Masonite(DOOR) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Unaudited Financial Statements Masonite's unaudited condensed consolidated financial statements detail financial position and performance for Q1 2024 Condensed Consolidated Statements of Income and Comprehensive Income Net income and EPS increased in Q1 2024 due to non-recurring other income, despite lower net sales and operating income | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended April 2, 2023 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :------------------------------------------------ | | Net sales | $668,339 | $725,984 | $(57,645) (-7.9%) | | Gross profit | $165,470 | $170,491 | $(5,021) (-2.9%) | | Operating income | $11,432 | $65,108 | $(53,676) (-82.5%) | | Other (income) expense, net | $(85,250) | $52 | $(85,302) (N/A) | | Net income attributable to Masonite | $61,055 | $38,491 | $22,564 (58.6%) | | Basic earnings per common share | $2.79 | $1.74 | $1.05 (60.3%) | | Diluted earnings per common share | $2.74 | $1.71 | $1.03 (60.2%) | - Other (income) expense, net, swung from an expense of $0.052 million in Q1 2023 to an income of $85.25 million in Q1 2024, primarily due to a termination fee received[16] Condensed Consolidated Balance Sheets Total assets and equity increased as of March 31, 2024, driven by higher cash, while total liabilities also rose | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change | | :-------------------------------- | :------------------------------ | :------------------------------- | :----------------------- | | Cash and cash equivalents | $230,441 | $137,414 | $93,027 (67.7%) | | Total current assets | $1,051,301 | $953,399 | $97,902 (10.3%) | | Total assets | $2,786,718 | $2,685,379 | $101,339 (3.8%) | | Total current liabilities | $425,673 | $394,584 | $31,089 (7.9%) | | Total liabilities | $1,866,664 | $1,826,051 | $40,613 (2.2%) | | Total equity | $920,054 | $859,328 | $60,726 (7.1%) | Condensed Consolidated Statements of Changes in Equity Total equity increased by $60.7 million in Q1 2024, primarily from net income, partially offset by other comprehensive loss | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended April 2, 2023 (in thousands) | | :--------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | | Total equity, beginning of period | $859,328 | $742,782 | | Net income attributable to Masonite | $61,055 | $38,491 | | Other comprehensive (loss) income attributable to Masonite, net of tax | $(4,543) | $9,103 | | Total equity, end of period | $920,054 | $780,724 | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased in Q1 2024, while investing and financing cash flows saw substantial changes | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended April 2, 2023 (in thousands) | Change (YoY) | | :--------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :------------------------------------------------ | | Net cash flow provided by operating activities | $133,322 | $56,347 | $76,975 (136.6%) | | Net cash flow used in investing activities | $(26,611) | $(372,952) | $346,341 (-92.9%) | | Net cash flow (used in) provided by financing activities | $(13,051) | $229,141 | $(242,192) (N/A) | | Increase (decrease) in cash, cash equivalents and restricted cash | $93,527 | $(86,609) | $180,136 (N/A) | | Cash, cash equivalents and restricted cash, at end of period | $242,867 | $222,312 | $20,555 (9.2%) | Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements 1. Business Overview and Significant Accounting Policies Masonite is a global leader in door solutions, operating 64 manufacturing locations, with financial statements adhering to GAAP and SEC standards - Masonite International Corporation is a leading global designer, manufacturer, marketer, and distributor of interior and exterior doors and door solutions, operating 64 manufacturing locations in seven countries[24] - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules for interim financial reporting[25] - The adoption of ASU 2021-08 and ASU 2023-07 had no material impact, and ASU 2023-09 is not expected to have a material impact[28][29][31] 2. Acquisitions and Divestitures Masonite is being acquired by Owens Corning for $133.00 per share, with the transaction expected to close by mid-2024, following 2023 acquisitions and a planned Q2 2024 divestiture - Masonite entered an Arrangement Agreement on February 8, 2024, to be acquired by Owens Corning for $133.00 per issued and outstanding share in an all-cash transaction, expected to close by mid-2024[32][35] - The company acquired Fleetwood Aluminum Products, LLC for approximately $279.5 million in October 2023, adding premium aluminum-framed glass door and window solutions[36] - The company acquired EPI Holdings, Inc. (Endura) for approximately $403.3 million in January 2023, enhancing its high-performance door frames and components[38] 2023 Acquisitions Net Sales and Net Income (in thousands) | Metric | Endura (in thousands) | Fleetwood (in thousands) | Total 2023 Acquisitions (in thousands) | | :------- | :-------------------- | :----------------------- | :----------------------------------- | | Net sales | $53,434 | $27,303 | $80,737 | | Net income attributable to Masonite | $3,440 | $1,682 | $5,122 | - Masonite entered an agreement on April 23, 2024, to sell its Architectural reporting segment for approximately $75 million, with an anticipated non-cash impairment charge of $90 million to $100 million in Q2 2024[45][109][110] 3. Accounts Receivable Accounts receivable, net, was $336.5 million as of March 31, 2024, with significant customer concentration and an AR Sales Program in place - Accounts receivable, net, was $336.5 million as of March 31, 2024, compared to $326.2 million as of December 31, 2023[18] - The ten largest customers accounted for 62.5% of total accounts receivable as of March 31, 2024, with The Home Depot, Inc. and Lowe's Companies, Inc. each exceeding 10%[46] - An accounts receivable sales program allows the company to transfer ownership of eligible trade accounts receivable to a third party, who assumes full collection risk without recourse[47] 4. Inventories Total inventories, net, decreased slightly to $383.9 million as of March 31, 2024, primarily due to reduced raw materials Inventories, Net (in thousands) | (In thousands) | March 31, 2024 | December 31, 2023 | | :------------- | :------------- | :---------------- | | Raw materials | $284,818 | $296,747 | | Finished goods | $112,647 | $106,919 | | Inventories, net | $383,866 | $391,199 | 5. Accrued Expenses Total accrued expenses decreased to $225.5 million as of March 31, 2024, mainly due to reductions in accrued payroll and rebates Accrued Expenses (in thousands) | (In thousands) | March 31, 2024 | December 31, 2023 | | :------------- | :------------- | :---------------- | | Accrued payroll | $61,581 | $81,004 | | Accrued rebates | $38,137 | $51,457 | | Other accruals | $87,001 | $57,420 | | Total accrued expenses | $225,500 | $240,476 | 6. Long-Term Debt Total debt decreased slightly to $1,078.0 million as of March 31, 2024, with all facilities in compliance with covenants Total Debt (in thousands) | (In thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------------------ | :------------- | :---------------- | | Senior unsecured notes, 3.50%, due 2030 | $375,000 | $375,000 | | Senior unsecured notes, 5.375%, due 2028 | $500,000 | $500,000 | | Term Loan Facility, SOFR plus 2.25%, due 2027 | $212,500 | $221,875 | | Total debt (including current portion) | $1,078,036 | $1,086,884 | - Interest expense, net, was $12.1 million for Q1 2024, a decrease from $15.4 million in the prior year period[52] - As of March 31, 2024, the company was in compliance with all covenants under its debt facilities[54][56][60][62] Scheduled Amortization Payments (in thousands) | Fiscal year | Scheduled Amortization Payments (in thousands) | | :---------- | :--------------------------------------------- | | 2024 (remainder) | $28,125 | | 2025 | $37,500 | | 2026 | $37,500 | | 2027 | $109,375 | | 2028 | $500,000 | | Thereafter | $375,000 | | Total | $1,087,500 | 7. Commitments and Contingencies Masonite is a defendant in Canadian antitrust class action proceedings, with a preliminary settlement of approximately $0.9 million reached in November 2023 - The company is a defendant in two antitrust class action proceedings in Canada alleging anticompetitive conduct, including price-fixing for interior molded doors[66][67] - A preliminary settlement agreement for approximately $0.9 million was entered into on November 3, 2023, to resolve the Canadian antitrust claims, with a charge recorded in SG&A[68] 8. Share Based Compensation Plans Share-based compensation expense increased to $6.9 million in Q1 2024, with $41.4 million in unrecognized expense remaining - Share based compensation expense was $6.9 million for Q1 2024, up from $6.1 million in the prior year period[69] - Total remaining unrecognized compensation expense related to share-based compensation was $41.4 million as of March 31, 2024, to be amortized over a weighted average remaining service period of 1.8 years[69] Stock Appreciation Rights (SARs) Activity (Three Months Ended March 31, 2024) | Metric | Stock Appreciation Rights | Aggregate Intrinsic Value (in thousands) | | :------------------------ | :------------------------ | :--------------------------------------- | | Outstanding, beginning of period | 199,838 | $2,365 | | Exercised | (2,211) | $11 | | Cancelled and forfeited | (892) | N/A | | Outstanding, end of period | 196,735 | $10,745 | Restricted Stock Units (RSUs) Activity (Three Months Ended March 31, 2024) | Metric | Total Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | | :------------------------ | :--------------------------------------- | :------------------------------------- | | Outstanding, beginning of period | 340,024 | $91.02 | | Granted | 187,840 | $127.64 | | Delivered | (108,335) | $93.54 | | Forfeited | (4,417) | $95.27 | | Outstanding, end of period | 407,079 | $107.15 | Performance-based Restricted Stock Units (PRSUs) Activity (Three Months Ended March 31, 2024) | Metric | Total Performance Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value | | :------------------------ | :------------------------------------------------- | :------------------------------------- | | Outstanding, beginning of period | 319,221 | $95.55 | | Delivered | (21,730) | $109.25 | | Forfeited | (15,553) | $108.72 | | Outstanding, end of period | 273,861 | $93.31 | 9. Restructuring Costs Restructuring costs decreased to $1.4 million in Q1 2024, as two plans optimize capacity and reduce workforce in Europe and North American Residential segments Total Restructuring Costs (in thousands) | (In thousands) | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :------------- | :-------------------------------- | :------------------------------- | | 2024 Plan | $961 | — | | 2022 Plan | $433 | $3,678 | | Total Restructuring Costs | $1,394 | $3,678 | - The 2024 Plan, initiated in December 2023, focuses on optimizing manufacturing capacity and reducing workforce in the Europe segment, with an expected $5 million to $8 million in additional charges throughout 2024[82] - The 2022 Plan, initiated in December 2022, targets similar optimizations in the North American Residential and Architectural segments, with an expected $2 million to $7 million in additional charges throughout 2024[83] 10. Income Taxes Income tax expense significantly increased to $23.3 million in Q1 2024, due to income mix across jurisdictions and a $1.1 million tax benefit from share-based awards - Income tax expense was $23.3 million for Q1 2024, compared to $11.4 million in the prior year period[16][85] - The increase is primarily due to the mix of earnings in foreign jurisdictions and a $1.1 million income tax benefit from the exercise and delivery of share-based awards in Q1 2024[85] 11. Earnings Per Share Basic and diluted EPS increased significantly in Q1 2024, reflecting higher net income, while the share repurchase program is suspended through February 8, 2025 Earnings Per Share (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :---------------------------------------- | :-------------------------------- | :------------------------------- | | Net income attributable to Masonite | $61,055 | $38,491 | | Basic earnings per common share | $2.79 | $1.74 | | Diluted earnings per common share | $2.74 | $1.71 | - The share repurchase program is suspended through February 8, 2025, due to restrictions under the Arrangement Agreement with Owens Corning[89] 12. Segment Information All segments experienced decreased net sales in Q1 2024, leading to a consolidated Adjusted EBITDA decline of 8.5% YoY, with Europe showing the largest percentage decrease Net Sales to External Customers by Segment (in thousands) | Segment | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | Change (YoY) | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------- | | North American Residential | $530,643 | $569,039 | $(38,396) (-6.7%) | | Europe | $58,392 | $63,694 | $(5,302) (-8.3%) | | Architectural | $75,539 | $87,902 | $(12,363) (-14.1%) | | Total External Net Sales | $668,339 | $725,984 | $(57,645) (-7.9%) | Adjusted EBITDA by Segment (in thousands) | Segment | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | Change (YoY) | | :---------------------- | :----------------------------------- | :----------------------------------- | :----------------------- | | North American Residential | $106,801 | $107,881 | $(1,080) (-1.0%) | | Europe | $1,941 | $5,151 | $(3,210) (-62.3%) | | Architectural | $4,816 | $5,350 | $(534) (-10.0%) | | Corporate & Other | $(16,458) | $(12,217) | $(4,241) (34.7%) | | Consolidated Adjusted EBITDA | $97,100 | $106,165 | $(9,065) (-8.5%) | - Adjusted EBITDA reconciliation for Q1 2024 includes $85.25 million in other income (primarily the PGTI termination fee) and $37.8 million in acquisition, retention, and due diligence related costs[97][98] 13. Accumulated Other Comprehensive Loss and Other Comprehensive (Loss) Income Accumulated other comprehensive loss increased to $(124.7) million in Q1 2024, primarily due to $(4.9) million in foreign currency translation losses Accumulated Other Comprehensive Loss (in thousands) | (In thousands) | March 31, 2024 | April 2, 2023 | | :------------------------------------------ | :------------- | :------------ | | Accumulated foreign currency translation losses, beginning of period | $(113,023) | $(132,001) | | Foreign currency translation (loss) gain | $(4,907) | $8,949 | | Accumulated other comprehensive loss, end of period | $(124,735) | $(133,121) | - Foreign currency translation losses of $4.9 million in Q1 2024 were primarily driven by the weakening of the Canadian dollar, British pound sterling, and Euro in comparison to the U.S. dollar[101] 14. Supplemental Cash Flow Information This section provides supplemental cash flow details, including interest and income taxes paid, and notes the receipt of an $84.0 million termination fee Supplemental Cash Flow Information (in thousands) | (In thousands) | Three Months Ended March 31, 2024 | Three Months Ended April 2, 2023 | | :---------------------------------------- | :-------------------------------- | :------------------------------- | | Interest paid | $25,356 | $23,872 | | Income taxes paid | $5,185 | $16,267 | | Right-of-use assets acquired under operating leases | $43,414 | $11,374 | - Masonite received an $84.0 million cash termination fee in Q1 2024 due to the termination of the merger agreement with PGT Innovations, recognized as other income[104] 15. Fair Value of Financial Instruments Carrying amounts of short-term financial instruments and the Term Loan Facility approximate fair values, while senior unsecured notes use Level 2 market quotes - The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, income taxes receivable, accounts payable, accrued expenses, income taxes payable, and the Term Loan Facility approximate their fair values[106] Fair Value vs. Carrying Value of Senior Notes (March 31, 2024, in thousands) | Debt Instrument | Fair Value | Carrying Value | | :-------------------------------- | :--------- | :------------- | | 3.50% senior unsecured notes due 2030 | $332,194 | $371,814 | | 5.375% senior unsecured notes due 2028 | $501,230 | $496,794 | - Fair value estimates for senior notes are based on market quotes and categorized as Level 2 valuation inputs[107] 16. Subsequent Event Masonite plans to sell its Architectural segment for approximately $75 million, anticipating a $90-$100 million impairment charge, and Owens Corning commenced a tender offer for Masonite's 2028 Notes - On April 23, 2024, Masonite entered an agreement to sell its Architectural reporting segment for approximately $75 million, expected to be completed in Q2 2024[109] - Masonite anticipates recording a net non-cash impairment charge in the preliminary range of $90 million to $100 million during Q2 2024 as a result of the Architectural segment disposition[110] - Owens Corning commenced a tender offer for Masonite's 2028 Notes, with $441.4 million (88.27%) tendered by April 26, 2024, and a Supplemental Indenture executed on April 29, 2024[111][112][113] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Masonite's Q1 2024 financial condition and results, covering business overview, key performance factors, detailed segment results, and liquidity analysis Overview Masonite is a leading global door solutions provider, operating 64 facilities, experiencing lower end market demand and negative macroeconomic impacts in Q1 2024 - Masonite is a leading global designer, manufacturer, marketer, and distributor of interior and exterior doors and door systems for residential and non-residential building construction markets[118] - The company operates 64 manufacturing and distribution facilities in North America, South America, Europe, and Asia[119] - In Q1 2024, net sales were $530.6 million (79.4%) from North American Residential, $58.4 million (8.7%) from Europe, and $75.5 million (11.3%) from Architectural segments[120] - The first quarter experienced lower end market demand and negative impacts from macroeconomic conditions, such as rising interest rates and unfavorable consumer sentiment, leading to decreased base volumes[121] Arrangement Agreement with Owens Corning Masonite is being acquired by Owens Corning for $133.00 per share in an all-cash transaction, expected to close by mid-2024 after shareholder approval and HSR Act waiting period expiration - Masonite entered an Arrangement Agreement on February 8, 2024, to be acquired by Owens Corning for $133.00 per share in an all-cash transaction, making the company a wholly owned subsidiary of Owens Corning[124][125] - The transaction is expected to close by mid-2024, following shareholder approval on April 25, 2024, and the expiration of the HSR Act waiting period on April 26, 2024[127] - Termination fees are stipulated: Masonite would pay $75.0 million under certain conditions, while Owens Corning would pay $150.0 million under others, such as a permanent injunction from Competition Laws[126] Key Factors Affecting Our Results of Operations Masonite's operational results are influenced by product demand, competitive pricing, customer relationships, ongoing restructuring, and inflation, with active portfolio management through acquisitions and divestitures Product Demand Product demand is influenced by global economic conditions, including inflation, interest rates, and capital availability, as well as residential and architectural construction trends - Product demand is influenced by global economic conditions such as inflation, interest rates, availability of capital, consumer spending, and energy costs[128][130] - Trends in residential new construction, repair, renovation, remodeling, and architectural building construction directly impact financial performance[130] Product Pricing and Mix The highly competitive building products industry pressures sales prices, and a shift towards lower-margin products could adversely affect future profitability - The building products industry is highly competitive, leading to pressure on sales prices[131] - Changes in consumer preferences, particularly towards lower-margin products, could reduce future profitability[131] Business Wins and Losses Customer concentration and periodic product line reviews by major customers present risks of business wins and losses, impacting sales and margin maintenance - Sales from significant customers may not continue at historical levels, and periodic product line reviews can lead to business wins or losses[132] - Competitive bidding processes may hinder the ability to increase or maintain product margins[132] Organizational Restructuring Masonite is implementing two restructuring plans to optimize manufacturing capacity and reduce workforce in Europe and North American Residential segments, with associated charges continuing throughout 2024 - The 2024 Plan, initiated in December 2023, focuses on optimizing manufacturing capacity and reducing workforce in the Europe segment, with associated severance and closure charges continuing throughout 2024[134] - The 2022 Plan, initiated in December 2022, targets similar improvements in the North American Residential and Architectural segments, with costs continuing throughout 2024[135][137] Inflation While material and supply chain cost pressures are expected to moderate in 2024, rising interest rates may impact consumer purchasing power, affecting profitability if costs cannot be passed on - Macroeconomic pressures on wood, resins, and other key product categories, as well as supply chain costs, are expected to moderate throughout 2024[138] - Rising interest rates may impact the ability of end consumers to purchase products, and profitability could be adversely affected if costs cannot be passed on or mitigated[138] Acquisitions and Divestitures Masonite strategically optimizes its portfolio through acquisitions and divestitures, including an $84.0 million termination fee, 2023 acquisitions, and a planned Q2 2024 Architectural segment divestiture - Masonite received an $84.0 million termination fee in January 2024 due to the termination of the merger agreement with PGT Innovations, Inc[140] - In October 2023, the company acquired Fleetwood Aluminum Products, LLC for approximately $279.5 million, adding premium glass door and window solutions[142] - In January 2023, the company acquired EPI Holdings, Inc. (Endura) for approximately $403.3 million, enhancing its high-performance door frames and components[142] - An agreement was entered into on April 23, 2024, to sell the Architectural reporting segment for approximately $75 million, with completion expected in Q2 2024[142] Results of Operations This section details Masonite's Q1 2024 financial performance, covering net sales, cost of goods sold, SG&A, restructuring costs, interest, other income/expense, income taxes, and segment-specific Adjusted EBITDA Three Months Ended March 31, 2024, Compared with Three Months Ended April 2, 2023 Consolidated net sales decreased by 7.9% YoY, while gross profit percentage improved, but operating income significantly declined due to higher SG&A expenses despite a large non-recurring other income - Net sales decreased by $57.7 million (7.9%) to $668.3 million in Q1 2024 compared to Q1 2023[144] - The Fleetwood acquisition increased net sales by $27.3 million (3.8%), while lower base volumes decreased net sales by $72.8 million (10.0%)[144] - Gross profit as a percentage of net sales improved to 24.8% in Q1 2024 from 23.5% in Q1 2023[143] - Selling, general and administration (SG&A) expenses increased by $50.9 million (50.1%) to $152.6 million, primarily due to $36.5 million in acquisition and due diligence related costs[155] - Operating income decreased significantly by $53.7 million (82.5%) to $11.4 million[143] - Other (income) expense, net, was $85.3 million of income in Q1 2024, primarily due to the PGTI termination fee[158] Liquidity and Capital Resources Masonite's liquidity is supported by operating cash flows, its ABL Facility, AR Sales Program, and existing cash, with significant changes in cash flows from operating, investing, and financing activities in Q1 2024 - Principal sources of liquidity include cash flows from operating activities, borrowings under the ABL Facility, an accounts receivable sales program, and existing cash balance[168] - As of March 31, 2024, the company had $230.4 million in cash and cash equivalents, $249.1 million availability under its ABL Facility, and $27.9 million availability under its AR Sales Program[169] - Net cash flow provided by operating activities increased by $77.0 million to $133.3 million in Q1 2024[170] - Net cash flow used in investing activities decreased by $346.4 million to $26.6 million in Q1 2024, primarily due to the absence of large acquisitions[171] - Net cash flow used in financing activities was $13.1 million in Q1 2024, a $242.2 million increase in cash used compared to the prior year, driven by reduced debt-related transactions and common share repurchases[172] - The share repurchase program is suspended through February 8, 2025, due to the Arrangement Agreement with Owens Corning, with $200.3 million still available for repurchase[176] Changes in Accounting Standards and Policies This section refers to Note 1 for details on accounting standard changes, indicating no material changes other than those disclosed - Changes in accounting standards and policies are discussed in Note 1, with no material changes from those disclosed in the fiscal year 2023 audited consolidated financial statements[27][189] Critical Accounting Policies and Estimates This section refers to the Annual Report for critical accounting policies and estimates, noting no material changes from prior disclosures - There have been no material changes to the critical accounting policies and estimates described in the Annual Report on Form 10-K for the year ended December 31, 2023[191] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the Annual Report for market risk disclosures, stating no material changes have occurred since the last disclosure - There have been no material changes to the quantitative and qualitative disclosures about market risk as provided in the Annual Report[192] Item 4. Controls and Procedures Disclosure controls were ineffective as of March 31, 2024, due to a material weakness in business combination internal controls, though financial statements are fairly presented Disclosure Controls and Procedures Disclosure controls were ineffective as of March 31, 2024, due to a material weakness in business combination internal controls, but financial statements are fairly presented - Disclosure controls and procedures were not effective as of March 31, 2024, due to a material weakness in internal control over financial reporting related to business combinations[194] - The material weakness did not result in any material misstatements to the condensed consolidated financial statements, and management believes the statements fairly present the company's financial position[195] - Management is actively working to remediate the identified material weakness by implementing business combination controls[196] Changes in Internal Control over Financial Reporting No material changes in internal control over financial reporting occurred during the quarter, other than the previously detailed material weakness - Other than the material weakness detailed in 'Disclosure Controls and Procedures', there have been no other material changes in internal control over financial reporting during the fiscal quarter[197] PART II – OTHER INFORMATION Item 1. Legal Proceedings This section incorporates legal proceedings information from Note 7 of the Condensed Consolidated Financial Statements, including Canadian antitrust class action details - Information regarding legal proceedings is incorporated by reference from Note 7. Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements[200] Item 1A. Risk Factors This section refers readers to the Annual Report for risk factors, stating no material changes have occurred since the last disclosure - There have been no material changes from the risk factors disclosed in the Annual Report on Form 10-K[201] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or applicable use of proceeds occurred, and the share repurchase program is suspended with $200.3 million remaining available (a) Unregistered Sale of Equity Securities. No unregistered sales of equity securities occurred during the period - No unregistered sales of equity securities[202] (b) Use of Proceeds. This item is not applicable for the reporting period - Not applicable[203] (c) Repurchases of Our Equity Securities. Masonite did not repurchase common shares in Q1 2024, and the share repurchase program is suspended through February 8, 2025, with $200.3 million still available - No common shares were repurchased in the open market during the three months ended March 31, 2024[204] - The share repurchase program is suspended through February 8, 2025, due to restrictions under the Arrangement Agreement with Owens Corning[206] - As of March 31, 2024, $200.3 million was available for repurchase under the existing programs[206] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[207] Item 4. Mine Safety Disclosures This item is not applicable to Masonite International Corporation - Not applicable[208] Item 5. Other Information This section confirms no changes in Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or Section 16 officers during the quarter (c) Trading Plans No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024[209] Item 6. Exhibits This section lists all exhibits filed or furnished as part of the report, including various agreements, certifications, and interactive data files - Exhibits include Securities Purchase Agreements for Fleetwood and Endura, and the Arrangement Agreement with Owens Corning[210] - Certifications of Periodic Report by Chief Executive Officer and Chief Financial Officer under Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 are included[210] - Interactive Data Files (Inline XBRL) for financial statements and cover page are furnished[210]