What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-13 compared with 2025-02-19 · 285 added, 452 removed, 1015 unchanged (42% of the section changed)

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Amortization of intangible assets 25.6 20.2 15.3

Asset impairment charges — — 46.4

Restructuring charges 15.2 18.0 10.1

OPERATING INCOME 119.0 235.7 306.3

Related party interest income, net — — ( 12.9 )

Interest expense 74.1 74.0 65.2

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NET INCOME $ 26.7 $ 125.9 $ 182.0

Other comprehensive (loss) income, before tax:

Other comprehensive income (loss), before tax:

Foreign currency translation adjustments 19.2 ( 27.7 ) 12.1

Unrealized (losses) gains on derivatives:

Unrealized holding (losses) gains arising during period ( 10.1 ) 9.6 7.2

reclassification adjustment for losses (gains) included in net income 2.9 ( 10.2 ) ( 4.5 )

Unrealized (losses) gains on derivatives

( 7.2 ) ( 0.6 ) 2.7

Unrealized gains (losses) on derivatives:

Unrealized holding gains (losses) arising during period 12.0 ( 10.1 ) 9.6

reclassification adjustment for (gains) losses included in net income ( 2.1 ) 2.9 ( 10.2 )

Unrealized gains (losses) on derivatives 9.9 ( 7.2 ) ( 0.6 )

Defined benefit plans:

Net actuarial gains (losses) arising during period 6.2 5.3 ( 4.1 )

Amortization of net actuarial loss and curtailment 2.6 3.2 1.7

Amortization of net actuarial (gain) loss and curtailment ( 0.4 ) 2.6 3.2

Defined benefit plans 5.8 7.9 ( 0.9 )

Other comprehensive (loss) income, before tax ( 27.0 ) 10.6 ( 11.6 )

Other comprehensive income (loss), before tax 34.9 ( 27.0 ) 10.6

Income tax (expense) benefit related to items of other comprehensive income ( 1.4 ) ( 2.0 ) 0.2

Other comprehensive (loss) income, net of tax ( 29.0 ) 10.8 ( 10.6 )

Other comprehensive income (loss), net of tax 33.5 ( 29.0 ) 10.8

COMPREHENSIVE INCOME $ 60.2 $ 96.9 $ 192.8

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Accounts payable 203.7 180.7

Current portion of long-term debt — 17.6

Current operating lease liabilities 24.3 19.5

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Treasury stock, at cost ( 70.4 ) ( 44.0 )

Accumulated other comprehensive loss ( 32.7 ) ( 3.7 )

Accumulated other comprehensive income (loss) 0.8 ( 32.7 )

Retained earnings 1,357.1 1,330.4

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Stock-based compensation 16.1 21.9 17.8

Asset impairment charges — — 46.4

Provision for bad debt 17.8 0.4 1.9

Recognition of actuarial losses and settlement charges ( 0.4 ) 2.7 2.9

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Payments of employee taxes withheld from share-based awards ( 8.3 ) ( 11.4 ) ( 4.0 )

Related party borrowings — — 2,754.5

Related party repayments — — ( 3,009.4 )

Net contributions from Fortune Brands — — 5.3

Dividend to Fortune Brands — — ( 940.0 )

Other items ( 2.5 ) ( 2.2 ) ( 1.4 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 269.6 ( 299.9 ) ( 215.3 )

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 65.7 ) 269.6 ( 299.9 )

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 6.7 ( 7.9 ) ( 1.2 )

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ ( 27.1 ) $ 47.6 $ ( 40.3 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ 62.3 $ ( 27.1 ) $ 47.6

Cash, cash equivalents, and restricted cash at beginning of period $ 121.6 $ 148.7 $ 101.1

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Balance at December 25, 2022 128.0 $ 1.3 $ — $ ( 0.1 ) $ ( 14.5 ) $ 1,022.5 $ 1,009.2

Distribution of MasterBrand, Inc.

stock to Fortune Brands shareholders 128.0 1.3 — — — — 1.3

Comprehensive income:

Net income — — — — — 182.0 182.0

Other comprehensive loss — — — — ( 10.6 ) — ( 10.6 )

Other comprehensive income — — — — 10.8 — 10.8

Stock-based compensation 0.7 — 17.8 ( 4.0 ) — — 13.8

Dividend to Fortune Brand — — — — — ( 940.0 ) ( 940.0 )

Net contributions from (distributions to) Fortune Brands — — 110.6 — — ( 105.3 ) 5.3

Return of capital to Fortune Brands — — ( 393.7 ) — — ( 273.1 ) ( 666.8 )

Stock repurchase program ( 1.9 ) — — ( 22.0 ) — — ( 22.0 )

Balance at December 31, 2023 126.8 $ 1.3 $ 17.8 $ ( 26.1 ) $ ( 3.7 ) $ 1,204.5 $ 1,193.8

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Net income — — — — — 125.9 125.9

Other comprehensive income — — — — 10.8 — 10.8

Other comprehensive loss — — — — ( 29.0 ) — ( 29.0 )

Stock-based compensation 1.2 — 21.9 ( 11.4 ) — — 10.5

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Net income — — — — — 26.7 26.7

Other comprehensive loss — — — — ( 29.0 ) — ( 29.0 )

Other comprehensive income — — — — 33.5 — 33.5

Stock-based compensation 1.0 — 16.1 ( 8.3 ) — — 7.8

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Background MasterBrand, Inc.

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.

is the largest 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.

References to “MasterBrand,” “the Company,” “we,” “our” and “us” refer to MasterBrand, Inc.

and its consolidated subsidiaries, unless the context otherwise requires.

On April 28, 2022, Fortune Brands announced that its Board of Directors approved in principle the Separation.

The Cabinets segment of Fortune Brands had historically been operated by MBCI.

In July 2022, Fortune Brands incorporated MasterBrand, Inc.

in the State of Delaware and subscribed to all of the shares of MasterBrand, Inc.’s common stock upon its incorporation.

After the incorporation of MasterBrand, Inc., the following occurred:

(1) Fortune Brands contributed all of the issued and outstanding shares of capital stock of MBCI to MasterBrand, Inc., resulting in MBCI becoming a wholly-owned subsidiary of MasterBrand, Inc.

through a transaction between entities under common control;

and (2) MBCI was converted into a Delaware limited liability company, MasterBrand Cabinets LLC (collectively, the “Reorganization”).

On December 14, 2022, the Separation was completed via the Distribution.

On December 14, 2022, the date of Separation, 128.0 million shares of MasterBrand, Inc.

common stock were issued.

Fortune Brand shareholders received one share of MasterBrand, Inc.

common stock for each share of Fortune Brands common stock held on the record date.

Following the Distribution, Fortune Brands stockholders owned 100 percent of the shares of MasterBrand, Inc.

common stock and MasterBrand, Inc.

became an independent, publicly-traded company, listed under the symbol “MBC” on the New York Stock Exchange, beginning December 15, 2022.

All share and per share amounts for the prior period presented in the consolidated financial statements, including Note 6, "Earnings Per Share," have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Reorganization, Separation and Distribution.

The historical activity of the Company is that of MBCI prior to the Reorganization.

The Company’s equity structure prior to the Separation and Distribution included 5,000 shares of MasterBrand, Inc.

common stock authorized and 100 shares issued.

Prior to the incorporation of MasterBrand, Inc.

in July 2022, the equity structure of MBCI included 1,000 authorized and issued shares of common stock.

MasterBrand, Inc.

is the registrant and the financial reporting entity following the consummation of the Separation and Distribution.

In order to govern the ongoing relationships between MasterBrand, Inc.

and Fortune Brands after the Separation and to facilitate an orderly transition, the parties entered into a series of agreements including the following:

• Separation and Distribution Agreement - sets forth the principal actions to be taken in connection with the Separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between MasterBrand, Inc.

and Fortune Brands.

• Tax Allocation Agreement – governs the respective rights, responsibilities and obligations of MasterBrand and Fortune Brands with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns.

• Employee Matters Agreement – addresses certain employment, compensation and benefits matters, including the allocation and treatment of certain assets and liabilities relating to MasterBrand associates.

Basis of Presentation The accompanying financial statements are presented on a consolidated basis as the Company is a standalone public company.

We had historically existed and functioned as a reporting segment of the consolidated business of Fortune Brands up until the Separation on December 14, 2022, at which time we became a standalone public company.

Certain information from prior to the Separation was derived from Fortune Brands’ consolidated financial statements and accounting records.

The consolidated f inancial statements and notes to consolidated financial statements as of and subsequent to December 14, 2022, the date of the Separation, reflect the consolidated financial position, results of operations and cash flows for MasterBrand as an independent company.

Prior to the Separation, the consolidated financial statements and notes to consolidated financial statements were prepared on a carve-out basis using the financial statements and accounting records of Fortune Brands.

The carve-out basis financial statements represent the historical financial position, results of operations, and cash flows of MasterBrand as they were historically managed in accordance with GAAP and reflect significant assumptions and allocations.

The carve-out financial statements may not include all expenses that would have been incurred had MasterBrand existed as a standalone entity.

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.

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.

Fiscal 2025 and 2024 both consisted of 52 weeks ended on December 28, 2025 and December 29, 2024, respectively.

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The consolidated financial statements have been prepared in accordance with GAAP.

The consolidated statements of income include all revenues and costs directly attributable to our business, including costs for facilities, functions and services we utilize.

The consolidated statements of income also include an allocation of expenses related to certain Fortune Brands corporate functions through the Separation, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services.

These expenses have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, associate headcount, or number of facilities, as applicable.

Prior to the Separation, total expenses allocated for the 2022 year were $ 92.5 million, of which $ 72.4 million was not previously allocated to us.

Such amounts are primarily included within selling, general and administrative expenses in the consolidated statements of income.

We consider the expense methodology and resulting allocation to be reasonable;

however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company in the prior year period presented.

Actual costs that we may have incurred during the time period when we were not a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our associates and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.

Accordingly, historical allocations may not be indicative of future costs we incur operating as an independent, publicly-traded company.

The consolidated statements of income also include $ 2.4 million of costs related to the separation from Fortune Brands for the year ended December 31, 2023.

The Separation-related costs include advisory fees, professional fees and other transaction related costs incurred directly by us.

These costs are included within selling, general and administrative expenses.

The income tax amounts in the consolidated financial statements have been calculated on a separate-return method and presented as if our operations were separate taxpayers in the respective jurisdictions.

For the period prior to the Separation in 2022, including the Separation, federal and state income tax payments, withholding taxes and refunds were paid and received by Fortune Brands on our behalf.

The net income taxes paid on our behalf are payable to Fortune Brands, as provided in the indemnification provisions of the Tax Allocation Agreement.

Accordingly, the net income tax payable of $ 32.6 million to Fortune Brands as of December 25, 2022, was recorded in accounts payable on and settled in 2023.

Following the Separation, a limited number of services that Fortune Brands provided to us, or we provided to them, prior to the Separation continued to be provided for a period of time under a transition services agreement.

Subsequent to the Separation, we have incurred certain costs as a standalone public company, including services provided by our own resources or through third-party service providers relating to corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services, as well as ongoing additional costs associated with operating as an independent, publicly-traded company.

Fortune Brands utilized a central approach to treasury management, and prior to the Separation, we historically participated in related cash pooling arrangements.

Our cash and cash equivalents on our consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries.

Prior to the Separation, we had no third-party borrowings, and all borrowings attributable to our business and due to Fortune Brands were recorded as “related party payable” in our consolidated balance sheets and classified as current or noncurrent based on loan maturity dates.

Fortune Brands’ third-party debt and related interest expense were not attributed to us as we were not the legal obligor of the debt, and the borrowings were not specifically identifiable to us.

However, in connection with the Separation, we completed a financing transaction, which resulted in additional interest expense beginning in the fourth quarter of 2022.

See Note 12, "Debt," for additional information.

For more information regarding related party transactions with Fortune Brands, see Note 21, "Related Party Transactions."

During the fourth quarter of 2022, we recognized $ 8.7 million of additional expense in cost of goods sold as an out-of-period adjustment.

This adjustment was to correct errors for expenses that should have been recognized of $ 5.1 million , $ 1.6 million and $ 2.0 million in the thirteen weeks ended March 27, 2022, June 26, 2022 and September 25, 2022, respectively.

The adjustment did not have any impact on our annual consolidated financial statements for the year ended December 25, 2022.

Pending Insurance Claims During the fiscal year ended December 28, 2025 the company recognized costs related to the incurrence of insurable events within the manufacturing footprint.

During 2025, we recognized $ 3.0 million of costs, net of $ 0.8 million of insurance recoveries.

These costs included expenditures to remediate damages to property and inventory, and compensation costs associated with the recovery efforts.

We are continuing to pursue insurance recoveries and any additional funds received will be used to offset these costs in future periods.

Both the expenses and insurance recoveries were recorded as a component of cost of products sold in the Consolidated Statements of Income.

Gain on Sale of Asset On December 12, 2024, the Company sold a warehouse and land located in Weslaco, Texas.

The location was previously closed in conjunction with the consolidation of our warehouse facilities to enable efficiencies and increase annual savings.

This facility sold for a purchase price of $ 6.6 million, resulting in a $ 4.3 million gain recognized as a separate component of non-operating income in the Consolidated Statements of Income.

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 and 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.

The Company incurred expenses of $ 9.4 million solely related to damages caused by the tornado in 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.

During fiscal 2023, we received $ 7.4 million of insurance proceeds for direct costs caused by the tornado.

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

Gain on sale of asset On December 12, 2024, the Company sold a warehouse and land located in Weslaco, Texas.

The location was previously closed in conjunction with the consolidation of our warehouse facilities to enable efficiencies and increase annual savings.

This facility sold for a purchase price of $ 6.6 million, resulting in a $ 4.3 million gain recognized as a separate component of non-operating income in the Consolidated Statements of Income.

Separation Costs The consolidated statements of income include $ 2.4 million of costs related to the separation from Fortune Brands for the year ended December 31, 2023.

The Separation-related costs include advisory fees, professional fees and other transaction related costs incurred directly by us and are included within selling, general and administrative expenses.

Significant Accounting Policies

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The related translation adjustments are made directly to a separate component of the accumulated other comprehensive loss caption in equity.

Transactions denominated in a currency other than the functional currency of a subsidiary are translated into the functional currency with resulting transaction gains or losses recorded in other expense, net.

Income Taxes The income tax expense in our Consolidated Financial Statements has been determined on a stand-alone return basis in accordance with ASC Topic 740, Income Taxes, which requires the recognition of income taxes using the liability method.

The tax provision and current and deferred tax balances have been prepared on a separate-return basis as if the Company were a separate filer.

The income taxes of the Company, as presented in the consolidated financial statements, may not be indicative of the income taxes that the Company will incur in the future.

For taxable periods prior to and including the Separation, our operations were included in the consolidated U.S.

federal and certain state and local income tax returns of Fortune Brands, as applicable.

The Company filed separate foreign income tax returns.

Post-Separation, our income tax provisions are calculated based on the Company’s operating footprint, as well as our tax return elections and assertions.

Income tax liabilities related to unrecognized tax benefits (“UTBs”), including interest and penalties, are reported as a liability within the Consolidated Balance Sheets based upon tax authorities’ ability to assert the Company may be legally liable for UTBs.

For taxable periods ended after the Separation, the Company filed consolidated U.S.

federal income tax returns and various state and local income tax returns.

The Company’s foreign income tax returns continue to be filed on a full-year basis.

The Company is subject to income taxes in the U.S.

Income Taxes The Company is subject to income taxes in the U.S.

and various foreign jurisdictions.

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In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance in the period in which such changes occur, which would reduce the provision for income taxes.

The Company recognizes Global Intangible Low-Taxed Income (“GILTI”) tax as a period cost.

The Company recognizes net controlled foreign corporations tested income tax as a period cost.

The Company recognizes tax-related interest and penalties as a component of income tax expense.

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Property, Plant and Equipment Property, plant and equipment are carried at cost.

Depreciation is provided, principally on a straight-line basis, over the estimated useful lives of the assets.

Depreciation is provided, on a straight-line basis, over the estimated useful lives of the assets.

Gains or losses resulting from dispositions are included in operating income.

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An interim impairment test is performed if an event occurs or conditions change that would more likely than not reduce the fair value of the reporting unit below the carrying value.

To evaluate the recoverability of goodwill, we first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired.

Qualitative factors include changes in volume, margin, customers and the industry.

If it is deemed more likely than not that goodwill for a reporting unit is impaired, we will perform a quantitative impairment test using a weighting of the income and market approaches.

We may also elect to bypass the qualitative testing and proceed directly to the quantitative testing.

Assessing qualitative factors during 2024, 2023 and 2022 would not have resulted in us performing a quantitative impairment test.

In 2024, 2023 and 2022, we elected to bypass the qualitative testing and performed quantitative tests for all goodwill.

For the income approach, we use a discounted cash flow model, estimating the future cash flows of the reporting units to which the goodwill relates and then discounting the future cash flows at a market-participant-derived discount rate based on the weighted-average cost of capital.

To evaluate the recoverability of goodwill, we perform a quantitative impairment test using a weighting of the income and market approaches.

In determining the estimated future cash flows, we consider current and projected future levels of income based on management’s plans for that business;

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and market-participant considerations.

For the market approach, we apply market multiples for peer groups to the current operating results of the reporting units to determine the reporting unit’s fair value.

The Company’s reporting units are operating segments, or one level below operating segments when appropriate.

When the estimated fair value of a reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss based on that difference.

For the market approach, we apply market multiples for peer groups to the current operating results of the reporting unit to determine the reporting unit’s fair value.

Our reporting unit is our operating segment.

When the estimated fair value of the reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss based on that difference.

The significant assumptions that are used to determine the estimated fair value for goodwill impairment testing include the following:

third-party market forecasts of U.S.

new home starts and home repair and remodel spending;

new home starts and home R&R spending;

management’s sales, operating income and cash flow forecasts;

peer company EBITDA earnings multiples;

peer company earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples;

the market-participant-based discount rate;

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Our estimates of reporting unit fair values are based on certain assumptions that may differ from our historical and future actual operating performance.

Specifically, assumptions related to growth in the new construction and repair and remodel segments of the U.S.

home products markets drive our forecasted sales growth.

Specifically, assumptions related to growth in the new construction and R&R market of the U.S.

home products markets, when combined with general economic data such as inflation and interest rates, drive our forecasted sales growth.

The market forecasts are developed using independent third-party forecasts from multiple sources.

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home products market is inherently uncertain and is subject to a number of factors, such as employment, home prices, interest rates, credit availability, new home starts and the rate of home foreclosures.

We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired.

Qualitative factors include changes in volume, customers and the industry.

If it is deemed more likely than not that an intangible asset is impaired, we will perform a quantitative impairment test.

We may also elect to bypass the qualitative testing and proceed directly to the quantitative testing.

In both 2024 and 2023, we elected to bypass the qualitative testing and tested all of our indefinite-lived tradenames quantitatively.

We measure fair value of our indefinite-lived tradenames using the relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life.

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After the measurement period, any subsequent adjustments are reflected in the consolidated statements of income.

Acquisition costs, such as legal and consulting fees, are expensed as incurred.

The Company classifies costs incurred in connection with acquisitions and their integration as acquisition-related costs.

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Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company.

Pension and Postretirement Benefits Other than Pensions We have a pension plan in the United States covering many of the Company’s associates.

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

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

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

In addition, the Company provides postretirement health care and life insurance benefits to certain retirees.

We record amounts relating to these plans based on calculations in accordance with ASC requirements for Compensation—Retirement Benefits, which include various actuarial assumptions, including discount rates, assumed rates of return, turnover and mortality rates and health care cost trend rates.

Actuarial gains or losses related to these assumptions represent the difference between actual and actuarially assumed experience.

We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in other expense, net to the extent they are in excess of 10 percent of the greater of the fair value of pension plan assets or the plan’s projected benefit obligation (the “corridor”) in earnings immediately upon remeasurement, which is at least annually in the fourth quarter of each fiscal year.

We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current economic conditions and trends.

The discount rate used to measure obligations is based on a spot-rate yield curve on a plan-by-plan basis that matches projected future benefit payments with the appropriate interest rate applicable to the timing of the projected future benefit payments.

The expected rate of return on plan assets is determined based on the nature of the plans’ investments, our current asset allocation and our expectations for long-term rates of return.

For postretirement benefits, our health care trend rate assumptions are based on historical cost increases and expectations for long-term increases.

The cost or benefit of plan changes, such as increasing or decreasing benefits for prior associate service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related associates.

We believe that the assumptions utilized in recording obligations under our plans, which are presented in Note 15, "Pension and Other Postretirement Plans," are reasonable based on our experience and on advice from our independent actuaries;

however, differences in actual experience or changes in the assumptions may materially affect our financial position and results of operations.

We will continue to monitor these assumptions as market conditions warrant.

Insurance Reserves We provide for expenses associated with workers’ compensation and product liability obligations when such amounts are probable and can be reasonably estimated.

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Liabilities and costs associated with litigation-related loss contingencies require estimates and judgments based on our knowledge of the facts and circumstances surrounding each matter and the advice of our legal counsel.

We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss in accordance with ASC Topic 450, Contingencies.

We evaluate the measurement of recorded liabilities each reporting period based on the then-current facts and circumstances specific to each matter.

We record liabilities for litigation-related losses when a loss is probable and we can reasonably estimate the amount of the loss in accordance with ASC Topic 450, “Contingencies.” We evaluate the measurement of recorded liabilities each reporting period based on the then-current facts and circumstances specific to each matter.

The ultimate losses incurred upon final resolution of litigation-related loss contingencies may differ materially from the estimated liability recorded at any particular balance sheet date.

Changes in estimates are recorded in earnings in the period in which such changes occur.

Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss refers to gains and losses that under GAAP are included in comprehensive income but are excluded from net earnings as these amounts are recorded directly as an adjustment to equity.

Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income refers to gains and losses that under GAAP are included in comprehensive income but are excluded from net earnings as these amounts are recorded directly as an adjustment to equity.

Recently Issued Accounting Standards

Accounting Standards Issued and Adopted

Improvements to Reportable Segment Disclosures

In November 2023, the 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.

Refer to Note 22, "Segment Information," for our implementation of ASU 2023-07.

The adoption of ASU 2023-07 did not have an impact on our consolidated financial position, results of operations or cash flows.

Accounting Standards Issued, But Not Yet Adopted

Improvements to Income Tax Disclosures

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

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

Refer to Note 14, "Income Taxes," for our implementation of ASU 2023-09 on a prospective basis.

The adoption of ASU 2023-09 did not have an impact on our consolidated financial position, results of operations or cash flows.

Accounting Standards Issued, But Not Yet Adopted

Disaggregation of Income Statement Expenses

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

Acquisition of Supreme

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

The amendments in ASU 2025-05 provide a practical expedient that allows entities to assume current economic conditions as of the balance sheet date will remain unchanged throughout the reasonable and supportable forecast period when estimating expected credit losses for eligible financial assets, including trade receivables and contract assets.

ASU 2025-05 is effective for fiscal periods beginning after December 15, 2025, including interim periods within those fiscal years.

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

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

The amendments in ASU 2025-06 clarify and refine the criteria for capitalizing costs related to internal-use software.

Under the new guidance, capitalization is permitted when both of the following conditions are met:

(i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

ASU 2025-06 is effective for fiscal periods beginning after December 15, 2027, and interim periods thereafter.

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

Narrow-Scope Improvements

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270):

Narrow-Scope Improvements,” to clarify and reorganize U.S.

GAAP interim reporting guidance to improve navigability, applicability, and consistency without changing the fundamental nature or volume of required interim disclosures.

This amendment clarifies when ASC 270 is applicable, establishes a disclosure principle requiring disclosure of material events or changes occurring since the most recent annual reporting period, and consolidates into ASC Topic 270 a comprehensive list of interim disclosures required by other Codification Topics.

The amendment also clarifies the form and content of interim financial statements, including guidance for condensed interim reporting.

The amendment is effective for the Company for interim periods in 2028, with early adoption permitted.

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

Other new accounting pronouncements issued but not effective until after December 28, 2025 did not and are not expected to have a material impact on our financial position, results of operations or cash flows.

American Woodmark

On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark Corporation (“American Woodmark”), a Virginia corporation, in an all-stock transaction.

The Company, Maple Merger Sub, Inc.

(“Merger Sub”), a Virginia corporation and direct, wholly owned subsidiary of the Company, and American Woodmark entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company (the “Merger”).

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each equity interest of American Woodmark issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive a number of shares of the Company’s common stock equal to 5.15 shares, which collectively will represent approximately 37 percent of the fully diluted shares outstanding of the combined company immediately prior to the execution and delivery of the Merger Agreement.

The closing of the Merger, which is expected to occur in early 2026, is subject to the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of other customary closing conditions.

As previously disclosed, on November 7, 2025, the Company and American Woodmark each received a Request for Additional Information and Documentary Material (the "Second Request") from the U.S.

Federal Trade Commission (the "FTC") in connection with the Merger.

The Company and American Woodmark continue to work cooperatively with the FTC to obtain regulatory clearance for the Merger as expeditiously as possible.

Both companies received the necessary shareholder approval at their respective special meetings of shareholders held on October 30, 2025.

The Merger Agreement contains certain termination rights for each of the Company and American Woodmark.

Upon termination of the Merger Agreement under specified circumstances, the Company may be required to pay American Woodmark a termination fee of $ 30.0 million or a regulatory termination fee of $ 35.0 million.

In addition, upon termination under specified circumstances, American Woodmark may be required to pay the Company a termination fee of $ 25.0 million.

The Company amended its 2024 Credit Agreement on November 3, 2025 to obtain $ 375.0 million of delayed draw term loan commitments that will be used to repay and terminate American Woodmark’s existing indebtedness, the funding of which is dependent on the closing of the Merger.

See Note 12, "Debt," for further discussion of our original credit agreement.

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.

(“Supreme”), a cabinetry company, from GHK Capital Partners LP for $ 520.0 million in cash, subject to customary purchase price adjustments set forth in the Merger Agreement.

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

(“Supreme”), a cabinetry company, from GHK Capital Partners LP for $ 520.0 million in cash.

Supreme was 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.

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

The purchase consideration was $ 527.3 million , which was determined as follows:

The purchase consideration was $ 527.3 million.

Dollars presented in millions)

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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.

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

Due to the timing of acquisition close, the preliminary fair value estimates and assumptions were subject to change as we obtained 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.

As such, we updated our initial allocation of the Merger Consideration that was completed during the third quarter of 2024.

We finalized our valuation of the identified assets acquired and liabilities assumed during the period ended June 29, 2025.

There were no adjustments to the preliminary valuation of identifiable assets acquired and liabilities assumed during the twenty-six weeks ended June 29, 2025.

The following table sets forth the 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 Initial Purchase Price Allocation Measurement Period Changes Updated Purchase Price Allocation

Net Assets Acquired Initial Purchase Price Allocation Measurement Period Changes Updated Purchase Price Allocation

Cash and cash equivalents $ 11.8 $ — $ 11.8

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The $ 203.4 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 $ 25.4 million of acquisition-related costs associated with the acquisition for the year ended December 29, 2024 , which are recorded within selling, general and administrative expenses in the consolidated statements of income.

Pro forma financial information

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

Net sales and earnings related to the operations of Supreme that have been included in our consolidated statements of income for the fifty-two weeks ended December 28, 2025 and for the period from July 10, 2024 to December 29, 2024 are as follows:

Dollars presented in millions) 2025 2024

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

The Company incurred $ 28.9 million and $ 25.4 million of acquisition-related costs for the years ended December 28, 2025 and December 29, 2024 , respectively, which are recorded within selling, general and administrative expenses in the consolidated statements of income.

The acquisition costs in the year ended December 28, 2025 primarily related to the costs associated with the acquisition of American Woodmark.

The acquisition related costs in the year ended December 29, 2024 related to the costs associated with the acquisition of Supreme.

Revenue from Contracts with Customers

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Return assets related to the refund obligation are measured at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value.

Net sales to two of the Company’s customers, Lowe’s and The Home Depot, each accounted for greater than 10 percent of the Company’s net sales in 2024, 2023 and 2022.

Net sales to two of the Company’s customers, Lowe’s and Home Depot, each accounted for greater than 10 percent of the Company’s net sales in 2025, 2024 and 2023.

Net sales to Lowe’s were 20 percent, 22 percent and 21 percent of net sales in 2025, 2024 and 2023, respectively.

Net sales to The Home Depot were 15 percent, 16 percent and 17 percent of net sales in 2024, 2023 and 2022, respectively.

Net sales to Home Depot were 13 percent, 15 percent and 16 percent of net sales in 2025, 2024 and 2023, respectively.

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.

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(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.

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

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Ending balance $ 17.4 $ 3.0

The Company increased the allowance for doubtful accounts by $ 17.1 million as a result of the Company’s assessment of the collectability of a specific customer’s receivable balance as of December 28, 2025.

The charge, which relates entirely to sales recognized in 2025, was based upon the Company’s assessment of the customer’s specific facts and circumstances, including its financial outlook and liquidity.

Other (Income) Expense, Net

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Pension and postretirement benefits other than pensions $ ( 0.3 ) $ 4.1 $ 2.9

Foreign currency (gains) losses ( 2.0 ) 3.2 1.1

Foreign currency losses (gains) 0.1 ( 2.0 ) 3.2

Other items, net ( 1.2 ) ( 4.4 ) ( 3.7 )

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Earnings Per Share

On December 14, 2022, 128.0 million MasterBrand common shares were distributed to Fortune Brands’ shareholders in conjunction with the Separation.

For the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022 , diluted earnings per share was computed by giving effect to all potentially dilutive stock awards that are outstanding.

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 fiscal years ended December 28, 2025 , December 29, 2024 and December 31, 2023 :

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Diluted $ 0.21 $ 0.96 $ 1.40

Approximately 0.7 million shares and 1.3 million shares were excluded from the calculation of diluted earnings per share for the years ended December 31, 2023 and December 25, 2022, respectively, because their inclusion would have been anti-dilutive.

Approximately 0.4 million and 0.7 million shares were excluded from the calculation of diluted earnings per share for the years ended December 28, 2025 and December 31, 2023, respectively, because their inclusion would have been anti-dilutive.

There were no shares excluded from the calculation of diluted earnings per share for the year ended December 29, 2024 .

Balance Sheet Information

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Accrued product warranties 7.3 9.3

Derivative payable 5.7 0.1

Accrued restructuring 2.4 4.9

Derivative payable — 5.7

Other accrued expenses 76.4 80.7

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We have operating and finance leases for buildings and certain machinery and equipment.

Operating leases are included in operating lease right-of-use assets, other current liabilities and operating lease liabilities in our consolidated balance sheets.

Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities in our consolidated balance sheets.

Amounts recognized for finance leases as of and for the years ended December 28, 2025 and December 29, 2024 were immaterial.

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Less imputed interest ( 57.1 )

Total $ 199.5

Reported as of December 28, 2025

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Operating lease liabilities (non-current) 175.2

Total $ 199.5

Goodwill and Identifiable Intangible Assets

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Balance at December 31, 2023

Supreme acquisition 203.4

2024 translation adjustments

Balance at December 29, 2024

Supreme acquisition 203.4

2025 translation adjustments

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We expect to record intangible amortization of $ 25.6 million annually from 2026 through 2030.

In the second quarter of 2022, subsequent to the balance sheet date, we recognized an impairment charge of $ 26.0 million related to an indefinite-lived tradename.

During the second quarter of 2022, production was shifted within our manufacturing footprint to enable what we expect to be a higher value purpose and growth opportunity, which led to downward revisions to forecasted revenue growth rates associated with the tradename.

In the fourth quarter of 2022, we recognized an impairment charge of $ 12.8 million related to the same indefinite-lived tradename as a result of further shifts within our product portfolio to better align with forecasted future customer demand as a result of a significant decrease in sales during the fourth quarter of 2022, driven by continued and persistent inflation, as well as elevated interest rates and economic uncertainty.

These downward revisions to forecasted revenue growth rates were not known when recording the impairment charge during the second quarter of 2022.

As of both December 29, 2024 and December 31, 2023, the carrying value of this tradename was $ 46.2 million.

In the fourth quarter of 2022, we recognized an impairment charge of $ 7.6 million to a second indefinite-lived tradename.

This was primarily due to a shift in customer demand from this tradename to a lower price point product, as a result of continued and persistent inflation, as well as elevated interest rates and economic uncertainty.

As of both December 29, 2024 and December 31, 2023 , the carrying value of this tradename was $ 19.1 million .

The fair values of the impaired tradenames were measured using the relief-from-royalty approach, which estimates the present value of royalty income that could be hypothetically earned by licensing the tradename to a third party over its remaining useful life.

Some of the more significant assumptions inherent in estimating the fair values include market-participant discount rates based on the weighted-average cost of capital, which is dependent on comparable company prices and other relevant information generated by market transactions, as well as broader market assumptions, such as U.S.

treasury rates, forecasted revenue growth rates and assumed royalty rates.

We selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, estimated growth rates and management plans.

These assumptions represent Level 3 inputs of the fair value hierarchy (refer to Note 11, “Fair Value Measurements”).

A reduction in the estimated fair value of any of our tradenames could trigger impairment charges in future periods.

Events or circumstances that could have a potential negative effect on the estimated fair value of our reporting units and indefinite-lived tradenames include:

increases in market-participant discount rates, lower than forecasted revenue growth rates, actual new construction and repair and remodel growth rates that fall below our assumptions, actions of key customers, continued economic uncertainty, higher levels of unemployment, weak consumer confidence, higher interest rates, lower levels of discretionary consumer spending, a decrease in assumed royalty rates and a decline in the trading price of our common stock.

We cannot predict with certainty the occurrence of certain events or changes in circumstances that might adversely affect the carrying value of goodwill and indefinite-lived assets.

There was no impairment of goodwill for any period presented.

There were no impairments of indefinite-lived assets for the years ended December 29, 2024 or December 31, 2023.

The significant assumptions used to estimate the fair values of the tradenames impaired during the year ended December 25, 2022 were as follows:

There was no impairment of goodwill or indefinite lived assets for any period presented.

The significant assumptions used to estimate the fair values of the tradenames tested quantitatively during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 were as follows:

2025 2024 2023

Unobservable Input Min Max Wtd

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Royalty rate(b) 3.0 % 4.0 % 2.5 % 3.0 % 4.0 % 3.6 % 3.0 % 4.0 % 3.6 %

2.5 % 3.0 % 2.8 %

Long-term revenue growth rate (c)

1.0 % 1.0 % 1.0 %

(a) Weighted by relative fair value of the impaired tradenames.

(b) Represents estimated percentage of sales a market-participant would pay to license the impaired tradenames.

(a) Weighted by the relative fair value of the tradenames that were tested quantitatively.

(b) Represents estimated percentage of sales a market-participant would pay to license the tradenames that were tested quantitatively.

Financial Instruments

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The gross U.S.

dollar equivalent notional amount of all foreign currency derivative hedges outstanding at December 29, 2024 was $ 88.1 million, representing a net settlement liability of $ 5.7 million.

Based on foreign exchange rates as of December 29, 2024, we estimate that $ 5.0 million of net derivative losses associated with cash flow hedges and included in accumulated other comprehensive income as of December 29, 2024 will be reclassified to earnings within the next twelve months.

dollar equivalent notional amount of all foreign currency derivative hedges outstanding at December 28, 2025 was $ 76.0 million, representing a net settlement asset of $ 6.1 million.

Based on foreign exchange rates as of December 28, 2025, we estimate that $ 4.9 million of net derivative gains associated with cash flow hedges and included in accumulated other comprehensive income as of December 28, 2025 will be reclassified to earnings within the next twelve months.

The fair values of foreign exchange derivative instruments on the consolidated balance sheets as of December 28, 2025 and December 29, 2024 were:

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Foreign exchange contracts:

Unrealized holding (losses) gains arising during period $ ( 10.1 ) $ 9.6 $ 7.2

reclassification adjustment for losses (gains) included in net income

Unrealized holding gains (losses) arising during period $ 12.0 $ ( 10.1 ) $ 9.6

reclassification adjustment for (gains) losses included in net income

( 2.1 ) 2.9 ( 10.2 )

Unrealized (losses) gains on derivatives $ ( 7.2 ) $ ( 0.6 ) $ 2.7

The effects of fair value hedging financial instruments included in other expense, net on the consolidated statements of income in 2024, 2023 and 2022 were:

Amount of Gain (Loss) Recognized in Earnings

Unrealized gains (losses) on derivatives $ 9.9 $ ( 7.2 ) $ ( 0.6 )

The effects of fair value hedging financial instruments included in other (income) expense, net on the consolidated statements of income in 2025, 2024 and 2023 were:

Amount of (Loss) Gain Recognized in Earnings

on Fair Value Hedging Relationships

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Derivatives designated as hedging instruments — ( 0.1 ) 5.9

Net gains (losses) recognized in earnings $ — $ 4.6 $ ( 7.2 )

Net (losses) gains recognized in earnings $ ( 0.6 ) $ — $ 4.6

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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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.

The estimated fair value of the Company's debt, including current maturities, is 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 December 28, 2025, the fair value of total debt was $ 1,009.1 million compared to the carrying value of $ 985.0 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.

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 December 28, 2025 and December 29, 2024 , including the carrying value of the debt less debt issuance costs:

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

Current Long-term Current Long-term

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

Term loan due November 2027 — — 18.8 693.7

December 28, 2025 December 29, 2024

Dollars presented in millions) Long-term Long-term

Revolving credit facility due June 2029 $ 285.0 $ 320.0

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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.

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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

On June 27, 2024, the Company completed a private offering (the “Offering”) of $ 700.0 million aggregate principal amount of 7.00 percent Senior Notes due 2032 (the “Senior Notes”) and entered into an amended and restated credit agreement (the “2024 Credit Agreement”), which amended and restated the 2022 Credit Agreement.

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

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The Senior Notes had an outstanding balance of $ 700.0 million as of December 28, 2025.

As of December 29, 2024, prepaid debt issuance costs related to the Notes were $ 12.2 million and are being amortized over the term of the debt.

As of December 28, 2025, prepaid debt issuance costs related to the Senior Notes were $ 10.5 million and are being amortized over the term of the debt.

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

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Interest rates under the revolving credit facility are variable based on the SOFR, or, at the Company’s option, at a base reference rate equal to the highest of (i) the federal funds rate plus 0.50 percent, (ii) the rate of interest last quoted by JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”) as its “prime rate” and (iii) the one-month SOFR rate plus 1.00 percent (the “Base Rate”), plus, as applicable, a margin ranging from 1.625 percent to 2.25 percent per annum for SOFR-based loans and ranging from 0.625 percent to 1.25 percent per annum for Base Rate-based loans, in each case, depending on the Company’s net leverage ratio.

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 Company also pays 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 Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of December 28, 2025.

2025 Refinancing Transaction

The interest rate of the delayed draw term loans is a variable rate based on SOFR, plus, a margin depending on the Company’s net leverage ratio.

The delayed draw term loans will have a maturity coterminous with the revolving credit facility under the 2024 Credit Agreement in June 2029, and there were no material changes to the covenants in place under the 2024 Credit Agreement as a result of this amendment.

As of December 28, 2025, prepaid debt issuance costs related to the 2025 Credit Agreement totaled $ 1.8 million, of which $ 0.5 million has been has been included in other current assets, and $ 1.3 million has been has been included in other assets in our consolidated balance sheet.

The prepaid debt issuance costs will be amortized over the term of the debt .

The revolving credit facility had an outstanding balance of $ 285.0 million as of December 28, 2025 and had $ 441.9 million of availability.

1 unchanged sentence

As of December 28, 2025, prepaid debt issuance costs related to the 2024 Credit Agreement were $ 3.6 million and are being amortized over the term of the debt.

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

At December 28, 2025, these costs are included in other assets in our consolidated balance sheet.

Over the next five years, debt due to be paid by the Company is as follows:

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Restructuring charges of $ 15.2 million in 2025 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.

2024 restructuring charges also include an asset impairment charge associated with the decision to exit a leased manufacturing facility.

Reconciliation of Restructuring Liability

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Workforce reduction costs $ 4.8 $ 10.6 $ ( 12.9 ) $ — $ 2.5

Facility Closure Costs

— 7.0 — ( 7.0 ) —

Other 0.1 4.6 ( 4.0 ) ( 0.8 ) ( 0.1 )

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(a) Cash expenditures primarily related to severance charges.

Restructuring charges of $ 10.1 million in 2023 are primarily related to severance costs and other associate-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint, and an asset impairment charge associated with a decision to permanently close our Newton, Kansas manufacturing facility, which had previously been idled.

Restructuring charges of $ 18.0 million in 2024 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.

2024 restructuring charges also include an asset impairment charge associated with the decision to exit a leased manufacturing facility.

Reconciliation of Restructuring Liability

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(a) Cash expenditures primarily related to severance charges.

Restructuring charges of $ 25.1 million in 2022 are largely related to severance costs and other associate-related costs associated with the relocation and closure of certain production facilities within our manufacturing footprint, resulting in a more flexible facility footprint.

These actions included the consolidation of two manufacturing facilities in Winnipeg, Canada into one facility, the idling of a manufacturing facility in Newton, Kansas and the closure of our Lynchburg, Virginia manufacturing facility.

For taxable periods prior to and including the Separation in 2022, our operations were included in the consolidated U.S.

federal and certain state and local income tax returns of Fortune Brands, as applicable.

The Company filed separate foreign income tax returns.

Subsequent to the Separation, as a stand-alone entity, we file consolidated U.S.

federal income tax returns and various state and local income tax returns.

The Company’s foreign income tax returns continue to be filed on a full-year basis.

The Company’s deferred taxes and effective tax rate may differ from those in the pre-Separation taxable periods.

The components of income from continuing operations before income taxes were as follows:

5 unchanged sentences

Dollars presented in millions) 2025 2024 2023

Current tax expense

Federal $ ( 1.1 ) $ 26.8 $ 44.2

1 unchanged sentence

Foreign 4.7 6.0 8.9

Total current tax expense 6.8 37.8 62.4

Deferred tax expense (benefit)

Federal 15.6 4.7 1.2

1 unchanged sentence

Foreign ( 0.2 ) 0.3 ( 4.8 )

Total deferred tax expense (benefit) 12.8 4.6 ( 5.7 )

Total income tax expense $ 19.6 $ 42.4 $ 56.7

A reconciliation of the U.S.

federal statutory tax rate to the Company’s effective income tax rate is as follows:

federal statutory tax rate to the Company’s effective income tax rate is as follows, in accordance with the updated requirements of ASU 2023-09 for the year ended December 28, 2025 :

Component $ %

Income taxes at U.S.

federal statutory income tax rate $ 9.7 21.0 %

State and local income taxes, net 0.5 1.1

Foreign tax effects

Singapore - Maquiladora tax benefit ( 1.3 ) ( 2.8 )

Singapore - Other foreign tax effects ( 0.8 ) ( 1.7 )

Mexico - Nondeductible benefits 0.8 1.7

Mexico - Inflationary ( 0.8 ) ( 1.7 )

Mexico - Maquiladora credit ( 0.7 ) ( 1.5 )

Mexico - Maquiladora tax 2.3 5.0

Mexico -Statutory rate differential 0.6 1.2

Other jurisdictions

Other foreign tax effects 0.5 1.1

R&D tax credits

( 1.5 ) ( 3.2 )

Change in valuation allowance 4.4 9.4

Nontaxable or nondeductible items

Nondeductible compensation 1.5 3.2

Acquisition-related transaction costs 3.6 7.8

Other nontaxable or nondeductible items 0.7 1.5

Changes in unrecognized tax benefits ( 0.6 ) ( 1.2 )

Deferred impact- Subpart F Full Inclusion

Adjustment to prior period provision ( 1.5 ) ( 3.2 )

Other items 0.2 0.3

Total tax provision and effective tax rate $ 19.6 42.3 %

(a) The states that contribute to the majority (greater than 50 percent) of the tax effect in this category include California and Georgia.

State and local income taxes also include state tax credits of $ 1.2 million.

In 2025, the Company recorded a valuation allowance charge of $ 4.4 million primarily based on an inability to demonstrate that sufficient future foreign-source taxable income in the general basket category will be available to absorb foreign tax credit carryovers within the ten-year carryforward period.

The Company also had nondeductible acquisition-related transaction costs incurred as a result of the pending merger with American Woodmark, which resulted in additional income tax expense of $ 4.3 million in 2025.

As previously disclosed for the years ended December 29, 2024, and December 31, 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

(in percentages) 2024 2023

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Unrecognized tax benefits ( 0.4 ) —

IRS audit adjustments — — 8.1

Foreign legislative exclusion ( 1.1 ) —

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For 2025, the Company’s effective tax rate was 42.3 percent, compared to an effective tax rate of 25.2 percent for 2024.

The increase in effective tax rate was primarily the result of an increase in the valuation allowance, nondeductible transaction costs related to the Supreme acquisition and foreign income inclusions net of foreign tax credits, partially offset by foreign exclusions, return-to-provision adjustments and the release of specific uncertain tax positions.

The increase in the effective tax rate between the periods was primarily due to the increase in the valuation allowance and nondeductible acquisition-related transaction costs, as well as changes in foreign income inclusions and changes in book income, partially offset by lower state and local income taxes and the mix of earnings in jurisdictions with differing tax rates.

The 2025 effective income tax rate of 42.3 percent compared to the U.S.

federal statutory rate of 21.0 percent was unfavorably impacted by net changes in state and local income taxes, foreign income taxed at higher rates, an increase in the valuation allowance, nondeductible transaction costs related to the Supreme acquisition and executive compensation.

These were partially offset by favorable benefits for the partial release of uncertain tax positions, return-to-provision adjustments, tax credits and foreign exclusions.

The 23.8 percent effective income tax rate for 2023 was unfavorably impacted by net changes in state and local income taxes and foreign income taxed at higher rates.

federal statutory rate of 21.0 percent was primarily the result of the increase in the valuation allowance and nondeductible acquisition-related transaction costs, as well as changes in foreign income inclusions, nondeductible compensation and net changes in state and local income taxes, partially offset by tax credits and the mix of earnings in jurisdictions with differing tax rates.

For 2024, the Company’s effective tax rate was 25.2 percent, compared to an effective tax rate of 23.8 percent for 2023.

The decrease in effective tax rate in 2023 was primarily the result of changes in state and local income taxes and the nonrecurrence of IRS audit adjustments in 2022, including recognition of a deferred tax liability for earnings of various foreign entities, partially offset by benefits for the release of uncertain tax positions in 2022 and foreign income taxed at higher rates.

The 27.2 percent effective income tax rate for 2022 was unfavorably impacted by IRS audit adjustments, including recognition of a deferred tax liability for earnings of various foreign entities, and state and local income taxes, partially offset by favorable benefits for the release of uncertain tax positions and foreign income taxed at lower rates.

The increase in effective tax rate was primarily the result of an increase in the valuation allowance, nondeductible acquisition-related costs to the Supreme acquisition and foreign income inclusions net of foreign tax credits, partially offset by foreign exclusions, return-to provision adjustments and the release of specific uncertain tax positions.

For the year ended December 28, 2025, cash income taxes paid directly to taxing authorities, net of refunds received, were as follows:

Dollars presented in millions) 2025

Federal $ 19.8

Other foreign ( 0.2 )

Total income taxes paid $ 28.8

For the years ended December 29, 2024 and December 31, 2023, income taxes paid directly to taxing authorities, net of refunds received, were $ 40.7 million and $ 68.5 million, respectively.

Deferred income tax assets and liabilities are provided for the impact of temporary differences between amounts of assets and liabilities recognized for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws.

These temporary differences result in taxable or deductible amounts in future years.

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view regarding the future realization of deferred tax assets.

As of each reporting date, the Company’s management considers all evidence, both positive and negative, that could impact management’s view regarding the future realization of deferred tax assets.

The negative evidence for the 2025 valuation allowance was primarily a result of insufficient future foreign-source taxable income in the general basket category within the ten-year carryover period, as discussed above.

The components of net deferred tax assets (liabilities) as of December 28, 2025 and December 29, 2024 were as follows:

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Deferred tax assets:

Other accrued expenses $ 14.4 $ 14.7

Operating lease liabilities $ 45.6 $ 14.3

Other accrued expenses 14.4 14.4

Compensation and benefits 13.4 8.1

Net operating loss and other tax carryforwards 11.7 11.2

Accounts receivable 13.4 11.1

R&D capitalization 10.2 7.9

Interest carryforward 5.7 9.6

Compensation and benefits 8.1 15.9

Capitalized inventories 4.8 4.8

R&D Capitalization 0.1 10.2

Defined benefit plans — 0.2

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Valuation allowance ( 8.1 ) ( 3.7 )

Total deferred tax assets 80.6 70.3

Total deferred tax assets (net of valuation allowance) 101.4 80.6

Deferred tax liabilities:

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As of December 28, 2025 and December 29, 2024, the Company had deferred tax assets related to net operating losses and other tax credit carryforwards of $ 11.7 million and $ 11.2 million, respectively, including foreign tax credit carryforwards of $ 8.0 million and $ 8.7 million, respectively.

The net operating losses expire between 2024 and 2043, foreign tax credits expire between 2029 and 2034 and the other tax credit carryforwards expire between 2033 and 2034.

Net operating losses generally expire between 2028 and 2040, foreign tax credits expire between 2029 and 2034 and the other tax credit carryforwards expire between 2030 and 2035.

R&D capitalization commenced in 2022 and pertains to the 2017 Tax Cuts and Jobs Act eliminating the immediate expensing of research and experimental expenditures and requiring taxpayers to capitalize their expenditures over a period of years.

On July 4, 2025, the OBBBA was enacted into U.S.

The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures allowing immediate expensing of prior year R&D capitalized.

The Company evaluated its ability to realize tax benefits associated with deferred tax assets and concluded, based on all available positive and negative evidence, that it is more likely than not that a portion of the deferred tax assets are not expected to be realized.

Accordingly, a valuation allowance of $ 8.1 million and $ 3.7 million as of December 28, 2025 and December 29, 2024, respectively, was recorded to reduce the deferred tax assets related to the net operating losses and tax credit carryforwards.

A reconciliation of the Company’s gross change in UTBs, including accrued interest and penalties, is as follows:

A reconciliation of the Company’s gross change in unrecognized tax benefits (“UTBs”), including accrued interest and penalties, is as follows:

Dollars presented in millions) 2025 2024 2023

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In 2025 and 2024, the Company released $ 0.3 million and $ 0.4 million of prior year tax positions due to the expiration of the statute of limitations, respectively.

In 2022, the IRS completed its examination of the Company’s tax filings for 2017 and 2018.

As a result of closing the IRS examination and other changes to UTBs, the Company realized a $ 19.0 million net reduction in UTBs, which was partially offset by related tax expenses to adjust current and deferred income tax liabilities.

As a result of the IRS audit, the Company is now recognizing a deferred tax liability for various foreign entities whose income is currently includable for U.S.

federal income tax purposes.

Post-Separation, liabilities related to UTBs, including interest and penalties, are reported as a liability within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be legally liable for UTBs.

Liabilities related to UTBs, including interest and penalties, are reported as a liability within the Consolidated Balance Sheet.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves.

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In 2025, the Company recognized interest and penalty benefit of approximately $ 0.3 million.

In 2023 and 2022, the Company recognized interest and penalty expenses of approximately $ 0.2 million and $ 0.1 million, respectively.

The amount of UTBs that, if recognized as of December 29, 2024, would affect the Company’s effective tax rate is $ 0.5 million.

It is reasonably possible that, within the next twelve months, total UTBs may decrease in the range of $ 0.1 million to $ 0.5 million primarily as a result of the conclusion of U.S.

federal, state, and foreign income tax proceedings or expiration of the relevant statute of limitations.

In 2024 and 2023, the Company recognized interest and penalty benefit of approximately $ 0.2 million and expense of $ 0.2 million, respectively.

As of December 28, 2025, the Company believed that it is more-likely-than-not that the tax positions it has taken would be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position, results of operations and cash flows.

However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made.

However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company’s estimates or from its historical income tax provisions and/or accruals and could have a material effect on operating results or cash flows in the periods for which that determination is made.

In addition, future period earnings may be adversely impacted by litigation costs, settlements, interest and/or penalty assessments.

For pre-Separation periods, the Company’s federal income tax returns, and various state income tax returns that included operations of the Company, were filed by Fortune Brands and remain open and subject to examination for tax years after 2021.

In addition to the U.S., the Company has tax years that remain open and subject to examination by tax authorities in the following major taxing jurisdictions:

Canada for years after 2019 and Mexico for years after 2018.

In addition to the U.S., the Company has tax years that remain open and subject to examination by tax authorities in Canada for years after 2020 and in Mexico for years after 2019.

As of December 28, 2025, the Company is not permanently reinvested with respect to all earnings generated by foreign operations.

There was no material deferred tax expense recorded for foreign and state tax costs associated with the future remittance of these undistributed earnings.

Accordingly, the Company’s foreign earnings are subject to the general presumption of APB 23, including the 100 percent dividends-received deduction and previously taxed income components.

Income taxes paid directly to taxing authorities, net of refunds received, were $ 40.7 million, $ 68.5 million and $ 10.3 million during the years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively.

Prior to the Separation in 2022, federal and state income tax payments and refunds were paid and received by Fortune Brands on our behalf.

There was no material deferred tax liability recorded for foreign and state tax costs associated with the future remittance of these undistributed earnings.

We expect to have the ability to repatriate available non-U.S.

cash without significant additional tax cost.

Pension and Other Postretirement Plans

We have a defined benefit pension plan in the United States covering many of the Company’s associates.

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

In addition, the Company provides postretirement health care and life insurance benefits to certain associates in Mexico.

Service cost for 2024 and 2023 relates to benefit accruals for an associate group in Mexico who receive statutorily-mandated retiree health and welfare benefits.

The plans provide for payment of retirement benefits, mainly commencing between the ages of 55 and 65.

After meeting certain qualifications, an associate acquires a vested right to future benefits.

The benefits payable under the plans are generally determined on the basis of an associate’s length of service and/or earnings.

Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied.

Also, from time to time, we may make contributions in excess of the legal funding requirements.

We had a defined benefit pension plan in the United States covering many of the Company’s associates.

However, the plan was frozen to new participants and benefit accruals were frozen for active participants on or before December 31, 2016.

In addition, the Company provides postretirement health care and life insurance benefits to certain associates in Mexico (“the postretirement plan”).

Service cost for the postretirement plan in 2025, 2024 and 2023 relates to benefit accruals for an associate group in Mexico who receive statutorily-mandated retiree health and welfare benefits.

The defined benefit pension plan provided and the postretirement plan provides payment of retirement benefits, mainly commencing between the ages of 55 and 65.

After meeting certain qualifications, an associate acquired (for the defined benefit pension plan) or acquires (for the postretirement plan) a vested right to future benefits.

The benefits payable under the plans were (for the defined benefit pension plan) or are (for the postretirement plan) generally determined on the basis of an associate’s length of service and/or earnings.

Employer contributions to the plans were made (for the defined benefit pension plan) or are made (for the postretirement plan), as necessary, to ensure legal funding requirements are satisfied.

Also, from time to time, we made (for the defined benefit pension plan) or may make (for the postretirement plan) contributions in excess of the legal funding requirements.

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.

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

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

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 began paying plan benefits to eligible plan participants through the group annuity contracts.

As a result of the final settlement of the plan, the Company recognized a non-cash settlement charge of $ 0.4 million recorded within other income, net in the accompanying consolidated statements of income for the fifty-two weeks ended December 28, 2025 .

As a result of the termination of the defined benefit pension plan, the Company recognized a surplus in plan assets of $ 7.2 million.

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

As of December 28, 2025, there are no remaining surplus funds held within the defined benefit pension plan and the plan is closed.

Net actuarial gains and losses occur when actual experience differs from any of the assumptions used to value the plans or when assumptions change as they may each year.

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Lump sum benefits paid ( 74.2 ) ( 41.9 ) — —

Settlements/Curtailments gain

— — ( 1.3 ) ( 0.2 )

Curtailment gain — — ( 0.4 ) ( 1.3 )

Projected benefit obligation at end of year $ — $ 82.2 $ 4.4 $ 3.7

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Funded status (Fair value of plan assets less PBO) $ — $ ( 0.7 ) $ ( 4.4 ) $ ( 3.7 )

For the year ended December 28, 2025, the gain on the pension obligation is primarily due to the finalization of plan liabilities in conjunction with the transfer of the plan liabilities to an insurance company.

For the year ended December 29, 2024, the gain on the pension obligation is primarily due to a combination of increasing discount rates and the actuarial gains from lump sum payments made from the plan during the year.

For the year ended December 31, 2023, the actuarial loss is primarily due to declining discount rates and the decision to terminate the plan, which resulted in the adoption of plan termination assumptions that resulted in an increase to the liability.

These liability losses were offset slightly by asset returns greater than expected.

The accumulated benefit obligation exceeds the fair value of the pension plan assets.

The accumulated benefit obligation exceeded the fair value of the pension plan assets at December 29, 2024.

Amounts recognized in the consolidated balance sheets consist of:

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As of December 29, 2024 and December 31, 2023, we utilized the Society of Actuaries’ base MP-2021 mortality projection scale without adjustment.

As of December 25, 2022, we utilized an aggregate Pri-2012 mortality table with the Society of Actuaries’ MP-2021 projection scale and an adjustment to reflect increased rates of mortality subsequent to the Society of Actuaries’ MP-2021 projection scale, resulting in an immaterial decrease in plan benefit obligation and ongoing expenses.

The amounts in accumulated other comprehensive loss on the Consolidated Balance Sheets that have not yet been recognized as components of net periodic benefit cost were as follows:

Dollars in millions)

Pension Benefits Postretirement Benefits

Net actuarial loss at December 25, 2022 $ 12.8 $ —

Recognition of actuarial loss

( 2.9 ) ( 0.3 )

Current year actuarial loss

Dollars presented in millions) Pension Benefits Postretirement Benefits

Net actuarial loss at December 31, 2023 $ 13.5 $ 0.2

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Net actuarial loss at December 29, 2024 $ 5.7 $ 0.1

Recognition of actuarial gain — 0.4

Current year actuarial gain ( 5.7 ) ( 0.5 )

Net actuarial loss at December 28, 2025 $ — $ —

Components of net periodic cost (benefit) were as follows:

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Recognition of actuarial (gains) losses — ( 0.2 ) 2.9 — — —

Settlement/Curtailment loss/(gain)

2.9 — — ( 0.2 ) 0.3 ( 0.3 )

Net periodic cost (benefit)

$ 4.0 $ 2.3 $ ( 2.0 ) $ 0.6 $ 1.1 $ 1.2

Settlement/Curtailment (gain)/loss ( 0.4 ) 2.9 — ( 0.5 ) ( 0.2 ) 0.3

Net periodic cost $ ( 0.3 ) $ 4.0 $ 2.3 $ 0.4 $ 0.6 $ 1.1

Assumptions Pension Benefits Postretirement Benefits

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Weighted-average assumptions used to determine benefit obligations at balance sheet date:

Discount rate 5.5 % 4.8 % 5.2 % 10.7 % 9.2 % 9.5 %

Discount rate N/A 5.5 % 4.8 % 10.0 % 10.7 % 9.2 %

Weighted-average assumptions used to determine net cost (benefit) for years ended:

Discount rate 4.8 % 5.2 % 3.0 % 9.9 % 9.4 % 8.9 %

Expected long-term rate of return on plan assets 4.5 % 3.8 % 6.2 % — % — % — %

The fair value of the pension assets by major category of plan assets as of December 29, 2024 and December 31, 2023 were as follows:

Discount rate N/A 4.8 % 5.2 % 9.4 % 9.9 % 9.4 %

Expected long-term rate of return on plan assets N/A 4.5 % 3.8 % — % — % — %

The fair value of the pension assets by major category of plan assets as of December 29, 2024 were as follows:

Dollars presented in millions) Total as of

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Cash and cash equivalents $ 9.7

Equity — 28.5

Fixed income 71.8

Multi-strategy hedge funds — 3.0

Real estate — 2.8

Total $ 81.5 $ 131.1

Our defined benefit plan Master Trust owns a variety of investment assets.

All of these investment assets are measured using net asset value per share as a practical expedient per ASC 820.

As of December 29, 2024, our defined benefit plan Master Trust owned a variety of investment assets.

All of these investment assets were measured using net asset value per share as a practical expedient per ASC 820.

Following the retrospective adoption of ASU 2015-07 (Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share) we excluded all investments measured using net asset value per share in the amount of $ 81.5 million and $ 131.1 million as of December 29, 2024 and December 31, 2023, respectively, from the tabular fair value hierarchy disclosure.

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share) we excluded all investments measured using net asset value per share in the amount of $ 81.5 million as of December 29, 2024, from the tabular fair value hierarchy disclosure.

Investment assets as of December 29, 2024, consisting of fixed income funds and cash and cash equivalents, have no specified redemption frequency and notice period, and may be redeemed daily.

As of December 29, 2024, we did not have an intent to sell or otherwise dispose of these investment assets at prices different than the net asset value per share.

Our investment strategy is to protect the funded status of the defined benefit plan with a portfolio of fixed income investments and cash which is designed to offset changes in the plan’s liabilities related to changes in the discount rate.

The asset allocation policy of the plan allows for liability-hedging assets, including fixed income funds and cash.

Asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure.

Our 2025 expected blended long-term rate of return on plan assets of 4.5 percent was determined based on the nature of the plans’ investments, our current asset allocation and projected long-term rates of return from pension investment consultants.

The asset allocation for plan investments has shifted to mirror the revised expected timing of the disbursement of plan assets in conjunction with the plan termination.

Our investment strategy was to protect the funded status of the defined benefit plan with a portfolio of fixed income investments and cash which was designed to offset changes in the plan’s liabilities related to changes in the discount rate.

The asset allocation policy of the plan allowed for liability-hedging assets, including fixed income funds and cash.

Asset allocations were reviewed periodically to ensure the allocation met the needs of the liability structure.

Estimated Future Retirement Benefit Payments

The following retirement benefit payments are expected to be paid by the respective plans:

Dollars presented in millions) Pension

Benefits Postretirement

2025 $ 6.0 $ 0.6

2026 $ 5.8 $ 0.5

2027 $ 5.7 $ 0.5

2028 $ 5.5 $ 0.5

2029 $ 5.4 $ 0.5

Dollars presented in millions) Postretirement

Years 2031-2035 $ 2.9

Estimated future retirement benefit payments listed are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to certain participants.

Defined Contribution Plan Contributions

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In the future, costs related to such audits or an unfavorable outcome could have a material impact on our consolidated results of operations, cash flows and financial condition.

Following an audit for the 2018 tax year, the Mexican tax administration service, the Servicio de Administración Tributaria, (the “SAT”), issued a tax assessment in the amount of approximately $ 54.9 million to our subsidiary, Woodcrafters Home Products, S.

Following an audit for the 2018 tax year, the Mexican tax administration service, the SAT, issued a tax assessment in the amount of 944.8 million Mexican pesos (approximately $ 52.7 million USD as of December 28, 2025) to our subsidiary, Woodcrafters Home Products, S.

de C.V., for allegedly failing to make certain tax payments and to export timely certain merchandise.

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Stock-Based Compensation

Prior to the Separation, certain of Cabinets’ associates participated in stock-based compensation plans sponsored by Fortune Brands.

In connection with the Separation, stock compensation awards granted under the Fortune Brands’ Long-Term Incentive Plans were adjusted as follows:

• Vested and unvested stock options were adjusted so that the grantee holds options to purchase MasterBrand, Inc.

common shares.

• The adjustment to the stock options was intended to generally preserve the intrinsic value of each original option grant and the ratio of the exercise price to the fair market value of Fortune Brands’ common shares on December 14, 2022 .

• For unvested performance share awards, progress against the targets was projected as of the conclusion of our fiscal third quarter of 2022.

The unvested performance share awards were then converted into awards of restricted stock units.

• Unvested restricted stock awards were replaced with adjusted, substitute awards for restricted shares or units, as applicable, of MasterBrand, Inc.

common shares.

The new awards of restricted stock were intended to generally preserve the intrinsic value of the original award determined as of December 14, 2022.

• Vesting periods of all awards described above were unaffected by the adjustment and substitution.

Subsequent to the Separation, certain of the Company’s associates participate in a stock-based compensation plan sponsored by MasterBrand, Inc.

Certain of the Company’s associates participate in a stock-based compensation plan sponsored by MasterBrand, Inc.

Our stock-based compensation plan, the MasterBrand, Inc.

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Upon the exercise or payment of stock-based awards, shares of common stock are issued from authorized common shares of MasterBrand, Inc.

Stock-based compensation expense, including expense recognized under both the Fortune Brands’ Long-Term Incentive Plans and the MasterBrand, Inc.

2022 Long-Term Incentive Plan, was as follows:

Stock-based compensation expense under the MasterBrand, Inc.

Plan was as follows:

Dollars presented in millions) 2025 2024 2023

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Total after tax expense $ 12.1 $ 16.5 $ 13.6

Compensation expense for 2022 included the recognition of $ 0.7 million of incremental compensation expense in the fourth quarter of 2022 resulting from the adjustment and substitution of Fortune Brands awards settled in MasterBrand, Inc.

Performance Share Awards

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Compensation cost is amortized into expense over the performance period, which is generally three years , and is based on the probability of meeting performance targets.

The fair value of each performance share award is based on the average of the high and low stock price on the date of grant.

Upon Separation, the progress against the targets for all outstanding performance share awards was projected as of the conclusion of our fiscal third quarter of 2022, and were converted into awards of Restricted Stock Units, and the v esting periods of the performance share awards were unaffected by the adjustment and substitution.

The fair value of performance share awards that vested during 2022 was $ 1.5 million ( 245,111 shares, as converted to MasterBrand, Inc.

common stock).

As of December 25, 2022, there were no unvested performance share awards outstanding that had been awarded under the Fortune Brands’ Long-Term Incentive Plans.

The fair value of each PSA is based on the average of the high and low stock price on the date of grant.

During 2025 , we granted 420,147 PSAs.

During 2023, we granted 411,647 performance share awards.

The following table summarizes activity with respect to performance share awards outstanding under the MasterBrand, Inc.

During 2024 , we granted 562,587 PSA.

The following table summarizes activity with respect to PSAs outstanding under the MasterBrand, Inc.

Performance Share Awards

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The remaining unrecognized pre-tax compensation cost related to PSAs at December 28, 2025 was approximately $ 2.6 million (based on the current estimated probability of meeting performance targets), and the weighted-average period of time over which this cost will be recognized is 1.54 years.

The fair value of PSAs that vested during 2024, 2023 and 2022 were $ 0.1 million, $ 0.1 million and $ 1.5 million, respectively.

The fair value of PSAs that vested during 2025, 2024 and 2023 was $ 0.1 million in each year.

The weighted-average grant date fair value of PSAs that were granted during 2025, 2024 and 2023 were $ 13.16 , $ 17.05 and $ 9.91 , respectively.

There were no PSAs granted in 2022.

Restricted Stock Units

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common stock subject to continued employment through each vesting date.

RSUs generally vest ratably over a three-year period (i.e., 1/3 vests on the 1st anniversary of the grant date, 1/3 vests on the 2nd anniversary of the grant date, and 1/3 vests on the 3rd anniversary of the grant date).

RSUs generally vest ratably over a three-year period, with 1/3 vesting on the 1st anniversary of the grant date, 1/3 vesting on the 2nd anniversary of the grant date, and 1/3 vesting on the 3rd anniversary of the grant date.

In addition, certain associates can elect to defer receipt of a portion of their RSU awards upon vesting.

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The remaining unrecognized pre-tax compensation cost related to RSUs at December 28, 2025 was approximately $ 16.8 million, and the weighted-average period of time over which this cost will be recognized is 1.77 years.

The fair value of RSUs that vested (including RSUs that had been awarded under the Fortune Brands’ Long-Term Incentive Plans that vested prior to the Separation) during 2024, 2023 and 2022 was $ 29.5 million, $ 10.6 million and $ 6.1 million, respectively.

The fair value of RSUs that vested during 2025, 2024 and 2023 was $ 21.4 million, $ 29.5 million and $ 10.6 million, respectively.

The weighted-average grant date fair value of RSUs that were granted during 2025, 2024 and 2023 were $ 12.99 , $ 17.58 and $ 10.28 , respectively.

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MasterBrand, Inc.

did not grant any stock options in fiscal 2024, 2023 or 2022 subsequent to the Separation.

did not grant any stock options in fiscal 2025, 2024 or 2023.

The fair value of MasterBrand, Inc.

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(b) At December 28, 2025 the weighted-average remaining contractual life of options exercisable was 4.6 years (as compared to 5.5 years at December 29, 2024) and the aggregate intrinsic value of options exercisable was $ 2.5 million (as compared to $ 6.4 million at December 29, 2024).

The remaining unrecognized compensation cost related to unvested awards at December 29, 2024 was immaterial , and the weighted-average period of time over which this cost will be recognized is 0.17 years.

The fair value of options that vested (including stock options that had been awarded under the Fortune Brands’ Long-Term Incentive Plans that vested prior to the Separation) during the years ended 2024, 2023 and 2022 was $ 0.8 million , $ 1.4 million and $ 0.8 million , respectively.

There is no remaining unrecognized compensation cost related to unvested awards at December 28, 2025, as all stock option awards have vested.

The fair value of options that vested during the years ended 2025, 2024 and 2023 was $ 0.4 million , $ 0.8 million and $ 1.4 million , respectively.

No options were exercised in 2024 or 2023.

Accumulated Other Comprehensive Loss

Total accumulated other comprehensive loss consists of net income and other changes in business equity from transactions and other events from sources other than stockholders.

Accumulated Other Comprehensive Income (Loss)

Total accumulated other comprehensive loss consists of net income and other changes in business equity from transactions and other events from sources other than shareholders.

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

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

Amounts classified into accumulated other comprehensive (loss) income ( 9.9 ) 7.2 ( 4.5 ) ( 7.2 )

Amounts reclassified into earnings — ( 4.5 ) 1.1 ( 3.4 )

Net current period other comprehensive (loss) income

( 9.9 ) 2.7 ( 3.4 ) ( 10.6 )

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

Amounts classified into accumulated other comprehensive income (loss) 12.1 9.6 ( 3.1 ) 18.6

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Net current period other comprehensive (loss) income ( 27.7 ) ( 7.2 ) 5.9 ( 29.0 )

( 27.7 ) ( 7.2 ) 5.9 ( 29.0 )

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

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.

Amounts classified into accumulated other comprehensive income 19.2 12.0 4.7 35.9

Amounts reclassified into earnings — ( 2.1 ) ( 0.3 ) ( 2.4 )

Net current period other comprehensive income 19.2 9.9 4.4 33.5

Balance at December 28, 2025 $ ( 4.4 ) $ 4.9 $ 0.3 $ 0.8

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 could repurchase up to $ 50.0 million of our common stock over a twenty-four month period, which expired 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 fiscal 2024, we repurchased 371,499 shares of our common stock under this program at a cost of approximately $ 6.5 million, or an average of $ 17.58 per share.

During 2023 we repurchased 1,874,806 shares of our common stock under this program at a cost of approximately $ 22.0 million, or an average of $ 11.73 per share.

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

Related Party Transactions

The accompanying financial statements are presented on a consolidated basis as the company is a standalone public company.

Certain information from prior to the Separation on December 14, 2022 was derived from Fortune Brands consolidated financial statements and accounting records.

Transactions between MasterBrand and Fortune Brands prior to the Separation have been presented as related party transactions in the accompanying consolidated financial statements.

After the Separation, Fortune Brands is not considered a related party of MasterBrand, Inc.

Fortune Brands performed certain corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services on behalf of the Company.

The expenses associated with these functions have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, associate headcount, or number of facilities, as applicable.

Prior to the Separation, total expenses allocated for 2022 were $ 92.5 million, and such amounts are primarily included within selling, general and administrative expenses in the Consolidated Statements of Income.

These amounts include costs of $ 72.4 million that were not historically allocated to us as part of Fortune Brands’ normal periodic management reporting process.

We consider the expense methodology and resulting allocation to be reasonable for the period presented;

however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company for the period presented.

Actual costs that we may have incurred had we been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our associates and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.

Cash Management

Fortune Brands utilized a central approach to treasury management, and prior to the Separation, we historically participated in related cash pooling arrangements to maximize the availability of cash for general operating and investing purposes.

Under these cash pooling arrangements in the United States, cash balances were remitted regularly from our accounts.

Our cash and cash equivalents on our consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries.

Stock-Based Compensation

Prior to the Separation, our associates participated in Fortune Brands stock-based compensation plans, the costs of which have been allocated and recorded in cost of products sold, and selling, general and administrative expenses in the consolidated statements of income.

Prior to the Separation, stock-based compensation costs related to our associates for 2022 were $ 10.9 million.

All of these amounts, except for $ 0.7 million of incremental compensation expense recognized in the fourth quarter of 2022, as described in Note 18, "Stock-Based Compensation," are included within the total expenses allocated, as noted above.

Related Party Sales

There were no material sales to or from Fortune Brands or its subsidiaries for any of the periods presented.

Balances Due to and From Related Parties

Prior to Separation, the amount owed to the Company and its subsidiaries from Fortune Brands was included in the related party note receivable balance.

We had written interest-bearing loan agreements in place with Fortune Brands.

The receivable balance consisted of excess cash remitted to the Parent’s cash pooling arrangements, net of expenses incurred by us which were paid for by Fortune Brands.

The loan agreements were to mature on April 14, 2026, but all amounts under these agreements were settled prior to the Separation.

The receivable balance earned interest at a rate in-line with the Fortune Brands’ short-term borrowing rate, which was between 0.95 percent and 4.80 percent during 2022.

Prior to Separation, the related party note payable balance was a note payable between a subsidiary of the Company and Fortune Brands.

The balance comprised of a revolving loan that was due at the maturity of the agreement on April 15, 2026, but was settled prior to the Separation.

The note bore interest at rates ranging between 1.20 percent and 5.05 percent during 2022.

The Company received interest income on related party receivables of $ 14.4 million for 2022 .

Additionally, the Company incurred interest expense on intercompany payables and notes of $ 1.5 million for 2022.

We may limit or terminate the 2025 Share Repurchase Authorization at any time.

During fiscal 2025, we repurchased 1,415,429 shares of our common stock under our 2023 and 2025 Share Repurchase Authorizations.

The shares were repurchased at a cost of approximately $ 18.1 million, or an average of $ 12.82 per share.

During fiscal 2024 we repurchased 371,499 shares of our common stock under our 2023 Share Repurchase Authorization.

The shares were repurchased at a cost of approximately $ 6.5 million, or an average of $ 17.58 per share.

As of December 28, 2025, $ 47.4 million remained authorized for purchase under the 2025 Share Repurchase Authorization.

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.

Products sold from which the Company derives revenue are described within Note 1, "Background and Basis of Presentation." 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 is limited to sale-related metrics, as disclosed in Note 4, "Revenue from Contracts with Customers."

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

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

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

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Commissions 59.0 47.2 48.4

Provision for bad debt 17.8 0.4 1.9

Amortization of intangibles 25.6 20.2 15.3

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of MasterBrand, Inc.

To the Board of Directors and Shareholders of MasterBrand, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Supreme from its assessment of internal control over financial reporting as of December 29, 2024, because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded Supreme from our audit of internal control over financial reporting.

Supreme is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 6% and 4% respectively, of the related consolidated financial statement amounts as of and for the year ended December 29, 2024.

Definition and Limitations of Internal Control over Financial Reporting

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Quantitative Impairment Tests – Certain Indefinite-Lived Tradenames

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Impairment losses are recorded to the extent that the carrying value of the indefinite-lived tradename exceeds its fair value.

Management first assesses qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired.

If it is more likely than not that an intangible asset is impaired, management performs a quantitative impairment test.

Management may also elect to bypass the qualitative testing and proceed directly to the quantitative testing.

Fair value is measured by management using the relief-from-royalty approach.

Significant assumptions inherent in estimating the fair values include forecasted revenue growth rates, assumed royalty rates and market-participant discount rates.

Significant assumptions used to determine the estimated fair values are forecasted revenue growth rates, assumed royalty rates and market-participant discount rates.

The principal considerations for our determination that performing procedures relating to the quantitative impairment tests for certain indefinite-lived tradenames is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of certain tradenames;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

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These procedures included testing the effectiveness of controls relating to management’s quantitative impairment tests for indefinite-lived tradenames, including controls over the valuation of certain indefinite-lived tradenames.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of certain tradenames;

(ii) evaluating the appropriateness of the relief-from-royalty approach used by management;

These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of certain tradenames, (ii) evaluating the appropriateness of the relief-from-royalty approach used by management;

(iii) testing the completeness and accuracy of underlying data used in the relief-from-royalty approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenue growth rates, market-participant discount rates, and assumed royalty rates for certain tradenames.

and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenue growth rates, assumed royalty rates, and market-participant discount rates for certain tradenames.

Evaluating management’s significant assumptions related to forecasted revenue growth rates and assumed royalty rates involved evaluating whether the significant assumptions used by management for certain tradenames were reasonable considering, (i) the current and past performance of the business associated with certain tradenames;

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and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s relief-from-royalty approach and (ii) the reasonableness of the assumed market-participant discount rate and assumed royalty rate significant assumptions for certain tradenames.

Acquisition of Supreme – Valuation of Customer Relationships and Tradenames

As described in Note 3 to the consolidated financial statements, on July 10, 2024, the Company completed the acquisition of Dura Investment Holdings, LLC, the parent company of Supreme Cabinetry Brands, Inc.

(“Supreme”) for purchase consideration of $527.3 million.

Of the acquired intangible assets, $174.1 million of customer relationships and $85.1 million of tradenames were recorded.

Fair value is estimated by management using an income valuation approach, which requires a forecast of future cash flows through the use of the multi-period excess earnings method or the relief-from royalty method.

The valuation methodologies used for the customer relationships and tradenames were the multi-period excess earnings method and the relief from royalty method, respectively.

Management applied significant judgment in determining the fair value of the customer relationship intangible assets, including estimates and assumptions of forecasted revenue growth rates, estimated earnings, customer attrition rates, and market-participant discount rates.

Management applied significant judgment in determining the fair value of the tradename intangible assets, including estimates and assumptions of forecasted revenue growth rates, assumed royalty rates and market-participant discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of customer relationships and tradenames acquired in the acquisition of Supreme is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships and tradenames acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenue growth rates, estimated earnings, customer attrition rates, and market-participant discount rates for customer relationships and forecasted revenue growth rates, assumed royalty rates, and market-participant discount rates for tradenames;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships and tradenames acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the customer relationships and tradenames acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings and relief from royalty methods used by management;

(iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings and relief from royalty methods;

and (v) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenue growth rates, estimated earnings, customer attrition rates, and market-participant discount rates for customer relationships and forecasted revenue growth rates, assumed royalty rates, and market-participant discount rates for tradenames.

Evaluating management’s assumptions related to forecasted revenue growth rates for customer relationships and tradenames, assumed royalty rates for tradenames, estimated earnings and customer attrition rates for customer relationships involved considering (i) the current and past performance of the Supreme business;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings and relief from royalty methods and (ii) the reasonableness of the market-participant discount rate assumption for customer relationships and the assumed royalty rate and market-participant discount rate assumptions for tradenames.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s relief-from-royalty approach and (ii) the reasonableness of the assumed royalty rate and market-participant discount rate significant assumptions for certain tradenames.

/s/ PricewaterhouseCoopers LLP

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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-K

Item 8. Financial Statements and Supplementary Data