MasterBrand(MBC) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2025 were $698.9 million, a decrease of 2.7% compared to Q3 2024, attributed to a mid- to high single-digit market decline[4] - Gross profit was $218.2 million, with a gross profit margin of 31.2%, down 190 basis points year-over-year due to lower volume and unfavorable fixed cost leverage[5] - Net income was $18.1 million, resulting in a net income margin of 2.6%, a decrease of 150 basis points from the prior year[6] - Adjusted EBITDA was $90.6 million, with an adjusted EBITDA margin of 13.0%, down 160 basis points year-over-year[7] - Diluted earnings per share were $0.14, compared to $0.22 in Q3 2024; adjusted diluted earnings per share were $0.33, down from $0.40[8] - Operating income for the 13 weeks ended September 28, 2025, was $41.7 million, a decline of 27.7% from $57.6 million in 2024[29] - Net income for the 39 weeks ended September 28, 2025, was $68.7 million, down 38.5% from $111.9 million in 2024[35] - Adjusted EBITDA for the 39 weeks ended September 28, 2025, was $263.1 million, compared to $289.0 million in 2024, reflecting a margin of 12.6% versus 14.2%[35] - Diluted earnings per share (EPS) for the 13 weeks ended September 28, 2025, was $0.14, down from $0.22 in 2024[32] - The company reported a net income margin of 3.3% for the 39 weeks ended September 28, 2025, down from 5.5% in 2024[35] Debt and Cash Flow - As of September 28, 2025, total debt was $954.1 million, with a net debt to adjusted EBITDA ratio of 2.5x[9] - Free cash flow for the thirty-nine weeks ended September 28, 2025, was $65.0 million, down from $142.3 million in the prior year[9] - Long-term debt decreased to $954.1 million from $1,062.3 million, a reduction of 10.2%[47] - Net debt to adjusted EBITDA ratio remained stable at 2.5x for both periods reported[47] - Cash and cash equivalents at the end of the period were $114.8 million, up from $108.4 million year-over-year[49] - The company reported a net cash provided by operating activities of $108.8 million, down from $176.9 million in the prior year[49] Future Outlook - The company expects organic net sales performance to outperform the underlying market, driven by new products and previously implemented price actions[10] - The financial outlook for 2025 includes adjusted EBITDA in the range of $315 to $335 million, with an adjusted EBITDA margin of approximately 11.5% to 12.0%[13] - The anticipated benefits of the pending acquisition may be affected by competition and the ability to integrate operations successfully[25] Mergers and Acquisitions - The company is focused on closing the merger with American Woodmark to drive growth and innovation[3] - Acquisition-related costs for the 39 weeks ended September 28, 2025, totaled $18.7 million, associated with the pending acquisition of American Woodmark[36] Restructuring and Capital Expenditures - The company incurred restructuring charges of $2.6 million for the 13 weeks ended September 28, 2025, compared to $7.8 million in 2024[32] - Capital expenditures for the 39 weeks ended September 28, 2025, were $43.8 million, an increase from $34.6 million in the previous year[49] Asset Management - Total assets increased to $3,001.9 million as of September 28, 2025, compared to $2,960.2 million a year earlier, representing a growth of 1.4%[47] - Total current liabilities decreased slightly to $369.9 million from $378.4 million[47]