What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 141 added, 66 removed, 111 unchanged (65% of the section changed)

5 unchanged sentences

Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements.

These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 within Part I, Item 1A and in this Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2025 within Part II, Item 1A.

These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 within Part I, Item 1A and in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 30, 2025 and June 29, 2025 within Part II, Item 1A.

The forward-looking statements included in this document are made as of the date of this Quarterly Report on Form 10-Q and, except pursuant to any obligations to disclose material information under the federal securities laws, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

8 unchanged sentences

• Our projections of future performance, including future revenues, capital expenditures, gross margins, and cash flows;

• The effects of competition and consolidation of competitors in our industry;

• The effects of competition;

• Costs of complying with evolving tax and other regulatory requirements and the effect of actual or alleged violations of tax, environmental or other laws;

• The effect of climate change and unpredictable seasonal and weather factors;

• Conditions in the housing market in the United States and Canada;

• Conditions in the housing market in the United States, Canada and Mexico;

• The expected strength of our existing customers and consumers and any loss or reduction in business from one or more of our key customers or increased buying power of large customers;

3 unchanged sentences

• The effects of a public health crisis or other unexpected event;

• The inability to recognize, or delays in obtaining, anticipated benefits of the acquisition of Supreme, including synergies, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees;

• Changes in the anticipated timing for closing the combination of MasterBrand with American Woodmark (the “Transaction”);

• Delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulatory reviews required to complete the Transaction;

• The outcome of any legal proceedings that may be instituted against MasterBrand or American Woodmark following the announcement of the Transaction;

• The inability to complete the Transaction;

• The inability to recognize, or delays in obtaining, anticipated benefits of the Transaction and acquisition of American Woodmark, including synergies, which may be affected by, among other things, competition, the ability of the combined company to integrate operations in a successful manner and in the expected time period, grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees;

• The impact of our current and any additional future debt obligations on our business, current and future operations, profitability and our ability to meet other obligations;

• Business disruption following the acquisition of Supreme;

• Diversion of management time on acquisition-related issues;

• The reaction of customers and other persons to the acquisition of Supreme;

• Business disruption following the acquisition of American Woodmark and during the pendency of or following the Transaction;

• Diversion of management time on Transaction-related issues;

• The reaction of customers and other persons to the acquisition of American Woodmark and the Transaction;

• Other statements contained in this Quarterly Report on Form 10-Q regarding items that are not historical facts or that involve predictions.

13 unchanged sentences

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

On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark in an all-stock transaction.

Merger Sub, a direct wholly owned subsidiary of the Company, will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company.

The closing of the Merger, which is expected to occur in early 2026, is subject to approval by stockholders of the Company and American Woodmark, respectively, as well as other customary closing conditions.

Basis of Presentation

6 unchanged sentences

Furthermore, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to:

(1) “the first quarter of 2025” refers to the thirteen week period that ended on March 30, 2025;

and (2) “the first quarter of 2024” refers to the thirteen week period that ended on March 31, 2024.

(1) “the second quarter of 2025” refers to the thirteen week period that ended on June 29, 2025;

(2) “the second quarter of 2024” refers to the thirteen week period that ended on June 30, 2024;

(3) “the first half of 2025” refers to the twenty-six weeks ended June 29, 2025 ;

and (4) “ the first half of 2024 ” refers to the twenty-six weeks ended June 30, 2024 .

Results of Operations

The following discussion of condensed consolidated results of operations refers to the thirteen weeks ended March 30, 2025 compared to the thirteen weeks ended March 31, 2024.

Thirteen Weeks Ended March 30, 2025 Compared to the Thirteen Weeks Ended March 31, 2024

The following discussion of condensed consolidated results of operations refers to the thirteen weeks ended June 29, 2025 compared to the thirteen weeks ended June 30, 2024.

Thirteen Weeks Ended June 29, 2025 Compared to the Thirteen Weeks Ended June 30, 2024

Thirteen Weeks Ended

Dollars presented in millions) March 30,

2025 $ change % change March 31,

Dollars presented in millions) June 29,

2025 $ change % change June 30,

NET SALES $ 730.9 $ 54.4 8.0 % $ 676.5

6 unchanged sentences

Interest expense 18.9 (1.7) (8.3) % 20.6

Other expense (income), net 0.4 0.7 n/m (1)

Other income, net (0.6) 2.3 (79.3) % (2.9)

INCOME BEFORE TAXES 49.0 (11.1) (18.5) % 60.1

2 unchanged sentences

(1) Not meaningful.

Net sales were $660.3 million for the thirteen weeks ended March 30, 2025 compared to $638.1 million for the thirteen weeks ended March 31, 2024, an increase of $22.2 million, or 3.5 percent.

The first quarter of 2025 includes $60.8 million of incremental sales related to the Supreme acquisition.

Excluding the impact of Supreme, the $38.6 million decrease in net sales from the thirteen weeks ended March 31, 2024 was driven primarily by lower sales unit volume of $48.2 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $10.6 million.

Overall end market demand was weaker in the first quarter of 2025 compared to the first quarter of 2024 in the repair and remodel and single-family new construction markets.

Foreign currency impact was unfavorable by $1.0 million during the thirteen weeks ended March 30, 2025 as compared to the thirteen weeks ended March 31, 2024.

Compared to the thirteen weeks ended March 31, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $38.1 million, or 12.1 percent, and net sales to retailers, including through their respective retail internet website portals, declined $19.4 million, or 8.0 percent.

Net sales were $730.9 million for the thirteen weeks ended June 29, 2025 compared to $676.5 million for the thirteen weeks ended June 30, 2024, an increase of $54.4 million, or 8.0 percent.

The second quarter of 2025 includes $70.7 million of incremental sales related to the Supreme acquisition.

Excluding the impact of Supreme, the $16.3 million decrease in net sales from the thirteen weeks ended June 30, 2024 was driven primarily by lower sales unit volume of $35.0 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $18.9 million.

Overall end market demand was weaker in the second quarter of 2025 compared to the second quarter of 2024 in the repair and remodel and single-family new construction markets.

Foreign currency impact was unfavorable by $0.2 million during the thirteen weeks ended June 29, 2025 as compared to the thirteen weeks ended June 30, 2024.

Compared to the thirteen weeks ended June 30, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $57.3 million, or 16.2 percent, and net sales to retailers, including through their respective retail internet website portals, declined $8.7 million, or 3.8 percent.

Net sales directly to builders increased $5.8 million, or 6.3 percent.

Cost of products sold

Cost of products sold increased by $24.7 million, or 5.7 percent, to $458.1 million (69.4 percent of net sales) in the thirteen weeks ended March 30, 2025 as compared to $433.4 million (67.9 percent of net sales) in the thirteen weeks ended March 31, 2024.

The inclusion of Supreme in the thirteen weeks ended March 30, 2025 resulted in an incremental $39.4 million of cost of products sold.

Cost of products sold increased by $45.7 million, or 10.3 percent, to $491.2 million (67.2 percent of net sales) in the thirteen weeks ended June 29, 2025 as compared to $445.5 million (65.9 percent of net sales) in the thirteen weeks ended June 30, 2024.

The inclusion of Supreme in the thirteen weeks ended June 29, 2025 resulted in an incremental $47.0 million of cost of products sold.

Excluding the impact of Supreme, the $1.3 million decrease in cost of products sold was driven primarily by lower sales unit volume of $21.9 million, partially offset by the combined net impact of costs and mix of $20.6 million.

In the first quarter, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage, in the thirteen weeks ended March 30, 2025.

In the second quarter of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $16.2 million, or 11.8 percent, to $154.0 million (23.3 percent of net sales) in the thirteen weeks ended March 30, 2025 compared to $137.8 million (21.6 percent of net sales) in the thirteen weeks ended March 31, 2024.

The increase in the thirteen weeks ended March 30, 2025 is primarily due to the inclusion of Supreme ($13.0 million), increased associate-related costs, net of lower variable compensation ($2.7 million) and acquisition-related costs ($1.6 million) associated with the acquisition of Supreme.

These increases were partially offset by lower distribution costs ($3.0 million) as a result of the decrease in sales unit volume.

Selling, general and administrative expenses increased by $12.7 million, or 8.7 percent, to $159.4 million (21.8 percent of net sales) in the thirteen weeks ended June 29, 2025 compared to $146.7 million (21.7 percent of net sales) in the thirteen weeks ended June 30, 2024.

The increase in the thirteen weeks ended June 29, 2025 is primarily due to the inclusion of Supreme ($13.2 million), partially offset by lower acquisition-related costs ($2.5 million).

Restructuring charges

Restructuring charges were $4.7 million in the thirteen weeks ended March 30, 2025, as compared to restructuring charges of $0.4 million in the thirteen weeks ended March 31, 2024.

Charges in the thirteen weeks ended March 30, 2025 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.

Restructuring charges were $6.6 million in the thirteen weeks ended June 29, 2025, compared to restructuring charges of $2.8 million in the thirteen weeks ended June 30, 2024.

Charges in both periods 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.

Interest expense

Interest expense was $19.4 million in the thirteen weeks ended March 30, 2025 as compared to $14.1 million in the thirteen weeks ended March 31, 2024.

The increase in interest expense for the thirteen weeks ended March 30, 2025 is due to the higher outstanding debt balance in 2025 as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme.

Other income expense, net

Other expense, net was $0.4 million in the thirteen weeks ended March 30, 2025, an increase of $0.7 million of expense as compared to other income, net of $0.3 million in the thirteen weeks ended March 31, 2024.

The first quarter of 2025 includes transactional foreign currency losses and a pension settlement charge of $0.3 million.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen week periods ended March 30, 2025 and March 31, 2024 were as follows:

Interest expense was $18.9 million in the thirteen weeks ended June 29, 2025, which was comparable to interest expense of $20.6 million in the thirteen weeks ended June 30, 2024.

The second quarter of 2025 includes higher interest expense due to the higher outstanding debt balance as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme.

The second quarter of 2024 includes $6.5 million of nonrecurring interest expense in connection with the debt refinancing transaction, including the write-off of deferred financing fees.

Other income, net

Other income, net was $0.6 million in the thirteen weeks ended June 29, 2025, a decline of $2.3 million as compared to other income, net of $2.9 million in the thirteen weeks ended June 30, 2024.

This decrease was due primarily to lower transactional foreign currency gains in the second quarter of 2025 as compared to the second quarter of 2024, due to fluctuations in exchange rates.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen weeks ended June 29, 2025 and June 30, 2024 were as follows:

Thirteen Weeks Ended

Dollars presented in millions) March 30,

2025 March 31,

Dollars presented in millions, except percentages) June 29,

2025 June 30,

Income before taxes $ 49.0 $ 60.1

1 unchanged sentence

Effective tax rate 23.9 % 24.6 %

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.

The effective income tax rates for the thirteen weeks ended June 29, 2025 and June 30, 2024, were 23.9 percent and 24.6 percent , respectively.

The net decrease in the effective tax rate between the periods is primarily due to lower state and local income taxes and changes in foreign exclusions, partially offset by an increase in the valuation allowance and a reduction in the stock compensation windfall benefit for shares which vested.

The difference between our effective income tax rate for the thirteen weeks ended June 29, 2025 , and the U.S.

statutory rate of 21.0 percent is 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 the release of uncertain tax positions and foreign exclusions .

The difference between our effective income tax rate for the thirteen weeks ended June 30, 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 and foreign income inclusions with offsetting tax credits, partially offset by the stock compensation windfall benefit for shares which vested and the mix of earnings in jurisdictions with differing tax rates.

The following discussion of condensed consolidated results of operations refers to the twenty-six weeks ended June 29, 2025 compared to the twenty-six weeks ended June 30, 2024.

Twenty-six Weeks Ended June 29, 2025 Compared to the Twenty-six Weeks Ended June 30, 2024

Twenty-six Weeks Ended

Dollars presented in millions) June 29,

2025 $ change % change June 30,

NET SALES $ 1,391.2 $ 76.6 5.8 % $ 1,314.6

Cost of products sold 949.3 70.4 8.0 % 878.9

GROSS PROFIT 441.9 6.2 1.4 % 435.7

Selling, general and administrative expenses 313.4 28.9 10.2 % 284.5

Amortization of intangible assets 12.8 5.4 73.0 % 7.4

Restructuring charges 11.3 8.1 n/m (1)

OPERATING INCOME 104.4 (36.2) (25.7) % 140.6

Interest expense 38.3 3.6 10.4 % 34.7

Other income, net (0.2) 3.0 (93.8) % (3.2)

INCOME BEFORE TAXES 66.3 (42.8) (39.2) % 109.1

Income tax expense 15.7 (10.6) (40.3) % 26.3

NET INCOME $ 50.6 $ (32.2) (38.9) % $ 82.8

(1) Not meaningful.

Net sales were $1,391.2 million for the twenty-six weeks ended June 29, 2025 compared to $1,314.6 million for the twenty-six weeks ended June 30, 2024, an increase of $76.6 million, or 5.8 percent.

The first half of 2025 includes $131.5 million of incremental sales related to the Supreme acquisition.

Excluding the impact of Supreme, the $54.9 million decrease in net sales from the twenty-six weeks ended June 30, 2024 was driven primarily by lower sales unit volume of $83.1 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $29.5 million.

Overall end market demand was weaker in the first half of 2025 compared to the first half of 2024 in the repair and remodel and single-family new construction markets.

Foreign currency impact was unfavorable by $1.3 million during the twenty-six weeks ended June 29, 2025 as compared to the twenty-six weeks ended June 30, 2024.

Compared to the twenty-six weeks ended June 30, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $95.4 million, or 14.3 percent, and net sales to retailers, including through their respective retail internet website portals, declined $28.1 million, or 5.9 percent.

Net sales directly to builders increased $9.3 million, or 5.4 percent.

Cost of products sold

Cost of products sold increased by $70.4 million, or 8.0 percent, to $949.3 million (68.2 percent of net sales) in the twenty-six weeks ended June 29, 2025 as compared to $878.9 million (66.9 percent of net sales) in the twenty-six weeks ended June 30, 2024.

The inclusion of Supreme in the twenty-six weeks ended June 29, 2025 resulted in an incremental $86.4 million of cost of products sold.

Excluding the impact of Supreme, the $16.0 million decrease in cost of products sold was driven primarily by lower sales unit volume of $56.2 million, partially offset by the combined net impact of costs and mix of $40.2 million.

In the first half of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage .

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $28.9 million, or 10.2 percent, to $313.4 million (22.5 percent of net sales) in the twenty-six weeks ended June 29, 2025 compared to $284.5 million (21.6 percent of net sales) in the twenty-six weeks ended June 30, 2024.

The increase in the twenty-six weeks ended June 29, 2025 is primarily due to the inclusion of Supreme ($26.1 million), increased associate-related costs, net of lower variable compensation ($3.1 million) and increased advertising costs ($2.3 million).

These increases were partially offset by lower distribution and commission costs ($2.9 million), as a result of the decrease in sales unit volume, and lower acquisition-related costs ($1.0 million).

Restructuring charges

Restructuring charges were $11.3 million in the twenty-six weeks ended June 29, 2025, as compared to restructuring charges of $3.2 million in the twenty-six weeks ended June 30, 2024.

Charges in both periods 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.

Interest expense

Interest expense was $38.3 million in the twenty-six weeks ended June 29, 2025 as compared to $34.7 million in the twenty-six weeks ended June 30, 2024.

The increase in interest expense for the twenty-six weeks ended June 29, 2025 is due to the higher outstanding debt balance in 2025 as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme.

The second quarter of 2024 includes $6.5 million of nonrecurring interest expense in connection with the debt refinancing transaction, including the write-off of deferred financing fees.

Other income, net

Other income, net was $0.2 million in the twenty-six weeks ended June 29, 2025, a decline of $3.0 million as compared to other income, net of $3.2 million in the twenty-six weeks ended June 30, 2024.

This decrease was due primarily to lower transactional foreign currency gains in the first half of 2025, as compared to the first half of 2024, due to fluctuations in exchange rates.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the twenty-six week periods ended June 29, 2025 and June 30, 2024 were as follows:

Twenty-six Weeks Ended

Dollars presented in millions) June 29,

2025 June 30,

Income before taxes $ 66.3 $ 109.1

Income tax expense 15.7 26.3

Effective tax rate 23.7 % 24.1 %

The effective income tax rates for the twenty-six weeks ended June 29, 2025 and June 30, 2024, were 23.7 percent and 24.1 percent, respectively.

The net decrease in effective tax rate between the periods is primarily due to lower state and local income taxes, changes in foreign exclusions and favorable return-to-provision adjustments, partially offset by an increase in the valuation allowance and a reduction in the stock compensation windfall benefit for shares which vested.

The difference between our effective income tax rate for the twenty-six weeks ended June 29, 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 our 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.

In 2024, certain jurisdictions in which we operate enacted, or announced their intention to enact, legislation consistent with one or more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”).

These were partially offset by the release of uncertain tax positions, the stock compensation windfall benefit for shares which vested, and foreign exclusions.

The difference between our effective income tax rate for the twenty-six weeks ended June 30, 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 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.

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into U.S.

The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures, changes to business interest expense limitations and bonus depreciation.

We are currently assessing its impact on our consolidated financial statements.

In 2024, certain jurisdictions in which we operate enacted, or announced their intention to enact, legislation consistent with one or

more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”).

The model rules include qualified domestic minimum top-up taxes, income inclusion rules, and undertaxed profit rules all aimed to ensure that multinationals pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate, with some rules effective in 2024, 2025 or others becoming effective in 2026.

1 unchanged sentence

Further changes to our entity structure, enacted local legislation, or changes in jurisdictions in which we operate could also impact our future effective tax rate.

Additionally, the new U.S.

administration could modify key aspects of the tax code, including the Tax Cuts and Jobs Act of 2017, which could materially affect our tax obligations and effective tax rate.

LIQUIDITY AND CAPITAL RESOURCES

3 unchanged sentences

However, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, or what impact any such transactions could have on our results of operations, cash flows or financial condition.

Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section entitled “Risk Factors” within Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024.

On November 18, 2022, we 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 was secured by certain assets as well as the guarantee of certain of our subsidiaries.

On June 27, 2024, the Company refinanced this debt by completing the Offering of $700.0 million aggregate principal amount of the Senior Notes and entered into the 2024 Credit Agreement.

On June 27, 2024, the Company refinanced this debt by completing the Offering of $700.0 million aggregate principal amount of Senior Notes and entered into the 2024 Credit Agreement.

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

2 unchanged sentences

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 is payable semi-annually in arrears on January 15 and July 15, beginning on January 15, 2025.

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 revolving credit facility under the 2024 Credit Agreement is not subject to amortization and will mature in June 2029.

6 unchanged sentences

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 March 30, 2025.

As of March 30, 2025, we had $1,058.2 million outstanding in third-party borrowings, net of deferred financing fees.

We may also incur additional indebtedness in the future.

Below is a summary of cash flows for the thirteen weeks ended March 30, 2025 and March 31, 2024.

Thirteen Weeks Ended

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

As of June 29, 2025, we had $998.7 million outstanding in third-party borrowings, net of deferred financing fees.

In conjunction with the Merger, the Company plans to arrange a revolver expansion with its current banking group under the 2024 Credit Agreement in order to pay off American Woodmark debt at the close of the transaction.

Below is a summary of cash flows for the twenty-six weeks ended June 29, 2025 and June 30, 2024.

Twenty-six Weeks Ended

Dollars presented in millions)

2025 March 31,

Net cash (used in) provided by operating activities

2025 June 30,

Net cash provided by operating activities

$ 53.4 $ 96.1

Net cash used in investing activities

Net cash provided by (used in) financing activities

(24.3) (11.9)

Net cash used in financing activities

(34.0) (40.3)

Effect of foreign exchange rate changes on cash

1 unchanged sentence

$ (0.9) $ 40.7

Net cash used by operating activities was $31.4 million in the first quarter of 2025 as compared to $18.7 million of net cash provided by operating activities in the first quarter of 2024 .

Net income contributed $13.3 million to operating cash flow in the first quarter of 2025, down from $37.5 million in the first quarter of 2024.

In the first quarter of 2025 , accounts receivable increased $30.0 million from the seasonally lower fiscal 2024 ending balance, compared to an increase of $21.7 million in the first quarter of 2024, reflecting higher sales in the first quarter of fiscal 2025.

In the first quarter of 2025 , inventory increased $12.2 million, reflective of the normal seasonal build in inventory from year-end, as compared to a decline in inventory of $1.6 million in the first quarter of 2024.

Accounts payable was flat compared to the fiscal 2024 ending balance, while the movement in accounts payable favorably contributed $10.2 million to the first quarter 2024 operating cash flow.

Net cash used in investing activities was $9.8 million in the first quarter of 2025 , compared to net cash used in investing activities of $7.0 million in first quarter of 2024 .

The year-over-year increase is due to increased capital expenditures as compared to the prior year.

Net cash provided by financing activities was $33.5 million in the thirteen weeks ended March 30, 2025 as compared to net cash used of $7.1 million in the thirteen weeks ended March 31, 2024.

In the first quarter of 2025 , we borrowed $50 million, net, to fund working capital needs.

The first quarter of 2025 also includes $11.4 million of stock repurchases as compared to $1.6 million of purchases in the first quarter of 2024.

Net cash provided by operating activities was $53.4 million in the first half of 2025 as compared to $96.1 million in the first half of 2024.

Net income contributed $50.6 million to operating cash flow in the first half of 2025, down from $82.8 million in the first half of 2024.

In the first half of 2025, accounts receivable increased $26.9 million from the seasonally lower fiscal 2024 ending balance, compared to an increase of $11.2 million in the first half of 2024, reflecting higher sales in the first half of fiscal 2025.

In the first half of 2025, inventory declined $0.2 million, as compared to an increase in inventory of $20.7 million in the first half of 2024.

The minimal change in inventory in the first half of 2025 is reflective of inventory management efforts.

In the first half of 2025, accounts payable decreased $5.5 million compared to an increase of $21.8 million in the first half of 2024.

The reduced favorability in accounts payable in 2025 was driven by the lack of growth in inventory.

Net cash used in investing activities was $24.3 million in the first half of 2025, compared to $11.9 million in the first half of 2024.

The year-over-year increase is primarily due to increased capital expenditures as compared to the prior year.

Net cash used in financing activities was $34.0 million in the twenty-six weeks ended June 29, 2025 as compared to $40.3 million in the twenty-six weeks ended June 30, 2024.

In the first half of 2025, we paid down $10 million, net on our revolving credit facility.

In the first half of 2024, our $712.5 million term loan was repaid, and replaced with $700.0 million of Senior Notes as a result of the refinancing transaction.

The first half of 2024 also included the payment of $15.2 million of financing fees associated with the refinancing transaction.

The first half of 2025 includes $18.1 million of stock repurchases as compared to $6.5 million of stock repurchases in the first half of 2024.

We believe that our cash and cash equivalent balances, along with available cash from operating cash flows and credit facilities, will be adequate to fund our typical needs, including working capital requirements and projected capital expenditures.

10 unchanged sentences

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 2. Management’s Discussion and Analysis