10-Q 1 door-20230702.htm 10-Q door-20230702
000089369112/312023Q2FALSEA1653500008936912023-01-022023-07-0200008936912023-08-07xbrli:shares00008936912023-04-032023-07-02iso4217:USD00008936912022-04-042022-07-0300008936912022-01-032022-07-03iso4217:USDxbrli:shares00008936912023-07-0200008936912023-01-0100008936912023-04-0200008936912022-04-0300008936912022-01-020000893691us-gaap:CommonStockMember2023-04-020000893691us-gaap:CommonStockMember2022-04-030000893691us-gaap:CommonStockMember2023-01-010000893691us-gaap:CommonStockMember2022-01-020000893691us-gaap:CommonStockMember2023-04-032023-07-020000893691us-gaap:CommonStockMember2022-04-042022-07-030000893691us-gaap:CommonStockMember2023-01-022023-07-020000893691us-gaap:CommonStockMember2022-01-032022-07-030000893691us-gaap:CommonStockMember2023-07-020000893691us-gaap:CommonStockMember2022-07-030000893691us-gaap:AdditionalPaidInCapitalMember2023-04-020000893691us-gaap:AdditionalPaidInCapitalMember2022-04-030000893691us-gaap:AdditionalPaidInCapitalMember2023-01-010000893691us-gaap:AdditionalPaidInCapitalMember2022-01-020000893691us-gaap:AdditionalPaidInCapitalMember2023-04-032023-07-020000893691us-gaap:AdditionalPaidInCapitalMember2022-04-042022-07-030000893691us-gaap:AdditionalPaidInCapitalMember2023-01-022023-07-020000893691us-gaap:AdditionalPaidInCapitalMember2022-01-032022-07-030000893691us-gaap:AdditionalPaidInCapitalMember2023-07-020000893691us-gaap:AdditionalPaidInCapitalMember2022-07-030000893691us-gaap:RetainedEarningsMember2023-04-020000893691us-gaap:RetainedEarningsMember2022-04-030000893691us-gaap:RetainedEarningsMember2023-01-010000893691us-gaap:RetainedEarningsMember2022-01-020000893691us-gaap:RetainedEarningsMember2023-04-032023-07-020000893691us-gaap:RetainedEarningsMember2022-04-042022-07-030000893691us-gaap:RetainedEarningsMember2023-01-022023-07-020000893691us-gaap:RetainedEarningsMember2022-01-032022-07-030000893691us-gaap:RetainedEarningsMember2023-07-020000893691us-gaap:RetainedEarningsMember2022-07-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-020000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-010000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-020000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-032023-07-020000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-042022-07-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-022023-07-020000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-032022-07-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-020000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-030000893691us-gaap:NoncontrollingInterestMember2023-04-020000893691us-gaap:NoncontrollingInterestMember2022-04-030000893691us-gaap:NoncontrollingInterestMember2023-01-010000893691us-gaap:NoncontrollingInterestMember2022-01-020000893691us-gaap:NoncontrollingInterestMember2023-04-032023-07-020000893691us-gaap:NoncontrollingInterestMember2022-04-042022-07-030000893691us-gaap:NoncontrollingInterestMember2023-01-022023-07-020000893691us-gaap:NoncontrollingInterestMember2022-01-032022-07-030000893691us-gaap:NoncontrollingInterestMember2023-07-020000893691us-gaap:NoncontrollingInterestMember2022-07-0300008936912022-07-03door:facilitydoor:Country0000893691door:EPIHoldingsIncMember2023-01-03xbrli:pure0000893691door:EPIHoldingsIncMember2023-01-032023-01-030000893691door:EPIHoldingsIncMember2023-01-022023-07-020000893691door:EPIHoldingsIncMember2023-07-020000893691door:EPIHoldingsIncMember2023-01-032023-07-020000893691door:EPIHoldingsIncMemberus-gaap:CustomerRelationshipsMember2023-01-032023-01-030000893691us-gaap:TrademarksAndTradeNamesMemberdoor:EPIHoldingsIncMember2023-01-032023-01-030000893691door:EPIHoldingsIncMemberus-gaap:PatentsMember2023-01-032023-01-030000893691door:EPIHoldingsIncMember2023-04-032023-07-020000893691door:EPIHoldingsIncMember2022-04-042022-07-030000893691door:IntercompanyEliminationsMemberdoor:EPIHoldingsIncMember2022-04-042022-07-030000893691door:IntercompanyEliminationsMemberdoor:EPIHoldingsIncMember2023-01-022023-07-020000893691us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberdoor:TenLargestCustomersMember2023-01-022023-07-02door:Customer0000893691us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberdoor:TenLargestCustomersMember2022-01-032023-01-010000893691door:TheHomeDepotIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-032023-01-010000893691door:TheHomeDepotIncMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-022023-07-020000893691door:SeniorNotesDue2030Memberus-gaap:SeniorNotesMember2021-07-260000893691door:SeniorNotesDue2030Memberus-gaap:SeniorNotesMember2023-07-020000893691door:SeniorNotesDue2030Memberus-gaap:SeniorNotesMember2023-01-010000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2019-07-250000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-07-020000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-01-010000893691door:TermLoanCreditAgreementMemberdoor:AdjustedTermSecuredOvernightFinancingRateSOFRMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691door:TermLoanCreditAgreementMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2023-07-020000893691door:TermLoanCreditAgreementMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2023-01-010000893691us-gaap:SeniorNotesMember2023-04-032023-07-020000893691us-gaap:SeniorNotesMember2023-01-022023-07-020000893691us-gaap:SeniorNotesMember2022-04-042022-07-030000893691us-gaap:SeniorNotesMember2022-01-032022-07-030000893691door:TermLoanCreditAgreementMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691door:TermLoanCreditAgreementMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-130000893691door:TermLoanCreditAgreementMemberdoor:AdjustedBaseRateMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691door:TermLoanCreditAgreementMemberdoor:PremiumAdjustedTermSecuredOvernightFinancingRateSOFRMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691door:TermLoanCreditAgreementMemberus-gaap:BaseRateMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691door:TermLoanCreditAgreementMemberdoor:ApplicableMarginMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2022-12-132022-12-130000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2019-01-310000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2022-10-282022-10-280000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2027Member2022-10-280000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2027Member2023-01-032023-01-030000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2023-07-020000893691us-gaap:CommonStockMemberdoor:A2021PlanMember2021-03-100000893691us-gaap:CommonStockMemberdoor:A2021PlanMember2023-07-020000893691us-gaap:StockAppreciationRightsSARSMember2023-01-022023-07-020000893691us-gaap:StockAppreciationRightsSARSMember2023-01-010000893691us-gaap:StockAppreciationRightsSARSMember2022-01-032023-01-010000893691us-gaap:StockAppreciationRightsSARSMember2023-07-020000893691us-gaap:PerformanceSharesMember2023-01-022023-07-020000893691us-gaap:RestrictedStockUnitsRSUMember2023-01-010000893691us-gaap:RestrictedStockUnitsRSUMember2023-01-022023-07-020000893691us-gaap:RestrictedStockUnitsRSUMember2023-07-020000893691us-gaap:PerformanceSharesMember2023-01-010000893691us-gaap:PerformanceSharesMember2023-07-020000893691us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2023-01-022023-07-020000893691us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2023-01-022023-07-020000893691srt:MinimumMember2023-07-020000893691srt:MaximumMember2023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:NorthAmericanResidentialSegmentMember2023-04-032023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:ArchitecturalSegmentMember2023-04-032023-07-020000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyTwoRestructuringPlansMember2023-04-032023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMember2023-04-032023-07-020000893691door:NorthAmericanResidentialSegmentMember2023-04-032023-07-020000893691door:ArchitecturalSegmentMember2023-04-032023-07-020000893691us-gaap:CorporateAndOtherMember2023-04-032023-07-020000893691door:A20182021RestructuringPlansMemberdoor:NorthAmericanResidentialSegmentMember2022-04-042022-07-030000893691door:A20182021RestructuringPlansMemberdoor:ArchitecturalSegmentMember2022-04-042022-07-030000893691us-gaap:CorporateAndOtherMemberdoor:A20182021RestructuringPlansMember2022-04-042022-07-030000893691door:A20182021RestructuringPlansMember2022-04-042022-07-030000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:NorthAmericanResidentialSegmentMember2023-01-022023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:ArchitecturalSegmentMember2023-01-022023-07-020000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyTwoRestructuringPlansMember2023-01-022023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMember2023-01-022023-07-020000893691door:NorthAmericanResidentialSegmentMember2023-01-022023-07-020000893691door:ArchitecturalSegmentMember2023-01-022023-07-020000893691us-gaap:CorporateAndOtherMember2023-01-022023-07-020000893691door:A20182021RestructuringPlansMemberdoor:NorthAmericanResidentialSegmentMember2022-01-032022-07-030000893691door:A20182021RestructuringPlansMemberdoor:ArchitecturalSegmentMember2022-01-032022-07-030000893691us-gaap:CorporateAndOtherMemberdoor:A20182021RestructuringPlansMember2022-01-032022-07-030000893691door:A20182021RestructuringPlansMember2022-01-032022-07-030000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:NorthAmericanResidentialSegmentMember2023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMemberdoor:ArchitecturalSegmentMember2023-07-020000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyTwoRestructuringPlansMember2023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMember2023-07-020000893691door:NorthAmericanResidentialSegmentMember2023-07-020000893691door:ArchitecturalSegmentMember2023-07-020000893691us-gaap:CorporateAndOtherMember2023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMember2023-01-010000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyTwentyTwoRestructuringPlansMember2023-01-022023-07-020000893691door:TwentyTwentyTwoRestructuringPlansMemberus-gaap:FacilityClosingMember2023-01-022023-07-020000893691us-gaap:EmployeeSeveranceMember2023-01-022023-07-020000893691us-gaap:FacilityClosingMember2023-01-022023-07-020000893691us-gaap:StockAppreciationRightsSARSMember2023-04-032023-07-020000893691us-gaap:StockAppreciationRightsSARSMember2022-04-042022-07-030000893691us-gaap:StockAppreciationRightsSARSMember2023-01-022023-07-020000893691us-gaap:StockAppreciationRightsSARSMember2022-01-032022-07-03door:authorization00008936912022-02-210000893691door:AcceleratedShareRepurchaseMember2022-04-030000893691door:AcceleratedShareRepurchaseMember2022-01-032022-04-030000893691door:AcceleratedShareRepurchaseMember2022-04-042022-07-030000893691door:AcceleratedShareRepurchaseMember2022-01-032023-01-010000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2023-04-032023-07-020000893691door:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2023-04-032023-07-020000893691us-gaap:OperatingSegmentsMemberdoor:ArchitecturalSegmentMember2023-04-032023-07-020000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2023-04-032023-07-020000893691us-gaap:OperatingSegmentsMember2023-04-032023-07-020000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2023-04-032023-07-020000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2023-04-032023-07-020000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2023-04-032023-07-020000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2023-04-032023-07-020000893691us-gaap:IntersegmentEliminationMember2023-04-032023-07-020000893691door:EuropeSegmentMember2023-04-032023-07-020000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2022-04-042022-07-030000893691door:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2022-04-042022-07-030000893691us-gaap:OperatingSegmentsMemberdoor:ArchitecturalSegmentMember2022-04-042022-07-030000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2022-04-042022-07-030000893691us-gaap:OperatingSegmentsMember2022-04-042022-07-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2022-04-042022-07-030000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2022-04-042022-07-030000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2022-04-042022-07-030000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2022-04-042022-07-030000893691us-gaap:IntersegmentEliminationMember2022-04-042022-07-030000893691door:NorthAmericanResidentialSegmentMember2022-04-042022-07-030000893691door:EuropeSegmentMember2022-04-042022-07-030000893691door:ArchitecturalSegmentMember2022-04-042022-07-030000893691us-gaap:CorporateAndOtherMember2022-04-042022-07-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2023-01-022023-07-020000893691door:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2023-01-022023-07-020000893691us-gaap:OperatingSegmentsMemberdoor:ArchitecturalSegmentMember2023-01-022023-07-020000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2023-01-022023-07-020000893691us-gaap:OperatingSegmentsMember2023-01-022023-07-020000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-022023-07-020000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-022023-07-020000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-022023-07-020000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2023-01-022023-07-020000893691us-gaap:IntersegmentEliminationMember2023-01-022023-07-020000893691door:EuropeSegmentMember2023-01-022023-07-020000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2022-01-032022-07-030000893691door:EuropeSegmentMemberus-gaap:OperatingSegmentsMember2022-01-032022-07-030000893691us-gaap:OperatingSegmentsMemberdoor:ArchitecturalSegmentMember2022-01-032022-07-030000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2022-01-032022-07-030000893691us-gaap:OperatingSegmentsMember2022-01-032022-07-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-032022-07-030000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-032022-07-030000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-032022-07-030000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2022-01-032022-07-030000893691us-gaap:IntersegmentEliminationMember2022-01-032022-07-030000893691door:NorthAmericanResidentialSegmentMember2022-01-032022-07-030000893691door:EuropeSegmentMember2022-01-032022-07-030000893691door:ArchitecturalSegmentMember2022-01-032022-07-030000893691us-gaap:CorporateAndOtherMember2022-01-032022-07-0300008936912022-01-032023-01-010000893691door:SeniorNotesDue2030Memberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2023-07-020000893691door:SeniorNotesDue2030Memberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2023-07-020000893691door:SeniorNotesDue2030Memberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMember2023-01-010000893691door:SeniorNotesDue2030Memberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMember2023-01-010000893691us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-07-020000893691us-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-07-020000893691us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-01-010000893691us-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2023-01-01


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 001-11796
____________________________
Image2.jpg
Masonite International Corporation
(Exact name of registrant as specified in its charter)
____________________________
British Columbia, Canada98-0377314
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

2771 Rutherford Road
Concord, Ontario L4K 2N6 Canada
(Address of principal executive offices)
(800) 895-2723
(Registrant's telephone number, including area code)
____________________________
Securities registered pursuant to Section 12(b) of the Act:
Common Stock (no par value)DOORNew York Stock Exchange
(Title of class)(Trading symbol)(Name of 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 ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 ☑ No ☐
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.
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
The registrant had outstanding 22,003,429 shares of Common Stock, no par value, as of August 7, 2023.


Image2.jpg

MASONITE INTERNATIONAL CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
July 2, 2023

i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements concerning the conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and product development efforts under "Management's Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as "may," "might," "could," "will," "would," "should," "expect," "believes," "outlook," "predict," "forecast," "objective," "remain," "anticipate," "estimate," "potential," "continue," "plan," "project," "targeting," and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. These risks and uncertainties include, without limitation, those identified under "Risk Factors" in our Annual Report on Form 10-K for the year ended January 1, 2023, subsequent reports on Form 10-Q and elsewhere in this Quarterly Report.
The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:
•downward trends in our end markets and in economic conditions;
•reduced levels of residential new construction; residential repair, renovation and remodeling; and non-residential building construction activity due to increases in mortgage rates, changes in mortgage interest deductions and related tax changes and reduced availability of financing;
•competition;
•the continued success of, and our ability to maintain relationships with, certain key customers in light of customer concentration and consolidation;
•our ability to accurately anticipate demand for our products;
•impacts on our business from weather and climate change;
•our ability to successfully consummate and integrate acquisitions and effectuate dispositions;
•changes in prices of raw materials and fuel;
•tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing duties;
•increases in labor costs, the availability of labor or labor relations (i.e., disruptions, strikes or work stoppages);
•our ability to manage our operations including potential disruptions, manufacturing realignments (including related restructuring charges) and customer credit risk;
•product liability claims and product recalls;
•our ability to generate sufficient cash flows to fund our capital expenditure requirements and to meet our debt service obligations, including our obligations under our senior notes, our term loan credit agreement (the "Term Loan Facility") and our asset-based revolving credit facility (the "ABL Facility");
•limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes, the Term Loan Facility and the ABL Facility;
•fluctuating foreign exchange and interest rates;
•the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks and data privacy requirements;
•political, economic and other risks that arise from operating a multinational business;
•retention of key management personnel;
•environmental and other government regulations, including the United States Foreign Corrupt Practices Act ("FCPA"), and any changes in such regulations;
•the scale and scope of public health issues and their impact on our operations, customer demand and supply chain; and
•our ability to replace our expiring patents and to innovate and keep pace with technological developments.
We caution you that the foregoing list of important factors is not all-inclusive. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
ii
The Company may use its website and/or social media outlets, such as LinkedIn, as distribution channels of material Company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at http://investor.masonite.com and its LinkedIn page at https://www.linkedin.com/company/masonitedoors/mycompany/. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section at http://investor.masonite.com.
iii
PART I – FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
Three Months EndedSix Months Ended
July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net sales$741,884 $761,874 $1,467,868 $1,488,091 
Cost of goods sold563,517 582,389 1,119,010 1,124,357 
Gross profit178,367 179,485 348,858 363,734 
Selling, general and administration expenses98,746 90,330 200,451 173,576 
Restructuring costs (benefit)3,065 (61)6,743 (80)
Operating income76,556 89,216 141,664 190,238 
Interest expense, net13,488 10,593 27,740 20,832 
Other (income) expense, net(550)(400)(498)(1,815)
Income before income tax expense63,618 79,023 114,422 171,221 
Income tax expense14,673 19,649 26,033 43,126 
Net income 48,945 59,374 88,389 128,095 
Less: net income attributable to non-controlling interests700 859 1,653 1,998 
Net income attributable to Masonite$48,245 $58,515 $86,736 $126,097 
Basic earnings per common share attributable to Masonite$2.19 $2.60 $3.92 $5.53 
Diluted earnings per common share attributable to Masonite$2.16 $2.58 $3.87 $5.47 
Comprehensive income:
Net income $48,945 $59,374 $88,389 $128,095 
Other comprehensive income (loss):
Foreign currency translation gain (loss)8,541 (28,392)17,490 (30,497)
Amortization of actuarial net losses192 6 383 12 
Income tax (expense) benefit related to other comprehensive income (loss)(29)(23)(74)(13)
Other comprehensive income (loss), net of tax:8,704 (28,409)17,799 (30,498)
Comprehensive income57,649 30,965 106,188 97,597 
Less: comprehensive income attributable to non-controlling interests864 1,358 1,809 2,639 
Comprehensive income attributable to Masonite$56,785 $29,607 $104,379 $94,958 

See accompanying notes to the condensed consolidated financial statements.
1
MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
ASSETSJuly 2, 2023January 1, 2023
Current assets:
Cash and cash equivalents$317,157 $296,922 
Restricted cash11,587 11,999 
Accounts receivable, net374,794 375,918 
Inventories, net378,705 406,828 
Prepaid expenses and other assets66,982 55,051 
Income taxes receivable21,266 16,922 
Total current assets1,170,491 1,163,640 
Property, plant and equipment, net735,932 652,329 
Operating lease right-of-use assets191,190 160,695 
Investment in equity investees18,058 16,111 
Goodwill257,527 69,868 
Intangible assets, net254,156 136,056 
Deferred income taxes21,400 16,133 
Other assets34,191 33,346 
Total assets$2,682,945 $2,248,178 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$137,895 $111,526 
Accrued expenses227,833 223,046 
Income taxes payable6,520 14,361 
Current portion of long-term debt37,500 — 
Total current liabilities409,748 348,933 
Long-term debt1,067,183 866,116 
Long-term operating lease liabilities178,820 151,242 
Deferred income taxes120,963 79,590 
Other liabilities76,406 59,515 
Total liabilities1,853,120 1,505,396 
Commitments and Contingencies (Note 7)
Equity:
Share capital: unlimited shares authorized, no par value, 21,995,420 and 22,155,035 shares issued and outstanding as of July 2, 2023, and January 1, 2023, respectively
526,816 520,003 
Additional paid-in capital223,540 226,514 
Retained earnings193,262 127,826 
Accumulated other comprehensive loss(124,581)(142,224)
Total equity attributable to Masonite819,037 732,119 
Equity attributable to non-controlling interests10,788 10,663 
Total equity829,825 742,782 
Total liabilities and equity$2,682,945 $2,248,178 

See accompanying notes to the condensed consolidated financial statements.
2
MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Changes in Equity
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
Three Months EndedSix Months Ended
July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Total equity, beginning of period$780,724 $626,447 $742,782 $699,778 
Share capital:
Beginning of period529,156 527,386 520,003 543,400 
Common shares issued for delivery of share based awards1,468 1,346 13,840 12,976 
Common shares issued under employee stock purchase plan— — 806 797 
Common shares repurchased(3,808)(7,489)(7,833)(35,930)
End of period526,816 521,243 526,816 521,243 
Additional paid-in capital:
Beginning of period218,010 194,459 226,514 222,177 
Share based compensation expense7,103 5,976 13,157 10,695 
Common shares issued for delivery of share based awards(1,468)(1,346)(13,840)(12,976)
Common shares withheld to cover income taxes payable due to delivery of share based awards(105)(146)(2,065)(3,109)
Common shares issued under employee stock purchase plan— — (226)(134)
Common shares repurchased— 17,710 — — 
End of period223,540 216,653 223,540 216,653 
Retained earnings (deficit):
Beginning of period155,625 (2,023)127,826 24,244 
Net income attributable to Masonite48,245 58,515 86,736 126,097 
Common shares repurchased(10,608)(10,221)(21,300)(104,070)
End of period193,262 46,271 193,262 46,271 
Accumulated other comprehensive loss:
Beginning of period(133,121)(104,810)(142,224)(101,582)
Other comprehensive income (loss) attributable to Masonite, net of tax8,540 (27,911)17,643 (31,139)
End of period(124,581)(132,721)(124,581)(132,721)
Equity attributable to non-controlling interests:
Beginning of period11,054 11,435 10,663 11,539 
Net income attributable to non-controlling interests700 859 1,653 1,998 
Other comprehensive (loss) income attributable to non-controlling interests, net of tax164 499 156 641 
Dividends to non-controlling interests(1,130)(1,174)(1,684)(2,559)
End of period10,788 11,619 10,788 11,619 
Total equity, end of period$829,825 $663,065 $829,825 $663,065 
Common shares outstanding:
Beginning of period22,138,282 22,564,956 22,155,035 23,623,887 
Common shares issued for delivery of share based awards16,177 14,078 159,120 183,448 
Common shares issued under employee stock purchase plan106 — 8,933 8,029 
Common shares repurchased(159,145)(319,678)(327,668)(1,556,008)
End of period21,995,420 22,259,356 21,995,420 22,259,356 
See accompanying notes to the condensed consolidated financial statements.
3
MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
(Unaudited)
Six Months Ended
Cash flows from operating activities:July 2, 2023July 3, 2022
Net income$88,389 $128,095 
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation44,466 34,516 
Amortization14,463 8,908 
Share based compensation expense13,157 10,695 
Deferred income taxes(9,457)1,042 
Unrealized foreign exchange (gain) loss(146)356 
Share of income from equity investees, net of tax(1,990)(2,610)
Dividend from equity investee3,150 — 
Pension and post-retirement funding, net of expense(956)— 
Non-cash accruals and interest1,861 (114)
Loss (gain) on sale of property, plant and equipment1,540 (1,400)
Changes in assets and liabilities, net of acquisitions:
Accounts receivable13,474 (67,611)
Inventories75,709 (89,508)
Prepaid expenses and other assets(22,152)(4,821)
Accounts payable and accrued expenses9,918 23,302 
Other assets and liabilities(13,614)(6,736)
Net cash flow provided by operating activities217,812 34,114 
Cash flows from investing activities:
Additions to property, plant and equipment(58,056)(39,955)
Acquisition of businesses, net of cash acquired(354,419)— 
Proceeds from sale of property, plant and equipment13 6,394 
Proceeds from repayment of note receivable12,000 — 
Other investing activities(3,834)(1,152)
Net cash flow used in investing activities(404,296)(34,713)
Cash flows from financing activities:
Proceeds from issuance of long-term debt250,000 — 
Repayments of long-term debt(9,375)— 
Payment of debt issuance costs(3,628)— 
Proceeds from borrowings on revolving credit facilities100,000 — 
Repayments of borrowings on revolving credit facilities(100,000)— 
Tax withholding on share based awards(2,065)(3,109)
Distributions to non-controlling interests(1,684)(2,559)
Repurchases of common shares(29,133)(140,000)
Net cash flow provided by (used in) financing activities204,115 (145,668)
Net foreign currency translation adjustment on cash2,192 (2,598)
Increase (decrease) in cash, cash equivalents and restricted cash19,823 (148,865)
Cash, cash equivalents and restricted cash, beginning of period308,921 391,505 
Cash, cash equivalents and restricted cash, at end of period$328,744 $242,640 
See accompanying notes to the condensed consolidated financial statements.
4

MASONITE INTERNATIONAL CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. Business Overview and Significant Accounting Policies
Unless we state otherwise or the context otherwise requires, references to "Masonite," "we," "our," "us" and the "Company" in these notes to the condensed consolidated financial statements refer to Masonite International Corporation and its subsidiaries.
Description of Business
Masonite International Corporation is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors, door system components and door systems for the new construction and repair, renovation and remodeling sectors of the residential and non-residential building construction markets. Masonite operates 63 manufacturing locations in seven countries and sells doors to customers throughout the world with our largest markets being the United States, Canada and the United Kingdom.
Basis of Presentation
We prepare these unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 2023, as filed with the SEC (the "Annual Report"). Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. In a 52-week year, each fiscal quarter consists of 13 weeks. For ease of disclosure, the 13-week periods are referred to as three-month periods and the 52- or 53-week periods are referred to as a year.
Changes in Accounting Standards and Policies
There have been no changes in the significant accounting policies from those that were disclosed in the fiscal year 2022 audited consolidated financial statements, other than as noted below.
Adoption of Recent Accounting Pronouncements
In December 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, "Government Assistance," which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity's financial statements. The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted. We adopted the new guidance as of January 3, 2022, the beginning of fiscal year 2022, and the adoption did not have a material impact on our financial statements.
In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, "Revenue from Contracts with Customers" as if the entity had originated the contracts. We adopted the new guidance as of January 1, 2023, the beginning of fiscal year 2023, and the adoption did not have a material impact on our financial statements.
5


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

2. Acquisitions and Divestitures
Acquisitions
On January 3, 2023, we completed the acquisition of 100% of the outstanding equity of EPI Holdings, Inc. ("Endura"), for total consideration of approximately $408.1 million, including an $18.0 million holdback which is payable 24 months after the acquisition date and was recorded in the consolidated balance sheets as a component of other liabilities. Endura is a leading innovator and manufacturer of high-performance door frames and door system components in the United States. Endura’s product offerings include engineered frames, self-adjusting sill systems, weather sealing, multi-point locks and installation accessories used by builders and contractors in residential new construction as well as repair and remodeling applications. The acquisition is intended to accelerate our Doors That Do MoreTM strategy and maximize our growth potential. The $187.7 million excess purchase price over the fair value of tangible and intangible assets acquired was allocated to goodwill. The goodwill principally represents anticipated synergies to be gained from the integration into our existing business and acquisition of the assembled workforce. This goodwill is not deductible for tax purposes and relates to the North American Residential segment.
The Company has accounted for the acquisition as a business combination and allocated the preliminary estimated purchase price to the estimated fair values of assets acquired and liabilities assumed utilizing various valuation methods including replacement cost, market values and the income approach. The Company has not yet completed its evaluation and determination of certain assets acquired and liabilities assumed, primarily (i) the final valuation of intangible assets related to customers relationships, patents and trade names, and (ii) the final assessment and valuation of certain other assets acquired and liabilities assumed, including inventory, property, plant and equipment, leases, and deferred income taxes, which could also impact goodwill during the measurement period.
The allocation of the purchase price to assets acquired and liabilities assumed is as follows:
(In thousands)Initial Purchase Price AllocationMeasurement Period AdjustmentsPreliminary Purchase Price Allocation
Cash acquired$32,501 $— $32,501 
Accounts receivable, net7,871 — 7,871 
Inventories, net44,183 35 44,218 
Property, plant and equipment, net54,373 10,576 64,949 
Goodwill189,938 (2,230)187,708 
Intangible assets135,800 (7,400)128,400 
Accounts payable and accrued expenses(15,088)— (15,088)
Deferred income taxes(44,345)(946)(45,291)
Other assets and liabilities, net2,868 (35)2,833 
Total purchase price$408,101 $— $408,101 
The fair values of intangible assets acquired are based on management's estimates and assumptions including the income approach, the cost approach and the market approach. The intangible assets acquired are not expected to have any residual value. The gross contractual value of acquired trade receivables was $8.3 million.

6


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Intangible assets acquired from the Endura acquisition consist of the following:
Fair Value
 (in thousands)		Expected Useful Life (Years)
Customer relationships$108,600 10
Trademarks and trade names6,600 10
Patents13,200 12
Total intangible assets acquired$128,400 
Endura's results of operations were included in the condensed consolidated statements of income and comprehensive income for the period subsequent to the acquisition date. For the three and six months ended July 2, 2023, Endura had net sales of $59.4 million and $119.2 million, respectively. For the three and six months ended July 2, 2023, Endura had $1.3 million in net income attributable to Masonite and $3.2 million in net loss attributable to Masonite, respectively.
Pro Forma Information
The following unaudited pro forma financial information represents the consolidated financial information as if the Endura acquisition had been included in our consolidated results beginning on January 2, 2022, the first day of the fiscal year prior to the respective acquisition date. The pro forma results have been calculated after adjusting the results of the acquired entities to remove intercompany transactions and to reflect the additional depreciation, amortization and interest expense that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets and the additional debt incurred to fund the acquisition had been applied on the first day of the fiscal year prior to the respective acquisition date, together with the consequential tax effects. The pro forma results do not reflect any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the acquisition; the costs to combine the companies' operations; or the costs necessary to achieve these costs savings, operating synergies and revenue enhancements. As a result, the pro forma information below does not purport to represent actual results had the acquisition been consummated on the date indicated and it is not necessarily indicative of future results of operations.
Three Months Ended July 3, 2022
(In thousands)MasoniteEnduraPro Forma AdjustmentsPro Forma
Net sales$761,874 $73,479 $(3,216)$832,137 
Net income attributable to Masonite58,515 4,097 (7,850)54,762 
Basic earnings per common share$2.60 $2.43 
Diluted earnings per common share$2.58 $2.41 
Six Months Ended July 3, 2022
(In thousands)MasoniteEnduraPro Forma AdjustmentsPro Forma
Net sales$1,488,091 $146,195 $(5,820)$1,628,466 
Net income attributable to Masonite126,097 7,450 (13,731)119,816 
Basic earnings per common share$5.53 $5.25 
Diluted earnings per common share$5.47 $5.20 
As previously disclosed, we are actively reviewing strategic alternatives for our Architectural segment, including a potential sale of the business. There can be no assurance that a potential transaction will be consummated or
7


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

on what terms. If a transaction is consummated, depending on the sale price, we could incur an impairment charge related to the book value of the segment's assets. This charge could be material.
3. Accounts Receivable
Our customers consist mainly of retailers, distributors and contractors. Our ten largest customers accounted for 57.8% and 62.3% of total accounts receivable as of July 2, 2023, and January 1, 2023, respectively. Our largest customer, The Home Depot, Inc., accounted for more than 10% of the consolidated gross accounts receivable balance as of July 2, 2023, and January 1, 2023. The allowance for doubtful accounts balance was $2.6 million and $2.5 million as of July 2, 2023, and January 1, 2023, respectively.
We maintain an accounts receivable sales program with a third party (the "AR Sales Program"). Under the AR Sales Program, we can transfer ownership of eligible trade accounts receivable of certain customers. Receivables are sold outright to a third party who assumes the full risk of collection, without recourse to us in the event of a loss. Transfers of receivables under this AR Sales Program are accounted for as sales. Proceeds from the transfers reflect the face value of the accounts receivable less a discount. Receivables sold under the AR Sales Program are excluded from trade accounts receivable in the condensed consolidated balance sheets and are included in cash flows from operating activities in the condensed consolidated statements of cash flows. The discounts on the sales of trade accounts receivable sold, if any, under the AR Sales Program were not material for any of the periods presented and were recorded in selling, general and administration expenses within the condensed consolidated statements of income and comprehensive income.
In most countries we pay and collect Value Added Tax ("VAT") when procuring goods and services within the normal course of business. VAT receivables are established in jurisdictions where VAT paid exceeds VAT collected and are recoverable through the filing of refund claims.
Certain wood moldings and millwork products being imported into the U.S. are subject to import tariffs. Tariff deposits are paid to the government and are recoverable through an assessment process.
4. Inventories
The amounts of inventory on hand were as follows as of the dates indicated:
(In thousands)July 2, 2023January 1, 2023
Raw materials$256,799 $320,553 
Finished goods137,115 95,005 
Provision for obsolete or aged inventory(15,209)(8,730)
Inventories, net$378,705 $406,828 
5. Accrued Expenses
The details of our accrued expenses were as follows as of the dates indicated:
(In thousands)July 2, 2023January 1, 2023
Accrued payroll$71,462 $69,224 
Accrued rebates56,660 50,200 
Current portion of operating lease liabilities26,397 24,372 
Accrued interest19,765 16,480 
Other accruals53,549 62,770 
Total accrued expenses$227,833 $223,046 
8


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

6. Long-Term Debt
(In thousands)July 2, 2023January 1, 2023
Senior unsecured notes, interest rate of 3.50%, due 2030
$375,000 $375,000 
Senior unsecured notes, interest rate of 5.375%, due 2028
500,000 500,000 
Term Loan Facility, interest rate of SOFR plus 2.25%, due 2027
240,625 — 
Debt issuance costs(10,942)(8,884)
Total debt (including current portion)1,104,683 866,116 
Less: debt due within one year(37,500)— 
Total long-term debt (excluding current portion)$1,067,183 $866,116 
Interest expense related to our consolidated indebtedness under our senior unsecured notes, Term Loan Facility and ABL Facility was $14.1 million and $29.5 million for the three and six months ended July 2, 2023, respectively, and $10.4 million and $20.7 million for the three and six months ended July 3, 2022, respectively.
3.50% Senior Notes due 2030
On July 26, 2021, we issued $375.0 million aggregate principal senior unsecured notes (the "2030 Notes"). The 2030 Notes bear interest at 3.50% per annum, payable in cash semiannually in arrears on February 15 and August 15 of each year and are due February 15, 2030. The 2030 Notes were issued at par.
Information concerning obligations under the 2030 Notes and the indenture governing them are described in detail in our Annual Report. As of July 2, 2023, we were in compliance with all covenants under the indenture governing the 2030 Notes.
5.375% Senior Notes due 2028
On July 25, 2019, we issued $500.0 million aggregate principal senior unsecured notes (the "2028 Notes"). The 2028 Notes bear interest at 5.375%, payable in cash semiannually in arrears on February 1 and August 1 of each year and are due February 1, 2028. The 2028 Notes were issued at par.
Information concerning obligations under the 2028 Notes and the indenture governing them are described in detail in our Annual Report. As of July 2, 2023, we were in compliance with all covenants under the indenture governing the 2028 Notes.
Term Loan Facility
On December 13, 2022, we and certain of our subsidiaries entered into a new delayed-draw term loan credit agreement (the "Term Loan Credit Agreement") maturing on December 12, 2027 (the "Term Loan Maturity Date"). The Term Loan Credit Agreement provides for a senior secured five-year delayed-draw term loan facility of $250.0 million (the "Term Loan Facility"). Loans under the Term Loan Facility (the "Term Loans") will bear interest at a rate equal to, at our option, (1) the Adjusted Term SOFR Rate (as defined in the Term Loan Credit Agreement) plus an applicable margin of 2.25% or (2) an alternate base rate equal to the greatest of (i) the "Prime Rate" in the U.S. last quoted by The Wall Street Journal, (ii) 0.50% above the greater of the federal funds rate and the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in U.S. dollars, (iii) 1.00% above the Adjusted Term SOFR Rate for a one month interest period and (iv) 1.00%, plus, in each case, an applicable margin of 1.25%, subject to, in each of cases (1) and (2), an agreed interest rate floor. The Term Loans are repayable in equal quarterly installments for an annual aggregate amortization payment equal to 15% of the aggregate principal amount of the Term Loans, with the balance of the principal being due on the Term Loan Maturity Date.
The Borrower also pays customary agency fees.

9


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Obligations under the Term Loan Credit Agreement are fully and unconditionally guaranteed, jointly and severally, by us and by certain of our directly or indirectly wholly-owned subsidiaries organized in the U.S. and are secured by the equity in, and substantially all the assets of, such subsidiaries. The Term Loans were funded in an amount of $250.0 million and applied to finance a portion of the consideration payable in connection with the consummation of the Endura acquisition on January 3, 2023. We received net proceeds of $246.4 million after deducting $3.6 million of debt issuance costs. The debt issuance costs were capitalized as a reduction to the carrying value of debt and are being accreted to interest expense over the term of the Term Loan using the effective interest method.
The Term Loan Credit Agreement contains various customary representations, warranties by us and covenants that are described in detail in our Annual Report. As of July 2, 2023, we were in compliance with all covenants under the indenture governing the Term Loan Credit Agreement.
ABL Facility
On January 31, 2019, we and certain of our subsidiaries entered into a $250.0 million asset-based revolving credit facility (the "ABL Facility") maturing on January 31, 2024, which replaced the previous facility. On October 28, 2022, we and certain of our subsidiaries entered into an amendment which, among other things, (i) increased the revolving credit commitments available thereunder by $100.0 million to an aggregate amount of $350.0 million and (ii) replaced the LIBOR-based interest rate applicable to borrowings thereunder in U.S. dollars with an interest rate based on the sum of (x) a "Term SOFR" rate published by the CME Group Benchmark Administration Limited (CBA) plus (y) 10 basis points ("Adjusted Term SOFR"). Additionally, on December 12, 2022, we entered into an amendment to the ABL Facility, which, among other things, extended the maturity of the ABL Facility from January 31, 2024 to December 12, 2027. The terms of the ABL Facility remained otherwise substantially unchanged and are described in detail in our Annual Report. On January 3, 2023, we borrowed $100.0 million under our ABL Facility in order to fund a portion of the cash consideration paid for the acquisition of Endura. During the first quarter of 2023, we repaid all amounts outstanding under the ABL Facility.
The ABL Facility contains various customary representations, warranties by us and covenants that are described in detail in our Annual Report. As of July 2, 2023, we were in compliance with all covenants under the credit agreement governing the ABL Facility. We had availability of $300.6 million under our ABL Facility, and there were no amounts outstanding as of July 2, 2023.
7. Commitments and Contingencies
We may become involved from time-to-time in litigation and regulatory compliance matters incidental to our business, including employment and wage and hour claims, antitrust, tax, product liability, environmental, health and safety, commercial disputes, intellectual property, contracts and other matters arising out of the normal conduct of our business. Since litigation is inherently unpredictable and unfavorable resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review and accrue for contingencies related to litigation and regulatory compliance matters, if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on current information, in the opinion of management, the ultimate resolution of these matters, individually or in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
Antitrust Class Action Proceedings - Canada
On May 19, 2020, an intended class proceeding was commenced in the Province of Québec, Canada naming as defendants Masonite Corporation, Corporation Internationale Masonite, JELD-WEN, Inc., JELD-WEN Holding, Inc. and JELD-WEN of Canada, Ltd. The plaintiff alleges that the Masonite and JELD-WEN defendants engaged in anticompetitive conduct, including price-fixing involving interior molded doors. The intended class proceeding seeks damages, punitive damages, and other relief. On December 22, 2020, the parties filed a motion with the court seeking to stay the proceeding.

10


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

On October 2, 2020, an intended class proceeding was commenced in the Federal Court of Canada naming as defendants Masonite International Corporation, Masonite Corporation, JELD-WEN, Inc., JELD-WEN Holding, Inc. and JELD-WEN of Canada, Ltd. The plaintiff alleges that the Masonite and JELD-WEN defendants engaged in anticompetitive conduct, including price-fixing involving interior molded doors. The intended class proceeding seeks damages, punitive damages, and other relief. The plaintiff served its certification record on March 31, 2021. The Federal Court has scheduled a hearing on certification for October 12-13, 2023.
As of July 2, 2023, we have not accrued an expense in connection with this matter because, although an adverse outcome is reasonably possible, the amount or range of any potential loss cannot be reasonably estimated. This proceeding is at an early stage. While we intend to defend against these claims vigorously, there can be no assurance that the ultimate resolution of this litigation will not have a material, adverse effect on our consolidated financial condition, results of operations or cash flow.
8. Share Based Compensation Plans
Share based compensation expense was $7.1 million and $13.2 million for the three and six months ended July 2, 2023, respectively, and $6.0 million and $10.7 million for the three and six months ended July 3, 2022, respectively. As of July 2, 2023, the total remaining unrecognized compensation expense related to share based compensation amounted to $40.2 million, which will be amortized over the weighted average remaining requisite service period of 1.9 years.
Equity Incentive Plans
Our equity incentive plans under the 2021 Equity Plan and 2012 Plan are described in detail and defined in our Annual Report. The aggregate number of common shares that can be issued with respect to equity awards under the 2021 Equity Plan cannot exceed 880,000 shares; plus the number of shares reserved for the 2012 Plan that is in excess of the number of shares related to outstanding grants; plus the number of shares subject to existing grants under the 2012 Plan that may expire or be forfeited or cancelled. As of July 2, 2023, there were 703,883 shares of common stock available for future issuance under the 2021 Equity Plan.
Deferred Compensation Plan
We offer to certain of our employees and directors a Deferred Compensation Plan, which is further described and defined in our Annual Report. As of July 2, 2023, the liability and asset relating to deferred compensation had a fair value of $7.5 million and $7.1 million, respectively. As of July 2, 2023, participation in the deferred compensation plan is limited and no restricted stock awards have been deferred into the deferred compensation plan. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework.
Stock Appreciation Rights
We have granted Stock Appreciation Rights ("SARs") to certain employees, which entitle the recipient to the appreciation in value of granted common shares over the exercise price over a period of time, each as specified in the applicable award agreement. The exercise price of any SAR granted may not be less than the fair market value of our common shares on the date of grant. The compensation expense for the SARs is measured based on the fair value of the SARs at the date of grant and is recognized over the requisite service period. The SARs vest over a maximum of three years, have a life of ten years and settle in common shares. It is assumed that all time-based SARs will vest. We recognize forfeitures of SARs in the period in which they occur.
11


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

The total fair value of SARs vested was $0.7 million during the six months ended July 2, 2023.
Six Months Ended July 2, 2023Stock Appreciation RightsAggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years)
Outstanding, beginning of period184,205 $2,153 $74.75 7.0
Granted30,946 88.99 
Exercised— — — 
Cancelled and forfeited— — 
Outstanding, end of period215,151 $5,646 $76.79 7.0
Exercisable, end of period153,236 $4,912 $70.93 6.1
The value of SARs granted is determined using the Black-Scholes-Merton valuation model, and the corresponding expense is expected to be recognized over the average requisite service period of 2.0 years. Expected volatility is based upon the historical volatility of our common shares amongst other considerations. The expected term is calculated based upon historical employee exercise behavior and the contractual term of the SAR amongst other considerations. The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated:
2023 Grants
SAR value (model conclusion)$32.63
Risk-free rate4.1 %
Expected dividend yield0.0 %
Expected volatility28.4 %
Expected term (years)6.0
Restricted Stock Units
We have granted Restricted Stock Units ("RSUs") to directors and certain employees under the 2021 Equity Plan and the 2012 Plan. The RSUs confer the right to receive shares of our common stock at a specified future date or when certain conditions are met. The compensation expense for the RSUs granted is based on the fair value of the RSUs at the date of grant, which is equal to the stock price on the date of grant, and is recognized over the requisite service period. The RSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted. It is assumed that all time-based RSUs will vest. We recognize forfeitures of RSUs in the period in which they occur.
12


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Six Months Ended July 2, 2023Total Restricted Stock Units OutstandingWeighted Average Grant Date Fair Value
Outstanding, beginning of period313,753 $92.85 
Granted203,445 89.37 
Delivered(96,879)91.05 
Withheld to cover (1)
(18,620)
Forfeited(23,629)90.99 
Outstanding, end of period378,070 $91.64 
___________
(1) A portion of the vested RSUs delivered were net shares settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting.
RSUs granted during the six months ended July 2, 2023, vest at specified future dates with only service requirements. The value of RSUs granted in the six months ended July 2, 2023, was $18.2 million and is being recognized over the weighted average requisite service period of 2.0 years. During the six months ended July 2, 2023, 115,499 RSUs vested at a fair value of $10.5 million.
Performance-based Restricted Stock Units
We have granted certain Performance-based Restricted Stock Units ("PRSUs") under the 2021 Equity Plan and the 2012 Plan. These PRSUs are settled with payouts ranging from zero to 200% of the target award value depending on performance goal achievement. The compensation expense for the PRSUs awarded is based on the fair value of the PRSUs at the date of grant, which is equal to the stock price on the date of grant, and is recognized over the requisite service period. The compensation expense for certain PRSUs is determined using the Monte Carlo simulation method. The PRSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted.
Six Months Ended July 2, 2023Total Performance Restricted Stock Units OutstandingWeighted Average Grant Date Fair Value
Outstanding, beginning of period310,678 $90.15 
Granted91,631 104.24 
Performance adjustment (1)
17,139 79.25 
Delivered(63,432)79.25 
Withheld to cover (2)
(5,224)
Forfeited(5,434)96.37 
Outstanding, end of period345,358 $95.41 
___________
(1) PRSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. Certain awards are settled with payouts ranging from zero to 200% of the target award value depending on achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target.
(2) A portion of the vested PRSUs delivered were net shares settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting.

13


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

PRSUs granted during the six months ended July 2, 2023, vest at specified future dates based on both performance and service requirements. The value of PRSUs granted in the six months ended July 2, 2023, was $9.6 million and is being recognized over the weighted average requisite service period of 3.0 years. During the six months ended July 2, 2023, 68,656 PRSUs vested at a fair value of $5.4 million.
9. Restructuring Costs
In December 2022, we began implementing a plan intended to improve overall business performance that includes the optimization of our manufacturing capacity and reduction of our overhead and selling, general and administration workforce primarily in our North American Residential reportable segment as well as actions in the Architectural reportable segment and in our head offices (collectively, the "2022 Plan"). The optimization of our manufacturing capacity involves specific plants in the North American Residential segment and costs associated with the closure of these plants and related headcount reductions. Costs associated with the 2022 Plan include severance and closure charges which continue throughout 2023. As of July 2, 2023, we expect to incur approximately $6 million to $11 million of additional charges related to the 2022 Plan.
The following tables summarize the restructuring (benefit) costs recorded for the periods indicated:
Three Months Ended July 2, 2023
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2022 Plan$2,875 $179 $11 $3,065 
Total Restructuring Costs$2,875 $179 $11 $3,065 
Three Months Ended July 3, 2022
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
Other$(90)$1 $28 $(61)
Total Restructuring (Benefit) Costs$(90)$1 $28 $(61)
Six Months Ended July 2, 2023
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2022 Plan$5,255 $863 $625 $6,743 
Total Restructuring (Benefit) Costs$5,255 $863 $625 $6,743 
Six Months Ended July 3, 2022
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
Other$(181)$48 $53 $(80)
Total Restructuring (Benefit) Costs$(181)$48 $53 $(80)
Cumulative Amount Incurred Through July 2, 2023
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2022 Plan$7,386 $863 $625 $8,874 
Total Restructuring Costs$7,386 $863 $625 $8,874 
14


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

The changes in the accrual for restructuring by activity were as follows for the periods indicated:
(In thousands)January 1,
2023		SeveranceClosure CostsCash PaymentsJuly 2,
2023
2022 Plan$— $5,852 $891 $(6,473)$270 
Total$— $5,852 $891 $(6,473)$270 
10. Income Taxes
The effective tax rate differs from the Canadian statutory rate of 26.13% primarily due to mix of earnings in foreign jurisdictions that are subject to tax rates which differ from the Canadian statutory rate. In addition, we recognized zero income tax benefit due to the exercise and delivery of share based awards during both the three and six months ended July 2, 2023, compared to zero and $1.1 million of income tax benefit during the three and six months ended July 3, 2022, respectively.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 ("IRA") into law. The IRA includes several changes to existing tax law, including a minimum tax on adjusted financial statement income of applicable corporations and an excise tax on certain corporate stock buybacks. The tax provisions included in the IRA were generally effective beginning January 1, 2023, and no significant impact to the consolidated financial statements resulted from their adoption as of July 2, 2023.
11. Earnings Per Share
Basic earnings per share ("EPS") is calculated by dividing earnings attributable to Masonite by the weighted average number of our common shares outstanding during the period. Diluted EPS is calculated by dividing earnings attributable to Masonite by the weighted average number of common shares plus the incremental number of shares issuable from non-vested and vested RSUs and SARs outstanding during the period.
(In thousands, except share and per share information)Three Months EndedSix Months Ended
July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net income attributable to Masonite$48,245 $58,515 $86,736 $126,097 
Shares used in computing basic earnings per share22,071,667 22,525,333 22,127,368 22,803,403 
Effect of dilutive securities:
Incremental shares issuable under share compensation plans277,525 179,620 292,667 254,628 
Shares used in computing diluted earnings per share22,349,192 22,704,953 22,420,035 23,058,031 
Basic earnings per common share attributable to Masonite$2.19 $2.60 $3.92 $5.53 
Diluted earnings per common share attributable to Masonite$2.16 $2.58 $3.87 $5.47 
Anti-dilutive instruments excluded from diluted earnings per common share180,819 104,332 180,819 79,764 
The weighted average number of shares outstanding utilized for the diluted EPS calculation contemplates the exercise of all currently outstanding SARs and the conversion of all RSUs. The dilutive effect of such equity awards is calculated based on the weighted average share price for each fiscal period using the treasury stock method.
The Company's Board of Directors has approved five share repurchase authorizations, the most recent being an incremental $200.0 million share repurchase program approved on February 21, 2022. Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital. The timing and
15


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through Rule 10b5-1 plans, open market purchases, each in compliance with Rule 10b-18 under the Exchange Act, or privately negotiated transactions. The program may be suspended or discontinued at any time and does not have an expiration date. In addition, the Company announced that its Board of Directors authorized it to enter into an accelerated share repurchase ("ASR") transaction as part of the new share repurchase program. The Company entered into an ASR transaction during the first quarter of 2022 with a third-party financial institution for the repurchase of $100.0 million of its outstanding common shares. At inception, pursuant to the agreement, the Company paid $100.0 million to the financial institution using cash on hand and received an initial delivery of 848,087 common shares on the same day. The final delivery of 319,678 common shares occurred in the second quarter. The $100.0 million ASR transaction was therefore completed in the second quarter of 2022 with a total delivery of 1,167,765 common shares at a volume-weighted average price ("VWAP") per share minus an agreed upon discount totaling $85.63 per share. The cash paid was reflected as a reduction of equity at the initial delivery of shares and the number of common shares outstanding were reduced at the dates of physical delivery.
12. Segment Information
Our reportable segments are organized and managed principally by end market: North American Residential, Europe and Architectural. The Corporate & Other category includes unallocated corporate costs and the results of immaterial operating segments which were not aggregated into any reportable segment. In addition to similar economic characteristics, we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors.
Our management reviews net sales and Adjusted EBITDA (as defined below) to evaluate segment performance and allocate resources. Net assets are not allocated to the reportable segments. Adjusted EBITDA is a non-GAAP financial measure which does not have a standardized meaning under GAAP and is unlikely to be comparable to similar measures used by other companies. Adjusted EBITDA should not be considered as an alternative to either net income or operating cash flows determined in accordance with GAAP. Adjusted EBITDA is defined as net income (loss) attributable to Masonite adjusted to exclude the following items, as applicable:
•    depreciation;
•    amortization;
•    share based compensation expense;
•    loss (gain) on disposal of property, plant and equipment;
•    registration and listing fees;
•    restructuring costs (benefit);
•    asset impairment;
•    loss (gain) on disposal of subsidiaries;
•    interest expense (income), net;
•    loss on extinguishment of debt;
•    other expense (income), net;
•    income tax expense (benefit);
•    other items;
•    loss (income) from discontinued operations, net of tax; and
•    net income (loss) attributable to non-controlling interest.
This definition of Adjusted EBITDA differs from the definitions of EBITDA contained in the indentures governing the 2030 Notes and the 2028 Notes and the credit agreements governing the Term Loan Facility and the ABL Facility. Although Adjusted EBITDA is not a measure of financial condition or performance determined in accordance with GAAP, it is used to evaluate and compare the operating performance of our reportable segments and it is one of the primary measures used to determine employee incentive compensation. Intersegment sales are recorded using market prices.
16


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Certain information with respect to reportable segments is as follows for the periods indicated:
Three Months Ended July 2, 2023
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
Net sales$585,422 $66,232 $92,332 $3,087 $747,073 
Intersegment sales(453)(222)(4,514)— (5,189)
Net sales to external customers$584,969 $66,010 $87,818 $3,087 $741,884 
Adjusted EBITDA$117,571 $2,691 $7,286 $(9,091)$118,457 
Three Months Ended July 3, 2022
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
Net sales$608,483 $74,172 $79,894 $4,820 $767,369 
Intersegment sales(707)(319)(4,469)— (5,495)
Net sales to external customers$607,776 $73,853 $75,425 $4,820 $761,874 
Adjusted EBITDA$124,974 $8,566 $78 $(15,493)$118,125 
Six Months Ended July 2, 2023
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
Net sales$1,154,851 $129,948 $185,193 $8,436 $1,478,428 
Intersegment sales(843)(244)(9,473)— (10,560)
Net sales to external customers$1,154,008 $129,704 $175,720 $8,436 $1,467,868 
Adjusted EBITDA$225,452 $7,842 $12,636 $(21,308)$224,622 
Six Months Ended July 3, 2022
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
Net sales$1,177,912 $156,011 $154,553 $11,016 $1,499,492 
Intersegment sales(1,572)(1,690)(8,139)— (11,401)
Net sales to external customers$1,176,340 $154,321 $146,414 $11,016 $1,488,091 
Adjusted EBITDA$252,641 $20,409 $(2,820)$(27,353)$242,877 
17


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

A reconciliation of our net income attributable to Masonite to consolidated Adjusted EBITDA is set forth as follows for the periods indicated:
Three Months EndedSix Months Ended
(In thousands)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Net income attributable to Masonite$48,245 $58,515 $86,736 $126,097 
Plus:
Depreciation22,981 17,244 44,466 34,516 
Amortization7,042 4,296 14,463 8,908 
Share based compensation expense7,103 5,976 13,157 10,695 
Loss (gain) on disposal of property, plant and equipment502 1,454 1,540 (1,400)
Restructuring costs (benefit)3,065 (61)6,743 (80)
Interest expense, net13,488 10,593 27,740 20,832 
Other (income) expense, net(550)(400)(498)(1,815)
Income tax expense14,673 19,649 26,033 43,126 
Other items (1)
1,208 — 2,589 — 
Net income attributable to non-controlling interest700 859 1,653 1,998 
Adjusted EBITDA$118,457 $118,125 $224,622 $242,877 
(1) Other items include $1,208 and $2,589 in acquisition and due diligence related costs in the three and six months ended July 2, 2023, and were recorded in selling, general and administration expenses within the condensed consolidated statements of comprehensive income.
18


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

13. Accumulated Other Comprehensive Loss and Other Comprehensive Income (Loss)
A rollforward of the components of accumulated other comprehensive loss is as follows for the periods indicated:
Three Months EndedSix Months Ended
(In thousands)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Accumulated foreign currency translation losses, beginning of period$(123,044)$(100,152)$(132,001)$(96,919)
Foreign currency translation gain (loss)8,541 (28,392)17,490 (30,497)
Income tax expense (benefit) on foreign currency translation loss10 (24)10 (13)
Less: foreign currency translation (loss) gain attributable to non-controlling interest164 (498)156 641 
Accumulated foreign currency translation losses, end of period(114,657)(128,070)(114,657)(128,070)
Accumulated pension and other post-retirement adjustments, beginning of period(10,077)(4,658)(10,223)(4,663)
Amortization of actuarial net losses192 6 383 12 
Income tax expense on amortization of actuarial net losses(39)1 (84)— 
Accumulated pension and other post-retirement adjustments(9,924)(4,651)(9,924)(4,651)
Accumulated other comprehensive loss$(124,581)$(132,721)$(124,581)$(132,721)
Other comprehensive income (loss), net of tax$8,704 $(28,409)$17,799 $(30,498)
Less: other comprehensive income (loss) attributable to non-controlling interest164 (498)156 641 
Other comprehensive income (loss) attributable to Masonite$8,540 $(27,911)$17,643 $(31,139)
Cumulative translation adjustments are reclassified out of accumulated other comprehensive loss into loss on disposal of subsidiaries in the condensed consolidated statements of income and comprehensive income. Actuarial net losses are reclassified out of accumulated other comprehensive loss into cost of goods sold in the condensed consolidated statements of income and comprehensive income.
Foreign currency translation gains as a result of translating our foreign assets and liabilities into U.S. dollars during the three months ended July 2, 2023, were $8.5 million, primarily driven by the strengthening of the British pound sterling, and the Canadian dollar, partially offset by weakening of the Malaysian ringgit in comparison to the U.S. dollar during the period. Foreign currency translation gains as a result of translating our foreign assets and liabilities into U.S. dollars during the six months ended July 2, 2023, were $17.5 million, primarily driven by the strengthening of the British pound sterling, the Canadian dollar and the Mexican peso in comparison to the U.S. dollar during the period.
19


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

14. Supplemental Cash Flow Information
Certain cash and non-cash transactions were as follows for the periods indicated:
Six Months Ended
(In thousands)July 2, 2023July 3, 2022
Transactions involving cash:
Interest paid$26,855 $20,500 
Interest received4,281 404 
Income taxes paid49,551 47,453 
Income tax refunds3,569 919 
Cash paid for operating lease liabilities19,189 16,430 
Cash paid for finance lease liabilities709 654 
Non-cash transactions:
Right-of-use assets acquired under operating leases48,425 2,931 
Holdback of portion of Endura purchase payable18,000 — 
The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated:
July 2, 2023January 1, 2023
Cash and cash equivalents$317,157 $296,922 
Restricted cash11,587 11,999 
Total cash, cash equivalents and restricted cash$328,744 $308,921 
Property, plant and equipment additions in accounts payable were $11.3 million and $10.4 million as of July 2, 2023, and January 1, 2023, respectively.
During the fourth quarter of 2018, we provided debt financing to a distribution company via an interest-bearing note that was scheduled to mature in 2028. The interest-bearing note receivable was carried at amortized cost, with the interest payable in kind at the election of the borrower. The note receivable balance was $12.6 million as of January 1, 2023, and was recorded in the consolidated balance sheets as a component of prepaid expenses and other assets. On January 26, 2023, the note receivable was redeemed and fully repaid.
15. Fair Value of Financial Instruments
The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short-term maturity of those instruments. The carrying amount of our Term Loan Facility approximates fair value as the interest rates are variable and reflective of market rates. The estimated fair values and carrying values of our long-term senior note debt instruments were as follows for the periods indicated:
July 2, 2023January 1, 2023
(In thousands)Fair ValueCarrying ValueFair ValueCarrying Value
3.50% senior unsecured notes due 2030
$315,874 $371,407 $303,870 $371,136 
5.375% senior unsecured notes due 2028
$475,735 $496,238 $462,495 $495,868 
These estimates are based on market quotes and calculations based on current market rates available to us and are categorized as having Level 2 valuation inputs as established by the FASB's Fair Value Framework. Market quotes used in these calculations are based on bid prices for our debt instruments and are obtained from and corroborated with multiple independent sources. The market quotes obtained from independent sources are within the range of management's expectations.
20

MASONITE INTERNATIONAL CORPORATION


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based upon accounting principles generally accepted in the United States of America and discusses the financial condition and results of operations for Masonite International Corporation for the three and six months ended July 2, 2023, and July 3, 2022. In this MD&A, "Masonite," "we," "us," "our" and the "Company" refer to Masonite International Corporation and its subsidiaries.