MasterBrand(MBC) - 2025 Q2 - Quarterly Results

Merger Details - The merger between MasterBrand, Inc. and American Woodmark Corporation is set to occur, with the latter continuing as the surviving corporation[21] - The merger is intended to qualify as a "reorganization" for U.S. federal income tax purposes under Section 368(a) of the Code[23] - The Company Board has unanimously approved the merger agreement and recommended it to the Company stockholders[23] - The Parent Board has also unanimously approved the merger and directed that the Parent Stock Issuance be submitted for approval[23] - The merger will be consummated remotely via electronic exchange of documents and signature pages[25] - The effective time of the merger will result in Merger Sub ceasing to exist, with the Company becoming a wholly owned subsidiary of Parent[27] - The merger will become effective within 15 days following the filing of the Articles of Merger with the SCC[28] - Each share of Company Common Stock will be converted into the right to receive shares of Parent Common Stock based on the Exchange Ratio, which may be adjusted[41] - The Parent Board will consist of eleven directors, with eight designated by Parent and three by the Company[35] - R. David Banyard, Jr. will continue as the Chief Executive Officer and President of Parent after the Effective Time[38] - The articles of incorporation and bylaws of the Company will be amended to reflect the name "American Woodmark Corporation" for the Surviving Corporation[31] - No appraisal rights will be available to holders of Company Common Stock in connection with the merger[46] - The Exchange Agent will handle the exchange of Company Common Stock for Parent Common Stock and any cash distributions[47] - Holders of Converted Shares will receive cash in lieu of fractional shares based on the proceeds from the sale of such fractional shares[45] - The merger will not affect the name and NYSE ticker symbol of Parent, which will remain "MasterBrand, Inc." and "MBC" respectively[33] - The merger will have effects as outlined in Section 13.1-721 of the VSCA, impacting the capital stock of both the Company and Merger Sub[29] - No dividends or distributions on shares of Parent Common Stock will be paid to holders of Company Common Stock until the surrender of their Certificates[53] - The Merger Consideration issued will satisfy all rights pertaining to Converted Shares of Company Common Stock, except for the right to receive dividends[55] - Any undistributed portion of the Exchange Fund after 12 months will be delivered to Parent, and former holders of Company Common Stock will look only to Parent for payment[57] - The Exchange Agent will invest cash in the Exchange Fund in short-term obligations, and any investment income will belong solely to Parent[60] - Company Stock Options will be assumed by Parent and converted into Assumed Stock Options based on the Exchange Ratio[64] - Company RSUs will convert into the right to receive shares of Parent Common Stock based on the Exchange Ratio, with cash for fractional shares[66] - Company PSUs will convert into Assumed PSUs with the same terms, adjusted for performance metrics and the Exchange Ratio[68] - Company RSTUs will be converted into cash-settled restricted stock tracking units based on the Exchange Ratio[70] - The Company Board will take necessary actions to approve and effectuate the transactions contemplated in the agreement[71] Company Financials - The Company has 40,000,000 authorized shares of Common Stock, with 14,558,035 shares issued and outstanding as of August 1, 2025[81] - There are no shares of Preferred Stock issued or outstanding, and 551,531 shares of Common Stock are reserved for issuance under outstanding awards[82] - The Company has not granted or issued any Equity Awards since the Capitalization Date, except for those related to the vesting or exercise of existing awards[82] - All issued shares of Common Stock are fully paid, non-assessable, and free of preemptive rights[82] - The Company Board unanimously approved the Agreement and the Plan of Merger, recommending adoption to the Company Stockholders[89] - The Company is not subject to any anti-takeover provisions or rights plans that would affect the Merger[90] - The Company has all necessary corporate power to execute and deliver the Agreement and consummate the transactions contemplated[87] - The Company has no outstanding subscriptions, options, or warrants requiring the purchase or issuance of any Equity Securities[85] - The Company is in good standing in all jurisdictions where it operates, with no material adverse effects expected from its current operations[77] - The Company has filed a registration statement for shares subject to Assumed Equity Awards post-Merger[72] - The Company has filed all required SEC documents since April 30, 2023, ensuring compliance with the Securities Act and the Exchange Act[97] - The consolidated financial statements were prepared in accordance with GAAP and present fairly the Company's consolidated financial position and results of operations[99] - The Company has not made any material changes in its accounting methods since April 30, 2023, and there are no unresolved comments from the SEC[99] - The Company is in compliance with the Sarbanes-Oxley Act and NASDAQ corporate governance rules[100] - The Company maintains an effective system of internal control over financial reporting, ensuring reliability in financial statements[101] - No material liabilities have been identified that are not reflected in the most recent audited balance sheet[107] - The Company has conducted its business in the ordinary course since the last balance sheet date, with no adverse effects expected[110] - There are no pending or threatened actions that would materially affect the Company[111] - The Company holds all necessary permits for lawful business conduct, which are valid and in full force[113] Compliance and Legal Matters - The Company has implemented policies to ensure compliance with Anti-Corruption Laws and has not faced any violations since December 31, 2019[116] - Each Company Benefit Plan complies with applicable laws and has been administered in accordance with its terms, with no adverse effects expected[121] - No Company Entity has maintained or contributed to any multiemployer plan or multiple employer plan[122] - There are no pending or threatened actions against any Company Benefit Plan that could result in material liability[125] - No Company Benefit Plan provides retiree or post-employment medical or other welfare benefits[127] - Each Company Entity is in material compliance with all applicable employment laws and practices[135] - Since December 31, 2022, there have been no labor union organizing activities or material labor disputes affecting any Company Entity[133][134] - Each Company Entity holds all necessary Environmental Permits and is in compliance with Environmental Laws[140] - Each Company Entity has timely filed all required tax returns and paid all material taxes in full[148] - There are no claims or investigations pending regarding material taxes of any Company Entity[150] - No Company Entity has been a member of any affiliated group for tax purposes since January 1, 2020[151] - Each Company Entity has timely paid all material amounts required for taxes and complied with applicable laws[153] - No Company Entity has waived or extended any statute of limitations regarding the collection of material taxes since 2020[154] - There are no material actions pending against any Company Entity alleging infringement of intellectual property[167] IT and Security - The Company IT Assets are sufficient for the conduct of the businesses and have maintained a reasonable security program[170] - No Company Entity has distributed stock of another person in a transaction intended to be governed by specific sections of the Code since December 31, 2022[152] - Each Company Material Contract is valid and binding, with no breaches or defaults reported since the Company Balance Sheet Date[165] - The Company Entities have not been subject to tax in any country other than their country of incorporation[155] - The Company has not received any written notice of significant concerns from Material Customers or Suppliers regarding their relationships[165] - The Company has implemented disaster recovery and incident response plans to protect its IT assets and confidential information[170] - Since December 31, 2022, the Company has been in compliance with all applicable Privacy Requirements, with no claims or investigations reported[172] - There have been no breaches of information security or unauthorized access to Company IT Assets since December 31, 2022[173] - All Company insurance policies are in full force, with premiums paid and no breaches or defaults reported[176] - Since December 31, 2022, there have been no material product recalls or significant warranty claims against the Company[178] Financial Advisory - The Company has not engaged any financial advisor or incurred liabilities for financial advisory fees in connection with the transactions contemplated[181] - The Company Board has received a fairness opinion from its financial advisor regarding the Exchange Ratio[182] Parent Company Information - As of the close of business on the Capitalization Date, there were 131,829,964 shares of Parent Common Stock issued and outstanding[193] - Parent has not granted or issued any Parent Equity Awards since the close of business on the Capitalization Date[193] - Parent owns all outstanding Equity Securities in each Parent Subsidiary, free and clear of any liens[197] - Merger Sub has not conducted any business or operations other than in connection with the Agreement and the contemplated transactions[198] - Parent, Merger Sub, and their subsidiaries do not own any equity securities of the Company or hold rights to acquire or vote any equity securities[199] - None of Parent, Merger Sub, or their affiliates have been an "interested shareholder" of the Company in the last three years[199]