MasterBrand, Inc.

Previous wording

•Changes in the anticipated timing for closing the combination of MasterBrand with American Woodmark (the “Transaction”);

Current wording

•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;

Previous wording

•The inability to recognize, or delays in obtaining, anticipated benefits of the Transaction and acquisition of American Woodmark, 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;

Current wording

•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;

Previous wording

•Business disruption following the acquisition of American Woodmark and during the pendency of or following the Transaction;

Current wording

•Business disruption during the pendency of or following the Transaction;

Previous wording

•The reaction of customers and other persons to the acquisition of American Woodmark and the Transaction; and

Current wording

•The reaction of customers and other persons to the Transaction; and

Previous wording

Founded over 70 years ago, we are the largest manufacturer of residential cabinets in North America. 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. 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 an improved 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. Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that cannot be easily replicated. We expect to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization to ordering to delivery and installation.

Current wording

Founded over 70 years ago, we are a leading manufacturer of residential cabinets in North America. 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. 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 an improved 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. Finally, with the most extensive dealer network throughout the United States and Canada, we have an advantaged distribution model that cannot be easily replicated. We expect to further extend our competitive advantages by using technology and data to enhance the consumer’s experience from visualization to ordering to delivery and installation.

Previous wording

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. Supreme, with manufacturing facilities located in Minnesota, Iowa and North Carolina, and its two brands, Dura Supreme and Bertch cabinetry, crafted 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. 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.

Current wording

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. 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. 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.

Previous wording

On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark in an all-stock transaction. Merger Sub, a direct wholly owned subsidiary of the Company, will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company. The closing of the Merger, which is expected to occur in early 2026, is subject to approval by stockholders of the Company and American Woodmark, respectively, as well as other customary closing conditions.

Current wording

On August 6, 2025, we announced the execution of a definitive agreement whereby the Company will combine with American Woodmark in an all-stock transaction. Merger Sub, a direct wholly owned subsidiary of the Company, will merge with and into American Woodmark, with American Woodmark surviving the merger and continuing as a wholly owned subsidiary of the Company. 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.

Previous wording

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into U.S. law. The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures, changes to business interest expense limitations and bonus depreciation. We are currently assessing its impact on our consolidated financial statements.

Current wording

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was enacted into U.S. law. The OBBBA includes changes to several corporate tax provisions, including tax deductions for qualified research expenditures, changes to business interest expense limitations and bonus depreciation. The OBBBA legislation does not materially impact our 2025 annual effective tax rate but is expected to reduce 2025 cash taxes.

Previous wording

more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”). The model rules include qualified domestic minimum 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, 2025 or others becoming effective in 2026. The Pillar Two legislation, as enacted in certain jurisdictions in which we operate, does not materially impact our 2025 annual effective tax rate but is expected to unfavorably impact our annual effective tax rate in 2026. Further changes to our entity structure, enacted local legislation, or changes in jurisdictions in which we operate could also impact our future effective tax rate.

Current wording

more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (“Pillar Two”). The model rules include qualified domestic minimum 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, 2025 or 2026. The Pillar Two legislation, as enacted in certain jurisdictions in which we operate, does not materially impact our 2025 annual effective tax rate but is expected to unfavorably impact our annual effective tax rate in 2026. Additionally, material changes to our separate legal entity pre-tax book income and structure, the valuation allowance, nondeductible acquisition-related transaction costs, enacted local legislation, or changes in jurisdictions in which we operate could also impact our effective tax rate in the fourth quarter of 2025 or fiscal 2026.

Previous wording

Unless the context otherwise requires, references to years and quarters contained in this Quarterly Report on Form 10-Q pertain to our fiscal years and fiscal quarters. Additionally, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “2025,” or “fiscal 2025” refers to our 2025 fiscal year that is a 52-week period that will end on December 28, 2025; and (2) “2024,” or “fiscal 2024” refers to our 2024 fiscal year that was a 52-week period that ended on December 29, 2024. Furthermore, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “the second quarter of 2025” refers to the thirteen week period that ended on June 29, 2025; (2) “the second quarter of 2024” refers to the thirteen week period that ended on June 30, 2024; (3) “the first half of 2025” refers to the twenty-six weeks ended June 29, 2025; and (4) “the first half of 2024” refers to thetwenty-six weeks ended June 30, 2024.

Current wording

Unless the context otherwise requires, references to years and quarters contained in this Quarterly Report on Form 10-Q pertain to our fiscal years and fiscal quarters. Additionally, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “2025,” or “fiscal 2025” refers to our 2025 fiscal year that is a 52-week period that will end on December 28, 2025; and (2) “2024,” or “fiscal 2024” refers to our 2024 fiscal year that was a 52-week period that ended on December 29, 2024. Furthermore, unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to: (1) “the third quarter of 2025” refers to the thirteen week period that ended on September 28, 2025; (2) “the third quarter of 2024” refers to the thirteen week period that ended on September 29, 2024; (3) “the first three quarters of 2025” refers to the thirty-nine weeks ended September 28, 2025; and (4) “the first three quarters of 2024” refers to thethirty-nine weeks ended September 29, 2024.

Previous wording

Net sales were $730.9 million for the thirteen weeks ended June 29, 2025 compared to $676.5 million for the thirteen weeks ended June 30, 2024, an increase of $54.4 million, or 8.0 percent. The second quarter of 2025 includes $70.7 million of incremental sales related to the Supreme acquisition. Excluding the impact of Supreme, the $16.3 million decrease in net sales from the thirteen weeks ended June 30, 2024 was driven primarily by lower sales unit volume of $35.0 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $18.9 million. Overall end market demand was weaker in the second quarter of 2025 compared to the second quarter of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $0.2 million during the thirteen weeks ended June 29, 2025 as compared to the thirteen weeks ended June 30, 2024.

Current wording

Net sales were $698.9 million for the thirteen weeks ended September 28, 2025 compared to $718.1 million for the thirteen weeks ended September 29, 2024, a decline of $19.2 million, or 2.7 percent. The lower net sales from the thirteen weeks ended September 29, 2024 was driven primarily by lower sales unit volume of $38.3 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $19.3 million. Overall end market demand was weaker in the third quarter of 2025 compared to the third quarter of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $0.2 million during the thirteen weeks ended September 28, 2025 as compared to the thirteen weeks ended September 29, 2024.

Previous wording

Compared to the thirteen weeks ended June 30, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $57.3 million, or 16.2 percent, and net sales to retailers, including through their respective retail internet website portals, declined $8.7 million, or 3.8 percent. Net sales directly to builders increased $5.8 million, or 6.3 percent.

Current wording

Compared to the thirteen weeks ended September 29, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, declined $1.6 million, or 0.4 percent, and net sales to retailers, including through their respective retail internet website portals, declined $19.2 million, or 8.3 percent. Net sales directly to builders increased $1.6 million, or 1.7 percent.

Previous wording

Cost of products sold increased by $45.7 million, or 10.3 percent, to $491.2 million (67.2 percent of net sales) in the thirteen weeks ended June 29, 2025 as compared to $445.5 million (65.9 percent of net sales) in the thirteen weeks ended June 30, 2024. The inclusion of Supreme in the thirteen weeks ended June 29, 2025 resulted in an incremental $47.0 million of cost of products sold. Excluding the impact of Supreme, the $1.3 million decrease in cost of products sold was driven primarily by lower sales unit volume of $21.9 million, partially offset by the combined net impact of costs and mix of $20.6 million. In the second quarter of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.

Current wording

Cost of products sold increased by $0.6 million, or 0.1 percent, to $480.7 million (68.8 percent of net sales) in the thirteen weeks ended September 28, 2025 as compared to $480.1 million (66.9 percent of net sales) in the thirteen weeks ended September 29, 2024. The $0.6 million increase in cost of products sold was driven primarily by the combined net impact of costs and mix of $26.4 million, partially offset by lower sales unit volume of $25.8 million. In the third quarter of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage and gross tariffs.

Previous wording

Restructuring charges were $6.6 million in the thirteen weeks ended June 29, 2025, compared to restructuring charges of $2.8 million in the thirteen weeks ended June 30, 2024. 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.

Current wording

Restructuring charges were $2.6 million in the thirteen weeks ended September 28, 2025, compared to restructuring charges of $7.8 million in the thirteen weeks ended September 29, 2024. 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.

Previous wording

Other income, net was $0.6 million in the thirteen weeks ended June 29, 2025, a decline of $2.3 million as compared to other income, net of $2.9 million in the thirteen weeks ended June 30, 2024. This decrease was due primarily to lower transactional foreign currency gains in the second quarter of 2025 as compared to the second quarter of 2024, due to fluctuations in exchange rates.

Current wording

Other expense, net was $0.1 million in the thirteen weeks ended September 28, 2025, a decline of $1.9 million as compared to other income, net of $1.8 million in the thirteen weeks ended September 29, 2024. This decrease was due primarily to lower transactional foreign currency gains in the third quarter of 2025 as compared to the third quarter of 2024, due to fluctuations in exchange rates.

Previous wording

The effective income tax rates for thethirteen weeks ended June 29, 2025 and June 30, 2024, were 23.9 percent and 24.6 percent, respectively. The net decrease in the effective tax rate between the periods is primarily due to lower state and local income taxes and changes in foreign exclusions, partially offset by an increase in the valuation allowance and a reduction in the stock compensation windfall benefit for shares which vested.

Current wording

The effective income tax rates for thethirteen weeks ended September 28, 2025 and September 29, 2024, were 22.6 percent and 26.1 percent, respectively. The net decrease in the effective tax rate between the periods is primarily due to favorable changes in foreign exclusions, lower state and local income taxes, return-to-provision adjustments, and foreign income inclusions with offsetting tax credits. These were partially offset by increases in the valuation allowance and nondeductible compensation.

Previous wording

The difference between our effective income tax rate for thethirteen weeks ended June 29, 2025, and the U.S. statutory rate of 21.0 percent is dueto the unfavorable impact of net changes in state and local income taxes, nondeductible compensation, foreign income taxed at higher rates, an increase in the valuation allowance and foreign income inclusions net of foreign tax credits. These were partially offset by the release of uncertain tax positions and foreign exclusions.

Current wording

The difference between our effective income tax rate for thethirteen weeks ended September 28, 2025, and the U.S. statutory rate of 21.0 percent is primarily dueto the unfavorable impact of nondeductible compensation, state and local income taxes, increases in the valuation allowance and foreign income inclusions net of foreign tax credits. These were partially offset by foreign exclusions and favorable return-to-provision adjustments.

Previous wording

The difference between our effective income tax rate for the thirteen weeks ended June 30, 2024, and the U.S. statutory rate of 21.0 percent is due to the unfavorable impact of state and local income taxes, nondeductible compensation and foreign income inclusions with offsetting tax credits, partially offset by the stock compensation windfall benefit for shares which vested and the mix of earnings in jurisdictions with differing tax rates.

Current wording

The difference between our effective income tax rate for the thirteen weeks ended September 29, 2024, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of state and local income taxes, nondeductible compensation, nondeductible acquisition-related transaction costs and foreign income inclusions with offsetting tax credits. These were partially offset by favorable return-to-provision adjustments and the mix of earnings in jurisdictions with differing tax rates.

Previous wording

The following discussion of condensed consolidated results of operations refers to the twenty-six weeks ended June 29, 2025 compared to the twenty-six weeks ended June 30, 2024.

Current wording

The following discussion of condensed consolidated results of operations refers to the thirty-nine weeks ended September 28, 2025 compared to the thirty-nine weeks ended September 29, 2024.

Previous wording

Net sales were $1,391.2 million for the twenty-six weeks ended June 29, 2025 compared to $1,314.6 million for the twenty-six weeks ended June 30, 2024, an increase of $76.6 million, or 5.8 percent. The first half of 2025 includes $131.5 million of incremental sales related to the Supreme acquisition. Excluding the impact of Supreme, the $54.9 million decrease in net sales from the twenty-six weeks ended June 30, 2024 was driven primarily by lower sales unit volume of $83.1 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $29.5 million. Overall end market demand was weaker in the first half of 2025 compared to the first half of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $1.3 million during the twenty-six weeks ended June 29, 2025 as compared to the twenty-six weeks ended June 30, 2024.

Current wording

Net sales were $2,090.1 million for the thirty-nine weeks ended September 28, 2025 compared to $2,032.7 million for the thirty-nine weeks ended September 29, 2024, an increase of $57.4 million, or 2.8 percent. The higher net sales from the thirty-nine weeks ended September 29, 2024 was driven primarily by the acquisition of Supreme in July of 2024, which contributed $131.5 million of incremental sales in the first half of 2025. Excluding the impact of Supreme, the $74.1 million decrease in net sales from the thirty-nine weeks ended September 29, 2024 was driven primarily by lower sales unit volume of $121.4 million, partially offset by the favorable combined net impact of price and mix on our overall average selling price of $48.8 million. Overall end market demand was weaker in the first three quarters of 2025 compared to the first three quarters of 2024 in the repair and remodel and single-family new construction markets. Foreign currency impact was unfavorable by $1.5 million during the thirty-nine weeks ended September 28, 2025 as compared to the thirty-nine weeks ended September 29, 2024.

Previous wording

Compared to the twenty-six weeks ended June 30, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $95.4 million, or 14.3 percent, and net sales to retailers, including through their respective retail internet website portals, declined $28.1 million, or 5.9 percent. Net sales directly to builders increased $9.3 million, or 5.4 percent.

Current wording

Compared to the thirty-nine weeks ended September 29, 2024, net sales to dealers, whose end customers include builders, professional trades and home remodelers, increased $93.8 million, or 8.8 percent, and net sales to retailers, including through their respective retail internet website portals, declined $47.3 million, or 6.7 percent. Net sales directly to builders increased $10.9 million, or 4.1 percent.

Previous wording

Cost of products sold increased by $70.4 million, or 8.0 percent, to $949.3 million (68.2 percent of net sales) in the twenty-six weeks ended June 29, 2025 as compared to $878.9 million (66.9 percent of net sales) in the twenty-six weeks ended June 30, 2024. The inclusion of Supreme in the twenty-six weeks ended June 29, 2025 resulted in an incremental $86.4 million of cost of products sold. Excluding the impact of Supreme, the $16.0 million decrease in cost of products sold was driven primarily by lower sales unit volume of $56.2 million, partially offset by the combined net impact of costs and mix of $40.2 million. In the first half of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage.

Current wording

Cost of products sold increased by $71.0 million, or 5.2 percent, to $1,430.0 million (68.4 percent of net sales) in the thirty-nine weeks ended September 28, 2025 as compared to $1,359.0 million (66.9 percent of net sales) in the thirty-nine weeks ended September 29, 2024. The inclusion of Supreme in the thirty-nine weeks ended September 28, 2025 resulted in an incremental $86.4 million of cost of products sold for the first half of 2025. Excluding the impact of Supreme, the $15.4 million decrease in cost of products sold was driven primarily by lower sales unit volume of $82.2 million, partially offset by the combined net impact of costs and mix of $66.8 million. In the first three quarters of 2025, realized savings from various cost reduction actions were more than offset by higher manufacturing costs, including unfavorable fixed cost leverage and gross tariffs.

Previous wording

Selling, general and administrative expenses increased by $28.9 million, or 10.2 percent, to $313.4 million (22.5 percent of net sales) in the twenty-six weeks ended June 29, 2025 compared to $284.5 million (21.6 percent of net sales) in the twenty-six weeks ended June 30, 2024. The increase in the twenty-six weeks ended June 29, 2025 is primarily due to the inclusion of Supreme ($26.1 million), increased associate-related costs, net of lower variable compensation ($3.1 million) and increased advertising costs ($2.3 million). These increases were partially offset by lower distribution and commission costs ($2.9 million), as a result of the decrease in sales unit volume, and lower acquisition-related costs ($1.0 million).

Current wording

Selling, general and administrative expenses increased by $30.1 million, or 6.7 percent, to $480.9 million (23.0 percent of net sales) in the thirty-nine weeks ended September 28, 2025 compared to $450.8 million (22.2 percent of net sales) in the thirty-nine weeks ended September 29, 2024. The increase in the thirty-nine weeks ended September 28, 2025 is primarily due to the inclusion of Supreme during the first half of 2025 ($26.1 million), continued investments in our strategic initiatives ($6.2 million), specifically digital and technology investments and marketing and increased associate-related costs, net of lower variable compensation ($3.2 million). These increases were partially offset by lower distribution and commission costs ($5.4 million), as a result of the decrease in sales unit volume.

Previous wording

Restructuring charges were $11.3 million in the twenty-six weeks ended June 29, 2025, as compared to restructuring charges of $3.2 million in the twenty-six weeks ended June 30, 2024. 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.

Current wording

Restructuring charges were $13.9 million in the thirty-nine weeks ended September 28, 2025, as compared to restructuring charges of $11.0 million in the thirty-nine weeks ended September 29, 2024. 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.

Previous wording

Interest expense was $38.3 million in the twenty-six weeks ended June 29, 2025 as compared to $34.7 million in the twenty-six weeks ended June 30, 2024. The increase in interest expense for the twenty-six weeks ended June 29, 2025 is due to the higher outstanding debt balance in 2025 as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme. The second quarter of 2024 includes $6.5 million of nonrecurring interest expense in connection with the debt refinancing transaction, including the write-off of deferred financing fees.

Current wording

Interest expense was $56.5 million in the thirty-nine weeks ended September 28, 2025 as compared to $54.7 million in the thirty-nine weeks ended September 29, 2024. The increase in interest expense for the thirty-nine weeks ended September 28, 2025 is due to the higher average outstanding debt balance during the thirty-nine weeks ended September 28, 2025 as a result of the debt refinancing transaction in the second quarter of 2024 associated with the acquisition of Supreme. The second quarter of 2024 includes $6.5 million of nonrecurring interest expense in connection with the debt refinancing transaction, including the write-off of deferred financing fees.

Previous wording

Other income, net was $0.2 million in the twenty-six weeks ended June 29, 2025, a decline of $3.0 million as compared to other income, net of $3.2 million in the twenty-six weeks ended June 30, 2024. This decrease was due primarily to lower transactional foreign currency gains in the first half of 2025, as compared to the first half of 2024, due to fluctuations in exchange rates.

Current wording

Other income, net was $0.1 million in the thirty-nine weeks ended September 28, 2025, a decline of $4.9 million as compared to other income, net of $5.0 million in the thirty-nine weeks ended September 29, 2024. This decrease was due primarily to lower transactional foreign currency gains in the first three quarters of 2025, as compared to the first three quarters of 2024, due to fluctuations in exchange rates.

Previous wording

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the twenty-six week periods ended June 29, 2025 and June 30, 2024 were as follows:

Current wording

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirty-nine week periods ended September 28, 2025 and September 29, 2024 were as follows:

Previous wording

The effective income tax rates for thetwenty-six weeks ended June 29, 2025 and June 30, 2024, were 23.7 percent and 24.1 percent, respectively. The net decrease in effective tax rate between the periods is primarily due to lower state and local income taxes, changes in foreign exclusions and favorable return-to-provision adjustments, partially offset by an increase in the valuation allowance and a reduction in the stock compensation windfall benefit for shares which vested.

Current wording

The effective income tax rates for thethirty-nine weeks ended September 28, 2025 and September 29, 2024, were 23.4 percent and 24.6 percent, respectively. The net decrease in effective tax rate between the periods is primarily due to changes in foreign exclusions, lower state and local income taxes, and changes in foreign income inclusions with offsetting tax credits. These were partially offset by increases in the valuation allowance, nondeductible compensation, reductions in favorable return-to provision adjustments and the stock compensation windfall benefit for shares which vested.

Previous wording

The difference between our effective income tax rate for thetwenty-six weeks ended June 29, 2025, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of net changes in state and local income taxes, nondeductible compensation, foreign income taxed at higher rates, an increase in the valuation allowance and foreign income inclusions net of foreign tax credits. These were partially offset by the release of uncertain tax positions, thestock compensation windfall benefitfor shares which vested, and foreign exclusions.

Current wording

The difference between our effective income tax rate for thethirty-nine weeks ended September 28, 2025, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of nondeductible compensation, net changes in state and local income taxes, and increases in the valuation allowance. These were partially offset by foreign exclusions, favorable return-to-provision adjustments and the release of uncertain tax positions.

Previous wording

The difference between our effective income tax rate for the twenty-six weeks ended June 30, 2024, and the U.S. statutory rate of 21.0 percent is due to the unfavorable impact of state and local income taxes, foreign income inclusions with offsetting tax credits and nondeductible compensation, partially offset by thestock compensation windfall benefitfor shares which vested and the mix of earnings in jurisdictions with differing tax rates.

Current wording

The difference between our effective income tax rate for the thirty-nine weeks ended September 29, 2024, and the U.S. statutory rate of 21.0 percent is primarily due to the unfavorable impact of state and local income taxes, foreign income inclusions with offsetting tax credits, nondeductible compensation and nondeductible acquisition-related transaction costs, partially offset by favorable return-to-provision adjustments, thestock compensation windfall benefitfor shares which vested and the mix of earnings in jurisdictions with differing tax rates.

Previous wording

The 2024 Credit Agreement contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed, in the case of any fiscal quarter ending on or following March 30, 2025,3.25 to 1:00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter. The Company is also required to maintain a minimum interest coverage ratio of 3.00 to 1.00. The 2024 Credit Agreement also contains customary events of default. The occurrence of an event of default could result in the termination of commitments under the revolving credit facility, the acceleration of all outstanding amounts thereunder and the requirement to cash collateralize outstanding letters of credit. The Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of June 29, 2025.

Current wording

The 2024 Credit Agreement contains a financial covenant that does not permit the Company to allow its net leverage ratio to exceed, in the case of any fiscal quarter ending on or following March 30, 2025,3.25 to 1.00 or, if the Company consummates any material acquisition, then the Company’s net leverage ratio shall not exceed 3.75 to 1.00 for the applicable fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter. The Company is also required to maintain a minimum interest coverage ratio of 3.00 to 1.00. The 2024 Credit Agreement also contains customary events of default. The occurrence of an event of default could result in the termination of commitments under the revolving credit facility, the acceleration of all outstanding amounts thereunder and the requirement to cash collateralize outstanding letters of credit. The Company was in compliance with all of its debt covenants under the 2024 Credit Agreement as of September 28, 2025.

Previous wording

As of June 29, 2025, we had $998.7 million outstanding in third-party borrowings, net of deferred financing fees. In conjunction with the Merger, the Company plans to arrange a revolver expansion with its current banking group under the 2024 Credit Agreement in order to pay off American Woodmark debt at the close of the transaction.

Current wording

As of September 28, 2025, we had $954.1 million outstanding in third-party borrowings, net of deferred financing fees. In conjunction with the Merger, the Company amended its credit agreement to obtain a $375.0 million term loan that will be used to settle American Woodmark’s existing indebtedness, the funding of which is dependent on the closing of the Merger. The interest rate of the term loan is a variable rate based on SOFR and the debt will have a maturity coterminous with the existing credit agreement in June 2029. See Note 10, "Debt," for a discussion of our original credit agreement.

Previous wording

Below is a summary of cash flows for the twenty-six weeks ended June 29, 2025 and June 30, 2024.

Current wording

Below is a summary of cash flows for the thirty-nine weeks ended September 28, 2025 and September 29, 2024.

Previous wording

Net cash provided by operating activities was $53.4 million in the first half of 2025 as compared to $96.1 million in the first half of 2024. Net income contributed $50.6 million to operating cash flow in the first half of 2025, down from $82.8 million in the first half of 2024. In the first half of 2025, accounts receivable increased $26.9 million from the seasonally lower fiscal 2024 ending balance, compared to an increase of $11.2 million in the first half of 2024, reflecting higher sales in the first half of fiscal 2025. In the first half of 2025, inventory declined $0.2 million, as compared to an increase in inventory of $20.7 million in the first half of 2024. The minimal change in inventory in the first half of 2025 is reflective of inventory management efforts. In the first half of 2025, accounts payable decreased $5.5 million compared to an increase of $21.8 million in the first half of 2024. The reduced favorability in accounts payable in 2025 was driven by the lack of growth in inventory.

Current wording

Net cash provided by operating activities was $108.8 million in the first three quarters of 2025 as compared to $176.9 million in the first three quarters of 2024. Net income contributed $68.7 million to operating cash flow in the first three quarters of 2025, down from $111.9 million in the first three quarters of 2024. In the first three quarters of 2025, accounts receivable increased $26.6 million from the seasonally lower fiscal 2024 ending balance, compared to an increase of $2.3 million in the first three quarters of 2024. In the first three quarters of 2025, inventory declined $4.4 million, as compared to an increase in inventory of $32.5 million in the first three quarters of 2024. The minimal change in inventory in the first three quarters of 2025 is reflective of inventory management efforts. In the first three quarters of 2025, accounts payable decreased $2.2 million compared to an increase of $18.0 million in the first three quarters of 2024. The reduced favorability in accounts payable in 2025 was a result of inventory management efforts. Accrued expenses and other current liabilities declined $27.5 million in the first three quarters of 2025 as compared to a decrease of $3.5 million in 2024. The timing of interest payments on the Company’s Senior Notes contributed to the unfavorability in 2025. Interest payments on the Senior Notes began in 2025. Depreciation in the first three quarters of 2025 was $51.2 million as compared to $39.5 million in the first three quarters of 2024. The increase is due to the inclusion of Supreme for the full year-to-date period in 2025.

Previous wording

Net cash used in investing activities was $24.3 million in the first half of 2025, compared to $11.9 million in the first half of 2024. The year-over-year increase is primarily due to increased capital expenditures as compared to the prior year.

Current wording

Net cash used in investing activities was $40.1 million in the first three quarters of 2025, compared to $541.9 million in the first three quarters of 2024. The year-over-year decrease is due to the acquisition of Supreme, net of cash acquired, of $515.7 million and increased capital expenditures in the third quarter of 2024. This year-over-year decrease is partially offset by increased capital expenditures as compared to the prior year.

Previous wording

Net cash used in financing activities was $34.0 million in the twenty-six weeks ended June 29, 2025 as compared to $40.3 million in the twenty-six weeks ended June 30, 2024. In the first half of 2025, we paid down $10 million, net on our revolving credit facility. In the first half of 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. The first half of 2024 also included the payment of $15.2 million of financing fees associated with the refinancing transaction. The first half of 2025 includes $18.1 million of stock repurchases as compared to $6.5 million of stock repurchases in the first half of 2024.

Current wording

Net cash used in financing activities was $79.8 million in the thirty-nine weeks ended September 28, 2025 as compared to net cash provided by financing activities of $331.3 million in the thirty-nine weeks ended September 29, 2024. In the first three quarters of 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. In the first three quarters of 2024, we used $430.0 million of proceeds from the revolving credit facility provided for by the 2024 Credit Agreement to fund the Supreme acquisition, and subsequently paid down $55 million, net on our revolving credit facility. The first three quarters of 2024 also included the payment of $17.8 million of financing fees associated with the refinancing transaction. The first three quarters of 2025 includes $18.1 million of stock repurchases as compared to $6.5 million of stock repurchases in the first three quarters of 2024.

Previous wording

We believe that our cash and cash equivalent balances, along with available cash from operating cash flows and credit facilities, will be adequate to fund our typical needs, including working capital requirements and projected capital expenditures. We also believe we have access to additional funds from capital markets to fund strategic initiatives.

Current wording

We believe that our cash and cash equivalent balances, along with available cash from operating cash flows and credit facilities, will be adequate to fund our typical needs, including working capital requirements and projected capital expenditures, as well as the closing of the Merger. We also believe we have access to additional funds from capital markets to fund strategic initiatives.