The following is a summary of the MasterBrand, Inc. (MBC) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 net sales were $718 million, reflecting a 6% increase year-over-year primarily driven by the acquisition of Supreme Cabinetry Brands.

• Adjusted EBITDA for Q3 was $105 million with a margin of 14.6%, which is 160 basis points lower than the same period last year.

• The gross profit margin decreased to 33.1% from 35.1% a year ago mainly due to lower net average selling price, increased costs, and strategic investments.

• Net income decreased by 51.3% to $29.1 million due to various acquisition-related costs and restructuring charges.

• Free cash flow stood at $65 million for the quarter, contributing to a year-to-date total of $142 million.

Business Progress:

• MasterBrand continues to drive growth through new customer wins and strategic initiatives including Aligned to Grow, Lead Through Lean, and Tech Enabled.

• Integration of Supreme Cabinetry Brands is progressing well, with efforts underway to optimize operations and enhance product offerings across dealer networks.

• Investments in digital infrastructures like MasterBrand Connect are enhancing connections and insights with channel partners, fostering potential market share growth.

Opportunities:

• The acquisition of Supreme Cabinetry Brands presents significant operational and commercial synergy opportunities, expected to drive incremental savings and enhance service levels.

• Continued strategic initiatives are aimed at capturing more market share despite the broader market challenges.

Risks:

• Soft demand in the repair and remodel markets due to economic uncertainties and low housing turnover poses near-term challenges.

• There is a potential soft demand in the U.S. single-family new construction market due to moderation by production builders and softer housing starts.

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