What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 155 added, 88 removed, 128 unchanged (65% of the section changed)

5 unchanged sentences

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

These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 within Part I, Item 1A.

These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025 within Part I, Item 1A and in our Quarterly Reports on Form 10-Q for the quarterly period ended March 29, 2026 within Part II, Item 1A.

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

17 unchanged sentences

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

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

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

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

• The inability to complete the Transaction;

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

• Our ability to successfully integrate American Woodmark’s operations, systems, personnel, and business processes and realize anticipated synergies, cost savings, and other strategic benefits within expected timeframes or at all;

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

• Business disruption during the pendency of or following the Transaction;

• Diversion of management time on Transaction-related issues;

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

• Business disruption, operational inefficiencies or increased costs resulting from integration activities following the acquisition of American Woodmark;

• The diversion of management attention and resources from ongoing business operations as a result of integration activities and strategic initiatives associated with the acquisition of American Woodmark

• Our ability to maintain relationships with customers, suppliers, associates and other business partners following the acquisition of American Woodmark;

• Our ability to successfully integrate, migrate, or harmonize information technology systems, cybersecurity controls, financial reporting systems and other business processes across the combined company;

• Unexpected integration costs, operational challenges, disruptions or liabilities associated with the acquisition of American Woodmark;

• Our ability to retain key employees and leadership personnel and effectively integrate workforces and corporate cultures;

• Our ability to optimize manufacturing operations, distribution networks and supply chain activities while minimizing disruption to customers and operations;

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

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Further, our decades of experience have informed how we use global geographies to optimize procurement and manufacturing costs.

Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that cannot be easily replicated.

Finally, with the most extensive dealer network throughout the United States, we have an advantaged distribution model that cannot be easily replicated.

We expect to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization to ordering to delivery and installation.

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

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

The closing of the Merger, which is expected to occur in the second calendar quarter of 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.

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

In February 2026, we announced plans to implement $30 million of planned cost reductions.

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As part of these cost reductions, during the thirteen weeks ended March 29, 2026, the Company implemented a voluntary and involuntary separation program to reduce overall headcount, primarily in our corporate functions.

Effective as of May 28, 2026, MasterBrand completed its previously announced transaction with American Woodmark .

Pursuant to the Merger Agreement, at the Effective Time, each share of American Woodmark common stock outstanding was converted into the right to receive 5.1500 shares of MasterBrand common stock, plus cash in lieu of any fractional shares.

Recent Developments

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tariffs and any retaliatory responses thereto, have resulted in and could further result in, among other things, increased input costs, supply chain disruptions, decreased consumer demand and volatility in foreign exchange rates and financial markets.

We continue to analyze the impact of these actions and

adjust our mitigation strategy, including pricing, productivity and repositioning our supply chain to offset the impact of the tariff exposure as trade policy evolves.

We continue to analyze the impact of these actions and adjust our mitigation strategy, including pricing, productivity and repositioning our supply chain to offset the impact of the tariff exposure as trade policy evolves.

The uncertain and evolving market dynamics and global trade environment could have a material adverse effect on the Company’s business, financial condition, and results of operations.

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Trump and Trump v.

Selections, Inc., two appeals concerning tariffs President Trump imposed under the IEEPA.

Selections, Inc., two appeals concerning tariffs President Trump imposed under IEEPA.

The Supreme Court held that the IEEPA does not give the President authority to impose tariffs.

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On March 4, 2026, the CIT ordered the Administration to begin refunding all tariffs imposed under the IEEPA.

The Company paid approximately $11.7 million in IEEPA tariffs prior to the Supreme Court decision.

The Company , inclusive of $3.2 million paid by American Woodmark prior to May 28, 2026, paid approximately $14.9 million in IEEPA tariffs prior to the Supreme Court decision.

No further tariffs under the IEEPA were paid subsequent to the Supreme Court decision.

However, the prospective benefit of the elimination of the IEEPA tariffs was approximately offset by the immediate implementation of new tariffs under Section 122 of the Trade Act of 1974.

However, the prospective beneﬁt of the elimination of the IEEPA tariffs was approximately offset by the immediate implementation of new tariffs under Section 122 of the Trade Act of 1974.

The Company intends to maintain all legal and administrative rights to potential recovery of IEEPA tariffs paid.

We are accounting for any such recoveries under the GAAP gain contingency model.

No receivable has been recognized as of March 29, 2026 due to uncertainty regarding the realizability of the refund process and administrative approval.

No receivable was recognized as of March 29, 2026 due to uncertainty regarding the realizability of the refund.

During the thirteen weeks ended June 28, 2026, MasterBrand received $1.2 million of refunds (excluding $0.1 million of interest) and recognized this amount as a reduction in cost of products sold.

No receivable has been recognized as of June 28, 2026 for the remaining $13.7 million of IEEPA tariffs paid prior to the Supreme Court decision due to uncertainty regarding the realizability of the refund.

Subsequent to June 28, 2026, MasterBrand received $9.2 million of refunds (excluding $0.4 million of interest) and will recognize this amount, as well as any additional refunds subsequently collected during our fiscal third quarter of 2026, as a reduction in cost of products sold during the thirteen weeks ended September 27, 2026.

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

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

(1) “the first quarter of 2026” refers to the thirteen week period that ended on March 29, 2026;

and (2) “the first quarter of 2025” refers to the thirteen week period that ended on March 30, 2025.

(1) “the second quarter of 2026” refers to the thirteen week period that ended on June 28, 2026;

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

(3) “the first half of 2026” refers to the twenty-six weeks ended June 28, 2026 ;

and (4) “ the first half of 2025 ” refers to the twenty-six weeks ended June 29, 2025 .

Results of Operations

The following discussion of condensed consolidated results of operations refers to the thirteen weeks ended March 29, 2026 compared to the thirteen weeks ended March 30, 2025.

Thirteen Weeks Ended March 29, 2026 Compared to the Thirteen Weeks Ended March 30, 2025

The following discussion of condensed consolidated results of operations refers to the thirteen weeks ended June 28, 2026 compared to the thirteen weeks ended June 29, 2025.

Thirteen Weeks Ended June 28, 2026 Compared to the Thirteen Weeks Ended June 29, 2025

Thirteen Weeks Ended

Dollars presented in millions) March 29,

2026 $ change % change March 30,

Dollars presented in millions) June 28,

2026 $ change % change June 29,

NET SALES $ 815.2 $ 84.3 11.5 % $ 730.9

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Amortization of intangible assets 7.4 1.0 15.6 % 6.4

Restructuring charges 12.8 8.1 n/m (1)

Restructuring charges 9.2 2.6 39.4 % 6.6

OPERATING (LOSS) INCOME (27.8) (95.1) (141.3) % 67.3

Interest expense 20.8 1.9 10.1 % 18.9

Other income, net (0.1) 0.5 n/m (1)

(LOSS) INCOME BEFORE TAXES (48.5) (97.5) n/m (1)

Income tax expense 9.1 (2.6) (22.2) % 11.7

NET (LOSS) INCOME $ (57.6) $ (94.9) n/m (1)

(1) Not meaningful.

Net sales were $815.2 million for the thirteen weeks ended June 28, 2026 compared to $730.9 million for the thirteen weeks ended June 29, 2025, an increase of $84.3 million, or 11.5 percent.

The higher net sales from the thirteen weeks ended June 29, 2025 was driven primarily by the acquisition of American Woodmark in May 2026, which contributed $125.5 million of incremental sales in the second quarter of 2026.

Excluding the impact of American Woodmark, the $41.2 million decrease in net sales from the thirteen weeks ended June 29, 2025 was driven by lower sales unit volume of $47.9 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $6.8 million.

Overall end market demand was weaker in the second quarter of 2026 compared to the second quarter of 2025 in the repair and remodel and single-family new construction markets.

Foreign currency had an immaterial impact during the thirteen weeks ended June 28, 2026 as compared to the thirteen weeks ended June 29, 2025.

Compared to the thirteen weeks ended June 29, 2025, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $2.3 million, or 0.6 percent, net sales to retailers, including through their respective retail internet website portals, increased $39.7 million, or 17.8 percent and net sales directly to builders increased $42.3 million, or 43.2 percent.

Each of these increases were mainly driven by the $125.5 million incremental sales in the second quarter of 2026 associated with the acquisition of American Woodmark.

Cost of products sold

Cost of products sold increased by $118.5 million, or 24.1 percent, to $609.7 million (74.8 percent of net sales) in the thirteen weeks ended June 28, 2026 as compared to $491.2 million (67.2 percent of net sales) in the thirteen weeks ended June 29, 2025.

The inclusion of American Woodmark in the thirteen weeks ended June 28, 2026 resulted in an incremental $108.8 million of cost of products sold in the second quarter of 2026.

Excluding the impact of American Woodmark, the $9.7 million increase in cost of products sold was driven primarily by the combined net impact of costs and mix of $41.9 million, partially offset by lower sales unit volume of $32.2 million.

In the second quarter of 2026, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $57.3 million, or 35.9 percent, to $216.7 million (26.6 percent of net sales) in the thirteen weeks ended June 28, 2026 compared to $159.4 million (21.8 percent of net sales) in the thirteen weeks ended June 29, 2025.

The increase in the thirteen weeks ended June 28, 2026 is primarily due to the inclusion of American Woodmark costs of $24.3 million, which include associate-related costs ($8.9 million) and distribution costs ($8.2 million).

The remaining increase in selling, general and administrative expenses were mainly due to increased acquisition-related costs ($36.5 million) and distribution costs ($5.9 million) due to increased fuel costs.

These increases were partially offset by lower commission costs ($1.0 million), as a result of the decrease in sales unit volume, and advertising costs ($0.7 million).

Restructuring charges

Restructuring charges were $9.2 million in the thirteen weeks ended June 28, 2026, compared to restructuring charges of $6.6 million in the thirteen weeks ended June 29, 2025.

The restructuring charges in the thirteen weeks ended June 28, 2026 included $4.1 million recorded in the second quarter related to the previously announced wind-down and closure of American Woodmark’s Monterrey, Mexico plant.

The remaining charges in the thirteen weeks ended June 28, 2026 and the charges in the thirteen weeks ended June 29, 2025 were 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.

Interest expense

Interest expense was $20.8 million in the thirteen weeks ended June 28, 2026, which was comparable to interest expense of $18.9 million in the thirteen weeks ended June 29, 2025.

The second quarter of 2026 includes approximately one month of interest expense related to the Term Loan A drawn on May 28, 2026 in conjunction with the American Woodmark transaction.

Other income, net

Other income, net was $0.1 million in the thirteen weeks ended June 28, 2026, a decline of $0.5 million as compared to other income, net of $0.6 million in the thirteen weeks ended June 29, 2025.

This decrease was due primarily to lower transactional foreign currency gains in the second quarter of 2026 as compared to the second quarter of 2025, due to fluctuations in exchange rates.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen weeks ended June 28, 2026 and June 29, 2025 were as follows:

Thirteen Weeks Ended

Dollars presented in millions, except percentages) June 28,

2026 June 29,

(Loss) income before taxes $ (48.5) $ 49.0

Income tax expense 9.1 11.7

Effective tax rate (18.8) % 23.9 %

The effective income tax rates for the thirteen weeks ended June 28, 2026 and June 29, 2025, were (18.8) percent and 23.9 percent , respectively.

The change in the effective income tax rate between the periods was primarily attributable to changes in pretax income (loss) relative to permanent tax adjustments, including a reduction in the tax benefit associated with nondeductible compensation, nondeductible acquisition-related transaction costs, deferred tax adjustments related to foreign tax elections, foreign taxes and the mix of earnings in jurisdictions with differing tax rates, partially offset by increased benefit from state and local income taxes, foreign exclusions and research and development tax credits .

The difference between our effective income tax rate for the thirteen weeks ended June 28, 2026 , and the U.S.

statutory rate of 21.0 percent is primarily attributable to a reduction in the tax benefit associated with our pretax loss resulting from nondeductible compensation, nondeductible acquisition-related transaction costs, deferred tax adjustments related to foreign tax elections, and the mix of earnings in jurisdictions with differing tax rates, partially offset by increased benefit from state and local income taxes and research and development tax credits .

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

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

These were partially offset by the release of uncertain tax positions and foreign exclusions .

The following discussion of condensed consolidated results of operations refers to the twenty-six weeks ended June 28, 2026 compared to the twenty-six weeks ended June 29, 2025.

Twenty-six Weeks Ended June 28, 2026 Compared to the Twenty-six Weeks Ended June 29, 2025

Twenty-six Weeks Ended

Dollars presented in millions) June 28,

2026 $ change % change June 29,

NET SALES $ 1,433.2 $ 42.0 3.0 % $ 1,391.2

Cost of products sold 1,071.1 121.8 12.8 % 949.3

GROSS PROFIT 362.1 (79.8) (18.1) % 441.9

Selling, general and administrative expenses 372.6 59.2 18.9 % 313.4

Amortization of intangible assets 13.8 1.0 7.8 % 12.8

Restructuring charges 22.0 10.7 94.7 % 11.3

OPERATING (LOSS) INCOME (46.3) (150.7) n/m (1)

Interest expense 39.2 0.9 2.3 % 38.3

Other (income) expense, net (0.8) (1.2) n/m (1)

Other income, net (0.9) (0.7) n/m (1)

(LOSS) INCOME BEFORE TAXES (84.6) (150.9) n/m (1)

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(1) Not meaningful.

Net sales were $618.0 million for the thirteen weeks ended March 29, 2026 compared to $660.3 million for the thirteen weeks ended March 30, 2025, a decline of $42.3 million, or 6.4 percent.

The lower net sales from the thirteen weeks ended March 30, 2025 was driven primarily by lower sales unit volume of $42.0 million and the unfavorable combined net impact of price and mix on our overall average selling price of $1.1 million.

Overall end market demand was weaker in the first quarter of 2026 compared to the first quarter of 2025 in the repair and remodel and single-family new construction markets.

Foreign currency impact was favorable by $0.8 million during the thirteen weeks ended March 29, 2026 as compared to the thirteen weeks ended March 30, 2025.

Compared to the thirteen weeks ended March 30, 2025, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $25.3 million, or 7.2 percent, net sales to retailers, including through their respective retail internet website portals, declined $7.0 million, or 3.1 percent, and net sales directly to builders declined $10.0 million, or 11.9 percent.

Net sales were $1,433.2 million for the twenty-six weeks ended June 28, 2026 compared to $1,391.2 million for the twenty-six weeks ended June 29, 2025, an increase of $42.0 million, or 3.0 percent.

The higher net sales from the twenty-six weeks ended June 29, 2025 was driven primarily by the acquisition of American Woodmark in May 2026, which contributed $125.5 million of incremental sales in the first half of 2026.

Excluding the impact of American Woodmark, the $83.5 million decrease in net sales from the twenty-six weeks ended June 29, 2025 was driven primarily by lower sales unit volume of $90.0 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $5.7 million.

Overall end market demand was weaker in the first half of 2026 compared to the first half of 2025 in the repair and remodel and single-family new construction markets.

Foreign currency impact was favorable by $0.8 million during the twenty-six weeks ended June 28, 2026 as compared to the twenty-six weeks ended June 29, 2025.

Compared to the twenty-six weeks ended June 29, 2025, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $23.0 million, or 3.0 percent, net sales to retailers, including through their respective retail internet website portals, increased $32.7 million, or 7.3 percent, and net sales directly to builders increased $32.3 million, or 17.8 percent.

The increases to retailers and builders were mainly driven by the $125.5 million incremental sales in the second quarter of 2026 associated with the acquisition of American Woodmark.

Cost of products sold

Cost of products sold increased by $3.3 million, or 0.7 percent, to $461.4 million (74.7 percent of net sales) in the thirteen weeks ended March 29, 2026 as compared to $458.1 million (69.4 percent of net sales) in the thirteen weeks ended March 30, 2025.

The increase in cost of products sold was driven primarily by the combined net impact of costs and mix of $31.9 million, partially offset by lower sales unit volume of $28.6 million.

In the first quarter of 2026, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage .

Cost of products sold increased by $121.8 million, or 12.8 percent, to $1,071.1 million (74.7 percent of net sales) in the twenty-six weeks ended June 28, 2026 as compared to $949.3 million (68.2 percent of net sales) in the twenty-six weeks ended June 29, 2025.

The inclusion of American Woodmark in the twenty-six weeks ended June 28, 2026 resulted in an incremental $108.8 million of cost of products sold in the second quarter of 2026.

Excluding the impact of American Woodmark, the $13.0 million increase in cost of products sold was driven primarily by the higher combined net impact of costs and mix of $73.8 million, partially offset by lower sales unit volume of $60.8 million.

In the the first half of 2026, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $1.9 million, or 1.2 percent, to $155.9 million (25.2 percent of net sales) in the thirteen weeks ended March 29, 2026 compared to $154.0 million (23.3 percent of net sales) in the thirteen weeks ended March 30, 2025.

The increase in the thirteen weeks ended March 29, 2026 is primarily due to increased acquisition-related costs ($4.0 million) and distribution costs ($2.5 million).

These increases were partially offset by lower commission costs ($1.3 million), as a result of the decrease in sales unit volume, advertising costs ($0.9 million), professional fees ($0.9 million) and cost savings initiatives ($0.4 million).

Selling, general and administrative expenses increased by $59.2 million, or 18.9 percent, to $372.6 million (26.0 percent of net sales) in the twenty-six weeks ended June 28, 2026 compared to $313.4 million (22.5 percent of net sales) in the twenty-six weeks ended June 29, 2025.

The increase in the twenty-six weeks ended June 28, 2026 is primarily due to the inclusion of American Woodmark of $24.3 million, which primarily includes associate-related costs ($8.9 million) and distribution costs ($8.2 million).

The remaining increase in selling, general and administrative expenses were mainly due to increased acquisition-related costs ($40.5 million) and distribution costs ($8.4 million), due to increased fuel costs.

These increases were partially offset by lower commission costs ($2.3 million), as a result of the decrease in sales unit volume, advertising costs ($1.6 million), and professional fees ($1.4 million).

Restructuring charges

Restructuring charges were $12.8 million in the thirteen weeks ended March 29, 2026, as compared to restructuring charges of $4.7 million in the thirteen weeks ended March 30, 2025.

The increase in the thirteen weeks ended March 29, 2026 is primarily due to the implementation of a voluntary and involuntary separation program to reduce overall headcount, primarily in our corporate functions.

Restructuring charges were $22.0 million in the twenty-six weeks ended June 28, 2026, as compared to restructuring charges of $11.3 million in the twenty-six weeks ended June 29, 2025.

The increase in the twenty-six weeks ended June 28, 2026 is primarily due to the implementation of a voluntary and involuntary separation program to reduce overall headcount, primarily in our corporate functions, in the first quarter.

As a result of the workforce reduction, the Company recorded $8.1 million of one-time termination benefit costs for employees who voluntarily and involuntarily terminated their employment with the Company during the first quarter of 2026 and recorded an additional $0.7 million of one-time termination benefit costs during the second quarter of 2026.

The restructuring charges in the second quarter of 2026 also included $4.1 million related to the previously announced wind-down and closure of American Woodmark’s Monterrey, Mexico plant.

The remaining charges in the twenty-six weeks ended June 28, 2026 and the charges in the twenty-six weeks ended June 29, 2025 were 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.

Interest expense

Interest expense was $18.4 million in the thirteen weeks ended March 29, 2026 as compared to $19.4 million in the thirteen weeks ended March 30, 2025.

The decrease in interest expense for the thirteen weeks ended March 29, 2026 is due to the lower average outstanding debt balance as compared to the thirteen weeks ended March 30, 2025.

Other (income) expense, net

Other income, net was $0.8 million in the thirteen weeks ended March 29, 2026, an increase of $1.2 million as compared to other expense, net of $0.4 million in the thirteen weeks ended March 30, 2025.

This increase was primarily due to higher transactional foreign currency gains in the first quarter of 2026, as compared to the first quarter of 2025, due to fluctuations in exchange rates.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen week periods ended March 29, 2026 and March 30, 2025 were as follows:

Thirteen Weeks Ended

Dollars presented in millions) March 29,

2026 March 30,

Interest expense was $39.2 million in the twenty-six weeks ended June 28, 2026 which was comparable to interest expense of $38.3 million in the twenty-six weeks ended June 29, 2025.

The second quarter of 2026 includes approximately one month of interest expense related to the Term Loan A drawn on May 28, 2026 in conjunction with the American Woodmark transaction.

Other income, net

Other income, net was $0.9 million in the twenty-six weeks ended June 28, 2026, an increase of $0.7 million as compared to other income, net of $0.2 million in the twenty-six weeks ended June 29, 2025.

This increase was primarily due to the change in transactional foreign currency gains due to fluctuations in exchange rates.

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the twenty-six week periods ended June 28, 2026 and June 29, 2025 were as follows:

Twenty-six Weeks Ended

Dollars presented in millions) June 28,

2026 June 29,

(Loss) income before taxes $ (84.6) $ 66.3

1 unchanged sentence

Effective tax rate 13.7 % 23.7 %

The effective income tax rates for the thirteen weeks ended March 29, 2026 and March 30, 2025, were 57.3 percent and 23.1 percent, respectively.

The net increase in effective tax rate between the periods is primarily due to unfavorable changes in pre-tax income relative to permanent tax adjustments, nondeductible acquisition-related transaction costs, foreign taxes, deferred tax adjustments due to foreign tax election and foreign exclusions, partially offset by lower state and local income taxes and a reduction in valuation allowance.

The difference between our effective income tax rate for the thirteen weeks ended March 29, 2026 , and the U.S.

statutory rate of 21.0 percent is primarily due to the unfavorable impact of nondeductible compensation, deferred tax adjustments due to foreign tax elections, nondeductible acquisition-related transaction costs and foreign taxes, partially offset by favorable adjustments for foreign exclusions and tax credits.

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

The effective income tax rates for the twenty-six weeks ended June 28, 2026 and June 29, 2025, were 13.7 percent and 23.7 percent, respectively.

The change in the effective income tax rate between the periods is primarily attributable to changes in pretax income (loss) relative to permanent tax adjustments, including a reduction in the tax benefit associated with nondeductible compensation, nondeductible acquisition-related transaction costs, deferred tax adjustments related to foreign tax elections, and the mix of earnings in jurisdictions with differing tax rates, partially offset by increased benefit from state and local income taxes and research and development tax credits .

The difference between our effective income tax rate for the twenty-six weeks ended June 28, 2026, and the U.S.

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section entitled “Risk Factors” within Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, and in our Quarterly Report on Form 10-Q for the quarter ended March 29, 2026 in the section entitled “Risk Factors” within Part II, Item 1A.

On November 18, 2022, we entered into a 5-year, $1.25 billion credit agreement, consisting of a $750.0 million term loan and a $500.0 million revolving credit facility.

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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 Merger with American Woodmark is deemed a material acquisition under the 2024 Credit Agreement.

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

4 unchanged sentences

The Second Amendment also changed the required minimum interest coverage ratio to 2.75 to 1.00 until the earlier of January 1, 2027 or the effective date of the Merger with American Woodmark.

The Company was in compliance with all of its debt covenants as of March 29, 2026.

The Company previously 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.

The interest rate of the delayed draw term loans is a variable rate based on the 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 the amendment did not result in any material changes to the covenants in place under the 2024 Credit Agreement.

As of March 29, 2026, we had $1,084.9 million outstanding in third-party borrowings, net of deferred financing fees.

Below is a summary of cash flows for the thirteen weeks ended March 29, 2026 and March 30, 2025.

Thirteen Weeks Ended

The aforementioned changes to the net leverage ratio and minimum interest coverage ratio as part of the Second Amendment are no longer in place as of the effective date of the Merger with American Woodmark on May 28, 2026.

The Company was in compliance with all of its debt covenants as of June 28, 2026.

The Company previously amended its 2024 Credit Agreement on November 3, 2025 to obtain $375.0 million of delayed draw Term Loan A commitments, the funding of which was dependent on the closing of the Merger.

E ffective as of the Closing Date, the $375.0 million of delayed draw Term Loan A commitments was used to repay and terminate American Woodmark’s existing indebtedness of $367.5 million, with the remaining funds used to reimburse MasterBrand for fees and expenses previously paid in connection with the First Amendment and the Merger .

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

The delayed draw Term Loan A 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.

Quarterly payments are required under the First Amendment, ranging from 1.25 percent to 1.875 percent of the aggregate principal amount of all delayed draw Term Loan A commitments, beginning in September 2026 and recurring through June 2029.

As of June 28, 2026, we had $1,390.3 million outstanding in third-party borrowings, net of deferred financing fees.

Below is a summary of cash flows for the twenty-six weeks ended June 28, 2026 and June 29, 2025.

Twenty-six Weeks Ended

Dollars presented in millions)

2026 March 30,

Net cash used in operating activities

$ (133.0) $ (31.4)

2026 June 29,

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by financing activities

(353.4) (24.3)

Net cash provided by (used in) financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

$ 57.7 $ (0.9)

Net cash used in operating activities was $133.0 million in the first quarter of 2026 as compared to $31.4 million in the first quarter of 2025.

Net loss decreased operating cash flow by $15.4 million in the first quarter of 2026, compared to net income of $13.3 million in the first quarter of 2025.

In the first quarter of 2026, accounts receivable increased $67.6 million from the seasonally lower fiscal 2025 ending balance, compared to an increase of $30.0 million in the first quarter of 2025.

Improved timing of cash collections resulted in a lower than typical accounts receivable balance at December 28, 2025 that contributed to the higher seasonal growth in the first quarter of 2026.

In the first quarter of 2026, inventory increased $2.8 million, as compared to an increase in inventory of $12.2 million in the first quarter of 2025.

There was minimal change in inventory in the first quarter of 2026.

In the first quarter of 2026, accounts payable decreased $24.6 million compared to a decrease of $0.1 million in the first quarter of 2025.

The reduced favorability in accounts payable in the first quarter of 2026 was due to minimal change in inventory.

Other current assets negatively impacted cash by $17.2 million in the first quarter of 2026, primarily due to an increase in our federal income tax receivable of $13.2 million due to the current period loss before taxes, as compared to a decrease of $5.9 million in the first quarter of 2025.

Net cash used in investing activities was $13.0 million in the first quarter of 2026, compared to $9.8 million in the first quarter of 2025.

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

Net cash provided by financing activities was $101.6 million in the thirteen weeks ended March 29, 2026 as compared to net cash provided by financing activities of $33.5 million in the thirteen weeks ended March 30, 2025.

The thirteen weeks ended March 29, 2026 included net borrowings on our revolving credit facility of $110.0 million, while the thirteen weeks ended March 30, 2025 included net borrowings on our revolving credit facility of $50.0 million.

The higher net borrowings was driven by the increased cash used in operating activities in the first quarter of 2026.

The thirteen weeks ended March 30, 2025 also includes $11.4 million of stock repurchases made under the $50.0 million stock repurchase programs.

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

Net cash provided by operating activities was $5.8 million in the first half of 2026 as compared to $53.4 million in the first half of 2025.

Net loss decreased operating cash flow by $73.0 million in the first half of 2026, compared to net income of $50.6 million in the first half of 2025.

In the first half of 2026, accounts receivable increased $6.3 million from the fiscal 2025 ending balance, compared to an increase of $26.9 million in the first half of 2025.

In the first half of 2026, inventory decreased $7.5 million, as compared to a decrease in inventory of $0.2 million in the first half of 2025.

In the first half of 2026, accounts payable increased $3.4 million compared to a decrease of $5.5 million in the first half of 2025.

Net cash used in investing activities was $353.4 million in the first half of 2026, compared to $24.3 million in the first half of 2025.

The year-over-year increase is due to the acquisition of American Woodmark, net of cash acquired, of $330.3 million, partially offset by decreased capital expenditures as compared to the prior year.

Net cash provided by financing activities was $404.6 million in the twenty-six weeks ended June 28, 2026 as compared to net cash used in financing activities of $34.0 million in the twenty-six weeks ended June 29, 2025.

The twenty-six weeks ended June 28, 2026 included the issuance of our Term Loan A of $375.0 million, which was used to repay and terminate American Woodmark’s existing indebtedness.

The twenty-six weeks ended June 28, 2026 also included net borrowings on our revolving credit facility of $40.0 million, while the twenty-six weeks ended June 29, 2025 included net repayments on our revolving credit facility of $10.0 million.

The twenty-six weeks ended June 29, 2025 also includes $18.1 million of stock repurchases made under the $50.0 million stock repurchase programs.

We also believe we have access to additional funds from capital markets to fund strategic initiatives.

4 unchanged sentences

Actual results could differ from those estimates.

Our critical accounting estimates requiring significant judgement that could materially impact our results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Our critical accounting estimates requiring significant judgment that could materially impact our results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

Since the date of the Company’s most recent Annual Report, there have been no material changes in our critical accounting estimates or assumptions.

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis