025 and December 29, 2024, respectively.

The condensed consolidated balance sheets as of March 30, 2025 , as well as the related condensed consolidated statements of income, comprehensive income, cash flows and equity for the thirteen weeks ended March 30, 2025 and the thirteen weeks ended March 31, 2024 are unaudited.

The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures.

5 unchanged sentences

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 .

Tornado at Jackson, Georgia Production Facility On January 12, 2023, a tornado hit the Company’s leased Jackson, Georgia production facility, causing damage to the Company’s assets and disrupting certain operations.

Insurance, less applicable deductibles, covered the repair or replacement of the Company’s assets that suffered loss or damage, provided business interruption coverage, including lost profits, and reimbursement for other expenses and costs that were incurred relating to the damages and losses suffered.

For the thirteen weeks ended March 26, 2023, the Company incurred expenses of $ 9.4 million solely related to damages caused by the tornado, and no additional expenses were incurred throughout the remainder of fiscal 2023.

These expenses included compensation costs that we continued to pay skilled labor at the Jackson facility to enable a timely ramp up of production upon re-opening the facility on March 27, 2023, the first day of our fiscal second quarter of 2023, as well as the write-off of damaged inventory, freight costs to move product to other warehouses and professional fees to secure and maintain the site.

During fiscal 2023, we received $ 7.4 million of insurance proceeds for direct costs caused by the tornado, consisting of $ 2.2 million, $ 2.0 million and $ 3.2 million received during our second, third and fourth quarters, respectively.

Both the expenses and insurance recoveries were recorded as a component of cost of products sold in the condensed consolidated statements of income.

Upon receipt of the final insurance proceeds in our fourth quarter of fiscal 2023, we considered this claim to be closed.

Recently Issued Accounting Standards

2 unchanged sentences

Accounting Standards Issued, But Not Yet Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole.

The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

The Company is currently evaluating the impact of adopting this guidance on the condensed consolidated financial statements and will adopt this guidance when it becomes effective in our Annual Report on Form 10-K for the fiscal year ending December 29, 2024.

Improvements to Income Tax Disclosures

5 unchanged sentences

The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted.

The Company is adopting this guidance when it becomes effective in our Annual Report on Form 10-K for the fiscal year ending December 28, 2025.

Disaggregation of Income Statement Expenses

4 unchanged sentences

The Company is currently evaluating the impact of adopting this guidance on the condensed consolidated financial statements.

Acquisition of Supreme

On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, the parent company of Supreme Cabinetry Brands, Inc.

1 unchanged sentence

Supreme is a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products.

Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafts framed and frameless cabinetry for a nationwide network of dealers.

Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafted framed and frameless cabinetry for a nationwide network of dealers.

The combined company is reaching more customers, through its highly complementary dealer networks, with greater efficiency and effectiveness.

1 unchanged sentence

The acquisition was funded with a combination of cash on hand and proceeds from our revolving credit facility.

The purchase consideration was $ 527.1 million , which was determined as follows:

Dollars presented in millions)

Cash considerations paid to Supreme shareholders $ 336.4

Cash paid for transaction costs of Supreme 13.9

Repayment of Supreme existing indebtedness and accrued interest 178.2

Total Cash Consideration $ 528.5

Preliminary purchase price adjustments ( 1.4 )

Total Preliminary Purchase Consideration $ 527.1

The purchase consideration was $ 527.3 million.

The Company incurred $ 1.6 million of acquisition-related costs associated with the acquisition in the thirteen weeks ended March 30, 2025 , which are recorded within selling, general and administrative expenses in the condensed consolidated statements of income.

The purchase price of Supreme was allocated on a preliminary basis as of the closing date of July 10, 2024.

Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable.

Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed of Supreme are recognized and measured at fair value.

Due to the timing of acquisition close, the preliminary fair value estimates and assumptions are subject to change as we obtain additional information over the measurement period.

The primary areas of the purchase accounting that remain preliminary for completion of the related valuations relate to, but are not limited to, property, plant and equipment, other intangible assets and the related deferred income tax impacts.

The following table sets forth the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed of Supreme, with the excess recorded to goodwill:

Dollars presented in millions)

Preliminary Net Assets Acquired Fair Value

Cash and cash equivalents $ 11.8

Accounts receivable 11.5

Inventories 17.3

Other current assets 2.1

Property, plant and equipment 115.9

Operating lease right-of-use assets 17.6

Other intangible assets 256.9

Other assets 1.9

Accounts payable $ 7.2

Current operating lease liabilities 2.4

Other current liabilities 18.0

Deferred income taxes 69.8

Operating lease liabilities 15.1

Other non-current liabilities 0.3

Net Assets Acquired $ 322.2

Goodwill 204.9

Purchase Consideration $ 527.1

The estimated value of Property, Plant and Equipment includes adjustments totaling $ 73.7 million to increase the net book value of $ 42.2 million to the preliminary fair value estimate of $ 115.9 million .

This estimate is based on other comparable acquisitions and historical experience, and preliminary expectations as to the duration of time we expect to realize benefits from those assets.

The estimated fair values of identifiable intangible assets acquired were prepared using an income valuation approach, which requires a forecast of expected future cash flows either through the use of the relief-from-royalty method or the multi-period excess earnings method.

The estimated useful lives are based on our historical experience and expectations as to the duration of time we expect to realize benefits from those assets.

We applied significant judgment in determining the fair value of the intangible assets, which involved the use of Level 3 inputs, including estimates and assumptions of future revenues, royalty rates and discount rates.

The estimated fair values of the identifiable intangible assets acquired, their estimated useful lives and the related valuation methodology are as follows:

Dollars presented in millions)

Asset Type Fair Value Useful Life Valuation Methodology

Customer relationships $ 171.8 17.5 years Multi-period excess earnings

Tradenames 85.1 Indefinite Relief from royalty method

Total other intangible assets $ 256.9

The Company recognized $ 204.9 million of goodwill , of which $ 180.8 million is tax deductible.

The $ 204.9 million of goodwill recognized is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and Supreme’s assembled workforce.

The Company incurred $ 15.0 million and $ 19.4 million of acquisition-related costs associated with the acquisition in the thirteen and thirty-nine weeks ended September 29, 2024 , respectively, which are recorded within selling, general and administrative expenses in the condensed consolidated statements of income.

Due to the timing of acquisition close, the preliminary fair value estimates and assumptions are subject to change as we obtain additional information over the measurement period of up to one year from the date of acquisition.

Since the initial measurement of the identified assets acquired and liabilities assumed, progress was made in completing certain of our additional valuations and analyses and disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

There were no adjustments to the preliminary valuation of identifiable assets acquired and liabilities assumed during the first quarter of 2025.

We continue to evaluate the initial fair values, which may be adjusted with an offsetting impact to goodwill, as additional information relative to the fair values of the assets and liabilities becomes available over the measurement period.

Pro forma financial information

Net sales and earnings related to the operations of Supreme that have been included in our condensed consolidated statements of income for the period from July 10, 2024 to September 29, 2024 are as follows:

Net sales and earnings related to the operations of Supreme that have been included in our condensed consolidated statements of income for the thirteen weeks ended March 30, 2025 are as follows:

Dollars presented in millions)

1 unchanged sentence

Net Income $ 4.1

The following table summarizes, on a pro forma basis, the combined results of operations of Supreme and MasterBrand as though the acquisition and the related financing had occurred as of December 26, 2022.

The pro forma results are not necessarily indicative of either the actual consolidated results had the acquisition of Supreme occurred on December 26, 2022, nor are they indicative of future consolidated operating results.

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

Net Sales $ 718.1 $ 738.5 $ 2,168.7 $ 2,242.4

Net Income $ 42.0 $ 56.7 $ 118.3 $ 124.5

These pro forma amounts have been calculated after applying our accounting policies and making certain adjustments, which primarily include:

(i) depreciation adjustments relating to fair value step-ups to property, plant and equipment;

(ii) amortization adjustments relating to fair value estimates of acquired intangible assets;

(iii) incremental interest expense associated with the revolving credit facility used, in part, to fund the acquisition, and related debt issuance costs;

(iv) cost of products sold adjustments relating to fair value step-ups to inventory;

and (v) transaction related costs of both MasterBrand and Supreme.

Revenue from Contracts with Customers

13 unchanged sentences

Obligations arise for us from customer rights to return our goods, including among others, product obsolescence, stock rotations, trade-in agreements for newer products and upon termination of a customer contract.

We estimate future product returns at the time of sale based on historical experience and record a corresponding refund obligation, which amounted to $ 2.2 million and $ 2.1 million as of September 29, 2024 and December 31, 2023, respectively.

We estimate future product returns at the time of sale based on historical experience and record a corresponding refund obligation, which amounted to $ 2.2 million and $ 1.9 million as of March 30, 2025 and December 29, 2024, respectively.

Refund obligations are classified within other current liabilities in our condensed consolidated balance sheets.

1 unchanged sentence

The Company disaggregates revenue from contracts with customers into (i) major sales distribution channels and (ii) total sales to customers by shipping location, as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors.

The following table disaggregates our consolidated revenue by major sales distribution channels and by shipping location for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023 .

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

Net Sales by Channel (a)

$ 393.2 $ 368.1 $ 1,060.9 $ 1,093.6

Retailers (c)

231.1 230.3 705.7 726.8

The following table disaggregates our consolidated revenue by major sales distribution channels and by shipping location for the thirteen weeks ended March 30, 2025 and March 31, 2024 .

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Net Sales by Channel

$ 353.1 $ 315.0

Retailers (b)

Net sales $ 660.3 $ 638.1

2 unchanged sentences

$ 635.0 $ 608.2

26.3 30.1 80.2 94.7

4.5 4.3 13.1 11.7

Net sales $ 660.3 $ 638.1

(a) Net sales by channel presented for the thirteen and thirty-nine weeks ended September 24, 2023 have been reclassified to conform with the new format of this table, which is intended to provide a consolidated view of our net sales by channel and shipping location.

Prior to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, net sales by channel were presented for our domestic sales only.

(b) Represents sales to dealers whose end customers include builders, professional trades and home remodelers, inclusive of sales through our dealers’ respective internet website portals.

(a) Represents sales to dealers whose end customers include builders, professional trades and home remodelers, inclusive of sales through our dealers’ respective internet website portals.

(b) Represents sales to “Do-It-Yourself” retailers, including our two largest customers:

1) Lowe’s and 2) The Home Depot, inclusive of sales through their respective internet website portals.

(d) Represents sales directly to builders.

Practical Expedients

9 unchanged sentences

All provisions for allowances for doubtful collection of accounts are included in selling, general and administrative expenses.

The following table summarizes the activity for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023:

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

The following table summarizes the activity for the thirteen weeks ended March 30, 2025 and March 31, 2024:

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Beginning balance $ 3.0 $ 4.6

Bad debt provision

— 0.8 0.1 1.5

Uncollectible accounts written off, net of recoveries ( 2.1 ) ( 0.9 )

1 unchanged sentence

Earnings Per Share

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023:

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions, except per share amounts) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the thirteen weeks ended March 30, 2025 and March 31, 2024:

13 Weeks Ended

Dollars presented in millions, except per share amounts) March 30, 2025 March 31, 2024

Numerator for basic and diluted earnings per share - Net income $ 13.3 $ 37.5

5 unchanged sentences

Diluted $ 0.10 $ 0.29

Approximately 0.3 million and 0.8 million shares were excluded from the calculation of diluted earnings per share for the thirteen and thirty-nine weeks ended September 24, 2023, respectively, because their inclusion would have been anti-dilutive.

Approximately 1.0 million shares were excluded from the calculation of diluted earnings per share for the thirteen weeks ended March 31, 2024, because their inclusion would have been anti-dilutive.

Balance Sheet Information

Supplemental information on our condensed consolidated balance sheets is as follows:

Dollars presented in millions) September 29, 2024 December 31, 2023

Dollars presented in millions) March 30, 2025 December 29, 2024

Raw materials and supplies $ 197.3 $ 197.2

12 unchanged sentences

Accrued salaries, wages and other compensation $ 41.0 $ 54.9

Accrued restructuring 4.5 1.4

Accrued income and other taxes 16.7 14.2

Accrued product warranties 9.2 12.9

Interest payable 10.8 25.5

Accrued product warranties 8.8 9.3

Accrued restructuring 7.7 4.9

Derivative payable 2.1 5.7

2 unchanged sentences

Goodwill and Identifiable Intangible Assets

We had goodwill of $ 1,129.4 million and $ 925.1 million as of September 29, 2024 and December 31, 2023, respectively.

We had goodwill of $ 1,126.1 million and $ 1,125.8 million as of March 30, 2025 and December 29, 2024, respectively.

The change in the net carrying amount of goodwill was as follows:

1 unchanged sentence

Balance at December 29, 2024

Supreme acquisition 204.9

2025 translation adjustments 0.3

Balance at September 29, 2024

The gross carrying value and accumulated amortization by class of intangible assets as of September 29, 2024 and December 31, 2023 were as follows:

September 29, 2024 December 31, 2023

Balance at March 30, 2025

The gross carrying value and accumulated amortization by class of intangible assets as of March 30, 2025 and December 29, 2024 were as follows:

March 30, 2025 December 29, 2024

Dollars presented in millions) Gross

3 unchanged sentences

Amortization Net

Indefinite-lived tradenames (a)

$ 268.5 $ — $ 268.5 $ 184.2 $ — $ 184.2

Indefinite-lived tradenames $ 266.4 $ — $ 266.4 $ 266.1 $ — $ 266.1

Amortizable intangible assets

Tradenames 10.0 ( 10.0 ) — 10.0 ( 10.0 ) —

Customer and contractual relationships (a)

534.9 ( 225.5 ) 309.4 363.6 ( 212.3 ) 151.3

Customer and contractual relationships 535.7 ( 236.8 ) 298.9 535.4 ( 230.2 ) 305.2

Patents/proprietary technology 11.0 ( 11.0 ) — 11.0 ( 11.0 ) —

1 unchanged sentence

Total identifiable intangibles $ 823.1 $ ( 257.8 ) $ 565.3 $ 822.5 $ ( 251.2 ) $ 571.3

(a) During the third quarter of 2024, we completed our acquisition of Supreme, acquiring Indefinite-lived tradenames of $ 85.1 million and customer relationships of $ 171.8 million.

There were no impairments of goodwill or indefinite-lived assets for the thirteen and thirty-nine weeks ended September 29, 2024 .

There were no impairments of goodwill or indefinite-lived assets for the thirteen weeks ended March 30, 2025 .

The Company tests goodwill and indefinite-lived intangibles for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate the asset might be impaired.

There were no triggering events requiring an impairment assessment be conducted in the thirteen and thirty-nine weeks ended September 29, 2024.

However, it is possible that future changes in circumstances would require the Company to record additional non-cash impairment charges.

There were no triggering events requiring an impairment assessment be conducted in the thirteen weeks ended March 30, 2025.

However, it is possible that future changes in circumstances would require the Company to record non-cash impairment charges.

Financial Instruments

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In all periods presented, the recognized gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item, are recognized in cost of products sold on the condensed consolidated statements of income.

• Derivative instruments that are designated as fair value hedges - The gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item, are recognized in other income, net on the condensed consolidated statements of income.

• Derivative instruments that are designated as fair value hedges - The gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item, are recognized in other expense, net on the condensed consolidated statements of income.

• Derivative instruments that are designated as net investment hedges - The changes in fair value of the derivative instrument are recognized in the condensed consolidated statements of income when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity.

As of and for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023, we have only entered into foreign currency forward contracts, some of which have been designated as fair value hedges and some of which have been designated as cash flow hedges.

As of and for the thirteen weeks ended March 30, 2025 and March 31, 2024, we have only entered into foreign currency forward contracts, some of which have been designated as fair value hedges and some of which have been designated as cash flow hedges.

We may enter into foreign currency forward contracts to protect against foreign exchange risks associated with certain existing assets and liabilities, forecasted future cash flows and net investments in foreign subsidiaries.

2 unchanged sentences

The gross U.S.

dollar equivalent notional amount of all foreign currency derivative hedges outstanding at September 29, 2024, was $ 91.3 million, representing a net settlement liability of $ 5.8 million.

Based on foreign exchange rates as of September 29, 2024 , we estimate that the $ 5.1 million of net derivative losses associated with cash flow hedges and included in accumulated other comprehensive inco me as of September 29, 2024, will be reclassified to earnings within the next twelve months.

The fair values of foreign exchange derivative instruments on the condensed consolidated balance sheets as of September 29, 2024 and December 31, 2023 were:

Dollars presented in millions) Location September 29, 2024 December 31, 2023

dollar equivalent notional amount of all foreign currency derivative hedges outstanding at March 30, 2025, was $ 79.3 million, representing a net settlement liability of $ 1.9 million.

Based on foreign exchange rates as of March 30, 2025 , we estimate that the $ 1.1 million of net derivative losses associated with cash flow hedges and included in accumulated other comprehensive inco me as of March 30, 2025, will be reclassified to earnings within the next twelve months.

The fair values of foreign exchange derivative instruments on the condensed consolidated balance sheets as of March 30, 2025 and December 29, 2024 were:

Dollars presented in millions) Location March 30, 2025 December 29, 2024

Foreign exchange contracts Other current assets $ 0.2 $ —

2 unchanged sentences

Total liabilities $ 2.1 $ 5.7

The effects of cash flow hedging financial instruments included within the condensed consolidated statements of comprehensive income for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023 are presented in the table below.

The effects of cash flow hedging financial instruments included within the condensed consolidated statements of comprehensive income for the thirteen weeks ended March 30, 2025 and March 31, 2024 are presented in the table below.

When the hedged item affects earnings, amounts are reclassed out of accumulated other comprehensive loss and recognized as a component of cost of products sold.

1 unchanged sentence

Income for Cash Flow Hedging Relationships

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Foreign exchange contracts:

Unrealized holding (losses) gains arising during period $ ( 4.1 ) $ 1.6 $ ( 8.0 ) $ 8.1

reclassification adjustment for gains included in net income 2.0 ( 3.1 ) 0.7 ( 8.6 )

Unrealized losses on derivatives $ ( 2.1 ) $ ( 1.5 ) $ ( 7.3 ) $ ( 0.5 )

The effects of fair value hedging financial instruments included in other income, net on the condensed consolidated statements of income for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023 were:

Amount of (Gain) Loss Recognized in Earnings

Unrealized holding gains arising during period $ 1.0 $ 1.8

reclassification adjustment for losses (gains) included in net income 2.9 ( 0.5 )

Unrealized gains on derivatives $ 3.9 $ 1.3

The effects of fair value hedging financial instruments included in other expense, net on the condensed consolidated statements of income for the thirteen weeks ended March 30, 2025 and March 31, 2024 were:

Amount of (Loss) Gain Recognized in Earnings

on Fair Value Hedging Relationships

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Foreign exchange contracts:

Hedged items $ ( 0.2 ) $ 0.1

Derivatives designated as hedging instruments ( 0.1 ) — — 3.4

Net losses recognized in earnings $ — $ 1.3 $ — $ 2.7

Net (losses) gains recognized in earnings $ ( 0.2 ) $ 0.1

Fair Value Measurements

ASC requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels.

ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels.

Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities.

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Level 3 inputs are unobservable inputs due to little or no market activity for the asset or liability, such as internally-developed valuation models.

We do not have any assets or liabilities measured at fair value on a recurring basis that are Level 3, except for certain assumptions in estimating the fair value of indefinite-lived tradenames, as discussed in Note 8, "Goodwill and Identifiable Intangible Assets," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Assets and liabilities measured at fair value on a recurring basis as of September 29, 2024 and December 31, 2023 were as follows:

Dollars presented in millions) September 29, 2024 December 31, 2023

We do not have any assets or liabilities measured at fair value on a recurring basis that are Level 3, except for certain assumptions in estimating the fair value of indefinite-lived tradenames, as discussed in Note 3, "Acquisition of Supreme," and Note 9, "Goodwill and Identifiable Intangible Assets," in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

Assets and liabilities measured at fair value on a recurring basis as of March 30, 2025 and December 29, 2024 were as follows:

Dollars presented in millions) March 30, 2025 December 29, 2024

Derivative asset financial instruments (Level 2) $ 0.2 $ —

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Derivative liability financial instruments (Level 2) $ 2.1 $ 5.7

The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities, as a discount rate for the remaining principal payments.

As of September 29, 2024, the fair value of total debt was $ 1,109.1 million compared to the carrying value of $ 1,075.0 million , excluding deferred financing costs.

As of December 31, 2023, the fair value of total debt was equal to the carrying value of $ 712.5 million , excluding deferred financing costs.

The following table provides a summary of the Company’s debt as of September 29, 2024 and December 31, 2023, including the carrying value of the debt less debt issuance costs:

September 29, 2024 December 31, 2023

Dollars presented in millions) Current Long-term Current Long-term

Revolving credit facility due November 2027 $ — $ — $ — $ —

Term loan due November 2027 — — 18.8 693.7

The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts.

Derivative financial instruments are recorded at fair value.

The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities, at a discount rate for the remaining principal payments.

As of March 30, 2025, both the fair value and carrying value of total debt was $ 1,070.0 million , excluding deferred financing costs.

As of December 29, 2024, the fair value of total debt was $ 1,025.3 million compared to the carrying value of $ 1,020.0 million , excluding deferred financing costs.

The following table provides a summary of the Company’s debt as of March 30, 2025 and December 29, 2024, including the carrying value of the debt less debt issuance costs:

March 30, 2025 December 29, 2024

Dollars presented in millions) Long-term Long-term

Revolving credit facility due June 2029 $ 370.0 $ 320.0

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Total $ 1,058.2 $ 1,007.8

2022 Credit Agreement

On November 18, 2022, the Company entered into a 5-year , $ 1.25 billion credit agreement, consisting of a $ 750.0 million term loan and a $ 500.0 million revolving credit facility (the “2022 Credit Agreement”).

The 2022 Credit Agreement was secured by certain assets as well as the guarantee of certain of our subsidiaries.

The $ 750.0 million term loan had quarterly required amortization payments that began in March 2023.

T he revolving credit facility was paid in full during the third quarter of fiscal 2023.

During the thirteen weeks ended September 24, 2023, the Company made total payments of $ 28.1 million on the term loan, consisting of a $ 4.7 million required payment due September 2023, and $ 23.4 million of required amortization payments due during each of the next three quarters.

As such, we were not required to make, nor did we make, any required amortization payments associated with the term loan during the fourth quarter of fiscal 2023 or in the first two quarters of fiscal 2024.

In June 2024, the Company refinanced the 2022 Credit Agreement, including extinguishing and repaying all amounts outstanding under the existing term loan facility, inclusive of accrued and unpaid interest.

Interest rates under the 2022 Credit Agreement were variable based on the Secured Overnight Financing Rate (“SOFR”) at the time of the borrowing and the Company’s net leverage ratio, as measured by net leverage to our consolidated earnings before interest, taxes, depreciation and amortization (“Consolidated EBITDA”).

Interest rates could range from SOFR plus 1.85 percent to SOFR plus 2.60 percent.

Net leverage was defined as consolidated total indebtedness minus certain cash and cash equivalents.

Consolidated EBITDA was defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments.

The net leverage ratio was not permitted to exceed 3.875 to 1.00 at the initial borrowing through the second fiscal quarter of 2023, adjusting downward in various future quarters before settling at 3.25 to 1.00 in January 2025.

The Company was also required to maintain a minimum interest coverage ratio, defined as Consolidated EBITDA compared to consolidated interest expense, of 3.0 to 1.0.

The Company was in compliance with all debt covenants under the 2022 Credit Agreement through the date of the June 2024 refinancing transaction.

2024 Refinancing Transaction

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The Company used the funds from the refinancing transaction, and cash on-hand, to:

1) refinance the 2022 Credit Agreement (including repaying all amounts outstanding under the existing term loan, inclusive of accrued and unpaid interest), 2) fund the previously announced acquisition of Supreme on July 10, 2024, and 3) to pay all fees and expenses related to the foregoing transactions.

1) refinance the 2022 credit agreement (including repaying all amounts outstanding under the existing term loan, inclusive of accrued and unpaid interest), 2) fund the acquisition of Supreme on July 10, 2024, and 3) pay all fees and expenses related to the foregoing transactions.

The Senior Notes were issued under the Indenture dated as of June 27, 2024 (the “Indenture”) at par.

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The Senior Notes will mature on July 15, 2032.

Interest on the Senior Notes will accrue at a rate of 7.00 percent per annum and will be payable semi-annually in arrears on January 15 and July 15, beginning on January 15, 2025.

The Senior Notes had an outstanding balance of $ 700.0 million as of September 29, 2024.

As of September 29, 2024, prepaid debt issuance costs related to the Notes were $ 12.7 million and are being amortized over the term of the debt.

Interest on the Senior Notes accrues at a rate of 7.00 percent per annum and is payable semi-annually in arrears on January 15 and July 15, beginning on January 15, 2025.

The Senior Notes had an outstanding balance of $ 700.0 million as of March 30, 2025.

As of March 30, 2025, prepaid debt issuance costs related to the Notes were $ 11.8 million and are being amortized over the term of the debt.

These costs are included in long-term debt in our condensed consolidated balance sheets.

The Company may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to July 15, 2027 at a redemption price equal to 100 percent of the principal amount of the Senior Notes redeemed plus a premium and accrued and unpaid interest.

At any time and from time to time on or after July 15, 2027, the Company may, at its option, redeem the Senior Notes, in whole or in part, at the applicable redemption price set forth in the Indenture plus, in each case, accrued and unpaid interest.

In addition, at any time and from time to time prior to July 15, 2027, the Company may, at its option, redeem up to 40 percent of the aggregate principal amount of the Senior Notes with the proceeds from certain equity offerings at the applicable redemption price set forth in the Indenture.

The Indenture contains certain covenants, including, but not limited to, limitations and restrictions on the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to (i) incur additional indebtedness and guarantee indebtedness, (ii) make restricted payments, (iii) create, incur or assume liens or use assets as security in other transactions, (iv) merge, consolidate, or sell, transfer, lease or dispose of substantially all of their assets, (v) sell or transfer certain assets, (vi) enter into or conduct transactions with affiliates of the Company and (vii) agree to certain restrictions or encumbrances on the ability of restricted subsidiaries to pay dividends, make loans or advances, or to otherwise transfer property or assets to the Company or other restricted subsidiaries.

These covenants are subject to a number of important conditions, qualifications, exceptions and limitations.

The Indenture also includes customary events of default.

Certain of the foregoing covenants will be suspended in the event that (i) the Senior Notes receive investment grade ratings from any two of Fitch Ratings Inc., Moody’s Investors Service, Inc.

or S&P Global Ratings and (ii) no default or event of default has occurred and is continuing under the Indenture.

The Company was in compliance with all of its debt covenants under the Indenture as of September 29, 2024.

The Company was in compliance with all of its debt covenants under the Indenture as of March 30, 2025 and December 29, 2024.

The 2024 Credit Agreement provides for a 5 -year , $ 750.0 million revolving credit facility.

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The Company will also pay customary agency fees and a commitment fee based on the daily unused portion of the revolving credit facility ranging from 0.20 percent to 0.30 percent per annum, depending on its net leverage ratio.

The 2024 Credit Agreement contains customary representations and warranties, affirmative covenants, and restrictive covenants.

The restrictive covenants limit the Company and its subsidiaries’ ability to, among other things, (i) incur indebtedness, (ii) create liens on the Company’s or such subsidiaries’ assets, (iii) engage in fundamental changes, (iv) make investments, (v) sell or otherwise dispose of assets, (vi) engage in sale-leaseback transactions, (vii) make restricted payments, (viii) engage in certain transactions with affiliates and (ix) enter into agreements restricting the ability of the Company’s subsidiaries to make distributions to the Company or incur liens on their assets.

The 2024 Credit Agreement also contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed (i) in the case of any fiscal quarter ending on or prior to December 31, 2024, 3.50 to 1:00 and (ii) in the case of any fiscal quarter ending on or following March 31, 2025, 3.25 to 1:00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter.

The 2024 Credit Agreement contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed, in the case of any fiscal quarter ending on or following March 30, 2025, 3.25 to 1:00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter.

The Company is also required to maintain a minimum interest coverage ratio of 3.00 to 1.00.

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The occurrence of an event of default could result in the termination of commitments under the revolving credit facility, the acceleration of all outstanding amounts thereunder and the requirement to cash collateralize outstanding letters of credit.

The Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of September 29, 2024.

The revolving credit facility had an outstanding balance of $ 375.0 million as of September 29, 2024 and had $ 350.4 million of availability.

The Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of March 30, 2025 and December 29, 2024.

The revolving credit facility had an outstanding balance of $ 370.0 million as of March 30, 2025 and had $ 358.6 million of availability.

Availability under the $ 750.0 million revolving credit facility is reduced by the outstanding balance under the revolving credit facility and outstanding letters of credit.

As of September 29, 2024, prepaid debt issuance costs related to the 2024 Credit Agreement were $ 4.9 million and will be amortized over the term of the debt.

At September 29, 2024, these costs are included in other assets in our condensed consolidated balance sheets.

Interest paid on debt was $ 6.7 million and $ 34.7 million for the thirteen and thirty-nine weeks ended September 29, 2024, respectively, and $ 14.4 million and $ 49.1 million for the thirteen and thirty-nine weeks ended September 24, 2023, respectively.

As of March 30, 2025, prepaid debt issuance costs related to the 2024 Credit Agreement were $ 4.4 million and will be amortized over the term of the debt.

At March 30, 2025, these costs are included in other assets in our condensed consolidated balance sheets.

Interest paid on debt was $ 33.4 million and $ 14.1 million for the thirteen weeks ended March 30, 2025 and March 31, 2024 , respectively.

Restructuring Charges

For the thirteen and thirty-nine weeks ended September 29, 2024 , we recognized restructuring charges of $ 7.8 million and $ 11.0 million, respectively.

For the thirteen and thirty-nine weeks ended September 24, 2023, we recognized restructuring charges of $ 1.4 million and $ 4.1 million.

Restructuring charges for all periods presented are largely related to severance costs and other employee-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint.

For the thirteen weeks ended March 30, 2025 , we recognized restructuring charges of $ 4.7 million.

For the thirteen weeks ended March 31, 2024, we recognized restructuring charges of $ 0.4 million.

Restructuring charges for all periods presented are largely related to severance costs and other associate-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint.

Reconciliation of Restructuring Liability

Dollars presented in millions) Balance at

June 30, 2024 Provision Cash Expenditures (a)

Writeoffs Balance at September 29, 2024

Workforce reduction costs $ 1.4 $ 5.7 $ ( 2.7 ) $ — $ 4.4

0.1 2.1 ( 0.9 ) ( 1.2 ) 0.1

$ 1.5 $ 7.8 $ ( 3.6 ) $ ( 1.2 ) $ 4.5

Dollars presented in millions) Balance at

June 25, 2023

Provision Cash Expenditures (a)

Writeoffs Balance at September 24, 2023

Workforce reduction costs $ 3.2 $ 1.2 $ ( 3.0 ) $ — $ 1.4

0.1 0.2 ( 0.2 ) — 0.1

$ 3.3 $ 1.4 $ ( 3.2 ) $ — $ 1.5

Dollars presented in millions) Balance at December 29, 2024 Provision Cash Expenditures (a)

Writeoffs Balance at September 29, 2024

Writeoffs Balance at March 30, 2025

Workforce reduction costs $ 4.8 $ 3.9 $ ( 1.0 ) $ — $ 7.7

0.1 3.3 ( 2.1 ) ( 1.2 ) 0.1

Other 0.1 0.8 ( 0.6 ) ( 0.3 ) —

$ 4.9 $ 4.7 $ ( 1.6 ) $ ( 0.3 ) $ 7.7

Dollars presented in millions) Balance at December 31, 2023 Provision Cash Expenditures (a)

Writeoffs Balance at September 24, 2023

Writeoffs Balance at March 31, 2024

Workforce reduction costs $ 1.3 $ 0.1 $ ( 0.9 ) $ — $ 0.5

0.1 1.6 ( 1.6 ) — 0.1

Other 0.1 0.3 ( 0.3 ) — 0.1

$ 1.4 $ 0.4 $ ( 1.2 ) $ — $ 0.6

(a) Cash expenditures primarily related to severance charges.

(b) Other includes provisions and non-cash writeoffs related to facility closure costs.

The effective income tax rates for the thirteen weeks ended September 29, 2024 and September 24, 2023, were 26.1 percent and 23.4 percent, respectively.

The net increase in the effective tax rate between the periods is primarily due to nondeductible acquisition-related transaction costs, an increase in nondeductible stock compensation and changes in foreign income inclusions with offsetting foreign tax credits, partially offset by favorable return-to-provision adjustments and a decrease in the deferred tax liability for foreign earnings.

The difference between our effective income tax rate for the thirteen weeks ended September 29, 2024, and the U.S.

statutory rate of 21.0 percent is due to the unfavorable impact of state and local income taxes, nondeductible compensation, nondeductible acquisition-related transaction costs and foreign income inclusions with offsetting tax credits, partially offset by favorable return-to-provision adjustments and the mix of earnings in jurisdictions with differing tax rates.

The difference between our effective income tax rate for the thirteen weeks ended September 24, 2023, and the U.S.

statutory rate of 21.0 percent is due to the unfavorable changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits and recognition of a deferred tax liability for foreign earnings, partially offset by the mix of earnings in jurisdictions with differing tax rates.

The effective income tax rates for the thirty-nine weeks ended September 29, 2024 and September 24, 2023, were 24.6 percent and 25.4 percent, respectively.

The net decrease in the effective tax rate between the periods is primarily related to favorable return-to-provision adjustments, the stock compensation windfall benefit for shares which vested and a decrease in the deferred tax liability for foreign earnings, partially offset by nondeductible acquisition-related transaction costs and nondeductible compensation.

The difference between our effective income tax rate for the thirty-nine weeks ended September 29, 2024, and the U.S.

statutory rate of 21.0 percent is due to the unfavorable impact of state and local income taxes, foreign income inclusions with offsetting tax credits, nondeductible compensation and nondeductible acquisition-related transaction costs, partially offset by favorable return-to-provision adjustments , the stock compensation windfall benefit for shares which vested and the mix of earnings in jurisdictions with differing tax rates.

The difference between the Company’s effective income tax rate for the thirty-nine weeks ended September 24, 2023, and the U.S.

statutory rate of 21.0 percent is due to unfavorable changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits, recognition of a deferred tax liability for foreign earnings and changes due to foreign tax return filings, partially offset by the mix of earnings in jurisdictions with differing tax rates.

The effective income tax rates for the thirteen weeks ended March 30, 2025 and March 31, 2024, were 23.1 percent and 23.5 percent, respectively.

The decrease in effective tax rate between the periods is primarily the result of lower foreign income taxed at higher rates, return-to-provision adjustments, and foreign inclusions net of foreign tax credits, partially offset by an increase in the valuation allowance and a reduction in the stock compensation windfall benefits for shares which vested.

The difference between our effective income tax rate for the thirteen weeks ended March 30, 2025, and the U.S.

statutory rate of 21.0 percent is primarily due to the unfavorable impact of net changes in state and local income taxes, nondeductible compensation, foreign income taxed at higher rates, an increase in the valuation allowance and foreign income inclusions net of foreign tax credits.

These were partially offset by benefits for return-to-provision adjustments , the stock compensation windfall benefit for shares which vested, tax credits, and foreign exclusions.

The difference between the Company’s effective income tax rate for the thirteen weeks ended March 31, 2024, and the U.S.

statutory rate of 21.0 percent is primarily due to the unfavorable impact of state and local income taxes, foreign income inclusions net of foreign tax credits and nondeductible compensation, partially offset by the stock compensation windfall benefit for shares which vested and the mix of earnings in jurisdictions with differing tax rates.

Pension and Other Postretirement Plans

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The defined benefit pension plan has been frozen to new participants and benefit accruals were frozen for active participants on or before December 31, 2016.

During 2023, our Board of Directors approved a plan to terminate the defined benefit pension plan.

The termination and settlement process, which preserves retirement benefits due to participants but changes the ultimate payor of such benefits, is expected to take up to 24 months to complete, subject to receipt of customary regulatory approvals.

During 2024, the Company is offering a lump-sum benefit payout option to certain plan participants.

During 2025, we expect to complete the purchase of group annuity contracts that will transfer any remaining pension benefit obligation to an insurance company.

The components of net periodic cost (benefit) for pension and other postretirement plans for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023, respectively, are as set forth in the tables below.

During 2023, the Board of Directors of MasterBrand, Inc.

approved a plan to terminate the defined benefit pension plan.

The termination and settlement process preserves retirement benefits due to participants but changes the ultimate payor of such benefits.

During 2024, the Company offered a lump-sum benefit payout option to certain plan participants, resulting in $ 41.9 million of payments to participants who elected this option, equivalent to approximately 34 percent of the Company’s benefit obligation for the plan.

Due to the size of the lump-sum distribution, in accordance with U.S.

GAAP, the Company was required to recognize a non-cash settlement charge of $ 2.9 million in the fourth quarter of 2024.

On February 18, 2025, the Company completed the purchase of group annuity contracts with an insurance company, in which the liability, plan administration and payout of benefits were irrevocably transferred.

In June 2025, the insurance company will begin paying plan benefits to eligible plan participants through the group annuity contracts.

As a result of the settlement, the Company recognized a non-cash settlement charge of $ 0.3 million recorded within other expense (income), net in the accompanying condensed consolidated statements of income for the quarter ended March 30, 2025.

As a result of the termination of the defined benefit pension plan, the Company recognized a surplus in plan assets of $ 5.2 million, recorded within other current assets in the accompanying condensed consolidated balance sheet as of March 30, 2025.

The Company intends to use the surplus to satisfy other Company obligations for qualified replacement plans.

The components of net periodic cost (benefit) for pension and other postretirement plans for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively, are as set forth in the table below.

Service cost is classified as either a component of cost of products sold or within selling, general and administrative expenses in the condensed consolidated statements of income, based on the nature of the job responsibilities of the associates participating in the plans.

All other components of net periodic cost (benefit) are classified as other income, net in the condensed consolidated statements of income.

Pension Benefits Postretirement Benefits

13 Weeks Ended 13 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

Service cost $ — $ — $ 0.1 $ 0.1

Interest cost 1.3 1.7 0.1 0.1

Expected return on plan assets ( 1.0 ) ( 1.8 ) — —

Net periodic cost (benefit) $ 0.3 $ ( 0.1 ) $ 0.2 $ 0.2

All other components of net periodic cost are classified as other expense (income), net in the condensed consolidated statements of income.

Pension Benefits Postretirement Benefits

13 Weeks Ended 13 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

Dollars presented in millions) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Service cost $ — $ — $ 0.1 $ 0.1

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Expected return on plan assets ( 0.4 ) ( 1.0 ) — —

Net periodic cost (benefit) $ 0.8 $ ( 0.4 ) $ 0.7 $ 0.5

Settlement charge 0.3 — — —

Net periodic cost $ 0.3 $ 0.3 $ 0.2 $ 0.2

Contingencies and Accrued Losses

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Warranty expense is determined based on historic claim experience and the nature of the product category.

The following table summarizes activity related to our product warranty liability for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023.

13 Weeks Ended 39 Weeks Ended

Dollars presented in millions) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023

The following table summarizes activity related to our product warranty liability for the thirteen weeks ended March 30, 2025 and March 31, 2024.

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Reserve balance at the beginning of the period $ 9.3 $ 12.9

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In order to prevent the 2018 tax year from further audit by the SAT, the Company has filed an action to declare this annulment final in the specialized court of trade and customs in Monterrey, Nuevo Leon, Sala Especializada en Materia de Comercio Exterior y Auxiliar – Noreste, Tribunal Federal de Justicia Administrativa.

We reserved an immaterial amount related to the 2018 tax year audit as our best estimate of our probable liability as of September 29, 2024 and December 31, 2023.

We reserved an immaterial amount related to the 2018 tax year audit as our best estimate of our probable liability as of March 30, 2025 and December 29, 2024.

While we cannot predict with certainty the outcome of any future review relating to the 2018 tax year or other open tax years, based on currently known information, we believe our risk of additional loss is remote and not estimable.

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We reserve for remediation activities to clean up potential environmental liabilities as required by federal and state laws based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties.

There were no material environmental accruals as of September 29, 2024 and December 31, 2023.

There were no material environmental accruals as of March 30, 2025 and December 29, 2024.

Accumulated Other Comprehensive Loss

1 unchanged sentence

It includes currency translation gains and losses, realized gains and losses from derivative instruments designated as cash flow hedges, and defined benefit plan adjustments.

The after-tax components of and changes in accumulated other comprehensive loss for the thirteen and thirty-nine weeks ended September 29, 2024 and September 24, 2023 were as follows:

The after-tax components of and changes in accumulated other comprehensive loss for the thirteen weeks ended March 30, 2025 and March 31, 2024 were as follows:

Dollars presented in millions) Foreign

Adjustments Derivative

Gain (Loss) Pension and Other

(Loss) Gain Pension and Other

Postretirement Plans

1 unchanged sentence

Comprehensive

(Loss) Income

Balance at June 30, 2024 $ ( 7.7 ) $ ( 3.0 ) $ ( 10.0 ) $ ( 20.7 )

Amounts classified into accumulated other comprehensive (loss) income ( 4.0 ) ( 4.1 ) — ( 8.1 )

Amounts reclassified into earnings — 2.0 — 2.0

Net current period other comprehensive (loss) income ( 4.0 ) ( 2.1 ) — ( 6.1 )

Balance at September 29, 2024 $ ( 11.7 ) $ ( 5.1 ) $ ( 10.0 ) $ ( 26.8 )

Balance at June 25, 2023 $ 1.6 $ 3.8 $ ( 9.3 ) $ ( 3.9 )

Balance at December 29, 2024 $ ( 23.6 ) $ ( 5.0 ) $ ( 4.1 ) $ ( 32.7 )

Amounts classified into accumulated other comprehensive (loss) income 1.2 1.0 4.2 6.4

Amounts reclassified into earnings — 2.9 0.2 3.1

Net current period other comprehensive loss ( 2.0 ) ( 1.5 ) — ( 3.5 )

Balance at September 24, 2023 $ ( 0.4 ) $ 2.3 $ ( 9.3 ) $ ( 7.4 )

Dollars presented in millions) Foreign

Adjustments Derivative

Gain (Loss) Pension and Other

Postretirement Plans

Adjustments Accumulated

Comprehensive

(Loss) Income

Net current period other comprehensive income 1.2 3.9 4.4 9.5

Balance at March 30, 2025 $ ( 22.4 ) $ ( 1.1 ) $ 0.3 $ ( 23.2 )

Balance at December 31, 2023 $ 4.1 $ 2.2 $ ( 10.0 ) $ ( 3.7 )

2 unchanged sentences

Net current period other comprehensive (loss) income ( 1.1 ) 1.3 — 0.2

Balance at September 29, 2024 $ ( 11.7 ) $ ( 5.1 ) $ ( 10.0 ) $ ( 26.8 )

Balance at December 25, 2022 $ ( 8.0 ) $ 2.8 $ ( 9.3 ) $ ( 14.5 )

Amounts classified into accumulated other comprehensive income 7.6 8.1 — 15.7

Amounts reclassified into earnings — ( 8.6 ) — ( 8.6 )

Net current period other comprehensive income (loss) 7.6 ( 0.5 ) — 7.1

Balance at September 24, 2023 $ ( 0.4 ) $ 2.3 $ ( 9.3 ) $ ( 7.4 )

Stock Repurchase Program

On May 9, 2023, we announced our Board of Directors’ authorization of a stock repurchase program under which we may repurchase up to $ 50.0 million of our common stock over a twenty-four month period at management’s discretion for general corporate purposes.

As a result of this authorization, we may repurchase shares from time to time through open market purchases, privately-negotiated transactions, block trades or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Balance at March 31, 2024 $ 3.0 $ 3.5 $ ( 10.0 ) $ ( 3.5 )

Stock Repurchase Programs

On May 9, 2023, we announced our Board of Directors’ authorization of a stock repurchase program (“2023 Share Repurchase Authorization”) under which we may repurchase up to $ 50.0 million of our common stock over a twenty-four month period expiring on April 23, 2025.

On March 13, 2025, our Board of Directors’ authorized an additional stock repurchase program (“2025 Share Repurchase Authorization”) under which we may repurchase up to $ 50.0 million of our common stock over a thirty-six month period expiring on March 13, 2028.

This stock repurchase program is in addition to the 2023 Share Repurchase Authorization.

Both stock repurchase programs allow the Company to repurchase shares at management’s discretion for general corporate purposes.

As a result of the authorization of both plans, we may repurchase shares from time to time through open market purchases, privately-negotiated transactions, block trades or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The timing and amount of our purchases will depend upon prevailing market conditions, our available capital resources, our financial and operational performance, alternative uses of capital and other factors.

We may limit or terminate the repurchase program at any time.

During the thirteen weeks ended September 29, 2024, we did not repurchase any shares of our common stock.

During the thirty-nine weeks ended September 29, 2024, we repurchased 371,499 shares of our common stock under this program.

The shares were repurchased at a cost of approximately $ 6.5 million, or an average of $ 17.58 per share, during the thirty-nine weeks ended September 29, 2024.

During the thirteen and thirty-nine weeks ended September 24, 2023, we repurchased 942,918 and 1,347,776 shares of our common stock under this program, respectively.

The shares were repurchased at a cost of approximately $ 11.5 million and $ 15.9 million, respectively, or an average of $ 12.23 and $ 11.83 per share, respectively, during the thirteen and thirty-nine weeks ended September 24, 2023.

As of September 29, 2024, $ 21.5 million remained authorized for purchase under our stock repurchase program.

We may limit or terminate either repurchase program at any time.

During the thirteen weeks ended March 30, 2025, we repurchased 838,984 shares of our common stock under the 2023 Share Repurchase Authorization.

The shares were repurchased at a cost of approximately $ 11.4 million, or an average of $ 13.60 per share.

During the thirteen weeks ended March 31, 2024, we repurchased 104,000 shares of our common stock under the 2023 Share Repurchase Authorization.

The shares were repurchased at a cost of approximately $ 1.9 million, or an average of $ 18.29 per share.

As of March 30, 2025, $ 10.0 million remained authorized for the purchase of shares under the 2023 Share Repurchase Authorization, and $ 50.0 million remained authorized for the purchase of shares under the 2025 Share Repurchase Authorizaton.

Segment Information

The Company has one operating and reportable segment that is organized based on the nature of products the Company sells, its production and distribution mode, the internal management structure and information that is regularly provided to the chief operating decision maker (“CODM”) for the purpose of assessing performance and allocating resources.

The Company is a leading manufacturer of residential cabinets in North America with a portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home.

Our production and distribution modes were determined to be a single reportable segment as discrete financial information by sale distribution channel and by customer shipping location that is limited to sale-related metrics, as disclosed in Note 4, "Revenue from Contracts with Customers."

Our chief executive officer is our CODM.

The CODM uses net income predominantly in the annual budget and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis from net income when making decisions about allocating capital resources to the operating segment.

The CODM also uses net income for evaluating the performance of the operating segment and in determining the compensation of certain employees.

The following summarizes the significant and other operating expenses reviewed by the CODM:

13 Weeks Ended

Dollars presented in millions) March 30, 2025 March 31, 2024

Net sales $ 660.3 $ 638.1

Raw materials 232.7 222.1

Production labor and overhead 225.4 211.3

Non-production associate-related costs 55.1 49.3

Distribution costs 36.7 37.5

Commissions 12.8 10.5

Amortization of intangibles 6.4 3.7

Other segment items (a)

Interest expense 19.4 14.1

Other expense (income), net 0.4 ( 0.3 )

Income tax expense 4.0 11.5

Consolidated net income $ 13.3 $ 37.5

(a) Other segment items include outside service costs, acquisition-related costs, restructuring charges and other expenses .

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The CODM does not review segment assets at a different asset level or category.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements