10q10k10q10k.net

What changed in MasterBrand, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of MasterBrand, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+283 added−316 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-19)

Top changes in MasterBrand, Inc.'s 2025 10-K

283 paragraphs added · 316 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

36 edited+9 added−5 removed41 unchanged
Biggest changeWe intend to continue to distinguish this advantaged platform by capitalizing on the powerful demographic trends that we expect will drive repair and remodel (“R&R”) and new construction growth for years to come. We believe the combination of our leading market position and size, strategic vision, strong partnerships and commitment to continuous improvement will drive our future growth.
Biggest changeWe believe we are only beginning to unlock the potential value of our unique combination of scale, operational agility, data-first operating model and strong continuous improvement culture. We intend to continue to distinguish this advantaged platform by capitalizing on the powerful demographic trends that we expect will drive repair and remodel (“R&R”) and new construction growth for years to come.
Environmental Matters We endeavor to be a leader in environmental compliance and sustainability. Since 2018, we have partnered with the National Forest Foundation (“NFF”) tree planting campaign. NFF works with U.S. Forest Service to promote the health and public enjoyment of our 193-million-acre National Forest System.
Environmental Matters We endeavor to be a leader in environmental compliance and sustainability. Since 2018, we have partnered with the National Forest Foundation (“NFF”) tree planting campaign. NFF works with the U.S. Forest Service to promote the health and public enjoyment of our 193-million-acre National Forest System.
We regularly monitor the landscape for attractive opportunities that could allow us to leverage our operations and strong customer relationships, expand our portfolio of products and expand into new categories and geographies. We expect to drive long-term stockholder value by utilizing a disciplined process to identify, evaluate and execute strategic acquisitions and integrate acquired businesses.
We regularly monitor the landscape for attractive opportunities that could allow us to leverage our operations and strong customer relationships, expand our portfolio of products and expand into new categories and geographies. We expect to drive long-term shareholder value by utilizing a disciplined process to identify, evaluate and execute strategic acquisitions and integrate acquired businesses.
You may automatically receive email alerts and other information about the Company by signing up for email alerts at masterbrand.com/investors. The information contained on or accessible through the Company’s website is not incorporated by reference in this Annual Report on Form 10-K and should not be considered a part of this report. 7 Table of Contents
You may automatically receive email alerts and other information about the Company by signing up for email alerts at masterbrand.com/investors. The information contained on or accessible through the Company’s website is not incorporated by reference in this Annual Report on Form 10-K and should not be considered a part of this report. 8 Table of Contents
Accordingly, our right, and thus the rights of our creditors (including holders of debt and other obligations) and stockholders to participate in any distribution of the assets or earnings of any subsidiary is subject to the claims of creditors of the subsidiary, except to the extent that our claims as a creditor of such subsidiary may be recognized, in which event our claims may in certain circumstances be subordinate to certain claims of others.
Accordingly, our right, and thus the rights of our creditors (including holders of debt and other obligations) and shareholders to participate in any distribution of the assets or earnings of any subsidiary is subject to the claims of creditors of the subsidiary, except to the extent that our claims as a creditor of such subsidiary may be recognized, in which event our claims may in certain circumstances be subordinate to certain claims of others.
On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, the parent company of Supreme Cabinetry Brands, Inc. (“Supreme”), a cabinetry company. Supreme is a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products.
On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, the parent company of Supreme Cabinetry Brands, Inc. (“Supreme”), a cabinetry company. Supreme was a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products.
Our products are sold throughout the United States and Canada to the remodeling and new construction markets through three primary channels: dealers, retailers and builders. On December 14, 2022, our former parent company, Fortune Brands Innovations, Inc.
O ur products are sold throughout the United States and Canada to the remodeling and new construction markets through three primary channels: dealers, retailers and builders. On December 14, 2022, our former parent company, Fortune Brands Innovations, Inc.
Through empowering associates to remedy issues locally, the MasterBrand Way fosters problem-solving and enhances our culture of continuous improvement. Beyond improved engagement and retention, we are able to witness leadership among our associates and develop internal talent. As opportunities present themselves across the organization, we are positioned to staff these roles internally.
Through empowering associates to remedy issues locally, the MasterBrand Way fosters problem-solving and enhances our culture of continuous improvement. Beyond improved engagement and retention, we are able to identify leadership potential among our associates to develop internal talent. As opportunities present themselves across the organization, we are positioned to staff these roles internally.
In addition, we are actively growing our presence in the emerging cabinets e-commerce channel, including through our retail channel partners’ online presence, and are actively partnering with leading players to develop continuing opportunities to penetrate and innovate in this exciting category. 4 Table of Contents Customers Our business competes based on quality, price, service and responsiveness to dealer, retailer and builder needs, as well as end-user consumer preferences.
In addition, we are actively growing our presence in the emerging cabinets e-commerce channel, including through our retail channel partners’ online presence, and are actively partnering with leading players to develop continuing opportunities to penetrate and innovate in this evolving area. 4 Table of Contents Customers Our business competes based on quality, price, service and responsiveness to dealer, retailer and builder needs, as well as end-user consumer preferences.
This benefit offers individualized care that integrates into our medical plan for our associates and their families, critical incident response, leader empowerment and support. 6 Table of Contents Creating a Team-Based Culture We value fostering a team-based culture and celebrate our team’s wide range of perspectives and experiences.
This benefit offers individualized care that integrates into our medical plan for our associates and their families, critical incident response, leader empowerment and support. Creating a Team-Based Culture We value fostering a team-based culture and celebrate our team’s wide range of perspectives and experiences.
Securities and Exchange Commission ("SEC") (https://www.sec.gov). The Company’s website is http://www.masterbrand.com. The Company has adopted charters for each of its Audit, Compensation and Nominating, Environmental, Social and Governance Committees, corporate governance guidelines and a code of conduct, which are available on the Company’s website and will be available to any stockholder who requests them from the Company’s Investor Relations department.
Securities and Exchange Commission ("SEC") (https://www.sec.gov). The Company’s website is http://www.masterbrand.com. The Company has adopted charters for each of its Audit, Compensation and Nominating and Governance Committees, corporate governance guidelines and a code of conduct, which are available on the Company’s website and will be available to any shareholder who requests them from the Company’s Investor Relations department.
We seek to achieve exceptional financial performance and growth through the disciplined execution of The MasterBrand Way and our continued strategic transformation. The MasterBrand Way Our ever-evolving business system and center of our culture is The MasterBrand Way.
We seek to achieve exceptional financial performance and growth through the disciplined execution of The MasterBrand Way and our continued strategic transformation. 2 Table of Contents The MasterBrand Way Our ever-evolving business system and center of our culture is The MasterBrand Way.
This acquisition allows us to reach more customers, through highly complementary dealer networks, with greater efficiency and effectiveness, and has broadened our portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories. We believe we will have opportunities to drive future value creation through additional thoughtful and strategic acquisitions.
This acquisition allows us to reach more customers, through highly complementary dealer networks, with greater efficiency and effectiveness, and has broadened our portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories. We believe we will have opportunities to drive future value creation through additional thoughtful and strategic acquisitions, including the pending merger with American Woodmark.
The Separation was completed through a series of transactions ending with a pro rata distribution of all of the shares of MasterBrand, Inc. common stock owned by Fortune Brands to Fortune Brands stockholders (the “Distribution”). After the Distribution, we became an independent, publicly-traded company.
The Separation was completed through a series of transactions ending with a pro rata distribution of all of the shares of MasterBrand, Inc. common stock owned by Fortune Brands to Fortune Brands shareholders, after which we became an independent, publicly-traded company.
Net sales to international markets represented approximately 5 percent, 5 percent and 6 percent for our 2024, 2023 and 2022 fiscal years, respectively. Products We offer a comprehensive portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home.
Net sales to international markets represented approximately 4 percent, 5 percent and 5 percent for our 2025, 2024 and 2023 fiscal years, respectively. Products We offer a comprehensive portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home.
We believe attracting and engaging talented associates with diverse perspectives enables us to be more innovative, responsive to consumer needs and deliver strong performance and growth. We support our communities through outreach and investment. Our engagement pulse survey fosters our associate listening strategy, providing routine feedback and meaningful action to drive improvement in our culture.
We believe attracting and engaging talented associates with diverse perspectives enables us to be more innovative, responsive to consumer needs and deliver strong performance and growth. Our engagement pulse survey fosters our associate listening strategy, providing routine feedback and meaningful action to drive improvement in our culture.
Item 1. Business MasterBrand, Inc. (“we,” “us,” “our,” “MasterBrand” or the “Company”) was founded over 70 years ago in 1954 under the name United Cabinet Incorporated. We are the largest manufacturer of residential cabinets in North America, based on 2023 reported net sales.
Item 1. Business MasterBrand, Inc. (“we,” “us,” “our,” “MasterBrand” or the “Company”), was founded over 70 years ago in 1954 under the name United Cabinet Incorp orated. We are the largest manufacturer of residential cabinets in North America, based on 2024 reported net sales.
Approximately 81 percent of our workforce is composed of hourly production and distribution associates and the remaining population is comprised of associates in administrative roles. As of December 29, 2024, approximately 32 percent of our associates worked under collective bargaining agreements.
Approximately 81 percent of our workforce is composed of hourly production and distribution associates and the remaining population is comprised of associates in administrative roles. As of December 28, 2025, approximately 32 percent of our associates worked under collective bargaining agreements.
Channels Our products are sold primarily throughout the United States and Canada to the remodeling and new construction markets through three primary channels: Dealers, Retailers and Builders. 1. Dealers : We built the industry’s largest and, we believe, strongest network, with well-established relationships with over 7,700 cabinet dealers across the United States and Canada, inclusive of those acquired with Supreme.
Channels Our products are sold primarily throughout the United States and Canada to the remodeling and new construction markets through three primary channels: Dealers, Retailers and Builders. 1. Dealers : We built the industry’s largest and, we believe, strongest network, with well-established relationships with over 7,900 cabinet dealers across the United States and Canada.
Our markets are very competitive. Lowe’s Companies, Inc. (“Lowe’s”) comprised approximately 22 percent, 21 percent and 20 percent of our net sales for our 2024, 2023 and 2022 fiscal years, respectively. The Home Depot, Inc. (“The Home Depot”) comprised approximately 15 percent, 16 percent and 17 percent of our net sales for our 2024, 2023 and 2022 fiscal years, respectively.
Our markets are very competitive. Lowe’s Companies, Inc. (“Lowe’s”) comprised approximately 20 percent, 22 percent and 21 percent of our net sales for our 2025, 2024 and 2023 fiscal years, respectively. The Home Depot, Inc. (“Home Depot”) comprised approximately 13 percent, 15 percent and 16 percent of our net sales for our 2025, 2024 and 2023 fiscal years, respectively.
Available Information The Company makes available free of charge, on or through its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the U.S.
These obligations include debt service and obligations to trade creditors, among others. 7 Table of Contents Available Information The Company makes available free of charge, on or through its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the U.S.
Intellectual Property We actively maintain and protect our trademarks, copyrights and trade secrets. Our products are marketed under a range of registered and unregistered trademarks that are widely recognized within our industry. To safeguard these assets, we continue to monitor for unauthorized use and take appropriate measures to prevent infringement.
Our products are marketed under a range of registered and unregistered trademarks that are widely recognized within our industry. To safeguard these assets, we continue to monitor for unauthorized use and take appropriate measures to prevent infringement.
In addition, as a holding company, the source of our unconsolidated revenues and funds is dividends and other payments from subsidiaries. Our subsidiaries have financial obligations that must be satisfied before funding us. These obligations include debt service and obligations to trade creditors, among others.
In addition, as a holding company, the source of our unconsolidated revenues and funds is dividends and other payments from subsidiaries. Our subsidiaries have financial obligations that must be satisfied before funding us.
Below is a summary of the number of associates by role as of December 29, 2024: Production and Distribution Office Total 10,813 2,503 13,316 We are a values-based organization and believe our strong culture is a true differentiator. We are guided by our purpose of building great experiences together.
Below is a summary of the number of associates by role as of December 28, 2025: Production and Distribution Office Total 10,182 2,451 12,633 We are a values-based organization and believe our strong culture is a true differentiator. We are guided by our purpose of building great experiences together.
These laws and regulations often require the dedication of time and effort of associates, as well as financial resources. During 2024, compliance with the applicable regulations did not have a material effect on our capital expenditures, earnings, or competitive position. Human Capital Resources As of December 29, 2024, we had more than 13,000 full-time and part-time associates (excluding contract workers).
During 2025, compliance with the applicable regulations did not have a material effect on our capital expenditures, earnings, or competitive position. Human Capital Resources As of December 28, 2025, we had more than 12,000 full-time and part-time associates (excluding contract workers).
We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other potentially responsible parties under Superfund or similar state laws or from insurance, will not have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. 5 Table of Contents Governmental Regulations We are subject to a wide variety of local, state and federal laws and regulations in the countries where we conduct business.
We believe that the cost of complying with the present environmental protection laws, before considering estimated recoveries either from other potentially responsible parties under Superfund, or similar state laws, or from insurance, will not have a material adverse effect on our competitive position, results of operations, cash flows or financial condition.
Raw Materials We utilize raw materials in the operation of our business, principally hardwoods (maple, birch and oak), plywood and particleboard. These materials are available from a number of sources. Volatility in the prices of commodities and transportation costs in making and distributing our products impacts the cost of manufacturing our products.
Raw Materials We utilize raw materials in the operation of our business, principally hardwoods (maple, birch and oak), plywood and particleboard. These materials are available from a number of sources.
Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafts framed and frameless cabinetry for a nationwide network of dealers. The combined company is reaching more customers, through its highly complementary dealer networks, with greater efficiency and effectiveness.
Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafts framed and frameless cabinetry for a nationwide network of dealers.
Attracting and Retaining Superior Talent To attract and retain superior talent at all levels of our Company, we have designed our offerings to be competitive and are seen as a leader in the communities where our associates live and work.
For our 2025 fiscal year, our TRIR and LTR were below the 2024 BLS industry averages of 3.5 and 1.4, respectively. 6 Table of Contents Attracting and Retaining Superior Talent To attract and retain superior talent at all levels of our Company, we have designed our offerings to be competitive and are seen as a leader in the communities where our associates live and work.
Our ability to reduce complexity in our product offering, and move to common platforms, enables us to simplify our manufacturing processes as well. Common platforms across plants and standard work allow us to drive supply chain efficiencies.
We are focused on reducing complexity that consumers do not notice or value, without reducing the variety of choices available. Our ability to reduce complexity in our product offering, and move to common platforms, enables us to simplify our manufacturing processes as well. Common platforms across plants and standard work allow us to drive supply chain efficiencies.
For our 2024 fiscal year, our TRIR was 0.64, compared to 0.84 for our 2023 fiscal year, and our LTR was 0.18 for both our 2024 and 2023 fiscal years. Our safety focus is also demonstrated by comparing our TRIR and LTR to the Bureau of Labor Statistics (“BLS”) industry averages.
Our safety focus is also demonstrated by comparing our TRIR and LTR to the Bureau of Labor Statistics (“BLS”) industry averages.
We have insight into the fashion and features consumers desire, which we use to tailor our product lines across price points. Our volume leadership allows us to achieve an advantaged cost structure and service platform by standardizing product platforms and components to the greatest extent possible—resulting in a more flexible facility footprint and an efficient supply chain.
Our volume leadership allows us to achieve an advantaged cost structure and service platform by standardizing product platforms and components to the greatest extent possible—resulting in a more flexible facility footprint and an efficient supply chain. Further, our decades of experience have informed how we use global geographies to optimize procurement and manufacturing costs.
We reserve for remediation activities to clean up potential environmental liabilities as required by federal and state laws based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. There were no material environmental accruals for the years ended December 29, 2024 and December 31, 2023.
We supported NFF’s successful campaign to plant 50 million trees across national forests by the end of 2025, with the NFF planting 50.4 million trees as of December 28, 2025. 5 Table of Contents We reserve for remediation activities to clean up potential environmental liabilities as required by federal and state laws based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties.
Further, our decades of experience have informed how we use global geographies to optimize procurement and manufacturing costs. Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that we believe cannot be easily replicated.
Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that we believe cannot be easily replicated. We plan to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization and ordering to delivery and installation.
To derive further efficiencies, we added three incremental initiatives to The MasterBrand Way: Align to Grow, Lead Through Lean and Tech Enabled. 2 Table of Contents Align to Grow – Deliver on the unique needs of each customer As an organization that historically grew through acquisitions, processes across the disparate acquired companies were inherently different.
Align to Grow – Deliver on the unique needs of each customer As an organization that historically grew through acquisitions, processes across the disparate acquired companies were inherently different. We believe we have further opportunities to both commercially and operationally align our business to reduce complexity in our product offering to customers.
Our disciplined deployment of these tools in recent years has driven our strategic transformation and improvements in commercial and operational efficiency.
Our disciplined deployment of these tools in recent years has driven our strategic transformation and improvements in commercial and operational efficiency. To derive further efficiencies, we added three incremental initiatives to The MasterBrand Way: Align to Grow, Lead Through Lean and Tech Enabled.
Removed
Through this transaction, MasterBrand broadened its portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories, further diversifying its channel distribution and adding to its strategically located facility footprint. Strategy Our superior product quality, innovative design and service excellence drives a compelling value proposition.
Added
On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark Corporation (“American Woodmark”), a Virginia corporation, in an all-stock transaction. The Company, Maple Merger Sub, Inc.
Removed
We plan to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization and ordering to delivery and installation. We believe we are only beginning to unlock the potential value of our unique combination of scale, operational agility, data-first operating model and strong continuous improvement culture.
Added
(“Merger Sub”), a Virginia corporation and direct, wholly owned subsidiary of the Company, and American Woodmark entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company (the “Merger”).
Removed
We believe we have further opportunities to both commercially and operationally align our business to reduce complexity in our product offering to customers. We are focused on reducing complexity that consumers do not notice or value, without reducing the variety of choices available.
Added
The closing of the Merger, which is expected to occur in early 2026, is subject to the receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction or waiver of other customary closing conditions. Both companies received the necessary shareholder approval at their respective special meetings of shareholders held on October 30, 2025.
Removed
We support NFF’s campaign to plant 50 million trees across national forests by the end of 2025, of which, the NFF has planted 38.2 million trees as of December 29, 2024.
Added
Strategy Our superior product quality, innovative design and service excellence drives a compelling value proposition. We have insight into the fashion and features consumers desire, which we use to tailor our product lines across price points.
Removed
For our 2024 fiscal year, our TRIR and LTR were below the 2023 BLS industry averages of 3.1 and 1.1, respectively.
Added
We believe the combination of our leading market position and size, strategic vision, strong partnerships and commitment to continuous improvement will drive our future growth.
Added
Volatility in the prices of commodities and transportation costs in making and distributing our products, as well as changes in trade policies and corresponding tariff rates, impact the cost of manufacturing our products. Intellectual Property We actively maintain and protect our trademarks, copyrights and trade secrets.
Added
There were no material environmental accruals for the years ended December 28, 2025 and December 29, 2024.
Added
Governmental Regulations We are subject to a wide variety of local, state and federal laws and regulations in the countries where we conduct business. These laws and regulations often require the dedication of time and effort of associates, as well as financial resources.
Added
For our 2025 fiscal year, our TRIR was 0.83, compared to 0.64 for our 2024 fiscal year, and our LTR was 0.33 in 2025, compared to 0.18 in 2024. Data for 2025 includes injuries from the Supreme locations acquired in July 2024.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

91 edited+22 added−26 removed113 unchanged
Biggest changeInability to obtain raw materials and finished goods in a timely and cost-effective manner from suppliers could adversely affect our ability to manufacture and market our products. We purchase raw materials to be used in manufacturing our products and also rely on third-party manufacturers to produce certain of the finished goods we sell.
Biggest changeChanges in laws, regulations or enforcement practices may impose new compliance requirements, restrict certain AI applications or increase our regulatory obligations, which could negatively impact our business and financial performance. Inability to obtain raw materials and finished goods in a timely and cost-effective manner from suppliers could adversely affect our ability to manufacture and market our products.
Any final determination by tax authorities, including related litigation, penalties and interest, with respect to any tax, import and export tax, customs and duty audits, could be materially different from our estimates or from our historical results in the periods for which that determination is made.
Any final determination by tax authorities, including related litigation, penalties and interest, with respect to any tax, import and export tax, customs and customs duty audits, could be materially different from our estimates or from our historical results in the periods for which that determination is made.
The model rules include minimum domestic top up taxes, income inclusion rules, and undertaxed profit rules all aimed to ensure that multinationals pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate, with some rules effective in 2024 or others becoming effective in 2025.
The model rules include minimum domestic top up taxes, income inclusion rules, and undertaxed profit rules all aimed to ensure that multinationals pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate, with some rules effective in 2024 and 2025, or others becoming effective in 2026.
Our charter provides that unless we consent in writing to the selection of an alternative forum, the state courts within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for (1) any state derivative action or proceeding brought or purporting to be brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director or officer of ours to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our charter or our bylaws, (4) any action asserting a claim relating to or involving us governed by the internal affairs doctrine or (5) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.
Our charter provides that unless we consent in writing to the selection of an alternative forum, the state courts within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) will be the sole and exclusive forum for (1) any state derivative action or proceeding brought or purporting to be brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director or officer of ours to us or our shareholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our charter or our bylaws, (4) any action asserting a claim relating to or involving us governed by the internal affairs doctrine or (5) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.
We regularly evaluate our organizational productivity and global supply chains and assess opportunities to increase capacity, reduce costs and enhance quality. We may be unable to enhance quality, speed and flexibility to meet changing and uncertain market conditions, as well as manage continued cost inflation, including wages, pension and medical costs.
We regularly evaluate our organizational productivity and global supply chains and assess opportunities to increase capacity, reduce costs and enhance quality. We may be unable to enhance quality, speed and flexibility to meet changing and uncertain market conditions, as well as manage continued cost inflation, including wages and medical costs.
The housing market is sensitive to changes in economic conditions and other factors, such as the level of employment, access to and the cost of labor, consumer confidence, demographic changes, consumer income, government tax programs, home prices, availability of financing, inflation and interest rate levels.
The housing market is sensitive to changes in economic conditions and other factors, such as the level of employment, access to and the cost of labor, consumer confidence, demographic changes, consumer income, government tax programs, home prices, availability of financing, inflation, tariffs and interest rate levels.
Prior to the Separation, Fortune Brands received a private letter ruling from the Internal Revenue Service (“IRS”) together with a written opinion of counsel to the effect that, among other things, the Distribution will qualify as a transaction that is tax-free for U.S. federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”). 20 Table of Contents The opinion of counsel does not address any U.S. state or local or foreign tax consequences of the Separation.
Prior to the Separation, Fortune Brands received a private letter ruling from the Internal Revenue Service (“IRS”) together with a written opinion of counsel to the effect that, among other things, the Distribution will qualify as a transaction that is tax-free for U.S. federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”). 21 Table of Contents The opinion of counsel does not address any U.S. state or local or foreign tax consequences of the Separation.
Risks inherent to international operations include: potentially adverse tax laws, unfavorable changes or uncertainty relating to trade agreements or importation duties, uncertainty regarding clearance and enforcement of intellectual property rights, risks associated with the Foreign Corrupt Practices Act and other anti-bribery laws, mandatory or voluntary shutdowns of our facilities or our suppliers due to changes in political dynamics, economic policies or health emergencies and difficulty enforcing contracts.
Risks inherent to international operations include: potentially adverse tax laws, unfavorable changes or uncertainty relating to trade agreements or import duties, uncertainty regarding clearance and enforcement of intellectual property rights, risks associated with the Foreign Corrupt Practices Act and other anti-bribery laws, mandatory or voluntary shutdowns of our facilities or our suppliers due to changes in political dynamics, economic policies or health emergencies and difficulty enforcing contracts.
The existence of some provisions of our amended and restated certificate of incorporation (“our charter”), our amended and restated bylaws (“our bylaws”) and Delaware law may discourage a future takeover attempt not approved by our Board of Directors but which our stockholders may deem to be in their best interests or in which stockholders may receive a substantial premium for their shares over then current market prices.
The existence of some provisions of our amended and restated certificate of incorporation (“our charter”), our amended and restated bylaws (“our bylaws”) and Delaware law may discourage a future takeover attempt not approved by our Board of Directors but which our shareholders may deem to be in their best interests or in which shareholders may receive a substantial premium for their shares over then current market prices.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our charter will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our charter further provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
We may face challenges in: (1) maintaining, developing or expanding our customer relationships; (2) sourcing raw materials on a timely basis or for a cost-effective price due to ongoing global supply chain issues and elevated inflation; and (3) attracting and retaining qualified personnel at all levels, including our senior management team and other key associates. 8 Table of Contents We face competition with respect to some of our products from competitors who operate in countries with lower labor and compliance costs.
We may face challenges in: (1) maintaining, developing or expanding our customer relationships; (2) sourcing raw materials on a timely basis or for a cost-effective price due to ongoing global supply chain issues, tariffs and elevated inflation; and (3) attracting and retaining qualified personnel at all levels, including our senior management team and other key associates. 9 Table of Contents We face competition with respect to some of our products from competitors who operate in countries with lower labor and compliance costs.
These provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in our best interests or the best interests of our stockholders. Our charter contains an exclusive forum provision that may discourage lawsuits against us and our directors and officers.
These provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our Board of Directors determines is not in our best interests or the best interests of our shareholders. Our charter contains an exclusive forum provision that may discourage lawsuits against us and our directors and officers.
In addition, customers have, and are likely to continue to, require us and our products to comply with their internal ESG-related standards, such as wood-sourcing policies. Complying with such standards may impose significant additional costs on us, and we may no longer be able to do business with customers with whose standards we are unable to comply with.
In addition, customers have, and are likely to continue to, require us and our products to comply with their internal CSR-related standards, such as wood-sourcing policies. Complying with such standards may impose significant additional costs on us, and we may no longer be able to do business with customers with whose standards we are unable to comply with.
If the Distribution were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Code, each stockholder that is subject to U.S. federal income tax who received our common stock in the Distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in: (1) a taxable dividend to such stockholder to the extent of that such stockholder’s pro rata share of Fortune Brand’s current or accumulated earnings and profits; (2) a reduction in such stockholder’s basis (but not below zero) in Fortune Brand common stock to the extent the amount received exceeds the stockholder’s share of Fortune Brand’s earnings and profits; and (3) taxable gain from the exchange of Fortune Brand common stock to the extent the amount received exceeded the sum of such stockholder’s share of Fortune Brand’s earnings and profits and such stockholder’s basis in its Fortune Brand common stock.
If the Distribution were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Code, each shareholder that is subject to U.S. federal income tax who received our common stock in the Distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in: (1) a taxable dividend to such shareholder to the extent of such shareholder’s pro rata share of Fortune Brand’s current or accumulated earnings and profits; (2) a reduction in such shareholder’s basis (but not below zero) in Fortune Brand common stock to the extent the amount received exceeds the shareholder’s share of Fortune Brand’s earnings and profits; and (3) taxable gain from the exchange of Fortune Brand common stock to the extent the amount received exceeded the sum of such shareholder’s share of Fortune Brand’s earnings and profits and such shareholder’s basis in its Fortune Brand common stock.
Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in increased financial leverage, increased borrowing costs, dilution in earnings per share or decreased return on capital. 14 Table of Contents Impairment charges could have a material adverse effect on our financial results.
Future acquisitions could cause us to incur additional debt or issue additional shares, resulting in increased financial leverage, increased borrowing costs, dilution in earnings per share or decreased return on capital. 16 Table of Contents Impairment charges could have a material adverse effect on our financial results.
If the Distribution, together with certain related transactions, were to fail to qualify as tax-free for U.S. federal income tax purposes, then we, Fortune Brands and our stockholders could be subject to significant tax liability or tax indemnity obligations.
If the Distribution, together with certain related transactions, were to fail to qualify as tax-free for U.S. federal income tax purposes, then we, Fortune Brands and our shareholders could be subject to significant tax liability or tax indemnity obligations.
If any of these facts, assumptions, representations, or undertakings are incorrect or not otherwise satisfied, Fortune Brands and its stockholders may not be able to rely on the private letter ruling or the opinion of counsel and could be subject to significant tax liabilities.
If any of these facts, assumptions, representations, or undertakings are incorrect or not otherwise satisfied, Fortune Brands and its shareholders may not be able to rely on the private letter ruling or the opinion of counsel and could be subject to significant tax liabilities.
Government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations with respect to ESG matters, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
Government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations with respect to CSR matters, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.
This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.
We are dependent on third parties for many of our products and components and for certain services. Our ability to offer a wide variety of products and provide high levels of service to our customers depend on our ability to obtain an adequate and timely supply of products and components.
We are dependent on third parties for many of our products and components and for certain services. Our ability to offer a wide variety of products and provide high levels of service to our customers depends on our ability to obtain an adequate and timely supply of products and components.
Additionally, claims from our customers, with or without merit, could result in costly and time-consuming litigation that could require significant time and attention of management and involve significant monetary damages. Risks Related to Our Operations Risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility could adversely affect our results of operations.
Additionally, claims from our customers, with or without merit, could result in costly and time-consuming litigation that could require significant time and attention of management and involve significant monetary damages. Risks Related to Our Operations Risks associated with our ability to improve organizational productivity and global supply chain efficiency and flexibility could adversely affect our financial performance .
Moreover, our profit margins with respect to these products depend, in part, on managing our costs, particularly raw materials, labor (including contract labor) and transportation costs, which represent significant cost components that also fluctuate based upon market and other factors beyond our control. We buy raw materials that contain commodities such as hardwoods (maple, birch and oak), plywood and particleboard.
Moreover, our profit margins with respect to these products depend, in part, on managing our costs, particularly raw materials, labor (including contract labor) and transportation costs, which represent significant cost components that also fluctuate based upon market and other factors beyond our control. 11 Table of Contents We buy raw materials that contain commodities such as hardwoods (maple, birch and oak), plywood and particleboard.
Risks Related to Our Industry Our business primarily relies on U.S. and Canadian home improvement, R&R and new home construction activity levels, all of which are impacted by risks associated with fluctuations in the housing market. Unfavorable changes in the general economy, the housing market, interest rates, inflation or other business conditions could adversely affect our results of operations.
Risks Related to Our Industry Our business primarily relies on U.S. and Canadian home improvement, R&R and new home construction activity levels, all of which are impacted by risks associated with fluctuations in the housing market. Unfavorable changes in the general economy, the housing market, interest rates, inflation or other business conditions could adversely affect our financial performance.
We rely on a distribution network comprised of consolidating customers. Any disruption to the existing distribution channels could adversely affect our results of operations. The consolidation of dealers or retailers or the financial instability or default of a dealer or one of its major customers could potentially cause such a disruption.
We rely on a distribution network comprised of consolidating customers. Any disruption to the existing distribution channels could adversely affect our financial performance. The consolidation of dealers or retailers or the financial instability or default of a dealer or one of its major customers could potentially cause such a disruption.
Moreover, we have acquired and may acquire in the future, businesses and subsidiaries that operate information technology systems that are distinct from our operating environment, which may result in significant integration or replacement issues or expenses. 11 Table of Contents We may be subject to security threats, including cyber and other attacks, which are becoming increasingly sophisticated, frequent and adaptive.
Moreover, we have acquired and may acquire in the future, businesses and subsidiaries that operate information technology systems that are distinct from our operating environment, which may result in significant integration or replacement issues or expenses. We may be subject to security threats, including cyber and other attacks, which are becoming increasingly sophisticated, frequent and adaptive.
This debt could potentially have important consequences to us and our debt and equity investors, including: ▪ require a substantial portion of our cash flow from operations to make interest and principal payments, which could reduce our profitability; ▪ make it more difficult to satisfy debt service and other obligations; ▪ increase the risk of a future downgrade of our credit ratings, which could increase our future debt costs and limit the future availability of debt financing; ▪ increase our vulnerability to adverse economic and industry conditions, such as adverse interest rates; ▪ reduce the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; ▪ limit our flexibility in planning for, or reacting to, changes in our business and the industry; ▪ place us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and ▪ limit our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock. 15 Table of Contents To the extent that we incur additional indebtedness, the foregoing risks could increase.
This debt could potentially have important consequences to us and our debt and equity investors, including: ▪ require a substantial portion of our cash flow from operations to make interest and principal payments, which could reduce our profitability; ▪ make it more difficult to satisfy debt service and other obligations; ▪ increase the risk of a future downgrade of our credit ratings, which could increase our future debt costs and limit the future availability of debt financing; ▪ increase our vulnerability to adverse economic and industry conditions, such as adverse interest rates; ▪ reduce the cash flow available to fund capital expenditures and other corporate purposes and to grow our business; ▪ limit our flexibility in planning for, or reacting to, changes in our business and the industry; ▪ place us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and ▪ limit our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock.
There is no assurance that we will be able to acquire attractive businesses or enter into strategic business relationships on favorable terms ahead of our competitors, or that such acquisitions or strategic business development relationships will be accretive to earnings or improve our competitive position. Risks associated with strategic acquisitions and joint ventures could adversely affect our results of operations.
There is no assurance that we will be able to acquire attractive businesses or enter into strategic business relationships on favorable terms ahead of our competitors, or that such acquisitions or strategic business development relationships will be accretive to earnings or improve our competitive position. Risks associated with strategic acquisitions and joint ventures could adversely affect our financial performance.
These provisions include but are not limited to: a classified board of directors with three-year staggered terms (however, beginning with our 2030 annual meeting, all directors will be elected annually); the right of our Board of Directors to issue preferred stock without stockholder approval; no stockholder ability to fill director vacancies; elimination of the rights of our stockholders to act by written consent and call special stockholder meetings; until our Board of Directors is no longer classified, prohibiting stockholders 21 Table of Contents from removing directors other than “for cause”; and rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings.
These provisions include but are not limited to: a classified board of directors with three-year staggered terms (however, beginning with our 2030 annual meeting, all directors will be elected annually); the right of our Board of Directors to issue preferred stock without shareholder approval; no shareholder ability to fill director vacancies; elimination of the rights of our shareholders to act by written consent and call special shareholder meetings; until our Board of Directors is no longer classified, prohibiting shareholders from removing directors other than “for cause”; and rules regarding how shareholders may present proposals or nominate directors for election at shareholder meetings.
Due to the highly competitive nature of the cabinets industry and the low barriers to entry in our markets, we are continually subject to the risk of losing market share, which may adversely affect our profitability and revenue levels, as well as our results of operations. We also use e-commerce to sell our products.
Due to the highly competitive nature of the cabinets industry and the low barriers to entry in our markets, we are continually subject to the risk of losing market share, which may adversely affect our profitability and revenue levels, as well as our financial performance. We also use e-commerce to sell our products.
As a result of the difficulty of controlling the quality of products or components sourced from other manufacturers, we are exposed to risks relating to the quality of such products and to limitations on our recourse against such suppliers. Failure to comply with laws, government regulations and other requirements could adversely affect our results of operations.
As a result of the difficulty of controlling the quality of products or components sourced from other manufacturers, we are exposed to risks relating to the quality of such products and to limitations on our recourse against such suppliers. Failure to comply with laws, government regulations and other requirements could adversely affect our financial performance.
Changes in tax laws or regulations may have a negative impact on our results of operations. We are subject to income taxes in the U.S. and various foreign jurisdictions. The determination of our income tax positions involves consideration of uncertainties, changing fiscal policies, tax laws, court rulings, regulations, and related legislation.
Changes in tax laws or regulations may have a negative impact on our financial performance. We are subject to income taxes in the U.S. and various foreign jurisdictions. The determination of our income tax positions involves consideration of uncertainties, changing fiscal policies, tax laws, court rulings, regulations, and related legislation.
We may seek to accelerate our growth by not only advancing our own product pipelines and maximizing the value of our existing products, but also through various forms of business development activities, which include our acquisition of Supreme and any alliances, licenses, joint ventures, collaborations, equity- or debt-based investments, dispositions, divestments, mergers and acquisitions.
We may seek to accelerate our growth by not only advancing our own product pipelines and maximizing the value of our existing products, but also through various forms of business development activities, which include our acquisition of Supreme, pending Merger with American Woodmark and any alliances, licenses, joint ventures, collaborations, equity- or debt-based investments, dispositions, divestments, mergers and acquisitions.
Tax audits may result in findings that have a negative impact on our results of operations. We regularly undergo tax audits in various jurisdictions in which our products are sold or manufactured, including audits of indirect taxes, value-added tax, import and export related taxes, customs and duties in certain jurisdictions.
Tax audits may result in findings that have a negative impact on our financial performance. We regularly undergo tax audits in various jurisdictions in which our products are sold or manufactured, including audits of indirect taxes, value-added tax, import and export related taxes, customs and customs duties in certain jurisdictions.
E-commerce brings an increased number of competitors and greater pricing transparency for consumers, which could affect our results of operations. In addition, our relationships with our customers, including our retailers, may be affected if we increase the amount of business we transact in the e-commerce channel.
E-commerce brings an increased number of competitors and greater pricing transparency for consumers, which could affect our financial performance. In addition, our relationships with our customers, including our retailers, may be affected if we increase the amount of business we transact in the e-commerce channel.
Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.
Our shareholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.
The loss of any of our significant customers or a reduction in the quantity of products they purchase could affect our financial health. Our ten largest customers generated approximately 55 percent, 55 percent and 52 percent of our net sales for our 2024, 2023 and 2022 fiscal years, respectively.
The loss of any of our significant customers or a reduction in the quantity of products they purchase could affect our financial health. Our ten largest customers generated approximately 50 percent, 55 percent and 55 percent of our net sales for our 2025, 2024 and 2023 fiscal years, respectively.
It is not possible to predict the outcome of pending or future claims, litigation, audits and regulatory proceedings and, as with any litigation, it is possible that some of the actions could be decided unfavorably and could have an adverse effect on our results of operations.
It is not possible to predict the outcome of pending or future claims, litigation, audits and regulatory proceedings and, as with any litigation, it is possible that some of the actions could be decided unfavorably and could have an adverse effect on our financial performance.
Moreover, even if we ultimately succeed in recovering from Fortune Brands any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our results of operations.
Moreover, even if we ultimately succeed in recovering from Fortune Brands any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. Each of these risks could negatively affect our financial performance.
Item 1A. Risk Factors There are inherent risks and uncertainties associated with our business that could adversely affect our results of operations, cash flows and financial condition.
Item 1A. Risk Factors There are inherent risks and uncertainties associated with our business that could adversely affect our results of operations, cash flows and financial condition (collectively, our “financial performance”).
Lowe’s and The Home Depot comprised approximately 37 percent of our net sales for our 2024, 2023 and 2022 fiscal years. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will supply these customers at historical levels.
Lowe’s and Home Depot comprised approximately 33 percent, 37 percent and 37 percent of our net sales for our 2025, 2024 and 2023 fiscal years. We cannot guarantee that we will maintain or improve our relationships with these customers or that we will supply these customers at historical levels.
There are many government and industry regulatory standards focused on wood, including the Toxic Substances Control Act and the Lacey Act. In particular, there may be additional tariffs or taxes related to our imported raw materials, components and finished goods.
There are many government and industry regulatory standards focused on wood, including the Toxic Substances Control Act and the Lacey Act. In particular, there have been additional tariffs or taxes related to our imported raw materials, components and finished goods.
Accordingly, we are unable to predict the exact future costs of compliance with or liability under environmental, health, and safety laws and regulations. Climate change and related legislative and regulatory initiatives could adversely affect our business and results of operations.
Accordingly, we are unable to predict the exact future costs of compliance with or liability under environmental, health, and safety laws and regulations. Climate change and related legislative and regulatory initiatives could adversely affect our business and financial performance.
Failure to achieve the desired level of quality, capacity or cost reductions could impair our results of operations. Risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, could adversely affect our results of operations.
Failure to achieve the desired level of quality, capacity or cost reductions could impair our financial performance . Risks associated with global commodity and energy availability and price volatility, as well as the possibility of sustained inflation, could adversely affect our financial performance.
In addition, the loss of critical suppliers, or a substantial decrease in the availability of products or components from our suppliers, could disrupt our business and may adversely affect our results of operations. Many of the suppliers we rely upon are located in foreign countries.
In addition, the loss of critical suppliers, or a substantial decrease in the availability of products or components from our suppliers, could disrupt our business and may adversely affect our financial performance . Many of the suppliers we rely upon are located in foreign countries.
Moreover, in the event of any economic downturn, some of our customers may exit or severely curtail activity in certain of our markets. The loss of one or more of our significant customers or deterioration in our relations with any of them could significantly affect our results of operations.
Moreover, in the event of any economic downturn, some of our customers may exit or severely curtail activity in certain of our markets. The loss of one or more of our significant customers or deterioration in our relations with any of them could significantly affect our financial performance.
Failure of our suppliers to timely provide us quality products or services on commercially reasonable terms or to comply with applicable legal and regulatory requirements, could have an adverse effect on our results of operations or could damage our reputation.
Failure of our suppliers to timely provide us quality products or services on commercially reasonable terms or to comply with applicable legal and regulatory requirements, could have an adverse effect on our financial performance or could damage our reputation.
We may fail to generate anticipated revenue growth for our existing products, product pipeline and acquired products or businesses or we may fail to achieve anticipated cost savings, such as those anticipated with respect to Supreme, within anticipated time frames or at all, which may impact our ability to meet our growth objectives.
We may fail to generate anticipated revenue growth for our existing products, product pipeline and acquired products or businesses or we may fail to achieve anticipated cost savings, such as those anticipated with respect to Supreme and the pending Merger with American Woodmark, within anticipated time frames or at all, which may impact our ability to meet our growth objectives.
We may experience constraints on and disruptions to transporting our raw materials, components and products from our international suppliers and may have to pay higher transportation costs.
We may experience constraints on and disruptions to transporting our raw materials, components and finished goods from our international suppliers and may have to pay higher transportation costs.
If we are unable to effectively manage our supply chain or if we experience transportation constraints, disruptions and higher costs for timely delivery of our products or components, our results of operations could be adversely affected. 13 Table of Contents We may not be successful in identifying and executing potential business development transactions, such as our acquisition of Supreme, or realizing the financial and strategic goals that were contemplated at the time of any historical or potential business development transaction, which could have an adverse impact on our ability to meet our growth objectives.
If we are unable to effectively manage our supply chain or if we experience transportation constraints, disruptions and higher costs for timely delivery of our products or components, our financial performance could be adversely affected. 15 Table of Contents We may not be successful in identifying and executing potential business development transactions, such as our acquisition of Supreme or pending Merger with American Woodmark, or realizing the financial and strategic goals that were contemplated at the time of any historical or potential business development transaction, which could have an adverse impact on our ability to meet our growth objectives.
If we do not effectively and timely comply with such regulations and other requirements, our results of operations could be adversely affected. We may be subject to significant compliance costs, as well as liabilities under environmental, health and safety laws and regulations.
If we do not effectively and timely comply with such regulations and other requirements, our financial performance could be adversely affected. We may be subject to significant compliance costs, as well as liabilities under environmental, health and safety laws and regulations.
In addition, if we are unable to make repurchases in accordance with our repurchase program, then we would not be able to reduce the effects of dilution experienced when we issue stock under our equity incentive programs, and we would not receive other benefits contemplated by the repurchase program.
In addition, if we are unable to make repurchases in accordance with our repurchase program, then we would not be able to reduce the effects of dilution experienced when we issue stock under our equity incentive programs, and we would not receive other benefits contemplated by the repurchase program. Item 1B. Unresolved Staff Comments None.
If the products we introduce do not gain widespread acceptance or if our competitors improve their products more rapidly or effectively than we do, we could lose market share or be required to reduce our prices, which could adversely impact our results of operations.
If the products we introduce do not gain widespread acceptance or if our competitors improve their products more rapidly or effectively than we do, we could lose market share or be required to reduce our prices, which could adversely impact our financial performance.
If we are unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price or if we experience other manufacturing, supply or distribution difficulties, our business and results of operations may be adversely affected. We acquire our components and raw materials from many suppliers and vendors across the globe.
If we are unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price or if we experience other manufacturing, supply or distribution difficulties, including the impact of tariffs, our business and financial performance may be adversely affected. We acquire our components and raw materials from many suppliers and vendors across the globe.
With respect of the Supreme acquisition, the assumptions and estimates underlying the estimated synergies are inherently uncertain and, although considered reasonable by the Company’s management as of the date of the acquisition, are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from expectations.
With respect to the Supreme acquisition and the pending Merger with American Woodmark, the assumptions and estimates underlying the estimated synergies are inherently uncertain and, although considered reasonable by the Company’s management as of the dates of the acquisitions, are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from expectations.
Overall, climate change, its effects and the resulting, unknown impact on government regulation, consumer, investor and business preferences could have a long-term adverse effect on our business. 17 Table of Contents ESG matters may adversely impact our business and reputation and we may be required to make material expenditures to respond to customer needs and investor expectations regarding ESG matters.
Overall, climate change, its effects and the resulting, unknown impact on government regulation, consumer, investor and business preferences could have a long-term adverse effect on our business. 19 Table of Contents Corporate Sustainability and Responsibility (“CSR”) matters may adversely impact our business and reputation and we may be required to make material expenditures to respond to customer needs and investor expectations regarding CSR matters.
Such determinations and additional costs relating to reviews of our practices as a result of such audits may adversely impact future period results of operations. 18 Table of Contents Our inability to secure and protect our intellectual property rights could negatively impact revenues and brand reputation.
Such determinations and additional costs relating to reviews of our practices as a result of such audits may adversely impact future period financial performance. 20 Table of Contents Our inability to secure and protect our intellectual property rights could negatively impact revenues and brand reputation.
In addition to the importance of their financial performance, companies are increasingly being judged by their performance on a variety of Environmental, Social and Governance (“ESG”) matters. In light of the increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet stakeholder expectations.
In addition to the importance of their financial performance, companies are increasingly being judged by their performance on a variety of CSR matters. In light of the increased focus on CSR matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet stakeholder expectations.
Accordingly, the increased size of our customers may further limit our ability to maintain or raise prices in the future. 9 Table of Contents Failure to maintain the performance, reliability and quality of our products, or to timely deliver our products, could have an adverse effect on our results of operations.
Accordingly, the increased size of our customers may further limit our ability to maintain or raise prices in the future. Failure to maintain the performance, reliability and quality of our products, or to timely deliver our products, could have an adverse effect on our financial performance.
As of December 29, 2024, approximately 32 percent of our associates worked under collective bargaining agreements. These collective bargaining agreements are subject to periodic negotiation and renewal.
As of December 28, 2025, approximately 32 percent of our associates worked under collective bargaining agreements. These collective bargaining agreements are subject to periodic negotiation and renewal.
If any of these risks materialize, our results of operations could be materially adversely affected, and the trading price of our common stock could materially decline.
If any of these risks materialize, our financial performance could be materially adversely affected, and the trading price of our common stock could materially decline.
In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.
Our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.
There can be no assurance that we will not experience a disruption in our business or harm to our financial condition related to changes in trade practices, and any changes to our operations or our sourcing strategy in order to mitigate any such tariff costs could be complicated, time-consuming and costly. 12 Table of Contents Disruption of operations could adversely affect our profitability and competitive position.
There can be no assurance that we will not experience a disruption in our business or harm to our financial condition related to changes in trade practices, and any changes to our operations or our sourcing strategy in order to mitigate any such tariff costs could be complicated, time-consuming and costly.
Potential liabilities and costs from claims and litigation could adversely affect our results of operations. We are, from time to time, involved in various claims, litigation matters, audits and regulatory proceedings that arise in the ordinary course of our business and that could have an adverse effect on us.
We are, from time to time, involved in various claims, litigation matters, audits and regulatory proceedings that arise in the ordinary course of our business and that could have an adverse effect on us.
We are subject to a wide variety of federal, state, local and foreign laws and regulations pertaining to: ▪ securities matters; ▪ taxation (including import and export related taxes); ▪ anti-bribery/anti-corruption; ▪ employment and labor matters; ▪ wage and hour matters; ▪ environment, health and safety matters; ▪ the protection of associates and consumers; • unclaimed property (i.e., aged outstanding checks to vendors & associates, aged unused credits issued to customers, etc.) ▪ product safety and performance; ▪ competition practices; ▪ trade, including duties and tariffs; ▪ data privacy and the collection and storage of information; and ▪ climate and protection of the environment. 16 Table of Contents In addition to complying with current requirements and known future requirements, we may be subject to new or more stringent requirements in the future.
We are subject to a wide variety of federal, state, local and foreign laws and regulations pertaining to: ▪ securities matters; ▪ taxation (including import and export related taxes); ▪ anti-bribery/anti-corruption; ▪ employment and labor matters; ▪ wage and hour matters; ▪ environment, health and safety matters; ▪ the protection of associates and consumers; • unclaimed property (i.e., aged outstanding checks to vendors & associates, aged unused credits issued to customers, etc.) ▪ product safety and performance; 18 Table of Contents ▪ competition practices; ▪ trade, including duties and tariffs; ▪ data privacy and the collection and storage of information; and ▪ climate and protection of the environment.
Such actions may result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences (including a decline in stock price) and could increase our capital expenditures and adversely impact our results of operations.
Such actions may result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences (including a decline in stock price) and could increase our capital expenditures and adversely impact our financial performance . Potential liabilities and costs from claims and litigation could adversely affect our financial performance.
Set forth below are descriptions of those risks and uncertainties that we currently believe to be material, but the risks and uncertainties described below are not the only risks and uncertainties that could affect our results of operations, cash flows and financial condition, (“results of operations”).
Set forth below are descriptions of those risks and uncertainties that we currently believe to be material, but the risks and uncertainties described below are not the only risks and uncertainties that could affect our financial performance.
In addition to the acquisition of Supreme, we will continue to consider acquisitions and joint ventures as a means of enhancing stockholder value.
In addition to the acquisition of Supreme and the pending Merger with American Woodmark, we will continue to consider acquisitions and joint ventures as a means of enhancing shareholder value.
This can result in higher associate costs, higher attrition rates and significant shifts in the labor market and associate expectations and we may face challenges in finding and retaining qualified personnel, particularly at the production level, which could have an adverse effect on our results of operations.
These factors may result in higher labor costs, elevated attrition rates and shifts in labor market dynamic and associate expectations. We may face challenges in finding and retaining qualified personnel, particularly at the production level, which could have an adverse effect on our financial performance.
Should our customers purchase our products in significantly lower quantities than they have in the past, such decreased purchases could adversely impact our results of operations. Certain of our customers may expand through consolidation and internal growth, which may increase their buying power. The increased size of our customers could have an adverse effect on our results of operations.
Should our customers purchase our products in significantly lower quantities than they have in the past, such decreased purchases could adversely impact our financial performance. 10 Table of Contents Certain of our customers may expand through consolidation and internal growth, which may increase their buying power.
We could be adversely affected by international trade regulations, including the imposition of sanctions, duties, new or increased tariffs and anti-dumping penalties.
We have been and could be further adversely affected by international trade regulations and administrative proceedings, including the imposition of sanctions and new or increased tariffs and duties, including anti-dumping and countervailing duties (“AD/CVD”).
The Fortune Brands indemnities may not be sufficient to hold MasterBrand harmless from the full amount of liabilities for which Fortune Brands will be allocated responsibility, and Fortune Brands may not be able to satisfy its indemnification obligations in the future.
If we are required to pay under these indemnities to Fortune Brands, our financial performance could be negatively impacted. The Fortune Brands indemnities may not be sufficient to hold MasterBrand harmless from the full amount of liabilities for which Fortune Brands will be allocated responsibility, and Fortune Brands may not be able to satisfy its indemnification obligations in the future.
Further, the increased size of our customers could result in our customers seeking more favorable terms, including pricing, for the products that they purchase from us.
Consolidation could decrease the number of potential significant customers for our products and increase our reliance on key customers. Further, the increased size of our customers could result in our customers seeking more favorable terms, including pricing, for the products that they purchase from us.
Future global pandemics would likely cause disruptions to our business and results of operations.
Future global pandemics would likely cause disruptions to our business and financial performance.
While in the past we have been able to mitigate the impact of these cost increases through productivity improvements and passing on increasing costs to our customers over time, there is no assurance that we will be able to offset such cost increases in the future, and the risk of potentially sustained high levels of inflation could adversely impact our results of operations. 10 Table of Contents Failure to attract and retain qualified personnel and other labor constraints, including increases in labor costs, potential labor disputes and work stoppages, could adversely affect our results of operations.
While in the past we have been able to mitigate the impact of these cost increases through productivity improvements and passing on increasing costs to our customers over time, there is no assurance that we will be able to offset such cost increases in the future, and the risk of potentially sustained high levels of inflation could adversely impact our financial performance.
As we sell new types of products or existing products in new geographic areas or channels, we are subject to the requirements applicable to those sales.
In addition to complying with current requirements and known future requirements, we may be subject to new or more stringent requirements in the future. As we sell new types of products or existing products in new geographic areas or channels, we are subject to the requirements applicable to those sales.
If Fortune Brands is unable or unwilling to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses. Fortune Brands may fail to perform under various transaction agreements that were executed as part of the Separation, which could cause us to incur expenses or losses we would not otherwise incur.
Risks Related to the Separation and Distribution Fortune Brands may fail to perform under various transaction agreements that were executed as part of the Separation, which could cause us to incur expenses or losses we would not otherwise incur.
We, or third-party systems that we rely upon, may be subject to information technology system failures and network disruptions caused by delays or disruptions due to system updates, natural disasters, malicious attacks and threats, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, or similar events or disruptions.
We, or third-party systems that we rely upon, may be subject to information technology system failures and network disruptions caused by delays or disruptions due to system updates, natural disasters, malicious attacks and threats, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, or similar events or disruptions. 12 Table of Contents In addition, our businesses have implemented and may implement in the future, digital systems or technologies, enterprise resource planning systems or additional applications to replace outdated systems and to operate more efficiently.
We often opt not to enter into long-term contracts with our suppliers or sourcing partners. Instead, most raw materials and sourced goods are obtained on a “purchase order” basis.
We purchase raw materials to be used in manufacturing our products and also rely on third-party manufacturers to produce certain of the finished goods we sell. We often opt not to enter into long-term contracts with our suppliers or sourcing partners. Instead, most raw materials and sourced goods are obtained on a “purchase order” basis.
Cybersecurity attacks or breaches due to security vulnerabilities, associate error, supplier or third-party error, malfeasance or other disruptions may still occur and create data privacy risks, which may lead to negative publicity, legal claims, extortion, ransom, theft, remediation costs and other significant costs.
Cybersecurity attacks or breaches due to security vulnerabilities, associate error, supplier or third-party error, malfeasance or other disruptions may still occur and create data privacy risks, which may lead to negative publicity, legal claims, extortion, ransom, theft, remediation costs and other significant costs. 13 Table of Contents We manufacture, source and sell products internationally and are exposed to risks associated with doing business globally, including risks associated with uncertain trade environments.
We manufacture, source and sell products internationally and are exposed to risks associated with doing business globally, including risks associated with uncertain trade environments. We manufacture, source or sell our products in a number of locations throughout the world, predominantly in the U.S., Mexico, Canada and Southeast Asia.
We manufacture, source or sell our products in a number of locations throughout the world, predominantly in the U.S., Mexico, Canada and Southeast Asia.

… 59 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed21 unchanged
Biggest changeAll applicable associates receive cybersecurity training in the form of online modules on an annual basis, routine simulations and newsletters. 23 Table of Contents Material Cybersecurity Risks, Threats & Incidents As of the date of this Annual Report on Form 10-K, we have not identified any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, that we believe have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations, or financial condition.
Biggest changeMaterial Cybersecurity Risks, Threats & Incidents As of the date of this Annual Report on Form 10-K, we have not identified any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, that we believe have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations, or financial condition.
Risk and security maturity assessments, as well as penetration assessments, are performed as part of our cybersecurity program. Third Party Risk Management We have a process in place to oversee our third-party vendors who have access to our information systems or who hold or store personal information on our behalf.
Risk and security maturity assessments, as well as penetration assessments, are performed as part of our cybersecurity program. 24 Table of Contents Third Party Risk Management We have a process in place to oversee our third-party vendors who have access to our information systems or who hold or store personal information on our behalf.
The Audit Committee reviews and discusses with our management key process and risk indicators, progress on plans to address keys risks, and any material changes in threat landscapes or risk posture which could negatively affect our business.
The Audit Committee reviews and discusses with our management key process and risk indicators, progress on plans to address keys risks, and any material changes in threat landscapes or risk posture which could negatively affect our business. 25 Table of Contents
All of our associates have a responsibility and a role to play by complying with our cybersecurity operational practices and reporting any potential cybersecurity incidents or exposures to our cybersecurity team.
All of our associates have a responsibility and a role to play by complying with our cybersecurity operational practices and reporting any potential cybersecurity incidents or exposures to our cybersecurity team. All applicable associates receive cybersecurity training in the form of online modules on an annual basis, routine simulations and newsletters.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeWe believe these principal properties have been adequately maintained, generally are in good condition and are suitable to meet the demands and production capacities required of our business. 24 Table of Contents
Biggest changeWe believe these principal properties have been adequately maintained, generally are in good condition and are suitable to meet the demands and production capacities required of our business.
Item 2. Properties Our corporate headquarters is located at 3300 Enterprise Parkway, Suite 300, Beachwood, Ohio, 44122. Prior to February 2024, our principal executive office was located at One MasterBrand Cabinets Drive, Jasper, Indiana, 47546. While our corporate headquarters is now in Beachwood, Ohio, our operations headquarters remains in Jasper, Indiana.
Item 2. Properties Our corporate headquarters is located at 3300 Enterprise Parkway, Suite 300, Beachwood, Ohio, 44122. Prior to February 2024, our principal executive office was located at One MasterBrand Cabinets Drive, Jasper, Indiana, 47546. While our corporate headquarters is in Beachwood, Ohio, our operations headquarters remains in Jasper, Indiana.
As of December 29, 2024, we principally operated 47 manufacturing facilities, distribution centers and warehouses throughout North America.
As of December 28, 2025, we principally operated 47 manufacturing facilities, distribution centers and warehouses throughout North America.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed9 unchanged
Biggest changeFollowing an audit for the 2018 tax year, the Mexican tax administration service, the Servicio de Administración Tributaria, (the “SAT”), issued a tax assessment in the amount of approximately $54.9 million to our subsidiary, Woodcrafters Home Products, S. de R.L. de C.V., for allegedly failing to make certain tax payments and to export timely certain merchandise.
Biggest changeFollowing an audit for the 2018 tax year, the Mexican tax administration service, the Servicio de Administración Tributaria, (the “SAT”), issued a tax assessment in the amount of 944.8 million Mexican pesos (approximately $52.7 million USD as of December 28, 2025) to our subsidiary, Woodcrafters Home Products, S. de R.L. de C.V., for allegedly failing to make certain tax payments and to export timely certain merchandise.
We reserved an immaterial amount related to the 2018 tax year audit as our best estimate of our probable liability as of December 29, 2024 and December 31, 2023.
We reserved an immaterial amount related to the 2018 tax year audit as our best estimate of our probable liability as of December 28, 2025 and December 29, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed5 unchanged
Biggest changeThe following chart assumes a hypothetical $100 investment on December 15, 2022 and shows the cumulative value at the end of each succeeding year. 26 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Biggest changeThe following chart assumes a hypothetical $100 investment on December 15, 2022 and shows the cumulative value at the end of each succeeding year. 27 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved] 28 Table of Contents
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Dividends Our common stock is listed on the New York Stock Exchange under the trading symbol “MBC”. We presently intend to retain future earnings, if any, to finance our business or reduce debt.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information and Dividends Our common stock is listed on the New York Stock Exchange under the trading symbol “MBC”. We presently intend to retain future earnings, if any, to finance our business or reduce debt.
Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company. Holders On February 14, 2025, there were 7,413 record holders of our common stock, par value $0.01 per share.
Our subsidiaries are not limited by long-term debt or other agreements in their abilities to pay cash dividends or to make other distributions with respect to their capital stock or other payments to the Company. Holders On February 11, 2026, there were 7,094 record holders of our common stock, par value $0.01 per share.
Stockholder Return Comparison We include in our Annual Report on Form 10-K a line graph presentation comparing the relative performance of our stock compared with the S&P SmallCap 600 Index and the S&P 600 Building Products Industry Index from the date we became publicly traded, December 15, 2022, through December 29, 2024 .
Shareholder Return Comparison We include in our Annual Report on Form 10-K a line graph presentation comparing the relative performance of our stock compared with the S&P SmallCap 600 Index and the S&P 600 Building Products Industry Index from the date we became publicly traded, December 15, 2022, through December 28, 2025 .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+33 added−67 removed51 unchanged
Biggest changeSome of the important factors that could cause our actual results to differ materially from those projected in any such forward-looking statements include: • Our ability to develop and expand our business; • Our ability to develop new products or respond to changing consumer preferences and purchasing practices; • Our anticipated financial resources and capital spending; • Our ability to manage costs; • Our ability to effectively manage manufacturing operations and capacity, or an inability to maintain the quality of our products; • The impact of our dependence on third parties to source raw materials and our ability to obtain raw materials in a timely manner or fluctuations in raw material costs; • Our ability to accurately price our products; • Our projections of future performance, including future revenues, capital expenditures, gross margins, and cash flows; • The effects of competition and consolidation of competitors in our industry; • Costs of complying with evolving tax and other regulatory requirements and the effect of actual or alleged violations of tax, environmental or other laws; • The effect of climate change and unpredictable seasonal and weather factors; • Conditions in the housing market in the United States and Canada; • The expected strength of our existing customers and consumers and any loss or reduction in business from one or more of our key customers or increased buying power of large customers; • Information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees, or other third parties; • Worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis, including risks associated with uncertain trade environments and changes to the U.S. administration; • The effects of a public health crisis or other unexpected event; • The inability to recognize, or delays in obtaining, anticipated benefits of the acquisition of Supreme, including synergies, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees; • The impact of our current and any additional future debt obligations on our business, current and future operations, profitability and our ability to meet other obligations; • Business disruption following the acquisition of Supreme; • Diversion of management time on acquisition-related issues; • The reaction of customers and other persons to the acquisition of Supreme; and • Other statements contained in this Annual Report on Form 10-K regarding items that are not historical facts or that involve predictions. 28 Table of Contents Introduction Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is a supplement to the accompanying consolidated financial statements of MasterBrand and its consolidated subsidiaries and provides additional information on our business, recent developments, financial condition, liquidity and capital resources, cash flows and results of operations.
Biggest changeSome of the important factors that could cause our actual results to differ materially from those projected in any such forward-looking statements include: • Our ability to develop and expand our business; • Our ability to develop new products or respond to changing consumer preferences and purchasing practices; • Our anticipated financial resources and capital spending; • Our ability to manage costs; • Our ability to effectively manage manufacturing operations and capacity, or an inability to maintain the quality of our products; • The impact of our dependence on third parties to source raw materials and our ability to obtain raw materials in a timely manner or fluctuations in raw material costs; • Our ability to accurately price our products; • Our projections of future performance, including future revenues, capital expenditures, gross margins, and cash flows; • The effects of competition; • Costs of complying with evolving tax and other regulatory requirements and the effect of actual or alleged violations of tax, environmental or other laws; • The effect of climate change and unpredictable seasonal and weather factors; • Conditions in the housing market in the United States, Canada and Mexico; • The expected strength of our existing customers and consumers and any loss or reduction in business from one or more of our key customers or increased buying power of large customers; • Information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees, or other third parties; • Worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis, including risks associated with uncertain trade environments, changes to U.S. tariff policy and retaliatory tariffs imposed by other countries; • The effects of a public health crisis or other unexpected event; • Changes in the anticipated timing for closing the combination of MasterBrand with American Woodmark (the “Transaction”), including the impact of the U.S. government shutdown; • Delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulatory reviews required to complete the Transaction; • The outcome of any legal proceedings that may be instituted against MasterBrand or American Woodmark following the announcement of the Transaction; • The inability to complete the Transaction; • The inability to recognize, or delays in obtaining, anticipated benefits of the Transaction, including synergies, which may be affected by, among other things, competition, the ability of the combined company to integrate operations in a successful manner and in the expected time period, grow and manage growth profitably, maintain relationships with customers and suppliers and retain key employees; 29 Table of Contents • The impact of our current and any additional future debt obligations on our business, current and future operations, profitability and our ability to meet other obligations; • Business disruption during the pendency of or following the Transaction; • Diversion of management time on Transaction-related issues; • The reaction of customers and other persons to the Transaction; and • Other statements contained in this Annual Report on Form 10-K regarding items that are not historical facts or that involve predictions.
In July 2024, upon closing, we funded the acquisition with a combination of cash on hand and $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement (see Note 12, "Debt," for further details).
In July 2024, upon closing, we funded the Supreme acquisition with a combination of cash on hand and $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement (see Note 12, "Debt," for further details).
We periodically review our portfolio of brands, manufacturing and supply chain footprint, and evaluate potential strategic transactions to increase stockholder value. However, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, or what impact any such transactions could have on our results of operations, cash flows or financial condition.
We periodically review our portfolio of brands, manufacturing and supply chain footprint, and evaluate potential strategic transactions to increase shareholder value. However, we cannot predict whether or when we may enter into acquisitions, joint ventures or dispositions, or what impact any such transactions could have on our results of operations, cash flows or financial condition.
On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, parent company of Supreme, a cabinetry company, from GHK Capital Partners LP. Supreme is a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products.
On July 10, 2024, we acquired all of the issued and outstanding limited liability interests of Dura Investment Holdings LLC, parent company of Supreme, a cabinetry company, from GHK Capital Partners LP. Supreme was a domestic manufacturer of residential cabinetry with a portfolio of product lines significantly focused on premium products.
This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at December 29, 2024 and December 31, 2023, as well as a discussion of our ability to fund our future commitments and ongoing operating activities through internal and external sources of capital. • Recently Issued Accounting Standards : This section identifies our adoption of recently issued accounting standards. • Critical Accounting Estimates : This section identifies and summarizes those accounting policies that significantly impact our reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application. 29 Table of Contents Overview Founded over 70 years ago, we are the largest manufacturer of residential cabinets in North America.
This section also provides a discussion of our contractual obligations, other purchase commitments and customer credit risk that existed at December 28, 2025 and December 29, 2024, as well as a discussion of our ability to fund our future commitments and ongoing operating activities through internal and external sources of capital. • Recently Issued Accounting Standards : This section identifies our adoption of recently issued accounting standards. • Critical Accounting Estimates : This section identifies and summarizes those accounting policies that significantly impact our reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application. 30 Table of Contents Overview Founded over 70 years ago, we are the largest manufacturer of residential cabinets in North America.
We also believe we have access to additional funds from capital markets to fund strategic initiatives. 37 Table of Contents Customer Credit Risk We routinely grant unsecured credit to customers in the normal course of business.
We also believe we have access to additional funds from capital markets to fund strategic initiatives. 36 Table of Contents Customer Credit Risk We routinely grant unsecured credit to customers in the normal course of business.
The Company will also pay customary agency fees and a commitment fee based on the daily unused portion of the revolving credit facility ranging from 0.20 percent to 0.30 percent per annum, depending on its net leverage ratio. The 2024 Credit Agreement contains customary representations and warranties, affirmative covenants and restrictive covenants.
The Company also pays customary agency fees and a commitment fee based on the daily unused portion of the revolving credit facility ranging from 0.20 percent to 0.30 percent per annum, depending on its net leverage ratio. The 2024 Credit Agreement contains customary representations and warranties, affirmative covenants and restrictive covenants.
We believe that of our accounting estimates and assumptions, those described in the following sections involve a high degree of judgment and complexity. Business Combinations We allocate the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
We believe that of our accounting estimates and assumptions, those described in the following sections involve a high degree of judgment and complexity. 38 Table of Contents Business Combinations We allocate the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
The Company was in compliance with all of its debt covenants under the Indenture as of December 29, 2024. The revolving credit facility under the 2024 Credit Agreement is not subject to amortization and will mature in June 2029. The 2024 Credit Agreement is secured by certain assets as well as the guarantee of certain of our subsidiaries.
The Company was in compliance with all of its debt covenants under the Indenture as of December 28, 2025. The revolving credit facility under the 2024 Credit Agreement is not subject to amortization and will mature in June 2029. The 2024 Credit Agreement is secured by certain assets as well as the guarantee of certain of our subsidiaries.
The conditions in the global economy and ongoing market volatility may reduce our customers’ ability to access sufficient liquidity and capital to fund their operations and make our estimation of customer defaults inherently uncertain.
Overall, t he conditions in the global economy and ongoing market volatility may reduce our customers’ ability to access sufficient liquidity and capital to fund their operations and make our estimation of customer defaults inherently uncertain.
A 50 basis point change in any of the significant assumptions used during the fiscal year ended December 29, 2024 or December 31, 2023 would not have resulted in an impairment being recognized when estimating the fair value of our indefinite-lived tradenames.
A 25 basis point change in any of the significant assumptions used during the fiscal year ended December 28, 2025, December 29, 2024 or December 31, 2023 would not have resulted in an impairment being recognized when estimating the fair value of our indefinite-lived tradenames.
We measure fair value of our indefinite-lived tradenames using the relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life.
In performing our quantitative testing, we measure fair value of our indefinite-lived tradenames using the relief-from-royalty approach which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life.
For comparisons of our 2023 fiscal year compared to our 2022 fiscal year, please refer to the heading “Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC. Fiscal 2024 compared to Fiscal 2023 (U.S.
For comparisons of our 2024 fiscal year compared to our 2023 fiscal year, please refer to the heading “Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, as filed with the SEC. Fiscal 2025 compared to Fiscal 2024 (U.S.
This section provides an analysis of our results of operations for the 52-week period that ended on December 29, 2024 as compared to the 53-week period that ended on December 31, 2023. Unless the context otherwise requires, references to years and quarters contained in this Annual Report on Form 10-K pertain to our fiscal years and fiscal quarters.
This section provides an analysis of our results of operations for the 52-week period that ended on December 28, 2025 as compared to the 52-week period that ended on December 29, 2024. Unless the context otherwise requires, references to years and quarters contained in this Annual Report on Form 10-K pertain to our fiscal years and fiscal quarters.
Additionally, unless the context otherwise requires, references in this Annual Report on Form 10-K to: (1) “2024,” “fiscal 2024” or our “2024 fiscal year” refers to our 2024 fiscal year that is a 52-week period that ended on December 29, 2024; (2)“2023,” “fiscal 2023” or our “2023 fiscal year” refers to our 2023 fiscal year that was a 53-week period that ended on December 31, 2023; and (3) “2022,” “fiscal 2022” or our “2022 fiscal year” refers to our 2022 fiscal year that was a 52-week period that ended on December 25, 2022. • Liquidity and Capital Resources : This section provides a discussion of our financial condition and an analysis of our cash flows for our 2024 fiscal year as compared to our 2023 fiscal year.
Additionally, unless the context otherwise requires, references in this Annual Report on Form 10-K to: (1) “2025,” “fiscal 2025” or our “2025 fiscal year” refers to our 2025 fiscal year that is a 52-week period that ended on December 28, 2025; (2)“2024,” “fiscal 2024” or our “2024 fiscal year” refers to our 2024 fiscal year that was a 52-week period that ended on December 29, 2024; and (3) “2023,” “fiscal 2023” or our “2023 fiscal year” refers to our 2023 fiscal year that was a 53-week period that ended on December 31, 2023. • Liquidity and Capital Resources : This section provides a discussion of our financial condition and an analysis of our cash flows for our 2025 fiscal year as compared to our 2024 fiscal year.
Net cash provided by financing activities was $269.6 million in 2024 as compared to net cash used of $299.9 million in 2023. In 2024, as a result of the refinancing transaction completed in the second quarter, our $712.5 million term loan was repaid, and replaced with $700.0 million of Senior Notes.
Net cash used in financing activities was $65.7 million in 2025 as compared to net cash provided of $269.6 million in 2024. In 2024, our $712.5 million term loan was repaid, and replaced with $700.0 million of Senior Notes as a result of the refinancing transaction completed in the second quarter of 2024.
The significant assumptions used to estimate the fair values of the tradenames tested quantitatively during the fiscal years ended December 29, 2024, December 31, 2023 and December 25, 2022 were as follows: 2024 2023 2022 Unobservable Input Min Max Wtd Avg (a) Min Max Wtd Avg (a) Min Max Wtd Avg (a) Discount rate 12.0 % 12.0 % 12.0 % 10.5 % 11.0 % 10.8 % 11.9 % 12.6 % 12.2 % Royalty rate (b) 3.0 % 4.0 % 3.6 % 3.0 % 4.0 % 3.6 % 2.5 % 4.0 % 3.5 % Long-term revenue growth rate (c) 2.0 % 2.5 % 2.3 % 2.0 % 2.5 % 2.3 % 1.0 % 3.0 % 2.0 % (a) Weighted by the relative fair value of the tradenames that were tested quantitatively.
The significant assumptions used to estimate the fair values of the tradenames tested quantitatively during the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 were as follows: 2025 2024 2023 Unobservable Input Min Max Wtd Avg (a) Min Max Wtd Avg (a) Min Max Wtd Avg (a) Discount rate 10.0 % 10.0 % 10.0 % 12.0 % 12.0 % 12.0 % 10.5 % 11.0 % 10.8 % Royalty rate(b) 3.0 % 4.0 % 2.5 % 3.0 % 4.0 % 3.6 % 3.0 % 4.0 % 3.6 % (a) Weighted by the relative fair value of the tradenames that were tested quantitatively.
Separating the former Cabinets segment into a standalone publicly-traded company significantly enhances the long-term growth and return prospects of our Company and offers substantially greater long-term value to stockholders, customers and associates.
Separating the former Cabinets segment of Fortune Brands into a standalone publicly-traded company significantly enhanced the long-term growth and return prospects of our Company and offers substantially greater long-term value to shareholders, customers and associates.
We use a variety of information sources to determine the fair value of acquired assets and liabilities including: third-party appraisers for the values and lives of property, identifiable intangibles and inventories; and actuaries and other third-party specialists, workers' compensation and general and product liabilities, as necessary. Transaction costs related to the acquisition of a business are expensed as incurred.
We use a variety of information sources to determine the fair value of acquired assets and liabilities including: third-party appraisers for the values and lives of property, identifiable intangibles and inventories; and actuaries and other third-party specialists, for the values of workers' compensation and general and product liabilities, as necessary.
The increase in interest expense is due to the higher outstanding debt balance in 2024 as a result of the second quarter debt refinancing transaction. Interest expense in 2024 also includes $6.5 million of nonrecurring interest expense incurred in connection with the debt refinancing transaction, including the write-off of deferred financing fees.
Our 2025 interest expense reflects a higher outstanding debt balance throughout 2025 as a result of the second quarter 2024 debt refinancing transaction. Interest expense in 2024 also includes $6.5 million of nonrecurring interest expense incurred in connection with the debt refinancing transaction, including the write-off of deferred financing fees.
Results of Operations The following discussion includes a comparison of results of operations for the fifty-two weeks ended December 29, 2024 compared to the fifty-three weeks ended December 31, 2023.
Results of Operations The following discussion includes a comparison of results of operations for the fifty-two weeks ended December 28, 2025 compared to the fifty-two weeks ended December 29, 2024.
Accounts receivable, net, were $191.0 million and $203.0 million as of December 29, 2024 and December 31, 2023, respectively, and are recorded at their stated amount less allowances for discounts and credit losses.
Accounts receivable, net, were $150.4 million and $191.0 million as of December 28, 2025 and December 29, 2024, respectively, and are recorded at their stated amount less allowances for discounts and credit losses.
Based on foreign exchange rates as of December 29, 2024 , we estimate that $5.0 million of net derivative loss included in accumulated other comprehensive loss as of December 29, 2024 , will be reclassified to earnings within the next twelve months. Foreign Currency Risk We have operations in various foreign countries, principally Canada and Mexico.
Based on foreign exchange rates as of December 28, 2025 , we estimate that $4.9 million of net derivative gains included in accumulated other comprehensive income as of December 28, 2025 , will be reclassified to earnings within the next twelve months. Foreign Currency Risk We have operations in various foreign countries, principally Canada and Mexico.
Overall end-market demand was softer in 2024 as compared to 2023 in the repair and remodel markets, while single-family new construction strengthened in 2024. Foreign currency impact was unfavorable by $1.2 million during 2024 as compared to 2023.
Overall end market demand was weaker in 2025 compared to 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $1.4 million during 2025 as compared to 2024.
Dollars presented in millions) 2024 2023 Net cash provided by operating activities $ 292.0 $ 405.6 Net cash used in investing activities (580.8) (56.9) Net cash used in (provided by) financing activities 269.6 (299.9) Effect of foreign exchange rate changes on cash (7.9) (1.2) Net (decrease) increase in cash, cash equivalents and restricted cash $ (27.1) $ 47.6 Fiscal 2024 as compared to Fiscal 2023 Net cash provided by operating activities decreased to $292.0 million in 2024 as compared to $405.6 million in 2023.
Dollars presented in millions) 2025 2024 Net cash provided by operating activities $ 195.7 $ 292.0 Net cash used in investing activities (74.4) (580.8) Net cash (used in) provided by financing activities (65.7) 269.6 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 6.7 (7.9) Net increase (decrease) in cash, cash equivalents and restricted cash $ 62.3 $ (27.1) Fiscal 2025 as compared to Fiscal 2024 Net cash provided by operating activities decreased to $195.7 million in 2025 as compared to $292.0 million in 2024.
In accordance with this policy, our inventory provision was $17.0 million and $15.9 million as of December 29, 2024 and December 31, 2023 , respectively. 40 Table of Contents Goodwill and Indefinite-lived Intangible Assets Goodwill In accordance with ASC Topic 350, Intangibles—Goodwill and Other , goodwill is tested for impairment at least annually in the fourth quarter and written down when impaired.
In accordance with this policy, our inventory provision was $15.7 million and $17.0 million as of December 28, 2025 and December 29, 2024 , respectively. Goodwill and Indefinite-lived Intangible Assets Goodwill In accordance with ASC Topic 350, “Intangibles—Goodwill and Other”, goodwill is tested for impairment at least annually in the fourth quarter and written down when impaired.
On June 27, 2024, the Company refinanced this debt by completing a private offering (the “Offering”) of $700.0 million aggregate principal amount of 7.00 percent Senior Notes due 2032 (the “Senior Notes”) and entered into an amended and restated credit agreement (the “2024 Credit Agreement”).
The 2022 Credit Agreement was secured by certain assets as well as the guarantee of certain of our subsidiaries. 34 Table of Contents On June 27, 2024, the Company refinanced this debt by completing a private offering (the “Offering”) of $700.0 million aggregate principal amount of 7.00 percent Senior Notes due 2032 (the “Senior Notes”) and entered into an amended and restated credit agreement (the “2024 Credit Agreement”).
In addition, estimated future operating income and cash flow consider our historical performance at similar levels of sales volume and management’s future operating plans as reflected in annual and long-term plans that are reviewed and approved by management.
The market forecasts are developed using independent third-party forecasts from multiple sources. In addition, estimated future operating income and cash flow consider our historical performance at similar levels of sales volume and management’s future operating plans as reflected in annual and long-term plans that are reviewed and approved by management.
On November 18, 2022, we entered into a 5-year, $1.25 billion credit agreement, consisting of a $750.0 million term loan and a $500.0 million revolving credit facility (the “2022 Credit Agreement”). The 2022 Credit Agreement was secured by certain assets as well as the guarantee of certain of our subsidiaries.
On November 18, 2022, we entered into a 5-year, $1.25 billion credit agreement, consisting of a $750.0 million term loan and a $500.0 million revolving credit facility (the “2022 Credit Agreement”).
The significant assumptions that are used to determine the estimated fair value for goodwill impairment testing include the following: third-party market forecasts of U.S. new home starts and home R&R spending; management’s sales, operating income and cash flow forecasts; peer company earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples; the market-participant-based discount rate; and the perpetuity growth rate.
When the estimated fair value of the reporting unit is less than its carrying value, we measure and recognize the amount of the goodwill impairment loss based on that difference. 39 Table of Contents The significant assumptions that are used to determine the estimated fair value for goodwill impairment testing include the following: third-party market forecasts of U.S. new home starts and home R&R spending; management’s sales, operating income and cash flow forecasts; peer company earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples; the market-participant-based discount rate; and the perpetuity growth rate.
The facility sold for a purchase price of $6.6 million, resulting in a $4.3 million gain. Other (income) expense, net Other income, net was $2.3 million in 2024 compared to other expense, net of $2.4 million in 2023.
The facility sold for a purchase price of $6.6 million, resulting in a $4.3 million gain. Other income, net Other income, net was $1.4 million in 2025, a decline of $0.9 million as compared to other income, net of $2.3 million in 2024.
Interest on the Senior Notes will accrue at a rate of 7.00 percent per annum and is payable semi-annually in arrears on January 15 and July 15, beginning on January 15, 2025. 35 Table of Contents The Indenture contains certain covenants, including, but not limited to, limitations and restrictions on the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to (i) incur additional indebtedness and guarantee indebtedness, (ii) make restricted payments, (iii) create, incur or assume liens or use assets as security in other transactions, (iv) merge, consolidate, or sell, transfer, lease or dispose of substantially all of their assets, (v) sell or transfer certain assets, (vi) enter into or conduct transactions with affiliates of the Company and (vii) agree to certain restrictions or encumbrances on the ability of restricted subsidiaries to pay dividends, make loans or advances, or to otherwise transfer property or assets to the Company or other restricted subsidiaries.
The Indenture contains certain covenants, including, but not limited to, limitations and restrictions on the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to (i) incur additional indebtedness and guarantee indebtedness, (ii) make restricted payments, (iii) create, incur or assume liens or use assets as security in other transactions, (iv) merge, consolidate, or sell, transfer, lease or dispose of substantially all of their assets, (v) sell or transfer certain assets, (vi) enter into or conduct transactions with affiliates of the Company and (vii) agree to certain restrictions or encumbrances on the ability of restricted subsidiaries to pay dividends, make loans or advances, or to otherwise transfer property or assets to the Company or other restricted subsidiaries.
Deferred currency losses of $2.9 million were reclassified into earnings for the 2024 fiscal year. Deferred currency gains of $10.2 million and $4.5 million were reclassified into earnings for the 2023 and 2022 fiscal years, respectively.
Deferred currency gains of $2.1 million were reclassified into earnings for the 2025 fiscal year. Deferred currency losses of $2.9 million were reclassified into earnings for the 2024 fiscal year. Deferred currency gains of $10.2 million were reclassified into earnings for the 2023 fiscal year.
Additionally, we used $470.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement to fund the Supreme acquisition. We have subsequently paid down $150.0 million on the revolving credit facility through the usage of cash flow from operations in the second half of 2024.
In 2024, we used $470.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement to fund the Supreme acquisition, and subsequently paid down $150.0 million, net on our revolving credit facility.
Our estimates of reporting unit fair values are based on certain assumptions that may differ from our historical and future actual operating performance. Specifically, assumptions related to growth in the new construction and R&R market of the U.S. home products markets drive our forecasted sales growth. The market forecasts are developed using independent third-party forecasts from multiple sources.
Our estimates of reporting unit fair values are based on certain assumptions that may differ from our historical and future actual operating performance. Specifically, assumptions related to growth in the new construction and R&R market of the U.S. home products markets, when combined with general economic data such as inflation and interest rates, drive our forecasted sales growth.
Selling, general and administrative expenses Selling, general and administrative expenses increased by $33.4 million, or 5.9 percent, to $603.1 million (22.3 percent of net sales) in 2024 compared to $569.7 million (20.9 percent of net sales) in the prior year.
Selling, general and administrative expenses Selling, general and administrative expenses increased by $64.7 million, or 10.7 percent, to $667.8 million (24.4 percent of net sales) in 2025 compared to $603.1 million (22.3 percent of net sales) in the prior year.
Other corporate commercial commitments as of December 29, 2024 include standby letters of credit of $24.6 million and surety bonds outstanding of $3.7 million , of which $3.5 million are due in the next 12 months.
Other corporate commercial commitments as of December 28, 2025 include standby letters of credit of $23.1 million and surety bonds outstanding of $13.1 million , of which $7.4 million are due in the next 12 months.
Through this transaction, MasterBrand broadened its portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories, further diversifying its channel distribution and adding to its strategically located facility footprint.
Through this transaction, MasterBrand broadened its portfolio of premium cabinetry in the resilient and attractive kitchen and bath categories, further diversifying its channel distribution and adding to its strategically located facility footprint. The acquisition was funded with a combination of cash on hand and proceeds from our revolving credit facility.
An interim impairment test is performed if an event occurs or conditions change that would more likely than not reduce the fair value of the reporting unit below the carrying value. To evaluate the recoverability of goodwill, we first assess qualitative factors to determine whether it is more likely than not that goodwill is impaired.
An interim impairment test is performed if an event occurs or conditions change that would more likely than not reduce the fair value of the reporting unit below the carrying value. To evaluate the recoverability of goodwill, we perform a quantitative impairment test using a weighting of the income and market approaches.
We estimate the fair value of acquired customer relationships using the multi-period excess earnings method. Fair value is estimated as the present value of the benefits anticipated from ownership of the asset, in excess of the returns required on the investment in contributory assets which are necessary to realize those benefits.
Fair value is estimated as the present value of the benefits anticipated from ownership of the asset, in excess of the returns required on the investment in contributory assets which are necessary to realize those benefits. The intangible asset’s estimated earnings are determined as the residual earnings after quantifying estimated earnings from contributory assets.
MD&A is organized as follows: • Overview : This section provides a general description of our business, as well as recent developments we believe are important in understanding our results of operations and financial condition or in understanding anticipated future trends. • Separation from Fortune Brands : This section provides a general discussion of our Separation from Fortune Brands. • Basis of Presentation : This section provides a discussion of the basis on which our consolidated financial statements were prepared, including our historical results of operations and adjustments thereto, primarily allocations of general corporate expenses from Fortune Brands. • Results of Operations : Our consolidated financial statements are based on a 52- or 53-week fiscal year ending on the last Sunday in December in each calendar year.
MD&A is organized as follows: • Overview : This section provides a general description of our business, as well as recent developments we believe are important in understanding our results of operations and financial condition or in understanding anticipated future trends. • Results of Operations : Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are based on a 52- or 53-week fiscal year ending on the last Sunday in December in each calendar year.
Our projection for the U.S. home products market is inherently uncertain and is subject to a number of factors, such as employment rates, home prices, interest rates, credit availability, new home starts and the rate of home foreclosures. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired.
Our projection for the U.S. home products market is inherently uncertain and is subject to a number of factors, such as employment rates, home prices, interest rates, credit availability, new home starts and the rate of home foreclosures.
Derivative Financial Instruments In accordance with Accounting Standards Codification (“ASC”) requirements for derivatives and hedging, we recognize all derivative contracts as either assets or liabilities on the balance sheet, and the measurement of those instruments is at fair value.
We do not curren tly have any off-balance sheet arrangements that are material or reasonably likely to be material to our financial condition or results of operations. 37 Table of Contents Derivative Financial Instruments In accordance with Accounting Standards Codification (“ASC”) requirements for derivatives and hedging, we recognize all derivative contracts as either assets or liabilities on the balance sheet, and the measurement of those instruments is at fair value.
Recently Issued Accounting Standards The adoption of recent accounting standards, as discussed in Note 2, "Significant Accounting Policies," of our audited consolidated financial statements within this Annual Report on Form 10-K, has not had and is not expected to have a significant impact on our revenue, earnings or liquidity. 39 Table of Contents Critical Accounting Estimates The consolidated financial statements are prepared in accordance with GAAP, which require us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses for the reporting period.
Recently Issued Accounting Standards The adoption of recent accounting standards, as discussed in Note 2, "Significant Accounting Policies," of our audited consolidated financial statements within this Annual Report on Form 10-K, has not had and is not expected to have a significant impact on our revenue, earnings or liquidity.
See Note 9, "Goodwill and Identifiable Intangible Assets," and Note 11, "Fair Value Measurements," of our audited consolidated financial statements within this Annual Report on Form 10-K, for additional information. During our 2024, 2023 and 2022 impairment tests, we elected to bypass the qualitative test and tested all of our indefinite lived tradenames quantitatively.
See Note 9, "Goodwill and Identifiable Intangible Assets," and Note 11, "Fair Value Measurements," of our audited consolidated financial statements within this Annual Report on Form 10-K, for additional information.
As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Any adjustments required after the measurement period are recorded in the consolidated statement of operations.
While we use our best estimates and assumptions, fair value estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.
Dollars presented in millions) December 29, 2024 $ change % change December 31, 2023 NET SALES $ 2,700.4 $ (25.8) (0.9 %) $ 2,726.2 Cost of products sold 1,823.4 (1.4) (0.1 %) 1,824.8 GROSS PROFIT 877.0 (24.4) (2.7 %) 901.4 Selling, general and administrative expenses 603.1 33.4 5.9 % 569.7 Amortization of intangible assets 20.2 4.9 32.0 % 15.3 Restructuring charges 18.0 7.9 78.2 % 10.1 OPERATING INCOME 235.7 (70.6) (23.0) % 306.3 Interest expense 74.0 8.8 13.5 % 65.2 Gain on sale of asset (4.3) (4.3) n/m (1) — Other (income) expense, net (2.3) (4.7) n/m (1) 2.4 INCOME BEFORE TAXES 168.3 (70.4) (29.5 %) 238.7 Income tax expense 42.4 (14.3) (25.2 %) 56.7 NET INCOME $ 125.9 $ (56.1) (30.8) % $ 182.0 __________ (1) Not meaningful.
Dollars presented in millions) December 28, 2025 $ change % change December 29, 2024 NET SALES $ 2,734.7 $ 34.3 1.3 % $ 2,700.4 Cost of products sold 1,907.1 83.7 4.6 % 1,823.4 GROSS PROFIT 827.6 (49.4) (5.6 %) 877.0 Selling, general and administrative expenses 667.8 64.7 10.7 % 603.1 Amortization of intangible assets 25.6 5.4 26.7 % 20.2 Restructuring charges 15.2 (2.8) (15.6 %) 18.0 OPERATING INCOME 119.0 (116.7) (49.5) % 235.7 Interest expense 74.1 0.1 0.1 % 74.0 Gain on sale of asset — 4.3 n/m (1) (4.3) Other income, net (1.4) 0.9 (39.1 %) (2.3) INCOME BEFORE TAXES 46.3 (122.0) (72.5 %) 168.3 Income tax expense 19.6 (22.8) (53.8 %) 42.4 NET INCOME $ 26.7 $ (99.2) (78.8) % $ 125.9 __________ (1) Not meaningful. 32 Table of Contents Net sales Net sales were $2,734.7 million for 2025 compared to $2,700.4 million for 2024, an increase of $34.3 million, or 1.3 percent.
Assumptions used in the determination of the fair value of a trade name include forecasted revenue growth rates, the assumed royalty rate and the market-participant discount rate. While we use our best estimates and assumptions, fair value estimates are inherently uncertain and subject to refinement.
Assumed royalty rates are applied to projected revenue for the remaining useful lives of the assets to estimate the royalty savings. Assumptions used in the determination of the fair value of a trade name include forecasted revenue growth rates, the assumed royalty rate and the market-participant discount rate.
For taxable periods ended after the Separation, we file a consolidated U.S. federal income tax return and various state and local income tax returns. Our foreign income tax returns continue to be filed on a full-year basis.
Income Taxes Our income tax provisions are calculated based on our operating footprint, as well as our tax return elections and assertions. For all taxable periods, we file a consolidated U.S. federal income tax return and various state and local income tax returns, and our foreign income tax returns are filed on a full-year basis.
The 2024 effective income tax rate of 25.2 percent compared to the U.S. federal statutory rate of 21.0 percent was unfavorably impacted by net changes in state and local income taxes, foreign income taxed at higher rates, an increase in the valuation allowance, nondeductible transaction costs related to the Supreme acquisition and executive compensation.
The 2025 effective income tax rate of 42.3 percent compared to the U.S. federal statutory rate of 21.0 percent was primarily the result of the increase in the valuation allowance and nondeductible acquisition-related transaction costs, as well as changes in foreign income inclusions, nondeductible compensation and net changes in state and local income taxes, partially offset by tax credits and the mix of earnings in jurisdictions with differing tax rates.
Dollars presented in millions) Payment Due by Period Total 2025 2026 2027 2028 2029 Thereafter Contractual Obligations Purchase obligations (a) $ 37.0 $ 26.5 $ 5.8 $ 3.8 $ 0.9 $ — $ — Non-cancellable operating leases 88.0 21.9 15.4 12.7 10.3 6.7 21.0 Non-cancellable financing leases 5.1 2.4 1.6 0.7 0.2 0.2 — Other Corporate Commercial Commitments Debt payments (b) 1,020.0 — — — — 320.0 700.0 Interest payments 486.8 72.0 69.5 69.5 69.5 59.3 147.0 Total contractual cash obligations $ 1,636.9 $ 122.8 $ 92.3 $ 86.7 $ 80.9 $ 386.2 $ 868.0 (a) Purchase obligations related to operating activities include agreements and contracts that give the supplier recourse to us for cancellation or nonperformance under the contract or contain terms that would subject us to liquidated damages.
Dollars presented in millions) Total 2026 2027 2028 2029 2030 Thereafter Contractual Obligations Purchase obligations (a) $ 65.6 $ 39.3 $ 16.6 $ 7.1 $ 1.3 $ 1.3 $ — Non-cancellable operating leases 256.6 33.1 32.0 30.4 27.1 24.5 109.5 Non-cancellable financing leases 5.8 2.6 1.6 1.0 0.5 0.1 — Other Corporate Commercial Commitments Debt payments (b) 985.0 — — — 285.0 — 700.0 Interest payments 399.4 65.1 65.1 65.1 57.1 49.0 98.0 Total contractual cash obligations $ 1,712.4 $ 140.1 $ 115.3 $ 103.6 $ 371.0 $ 74.9 $ 907.5 (a) Purchase obligations related to operating activities include agreements and contracts that give the supplier recourse to us for cancellation or nonperformance under the contract or contain terms that would subject us to liquidated damages.
Excluding the impact of Supreme, the $147.0 million decrease in net sales in 2024 compared to 2023 was driven primarily by the combined net impact of price and mix on our overall average selling price, which accounted for 77.0 percent of the decrease, while lower sales unit volume represented 23.0 percent of the decrease from 2023 to 2024.
Excluding the impact of Supreme, the $97.2 million decrease in net sales from 2024 was driven primarily by lower sales unit volume of $156.5 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $60.7 million.
While we believe current allowances for credit losses are adequate, it is possible that continued weak economic conditions may cause significantly higher levels of customer defaults and bad debt expense in future periods. Pension Plan We sponsor a defined benefit pension plan.
While we believe current allowances for credit losses are adequate, it is possible that continued weak economic conditions may cause significantly higher levels of customer defaults and bad debt expense in future periods. Contractual Obligations and Other Commercial Commitments The following table summarizes our contractual obligations and commitments as of December 28, 2025: Payment Due by Period (U.S.
Excluding the impact of Supreme, the $84.8 million decrease in cost of products sold was driven primarily by the combined net impact of costs and mix, which accounted for 74.0 percent of the decrease, while lower sales unit volume represented 26.0 percent of the $84.8 million decrease.
Excluding the impact of Supreme, the $2.7 million decrease in cost of products sold was driven primarily by lower sales unit volume of $105.6 million, partially offset by the combined net impact of costs and mix of $102.9 million.
The purchase obligations in the table above include contracts for raw materials and finished goods purchases, selling and administrative services and capital expenditures.
The purchase obligations in the table above include contracts for raw materials and finished goods purchases, selling and administrative services and capital expenditures. (b) Debt payments include our $700.0 million Senior Notes and $750.0 million revolving credit facility under the 2024 Credit Agreement.
The Senior Notes were issued under the Indenture dated as of June 27, 2024 (the “Indenture”) and will mature on July 15, 2032.
The Senior Notes were issued under the Indenture dated as of June 27, 2024 (the “Indenture”) and will mature on July 15, 2032. Interest on the Senior Notes accrues at a rate of 7.00 percent per annum and is payable semi-annually in arrears on January 15 and July 15.
Compared to 2023, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $25.2 million, or 1.7 percent, and net sales to retailers, including through their respective retail internet website portals, declined $39.4 million, or 4.1 percent.
Net sales to retailers, including through their respective retail internet website portals, declined $49.2 million, or 5.3 percent, and net sales directly to builders increased $4.4 million, or 1.3 percent.
Certain of our entities have standalone cash accounts that are not included in the centralized cash pooling arrangements. All cash balances specifically identifiable to us are included in our consolidated balance sheets and statement of cash flows.
All cash balances specifically identifiable to us are included in our consolidated balance sheets and statement of cash flows. Our operating income is generated by our subsidiaries.
(b) Debt payments include our $700.0 million term loan and $750.0 million revolving credit facility under the 2024 Credit Agreement. 38 Table of Contents In addition to the contractual obligations and commitments described above, we also had other corporate commercial commitments for which we are contingently liable as of December 29, 2024.
In addition to the contractual obligations and commitments described above, we also had other corporate commercial commitments for which we are contingently liable as of December 28, 2025.
We estimate the fair value of tradenames using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the assets. Assumed royalty rates are applied to projected revenue for the remaining useful lives of the assets to estimate the royalty savings.
Assumptions used in these calculations are considered from a market participant perspective and include forecasted revenue growth rates, estimated earnings, customer attrition rates and market-participant discount rates. We estimate the fair value of tradenames using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the assets.
Income taxes Our consolidated income tax expense, income before taxes, and effective tax rate for the fiscal years ended December 29, 2024 and December 31, 2023 were as follows: (U.S.
This decrease was due primarily to lower transactional foreign currency gains in 2025, as compared to 2024, due to fluctuations in exchange rates. 33 Table of Contents Income taxes Our consolidated income tax expense, income before taxes, and effective tax rate for the fiscal years ended December 28, 2025 and December 29, 2024 were as follows: (U.S.
In accordance with our policy, our allowance for credit losses was $3.0 million and $4.6 million as of December 29, 2024 and December 31, 2023 , respectively.
In accordance with our policy, our allowance for credit losses was $17.4 million and $3.0 million as of December 28, 2025 and December 29, 2024 , respectively. The Company increased the allowance for doubtful accounts by $17.1 million as a result of the Company’s assessment of the collectability of a specific customer’s receivable balance as of December 28, 2025.
The determination of fair value using this technique requires the use of estimates and assumptions related to forecasted revenue growth rates, the assumed royalty rates and the market-participant discount rates. 41 Table of Contents In the second quarter ended June 26, 2022, we recognized an impairment charge of $26.0 million related to an indefinite-lived tradename.
The determination of fair value using this technique requires the use of estimates and assumptions related to forecasted revenue growth rates, the assumed royalty rates and the market-participant discount rates. The fair values of the impaired tradenames were measured using the relief-from-royalty approach.
The increase in 2024 is primarily due to increased acquisition-related costs ($25.4 million) associated with the acquisition of Supreme, the inclusion of Supreme ($24.4 million) and increased associate-related costs, net of lower variable compensation ($9.1 million). These increases were partially offset by lower distribution and commission costs ($21.4 million), as a result of the decrease in sales unit volume.
These increases were partially offset by lower distribution and commission costs ($3.3 million), as a result of the decrease in sales unit volume. Restructuring charges Restructuring charges were $15.2 million in 2025 as compared to $18.0 million in 2024.
The increase in effective tax rate was primarily the result of an increase in the valuation allowance, nondeductible transaction costs related to the Supreme acquisition and foreign income inclusions net of foreign tax credits, partially offset by foreign exclusions, return-to-provision adjustments and the release of specific uncertain tax positions.
The increase in the effective tax rate between the periods was primarily due to the increase in the valuation allowance and nondeductible acquisition-related transaction costs, as well as changes in foreign income inclusions and changes in book income, partially offset by lower state and local income taxes and the mix of earnings in jurisdictions with differing tax rates.
The inclusion of Supreme in the second half of 2024 resulted in an incremental $83.4 million of cost of products sold.
Cost of products sold Cost of products sold increased by $83.7 million, or 4.6 percent, to $1,907.1 million (69.7 percent of net sales) in 2025 as compared to $1,823.4 million (67.5 percent of net sales) in 2024. The inclusion of Supreme during the first half of 2025 resulted in an incremental $86.4 million of cost of products sold.
Cash Flows Below is a summary of cash flows for the fiscal years ended December 29, 2024 and December 31, 2023. For years ended (U.S.
As of December 28, 2025 , we had $974.5 million outstanding in third-party borrowings, net of deferred financing fees. We may also incur additional indebtedness in the future. Cash Flows Below is a summary of cash flows for the fiscal years ended December 28, 2025 and December 29, 2024. For years ended (U.S.
The year-over-year increase is due to the acquisition of Supreme, net of cash acquired, of $514.5 million and increased capital expenditures as compared to the prior year due to Supreme integration efforts and incremental tech-enabled initiatives. These increases were partially offset by the proceeds from the sale of former manufacturing warehouse facility sites in 2024.
Capital expenditures were comparable in 2025 ($78.2 million) versus 2024 ($80.9 million). Fiscal 2024 included the acquisition of Supreme, net of cash acquired, of $514.5 million. Fiscal 2024 also included the proceeds from the sale of former manufacturing warehouse facility sites.
The decrease in operating cash flows was partially driven by the Company’s decreased net income in 2024 of $125.9 million, as compared to net income of $182.0 million in 2023. In 2024, accounts receivable generated $21.7 million of cash, compared to 2023, which generated $88.1 million of cash.
Net income contributed $26.7 million to operating cash flow in 2025, down from $125.9 million in 2024. In 2025, accounts receivable decreased $24.0 million as a result of lower net sales and improved timing of cash collections in the fourth quarter of 2025, compared to a decrease of $21.3 million in 2024.
Restructuring charges, net of cash payments, were $10.5 million favorable in 2024 as compared to $9.4 million unfavorable in 2023 due to the timing of actions and associated cash impact. Net cash used in investing activities was $580.8 million in 2024, compared to net cash used in investing activities of $56.9 million in 2023.
Depreciation in 2025 was $67.9 million as compared to $57.1 million in 2024. The increase is due to the inclusion of Supreme for the full year in 2025. Net cash used in investing activities was $74.4 million in 2025, compared to net cash used in investing activities of $580.8 million in 2024.
Charges in 2024 include severance costs and other associate-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint. 2024 restructuring charges also include an asset impairment charge associated with the decision to exit a leased manufacturing facility.
Charges in both periods are largely related to severance costs and other employee-related costs in order to better align our workforce with our forecasted demand within our manufacturing footprint. Interest expense Interest expense was $74.1 million in 2025, which was comparable to $74.0 million in 2024 .
These were partially offset by favorable benefits for the partial release of uncertain tax positions, return-to-provision adjustments, tax credits and foreign exclusions. The 23.8 percent effective income tax rate for 2023 was unfavorably impacted by net changes in state and local income taxes and foreign income taxed at higher rates.
The 25.2 percent effective income tax rate for 2024 was unfavorably impacted by net changes in state and local income taxes and foreign income taxed at higher rates. Liquidity and Capital Resources Our primary liquidity needs have historically been to support working capital requirements and fund capital expenditures.
(b) Represents estimated percentage of sales a market-participant would pay to license the tradenames that were tested quantitatively. (c) Selected long-term revenue growth rate within 10-year projection period of the tradenames that were tested quantitatively.
(b) Represents estimated percentage of sales a market-participant would pay to license the tradenames that were tested quantitatively. 40 Table of Contents A reduction in the estimated fair value of our reporting units or any of our tradenames could trigger impairment charges in future periods.
Accounts payable was $23.8 million favorable in 2024, partially due to the increased purchasing associated with the higher inventory balance from year-end, as compared to unfavorable accounts payable movement of $69.4 million in 2023 as a result of decreased purchasing levels aligned with our inventory management.
In 2025, inventory declined $8.0 million as a result of inventory management efforts, as compared to an increase in inventory of $10.7 million in 2024. In 2025, accounts payable increased $15.7 million compared to an increase of $23.8 million in 2024. The reduced favorability in accounts payable in 2025 was a result of inventory management efforts.
Removed
The acquisition was funded with a combination of cash on hand and proceeds from our revolving credit facility. 30 Table of Contents Separation from Fortune Brands On April 28, 2022, Fortune Brands announced that its Board of Directors approved in principle the Separation. The Cabinets segment of Fortune Brands had historically been operated by MasterBrand Cabinets, Inc. (“MBCI”).
Added
Introduction Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is a supplement to the accompanying consolidated financial statements of MasterBrand and its consolidated subsidiaries and provides additional information on our business, recent developments, financial condition, liquidity and capital resources, cash flows and results of operations.
Removed
In July 2022, Fortune Brands incorporated MasterBrand, Inc. in the State of Delaware and subscribed to all of the shares of MasterBrand, Inc.’s common stock upon its incorporation.
Added
On December 14, 2022, our former parent company, Fortune Brands, completed a tax free spin-off transaction to separate its Cabinets segment into a standalone publicly-traded company.
Removed
After the incorporation of MasterBrand, Inc., the following occurred: (1) Fortune Brands contributed all of the issued and outstanding shares of capital stock of MBCI to MasterBrand, Inc., resulting in MBCI becoming a wholly-owned subsidiary of MasterBrand, Inc. through a transaction between entities under common control; and (2) MBCI was converted into a Delaware limited liability company, MasterBrand Cabinets LLC (collectively, the “Reorganization”).
Added
The Separation was completed through a series of transactions ending with a pro rata distribution of all of the shares of MasterBrand, Inc. common stock owned by Fortune Brands to Fortune Brands shareholders, after which we became an independent, publicly-traded company.

… 94 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−0 removed1 unchanged
Biggest changeA hypothetical 100 basis point increase in interest rates affecting our external borrowings as of December 29, 2024 would increase our borrowing costs by $3.2 million on a pre-tax basis annually. 43 Table of Contents Foreign Exchange Rate Risk We enter into forward foreign exchange contracts principally to hedge currency fluctuations in transactions denominated in certain foreign currencies, thereby limiting our risk that would otherwise result from changes in exchange rates.
Biggest changeForeign Exchange Rate Risk We enter into forward foreign exchange contracts principally to hedge currency fluctuations in transactions denominated in certain foreign currencies, thereby limiting our risk that would otherwise result from changes in exchange rates. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions.
We do not enter into derivatives or other financial instruments for trading or speculative purposes. We enter into financial instruments to manage and reduce the impact of changes in foreign currency exchange rates. The counterparties are major financial institutions. Interest Rate Risk We had $320.0 million of external variable rate borrowings as of December 29, 2024 .
We do not enter into derivatives or other financial instruments for trading or speculative purposes. We enter into financial instruments to manage and reduce the impact of changes in foreign currency exchange rates.
The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions. The estimated fair value of foreign currency contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices.
The estimated fair value of foreign currency contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. The estimated potential loss under foreign exchange contracts from movement in foreign exchange rates would not have a material impact on our results of operations.
The estimated potential loss under foreign exchange contracts from movement in foreign exchange rates would not have a material impact on our results of operations. Commodity Price Risk We are subject to commodity price volatility caused by weather, supply conditions, geopolitical and economic variables and other unpredictable external factors.
Commodity Price Risk We are subject to commodity price volatility caused by weather, supply conditions, geopolitical and economic variables and other unpredictable external factors.
Added
The counterparties are major financial institutions. 41 Table of Contents Interest Rate Risk We had $285.0 million of external variable rate borrowings as of December 28, 2025 . A hypothetical 100 basis point increase in interest rates affecting our external borrowings as of December 28, 2025 would increase our borrowing costs by $2.9 million on a pre-tax basis annually.

Other MBC 10-K year-over-year comparisons