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 ...

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 Data and Key Metrics Changes - The company reported net sales of $699 million for Q3 2025, a 3% decrease compared to the same period last year, reflecting mid to high single-digit end-market contraction [5][20] - Adjusted EBITDA was $91 million, down from $105 million in Q3 2024, resulting in an adjusted EBITDA margin of 13%, a decline of 160 basis points year-over-year [6][24] - Free cash flow for the quarter was $40 million, down from $65 million in the same period last year, attributed to lower net cash from operating activities and higher capital expenditures [7][26] Business Line Data and Key Metrics Changes - Demand in retail and dealer channels remained soft, particularly in stock cabinetry, while semi-custom offerings performed better as consumers sought value [6][10] - The repair and remodel business was down mid to high single digits year-over-year, consistent with broader market trends, particularly in entry-price stock cabinetry [9][10] - Mid-tier semi-custom products showed stronger performance, benefiting from consumers trading down from premium offerings [10] Market Data and Key Metrics Changes - In new construction, single-family housing starts were down mid to high single digits, but the company's new construction sales outperformed the broader market [8][9] - Canadian market performance was down mid-single digits, consistent with expectations, due to housing affordability challenges [10] - Overall, the company expects the addressable market in 2025 to be down mid to high single digits year-over-year [33] Company Strategy and Development Direction - The company is focused on integration initiatives and proactive management of trade dynamics to strengthen its foundation for growth [5][14] - The merger with American Woodmark is progressing as expected, with integration planning underway and anticipated cost synergies of approximately $90 million by the end of year three post-close [15][16] - Continuous improvement programs are driving measurable savings and are essential for managing through near-term softness while positioning for long-term margin expansion [17] Management Comments on Operating Environment and Future Outlook - Management noted that demand across both new construction and repair and remodel markets is expected to remain subdued through next year, with gradual improvement anticipated in late fiscal 2026 or early fiscal 2027 [11] - The evolving tariff landscape remains a major focus, with contingency plans in place to mitigate impacts [12][13] - The company remains confident in its ability to navigate challenges and is focused on maintaining operational discipline and customer service [36] Other Important Information - The company ended the quarter with $114.8 million in cash and $461.9 million in liquidity available under its revolving credit facility [24] - Net debt at the end of the quarter was $839.3 million, with a net debt-to-adjusted EBITDA leverage ratio of 2.5 times [25] - The company is committed to generating free cash flow in excess of net income for the full year [27] Q&A Session Summary Question: Reason for sales guidance revision for the full year - Management indicated that the revision to flat sales is due to better-than-expected performance in Q3 and the impact of prior pricing actions [39] Question: Challenges in realizing pricing and demand destruction - Management acknowledged challenges in pricing due to tariffs, particularly on products sourced from Mexico and Canada, but emphasized a comprehensive mitigation strategy [41][42] Question: Phasing of unmitigated exposure moving into next year - Management noted that the cost implications of tariffs will begin to materialize in Q4 and will spread throughout the year as mitigation efforts take time [45]

MasterBrand Overview - MasterBrand is the 1 North American residential cabinet manufacturer with $2.7 billion in 2024 net sales[6,7] - Approximately 60% of net sales are attributed to R&R (Repair and Remodel)[7] - The company has a dealer network of over 7,700 and employs over 13,000 people across 20+ manufacturing facilities[7] - The company's 2024 Adjusted EBITDA was $364 million[7] Q3 2025 Financial Performance - Net sales for Q3 2025 were $698.9 million, a decrease of 2.7% compared to $718.1 million in Q3 2024[30] - Gross profit decreased by 8.3% from $238.0 million in Q3 2024 to $218.2 million in Q3 2025[30] - Net income decreased by 37.8% from $29.1 million in Q3 2024 to $18.1 million in Q3 2025[30] - Adjusted EBITDA decreased by 13.3% from $104.5 million in Q3 2024 to $90.6 million in Q3 2025[30] - Diluted EPS (GAAP) decreased by 36.4% from $0.22 in Q3 2024 to $0.14 in Q3 2025[30] - Free cash flow (YTD) decreased by 54.3% from $142.3 million in 2024 to $65.0 million in 2025[30] Full Year 2025 Outlook - The company anticipates a high to mid-single-digit percentage decline in the North American cabinets market[31] - The company expects net sales to be approximately flat[31] - The company projects adjusted EBITDA to be between $315 million and $335 million, with an adjusted EBITDA margin of approximately 11.5%-12.0%[31] - The company forecasts adjusted diluted EPS to be between $1.01 and $1.13[31] Long-Term Financial Targets - The company aims for a 3-5% CAGR in the North American Cabinets Market[36] - The company targets a 4-6% CAGR in Net Sales[36] - The company aims for an adjusted EBITDA margin of approximately 16%-18%[36] Additional Information - Strategic transformation initiatives have created >$180 million of cumulative annual savings since 2019, with another $50 million of incremental savings anticipated in 2025[27] - The company expects annual run-rate cost synergies of $90 million by the end of year three, following the close of the American Woodmark merger[29]

Financial Performance - Q2 2025 - Net sales increased to $730.9 million, an 8% increase compared to $676.5 million in Q2 2024 [33] - Gross profit reached $239.7 million, a 3.8% increase from $231.0 million in Q2 2024, but gross profit margin decreased by 130 bps to 32.8% [33] - Net income decreased by 17.7% to $37.3 million, compared to $45.3 million in Q2 2024, with net income margin declining by 160 bps to 5.1% [33] - Adjusted EBITDA increased slightly by 0.3% to $105.4 million, compared to $105.1 million in Q2 2024, but adjusted EBITDA margin decreased by 110 bps to 14.4% [33] Full Year 2025 Outlook - The company anticipates a low single-digit percentage decline in net sales for the full year 2025 [35] - Adjusted EBITDA is projected to be between $315 million and $365 million [35] - Adjusted EBITDA margin is expected to be approximately 12.0%-13.5% [35] - Adjusted diluted EPS is forecasted to be between $1.03 and $1.32 [35] Long-Term Financial Targets - The company aims for a 4-6% CAGR in net sales [40] - The company targets an adjusted EBITDA margin of approximately 16%-18% [40]