Group 1 - The Ademi Firm is investigating American Woodmark for possible breaches of fiduciary duty and other legal violations related to its transaction with MasterBrand [1] - In the transaction, shareholders of American Woodmark will receive 5.150 shares of MasterBrand common stock for each share they own [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Commission File Number: 000-14798 American Woodmark Corporation FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ (Exact name of registrant as specified in its charter) Virgi ...

[THE MERGER](index=2&type=section&id=ARTICLE%20I) This article details the merger's closing procedures and legal mechanics, ensuring the Company continues as the surviving corporation [Closing](index=2&type=section&id=Section%201.1%20Closing) This section outlines the closing procedures for the merger, specifying that it will occur remotely on the third business day following the satisfaction or waiver of all conditions in Article VII - The merger's closing will take place remotely via electronic exchange of documents on the **third Business Day** after conditions in Article VII are satisfied or waived[21](index=21&type=chunk) [The Merger Mechanics](index=2&type=section&id=Section%201.2%20The%20Merger) This section details the legal and structural aspects of the merger, including the Company's continuation as the surviving corporation and the amendment of its organizational documents - Merger Sub will merge into the Company, with the Company continuing as the Surviving Corporation and becoming a wholly-owned Subsidiary of Parent[22](index=22&type=chunk) - The merger becomes effective upon the State Corporation Commission of Virginia (SCC) issuing its certificate of merger, or a later agreed-upon date[23](index=23&type=chunk) - At the Effective Time, the Company's articles of incorporation and bylaws will be amended and restated to be the same as Merger Sub's, retaining 'American Woodmark Corporation' as the name[25](index=25&type=chunk) [CERTAIN GOVERNANCE MATTERS](index=2&type=section&id=ARTICLE%20II) This article addresses post-merger governance, covering Parent's identity, headquarters, board composition, CEO continuity, and pre-merger operational autonomy [Parent's Identity Post-Merger](index=2&type=section&id=Section%202.1%20Name%20and%20Trading%20Symbol) This section confirms that Parent's corporate name and stock exchange ticker symbol will remain unchanged after the merger - Parent's name ('MasterBrand, Inc.') and NYSE ticker symbol ('MBC') will not be affected by the merger[27](index=27&type=chunk) [Parent's Headquarters](index=2&type=section&id=Section%202.2%20Headquarters%3B%20Other%20Locations) This section specifies that Parent's headquarters will remain at its current location post-merger - Parent's headquarters will remain in Beachwood, OH, from and after the Effective Time[28](index=28&type=chunk) [Board Composition](index=2&type=section&id=Section%202.3%20Parent%20Board%20of%20Directors) This section details the post-merger composition of the Parent Board of Directors, including the number of directors and the designation of Company representatives - At the Effective Time, the Parent Board will consist of **eleven (11) directors**: **eight (8)** designated by Parent and **three (3)** designated by the Company[29](index=29&type=chunk) - Company Designees must meet NYSE independence requirements and Parent's corporate governance standards[29](index=29&type=chunk) [CEO Continuity](index=2&type=section&id=Section%202.4%20Parent%20Chief%20Executive%20Officer) This section confirms the continuation of Parent's current Chief Executive Officer and President after the merger - R. David Banyard, Jr. will continue to serve as the Chief Executive Officer and President of Parent after the Effective Time[33](index=33&type=chunk) [Pre-Merger Operational Autonomy](index=2&type=section&id=Section%202.5%20No%20Control) This section clarifies that the agreement does not grant any party control over another's operations or decision-making prior to the merger's effective time - Nothing in this Article II grants any Party control over another Party's operations, business, or decision-making prior to the Effective Time[34](index=34&type=chunk) [EFFECT ON CAPITAL STOCK OF THE MERGER; EXCHANGE OF CERTIFICATES](index=2&type=section&id=ARTICLE%20III) This article details the conversion of Company capital stock into Parent stock, fractional share treatment, and exchange procedures, excluding appraisal rights [Capital Stock Conversion](index=2&type=section&id=Section%203.1%20Effect%20on%20Capital%20Stock%20of%20the%20Company%20and%20Merger%20Sub) This section details the conversion of Company Common Stock into Parent Common Stock and Merger Sub stock into Surviving Corporation stock upon the merger's effectiveness - Each share of Company Common Stock will be canceled and converted into the right to receive **5.15 shares of Parent Common Stock** (Merger Consideration)[36](index=36&type=chunk) - Each share of Merger Sub common stock will convert into one validly issued, fully paid, and non-assessable share of common stock of the Surviving Corporation[36](index=36&type=chunk) [Exchange Ratio Adjustments](index=2&type=section&id=Section%203.2%20Certain%20Adjustments) This section provides for appropriate adjustments to the Exchange Ratio and other dependent items in the event of certain capital structure changes by Parent or the Company prior to the merger - The Exchange Ratio will be adjusted for reclassifications, stock splits, recapitalizations, or stock dividends on Parent or Company Common Stock to maintain the intended economic effect[39](index=39&type=chunk) [Treatment of Fractional Shares](index=2&type=section&id=Section%203.3%20Fractional%20Shares) This section specifies that no fractional shares of Parent Common Stock will be issued; instead, holders will receive cash proceeds from the aggregated sale of such fractional shares - No fractional shares of Parent Common Stock will be issued; instead, the Exchange Agent will aggregate and sell them on NYSE, distributing proportionate cash proceeds to holders[40](index=40&type=chunk) [Appraisal Rights Exclusion](index=2&type=section&id=Section%203.4%20No%20Appraisal%20Rights) This section explicitly states that holders of Company Common Stock will not have appraisal rights in connection with the merger, in accordance with Virginia law - No appraisal rights will be available to holders of Company Common Stock in connection with the Merger, as per Section 13.1-730 of the VSCA[41](index=41&type=chunk) [Exchange Procedures for Company Stock](index=2&type=section&id=Section%203.5%20Exchange%20of%20Company%20Common%20Stock) This section details the process for exchanging Company Common Stock for the Merger Consideration, including the role of the Exchange Agent, handling of dividends, and procedures for lost certificates - Parent will appoint an Exchange Agent and deposit Parent Common Stock and cash (for dividends) into an Exchange Fund for distribution to Company stockholders[43](index=43&type=chunk) - Holders of Company Common Stock (both certificated and book-entry) will receive Parent Common Stock, cash in lieu of fractional shares, and any dividends upon surrender of certificates or automatically for book-entry shares[44](index=44&type=chunk)[46](index=46&type=chunk) - Any undistributed Exchange Fund amounts remaining after **12 months** will be delivered to Parent, and Parent, Merger Sub, Surviving Corporation, and the Exchange Agent retain the right to deduct and withhold taxes from payments[51](index=51&type=chunk)[56](index=56&type=chunk) [Post-Merger Asset Vesting](index=2&type=section&id=Section%203.6%20Further%20Assurances) This section obligates the Surviving Corporation to take any necessary actions after the merger to fully vest its rights, title, and interest in the acquired assets - The Surviving Corporation's agents are authorized to take all necessary actions post-Effective Time to vest, perfect, or confirm its rights, title, or interest in acquired assets[57](index=57&type=chunk) [Treatment of Company Equity Awards](index=2&type=section&id=Section%203.7%20Stock-Based%20Awards) This section details how Company stock options, restricted stock units (RSUs), performance stock units (PSUs), and restricted stock tracking units (RSTUs) will be converted into Parent equity awards or cash upon the merger - Outstanding Company Stock Options will be assumed by Parent and converted into Assumed Stock Options for Parent Common Stock, with adjusted share numbers and exercise prices; performance-based vesting conditions will cease[58](index=58&type=chunk)[59](index=59&type=chunk) - Company RSUs with automatic accelerated vesting will convert into Parent Common Stock shares; other Company RSUs will become Assumed RSUs for Parent Common Stock with existing terms[60](index=60&type=chunk)[61](index=61&type=chunk) - Company PSUs will convert into Assumed PSUs for Parent Common Stock, with performance-based vesting conditions ceasing and achievement determined based on actual or superior performance levels[62](index=62&type=chunk)[63](index=63&type=chunk) - Company RSTUs will be assumed by Parent as cash-settled Assumed RSTUs, based on Parent Common Stock, with performance metrics determined at the superior level[64](index=64&type=chunk) - Parent will assume all obligations under Company Stock Plans for the Assumed Equity Awards and will file a registration statement for the Parent Common Stock subject to these awards[66](index=66&type=chunk) [REPRESENTATIONS AND WARRANTIES OF THE COMPANY](index=2&type=section&id=ARTICLE%20IV) This article details the Company's representations and warranties covering its corporate status, capitalization, authority, compliance, financials, and key business aspects [Company's Corporate Status and Subsidiaries](index=2&type=section&id=Section%204.1%20Organization%3B%20Good%20Standing%3B%20Corporate%20Power%3B%20Company%20Subsidiaries) This section represents that the Company and its material subsidiaries are duly organized, validly existing, in good standing, and possess the necessary corporate power to conduct their businesses - The Company is a duly incorporated, validly existing, and in good standing corporation in Virginia, with the requisite corporate power to operate its assets and business[71](index=71&type=chunk) - Each material Company Subsidiary is duly organized, validly existing, and in good standing in its jurisdiction, with the necessary power to conduct its business[73](index=73&type=chunk) [Company's Capital Structure](index=2&type=section&id=Section%204.2%20Company%20Capitalization) This section details the Company's authorized and outstanding capital stock, including common and preferred shares, equity awards, and the ownership structure of its subsidiaries Company Capitalization as of August 1, 2025 | Category | Amount | | :------- | :----- | | Authorized Company Common Stock | **40,000,000 shares** | | Authorized Company Preferred Stock | **2,000,000 shares** | | Issued & Outstanding Company Common Stock | **14,558,035 shares** | | Reserved for Outstanding Company RSUs | **164,504 shares** | | Reserved for Outstanding Company PSUs (max performance) | **325,467 shares** | | Reserved for Outstanding Company Stock Options (max performance) | **61,560 shares** | | Reserved for Future Awards | **1,180,297 shares** | - All issued and outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid, non-assessable, and free of preemptive rights[77](index=77&type=chunk) - The Company owns all outstanding Equity Securities in each Company Subsidiary, free and clear of any Liens (with specified exceptions)[80](index=80&type=chunk) [Company's Authority and Compliance](index=2&type=section&id=Section%204.3%20Authority%3B%20Execution%20and%20Delivery%3B%20Enforceability%3B%20State%20Takeover%20Statutes%3B%20No%20Rights%20Plan) This section affirms the Company's corporate authority to execute the agreement and consummate the merger, subject to stockholder approval, and confirms the absence of applicable takeover statutes or rights plans - The Company has the necessary corporate power and authority to execute and deliver this Agreement and consummate the transactions, subject to Company Stockholder Approval[82](index=82&type=chunk) - The Company Board unanimously approved and adopted the Agreement and recommended it to Company Stockholders[84](index=84&type=chunk) - No 'Takeover Laws' or anti-takeover provisions in the Company's organizational documents, nor any 'poison pill' or similar agreements, are applicable to the Merger[85](index=85&type=chunk) [Regulatory and Contractual Compliance](index=2&type=section&id=Section%204.4%20No%20Conflicts%3B%20Consents%20and%20Approvals) This section represents that the Company's entry into and performance of the agreement will not conflict with its governing documents, applicable laws, or material contracts, and lists the required governmental and third-party consents - The Company's execution and performance of the Agreement will not conflict with its Constituent Documents, applicable Laws, or breach Company Material Contracts, subject to Company Stockholder Approval and specified filings/consents[86](index=86&type=chunk) - Required filings and consents include the Joint Proxy Statement, Articles of Merger, SEC filings (including Form S-4), HSR Clearance, and other governmental approvals listed in the Company Disclosure Schedule[88](index=88&type=chunk) [Company's Public Filings and Financials](index=2&type=section&id=Section%204.5%20SEC%20Documents%3B%20Financial%20Statements%3B%20Related-Party%20Transactions.) This section asserts the accuracy, completeness, and compliance of the Company's SEC filings and financial statements with GAAP and relevant regulations, and confirms the absence of undisclosed related-party transactions - All Company SEC Documents filed since **April 30, 2023**, materially complied with the Securities Act, Exchange Act, and Sarbanes-Oxley Act, and contained no material misstatements or omissions[89](index=89&type=chunk) - The Company SEC Financial Statements were prepared in accordance with GAAP and fairly present the Company Entities' consolidated financial position and results of operations[91](index=91&type=chunk) - The Company maintains effective internal control over financial reporting and disclosure controls and procedures, compliant with Sarbanes-Oxley Act and NASDAQ rules[92](index=92&type=chunk)[93](index=93&type=chunk) [Liabilities and Business Continuity](index=2&type=section&id=Section%204.6%20No%20Undisclosed%20Liabilities%3B%20Absence%20of%20Certain%20Changes%20or%20Events) This section represents that the Company has no material undisclosed liabilities and that its business has been conducted in the ordinary course without a Company Material Adverse Effect since the last balance sheet date - No Company Entity has any material liabilities that would be required to be reflected or reserved against in the Company's consolidated audited balance sheet, except those disclosed, incurred in the ordinary course, or related to the merger[99](index=99&type=chunk) - Since the Company Balance Sheet Date (**April 30, 2025**), Company Entities have conducted their businesses in all material respects in the ordinary course, and no Company Material Adverse Effect has occurred[102](index=102&type=chunk) [Legal Actions and Orders](index=2&type=section&id=Section%204.7%20Actions) This section states that there are no pending or threatened material legal actions or investigations against the Company or its personnel that would result in a Company Material Adverse Effect - There are no pending or threatened Actions or investigations against any Company Entity or its officers, directors, employees, or agents that would reasonably be expected to result in a Company Material Adverse Effect[103](index=103&type=chunk) [Legal and Permit Compliance](index=2&type=section&id=Section%204.8%20Compliance%20with%20Laws%3B%20Permits) This section represents that the Company Entities have conducted their businesses in compliance with all applicable laws and hold all necessary permits, without material adverse effect - Company Entities have conducted their businesses in compliance with all applicable Laws and hold all Permits required for their operations, except where non-compliance would not result in a Company Material Adverse Effect[104](index=104&type=chunk)[105](index=105&type=chunk) [Sanctions and Anti-Corruption Compliance](index=2&type=section&id=Section%204.9%20Sanctions%20and%20Anti-Corruption) This section represents the Company's material compliance with Customs and Trade Laws, Sanctions, and Anti-Corruption Laws since December 31, 2019, and the absence of related investigations or violations - Since **December 31, 2019**, Company Entities and their personnel have been in material compliance with Customs and Trade Laws and Sanctions, and no Company Entity is a Sanctioned Person[106](index=106&type=chunk) - The Company and its Subsidiaries have implemented and maintain policies and procedures reasonably designed to ensure compliance with applicable Anti-Corruption Laws[109](index=109&type=chunk) [Employee Benefit Plan Compliance](index=2&type=section&id=Section%204.10%20Employee%20Benefit%20Plans%3B%20ERISA) This section represents that the Company's material employee benefit plans are qualified, compliant with ERISA and the Code, and that the merger will not trigger adverse financial consequences related to these plans - Each Company Benefit Plan intended to be qualified under Section 401(a) of the Code is qualified, and all Company Benefit Plans comply with their terms, ERISA, the Code, and other applicable Laws, except for non-compliance that would not result in a Company Material Adverse Effect[113](index=113&type=chunk) - No Company Benefit Plan is a defined benefit plan, multiemployer plan, or multiple employer plan[114](index=114&type=chunk) - The merger will not trigger severance, accelerate payments, or result in 'excess parachute payments' under Section 280G(b)(1) of the Code for any current or former employee, director, or officer[120](index=120&type=chunk) [Labor Relations and Employment Practices](index=3&type=section&id=Section%204.11%20Labor%20Matters) This section represents the Company's absence of collective bargaining agreements, labor disputes, and material compliance with employment laws and practices - No Company Entity is party to or negotiating any Collective Bargaining Agreement, and no employees are represented by a labor union[123](index=123&type=chunk) - Since **December 31, 2022**, there have been no labor union organizing activities, and no material labor disputes, unfair labor practice charges, or strikes are pending or threatened[125](index=125&type=chunk)[126](index=126&type=chunk) - Each Company Entity is in material compliance with all applicable Laws respecting employment and employment practices[127](index=127&type=chunk) [Environmental Compliance](index=3&type=section&id=Section%204.12%20Environmental%20Matters) This section represents the Company's compliance with environmental laws and permits, and the absence of material environmental claims or hazardous material releases - Company Entities are in compliance with all applicable Environmental Laws and hold all necessary Environmental Permits, except where non-compliance would not result in a Company Material Adverse Effect[131](index=131&type=chunk)[132](index=132&type=chunk) - No material Environmental Claims are pending or threatened, and no material Release or threatened Release of Hazardous Materials has occurred since **December 31, 2022**[131](index=131&type=chunk)[133](index=133&type=chunk) [Asset and Real Property Ownership](index=3&type=section&id=Section%204.13%20Title%20to%20Assets%3B%20Real%20Property) This section represents that the Company Entities have good and valid title to their tangible assets and real property, free and clear of material liens, with specified exceptions - Each Company Entity owns good and valid title to all tangible assets reflected on the most recent audited balance sheet (with exceptions for ordinary course dispositions) and Company Owned Real Property, free and clear of Liens (except Permitted Liens), except where non-compliance would not result in a Company Material Adverse Effect[137](index=137&type=chunk)[138](index=138&type=chunk) - Each Company Entity has a good, valid, subsisting, and enforceable leasehold interest or license for Company Leased Real Property, free and clear of subtenancies and other occupancy rights, options, and Liens (except Permitted Liens)[139](index=139&type=chunk) [Tax Compliance](index=3&type=section&id=Section%204.14%20Taxes) This section represents the Company's timely filing of all material tax returns, payment of taxes, and the absence of material tax claims, audits, or liens - Each Company Entity has timely filed all income and other material Tax Returns, which were true, correct, and complete, and has timely paid all material Taxes or established adequate reserves[141](index=141&type=chunk) - There are no pending or threatened claims, investigations, audits, or deficiencies for material Taxes, and no Liens for material Taxes on Company assets (except Permitted Liens)[142](index=142&type=chunk) - No Company Entity is or has been a member of an affiliated tax group (other than one where a Company Entity is the common parent) or has material liability for taxes of other persons[143](index=143&type=chunk) [Company's Key Agreements](index=3&type=section&id=Section%204.15%20Company%20Material%20Contracts) This section identifies and represents the status of the Company's material contracts, confirming their validity, enforceability, and the absence of material breaches or defaults - The Company Disclosure Schedule lists all Company Material Contracts, which include agreements required by SEC, contracts with top customers/suppliers, capital expenditure contracts over **$2,000,000**, and contracts limiting competition or involving significant indebtedness[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Each Company Material Contract is in full force and effect, valid, and binding, and neither the Company nor, to its knowledge, any other party is in material breach or default[156](index=156&type=chunk) [Company's Intellectual Property](index=3&type=section&id=Section%204.16%20Intellectual%20Property) This section represents the Company's ownership, validity, and non-infringement of its intellectual property, and the absence of material claims against it - A Company Entity is the sole and exclusive owner of all Company Intellectual Property, free and clear of Liens (except Permitted Liens), and all Company Registered Intellectual Property is subsisting, valid, and enforceable in all material respects[157](index=157&type=chunk) - There are no material Actions pending or threatened against any Company Entity alleging infringement or challenging the ownership, validity, scope, or enforceability of any Company Intellectual Property[158](index=158&type=chunk) - The operation of the Company Entities' businesses does not infringe, misappropriate, or violate any third-party Intellectual Property, and the Company takes reasonable actions to protect trade secrets[159](index=159&type=chunk) [IT Assets and Data Privacy](index=3&type=section&id=Section%204.17%20Information%20Technology%3B%20Data%20Protection) This section represents the sufficiency and security of the Company's IT assets and its material compliance with privacy and data protection requirements - The Company IT Assets are materially sufficient for business operations, and the Company has implemented commercially reasonable security programs to protect IT assets and confidential information[160](index=160&type=chunk) - Company Entities are in material compliance with all applicable Privacy Requirements, and there have been no material security breaches or unauthorized access to Company IT Assets or confidential information since **December 31, 2022**[162](index=162&type=chunk)[164](index=164&type=chunk) [Company's Insurance Coverage](index=3&type=section&id=Section%204.18%20Insurance) This section represents that the Company maintains all required insurance policies, which are in full force and effect, with paid premiums and no material breaches or claims - All Company Policies are in full force and effect, with paid premiums and full limits, and no Company Entity is in breach or default, except where non-compliance would not result in a Company Material Adverse Effect[166](index=166&type=chunk) - No Company Entity has received written notice of cancellation, denial of coverage, or premium increase, and there are no pending actions against any insurance carrier[166](index=166&type=chunk) [Product Safety and Liability](index=3&type=section&id=Section%204.19%20Product%20Warranties%20and%20Liabilities) This section represents the absence of material product recalls or significant product liability claims against the Company since December 31, 2022 - Since **December 31, 2022**, there have been no material product recalls, retrofit campaigns, or post-sale warnings issued or considered, and no circumstances are expected to result in such actions[168](index=168&type=chunk) - No material Actions or investigations are pending or threatened regarding product repair, replacement, damages, or personal/property injury, other than routine warranty claims[169](index=169&type=chunk) [Financial Advisor Fees](index=3&type=section&id=Section%204.20%20Broker's%20Fees) This section identifies the Company's financial advisor and confirms that no other brokers or finders are owed fees in connection with the merger - Jefferies LLC is the Company's sole financial advisor for the transaction, and its fees and expenses will be paid by the Company[170](index=170&type=chunk) [Fairness Opinion](index=3&type=section&id=Section%204.21%20Opinion%20of%20Company%20Financial%20Advisor) This section states that the Company Board received a fairness opinion from its financial advisor regarding the Exchange Ratio - The Company Board received an opinion from Jefferies LLC that the Exchange Ratio is fair, from a financial point of view, to the holders of Converted Shares[171](index=171&type=chunk) [Limitation of Representations and Reliance](index=3&type=section&id=Section%204.22%20No%20Other%20Representations%20or%20Warranties%3B%20No%20Reliance) This section clarifies that the representations and warranties in Article IV are the Company's sole and exclusive representations, and the Company disclaims reliance on any unstated information from Parent or Merger Sub - The representations and warranties in Article IV are the Company's sole and exclusive representations; all other express or implied warranties are expressly disclaimed[172](index=172&type=chunk) - The Company acknowledges it has relied solely on the representations and warranties in Article V and its own independent investigation, not on any other information provided by Parent or Merger Sub[174](index=174&type=chunk) [REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB](index=3&type=section&id=ARTICLE%20V) This article details Parent's and Merger Sub's representations and warranties covering their corporate status, capitalization, authority, compliance, financials, and key business aspects [Parent's Corporate Status and Subsidiaries](index=3&type=section&id=Section%205.1%20Organization%3B%20Good%20Standing%3B%20Corporate%20Power%3B%20Parent%20Subsidiaries) This section represents that Parent and Merger Sub, along with Parent's material subsidiaries, are duly organized, validly existing, in good standing, and possess the necessary corporate power to conduct their businesses - Parent is a duly incorporated, validly existing, and in good standing Delaware corporation, and Merger Sub is a duly incorporated, validly existing, and in good standing Virginia corporation, both with requisite power to operate[177](index=177&type=chunk) - Each material Parent Subsidiary is duly organized, validly existing, and in good standing in its jurisdiction, with the necessary power to conduct its business[180](index=180&type=chunk) [Parent's Capital Structure and Merger Sub Operations](index=3&type=section&id=Section%205.2%20Parent%20and%20Merger%20Sub%20Capitalization%3B%20Operations%20of%20Merger%20Sub%3B%20Ownership%20of%20Company%20Common%20Stock) This section details Parent's authorized and outstanding capital stock, Merger Sub's limited operational history, and confirms that Parent and Merger Sub do not beneficially own Company Equity Securities Parent Capitalization as of August 1, 2025 | Category | Amount | | :------- | :----- | | Authorized Parent Common Stock | **750,000,000 shares** | | Authorized Parent Preferred Stock | **60,000,000 shares** | | Issued & Outstanding Parent Common Stock | **131,829,964 shares** | | Parent Common Stock in Treasury | **5,099,040 shares** | | Reserved for Outstanding Parent Stock Options | **1,329,982 shares** | | Reserved for Outstanding Parent Performance Share Awards (max performance) | **2,563,312 shares** | | Reserved for Outstanding Parent RSUs | **3,105,858 shares** | | Reserved for Future Awards | **7,134,657 shares** | - Merger Sub has not conducted any business or operations other than in connection with this Agreement and the transactions contemplated hereby since its incorporation[187](index=187&type=chunk) - None of Parent, Merger Sub, or their respective Subsidiaries beneficially own any Equity Securities of the Company or hold any rights to acquire or vote them (other than pursuant to this Agreement)[188](index=188&type=chunk) [Parent's Authority and Enforceability](index=3&type=section&id=Section%205.3%20Authority%3B%20Execution%20and%20Delivery%3B%20Enforceability) This section affirms Parent's and Merger Sub's corporate authority to execute the agreement and consummate the merger, subject to Parent Stockholder Approval and Parent's adoption of the agreement as Merger Sub's sole stockholder - Parent and Merger Sub have the necessary corporate power and authority to execute and deliver this Agreement and consummate the transactions, subject to Parent Stockholder Approval and Parent's adoption of the Agreement as Merger Sub's sole stockholder[190](index=190&type=chunk) - The Parent Board unanimously approved and declared advisable this Agreement and the consummation of the Merger, the Parent Stock Issuance, and other transactions, and recommended the Parent Stock Issuance to stockholders[191](index=191&type=chunk) [Regulatory and Contractual Compliance](index=3&type=section&id=Section%205.4%20No%20Conflicts%3B%20Consents%20and%20Approvals) This section represents that Parent's and Merger Sub's entry into and performance of the agreement will not conflict with their governing documents, applicable laws, or material contracts, and lists the required governmental and third-party consents - Parent's and Merger Sub's execution and performance of the Agreement will not conflict with their Constituent Documents, applicable Laws, or breach Parent Material Contracts, subject to stockholder approvals and specified filings/consents[193](index=193&type=chunk)[194](index=194&type=chunk) - Required filings and consents include the Joint Proxy Statement, Certificate of Merger, SEC filings (including Form S-4), HSR Clearance, and other governmental approvals listed in the Company Disclosure Schedule[195](index=195&type=chunk) [Parent's Public Filings and Financials](index=3&type=section&id=Section%205.5%20SEC%20Documents%3B%20Financial%20Statements%3B%20Related-Party%20Transactions.) This section asserts the accuracy, completeness, and compliance of Parent's SEC filings and financial statements with GAAP and relevant regulations, and confirms the absence of undisclosed related-party transactions - All Parent SEC Documents filed since **December 31, 2022**, materially complied with the Securities Act, Exchange Act, and Sarbanes-Oxley Act, and contained no material misstatements or omissions[196](index=196&type=chunk)[197](index=197&type=chunk) - The Parent SEC Financial Statements were prepared in accordance with GAAP and fairly present the Parent Entities' consolidated financial position and results of operations[198](index=198&type=chunk) - Parent maintains effective internal control over financial reporting and disclosure controls and procedures, compliant with Sarbanes-Oxley Act and NYSE rules[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [Liabilities and Business Continuity](index=3&type=section&id=Section%205.6%20No%20Undisclosed%20Liabilities%3B%20Absence%20of%20Certain%20Changes%20or%20Events) This section represents that Parent has no material undisclosed liabilities and that its business has been conducted in the ordinary course without a Parent Material Adverse Effect since the last balance sheet date - No Parent Entity has any material liabilities that would be required to be reflected or reserved against in Parent's consolidated audited balance sheet, except those disclosed, incurred in the ordinary course, or related to the merger[207](index=207&type=chunk) - Since the Parent Balance Sheet Date, Parent Entities have conducted their businesses in all material respects in the ordinary course, and no Parent Material Adverse Effect has occurred[209](index=209&type=chunk) [Legal Actions and Orders](index=3&type=section&id=Section%205.7%20Actions) This section states that there are no pending or threatened material legal actions or investigations against Parent or its personnel that would result in a Parent Material Adverse Effect - There are no pending or threatened Actions or investigations against any Parent Entity or its officers, directors, employees, or agents that would reasonably be expected to result in a Parent Material Adverse Effect[210](index=210&type=chunk) [Legal and Permit Compliance](index=3&type=section&id=Section%205.8%20Compliance%20with%20Laws%3B%20Permits) This section represents that Parent Entities have conducted their businesses in compliance with all applicable laws and hold all necessary permits, without material adverse effect - Parent Entities have conducted their businesses in compliance with all applicable Laws and hold all Permits required for their operations, except where non-compliance would not result in a Parent Material Adverse Effect[211](index=211&type=chunk)[213](index=213&type=chunk) [Sanctions and Anti-Corruption Compliance](index=3&type=section&id=Section%205.9%20Sanctions%20and%20Anti-Corruption) This section represents Parent's material compliance with Customs and Trade Laws, Sanctions, and Anti-Corruption Laws since December 14, 2022, and the absence of related investigations or violations - Since **December 14, 2022**, Parent Entities and their personnel have been in material compliance with Customs and Trade Laws and Sanctions, and no Parent Entity is a Sanctioned Person[214](index=214&type=chunk) - Parent and its Subsidiaries have implemented and maintain policies and procedures reasonably designed to ensure compliance with applicable Anti-Corruption Laws[217](index=217&type=chunk) [Employee Benefit Plan Compliance](index=3&type=section&id=Section%205.10%20Employee%20Benefit%20Plans%3B%20ERISA) This section represents that Parent's material employee benefit plans are qualified, compliant with ERISA and the Code, and that the merger will not trigger adverse financial consequences related to these plans - Each Parent Benefit Plan intended to be qualified under Section 401(a) of the Code is qualified, and all Parent Benefit Plans comply with their terms, ERISA, the Code, and other applicable Laws, except for non-compliance that would not result in a Parent Material Adverse Effect[220](index=220&type=chunk) - No Parent Benefit Plan is a defined benefit plan, multiemployer plan, or multiple employer plan[221](index=221&type=chunk) - The merger will not trigger severance, accelerate payments, or result in 'excess parachute payments' under Section 280G(b)(1) of the Code for any current or former employee, director, or officer[223](index=223&type=chunk) [Labor Relations and Employment Practices](index=3&type=section&id=Section%205.11%20Labor%20Matters) This section represents Parent's absence of collective bargaining agreements, labor disputes, and material compliance with employment laws and practices - No Parent Entity is party to or negotiating any Collective Bargaining Agreement, and no employees are represented by a labor union[224](index=224&type=chunk) - Since **December 31, 2022**, there have been no labor union organizing activities, and no material labor disputes, unfair labor practice charges, or strikes are pending or threatened[226](index=226&type=chunk)[227](index=227&type=chunk) - Each Parent Entity is in material compliance with all applicable Laws respecting employment and employment practices[228](index=228&type=chunk) [Environmental Compliance](index=3&type=section&id=Section%205.12%20Environmental%20Matters) This section represents Parent's compliance with environmental laws and permits, and the absence of material environmental claims or hazardous material releases - Parent Entities are in compliance with all applicable Environmental Laws and hold all necessary Environmental Permits, except where non-compliance would not result in a Parent Material Adverse Effect[231](index=231&type=chunk)[233](index=233&type=chunk) - No material Environmental Claims are pending or threatened, and no material Release or threatened Release of Hazardous Materials has occurred since **December 14, 2022**[231](index=231&type=chunk)[234](index=234&type=chunk) [Asset and Real Property Ownership](index=3&type=section&id=Section%205.13%20Title%20to%20Assets%3B%20Real%20Property) This section represents that Parent Entities have good and valid title to their tangible assets and real property, free and clear of material liens, with specified exceptions - Each Parent Entity owns good and valid title to all tangible assets reflected on the most recent audited balance sheet (with exceptions for ordinary course dispositions) and Parent Owned Real Property, free and clear of Liens (except Permitted Liens), except where non-compliance would not result in a Parent Material Adverse Effect[237](index=237&type=chunk)[239](index=239&type=chunk) - Each Parent Entity has a good, valid, subsisting, and enforceable leasehold interest or license for Parent Leased Real Property, free and clear of subtenancies and other occupancy rights, options, and Liens (except Permitted Liens)[240](index=240&type=chunk) [Tax Compliance](index=3&type=section&id=Section%205.14%20Taxes) This section represents Parent's timely filing of all material tax returns, payment of taxes, and the absence of material tax claims, audits, or liens - Each Parent Entity has timely filed all income and other material Tax Returns, which were true, correct, and complete, and has timely paid all material Taxes or established adequate reserves[241](index=241&type=chunk) - There are no pending or threatened claims, investigations, audits, or deficiencies for material Taxes, and no Liens for material Taxes on Parent assets (except Permitted Liens)[242](index=242&type=chunk) - No Parent Entity is or has been a member of an affiliated tax group (other than one where a Parent Entity is the common parent) or has material liability for taxes of other persons[244](index=244&type=chunk) [Parent's Key Agreements](index=3&type=section&id=Section%205.15%20Parent%20Material%20Contracts) This section identifies and represents the status of Parent's material contracts, confirming their validity, enforceability, and the absence of material breaches or defaults - Parent Material Contracts include Parent Specified Debt Agreements and other contracts required by SEC, contracts with top customers/suppliers, capital expenditure contracts over **$4,500,000**, and contracts limiting competition or involving significant indebtedness[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Each Parent Material Contract is in full force and effect, valid, and binding, and neither Parent nor, to its knowledge, any other party is in material breach or default[255](index=255&type=chunk) [Parent's Intellectual Property](index=3&type=section&id=Section%205.16%20Intellectual%20Property) This section represents Parent's ownership, validity, and non-infringement of its intellectual property, and the absence of material claims against it - A Parent Entity is the sole and exclusive owner of all Parent Intellectual Property, free and clear of Liens (except Permitted Liens), and all Parent Registered Intellectual Property is subsisting, valid, and enforceable in all material respects[257](index=257&type=chunk) - There are no material Actions pending or threatened against any Parent Entity alleging infringement or challenging the ownership, validity, scope, or enforceability of any Parent Intellectual Property[258](index=258&type=chunk) - The operation of the Parent Entities' businesses does not infringe, misappropriate, or violate any third-party Intellectual Property, and Parent takes reasonable actions to protect trade secrets[259](index=259&type=chunk) [IT Assets and Data Privacy](index=3&type=section&id=Section%205.17%20IT) This section represents the sufficiency and security of Parent's IT assets and its material compliance with privacy and data protection requirements - The Parent IT Assets are materially sufficient for business operations, and Parent has implemented commercially reasonable security programs to protect IT assets and confidential information[260](index=260&type=chunk) - Parent Entities are in material compliance with all applicable Privacy Requirements, and there have been no material security breaches or unauthorized access to Parent IT Assets or confidential information since **December 31, 2022**[263](index=263&type=chunk)[264](index=264&type=chunk) [Financial Advisor Fees](index=3&type=section&id=Section%205.18%20Broker's%20Fees) This section identifies Parent's financial advisor and confirms that no other brokers or finders are owed fees in connection with the merger - Rothschild & Co. US Inc. is Parent's sole financial advisor for the transaction, and its fees and expenses will be paid by Parent[265](index=265&type=chunk) [Fairness Opinion](index=3&type=section&id=Section%205.19%20Opinion%20of%20Parent%20Financial%20Advisor) This section states that the Parent Board received a fairness opinion from its financial advisor regarding the Exchange Ratio - The Parent Board received an opinion from Rothschild & Co. US Inc. that the Exchange Ratio is fair, from a financial point of view, to Parent[266](index=266&type=chunk) [Limitation of Representations and Reliance](index=3&type=section&id=Section%205.20%20No%20Other%20Representations%20or%20Warranties%3B%20No%20Reliance) This section clarifies that the representations and warranties in Article V are Parent's and Merger Sub's sole and exclusive representations, and they disclaim reliance on any unstated information from the Company - The representations and warranties in Article V are the sole and exclusive ones made by Parent and Merger Sub; all other express or implied warranties are expressly disclaimed[268](index=268&type=chunk) - Parent and Merger Sub acknowledge they have relied solely on the representations and warranties in Article IV and their own independent investigation, not on any other information provided by the Company[269](index=269&type=chunk) [COVENANTS](index=3&type=section&id=ARTICLE%20VI) This article outlines pre-closing obligations for business conduct, regulatory filings, non-solicitation, and post-merger employee benefits and indemnification [Company's Pre-Closing Business Conduct](index=3&type=section&id=Section%206.1%20Conduct%20of%20Company%20Business%20prior%20to%20the%20Effective%20Time) This section outlines the Company's obligations to conduct its business in the ordinary course prior to the merger's effective time and lists specific actions that are prohibited without Parent's consent - The Company must use reasonable best efforts to conduct its business in the ordinary course, preserve its organization, assets, and relationships, and maintain all material Permits[271](index=271&type=chunk) - Without Parent's written consent, the Company is prohibited from actions such as amending Constituent Documents, issuing equity (with exceptions), incurring material indebtedness, selling material assets, or making significant capital expenditures[273](index=273&type=chunk)[274](index=274&type=chunk) - The Company is also restricted from increasing compensation/benefits, granting new equity awards (with exceptions), or terminating high-level employees without cause[275](index=275&type=chunk) [Parent's Pre-Closing Business Conduct](index=3&type=section&id=Section%206.2%20Parent%20Conduct%20of%20Business%20prior%20to%20the%20Effective%20Time) This section outlines Parent's obligations to conduct its business in the ordinary course prior to the merger's effective time and lists specific actions that are prohibited without the Company's consent - Parent must use reasonable best efforts to conduct its business in the ordinary course, preserve its organization, assets, and relationships, and maintain all material Permits[279](index=279&type=chunk) - Without the Company's written consent, Parent is prohibited from actions such as amending its Constituent Documents in a materially adverse way to Company Stockholders, issuing equity (with exceptions), or incurring material indebtedness (with exceptions)[280](index=280&type=chunk)[281](index=281&type=chunk) [SEC Filings and Stockholder Meetings](index=4&type=section&id=Section%206.3%20Preparation%20of%20the%20Form%20S-4%20and%20the%20Joint%20Proxy%20Statement%3B%20Information%20Supplied%3B%20Stockholders%20Meetings) This section details the joint responsibilities of Parent and the Company for preparing and filing the Form S-4 and Joint Proxy Statement, responding to SEC comments, and convening their respective stockholder meetings to obtain necessary approvals - Parent and the Company will jointly prepare and file the Joint Proxy Statement and Form S-4, ensuring compliance with SEC rules, and will include their respective recommendations (unless a Change of Recommendation occurs)[283](index=283&type=chunk) - Both parties will cooperate with SEC comments, provide reasonable review opportunities for documents, and use reasonable best efforts to cause the Form S-4 to become effective as soon as practicable[284](index=284&type=chunk) - The Company and Parent will set record dates and convene their respective Stockholders Meetings (Company Stockholders Meeting and Parent Stockholders Meeting) to seek necessary approvals, aiming for the same date[286](index=286&type=chunk)[288](index=288&type=chunk) [Company's Non-Solicitation Covenant](index=4&type=section&id=Section%206.4%20No%20Company%20Solicitation) This section prohibits the Company from soliciting alternative acquisition proposals and outlines the limited circumstances under which the Company Board may engage with unsolicited, bona fide superior proposals or change its recommendation - The Company must immediately cease all existing discussions and negotiations related to Company Acquisition Proposals and terminate data room access[293](index=293&type=chunk) - The Company may engage with unsolicited, bona fide Company Acquisition Proposals if the Board determines it is a Superior Company Acquisition Proposal and failure to act would breach fiduciary duties, subject to an Acceptable Company Confidentiality Agreement and prompt notification to Parent[295](index=295&type=chunk) - The Company Board is generally prohibited from making a Company Change of Recommendation, with specific exceptions for a Superior Company Acquisition Proposal or a Company Intervening Event, each requiring a **5-Business Day** negotiation period with Parent[298](index=298&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) [Parent's Non-Solicitation Covenant](index=4&type=section&id=Section%206.5%20No%20Parent%20Solicitation) This section prohibits Parent from soliciting alternative acquisition proposals and outlines the limited circumstances under which the Parent Board may engage with unsolicited, bona fide superior proposals or change its recommendation - Parent must immediately cease all existing discussions and negotiations related to Parent Acquisition Proposals and terminate data room access[306](index=306&type=chunk) - Parent may engage with unsolicited, bona fide Parent Acquisition Proposals if the Board determines it is a Superior Parent Acquisition Proposal and failure to act would breach fiduciary duties, subject to an Acceptable Parent Confidentiality Agreement and prompt notification to the Company[308](index=308&type=chunk) - The Parent Board is generally prohibited from making a Parent Change of Recommendation, with specific exceptions for a Superior Parent Acquisition Proposal or a Parent Intervening Event, each requiring a **5-Business Day** negotiation period with the Company[311](index=311&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) [Material Event Notification](index=4&type=section&id=Section%206.6%20Notification%20of%20Certain%20Matters) This section requires Parent and the Company to promptly notify each other of any material events, communications from governmental authorities, or occurrences that could prevent or delay the merger or cause a condition to fail - Each party must promptly notify the other of any written notice from third parties alleging required consents, communications from Governmental Authorities (except those covered by Section 6.8), or events that could prevent/delay closing or cause a condition in Article VII to fail[318](index=318&type=chunk)[319](index=319&type=chunk) [Information Exchange and Access](index=4&type=section&id=Section%206.7%20Access%20to%20Information) This section outlines the reciprocal obligations of the Company and Parent to provide reasonable access to their properties, records, and personnel for due diligence and merger consummation, subject to confidentiality, legal restrictions, and privilege - The Company will provide Parent reasonable access to its properties, books, records, and personnel, and furnish information, subject to not disclosing trade secrets, violating laws/contracts, or jeopardizing attorney-client privilege[320](index=320&type=chunk) - Parent will provide the Company similar access to its information, subject to the same limitations regarding trade secrets, legal violations, and privilege[322](index=322&type=chunk) [Regulatory Approvals and Filings](index=4&type=section&id=Section%206.8%20Consents%2C%20Approvals%20and%20Filings%3B%20Other%20Actions) This section details the parties' commitment to cooperate and use reasonable best efforts to obtain all necessary consents, approvals, and filings from governmental authorities and third parties, particularly regarding antitrust matters, while setting limits on required divestitures - Parent and the Company will use reasonable best efforts to obtain all necessary consents, registrations, approvals, and permits from third parties and Governmental Authorities, including HSR Clearance, and will share Antitrust Laws filing fees equally[324](index=324&type=chunk) - Parent and Company will file HSR Act notices within **20 Business Days** and other required regulatory filings promptly, cooperating with authorities and taking reasonable actions as conditions to approval[325](index=325&type=chunk)[326](index=326&type=chunk) - Parent has primary responsibility for antitrust strategy, but neither party is required to take Regulatory Actions (e.g., divestitures) that would have a material adverse impact on their businesses or the expected benefits of the transaction[328](index=328&type=chunk)[329](index=329&type=chunk) [Post-Merger Indemnification and D&O Insurance](index=4&type=section&id=Section%206.9%20Director%20and%20Officer%20Indemnification%20and%20Insurance) This section ensures that Company directors and officers will continue to receive indemnification and be covered by directors' and officers' liability insurance for a period of six years after the merger, under terms no less favorable than existing policies - Parent will cause the Surviving Corporation to fulfill and honor existing Company Indemnification Agreements and maintain no less favorable indemnification and exculpation provisions in its Constituent Documents for **six years** post-merger[333](index=333&type=chunk) - The Company will purchase a prepaid 'tail' directors' and officers' liability insurance policy for **six years**, with coverage no less favorable than current policies, subject to a maximum aggregate premium of **300%** of the current annual premium[335](index=335&type=chunk) [Company Credit Facility Payoff](index=4&type=section&id=Section%206.10%20Financing) This section requires the Company to obtain and deliver a payoff letter for its existing credit facility prior to the closing date, ensuring its termination upon payment - The Company must cause the agent under the Existing Company Credit Facility to deliver an executed payoff letter prior to the Closing Date, detailing the Payoff Amount and ensuring the discharge of the facility and release of all Liens upon payment[340](index=340&type=chunk) [Stock Listing and Delisting](index=4&type=section&id=Section%206.11%20Stock%20Exchange%20Listing%3B%20Blue-Sky%20Laws%3B%20Delisting) This section outlines Parent's obligation to list its shares on NYSE and the Company's obligation to delist its shares from NASDAQ and terminate its SEC registration after the merger - Parent will use reasonable best efforts to cause the shares of Parent Common Stock to be listed on NYSE prior to the Effective Time[341](index=341&type=chunk) - The Company will use reasonable best efforts to delist Company Common Stock from NASDAQ and terminate its registration under the Exchange Act as soon as practicable following the Effective Time[343](index=343&type=chunk) [Insider Trading Compliance](index=4&type=section&id=Section%206.12%20Section%2016%20Matters) This section requires Parent and the Company to take actions to ensure that certain transactions by insiders related to the merger are exempt under Section 16(b) of the Exchange Act - Parent and the Company will use reasonable best efforts to exempt dispositions of Company Common Stock and acquisitions of Parent Common Stock by Section 16(a) reporting individuals under Rule 16b-3[344](index=344&type=chunk) [Employee Benefits Post-Merger](index=4&type=section&id=Section%206.13%20Employee%20Benefit%20Matters) This section details the treatment of Company employees' compensation and benefits post-merger, including salary, bonus, and service credit, and the termination and rollover of Company qualified plans - For **one year** post-merger, Continuing Employees will receive no less favorable annual base salary/wage and target cash bonus, substantially comparable aggregate employee benefits (excluding certain types), and no less favorable severance benefits[345](index=345&type=chunk) - Continuing Employees will be credited with prior Company service for vesting, eligibility, and benefit levels under Parent Plans (with exceptions to prevent duplication or for specific plan types)[347](index=347&type=chunk) - The Company will terminate its 401(a) qualified defined contribution plans (Company Qualified Plans) prior to closing, and Parent will designate a Parent Qualified Plan to accept direct rollovers of account balances, including participant loans[348](index=348&type=chunk)[350](index=350&type=chunk) [Equity Award Information](index=4&type=section&id=Section%206.14%20Stock%20Award%20Schedule) This section requires the Company to provide Parent with a detailed list of all outstanding Company Equity Awards prior to the anticipated closing date - The Company must provide Parent with a list of all outstanding Company Equity Awards, including holder identity, award type, number of shares, plan, grant date, and vesting terms, no later than **three Business Days** prior to the anticipated Closing Date[352](index=352&type=chunk) [Management of Stockholder Litigation](index=4&type=section&id=Section%206.15%20Stockholder%20Litigation) This section mandates prompt notification and cooperation between Parent and the Company in the event of stockholder litigation related to the merger, requiring mutual consent for any settlement - In the event of Stockholder Litigation related to the Merger, the Company or Parent must promptly notify the other party and provide a reasonable opportunity to participate in the defense and settlement, with mutual written consent required for settlement[353](index=353&type=chunk) [Tax Treatment of Merger](index=4&type=section&id=Section%206.16%20Certain%20Tax%20Matters) This section outlines the parties' intent for the merger to qualify as a tax-free reorganization under U.S. federal income tax purposes and their commitment to cooperate to achieve this 'Intended Tax Treatment' - The Parties intend for the Merger to qualify as a 'reorganization' under Section 368(a) of the Code and will use reasonable best efforts to achieve this 'Intended Tax Treatment'[355](index=355&type=chunk)[356](index=356&type=chunk) - Each Party will report the Merger consistent with the Intended Tax Treatment and promptly notify the other of any facts or circumstances that could reasonably be expected to prevent or impede this qualification[356](index=356&type=chunk)[357](index=357&type=chunk) [Post-Merger Board Appointments](index=4&type=section&id=Section%206.17%20Governance%20Matters) This section requires the Parent Board to take actions to increase its size and appoint three designated Company directors, effective immediately after the merger - Prior to the Effective Time, the Parent Board will increase its size to **eleven (11) directors** and appoint **three (3)** Company Directors (designated by the Company and reasonably acceptable to Parent) to fill the new vacancies[361](index=361&type=chunk) [Company Officer and Director Resignations](index=4&type=section&id=Section%206.18%20Company%20Resignations) This section obligates the Company to obtain resignations from its directors and officers, effective upon the merger's completion, without affecting their change of control rights or employment status - The Company will use reasonable efforts to obtain and deliver resignations from each director and officer of Company Entities, effective as of (but conditioned on) the Effective Time, without impacting change of control rights or employment status[362](index=362&type=chunk) [Takeover Law Mitigation](index=4&type=section&id=Section%206.19%20State%20Takeover%20Statutes) This section requires each party to take necessary actions to address any applicable state takeover laws to ensure the prompt consummation of the merger - If any Takeover Law becomes applicable to the Merger, each Party will grant approvals and take necessary actions to consummate the Merger promptly and eliminate or minimize the statute's effects[363](index=363&type=chunk) [Merger Sub's Obligations](index=4&type=section&id=Section%206.20%20Merger%20Sub) This section states Parent's responsibility to ensure Merger Sub performs all its obligations under the agreement and consummates the merger - Parent shall take all action necessary to cause Merger Sub to perform its obligations under this Agreement and to consummate the Merger and other contemplated transactions[365](index=365&type=chunk) [CONDITIONS TO THE MERGER](index=4&type=section&id=ARTICLE%20VII) This article outlines the conditions for merger consummation, including stockholder approvals, regulatory clearances, and SEC effectiveness, which must be satisfied or waived by both parties [Mutual Closing Conditions](index=4&type=section&id=Section%207.1%20Conditions%20to%20Obligations%20of%20Each%20Party) This section lists the conditions that must be satisfied or waived by both Parent and the Company before the merger can be consummated, including stockholder approvals, regulatory clearances, and SEC effectiveness - Mutual conditions for closing include obtaining Parent and Company Stockholder Approvals, NYSE listing for Parent Common Stock, absence of Legal Restraints, effectiveness of Form S-4, HSR Clearance, and other specified governmental approvals[367](index=367&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk) [Parent's Closing Conditions](index=4&type=section&id=Section%207.2%20Conditions%20to%20Obligations%20of%20Parent%20and%20Merger%20Sub) This section outlines the specific conditions that must be met or waived for Parent and Merger Sub to be obligated to consummate the merger, primarily focusing on the Company's representations, covenants, and the absence of adverse effects - Conditions for Parent and Merger Sub include the Company's representations and warranties being true and correct (with varying materiality thresholds), the Company's material performance of covenants, the absence of a Company Material Adverse Effect, and receipt of the Payoff Letter[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk) [Company's Closing Conditions](index=4&type=section&id=Section%207.3%20Conditions%20to%20Obligations%20of%20the%20Company) This section outlines the specific conditions that must be met or waived for the Company to be obligated to consummate the merger, primarily focusing on Parent's and Merger Sub's representations, covenants, and the absence of adverse effects - Conditions for the Company include Parent's and Merger Sub's representations and warranties being true and correct (with varying materiality thresholds), their material performance of covenants, and the absence of a Parent Material Adverse Effect[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk) [TERMINATION](index=4&type=section&id=ARTICLE%20VIII) This article details the circumstances for Agreement termination, its consequences, and the conditions for payment of termination fees and expense reimbursements [Termination Rights](index=4&type=section&id=Section%208.1%20Termination) This section details the various circumstances under which the Agreement may be terminated, including by mutual agreement, by either party under specific conditions (e.g., failure to close by Outside Date, legal restraints, or lack of stockholder approval), or unilaterally by Parent or the Company under certain conditions (e.g., superior acquisition proposals or material breaches) - The Agreement may be terminated by mutual written agreement of Parent and the Company[383](index=383&type=chunk) - Either party may terminate if the Closing does not occur by the Outside Date (**August 5, 2026**, extendable to **May 5, 2027** under certain conditions), if a final and non-appealable Legal Restraint exists, or if stockholder approvals are not obtained[384](index=384&type=chunk) - Parent may terminate if the Parent Board authorizes termination for a Superior Parent Acquisition Proposal (with fee), if the Company Board makes a Company Change of Recommendation, or for uncured material breaches by the Company[385](index=385&type=chunk)[386](index=386&type=chunk) - The Company may terminate if the Company Board authorizes termination for a Superior Company Acquisition Proposal (with fee), if the Parent Board makes a Parent Change of Recommendation, or for uncured material breaches by Parent/Merger Sub[386](index=386&type=chunk)[387](index=387&type=chunk) [Consequences of Termination](index=4&type=section&id=Section%208.2%20Effect%20of%20Termination) This section specifies that upon termination, the Agreement becomes void, and parties generally have no further liability, except for certain surviving provisions and liability for fraud or willful breach - Upon termination, the Agreement immediately becomes void, and no Party has further liability, except that specific sections (e.g., Section 6.7, 8.2, 8.3, and Article IX) survive, and liability for fraud or Willful Breach remains[388](index=388&type=chunk) [Termination Fees and Expenses](index=4&type=section&id=Section%208.3%20Termination%20Fee%3B%20Expense%20Reimbursements) This section outlines the conditions under which a termination fee is payable by either the Company or Parent, specifies the amounts, and addresses expense reimbursements and the nature of these fees as liquidated damages - A Company Termination Fee of **$25,000,000** is payable to Parent under conditions such as a Company Change of Recommendation or the consummation of an alternative Company Acquisition Proposal with

Investors can contact the law firm at no cost to learn more about recovering their losses LOS ANGELES, Aug. 14, 2025 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises American Woodmark Corporation (“American Woodmark” or “the Company”) (NASDAQ: AMWD) investors that the firm has initiated an investigation into possible securities fraud and may file a class action on behalf of investors. American Woodmark investors that lost money on their investment are encouraged to contact Lesley Portnoy, Esq. Investors are ...

NEW YORK, Aug. 7, 2025 /PRNewswire/ -- Class Action Attorney Juan Monteverde with Monteverde & Associates PC (the "M&A Class Action Firm"), has recovered millions of dollars for shareholders and is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report. The firm is headquartered at the Empire State Building in New York City and is investigating American Woodmark Corporation (NASDAQ: AMWD) related to its sale to MasterBrand, Inc. Under the terms of the proposed transaction, each ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) American Woodmark is a leading U.S. cabinet manufacturer serving remodeling and new construction markets through diverse brands and sales channels - The company is one of the nation's largest cabinet manufacturers with over **7,800 employees** and more than a **dozen brands**[17](index=17&type=chunk) - The company's long-term strategy, "GDP", focuses on **Growth** (maximizing market opportunity), **Digital Transformation** (unifying under "One American Woodmark"), and **Platform Design** (reducing complexity and improving margins)[18](index=18&type=chunk) - Products are sold through **three primary channels**: home centers, builders, and independent dealers/distributors[23](index=23&type=chunk) Net Sales by Customer Channel (Fiscal 2025) | Customer Channel | Percentage of Net Sales | | :--- | :--- | | Builders | ~43.5% | | Home Centers (Home Depot & Lowe's) | ~40.8% | | Independent Dealers & Distributors | ~15.8% | - The company operates **17 manufacturing facilities** across the United States and Mexico, with recent expansion in Monterrey, Mexico and Hamlet, North Carolina. The Orange, Virginia plant was approved for closure in Q3 fiscal 2025[30](index=30&type=chunk)[32](index=32&type=chunk) - The OSHA recordable incident rate was **1.48** during fiscal 2025, which is **53% better** than the industry average[47](index=47&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including international trade, supply chain, raw material costs, customer concentration, and housing market dependence - The company is exposed to risks from its international operations in Mexico and sourcing from Asia, including tariffs, trade disputes, and supply chain disruptions[59](index=59&type=chunk)[62](index=62&type=chunk) - A high concentration of sales to Home Depot and Lowe's (**approximately 40.8%** of total net sales in fiscal 2025) presents a significant risk, as the loss of either customer would materially impact the business[69](index=69&type=chunk) - The business is heavily reliant on the U.S. housing market, with performance sensitive to economic conditions, interest rates, consumer confidence, and new construction activity[72](index=72&type=chunk) - The ongoing multi-year implementation of a new Enterprise Resource Planning (ERP) system carries inherent risks of disruption to supply chains, customer order fulfillment, and internal controls[83](index=83&type=chunk) - The company's debt level and the restrictive covenants in its credit agreement could limit its ability to fund operations, make capital expenditures, and pursue business opportunities[96](index=96&type=chunk)[98](index=98&type=chunk) [Unresolved Staff Comments](index=15&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[101](index=101&type=chunk) [Cybersecurity](index=15&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks through a NIST-aligned framework with Board oversight, reporting no material incidents to date - The company's cybersecurity risk management program is evaluated against the National Institute of Standards and Technology's Cybersecurity Framework (NIST-CSF)[102](index=102&type=chunk) - The Board of Directors executes its cybersecurity risk oversight function, delegating primary responsibility to the Audit Committee. The Chief Information Security Officer (CISO) presents to the Audit Committee at least quarterly[111](index=111&type=chunk) - As of the filing date, the company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[115](index=115&type=chunk) [Properties](index=17&type=section&id=Item%202.%20Properties) The company operates through a mix of owned and leased manufacturing, service, and distribution facilities across the U.S. and Mexico - The company owns its corporate office and eight manufacturing facilities in the eastern and southern U.S[116](index=116&type=chunk) - It leases five manufacturing facilities in the U.S., four in Mexico, and one distribution center, along with various service centers and offices[116](index=116&type=chunk) [Legal Proceedings](index=17&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal claims and an AD/CVD investigation, potentially leading to a $3.8 million deposit refund - The aggregate range of estimated loss from routine lawsuits and claims is not considered material as of April 30, 2025, with the exception of the AD/CVD investigation[118](index=118&type=chunk) - In May 2025, the DOC's Final Review of the AD/CVD investigation found the company's two vendors eligible for certification. If not appealed, this could lead to a refund of the **$3.8 million** in deposits remitted by the company[279](index=279&type=chunk)[280](index=280&type=chunk) [Mine Safety Disclosures](index=17&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[119](index=119&type=chunk) [Executive Officers of the Registrant](index=17&type=section&id=Executive%20Officers%20of%20the%20Registrant) This section lists the company's executive officers, detailing their age and positions held over the past five years Executive Officers | Name | Age | Position(s) | | :--- | :--- | :--- | | M. Scott Culbreth | 54 | President and Chief Executive Officer | | Paul Joachimczyk | 53 | Senior Vice President and Chief Financial Officer | | Robert J. Adams, Jr. | 59 | Senior Vice President, Chief Manufacturing and Supply Chain Officer | | Dwayne L. Medlin | 57 | Senior Vice President, Remodel Sales | | Kimberly G. Pascarella | 46 | Senior Vice President, Chief Human Resources Officer | | William L. Waszak | 64 | Senior Vice President, Chief Information Officer | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=18&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) American Woodmark's common stock trades on NASDAQ, with $27.6 million in Q4 fiscal 2025 share repurchases and no current cash dividends - The company's common stock is listed on The NASDAQ Global Select Market under the symbol "AMWD"[123](index=123&type=chunk) - The company does not currently pay cash dividends and has no immediate plans to do so[124](index=124&type=chunk) Share Repurchases (Q4 Fiscal 2025) | Period | Total Shares Purchased | Average Price Paid | Dollar Value Remaining Under Program (000) | | :--- | :--- | :--- | :--- | | Feb 2025 | 195,339 | $76.57 | $130,358 | | Mar 2025 | — | $— | $130,358 | | Apr 2025 | 221,959 | $56.75 | $117,765 | | **Total Q4** | **417,298** | **$64.33** | **$117,765** | - As of April 30, 2025, **$117.8 million** remained available for share repurchases under board-authorized programs[126](index=126&type=chunk) [Selected Financial Data](index=19&type=section&id=Item%206.%20%5BReserved.%5D) This item is reserved in the report - Item 6 is noted as [Reserved.] in the body of the report[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 net sales decreased to $1.71 billion and net income fell to $99.5 million, with fiscal 2026 sales projected for low single-digit change Fiscal 2025 vs. 2024 Key Financial Results (in thousands) | Metric | Fiscal 2025 | Fiscal 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,709,585 | $1,847,502 | (7.5)% | | Gross Profit | $306,550 | $377,807 | (18.9)% | | Net Income | $99,456 | $116,216 | (14.4)% | - The decrease in net sales for fiscal 2025 was driven by a **9.3% decline** in the home center channel, an **8.9% decline** in the independent dealer and distributor channel, and a **5.1% decline** in the builder channel[147](index=147&type=chunk)[148](index=148&type=chunk) - Gross profit margin decreased by **250 basis points** to **17.9%** in fiscal 2025, primarily due to lower sales volume, fixed cost deleverage, and rising input costs[149](index=149&type=chunk) - General and administrative expenses decreased by **39.1%**, mainly due to the end of **$30.4 million** in amortization of customer relationship intangibles from the RSI acquisition[151](index=151&type=chunk) - The company recorded pre-tax restructuring charges of **$4.6 million** in fiscal 2025 related to a reduction in force and the closure of its Orange, Virginia manufacturing plant[142](index=142&type=chunk) - For fiscal 2026, the company expects net sales to range from a low single-digit decline to a low single-digit increase, and Adjusted EBITDA to be between **$175 million** and **$200 million**[167](index=167&type=chunk) - Cash provided by operating activities decreased to **$108.4 million** in fiscal 2025 from **$230.8 million** in fiscal 2024, driven by lower net income and unfavorable changes in working capital[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from inflation, commodity prices, tariffs, and interest rates, mitigated by derivative instruments - A **100 basis point increase** in the variable interest rate on its debt as of April 30, 2025, would increase annual interest expense by approximately **$1.7 million**[190](index=190&type=chunk) - The company uses interest rate swaps to hedge variable interest rate debt and foreign exchange forward contracts to manage currency fluctuation risks, particularly for transactions in Mexican Pesos[191](index=191&type=chunk)[192](index=192&type=chunk) [Financial Statements and Supplementary Data](index=31&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2025, including key financial statements and notes Consolidated Balance Sheet Data (in thousands) | | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $364,453 | $402,710 | | **Total Assets** | $1,570,569 | $1,593,865 | | **Total Current Liabilities** | $182,942 | $195,726 | | **Total Long-Term Debt** | $365,825 | $371,761 | | **Total Shareholders' Equity** | $915,998 | $910,376 | | **Total Liabilities and Shareholders' Equity** | $1,570,569 | $1,593,865 | Consolidated Statement of Income Data (in thousands) | | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,709,585 | $1,847,502 | $2,066,200 | | **Gross Profit** | $306,550 | $377,807 | $357,524 | | **Operating Income** | $140,239 | $161,394 | $136,352 | | **Net Income** | $99,456 | $116,216 | $93,723 | Consolidated Statement of Cash Flows Data (in thousands) | | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $108,447 | $230,750 | $198,837 | | **Net Cash Used by Investing Activities** | $(42,658) | $(92,191) | $(45,337) | | **Net Cash Used by Financing Activities** | $(104,992) | $(92,893) | $(134,093) | | **Net (Decrease) Increase in Cash** | $(39,203) | $45,666 | $19,407 | - The company's two largest customers accounted for **39.3%** and **12.8%** of gross customer receivables at April 30, 2025. For the fiscal year, they represented **29.4%** and **11.4%** of net sales, respectively[287](index=287&type=chunk)[288](index=288&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=58&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - None[331](index=331&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and internal financial reporting controls were effective as of April 30, 2025 - Management concluded that the Company's disclosure controls and procedures were effective as of April 30, 2025[332](index=332&type=chunk) - Management concluded that the Company's internal control over financial reporting was effective as of April 30, 2025, based on the COSO 2013 Framework[321](index=321&type=chunk)[333](index=333&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2025 that materially affected, or are reasonably likely to materially affect, the company's internal controls[335](index=335&type=chunk) [Other Information](index=58&type=section&id=Item%209B.%20Other%20Information) No directors or executive officers adopted, terminated, or modified Rule 10b5-1 trading plans during Q4 fiscal 2025 - No directors or executive officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement during the quarter ended April 30, 2025[336](index=336&type=chunk) [Disclosure About Foreign Jurisdictions That Prevent Inspections](index=58&type=section&id=Item%209C.%20Disclosure%20About%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[337](index=337&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates director, executive officer, and corporate governance information from the 2025 Proxy Statement - Information regarding directors, executive officers, corporate governance, and the audit committee is incorporated by reference from the company's Proxy Statement[339](index=339&type=chunk)[340](index=340&type=chunk) [Executive Compensation](index=59&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates executive and director compensation information from the company's 2025 Proxy Statement - Information regarding executive compensation is incorporated by reference from the company's Proxy Statement[341](index=341&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=59&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates security ownership information from the 2025 Proxy Statement and details equity compensation plans Equity Compensation Plan Information as of April 30, 2025 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | **Equity plans approved by security holders** | | | | | Options | 71,820 | $77.19 | 749,850 | | Performance-based RSUs | 321,451 | N/A | | | Service-based RSUs | 148,086 | N/A | | | **Equity plans not approved by security holders** | — | $— | — | | **Total** | **541,357** | **$77.19** | **749,850** | [Certain Relationships and Related Transactions, and Director Independence](index=60&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates related party transactions and director independence information from the company's 2025 Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's Proxy Statement[346](index=346&type=chunk) [Principal Accounting Fees and Services](index=60&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section incorporates information on principal accounting fees and services from the company's 2025 Proxy Statement - Information regarding principal accounting fees and services is incorporated by reference from the company's Proxy Statement[347](index=347&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=60&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including governance and material contracts - Lists all financial statements, schedules, and exhibits filed with the Form 10-K[349](index=349&type=chunk) - Includes Financial Statement Schedule II – Valuation and Qualifying Accounts[352](index=352&type=chunk) - Exhibits filed include governance documents, material contracts (such as the A&R Credit Agreement), executive employment agreements, equity incentive plans, and required certifications[353](index=353&type=chunk)[355](index=355&type=chunk) [Form 10-K Summary](index=63&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary under this item - None[359](index=359&type=chunk)

Financial Data and Key Metrics Changes - The company reported net sales of $400.4 million for the fourth fiscal quarter, representing a decline of 11.7% compared to the prior year [4][14] - Adjusted EBITDA for the quarter was $47.1 million, or 11.8% of net sales, down from 12.1% in the same period last year [8][16] - Adjusted net income was $24 million, or $1.61 per diluted share, compared to $28.2 million, or $1.78 per diluted share last year [16] - The gross profit margin decreased by 160 basis points to 17% of net sales from 18.6% in the prior year [15] - For the full fiscal year, net sales were $1.7 billion, a decrease of 7.5% year-over-year [18] Business Line Data and Key Metrics Changes - Remodel net sales, which include home centers and independent dealers, decreased by 10.4% in the fourth quarter [14] - New construction net sales decreased by 13.4% for the quarter compared to last year [14] - The home center business saw a low single-digit negative comp, while the pro business reported a positive comp for the quarter [5][6] Market Data and Key Metrics Changes - Existing home sales fell by 0.5% month-over-month to a seasonally adjusted rate of 4 million in April 2025, with a year-over-year decline of 2% [4] - The NAHB housing market index fell to 34 in May, marking the lowest level since November 2023 [7] - Single-family housing starts experienced negative comps from January to April [7] Company Strategy and Development Direction - The company focuses on three main strategic pillars: growth, digital transformation, and platform design [10] - Key accomplishments include product innovation, capacity investments, and channel expansion, with over 30% of made-to-order sales coming from products launched in the last three years [10][11] - The company is enhancing its manufacturing capabilities and transitioning independent distributor customers to a new brand [11][12] Management's Comments on Operating Environment and Future Outlook - The management expects demand trends to remain challenging, with net sales for fiscal year 2026 projected to range from low single-digit declines to low single-digit increases [9][20] - The outlook is influenced by macroeconomic factors, including interest rates, tariff changes, and consumer behavior [20] - Management believes that a decline in mortgage rates and increased consumer confidence could positively impact the housing market [9] Other Important Information - The company repurchased 1.17 million shares during fiscal year 2025, representing about 7.5% of outstanding shares [19] - Free cash flow totaled $65.7 million for the current fiscal year, down from $138.5 million in the prior year [18] - The company has a net leverage ratio of 1.56 times adjusted EBITDA at the end of the fourth quarter [19] Q&A Session Summary Question: Impact of tariffs on full year guidance - Management indicated that the outlook was significantly influenced by tariffs, estimating a cost impact of approximately $20 million [26][27] Question: Gross margin improvement - The improvement in gross margins was attributed to operational adjustments made in response to previous demand softness [28][30] Question: Revenue guidance assumptions - The revenue guidance assumes a recovery in both remodel and new construction markets in the second half of fiscal year 2026 [35][36] Question: Cost side considerations - Management acknowledged potential commodity inflation and labor costs as factors to consider for the full year guidance [43] Question: Savings from facility closure - The closure of a components facility is expected to yield annual savings of $5 million to $6 million [45] Question: Automation investments progress - Management described the company as being in the early stages of its automation investment journey, with significant spending planned for fiscal year 2026 [53][54]

Financial Data and Key Metrics Changes - The company reported net sales of $400.4 million for Q4 2025, a decline of 11.7% compared to the prior year [4][14] - Adjusted EBITDA for the quarter was $47.1 million, representing 11.8% of net sales, down from 12.1% in the same period last year [7][17] - Adjusted net income was $24 million or $1.61 per diluted share, compared to $28.2 million or $1.78 per diluted share last year [17] - The gross profit margin decreased by 160 basis points to 17% of net sales from 18.6% in the prior year [15] - For the full fiscal year, net sales were $1.7 billion, a decrease of 7.5% year-over-year [19] Business Line Data and Key Metrics Changes - Remodel net sales decreased by 10.4% in Q4, with home centers and dealer distributors both declining by approximately 10-11% [14] - New construction net sales decreased by 13.4% for the quarter compared to last year [14] - The home center business saw a low single-digit negative comp, while the pro business reported a positive comp for the quarter [5] Market Data and Key Metrics Changes - Existing home sales fell by 0.5% month-over-month to a seasonally adjusted rate of 4 million in April 2025, with a year-over-year decline of 2% [4] - The NAHB housing market index dropped to 34 in May, marking the lowest level since November 2023 [6] - Single-family housing starts experienced negative comps from January to April [6] Company Strategy and Development Direction - The company focuses on three main pillars: growth, digital transformation, and platform design [10] - Key accomplishments include product innovation, capacity investments, and channel expansion despite a challenging macroeconomic environment [10] - The company is enhancing its manufacturing capabilities and transitioning independent distributor customers to a new brand [11][12] Management's Comments on Operating Environment and Future Outlook - Management expects demand trends to remain challenging, with net sales outlook ranging from low single-digit declines to low single-digit increases for fiscal year 2026 [9][21] - The company anticipates that as mortgage rates decline and consumer confidence increases, there will be a potential for higher ticket home projects [9] - Management highlighted the importance of removing uncertainty related to tariffs for future growth [50] Other Important Information - The company repurchased 1.17 million shares for $96.7 million during fiscal year 2025, representing about 7.5% of outstanding shares [20] - Free cash flow totaled $65.7 million for the fiscal year, down from $138.5 million in the prior year [19] Q&A Session Summary Question: Impact of tariffs on full year guidance - Management indicated that the outlook was significantly influenced by tariffs, estimating a cost impact of approximately $20 million [27][28] Question: Improvement in gross margins - The improvement in gross margins was attributed to operational adjustments made in Q4 following a challenging Q3 [30][31] Question: Revenue guidance assumptions for end markets - The revenue guidance assumes a consistent recovery across both remodel and new construction markets, with expectations for better performance in the second half of fiscal year 2026 [37][38] Question: Cost considerations beyond tariffs - Management acknowledged potential commodity inflation and labor costs as additional factors impacting guidance [44] Question: Savings from facility closure - The closure of a components facility is expected to yield annual savings of $5-6 million in EBITDA [46]

Financial Performance - Net sales for the fourth quarter of fiscal 2025 decreased by $52.9 million, or 11.7%, to $400.4 million compared to the same quarter of the prior fiscal year[3]. - Net income for the fourth quarter of fiscal 2025 was $25.6 million, a decrease of 4.6% year-over-year, representing 6.4% of net sales[5]. - Adjusted EBITDA for the fourth quarter of fiscal 2025 decreased by $7.6 million, or 13.9%, to $47.1 million, or 11.8% of net sales[5]. - For the fiscal year ended April 30, 2025, net sales decreased by 7.5% to $1,709.6 million from the prior fiscal year[4]. - Net income for the fiscal year 2025 was $99.5 million, a decrease of 14.4% year-over-year, representing 5.8% of net sales[5]. - Adjusted EBITDA for the fiscal year 2025 was $208.6 million, or 12.2% of net sales, down from $252.8 million, or 13.7% of net sales in the prior fiscal year[5]. - Net income for the three months ended April 30, 2025, is $25.566 million, a decrease from $26.798 million in the same period last year[28]. - Adjusted EBITDA for the twelve months ended April 30, 2025, is $208.630 million, compared to $252.773 million for the same period in 2024[28]. - Net sales for the three months ended April 30, 2025, are $400.395 million, a decline from $453.278 million in Q2 fiscal 2024[28]. Cash Flow and Liquidity - Cash provided by operating activities for the fiscal year was $108.4 million, with free cash flow totaling $65.7 million[8]. - As of April 30, 2025, the company had $48.2 million in cash and access to $314.2 million under its revolving credit facility[7]. - Free cash flow for the twelve months ended April 30, 2025, is $65.684 million, down from $138.509 million in the previous year[33]. - Cash provided by operating activities for the twelve months ended April 30, 2025, is $108.447 million, down from $230.750 million in the previous year[33]. Future Outlook - The company expects net sales for fiscal 2026 to range from low-single digit declines to low-single digit increases[12]. - The targeted Adjusted EBITDA range for fiscal 2026 is set at $175 million to $200 million[12]. Restructuring and Adjustments - The company incurred restructuring charges of $2.956 million in Q2 fiscal 2025, related to workforce reductions and facility closures[29]. - The company has adjusted its definition of Adjusted EPS to exclude changes in the fair value of foreign exchange forward contracts starting Q2 fiscal 2025[25]. Earnings Per Share - Adjusted EPS per diluted share for Q2 fiscal 2025 is $1.61, down from $1.78 in Q2 fiscal 2024, while GAAP EPS is $1.71 compared to $1.69 in the prior year[31]. - The net income margin for Q2 fiscal 2025 is 6.4%, compared to 5.9% in the same quarter last year[28]. Leverage - Net leverage as of April 30, 2025, is 1.56, indicating the company's leverage position after accounting for cash and cash equivalents[36].

Core Insights - The article highlights the investment strategies and achievements of Paul Franke, a seasoned investor with 38 years of trading experience, emphasizing his contrarian stock selection style and algorithmic analysis [1] Group 1: Investment Strategy - Paul Franke developed a system called "Victory Formation," which focuses on identifying supply/demand imbalances through specific stock price and volume movements [1] - The strategy recommends investors to maintain a diversified portfolio of at least 50 well-positioned stocks and to use stop-loss levels of 10% or 20% on individual investments to enhance market outperformance [1] Group 2: Stock Selection Focus - The "Bottom Fishing Club" articles target deep-value stocks or those showing significant positive technical momentum reversals [1] - The "Volume Breakout Report" articles analyze stocks that exhibit positive trend changes supported by strong price and volume trading activity [1]