- \n
- \nNet sales were $1,036.8 million, including a $355.7 million contribution from American Woodmark<\/p>\n<\/li>\n
- \nNet loss was $(9.2) million and net loss margin was (0.9)%<\/p>\n<\/li>\n
- \nAdjusted EBITDA1<\/sup> was $86.0 million, representing an adjusted EBITDA margin1<\/sup> of 8.3%<\/p>\n<\/li>\n
- \nDiluted loss per share was $(0.05) and adjusted diluted earnings per share1<\/sup> was $0.10<\/p>\n<\/li>\n
- \nIntegration of American Woodmark ahead of schedule, with $11 million of cost synergies realized to-date<\/p>\n<\/li>\n<\/ul>\n
BEACHWOOD, Ohio–(BUSINESS WIRE<\/a>)–
\nMasterBrand, Inc. (NYSE: MBC, the \u201cCompany,\u201d or \u201cMasterBrand\u201d), the largest residential cabinet manufacturer in North America, today announced third quarter 2026 financial results.<\/p>\n\n\u201cOur first full quarter as a combined company showed real momentum on integration, with synergies ahead of schedule,\u201d said Dave Banyard, President and Chief Executive Officer. \u201cWe are realizing the benefits of our combined scale and managing through ongoing market softness with operating discipline, and legacy MasterBrand gained share across our end markets despite ongoing demand headwinds. We believe we are building a more efficient, more competitive MasterBrand, and we are confident in the steps we are taking that are designed to improve profitability independent of a market recovery, and to drive growth when markets do recover.\u201d<\/p>\n
Third Quarter 2026<\/span><\/b><\/p>\n
\nResults for the third quarter include American Woodmark for the full period. Prior year results reflect legacy MasterBrand only.<\/p>\n
\nNet sales were $1,036.8 million, including a $355.7 million contribution from American Woodmark. Legacy MasterBrand net sales were $681.1 million, a decrease of 2.5% compared to the third quarter of 2025, reflecting a mid- to high-single-digit market decline, unfavorable mix and trade-downs, partially offset by share gains across our end markets and favorable net average selling price (\u201cASP\u201d) due to the flow through of tariff pricing.<\/p>\n
\nGross profit was $254.9 million and gross profit margin was 24.6%, compared to $218.2 million and 31.2%, respectively, in the prior year period. The increase in gross profit primarily reflects the contribution from American Woodmark, $10.9 million of IEEPA duty refunds and integration synergies. Gross profit margin decreased 660 basis points, driven by lower volume and the related unfavorable fixed cost leverage, inflation that outpaced pricing actions, unfavorable product mix and trade-downs, and the inclusion of American Woodmark\u2019s lower gross margin.<\/p>\n
\nNet loss was $(9.2) million and net loss margin was (0.9)%, compared to net income of $18.1 million and net income margin of 2.6% in the third quarter of 2025. The decline was driven by the factors impacting gross profit, higher interest expense and the inclusion of American Woodmark SG&A, partially offset by lower merger-related costs, the flow through of cost actions taken in the first half and integration synergies.<\/p>\n
\nAdjusted EBITDA1<\/sup> was $86.0 million and adjusted EBITDA margin1<\/sup> was 8.3%, compared to $90.6 million and 13.0%, respectively, in the prior year period. The 470 basis point decline reflects lower volume and the related unfavorable fixed cost leverage, inflation that outpaced pricing actions, and unfavorable product mix. These headwinds were partially offset by the contribution from American Woodmark, $10.9 million of IEEPA duty refunds, continuous improvement efforts, previously announced cost actions and integration synergies.<\/p>\n
\nDiluted loss per share was $(0.05) based on 203.5 million weighted average shares outstanding compared to diluted earnings per share of $0.14 in the third quarter of 2025 based on 129.5 million weighted average shares outstanding. Adjusted diluted earnings per share1<\/sup> was $0.10 compared to $0.33 in the third quarter of 2025.<\/p>\n
American Woodmark Integration and Synergies<\/span><\/b><\/p>\n
\nIntegration is ahead of schedule, with approximately $11 million of cost synergies realized as of September 27, 2026. As of quarter end, the Company has initiated or completed actions that are expected to drive more than $50 million in run-rate cost synergies exiting year one following close, with the full benefit phasing in over time. The Company continues to expect over $100 million in annual run-rate cost synergies by the end of year three post-close.<\/p>\n
Balance Sheet, Cash Flow and Capital Allocation<\/span><\/b><\/p>\n
\nAs of September 27, 2026, the Company had $139.7 million in cash and $554.5 million of availability under its revolving credit facility. Total debt was $1,230.8 million, net debt1<\/sup><\/b> was $1,091.1 million and the ratio of net debt to trailing twelve-month adjusted EBITDA1<\/sup>, inclusive of American Woodmark\u2019s trailing twelve-month adjusted EBITDA1<\/sup>, was 4.3x. The Company’s credit agreement permits the inclusion of trailing twelve-month adjusted EBITDA for American Woodmark and stock-based compensation, among other permitted adjustments, for covenant compliance purposes. The Company remained in full compliance with all applicable financial covenants related to its outstanding debt as of the end of the third quarter.<\/p>\n
\nNet cash provided by operating activities was $80.2 million for the thirty-nine weeks ended September 27, 2026, compared to $108.8 million for the thirty-nine weeks ended September 28, 2025. Free cash flow1<\/sup> was $43.6 million for the thirty-nine weeks ended September 27, 2026, compared to $65.0 million in the prior-year period. The decrease in net cash provided by operating activities and free cash flow was driven by lower earnings and merger-related costs, partially offset by disciplined working capital management.<\/p>\n
\nNo share repurchases were made during the third quarter of 2026 as the Company prioritizes integration investments and balance sheet management.<\/p>\n
Fourth Quarter 2026 Financial Outlook<\/span><\/b><\/p>\n
\nFor the fourth quarter of 2026, MasterBrand expects the following:<\/p>\n
- \n
- \nNet sales of $958 to $988 million<\/p>\n<\/li>\n
- \nAdjusted EBITDA1,2<\/sup> in the range of $38 to $48 million, with related adjusted EBITDA margin1,2 <\/sup>in the range of 4.0% to 4.9%<\/p>\n<\/li>\n
- \nAdjusted diluted loss per share1,2<\/sup> in the range of $(0.12) to $(0.08)<\/p>\n
- \n
- \nReflects interest expense of approximately $24 million, reflecting the $375 million Term Loan A used to retire American Woodmark’s debt at close<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\nFor the full year 2026, MasterBrand now expects its addressable market to be down high-single digits and assumes no improvement in demand through year-end. The Company also expects the following:<\/p>\n
- \n
- \nGross tariff costs of approximately 5-6% of full-year 2026 net sales; expected to be fully offset on a dollar-for-dollar run-rate basis by end of year<\/p>\n<\/li>\n
- \nFree cash flow1<\/sup> for full-year 2026 expected to be approximately breakeven<\/p>\n<\/li>\n<\/ul>\n
\nThis outlook reflects the combined company, includes the $1.3 million of IEEPA duty refunds received in the fourth quarter and continued synergy realization, and supersedes the second-half 2026 outlook previously provided by the Company. MasterBrand now expects second-half 2026 cost synergies to exceed its previously communicated target of approximately $15 million.<\/p>\n
\nThis financial outlook only reflects the impact of those tariffs in effect as of the date of this release and does not reflect any other potential tariffs or tariff-related impacts on company costs or end market demand. The Company believes the dynamic nature of tariffs, specifically the uncertainty of implementation, potential timing and duration, limits the usefulness of estimating this information. MasterBrand undertakes no obligation to update this outlook as circumstances evolve.<\/p>\n
- \nAdjusted diluted loss per share1,2<\/sup> in the range of $(0.12) to $(0.08)<\/p>\n
- \nDiluted loss per share was $(0.05) and adjusted diluted earnings per share1<\/sup> was $0.10<\/p>\n<\/li>\n
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