Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 25, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-41545

MasterBrand, Inc.

(Exact name of registrant as specified in its charter)


Delaware			88-3479920
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

One MasterBrand Cabinets Dr. Jasper, Indiana			47547
(Address of principal executive offices)			(Zip Code)

812-482-2527

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Common Stock, par value $0.01 per share	MBC	New York Stock Exchange
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The registrant had outstanding 127,682,912 shares of common stock as of August 4, 2023.

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			Page No
Part I - Financial Information			1
Item 1. Financial Statements (Unaudited)			1
Condensed Consolidated Statements of Income			1
Condensed Consolidated Statements of Comprehensive Income			2
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Cash Flows			4
Condensed Consolidated Statements of Equity			5
Notes To Unaudited Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
Item 5. Other Information			35
Part II - Other Information			36
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 6. Exhibits			37
Signatures			38

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Part I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

MasterBrand, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	13 Weeks Ended				26 Weeks Ended
(U.S. Dollars presented in millions, except per share amounts)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
NET SALES	$	695.1	$	855.6	$	1,371.8	$	1,632.7
Cost of products sold	458.9		606.0		931.0		1,172.1
GROSS PROFIT	236.2		249.6		440.8		460.6
Selling, general and administrative expenses	141.7		166.0		277.0		311.0
Amortization of intangible assets	4.0		4.4		8.0		8.9
Asset impairment charge	—		26.0		—		26.0
Restructuring charges	3.1		1.3		2.7		1.3
OPERATING INCOME	87.4		51.9		153.1		113.4
Related party interest income, net	—		(1.9)		—		(3.1)
Interest expense	17.2		—		34.6		—
Other expense (income), net	0.5		(0.2)		0.9		0.7
INCOME BEFORE TAXES	69.7		54.0		117.6		115.8
Income tax expense	18.5		13.1		31.4		27.9
NET INCOME	$	51.2	$	40.9	$	86.2	$	87.9
Average Number of Shares of Common Stock Outstanding
Basic	128.4		128.0		128.3		128.0
Diluted	129.9		128.0		129.7		128.0
Earnings Per Common Share
Basic	$	0.40	$	0.32	$	0.67	$	0.69
Diluted	$	0.39	$	0.32	$	0.66	$	0.69

See notes to consolidated financial statements.

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MasterBrand, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	13 Weeks Ended				26 Weeks Ended
(U.S. Dollars presented in millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
NET INCOME	$	51.2	$	40.9	$	86.2	$	87.9
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	9.8		(7.1)		9.6		(0.6)
Unrealized gains on derivatives:
Unrealized holding gains arising during period	3.9		1.3		6.5		3.5
Less: reclassification adjustment for gains included in net income	(3.1)		(1.2)		(5.5)		(1.7)
Unrealized gains on derivatives	0.8		0.1		1.0		1.8
Defined benefit plans:
Net actuarial gains arising during period	—		—		—		0.1
Defined benefit plans	—		—		—		0.1
Other comprehensive income (loss), before tax	10.6		(7.0)		10.6		1.3
Income tax expense related to items of other comprehensive income	—		—		—		—
Other comprehensive income (loss), net of tax	10.6		(7.0)		10.6		1.3
COMPREHENSIVE INCOME	$	61.8	$	33.9	$	96.8	$	89.2

See notes to consolidated financial statements.

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MasterBrand, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(U.S. Dollars presented in millions)	June 25, 2023		December 25, 2022
ASSETS
Current assets
Cash and cash equivalents	$	110.2	$	101.1
Accounts receivable, net	235.7		289.6
Inventories	319.6		373.1
Other current assets	62.7		66.2
TOTAL CURRENT ASSETS	728.2		830.0
Property, plant and equipment, net of accumulated depreciation	341.9		352.6
Operating lease right-of-use assets, net of accumulated amortization	59.7		52.3
Goodwill	925.2		924.2
Other intangible assets, net of accumulated amortization	342.9		349.8
Other assets	26.1		20.5
TOTAL ASSETS	$	2,424.0	$	2,529.4
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	182.2	$	219.2
Current portion of long-term debt	26.9		17.5
Current operating lease liabilities	14.1		13.9
Other current liabilities	151.2		160.5
TOTAL CURRENT LIABILITIES	374.4		411.1
Long-term debt	788.3		961.5
Deferred income taxes	85.2		87.3
Pension and other postretirement plan liabilities	12.3		12.2
Operating lease liabilities	47.9		40.7
Other non-current liabilities	8.3		7.4
TOTAL LIABILITIES	1,316.4		1,520.2
Contingencies and Accrued Losses (Note 13)
Equity
Common stock (par value $0.01 per share; authorized 750.0 million shares; 128.8 million shares issued and 128.1 million shares outstanding as of June 25, 2023; 128.0 million shares issued and outstanding as of December 25, 2022)	1.3		1.3
Paid-in capital	8.9		—
Treasury stock, at cost	(7.4)		(0.1)
Accumulated other comprehensive loss	(3.9)		(14.5)
Retained earnings	1,108.7		1,022.5
TOTAL EQUITY	1,107.6		1,009.2
TOTAL LIABILITIES AND EQUITY	$	2,424.0	$	2,529.4

See notes to consolidated financial statements.

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MasterBrand, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	26 Weeks Ended
(U.S. Dollars presented in millions)	June 25, 2023		June 26, 2022
OPERATING ACTIVITIES
Net income	$	86.2	$	87.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	23.0		21.5
Amortization of intangibles	8.0		8.9
Restructuring charges, net of cash payments	(12.1)		(0.5)
Amortization of finance fees	1.0		—
Stock-based compensation	8.9		5.4
Asset impairment charge	—		26.0

Changes in operating assets and liabilities:
Accounts receivable	58.6		(27.3)
Inventories	54.0		(71.2)
Other current assets	4.1		3.2
Accounts payable	(39.6)		33.4
Accrued expenses and other current liabilities	(1.7)		5.5
Other items	3.6		(16.7)
NET CASH PROVIDED BY OPERATING ACTIVITIES	194.0		76.1
INVESTING ACTIVITIES
Capital expenditures(a)	(11.4)		(22.1)
Proceeds from the disposition of assets	0.2		—
NET CASH USED IN INVESTING ACTIVITIES	(11.2)		(22.1)
FINANCING ACTIVITIES
Issuance of long-term and short-term debt	55.0		—
Repayments of long-term and short-term debt	(219.4)		—
Repurchase of common stock	(4.1)		—
Payments of employee taxes withheld from share-based awards	(2.9)		—
Repayment of finance leases	(0.6)		(0.3)
Related party borrowings	—		1,448.1
Related party repayments	—		(1,582.4)
Net contributions from Fortune Brands	—		65.0


NET CASH USED IN FINANCING ACTIVITIES	(172.0)		(69.6)
Effect of foreign exchange rate changes on cash and cash equivalents	(1.7)		—
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	$	9.1	$	(15.6)
Cash and cash equivalents at beginning of period	$	101.1	$	141.4
Cash and cash equivalents at end of period	$	110.2	$	125.8

(a)Capital expenditures of $3.0 million and $3.2 million that have not been paid as of June 25, 2023 and June 26, 2022, respectively, were excluded from the condensed consolidated statements of cash flows.

See notes to consolidated financial statements.

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MasterBrand, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Common Stock			Paid-in Capital		Treasury stock, at cost		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total Equity
(U.S. Dollars and shares presented in millions)	Shares	Amount
Balance at December 26, 2021	—	$	—	$	272.2	$	—	$	(3.9)	$	2,185.5	$	2,453.8
Comprehensive income:
Net income	—	—		—		—		—		87.9		87.9
Other comprehensive income	—	—		—		—		1.3		—		1.3
Stock-based compensation	—	—		5.4		—		—		—		5.4
Net contributions from Fortune Brands	—	—		65.0		—		—		—		65.0
Balance at June 26, 2022	—	$	—	$	342.6	$	—	$	(2.6)	$	2,273.4	$	2,613.4

Balance at December 25, 2022	128.0	$	1.3	$	—	$	(0.1)	$	(14.5)	$	1,022.5	$	1,009.2
Comprehensive income:
Net income	—	—		—		—		—		86.2		86.2
Other comprehensive income	—	—		—		—		10.6		—		10.6
Stock-based compensation	0.5	—		8.9		(2.9)		—		—		6.0
Stock repurchase program	(0.4)	—		—		(4.4)		—		—		(4.4)
Balance at June 25, 2023	128.1	$	1.3	$	8.9	$	(7.4)	$	(3.9)	$	1,108.7	$	1,107.6

See notes to consolidated financial statements.

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MasterBrand, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Principles of Consolidation

Background MasterBrand, Inc. is a leading manufacturer of residential cabinets in North America with a portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home. References to “Cabinets,” “MasterBrand,” “the Company,” “we,” “our” and “us” refer to MasterBrand, Inc. and its consolidated subsidiaries, unless the context otherwise requires.

On April 28, 2022, Fortune Brands Home & Security, Inc. (“Fortune Brands” or the “Parent”) announced that its Board of Directors approved in principle a separation of its Cabinets segment into a standalone publicly-traded company (the “Separation”). The Cabinets segment of Fortune Brands had historically been operated by MasterBrand Cabinets, Inc. (“MBCI”). 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. 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”).

On December 14, 2022, the Separation was completed by way of a pro rata dividend of our common stock to stockholders of Fortune Brands common stock (the “Distribution”). On December 14, 2022, the date of Separation, 128.0 million shares of MasterBrand, Inc. common stock were issued. Fortune Brand shareholders received one share of MasterBrand, Inc. common stock for each share of Fortune Brands common stock held on the record date. Following the Distribution, Fortune Brands stockholders owned 100 percent of the shares of MasterBrand, Inc. common stock, and MasterBrand, Inc. became an independent, publicly-traded company, listed under the symbol “MBC” on the New York Stock Exchange beginning December 15, 2022. All share and per share amounts for all prior periods presented in the condensed consolidated financial statements, including Note 4, “Earnings Per Share,” have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Reorganization, Separation and Distribution. The historical activity of the Company is that of MBCI prior to the Reorganization. The Company’s equity structure prior to the Separation and Distribution included 5,000 shares of MasterBrand, Inc. common stock authorized and 100 shares issued. Prior to the incorporation of MasterBrand, Inc. in July 2022, the equity structure of MBCI included 1,000 authorized and issued shares of common stock. MasterBrand, Inc. is the registrant and the financial reporting entity following the consummation of the Separation and Distribution.

In order to govern the ongoing relationships between MasterBrand, Inc. and Fortune Brands after the Separation and to facilitate an orderly transition, the parties entered into a series of agreements, including the following:

•Separation and Distribution Agreement – sets forth the principal actions to be taken in connection with the Separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between MasterBrand and Fortune Brands.

•Transition Services Agreement – allows for Fortune Brands and MasterBrand to provide certain transition services to each other for a limited time, up to 24 months following the Separation.

•Tax Allocation Agreement – governs the respective rights, responsibilities and obligations of MasterBrand and Fortune Brands with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns.

•Employee Matters Agreement – addresses certain employment, compensation and benefits matters, including the allocation and treatment of certain assets and liabilities relating to MasterBrand employees.

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Basis of Presentation The accompanying financial statements are now presented on a consolidated basis as the Company is a standalone public company. We have historically existed and functioned as a reporting segment of the consolidated business of Fortune Brands up until the Separation on December 14, 2022, at which time we became a standalone public company. Certain information from prior to the Separation was derived from Fortune Brands’ consolidated financial statements and accounting records. The condensed consolidated financial statements and notes to condensed consolidated financial statements as of and subsequent to December 14, 2022, the date of the Separation, reflect the consolidated financial position, results of operations and cash flows for MasterBrand as an independent company. Prior to the Separation, the condensed consolidated financial statements and notes to condensed consolidated financial statements were prepared on a carve-out basis using the financial statements and accounting records of Fortune Brands. The carve-out basis financial statements represent the historical financial position, results of operations, and cash flows of MasterBrand as they were historically managed in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect significant assumptions and allocations. The carve-out financial statements may not include all expenses that would have been incurred had MasterBrand existed as a standalone entity.

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. Our fiscal 2023 will consist of 53 weeks ending on December 31, 2023, while our fiscal 2022 consisted of 52 weeks ended on December 25, 2022.

The condensed consolidated balance sheet as of the twenty-six weeks ended June 25, 2023, as well as the related condensed consolidated statements of income, comprehensive income, cash flows, and equity for the thirteen and twenty-six weeks ended June 25, 2023 and the thirteen and twenty-six weeks ended June 26, 2022 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year.

The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our audited consolidated financial statements and notes. The 2022 condensed consolidated balance sheet was derived from our audited consolidated financial statements, but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022.

The condensed consolidated statements of income include all revenues and costs directly attributable to our business, including costs for facilities, functions, and services we utilize. The condensed consolidated statements of income also include an allocation of expenses related to certain Fortune Brands corporate functions through the Separation, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services. These expenses have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount, or number of facilities, as applicable. Prior to the Separation, total expenses allocated for the thirteen and twenty-six weeks ended June 26, 2022 were $21.0 million and $41.1 million, respectively, of which $16.9 million and $29.0 million, respectively, was not previously allocated to us. Such amounts are primarily included within selling, general and administrative expenses in the condensed consolidated statements of income. We consider the expense methodology and resulting allocation to be reasonable; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company in the prior year period presented. Actual costs that we may have incurred during the time period when we were not a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Accordingly, historical allocations may not be indicative of future costs we incur operating as an independent, publicly-traded company.

The condensed consolidated statements of income also include $0.6 million and $2.2 million of costs related to the separation from Fortune Brands for the thirteen and twenty-six weeks ended June 25, 2023, respectively, and $0.2 million for both the thirteen and twenty-six weeks ended June 26, 2022. The Separation-related costs include advisory fees, professional fees and other transaction related costs incurred directly by us. These costs are included within selling, general and administrative expenses.

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The income tax amounts in the condensed consolidated financial statements have been calculated on a separate-return method and presented as if our operations were separate taxpayers in the respective jurisdictions. For the period prior to the Separation in 2022, including the Separation, federal and state income tax payments and refunds were paid and received by Fortune Brands on our behalf. The net taxes paid on our behalf are payable to Fortune Brands, as provided in the indemnification provisions of the Tax Allocation Agreement. Accordingly, the net tax payable of $32.6 million to Fortune Brands at both June 25, 2023 and December 25, 2022, is recorded in accounts payable on the condensed consolidated balance sheets.

Following the Separation, a limited number of services that Fortune Brands provided to us, or we provided to them, prior to the Separation continue to be provided for a period of time under a Transition Services Agreement. We are now incurring certain costs as a standalone public company, including services provided by our own resources or through third-party service providers relating to corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services, as well as ongoing additional costs associated with operating as an independent, publicly-traded company.

Fortune Brands utilized a central approach to treasury management, and prior to Separation, we historically participated in related cash pooling arrangements prior to the Separation. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries. Prior to the Separation, we had no third-party borrowings, and all borrowings attributable to our business and due to Fortune Brands were recorded as “related party payable” in our consolidated balance sheets and classified as current or noncurrent based on loan maturity dates. Fortune Brands’ third-party debt and related interest expense were not attributed to us as we were not the legal obligor of the debt, and the borrowings were not specifically identifiable to us. However, in connection with the Separation, we completed a financing transaction, which resulted in additional interest expense beginning in the fourth quarter of 2022. See Note 9, “Debt” for additional information related to our financing transaction. For more information regarding related party transactions with Fortune Brands, see Note 15, “Related Party Transactions.”

During the fourth quarter of 2022, we recognized $8.7 million of additional expense in cost of goods sold as an out-of-period adjustment. This adjustment was to correct errors for expenses that should have been recognized of $5.1 million, $1.6 million and $2.0 million in the thirteen weeks ended March 27, 2022, June 26, 2022 and September 25, 2022, respectively. The adjustment did not have any impact on our annual consolidated financial statements for the fiscal year ended December 25, 2022.

Tornado at Jackson, GA Production Facility On January 12, 2023, a tornado hit the Company’s leased Jackson, Georgia production facility, causing damage to the Company’s assets and disrupting certain operations. Insurance, less applicable deductibles, covers the repair or replacement of the Company’s assets that suffered loss or damage, and the Company is working closely with its insurance carriers and claims adjusters to ascertain the full amount of insurance proceeds due to the Company as a result of the damages and the losses the Company suffered. The Company’s insurance policies also provide business interruption coverage, including lost profits, and reimbursement for other expenses and costs that have been incurred relating to the damages and losses suffered. In the first quarter of 2023, the Company incurred expenses of $9.4 million solely related to damages caused by the tornado. These expenses included compensation costs that we continued to pay skilled labor at the Jackson facility to enable a timely ramp up of production upon re-opening the facility on March 27, 2023, the first day of our fiscal second quarter of 2023, as well as the write-off of damaged inventory, freight costs to move product to other warehouses and professional fees to secure and maintain the site. In the second quarter, no expenses related to the tornado were incurred and we received $2.2 million of insurance proceeds for direct costs caused by the tornado. At this time, we do not expect to incur any additional costs related to this matter, but continue to work through the insurance claim process. Both the expenses and insurance recoveries are recorded as a component of cost of products sold in the condensed consolidated statements of income. At this time, the full amount of combined inventory damage and business interruption costs and recoveries cannot be estimated, and accordingly, no additional amounts, including amounts for insurance recoveries, have been recorded as of June 25, 2023.

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2. Recently Issued Accounting Standards

Accounting Standards Issued and Adopted

There are no recently issued accounting pronouncements that we have adopted and which have had a material effect on our results of operations, cash flows or financial condition.

Accounting Standards Issued, But Not Yet Adopted

There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our results of operations, cash flows or financial condition.

3. Revenue from Contracts with Customers

Our principal performance obligations are the sale of high quality stock, semi-custom and premium cabinetry, as well as vanities, for the kitchen, bath and other parts of the home (collectively, “goods” or “products”). We recognize revenue for the sale of goods based on our assessment of when control transfers to our customers, which generally occurs upon shipment or delivery of the products. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods to our customers. Payment terms on our product sales normally range from 30 to 90 days. Taxes assessed by a governmental authority that we collect are excluded from revenue. The expected costs associated with our contractual warranties are recognized as expense when the products are sold. See Note 13, “Contingencies and Accrued Losses” for further discussion.

We record estimates to reduce revenue for customer programs and incentives, which are considered variable consideration, and include price discounts, volume-based incentives, promotions and cooperative advertising when revenue is recognized in order to determine the amount of consideration the Company will ultimately be entitled to receive. These estimates are based on historical and projected experience for each type of customer. In addition, for certain customer program incentives, we receive an identifiable benefit (goods or services) in exchange for the consideration given and record the associated expenditure in selling, general and administrative expenses. We account for shipping and handling costs that occur after the customer has obtained control of a product as a fulfillment activity (i.e., as an expense) rather than as a promised service (i.e., as a revenue element). These costs are classified within selling, general and administrative expenses.

Settlement of our outstanding accounts receivable balances normally occurs within 30 to 90 days of the original sale transaction date. Obligations arise for us from customer rights to return our goods, including among others, product obsolescence, stock rotations, trade-in agreements for newer products and upon termination of a customer contract. We estimate future product returns at the time of sale based on historical experience and record a corresponding refund obligation, which amounted to $2.3 million and $3.0 million as of June 25, 2023 and December 25, 2022, respectively. Refund obligations are classified within other current liabilities in our condensed consolidated balance sheets. Return assets related to the refund obligation are measured at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value.

The Company disaggregates revenue from contracts with customers into (i) major sales distribution channels in the U.S. and (ii) total sales to customers outside the U.S. market, as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors. The following table disaggregates our consolidated revenue by major sales distribution channels for 2023 and 2022.

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	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Dealers(a)	$	357.3	$	454.0	$	686.3	$	833.6
Retailers(b)	220.7		258.5		463.6		540.0
Builders(c)	78.4		87.8		149.8		160.0
U.S. net sales	656.4		800.3		1,299.7		1,533.6
International(d)	38.7		55.3		72.1		99.1
Net sales	$	695.1	$	855.6	$	1,371.8	$	1,632.7

a)Represents sales to domestic dealers whose end customers include builders, professional trades and home remodelers, inclusive of sales through our dealers’ respective internet website portals.

b)Represents sales to domestic “Do-It-Yourself” retailers, including our two largest customers: 1) The Home Depot, Inc., and 2) Lowe’s Companies, Inc., inclusive of sales through their respective internet website portals.

c)Represents sales directly to domestic builders.

d)Represents sales in markets outside the United States, principally in Canada and Mexico.

Practical Expedients

Incremental costs of obtaining a contract include only those costs the Company incurs that would not have been incurred if the contract had not been obtained. These costs are required to be recognized as assets and amortized over the period that the related goods or services transfer to the customer. As a practical expedient, we expense as incurred costs to obtain a contract when the expected amortization period is one year or less. These costs are recorded within selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Allowance for Credit Losses

Our primary allowance for credit losses is the allowance for doubtful accounts. The allowance for doubtful accounts reduces the trade accounts receivable balance to the estimated net realizable value that is expected to be collected. The allowance is based on assessments of current creditworthiness of customers, historical collection experience, the aging of receivables and other currently available evidence. Trade accounts receivable balances are written-off against the allowance if a final determination of uncollectibility is made. All provisions for allowances for doubtful collection of accounts are included in selling, general and administrative expenses.

The following table summarizes the activity for the thirteen and twenty-six week periods ended June 25, 2023 and June 26, 2022:


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Beginning balance	$	8.5	$	3.3	$	11.6	$	2.5
Bad debt provision	0.3		6.2		0.7		7.9
Uncollectible accounts written off, net of recoveries	(2.7)		(0.3)		(6.2)		(1.2)
Ending balance	$	6.1	$	9.2	$	6.1	$	9.2

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4. Earnings Per Share

On December 14, 2022, 128.0 million MasterBrand common shares were distributed to Fortune Brands’ shareholders in conjunction with the Separation. For comparative purposes, the thirteen and twenty-six weeks ended June 26, 2022 have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Reorganization, Separation and Distribution and assume the same basic weighted average shares. For the thirteen weeks and twenty-six weeks ended June 25, 2023, diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding. For the thirteen and twenty-six weeks ended June 26, 2022, which was prior to the Separation, it is assumed that there are no dilutive securities as there were no stock-based awards of MasterBrand, Inc. outstanding.

The following table sets forth the reconciliation of the numerator and the denominator of basic earnings per share and diluted earnings per share for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022:


	13 Weeks Ended				26 Weeks Ended
(In millions, except per share amounts)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Numerator:
Numerator for basic and diluted earnings per share - Net income	$	51.2	$	40.9	$	86.2	$	87.9
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	128.4		128.0		128.3		128.0
Effect of dilutive securities - stock-based awards	1.5		—		1.4		—
Denominator for diluted earnings per share - weighted average shares outstanding	129.9		128.0		129.7		128.0
Earnings per share:
Basic	$	0.40	$	0.32	$	0.67	$	0.69
Diluted	$	0.39	$	0.32	$	0.66	$	0.69

For the thirteen and twenty-six weeks ended June 25, 2023, approximately 1.0 million and 2.3 million shares of stock granted under share-based compensation plans, respectively, are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

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5. Balance Sheet Information

Supplemental information on our balance sheets is as follows:


(In millions)	June 25, 2023		December 25, 2022
Inventories:
Raw materials and supplies	$	229.0	$	292.1
Work in process	25.5		23.6
Finished products	65.1		57.4
Total inventories	$	319.6	$	373.1
Property, plant and equipment:
Land and improvements	$	30.9	$	32.9
Buildings and improvements to leaseholds	303.5		304.0
Machinery and equipment	530.1		518.8
Construction in progress	32.6		37.7
Property, plant and equipment, gross	897.1		893.4
Less: accumulated depreciation	555.2		540.8
Property, plant and equipment, net of accumulated depreciation	$	341.9	$	352.6
Accounts payable:
Third party	$	147.9	$	175.1
Fortune Brands (a)	34.3		44.1
Total accounts payable	$	182.2	$	219.2
Other current liabilities:
Accrued salaries, wages and other compensation	$	48.0	$	49.0
Accrued restructuring	3.3		15.4
Accrued taxes	18.9		14.3
Accrued product warranties	13.2		11.2
Other accrued expenses	67.8		70.6
Total other current liabilities	$	151.2	$	160.5

(a) The payable to Fortune Brands of $34.3 million and $44.1 million as of June 25, 2023 and December 25, 2022, respectively, includes various items Fortune Brands paid on our behalf, for which we owe reimbursement, including income taxes incurred prior to the Separation of $32.6 million, and amounts owed to Fortune for transition services performed in accordance with the Transition Services Agreement.

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6. Goodwill and Identifiable Intangible Assets

We had goodwill of $925.2 million and $924.2 million as of June 25, 2023 and December 25, 2022, respectively. The change in the net carrying amount of goodwill was as follows:


(In millions)	Total Goodwill
Balance at December 25, 2022	$	924.2
Q1 2023 translation adjustments	(0.4)
Balance at March 26, 2023	$	923.8
Q2 2023 translation adjustments	1.4
Balance at June 25, 2023	$	925.2

The gross carrying value and accumulated amortization by class of intangible assets as of June 25, 2023 and December 25, 2022 were as follows:


	As of June 25, 2023						As of December 25, 2022
(In millions)	Gross Carrying Amounts		Accumulated Amortization		Net Book Value		Gross Carrying Amounts		Accumulated Amortization		Net Book Value
Indefinite-lived tradenames	$	184.2	$	—	$	184.2	$	183.1	$	—	$	183.1
Amortizable intangible assets
Tradenames	10.5		(10.5)		—		10.3		(10.2)		0.1
Customer and contractual relationships	363.6		(204.9)		158.7		362.9		(196.8)		166.1
Patents/proprietary technology	11.0		(11.0)		—		11.0		(10.5)		0.5
Total	385.1		(226.4)		158.7		384.2		(217.5)		166.7
Total identifiable intangibles	$	569.3	$	(226.4)	$	342.9	$	567.3	$	(217.5)	$	349.8

There were no impairments of goodwill or indefinite-lived assets for the thirteen and twenty-six week periods ended June 25, 2023. For the thirteen and twenty-six week periods ended June 26, 2022, we recognized an impairment charge of $26.0 million, as described in further detail below. The Company tests goodwill and indefinite-lived intangibles for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate the asset might be impaired. There were no triggering events requiring an impairment assessment be conducted in the thirteen and twenty-six weeks ended June 25, 2023. However, it is possible that future changes in circumstances would require the Company to record additional non-cash impairment charges.

In the second quarter of 2022, subsequent to the balance sheet date, we recognized an impairment charge of $26.0 million related to an indefinite-lived tradename. During the second quarter of 2022, production was shifted within our manufacturing footprint to enable what we expect to be a higher value purpose and growth opportunity, which led to downward revisions to forecasted revenue growth rates associated with the tradename. In the fourth quarter of 2022, we recognized an impairment charge of $12.8 million related to the same indefinite-lived tradename as a result of further shifts within our product portfolio to better align with forecasted future customer demand as a result of a significant decrease in sales during the fourth quarter of 2022, driven by continued and persistent inflation, as well as elevated interest rates and economic uncertainty. These downward revisions to forecasted revenue growth were not known when recording the impairment charge during the second quarter of 2022. As of both June 25, 2023 and December 25, 2022, the carrying value of this tradename was $46.2 million.

In the fourth quarter of 2022, we recognized an impairment charge of $7.6 million to a second indefinite-lived tradename. This was primarily due to a shift in customer demand from this tradename to a lower price point product, as a result of continued and persistent inflation as well as elevated interest rates and economic uncertainty. As of both June 25, 2023 and December 25, 2022, the carrying value of this tradename was $19.1 million.

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7. Financial Instruments

We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value. The counterparties to derivative contracts are major financial institutions. We are subject to credit risk on these contracts equal to the fair value of these instruments. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company.

We account for derivative instruments as follows:

•Derivative instruments that are designated as fair value hedges - The gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, are recognized in the same line of the condensed consolidated statements of income.

•Derivative instruments that are designated as cash flow hedges - The changes in the fair value of the derivative instrument are reported in other comprehensive income and are recognized in the condensed consolidated statements of income when the hedged item affects earnings. The recognized gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, are recognized in the same line of the condensed consolidated statements of income.

•Derivative instruments that are designated as net investment hedges - The changes in fair value of the derivative instrument are recognized in the condensed consolidated statements of income when realized upon sale or upon complete or substantially complete liquidation of the investment in the foreign entity.

As of and for the thirteen and twenty-six week periods ending June 25, 2023 and June 26, 2022, we have only entered into foreign currency forward contracts, some of which have been designated as fair value hedges and some of which have been designated as cash flow hedges. We may enter into foreign currency forward contracts to protect against foreign exchange risks associated with certain existing assets and liabilities, forecasted future cash flows, and net investments in foreign subsidiaries. Foreign exchange contracts related to forecasted future cash flows correspond to the periods of the forecasted transactions, which generally do not exceed 12 to 15 months subsequent to the latest balance sheet date.

Our primary foreign currency hedge contracts pertain to the Mexican peso and the Canadian dollar. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at June 25, 2023 was $50.7 million, representing a net settlement asset of $5.2 million. Based on foreign exchange rates as of June 25, 2023, we estimate that the $3.8 million of net derivative gains associated with cash flow hedges and included in accumulated other comprehensive income as of June 25, 2023 will be reclassified to earnings within the next twelve months.

The fair values of foreign exchange derivative instruments on the condensed consolidated balance sheets as of June 25, 2023 and December 25, 2022 were:


(In millions)	Location	June 25, 2023		December 25, 2022
Assets:
Foreign exchange contracts	Other current assets	$	5.2	$	3.7
	Total assets	$	5.2	$	3.7
Liabilities:
Foreign exchange contracts	Other current liabilities	$	—	$	0.5
	Total liabilities	$	—	$	0.5

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The effects of derivative financial instruments on the condensed consolidated statements of income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were:


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 25, 2023
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	458.9	$	0.5
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(0.9)
Derivative designated as hedging instruments	—		0.9
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(3.1)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 26, 2022
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	606.0	$	(0.2)
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(1.7)
Derivative designated as hedging instruments	—		2.7
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(1.2)		—

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	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	26 weeks ended June 25, 2023
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	931.0	$	0.9
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(2.0)
Derivative designated as hedging instruments	—		3.4
Gain on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(5.5)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	26 weeks ended June 26, 2022
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	1,172.1	$	0.7
The effects of fair value and cash flow hedging:
(Gain) on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(2.6)
Derivative designated as hedging instruments	—		4.3
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(1.7)		—

The unrealized holding gains from cash flow hedges recognized in other comprehensive income during the thirteen weeks ended June 25, 2023 and June 26, 2022 were net gains of $3.9 million and $1.3 million, respectively. The unrealized holding gains from cash flow hedges recognized in other comprehensive income during the twenty-six weeks ended June 25, 2023 and June 26, 2022 were net gains of $6.5 million and $3.5 million, respectively.

8. Fair Value Measurements

ASC requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect other than quoted prices included in Level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs due to little or no market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are Level 3, except for certain assumptions in estimating the fair value of indefinite-lived tradenames, as discussed in Note 8, “Goodwill and Identifiable Intangible Assets” in our Annual Report on Form 10-K.

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Assets and liabilities measured at fair value on a recurring basis as of June 25, 2023 and December 25, 2022 were as follows:


(In millions)	Fair Value
	June 25, 2023		December 25, 2022
Assets:
Derivative asset financial instruments (Level 2)	$	5.2	$	3.7
Deferred compensation program assets (Level 2)	4.7		3.6
Total assets	$	9.9	$	7.3
Liabilities:
Derivative liability financial instruments (Level 2)	$	—	$	0.5

9. Debt

The following table provides a summary of the Company’s debt as of June 25, 2023 and December 25, 2022, including the carrying value of the debt less debt issuance costs:


	June 25, 2023				December 25, 2022
(In millions)	Current		Long-term		Current		Long-term
Revolving credit facility due November 2027	$	—	$	80.0	$	—	$	235.0
Term loan due November 2027	28.1		712.5		18.8		731.3
	28.1		792.5		18.8		966.3
Less: Unamortized debt issuance costs	(1.2)		(4.2)		(1.3)		(4.8)
Total	$	26.9	$	788.3	$	17.5	$	961.5

On November 18, 2022, the Company 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”). Initial proceeds from the 2022 Credit Agreement were received at the time of Separation from Fortune Brands and were used to fund the dividend paid to Fortune Brands, with any future proceeds to be used for general corporate purposes. The 2022 Credit Agreement is secured by certain assets as well as the guarantee of certain of our subsidiaries. Total amounts outstanding under the Term Loan and Revolving Credit Facility as of June 25, 2023 were $740.6 million and $80.0 million, respectively. Total amounts outstanding under the Term Loan and Revolving Credit Facility as of December 25, 2022 were $750.0 million and $235.0 million, respectively. The $750.0 million Term Loan has quarterly required amortization payments that began in March 2023.

Interest rates under these facilities are variable based on the Secured Overnight Financing Rate (“SOFR”) at the time of the borrowing, and the Company’s net leverage ratio as measured by Net Leverage to our consolidated earnings before interest, taxes, depreciation and amortization (“Consolidated EBITDA”). Interest rates can range from SOFR plus 1.85 percent to SOFR plus 2.60 percent. Net Leverage is defined as consolidated total indebtedness minus certain cash and cash equivalents. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. The Net Leverage Ratio may not exceed 3.875 to 1.0 at the initial borrowing through the second fiscal quarter of 2023, adjusting downward in various future quarters before settling at 3.25 to 1.0 in January 2025. The Company also is required to maintain a minimum Interest Coverage Ratio, defined as Consolidated EBITDA to consolidated interest expense, of 3.0 to 1.0.

The Company’s 2022 Credit Agreement contains additional covenants which limit or preclude certain corporate actions based upon the measurement of certain financial covenant metrics. The Company believes it was in compliance with all of its debt covenants as of June 25, 2023 and December 25, 2022.

Interest paid on debt was $17.8 million and $34.7 million for the thirteen and twenty-six weeks ended June 25, 2023, respectively. During the fourth quarter of 2022, we incurred indebtedness in connection with the Separation and Distribution, which resulted in the recognition of interest expense. Prior to the Separation, we had no third-party borrowings. We did not record any material capitalized interest during the thirteen or twenty-six weeks ended June 25, 2023 or June 26, 2022.

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10. Restructuring Charges

For the thirteen and twenty-six weeks ended June 25, 2023, we recognized restructuring charges of $3.1 million and $2.7 million, respectively. For the thirteen and twenty-six weeks ended June 26, 2022, we recognized restructuring charges of $1.3 million. Restructuring charges for all periods presented 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.

Reconciliation of Restructuring Liability


(In millions)	Balance at March 26, 2023		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	4.9	$	2.4	$	(4.1)	$	3.2
Other	0.1		0.7		(0.7)		0.1
	$	5.0	$	3.1	$	(4.8)	$	3.3


(In millions)	Balance at March 27, 2022		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	1.6	$	1.2	$	(1.0)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	1.8	$	1.3	$	(1.2)	$	1.9


(In millions)	Balance at December 25, 2022		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	15.3	$	1.3	$	(13.4)	$	3.2
Other	0.1		1.4		(1.4)		0.1
	$	15.4	$	2.7	$	(14.8)	$	3.3


(In millions)	Balance at December 26, 2021		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	2.2	$	1.2	$	(1.6)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	2.4	$	1.3	$	(1.8)	$	1.9

(a) Cash expenditures primarily related to severance charges.

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11. Income Taxes

Subsequent to the Separation, as a stand-alone entity, we will file consolidated U.S. federal income tax returns and various state and local income tax returns. The Company’s foreign income tax returns will continue to be filed on a full-year basis. The Company’s deferred taxes and effective tax rate may differ from those in the pre-Separation taxable periods.

The effective income tax rates for the thirteen weeks ended June 25, 2023, and June 26, 2022, were 26.5 percent and 24.3 percent, respectively. The change in the effective tax rate between the periods resulted primarily due to increases in foreign income inclusions with offsetting foreign tax credits, nondeductible compensation, and recognition of deferred tax liability for foreign earnings in 2023, partially offset by a reduction in changes in state and local income taxes.

The difference between our effective income tax rate for the thirteen weeks ended June 25, 2023, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits, recognition of a deferred tax liability for foreign earnings, and the mix of earnings in jurisdictions with differing tax rates.

The difference between our effective income tax rate for the thirteen weeks ended June 26, 2022, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, and tax benefits from general business credits.

The effective income tax rates for the twenty-six weeks ended June 25, 2023, and June 26, 2022, were 26.7 percent and 24.1 percent, respectively. The change in the effective tax rate between the periods resulted primarily from increases in foreign income inclusions with offsetting foreign tax credits, nondeductible compensation, and recognition of deferred tax liability for foreign earnings in 2023, partially offset by a reduction in state and local income taxes.

The difference between our effective income tax rate for the twenty-six weeks ended June 25, 2023, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits, recognition of a deferred tax liability for foreign earnings, changes due to foreign tax return filings, and the mix of earnings in jurisdictions with differing tax rates.

The difference between our effective income tax rate for the twenty-six weeks ended June 26, 2022, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, and tax benefits from general business credits.

The Company is subject to ongoing tax authority examinations in various jurisdictions in which it operates. Liabilities related to uncertain tax benefits (“UTBs”), including interest and penalties, are reported as a liability within the condensed consolidated balance sheets. The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company classifies interest and penalty accruals related to UTBs as income tax expense.

As of June 25, 2023, the Company was not permanently reinvested with respect to all earnings generated by foreign operations.

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12. Pension and Other Postretirement Plans

The components of net periodic (benefit) cost for pension and other postretirement plans for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022, respectively, are as set forth in the tables below. Service cost is classified as either a component of cost of products sold or within selling, general and administrative expenses in the condensed consolidated statements of income, based on the nature of the job responsibilities of the associates participating in the plans. All other components of net periodic (benefit) cost are classified as other expense (income), net in the condensed consolidated statements of income.


	Pension Benefits				Postretirement Benefits
	13 Weeks Ended				13 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.1	$	0.1
Interest cost	1.6		1.2		0.1		0.1
Expected return on plan assets	(1.8)		(1.8)		—		—


Net periodic (benefit) cost	(0.2)		(0.6)		0.2		0.2


	Pension Benefits				Postretirement Benefits
	26 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.2	$	0.2
Interest cost	3.2		2.5		0.1		0.1
Expected return on plan assets	(3.5)		(3.6)		—		—
Net periodic (benefit) cost	$	(0.3)	$	(1.1)	$	0.3	$	0.3

13. Contingencies and Accrued Losses

Product Warranties

We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historic claim experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the thirteen and twenty-six week periods ended June 25, 2023 and June 26, 2022.


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Reserve balance at the beginning of the period	$	12.2	$	7.5	$	11.2	$	7.0
Provision for warranties issued	9.0		9.6		18.1		18.3
Settlements made (in cash or in kind)	(8.0)		(8.9)		(16.1)		(17.1)
Reserve balance at the end of the period	$	13.2	$	8.2	$	13.2	$	8.2

Litigation

The Company is a defendant in lawsuits that are ordinary routine litigation matters incidental to our business and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company’s results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote.

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Environmental

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 as of June 25, 2023 and December 25, 2022.

14. Accumulated Other Comprehensive (Loss) Income

Total accumulated other comprehensive (loss) income consists of net income and other changes in business equity from transactions and other events from sources other than stockholders. It includes currency translation gains and losses, realized gains and losses from derivative instruments designated as hedges, and defined benefit plan adjustments. The after-tax components of, and changes in, accumulated other comprehensive (loss) income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at March 26, 2023	$	(8.2)	$	3.0	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.8		3.9		—		13.7
Amounts reclassified into earnings	—		(3.1)		—		(3.1)
Net current period other comprehensive (loss) income	9.8		0.8		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at March 27, 2022	$	8.4	$	1.8	$	(5.8)	$	4.4
Amounts classified into accumulated other comprehensive (loss) income	(7.1)		1.3		—		(5.8)
Amounts reclassified into earnings	—		(1.2)		—		(1.2)
Net current period other comprehensive (loss) income	(7.1)		0.1		—		(7.0)
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at December 25, 2022	$	(8.0)	$	2.8	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.6		6.5		—		16.1
Amounts reclassified into earnings	—		(5.5)		—		(5.5)
Net current period other comprehensive (loss) income	9.6		1.0		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at December 26, 2021	$	1.9	$	0.1	$	(5.9)	$	(3.9)
Amounts classified into accumulated other comprehensive (loss) income	(0.6)		3.5		0.1		3.0
Amounts reclassified into earnings	—		(1.7)		—		(1.7)
Net current period other comprehensive (loss) income	(0.6)		1.8		0.1		1.3
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)

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The reclassifications out of accumulated other comprehensive (loss) income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:

(In millions)

Details about Accumulated Other
Comprehensive (Loss) Income Components

Affected Line Item in the
Condensed Consolidated Statements of Income

13 Weeks Ended

June 25, 2023

June 26, 2022

Gains on cash flow hedges

Foreign exchange contracts

(3.1)

(1.2)

Cost of products sold

Total reclassifications for the period

(3.1)

(1.2)

Net of tax


	26 Weeks Ended
	June 25, 2023		June 26, 2022
Gains on cash flow hedges
Foreign exchange contracts	$	(5.5)	$	(1.7)	Cost of products sold
Total reclassifications for the period	$	(5.5)	$	(1.7)	Net of tax

15. Related Party Transactions

The accompanying financial statements are now presented on a consolidated basis as the company is a standalone public company. Certain information from prior to the Separation on December 14, 2022 was derived from Fortune Brands consolidated financial statements and accounting records. Transactions between MasterBrand and Fortune Brands prior to the Separation have been presented as related party transactions in the accompanying condensed consolidated financial statements. After the Separation, Fortune Brands is not considered a related party of MasterBrand.

Fortune Brands performed, and continues to perform in limited areas as part of a transitional services agreement, certain corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services on behalf of the Company. The expenses associated with these functions have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount, or number of facilities, as applicable. Prior to the Separation, total expenses allocated were $21.0 million and $41.1 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively, and such amounts are primarily included within selling, general and administrative expenses in the condensed consolidated statements of income. These amounts include costs of $16.9 million and $29.0 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively, that were not historically allocated to us as part of Fortune Brands’ normal periodic management reporting process. We consider the expense methodology and resulting allocation to be reasonable for all periods presented; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company for the prior year period presented. Actual costs that we may have incurred had we been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.

Cash Management

Fortune Brands utilized a central approach to treasury management, and prior to the Separation, we historically participated in related cash pooling arrangements to maximize the availability of cash for general operating and investing purposes. Under these cash pooling arrangements in the United States, cash balances were remitted regularly from our accounts. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries.

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Share-Based Compensation

Prior to the Separation, our employees participated in Fortune Brands stock-based compensation plans, the costs of which have been allocated and recorded in cost of products sold, and selling, general and administrative expenses in the condensed consolidated statements of income, based on the nature of the job responsibilities of the associates participating in the plans. Stock-based compensation costs related to our employees for the thirteen and twenty-six weeks ended June 26, 2022 were $2.7 million and $5.4 million, respectively, and are included within the total expenses allocated, as noted above.

Related Party Sales

There were no material sales to or from Fortune Brands or its subsidiaries for any of the periods presented.

Balances Due to and From Related Parties

After the Separation, Fortune Brands is not considered a related party of MasterBrand. As such, there were no related party receivables or payables outstanding as of June 25, 2023 and December 25, 2022. Refer to Note 5, “Balance Sheet Information,” for additional details of the accounts payable due from MasterBrand to Fortune Brands as of June 25, 2023 and December 25, 2022.

Prior to the Separation, the related party note receivable balance was the amount owed to the Company and its subsidiaries from Fortune Brands. We had written interest-bearing loan agreements in place with Fortune Brands. The receivable balance consisted of excess cash remitted to the Parent’s cash pooling arrangements, net of expenses incurred by us which were paid for by Fortune Brands. The loan agreements were to mature on April 14, 2026, but all amounts under these agreements were settled prior to the Separation. The receivable balance earned interest at a rate in-line with the Fortune Brands’ short-term borrowing rate, which was between 1.40 percent and 2.10 percent and between 0.95 percent and 2.10 percent during the thirteen and twenty-six weeks ended June 26, 2022, respectively.

Prior to the Separation, the related party note payable balance was a note payable between a subsidiary of the Company and Fortune Brands. The balance comprised of a revolving loan that was due at the maturity of the agreement on April 15, 2026, but was settled prior to the Separation. The note bore interest at rates ranging between 1.65 percent and 2.35 percent and between 1.20 percent and 2.35 percent during the thirteen and twenty-six weeks ended June 26, 2022, respectively.

The Company received interest income on related party receivables of $2.2 million and $3.6 million during the thirteen and twenty-six weeks ended June 26, 2022, respectively. Additionally, the Company incurred interest expense on intercompany payables and notes of $0.3 million and $0.5 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively.

16. Stock Repurchase Program

On May 9, 2023, we announced our authorization of a stock repurchase program under which we may repurchase up to $50.0 million of MasterBrand common stock over a twenty-four month period at management’s discretion for general corporate purposes. As a result of this authorization, we may repurchase shares from time to time through open market purchases, privately-negotiated transactions, block trades or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and amount of our purchases will depend upon prevailing market conditions, our available capital resources, our financial and operational performance, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time.

During the thirteen and twenty-six weeks ended June 25, 2023, we repurchased 404,858 shares of our common stock under this program at a cost of approximately $4.4 million, or an average of $10.89 per share. As of June 25, 2023, $45.6 million remained authorized for purchase under our stock repurchase program.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” regarding business strategies, market potential, future financial performance, and other matters. Statements preceded by, followed by or that otherwise include the word “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could,” are generally forward-looking in nature and not historical facts. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management. Although we believe that these statements are based on reasonable assumptions, they are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those indicated in such statements. These factors include those listed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 within Part I, Item 1A and in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 2023 within Part II, Item 1A.

The forward-looking statements included in this document are made as of the date of this Quarterly Report on Form 10-Q and, except pursuant to any obligations to disclose material information under the federal securities laws, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Some 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 anticipated financial resources and capital spending;

◦Our ability to manage costs;

◦The impact of our dependence on third parties with respect to sourcing our raw materials;

◦Our ability to accurately price our products;

◦Our anticipated future revenues and expectations of operational performance;

◦The effects of competition and consolidation of competitors in our industry;

◦Costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws;

◦The effect of climate change and unpredictable seasonal and weather factors;

◦Failure to realize the anticipated benefits of the Separation;

◦Conditions in the housing market in the United States and Canada;

◦The expected strength of our existing customers and consumers;

◦Worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis;

◦Unfavorable or unexpected effects of the Distribution and Separation;

◦The effects of the COVID-19 pandemic or another public health crisis or other unexpected event; and

◦Other statements contained in this Quarterly Report on Form 10-Q regarding items that are not historical facts or that involve predictions.

Introduction

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is a supplement to the accompanying condensed 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.

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.

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•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 condensed 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. This section provides an analysis of our results of operations for the thirteen and twenty-six week periods that ended on June 25, 2023 as compared to June 26, 2022. 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) “2023,” or “fiscal 2023” refers to our 2023 fiscal year that is a 53-week period that will end on December 31, 2023; and (2) “2022,” or “fiscal 2022” refers to our 2022 fiscal year that was a 52-week period that ended on December 25, 2022. Furthermore, unless the context otherwise requires, reference in this Quarterly Report on Form 10-Q to: (1) “the second quarter of 2023” refers to the thirteen week period that ended on June 25, 2023; (2) “the second quarter of 2022” refers to the thirteen week period that ended on June 26, 2022; (3) “the first half of 2023” refers to the twenty-six weeks ended June 25, 2023; and (4) “the first half of 2022” refers to the twenty-six weeks ended June 26, 2022.

•Liquidity and Capital Resources: This section provides a discussion of our financial condition and an analysis of our cash flows for our twenty-six week period that ended on June 25, 2023 as compared to our twenty-six week period that ended on June 26, 2022. This section also provides 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.

Overview

Founded nearly 70 years ago, we are the largest manufacturer of residential cabinets in North America. Our superior product quality, innovative design and service excellence drive 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.

Separation from Fortune Brands

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and (2) MBCI was converted into a Delaware limited liability company, MasterBrand Cabinets LLC (collectively, the “Reorganization”).

•Transition Services Agreement – allows for Fortune Brands and MasterBrand to provide certain transition services to each other for a limited time, up to 24 months following the Separation.

Separating the 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 employees. Moreover, separating the Cabinets segment into an independent, standalone company with publicly-traded stock provides our Company with a number of benefits, including:

•Strategic and Management Focus: The Separation enables our management team to better focus on strengthening our market-leading business and pursue targeted opportunities for long-term growth, profitability, and value creation. Like many of our competitors and peers, we believe that we will be more effective in managing our capital structure with credit tied more specifically to our industry and business performance and achieving greater margin expansion by focusing on our operational effectiveness specific to its products. A dedicated management team and board of directors streamlines operational and strategic decision-making, and ensures management incentives are optimized and aligned with our strategic priorities and financial objectives are in line with our industry.

•Resource Allocation and Capital Deployment: The Separation provides us with an opportunity to implement a tailored capital structure that ties specifically to our industry and business that provides greater financial and operational flexibility and increased agility. We are better positioned to more effectively allocate resources to address unique operating needs relating to our manufacturing and marketing requirements within our specific markets, invest in strategic priorities that will maximize long-term potential, and manage capital return strategies. Our unique operating needs are tailored towards enhancing the standardization of our processes, including with respect to our supply chain, and the specific manufacturing needs of our products, and strengthening our lean manufacturing capabilities. The Separation provides an opportunity for us to more effectively focus on these unique operating needs and markets.

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•Distinct Investment Opportunities and Investor Choice: The Separation creates a compelling investment opportunity for investors based on our unique operating model and financial profile. It also provides investors with enhanced insight into our distinct value drivers and allows for more targeted investment decisions.

Basis of Presentation

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 and have been principally derived from the consolidated financial statements of our Company and its consolidated subsidiaries using the historical results of operations, and historical basis of assets and liabilities. Our condensed consolidated financial statements have been prepared in accordance with GAAP. Our historical financial statements through the date of Separation include allocations of expenses related to certain Fortune Brands corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services. These expenses have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount or number of facilities, as applicable. Prior to the Separation, total expenses allocated for the thirteen and twenty-six weeks ended June 26, 2022 were $21.0 million and $41.1 million, respectively, of which $16.9 million and $29.0 million, respectively, was not previously allocated to us. Such amounts are primarily included within selling, general and administrative expenses in our condensed consolidated statements of income. We consider the expense methodology and resulting allocation to be reasonable for all periods presented; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company for the periods presented. Actual costs that we may have incurred had we been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Accordingly, historical allocations may not be indicative of future costs we incur operating as an independent, publicly-traded company.

The income tax amounts in our condensed consolidated financial statements have been calculated on a separate return method and presented as if our operations were separate taxpayers in the respective jurisdictions. For the period prior to the Separation in 2022, including the Separation, federal and state income tax payments and refunds were paid and received by Fortune Brands on our behalf. The net taxes paid on our behalf are payable to Fortune Brands, as provided in the indemnification provisions of the Tax Allocation Agreement. Accordingly, the net tax payable of $32.6 million to Fortune Brands as of June 25, 2023, is recorded in accounts payable on the condensed consolidated balance sheets.

All transactions between us and Fortune Brands previously resulting in related party balances were settled in our consolidated financial statements immediately prior to the Distribution, or were settled shortly thereafter, including by making a distribution of capital by us to Fortune Brands of any remaining related party receivable owed by Fortune Brands to us. For more information regarding related party transactions with Fortune Brands, see Note 15, “Related Party Transactions” within this Quarterly Report on Form 10-Q. Fortune Brands utilized a central approach to treasury management, and we historically participated in related cash pooling arrangements prior to the Separation. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by us and our consolidated subsidiaries. Prior to Separation, we had no third-party borrowings. All borrowings attributable to our business and due to Fortune Brands were recorded as “related party payable” in our condensed consolidated balance sheets and classified as current or noncurrent based on loan maturity dates. Fortune Brands’ third-party debt and related interest expense have not historically been attributed to us as we were not the legal obligor of the debt, and the borrowings are not specifically identifiable to us. However, we incurred indebtedness in connection with the Separation and Distribution, which resulted in additional interest expense beginning in the fourth quarter of 2022.

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Results of Operations

The following discussion of condensed consolidated results of operations refers to the thirteen weeks ended June 25, 2023 compared to the thirteen weeks ended June 26, 2022.

Thirteen Weeks Ended June 25, 2023 Compared to the Thirteen Weeks Ended June 26, 2022


	Thirteen Weeks Ended
(In millions)	June 25, 2023		$ change		% change		June 26, 2022
NET SALES	$	695.1	$	(160.5)	(18.8)	%	$	855.6
Cost of products sold	458.9		(147.1)		(24.3)	%	606.0
GROSS PROFIT	236.2		(13.4)		(5.4)	%	249.6
Selling, general and administrative expenses	141.7		(24.3)		(14.6)	%	166.0
Amortization of intangible assets	4.0		(0.4)		(9.1)	%	4.4
Asset impairment charge	—		(26.0)		(100.0)	%	26.0
Restructuring charges	3.1		1.8		138.5	%	1.3
OPERATING INCOME	87.4		35.5		68.4	%	51.9
Related party interest income, net	—		1.9		n/m (1)		(1.9)
Interest expense	17.2		17.2		n/m (1)		—
Other expense (income), net	0.5		0.7		(350.0)	%	(0.2)
INCOME BEFORE TAXES	69.7		15.7		29.1	%	54.0
Income tax expense	18.5		5.4		41.2	%	13.1
NET INCOME	$	51.2	$	10.3	25.2	%	$	40.9

___________

(1)Not meaningful.

Net sales

Net sales were $695.1 million for the thirteen weeks ended June 25, 2023 compared to $855.6 million for the thirteen weeks ended June 26, 2022, a decrease of $160.5 million, or 18.8 percent. The lower net sales compared to the second quarter of 2022 was driven by a decrease in sales unit volume, partially offset by favorable price, including the carryover of price increases implemented in 2022 which helped to mitigate the impact of cumulative commodity and transportation cost increases. Foreign currency impact was unfavorable by $1.5 million during the second quarter of 2023 as compared to the second quarter of 2022.

Cost of products sold

Cost of products sold decreased by $147.1 million, or 24.3 percent, to $458.9 million (66.0 percent of net sales) in the second quarter of 2023 as compared to $606.0 million (70.8 percent of net sales) in the second quarter of 2022. In addition to the impact of decreased sales unit volume, the lower cost of products sold as a percentage of net sales in the second quarter of 2023 is due to the favorable carryover of price increases implemented in 2022, as well as realized savings from various cost reduction actions taken in the fourth quarter of 2022 and first half of 2023 and commodity cost deflation, partially offset by labor inflation. Additionally, the second quarter of 2023 was favorably impacted by $2.2 million of insurance recoveries related to the tornado that occurred during the first quarter at our Jackson, GA facility.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $24.3 million, or 14.6 percent, to $141.7 million (20.4 percent of net sales) in the thirteen weeks ended June 25, 2023 compared to $166.0 million (19.4 percent of net sales) in the thirteen weeks ended June 26, 2022. The decrease in the second quarter of 2023 is primarily due to lower distribution costs ($11.4 million), and commission costs ($5.4 million) as a result of lower unit volume, partially offset by increased employee-related costs ($10.1 million), including salaries, incentive compensation and stock-based compensation, and professional support fees ($7.5 million). The second quarter of 2023 includes employee-related and professional support fee costs for newly established MasterBrand corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit,

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governance and legal services, previously provided by Fortune Brands. The second quarter of 2022 included $21.0 million of allocated costs from Fortune Brands which did not recur in the second quarter of 2023. In the second quarter of 2023, we incurred $0.6 million of additional costs directly related to the Separation from Fortune Brands, as compared to $0.2 million in the second quarter of 2022.

Asset impairment charge

We incurred an asset impairment charge of $26.0 million in the second quarter of 2022 related to an indefinite-lived tradename. During the second quarter ended June 26, 2022, production was shifted within our manufacturing footprint to enable what we expect to be a higher value purpose and growth opportunity, which led to downward revisions to forecasted revenue growth rates associated with the tradename.

Restructuring charges

Restructuring charges were $3.1 million in the thirteen weeks ended June 25, 2023 as compared to $1.3 million during the thirteen week period ended June 26, 2022. Restructuring charges for all periods presented 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.

Operating income

We recorded operating income of $87.4 million in the thirteen weeks ended June 25, 2023, compared to operating income of $51.9 million for the thirteen weeks ended June 26, 2022. The $35.5 million, or 68.4 percent, increase in operating income was driven mainly by the non-recurrence of the $26.0 million asset impairment charge taken in the second quarter of 2022, coupled with the favorable carryover of price increases implemented in 2022, the realized savings from various cost reduction actions taken in the fourth quarter of 2022 and first half of 2023 and decreased selling, general and administrative expenses.

Related party interest income, net

Related party interest income, net, was $1.9 million in the second quarter of 2022 based upon the related party loan receivable from Fortune Brands. Prior to the Separation, excess cash generated by our operations was remitted to Fortune Brands on a regular basis through the cash pooling arrangements. At the date of the Separation, such arrangements ceased.

Interest expense

Upon Separation, we incurred indebtedness in connection with the Separation and Distribution, which resulted in $17.2 million of interest expense in the second quarter of 2023. Prior to the Separation, we had no third-party borrowings.

Other expense (income), net

Other expense, net was $0.5 million in the second quarter of 2023, which was comparable to other income, net of $0.2 million in the second quarter of 2022.

Income taxes

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the thirteen week periods ended June 25, 2023 and June 26, 2022 were as follows:


	Thirteen Weeks Ended
(In millions)	June 25, 2023			June 26, 2022
Income before taxes	$	69.7		$	54.0
Income tax expense	18.5			13.1
Effective tax rate	26.5		%	24.3		%

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Net income

Net income was $51.2 million for the thirteen weeks ended June 25, 2023 compared to $40.9 million for the thirteen weeks ended June 26, 2022. While operating income increased $35.5 million, or 68.4 percent, it was partially offset by the $17.2 million of interest expense in the second quarter of 2023 resulting from the indebtedness we incurred upon Separation from Fortune Brands and increased tax expense of $5.4 million primarily due to higher income before taxes.

The following discussion of condensed consolidated results of operations refers to the twenty-six weeks ended June 25, 2023 compared to the twenty-six weeks ended June 26, 2022.

Twenty-Six Weeks Ended June 25, 2023 Compared to the Twenty-Six Weeks Ended June 26, 2022


	Twenty-Six Weeks Ended
(In millions)	June 25, 2023		$ change		% change		June 26, 2022
NET SALES	$	1,371.8	$	(260.9)	(16.0)	%	$	1,632.7
Cost of products sold	931.0		(241.1)		(20.6)	%	1,172.1
GROSS PROFIT	440.8		(19.8)		(4.3)	%	460.6
Selling, general and administrative expenses	277.0		(34.0)		(10.9)	%	311.0
Amortization of intangible assets	8.0		(0.9)		(10.1)	%	8.9
Asset impairment charge	—		(26.0)		(100.0)	%	26.0
Restructuring charges	2.7		1.4		107.7	%	1.3
OPERATING INCOME	153.1		39.7		35.0	%	113.4
Related party interest income, net	—		3.1		n/m (1)		(3.1)
Interest expense	34.6		34.6		n/m (1)		—
Other expense, net	0.9		0.2		28.6	%	0.7
INCOME BEFORE TAXES	117.6		1.8		1.6	%	115.8
Income tax expense	31.4		3.5		12.5	%	27.9
NET INCOME	$	86.2	$	(1.7)	(1.9)	%	$	87.9

___________

(1)Not meaningful.

Net sales

Net sales were $1,371.8 million for the twenty-six weeks ended June 25, 2023 compared to $1,632.7 million for the twenty-six weeks ended June 26, 2022, a decrease of $260.9 million, or 16.0 percent. The lower net sales, compared to the first half of 2022, were driven by a decrease in sales unit volume, partially offset by favorable price, including the carryover of price increases implemented in 2022. Foreign currency impact was $3.0 million unfavorable during the first half of 2023 as compared to the first half of 2022.

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Cost of products sold

Cost of products sold decreased by $241.1 million, or 20.6 percent, to $931.0 million (67.9 percent of net sales) in the first half of 2023 as compared to $1,172.1 million (71.8 percent of net sales) in the first half of 2022. In addition to the impact of decreased sales unit volume, the lower cost of products sold as a percentage of net sales in the first half of 2023 is due to the favorable carryover of price increases implemented in 2022, as well as realized savings from various cost reduction actions taken in the fourth quarter of 2022 and first half of 2023, and deflation in commodity costs and inbound transportation. These factors were partially offset by labor inflation. Additionally, the first half of 2023 included $9.4 million of incremental costs, less $2.2 million of insurance recoveries, related to the tornado that occurred during our first quarter at our Jackson, GA facility.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $34.0 million, or 10.9 percent, to $277.0 million (20.2 percent of net sales) in the twenty-six weeks ended June 25, 2023 compared to $311.0 million (19.0 percent of net sales) in the twenty-six weeks ended June 26, 2022. The decrease in the first half of 2023 is primarily due to lower distribution costs ($21.8 million) and commission costs ($8.8 million) as a result of lower unit volume, partially offset by increased employee-related costs ($17.5 million), including salaries, incentive compensation and stock-based compensation, and professional support fees ($13.2 million). The first half of 2023 includes employee-related and professional support fee costs for newly established MasterBrand corporate functions. The first half of 2022 included $41.1 million of allocated costs from Fortune Brands which did not recur in the first half of 2023. In the first half of 2023, we incurred $2.2 million of additional costs directly related to the Separation from Fortune Brands, as compared to $0.2 million in the first half of 2022.

Asset impairment charge

Restructuring charges

Restructuring charges were $2.7 million in the twenty-six weeks ended June 25, 2023 as compared to $1.3 million during the twenty-six week period ended June 26, 2022. Restructuring charges for all periods presented 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.

Operating income

We recorded operating income of $153.1 million in the twenty-six weeks ended June 25, 2023, compared to operating income of $113.4 million for the twenty-six weeks ended June 26, 2022. The $39.7 million, or 35.0 percent, increase in operating income was driven mainly by the non-recurrence of the $26.0 million asset impairment charge taken in the second quarter of 2022, coupled with the favorable carryover of price increases implemented in 2022, realized savings from various cost reduction actions taken in the fourth quarter of 2022 and first half of 2023, and decreased selling, general and administrative expenses. These items were partially offset by $9.4 million of incremental costs, less $2.2 million of insurance recoveries, related to the tornado at our Jackson, GA facility.

Related party interest income, net

Related party interest income, net, was $3.1 million in the first half of 2022 based upon the related party loan receivable from Fortune Brands. Prior to the Separation, excess cash generated by our operations was remitted to Fortune Brands on a regular basis through the cash pooling arrangements. At the date of the Separation, such arrangements ceased.

Interest expense

Upon Separation, we incurred indebtedness in connection with the Separation and Distribution, which resulted in $34.6 million of interest expense in the first half of 2023. Prior to the Separation, we had no third-party borrowings.

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Other expense, net

Other expense, net was $0.9 million in the first half of 2023, which was comparable to other expense, net of $0.7 million in the first half of 2022.

Income taxes

Our condensed consolidated income before taxes, income tax expense, and effective tax rate for the twenty-six week periods ended June 25, 2023 and June 26, 2022 were as follows:


	Twenty-Six Weeks Ended
(In millions)	June 25, 2023			June 26, 2022
Income before taxes	$	117.6		$	115.8
Income tax expense	31.4			27.9
Effective tax rate	26.7		%	24.1		%

Net income

Net income was $86.2 million for the twenty-six weeks ended June 25, 2023 compared to $87.9 million for the twenty-six weeks ended June 26, 2022. While operating income increased $39.7 million, or 35.0 percent, it was offset by the $34.6 million of interest expense in the first half of 2023 resulting from the indebtedness we incurred upon Separation from Fortune Brands.

LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs have historically been to support working capital requirements and fund capital expenditures. Prospectively, we may have liquidity needs to finance acquisitions and return cash to stockholders, if and when appropriate. Historically, our principal sources of liquidity have been cash on hand, cash flows from operating activities and financial support from Fortune Brands via participation in Fortune Brands’ centralized approach to treasury, including financing and cash management activities. Subsequent to the Separation, we implemented our own centralized approach to treasury management, including cash management performed through cash pooling arrangements. 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 condensed consolidated balance sheets and statement of cash flows. The cash flows presented in our condensed consolidated statement of cash flows may not be indicative of the cash flows we would have recognized had we operated as a standalone publicly-traded company for the periods presented prior to the Separation.

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After the Separation, we no longer have financial support from Fortune Brands. Our operating income is generated by our subsidiaries. There are no restrictions on the ability of our subsidiaries to pay dividends or make other distributions to MasterBrand. 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. Our cash flows from operations, borrowing availability and overall liquidity are subject to certain risks and uncertainties, including those described in the section entitled “Risk Factors” within Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 2023 within Part II, Item 1A.

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”). Initial proceeds of $955.0 million from the credit agreement were received at the time of Separation from Fortune Brands. The proceeds were primarily used to make a cash dividend payment of $940.0 million to Fortune Brands and to pay related fees and expenses at the Separation. The 2022 Credit Agreement is secured by certain assets as well as the guarantee of certain of our subsidiaries.

Interest rates under these facilities are variable based on the SOFR at the time of the borrowing, and our net leverage ratio as measured by our Net Leverage to our Consolidated EBITDA. Net Leverage is defined as consolidated total indebtedness minus certain cash and cash equivalents. Consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, amortization of intangible assets, losses from asset impairments, and certain other one-time adjustments. The Net Leverage Ratio may not exceed 3.875 to 1.0 at the initial borrowing through the second fiscal quarter of 2023, adjusting downward in various future quarters before settling at 3.25 to 1.0 in January 2025. Interest rates can range from SOFR plus 1.85 percent to SOFR plus 2.60 percent. We also are required to maintain a minimum Interest Coverage Ratio of 3.0 to 1.0. The Interest Coverage Ratio is defined as Consolidated EBITDA to consolidated interest expense.

Our 2022 Credit Agreement contains additional covenants which limit or preclude certain corporate actions based upon the measurement of certain financial covenant metrics. The $750.0 million Term Loan has quarterly required amortization payments, which began in March 2023.

As of June 25, 2023, the Company believes it was in compliance with all financial covenants set forth in the 2022 Credit Agreement, and expects to remain in compliance for the foreseeable future.

As of June 25, 2023, we had $815.2 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 twenty-six weeks ended June 25, 2023 and June 26, 2022.


	Twenty-Six Weeks Ended
(In millions)	June 25, 2023		June 26, 2022
Net cash provided by operating activities	$	194.0	$	76.1
Net cash used in investing activities	(11.2)		(22.1)
Net cash used in financing activities	(172.0)		(69.6)
Effect of foreign exchange rate changes on cash and cash equivalents	(1.7)		—
Net increase (decrease) in cash and cash equivalents	$	9.1	$	(15.6)

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Net cash provided by operating activities included net income of $86.2 million in the first half of 2023, as compared to net income of $87.9 million in the first half of 2022. First half 2023 net income included interest expense of $34.6 million on external debt that was entered into at the Separation, which resulted in cash outflows of $34.7 million for interest in the first half of 2023. In the first half of 2023, accounts receivable generated $58.6 million of cash, as a result of improvements in our collection processes and decreased sales. In the first half of 2022, our accounts receivable used $27.3 million, due in part to increased first half 2022 sales. In the first half of 2023, the movement in inventory was $54.0 million favorable, as compared to the first half of 2022, which had an unfavorable movement in inventory of $71.2 million. In 2022, we executed an intentional build in inventory in the first half of the year in order to mitigate the impact of an uncertain and volatile global supply chain environment. The favorable inventory movement in the first half of 2023 reflects our efforts to more efficiently manage our inventory levels in the current supply chain environment and in alignment with sales volume. Accounts payable was $39.6 million unfavorable in the first half of 2023 as a result of decreased purchasing levels aligned with our lower inventory levels. This compares to the favorable accounts payable movement of $33.4 million in the first half of 2022 in conjunction with our increasing inventory levels. The first half of 2023 was also unfavorably impacted by $12.1 million of payments related to restructuring reserves primarily established in fiscal 2022.

Net cash used in investing activities was $11.2 million in the twenty-six weeks ended June 25, 2023, compared to net cash used in investing activities of $22.1 million in the twenty-six weeks ended June 26, 2022. The year-over-year decrease is due to fewer capital expenditures scheduled in the first half of 2023 as compared to the prior year, which included spending related to the completion of a large expansion at our production facility in Reynosa, Mexico.

Net cash used in financing activities was $172.0 million in the twenty-six weeks ended June 25, 2023, as compared to cash used of $69.6 million in the twenty-six weeks ended June 26, 2022. The first half of 2023 included net payments on external debt of $164.4 million, as we used cash generated from operations to pay down our revolving credit facility. The first half of 2023 also includes $4.1 million of stock repurchases made under the $50.0 million stock repurchase program authorized in the second quarter of 2023. The activity in the first half of 2022 primarily reflects our cash remittances to Fortune Brands, net of cash lending from Fortune Brands, to finance our operations prior to the Separation. The financing relationship with Fortune Brands ceased as of the date of Separation.

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.

RECENTLY ISSUED ACCOUNTING STANDARDS

As discussed in Note 2, “Recently Issued Accounting Standards,” of our unaudited condensed consolidated financial statements, there are no recently issued accounting pronouncements that we have adopted and which have had a material effect on our results of operations, cash flows or financial condition.

CRITICAL ACCOUNTING ESTIMATES

We prepare our condensed consolidated financial statements in conformity with GAAP. This requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. Our critical accounting estimates requiring significant judgement that could materially impact our results of operations, financial position and cash flows are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2022. Since the date of the Company’s most recent Annual Report, there have been no material changes in our critical accounting estimates or assumptions.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in the information provided in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended December 25, 2022.

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Item 4. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of June 25, 2023 (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (2) is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

(b) CHANGES IN INTERNAL CONTROL.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended June 25, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 5. OTHER INFORMATION.

Rule 10b5-1 Trading Plans

During the fiscal quarter ended June 25, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Corrected Amended and Restated Certificate of Incorporation

On August 7, 2023, the Company filed a Corrected Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to correct the Company’s previously filed Amended and Restated Certificate of Incorporation, to correct an unintended drafting error, so that it accurately reflects the Company’s intent that certain officers of the Company are exculpated from monetary damages for certain breaches of fiduciary duties in their capacity as officers of the Company to the fullest extent permitted by 102(b)(7) of the General Corporation Law of the State of Delaware, as presently in effect or as may hereafter be amended to expand such protection.

The foregoing description of the Corrected Amended and Restated Certificate of Incorporation is qualified in its entirety by reference to the full text of the Corrected Amended and Restated Certificate of Incorporation, a copy of which is filed as Exhibit 3.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

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Part II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

We are defendants in lawsuits that are ordinary routine litigation matters incidental to our business and operations. In addition, other matters, including indirect tax assessments, claims and governmental investigations and proceedings covering a wide range of matters are pending against us. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that these actions could be decided unfavorably to us. We believe that there are meritorious defenses to these actions and that these actions will not have a material adverse effect on our results of operations, cash flows or financial condition, and, where appropriate, these actions are being vigorously contested. Accordingly, we believe the likelihood of material loss is remote. In the future, such costs could have a materially greater impact on our consolidated results of operations and financial position than in the past.

Based on available information, we do not consider any such action, assessment, claim, investigation or proceeding to be material, within the meaning of that term as used in “Item 103 of Regulation S-K” and the instructions thereto. For additional information regarding our legal proceedings, refer to Note 13, “Contingencies and Accrued Losses” included in this Quarterly Report on Form 10-Q.

Item 1A. RISK FACTORS.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022 in the section entitled “Risk Factors” within Part I, Item 1A, other than those noted in our Quarterly Report on Form 10-Q for the thirteen weeks ended March 26, 2023 in the section entitled “Risk Factors” within Part II, Item 1A.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table presents information with respect to purchases of common stock of the Company made during the thirteen week period ended June 25, 2023 by the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended:


Period	Total number of shares purchased	Average price paid per share (2)		Total number of shares purchased as part of publicly announced plans or programs	Maximum dollar amount that may yet be purchased under the plans or programs(1)
March 27, 2023 through April 23, 2023	—	$	—	—	$	50,000,000
April 24, 2023 through May 21, 2023	60,000	$	10.75	60,000	$	49,355,173
May 22, 2023 through June 25, 2023	344,858	$	10.91	344,858	$	45,591,827
Total	404,858	$	10.89	404,858

(1) On May 9, 2023, we announced our authorization of a stock repurchase program under which we may repurchase up to $50.0 million of MasterBrand common stock over a twenty-four month period at management’s discretion for general corporate purposes.


(2) Average price paid per share excludes commissions paid.

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Item 6. EXHIBITS.


		Incorporated by reference herein
Exhibit Number	Description	Form	Date
3.1*	Corrected Amended and Restated Certificate of Incorporation of MasterBrand, Inc., effective August 7, 2023
3.2	Amended and Restated Bylaws of MasterBrand, Inc., effective December 14, 2022	Current Report on Form 8-K (File No. 001-41545)	December 15, 2022
31.1*	Certification of principal executive officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of principal executive officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002







32.2*	Certification of principal financial officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
101.*	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2023 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) the Cover Page, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Balance Sheets, (v) the Condensed Consolidated Statements of Cash Flows, (vi) the Condensed Consolidated Statements of Equity, and (vii) the Notes to the Condensed Consolidated Financial Statements
104.*	Cover Page Interactive Data File (embedded within the iXBRL document)

* Filed or furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: August 9, 2023	MasterBrand, Inc.
	(Registrant)

	By:	/s/ R. David Banyard, Jr.
	Name:	R. David Banyard, Jr.
	Title:	President & Chief Executive Officer

	By:	/s/ Andrea H. Simon
	Name:	Andrea H. Simon
	Title:	Executive Vice President & Chief Financial Officer

CORRECTED

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

MASTERBRAND, INC.


Pursuant to Section 103(f) of the General Corporation Law of the State of Delaware

MasterBrand, Inc., a corporation organized and existing under the laws of the General Corporation Law of the State of Delaware (the “Corporation”), filed its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on December 13, 2022. The Amended and Restated Certificate of Incorporation was an inaccurate record in that it, as a result of an unintended drafting error, failed to accurately reflect the Corporation’s intent to provide for officer exculpation, such that certain officers of the Corporation are not exculpated from monetary damages for certain breaches of fiduciary duties in their capacity as officers of the Corporation to the fullest extent permitted by 102(b)(7) of the General Corporation Law of the State of Delaware, as presently in effect or as may hereafter be amended to expand such protection.

The Amended and Restated Certificate of Incorporation is hereby corrected to read in its entirety as set forth below:

MasterBrand, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

A. The name of the Corporation is MasterBrand, Inc. The Corporation’s original certificate of incorporation was filed with the office of the Secretary of State of the State of Delaware on July 27, 2022 and the previously amended and restated certificate of incorporation was filed with the office of the Secretary of State of the State of Delaware on December 13, 2022

B. This amended and restated certificate of incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, as amended (the “DGCL”), restates and amends the provisions of the Corporation’s certificate of incorporation and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the DGCL.

C. The text of the certificate of incorporation of this Corporation shall be amended and restated, effective as of 5:55 p.m., Eastern Time, on December 14, 2022 (the “Effective Time”), to read in its entirety as follows:

ARTICLE I

NAME

The name of the Corporation is MasterBrand, Inc.

ARTICLE II

REGISTERED OFFICE

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808-1674. The name of its registered agent at such address is Corporation Service Company.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

ARTICLE IV

CAPITAL STOCK

4.1 Authorized Capital Stock. The total number of shares of all classes of capital stock that the Corporation is authorized to issue is eight hundred ten million (810,000,000) shares, consisting of seven hundred fifty million (750,000,000) shares of common stock, par value $0.01 per share (“Common Stock”), and sixty million (60,000,000) shares of preferred stock, par value $0.01 per share (“Preferred Stock”). At the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time shall be automatically subdivided and converted, without further action on the part of the Corporation or any holder of such Common Stock, into 1,280,285.830 shares of Common Stock.

4.2 Increase or Decrease in Authorized Capital Stock. The number of authorized shares of Preferred Stock or Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote generally in the election of directors, irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), voting together as a single class, without a separate vote of the holders of the class or classes the number of authorized shares of which are being increased or decreased, unless a vote by any holders of one or more series of Preferred Stock is required by the express terms of any series of Preferred Stock as provided for or fixed pursuant to the provisions of Section 4.4 of this Certificate of Incorporation (as defined below).

4.3 Common Stock.

(a) The holders of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders on which the holders of shares of Common Stock are entitled to vote. The holders of shares of Common Stock shall not have cumulative voting rights. Except as otherwise required by law or this amended and restated certificate of incorporation of the Corporation (as further amended from time to time in accordance with the provisions hereof and including, without limitation, the terms of any

certificate of designation with respect to any series of Preferred Stock, this “Certificate of Incorporation”), and subject to the rights of the holders of shares of Preferred Stock, if any, at any annual or special meeting of the stockholders of the Corporation, the holders of shares of Common Stock shall have the right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders; provided, however, that, except as otherwise required by law, holders of shares of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation that relates solely to the terms, number of shares, powers, designations, preferences or relative, participating, optional or other special rights (including, without limitation, voting rights), or to qualifications, limitations or restrictions thereof, of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation or pursuant to the DGCL.

(b) Subject to the rights of the holders of shares of Preferred Stock, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the board of directors of the Corporation (the “Board”) from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.

(c) In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, and subject to the rights of the holders of shares of Preferred Stock in respect thereof, the holders of shares of Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them.

4.4 Preferred Stock.

(a) The Board is expressly authorized to issue from time to time shares of Preferred Stock in one or more series pursuant to a resolution or resolutions providing for such issue duly adopted by the Board. The Board is further authorized, subject to limitations prescribed by law, to fix by resolution or resolutions and to set forth in a certification of designation filed pursuant to the DGCL the powers, designations, preferences and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions thereof, if any, of any wholly unissued series of Preferred Stock, including, without limitation, dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including, without limitation, sinking fund provisions), redemption price or prices and liquidation preferences of any such series, and the number of shares constituting any such series and the designation thereof, or any of the foregoing.

(b) The Board is further authorized to increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series of Preferred Stock, the number of which was fixed by it, subsequent to the issuance of shares of such series then outstanding, subject to the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, stated in this Certificate of Incorporation or the resolution of the Board originally fixing the number of shares of such series. If the number of shares of any series of Preferred Stock is so decreased, then the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

ARTICLE V

BOARD OF DIRECTORS

5.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board.

5.2 Number of Directors; Election; Term.

(a) The number of directors that shall constitute the entire Board shall not be less than five (5) nor more than fifteen (15). Within such limit, the number of members of the entire Board shall be fixed, from time to time, exclusively by the Board, subject to the rights of the holders of any series of Preferred Stock with respect to the election of directors, if any.

(b) Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, from the Effective Time until the completion of the seventh annual meeting of stockholders to occur after the Effective Time (the “Sunset Date”), the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be practicable, of one-third of the total number of directors constituting the entire Board of Directors. Each director shall serve for a term ending on the date of the third annual meeting of stockholders next following the annual meeting at which such director was elected; provided that (i) directors initially designated as Class I directors shall serve for a term ending on the date of the 2023 annual meeting, directors initially designated as Class II directors shall serve for a term ending on the 2024 annual meeting, and directors initially designated as Class III directors shall serve for a term ending on the date of the 2025 annual meeting and (ii) from and after the Sunset Date, the Board will no longer be classified under Section 141(d) of the DGCL and at each annual meeting of stockholders thereafter, all directors shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders and until their respective successors shall have been duly elected and qualified or until their earlier resignation or removal. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, prior to the Sunset Date, if the number of directors that constitutes the Board is changed, any newly created directorships or decrease in directorships shall be so apportioned by the Board among the classes as to make all classes as nearly equal in number as is practicable, but in no case will a decrease in the number of directors constituting the Board shorten the term of any incumbent director. Prior to the Sunset Date, the Board is authorized to assign members of the Board already in office to such classes.

(c) Notwithstanding the foregoing provisions of this Section 5.2, and subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, each director shall serve until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal.

(d) Elections of directors need not be by written ballot unless the bylaws of the Corporation (as amended from time to time in accordance with the provisions hereof and thereof, the “Bylaws”) shall so provide.

(e) Notwithstanding any of the other provisions of this Article V, whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of the certificate of designation for such series of Preferred Stock, and such directors so elected shall not be divided into classes pursuant to this Article V unless expressly provided by such terms. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of this Article V, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to such provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to such provisions, whichever occurs earlier, subject to such director’s earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such series of stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate, and the total authorized number of directors of the Corporation shall be reduced accordingly.

5.3 Removal. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, prior to the Sunset Date, a director may be removed from office only for cause and only by the holders of a majority of voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors . From and after the Sunset Date, subject to the rights of holders of any series of Preferred Stock with respect to the removal of directors, any director may be removed from office at any time with or without cause, but only by the affirmative vote of the holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.

5.4 Vacancies and Newly Created Directorships. Subject to the rights of holders of any series of Preferred Stock with respect to the election of directors, vacancies occurring on the Board for any reason and newly created directorships resulting from an increase in the number of directors may be filled only by vote of a majority of the remaining members of the Board, although less than a quorum, or by a sole remaining director, at any meeting of the Board and not by the stockholders. A person so elected by the Board to fill a vacancy or newly created directorship shall hold office until such director’s successor has been duly elected and qualified or until such director’s earlier death, resignation or removal as hereinafter provided.

ARTICLE VI

AMENDMENT OF BYLAWS

In furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to adopt, amend, alter or repeal the Bylaws. The Bylaws may also be adopted, amended, altered or repealed by the stockholders of the Corporation by the affirmative vote of the holders of at least a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE VII

STOCKHOLDERS

7.1 No Action by Written Consent of Stockholders. Except as otherwise expressly provided by the terms of any series of Preferred Stock permitting the holders of such series of Preferred Stock to act by written consent, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by written consent in lieu of a meeting.

7.2 Special Meetings. Except as otherwise expressly provided by the terms of any series of Preferred Stock permitting the holders of such series of Preferred Stock to call a special meeting of the holders of such series, special meetings of the stockholders of the Corporation may be called only by the chairperson of the Board, the chief executive officer of the Corporation or the Board, and the ability of the stockholders to call a special meeting of the stockholders is hereby specifically denied.

7.3 Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

ARTICLE VIII

LIMITATION OF LIABILITY AND INDEMNIFICATION

8.1 Limitation of Personal Liability. No director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as it presently exists or may hereafter be amended from time to time. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. For purposes of this Section 8.1, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL, as it presently exists or may hereafter be amended from time to time.

8.2 Indemnification and Advancement of Expenses. The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by the DGCL, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of such person’s heirs, executors and personal and legal representatives. A director’s right to indemnification conferred by this Section 8.2 shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition, provided that such director presents to the Corporation a written undertaking to repay such amount if it shall ultimately be determined that such director is not entitled to be indemnified by the Corporation under this Article VIII or otherwise. Notwithstanding the foregoing, except for proceedings to enforce any officer’s or director’s rights to indemnification or any director’s rights to advancement of expenses, the Corporation shall not be obligated to indemnify any director or officer, or advance expenses of any director, (or such person’s heirs, executors or personal or legal representatives) in connection with any proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board.

8.3 Non-Exclusivity of Rights. The rights to indemnification and advancement of expenses conferred in Section 8.2 of this Certificate of Incorporation shall neither be exclusive of, nor be deemed in limitation of, any rights to which any person may otherwise be or become entitled or permitted under this Certificate of Incorporation, the Bylaws, any statute, agreement, vote of stockholders or disinterested directors or otherwise.

8.4 Insurance. To the fullest extent authorized or permitted by the DGCL, the Corporation may purchase and maintain insurance on behalf of any current or former director or officer of the Corporation against any liability asserted against such person, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VIII or otherwise.

8.5 Persons Other Than Directors and Officers. This Article VIII shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to, or to purchase and maintain insurance on behalf of, persons other than those persons described in the first sentence of Section 8.2 of this Certificate of Incorporation or to advance expenses to persons other than directors of the Corporation.

8.6 Effect of Modifications. Any amendment, repeal or modification of any provision contained in this Article VIII shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to further limit or eliminate the liability of directors or officers) and shall not adversely affect any right or protection of any current or former director or officer of the Corporation existing at the time of such amendment, repeal or modification with respect to any acts or omissions occurring prior to such amendment, repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Forum for Certain Actions.

(a) Unless a majority of the Board, acting on behalf of the Corporation, consents in writing to the selection of an alternative forum (which consent may be given at any time, including during the pendency of litigation), the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court located within the State of Delaware or, if no court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware), to the fullest extent permitted by law, shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation under Delaware law , (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation or any of its directors, officers or other employees arising pursuant to any provision of the DGCL, this Certificate of Incorporation or the Bylaws (in each case, as may be amended from time to time),

(iv) any action asserting a claim against the Corporation or any of its directors, officers or other employees governed by the internal affairs doctrine of the State of Delaware or (v) any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL, in all cases subject to the court’s having personal jurisdiction over all indispensable parties named as defendants. Unless a majority of the Board, acting on behalf of the Corporation, consents in writing to the selection of an alternative forum (which consent may be given at any time, including during the pendency of litigation), the federal district courts of the United States of America, to the fullest extent permitted by law, shall be the sole and exclusive forum for the resolution of any action asserting a cause of action arising under the Securities Act of 1933, as amended.

(b) Personal Jurisdiction. If any action the subject matter of which is within the scope of subparagraph (a) of this Section 9.1 is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce subparagraph (a) of this Section 9.1 (an “Enforcement Action”) and (ii) having service of process made upon such stockholder in any such Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

(c) Enforceability. If any provision of this Section 9.1 shall be held to be invalid, illegal or unenforceable as applied to any person, entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Section 9.1, and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

(d) Notice and Consent. For the avoidance of doubt, any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 9.1.

(e) Exchange Act. or the avoidance of doubt, nothing contained in this Section 9.1 shall apply to any action brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or the rules and regulations thereunder.

9.2 Amendment. The Corporation reserves the right to amend, repeal or modify any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by this Certificate of Incorporation and the DGCL; and all rights, preferences and privileges herein conferred upon stockholders by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article IX.

9.3 Severability. If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby.

IN WITNESS WHEREOF, the Corporation has caused this Corrected Amended and Restated Certificate of Incorporation to be signed by a duly authorized officer of the Corporation on this 7th day of August, 2023.



/s/ Andrean Horton

By: Andrean Horton
Its: Chief Legal Officer

Exhibit No. 31.1

RULE 13a-14(a) CERTIFICATION

I, R. David Banyard, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended June 25, 2023 of MasterBrand, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ R. David Banyard, Jr.
R. David Banyard, Jr.
President & Chief Executive Officer

Dated: August 9, 2023

Exhibit No. 31.2

RULE 13a-14(a) CERTIFICATION

I, Andrea H. Simon, certify that:

1.I have reviewed this quarterly report on Form 10-Q for the quarter ended June 25, 2023 of MasterBrand, Inc. (the “registrant”);

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ Andrea H. Simon
Andrea H. Simon
Executive Vice President and Chief Financial Officer

Dated: August 9, 2023

Exhibit No. 32.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, the undersigned officer of MasterBrand, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that the Company’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2023 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.


/s/ R. David Banyard, Jr.
R. David Banyard, Jr.
President & Chief Executive Officer

Dated: August 9, 2023

A signed original of this written statement required by Section 906 has been provided to MasterBrand, Inc. and will be retained by MasterBrand, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit No. 32.2

CERTIFICATION


/s/ Andrea H. Simon
Andrea H. Simon
Executive Vice President and Chief Financial Officer

Dated: August 9, 2023

Cover - shares	6 Months Ended
Cover - shares	Jun. 25, 2023	Aug. 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 25, 2023
Document Transition Report	false
Entity File Number	001-41545
Entity Registrant Name	MasterBrand, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	88-3479920
Entity Address, Address Line One	One MasterBrand Cabinets Dr.
Entity Address, City or Town	Jasper
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47547
City Area Code	812
Local Phone Number	482-2527
Title of 12(g) Security	Common Stock, par value $0.01 per share
Trading Symbol	MBC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		127,682,912
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001941365

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Income Statement [Abstract]
NET SALES	$ 695.1	$ 855.6	$ 1,371.8	$ 1,632.7
Cost of products sold	458.9	606.0	931.0	1,172.1
GROSS PROFIT	236.2	249.6	440.8	460.6
Selling, general and administrative expenses	141.7	166.0	277.0	311.0
Amortization of intangibles	4.0	4.4	8.0	8.9
Asset impairment charge	0.0	26.0	0.0	26.0
Restructuring charges	3.1	1.3	2.7	1.3
OPERATING INCOME	87.4	51.9	153.1	113.4
Related party interest income, net	0.0	(1.9)	0.0	(3.1)
Interest expense	17.2	0.0	34.6	0.0
Other expense (income), net	0.5	(0.2)	0.9	0.7
INCOME BEFORE TAXES	69.7	54.0	117.6	115.8
Income tax expense	18.5	13.1	31.4	27.9
NET INCOME	$ 51.2	$ 40.9	$ 86.2	$ 87.9
Average Number of Shares of Common Stock Outstanding
Basic (in shares)	128.4	128.0	128.3	128.0
Diluted (in shares)	129.9	128.0	129.7	128.0
Earnings Per Common Share
Basic (in dollars per share)	$ 0.40	$ 0.32	$ 0.67	$ 0.69
Diluted (in dollars per share)	$ 0.39	$ 0.32	$ 0.66	$ 0.69

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 51.2	$ 40.9	$ 86.2	$ 87.9
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	9.8	(7.1)	9.6	(0.6)
Unrealized gains on derivatives:
Unrealized holding gains arising during period	3.9	1.3	6.5	3.5
Less: reclassification adjustment for gains included in net income	(3.1)	(1.2)	(5.5)	(1.7)
Unrealized gains on derivatives	0.8	0.1	1.0	1.8
Defined benefit plans:
Net actuarial gains arising during period	0.0	0.0	0.0	0.1
Defined benefit plans	0.0	0.0	0.0	0.1
Other comprehensive income (loss), before tax	10.6	(7.0)	10.6	1.3
Income tax expense related to items of other comprehensive income	0.0	0.0	0.0	0.0
Other comprehensive income (loss), net of tax	10.6	(7.0)	10.6	1.3
COMPREHENSIVE INCOME	$ 61.8	$ 33.9	$ 96.8	$ 89.2

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022
Current assets
Cash and cash equivalents	$ 110.2	$ 101.1
Accounts receivable, net	235.7	289.6
Inventories	319.6	373.1
Other current assets	62.7	66.2
TOTAL CURRENT ASSETS	728.2	830.0
Property, plant and equipment, net of accumulated depreciation	341.9	352.6
Operating lease right-of-use assets, net of accumulated amortization	59.7	52.3
Goodwill	925.2	924.2
Other intangible assets, net of accumulated amortization	342.9	349.8
Other assets	26.1	20.5
TOTAL ASSETS	2,424.0	2,529.4
Current liabilities
Accounts payable	182.2	219.2
Current portion of long-term debt	26.9	17.5
Current operating lease liabilities	14.1	13.9
Other current liabilities	151.2	160.5
TOTAL CURRENT LIABILITIES	374.4	411.1
Long-term debt	788.3	961.5
Deferred income taxes	85.2	87.3
Pension and other postretirement plan liabilities	12.3	12.2
Operating lease liabilities	47.9	40.7
Other non-current liabilities	8.3	7.4
TOTAL LIABILITIES	1,316.4	1,520.2
Contingencies and Accrued Losses (Note 13)
Equity
Common stock (par value $0.01 per share; authorized 750.0 million shares; 128.8 million shares issued and 128.1 million shares outstanding as of June 25, 2023; 128.0 million shares issued and outstanding as of December 25, 2022)	1.3	1.3
Paid-in capital	8.9	0.0
Treasury stock, at cost	(7.4)	(0.1)
Accumulated other comprehensive loss	(3.9)	(14.5)
Retained earnings	1,108.7	1,022.5
TOTAL EQUITY	1,107.6	1,009.2
TOTAL LIABILITIES AND EQUITY	$ 2,424.0	$ 2,529.4

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 25, 2023	Dec. 25, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	750,000,000.0	750,000,000.0
Common stock issued (in shares)	128,800,000	128,000,000.0
Common stock outstanding (in shares)	128,100,000	128,000,000.0

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions

6 Months Ended

Jun. 25, 2023

Jun. 26, 2022

OPERATING ACTIVITIES

NET INCOME

$ 86.2

$ 87.9

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

23.0

21.5

Amortization of intangibles

8.0

8.9

Restructuring charges, net of cash payments

(12.1)

(0.5)

Amortization of finance fees

1.0

0.0

Stock-based compensation

8.9

5.4

Asset impairment charge

0.0

26.0

Changes in operating assets and liabilities:

Accounts receivable

58.6

(27.3)

Inventories

54.0

(71.2)

Other current assets

4.1

3.2

Accounts payable

(39.6)

33.4

Accrued expenses and other current liabilities

(1.7)

5.5

Other items

3.6

(16.7)

NET CASH PROVIDED BY OPERATING ACTIVITIES

194.0

76.1

INVESTING ACTIVITIES

Capital expenditures

^[1]

(11.4)

(22.1)

Proceeds from the disposition of assets

0.2

0.0

NET CASH USED IN INVESTING ACTIVITIES

(11.2)

(22.1)

FINANCING ACTIVITIES

Issuance of long-term and short-term debt

55.0

0.0

Repayments of long-term and short-term debt

(219.4)

0.0

Repurchase of common stock

(4.1)

0.0

Payments of employee taxes withheld from share-based awards

(2.9)

0.0

Repayment of finance leases

(0.6)

(0.3)

Related party borrowings

0.0

1,448.1

Related party repayments

0.0

(1,582.4)

Net contributions from Fortune Brands

0.0

65.0

NET CASH USED IN FINANCING ACTIVITIES

(172.0)

(69.6)

Effect of foreign exchange rate changes on cash and cash equivalents

(1.7)

0.0

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

9.1

(15.6)

Cash and cash equivalents at beginning of period

101.1

141.4

Cash and cash equivalents at end of period

$ 110.2

$ 125.8

[1]	Capital expenditures of $3.0 million and $3.2 million that have not been paid as of June 25, 2023 and June 26, 2022, respectively, were excluded from the condensed consolidated statements of cash flows.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions	6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022
Statement of Cash Flows [Abstract]
Capital expenditures incurred but not yet paid	$ 3.0	$ 3.2

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions	Total	Common Stock	Paid-in Capital	Treasury stock, at cost	Accumulated Other Comprehensive (Loss) Income	Retained Earnings
Beginning balance, shares (in shares) at Dec. 26, 2021		0
Beginning balance at Dec. 26, 2021	$ 2,453.8	$ 0.0	$ 272.2	$ 0.0	$ (3.9)	$ 2,185.5
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
NET INCOME	87.9					87.9
Other comprehensive income	1.3				1.3
Stock-based compensation	5.4		5.4
Net contributions from Fortune Brands	65.0		65.0
Ending balance, shares (in shares) at Jun. 26, 2022		0
Ending balance at Jun. 26, 2022	2,613.4	$ 0.0	342.6	0.0	(2.6)	2,273.4
Beginning balance at Mar. 27, 2022					4.4
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
NET INCOME	40.9
Other comprehensive income	(7.0)
Ending balance, shares (in shares) at Jun. 26, 2022		0
Ending balance at Jun. 26, 2022	$ 2,613.4	$ 0.0	342.6	0.0	(2.6)	2,273.4
Beginning balance, shares (in shares) at Dec. 25, 2022	128,000,000.0	128,000,000.0
Beginning balance at Dec. 25, 2022	$ 1,009.2	$ 1.3	0.0	(0.1)	(14.5)	1,022.5
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
NET INCOME	86.2					86.2
Other comprehensive income	10.6				10.6
Shares issued under compensation plans (in shares)		500,000
Stock-based compensation	$ 6.0		8.9	(2.9)
Stock repurchased under repurchase program (in shares)	(404,858)	(400,000)
Stock repurchase program	$ (4.4)			(4.4)
Ending balance, shares (in shares) at Jun. 25, 2023	128,100,000	128,100,000
Ending balance at Jun. 25, 2023	$ 1,107.6	$ 1.3	8.9	(7.4)	(3.9)	1,108.7
Beginning balance at Mar. 26, 2023					(14.5)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
NET INCOME	51.2
Other comprehensive income	$ 10.6
Stock repurchased under repurchase program (in shares)	(404,858)
Stock repurchase program	$ (4.4)
Ending balance, shares (in shares) at Jun. 25, 2023	128,100,000	128,100,000
Ending balance at Jun. 25, 2023	$ 1,107.6	$ 1.3	$ 8.9	$ (7.4)	$ (3.9)	$ 1,108.7

Basis of Presentation and Principles of Consolidation	6 Months Ended
Basis of Presentation and Principles of Consolidation	Jun. 25, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation Background MasterBrand, Inc. is a leading manufacturer of residential cabinets in North America with a portfolio of leading residential cabinetry products for the kitchen, bathroom and other parts of the home. References to “Cabinets,” “MasterBrand,” “the Company,” “we,” “our” and “us” refer to MasterBrand, Inc. and its consolidated subsidiaries, unless the context otherwise requires. On April 28, 2022, Fortune Brands Home & Security, Inc. (“Fortune Brands” or the “Parent”) announced that its Board of Directors approved in principle a separation of its Cabinets segment into a standalone publicly-traded company (the “Separation”). The Cabinets segment of Fortune Brands had historically been operated by MasterBrand Cabinets, Inc. (“MBCI”). 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. 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”). On December 14, 2022, the Separation was completed by way of a pro rata dividend of our common stock to stockholders of Fortune Brands common stock (the “Distribution”). On December 14, 2022, the date of Separation, 128.0 million shares of MasterBrand, Inc. common stock were issued. Fortune Brand shareholders received one share of MasterBrand, Inc. common stock for each share of Fortune Brands common stock held on the record date. Following the Distribution, Fortune Brands stockholders owned 100 percent of the shares of MasterBrand, Inc. common stock, and MasterBrand, Inc. became an independent, publicly-traded company, listed under the symbol “MBC” on the New York Stock Exchange beginning December 15, 2022. All share and per share amounts for all prior periods presented in the condensed consolidated financial statements, including Note 4, “Earnings Per Share,” have been retroactively recast to reflect the effects of the changes in equity structure resulting from the Reorganization, Separation and Distribution. The historical activity of the Company is that of MBCI prior to the Reorganization. The Company’s equity structure prior to the Separation and Distribution included 5,000 shares of MasterBrand, Inc. common stock authorized and 100 shares issued. Prior to the incorporation of MasterBrand, Inc. in July 2022, the equity structure of MBCI included 1,000 authorized and issued shares of common stock. MasterBrand, Inc. is the registrant and the financial reporting entity following the consummation of the Separation and Distribution. In order to govern the ongoing relationships between MasterBrand, Inc. and Fortune Brands after the Separation and to facilitate an orderly transition, the parties entered into a series of agreements, including the following: •Separation and Distribution Agreement – sets forth the principal actions to be taken in connection with the Separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between MasterBrand and Fortune Brands. •Transition Services Agreement – allows for Fortune Brands and MasterBrand to provide certain transition services to each other for a limited time, up to 24 months following the Separation. •Tax Allocation Agreement – governs the respective rights, responsibilities and obligations of MasterBrand and Fortune Brands with respect to tax liabilities and benefits, tax attributes, tax contests and other matters regarding income taxes, non-income taxes and related tax returns. •Employee Matters Agreement – addresses certain employment, compensation and benefits matters, including the allocation and treatment of certain assets and liabilities relating to MasterBrand employees. Basis of Presentation The accompanying financial statements are now presented on a consolidated basis as the Company is a standalone public company. We have historically existed and functioned as a reporting segment of the consolidated business of Fortune Brands up until the Separation on December 14, 2022, at which time we became a standalone public company. Certain information from prior to the Separation was derived from Fortune Brands’ consolidated financial statements and accounting records. The condensed consolidated financial statements and notes to condensed consolidated financial statements as of and subsequent to December 14, 2022, the date of the Separation, reflect the consolidated financial position, results of operations and cash flows for MasterBrand as an independent company. Prior to the Separation, the condensed consolidated financial statements and notes to condensed consolidated financial statements were prepared on a carve-out basis using the financial statements and accounting records of Fortune Brands. The carve-out basis financial statements represent the historical financial position, results of operations, and cash flows of MasterBrand as they were historically managed in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect significant assumptions and allocations. The carve-out financial statements may not include all expenses that would have been incurred had MasterBrand existed as a standalone entity. 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. Our fiscal 2023 will consist of 53 weeks ending on December 31, 2023, while our fiscal 2022 consisted of 52 weeks ended on December 25, 2022. The condensed consolidated balance sheet as of the twenty-six weeks ended June 25, 2023, as well as the related condensed consolidated statements of income, comprehensive income, cash flows, and equity for the thirteen and twenty-six weeks ended June 25, 2023 and the thirteen and twenty-six weeks ended June 26, 2022 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year. The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our audited consolidated financial statements and notes. The 2022 condensed consolidated balance sheet was derived from our audited consolidated financial statements, but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022. The condensed consolidated statements of income include all revenues and costs directly attributable to our business, including costs for facilities, functions, and services we utilize. The condensed consolidated statements of income also include an allocation of expenses related to certain Fortune Brands corporate functions through the Separation, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services. These expenses have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount, or number of facilities, as applicable. Prior to the Separation, total expenses allocated for the thirteen and twenty-six weeks ended June 26, 2022 were $21.0 million and $41.1 million, respectively, of which $16.9 million and $29.0 million, respectively, was not previously allocated to us. Such amounts are primarily included within selling, general and administrative expenses in the condensed consolidated statements of income. We consider the expense methodology and resulting allocation to be reasonable; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company in the prior year period presented. Actual costs that we may have incurred during the time period when we were not a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Accordingly, historical allocations may not be indicative of future costs we incur operating as an independent, publicly-traded company. The condensed consolidated statements of income also include $0.6 million and $2.2 million of costs related to the separation from Fortune Brands for the thirteen and twenty-six weeks ended June 25, 2023, respectively, and $0.2 million for both the thirteen and twenty-six weeks ended June 26, 2022. The Separation-related costs include advisory fees, professional fees and other transaction related costs incurred directly by us. These costs are included within selling, general and administrative expenses. The income tax amounts in the condensed consolidated financial statements have been calculated on a separate-return method and presented as if our operations were separate taxpayers in the respective jurisdictions. For the period prior to the Separation in 2022, including the Separation, federal and state income tax payments and refunds were paid and received by Fortune Brands on our behalf. The net taxes paid on our behalf are payable to Fortune Brands, as provided in the indemnification provisions of the Tax Allocation Agreement. Accordingly, the net tax payable of $32.6 million to Fortune Brands at both June 25, 2023 and December 25, 2022, is recorded in accounts payable on the condensed consolidated balance sheets. Following the Separation, a limited number of services that Fortune Brands provided to us, or we provided to them, prior to the Separation continue to be provided for a period of time under a Transition Services Agreement. We are now incurring certain costs as a standalone public company, including services provided by our own resources or through third-party service providers relating to corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services, as well as ongoing additional costs associated with operating as an independent, publicly-traded company. Fortune Brands utilized a central approach to treasury management, and prior to Separation, we historically participated in related cash pooling arrangements prior to the Separation. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries. Prior to the Separation, we had no third-party borrowings, and all borrowings attributable to our business and due to Fortune Brands were recorded as “related party payable” in our consolidated balance sheets and classified as current or noncurrent based on loan maturity dates. Fortune Brands’ third-party debt and related interest expense were not attributed to us as we were not the legal obligor of the debt, and the borrowings were not specifically identifiable to us. However, in connection with the Separation, we completed a financing transaction, which resulted in additional interest expense beginning in the fourth quarter of 2022. See Note 9, “Debt” for additional information related to our financing transaction. For more information regarding related party transactions with Fortune Brands, see Note 15, “Related Party Transactions.” During the fourth quarter of 2022, we recognized $8.7 million of additional expense in cost of goods sold as an out-of-period adjustment. This adjustment was to correct errors for expenses that should have been recognized of $5.1 million, $1.6 million and $2.0 million in the thirteen weeks ended March 27, 2022, June 26, 2022 and September 25, 2022, respectively. The adjustment did not have any impact on our annual consolidated financial statements for the fiscal year ended December 25, 2022. Tornado at Jackson, GA Production Facility On January 12, 2023, a tornado hit the Company’s leased Jackson, Georgia production facility, causing damage to the Company’s assets and disrupting certain operations. Insurance, less applicable deductibles, covers the repair or replacement of the Company’s assets that suffered loss or damage, and the Company is working closely with its insurance carriers and claims adjusters to ascertain the full amount of insurance proceeds due to the Company as a result of the damages and the losses the Company suffered. The Company’s insurance policies also provide business interruption coverage, including lost profits, and reimbursement for other expenses and costs that have been incurred relating to the damages and losses suffered. In the first quarter of 2023, the Company incurred expenses of $9.4 million solely related to damages caused by the tornado. These expenses included compensation costs that we continued to pay skilled labor at the Jackson facility to enable a timely ramp up of production upon re-opening the facility on March 27, 2023, the first day of our fiscal second quarter of 2023, as well as the write-off of damaged inventory, freight costs to move product to other warehouses and professional fees to secure and maintain the site. In the second quarter, no expenses related to the tornado were incurred and we received $2.2 million of insurance proceeds for direct costs caused by the tornado. At this time, we do not expect to incur any additional costs related to this matter, but continue to work through the insurance claim process. Both the expenses and insurance recoveries are recorded as a component of cost of products sold in the condensed consolidated statements of income. At this time, the full amount of combined inventory damage and business interruption costs and recoveries cannot be estimated, and accordingly, no additional amounts, including amounts for insurance recoveries, have been recorded as of June 25, 2023.

Recently Issued Accounting Standards	6 Months Ended
Recently Issued Accounting Standards	Jun. 25, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards Accounting Standards Issued and Adopted There are no recently issued accounting pronouncements that we have adopted and which have had a material effect on our results of operations, cash flows or financial condition. Accounting Standards Issued, But Not Yet Adopted There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our results of operations, cash flows or financial condition.

Revenue from Contracts with Customers

6 Months Ended

Jun. 25, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Dealers(a)	$	357.3	$	454.0	$	686.3	$	833.6
Retailers(b)	220.7		258.5		463.6		540.0
Builders(c)	78.4		87.8		149.8		160.0
U.S. net sales	656.4		800.3		1,299.7		1,533.6
International(d)	38.7		55.3		72.1		99.1
Net sales	$	695.1	$	855.6	$	1,371.8	$	1,632.7

a)Represents sales to domestic dealers whose end customers include builders, professional trades and home remodelers, inclusive of sales through our dealers’ respective internet website portals.

c)Represents sales directly to domestic builders.

d)Represents sales in markets outside the United States, principally in Canada and Mexico.

Practical Expedients

Allowance for Credit Losses

The following table summarizes the activity for the thirteen and twenty-six week periods ended June 25, 2023 and June 26, 2022:


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Beginning balance	$	8.5	$	3.3	$	11.6	$	2.5
Bad debt provision	0.3		6.2		0.7		7.9
Uncollectible accounts written off, net of recoveries	(2.7)		(0.3)		(6.2)		(1.2)
Ending balance	$	6.1	$	9.2	$	6.1	$	9.2

Earnings Per Share

6 Months Ended

Jun. 25, 2023

Earnings Per Share [Abstract]

Earnings Per Share


	13 Weeks Ended				26 Weeks Ended
(In millions, except per share amounts)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Numerator:
Numerator for basic and diluted earnings per share - Net income	$	51.2	$	40.9	$	86.2	$	87.9
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	128.4		128.0		128.3		128.0
Effect of dilutive securities - stock-based awards	1.5		—		1.4		—
Denominator for diluted earnings per share - weighted average shares outstanding	129.9		128.0		129.7		128.0
Earnings per share:
Basic	$	0.40	$	0.32	$	0.67	$	0.69
Diluted	$	0.39	$	0.32	$	0.66	$	0.69

Balance Sheet Information

6 Months Ended

Jun. 25, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Information

Supplemental information on our balance sheets is as follows:


(In millions)	June 25, 2023		December 25, 2022
Inventories:
Raw materials and supplies	$	229.0	$	292.1
Work in process	25.5		23.6
Finished products	65.1		57.4
Total inventories	$	319.6	$	373.1
Property, plant and equipment:
Land and improvements	$	30.9	$	32.9
Buildings and improvements to leaseholds	303.5		304.0
Machinery and equipment	530.1		518.8
Construction in progress	32.6		37.7
Property, plant and equipment, gross	897.1		893.4
Less: accumulated depreciation	555.2		540.8
Property, plant and equipment, net of accumulated depreciation	$	341.9	$	352.6
Accounts payable:
Third party	$	147.9	$	175.1
Fortune Brands (a)	34.3		44.1
Total accounts payable	$	182.2	$	219.2
Other current liabilities:
Accrued salaries, wages and other compensation	$	48.0	$	49.0
Accrued restructuring	3.3		15.4
Accrued taxes	18.9		14.3
Accrued product warranties	13.2		11.2
Other accrued expenses	67.8		70.6
Total other current liabilities	$	151.2	$	160.5

Goodwill and Identifiable Intangible Assets

6 Months Ended

Jun. 25, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets

We had goodwill of $925.2 million and $924.2 million as of June 25, 2023 and December 25, 2022, respectively. The change in the net carrying amount of goodwill was as follows:


(In millions)	Total Goodwill
Balance at December 25, 2022	$	924.2
Q1 2023 translation adjustments	(0.4)
Balance at March 26, 2023	$	923.8
Q2 2023 translation adjustments	1.4
Balance at June 25, 2023	$	925.2

The gross carrying value and accumulated amortization by class of intangible assets as of June 25, 2023 and December 25, 2022 were as follows:


	As of June 25, 2023						As of December 25, 2022
(In millions)	Gross Carrying Amounts		Accumulated Amortization		Net Book Value		Gross Carrying Amounts		Accumulated Amortization		Net Book Value
Indefinite-lived tradenames	$	184.2	$	—	$	184.2	$	183.1	$	—	$	183.1
Amortizable intangible assets
Tradenames	10.5		(10.5)		—		10.3		(10.2)		0.1
Customer and contractual relationships	363.6		(204.9)		158.7		362.9		(196.8)		166.1
Patents/proprietary technology	11.0		(11.0)		—		11.0		(10.5)		0.5
Total	385.1		(226.4)		158.7		384.2		(217.5)		166.7
Total identifiable intangibles	$	569.3	$	(226.4)	$	342.9	$	567.3	$	(217.5)	$	349.8

Financial Instruments

6 Months Ended

Jun. 25, 2023

Investments, Debt and Equity Securities [Abstract]

Financial Instruments

We account for derivative instruments as follows:

The fair values of foreign exchange derivative instruments on the condensed consolidated balance sheets as of June 25, 2023 and December 25, 2022 were:


(In millions)	Location	June 25, 2023		December 25, 2022
Assets:
Foreign exchange contracts	Other current assets	$	5.2	$	3.7
	Total assets	$	5.2	$	3.7
Liabilities:
Foreign exchange contracts	Other current liabilities	$	—	$	0.5
	Total liabilities	$	—	$	0.5

The effects of derivative financial instruments on the condensed consolidated statements of income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were:


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 25, 2023
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	458.9	$	0.5
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(0.9)
Derivative designated as hedging instruments	—		0.9
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(3.1)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 26, 2022
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	606.0	$	(0.2)
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(1.7)
Derivative designated as hedging instruments	—		2.7
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(1.2)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	26 weeks ended June 25, 2023
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	931.0	$	0.9
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(2.0)
Derivative designated as hedging instruments	—		3.4
Gain on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(5.5)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	26 weeks ended June 26, 2022
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	1,172.1	$	0.7
The effects of fair value and cash flow hedging:
(Gain) on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(2.6)
Derivative designated as hedging instruments	—		4.3
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(1.7)		—

Fair Value Measurements

6 Months Ended

Jun. 25, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value MeasurementsASC requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect other than quoted prices included in Level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs due to little or no market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are Level 3, except for certain assumptions in estimating the fair value of indefinite-lived tradenames, as discussed in Note 8, “Goodwill and Identifiable Intangible Assets” in our Annual Report on Form 10-K.

Assets and liabilities measured at fair value on a recurring basis as of June 25, 2023 and December 25, 2022 were as follows:


(In millions)	Fair Value
	June 25, 2023		December 25, 2022
Assets:
Derivative asset financial instruments (Level 2)	$	5.2	$	3.7
Deferred compensation program assets (Level 2)	4.7		3.6
Total assets	$	9.9	$	7.3
Liabilities:
Derivative liability financial instruments (Level 2)	$	—	$	0.5

Debt

6 Months Ended

Jun. 25, 2023

Debt Disclosure [Abstract]

Debt

The following table provides a summary of the Company’s debt as of June 25, 2023 and December 25, 2022, including the carrying value of the debt less debt issuance costs:


	June 25, 2023				December 25, 2022
(In millions)	Current		Long-term		Current		Long-term
Revolving credit facility due November 2027	$	—	$	80.0	$	—	$	235.0
Term loan due November 2027	28.1		712.5		18.8		731.3
	28.1		792.5		18.8		966.3
Less: Unamortized debt issuance costs	(1.2)		(4.2)		(1.3)		(4.8)
Total	$	26.9	$	788.3	$	17.5	$	961.5

Restructuring Charges

6 Months Ended

Jun. 25, 2023

Restructuring and Related Activities [Abstract]

Restructuring Charges

Reconciliation of Restructuring Liability


(In millions)	Balance at March 26, 2023		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	4.9	$	2.4	$	(4.1)	$	3.2
Other	0.1		0.7		(0.7)		0.1
	$	5.0	$	3.1	$	(4.8)	$	3.3


(In millions)	Balance at March 27, 2022		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	1.6	$	1.2	$	(1.0)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	1.8	$	1.3	$	(1.2)	$	1.9


(In millions)	Balance at December 25, 2022		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	15.3	$	1.3	$	(13.4)	$	3.2
Other	0.1		1.4		(1.4)		0.1
	$	15.4	$	2.7	$	(14.8)	$	3.3


(In millions)	Balance at December 26, 2021		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	2.2	$	1.2	$	(1.6)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	2.4	$	1.3	$	(1.8)	$	1.9

(a) Cash expenditures primarily related to severance charges.

Income Taxes	6 Months Ended
Income Taxes	Jun. 25, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Subsequent to the Separation, as a stand-alone entity, we will file consolidated U.S. federal income tax returns and various state and local income tax returns. The Company’s foreign income tax returns will continue to be filed on a full-year basis. The Company’s deferred taxes and effective tax rate may differ from those in the pre-Separation taxable periods. The effective income tax rates for the thirteen weeks ended June 25, 2023, and June 26, 2022, were 26.5 percent and 24.3 percent, respectively. The change in the effective tax rate between the periods resulted primarily due to increases in foreign income inclusions with offsetting foreign tax credits, nondeductible compensation, and recognition of deferred tax liability for foreign earnings in 2023, partially offset by a reduction in changes in state and local income taxes. The difference between our effective income tax rate for the thirteen weeks ended June 25, 2023, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits, recognition of a deferred tax liability for foreign earnings, and the mix of earnings in jurisdictions with differing tax rates. The difference between our effective income tax rate for the thirteen weeks ended June 26, 2022, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, and tax benefits from general business credits. The effective income tax rates for the twenty-six weeks ended June 25, 2023, and June 26, 2022, were 26.7 percent and 24.1 percent, respectively. The change in the effective tax rate between the periods resulted primarily from increases in foreign income inclusions with offsetting foreign tax credits, nondeductible compensation, and recognition of deferred tax liability for foreign earnings in 2023, partially offset by a reduction in state and local income taxes. The difference between our effective income tax rate for the twenty-six weeks ended June 25, 2023, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, foreign income inclusions with offsetting foreign tax credits, recognition of a deferred tax liability for foreign earnings, changes due to foreign tax return filings, and the mix of earnings in jurisdictions with differing tax rates. The difference between our effective income tax rate for the twenty-six weeks ended June 26, 2022, and the U.S. statutory rate of 21.0 percent primarily relates to changes in state and local income taxes, nondeductible compensation, and tax benefits from general business credits. The Company is subject to ongoing tax authority examinations in various jurisdictions in which it operates. Liabilities related to uncertain tax benefits (“UTBs”), including interest and penalties, are reported as a liability within the condensed consolidated balance sheets. The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company classifies interest and penalty accruals related to UTBs as income tax expense. As of June 25, 2023, the Company was not permanently reinvested with respect to all earnings generated by foreign operations.

Pension and Other Postretirement Plans

6 Months Ended

Jun. 25, 2023

Retirement Benefits [Abstract]

Pension and Other Postretirement Plans


	Pension Benefits				Postretirement Benefits
	13 Weeks Ended				13 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.1	$	0.1
Interest cost	1.6		1.2		0.1		0.1
Expected return on plan assets	(1.8)		(1.8)		—		—


Net periodic (benefit) cost	(0.2)		(0.6)		0.2		0.2


	Pension Benefits				Postretirement Benefits
	26 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.2	$	0.2
Interest cost	3.2		2.5		0.1		0.1
Expected return on plan assets	(3.5)		(3.6)		—		—
Net periodic (benefit) cost	$	(0.3)	$	(1.1)	$	0.3	$	0.3

Contingencies and Accrued Losses

6 Months Ended

Jun. 25, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Accrued Losses

Product Warranties


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Reserve balance at the beginning of the period	$	12.2	$	7.5	$	11.2	$	7.0
Provision for warranties issued	9.0		9.6		18.1		18.3
Settlements made (in cash or in kind)	(8.0)		(8.9)		(16.1)		(17.1)
Reserve balance at the end of the period	$	13.2	$	8.2	$	13.2	$	8.2

Litigation

Environmental

Accumulated Other Comprehensive (Loss) Income

6 Months Ended

Jun. 25, 2023

Equity [Abstract]

Accumulated Other Comprehensive (Loss) Income


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at March 26, 2023	$	(8.2)	$	3.0	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.8		3.9		—		13.7
Amounts reclassified into earnings	—		(3.1)		—		(3.1)
Net current period other comprehensive (loss) income	9.8		0.8		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at March 27, 2022	$	8.4	$	1.8	$	(5.8)	$	4.4
Amounts classified into accumulated other comprehensive (loss) income	(7.1)		1.3		—		(5.8)
Amounts reclassified into earnings	—		(1.2)		—		(1.2)
Net current period other comprehensive (loss) income	(7.1)		0.1		—		(7.0)
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at December 25, 2022	$	(8.0)	$	2.8	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.6		6.5		—		16.1
Amounts reclassified into earnings	—		(5.5)		—		(5.5)
Net current period other comprehensive (loss) income	9.6		1.0		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at December 26, 2021	$	1.9	$	0.1	$	(5.9)	$	(3.9)
Amounts classified into accumulated other comprehensive (loss) income	(0.6)		3.5		0.1		3.0
Amounts reclassified into earnings	—		(1.7)		—		(1.7)
Net current period other comprehensive (loss) income	(0.6)		1.8		0.1		1.3
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)

The reclassifications out of accumulated other comprehensive (loss) income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:

(In millions)

Details about Accumulated Other
Comprehensive (Loss) Income Components

Affected Line Item in the
Condensed Consolidated Statements of Income

13 Weeks Ended

June 25, 2023

June 26, 2022

Gains on cash flow hedges

Foreign exchange contracts

(3.1)

(1.2)

Cost of products sold

Total reclassifications for the period

(3.1)

(1.2)

Net of tax


	26 Weeks Ended
	June 25, 2023		June 26, 2022
Gains on cash flow hedges
Foreign exchange contracts	$	(5.5)	$	(1.7)	Cost of products sold
Total reclassifications for the period	$	(5.5)	$	(1.7)	Net of tax

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 25, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The accompanying financial statements are now presented on a consolidated basis as the company is a standalone public company. Certain information from prior to the Separation on December 14, 2022 was derived from Fortune Brands consolidated financial statements and accounting records. Transactions between MasterBrand and Fortune Brands prior to the Separation have been presented as related party transactions in the accompanying condensed consolidated financial statements. After the Separation, Fortune Brands is not considered a related party of MasterBrand. Fortune Brands performed, and continues to perform in limited areas as part of a transitional services agreement, certain corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services on behalf of the Company. The expenses associated with these functions have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount, or number of facilities, as applicable. Prior to the Separation, total expenses allocated were $21.0 million and $41.1 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively, and such amounts are primarily included within selling, general and administrative expenses in the condensed consolidated statements of income. These amounts include costs of $16.9 million and $29.0 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively, that were not historically allocated to us as part of Fortune Brands’ normal periodic management reporting process. We consider the expense methodology and resulting allocation to be reasonable for all periods presented; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company for the prior year period presented. Actual costs that we may have incurred had we been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Cash Management Fortune Brands utilized a central approach to treasury management, and prior to the Separation, we historically participated in related cash pooling arrangements to maximize the availability of cash for general operating and investing purposes. Under these cash pooling arrangements in the United States, cash balances were remitted regularly from our accounts. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries. Share-Based Compensation Prior to the Separation, our employees participated in Fortune Brands stock-based compensation plans, the costs of which have been allocated and recorded in cost of products sold, and selling, general and administrative expenses in the condensed consolidated statements of income, based on the nature of the job responsibilities of the associates participating in the plans. Stock-based compensation costs related to our employees for the thirteen and twenty-six weeks ended June 26, 2022 were $2.7 million and $5.4 million, respectively, and are included within the total expenses allocated, as noted above. Related Party Sales There were no material sales to or from Fortune Brands or its subsidiaries for any of the periods presented. Balances Due to and From Related Parties After the Separation, Fortune Brands is not considered a related party of MasterBrand. As such, there were no related party receivables or payables outstanding as of June 25, 2023 and December 25, 2022. Refer to Note 5, “Balance Sheet Information,” for additional details of the accounts payable due from MasterBrand to Fortune Brands as of June 25, 2023 and December 25, 2022. Prior to the Separation, the related party note receivable balance was the amount owed to the Company and its subsidiaries from Fortune Brands. We had written interest-bearing loan agreements in place with Fortune Brands. The receivable balance consisted of excess cash remitted to the Parent’s cash pooling arrangements, net of expenses incurred by us which were paid for by Fortune Brands. The loan agreements were to mature on April 14, 2026, but all amounts under these agreements were settled prior to the Separation. The receivable balance earned interest at a rate in-line with the Fortune Brands’ short-term borrowing rate, which was between 1.40 percent and 2.10 percent and between 0.95 percent and 2.10 percent during the thirteen and twenty-six weeks ended June 26, 2022, respectively. Prior to the Separation, the related party note payable balance was a note payable between a subsidiary of the Company and Fortune Brands. The balance comprised of a revolving loan that was due at the maturity of the agreement on April 15, 2026, but was settled prior to the Separation. The note bore interest at rates ranging between 1.65 percent and 2.35 percent and between 1.20 percent and 2.35 percent during the thirteen and twenty-six weeks ended June 26, 2022, respectively. The Company received interest income on related party receivables of $2.2 million and $3.6 million during the thirteen and twenty-six weeks ended June 26, 2022, respectively. Additionally, the Company incurred interest expense on intercompany payables and notes of $0.3 million and $0.5 million for the thirteen and twenty-six weeks ended June 26, 2022, respectively.

Stock Repurchase Program	6 Months Ended
Stock Repurchase Program	Jun. 25, 2023
Equity [Abstract]
Stock Repurchase Program	Stock Repurchase Program On May 9, 2023, we announced our authorization of a stock repurchase program under which we may repurchase up to $50.0 million of MasterBrand common stock over a twenty-four month period at management’s discretion for general corporate purposes. As a result of this authorization, we may repurchase shares from time to time through open market purchases, privately-negotiated transactions, block trades or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and amount of our purchases will depend upon prevailing market conditions, our available capital resources, our financial and operational performance, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time. During the thirteen and twenty-six weeks ended June 25, 2023, we repurchased 404,858 shares of our common stock under this program at a cost of approximately $4.4 million, or an average of $10.89 per share. As of June 25, 2023, $45.6 million remained authorized for purchase under our stock repurchase program.

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Pay vs Performance Disclosure
NET INCOME	$ 51.2	$ 40.9	$ 86.2	$ 87.9

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 25, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Basis of Presentation and Principles of Consolidation (Policies)	6 Months Ended
	Jun. 25, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying financial statements are now presented on a consolidated basis as the Company is a standalone public company. We have historically existed and functioned as a reporting segment of the consolidated business of Fortune Brands up until the Separation on December 14, 2022, at which time we became a standalone public company. Certain information from prior to the Separation was derived from Fortune Brands’ consolidated financial statements and accounting records. The condensed consolidated financial statements and notes to condensed consolidated financial statements as of and subsequent to December 14, 2022, the date of the Separation, reflect the consolidated financial position, results of operations and cash flows for MasterBrand as an independent company. Prior to the Separation, the condensed consolidated financial statements and notes to condensed consolidated financial statements were prepared on a carve-out basis using the financial statements and accounting records of Fortune Brands. The carve-out basis financial statements represent the historical financial position, results of operations, and cash flows of MasterBrand as they were historically managed in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect significant assumptions and allocations. The carve-out financial statements may not include all expenses that would have been incurred had MasterBrand existed as a standalone entity. 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. Our fiscal 2023 will consist of 53 weeks ending on December 31, 2023, while our fiscal 2022 consisted of 52 weeks ended on December 25, 2022. The condensed consolidated balance sheet as of the twenty-six weeks ended June 25, 2023, as well as the related condensed consolidated statements of income, comprehensive income, cash flows, and equity for the thirteen and twenty-six weeks ended June 25, 2023 and the thirteen and twenty-six weeks ended June 26, 2022 are unaudited. The presentation of these financial statements requires us to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. In the opinion of management, all adjustments necessary for a fair statement of the financial statements have been included. Interim results may not be indicative of results for a full year. The condensed consolidated financial statements and notes are presented pursuant to the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in our audited consolidated financial statements and notes. The 2022 condensed consolidated balance sheet was derived from our audited consolidated financial statements, but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 25, 2022. The condensed consolidated statements of income include all revenues and costs directly attributable to our business, including costs for facilities, functions, and services we utilize. The condensed consolidated statements of income also include an allocation of expenses related to certain Fortune Brands corporate functions through the Separation, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services. These expenses have been allocated based on direct usage or benefit where specifically identifiable, with the remainder allocated on a proportional cost allocation method based primarily on net sales, employee headcount, or number of facilities, as applicable. Prior to the Separation, total expenses allocated for the thirteen and twenty-six weeks ended June 26, 2022 were $21.0 million and $41.1 million, respectively, of which $16.9 million and $29.0 million, respectively, was not previously allocated to us. Such amounts are primarily included within selling, general and administrative expenses in the condensed consolidated statements of income. We consider the expense methodology and resulting allocation to be reasonable; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly-traded company in the prior year period presented. Actual costs that we may have incurred during the time period when we were not a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by our employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure. Accordingly, historical allocations may not be indicative of future costs we incur operating as an independent, publicly-traded company. The condensed consolidated statements of income also include $0.6 million and $2.2 million of costs related to the separation from Fortune Brands for the thirteen and twenty-six weeks ended June 25, 2023, respectively, and $0.2 million for both the thirteen and twenty-six weeks ended June 26, 2022. The Separation-related costs include advisory fees, professional fees and other transaction related costs incurred directly by us. These costs are included within selling, general and administrative expenses. The income tax amounts in the condensed consolidated financial statements have been calculated on a separate-return method and presented as if our operations were separate taxpayers in the respective jurisdictions. For the period prior to the Separation in 2022, including the Separation, federal and state income tax payments and refunds were paid and received by Fortune Brands on our behalf. The net taxes paid on our behalf are payable to Fortune Brands, as provided in the indemnification provisions of the Tax Allocation Agreement. Accordingly, the net tax payable of $32.6 million to Fortune Brands at both June 25, 2023 and December 25, 2022, is recorded in accounts payable on the condensed consolidated balance sheets. Following the Separation, a limited number of services that Fortune Brands provided to us, or we provided to them, prior to the Separation continue to be provided for a period of time under a Transition Services Agreement. We are now incurring certain costs as a standalone public company, including services provided by our own resources or through third-party service providers relating to corporate functions, including information technology, finance, executive, human resources, supply chain, internal audit, governance and legal services, as well as ongoing additional costs associated with operating as an independent, publicly-traded company. Fortune Brands utilized a central approach to treasury management, and prior to Separation, we historically participated in related cash pooling arrangements prior to the Separation. Our cash and cash equivalents on our condensed consolidated balance sheets represent cash balances held in bank accounts owned by the Company and its subsidiaries. Prior to the Separation, we had no third-party borrowings, and all borrowings attributable to our business and due to Fortune Brands were recorded as “related party payable” in our consolidated balance sheets and classified as current or noncurrent based on loan maturity dates. Fortune Brands’ third-party debt and related interest expense were not attributed to us as we were not the legal obligor of the debt, and the borrowings were not specifically identifiable to us. However, in connection with the Separation, we completed a financing transaction, which resulted in additional interest expense beginning in the fourth quarter of 2022. See Note 9, “Debt” for additional information related to our financing transaction. For more information regarding related party transactions with Fortune Brands, see Note 15, “Related Party Transactions.”
Accounting Standards Issued and Adopted	Accounting Standards Issued and Adopted There are no recently issued accounting pronouncements that we have adopted and which have had a material effect on our results of operations, cash flows or financial condition. Accounting Standards Issued, But Not Yet Adopted There are no recently issued accounting pronouncements that we have not yet adopted that are expected to have a material effect on our results of operations, cash flows or financial condition.

Revenue from Contract with Customers (Tables)

6 Months Ended

Jun. 25, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table disaggregates our consolidated revenue by major sales distribution channels for 2023 and 2022.


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Dealers(a)	$	357.3	$	454.0	$	686.3	$	833.6
Retailers(b)	220.7		258.5		463.6		540.0
Builders(c)	78.4		87.8		149.8		160.0
U.S. net sales	656.4		800.3		1,299.7		1,533.6
International(d)	38.7		55.3		72.1		99.1
Net sales	$	695.1	$	855.6	$	1,371.8	$	1,632.7

a)Represents sales to domestic dealers whose end customers include builders, professional trades and home remodelers, inclusive of sales through our dealers’ respective internet website portals.

c)Represents sales directly to domestic builders.

d)Represents sales in markets outside the United States, principally in Canada and Mexico.

Accounts Receivable, Allowance for Credit Loss

The following table summarizes the activity for the thirteen and twenty-six week periods ended June 25, 2023 and June 26, 2022:


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Beginning balance	$	8.5	$	3.3	$	11.6	$	2.5
Bad debt provision	0.3		6.2		0.7		7.9
Uncollectible accounts written off, net of recoveries	(2.7)		(0.3)		(6.2)		(1.2)
Ending balance	$	6.1	$	9.2	$	6.1	$	9.2

Earnings Per Share (Tables)

6 Months Ended

Jun. 25, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted


	13 Weeks Ended				26 Weeks Ended
(In millions, except per share amounts)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Numerator:
Numerator for basic and diluted earnings per share - Net income	$	51.2	$	40.9	$	86.2	$	87.9
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	128.4		128.0		128.3		128.0
Effect of dilutive securities - stock-based awards	1.5		—		1.4		—
Denominator for diluted earnings per share - weighted average shares outstanding	129.9		128.0		129.7		128.0
Earnings per share:
Basic	$	0.40	$	0.32	$	0.67	$	0.69
Diluted	$	0.39	$	0.32	$	0.66	$	0.69

Balance Sheet Information - (Tables)

6 Months Ended

Jun. 25, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Balance Sheet

Supplemental information on our balance sheets is as follows:


(In millions)	June 25, 2023		December 25, 2022
Inventories:
Raw materials and supplies	$	229.0	$	292.1
Work in process	25.5		23.6
Finished products	65.1		57.4
Total inventories	$	319.6	$	373.1
Property, plant and equipment:
Land and improvements	$	30.9	$	32.9
Buildings and improvements to leaseholds	303.5		304.0
Machinery and equipment	530.1		518.8
Construction in progress	32.6		37.7
Property, plant and equipment, gross	897.1		893.4
Less: accumulated depreciation	555.2		540.8
Property, plant and equipment, net of accumulated depreciation	$	341.9	$	352.6
Accounts payable:
Third party	$	147.9	$	175.1
Fortune Brands (a)	34.3		44.1
Total accounts payable	$	182.2	$	219.2
Other current liabilities:
Accrued salaries, wages and other compensation	$	48.0	$	49.0
Accrued restructuring	3.3		15.4
Accrued taxes	18.9		14.3
Accrued product warranties	13.2		11.2
Other accrued expenses	67.8		70.6
Total other current liabilities	$	151.2	$	160.5

Goodwill and Identifiable Intangible Assets (Tables)

6 Months Ended

Jun. 25, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The change in the net carrying amount of goodwill was as follows:


(In millions)	Total Goodwill
Balance at December 25, 2022	$	924.2
Q1 2023 translation adjustments	(0.4)
Balance at March 26, 2023	$	923.8
Q2 2023 translation adjustments	1.4
Balance at June 25, 2023	$	925.2

Schedule of Finite-Lived Intangible Assets

The gross carrying value and accumulated amortization by class of intangible assets as of June 25, 2023 and December 25, 2022 were as follows:


	As of June 25, 2023						As of December 25, 2022
(In millions)	Gross Carrying Amounts		Accumulated Amortization		Net Book Value		Gross Carrying Amounts		Accumulated Amortization		Net Book Value
Indefinite-lived tradenames	$	184.2	$	—	$	184.2	$	183.1	$	—	$	183.1
Amortizable intangible assets
Tradenames	10.5		(10.5)		—		10.3		(10.2)		0.1
Customer and contractual relationships	363.6		(204.9)		158.7		362.9		(196.8)		166.1
Patents/proprietary technology	11.0		(11.0)		—		11.0		(10.5)		0.5
Total	385.1		(226.4)		158.7		384.2		(217.5)		166.7
Total identifiable intangibles	$	569.3	$	(226.4)	$	342.9	$	567.3	$	(217.5)	$	349.8

Schedule of Indefinite-Lived Intangible Assets

The gross carrying value and accumulated amortization by class of intangible assets as of June 25, 2023 and December 25, 2022 were as follows:


	As of June 25, 2023						As of December 25, 2022
(In millions)	Gross Carrying Amounts		Accumulated Amortization		Net Book Value		Gross Carrying Amounts		Accumulated Amortization		Net Book Value
Indefinite-lived tradenames	$	184.2	$	—	$	184.2	$	183.1	$	—	$	183.1
Amortizable intangible assets
Tradenames	10.5		(10.5)		—		10.3		(10.2)		0.1
Customer and contractual relationships	363.6		(204.9)		158.7		362.9		(196.8)		166.1
Patents/proprietary technology	11.0		(11.0)		—		11.0		(10.5)		0.5
Total	385.1		(226.4)		158.7		384.2		(217.5)		166.7
Total identifiable intangibles	$	569.3	$	(226.4)	$	342.9	$	567.3	$	(217.5)	$	349.8

Financial Instruments (Tables)

6 Months Ended

Jun. 25, 2023

Investments, Debt and Equity Securities [Abstract]

Fair Values of Foreign Exchange Derivative Instruments on the Consolidated Balance Sheets

The fair values of foreign exchange derivative instruments on the condensed consolidated balance sheets as of June 25, 2023 and December 25, 2022 were:


(In millions)	Location	June 25, 2023		December 25, 2022
Assets:
Foreign exchange contracts	Other current assets	$	5.2	$	3.7
	Total assets	$	5.2	$	3.7
Liabilities:
Foreign exchange contracts	Other current liabilities	$	—	$	0.5
	Total liabilities	$	—	$	0.5

Effects of Derivative Financial Instruments on the Consolidated Statements of Income

The effects of derivative financial instruments on the condensed consolidated statements of income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were:


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 25, 2023
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	458.9	$	0.5
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(0.9)
Derivative designated as hedging instruments	—		0.9
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(3.1)		—


	Classification and Amount Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	13 weeks ended June 26, 2022
(In millions)	Cost of products sold		Other expense (income), net
Total amounts per Condensed Consolidated Statements of Income	$	606.0	$	(0.2)
The effects of fair value and cash flow hedging:
(Gain) loss on fair value hedging relationships
Foreign exchange contracts:
Hedged items	—		(1.7)
Derivative designated as hedging instruments	—		2.7
(Gain) on cash flow hedging relationships
Foreign exchange contracts:
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(1.2)		—

Fair Value Measurements (Tables)

6 Months Ended

Jun. 25, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of June 25, 2023 and December 25, 2022 were as follows:


(In millions)	Fair Value
	June 25, 2023		December 25, 2022
Assets:
Derivative asset financial instruments (Level 2)	$	5.2	$	3.7
Deferred compensation program assets (Level 2)	4.7		3.6
Total assets	$	9.9	$	7.3
Liabilities:
Derivative liability financial instruments (Level 2)	$	—	$	0.5

Debt (Tables)

6 Months Ended

Jun. 25, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The following table provides a summary of the Company’s debt as of June 25, 2023 and December 25, 2022, including the carrying value of the debt less debt issuance costs:


	June 25, 2023				December 25, 2022
(In millions)	Current		Long-term		Current		Long-term
Revolving credit facility due November 2027	$	—	$	80.0	$	—	$	235.0
Term loan due November 2027	28.1		712.5		18.8		731.3
	28.1		792.5		18.8		966.3
Less: Unamortized debt issuance costs	(1.2)		(4.2)		(1.3)		(4.8)
Total	$	26.9	$	788.3	$	17.5	$	961.5

Restructuring Charges (Tables)

6 Months Ended

Jun. 25, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Liabilities


(In millions)	Balance at March 26, 2023		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	4.9	$	2.4	$	(4.1)	$	3.2
Other	0.1		0.7		(0.7)		0.1
	$	5.0	$	3.1	$	(4.8)	$	3.3


(In millions)	Balance at March 27, 2022		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	1.6	$	1.2	$	(1.0)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	1.8	$	1.3	$	(1.2)	$	1.9


(In millions)	Balance at December 25, 2022		Provision		Cash Expenditures(a)		Balance at June 25, 2023
Workforce reduction costs	$	15.3	$	1.3	$	(13.4)	$	3.2
Other	0.1		1.4		(1.4)		0.1
	$	15.4	$	2.7	$	(14.8)	$	3.3


(In millions)	Balance at December 26, 2021		Provision		Cash Expenditures(a)		Balance at June 26, 2022
Workforce reduction costs	$	2.2	$	1.2	$	(1.6)	$	1.8
Other	0.2		0.1		(0.2)		0.1
	$	2.4	$	1.3	$	(1.8)	$	1.9

(a) Cash expenditures primarily related to severance charges.

Pension and Other Postretirement Plans (Tables)

6 Months Ended

Jun. 25, 2023

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs


	Pension Benefits				Postretirement Benefits
	13 Weeks Ended				13 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.1	$	0.1
Interest cost	1.6		1.2		0.1		0.1
Expected return on plan assets	(1.8)		(1.8)		—		—


Net periodic (benefit) cost	(0.2)		(0.6)		0.2		0.2


	Pension Benefits				Postretirement Benefits
	26 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Service cost	$	—	$	—	$	0.2	$	0.2
Interest cost	3.2		2.5		0.1		0.1
Expected return on plan assets	(3.5)		(3.6)		—		—
Net periodic (benefit) cost	$	(0.3)	$	(1.1)	$	0.3	$	0.3

Contingencies and Accrued Losses (Tables)

6 Months Ended

Jun. 25, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following table summarizes activity related to our product warranty liability for the thirteen and twenty-six week periods ended June 25, 2023 and June 26, 2022.


	13 Weeks Ended				26 Weeks Ended
(In millions)	June 25, 2023		June 26, 2022		June 25, 2023		June 26, 2022
Reserve balance at the beginning of the period	$	12.2	$	7.5	$	11.2	$	7.0
Provision for warranties issued	9.0		9.6		18.1		18.3
Settlements made (in cash or in kind)	(8.0)		(8.9)		(16.1)		(17.1)
Reserve balance at the end of the period	$	13.2	$	8.2	$	13.2	$	8.2

Accumulated Other Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 25, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The after-tax components of, and changes in, accumulated other comprehensive (loss) income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at March 26, 2023	$	(8.2)	$	3.0	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.8		3.9		—		13.7
Amounts reclassified into earnings	—		(3.1)		—		(3.1)
Net current period other comprehensive (loss) income	9.8		0.8		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at March 27, 2022	$	8.4	$	1.8	$	(5.8)	$	4.4
Amounts classified into accumulated other comprehensive (loss) income	(7.1)		1.3		—		(5.8)
Amounts reclassified into earnings	—		(1.2)		—		(1.2)
Net current period other comprehensive (loss) income	(7.1)		0.1		—		(7.0)
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)


(In millions)	Foreign Currency Adjustments		Derivative Hedging Gain (Loss)		Pension and Other Postretirement Plans Adjustments		Accumulated Other Comprehensive (Loss) Income
Balance at December 25, 2022	$	(8.0)	$	2.8	$	(9.3)	$	(14.5)
Amounts classified into accumulated other comprehensive (loss) income	9.6		6.5		—		16.1
Amounts reclassified into earnings	—		(5.5)		—		(5.5)
Net current period other comprehensive (loss) income	9.6		1.0		—		10.6
Balance at June 25, 2023	$	1.6	$	3.8	$	(9.3)	$	(3.9)

Balance at December 26, 2021	$	1.9	$	0.1	$	(5.9)	$	(3.9)
Amounts classified into accumulated other comprehensive (loss) income	(0.6)		3.5		0.1		3.0
Amounts reclassified into earnings	—		(1.7)		—		(1.7)
Net current period other comprehensive (loss) income	(0.6)		1.8		0.1		1.3
Balance at June 26, 2022	$	1.3	$	1.9	$	(5.8)	$	(2.6)

Reclassification out of Accumulated Other Comprehensive Income

The reclassifications out of accumulated other comprehensive (loss) income for the thirteen and twenty-six weeks ended June 25, 2023 and June 26, 2022 were as follows:

(In millions)

Details about Accumulated Other
Comprehensive (Loss) Income Components

Affected Line Item in the
Condensed Consolidated Statements of Income

13 Weeks Ended

June 25, 2023

June 26, 2022

Gains on cash flow hedges

Foreign exchange contracts

(3.1)

(1.2)

Cost of products sold

Total reclassifications for the period

(3.1)

(1.2)

Net of tax


	26 Weeks Ended
	June 25, 2023		June 26, 2022
Gains on cash flow hedges
Foreign exchange contracts	$	(5.5)	$	(1.7)	Cost of products sold
Total reclassifications for the period	$	(5.5)	$	(1.7)	Net of tax

Basis of Presentation and Principles of Consolidation (Details) - USD ($) $ in Millions		3 Months Ended						6 Months Ended
	Dec. 14, 2022	Jun. 25, 2023	Mar. 26, 2023	Dec. 25, 2022	Sep. 25, 2022	Jun. 26, 2022	Mar. 27, 2022	Jun. 25, 2023	Jun. 26, 2022	Dec. 15, 2022	Dec. 13, 2022	Jun. 30, 2022
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Common stock authorized (in shares)		750,000,000.0		750,000,000.0				750,000,000.0			5,000
Common stock issued (in shares)		128,800,000		128,000,000.0				128,800,000			100
Selling, general and administrative expenses		$ 141.7				$ 166.0		$ 277.0	$ 311.0
Separation costs		0.6				0.2		2.2	0.2
Accrued taxes		18.9		$ 14.3				18.9
Cost of products sold		458.9				606.0		931.0	1,172.1
Related Party \| Transitional Services Agreement
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Selling, general and administrative expenses						21.0			41.1
Fortune Brands
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Common stock, shares issued (in shares)	128,000,000
Accrued taxes		32.6		32.6				$ 32.6
Fortune Brands \| Related Party \| Transitional Services Agreement, Costs Previously Not Allocated
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Selling, general and administrative expenses						16.9			$ 29.0
MBCI
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Common stock authorized (in shares)												1,000
Common stock issued (in shares)												1,000
Tornado
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Other nonrecurring expense			$ 9.4
Insurance proceeds		$ 2.2
Revision of Prior Period, Error Correction, Adjustment
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Cost of products sold				$ 8.7	$ 2.0	$ 1.6	$ 5.1
Fortune Brand Stockholders
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Noncontrolling interest, ownership percentage by parent										100.00%

Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 25, 2023	Dec. 25, 2022
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, estimate refund	$ 2.3	$ 3.0
Minimum
Disaggregation of Revenue [Line Items]
Contract with customer, terms of payment	30 days
Maximum
Disaggregation of Revenue [Line Items]
Contract with customer, terms of payment	90 days

Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023 USD ($) customer	Jun. 26, 2022 USD ($)	Jun. 25, 2023 USD ($) customer	Jun. 26, 2022 USD ($)
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 695.1	$ 855.6	$ 1,371.8	$ 1,632.7
Number of largest customers \| customer	2		2
UNITED STATES
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 656.4	800.3	$ 1,299.7	1,533.6
UNITED STATES \| Dealer
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	357.3	454.0	686.3	833.6
UNITED STATES \| Retail
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	220.7	258.5	463.6	540.0
UNITED STATES \| Builders(c)
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	78.4	87.8	149.8	160.0
Non-US
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 38.7	$ 55.3	$ 72.1	$ 99.1

Revenue from Contracts with Customers - Accounts Receivable Allowance for Credit Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 8.5	$ 3.3	$ 11.6	$ 2.5
Bad debt provision	0.3	6.2	0.7	7.9
Uncollectible accounts written off, net of recoveries	(2.7)	(0.3)	(6.2)	(1.2)
Ending balance	$ 6.1	$ 9.2	$ 6.1	$ 9.2

Earnings Per Share - Narrative (Details) - shares shares in Millions	3 Months Ended	6 Months Ended
	Jun. 25, 2023	Jun. 25, 2023
Earnings Per Share [Abstract]
Anti-dilutive weighted-average stock awards (in shares)	1.0	2.3

Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Numerator:
Numerator for basic and diluted earnings per share - Net income	$ 51.2	$ 40.9	$ 86.2	$ 87.9
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding (in shares)	128.4	128.0	128.3	128.0
Effect of dilutive securities - stock-based awards (in shares)	1.5	0.0	1.4	0.0
Denominator for diluted earnings per share - weighted average shares outstanding (in shares)	129.9	128.0	129.7	128.0
Earnings per share:
Basic (in dollars per share)	$ 0.40	$ 0.32	$ 0.67	$ 0.69
Diluted (in dollars per share)	$ 0.39	$ 0.32	$ 0.66	$ 0.69

Balance Sheet Information- Schedule of Balance Sheet (Details) - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022	Dec. 15, 2022
Inventories:
Raw materials and supplies	$ 229.0	$ 292.1
Work in process	25.5	23.6
Finished products	65.1	57.4
Total inventories	319.6	373.1
Property, plant and equipment:
Property, plant and equipment, gross	897.1	893.4
Less: accumulated depreciation	555.2	540.8
Property, plant and equipment, net of accumulated depreciation	341.9	352.6
Accounts payable:
Accounts payable	182.2	219.2
Other current liabilities:
Accrued salaries, wages and other compensation	48.0	49.0
Accrued restructuring	3.3	15.4
Accrued taxes	18.9	14.3
Accrued product warranties	13.2	11.2
Other accrued expenses	67.8	70.6
Total other current liabilities	151.2	160.5
Nonrelated Party
Accounts payable:
Accounts payable	147.9	175.1
Related Party
Accounts payable:
Accounts payable	34.3	44.1
Other current liabilities:
Income taxes payable			$ 32.6
Land and Land Improvements
Property, plant and equipment:
Property, plant and equipment, gross	30.9	32.9
Building and Building Improvements
Property, plant and equipment:
Property, plant and equipment, gross	303.5	304.0
Machinery and Equipment
Property, plant and equipment:
Property, plant and equipment, gross	530.1	518.8
Construction in Progress
Property, plant and equipment:
Property, plant and equipment, gross	$ 32.6	$ 37.7

Goodwill and Identifiable Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 25, 2023	Dec. 25, 2022	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022	Mar. 26, 2023
Indefinite-Lived Intangible Assets [Line Items]
Goodwill	$ 925.2	$ 924.2		$ 925.2		$ 923.8
Impairment of goodwill	0.0
Impairment of intangible assets, indefinite-lived			$ 26.0	0.0	$ 26.0
Tradenames, One
Indefinite-Lived Intangible Assets [Line Items]
Impairment of intangible assets, indefinite-lived		12.8	$ 26.0
Indefinite-lived tradenames	46.2	46.2		46.2
Tradenames, Two
Indefinite-Lived Intangible Assets [Line Items]
Impairment of intangible assets, indefinite-lived		7.6
Indefinite-lived tradenames	$ 19.1	$ 19.1		$ 19.1

Goodwill and Identifiable Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 25, 2023	Mar. 26, 2023
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 923.8	$ 924.2
Currency translation adjustment	1.4	(0.4)
Goodwill, ending balance	$ 925.2	$ 923.8

Goodwill and Identifiable Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	$ 385.1	$ 384.2
Accumulated Amortization	(226.4)	(217.5)
Net Book Value	158.7	166.7
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Gross Carrying Amounts	569.3	567.3
Accumulated Amortization	(226.4)	(217.5)
Net Book Value	342.9	349.8
Tradenames
Indefinite-Lived Intangible Assets [Line Items]
Indefinite-lived tradenames	184.2	183.1
Tradenames
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	10.5	10.3
Accumulated Amortization	(10.5)	(10.2)
Net Book Value	0.0	0.1
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(10.5)	(10.2)
Customer and contractual relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	363.6	362.9
Accumulated Amortization	(204.9)	(196.8)
Net Book Value	158.7	166.1
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	(204.9)	(196.8)
Patents/proprietary technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amounts	11.0	11.0
Accumulated Amortization	(11.0)	(10.5)
Net Book Value	0.0	0.5
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Accumulated Amortization	$ (11.0)	$ (10.5)

Financial Instruments - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Derivative [Line Items]
Unrealized holding gains arising during period	$ 3.9	$ 1.3	$ 6.5	$ 3.5
Foreign Exchange Contract \| Minimum
Derivative [Line Items]
Derivative, term of contract			12 months
Foreign Exchange Contract \| Maximum
Derivative [Line Items]
Derivative, term of contract			15 months
Designated as Hedging Instrument \| USD to Mexican Peso and Canadian Dollar
Derivative [Line Items]
Notional amount	50.7		$ 50.7
Net derivative asset	$ 5.2		5.2
Net gain on derivative			$ 3.8

Financial Instruments - Fair Value of Foreign Exchange Derivatives Recorded in the Balance Sheet (Details) - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022
Derivatives, Fair Value [Line Items]
Derivative asset	$ 5.2	$ 3.7
Derivative liability	0.0	0.5
Foreign Exchange Contract
Derivatives, Fair Value [Line Items]
Derivative asset	5.2	3.7
Derivative liability	$ 0.0	$ 0.5

Financial Instruments - Effect of Derivative Instruments on Statements of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Cost of products sold	$ 458.9	$ 606.0	$ 931.0	$ 1,172.1
Other expense (income), net	0.5	(0.2)	0.9	0.7
Unrealized holding gains arising during period	3.9	1.3	6.5	3.5
Amount of (gain) reclassified from accumulated other comprehensive loss into income	3.1	1.2	5.5	1.7
Cost of products sold
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	0.0	0.0	0.0	0.0
Unrealized holding gains arising during period	0.0	0.0	0.0	0.0
Amount of (gain) reclassified from accumulated other comprehensive loss into income	(3.1)	(1.2)	(5.5)	(1.7)
Other expense (income), net
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Hedged items	(0.9)	(1.7)	(2.0)	(2.6)
Unrealized holding gains arising during period	0.9	2.7	3.4	4.3
Amount of (gain) reclassified from accumulated other comprehensive loss into income	$ 0.0	$ 0.0	$ 0.0	$ 0.0

Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022
Assets:
Derivative asset	$ 5.2	$ 3.7
Liabilities:
Derivative liability	0.0	0.5
Fair Value, Recurring
Assets:
Total assets	9.9	7.3
Fair Value, Inputs, Level 2 \| Fair Value, Recurring
Assets:
Derivative asset	5.2	3.7
Deferred compensation plan assets	4.7	3.6
Liabilities:
Derivative liability	$ 0.0	$ 0.5

Debt - Schedule of Debt (Details) - USD ($) $ in Millions	Jun. 25, 2023	Dec. 25, 2022
Debt Instrument [Line Items]
Long-term debt, current maturities, gross	$ 28.1	$ 18.8
Long-term debt, excluding current maturities, gross	792.5	966.3
Current debt issuance costs, net	(1.2)	(1.3)
Noncurrent debt issuance costs, net	(4.2)	(4.8)
Current portion of long-term debt	26.9	17.5
Long-term debt	788.3	961.5
Secured Debt \| The Credit Facility
Debt Instrument [Line Items]
Long-term debt, current maturities, gross	28.1	18.8
Long-term debt, excluding current maturities, gross	712.5	731.3
Revolving Credit Facility \| Line of Credit \| The Credit Facility
Debt Instrument [Line Items]
Long-term debt, current maturities, gross	0.0	0.0
Long-term debt, excluding current maturities, gross	$ 80.0	$ 235.0

Debt - Narrative (Details) - The Credit Facility $ in Millions		3 Months Ended	6 Months Ended
	Nov. 18, 2022 USD ($)	Jun. 25, 2023 USD ($)	Jun. 25, 2023 USD ($)	Dec. 25, 2022 USD ($)
Debt Instrument [Line Items]
Debt term	5 years
Face amount	$ 1,250.0
Maximum EBITDA to consolidated interest expense		3.0	3.0
Interest expense		$ 17.8	$ 34.7
Through Second Fiscal Quarter Of 2023
Debt Instrument [Line Items]
Maximum net debt to EBITDA ratio		3.875	3.875
January 2025
Debt Instrument [Line Items]
Maximum net debt to EBITDA ratio		3.25	3.25
Minimum \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Interest rate spread	1.85%
Maximum \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Interest rate spread	2.60%
Secured Debt
Debt Instrument [Line Items]
Face amount	$ 750.0
Long-term debt, gross		$ 740.6	$ 740.6	$ 750.0
Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Face amount	$ 500.0
Long-term debt, gross		$ 80.0	$ 80.0	$ 235.0

Restructuring Charges - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 3.1	$ 1.3	$ 2.7	$ 1.3

Restructuring Charges - Restructuring Charges Reconciliation (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Restructuring Reserve [Roll Forward]
Beginning balance	$ 5.0	$ 1.8	$ 15.4	$ 2.4
Restructuring Charges	3.1	1.3	2.7	1.3
Payments for restructuring	(4.8)	(1.2)	(14.8)	(1.8)
Ending balance	3.3	1.9	3.3	1.9
Workforce reduction costs
Restructuring Reserve [Roll Forward]
Beginning balance	4.9	1.6	15.3	2.2
Restructuring Charges	2.4	1.2	1.3	1.2
Payments for restructuring	(4.1)	(1.0)	(13.4)	(1.6)
Ending balance	3.2	1.8	3.2	1.8
Other
Restructuring Reserve [Roll Forward]
Beginning balance	0.1	0.2	0.1	0.2
Restructuring Charges	0.7	0.1	1.4	0.1
Payments for restructuring	(0.7)	(0.2)	(1.4)	(0.2)
Ending balance	$ 0.1	$ 0.1	$ 0.1	$ 0.1

Income Taxes - Narrative (Details)	3 Months Ended		6 Months Ended
Income Taxes - Narrative (Details)	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate, percent	26.50%	24.30%	26.70%	24.10%

Pension and Other Postretirement Plans - Schedule of Net Benefit Costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Interest cost	1.6	1.2	3.2	2.5
Expected return on plan assets	(1.8)	(1.8)	(3.5)	(3.6)
Net periodic (benefit) cost	(0.2)	(0.6)	(0.3)	(1.1)
Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	0.1	0.1	0.2	0.2
Interest cost	0.1	0.1	0.1	0.1
Expected return on plan assets	0.0	0.0	0.0	0.0
Net periodic (benefit) cost	$ 0.2	$ 0.2	$ 0.3	$ 0.3

Contingencies and Accrued Losses (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Reserve balance at the beginning of the period	$ 12.2	$ 7.5	$ 11.2	$ 7.0
Provision for warranties issued	9.0	9.6	18.1	18.3
Settlements made (in cash or in kind)	(8.0)	(8.9)	(16.1)	(17.1)
Reserve balance at the end of the period	$ 13.2	$ 8.2	$ 13.2	$ 8.2

Accumulated Other Comprehensive (Loss) Income - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,009.2	$ 2,453.8
Amounts classified into accumulated other comprehensive (loss) income	$ 13.7	$ (5.8)	16.1	3.0
Amounts reclassified into earnings	(3.1)	(1.2)	(5.5)	(1.7)
Other comprehensive income	10.6	(7.0)	10.6	1.3
Ending balance	1,107.6	2,613.4	1,107.6	2,613.4
Foreign Currency Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(8.2)	8.4	(8.0)	1.9
Amounts classified into accumulated other comprehensive (loss) income	9.8	(7.1)	9.6	(0.6)
Amounts reclassified into earnings	0.0	0.0	0.0	0.0
Other comprehensive income	9.8	(7.1)	9.6	(0.6)
Ending balance	1.6	1.3	1.6	1.3
Derivative Hedging Gain (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	3.0	1.8	2.8	0.1
Amounts classified into accumulated other comprehensive (loss) income	3.9	1.3	6.5	3.5
Amounts reclassified into earnings	(3.1)	(1.2)	(5.5)	(1.7)
Other comprehensive income	0.8	0.1	1.0	1.8
Ending balance	3.8	1.9	3.8	1.9
Pension and Other Postretirement Plans Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(9.3)	(5.8)	(9.3)	(5.9)
Amounts classified into accumulated other comprehensive (loss) income	0.0	0.0	0.0	0.1
Amounts reclassified into earnings	0.0	0.0	0.0	0.0
Other comprehensive income	0.0	0.0	0.0	0.1
Ending balance	(9.3)	(5.8)	(9.3)	(5.8)
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(14.5)	4.4	(14.5)	(3.9)
Other comprehensive income			10.6	1.3
Ending balance	$ (3.9)	$ (2.6)	$ (3.9)	$ (2.6)

Accumulated Other Comprehensive (Loss) Income - Reclassification of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total reclassifications for the period	$ (3.1)	$ (1.2)	$ (5.5)	$ (1.7)
Cost of products sold \| Foreign Exchange Contract
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total reclassifications for the period	$ (3.1)	$ (1.2)	$ (5.5)	$ (1.7)

Related Party Transactions - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 25, 2023	Jun. 26, 2022	Jun. 25, 2023	Jun. 26, 2022
Related Party Transaction [Line Items]
Stock based compensation expense		$ 2.7		$ 5.4
Interest income	$ 0.0	1.9	$ 0.0	3.1
Interest expense	$ 17.2	0.0	$ 34.6	0.0
Transitional Services Agreement
Related Party Transaction [Line Items]
Related party transaction amount		21.0		41.1
Transitional Services Agreement, Costs Previously Not Allocated
Related Party Transaction [Line Items]
Related party transaction amount		$ 16.9		$ 29.0
Minimum \| Fortune Brands \| Related Party, Note Payable
Related Party Transaction [Line Items]
Related party interest rate		165.00%		120.00%
Minimum \| Fortune Brands \| Related Party, Note Receivable
Related Party Transaction [Line Items]
Related party interest rate		140.00%		95.00%
Maximum \| Fortune Brands \| Related Party, Note Payable
Related Party Transaction [Line Items]
Related party interest rate		235.00%		235.00%
Maximum \| Fortune Brands \| Related Party, Note Receivable
Related Party Transaction [Line Items]
Related party interest rate		210.00%		210.00%
Related Party
Related Party Transaction [Line Items]
Interest income		$ 2.2		$ 3.6
Interest expense		$ 0.3		$ 0.5

Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 25, 2023	Jun. 25, 2023	May 09, 2023
Equity [Abstract]
Stock repurchase program, authorized amount			$ 50.0
Stock repurchased under repurchase program (in shares)	404,858	404,858
Stock repurchase program	$ 4.4	$ 4.4
Average cost per share (in USD per share)	$ 10.89	$ 10.89
Remaining authorized repurchase amount	$ 45.6	$ 45.6