Company Quick10K Filing
Masonite International
Price57.69 EPS2
Shares26 P/E25
MCap1,472 P/FCF11
Net Debt670 EBIT103
TEV2,142 TEV/EBIT21
TTM 2019-09-29, in MM, except price, ratios
10-Q 2020-03-29 Filed 2020-05-06
10-K 2019-12-29 Filed 2020-02-20
10-Q 2019-09-29 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-02
10-K 2018-12-30 Filed 2019-02-26
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-07-01 Filed 2018-08-09
10-Q 2018-04-01 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-27
10-Q 2017-10-01 Filed 2017-11-08
10-Q 2017-07-02 Filed 2017-08-10
10-Q 2017-04-02 Filed 2017-05-09
10-K 2017-01-01 Filed 2017-03-01
10-Q 2016-10-02 Filed 2016-11-09
10-Q 2016-07-03 Filed 2016-08-11
10-Q 2016-04-03 Filed 2016-05-05
10-K 2016-01-03 Filed 2016-03-02
10-Q 2015-09-27 Filed 2015-11-06
10-Q 2015-06-28 Filed 2015-08-06
10-Q 2015-03-29 Filed 2015-05-07
10-K 2014-12-28 Filed 2015-02-26
10-Q 2014-09-28 Filed 2014-11-06
10-Q 2014-06-29 Filed 2014-08-07
10-Q 2014-03-30 Filed 2014-05-08
10-K 2013-12-29 Filed 2014-02-27
10-Q 2013-09-29 Filed 2013-11-06
8-K 2020-05-14 Shareholder Vote
8-K 2020-05-05 Earnings, Exhibits
8-K 2020-03-27 Regulation FD, Exhibits
8-K 2020-02-25 Officers, Exhibits
8-K 2020-02-18 Earnings, Exhibits
8-K 2019-11-04 Earnings, Exhibits
8-K 2019-08-05 Earnings, Exhibits
8-K 2019-07-25 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-07-11 Regulation FD, Exhibits
8-K 2019-07-11 Regulation FD, Exhibits
8-K 2019-05-24 Exhibits
8-K 2019-05-13 Shareholder Vote, Exhibits
8-K 2019-05-01 Earnings, Exhibits
8-K 2019-05-01 Officers
8-K 2019-02-18 Earnings, Exhibits
8-K 2019-01-31 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-01-31 Earnings, Exhibits
8-K 2018-12-31 Officers, Exhibits
8-K 2018-12-13 Officers, Exhibits
8-K 2018-11-06 Earnings, Exhibits
8-K 2018-08-27 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-08-13 Regulation FD, Exhibits
8-K 2018-08-13 Regulation FD, Exhibits
8-K 2018-08-08 Earnings, Exhibits
8-K 2018-05-15 Officers, Shareholder Vote, Other Events, Exhibits
8-K 2018-05-02 Earnings, Exhibits
8-K 2018-02-26 Officers, Exhibits
8-K 2018-02-21 Earnings, Exhibits

DOOR 10Q Quarterly Report

Part I - Financial Information
Item 1. Unaudited Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.5(A) a2020q110-qxex105a.htm
EX-10.5(B) a2020q110-qxex105b.htm
EX-10.5(C) a2020q110-qxex105c.htm
EX-10.5(D) a2020q110-qxex105d.htm
EX-10.5(E) a2020q110-qxex105e.htm
EX-31.1 a2020q110-qxex311.htm
EX-31.2 a2020q110-qxex312.htm
EX-32.1 a2020q110-qxex321.htm
EX-32.2 a2020q110-qxex322.htm

Masonite International Earnings 2020-03-29

Balance SheetIncome StatementCash Flow
2.01.61.20.80.40.02012201420172020
Assets, Equity
0.60.50.30.20.0-0.12012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.0-0.1-0.22012201420172020
Ops, Inv, Fin

door-20200329
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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 March 29, 2020
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
____________________________
door-20200329_g1.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 filerAccelerated filer
Non-accelerated filerSmaller 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 24,449,287 shares of Common Stock, no par value, as of May 1, 2020.




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MASONITE INTERNATIONAL CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 29, 2020

PART IPage
Item 1
Item 2
Item 3
Item 4
PART II
Item 1
Item 1A
Item 2
Item 3
Item 4
Item 5
Item 6

i


Table of Contents
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 December 29, 2019, 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;
scale and scope of the current coronavirus ("COVID-19") pandemic on our operations, customer demand and supply chain;
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 price increases and customer concentration and consolidation;
tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing trade cases;
increases in prices of raw materials and fuel;
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 anticipating demand for our products, managing disruptions in our operations, managing manufacturing realignments (including related restructuring charges), managing customer credit risk and successful integration of acquisitions;
the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks;
our ability to generate sufficient cash flows to fund our capital expenditure requirements, to meet our pension obligations, and to meet our debt service obligations, including our obligations under our senior notes and our asset-based revolving credit facility ("ABL Facility");
political, economic and other risks that arise from operating a multinational business;
uncertainty relating to the United Kingdom's exit from the European Union;
fluctuating exchange and interest rates;
our ability to innovate and keep pace with technological developments;
product liability claims and product recalls;
retention of key management personnel;
limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and our ABL Facility; and
environmental and other government regulations, including the United States Foreign Corrupt Practices Act ("FCPA"), and any changes in such regulations.
We caution you that the foregoing list of important factors is not exclusive. 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


Table of Contents
PART I – FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
Three Months Ended
March 29, 2020March 31, 2019
Net sales$551,228  $530,311  
Cost of goods sold416,947  418,207  
Gross profit134,281  112,104  
Selling, general and administration expenses80,333  78,100  
Restructuring costs1,941  3,740  
Asset impairment  10,625  
Loss on disposal of subsidiaries  4,605  
Operating income52,007  15,034  
Interest expense, net11,282  11,127  
Other expense (income), net49  (1,130) 
Income before income tax expense40,676  5,037  
Income tax expense9,639  58  
Net income31,037  4,979  
Less: net income attributable to non-controlling interests1,152  1,190  
Net income attributable to Masonite$29,885  $3,789  
Basic earnings per common share attributable to Masonite$1.20  $0.15  
Diluted earnings per common share attributable to Masonite$1.19  $0.15  
Comprehensive income (loss):
Net income$31,037  $4,979  
Other comprehensive income (loss):
Foreign currency translation gain (loss)(38,687) 13,991  
Amortization of actuarial net losses173  404  
Income tax expense related to other comprehensive income(89) (93) 
Other comprehensive income (loss), net of tax:(38,603) 14,302  
Comprehensive income (loss)(7,566) 19,281  
Less: comprehensive income attributable to non-controlling interests573  1,406  
Comprehensive income (loss) attributable to Masonite$(8,139) $17,875  

See accompanying notes to the condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
ASSETSMarch 29, 2020December 29, 2019
Current assets:
Cash and cash equivalents$114,375  $166,964  
Restricted cash10,644  10,644  
Accounts receivable, net303,111  276,208  
Inventories, net240,975  242,230  
Prepaid expenses33,137  33,190  
Income taxes receivable3,492  4,819  
Total current assets705,734  734,055  
Property, plant and equipment, net612,304  625,585  
Operating lease right-of-use assets123,925  121,367  
Investment in equity investees17,011  16,100  
Goodwill179,386  184,192  
Intangible assets, net171,684  184,532  
Deferred income taxes24,355  25,945  
Other assets43,650  44,808  
Total assets$1,878,049  $1,936,584  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$97,501  $84,912  
Accrued expenses145,342  180,405  
Income taxes payable1,537  2,350  
Total current liabilities244,380  267,667  
Long-term debt791,190  790,984  
Long-term operating lease liabilities112,691  110,497  
Deferred income taxes88,504  83,465  
Other liabilities45,028  47,109  
Total liabilities1,281,793  1,299,722  
Commitments and Contingencies (Note 7)
Equity:
Share capital: unlimited shares authorized, no par value, 24,446,987 and 24,869,921 shares issued and outstanding as of March 29, 2020, and December 29, 2019, respectively
551,983  558,514  
Additional paid-in capital212,826  216,584  
Accumulated deficit(12,203) (20,047) 
Accumulated other comprehensive loss(168,193) (130,169) 
Total equity attributable to Masonite584,413  624,882  
Equity attributable to non-controlling interests11,843  11,980  
Total equity596,256  636,862  
Total liabilities and equity$1,878,049  $1,936,584  

See accompanying notes to the condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Changes in Equity
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
Three Months Ended
March 29, 2020March 31, 2019
Total equity, beginning of period$636,862  $622,305  
Share capital:
Beginning of period558,514  575,207  
Common shares issued for delivery of share based awards5,490  6,152  
Common shares issued under employee stock purchase plan708  517  
Common shares repurchased and retired(12,729) (14,386) 
End of period551,983  567,490  
Additional paid-in capital:
Beginning of period216,584  218,988  
Share based compensation expense3,470  2,680  
Common shares issued for delivery of share based awards(5,490) (6,152) 
Common shares withheld to cover income taxes payable due to delivery of share based awards  (1,427) (1,090) 
Common shares issued under employee stock purchase plan  (311) (132) 
End of period  212,826  214,294  
Accumulated deficit:  
Beginning of period  (20,047) (30,836) 
Net income attributable to Masonite  29,885  3,789  
Common shares repurchased and retired  (22,041) (18,805) 
End of period  (12,203) (45,852) 
Accumulated other comprehensive loss:  
Beginning of period  (130,169) (152,919) 
Other comprehensive income (loss) attributable to Masonite, net of tax (38,024) 14,086  
End of period  (168,193) (138,833) 
Equity attributable to non-controlling interests:  
Beginning of period  11,980  11,865  
Net income attributable to non-controlling interests  1,152  1,190  
Other comprehensive income (loss) attributable to non-controlling interests, net of tax (579) 216  
Dividends to non-controlling interests  (710)   
End of period  11,843  13,271  
Total equity, end of period  $596,256  $610,370  
Common shares outstanding:
Beginning of period24,869,921  25,835,664  
Common shares issued for delivery of share based awards134,911  116,252  
Common shares issued under employee stock purchase plan9,426  9,036  
Common shares repurchased and retired(567,271) (646,102) 
End of period24,446,987  25,314,850  


See accompanying notes to the condensed consolidated financial statements.
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MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended
Cash flows from operating activities:March 29, 2020March 31, 2019
Net income$31,037  $4,979  
Adjustments to reconcile net income to net cash flow provided by operating activities:
Loss on disposal of subsidiaries  4,605  
Depreciation16,018  18,285  
Amortization6,459  7,597  
Share based compensation expense3,470  2,680  
Deferred income taxes6,160  (3,708) 
Unrealized foreign exchange loss (gain)94  272  
Share of income from equity investees, net of tax(911) (898) 
Pension and post-retirement funding, net of expense(1,900) (1,661) 
Non-cash accruals and interest427  (562) 
Loss on sale of property, plant and equipment1,622  2,913  
Asset impairment  10,625  
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(37,990) (6,587) 
Inventories(5,388) (5,902) 
Prepaid expenses(491) 1,986  
Accounts payable and accrued expenses(15,163) (16,193) 
Other assets and liabilities2,602  80  
Net cash flow provided by operating activities6,046  18,511  
Cash flows from investing activities:
Additions to property, plant and equipment(17,246) (20,422) 
Acquisition of businesses, net of cash acquired  (219) 
Proceeds from sale of subsidiaries, net of cash disposed  (230) 
Proceeds from sale of property, plant and equipment15  88  
Other investing activities(587) (418) 
Net cash flow used in investing activities(17,818) (21,201) 
Cash flows from financing activities:
Repayments of long-term debt(57) (6) 
Tax withholding on share based awards(1,427) (1,090) 
Distributions to non-controlling interests(710)   
Repurchases of common shares(34,770) (33,191) 
Net cash flow used in financing activities(36,964) (34,287) 
Net foreign currency translation adjustment on cash(3,853) 1,463  
Decrease in cash, cash equivalents and restricted cash(52,589) (35,514) 
Cash, cash equivalents and restricted cash, beginning of period177,608  126,141  
Cash, cash equivalents and restricted cash, at end of period$125,019  $90,627  

See accompanying notes to the condensed consolidated financial statements.
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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 one of the largest manufacturers of doors in the world, with significant market share in both interior and exterior door products. Masonite operates 63 manufacturing and distribution facilities in eight 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 December 29, 2019, as filed with the SEC. 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. Our 2020 fiscal year, which ends on January 3, 2021, will contain 53 weeks of operating results, with the additional week occurring in the fourth quarter.
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 2019 audited consolidated financial statements, other than as noted below.
Adoption of Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”, which replaced the incurred loss methodology for recognizing credit losses with a current expected credit losses model. This standard applied to most financial assets, including trade receivables. Our prior accounts receivable policy is described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. We have adopted the new guidance using a modified retrospective approach as of December 30, 2019, the beginning of fiscal year 2020, and the adoption did not have a material impact on our financial statements and no adjustment was necessary to retained earnings on December 30, 2019.
The adoption of the standard resulted in a change in accounting policy for accounts receivable. Our new accounting policy for accounts receivable is presented below.
Accounts Receivable
We record accounts receivable as our products are received by our customers. Our customers are primarily retailers, distributors and contractors. We record an allowance for credit losses at the time that accounts receivable are initially recorded based on our historical write-off experience and the current economic environment as well as our
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

expectations of future economic conditions. We reassess the allowance at each reporting date. When it becomes apparent, based on age or customer circumstances, that such amounts will not be collected, they are charged to the allowance. Payments subsequently received are credited to the credit loss expense account included within selling, general and administration expenses in the consolidated statements of comprehensive income. Generally, we do not require collateral for our accounts receivable.
Other Recent Accounting Pronouncements not yet Adopted
In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We are in the process of evaluating this guidance to determine the impact it may have on our financial statements.
In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans," which amended ASC 715, "Compensation—Retirement Benefits." This standard is applicable for employers that sponsor defined benefit pension or other postretirement plans, and eliminates disclosures no longer considered cost beneficial, clarifies specific disclosure requirements for entities that provide aggregate disclosures for two or more plans and adds requirements for explanations for significant gains and losses related to changes in benefit obligations. The guidance will be effective for annual periods ending after December 15, 2020; early adoption is permitted and retrospective application is required. We are in the process of evaluating this guidance to determine the impact it may have on our financial statements.
2. Acquisitions and Divestitures
Acquisitions
Top Doors
On August 29, 2019, we completed the acquisition of TOPDOORS, s.r.o. ("Top Doors") based in the Czech Republic for cash consideration of $1.8 million, net of cash acquired. Top Doors is a specialist manufacturer of door frames. The excess purchase price over the fair value of net assets acquired of $1.1 million was allocated to goodwill in our Europe segment. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for Top Doors are not presented as they were not material for any period presented.
Divestitures
Window Widgets
        On December 13, 2019, we completed the sale of all of the capital stock of Window Widgets Limited ("WW") for consideration of $1.2 million, net of cash disposed. We have had no continuing involvement with WW subsequent to the sale. The divestiture of this business resulted in a loss on disposal of subsidiaries of $9.7 million, which was recognized in the fourth quarter of 2019 in the Europe segment. The total charge consists of $8.3 million relating to the write-off of the assets sold and other professional fees and $1.4 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss.
Performance Doorset Solutions Limited
On March 21, 2019, we completed the sale of all of the capital stock of Performance Doorset Solutions Limited ("PDS") for nominal consideration. We have had no continuing involvement with PDS subsequent to the sale, and the purchasers are not considered to be a related party. The divestiture of this business resulted in a loss on disposal of subsidiaries of $4.6 million, which was recognized in the first quarter of 2019 in the Europe segment. The total charge consists of $3.6 million relating to the write-off of the net assets sold and other professional fees and $1.0 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

3. Accounts Receivable
Our customers consist mainly of wholesale distributors, dealers and retail home centers. Our ten largest customers accounted for 53.7% and 44.9% of total accounts receivable as of March 29, 2020, and December 29, 2019, respectively. Our largest customer, The Home Depot, Inc., accounted for more than 10% of the consolidated gross accounts receivable balance as of March 29, 2020, and December 29, 2019. The allowance for doubtful accounts balance was $2.2 million and $1.8 million as of March 29, 2020, and December 29, 2019, 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 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 expense within the condensed consolidated statements of comprehensive income.
4. Inventories
The amounts of inventory on hand were as follows as of the dates indicated:
(In thousands)March 29, 2020December 29, 2019
Raw materials$175,775  $179,155  
Finished goods72,693  70,211  
Provision for obsolete or aged inventory(7,493) (7,136) 
Inventories, net  $240,975  $242,230  

5. Accrued Expenses
The details of our accrued expenses were as follows as of the dates indicated:
(In thousands)March 29, 2020December 29, 2019
Accrued payroll$43,864  $60,876  
Accrued rebates30,971  33,556  
Current portion of operating lease liabilities21,559  20,980  
Accrued interest5,420  16,913  
Other accruals43,528  48,080  
Total accrued expenses$145,342  $180,405  

6. Long-Term Debt
(In thousands)March 29, 2020December 29, 2019
5.375% senior unsecured notes due 2028$500,000  $500,000  
5.750% senior unsecured notes due 2026300,000  300,000  
Debt issuance costs(9,662) (9,985) 
Other long-term debt852  969  
Total long-term debt$791,190  $790,984  
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Interest expense related to our consolidated indebtedness under senior unsecured notes was $11.3 million for both the three months ended March 29, 2020, and March 31, 2019.
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. The net proceeds from issuance of the 2028 Notes, together with available cash balances, were used to redeem the remaining $500.0 million aggregate principal amount of similar senior unsecured notes, including the payment of related premiums, fees and expenses.
        Information concerning obligations under the 2028 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the indenture governing the 2028 Notes.

5.750% Senior Notes due 2026
On August 27, 2018, we issued $300.0 million aggregate principal senior unsecured notes (the "2026 Notes"). The 2026 Notes bear interest at 5.750% per annum, payable in cash semiannually in arrears on March 15 and September 15 of each year and are due September 15, 2026. The 2026 Notes were issued at par.
Information concerning obligations under the 2026 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the indenture governing the 2026 Notes.
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. Borrowings under the ABL Facility bear interest at a rate equal to, at our option, (i) the United States, Canadian or United Kingdom Base Rate (each as defined in the credit agreement relating to the ABL Facility, the "Amended and Restated Credit Agreement") plus a margin ranging from 0.25% to 0.50% per annum, or (ii) the Adjusted LIBO Rate or BA Rate (each as defined in the Amended and Restated Credit Agreement), plus a margin ranging from 1.25% to 1.50% per annum. In addition to paying interest on any outstanding principal under the ABL Facility, a commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter.
The ABL Facility contains various customary representations, warranties by us and covenants that are described in detail in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, we were in compliance with all covenants under the credit agreement governing the ABL Facility. We had availability of $185.3 million under our ABL Facility and there were no amounts outstanding as of March 29, 2020.

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

7. Commitments and Contingencies
The following discussion describes material developments in previously disclosed legal proceedings that occurred since December 29, 2019. Refer to Note 10. Commitments and Contingencies in the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 29, 2019, for a full description of the previously disclosed legal proceedings.
Class Action Proceedings
With respect to the putative antitrust class action cases pending in the Eastern District of Virginia, the parties are in the midst of class certification briefing and expert discovery. Due to the ongoing coronavirus pandemic, on March 17, 2020, the Court extended all case deadlines by 60 days at the parties’ request. Expert discovery is now expected to close in June 2020. Briefing on class certification discovery is expected to be completed by June 9, 2020. Briefing on dispositive motions is expected to be completed by September 7, 2020. The Court has reset the presumptive trial date as January 11, 2021. On May 4, 2020, the Court ruled on Defendants’ December 16, 2019, partial motion to dismiss plaintiffs’ reinstated claims, granting it in part and denying it in part. By granting the motion in part, the Court dismissed the indirect purchasers' claims under Kansas, Utah and Virginia consumer protection laws and it also limited the time period during which indirect purchasers from Hawaii, Kansas, Maine, New Hampshire, North Dakota, Utah, Virginia, West Virginia and Wisconsin could claim damages.
In addition, from time to time, we are involved in various claims and legal actions. In the opinion of management, the ultimate disposition of these matters, individually and in the aggregate, will not have a material effect on our financial condition, results of operations or cash flows.
8. Share Based Compensation Plans
Share based compensation expense was $3.5 million and $2.7 million for the three months ended March 29, 2020, and March 31, 2019, respectively. As of March 29, 2020, the total remaining unrecognized compensation expense related to share based compensation amounted to $24.5 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 2009 Plan and the 2012 Plan are described in detail and defined in our Annual Report on Form 10-K for the year ended December 29, 2019. The aggregate number of common shares that can be issued with respect to equity awards under the 2012 Plan cannot exceed 2,000,000 shares plus the number of shares subject to existing grants under the 2009 Plan that may expire or be forfeited or canceled. As of March 29, 2020, there were 675,354 shares of common stock available for future issuance under the 2012 Plan.
Deferred Compensation Plan
We offer to certain of our employees and directors a Deferred Compensation Plan, which is further described in our Annual Report on Form 10-K for the year ended December 29, 2019. As of March 29, 2020, the liability and asset relating to deferred compensation had a fair value of $5.1 million and $4.9 million, respectively. As of March 29, 2020, 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 under both the 2009 Plan and the 2012 Plan, which entitle the recipient to the appreciation in value of a number of 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.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

The total fair value of SARs vested was $0.9 million and $1.1 million during the three months ended March 29, 2020, and March 31, 2019, respectively.
Three Months Ended March 29, 2020Stock Appreciation RightsAggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years)
Outstanding, beginning of period404,447  $7,615  $53.62  4.7
Granted29,522  87.18  
Exercised(44,850) 2,155  31.82  
Forfeited(4,613) 57.52  
Outstanding, end of period384,506  $986  $58.70  5.2
Exercisable, end of period241,134  $986  $55.14  3.3
The value of SARs granted is determined using the Black-Scholes-Merton valuation model, and the corresponding expense is recognized over the average requisite service period of 2.0 years for all periods presented. Expected volatility is based upon the historical volatility of our common shares amongst other considerations. The expected term is calculated using the simplified method, due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated:
2020 Grants
SAR value (model conclusion)$21.51  
Risk-free rate1.3 %
Expected dividend yield0.0 %
Expected volatility22.4 %
Expected term (years)6.0

Restricted Stock Units
We have granted Restricted Stock Units ("RSUs") to directors and certain employees under both the 2009 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 awarded is based on the fair value of the RSUs at 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.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Three Months Ended
March 29, 2020
Total Restricted Stock Units OutstandingWeighted Average Grant Date Fair Value
Outstanding, beginning of period523,207  $59.58  
Granted177,866  81.91  
Performance adjustment (1)
(59,936) 67.50  
Delivered(79,449) 
Withheld to cover (2)
(8,235) 
Forfeited(17,572) 
Outstanding, end of period535,881  $65.46  
____________
(1) Performance-based RSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These 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 RSUs delivered were net share 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.
Approximately two-thirds of the RSUs granted during the three months ended March 29, 2020, vest at specified future dates with only service requirements, while the remaining portion of the RSUs vest based on both performance and service requirements. The expense for RSUs granted during the three months ended March 29, 2020, is being recognized over the weighted average requisite service period of 2.5 years. 87,684 RSUs vested during the three months ended March 29, 2020, at a fair value of $5.6 million.
9. Restructuring Costs
In February 2019, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce across all of our reportable segments and in our head offices. The reorganization of our manufacturing capacity involves specific plants in the North American Residential and Architectural segments and costs associated with the closure of these plants and related headcount reductions began taking place in the first quarter of 2019 (collectively, the "2019 Plan"). Costs associated with the 2019 Plan include severance, retention and closure charges and will continue through 2020. Additionally, the plan to divest non-core assets was determined to be a triggering event requiring a test of the carrying value of the definite-lived assets relating to the divestitures, as further described in Note 10. As of March 29, 2020, we expect to incur approximately $5 million to $6 million of additional charges related to the 2019 Plan.
During the fourth quarter of 2018, we began implementing a plan to reorganize and consolidate certain aspects of our United Kingdom head office function and optimize our portfolio by divesting non-core assets to enable more effective and consistent business processes in the Europe segment. In addition, in the North American Residential segment we announced a new facility that will optimize and expand capacity through increased automation, which resulted in the closure of one existing facility and related headcount reductions beginning in the second quarter of 2019 (collectively, the "2018 Plan"). Costs associated with the 2018 Plan include severance, retention and closure charges and continued throughout 2019. As of March 29, 2020, we do not expect to incur any material future charges related to the 2018 Plan.

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

The following table summarizes the restructuring charges recorded for the periods indicated:
Three Months Ended March 29, 2020
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
2019 Plan$728  $(37) $862  $267  $1,820  
2018 Plan121        121  
Total Restructuring Costs$849  $(37) $862  $267  $1,941  

Three Months Ended March 31, 2019
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
2019 Plan$1,459  $331  $604  $394  $2,788  
2018 Plan421  531      952  
Total Restructuring Costs$1,880  $862  $604  $394  $3,740  

Cumulative Amount Incurred Through March 29, 2020
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
2019 Plan$6,187  $359  $1,368  $1,286  $9,200  
2018 Plan1,866  2,275      4,141  
Total Restructuring Costs$8,053  $2,634  $1,368  $1,286  $13,341  

The changes in the accrual for restructuring by activity were as follows for the periods indicated:
(In thousands)December 29, 2019SeveranceClosure CostsCash PaymentsMarch 29, 2020
2019 Plan$1,535  $187  $1,633  $(2,769) $586  
2018 Plan  103  18  (121)   
Total$1,535  $290  $1,651  $(2,890) $586  

(In thousands)December 30, 2018SeveranceClosure CostsCash PaymentsMarch 31, 2019
2019 Plan$  $2,770  $18