Financial Performance - Net sales for fiscal 2025 were $2,734.7 million, an increase of $34.3 million or 1.3% compared to $2,700.4 million in fiscal 2024[175]. - Gross profit for fiscal 2025 was $827.6 million, a decrease of $49.4 million or 5.6% from $877.0 million in fiscal 2024[175]. - Operating income fell to $119.0 million, down $116.7 million or 49.5% compared to $235.7 million in fiscal 2024[175]. - Net income for fiscal 2025 was $26.7 million, a decline of $99.2 million or 78.8% from $125.9 million in fiscal 2024[175]. - Selling, general and administrative expenses increased by $64.7 million or 10.7% to $667.8 million in fiscal 2025[175]. - Cost of products sold increased by $83.7 million, or 4.6%, to $1,907.1 million in 2025, compared to $1,823.4 million in 2024[178]. Sales and Revenue - The acquisition of Supreme contributed $131.5 million in incremental sales during the first half of 2025, while excluding this impact, net sales decreased by $97.2 million due to lower sales unit volume[176]. - Net sales to dealers increased by $79.1 million or 5.6%, while sales to retailers declined by $49.2 million or 5.3% in fiscal 2025[177]. Expenses and Cost Management - Selling, general and administrative expenses rose by $64.7 million, or 10.7%, to $667.8 million in 2025, up from $603.1 million in 2024[179]. - The company plans to implement $30 million in cost reductions primarily in selling, general, and administrative expenses starting in Q1 2026[169]. - Restructuring charges decreased to $15.2 million in 2025 from $18.0 million in 2024, primarily related to severance and employee-related costs[180]. Cash Flow and Financing - Net cash provided by operating activities decreased to $195.7 million in 2025 from $292.0 million in 2024, with net income contributing $26.7 million[201]. - Net cash used in investing activities was $74.4 million in 2025, significantly lower than $580.8 million in 2024, which included the acquisition of Supreme[202]. - Net cash used in financing activities was $65.7 million in 2025, a decrease from net cash provided of $269.6 million in 2024[203]. - As of December 28, 2025, the company had $974.5 million in outstanding third-party borrowings, net of deferred financing fees[198]. Tax and Regulatory Matters - The effective tax rate increased to 42.3% in 2025 from 25.2% in 2024, mainly due to valuation allowance charges and nondeductible acquisition-related costs[185]. - The merger with American Woodmark is expected to close in early 2026, pending regulatory approvals[168]. Asset Management - Accounts receivable, net, decreased to $150.4 million as of December 28, 2025, from $191.0 million as of December 29, 2024[205]. - The allowance for credit losses increased to $17.4 million in 2025 from $3.0 million in 2024, reflecting a significant assessment of customer collectability[205]. - Total contractual cash obligations amounted to $1,712.4 million as of December 28, 2025, with $985.0 million in debt payments due[206]. - The company has standby letters of credit of $23.1 million and surety bonds outstanding of $13.1 million as of December 28, 2025[208]. - Inventory provision was recorded at $15.7 million in 2025, down from $17.0 million in 2024[222]. Stock and Shareholder Returns - The company repurchased $18.1 million in stock in 2025, compared to $6.5 million in 2024[203]. - The company anticipates that cash and cash equivalents, along with operating cash flows, will be sufficient to meet typical needs and capital expenditures[204]. Currency and Commodity Risks - The company experienced unfavorable foreign currency impacts of $1.4 million in fiscal 2025 compared to fiscal 2024[176]. - The company uses forward foreign exchange contracts to hedge against currency fluctuations, limiting risks from changes in exchange rates[239]. - The estimated potential loss under foreign exchange contracts from currency rate movements is not expected to materially impact the company's results of operations[240]. - The company is exposed to commodity price volatility due to various unpredictable external factors[241]. Impairment and Valuation - The fair values of impaired tradenames were estimated using the relief-from-royalty approach, with significant assumptions including forecasted revenue growth rates and market-participant discount rates[229]. - The discount rates for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 ranged from 10.0% to 12.0%, while the royalty rates ranged from 3.0% to 4.0%[230]. - A reduction in estimated fair value of reporting units or tradenames could trigger impairment charges due to factors like increased discount rates and lower revenue growth rates[231]. - A 25 basis point change in significant assumptions would not have resulted in impairment recognition for indefinite-lived tradenames during the fiscal years analyzed[232]. - The company incurs customer program costs to promote sales and maintain competitive pricing, recording estimates based on historical and projected experiences[236]. Interest and Debt Management - Interest expense remained stable at $74.1 million in 2025, compared to $74.0 million in 2024, reflecting a higher outstanding debt balance[181]. - The company amended its 2024 Credit Agreement to obtain $375.0 million of delayed draw term loan commitments, contingent on the closing of the merger with American Woodmark[197].

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $645 million, a 3.5% decrease from $667.7 million in Q4 2024 [5][20] - Adjusted EBITDA for Q4 was $35 million, down from $75 million in the prior year, with an adjusted EBITDA margin of 5.4% [6][24] - Full-year 2025 net sales were $2.7 billion, up 1% year-over-year, driven by contributions from Supreme and pricing improvements [25][26] - Net income for Q4 was a loss of $42 million compared to a profit of $14 million in Q4 2024, resulting in a net income margin of -6.5% [23][27] - Full-year adjusted EBITDA was $298.2 million, down 18% from $363.6 million in 2024, with an adjusted EBITDA margin of 10.9% [28] Business Line Data and Key Metrics Changes - The U.S. single-family new construction market declined high single digits in Q4 and mid-single digits for the full year, with MasterBrand's new construction sales outperforming the broader market [8][9] - In the repair and remodel segment, the U.S. cabinet R&R market declined mid-single digits in both Q4 and the full year, driven by low existing home turnover [9][10] - The Canadian market also faced mid-single-digit declines in both new construction and R&R demand [10] Market Data and Key Metrics Changes - 2025 marked the third consecutive year of market contraction, influenced by elevated interest rates and lower consumer confidence [8] - The company expects continued headwinds in the new construction market into 2026, with demand closely tied to financing conditions and consumer sentiment [9][11] - The anticipated Canadian market conditions for 2026 remain pressured due to similar affordability and turnover dynamics [10] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility through targeted cash management and cost reductions, with $30 million in planned cost reductions for 2026 [12][34] - MasterBrand aims to capture synergies from the Supreme integration and the pending American Woodmark transaction, expecting approximately $90 million in run-rate cost synergies post-close [17][29] - The company is implementing a coordinated mitigation strategy to manage tariff impacts, including sourcing flexibility and operational adjustments [15][32] Management Comments on Operating Environment and Future Outlook - Management noted ongoing demand pressure and a complex trade backdrop, with expectations for a transitional year in 2026 as market trends persist [5][40] - The company anticipates a modest recovery in 2027, supported by improving affordability and easing financing conditions [12][42] - Management emphasized the importance of disciplined execution and cash generation to navigate the current environment [41][36] Other Important Information - The company ended 2025 with $183.3 million in cash and $441.9 million in liquidity available under its revolving credit facility [29][30] - Tariffs continue to pressure costs, with a 25% tariff on cabinets and related products expected to remain in place throughout 2026 [14][31] - The company expects to fully offset tariff costs on a run-rate basis by the end of 2026 through mitigation initiatives [37][38] Q&A Session Summary Question: Can you break down the full-year market outlook by end channel? - Management indicated that both the builder and R&R markets are expected to decline mid-single digits, with uncertainty around the spring season influencing guidance [46] Question: What drove the sequential deceleration in price realization? - Management attributed the deceleration to a mix shift towards lower price point products and the timing of price adjustments to mitigate tariffs [47][48] Question: Can you provide more detail on the residential construction weakness? - Management noted a significant drop-off in late November, similar to the prior year, impacting overall volume and factory efficiency [52] Question: What are the details on the $30 million in expected savings for 2026? - Management clarified that the $30 million represents annualized savings expected throughout the year, primarily from structural cost adjustments [53] Question: How confident is the company in offsetting tariff costs? - Management expressed confidence in their long-term strategy to cover tariff costs, though timing remains uncertain due to the dynamic pricing environment [54][55]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $645 million, a 3.5% decrease from $667.7 million in Q4 2024, reflecting ongoing demand pressure and market decline [5][20] - Adjusted EBITDA for Q4 was $35 million, down from $75 million in the prior year, with an adjusted EBITDA margin of 5.4%, a decline of 580 basis points year-over-year [6][24] - Full-year 2025 net sales were $2.7 billion, up 1% from the previous year, driven by contributions from the Supreme acquisition and pricing improvements [25][26] - Net loss for Q4 was $42 million compared to net income of $14 million in Q4 2024, resulting in a negative net income margin of 6.5% [23][28] Business Line Data and Key Metrics Changes - In the new construction market, U.S. single-family construction declined high single digits in Q4 and mid-single digits for the full year, with MasterBrand's new construction sales outperforming the broader market [8][9] - The U.S. cabinet repair and remodel market also saw a mid-single-digit decline, driven by low existing home turnover and consumer confidence issues [9][10] - The Canadian market experienced similar challenges, with mid-single-digit declines in both new construction and repair and remodel demand [10] Market Data and Key Metrics Changes - The overall market has contracted for three consecutive years, with elevated interest rates and affordability concerns continuing to constrain activity [8] - The company expects the U.S. cabinet repair and remodel demand to remain subdued in 2026, closely tied to financing conditions and consumer confidence [10][11] - The Canadian market is anticipated to remain pressured in 2026 due to similar dynamics affecting consumer sentiment and low resale activity [10] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility through targeted cash management and cost reductions, with $30 million in planned cost reductions for 2026 [12][34] - MasterBrand aims to capture synergies from the Supreme integration and the pending American Woodmark transaction, expecting approximately $90 million in run-rate cost synergies by the end of year three post-close [17][29] - The company is implementing a coordinated mitigation strategy to manage tariff impacts, including sourcing flexibility and operational adjustments [15][32] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, with demand softness and affordability pressures expected to persist into 2026 [40][41] - The company anticipates a more meaningful recovery in 2027 as affordability improves and housing activity normalizes [12][41] - Management emphasized the importance of disciplined execution and cash management to navigate the current uncertainty [40] Other Important Information - The company ended 2025 with $183.3 million in cash and $441.9 million in liquidity available under its revolving credit facility, with net debt at $791.2 million [29][30] - Tariffs continue to pressure costs, with a 25% tariff on cabinets and related products remaining in place throughout 2026, and a 50% tariff scheduled for January 2027 [13][14] Q&A Session Summary Question: Full-year market outlook breakdown by end channel - Management indicated that both the builder and retail markets are expected to decline mid-single digits, with uncertainty around the spring season influencing the full-year outlook [45][46] Question: Pricing realization and competitive behavior - Management noted that the pricing realization decelerated due to a mix shift towards lower price points and the timing of tariff mitigation efforts [47][48] Question: Residential construction weakness and sales progression - Management observed a significant drop-off in residential construction sales late in the quarter, similar to the previous year, impacting overall volume and efficiency [52] Question: Details on restructuring actions and expected savings - Management clarified that the $30 million in expected savings for 2026 is the annualized amount, aimed at adjusting the cost structure to match demand [53] Question: Confidence in offsetting tariff impacts - Management expressed confidence in their ability to offset tariff costs through pricing and operational actions, although timing remains a challenge [54][55]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $645 million, a 3.5% decrease from $667.7 million in Q4 2024, reflecting ongoing demand pressure and a mid-single-digit market decline [5][19] - Adjusted EBITDA for Q4 was $35 million, down from $75 million in the prior year, with an adjusted EBITDA margin of 5.4%, a decline of 580 basis points year-over-year [6][23] - Full-year 2025 net sales reached $2.7 billion, a 1% increase compared to the previous year, driven by contributions from the Supreme acquisition and improvements in net average selling price [25][29] - Net loss for Q4 was $42 million, compared to net income of $14 million in the same period last year, resulting in a negative net income margin of 6.5% [22][24] Business Line Data and Key Metrics Changes - In the new construction segment, U.S. single-family new construction sales declined high single digits in Q4 and mid-single digits for the full year, although MasterBrand's new construction sales outperformed the broader market [7][8] - The U.S. cabinet repair and remodel market also saw a mid-single-digit decline in both Q4 and the full year, driven by low existing home turnover and consumer confidence issues [9][10] - The Canadian market experienced similar challenges, with mid-single-digit declines in both new construction and repair and remodel demand [10] Market Data and Key Metrics Changes - The overall market has contracted for three consecutive years, with elevated interest rates and affordability concerns continuing to constrain activity [7][11] - The company expects the U.S. cabinet repair and remodel demand to remain subdued in 2026, closely tied to financing conditions and consumer confidence [9][12] - The Canadian market is anticipated to remain pressured in 2026 due to similar dynamics affecting consumer sentiment and low resale activity [10] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility through targeted cash management and cost reductions, with $30 million in planned cost reductions for 2026 [12][34] - MasterBrand is pursuing a merger with American Woodmark, expecting approximately $90 million in run-rate cost synergies by the end of year three post-close [16][29] - The company aims to enhance sourcing flexibility and operational adjustments to mitigate tariff impacts and maintain competitive positioning [14][32] Management's Comments on Operating Environment and Future Outlook - Management noted that 2026 is expected to be a transitional year with continued market challenges, but they anticipate a modest recovery in 2027 as affordability improves [12][41] - The company is taking a measured approach to its outlook, transitioning to quarterly guidance due to increased uncertainty in key performance drivers and costs [33] - Management remains committed to executing strategic initiatives and maintaining operational excellence to position the company for future growth [17][39] Other Important Information - The company ended 2025 with $183.3 million in cash and $441.9 million in liquidity available under its revolving credit facility, with net debt at $791.2 million [29][30] - Tariffs continue to pressure costs, with a 25% tariff on cabinets and related products expected to remain in place throughout 2026 [13][31] Q&A Session Summary Question: Can you break down the full-year market outlook by end channel? - Management indicated that both the builder and retail markets are expected to decline mid-single digits, with uncertainty around the spring season influencing the full-year outlook [44] Question: What drove the sequential deceleration in price realization? - The deceleration was attributed to a mix shift towards lower price point products and challenges in capturing price to mitigate tariffs [46] Question: Can you provide more detail on the residential construction weakness? - Management noted a significant drop-off in late November, similar to the previous year, which affected overall sales and resulted in inefficiencies in certain factories [50] Question: What are the expected savings from restructuring actions? - The $30 million in expected savings for 2026 is the annualized amount, aimed at adjusting the cost structure to align with current demand levels [52] Question: How confident is the company in offsetting tariff costs? - Management expressed confidence in their long-term strategy to cover tariff costs, although timing remains a challenge due to the dynamic pricing environment [54]

The forward-looking statements included in this document are made as of the date of this Press Release and, except pursuant to any obligations to disclose material information under the federal securities laws, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this presentation. 2 MasterBrand Overview Q4 and Full Year 2025 Investor Presentation February 10, 2026 Forward Looking Statements Cert ...

"In the fourth quarter, we continued taking decisive actions to strengthen MasterBrand, even as demand remained soft and the trade environment became more complex," said Dave Banyard, President and Chief Executive Officer. "We are executing a coordinated, multifaceted tariff mitigation plan, flexing our manufacturing network to match demand, and maintaining a sharp focus on cost management and cash generation. As part of these efforts, we are implementing targeted cost actions in the first quarter that are ...

Core Insights - MasterBrand, Inc. is collaborating with Cambria Surfaces to showcase a feature kitchen at the Kitchen and Bath Industry Show (KBIS) from February 17-19, 2026, in Orlando, Florida [1][5] Company Overview - MasterBrand, Inc. is the largest manufacturer of residential cabinets in North America, offering a wide range of cabinetry products for kitchens, bathrooms, and other areas of the home [6] - The company has a distribution network of over 7,700 dealers, major retailers, and builders, employing over 13,000 associates across more than 20 manufacturing facilities [6] Product Highlights - The feature kitchen will highlight MasterBrand's cabinetry craftsmanship alongside Cambria's natural quartz surfaces, showcasing two new products from Omega Cabinetry: the Jonah micro-onlay slab door style and a new wall cabinet arch door modification [3] - The cabinets will be painted in a custom cool gray-blue color and will be paired with Cambria's latest designs, Traymore Bay™ and St. Isley™ [3] Design Elements - Additional design elements from Cambria include a full-range hood, a curved and vertical bullnose fluted island base, and floating shelves, emphasizing the adaptability and elegance of quartz in kitchen design [4] Collaboration Significance - The collaboration is seen as an opportunity to showcase premium products and demonstrate a shared commitment to quality and innovation in kitchen design [5] About Omega Cabinetry - Omega Cabinetry is known for its expert craftsmanship and offers a wide range of styles, sizes, species, and finishes, allowing for extensive customization options [7] - The brand emphasizes exceptional quality, innovative designs, and customer service [7] About Cambria - Cambria is a leading American-made producer of quartz surfaces, known for its stain-resistant, nonporous, and durable products, backed by a Full Lifetime Warranty [8]

Core Insights - Canyon Capital Advisors increased its stake in MasterBrand by 734,854 shares in Q3 2025, bringing its total position to 1.8 million shares valued at $23.7 million as of September 30, representing a 1.3% incremental shift in the fund's U.S. equity assets [2][7] - MasterBrand's stock price is currently at $11.20, reflecting a 35% decline over the past year, significantly underperforming the S&P 500's 13% gain during the same period [3][4] - The company reported a 2.7% decline in net sales to $698.9 million in Q3, with net income margin compressing to 2.6% and adjusted EBITDA margin falling by 160 basis points to 13% [9] Company Overview - MasterBrand is a leading provider of residential cabinetry products, employing over 10,000 people and having a strong presence in the North American market [5] - The company's strategy focuses on product breadth, operational efficiency, and strong relationships with builders and retailers, leveraging a broad portfolio and established distribution channels [5] Investment Thesis - Canyon's incremental buy suggests confidence in MasterBrand's potential for margin recovery and the positive impact of its upcoming merger with American Woodmark, despite current challenges from soft housing demand and tariff-related cost inflation [6][10] - If housing volumes recover and merger synergies materialize, the current depressed valuation of MasterBrand could present an upside opportunity for long-term investors [10]

Core Insights - Coliseum Capital Management has significantly increased its stake in MasterBrand, acquiring nearly 3.3 million shares in Q3, raising its total holdings to 7.6 million shares valued at $99.6 million, making it the fund's fourth-largest position [2][3][9] Company Overview - MasterBrand is a leading provider of residential cabinetry in North America, focusing on a diverse range of cabinetry solutions for kitchens, bathrooms, and other home spaces [5] - The company has a market capitalization of $1.4 billion and reported revenue of $2.8 billion with a net income of $82.7 million for the trailing twelve months [4] Financial Performance - MasterBrand's stock price is currently $11.09, reflecting a 35% decline over the past year, underperforming the S&P 500, which has increased by 14% during the same period [3] - The latest quarter showed a 2.7% decline in net sales to $698.9 million, with adjusted EBITDA margin decreasing from 14.6% to 13% due to lower volume and tariff pressures [6][8] - Despite these challenges, MasterBrand generated $108.8 million in operating cash flow year-to-date [9] Strategic Moves - The company is preparing to merge with American Woodmark, which management believes could enhance growth, drive innovation, and unlock long-term synergies [9] - Coliseum's investment strategy appears to align with a value-oriented approach, positioning for a potential cyclical recovery in homebuilding and remodeling [6]

Financial Performance - Net sales for the thirteen weeks ended September 28, 2025, were $698.9 million, a decline of $19.2 million or 2.7% compared to $718.1 million for the same period in 2024[122] - Gross profit decreased by $19.8 million or 8.3%, totaling $218.2 million for the thirteen weeks ended September 28, 2025[122] - Operating income fell to $41.7 million, down $15.9 million or 27.6% from $57.6 million in the prior year[122] - Net income for the period was $18.1 million, a decrease of $11.0 million or 37.8% compared to $29.1 million in the same quarter of 2024[122] - Net sales for the thirty-nine weeks ended September 28, 2025, were $2,090.1 million, an increase of $57.4 million or 2.8% compared to $2,032.7 million for the same period in 2024, driven primarily by the acquisition of Supreme[137] - Gross profit decreased by $13.6 million or 2.0% to $660.1 million, reflecting weaker overall end market demand[136] - Operating income for the thirty-nine weeks ended September 28, 2025, was $146.1 million, a decrease of $52.1 million or 26.3% compared to $198.2 million in 2024[136] - Net income fell to $68.7 million, down $43.2 million or 38.6% from $111.9 million in the prior year[136] Costs and Expenses - Cost of products sold increased by $0.6 million or 0.1% to $480.7 million, representing 68.8% of net sales[125] - Selling, general and administrative expenses rose by $1.2 million or 0.7% to $167.5 million, accounting for 24.0% of net sales[126] - Cost of products sold increased by $71.0 million or 5.2% to $1,430.0 million, representing 68.4% of net sales, compared to 66.9% in the prior year[139] - Selling, general and administrative expenses rose by $30.1 million or 6.7% to $480.9 million, influenced by the inclusion of Supreme and strategic investments[140] - Restructuring charges were $13.9 million, up from $11.0 million in the prior year, primarily related to severance and employee-related costs[141] Debt and Financing - The company refinanced its debt in June 2024, completing the offering of $700.0 million in Senior Notes to fund the acquisition of Supreme and refinance existing debt[148] - As of September 28, 2025, the company had $954.1 million in outstanding third-party borrowings, net of deferred financing fees[152] - Interest expense increased to $56.5 million for the thirty-nine weeks ended September 28, 2025, compared to $54.7 million in the prior year, attributed to a higher average outstanding debt balance[142] - The company is required to maintain a minimum interest coverage ratio of 3.00 to 1.00 and a net leverage ratio not exceeding 3.25 to 1.00 starting March 30, 2025[151] - The company was in compliance with all debt covenants under the 2024 Credit Agreement as of September 28, 2025[151] Cash Flow and Investments - Net cash provided by operating activities was $108.8 million for the first three quarters of 2025, down from $176.9 million in the same period of 2024[154] - Net cash used in investing activities decreased to $40.1 million in the first three quarters of 2025, compared to $541.9 million in the same period of 2024, primarily due to the acquisition of Supreme[155] - Net cash used in financing activities was $79.8 million in the first three quarters of 2025, a significant decrease from net cash provided of $331.3 million in the same period of 2024[156] Strategic Actions - The company acquired Dura Investment Holdings LLC on July 10, 2024, enhancing its portfolio in the premium cabinetry market[112] - A definitive agreement was announced on August 6, 2025, for a merger with American Woodmark, expected to close in early 2026[113] - The company is actively monitoring trade policies and tariffs, which could impact input costs and supply chain dynamics[114] - Restructuring charges decreased to $2.6 million in the latest quarter from $7.8 million in the same quarter of the previous year[129] Tax and Compliance - The effective tax rate for the thirty-nine weeks ended September 28, 2025, was 23.4%, a decrease from 24.6% in the prior year, primarily due to changes in foreign exclusions and lower state and local income taxes[144] Inventory and Receivables - In the first three quarters of 2025, accounts receivable increased by $26.6 million, while inventory declined by $4.4 million, reflecting improved inventory management[154] - Depreciation expense increased to $51.2 million in the first three quarters of 2025, compared to $39.5 million in the same period of 2024, due to the full-year inclusion of Supreme[154] - The company believes its cash and cash equivalents, along with operating cash flows and credit facilities, will be sufficient to meet working capital and capital expenditure needs[157] - The company amended its credit agreement to obtain a $375.0 million term loan to settle American Woodmark's existing indebtedness, contingent on the closing of the Merger[152]