MasterBrand — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales were $1,036.8 million for the quarter, including a $355.7 million contribution from American Woodmark; legacy MasterBrand net sales were $681.1 million, a 2.5% decrease year-over-year.
• Gross profit was $254.9 million with a margin of 24.6%, compared to $218.2 million and 31.2% in the prior year period.
• Net loss was $(9.2) million with a net loss margin of (0.9)%, compared to net income of $18.1 million and a 2.6% margin in the prior year.
• Adjusted EBITDA was $86.0 million with a margin of 8.3%, compared to $90.6 million and 13.0% in the prior year.
• Diluted loss per share was $(0.05) compared to diluted earnings per share of $0.14 in the prior year; adjusted diluted earnings per share was $0.10 compared to $0.33 in the prior year.
• Net cash provided by operating activities was $80.2 million for the 39 weeks ended September 27, 2026, compared to $108.8 million in the prior year.
• Free cash flow was $43.6 million for the 39 weeks ended September 27, 2026, compared to $65.0 million in the prior year.
• Total debt was $1,230.8 million; net debt was $1,091.1 million; the net debt to trailing twelve-month adjusted EBITDA ratio was 4.3x.
• Cash and cash equivalents were $139.7 million as of September 27, 2026.

Guidance and Future Outlook:

• Fourth quarter 2026 net sales are expected to be $958 to $988 million.
• Fourth quarter 2026 adjusted EBITDA is expected to be $38 to $48 million, with a margin of 4.0% to 4.9%.
• Fourth quarter 2026 adjusted diluted loss per share is expected to be $(0.12) to $(0.08).
• Full-year 2026 addressable market is expected to be down high-single digits with no demand improvement assumed through year-end.
• Full-year 2026 gross tariff costs are expected to be approximately 5-6% of net sales, expected to be fully offset by end of year.
• Full-year 2026 free cash flow is expected to be approximately breakeven.
• Second-half 2026 cost synergies are now expected to exceed the previously communicated target of approximately $15 million.

Business Segments and Product Lines:

• Legacy MasterBrand gained share across end markets despite a mid- to high-single-digit market decline.
• Legacy MasterBrand sales were partially offset by unfavorable mix, trade-downs, and inflation outpacing pricing actions, though partially offset by favorable net average selling price due to tariff pricing flow-through.
• Integration of American Woodmark is ahead of schedule, with approximately $11 million of cost synergies realized as of September 27, 2026.
• The Company has initiated or completed actions expected to drive more than $50 million in run-rate cost synergies exiting year one post-close.
• The Company expects over $100 million in annual run-rate cost synergies by the end of year three post-close.

Market and Competitive Landscape:

• The Company operates as the largest residential cabinet manufacturer in North America.
• The market is experiencing ongoing softness with demand headwinds.
• Legacy MasterBrand gained share across end markets despite market decline.
• Tariff pricing has flowed through to net average selling prices, partially offsetting volume declines.

Risks and Challenges:

• Gross profit margin decreased 660 basis points driven by lower volume, unfavorable fixed cost leverage, inflation outpacing pricing, unfavorable product mix, trade-downs, and the inclusion of American Woodmark's lower gross margin.
• Adjusted EBITDA margin declined 470 basis points due to lower volume, unfavorable fixed cost leverage, inflation outpacing pricing, and unfavorable product mix.
• Net loss was driven by factors impacting gross profit, higher interest expense, and the inclusion of American Woodmark SG&A.
• Free cash flow decreased due to lower earnings and merger-related costs.
• Forward-looking statements are subject to risks including tariff uncertainty, integration challenges, raw material costs, housing market conditions, and debt covenant compliance.

Management Commentary and Tone:

• CEO Dave Banyard stated the first full quarter as a combined company showed real momentum on integration with synergies ahead of schedule.
• Management noted they are realizing benefits of combined scale and managing through market softness with operating discipline.
• Management expressed confidence in building a more efficient and competitive MasterBrand, aiming to improve profitability independent of market recovery and drive growth when markets recover.

Other Key Points:

• The acquisition of American Woodmark closed on May 28, 2026.
• The Company utilized a $375 million Term Loan A to retire American Woodmark's debt at close.
• The Company received $10.9 million in IEEPA duty refunds during the quarter.
• No share repurchases were made during the third quarter of 2026 as the Company prioritized integration investments and balance sheet management.
• The Company remained in full compliance with all applicable financial covenants related to its outstanding debt.
• The Company has $554.5 million of availability under its revolving credit facility.
• The outlook includes the $1.3 million of IEEPA duty refunds received in the fourth quarter and supersedes the previously provided second-half 2026 outlook.