MasterBrand, Inc. Q2 FY2025 earnings call

• Announced the definitive agreement to merge with American Woodmark in an all-stock transaction, seen as transformative for both companies.
• Discussed strategic benefits of the merger, including combined customer-centric platforms, expanded product portfolio across price spectrum, and complementary cultures.
• American Woodmark's select preliminary first quarter fiscal 2026 financial results were overviewed.
• MasterBrand's second quarter 2025 financial results were detailed, including net sales growth, gross profit, SG&A, and adjusted EBITDA.
• Progress on Supreme integration with plant consolidations in North Carolina nearing completion, with synergies expected to ramp in the second half of 2025.

MasterBrand's second quarter 2025 financial results: Net sales were $730.9 million, an 8% increase from $676.5 million in the same period last year. Gross profit was $239.7 million, up 3.8% from $231 million, with a gross profit margin of 32.8% (down 130 basis points year-over-year but up 220 basis points from the first quarter). SG&A expenses totaled $159.4 million, up 8.7% year-over-year. Net income was $37.3 million, down from $45.3 million in the prior year. Adjusted EBITDA was $105.4 million, relatively flat year-over-year. Diluted earnings per share were $0.29, and adjusted diluted earnings per share were $0.40.

• Reaffirmed full year 2025 outlook: Addressable market down high to mid-single digits, net sales decline low single digits (including mid-single-digit contribution from Supreme, organic net sales down mid-single digits).
• Adjusted EBITDA guidance $315 million to $365 million with margin range 12% to 13.5%.
• Outlook does not include financial benefits from merger with American Woodmark or transaction/integration costs.
• Monitors tariff environment, including potential Section 232 tariffs on steel, aluminum, and lumber, with no quantified impact yet but preparing mitigation strategies.

• Potential impact of tariffs, including Section 232 tariffs on steel, aluminum, and lumber, with unknown impact on cost and demand.
• Uncertainty around trade policy changes and their implications on cost and demand.

Q: Timing of the merger, why now?

A: R. David Banyard stated it's a compelling combination of two U.S. companies with value-generating opportunities, fortifies financial profile, and expands opportunities for customers, shareholders, and associates. Michael Scott Culbreth added on benefits to customers, shareholders, and team members.

Q: Cost synergies detail?

A: R. David Banyard said ~40% G&A/indirect costs and ~60% COGS, phasing similar to Supreme integration.

Q: Channel exposure?

A: R. David Banyard said the merger brings more value to all channels, intends to expand dealer network and cross-sell products, with complementary dealer networks and existing relationships to leverage.

Q: Network optimization and brand pruning?

A: R. David Banyard said optimize around customer footprint, focus on growing legacy brands, not pruning immediately; Michael Scott Culbreth added focus on growing legacy brands.

Q: Merger process and market share?

A: R. David Banyard said detailed collaboration, direct to 8-K for deal specifics; preferred not to comment on market share