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-{"quote": ["Project Rohe\nDRAFT Financial Due Diligence Report\nRReelliiaannccee RReessttrriicctteedd\nMarch 27, 2023", "Important Message to Any Person Not Authorized by Ernst and Young LLP to Have Access to This Report\nAny person who is notan addressee of this report, a professional advisor of the addressee of this report or who has not signed and returnedto Ernst &Young\nLLP(\u201cEY\u201d)anAccessLetterinEY\u2019sprescribedformisnotauthorizedtohaveaccesstothisreport.\nShouldanyunauthorizedpersonobtainaccesstothisreport,suchperson(the\u201cRecipient\u201d),byreadingthisreport,acceptsandagreestothefollowingterms:\n1. The work performed by EY was performed in accordance with instructions provided by our addressee client and was performed exclusively for our\naddressee clientandwas performedexclusivelyforouraddressee client\u2019ssolebenefitanduse.\n2. Thisreportwaspreparedatthedirectionofouraddressee clientandmaynotincludeallproceduresdeemednecessary forthepurposesofthereader.\n3. The Recipient will perform its own due diligence inquiries and procedures for all purposes, including satisfying itself as to the financial condition and the\ncontrolenvironmentoftheCompany.\n4. The Recipient will not use this report to solicit financing for the proposed transaction or disclose it or any portion thereof, or refer to EY, in connection with\nsucheffort.\n5. EY,itspartners,employeesandagents,neitherowenoracceptanydutyorresponsibilitytosuchperson,whetherbycontractorotherwise(includingwithout\nlimitation, for negligence or breach of any statutory duty), and shall not be liable in respect of any loss, damage, or expense whatsoever incurred by such\npersonasaresultof hisorheruseof thisreport,orasresultofhisorheraccesstothereport.Further,theRecipientagreesthatismaynotrefertoorquote\nthis report, in whole or in part, in any prospectus, registration statement, offering circular, public filing, loan, other agreement or document and shall not\ndistributeittoanyotherperson.\n6. The Recipient shall make no claims whatsoever against EY, its partners, employees or agents arising out of, relating to, orin connection with this report or\nanyofthecontentshereof.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 2", "Reliance Restricted\nRuss Tiejema\nExecutive Vice President and Chief Financial Officer\nMasonite International Corporation\n201 N. Franklin Street, Suite 300\nTampa, FL 33602\nErnst & Young LLP Project Rohe March 27, 2023\nStrategy and Transactions\n155 N. Wacker Drive,\nChicago, IL 60606 As you requested, we have performed sell-side financial due diligence in connection with Masonite International\nCorporation and its wholly owned subsidiary Masonite Corporation\u2019s (\"Client\" or \"Masonite\") contemplated sale of its\ney.com Architectural reporting segment(\u201ctheBusiness\u201d) solelyto assist youinyourevaluationoftheBusiness. Thepurposeof\nour work is to provide Masonite anditsBoard a buyer\u2019s perspective of theBusiness. Consistent with your instructions,\nourserviceshavebeenlimitedtotheproceduresdescribedinourengagementletterdatedOctober5,2022.\nInformation with respect to the Business' operations, account balances and accounting and operating procedures\npurported to be in effect and described in our report was obtained through discussions with certain officers and\nemployeesofMasoniteandobservationsandanalysesmadebyusduringthecourseofourwork.\nOur work did not constitute an audit conducted in accordance with generally accepted auditing standards, an\nexamination ofinternal controlsor other attestationorreviewservicesin accordancewith standardsestablished bythe\nAmerican Institute of Certified Public Accountants (\u201cAICPA\u201d) or by the Public Company Accounting Oversight Board.\nAccordingly, we do not express an opinion or any other form of assurance on thefinancial statements of theBusiness\noranyfinancialorotherinformation,oroperatingandinternalcontrolsoftheBusiness. Assuch, ourproceduresdonot\naddressthe effectivenessof internal controlsoverfinancial reporting under Section 404of theSarbanes-OxleyActnor\nshould our work be considered an opinion or advice to management on the application of accounting standards to\nspecific facts, circumstances or transaction. Our work was based on information supplied by the management of\nMasoniteandwascarriedoutonthebasisthatsuchinformationisaccurateandcomplete. Informationwasnot subject\ntocheckingorverificationprocedures,excepttotheextentexpresslystatedtoformpartofthescopeofourwork.\nProspectivefinancialinformation\nWith respect to prospective financial information (\u201cPFI\u201d) relative to the Business referenced throughout this report, we\ndid not examine, compile or apply agreed-upon procedures to such information in accordance with standards\nestablished by the AICPA, and we express no assurance of any kind on such information. We did not assist in the\npreparation of the Business\u2019 PFI or in the development of any assumptions therein. Our report may include tables\naggregating quantified vulnerabilities and sensitivities in order to illustrate effects of possible alternative assumptions.\nThose tables, if presented, should not be regarded as a restatement of the Business\u2019 or management\u2019s PFI, or\npreparation of revised PFI; they are provided as a means of summarizing our comments to assist you in considering\ntheir implications for the transaction. Management has the knowledge, experience and ability to form its own\nconclusions related to the PFI. We have made factual findings and recommendations about specific assumptions and\ncomponentsof thePFI herein, where we had sufficientevidenceto providea reasonablebasisforthem. Wehavenot\nprepared, assembled, formulated, developed or processed the PFI data or assumptions used to generate the PFI as\npresented. We have not provided any opinion, conclusion or any type of assurance about specific assumptions or\ncomponentsofthePFIoronthePFIasawhole.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 3", "Reliance Restricted\nRuss Tiejema\nExecutive Vice President and Chief Financial Officer\nMasonite International Corporation\n201 N. Franklin Street, Suite 300\nTampa, FL 33602\nErnst & Young LLP Project Rohe March 27, 2023\nStrategy and Transactions\n155 N. Wacker Drive,\nChicago, IL 60606 Itisyour responsibilitytoconsider ourfindingsand recommendationsregardingthe projectedfinancial informationand\nmake your own decision based on the information available to you. There will usually be differences between\ney.com estimated and actual results, because events and circumstances frequently do not occur as expected, and those\ndifferencesmaybematerial. Wetakenoresponsibilityfortheachievementofprojectedresults.\nWe make no representation regarding the sufficiency of our work either for purposes for which this report has been\nrequested or for any other purpose. The sufficiency of the work we performed is solely the responsibility of Masonite\nas are any decisions with respect to the proposed transaction. Had we been requested to perform additional work,\nadditionalmattersmighthavecometoourattentionthatwouldhavebeenreportedtoyou.\nReferencestoCOVID-19\nAnyfutureimpactofCOVID-19(SARS-CoV-2)(\u201cCoronavirus\u201dor\u201cVirus\u201d)ontheBusiness,oranyactionsitmaytakeas\naresultoftheevolvingVirussituation,isinherentlyuncertain.AnyreferencesmadetotheimpactoftheCoronaviruson\nthe Businessinthe report are based on preliminaryinquiriesand cannot, andshould not,beinterpreted asa complete\ncommentaryor asanaccurateassessment of thefullimpact oftheVirus.Thefull impactof theVirus, and potential for\nunknown ramificationsonconsumers, supplychains, operations, commercial counterparties(bothdirectandindirectto\nthe Company\u2019s operations), is not capable of being qualitatively or quantitatively assessed at this time and is\nspecifically excluded from EY\u2019s analysis. The limitations of the report should be noted and you should make your own\ndeterminationastowhethertheuncertaintyoftheimpactoftheCoronaviruswouldimpactyourinvestmentdecision.\nItis understoodthatthis reportis solelyfortheinformation of Masonite. Thisreport, or portionsthereof, should not be\nreferred or distributed, orally or in writing, to any other persons or entity, other than Masonite and its officers,\nemployees,andprofessional advisorsonthistransaction. Itisnottobereferredtoorquoted,inwholeorinpart,inany\nregistration statement, prospectus, publicfiling, loan agreement, or other agreement or document without our express\npriorwrittenapproval,whichmayrequirethatwe performadditionalwork.\nWe appreciate the opportunityto assist you in connection with your due diligence review of the Business. Should you\nrequire clarification of any of the matters contained in our report or any further information, we would be pleased to\nextendourworkasyouconsidernecessary.\nDRAFT\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 4", "Table of contents\n1 7\nOverview and scope 6 Appendices 46\n2\nSummary of findings 11\n3\nQuality of earnings 13\n4\nRecast operating results 26\n5\nBalance sheet overview 36\n6\nAdjusted net working capital 42\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 5", "Overview and scope\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 6", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nTransaction and business overview\nTransaction overview\nMasonite reporting segments\nWe understand Masonite Corporation (\u201cMasonite\u201d) is contemplating the carve-\nout and sale of its Architectural business (the \u201cBusiness\u201d, \u201cArchitectural\u201d or\n\u201cARCH\u201d). Based on our discussions with Masonite, we understand the\ncontemplated transaction will be on a cash-free and debt-free basis. Masonite\nBusiness overview Corporation\nMasonite\u2019s Architectural business designs and manufactures interior and\nexterior doors and door components sold into institutional (e.g., schools /\nuniversities, healthcare and government facilities) and commercial (e.g., offices,\nhotels, apartments, etc.) end markets across North America. Top customers are\nprimarily distributors.\nNorth America\nArchitectural Corporate\nWith over 1,500 direct employees across two operating divisions, the Residential (NAR)\nArchitectural business maintains 19 direct and dedicated manufacturing and\ndistribution facilities located in the US and Canada.\n\u25ba Product overview\u2013Manufactured doors consist of various components Transaction Perimeter\nincluding a door core (fire resistant mineral core or particleboard core made\nfrom solid wood, composite, steel-pan, or lead-lines), a door skin (typically a\ncrossband) and a face (typically veneer). Business profile\n\u25ba Doors & Components(\u201cD&C\u201d)operating division\u2013 Comprised of Business Masonite Corporation\u2019s Architectural business\nvertically integrated plants that manufacture engineered doors and input\ncomponents. Three Components plants manufacture cores and door skins Headquarters Tampa, FL\nthat are utilized by the six Architectural door plants to manufacture doors.\nTotal employees 1,578 direct ARCH employees as of Dec22\nProducts sold through the D&C division are made to order, specified by\narchitects, designers, contractors and distributors. Primary product series Facilities 19 direct and dedicated manufacturing facilities and warehouses in the US\ninclude AspiroTM(high-end and performance doors with a lifetime warranty) and Canada\nand CenduraTM (balance of performance and value doors with a limited\nManagement SVP & Business Leader \u2013Architectural: Alex Legall\nwarranty). Door plants also provide non-customized door slabs to the Quick\nVP & Finance Director \u2013Architectural: John Amonett\nShip division.\nSr. Finance Manager \u2013Architectural: Aurora Qorri\nFinance Manager \u2013Architectural: Supriya Thorat\n\u25ba Quick Ship(\u201cQS\u201d) operating division \u2013Comprised of three plants that\nfocus on asset light fabrication, customized manufactured doors, frames and Fiscal year 52-or 53-week period ending on Sunday closest to December 31\nhardware to service urgent and time-sensitive projects.\nReporting US Dollars\ncurrency\nConsolidation and Hyperion Financial Management (\u201cHFM\u201d)\nreporting system\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 7", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nSummary of facilities included in the Architectural business\nDirect\nTotal direct employees FY22 reported Functional\nFacility Division HFM ID Mfg. Whse. ERP\nfacilities at Dec22 net sales ($000) currency\n(actual)\nMarshfield, WI Door 015MAR 2 Owned Leased Oracle 335 75,772 USD\nNorthumberland, PA Door 016MHN 2 Owned Leased Microsoft AX 192 37,334 USD\nMason City, IA Door 118MAS 2 Owned Leased Microsoft AX 183 37,891 USD\nJefferson City, TN Door 123JEF 3 Leased Leased Microsoft AX 107 20,295 USD\nSt. Ephrem, QC Door 064BDI 2 Owned Leased Great Plains 80 24,783 CAD\nLondon, ON Door 117HAR 1 Leased - Macola 56 12,456 CAD\nBirchwood, WI Components 057BRCH 1 Owned - Microsoft AX 195 22,013 USD\nMarshfield Particle Board Components 020PARTBD - - - Oracle 73 23,557 USD\nThorpe, WI Components 057BRCH 1 Owned - Microsoft AX - - USD\nWestminster, CO Components 057BRCH 1 Leased - Microsoft AX - - USD\nArlington, TX Quick Ship 125MAR 1 Leased - ERP One 17 8,526 USD\nHowell, MI Quick Ship 126MDW 1 Leased - ERP One 36 21,081 USD\nThorofare, NJ Quick Ship 133NNE 2 Leased Leased ERP One 49 41,460 USD\nHQ - - - Masterpack / HFM 255 (1,991) USD\nTotal 19 12 7 1,578 323,175\nNotes to table:\n\u25ba Plant level net sales are presented net of intra-company sales. Except for Marshfield Particle Board (\u201cMFPB\u201d), intra-company\nsales are generally recorded at standard cost. A quarterly margin credit associated with sales from MFPB to Masonite\u2019s North\nAmerica Residential segment is included within MFPB net sales presented in the above table. Refer toOther EBITDA\nconsiderations for further discussion.\n\u25ba Planned restructuring activities, as discussed inQuality of earnings, resulted in the closures of Architectural\u2019s Largo, Megantic\nand Springfield facilities. These locations closed in December 2019, December 2020 and June 2021, respectively. For\npresentation purposes, we note approximately $115 of sales deductions associated with the Springfield location are included in\nLondon FY22 net sales in the above table, as we understand a portion of the Springfield business shifted to London.\n\u25ba The Thorpe and Westminster locations are combined with Birchwood for financial reporting purposes.\n\u25ba For presentation purposes, HQ in the above table includes all activity (except for the MFPB margin credit noted above) that is\nincluded within administrative entities for each operating division (048HQMA, 160CHQ, 017DISTHQ, 008ARCHHQ and\najARCH).\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 8", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBasis of presentation and scope\nArchitectural summary reported operating results Basis of presentation\nCurrency: $ 000 FY20 FY21 FY22 \u25ba The Architectural business is a reporting segment of Masonite, with financial\ninformation prepared in accordance with US GAAP and included in the consolidated\nNet sales 358,049 303,078 323,175\nfinancial statements of Masonite.\nCost of sales 280,411 261,039 281,782\n\u25ba Masonite\u2019s fiscal year is the 52-or 53-week period ending on the Sunday closest to\nGross profit 77,638 42,039 41,392\nDecember 31. We note FY20 contained 53 weeks of operating results, with the\nSelling and Administration 43,485 45,007 45,140 additional week occurring in the fourth quarter.\nOperating income (loss) 34,153 (2,968) (3,748)\n\u25ba The Architectural business utilizes Hyperion Financial Management (\u201cHFM\u201d) for\nOther (income) / expense 75,022 88,287 9,614 consolidation and financial reporting. Separate trial balances (P&L and balance sheets)\nReported net loss (40,869) (91,255) (13,362) are maintained within the various ERP systems utilized at the plant-level (i.e., Microsoft\nAX, Oracle, ERP One, etc.) and are uploaded into HFM on a monthly basis. Trial\nbalances (P&L and balance sheet) by entity maintained within HFM were the basis for\nfinancial statement information and analyses presented in this report. Refer to the\nReconciliation to Masonite external reporting\ntables at left for a reconciliation of Architectural net sales and operating income to\nCurrency: $ 000 FY20 FY21 FY22 Masonite\u2019s externally reported segment disclosures.\nMasonite Net sales reconciliation: \u25ba The Architectural business has a separate finance function led by the Finance Director\nArchitectural internal net sales, as reported 358,049 303,078 323,175 and supported by two finance managers and three analysts. This finance team is\nresponsible for traditional FP&A analyses including annual budgeting and forecasting\nElimination of sales to NAR (17,153) (13,602) (16,192)\n(AOP process) and monthly reporting to senior leadership and executive management.\nArchitectural 340,896 289,476 306,983\nWe note the St. Ephrem door plant also has three onsite accounting personnel.\nNorth America Residential 1,638,119 1,952,898 2,283,642\n\u25ba Masonite\u2019s Global Business Services (\u201cGBS\u201d) provides the Architectural business with\nEurope 258,113 334,532 280,769\ncorporate accounting support inclusive of journal entry processing, month-end account\nCorporate & Other 19,947 20,014 20,293 reconciliations, receivable and payable invoice processing, internal audit functions, etc.\nConsolidated Masonite Net sales 2,257,075 2,596,920 2,891,687 This shared services team is also responsible for uploading data from the various plant\nERPs into HFM.\nMasonite Adjusted EBITDA reconciliation:\n\u25ba Corporate cost allocations, summarized in the following table for the Historical Period,\nArchitectural operating income (loss), as reported 34,153 (2,968) (3,748) are included in Architectural\u2019s reported operating results. These allocations, included\nNon-recurring scrap sales 48 264 - within cost of sales (overhead) and administrative expense, relate to support provided\nArchitectural 34,201 (2,704) (3,748) by GBS as well as other corporate functions including treasury, HR, legal, tax and IT.\nManagement has prepared a separate standalone cost analysis related to the\nNorth America Residential 347,822 374,452 461,750\ncorporate support provided to the Architectural business which is not presented\nEurope 40,474 60,624 28,774 in this report.\nCorporate & Other (58,785) (19,766) (40,978)\nConsolidated Masonite Adjusted EBITDA 363,712 412,606 445,798\nCurrency: $ 000 FY20 FY21 FY22\nNote to table: For external reporting purposes, 100% of Architectural sales to NAR are eliminated in\nconsolidation with an equally offsetting elimination to cost of sales. The cost of sales elimination Overhead 3,451 3,554 3,660\neffectively represents 100% of the inter-company cost of sales recorded at NAR. Administration 7,334 7,555 7,781\nTotal corporate allocated costs 10,785 11,108 11,442\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 9", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBasis of presentation and scope\nBasis of presentation (continued) Financial statement close process\n\u25ba Various sales transactions occur between plants within the Architectural business \u25ba The Architectural financial statement close process is generally completed within\n(intra-company), but also between other reporting segments of Masonite (inter- five business days and includes closing out sales activity for the month, loading\ncompany). Reported results are presented net of intra-company sales and trial balances into HFM, GBS journal entry processing and account\nassociated costs. Inter-company sales to Masonite\u2019s North America Residential reconciliations, analyses to identify any unusual items or abnormalities and\nreporting segment (which is outside of the transaction perimeter) have not been preparation of final results to share with senior leadership.\neliminated from reported amounts presented, as we understand these sales will\ncontinue to occur post-transaction. Except for Marshfield Particle Board (MFPB), \u25ba Differences between month-end vs. quarter-end / year-end close primarily relate\nto (i) quarterly margin credit received for MFPB sales to Masonite\u2019s NAR\ndiscussed inOther EBITDA considerations,intra-company and inter-company sales\nsegment, (ii) quarterly adjustments to defer variances associated with standard\nare generally recorded at standard cost.\nversus actual material, labor and overhead costs incurred in the production\n\u25ba While separate balance sheets are prepared for the Architectural business process, (iii) quarterly adjustments to the inventory reserve and (iv) year-end\n(presented below for the Historical Balance Sheet Dates), certain balance sheet entries for physical inventory counts, customer rebate true-ups, and incentive\naccounts are centrally managed by Masonite Corporate and reported within the plan true-ups.\nMasonite Corporate balance sheet. These balances predominately include (i)\nScopeofwork\nallowance for doubtful accounts, (ii) accruals for certain incentive compensation\nplans, (iii) freight and utility expense accruals and (iv) certain insurance accruals. The scope of our work was determined by Masonite as agreed upon in the\nStatementofWorkdatedOctober5,2022.\nArchitectural summary reported balance sheets\nCurrency: $ 000 Dec20 Dec21 Dec22 \u25ba The due diligence procedures were designed to focus on the following areas: (i)\nCurrent assets 68,990 72,147 100,556 quality of earnings, (ii) analyzing income statement trends and (iii) analyzing\nNoncurrent assets 191,633 115,468 108,503 balance sheet accounts and (iv) analyzing trends in working capital and historical\ncapital expenditures.\nTotal assets 260,623 187,615 209,058\nCurrent liabilities 17,011 17,161 18,047 \u25ba The sources of our work, findings and observations discussed throughout this\nNoncurrent liabilities (135,345) (132,330) (102,124) report are based on (i) reading certain of the FY20 and FY21 audit workpapers,\nEquity 378,957 302,784 293,135 (ii) analysis of financial and accounting information provided by Management,\nTotal liabilities and equity 260,623 187,615 209,058 and (iii) various in-person meetings and conference calls with Management.\n\u25ba The historical periods covered by the due diligence procedures were as of and\n\u25ba Masonite is a publicly traded company with consolidated financial statements and for the fiscal years ended January 3, 2021 (\u201cFY20\u201d), January 2, 2022 (\u201cFY21\u201d)\ninternal controls reviewed quarterly and audited annually by Ernst & Young LLP. As\nand January 1, 2023 (\u201cFY22\u201d), which collectively represents the Historical Period.\npart of the procedures performed, we read certain of the FY20 and FY21 audit\nworkpapers noting recorded and unrecorded audit adjustments during these periods \u25ba Our comments and observations are focused principally on those matters that,\nwere either not directly related to the Architectural business or not significant to based on our discussion with Masonite, we believe would be of significance or\nEBITDA. might require further consideration. Other matters beyond the scope of our\nengagement should be considered in evaluating the merits of a proposed\n\u25ba Unless otherwise stated, amounts presented in this report are in thousands of US transaction.The due diligence procedures did not include standalone cost\nDollars ($000).\nanalysis for the Business.In addition, we did not perform any services with\n\u25ba Minor variances may exist in this report due to rounding. respect to: (i) commercial diligence, (ii) internal controls, (iii) tax due diligence,\n(iv) regulatory or legal matters, (v) information technology, or (vi) human capital.\n\u25ba Any use of the terms \u201cpro forma\u201d, \u201crecast\u201d, or \u201cnonrecurring\u201d are in a generic sense\nand is not intended to comply with the United States Security and Exchange \u25ba A full listing of the procedures performed is included in theAppendicessection\nCommission rules, regulations and interpretation. of this report.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 10", "Summary of findings\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 11", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nSummary of findings\nFY22 Adjusted FY22 Pro forma FY22 Adjusted net FY22 average FY22 Capital\nEBITDA EBITDA sales adjusted NWC expenditures\n($2.2)m $6.5m $323.1m $71.9m $10.4m\nFY20 and FY21 Adjusted Incorporates $8.7m of pro FY20 and FY21 adjusted net FY20 and FY21 average FY20 and FY21 capital\nEBITDA was $34.8m and forma adjustments identified by sales were $358.1m and adjusted NWC was $58.4m expenditures were $19.5m and\n$1.2m, respectively Management $303.1m, respectively and $55.0m, respectively $15.2m, respectively\nFY22 Mgmt. EBITDA Pro forma adjustments FY22 adjusted net sales Adjusted working capital is Major capital investments\nremoves the impact of non- reflect the retrospective reflects a $19.9m increase predominately comprised of during the Historical Period\noperational gains ($2.9m) impact of (i) cost reduction from FY21 driven by price inventory and accounts include (i) autoclave and\non the sale of fixed assets initiatives the Business increases enacted over the receivable. dryer mineral core repairs /\nrelated to the Springfield executed on in FY20 and Historical Period and rebuild at the Marshfield\nAvg. adjusted NWC\nplant closure. During FY20 FY21, (ii) other run-rate volume increases in the door plant, (ii) Mason City\nincreased $13.6 million from\nand FY21, the Business normalizations for the Quick Ship division. ERP conversion, order\nFY20 to FY22\nalso incurred non-cash impact of certain configurator implementation\nApproximately 80% of predominately driven by a\nimpairment charges and operational ($0.5m) and and edge banding\nadjusted net sales related to $15.1 million growth in\nrestructuring costs that are supply chain ($4.9m) investment to increase\nDoors and Components and inventory resulting from\nexcluded from Mgmt. matters the Business automation, (ii) Jefferson\n20% related to Quick Ship. supply chain disruptions\nEBITDA. encountered during the City machining center to\nand longer lead times.\nHistorical Period, and (iii) Management has invested improve and automate\nFY22 due diligence Management is actively\nadditional restructuring in systems and processes to processes that allows the\nadjustments primarily relate trying to drive down DIO,\nactions implemented in address operational and plant to run a higher and\nto addbacks for (i) $0.6m of which increased ~19 days\nearly FY23 ($3.4m). supply chain challenges more complex mix, and (iii)\none-time R&M expense and over the same period,\nencountered that partially a large regulatory required\n(iii) $0.6m of non-recurring without exposing the\ndrove volume declines in project to replace the steam\nconsulting and hiring Business to any further\nDoors and Components and dryer at Marshfield Particle\nexpenses. FY20 and FY21 risks to supply of materials.\ncontributed to the $55.0m Board incurred between\nalso included adjustments\ndecline in adjusted net sales 2017-2021.\nfor bonus true-ups and post-\nfrom FY20 to FY21.\nclose losses at Springfield.\nMore on page14 More on page20 More on page27 More on page43 More on page39\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 12", "Quality of earnings\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 13", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nQuality of earnings summary\nCurrency: $ 000 FY20 FY21 FY22 Quality of earnings\nNet loss (40,869) (91,255) (13,362) The adjacent table presents a reconciliation from net loss to Adjusted and Pro forma\nDepreciation expense 11,651 10,986 11,529 EBITDA for FY20, FY21 and FY22 (collectively the \u201cHistorical Period\u201d) for the\nArchitectural business. The majority of support for the adjustments was based on\nAmortization expense 6,084 3,634 844\naccount fluctuations, supporting calculations and discussions with Management (i.e.,\nInterest expense 1 0 17\nwe did not obtain check copies, invoices, payroll registers, etc. for each adjustment).\nReported EBITDA (23,133) (76,635) (972) For further details on the components and computation of adjustments, refer to the\nManagement adjustments 57,286 73,667 (2,777) accompanying Databook.\nManagement EBITDA 34,153 (2,968) (3,748) \u25ba Reported EBITDAexcludes non-cash depreciation and amortization as well as\nDue diligence adjustments 628 4,180 1,533 interest expense incurred during the Historical Period. Architectural\u2019s fixed assets\nare primarily comprised of machinery and equipment and buildings, depreciated on\nAdjusted EBITDA 34,781 1,212 (2,215)\na straight-line basis over the respective asset\u2019s estimated useful life. Amortization\nPro forma and run-rate adjustments 3,521 2,543 8,730\nexpense predominately relates to customer lists amortized over a 20-year period.\nPro forma EBITDA 38,302 3,754 6,515\n\u25ba Management EBITDAreflects EBITDA adjustments externally reported for the\nOther EBITDA considerations:\nArchitectural segment on a quarterly basis. During the Historical Period, these\nCorporate allocated costs 10,785 11,108 11,442 adjustments were primarily comprised of (i) non-cash goodwill and fixed asset\nMargin credit on sales to NAR 5,977 5,706 7,082 impairments, (ii) non-recurring restructuring charges and (iii) gains/losses\nassociated with the sale of fixed assets predominately related to plant closures.\nManagement EBITDA presented herein also excludes non-recurring scrap sales\nKey metrics:\nthat Management does not adjust for in external reporting. Refer to the\nReported EBITDA margin (6.5) (25.3) (0.3) reconciliation of reported Architectural results to Masonite external reporting\nManagement EBITDA margin 9.5 (1.0) (1.2) included in theBasis of presentation.\nAdjusted EBITDA margin 9.7 0.4 (0.7)\n\u25ba Adjusted EBITDAreflects adjustments identified during due diligence, primarily\ncomprised of (i) non-recurring and one-time expense add backs, (ii) normalizing\nfacility costs including rent and property insurance, (iii) adjusting incentive\ncompensation expense based on actual payouts and (iv) removing operating\nlosses associated with certain facilities subsequent to closure.\n\u25ba Pro forma EBITDAis presented to reflect the retrospective impact of (i) cost\nreduction initiatives the Business executed on in FY20 and FY21, (ii) other run-rate\nnormalizations for the impact of certain operational and supply chain matters the\nBusiness encountered during the Historical Period, and (iii) additional restructuring\nactions implemented in early FY23.\n\u25ba Other EBITDA considerations represent items impacting EBITDA and cash flows\nthat a Buyer should consider when modelling the contemplated transaction.\nRefer to the following pages for a more detailed discussion of these\nadjustments.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 14", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nManagement adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Management adjustments\nReported EBITDA (23,133) (76,635) (972) 1. Asset impairment\u2013Asset impairment charges of $51.5m and $69.2m were\nManagement adjustments: recorded for the Architectural business in FY20 and FY21, respectively. In\nconjunction with Masonite\u2019s annual impairment testing, it was determined the\nAsset impairment 1 51,515 69,171 -\ncontinued decreased demand in the Architectural door market due to the impact of\n(Gain) / loss on sale of fixed assets 2 2,922 (410) (2,856)\nCOVID-19, along with the uncertainty of the duration and intensity of the pandemic\nRestructuring costs 3 2,897 5,164 79 on the Architectural door market for future periods were indicators that goodwill\nOther income 4 (48) (259) 0 impairment was present in the Architectural reporting unit. Accordingly, a goodwill\nimpairment charge of $51.5m was recorded in 3Q\u201920. Annual impairment testing in\nManagement adjustments 57,286 73,667 (2,777)\nFY21 resulted in the additional write down of Architectural goodwill ($59.5m) as a\nManagement EBITDA 34,153 (2,968) (3,748)\nresult of manufacturing constraints due to COVID-19 related absenteeism, material\nDue diligence adjustments 628 4,180 1,533 availability and production challenges. As of Dec21, there was zero goodwill\nAdjusted EBITDA 34,781 1,212 (2,215) recorded at Architectural. The FY21 asset impairment also includes $10.4m related\nto fixed assets as a result of announced plant closures associated with restructuring\nPro forma and run-rate adjustments 3,521 2,543 8,730\nactivities.\nPro forma EBITDA 38,302 3,754 6,515\n2. (Gain) / loss on sale of fixed assets\u2013Management\u2019s adjustment removes the\nOther EBITDA considerations:\nimpact of non-operational gains and losses associated with the sale of fixed assets,\nCorporate allocated costs 10,785 11,108 11,442\nprimarily associated with planned facility closures during the Historical Period (i.e.,\nMargin credit on sales to NAR 5,977 5,706 7,082 Largo, Megantic and Springfield).\n3. Restructuring costs \u2013The table at bottom left presents restructuring costs by\nKey metrics: location. Restructuring costs during the Historical Period were comprised of\nReported EBITDA margin (6.5) (25.3) (0.3) severance and facility closure costs associated with planned restructuring activities\nManagement EBITDA margin 9.5 (1.0) (1.2) for the Largo, Megantic and Springfield facility closures, which closed in December\n2019, December 2020 and June 2021, respectively. Over the past several years\nAdjusted EBITDA margin 9.7 0.4 (0.7)\nMasonite has engaged in a series of restructuring programs related to exiting certain\ngeographies and non-core businesses, consolidating certain internal support\nfunctions and engaging in other actions designed to reduce costs and improve\nRestructuring costs by location productivity. Due diligence and pro forma adjustments associated with post-closure\noperating losses and fixed and non-recurring expenses associated with these facility\nCurrency: $ 000 FY20 FY21 FY22\nclosures are presented on the following pages.\nLargo, FL 1,009 - -\n4. Other income\u2013Management\u2019s adjustment removes non-operational income\nMegantic, QC 1,720 3,225 -\nassociated with the sale of scrap, primarily related to the Springfield closure.\nSpringfield, MO - 1,630 10\nArchitectural doorsystems HQ 155 183 72\nOther 13 127 (3)\nRestructuring costs 2,897 5,164 79\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 15", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nDue diligence adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Due diligence adjustments\nReported EBITDA (23,133) (76,635) (972) 5. One-time repairs & maintenance\u2013The adjustment removes the EBITDA impact of\nManagement adjustments 57,286 73,667 (2,777) one-time repairs and maintenance expense incurred for (i) various priority items\nrequired to be addressed by an insurance provider at the Marshfield door plant (i.e.,\nManagement EBITDA 34,153 (2,968) (3,748)\nautoclave fire testing, clean up activities, etc.), (ii) third party costs for installation\nDue diligence adjustments:\nlabor and materials relating to the Marshfield steam dryer capital investment that\nOne-time repairs & maintenance 5 - 542 600 were expensed and not capitalized, (iii) relocating equipment to support the\nNon-recurring expenses 6 273 925 570 Jefferson City machining center project, (iv) installation of equipment transferred\nfrom Megantic to Birchwood subsequent to the Meganticfacility closure and (v) fees\nRent normalization 7 37 348 287\nincurred for controls upgrade / rewiring of the Gabianni trimmer at the Birchwood\nBonus true-up 8 662 1,301 (184)\nfacility.\nPost-ERP implementation IT support 9 - 307 173\nCurrency: $ 000 FY20 FY21 FY22\nPrepaid and non-recurring marketing 10 - - 110\nMarshfield autoclave - - 325\nVolume rebate normalization 11 50 71 (106)\nMarshfield dryer - - 275\nIntercompany sale write-offs 12 62 287 102\nJefferson City machining center - 224 -\nProperty insurance adjustment 13 (223) (120) (20)\nMegantic press installation - 262 -\nPost-close operating losses 14 - 518 -\nBirchwood saw rewiring - 57 -\nOut-of period vendor rebates 15 (234) - -\nOne-time repairs & maintenance - 542 600\nDue diligence adjustments 628 4,180 1,533\nAdjusted EBITDA 34,781 1,212 (2,215) 6. Non-recurring expenses-The following table presents a summary of non-recurring\nPro forma and run-rate adjustments 3,521 2,543 8,730 expenses identified during the Historical Period that have been removed from\nAdjusted EBITDA.\nPro forma EBITDA 38,302 3,754 6,515\nOther EBITDA considerations:\nCurrency: $ 000 FY20 FY21 FY22\nCorporate allocated costs 10,785 11,108 11,442\nMarket study - - 512\nMargin credit on sales to NAR 5,977 5,706 7,082\nCustomer profitability study - 382 -\nOne-time hiring fees 273 543 58\nKey metrics:\nNon-recurring expenses 273 925 570\nReported EBITDA margin (6.5) (25.3) (0.3)\nManagement EBITDA margin 9.5 (1.0) (1.2) The adjustment is comprised of (i) one-time consulting fees associated with a\nAdjusted EBITDA margin 9.7 0.4 (0.7) customer profitability study in FY21, (ii) an L.E.K. Consulting market study in FY22\nand (iii) non-recurring hiring fees incurred in FY20 and FY21 associated with the\nrelocation of senior Architectural management to Tampa, FL as well as contract\nlabor incurred for psychological evaluations of new leadership and business advisory\nservices to support leadership changes.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 16", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nDue diligence adjustments\nDue diligence adjustments (continued)\nCurrency: $ 000 Ref. FY20 FY21 FY22\nReported EBITDA (23,133) (76,635) (972) 7. Rent normalization\u2013The adjustment normalizes rent expense over the Historical\nManagement adjustments 57,286 73,667 (2,777) Period to (i) add back rent expense for the Mason City and Algoma sales offices\nthat were not in use and subsequently exited as sales employees began working\nManagement EBITDA 34,153 (2,968) (3,748)\nfrom home in Mar20 due to COVID-19, (ii) remove the impact of an out-of-period\nDue diligence adjustments: catch up payment associated with the Mason City warehouse lease, and (iii)\nOne-time repairs & maintenance 5 - 542 600 include rent expense for the Marshfield warehouse lease in FY20 as rent for this\nNon-recurring expenses 6 273 925 570 period was recorded at Masonite Corporate.\nRent normalization 7 37 348 287 Currency: $ 000 FY20 FY21 FY22\nBonus true-up 8 662 1,301 (184) Mason City sales office 154 117 287\nPost-ERP implementation IT support 9 - 307 173 Algoma sales office 130 - -\nOut-of-period rent - 231 -\nPrepaid and non-recurring marketing 10 - - 110\nMarshfield warehouse lease (246) - -\nVolume rebate normalization 11 50 71 (106)\nRent normalization 37 348 287\nIntercompany sale write-offs 12 62 287 102\nProperty insurance adjustment 13 (223) (120) (20)\n8. Bonus true-up\u2013Architectural employees participate in various incentive plans\nPost-close operating losses 14 - 518 - that are accrued for monthly within the Architectural P&L based on plan.\nOut-of period vendor rebates 15 (234) - - Management indicated true-up adjustments based on actual amounts paid are\nrecorded at Masonite Corporate. Accordingly, an EBITDA adjustment is presented\nDue diligence adjustments 628 4,180 1,533\nto adjust expense for the SIP, Mcentive and MIP plans based on actual payments\nAdjusted EBITDA 34,781 1,212 (2,215)\nfor the respective period. We note reported expense was lower in FY22 due to the\nPro forma and run-rate adjustments 3,521 2,543 8,730 Mcentive plan, which had a 153% achievement of FY22 target, that was recorded\nPro forma EBITDA 38,302 3,754 6,515 on the Masonite Corporate P&L.\nCurrency: $ 000 FY20 FY21 FY22\nReported expense 2,411 2,718 2,075\nPost-ERP implementation IT support Actual payouts 1,749 1,417 2,259\nCurrency: $ 000 FY20 FY21 FY22 Bonus true-up 662 1,301 (184)\nAllocated IT support (admin salaries) 308 446 348\nNormalized IT support 308 192 175\n9. Post-ERP implementation IT support\u2013The Architectural business incurred non-\nNormalization adjustment - 254 173 recurring IT support charges from Masonite Corporate associated with the Mason\nNonrecurring travel & entertainment - 52 - City implementation of Microsoft AX between Oct21-Jul22. Management indicated\nPost-ERP implementation IT support - 307 173 these costs were not capitalized and represent charges above normal IT support\nthat is charged to the Business and included within administration salaries.\nJan21- Oct21- Aug22-\nCurrency: $ 000 Management indicated all other corporate support is charged to Architectural\nSep21 Jul22 Feb23\nthrough the corporate cost allocations lines within overhead and administration\nAllocated IT support 148 572 101\nexpense. The table at bottom left provides a summary calculation of the EBITDA\nWeeks 39 43 30\nadjustment, which assumes normalized support of ~$3/week based on actual\nAllocated IT support per week 4 13 3 average charges incurred from Aug22-Feb23.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 17", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nDue diligence adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Due diligence adjustments (continued)\nReported EBITDA (23,133) (76,635) (972)\n10.Prepaid and non-recurring marketing\u2013The adjustment adds back $110\nManagement adjustments 57,286 73,667 (2,777)\nexpensed in Dec22 for new samples to send to customers that were ordered for\nManagement EBITDA 34,153 (2,968) (3,748) approval under the simplification program (a new initiative involving the reduction\nDue diligence adjustments: of color stain offerings), as well as samples ordered to hand out at the Door &\nHardware Institute tradeshow that will take place in FY23. Architectural\u2019s policy is\nOne-time repairs & maintenance 5 - 542 600\nto record prepayments on the balance sheet and expense during the program\nNon-recurring expenses 6 273 925 570\nperiod.\nRent normalization 7 37 348 287\n11.Volume rebate normalization -Certain customers receive volume rebates,\nBonus true-up 8 662 1,301 (184)\nrepresenting approximately 0.6% of net sales annually. These rebates are accrued\nPost-ERP implementation IT support 9 - 307 173 monthly and paid annually in the first quarter subsequent to the respective fiscal\nPrepaid and non-recurring marketing 10 - - 110 year. An EBITDA adjustment is presented to remove the out-of-period impact\nassociated with true-ups to volume rebates recorded at the time payments are\nVolume rebate normalization 11 50 71 (106)\nreleased.\nIntercompany sale write-offs 12 62 287 102\nProperty insurance adjustment 13 (223) (120) (20) Currency: $ 000 FY20 FY21 FY22\nVolume rebates, as reported 2,146 1,694 1,729\nPost-close operating losses 14 - 518 -\nFY19 true-up (63) - -\nOut-of period vendor rebates 15 (234) - -\nFY20 true-up 13 (13) -\nDue diligence adjustments 628 4,180 1,533\nFY21 true-up - (59) 59\nAdjusted EBITDA 34,781 1,212 (2,215)\nFY22 true-up - - 47\nPro forma and run-rate adjustments 3,521 2,543 8,730\nTotal adjustment (50) (71) 106\nPro forma EBITDA 38,302 3,754 6,515\nVolume rebates, as adjusted 2,096 1,623 1,835\nOther EBITDA considerations: As a % of net sales 0.6 0.5 0.6\nCorporate allocated costs 10,785 11,108 11,442\n12.Intercompany sale write-offs\u2013The adjustment adds back Marshfield Particle\nMargin credit on sales to NAR 5,977 5,706 7,082\nBoard bad debt write-offs associated with intercompany sales to Masonite\u2019s North\nAmerica Residential (NAR) business. Management indicated these write-offs were\nKey metrics: likely the result of not properly applying unapplied cash and that the charges do not\nrepresent actual bad debt expense.\nReported EBITDA margin (6.5) (25.3) (0.3)\nManagement EBITDA margin 9.5 (1.0) (1.2)\nAdjusted EBITDA margin 9.7 0.4 (0.7)\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 18", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nDue diligence adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Due diligence adjustments (continued)\nReported EBITDA (23,133) (76,635) (972)\n13.Property insurance adjustment \u2013Total Masonite property insurance gets\nManagement adjustments 57,286 73,667 (2,777)\nallocated at the plant level based on total insurable value. Management indicated\nManagement EBITDA 34,153 (2,968) (3,748) certain plants were not allocated costs during the Historical Period. The EBITDA\nDue diligence adjustments: adjustment presented adjusts property insurance expense for Mason City,\nThorofare, Howell and Arlington for the periods expense was recorded at Masonite\nOne-time repairs & maintenance 5 - 542 600\nCorporate. These adjustments assume the same level of expense was incurred\nNon-recurring expenses 6 273 925 570\nthroughout the Historical Period.\nRent normalization 7 37 348 287\nBonus true-up 8 662 1,301 (184) Currency: $ 000 FY20 FY21 FY22\nPost-ERP implementation IT support 9 - 307 173 Reported property insurance expense 534 1,052 1,205\nPrepaid and non-recurring marketing 10 - - 110 As a % of reported net sales 0.1 0.3 0.4\nVolume rebate normalization 11 50 71 (106) Property insurance adjustment:\nIntercompany sale write-offs 12 62 287 102 Howell, MI 24 - -\nMason City, IA 133 100 -\nProperty insurance adjustment 13 (223) (120) (20)\nThorofare, NJ 46 - -\nPost-close operating losses 14 - 518 -\nArlington, TX 20 20 20\nOut-of period vendor rebates 15 (234) - -\nTotal EBITDA adjustment 223 120 20\nDue diligence adjustments 628 4,180 1,533\nAdjusted property insurance expense 757 1,172 1,225\nAdjusted EBITDA 34,781 1,212 (2,215)\nAs a % of adjusted net sales 0.2 0.4 0.4\nPro forma and run-rate adjustments 3,521 2,543 8,730\n14.Post-close operating losses\u2013The Largo (December 2019), Megantic\nPro forma EBITDA 38,302 3,754 6,515\n(December 2020) and Springfield (June 2021) locations were closed as part of\nOther EBITDA considerations:\nMasonite\u2019s restructuring plans. The EBITDA adjustment presented removes losses\nCorporate allocated costs 10,785 11,108 11,442 incurred at Springfield subsequent to the facility\u2019s closure date. We note post-close\nMargin credit on sales to NAR 5,977 5,706 7,082 activity for Largo and Megantic were not significant in the Historical Period.\nCurrency: $ 000 FY20 FY21 FY22\nKey metrics:\nReported EBITDA margin (6.5) (25.3) (0.3) Inventory write-offs - 326 -\nManagement EBITDA margin 9.5 (1.0) (1.2) Moving costs - 181 -\nSG&A - 11 -\nAdjusted EBITDA margin 9.7 0.4 (0.7)\nPost-close operating losses - 518 -\n15.Out-of-period vendor rebates-Vendor rebates primarily relate to Supplier 27,\nArchitectural\u2019s stain / paint provider. The EBITDA adjustment removes a correcting\nentry recorded in FY20 relating to FY19 purchases.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 19", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nPro forma adjustments\nPro forma adjustments\n16.Fixed and non-recurring costs at closed locations -As previously noted, the\nThe subsequent discussion presents pro forma adjustments to EBITDA identified and Megantic and Springfield plants were closed in December 2020 and June 2021,\nprepared by Management. These adjustments address the pro forma impact of (i) cost respectively and consolidated with existing component and door plants to eliminate\nreduction initiatives the Business executed on in FY20 and FY21, (ii) other run-rate redundancies, improve efficiency and enable operating leverage.Management\nnormalizations for the impact of certain operational and supply chain matters the represented Megantic\u2019s volume transferred to Birchwood and of the various\nBusiness encountered during the Historical Period, and (iii) additional restructuring Springfield product lines, the Stile & Rails product line shifted to the London door\nactions implemented in early FY23. plant, the HPDL and LPDL product lines shifted to Jefferson City and Marshfield\ndoor plants, and the MDF line, which was not profitable, was exited. Management\u2019s\nThe underlying assumptions utilized in Management\u2019s calculations were generally\npro forma adjustment removes fixed costs from Adjusted EBITDA that were\nbased on historical evidence or certain forecast estimates. The achievability of forecast\nincurred prior to facility closure as these costs were not required to support the\nassumptions are subject to many factors, some of which are beyond Management\nvolume shifts subsequent toconsolidation. A due diligence adjustment was also\ncontrol. Accordingly, actual results may differ from pro forma results. EY did not assist\npresented to add back post-close losses associated with these closures. The table\nin the preparation of the pro forma calculations or in the development of any\nbelow presents a summary calculation of the Management\u2019s pro forma adjustment\nassumptions therein, and the procedures were largely limited to ascertaining that\nby location. We note the following:\ncertain information in tabulations and reports received from Management agreed with\nthe accounting records. For further details on the computation of the adjustments \u25ba Management\u2019s estimate of fixed overhead is comprised of (i) a portion of\ndiscussed in the following pages, refer to theaccompanying Databook. overhead salaries and 20% of benefits associated with those salaries, (ii)\noverhead facility costs consisting of 100% facility rent, insurance, real estate\ntaxes and 40% utilities expense and (iii) 100% of building related repairs and\nCurrency: $ 000 Ref. FY20 FY21 FY22\nmaintenance and 50% of all other repairs and maintenance expense.\nReported EBITDA (23,133) (76,635) (972)\nManagement estimated fixed overhead salaries of 70% for Meganitc and 80%\nManagement adjustments 57,286 73,667 (2,777) for Springfield.\nManagement EBITDA 34,153 (2,968) (3,748)\n\u25ba Fixed SG&A estimated by Management is primarily comprised of administrative\nDue diligence adjustments 628 4,180 1,533 expenses (primarily salaries and benefits).\nAdjusted EBITDA 34,781 1,212 (2,215)\nPro forma and run-rate adjustments: Fixed and non-recurring costs at closed locations\nFixed and non-recurring costs at closed facilities 16 3,521 745 - Currency: $ 000 FY20 FY21 FY22\nJefferson City machining center 17 - 77 264 Fixed overhead 1,305 - -\nMason City ERP implementation 18 - 1,181 188 SG&A 361 - -\nBirchwood supply chain impacts 19 - 539 4,855 Megantic (Dec20 closure) 1,666 - -\nFY23 restructuring plan 20 - - 3,423 Fixed overhead 1,355 635 -\nPro forma and run-rate adjustments 3,521 2,543 8,730 SG&A 501 110 -\nSpringfield (Jun21 closure) 1,855 745 -\nPro forma EBITDA 38,302 3,754 6,515\nFixed and non-recurring costs at closed facilities 3,521 745 -\nOther EBITDA considerations:\nCorporate allocated costs 10,785 11,108 11,442\nMargin credit on sales to NAR 5,977 5,706 7,082\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 20", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nPro forma adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Pro forma adjustments (continued)\nReported EBITDA (23,133) (76,635) (972) 17.Jefferson City machining center\u2013A$2.9 million machining center was installed\nManagement adjustments 57,286 73,667 (2,777) at the Jefferson City door plant to improve and automate downstream machining\ncapabilities within the network. The installation allows for increased throughput and\nManagement EBITDA 34,153 (2,968) (3,748)\nmore complex production mix. During the installation period (Dec21-Mar22),\nDue diligence adjustments 628 4,180 1,533\nproduction lines went down, resulting in a temporary loss in volume, that has\nAdjusted EBITDA 34,781 1,212 (2,215) subsequently resumed. Management represented volumes did not shift to other\nPro forma and run-rate adjustments: door plants during this period, due in part to an ERP implementation at Mason City\nand Marshfield being on a different system. The pro forma adjustment presented\nFixed and non-recurring costs at closed facilities 16 3,521 745 -\ncalculates the contribution margin associated with the estimated volume loss during\nJefferson City machining center 17 - 77 264\nthe installation period. The contribution margin utilized in the calculation was based\nMason City ERP implementation 18 - 1,181 188 on actual net sales, material cost of sales and 80% of distribution costs per unit\nBirchwood supply chain impacts 19 - 539 4,855 during each respective month of the installation period. Management\u2019s calculation\nassumes direct labor and overhead would not have been impacted by incremental\nFY23 restructuring plan 20 - - 3,423\nvolume produced and sold during the installation period as Management held\nPro forma and run-rate adjustments 3,521 2,543 8,730\nheadcount levels steady in expectation that volume would quickly return post-\nPro forma EBITDA 38,302 3,754 6,515 machining installation. Refer to the following table for a summary calculation of the\nOther EBITDA considerations: pro forma adjustment.\nCorporate allocated costs 10,785 11,108 11,442\nCurrency: $ 000 FY20 FY21 FY22\nMargin credit on sales to NAR 5,977 5,706 7,082\nDec21-Mar22:\nWeeks 5 13\nActual volume (000s) 8.4 22.8 -\nPro forma volume (000s) - 2.0 units / week 10.0 26.0 -\nEstimated volume loss (000s) 1.6 3.3\nPro forma impact:\nNet sales 356 771 -\nMaterial COS 239 402 -\nDistribution 40 105 -\nPro forma impact of volume loss 77 264 -\nJan21- Dec21- Apr22-\nCurrency: $ 000\nSep21 Mar22 Dec22\nTotal units sold (000s) 78.0 31.1 79.4\nNumber of weeks 39 18 39\nAvg. units sold per week (000s) 2.0 1.7 2.0\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 21", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nPro forma adjustments\nCurrency: $ 000 Ref. FY20 FY21 FY22 Pro forma adjustments (continued)\nReported EBITDA (23,133) (76,635) (972) 18.Mason City ERP implementation\u2013In Oct21, the Mason City door plant went live\nManagement adjustments 57,286 73,667 (2,777) on Microsoft AX. The system was implemented in advance of Mason City\u2019s\nTransition Services Agreement (\u201cTSA\u201d) with the facility\u2019s prior owner terminating in\nManagement EBITDA 34,153 (2,968) (3,748)\nDec21. (Management represented the TSA was entered into in conjunction with the\nDue diligence adjustments 628 4,180 1,533\n2018 Graham acquisition and all TSA costs incurred during the Historical Period\nAdjusted EBITDA 34,781 1,212 (2,215) were recorded on the Masonite Corporate P&L).\nPro forma and run-rate adjustments:\nWhile Masonite had previously undertaken deployments of Microsoft AX at two of its\nFixed and non-recurring costs at closed facilities 16 3,521 745 - door plants, Mason City\u2019s production footprint required the deployment of a\nJefferson City machining center 17 - 77 264 scheduling model that was not part of the other implementations. In addition, as part\nof the ERP conversion, various projects were undertaken to harmonize product\nMason City ERP implementation 18 - 1,181 188\nofferings, migrate and integrate with Masonite\u2019s DoorBuilder configurator and front-\nBirchwood supply chain impacts 19 - 539 4,855\nend application, automate production and upgrade IT infrastructure.\nFY23 restructuring plan 20 - - 3,423\nPrior to the implementation, the plant was averaging approximately 4,000 (actual)\nPro forma and run-rate adjustments 3,521 2,543 8,730\nunits sold per week. However, this volume declined significantly during the ERP\nPro forma EBITDA 38,302 3,754 6,515 implementation period due to the change in the scheduling logic and orderflow that\nOther EBITDA considerations: impacted production and increased backlog. While volumes have not yet returned to\npre-ERP implementation levels, Management is in the process of addressing\nMason City ERP implementation various operational issues resulting from the ERP change and will have completed\nmajor capital projects (i.e., edge bander, trim saw and down stacker) expected to\nCurrency: $ 000 FY20 FY21 FY22 result in normal production levels by the end of FY23.\nOct21-Jan22:\nThe pro forma adjustment presented calculates the contribution margin associated\nWeeks - 13 4\nwith the estimated volume loss during the ERP implementation period (Oct21-\nActual volume (000s) - 25.2 8.7 Jan22). The contribution margin utilized in the calculation was based on actual net\nPro forma volume (000s) - 2.850 units / week - 37.1 11.4 sales, material cost of sales and 80% of distribution costs per unit during each\nEstimated volume loss (000s) - 11.9 2.7 respective month impacted by the implementation. Management\u2019s calculation\nassumes direct labor and overhead would not have been impacted by incremental\nvolume produced and sold during the implementation period as Management held\nPro forma impact:\nheadcount levels steady in expectation that volume would quickly return post-ERP\nNet sales - 2,768 622\nimplementation.\nMaterial COS - 948 342\nDistribution - 639 91 Refer to the tables at bottom left for a summary calculation of the pro forma\nadjustment.\nPro forma impact of volume loss - 1,181 188\nJan21- Oct21- Feb22-\nCurrency: $ 000\nSep21 Jan22 Dec22\nTotal units sold (000s) 157.7 67.8 136.7\nNumber of weeks 39 26 48\nAvg. units sold per week (000s) 4.0 2.6 2.8\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 22", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nPro forma adjustments\nPro forma adjustments (continued)\nBirchwood supply chain impacts\n19.Birchwood supply chain impacts\u2013Prior to FY22, crossbands used to\nmanufacture door skins were sourced domestically from two vendors. During FY22, Currency: $ 000 FY20 FY21 FY22\none of the legacy crossband suppliers (~30% of purchases), exited the crossband Inbound freight on overseas crossband purchases - - 3,447\nmarket and repurposed its capacity to manufacture flooring. The other US-based Birchwood substitution costs - 539 882\ncrossband supplier(~70% of purchases), implemented an allocation process that German supplier unit pricing on crossbands - - 526\nsignificantly reduced the availability of crossbands to the Birchwood plant. As a\nBirchwood supply chain impacts - 539 4,855\nresult, the Architectural business was required to identify alternative suppliers, one\nof which was located inMalaysia, resulting in longer lead times and increased levels\nof freight expense, and another that offered product at a significantly higher unit\nInbound freight on overseas crossband purchases\nprice. In addition, Management noted these new suppliers only offered certain sizes\nof crossbands that resulted in incremental scrap expense to modify the product to\nCurrency: $ 000 FY20 FY21 FY22\nthe specifications required in the manufacturing process. Management\u2019s pro forma\nActual ocean freight spend - - 7,473\nadjustment quantifies the estimated EBITDA impact associated with the supply chain\nNumber of containers - - 260\ndisruption, largely affecting the Birchwood plant. Management noted Masonite stood\nup its European operations in FY22 to provide long term supply of crossbands to Actual ocean freight spend per container - - 29\nArchitectural and beginning in Oct22, the Birchwood plant is no longer on allocation\nPro forma spend per container - - 11\nwith the US-based supplier. The table at top right presents a breakout of the pro\nPro forma spend - - 2,860\nforma adjustment.\nIncremental spend - - 4,613\n\u25ba Inbound freight on overseas crossband purchases-Birchwood began Estimated deferred freight PPV - - (1,166)\nsourcing crossbands from a Malaysian supplier beginning in early FY22. The first\nInbound freight on overseas crossband purchases - - 3,447\norder was placed in Mar22 to support the product qualification process (e.g., fire\ntesting). Full orders started in May22 and were received through the remainder of\nthe year. During this period, ocean freight rates significantly increased due to Birchwood substitution costs\nhigher demands on the global supply chain. Masonite has seen these rates Currency: $ 000 FY20 FY21 FY22\ndecline beginning in Dec22 (average rate per container was $11 during Dec22-\nSep21-Oct22:\nFeb23 compared to $29 during FY22). The table at middle right presents a\nWeeks - 18 43\nsummary calculation of Management\u2019s estimate of incremental freight incurred\nRaw material scrap as reported - 1,620 3,462\n(net of deferrals based on actual inventory days on hand for each respective\nmonth impacted) associated with higher-than-normal ocean freight rates. Pro forma scrap / week - 60 60\nPro forma scrap expense - 1,080 2,580\n\u25ba Birchwood substitution costs\u2013Beginning in Sep21, the US-based crossband\nBirchwood substitution costs - 539 882\nsupplier started having trouble with production and subsequently placed\nBirchwood on allocation and beginning in Mar22, new suppliers were brought on.\nBirchwood scrap expense increased from $65 / week during Jan21-Aug21 to $83 Jan21- Sep21- Dec22-\nCurrency: $ 000\n/ week during Sep21-Oct22. Management attributes this increase directly to Aug21 Oct22 Jan23\ncutting and resizing existing stock from the US supplier and materials purchased Raw material scrap 2,213 5,082 540\nfrom new suppliers that did not meet the required manufacturing specifications. Number of weeks 34 61 9\nBeginning in Dec22 and onward, the Birchwood plant has experienced lower Raw material scrap per week 65 83 60\nlevels of scrap as the Birchwood plant is no longer on allocation with the US-\nbased supplier.\nContinued onthe following page.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 23", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nPro forma adjustments\nPro forma adjustments (continued)\nCurrency: $ 000 Ref. FY20 FY21 FY22\nReported EBITDA (23,133) (76,635) (972) 19.Birchwood supply chain impacts(continued from the previous page)\nManagement adjustments 57,286 73,667 (2,777) \u25ba German supplier unit pricing on crossbands \u2013Due to the supply\nManagement EBITDA 34,153 (2,968) (3,748) shortage of crossbands, Birchwood also began purchasing crossbands from\na German supplier. As illustrated in the following table, crossbands\nDue diligence adjustments 628 4,180 1,533\npurchased from this German supplier had a significantly higher unit price\nAdjusted EBITDA 34,781 1,212 (2,215)\nthan Birchwood\u2019s primary US-based crossband supplier. As Birchwood\nPro forma and run-rate adjustments: ceased purchasing from the German-based supplierin mid-Dec22,\nFixed and non-recurring costs at closed facilities 16 3,521 745 - Management does not consider this incremental spend as recurring in\nnature. The following table presents a summary calculation estimating the\nJefferson City machining center 17 - 77 264\nincrease in material costs incurred (net of deferrals based on actual\nMason City ERP implementation 18 - 1,181 188\ninventory days on hand for each respective month impacted) in FY22\nBirchwood supply chain impacts 19 - 539 4,855 associated with purchases of crossbands from the German-based supplier.\nFY23 restructuring plan 20 - - 3,423 Management noted beginning in Oct22, the Birchwood plant is no longer on\nallocation with the US-based supplier and Masonite\u2019s European operations\nPro forma and run-rate adjustments 3,521 2,543 8,730\nhas sufficient capacity to supply crossbands to Birchwood if supply is\nPro forma EBITDA 38,302 3,754 6,515\ndisrupted in the future.\nUS German\nBirchwood supply chain impacts Currency: $ 000\nsupplier supplier\nCurrency: $ 000 FY20 FY21 FY22 FY22 vendor spend 7,002 2,541\nInbound freight on overseas crossband purchases - - 3,447 FY22 units purchased 925 114\nBirchwood substitution costs - 539 882 FY22 average cost per unit 7.6 22.3\nGerman supplier unit pricing on crossbands - - 526\nBirchwood supply chain impacts - 539 4,855 Unit price differential 13.4\nPro forma impact on spend 1,530\nFY23 restructuring plan\nEstimated deferred PPV (1,005)\nComp. & German supplier unit pricing on crossbands 526\nCurrency: $ 000 Headcount\nbenefits\nSales 23 2,364\n20.FY23 restructuring plan\u2013Management\u2019s pro forma adjustment represents\nOperations 2 402\nsavings in compensation and benefits expected to be realized in FY23 as a\nFY23 reduction in force 25 2,767 result of (i) reduction in force restructuring actions predominately implemented\nFinance 1 211 at the beginning of FY23, and (ii) the elimination of certain roles during FY22\nSales 1 161 that were deemed redundant or were replaced with existing employees. The\nOperations 1 159 table at bottom left presents a summary of the expected cost savings. FY23\nreduction in force amounts represent pro-rated compensation and benefits\nCustomer service 1 70\nsavings for FY23 based on expected separation date. For roles eliminated in\nHR 1 54\nFY22, the presented amounts represent compensation and benefits paid in\nRoles eliminated in FY22 5 656\nFY22 during employment with Masonite.\nPro forma impact to EBITDA 30 3,423\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 24", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nOther EBITDA considerations\nCurrency: $ 000 Ref. FY20 FY21 FY22 Other EBITDA considerations\nReported EBITDA (23,133) (76,635) (972) 21.Corporate allocated costs\u2013Architectural receives a monthly corporate allocation\nManagement adjustments 57,286 73,667 (2,777) charge from Masonite Corporate (\u201cParent\u201d) which is reflected in overhead and\nadministration expense on a reported basis. Management indicated these charges\nManagement EBITDA 34,153 (2,968) (3,748)\nrepresent support provided by Parent primarily for IT and back-office support (i.e.,\nDue diligence adjustments 628 4,180 1,533\nfinancial reporting, tax, HR, legal, treasury, etc.) and noted, with the exception of\nAdjusted EBITDA 34,781 1,212 (2,215) minor IT support allocated to administration salaries, no other costs are cross\nPro forma and run-rate adjustments 3,521 2,543 8,730 charged to the Architectural business. The following table presents a summary of\ncorporate allocated costs included within Adjusted EBITDA.We understand\nPro forma EBITDA 38,302 3,754 6,515\nManagement has prepared a separate standalone cost analysis related to the\nOther EBITDA considerations:\ncorporate support provided to the Architectural business which is not\nCorporate allocated costs 21 10,785 11,108 11,442 presented in this report.\nMargin credit on sales to NAR 22 5,977 5,706 7,082\nCurrency: $ 000 FY20 FY21 FY22\nOverhead 3,451 3,554 3,660\nKey metrics: Administration 7,334 7,555 7,781\nReported EBITDA margin (6.5) (25.3) (0.3) Total corporate allocated costs 10,785 11,108 11,442\nManagement EBITDA margin 9.5 (1.0) (1.2) As a % of adjusted net sales 3.0 3.7 3.5\nAdjusted EBITDA margin 9.7 0.4 (0.7)\n22.Margin credit on sales to NAR\u2013Various Architectural plants sell doors and\ncomponents to other entities within Masonite. These intercompany sales are\ngenerally recorded at cost, however sales from the Marshfield Particle Board plant\nto the North America Residential (NAR) segment of Masonite, which represented\nover 90% of total sales to NAR in FY22, receive a quarterly margin credit.\nManagement indicated this sales activity is expected to continue post-transaction,\nand the margin received on these salesapproximate arms\u2019 length transactions.\nCurrency: $ 000 FY20 FY21 FY22\nSales to NAR at standard cost 11,175 7,895 9,110\nMarshfield Particle Board margin credit 5,977 5,706 7,082\nTotal sales to NAR 17,152 13,602 16,192\nEstimated margin on sales to NAR 34.8 42.0 43.7\nMFPB as a % of total sales 85.5 90.7 91.7\nNote to table: As discussed in theOverview,for external reporting purposes, 100% of Architectural sales\nto NAR are eliminated in Masonite consolidation with an equally offsetting elimination to cost of sales. The\ncost of sales elimination effectively represents 100% of the inter-company cost of sales recorded at NAR.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 25", "Recast operating results\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 26", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast operating results Adjusted EBITDA bridge\nThe following table presents recast operating results for the\nCCuurrrernecny:c $y 0:0 $0 000\nArchitectural business adjusted for reported EBITDA, Management and\ndue diligence adjustments discussed in theQuality of earnings.\n40,000\n40,000\nCurrency: $ 000 FY20 FY21 FY22\n3300,,000000\n1199,,992109\nNet sales 358,099 303,149 323,069\n2200,,000000\nCost of sales 281,052 259,592 281,042 3344,,879811\n1100,,000000\nGross profit 77,047 43,557 42,026 2211,,345600\nSelling 17,134 18,506 19,866 -- 11,,221122 ((22,,221155))\nAdministration 25,131 23,840 24,376 ((1100,,000000)) ((7890)) ((2211,,445500)) ((11,,889976))\nAdjusted EBITDA 34,781 1,212 (2,215)\n((2200,,000000))\nExternal door units sold 1,258 1,001 919\n((5544,,995409))\n((3300,,000000))\nAdjusted gross margin 21.5 14.4 13.0\nFFYY2200 NNeett ssaalleess CCoosstt ooff SSGG&&AA FFYY2211 NNeett ssaalleess CCoosstt ooff SSGG&&AA FFYY2222\nAdjusted EBITDA margin 9.7 0.4 (0.7) AAddjjuusstteedd ssaalleess AAddjjuusstteedd ssaalleess AAddjjuusstteedd\nEEBBIITTDDAA EEBBIITTDDAA EEBBIITTDDAA\nCOVID-19 impacts\nAs illustrated in the chart above, the decline in Adjusted EBITDA over the Historical Period was\nDuring the Historical Period, the Architectural business experienced\ndriven by:\ndeclines in customer demand, supply shortages and material cost /\nwage inflation as a result of COVID-19. Management further noted \u25ba A $54.9 million decline in net sales from FY20 to FY21 due in part to lower customer demand\nthe following: and to production challenges at certain facilities that impacted sales volume. Refer to thePro\nforma adjustmentssection for discussion of Jefferson machining center and Mason City ERP\n\u25ba In FY20, employees received pay cuts for ~7 weeks, but were\nimplementation.\nsubsequently reinstated and made whole inclusive of normal\nmerit increases shortly thereafter. \u25ba While this decline in net sales was offset by a $21.5 million decline in cost of sales, gross\n\u25ba Masonite deferred payment of payroll taxes as part of the margin declined from 21.5% in FY20 to 14.4% in FY21 due to an inability to flex direct labor\nCARES Act. This liability was maintained on the Masonite Corp. costs and reduced fixed overhead leverage in addition to constraints on ability to service\nbalance sheet. As of Dec22, there were no remaining liabilities demand driven by supply chain constraints.\nassociated with this deferral.\n\u25ba Net sales increased $19.9 million from FY21 to FY22 primarily due to implemented price\n\u25ba No other COVID-19 related government subsidies (e.g., PPP increases. However, this impact was offset by $21.4 million of additional cost of sales\nloans) were received by the Architectural business. associated with (i) material cost increases, (ii) supply chain disruptions (refer to the\nBirchwood supply chain impacts pro forma adjustment), (iii) wage inflation and labor\n\u25ba In response to declines in volume experienced in FY20,\ninefficiencies due to higher plant-level attrition, and (iv) increased overhead and distribution\nArchitectural reduced direct labor and distribution headcount.\ncosts.\nWhen demand resumed, rehiring these plant level positions\nbecame a challenge and higher attrition at plants resulted in \u25ba The following pages provide additional commentary on net sales and gross margin by\nlabor inefficiencies. operating division / location.\n\u25ba These impacts along with other operational matters resulting in\nan increase in lead times and order backlog.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 27", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast net sales and gross margin by division Net sales bridge\nThe following table presents recast net sales and cost of sales by\nCurrency: $ 000\ndivision. Refer to theOverviewfor a listing of plant locations by division.\nAs illustrated in the top right chart, Doors & Components drove the\n370,000\ndecline in net sales from FY20 to FY21 and Quick Ship (QS) drove the\nincrease in net sales from FY21 to FY22. 360,000\n350,000\nCurrency: $ 000 FY20 FY21 FY22\n340,000\nDoors & Components 316,625 254,874 254,038\n330,000 21,205\nQuick Ship 43,161 49,390 70,595\n320,000 358,099\nHQ (1,687) (1,115) (1,564) (449)\n310,000 6,229 572\nNet sales 358,099 303,149 323,069\n300,000 323,069\nDoors & Components 245,932 221,381 230,630 290,000 303,149 (836)\n(61,751)\nQuick Ship 30,413 33,278 43,971\n280,000\nHQ 4,707 4,933 6,441\nCost of sales 281,052 259,592 281,042\nGross profit 77,047 43,557 42,026\nNote to table: HQ net sales primarily includes customer volume rebates. HQ cost of sales is\nprimarily comprised of OH corporate cost allocations as well as vendor rebates.\nDoors & Components net sales bridge\nDoors & Components\nCurrency: $ 000\nThe chart at bottom right presents a bridge of net sales for D&C and\nillustrates the impact of volume declines on net sales over the Historical\n340,000\nPeriod as previously noted. Volume declines, driven by lower customer\ndemand and production challenges at certain D&C facilities, were 320,000\npartially offset by price increases and changes in mix. While net sales\nper external unit sold increased from $289 (actual) in FY20 to $352 300,000\n(actual) in FY22, we note material cost increases, supply chain\n280,000 7,761\ndisruptions, wage inflation and labor inefficiencies, and increased\n32,903\noverhead and distribution costs contributed to D&C gross margin 260,000 316,625\ndeclines over the Historical Period as illustrated in the following table.\n(57,118)\n240,000 (12,394) (2,236)\nCurrency: $ 000 FY20 FY21 FY22 254,874 254,038\n220,000\nDoors & Components:\n(31,503)\nNet sales 316,625 254,874 254,038 200,000\nExternal units sold 1,097 852 722\nNet sales per external door sold 289 299 352\nGross margin 22.4 13.1 9.2\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 28", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast net sales and gross margin by division Net sales bridge\nCurrency: $ 000 FY20 FY21 FY22\nCurrency: $ 000\nDoors & Components 316,625 254,874 254,038\n370,000\nQuick Ship 43,161 49,390 70,595\n360,000\nHQ (1,687) (1,115) (1,564)\n350,000\nNet sales 358,099 303,149 323,069\n340,000\nDoors & Components 245,932 221,381 230,630 330,000 21,205\nQuick Ship 30,413 33,278 43,971\n320,000 358,099\nHQ 4,707 4,933 6,441 (449)\n310,000 6,229 572\nCost of sales 281,052 259,592 281,042\n300,000 323,069\nGross profit 77,047 43,557 42,026 (836)\n290,000 303,149\n(61,751)\nQuick Ship 280,000\nThe chart at bottom right presents a bridge of net sales for QS and\nillustrates (i) increases in QS net sales from FY20 to FY21 were\nprimarily driven by price / mix and (ii) increases in QS net sales from\nFY21 to FY22 were primarily due to an increase in volumes sold.\nWe note net sales per external unit sold increased from $269 (actual) in Quick Ship net sales bridge\nFY20 to $358 (actual) in FY22, with the impact of price driving margin\ngrowth over the Historical Period.\nCurrency: $ 000\nCurrency: $ 000 FY20 FY21 FY22 75,000 4,978 191\nQuick Ship:\n70,000 16,036\nNet sales 43,161 49,390 70,595\n65,000\nExternal units sold 160 149 197\n60,000\nNet sales per external door sold 269 332 358\n55,000\nGross margin 29.5 32.6 37.7 9,543\n50,000 70,595\n45,000 (227)\n40,000 49,390\n43,161 (3,087)\n35,000\n30,000\nFY20 net External External Sales to FY21 net External External Sales to FY22 net\nsales door door price NAR sales door door price NAR sales\nvolume / mix volume / mix\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 29", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast operating results\nAAmmoouunntt AAss aa %% ooff nneett ssaalleess Net sales\nCCuurrrreennccyy:: $$ 000000 FFYY2200 FFYY2211 FFYY2222 FFYY2200 FFYY2211 FFYY2222\nNet sales is comprised of (i) external sales of doors and door\nNNeett ssaalleess 335588,,009999 330033,,114499 332233,,006699 110000..00 110000..00 110000..00 components to third party customers, (ii) sales to Masonite\u2019s NAR\nCCoosstt ooff ssaalleess 228801,,904522 225599,,559922 228811,,004422 7788..55 8855..66 8877..00 segment and (iii) freight charged to third party customers, offset by (iv)\nGGrroossss pprrooffiitt 7777,,105477 4433,,555577 4422,,002266 2211..55 1144..44 1133..00 sales deductions (i.e., discounts, returns, rebates, etc.).\nSSeelllliinngg 1177,,113344 1188,,550066 1199,,886666 44..88 66..11 66..11\n\u25ba Revenue recognition\u2013Architectural recognizes revenue at the time\nAAddmmiinniissttrraattiioonn 2255,,113311 2233,,884400 2244,,337766 77..00 77..99 77..55 of shipment, however as most customers have FOB Destination\nAAddjjuusstteedd EEBBIITTDDAA 3344,,879811 11,,221122 ((22,,221155)) 99..77 00..44 ((00..77)) terms, a quarterly adjustment (is recorded to estimate and reverse\ninventory in transit.\nNet sales \u25ba Sales to NAR\u2013Sales to NAR primarily relate to particle board\nproduced at the MFPB plant. Sales to NAR transfer at standard cost\nAmount As a % of net sales and MFPB receives a quarterly margin credit as discussed inOther\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22 EBITDA considerations.\nExternal sales 331,824 281,418 296,445 92.7 92.8 91.8 \u25ba Freight revenue\u2013Freight charged to third party customers increased\nSales to NAR 17,295 13,711 16,322 4.8 4.5 5.1 over the Historical Period to offset higher shipping costs.\nFreight revenue 17,759 15,973 18,625 5.0 5.3 5.8 Management notes while freight expense is incurred to ship product\nintra-and inter-company, freight is not charged to the receiving plant\nSales deductions (8,780) (7,952) (8,323) (2.5) (2.6) (2.6)\non product movements.\nNet sales 358,099 303,149 323,069 100.0 100.0 100.0\n\u25ba Sales deductions\u2013Sales deductions as a percent of net sales have\nremained consistent over the Historical Period. Management noted\nfluctuations in the various sales deduction accounts was partly driven\nSales deductions\nby varying classification of activity at the plant-level. However, it was\nnoted sales allowance Increased in FY22 in part due to global supply\nAmount As a % of net sales\nchain constraints that impacted delivery of orders on original\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\npromised date and cash discounts declined in FY22 partially due to a\nReturns (2,256) (2,392) (2,289) (0.6) (0.8) (0.7) top customer not paying early and qualifying for2% early payment\nSales allowances (1,386) (791) (1,798) (0.4) (0.3) (0.6) term discount beginning in Aug22. We note volume rebates presented\nVolume rebates (2,097) (1,623) (1,835) (0.6) (0.5) (0.6) at left reflect adjustments discussed in theQuality of earningssection.\nCash discounts (2,493) (2,199) (1,049) (0.7) (0.7) (0.3)\nOther price / order adjustments (549) (947) (1,352) (0.2) (0.3) (0.4)\nSales deductions (8,780) (7,952) (8,323) (2.5) (2.6) (2.6)\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 30", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast operating results Cost of sales\nAdjusted cost of sales, comprised of (i) material costs, (ii) direct labor, (iii)\nAmount As a % of net sales\noverhead and (iv) distribution costs, is presented in the middle table for\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\nthe Historical Period.\nNet sales 358,099 303,149 323,069 100.0 100.0 100.0\nMaterial COS\u2013The table at middle left presents a breakout of material\nCost of sales 281,052 259,592 281,042 78.5 85.6 87.0\nCOS.\nGross profit 77,047 43,557 42,026 21.5 14.4 13.0\nSelling 17,134 18,506 19,866 4.8 6.1 6.1 \u25ba Standard material cost-The Architectural business utilizes standard\nAdministration 25,131 23,840 24,376 7.0 7.9 7.5 costing whereby inventory sold is recognized as cost of sales based\non a standard direct material, direct labor and overhead rate.\nAdjusted EBITDA 34,781 1,212 (2,215) 9.7 0.4 (0.7)\nStandard material cost presented at bottom left represents total\nstandard costs of inventory sold, net of absorbed labor and overhead.\nCost of sales The fluctuation in standard material cost is largely due to changes in\nvolume and mix. Management noted standards were updated for\nAAmmoouunntt AAss aa %% ooff nneett ssaalleess\ncrossbands in FY22, but no other standard costs were updated during\nCCuurrrreennccyy:: $$ 000000 FFYY2200 FFYY2211 FFYY2222 FFYY2200 FFYY2211 FFYY2222\nthe Historical Period.\nMMaatteerriiaall CCOOSS 112255,,882211 111111,,669922 111188,,990077 3355..11 3366..88 3366..88\n\u25ba Freight In\u2013Represents actual freight expense incurred associated\nDDiirreecctt llaabboorr 5577,,007722 5500,,668888 5555,,002288 1155..99 1166..77 1177..00\nwith purchased inventory. The increase in freight expense is\nOOvveerrhheeaadd 6666,,310966 6644,,771166 7722,,775500 1188..55 2211..33 2222..55 predominately driven by Birchwood purchases of crossbands from\nDDiissttrriibbuuttiioonn 3311,,885533 3322,,449966 3344,,335577 88..99 1100..77 1100..66 foreign suppliers. Refer to the Birchwood supply chain impacts pro\nCCoosstt ooff ssaalleess 228810,,095422 225599,,559922 228811,,004422 7788..55 8855..66 8877..00 forma adjustment for further discussion.\n\u25ba Purchase price variances\u2013Variances between standard and actual\nMaterial COS material, labor and overhead costs are recorded to the P&L on a\nmonthly basis. These variances along with freight incurred are\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\ncapitalized to inventory on a quarterly basis based on total inventory\nStandard material cost 119,368 93,681 85,518 33.3 30.9 26.5\ndays on hand. Net purchase price variances increased over the\nFreight in 3,458 5,104 15,629 1.0 1.7 4.8 Historical Period due to inflation in material costs and the Business\nPurchase price variances (1,029) 4,730 10,587 (0.3) 1.6 3.3 not updating standards for all plants.\nInventory adjustments 5,063 9,090 8,173 1.4 3.0 2.5\n\u25ba Inventory adjustments\u2013As presented in the table at bottom left,\nVendor rebates and discounts (1,038) (913) (1,001) (0.3) (0.3) (0.3)\namounts are primarily comprised of scrap expense, changes to\nMaterial COS 125,821 111,692 118,907 35.1 36.8 36.8 provisions for obsolete and slow-moving inventory (\u201cOSMI\u201d) that are\nrecorded quarterly, and count adjustments. We note plants perform\nInventory adjustments periodic cycle counts and full physical counts annually.\nCurrency: $ 000 FY20 FY21 FY22 \u25ba Vendor rebates and discounts \u2013Includes early pay discounts on\npurchases as well as rebates earned primarily from paint and stain\nRaw material scrap 4,557 8,290 8,277\nvendors. Vendor rebates fluctuate each year based on usage.\nOMSI 487 1,050 476\nManagement noted no changes in vendor terms during the Historical\nCount adjustments 148 (155) (385) Period, but indicated Marshfield is transitioning from PPG to Sherwin\nOther inventory adjustments (130) (95) (194) Williams in FY23. The amounts presented at left reflect adjustments\nTotal inventory adjustments 5,063 9,090 8,173 discussed in theQuality of earningssection.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 31", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nDirect labor\nCost of sales (continued)\nAmount As a % of net sales\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22 Direct labor\u2013Direct labor is comprised of compensation and benefits\nHourly wages 33,127 29,853 33,208 9.3 9.8 10.3 for hourly employees at the plant level and well as contract labor\nutilized to support production.\nOvertime pay 4,797 4,956 4,597 1.3 1.6 1.4\nBonus 374 334 283 0.1 0.1 0.1 \u25ba Fluctuations in direct labor compensation and benefits during the\nBenefits 17,215 14,665 16,067 4.8 4.8 5.0 Historical Period were driven in part by a reduction in headcount\nCompensation and benefits 55,513 49,808 54,154 15.5 16.4 16.8 (average direct labor employees declined from 1,043 in FY20 to 900\nin FY22), offset by wage inflation.\nContract labor 1,559 880 874 0.4 0.3 0.3\nDirect labor 57,072 50,688 55,028 15.9 16.7 17.0 \u25ba Direct labor employees receive operational performance (OIP)\nAvg. direct labor employees 1,043 900 900 bonuses, which are expensed and accrued within the Architectural\nAvg. C&B per employee 53 55 60 P&L.\nBenefits as a % of total comp. 45.0 41.7 42.2 \u25ba Benefits for direct labor employees includes payroll taxes, allocated\ncosts associated with group health insurance, as well as vacation\nand post-retirement benefit costs.\nOverhead\nOverhead\u2013Overhead is primarily comprised of compensation and\nAAmmoouunntt AAss aa %% ooff nneett ssaalleess benefits, facility costs (lease expense, utilities, waste disposal,\nCCuurrrreennccyy:: $$ 000000 FFYY2200 FFYY2211 FFYY2222 FFYY2200 FFYY2211 FFYY2222 insurance and real estate taxes) and repairs and maintenance. We note\noverhead also includes a portion of corporate cost allocations, which\nSSaallaarriieess 1111,,220066 1100,,999922 1122,,228866 33..11 33..66 33..88\nhave remained fairly consistent over the Historical Period.\nHHoouurrllyy wwaaggeess 55,,002211 55,,444422 55,,332277 11..44 11..88 11..66\nOOvveerrttiimmee ppaayy 11,,227700 11,,441111 11,,115588 00..44 00..55 00..44 \u25ba Compensation and benefits-Fluctuations in overhead\nBBoonnuuss 11,,226622 778844 999999 00..44 00..33 00..33 compensation and benefits during the Historical Period were driven\nBBeenneeffiittss 66,,000033 55,,994422 66,,112211 11..77 22..00 11..99 in part by a reduction in headcount (average OH employees\ndeclined from 302 in FY20 to 272 in FY22), offset by wage inflation.\nCCoommppeennssaattiioonn aanndd bbeenneeffiittss 2244,,776622 2244,,557711 2255,,889900 66..99 88..11 88..00\nFFaacciilliittyy ccoossttss 1155,,775555 1166,,447766 1188,,884466 44..44 55..44 55..88 \u25ba Facility costs\u2013The increase in facility costs during the Historical\nRReeppaaiirrss && mmaaiinntteennaannccee 1133,,579066 1122,,115533 1155,,006611 33..88 44..00 44..77 Period was primarily driven by increased utilities (natural gas),\nSSuupppplliieess 55,,995599 55,,770000 66,,339977 11..77 11..99 22..00 insurance and warehouse rentals as incremental space was leased\nin Northumberland (to create a kitting area) and Marshfield.\nCCoorrppoorraattee aallllooccaattiioonn 33,,445511 33,,555544 33,,666600 11..00 11..22 11..11\nCCoonnttrraacctt llaabboorr 11,,333355 11,,003355 11,,229955 00..44 00..33 00..44 \u25ba Repairs and maintenance\u2013R&M expense increased $1.5m from\nOOtthheerr oovveerrhheeaadd 11,,333388 11,,222277 11,,660022 00..44 00..44 00..55 FY20 to FY22 predominately related to Mason City, Jefferson City\nOOvveerrhheeaadd 6666,,139066 6644,,771166 7722,,775500 1188..55 2211..33 2222..55 and Birchwood associated with operational updates discussed\nthroughout the report. The amounts presented at left reflect\nAAvvgg.. OOHH eemmppllooyyeeeess 330022 228811 227722\nadjustments discussed in theQuality of earningssection.\nAAvvgg.. CC&&BB ppeerr eemmppllooyyeeee 8822 8877 9955\nBBeenneeffiittss aass aa %% ooff ttoottaall ccoommpp.. 3322..00 3311..99 3311..00 \u25ba Other overhead\u2013Primarily includes travel & entertainment (T&E)\ncosts as well as cell phone and internet reimbursements for OH\nemployees.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 32", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nCost of sales\nAmount As a % of net sales Cost of sales (continued)\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22 Distribution\u2013Distribution expense is predominately comprised of (i)\nMaterial COS 125,821 111,692 118,907 35.1 36.8 36.8 third-party freight expense for both shipments to customers as well as\nDirect labor 57,072 50,688 55,028 15.9 16.7 17.0 intra-company shipments of products and (ii) compensation and\nbenefits associated distribution employees (primarily hourly\nOverhead 66,306 64,716 72,750 18.5 21.3 22.5\nemployees).\nDistribution 31,853 32,496 34,357 8.9 10.7 10.6\nCost of sales 281,052 259,592 281,042 78.5 85.6 87.0 \u25ba Freight expense-Common carrier costs decline from FY21 to\nFY22 in part due to Springfield closure and demand change to\nDistribution service internal customers. Shipping costs increased over the\nHistorical Period due to inflationary pressures and an increase in\nsmaller freight loads, or less than truckload (\u201cLTL\u201d) shipments,\nAmount As a % of net sales\nrequiring more packaging supplies for secure shipments to avoid\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\nproduct damages.\nCommon carrier 19,611 19,741 18,342 5.5 6.5 5.7\nShipping costs 4,892 5,913 7,778 1.4 2.0 2.4 \u25ba Compensation and benefits-Fluctuations in distribution\ncompensation and benefits during the Historical Period were driven\nFreight expense 24,503 25,654 26,119 6.8 8.5 8.1\nwage inflation where average compensation and benefits per\nSalaries 547 497 279 0.2 0.2 0.1\nemployee increased from $60 in FY20 to $66 in FY22.\nHourly wages 3,088 2,804 3,790 0.9 0.9 1.2\nOvertime pay 662 711 688 0.2 0.2 0.2\nBonus 93 53 51 0.0 0.0 0.0\nBenefits 1,751 1,537 1,916 0.5 0.5 0.6\nCompensation and benefits 6,140 5,603 6,724 1.7 1.8 2.1\nRepairs & maintenance 380 480 680 0.1 0.2 0.2\nRentals 594 520 600 0.2 0.2 0.2\nContract labor 160 162 116 0.0 0.1 0.0\nOther distribution 76 77 119 0.0 0.0 0.0\nDistribution 31,853 32,496 34,357 8.9 10.7 10.6\nAvg. distribution employees 103 88 102\nAvg. C&B per employee 60 64 66\nBenefits as a % of total comp. 39.9 37.8 39.8\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 33", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast operating results Selling and administration expense\nSelling expense-Selling expense is predominately comprised of\nAmount As a % of net sales\ncompensation and benefits associated with the sales force supporting\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\nArchitectural. On an adjusted basis, selling expense increased\nNet sales 358,099 303,149 323,069 100.0 100.0 100.0\napproximately $2.7 million from FY20 to FY22, primarily driven by an\nCost of sales 281,052 259,592 281,042 78.5 85.6 87.0\nincrease in compensation and benefits as well as third party\nGross profit 77,047 43,557 42,026 21.5 14.4 13.0 commissions. We note while average employees supporting sales have\nSelling 17,134 18,506 19,866 4.8 6.1 6.1 declined from 154 in FY20 to 143 in FY22, average compensation and\nAdministration 25,131 23,840 24,376 7.0 7.9 7.5 benefits per employee increased during this period due in part to wage\nAdjusted EBITDA 34,781 1,212 (2,215) 9.7 0.4 (0.7) inflation.\n\u25ba Sales employees are generally provided a base salary and a base\npay target incentive opportunity. We note there are multiple\nSelling expense\nincentive programs available to sales employees including the SIP\nAmount As a % of net sales and Mcentive Program with payouts based on achievement of\ndivision / location metrics (i.e., revenue, gross margin, etc.) as well\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\nas overall Masonite Adjusted EBITDA metrics. Both incentive\nSalaries 8,916 9,577 9,516 2.5 3.2 2.9\nprograms (included in bonus expense) are accrued for monthly with\nHourly wages 116 131 141 0.0 0.0 0.0\nSIP paid annually and Mcentive paid out quarterly in arrears. The\nOvertime pay 417 555 425 0.1 0.2 0.1 amounts presented at left reflect adjustments discussed in the\nBonus 1,114 1,030 1,831 0.3 0.3 0.6 Quality of earningssection.\nBenefits 2,682 2,833 2,875 0.7 0.9 0.9\n\u25ba Sales commissions are accrued for monthly and paid monthly in\nCompensation and benefits 13,244 14,127 14,788 3.7 4.7 4.6\narrears. Commissions relate to external sales representatives\nCommissions 1,670 2,125 2,725 0.5 0.7 0.8 supporting Quick Ship and St. Ephrem sales. Commissions\nAdvertising 1,248 1,397 963 0.3 0.5 0.3 increased during the Historical Period in part due to an increase in\nTravel & entertainment 296 340 670 0.1 0.1 0.2 Quick Ship sales as well as an increase in the commission rates\nSupplies 110 35 66 0.0 0.0 0.0 during the Historical Period. We note sales commissions related to\nSt. Ephrem have remained relatively consistent as a percent of\nOther selling expenses 567 482 654 0.2 0.2 0.2\nfacility sales.\nSelling 17,134 18,506 19,866 4.8 6.1 6.1\nAvg. selling employees 154 149 143 \u25ba Non-personnel related selling costs were primarily comprised of\nAvg. C&B per employee 86 95 103 third-party advertising spend and T&E costs. We note T&E has\nmore than doubled since FY20 as travel has resumed post-COVID.\nBenefits as a % of total comp. 25.4 25.1 24.1\nAdditionally, we note as a result of COVID, the Business ceased\nutilizing certain sales offices as employees have continued to work\nfrom home. Refer to theQuality of earnings for rent expense\nnormalization adjustment to EBITDA.\n\u25ba Other selling expenses were primarily comprised of (i) company car\nallowances, (ii) cell phone and internet reimbursements and (iii)\nsupplies.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 34", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast operating results\nRecast operating results\nAmount As a % of net sales Selling and administration expense (continued)\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22 Administration expense-Administration expense is predominately\nNet sales 358,099 303,149 323,069 100.0 100.0 100.0 comprised of (i) compensation and benefits associated with executives,\nCost of sales 281,052 259,592 281,042 78.5 85.6 87.0 operations, and finance employees that directly support the\nGross profit 77,047 43,557 42,026 21.5 14.4 13.0 Architectural business, and (ii) corporate allocated costs, which have\nSelling 17,134 18,506 19,866 4.8 6.1 6.1 remained fairly consistent over the Historical Period. On an adjusted\nbasis, administration expense decreased approximately $755 from\nAdministration 25,131 23,840 24,376 7.0 7.9 7.5\nFY20 to FY22, primarily driven by a decline in compensation and\nAdjusted EBITDA 34,781 1,212 (2,215) 9.7 0.4 (0.7)\nbenefits as average headcount declined from 139 in FY20 to 117 in\nFY22, partially offset by wage inflation.\nAdministration expense\n\u25ba Hourly wages\u2013Management indicated FY20 expense was likely\nmis-classified, as administration employees are generally salaried\nAmount As a % of net sales\nemployees.\nCurrency: $ 000 FY20 FY21 FY22 FY20 FY21 FY22\nSalaries 8,824 9,034 9,321 2.5 3.0 2.9 \u25ba Bonus-Relates to the MIP incentive plan as discussed in the\nHourly wages 544 18 11 0.2 0.0 0.0 Quality of earnings. Payouts have declined over the Historical\nPeriod in part due to a reduction in headcount as well as\nOvertime pay 232 350 137 0.1 0.1 0.0\nArchitectural performance.\nBonus 929 653 656 0.3 0.2 0.2\nBenefits 2,558 2,418 2,269 0.7 0.8 0.7 \u25ba Travel and entertainment\u2013T&E increased from FY20 as travel\nCompensation and benefits 13,087 12,473 12,393 3.7 4.1 3.8 has resumed post-COVID.\nCorporate allocation 7,334 7,555 7,781 2.0 2.5 2.4 \u25ba Professional fees\u2013On an adjusted basis, professional fees is\nTravel & entertainment 524 606 874 0.1 0.2 0.3 primarily comprised of direct IT spend, marketing analytics,\nSupplies 738 464 693 0.2 0.2 0.2 consulting, translation services, etc. from various third-party\nContract labor 546 239 272 0.2 0.1 0.1 vendors.\nProfessional fees 539 393 323 0.2 0.1 0.1 \u25ba Rentals-Includes rent on copiers and printers.\nHiring & training 694 501 723 0.2 0.2 0.2\n\u25ba Other administration expenses\u2013Other administration expense\nCommunications 659 620 444 0.2 0.2 0.1\nwas primarily comprised of (i) cell phone and internet\nRentals 119 181 258 0.0 0.1 0.1\nreimbursements, (ii) health and safety costs and (iii) licenses and\nOther administration costs 891 807 615 0.2 0.3 0.2 fees. Other administrative expenses also includes actual bad debt\nAdministration 25,131 23,840 24,376 7.0 7.9 7.5 write-offs. Management represented actual bad debt write-offs\nAvg. admin employees 139 126 117 associated with third party sales were immaterial during the\nAvg. C&B per employee 94 99 106 Historical Period. As further discussed in theBalance sheet\noverview, Architectural\u2019s allowance for doubtful accounts is\nBenefits as a % of total comp. 24.3 24.0 22.4\nrecorded at Masonite Corporate with changes in the reserve\nrecorded on the Masonite Corporate P&L.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 35", "Balance sheet overview\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 36", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBalance sheet overview\nHistoricalbalancesheets\nThe following table presents Architectural\u2019s consolidated balance sheets as of 1. Cash\u2013All treasury functions including cash collections and disbursements are\nDec20, Dec21 and Dec22. Reported amounts are based on consolidated managed centrally through Masonite\u2019s shared services center. As Architectural plants\nArchitectural trial balances maintained within HFM and are not reflective of do not maintain any bank accounts, the balances presented are not indicative of actual\nstandalone carve-out balance sheets for the Business as certain balance sheet cash on hand.\naccounts are centrally managed by Masonite Corporate and reported within the\n2. Accounts receivable \u2013 Accounts receivable (AR) are primarily comprised of trade\nMasonite Corporate balance sheet. These balances predominately include (i)\nreceivables due from third party customers for shipped products. Cash collections and\nallowance for doubtful accounts, (ii) accruals for certain incentive compensation\nassociated AR applications are managed centrally by Masonite\u2019s shared services\nplans, (iii) freight and utility expense accruals and (iv) certain insurance accruals.\ncenter.\nCertain balances have been quantified for net working capital purposes as\ndiscussed in the following section of this report. Currency: $ 000 Dec20 Dec21 Dec22\nTrade AR 30,661 29,784 37,991\nCurrency: $ 000 Ref. Dec20 Dec21 Dec22 Unapplied cash (578) (1,021) (3,266)\nCash 1 (1,890) (855) (226) Other receivables 363 678 961\nAccounts receivable 2 30,445 29,441 35,686 Accounts receivable 30,445 29,441 35,686\nInventory 3 36,515 39,692 60,935 Reported DSO 36.4 39.8 37.7\nPrepaid expenses 4 2,447 2,692 2,850 Allowance for doubtful accounts (1,085) (478) (604)\nAFDA as a % of Trade AR (3.5) (1.6) (1.6)\nIntercompany receivables 5 1,473 1,178 1,311\nCurrent assets 68,990 72,147 100,556 \u25ba Management noted customer payment terms vary, but generally range between 30-\nFixed assets 6 107,816 98,601 93,680 60 days. No significant changes in customer payment terms were noted during the\nHistorical Period.\nOther assets 7 83,817 16,867 14,823\nTotal assets 260,623 187,615 209,058 \u25ba We note DSO increased over the Historical Perioddue to longer lead times and an\nincrease in orders not being filled timely due to supply chain constraints.\nAccounts payable 8 6,375 9,282 9,628\n\u25ba Architectural\u2019s reported balance sheet does not include an allowance for doubtful\nAccrued liabilities 9 10,418 7,686 8,193\naccounts, as this balance is maintained on the Masonite Corporate balance sheet.\nIntercompany payables 5 218 192 226\nWe note the Architectural allowance is comprised of a general reserve (0.7% of all\nCurrent liabilities 17,011 17,161 18,047 past due AR excluding credit balances) and a specific reserve that is adjusted\nNoncurrent liabilities 10 16,703 12,668 10,268 quarterly based on a detailed review of invoice collectability. We note write-offs\nassociated with third party sales were nominal during the Historical Period.\nLong-term intercompany payables 5 (152,048) (144,998) (112,392)\nTotal liabilities (118,334) (115,169) (84,077) \u25ba Other receivables primarily include (i) amounts due from vendor rebatesand (ii)\ncredit balances in trade AR reclassified to accrued liabilities on a quarterly basis.\nEquity 378,957 302,784 293,135\nTotal liabilities and equity 260,623 187,615 209,058 \u25ba We note Dec22 unapplied cash includes amounts related to NAR that were\ninadvertently recorded on the Architectural balance sheet. Management indicated\nthese amounts were reclassified in Jan23.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 37", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBalance sheet overview\nInventory 3. Inventory\u2013Inventory is comprised of raw materials (e.g., door skins, stile and rail,\ndoor cores, crossbands, etc.), WIP and finished goods (manufactured doors).\nCurrency: $ 000 Dec20 Dec21 Dec22\n\u25ba The Architectural business utilizes standard costing and capitalizes variances for\nRaw materials 22,877 26,001 36,979 purchase price, labor and overhead on a quarterly basis based on total inventory\nFinished goods and WIP 13,702 10,783 15,923 days on hand.\nDeferred variances 920 3,757 10,116 \u25ba Plants perform cycle counts monthly and full physical counts at least annually.\nProvisions (982) (842) (952) Count adjustments and write-offs are recorded to material costs within cost of\nProfit in inventory elimination (2) (7) (1,131) sales.\nInventory 36,515 39,692 60,935 \u25ba Provisions are recorded quarterly for obsolete and slow-moving inventory\nProvisions as a % of total (2.7) (2.1) (1.6) (\u201cOSMI\u201d) based on a 24-month average historical reserve percentage.\nManagement indicated the risk of obsolescence is low for the Business given the\nReported DIO 51.2 57.7 73.3\nnature of inventory as Architectural\u2019s product lines are made from a select few\nmaterials that typically only vary by size and paint color and are not subject to\nfrequent stylistic changes. Architectural\u2019s vertical integration and made-to-order\nInventorybylocation\nprocess further limits the amount of exposure to obsolescence.\nCurrency: $ 000 Dec20 Dec21 Dec22\n\u25ba On a quarterly basis, an entry is booked to eliminate intercompany profits in\nBirchwood 5,972 7,026 20,059 inventory. Management indicated the Dec22 entry was larger than normal due to\nNorthumberland 4,886 7,795 10,058 multiple shipments close to year end.\nMarshfield 5,624 5,039 7,512\nMason City 3,171 5,591 5,548\nJefferson City 2,733 4,637 3,864 Inventory trends\nSt. Ephrem 1,902 1,982 3,539 Architectural inventory balances, inclusive of deferred variances, increased\nMarshfield Particle Board 1,507 2,728 2,799 $24.4m over the Historical Period primarily due to (i) increased cost of\nmaterials and freight resulting from inflation and supply chain constraints\nLondon 459 708 911\nand (ii) increased inventory days on hand as Architectural experienced\nSpringfield 1,422 - -\nlonger lead times due to material constraints and other operational issued\nMegantic 4,369 - - noted in theQuality of earnings. As a result, Architectural plants are\nDoor & Components 32,045 35,507 54,292 holding higher levels of inventory to replenish safety stock, work through\nThorofare 1,683 1,861 3,237 backlog and out of an abundance of caution given historical supply\nconstraints. Fluctuations in inventory by location were in part due to plant\nHowell 1,616 1,510 2,420\nclosures (i.e., Springfield and Megantic), offset by the impact of crossbands\nArlington 515 346 1,284 supply at Birchwood.\nQuick Ship 3,814 3,717 6,940\nHQ 656 469 (297)\nTotal inventory 36,515 39,692 60,935\nNotetotable:HQinventoryisprimarilycomprisedof(i)profitininventoryelimination,offsetby(ii)goods\nintransitadjustmentsrecordedatquarter-end.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 38", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBalance sheet overview\nHistoricalbalancesheets\n6. Fixed assets\u2013The following table presents a summary of fixed assets, net of\nCurrency: $ 000 Ref. Dec20 Dec21 Dec22 accumulated depreciation, by asset type at the Historical Balance Sheet Dates.\nCash 1 (1,890) (855) (226) Currency: $ 000 Dec20 Dec21 Dec22\nAccounts receivable 2 30,445 29,441 35,686 Machinery and equipment 77,310 68,430 67,313\nInventory 3 36,515 39,692 60,935 Buildings and leashold improvements 25,164 25,911 23,040\nPrepaid expenses 4 2,447 2,692 2,850 Land 5,288 4,260 3,327\nIntercompany receivables 5 1,473 1,178 1,311 Capital leases 55 - -\nCurrent assets 68,990 72,147 100,556\nFixed assets 107,816 98,601 93,680\nFixed assets 6 107,816 98,601 93,680\nOther assets 7 83,817 16,867 14,823 \u25ba A summary of historical capital expenditures by plant is presented in the following table.\nSignificant capital projects during the Historical Period are discussed below.\nTotal assets 260,623 187,615 209,058\nAccounts payable 8 6,375 9,282 9,628 Currency: $ 000 FY20 FY21 FY22\nMarshfield, WI 3,322 2,135 2,550\nAccrued liabilities 9 10,418 7,686 8,193\nMason City, IA 1,989 3,170 1,689\nIntercompany payables 5 218 192 226\nNorthumberland, PA 505 730 1,490\nCurrent liabilities 17,011 17,161 18,047\nJefferson City, TN 838 2,063 958\nNoncurrent liabilities 10 16,703 12,668 10,268\nMarshfield Particle Board 9,349 3,929 795\nLong-term intercompany payables 5 (152,048) (144,998) (112,392)\nAll other locations 10,128 11,255 9,620\nTotal liabilities (118,334) (115,169) (84,077)\nTotal capital expenditures 19,478 15,184 10,415\nEquity 378,957 302,784 293,135\nAs a % of adjusted net sales 5.4 5.0 3.2\nTotal liabilities and equity 260,623 187,615 209,058\nMaintenance Capex as a % of total 35.5 31.5 58.7\n4. Prepaid expenses\u2013Prepaid expenses are primarily comprised of current\n\u25ba Marshfield\u2013Spend primarily includes major autoclave repairs in FY20, a rebuild of\nstoreroom materials (i.e., spare parts and consumables used in the\nthe mineral core dryer in FY21, as well as capitalizable spend associated with\nmanufacturing process). Management indicated the vast majority of\nvarious priority items required to be addressed by a new insurance provider in FY22.\nstoreroom materials are expensed through repairs and maintenance expense\n\u25ba Mason City\u2013Includes ERP conversion to Microsoft AX that went live Oct21 and\nwhen placed in use. To the extent not used within 24 months, these items are\ninvestments a new edge banding equipment to increase automation. ERP spend\ncapitalized (current portion included in prepaid expense and noncurrent\nalso relates to implementation of the fully customer facing order engineering\nportion included in other assets) and amortized. Management noted plants\nconfigurator.\nperform full physical counts of storeroom materials on an annual basis.\n\u25ba Northumberland\u2013FY22 spend increased primarily due to roof replacements.\n5. Intercompany balances\u2013Current intercompany balances represent\n\u25ba Jefferson City\u2013Includes spend associated with a new machining center to improve\nreceivables / payables associated with intra-company transactions (sales /\nand automate processes and allows the plant to run a higher and more complex mix.\npurchases within Architectural) and inter-company sales / purchases with\n\u25ba Marshfield Particle Board\u2013Spend primarily relates to a large regulatory required\nentities outside of Architectural. Management indicated cash settlements of\nproject to replace the steam dryer. Management indicated Architectural spent\nreceivables / payables occur for transactions between plants on different ERP\napproximately $15 million on this project between 2017-2021.\nsystems. Furthermore, corporate allocations and movements in cash are\nrecorded through long-term intercompany payable. \u25ba We note disposals during the Historical Period were primarily associated with plant\nclosures.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 39", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBalance sheet overview\nHistoricalbalancesheets\nCurrency: $ 000 Ref. Dec20 Dec21 Dec22 7. Other assets\u2013Other assets includes goodwill, intangible assets (customer lists),\nCash 1 (1,890) (855) (226) noncurrent storeroom materials and right of use assets associated with operating\nleases. The decline in other assets over the Historical Period relates to the write off\nAccounts receivable 2 30,445 29,441 35,686\nof goodwill through impairment charges in FY20 and FY21.\nInventory 3 36,515 39,692 60,935\nPrepaid expenses 4 2,447 2,692 2,850 Currency: $ 000 Dec20 Dec21 Dec22\nIntercompany receivables 5 1,473 1,178 1,311 Goodwill 59,523 - -\nCurrent assets 68,990 72,147 100,556 ROU assets 15,472 11,895 9,766\nIntangible assets, net 6,799 3,258 2,569\nFixed assets 6 107,816 98,601 93,680\nNoncurrent storeroom materials 2,023 1,714 2,488\nOther assets 7 83,817 16,867 14,823\nOther assets 83,817 16,867 14,823\nTotal assets 260,623 187,615 209,058\nAccounts payable 8 6,375 9,282 9,628 8. Accounts payable\u2013Accounts payable is comprised of trade payables, accrued\nAccrued liabilities 9 10,418 7,686 8,193 payables associated with inventory receipts, and payables associated with capital\nIntercompany payables 5 218 192 226 expenditures. Disbursements are managed centrally by Masonite\u2019s shared service\ncenter. We noted DPO averaged 27 days in FY22.\nCurrent liabilities 17,011 17,161 18,047\nNoncurrent liabilities 10 16,703 12,668 10,268 9. Accrued liabilities\u2013The table at bottom left presents of summary of accrued\nLong-term intercompany payables 5 (152,048) (144,998) (112,392) liabilities at the Historical Balance Sheet Dates.\nTotal liabilities (118,334) (115,169) (84,077) \u25ba Accrued compensation and benefits includes (i) accrued payroll, (ii) vacation\nEquity 378,957 302,784 293,135 accruals (iii) plant level accruals for operational bonuses and (iv) accrued\ncommissions. We note MIP and SIP accruals are recorded at Masonite Corporate.\nTotal liabilities and equity 260,623 187,615 209,058\n\u25ba Volume rebates are provided to top customers and range between 1-5% of sales\nto the respective customers. Rebate programs are predominately annual with\nAccruedliabilities accruals trued-up on a quarterly basis and upon payment as noted in theQuality\nof earnings.\nCurrency: $ 000 Dec20 Dec21 Dec22\nAccrued compensation and benefits 4,384 3,276 3,568 \u25ba Architectural provides warranties on its products. Approximately 2% of plant sales\nare accrued to cover potential warranty claims. The warranty accrual at the\nCustomer rebates 1,964 1,679 1,739\nHistorical Balance Sheet Dates also includes claims associated fire doors\nWarranty accrual 1,214 1,102 1,234 produced at Northumberland and Jefferson City that were not built to meet\nUnearned revenue 181 540 730 required specifications. These doors are being remanufactured, transported and\nAccrued property taxes 78 279 306 installed at no cost to the customer. At Dec22, approximately $680 of claims\nremain outstanding for these fire doors. Management indicated this specific\nRestructuring reserve 1,517 47 -\nwarranty claim will be completed in late FY23.\nAccrued utilities 502 - -\nOther accrued liabilities 578 764 616\nAccrued liabilities 10,418 7,686 8,193\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 40", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nBalance sheet overview\nHistoricalbalancesheets\nCurrency: $ 000 Ref. Dec20 Dec21 Dec22 9. Accrued liabilities(continued)\nCash 1 (1,890) (855) (226)\nAccounts receivable 2 30,445 29,441 35,686 Currency: $ 000 Dec20 Dec21 Dec22\nInventory 3 36,515 39,692 60,935 Accrued compensation and benefits 4,384 3,276 3,568\nPrepaid expenses 4 2,447 2,692 2,850 Customer rebates 1,964 1,679 1,739\nIntercompany receivables 5 1,473 1,178 1,311 Warranty accrual 1,214 1,102 1,234\nCurrent assets 68,990 72,147 100,556 Unearned revenue 181 540 730\nFixed assets 6 107,816 98,601 93,680 Accrued property taxes 78 279 306\nOther assets 7 83,817 16,867 14,823 Restructuring reserve 1,517 47 -\nTotal assets 260,623 187,615 209,058 Accrued utilities 502 - -\nAccounts payable 8 6,375 9,282 9,628 Other accrued liabilities 578 764 616\nAccrued liabilities 9 10,418 7,686 8,193 Accrued liabilities 10,418 7,686 8,193\nIntercompany payables 5 218 192 226\nCurrent liabilities 17,011 17,161 18,047 \u25ba Unearned revenue represents credit balances reclassified from AR.\nNoncurrent liabilities 10 16,703 12,668 10,268 \u25ba Restructuring reserve includes accrued severance and facility closure costs,\nLong-term intercompany payables 5 (152,048) (144,998) (112,392) primarily associated with the Largo, Megantic and Springfield facility closures.\nTotal liabilities (118,334) (115,169) (84,077)\n\u25ba Subsequent to Dec20, Masonite changed its accrual process for utilities whereby\nEquity 378,957 302,784 293,135 liabilities are recorded on the Masonite Corporate balance sheet.\nTotal liabilities and equity 260,623 187,615 209,058\n\u25ba Other accrued liabilities is primarily comprised on non-PO accruals, which have\nremained relatively consistent over the Historical Period.\n10. Noncurrent liabilities\u2013Noncurrent liabilities are primarily comprised of operating\nlease liabilities, with the associated right of use assets included in other assets.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 41", "Adjusted net working capital\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 42", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nRecast net working capital\nRecast net working capital\nAverage The adjacent table presents the recast components of net working capital (NWC)\nreflecting the impact of definitional and due diligence adjustments presented and\nCurrency: $ 000 Dec22 FY20 FY21 FY22\ndiscussed on the following page.\nAccounts receivable 38,693 35,032 32,150 35,601\nAs illustrated in the chart at bottom left, Adjusted working capital is predominately\nInventory 60,935 38,856 38,589 53,957\ncomprised of inventory and accounts receivable. The $13.4 million increase in\nPrepaid expenses 216 522 324 367 average adjusted NWC from FY20 to FY22 was predominately driven by a $15.1\nCurrent assets 99,843 74,410 71,062 89,926 million growth in inventory resulting from supply chain disruptions and longer lead\nAccounts payable (9,064) (7,468) (7,808) (8,399) times.\nAccrued liabilities (12,155) (8,565) (8,276) (9,594) \u25ba Fluctuations in inventory over the Historical Period were in part due to plant\nCurrent liabilities (21,219) (16,033) (16,084) (17,993) closures (i.e., Springfield and Megantic), offset by the impact of crossbands\nsupply at Birchwood.\nAdjusted NWC 78,625 58,377 54,978 71,933\nAdjusted DSO 40.8 35.3 38.5 41.1 \u25ba During FY22 the Birchwood plant was required to source crossbands from\nforeign suppliers, resulting in crossbands purchased at higher unit prices and\nAdjusted DIO 73.4 51.2 54.3 70.6\nthe Business incurring significant freight costs. The length of time required for\nAdjusted DPO 24.2 20.9 25.5 26.5\nocean freight was partly responsible for longer lead times and Management\nQuarterly adjusted net working capital indicated crossband inventory was built up in FY22 to replenish safety stock,\nQuarterly adjusted NWC ($000) work through backlog and ensure no further disruptions in production. All of\nthese factors resulted in ~19 day increase in days inventory outstanding (DIO),\n80,000 which Management is actively driving down without exposing the Business to\nany further risks to supply of materials. Refer to the theQuality of earningsfor\n60,000 further discussion of Pro forma EBITDA adjustments associated with\nBirchwood supply chain impacts.\n40,000\n\u25ba Receivable balances have fluctuated in line with sales, offset by a ~6 day\n20,000 increase in average days sales outstanding (DSO) from FY20 to FY22.\nManagement attributes the increase in DSO to longer lead times and an\n- increase in orders not being filled timely due to supply chain constraints\nwhereby customers received partial shipments and would pay upon receipt of\n(20,000)\nfull order.\nAccounts receivable Inventory \u25ba Management indicated the Business does not experience seasonality,\nhowever production may vary based on timing of holidays.\nPrepaid expenses Accounts payable\nAccrued liabilities Adjusted NWC\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 43", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nNet working capital adjustments\nNet working capital adjustments\nThe adjacent table presents a reconciliation from reported NWC to Adjusted\nAverage NWC for the latest balance sheet date along with averages for the Historical\nPeriod. Refer to theaccompanying Databookfor additional details and\nCurrency: $ 000 Ref. Dec22 FY20 FY21 FY22\ncalculations supporting the ne working capital adjustments.\nCash (226) (356) (1,943) (1,564)\n1. Reported cash balances were removed from working capital as we\nAccounts receivable 35,686 35,141 31,803 35,050\nunderstand the contemplated transaction will be on a cash-free and debt-\nInventory 60,935 38,856 38,589 53,957\nfree basis. Architectural plants do not maintain any bank accounts, as\nPrepaid expenses 2,850 2,718 2,465 2,983 cash collections and disbursements are managed centrally through\nIntercompany receivables 1,311 1,067 1,324 1,313 Masonite\u2019s shared services center. Accordingly, reported cash balances\nare not indicative of actual cash on hand.\nCurrent assets 100,556 77,427 72,237 91,740\nAccounts payable 9,628 7,511 7,767 8,531 2. Adjustments remove balances that are associated with noncurrent assets.\nAccrued liabilities 8,193 7,532 7,001 6,648 \u25ba Storeroom materials (spare parts and consumables used in the\nIntercompany payables 226 132 210 214 manufacturing process) relate to machinery and equipment. The\nCurrent liabilities 18,047 15,174 14,978 15,393 current portion of this balance is included in prepaid expenses.\nReported NWC 82,509 62,253 57,259 76,346 \u25ba CIP in AP relates to accounts payable associated with capital\nDefinitional and due diligence adjustments: expenditures.\nCash 1 226 356 1,943 1,564 \u25ba Deposits relate to long-term facility leases.\nStoreroom materials 2 (2,479) (2,055) (2,002) (2,475)\n3. NWC adjustments reflect the balance sheet impact of Management and\nBonus normalization 3 (2,259) (921) (1,050) (1,445) due diligence adjustments presented and discussed in theQuality of\nAccrued utilities 4 (773) - (277) (605) earnings, that would have a significant impact to NWC.\nAllow. for doubtful accounts 4 (604) (1,011) (478) (604) \u25ba Bonus normalization was based on normalized expense (actual\nCIP in AP 2 896 226 309 517 payouts ratably recognized over the respective period) and assumes\npayments occurred in March of the subsequent year.\nNormalize intercompany AR / AP 5 (806) (216) (640) (578)\nDeposits 2 (155) (141) (139) (140) \u25ba The restructuring reserve represents actual liabilities maintained on the\nArchitectural balance sheet.\nRestructuring reserve 3 - 111 395 10\nNon-operational balances 6 61 61 61 61 4. NWC adjustments quantify operating assets and liabilities maintained\nAccrued internal commissions 4 (39) (85) (56) (58) within the Masonite Corporate balance sheet.\nFreight accrual 4 (952) (199) (349) (908) \u25ba The Architectural balance sheet included accrued utility balances from\nUnapplied cash reclass 7 3,000 - - 250 Jan20-Jun21. The NWC adjustment estimates accrued utilities from\nJul21-Dec22 assuming 66% (average actual accrual as a percent of\nTotal def. and DD adjustments (3,884) (3,876) (2,281) (4,414)\nexpense for Jan21-Jun21) of actual monthly expense in the\nAdjusted NWC 78,625 58,377 54,978 71,933 Architectural P&L is accrued for at month-end.\nPro forma NWC considerations:\nContinued on the following page.\nPro forma impact of PPV deferrals 8 (2,170) - - (1,688)\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 44", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nNet working capital adjustments\nNet working capital adjustments 4. NWC adjustments quantify operating assets and liabilities maintained within\nthe Masonite Corporate balance sheet.(continued from the previous page)\nAverage\n\u25ba Allowance for doubtful accounts represent actual reserves for\nCurrency: $ 000 Ref. Dec22 FY20 FY21 FY22\nArchitectural provided by Management.\nCash (226) (356) (1,943) (1,564)\n\u25ba Accrued commissions was normalized utilizing total actual commissions\nAccounts receivable 35,686 35,141 31,803 35,050\nexpense recorded in the Architectural P&L and assumes monthly\nInventory 60,935 38,856 38,589 53,957 payments in arrears. The difference between the normalized\nPrepaid expenses 2,850 2,718 2,465 2,983 commissions accrual calculated versus the portion in the Architectural\nbalance sheet is presented as a NWC adjustment.\nIntercompany receivables 1,311 1,067 1,324 1,313\nCurrent assets 100,556 77,427 72,237 91,740 \u25ba Freight accrual is estimated based on reported DPO and actual freight\nAccounts payable 9,628 7,511 7,767 8,531 expense recorded in the Architectural P&L.\nAccrued liabilities 8,193 7,532 7,001 6,648 5. A due diligence adjustment is presented to normalize intercompany\nIntercompany payables 226 132 210 214 receivable and payable balances in working capital based on sales to /\npurchases from NAR. Normalized balances are based on actual sales to\nCurrent liabilities 18,047 15,174 14,978 15,393\nNAR and purchases from NAR and reported DSO / DPO.\nReported NWC 82,509 62,253 57,259 76,346\n6. Certain accrual balances were removed from NWC as these balances have\nDefinitional and due diligence adjustments:\nbeen static throughout the Historical Period. Management indicated the\nCash 1 226 356 1,943 1,564\nrelated trial balance accounts were not in use during the Historical Period\nStoreroom materials 2 (2,479) (2,055) (2,002) (2,475) and do not represent operational liabilities.\nBonus normalization 3 (2,259) (921) (1,050) (1,445)\n7. We note Dec22 unapplied cash (included in AR) includes amounts related\nAccrued utilities 4 (773) - (277) (605) to NAR that were inadvertently recorded on the Architectural balance sheet.\nAllow. for doubtful accounts 4 (604) (1,011) (478) (604) Management indicated these amounts were reclassified in Jan23. The\nNWC adjustment removes this credit balance from Dec22 AR.\nCIP in AP 2 896 226 309 517\nNormalize intercompany AR / AP 5 (806) (216) (640) (578) 8. A pro forma NWC consideration is presented to estimate deferred PPV\nassociated with Birchwood supply chain impacts discussed inQuality of\nDeposits 2 (155) (141) (139) (140)\nearnings. Management estimates monthly Architectural inventory balances\nRestructuring reserve 3 - 111 395 10\nwere approximately $1.7 million higher in FY22 due to the impact of higher\nNon-operational balances 6 61 61 61 61 unit pricing, increased freight and longer lead times for crossband\nAccrued internal commissions 4 (39) (85) (56) (58) purchases. The following table provides a breakout of the estimated pro\nforma impact of PPV deferrals.\nFreight accrual 4 (952) (199) (349) (908)\nUnapplied cash reclass 7 3,000 - - 250\nAverage\nTotal def. and DD adjustments (3,884) (3,876) (2,281) (4,414)\nCurrency: $ 000 Dec22 FY22\nAdjusted NWC 78,625 58,377 54,978 71,933\nGerman supplier unit pricing on crossbands (1,005) (360)\nPro forma NWC considerations:\nInbound freight on overseas crossband purchases (1,165) (1,328)\nPro forma impact of PPV deferrals 8 (2,170) - - (1,688)\nPro forma impact of PPV deferrals (2,170) (1,688)\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 45", "Appendices\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 46", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nAppendix A: Definitions and abbreviations\nAbbreviations\nNames\nClient or Masonite Masonite Corporation DSO Days sales outstanding\nEarnings before interest, taxes, depreciation and\nBusiness, Architectural EBITDA\nMasonite\u2019s Architectural business amortization\nor ARCH\nERP Enterprise resource planning\nParent Masonite Corporate\nFOB Free On Board\nEY or we Ernst & Young LLP FP&A Financial planning and analysis\nSVP & Business Leader \u2013Architectural: Alex Legall GBS Global Business Services\nVP & Finance Director \u2013Architectural: John Amonett\nManagement HFM Hyperion Financial Management\nSr. Finance Manager \u2013Architectural: Aurora Qorri\nHQ ARCH headquarters / administration\nFinance Manager \u2013Architectural: Supriya Thorat\nHR Human resource\nPeriods IT Information Technology\nLTL Less than truckload\nFiscal years ended January 3, 2021 (\u201cFY20\u201d), January 2, MFPB Marshfield Particle Board\nHistorical Period\n2022 (\u201cFY21\u201d) and January 1, 2023 (\u201cFY22\u201d)\nMIP Management incentive program\nHistorical Balance Month ended as of January 3, 2021 (\u201cDec20\u201d), January 2, NAR North America Residential segment of Masonite\nSheet Dates 2022 (\u201cDec21\u201d) and January 1, 2023 (\u201cDec22\u201d)\nNWC Net working Capital\nOH Overhead\nAbbreviations\nOIP Operations incentive program\nOSMI Obsolete and slow-moving inventory\nPO Purchase Order\nAFDA Allowance for doubtful accounts\nPPP Paycheck Protection Program\nAOP Annual Operating Plan\nPPV Purchase price variance\nAP Accounts payable\nQS Quick Ship division of ARCH\nAR Accounts receivable\nR&M Repair & Maintenance\nC&B Compensation and benefits\nSG&A Selling, general & administrative\nCAD Canadian dollar\nSIP Sales incentive program\nCIP Construction in progress\nSVP Senior Vice President\nCOS Cost of sales\nT&E Travel & entertainment\nD&C Doors & Components division of ARCH\nUSD U.S. Dollar\nDIO Days inventory outstanding VP Vice President\nDPO Days payables outstanding WIP Work in process\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 47", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nAppendix B: Due diligence procedures performed\nAnalyzed deal basis\nQuality of earnings cont.\n\u25ba Obtained an understanding of the transaction perimeter and inquired of any \u25ba Analyzed the components of operating expenses and other income /\noverlap with other Masonite businesses (e.g., shared facilities / shared expense to understand period-over-period fluctuations.\nservices / cost allocations / allocated assets & liabilities).\n\u25ba Analyzed trends in FTEs and payroll and payroll related costs.\n\u25ba Read relevant FY20 and FY21 auditor workpapers applicable to the\n\u25ba Analyzed schedules associated with restructuring and restructuring-related\nBusiness.\nexpenses.\n\u25ba Gained an understanding of management information and internal reporting\n\u25ba Inquired of management the nature of significant direct, indirect and\n(e.g., key statistics and reports).\nallocated costs (as well as any support or other costs excluded from\n\u25ba Obtained and reconciled underlying financial data including consolidating existing reporting).\ntrial balances to internal financial statements and audited financial\n\u25ba Discussed carve-out / allocation considerations for indirect/shared or\nstatements.\nallocated costs with management.\n\u25ba Discussed significant accounting policies and procedures, along with (i) any\n\u25ba Discussed the nature and impact of all significant intercompany\nchanges therein during the Historical Period, and (ii) differences in\ntransactions, including shared services received from Masonite and if/how\napplication between interim and year-end.\nallocated to the Business.\n\u25ba Analyzed operating results for the Historical Period to verify management's\n\u25ba Analyzed intercompany purchases / sales and management's assumptions\nproposed adjustments and Identified other one-time, out-of-period or\nto anticipated pricing post-close.\nnormalizing adjustments that could impact valuation.\nQuality of earnings Quality of net assets, working capital and cash flows\n\u25ba Inquired of management and gained an understanding of the significant\ncustomer terms and conditions, such as (i) revenue recognition policies, (ii)\n\u25ba Analyzed significant assets and liabilities at the trial balance level and\npricing strategies, (iii) sales terms, (iv) discounts, (v) non-standard revenue\nobtained an understanding for significant fluctuations.\narrangements, and (vi) pricing adjustments.\n\u25ba Identified significant assets and liabilities which can be specifically identified\n\u25ba Analyzed gross to net sales trends (e.g., to identify potential out of period or to the Business.\nnon-recurring items).\n\u25ba For other significant accounts which are commingled, discussed carve-out /\n\u25ba Analyzed sales (volumes and dollars), costs and gross margin by division / allocation considerations with management to arrive at the \"reported deal\nlocation.\nbasis balance sheet\u201c.\n\u25ba Analyzed the elements and trends in cost of sales, including direct, indirect \u25ba Analyzed accounts receivable agings for select locations and inquired of\nand fixed nature of costs, and costs by facility.\nmanagement as to Masonite's reserve methodology.\n\u25ba Inquired of management significant supplier spend, cost trends, and the\ngeneral nature of supplier agreements / payment terms.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 48", "Overview and Summary of Quality of Recast operating Balance sheet Adjusted net\nAppendices\nscope findings earnings results overview working capital\nAppendix B: Due diligence procedures performed\nQuality of net assets, working capital and cash flows cont.\n\u25ba Analyzed trends in the significant components of inventory.\n\u25ba Obtained an understanding of Masonite's reserve methodologies for\ninventory reserves and any other significant reserves.\n\u25ba Analyzed prepaid expenses and other assets as appropriate.\n\u25ba Analyzed the aged accounts payable trial balances for select locations.\n\u25ba Analyzed detail schedules/calculations for significant accrued expenses\nand other liabilities.\n\u25ba Obtained schedules to analyze historical capital expenditures.\n\u25ba Obtained an understanding of Masonite's capitalization and depreciation\npolicies.\n\u25ba Inquired management of committed/deferred capital expenditures\n\u25ba Analyzed financial information to identify potential debt and \"debt-like\"\nmatters.\n\u25ba Inquired of management significant contractual agreements.\n\u25ba In conjunction with analyses of the assets and liabilities, identified non-\noperating/non-recurring working capital items, such as restructuring\nliabilities, for purposes of estimating recurring net working capital for the\nBusiness.\n\u25ba Analyzed monthly/quarterly trended working capital balances and related\nmetrics (DSO, DIO, DPO, etc.) to identify high and low points and drivers\nbehind amounts reported, including seasonality with sales activities.\nMarch 27, 2023 | Project Rohe | DRAFT Financial Due Diligence Report Page 49", "", "Q1 Earnings\nUpdate\nSpring 2023 | Confidential", "Financial Summary\nCommentary(1)\n($ in millions)\nQ1 2021 Q1 2022 Q1 2023 YoY Growth (22-23)\n\u25a0 Architectural delivered\nSales by Division\nstrong performance in Q1\nDoors & Components $69.0 $59.8 $74.0 23.8%\n2023 supported by\nQuick Ship 9.8 15.7 19.8 26.0%\nOther Sales, Deductions and Adjustments (0.7) (0.8) (1.0) 15.5% continued improvement\nacross markets and within\nNet Sales $78.1 $74.7 $92.9 24.4%\nthe business following\nAdjusted EBITDA (EXCLUDING Corp. Allocation) $5.9 $1.2 $8.2 592.1% recent operational and\n% Margin 7.6% 1.6% 8.8% supply chain challenges\nEstimated Standalone Costs ($3.9) ($3.9) ($3.9) -\n\u25a0 Across both Doors &\nAdjusted EBITDA INCLUDING Standalone $2.1 ($2.7) $4.3 261.2%\nComponents and Quick\n% Margin 2.6% (3.6%) 4.7%\nShip, revenue increases\nMemo:\nwere driven by focus on\nCorporate Allocation excluded from all figures shown above $2.8 $2.9 $2.9\ndemand fulfillment,\nimproved production\n($ in millions) Historical Forecast\nenvironment and pricing\n2021A 2022A 2023E YoY Growth (22-23)\nbenefits\nSales by Division\n\u25a0 Adjusted EBITDA increased\nDoors & Components $254.9 $254.0 $292.0 14.9%\nyear-over-year and was\nQuick Ship 49.4 70.6 83.5 18.2%\nsequentially driven by\nOther Sales, Deductions and Adjustments (1.1) (1.6) (1.7) 6.0%\nrevenue growth, price\nNet Sales $303.1 $323.1 $373.8 15.7% realization as well as\nefficiencies associated with\nAdjusted EBITDA (EXCLUDING Corp. Allocation) $14.9 $18.0 $36.9 105.7%\nongoing improvement within\n% Margin 4.9% 5.6% 9.9%\nthe production environment\nEstimated Standalone Costs ($15.5) ($15.5) ($15.5) -\n\u25a0 Architectural remains on\nAdjusted EBITDA INCLUDING Standalone ($0.6) $2.5 $21.4 772.7%\n% Margin (0.2%) 0.8% 5.7% track to meet or exceed\nits forecasted 2023\nresults\nSource: Company Information\n(1) Corporate allocation has been backed out of EBITDA numbers, and the expected $15.5M of standalone costs has been applied to thehistorical periods; The pro-rata standalone\ncosts have been applied to historical quarters; 2021 and 2022 numbers are inclusive of QofE adjustments 2", "Q1 Financial Performance Supplement\nQuarterly Bridge Commentary from Management\n($ in millions)\nOverall flat volume principally attributable to internal focus on backorder\n($ in millions)\nreduction, service enhancement and internal components focus\nNet Sales EBITDA \uf0a7 Doorsvolume relatively flat y/y as the Company remained focused on\nreducing backorders within the network to deliver enhanced service\n2022 Q1 EXCLUDING Corp. Allocation $74.7 $1.2 levels in order to better support inbound orders\n\uf0a7 Backorders included small volume, high complexity orders which\nA Volume occupied capacity. Company\u2019s efforts led to 45% reduction in\nA backorders and continued improvement in service levels\nDoors & Components ($0.5) $0.9 \uf0a7 Components flat volume reflected reduced external skins sales as the\nQuick Ship $0.7 $0.3 Company prioritized internal consumption\n\uf0a7 Quick Ship volume improvement attributable to continued customer\nTotal Volume $0.2 $1.2 fulfillment and service focus\n\uf0a7 EBITDA expansion supported by improved plant productivity and\nB Price particleboard trends\nDoors & Components $11.2 $11.2 Price attainment driven by flow-through benefit of price actions to further\nB\nQuick Ship $2.2 $2.2 capture value delivered as well as material cost inflation\nTotal Price $13.4 $13.4 C Mix benefitted from improved proportion of higher efficiency project doors\nC Mix\nD FX impact driven by Canadian Dollar fluctuations within the quarter\nDoors & Components $4.9 $0.8\nQuick Ship $0.5 $0.3 Material cost inflation principally related to inbound freight on 2022\npurchases of Malaysian-sourced crossbands (~$6mm detriment) and OSMI\nTotal Mix $5.3 $1.1 E reserve (~$2mm) true-up for skins, mineral cores and PLAM in door plants;\nThese items are one-time in nature and should not occur in future periods\nD FX ($0.7) ($0.2) +$1.2M total network efficiencies (Door efficiencies partially offset by\nComponents personnel adds and impact of shift to 24/7 schedule at Particle\nE Materials ($7.7) F Board operation); ($1.3M) W&B Inflation to attract/retain hourly talent;\n($0.5M) Utilities; ($0.4M) offsite warehouse costs; ($0.2M) increased\nF Factory ($1.0)\nmaintenance at Particle Board operation due to a 24/7 schedule\nG Distribution $1.1\nEfficiencies in Door from fewer LTL shipments; favorable outbound freight\nG\nH SG&A (Net of QofE Adjustments) ($0.9) due to mix and fuel deflation, partially offset by W&B inflation\nI 2023 Q1 EXCLUDING Corp. Allocation $92.9 $8.2 Lower spend in Advertising, Supplies, Training & Recruitment fees partially\nH offset by investments in Quick Ship to support revenue growth (People &\nMemo: Commissions)\nQ1 2023 EBITDA including estimated standalone costs and\n$4.3\nexcluding corporate allocation I Management EBITDA number excludes corporate allocation of ~$2.9M\n3", "", "h\nc\nr\nu\nh\nc\nn\nn\ny\nConfidential\nW\nInformation\nPresentation\nSpring 2023 | Confidential", "Disclaimer\nHoulihanLokeyCapital,Inc.(\u201cHoulihanLokey\u201d)hasbeenretainedbyMasoniteInternationalCorporation(\u201cMasonite\u201d)toserveasexclusivefinancial\nadvisortoassistwithapotentialtransaction(the\u201cTransaction\u201d)relatedtoMasonite\u2019sArchitectuhralDoorbusiness(\u201cMasoniteArchitectural\u201d,\u201cRohe\u201dor\nMichael Morabito the\u201cCompany\u201d).\nManaging Director ThisConfidentialInformationPresentation(this\u201cPresentation\u201d)hasbeenpreparedfordiscussionpurposesonly.Itisbeingdeliveredonaconfidential\nD: (212) 497-7966 basistospecifiedpartiessolelytoassistthemindecidingwhethertoproceedwiththceirinvestigationoftheCompanyinaccordancewithprocedures\nestablished by the Company. This Presentation does not purport to contain all of the information that may be required or relevant to a recipient\u2019s\nM: (917) 544-2628\nevaluationofanyTransactionandrecipientswillberesponsibleforconductingtheirowninvestigationsandanalysis.\nMMorabito@hl.com\nByacceptingthisPresentation,therecipientagreesthat(i) neither itnoritsragents,representatives,directorsoremployeeswillcopy,reproduceor\ndistributetoothersthisPresentation,inwholeorinpart,atanytimewithoutthepriorwrittenconsentoftheCompany;(ii)itwillkeepconfidentialall\ninformationcontainedhereinnotalreadyinthepublicdomaininaccorudancewiththeprovisionsofsuchconfidentialityagreement;and(iii)itwilluse\nthisPresentationforthesolepurposeofdecidingwhethertoproceedwithafurtherinvestigationoftheCompany.\nShevon Newman\nHoulihan Lokey has not independently verified any of the information contained herein. Neither the Company nor Houlihan Lokey nor any of their\nDirector respectivedirectors,officers,employees,affiliatesorrepresentativesmakesanyrepresentation,warrantyorguarantyofanykind,expressorimplied,\nh\nD: (212) 497-7878 as tothe accuracy,completeness or reasonableness ofthe informationcontained herein or anyother writtenor oralcommunicationtransmittedor\nmadeavailabletoanyrecipient.TheCompanyandHoulihanLokeyandtheirrespectivedirectors,officers,employees,affiliatesandrepresentatives\nM: (609) 975-4780\nexpresslydisclaimanyandallliabilitybasedonorarisingfrom,inwholeorinpart,suchinformation,errorsthereinoromissionstherefrom.\nSNewman@hl.com\nInaddition,thisPresentationincludescertainestimactes,targets,projectionsandforward-lookingstatementsprovidedbytheCompanywithrespectto\ntheanticipatedfutureperformanceoftheCompany.Suchestimates,targets,projectionsandforward-lookingstatementsreflectvariousassumptions\nandsubjectivejudgmentsofmanagementconcerningthefutureperformanceoftheCompany,andaresubjecttosignificantbusiness,economicand\ncompetitiverisks,uncertaintiesandcontingnencies,manyofwhicharebeyondthecontroloftheCompany.Accordingly,therecanbenoassurancesor\nMaddie Garvey guaranteesthatsuchestimates,targets,projectionsorforward-lookingstatementswillberealized.Actualresultsmayvaryfromanticipatedresultsand\nAssociate suchvariationsmaybematerial.Pastperformanceisnotaguaranteeoffutureresults.Norepresentationsorwarrantiesaremadeastotheaccuracy\nD: (212) 331-8177 orreasonablenessofsuchassumptionsortheestimates,targets,projectionsorforward-lookingstatementsbasedthereon.\nn\nM: (773) 899-5684 OnlythoserepresentationsandwarrantiesthataremadeinadefinitivewrittenagreementrelatingtoaTransaction,whenandifexecuted,andsubject\ntoanylimitationsandrestrictionsasmaybespecifiedinsuchdefinitivewrittenagreement,shallhaveanylegaleffect.Eachrecipientshouldmakean\nMGarvey@hl.com\nindependentassessmentofthemeritsofpursuingaTransactionandshouldconsultitsownprofessionaladvisors.\ny\nHoulihanLokeymayfromtime-to-timeassistinterestedpartieswithfinancingmatters,whichmay,insomecases,berelatedtotheTransaction.\nExceptasotherwiseexpresslyindicatedherein,theinformationcontainedinthisPresentationspeaksasofthedatehereofandasofthedateatwhich\nsuchinformationis expressedtobestated,asapplicable.Thedeliveryofthis Presentationdoes notcreateanyimplicationthattherehas beenno\nDan Grob W\nchangeinthebusinessandaffairsoftheCompanysincesuchdate.NeithertheCompanynorHoulihanLokeynoranyoftheirrespectivedirectors,\nFinancial Analyst\nofficers, employees, affiliates or representatives undertakes any obligation to update any of the information contained herein or to correct any\nD: (212) 497-7866 inaccuraciesoromissionsthatmaybecomeapparent.\nM: (724) 814-2437 The Company reserves the right to conduct the process for the Transaction as it determines in its sole discretion (including, without limitation,\nDGrob@hl.com terminatingfurtherparticipationintheprocessbyanyparty,rejectinganyproposalsorindicationsofinterest,negotiatingwithoneormoreprospective\nbuyersandenteringintoanagreementwithrespecttoaTransactionwithoutpriornoticetoyouoranyotherperson)andanyproceduresrelatingto\nsuchTransactionmaybechangedatanytimewithoutpriornoticetoyouoranyotherperson.TheRecipientacknowledgesthatnorepresentationor\nwarranty,expressorimplied,hasbeenmadewithrespecttosuchprocess.NoneoftheCompany,HoulihanLokeyoranyoftheirrespectiveaffiliates\nHays Kassen hasanylegal,fiduciaryorotherdutytotherecipientwithrespecttothemannerinwhichtheproposedprocessisconducted.\nFinancial Analyst ThisPresentationdoesnotconstituteanofferorinvitationforthesaleorpurchaseofanysharesorassetsoftheCompanydescribedhereinandshall\nD: (646) 259-7518 not form the basis of any contract. No legal relationship shall be created between the Company or Houlihan Lokey and any recipient of this\nPresentation by virtue of the issuance or delivery of this Presentation. The recipient of this Presentation may not construe the contents of this\nM: (901) 871-8987\nPresentationaslegalorinvestmentadvice.Eachrecipientshouldconsultitsowncounsel,accountants,andbusinessadvisorsastolegal,tax,and\nHays.Kassen@hl.com relatedmattersconcerninganacquisitionoftheCompany.\nAllcommunicationsorinquiriesrelatingtotheCompanyorthisPresentationshouldbedirectedtotherepresentativesofHoulihanLokeylistedhere.\nNopersonneloftheCompanyshouldbecontacteddirectlyunderanycircumstancesunlessexpresslypermittedbyHoulihanLokey.\n2", "h\nExecutive Summary 4\nc\nr\nIndustry and Markets 18\nu\nh\nBusiness Overview 24\nc\nn\nGrowth Opportunities 37\nn\ny Operations Overview 48\nW\nFinancial Overview 60\nAppendix 70\n3", "h\nc\nr\nu\nh\nc\nn\nn\nExecutive Summary\ny\nW", "Masonite Architectural is a Leader\nin Opening Solutions\nMasonite Architectural is a leading specialty designer, manufacturer and provider of openingh solutions for use in large and\ndiverse commercial end applications across North America\nc\nA Differentiated Opening Solutions Platform Premier Attributes\n\uf0a1 Leading supplier of engineered, performance-driven, built-to-order opening r\nsolutionsforcommercialandinstitutionalenduses u 40+ Year ~$375M\n\uf0a1 Onlyvertically integratedplatformofscale\nTrack Record 2023E Net Sales\nh\n\uf0a1 Highly diverse and loyal customer base as evidenced by average tenure of Established Position Scaled Platform\n20+years(top30customers)andbest-in-classNetPromoterScoreof46\nc\n\uf0a1 Persistent need for tenant improvement activity supports >65% repair, replace >65% 22%\nandretrofit(\u201cRRR\u201d)salesacrossdiversecommercialenduses\nn\nRepair, Replace and 2023E Quick Ship\n\uf0a1 Robust portfolio of often-specified and always-performance-driven solutions to\nRetrofit Sales Revenue\nsolve customers\u2019 demanding needs for fire resistannce, enhanced security,\nHighly Resilient Highly Regional,\nacousticperformanceandtechnologicaldifferentiation\nDemand Service-Driven Sales\n\uf0a1 Only provider of scale with an established ryegional Quick Ship business\n~70% $3B+\nmodelpositioned to providehighlycustomized doorsto supportrapid-turn,time-\ncriticalprojectsacrossanever-expandingWnationalfootprint\nof States with Sales N on-Residential Interior\n\uf0a1 Large, diverse end applications underpinned by positive, enduring <$5M Today Door Sales\ntailwinds driven by ongoing tenant improvement activity, expanding education Significant Whitespace Large Opportunity\nfunding,growth inoutpatientcarefacilities,amongotherenduringdrivers to Capture Available\n\uf0a1 Highly actionable, demonstrated and in-process levers for significant above-\n46 >60%\nmarketgrowthandrobustoperationalimprovementopportunities\n\uf0a1 Experienced and credentialed leadership team with a demonstrated track Net Promoter Score Specification Share\nrecordofmanaginglargeorganizationsanddeliveringvalue Best in Class Established Brand\n(vs. ~7 for comps) Recognition\nSource: Company Information, L.E.K. Market Study 5", "Architectural Has Two Distinct but\nComplementary Solutions Offerings\nMasonite Architectural provides a comprehensive range of solutions across two complemenhtary, performance-and service-\ndriven models: engineered Doors & Components as well as service-focused Quick Ship delivery\nc\nDoors & Components Quick Ship\nr\n\uf0a7 Engineered doors and input components\nfor a broad array of architect-and u \uf0a7 Service-driven model with products\nperformance-driven end uses custom-fabricated to meet specified or\nDescription \uf0a7 Balanced suite of offerings to satisfy simple Description customer-dictated needs\nto complex customer-focused needs 2023E Revenue by Division \uf0a7 Focus on speed of delivery to meet\nh\n\uf0a7 Products made-to-order for architect- critical, time-driven challenges\nspecified or customer-directed requests\nQuick Ship \uf0a7 Services distributors to provide custom,\n\uf0a7 Engagement with architects, designers,\nc 22% high-performance products within\nGo-to-Market contractors and distributors to drive Go-to-Market\naccelerated timelines\nStrategy specification and solve performance-driven Strategy\n\uf0a7 Complements longer lead time Doors &\nchallenges\nComponents offerings\nn\nPrimary High performance product delivered on-time ~$375M Primary Speed of Delivery (\u201cNeed it Now\u201d)\nCustomer Customer Customized, High Product Performance\nand on-specification\nChallenge Challenge (\u201cMeet My Need\u201d)\nn\nQuote to Delivery Doors & Quote to Delivery\n12 weeks to over 6 months 24 hours to two weeks\n(Typical) Components (Typical)\ny 78%\nProduction Vertically integrated, standard and custom- Production Service-driven model with asset-light\nProcess manufactured offerings Process fabrication and product assembly\nW\nNational, based on customer access points and Generally regional with majority of sales in\nShipping Radius Shipping Radius\ndelivery needs close proximity to service facility\nFinancial Profile\nDoors & Components Quick Ship\n~30%\n~$290M ~$85M ~100%\nTarget\n2023E Sales 2023E Sales Return on Capital\nGross Profit Margin\n6", "Masonite Architectural Serves a Wide Variety of\nAddressable Applications within Commercial Buildings\nInterior opening solutions serve a critical function in building performance, including fire inhhibition, safety,\nRepresentative Example\nsecurity, acoustic and aesthetic performance to deliver end-user-desired outcomes\nc\nSample Use Case\nImaging Rooms\nStairwell\nSample Performance Requirement\nr\nu\nRadiation Resistance\nh Fire / Acoustic\nPerformance\nService / Supply Rooms\nc\nPatient Rooms\nn\nAesthetic\nn\nAcoustic Performance\nOffice / Lobby\ny\nW Surgery / Lab Rooms\nSecurity / Acoustic\nPerformance\nEmergency / Cross\nCorridor\nRadiation Resistance\nAttack Resistance / Fire Loading Entrance\nPerformance This example includes a mix of metal and wood doors, but principally wood\nDurability / Security\nThe average commercial building can include several hundred interior openings with strict performance criteria\nSource: L.E.K. Market Study 7", "Masonite Architectural Delivers a\nUnique Value Proposition\nMasonite Architectural serves as a critical partner within the value chain to drive specificatiohn and deliver a unique proposition to\na loyal and expanding customer base\nc\nOnly Player of Scale with Fully Unmatched Wood Door\nIntegrated Business Model r Offering and Knowledge\nu \uf0a7 40+ year track record of successand embedded\n\uf0a7 Vertically integratedfrom door input components\ndoor knowledge\nto door slabs to door service and value-added\n\uf0a7 Broadest and deepestsuite of products to service\nfabrication h\nperformance-driven customer needs\n\uf0a7 Only provider capable of serving customers at \uf0a7 Offerings exceed key performance criteria set by\nany point in the decision chain\u2013from the c customers and code, including acoustic, fire-rated,\nBest-In-Class\nmoment of specification to Quick Ship service radiation protection and attack resistance\nNet Promoter Score(1)\n\uf0a7 Ensures end-to-end product quality, proven n46 \uf0a7 Fulsome range of capabilities services the unique\nneeds of architects, distributors, general\nperformance and enhanced channel access\ncontractors and end users\nn\nOnly Player of Scale with an\n~6\nSuperior Customer Engagement\ny Established Quick Ship Model\nOther\n\uf0a7 DoorBuilderTMLive order configurator makWes Competitors \uf0a7 Only provider of scale offering a regionally\nselecting and ordering the right door easier and focused service modelthat allows Architectural to\nmore intuitive for the customer offer customized products to meet critical, time-\ndriven customer demands\n\uf0a7 DoorUniversityTraining Program educates\narchitects on selecting the right solutions to meet \uf0a7 70%+ of Quick Ship customers are also Doors &\nproject needs and client goals while enhancing Components customers; this demonstrates the\narchitect knowledge of end market trends unique needs of customers and Masonite\nArchitectural\u2019s ability to meet those needs\nWith 40+ years of experience, Masonite Architectural maintains a deep and entrenched position within the opening solutions valuechain\nSource: L.E.K. Market Study\n8\n(1) % of all respondents for an average score out of 10", "Quick Ship Business Model Provides Unique\nPlatform to Further Expand Exposure to the Three Rs\nMasonite Architectural is the only interior opening solutions provider of scale capable of delhivering regular and reliable Quick\nShip products across regionally focused repair, replace and retrofit end user needs\nc\nRegional Quick Ship Footprint Drives\nMasonite Architectural\u2019s Quick Ship Model is a Differentiated Platform\nSignificant Opportunity for Growth through\nGeographical Expansion r\nRegionally focused, customer-driven demand \u2013being local is critical given time-sensitive customer\nu\n\u2713 needs and high cost of failure (e.g., lost revenues associated with a hotel\u2019s inability to open)\nQuick Ship FY2022 Sales by Location(1)\n% of orders shipped within ideal 300-mile radius\nValue-added services, hincluding custom metal frames, staining, finishing, machining, installation of lite\n\u2713 kits, glazing and customsizing \u2013full suite of value-added fabrication, assembly and customization\n~75%\nSignificant c\nPremium price points are a result of customer prioritization of speed and high degree of customization\nWhite Space\n~65% \u2713 \u2013enables enhanced product margin potential and opportunity for further entrenchment\nn\nLow capital intensity and high margin offerings with a heavy focus on RRR needs\n\u2713\nn\n~25%\ny Total Quick Ship Revenue Why Speed Matters\nThorofare, NJ Arlington, TX Howell, MI Columbus, OH(2)\n($USD in millions)\nKey Quick Ship Metrics W Compressed Project Cycle Times\n14% CAGR\n$83\n% of 2023E\n22% Break / Fix Requires\nArchitectural Revenue\nQuick Replacement\n% 2023E Gross Margin 34% $44 Dictated by Building Codes\nRisk of High Costs and Penalties\n18A\u2019-23E\u2019 Revenue CAGR 14%\nAssociated with Delays\n24 hrs. to 2\nAvg. Lead Time Tenant Improvement Requiring Speed\nweeks 2018A 2023E\nSource: L.E.K Market Study\n(1) Size of circles on map represents amount of revenue shipped to location 9\n(2) Washington Court House location launched Q1 of 2023", "Highly Diverse End Applications\nMasonite Architectural delivers a comprehensive suite of solutions to address a broad arrayh of critical end uses\nOpening Solutions Span a Broad Range of Diverse End Applications With a Heavy Focus on RRR\nc\nEnd Application % of End Users(1) Sample End Uses Sample End Users Customer Demands\nr\n\uf0fc\n\uf0a7 Elementary / Middle / High Schools u Superior Performance\nEducation ~16% \uf0a7 Universities\n\uf0a7 Research Facilities \uf0a7 Up to 90 Minute Fire Rating\nlanoitutitsnIlaicremmoC h\n\uf0a7 Acoustic Performance (as measured\n\uf0a7 Hospitals\nby sound transmission class rating)\n\uf0a7 Outpatient Treatment Facilities\nHealthcare ~13%\n\uf0a7 Labs c\n\uf0a7 Long-Term Care Facilities \uf0a7 Safety and Security\n\uf0fc\n\uf0a7 Government Buildinn gs Specialized Features\nGovernment ~6% sucoF \uf0a7 Airports\n& Other \uf0a7 Infrastructure \uf0a7 Attack Resistance\n\uf0a7 Prisons n\netinosaM\n\uf0a7 Radiation Protection\n\uf0a7 Hotels / Resorts\nHospitality ~12% \uf0a7 Myotels / Inns \uf0a7 Acoustic Core\n\uf0a7 Amusement\n\uf0fc\nExceptional Service\nW\n\uf0a7 Office Buildings \uf0a7 On-Time and On-Spec Delivery\nOffice ~14%\n\uf0a7 Medical Offices\n\uf0a7 Manageable Lead Times\n\uf0fc\nDesign and Aesthetic\n\uf0a7 Storefronts\nRetail ~10% \uf0a7 Retail Shopping\n\uf0a7 Restaurants / Bars \uf0a7 Real Wood Look and Feel\n\uf0a7 Distinct Colors and Wood Graining\nMultifamily ~25% \uf0a7 Apartments / Condos \uf0a7 Custom Sizes\nSource: L.E.K Market Study\n(1) Excludes manufacturing (~4%), which is not identified as core for Architectural 10", "Well-Positioned in a Large Marketplace\nwith Attractive Tailwinds\nAttractive tailwinds that align with its strategy make Architectural best positioned to win h\nLarge and Growing Marketplace (2022A) Strong Growth Drivers with Attractive Tailwinds\nc\nUse Case Material Used End Application\nr\n~$8.6B ~$3.1B ~$1.1B\nuGrowth driven by continued rebound in key end applications\nGlass (e.g., office, hospitality) and supported by marketplace\n14% (~$0.4B) exposure to largely non-discretionary RRR spend\nHardware h\n31% (~$2.7B) Composite New Construction\n14% (~$0.4B) 40% (~$0.4B)\nc\nVolume mix of non-residential interior doors over-indexes to\nseveral end applications (e.g., healthcare, education) with\nMetal\nExterior n positive and sustained tailwinds\n37% (~$1.1B)\n33% (~$2.9B)\nn\nRRR Office layouts are beginning to normalize from a peak in the\n60% (~$0.7B) prior open-office concept, meaning increased door usage per\ny square foot as individual spaces and additional amenities in\nInterior Wood\ncommercial buildings are installed. Furthermore, tenant\n36% (~$3.1B) 36% (~$1.1B)\nimprovement activity will continue to be a consistent trend\nW\nBy Entry Product By Material Type By Construction Type Architectural doors (higher performance and Masonite focus)\nare expected to become increasingly common relative to\ncommercial doors (standardized performance requirements,\nbut higher churn) due to their higher performance specifications\nand strong aesthetic appeal\nU.S. Non-Residential Interior Wood Door Sales Growth\n2017A-2022A 2022A-2023E 2023E-2027F\nPricing is forecast to revert to the long-term historical pricing\n5% p.a. 11% p.a. 8% p.a. growth of 3-4% p.a. as supply chains and input costs normalize\nSource: L.E.K. Market Study 11", "Masonite Architectural has Transformative\nValue Creation Potential\u2026\nMasonite Architectural was established with a clear thesis to create the leader in commerciahl interior opening solutions. The\nCompany is executing on this plan despite recent, idiosyncratic challenges\nc\nArchitectural was Created to Deliver on a Defined Premise, Despite Recent Discrete Challenges\nr\nObjective Strategy Actions Taken What Was Delivered What Remained Open\nu\n\uf0a1 Create a marketplace leader with recognized \uf0a1 Continued refinement of the \uf0fc Entrenched marketplace \uf0a1 Regional penetration and\nbrand equity and customer position product portfolio position expansion opportunity\nBuild a\nh underway\nMarketplace \uf0a1 Develop and deploy a robust product strategy \uf0a1 High engagement through \uf0fc Strongest NPSin the\nthat leverages innovation and Masonite the channel category \uf0a1 Deliver greater value to\nLeader\nlegacy door and wood knowhow A&D community\nc\n\uf0a1 Develop a vertically integrated business \uf0a1 Completed 6 acquisitions \uf0fc Vertical integrationfrom \uf0a1 Plant network not fully\nmodel for greater control of the supply chain andn 4 plant closures from inputs to product delivery integrated\n2011-2021, which added\n\uf0a1 Execute and integrate a regionally focused \uf0fc Most robust product \uf0a1 Concentrated supply chain\nupstream and downstream\nacquisition strategy to add products, platformin the industry\nncapabilities \uf0a1 Fixed cost takeout plan still\ncustomers and production capabilities\nin process\nCreate a\nFlexible,\n\uf0a1 Deploy standard operating proceduresy across \uf0a1 Implemented common ERP \uf0fc Unified ERP system in \uf0a1 Recency of ERP\nIntegrated\nthe network of plants platform across multiple key plants and select implementations left\nPlant Network plant locations production processes significant learning curve\nW\n\uf0a1 Deliver a consistent service strategy that \uf0a1 Established a cohesive \uf0fc Management team and \uf0a1 Fully aligning service levels\ncreates a singular customer experience (e.g., management and frameworkfor efficient across plant locations\nconsistent quality and service levels across all organizational structure in standard operating\n\uf0a1 Establishing a network\nproduction plants) key regions procedures in place\n\uf0a1 Scale a premium Quick Ship business model \uf0a1 Scaled two Quick Ship \uf0fc Quick Ship >20% revenue \uf0a1 Significant white space\nBuild a High nationally to meet customers\u2019 unexpected \u2013 locations and ramping a at >30% gross margins across the country remains\nbut urgent \u2013needs third to be captured\nMargin Quick \uf0fc Quick Ship growing >10%\nShip Business annually\nCompany generated >$40mm EBITDA with a plan to deliver further growth prior to recent supply disruptions\n12", "\u2026But Faced Definable and Idiosyncratic Challenges\u2026\nDespite an enviable brand position and robust product portfolio, Masonite Architectural has hbeen held back by definable,\nidiosyncratic challenges, which are each on a path to resolution\nc\nSituation Backdrop Specific Impacts on the Business \u2013Why Did Architectural Face an Outsized Impact?\nr\n\uf0a1 Commercial end applications faced\nWhat Happened Impact\ndramatic and abrupt pullback in u\n\uf0a1 A crossband is a component of a door face and is \uf0a1 Elongated lead times hampered\ndemand driven by mandated\nincluded in >70% of doors produced customer service levels and on-\nshutdowns and the pandemic\n\uf0a1 Management immediately took Inability to \uf0a1 Historically, Companhy had two very stable and consistent time-completion performance\nSource Critical local crossband suppliers \uf0a1 Resulted in demand erosion\ndecisive actions to confront an\nComponent: \uf0a1 In 2022, one supplier exited the business and the other and deferral given inability to\nuncertain demand environment Crossbands went on alloccation, severely constraining critical meet required service levels\n\uf0a1 Eliminated shifts and downsized crossband supply and dramatically extending lead times\n\uf0a1 Shuttered individual production lines \uf0a1 Comnpany had to rapidly stand-up three new suppliers\n\uf0a1 Following these steps, specific factors \uf0a1 Following its acquisition, Mason City plant was on an \uf0a1 Reduced daily production\nimpacted the pace of the recovery extended TSA for its ERP system. TSA expired in 2021 levels and productivity\nInefficiencies n\n\uf0a1 Marketplace demand quickly of Multiple \uf0a1 Company forced to undergo an ERP conversion during \uf0a1 Deteriorated customer experience\nreturned ERP an unprecedented production-challenged environment given inconsistent scheduling and\n\uf0a1 Rapid inflation and severe supply Deploymyents \uf0a1 Company was still on ERP / scheduling learning curve lead time performance\nrelated to several other recent ERP conversions \uf0a1 Reduced demand fulfilment\nchain disruptions ensued\n\uf0a1 Company faced heightened levels of W \uf0a1 Company has ~1,100 hourly manufacturing employees \uf0a1 Significant learning curve to train\nattrition driven by competition for Significant \uf0a1 Typical total attrition levels are ~20% per year new employees and quickly\ntalent Employee correct product issues\n\uf0a1 In 2022, attrition reached ~40%, and ~80% in certain\n\uf0a1 Company faced discrete production Attrition plants, as competition for hourly labor ratcheted up \uf0a1 Expanded lead times, slowed\nproduction, hampered demand\nchallenges and elongated lead\ntimes, which reduced production\n\uf0a1 Despite a well-documented plan, limited Parent \uf0a1 Inability to quickly migrate\nlevels Slow investments in creating product and service consistency production across plants\n\uf0a1 Scheduling challenges within a Investments across plants to facilitate free flow of production \uf0a1 Underinvested downstream\nto Create\ncustom production environment \uf0a1 Limited investments in downstream areas of machining, processes created bottleneck\nPlant Network\ngiven ERP learning curves finishing and edge-banding for consistent service and elongated lead times\nMasonite Architectural faced unprecedented demand deferral and built-up backorders given elongated lead times, reduced service levels and an inability to\nefficiently migrate production \u2013each of which resulted in significant deterioration in operating leverage\n13", "\u2026And Today is on a Proven Path to Resolution\nMasonite Architectural has been held back by both long-term and short-term challenges, eachh of which are definable and have\nbeen, or are on a path to being, resolved\nc\nWhere is Architectural Today?\nr\nActive Steps Towards the Improved Supply Chain Resiliency and\nDevelopment of a More Nimble and Customer Experienceu Improved Price Realization\nFlexible Organizational Network\n\uf050Completed a critical mass of ERP conversions \uf050Invested in a more intuitive, autohmated, accurate and \uf050Activated multiple sources of crossband supply and\n\uf050Completed several capital projects to improve efficient order configurator (DoorBuilderTMLive) reinforced existing relationship\nproduction reliability and flexibility \uf050Actively rebuilding local plant leadership and installing \uf050Demonstrated improved price capture to cover\nc\n\uf050Invested extensively in improving scheduling processes for greater accountability material cost inflation\nprocesses across the organization \uf050Established improved standard operating procedures\n\uf050Improved recruiting / retention tools and training doncuments across all U.S. plants\nPriorn 2021 Today\n~27k\n~16k\ny\nMonthly Customer Backorders\n~4k\nW\n5\n2\nCrossband Suppliers\n1\n~37%\n~21% ~23%\nAttrition\n~32k\nAverage Weekly Production ~20k ~25k\nYTD 2023 performance is well on track to meet or exceed budget from improved demand attainment and production efficiency\n14", "Leadership Team in Place to Deliver on the\nGrowth Plan as a Stand-Alone Company\nMasonite Architectural is led by a highly experienced management team with deep sector exhpertise; significant investments in\nexecutive talent position the Company for continued growth\nc\nManagement Overview\nr\nMasonite Architectural Years of Industry Prior Professional\nExecutive Education & Qualifications Tenure Experience Experience\nu\n\uf0a7 Former VP / GM North America Technical Insulation at Owens Corning\nAlex Legall \uf0a7 Former VP, Sales and Marketing at Carrier Corporation\n3 11+\nBusiness Leader \uf0a7 MSMfrom Purdue University\n\uf0a7 BS from Prairie View A&M University h\n\uf0a7 Former Director, Financial Planning & Analysis \u2013Insulation at Owens Corning\nJohn Amonett \uf0a7 Former VP, Component Business Group at First Solar\n1 11+\nFinance Lead \uf0a7 MBAfrom Carnegie Mellon University c\n\uf0a7 BA from Princeton University\n\uf0a7 Former HR Director, Global Compensation at Owens Corning\nKrists Culkstens \uf0a7 Former Manager, HR at Amazon n\nHuman Resources 2 12+\n\uf0a7 MBA from Harvard University\nLead\n\uf0a7 BS from The United States Military Academy \u2013West Point\n\uf0a7 Former Global Marketing Manager at Sainnt-Gobain\nAngie Day-\n` \uf0a7 Former Marketing Manager at CertainTeed Corporation\nMarcelli 7 22+\n\uf0a7 MBA from The University of Colorado\nMarketing Lead\n\uf0a7 BS from The University of Central Florida\ny\n\uf0a7 Former Senior VP of Operations at Klaussner Furniture\nRichard Moore \uf0a7 Former Director of Operations, North America at Performance Fibers\n6 19+\nOperations Lead \uf0a7 MBA from Elon University\n\uf0a7 BS from North CarolinW a State University\nLisa Schultz \uf0a7 Former VP of Finance and Controller for Marshfield Door Systems\nCustomer \uf0a7 MBA from Indiana University 12 21+\nExperience Lead \uf0a7 BS from The University of Wisconsin-Superior\n\uf0a7 Former National Sales Manager, Mohawk Door\nBarry Shovlin\n\uf0a7 President of The Door and Hardware Institute (2014-15) 24 40+\nSales Lead\n\uf0a7 BS from Penn State University\nMasonite Architectural is ready to be a stand-alone company\nDecades of relevant, scale business Over 100 years of industry Talented teams built out as additional\nand operational experience experience across the team resources to senior management\n15", "Actionable Growth Plan in Place\nMasonite Architectural is well-positioned to capitalize on numerous identified and actionableh growth strategies\nTopline Growth Margcin Expansion M&A\nr\nExecute Value\nu Accretive M&A\nh\nc Operating Efficiencies\n\uf0fc Opportunities exist within a\nn highly fragmented opening\nsolutions landscape that is\n>$8.5B\nQuick Ship Expansion\nn \uf0fc Continue executing\n\uf0fc Rebalancing of supply chains\nRecapture / Expand strategic add-ons for\nand raw material availability to\nShare of Wallet and Add product and geographic\ncapture operating leverage\nNew Customerys expansion\nand margin improvement\n\uf0fc Pursue transformational\nEnd Application W \uf0fc Scale recent Texas location \uf0fc Completed ~$5M structural M&A opportunities to\nreorganization in January\nTailwinds \uf0fc Expand Quick Ship storefront expand platform reach in\n2022, reducing labor\npresence in underrepresented existing and adjacent\n\uf0fc Expand wallet share across requirements and costs\nSouthwest and West regions categories\nexisting distributor base\n\uf0fc Regain wallet share with \uf0fc Significant geographical white \uf0fc Opportunities for further\n\uf0fc Sales of U.S. non-residential space given need for local simplification of the\nexisting customers who have\ninterior wood doors forecast to representation and time- organizational structure\nbeen affected by\ngrow at a CAGR of ~9% from sensitive delivery requirements\nArchitectural\u2019s supply chain \uf0fc Simplification and codification\n2022A to 2027F\nissues 14% CAGR of standard operating Multiple Targets in\n\uf0fc Architectural\u2019s revenue is \uf0fc Acquire new customers in procedures across facilities\nover-indexed to RRR projects existing and new end $83 Large, Highly\n$44\nrelative to the broader applications and geographies \uf0fc Continued price attainment, Fragmented\nmarketplace including improvement in\nMarketplace\n~30% 2022 Wallet Share ~70% of States with 2018A 2023E approach\n~9% CAGR (\u201922A-\u201927F) for Top 25 Customers <$5M Annual Revenue\nQuick Ship Revenue\nSource: L.E.K. Market Study 16", "Masonite Architectural\u2019s Differentiated Positioning will\nEnable an Attractive Financial Profile\nArchitectural has a well-established plan to build on current momentum and deliver leading hperformance\nNet Sales(1) c Carveout Considerations\n($USD in millions) Quick Ship Doors + Components\n\uf0fc Masonite Architectural has\nr\nCOVID Identified and thoroughly evaluated the\nLockdowns Discrete Challenges\nu impacts on the Company\n$558\n$516\nrelated to the proposed\n$467\n$418 corporate carveout\n$380 $374 h\n$358 $323\n$303 \uf0fc Architectural is largely a\nc stand-alone division within\nMasonite Corporate, in\naddition to recent internal\nn\nrestructuring efforts to\n2019A 2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F create an independent\nn\norganization\nAdj. Carveout EBITDA(1)\n\uf0fc Experienced leadership\ny\n($USD in millions) team in place to continue to\ndeliver on the clear growth\nW\npath ahead\n$99\n$83 \uf0fc Minimal customer and\n$65 supplier overlap with\n$51 $49 $49 Masonite Corporate\n$37\n\uf0fc Developed a detailed, yet\n$15 $18\nconservative, bottoms-up\nbuild of each functional\nteam and associated people\n2019A 2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F\n/ non-people costs to deliver\nthe operating plan\n~$15M corporate allocation and incremental stand-alone costs excluded from the above(2)\n(1) 2020-2022 Historical Financials represent figures from the QofE Recast Analysis while the 2019 Financials represent company reporting 17\n(2) ~$15M represents corporate costs currently allocated from Parent as well as additional costs expected to replicate stand-alone requirements", "h\nc\nr\nu\nh\nc\nn\nn\nIndustry and Markets\ny\nW", "Attractive Marketplace Opportunity\nMasonite Architectural is well-positioned to capitalize on favorable industry tailwinds h\nc\n\uf0a1 ~9%growth CAGR (2022A-2027F) for Masonite Architectural\u2019s core addressable strategic focus with nearly equal\ncontributions from volume and price\nr\nGrowing\n\uf0a1 ~11% CAGR from 2022A-2023E; ~8% CAGR from 2023E-2027F\nMarketplace u\n\uf0a1 Growth primarily driven by increasing non-residential construction spend and favorable end application\nexposure\nh\n\uf0a1 Relatively high exposure to RRR (~60%c of market), of which a significant portion is non-discretionary break / fix\nprojects compared to broader construction spend, drivesincreased resilience and steadier performanceacross\nDefensive\ncycles\nn\nCharacteristics \uf0a1 Non-residential interior wood doors are employed in a wide variety of diverse applications and end uses, minimizing\nexposure to cyclical ups and downs\nn\ny\nAttractive\n\uf0a1 Consistent growth expected in key applications of education, healthcare, hospitality, office and other use cases over\nSecular W\nthe forecast period driven by attractive end application tailwinds\nTrends\n\uf0a1 Masonite Architectural offers national coverage in sales of non-residential interior wood doors, where there are\nFavorable advantages to scale, and has a broad product offering that can meet specifications for a variety of projects across end\nChannel applications\n\uf0a1 The Company\u2019s unique approach to customer engagement cultivates deep, direct relationships with all channel\nDynamics\nparticipants(e.g., distributors, architects, designers and end users)\n19\nSource: L.E.K. Market Study", "Large Market of Non-Residential Opening Solutions\nMasonite Architectural participates in a large U.S. market of non-residential opening solutionhs\nOverview Marketplace Overview\nc\n\uf0a1 Architectural is a leader in interior wood (U.S., 2022A)\ndoors and an emerging player in Quick\nr\nShip metal door fabrication, specifically\nUse Case Material Used End Application\nassembly and machining of hollow metal u\ndoor components\n~$8.6B ~$3.1B ~$1.1B ~$1.1B\n\uf0a1 Total addressable market of doors and h\nManufacturing 4% (~$45M)\nhardware totals ~$8.6B\nOther 6% (~$65M)\nHardware\n\uf0a1 \u201cCommercial\u201d doors are most often used Hardware 31% 28% (~c $0.8B) NH oa t r Cd ow va er re e: d Retail\nfor higher-volume projects, while (~$2.7B) Today 10% (~$105M) New Construction\n\u201carchitectural\u201d doors are utilized for n 40% (~$440M)\nprojects with more precise / higher-end\nperformance specifications\nMultifamily\nn 25% (~$275M)\n\uf0a1 The market is expansive across all\ngeographies and key end markets, Metal Metal:\nincluding education, hospitality, office, Exteyrior 33% 36% (~$1.1B) Potential\nhealthcare, multifamily, retail, (~$2.9B) Opportunity\nHealthcare\nmanufacturing and other institutional and 13% (~$150M)\nW\ncommercial applications\n\uf0a1 Highly stable, resilient and growing Education\n16% (~$170M) RRR\ndemand environment benefitting from Architectural Wood\n60% (~$660M)\nfavorable secular trends drives continued 17% (~$0.5B)\ngrowth of interior wood doors Interior 36% Wood: Hospitality\n(~$3.1B) Core Focus 12% (~$130M)\n\uf0a1 ~60% of the market is driven by repeat Commercial Wood Today\nand stable revenue streams from 19% (~$0.6B)\nOffice\nrenovation, remodel & repair and retrofit 14% (~$150M)\nprojects\n(1)\nBy Entry Product By Material Type By End Market By Construction Type\nSource: L.E.K. Market Study\n20\n(1) This chart represents the RRR vs New Construction breakdown for the Non-Residential Interior Wood Door marketplace", "Attractive Marketplace Tailwinds\nMasonite Architectural is well-positioned to benefit from attractive tailwinds h\nPositive Trends\nc\nCAGR (\u201823-\u201927)\n\uf0a1 Afteraperiodoflower-than-usualactivity,underlyingnon-residerntialconstructionspendis\nUnderlying\nrebounding towards pre-COVIDlevelsdrivenbyan expected reboundinkeyapplications\nConstruction u ~2.6% p.a.\n(e.g.,office,retail,hospitalityandhealthcare)andissupportedbyresiliencyresultingfrom\nSpend (\u201cCPIP\u201d)\nmarketexposuretoRRRconstructiontrends\nsrevirD\nh\n\uf0a1 Sales are expected to outperform underlying construction spend growth from 2023 to\nEnd Application\n2027asthemixof non-residential interiordoors over-indexes toseveralendapplications ~1.8% p.a.\nemuloVsrevirD Exposure\nwithstronggrowthrates(e.g.,healthcare,educationandhospitality)relativetoCPIP\nc\n\uf0a1 Growth driven by trends supporting increased door usage per square foot (e.g., the\nIntensity of proliferationofamenitiesincommenrcialbuildings,increasedsecurityconcernsandapeak\n~0.3% p.a.\nDoor Usage in the open office concept) is expected to remain relatively consistent over the forecast\nperiod\nn\n\uf0a1 Architectural doors are expected to become increasingly common relative to commercial\nProduct\nduetotheirhigherperformance specifications (e.g., impactresistance,sounddeadening) ~0.2% p.a.\nMix-Shift y\nandstrongeraestheticappeal,particularlyinofficeandretail\neulaV W\n\uf0a1 Pricingisforecasttoreverttothelong-termhistoricalpricinggrowthof3-4%p.a.asvalue\nPricing Reverts to\nchainsandinputcostsareexpectedtonormalizeafterrapidpriceincreasesoccurredover ~3.5% p.a.\nTrend\nthepasttwoyearsduetosupplyanddemandimbalances\nTotal U.S. Non-Residential Interior Wood Door Market Value Growth\n~11.3%\n~8.2%\n~5.0%\n2017A-2022A 2022A-2023E 2023E-2027F\nHistorical Projected\n21\nSource: L.E.K. Market Study", "Continued Growth in Use of Wood Interior Doors\nThe mix of interior wood door volume over-indexes to multiple construction end applicationsh that are forecast to outpace broader\nConstruction Put-In-Place (\u201cCPIP\u201d) growth over the next five years\nc\nExposure of Interior Doors to Underlying End Applications(1)\nr\nShare of Non-Residential Interior Wood Door Volume (2022A)(2)\nu\nApplication h\nHospitality Healthcare Education Office Retail Multifamily Other(3) Manufacturing\nc\nInterior door High usage of Interior doors for Moderate door Average interior Interior Slightly above Lower door\nusage to afford interior doors to both safety / usage for offices door usage door usage average door usage due to\nUse Case\nprivacy and for adhere to health security as well and restrooms offset by use of usage given need for open\nn\namenities codes as building size residential doors building variety space\nShare of\n~12% ~13% ~16% ~14% ~10% ~25% ~6% ~4%\nVolume n\nExpected CAGR (2022A-27F)\ny\nCAGR % ~10.0% p.a. ~3.8% p.a. ~3.5% p.a. ~4.1% p.a. ~0.3% p.a. ~3.0% p.a. ~3.4% p.a. ~3.5% p.a.\nW\nTravel activity is New activity in Education spend Officeis Retail Multifamily The Other Manufacturing\nexpected to healthcareis is expected to expected to construction developments are Institutionalend spend is forecast\nresume in the expected due to increase in the experience a stabilized in 2022 coming off a application is to benefit from\nlong term, continued growth long term; school modest as demand period of higher expected to longer-term\nsupporting a in outpatient care enrollment growth turnaround in line stabilized growth through outpace overall onshoring activity\nrobust recovery in facilities and and school with broader following COVID- 2023 and are CPIP growth as and investment in\nCommentary\nhospitality hospitals funding are nonresidential 19 and as expected to see delayed projects capacity as\nactivity expected to expectations as delayed lower growth as are expected to domestic\nremain resilient offices adapt to improvement buyers opt away be completed producers look to\nsustained hybrid / projects occurred from denser de-risk supply\nremote work developments chains\npolicies\nSource: U.S. Census Bureau; FMI; Dodge; L.E.K. research and analysis\n(1) End applications are ordered from left to right in descending order based on Masonite Architectural\u2019s exposure to each\n(2) Percentages may not sum to 100% due to rounding\n(3) Other includes religious, public safety and amusement & recreation segments 22", "Unique Value Chain Position\nMasonite Architectural operates upstream in the wood door value chain, providing productsh primarily to wholesalers and\ndistributors of wood doors while maintaining strong relationships with end customers\nc\nArchitectural\u2019s Area of Focus\nNon-Residential Wood Doors Value Chain\nr\nu\nValue Chain Architects &\nh\nDecision Flow Designers\nc\nArchitects & n Channel Partner Original Equipment\nEnd Users General Contractors\nDesigners (Distributor, Other) Manufacturers\n\uf0a7 Interface directly to \uf0a7 Responsible for the \uf0a7 Purchase the door \uf0a7 Liaise between \uf0a7 Convert raw wood\nn\nconvey owner scope and design of from the distributor and manufacturer and materials into door\nrequirements, new construction and work with architect and general contractor, slabsand provideto\nDescription determine final product large renovation & end user to determine providing bids, logistics, wholesalers / service\ny\nselection and manage remodel projects project requirements sale support and centers as well as other\nproduct delivery and timeline for door products value-add services\ninstallation (e.g., machining)\nW\n\uf0a7 Convey project \uf0a7 Work with general \uf0a7 Convey project \uf0a7 Based on project specs, \uf0a7 Source raw materials\nrequirements to contractor for entirety of requirements set by put forth proposal(s) for and mill wood into door\narchitect and select project architect to distributor acceptable door to the slabs\nwinning bid based on \uf0a7 Determine timelines for \uf0a7 Coordinate with general contractor \uf0a7 Distribute slabs to\nKey Activities\nspecs overall project distributor through \uf0a7 Steward GC team and wholesalers / service\n\uf0a7 Coordinate with \uf0a7 Involved in selecting, product delivery wholesaler / centers or add\ndistributor / architect specifying manufacturer through hardware and finish\nthrough product delivery product delivery product\nOEM focus\nInfluence Influence Influence Primary Customer -\n(e.g., Masonite)\nSource: Company websites; L.E.K. research and analysis\nNote: \u201cGC\u201d = General Contractor 23", "h\nc\nr\nu\nh\nc\nn\nn\nBusiness Overview\ny\nW", "Masonite Architectural Operates Across Two Leading,\nComplementary Divisions\nArchitectural provides high quality products and exceptional services to highly attractive, dihverse and resilient end markets\nc\nr\nu\nDoors and Components Quick Ship\nh\nLeading Provider of a Robust Portfolio of Leading Provider of Highly Customized,\nSpecified, High-Performance Wood Interior Expedited Shipping Solutions to Meet\nc\nOpening Solutions for Institutional and Critical Customer Needs with High Costs of\nCommercial End Uses Failure\nn\n~$290M ~30% ~$85M ~34%\n2023E Revenue Target Gross Profit Margin 2023E Revenue 2023E Gross Profit Margin\nn\n>65% 12 weeks \u2013 6 months+ >100% 24 hours \u2013 2 weeks\nRRR Typical Quote to Delivery ROIC Typical Quote to Delivery\ny\nEducation, Healthcare, Hospitality, Office Projects Requiring Quick Service\nTypical Use CaseWs Typical Use Cases\nMasonite Architectural Value Proposition\n\uf0fc Architectural possesses a vast portfolio of Architectural and \uf0fc Architectural\u2019s Quick Ship capabilities increase product\nCommercial Interior Doors that differentiate themselves from their availability and enable it to meet demand for quick-turn projects\ncompetitors\n25", "Defining the Door\nMasonite Architectural is a full-service opening solutions manufacturer, including skins, corhes, slabs and hardware accessories\nInterior Opening Solution Overview Crocss-Section of a Door Slab\nr\nDoor Frames\nDoor Glass\nFabricated glass Framework supporting the door, Edgue Band for\nincluding the sill, jamb and head\npanels integrated with coverage of door edge\ndoor slab Wooden stile and rails\nh\nAccess Control System\nElectronic hardware and\nc\nsoftware for security\nDoor Hinges n Wood Core (e.g.,\nLock Hardware Moveable joint or particleboard,\nMechanisms for door mechanism on which structural composite\nsecurity a door swinngs as it lumber, mineral core)\nopens and closes\ny Crossband for\nDoor face, support between\noften veneer core and skin\nW\nDoor Handle\nMechanism attached\nto door slab for\nopening and closing\ndoor Door Slab\nRectangular slab of wood pre- Additional Services Offered by Masonite Architectural\ncut to fit the opening\ndimension; may or may not \uf0fc Machining: Preparing the door for \uf0fc Finishing: applying stain(s) to slab\nhave hardware pre-attached installation and acceptance of various \uf0fc Detailing: Preparing the slab for the addition\nhardware per buyer specification of glazing and adding integrated electronics\nGlass, lock hardware, hinges and door handles comprise the core components within a door\nDenotes product that Masonite Architectural manufactures\n26", "Illustrative Flush Door Assembly Process\nMasonite Architectural offers a vertically integrated production process which includes doorh assembly as well as value-added\nservices, such as machining, detailing, finishing and hardware installation\nc\nDoor Core Wood Stiles & Rails Door Skin (Consisting of a Door Face Door Slab is Trimmed Door Slab is Stained Machine & Detail of\n(Solid Interior of a Door) Bonded to Door Core and Crossband) Adhered to Wood Core to Customer Specified and Finished to Door Slab (including\nto Create a Door Slab rSize Reflect Customer Edge Banding)\nSpecified Aesthetic\nu\nh\nc\nn\nn\ny\nW\nDoor Slab Production Additional Value-Added Services\n\uf0fc Most manufactured door slabs consist of a core (solid wood, composite, steel-pan or lead-lined), two skins (skin \uf0fc Machining: Preparing the door for\nis essentially a crossband and a veneer) and stile & rails that are attached to the core installation\n\uf0fc Finishing: Applying standard or custom\n\uf0fc 90% of veneers exists within three different wood species (birch, maple and oak) stains to slab\n\uf0fc Detailing: Prepping the slab for glazing\n\uf0fc Commercial doors are primarily solid core to reflect specific sound and / or fire rating requirements\nand installation of glass\n27", "Architectural Offers a Robust Portfolio of Branded,\nPerformance-Driven Opening Solutions\nMasonite Architectural delivers the most comprehensive range of high-value, high-performahnce interior opening solutions in the\nindustry with significant category expansion opportunities\nc\nDoors & Components Quick Ship\nAspiro\u2122 Series Cendura\u2122 Series r\nu\nh\nc\nn\nAuthentic Select Wood Premium Choice Standard Standard Everyday Wood Hollow Metal W o o d & Metal\nStile & Rail Veneer Painted Laminates Wood Veneer Painted Laminates Doors Doors Frames\nFeatures \uf0a7 Fire ratings up to 90 minutes Fneatures \uf0a7 Fire ratings vary by core type, Features \uf0a7 Fabricated commercial doors, frames\n\uf0a7 Acoustic Sound Transmission Class (\u201cSTC\u201d) typically up to 45 minutes and and hardware that are available to\nratings of 50+ to minimize noise transmission available up to 90 minutes ship within 24 hours to two weeks\n\uf0a7 Clean-edge doors designed to minimize bacteryial \uf0a7 Balance of performance and value \uf0a7 Architectural-, commercial-and\ngrowth and improve aesthetics that meets wide range of economy-grade options\n\uf0a7 High-impact-edge doors for added durability specifications while maintaining\nW\n\uf0a7 Options for radiation protection, acoustic quality and differentiated aesthetics\nperformance or attack resistance\n~44% ~410K ~16% ~300k ~22% ~200k\n2022A Doors Sold 2022A Doors Sold 2022A Units Sold\nSales(1) Per Annum Sales(1) Per Annum Sales(1) Per Annum\nAspiro\u2122series offers high-end aesthetic and Cendura\u2122series provides a balance of Service-driven solution to complement\nperformance qualities and a lifetime warranty performance and value and a limited warranty longer-lead time offerings\nRobust portfolio of offerings to meet customer-dictated needs from \"need-it-now\" to highly-specified opening solutions\n28\n(1) Excludes sale of components to external parties and other uncategorized / miscellaneous sales; Remaining ~18% of sales made up of ~7% skins, ~8% particleboard cores, ~3% other", "Doors | Division Overview\nArchitectural manufactures door slabs with additional value-add services to produce finishehd non-residential wood interior doors\nDivision Description Financial Summacry and Key Statistics\n\uf0a7 Manufactured door slabs consisting of a core (solid wood, External Net Sales ($M) by Year 2022A Revenue Mix\nr\ncomposite, steel-pan or lead-lined), two skins made up of a\ncrossband and a veneer and stile & rails attached to the core $257 u Cendura\n$238 27%\n\uf0a7 Slabs may be machined (e.g., prepared for installation) and / or $207 $208\ndetailed (e.g., modified, cut open for glazing) and sold through h\ntraditional channels based on demand and capacity-driven lead time\n\uf0a7 Robust portfolio of offerings capable of meeting customer needs c\nAspiro\nfrom standard to complex and across a range of specifications\n73%\nn\n2020A 2021A 2022A 2023E\nProduct Overview\nn\nAspiro\u2122 Series Cendura\u2122 Series Other\ny\n\uf0a7 Architectural sources and installs\n\uf0a7 Fire ratings up to 90 minutes \uf0a7 Fire ratings vary by core type, typically up\nFeatures Features a variety of additional\nto 45 minutes and available up to 90\n\uf0a7 Acoustic Sound Transmission ClWass (\u201cSTC\u201d) components, including cut-to-\nminutes stock door frames\nratings of 50+ to minimize noise transmission\n\uf0a7 Balance of performance and value that \uf0a7 Wood frames enable ease-of-\n\uf0a7 Clean-edge doors designed to minimize meets wide range of specifications while installation and are manufactured\nbacterial growth and improve aesthetics maintaining quality and differentiated at the stile & rail plant\naesthetics \uf0a7 Architectural also sources wiring\n\uf0a7 High-impact-edge doors for added durability\n\uf0a7 Global product lines include standard harnesses for installation in\n\uf0a7 Options for radiation protection, acoustic wood veneer, standard painted and doors through raceways to\nconnect electrified hardware as\nperformance or attack resistance everyday laminates\nan option\nFrames and other components\nAspiro\u2122series offers high-end aesthetic and performance Cendura\u2122series provides a balance of performance and\nimprove door performance and\nqualities and a lifetime warranty value and a limited warranty\nadd desired aesthetics\n29", "Components | Division Overview\nDoor skin and core components serve an important role in providing the overall aesthetics ahnd performance qualities of the\nfinished door\nc\nDivision Description Financial Summary and Key Statistics\n\uf0a7 Components are parts used internally in the completion of an External Net rSales ($M) by Year 2022A Revenue Mix\nassembled manufactured door\nu Internal Use\n48%\n\uf0a7 Some examples of components include cores, door skins $60\nand cut stock $54\nh $48 $46\n\uf0a7 Depending on external demand and cases of excess capacity, Third Party\n52%\nArchitectural\u2019s components may also be sold externally\nc\n\uf0a7 Components are typically purchased directly from distributors and\nSkins\nprimarily sold as part of the manufactured door from Architectural 48%\nn\nCores(2)\n2020A 2021A 2022A 2023E 52%\nProduct Overview\nn\nCores(1) Door Skins(1)\ny\nW\nFire-Resistant Particleboard Wood Veneer and Medium Density\nMineral Core Core Overlay Door Skins\nDescription Description\n\uf0a7 Each Architectural door consists of a wood-based or composite core \uf0a7 Door skins represent the outer and visible layers of a completed door\n(interior of door) and are typically made of wood veneer, medium density overlay or\n\uf0a7 Particleboard core, fire-resistant mineral core, structural composite plastic laminates over high density crossband\nlumber, lead-lined core, steel-pan core\n\uf0a7 Architectural principally manufactures wood veneer and medium density\n\uf0a7 Cores are chosen based on performance criteria, including acoustic\noverlay skins\nratings, fire ratings, attack resistance and radiation shielding\n\uf0a7 For example: lead-lined for radiation shielding \uf0a7 Architectural\u2019s selection and optionality of skins allows customers and\n\uf0a7 Architectural manufactures particleboard and mineral core while architects to focus on style and fit while relying on Architectural for\nsourcing structural composite lumber, lead-lined and steel-pan durability and performance\n(1) Example pictures of Cores and Door Skins only represent components manufactured by Architectural\n30\n(2) Within Marshfield PB (MFPB), intra-company sales are generally recorded at standard costs; A quarterly margin credit associated with MFPB sales to NA Residential is included in chart", "Quick Ship | Division Overview\nArchitectural is positioned to win in expedited purchase scenarios given the discrete and highh performing Quick Ship offering\nDivision Description Financial Summacry and Key Statistics\n\uf0a7 Service-driven division focused on providing quick turnarounds for External Net Sales ($M) by Year % Orders by Shipping Distance\nlargely repair and replacement projects that have high costs of r\nfailure u $83 Not Mapped 0-50 Miles\n\uf0a7 Offering is typically custom-fabricated door slabs sold distinctly 11% 11%\n$71\nthrough the Quick Ship program 50-100 Miles\n300+ Miles\n\uf0a7 Ability to ship up to 100 doors in 5-,10-and 15-day increments h 28% 8%\n$49\n\uf0a7 ~70% of sales within 300 miles of facility (equivalent of NYC to DC $43\nor ~5 hours drive)\nc\n\uf0a7 Primarily sold through distributors (with >70% customer overlap with\nDoors division); however large contractors and installers may\npurchase directly from Masonite Architectural n 100-200 Miles\n200-300 Miles 24%\n2020A 2021A 2022A 2023E\nService Overview 18%\nn\nQuick Ship Platform\nModel Overview Key Productys Typical Use Cases Rationale Service Coverage\n\uf0a7 Masonite Architectural \uf0a7 Commercial and \uf0a7 Door repairs and \uf0a7 Doors can be needed \uf0a7 The Quick Ship program\nW\nstocks pre-finished door Architectural-tier Interior replacements following quickly to avoid costly delivers to customers\nslabs with their most Wood Doors and Frames damage to the original delays to overall across the United States\npopular door options and \uf0a7 Hollow Metal Doors and \uf0a7 Short term and small- construction completion from strategically located\naccessories in each scale projects and building occupancy distribution centers\nFrames\nregion\n\uf0a7 Incremental orders for \uf0a7 Expedited shipping is \uf0a7 Regional truck deliveries\n\uf0a7 Using machining and \uf0a7 Commercial Hardware new construction and sometimes needed to allow for faster door\ntooling, Architectural is renovations if there was meet legal and building delivery, consistency in\nable to deliver custom- a mis-order or damage code requirements to execution and lower risk\nfabricated commercial during installation avoid costly fines of damage\ndoors on an expedited\ntimeline\nArchitectural\u2019s Quick Ship Platform offers customers trusted service when projects are urgent or time sensitive\n31", "Diverse Operating Platform\nMasonite Architectural\u2019s platform diversification is multi-faceted h\nDifferentiated Vast End Use Diverse Custcomer RRR vs. New\nBusiness Model Exposure(1) Base Construction\n(2022A Revenue by Division) (2022A Revenue by End Use) (2022A Revernue by Customer) (2022A Revenue by Project Type)\nVertically integrated business Diverse exposure across seven Minimal cuustomer concentration Masonite Architectural\u2019s sales\nmodel critical end uses with long tail of customers are over-indexed to RRR relative\nto the core market\nGovernment h\nCustomers 1-5\nMultifamily 5% 17% New\n8% Healthcare All Others Construction\nQuick Ship Hospitality 21% c42% 35%\n22% 9%\nn\nOffice Customers\n17% 6-25\nn 16%\nEducation\nDoors & RRR\n20%\nComponents Religious / Retail / Other Customers 26-100 65%\n78% y20% 25%\n\uf0a1 Significant installed base, \uf0a1 Stable, recession-resistant \uf0a1 Expansive and growing base of \uf0a1 RRR volume has historically\nbreadth of offering and leading growth in core areas of focus customers globally outperformed new construction\nW\nmarket position act as in market down-cycles\n\uf0a1 Specialty doors represent only \uf0a1 Top 30 customers have an\ncompetitive moat\n1-2% of the cost in a typical average tenure of 20+ years \uf0a1 RRR projects tend to be a\n\uf0a1 Products are typically specified build / remodel project, more cost-efficient way to\n\uf0a1 Customer loyalty driven by high\nand non-discretionary providing improved resiliency improve aesthetics as opposed\nquality products, reliable\nto new construction\n\uf0a1 Differentiated Quick Ship \uf0a1 Vast range of needs from customer service and short\nbusiness model creates simple to complex lead times \u2013there is a cost \uf0a1 Attractive RRR tailwinds drive\nsuperior resiliency to pricing associated with failure to outsized growth and\nand market fluctuations deliver reoccurring revenue\nResiliency underpinned by Masonite Architectural\u2019s uniquely diversified business model and entrenched position\nSource: L.E.K Market Study\n32\n(1) End market breakdown represents Door Plant sales to specific verticals where available; Excludes Quick Ship and Components", "Masonite Architectural\u2019s Engagement Across\nthe Value Chain is Well Recognized\nMasonite Architectural is highly differentiated by the Company\u2019s approach to acquiring and hengaging with its customers\n\uf0a1 Masonite Architectural\u2019s unique approach to customer engagement leverages selling through distributor partners while cultivatingdeep, direct\nc\nrelationships with all other market participants (e.g., architects, designers and end users)\n\u2012 This strategy creates a compelling demand dynamic whereby architects specify Masonite Architectural products in order to meetperformance\nr\ncharacteristics and regulations \u2013specified products drive pull-through demand\nu\n\uf0a1 Masonite Architectural employs a multi-faceted strategy to engage distributors and end users that leverages solution-based product scale and\ncustomization, an intuitive door configurator and reliable quality and service\nh\nModel Advantages Established and Highly Entrenched Brand\n\u201cMasonite Architectural is committecd Best-In-Class\nContinued Development of \u201cWith Masonite Architectural\u2019s 15-day\nand invested in the industry, the Net Promoter Score(1)\nDeeper Customer Quick Ship program, I am able to get\n\u2713 products are rock solid, and we know if a\nEngagement product fails, they will make nit right. That\u2019s the doors my customers need when\nthings are urgent and time sensitive\u2026\u201d\na big deal for us in healthcare facilities...\u201d\nDrive Pull-Through n -Project Manager, Distributor Customer 4 6\n\u2713 Demand -Regional Director, Architect Customer\n\u201cMasonite Architectural has a wide\ny \u201cMasonite Architectural has a wide variety\nproduct catalogueand far\nof architectural doors; they are visually\nHighly Specified Products geographical reachso it is able to\n\u2713 service all kinds of projects across the attractive and fit all our needs. They\u2019re\nW my go-to brand when selecting doors\u2026\u201d\ncountry; it sells so many different\nproducts to a wide range of distributors\nthat makes it easy for end customers to -Facilities Director, Healthcare System ~6\n\u2713 Trusted Distributor Partner get their hands on Masonite\nmerchandise\u2026\u201d\nOther\n\u201cUSA Wood Doors has very strategic\nDepth and Breadth of -Purchasing Director, Distributor Customer Competitors\ndistributor and partner networks\nOfferings to Meet End\n\u2713 throughout the US. This supports the\nUser Performance Needs \u201cMasonite Architectural\u2019s brand is differentiating advantage that they deliver\nLeading net promoter\nincredibly strong. You can find them directly to the jobsite, which is a huge\nanywhere in the U.S., and they\u2019re very convenience\u2026\u201d score with strong\nQuick Ship Model\nwell positioned\u2026\u201d customer attachment\n\u2713 Augments Strategy\n-Purchasing Director, Distributor Customer r ates\n-Senior Director, Distributor Customer\nSource: L.E.K. Market Study\n33\n(1) % of all respondents for an average score out of 10", "Entrenched Relationships with Diversified Customers\nMasonite Architectural supplies a wide customer base primarily focusing on one-step and sphecialty door distributors\nOverview 2022cA Revenue 2022A Revenue\nby Customer by Project Type\n\uf0a7 Supplies a diverse base of local and national distributors and wholesalers r Customers 1-5\n17% New\nAll Others Construction\nu\n\uf0a7 Regional door distributors generally rely on Architectural for a wide range of 42% 35%\nRRR\ninterior door needs with extensive focus on product breadth, service and speed / 65%\nquality at delivery h\nCustomers\n6-25\n\uf0a7 Complemented by strategic relationships with select national distribution partners\nc 16%\nCustomers 26-100\nTop 10 Customers for Doors and Quick Ship Sales(1) n 25%\n($ in millions)\n1,075+\nn\nCustomer Tenure Description of Relationship 2022A Total # Customers\n(years) Revenue\ny\nCustomer 1 23 Commercial doors, frames and hardware $25.7\n~$250k\nCustomer 2 27 Commercial doors, frames and hardware $7.1\nW\nAverage Revenue\nCustomer 3 32 Commercial doors, frames and hardware $4.6\nper Customer\nCustomer 4 27 Commercial doors, frames and hardware $4.2\nCustomer 5 27 Commercial doors $3.8\n~$70k\nCustomer 6 25 Commercial doors and hardware $3.7\nMedian Revenue\nCustomer 7 28 Commercial doors, frames and hardware $3.6\nper Customer\nCustomer 8 18 Commercial doors and hardware $3.3\nCustomer 9 11 Commercial doors, frames and hardware $2.8\n~98%\nCustomer 10 25 Commercial doors, frames and hardware $2.6\nRetention Rate(2)\nTotal Top 10 $61.6\n(1) External components sales not included\n34\n(2) 98% retention rate represents gross retention; gross retention calculated with the assumption that 95%+ drop in annual revenue represents a lost customer", "Tiered Customer Approach\nMasonite Architectural defines customers using a tiered system based on the size and frequhency of orders placed, wallet share\nexpansion opportunity and cost of servicing the customer\nc\n2022A Revenue by Customer Tier (Door Customers Only)(1)\nr\nAll Others Defining the Customer Tiers\nTier A \uf0fc Tier Acustomers aure high value, direct call relationships with dedicated service\n12%\n24% reps. Opportunities to retain and grow share with Tier A customers\n\uf0fc h\nTier B customers are high value, lower order frequency relationships; share\n2022A\nexpansion is a priority with Tier B customers\n39% c\n\uf0fc\n25% Tier C and D customers place smaller, ad hoc orders; opportunities to scale\nTier C and D\nTier B targeted customers with higher tier potential while driving entrenchment with all\nn\ncustomers\nTier Statistics n\ny 2022A Avg. Revenue 2022A Avg. Order Architectural\nTier # of Customers(1) 2022A Revenue\nper Customer Volume per Customer Engagement Level\nW\nTier A 10 $48.1M $4.8M ~17,300\nTier B 65 $49.2M $0.8M ~2,900\nTier C 155 $53.4M $0.3M ~1,200\nTier D &\n390+ $47.8M $0.1M ~200\nAll Others\nSource: Company Information\n(1) Reflects tiered customers that Architectural did business with in 2022 and excludes Quick Ship and Components customers 35", "Overview of Sales & Marketing Organization\nMasonite Architectural\u2019s sales organization provides local, day-to-day coverage of a broad, dhiversified base of customers\nOverview Sales Strategy\nc\n\uf0a1 Architectural\u2019s sales and marketing team has functional and regional expertise and is\nOverview\nbuilt on a reputation of quality, customer service and trust r\n\uf0a1 Architectural engages each customer channel with a tailored engagement strategy,\nu\nincluding trade shows, industry events and co-branding opportunities, among other \uf0fcGo-to-market strategy underpinned by long-term\nstrategies growth objectives and Company vision to be a\nregional leader\n\uf0a1 Architectural provides high-touch, local engagement for distributors and wholesalers toh\ndrive customer stickiness and retention \uf0fcSales team mission: deliver trusted, valued and\neffortless customer solutions that build lasting\n\uf0a1 Tools like DoorBuilderTMLive help make the door selection and customization cprocess Philosophy partnerships\nmore intuitive\n\uf0fcDeliver a comprehensive, high-quality range of\nn solutions and award-winning service\nSales & Marketing Organization Structure\n\uf0fcWinning at the point of sale is critical to drive\nBarry Shovlin Kirk Soe nAngie Day growth and profitability\nSales Lead Sales Lead Marketing Lead\nDistC ria bn ua tod ria Sn a les U.S. D Si as lt er sibutor S anaI dln e s Csi od O me p S e pra oal ne ti es o n, n ts s OP Cpr ei oc r mi an t mg io, e nS rs ca il a ae n ls d Tec &y h Sn uic pa pl oS ra tles C MPh ara ro kn d en u te ic nl t& g D3 e sA igrc nh Mite ac nt au gra erl s \uf0fcN tea rrt ii to on rya bl aa sn id s ,R ee ag ci ho wna ithl p al a loy ce ars llys mer av nic ae gd e o dn s aa l es\nSystems\nstrategy\nW\n4 SIn ad lee sp e Rn ed pe snt 8 Te Mr ari nto ar gy e S rsales 2 In Ls ei ad de e S ra sles 1 Data Analyst T2 e cP hr no id cu iac nt s M3 aP nro ad gu erc st Distributors \uf0fcRelationship-driven coverage\n1 Strategic 1 Strategic \uf0fcTend to sell to higher volume contractors and\nAccount 4 Inside Sales Marketing\nManagers builders in both new construction and R&R\nManager Manager\n2 Sales Account\nSpecialists \uf0fcCreate specified demand anddrive brand\npreference\n1 Coordinator,\nInside Sales \uf0fcServe larger projects such as healthcare\nArchitects &\nfacilities, educational and multifamily buildings\nDesigners\n1 Customer\nService \uf0fcDirect-to-site delivery, delivered-to-spec and\nRepresentative\nservice to ensure strict adherence to project\ntimelines\nExperienced and Versatile Sales Team\n36", "h\nc\nr\nu\nh\nc\nn\nn\nGrowth Opportunities\ny\nW", "Multiple Levers for Growth\nWell-defined, multi-pronged strategy to achieve robust growth in the near-term through orgahnic and M&A initiatives\nKey Growth Initiatives cRobust Financial Outlook\n1 ($ in millions)\n\uf0fc Favorable, sustainable end market growth driven by pent-up demand r\nAttractive\nIndustry Tailwinds from residential under-build, attractive new construction backdrop and Revenue PF Adjusted Carveout EBITDA\nu\nstable RRR spend\n2\nExpand Share of \uf0fc Expand wallet share across existing distributor base once critical suphply\nWallet with Existing\nchain challenges are addressed\nCustomers\nc\n2\nExpand Influence with \uf0fc Drive demand pull-through with architects and designers through the $558\nChannel Participants Company\u2019s unique engagement strategy with valuen chain participants $516\n$467\n3\nDrive New Customer \uf0fc Acquire new end users in existing and unnderpenetrated regions and $418\nGrowth markets\n$374\ny $99\n4\n\uf0fc Expand Quick Ship storefront presence within underrepresented $83\nStrategic Expansion of\nSouthwest and West reWgions to address need for local relationships\nQuick Ship Business\n$65\nwithin hyper-regional business model\n$49\n5\n$37\n\uf0fc Quick Ship doors provide price upside opportunity to capture growth\nUpside: Pricing\n\uf0fc Opportunity to pass along price increases to improve top and bottom line\n5\n\uf0fc Rebalancing of supply chains and raw material availability to drive\nMargin Improvement leverage and margin improvement\n\uf0fc Further simplification of the organizational structure post-transaction\n6 2023E 2024F 2025F 2026F 2027F\n\uf0fc Leverage proven integration capabilities across a robust pipeline of\nExecute Value\nopportunities to drive top-and bottom-line synergies ~$15M corporate allocation and incremental\nAccretive M&A\n\uf0fc Highly fragmented opening solutions market landscape stand-alone costs excluded from the above(1)\n38\n(1) ~$15M represents corporate costs currently allocated from Parent as well as additional costs expected to replicate stand-alone requirements", "1\nAttractive Industry Tailwinds\nh\nLarge Marketplace (2022A) Strong Growth in U.S. Sales of Non-Residential Interior Wood Doors\nc\nSales of Interior Wood Doors ($)\n8.2% CAGR\n~$8.6B (2022A-2027F)\nr\n~$1.7B\nTotal interior and exterior\nu\nnon-residential doors and 11.3% CAGR\nhardware\n~$1.2B\nh ~$1.1B\n~$3.1B c\nInterior non-residential\nn\ndoors\nn 22A 23F 27F\nGrowth in Interior Wood Door Sales % CAGR\n~$1.1B\ny\n(2023E-2027F)\nInterior non-\n~3.7% p.a. ~8% p.a.\nresidential wooWd\ndoors\n~2.1% p.a.\n~2.6% p.a.\nUnderlying CPIP Volume Growth Pricing Growth 2023P-2027P Total\nSpend Growth Value Growth\n39\nSource: L.E.K. Market Study", "Expand Distributor Wallet Share Capture\n2\nin Existing Categories and Regions\nService recovery to drive wallet share capture (and recapture) with top distributors as the Comhpany migrates customers up the\nvalue and volume curve with reinvigorated service and enhanced customer experience focus\nc\nIdentified Opportunities for Share Capture\nDistributor Customer Tenure 2022A Sales 2019 Wallet Share 2022 Wallet Sharer\u0394in Wallet Share Share of Wallet has Been\nType (\u201919A-\u201922A)\nHeld Back by Supply\nCustomer 1 Distributor 23 years ~$20M ~50% ~35%u ~(15%)\nChallenges, Expanded Lead\nCustomer 2 Distributor 27 years ~6M ~75% ~50% ~(25%)\nTimes and Inconsistent\nCustomer 3 Distributor 32 years ~5M ~85% ~55% ~(30%) Service Levels\nCustomer 4 Distributor 27 years ~4M ~50% h~25% ~(25%)\nCustomer 7 Distributor 28 years ~4M ~70% ~20% ~(50%) Although share of wallet was\nCustomer 5 Distributor 27 years ~3M ~95% ~70% ~(25%) lost, the Architectural team is\nc\nCustomer 8 Distributor 18 years ~3M ~65% ~35% ~(30%) confident in the Company\u2019s\nCustomer 10 Distributor 25 years ~3M ~50% ~15% ~(35%)\nability to gain share back with\nCustomer 9 Distributor 11 years ~2M ~n25% ~5% ~(20%)\nimproved customer service,\nCustomer 11 Distributor 24 years ~2M ~85% ~45% ~(40%)\ncustomized experience and\nTotal Top 25 23 years ~$65M ~55% ~30% ~(25%)\nn\nTiers B, C, and D + All others ~$133M superior brand recognition\nTotal Doors Revenue ~$198M(1)\ny\nCustomers View Masonite Strong Customer Desire to Expand Wallet Share with Masonite\nBest-In-Class\nArchitectural Favorably Architectural Once Critical Operational Challenges are Addressed\nW\nNet Promoter Score(2)\n\u201cThey are the market leader among architects. Everyone knows a Masonite door,\nand I expect them to be widely used once they solve their supply issues...\u201d\n46\n-Former COO, Distributor Customer\nStrong Brand Breadth of Product\nReputation Offering Availability\n\u201cMasonite Architectural\u2019s brand is \u201cWe would love to start purchasing more doors from them once their lead times\nand product availability issues are sorted out...\u201d\nincredibly strong.You can find\n-Project Manager, Distributor Customer\nthem anywhere in the U.S., and\nthey are very well positioned\u2026\u201d ~6\n\u201cMasonite Architectural has an incredible brand reputation \u2026 Once they get their\n-Senior Director, Distributor lead times back to normal, we plan to use Masonite Architectural even more...\u201d\nCustomer -Senior Project Manager, Distributor Customer Other\nCompetitors\nSource: L.E.K. Market Study\n40\n(1)Total sales includes door plants only and excludes I/C Sales ; (2) % of all respondents for an average score out of 10", "Expand Distributor Wallet Share Capture\n2\nin Existing Categories and Regions (cont.)\nMasonite Architectural has a defined set of processes in place to deliver wallet share expanshion with a focus on high volume,\nTier A and Tier B customers augmented by opportunistic Tier C&D expansion\nc\nFocused Strategy by Customer Category Clearly Defined Path to Share Recapture\nr\n\u201cConcierge Approach\u201d for Tier A and B customers that includes\nArchitectural Tiers Customers by Specific Strategies,\nu dedicated customer service reps, consistency of service across\n\u2713\nEngagement Level and Cost-to-Serve the organization and enhanced, senior-level engagement\nAnnual $\n# of W allet\nSummary Strategy Customers Opportunity(1) h\nCustomer Leverage inside sales team to clearly identify and scale high\n\uf0a7 Create enhanced and Focus \u2713 value Tier C&D customers on the Architectural platform\n\uf0a7 High volume dedicated service\npotential experience with warm c\n\uf0a7 High return on touch\nTier A service investment \uf0a7 Customer-specific 10 ~$80M Ongoing review and refinement of customer prioritization to\n\uf0a7 High value placed plan and ownership by\nn \u2713 maximize focus on value-added opportunities within the funnel\non service and sales organization\nsolutions sale \uf0a7 Consistent, senior-\nlevel engagement\nn Identified steps to improve selectivity in order intake scheduling\ninefficiencies and communication / transparency to preserve\n\uf0a7 High volume \uf0a7 Drive increased \u2713 lead time integrity and production efficiency\npotential, but lower engagement Service\nTier B o tor dd ae yr frequency \uf0a7 M freig qr ua ete n co yr d toe r T ier A y 65 ~$85M Recovery\nOperational plan in place to deliver consistent improvement in\n\uf0a7 High value placed \uf0a7 Improve consistency\non-time and complete performance amongst high priority\non service of service levels \u2713\nW customer groups\nLeverage internal design team to drive selection of existing and\nTier C, D \uf0a7 L voo lw ue mr e annual \uf0a7 L ae nv de dra eg live e i rn es nid he a s na cl ee ds \u2713 n cue sw t op mro ed ru s c at ns, d p /r i oo rr i gti rz oin wg th g oe po pg ora rtp uh nie itis e sthat align with strategic\n\uf0a7 Lower volume customer service Service\nand Other frequency and \uf0a7 F efu fort rh tse r t om ia dr ek ne tt ii fn y g a nd 545+ ~$170M+ Enhancement\nwallet potential Expand stocking programs with select critical core customers\nscale value potential\nwith focus on high volume, repeat product offerings at highly\n\u2713\nattractive values\nService Recovery Differentiated Service Experience Customer Focus\n(1) Reflects tiered customers that Architectural did business with in 2022 and includes the combined total estimated wallet 41", "Expand Influence with Channel Participants\n2\nto Drive Specified Demand\nOpportunity to drive specified demand through differentiated engagement and influence withh channel participants\nPath to Exerting Influence and Drivingc Specification with Channel Participants\nWhat are Specifications?\nStrategy Proof Point\n\uf0a1 Sole OEM selected to 1 r\nprovide specific products\nwithin a project u \uf0fcSuperior customer\n\uf0a1 Educate architects on the full suite of offerings\nBasis of \uf0a1 Selecting alternative supplier Lead with Breadth of capable of satisfying key performance criteria NPS performance\nDesign r re eq wu rii tr te es n s ap ne dc i dfi ec mat oio nn s tt ro a tb ee d Products hrequired within a particular project \uf0fcBroadest range of\nsolutions in the\n\uf0fc Masonite improvement in performance \uf0a1 Make Masonite Architectural name known\ncategory\nFocus \uf0a1 Costly and time consuming\nto rewrite specification c\n2\n\uf0a1 Engage in consultative sales process with \uf0fc Attack-resistant\nn customers to understand evolving needs doors for\n\uf0a1 2-3 OEMs listed as Identify Emerging Trends \uf0a1 Leverage Architectural\u2019s DoorUniversity Training education\nacceptable for the product\nEarly and Educate the settings in wake\nProgram to educate architects on end market trends\n\uf0a1 Ultimate OEM selection nChannel and anticipating emerging needs as they engage of the growing\nSoft made by distributor and need for\nwith end users and general contractors\nSpecification general contractor enhanced safety\n\uf0a1 OEM focused on winning y\n\uf0fc Masonite with distributor customer 3\nFocus through consistent \uf0a1 Distributor partners engage with architects \uf0fc In-house ADMs\nperformance and service W nationally to attempt to win jobs with contractors review specs,\npartner with\nPartner with Distributors \uf0a1 Masonite Architectural has in-house Architect distributors and\nto Influence Outcomes Design Managers (\u201cADMs\u201d) to work closely with demonstrate\ndistributors in identifying opportunities and value of the\n\uf0a1 No OEM listed, but a\nperformance criteria outlined positioning for joint win products\n\uf0a1 Selection made by 4\nPerformance\nSpecification distributor and GC \uf0a1 ADMs engage directly with architects and designers \uf0fc >65% spec\n\uf0a1 OEM focused on winning to understand performance requirements, provide share for\nwith distributor and GC Directly Engage with product education and review specs Masonite\nArchitects & Designers in Architectural\n\uf0a1 M noa ts ao cn ti it ve e lA y r tc ah ri gte ec t t tu hr ea sl ed o joe bs s the Spec Writing Process \uf0a1 Leverage DoorUniversity to educate architects on (e.g., >65% of\nthe benefits of reduced complexity for specs, lead specs mention\ntimes and quality control Masonite)\n42\nSource: L.E.K. Market Study", "Add New Customers in Underpenetrated Regions\n3\nFocus: Doors & Components\nAttractive white space to expand Masonite Architectural\u2019s distribution network and enhanceh its reach throughout North America\nSignificant Whitespace to Expand Distribution Reach\nKeyc Strategies to Drive Customer Wins\nShading\n>$5M 2022 Sales $1-5M 2022 Sales >$1M 2022 Sales\nLegend r Pipeline Identified\nDoors Plant Sales\nExuisting Customers in New Customers\nUnderserved Regions Identified in Pipeline\nhCustomer A Customer B Customer F Customer GCustomer H\nNorth\nAustin, TX Phoenix, AZ Houston, TX Dallas, TX Houston, TX\nCentral\nNortheast c\nWest Customer C Customer I Customer J\nFacility Legend\nSouth Tucson, AZ Auburn, WA Irving, TX\nDoors Plants Central South Atlann tic\nComponents Plants Customer D Customer E Customer K Customer L\nn Lubbock, TX Phoenix, AZ Brea, CA Tacoma, WA\nMasonite Architectural is Underpenetrated in Key Regions\nLarge, attractive opportunity available, including in growing but\n$3B+ Opportunity y\nunderpenetrated regions Expand Sales Coverage in Targeted Regions\n(2022A TAM; $USD in Millions)\nW\nWhere? Why? How?\n\uf0fc South \uf0fc Underserved but \uf0fc Leverage DoorUniversity\nhigh growth Architectural and Customer\n\uf0fc Southeast regions Training Program to support\ncustomer engagement\n\uf0fc Southwest \uf0fc Limited players\n\uf0fc Build interface with DoorBuilder\n~37% ~28% ~27% of scale in the Live within regional ERP systems\n~15% ~11% region to support order intake and\nSouth Atlantic North Central Northeast South Central West \uf0fc Masonite processing\nArchitectural \uf0fc Leverage existing customer pull\nArchitectural Share White Space Opportunity\nright to win into certain regions to scale\n\uf0fc Deploy land-and-expand strategy\naround key products and market\nOpportunity to leverage the Masonite Architectural brand and legacy\ncategories\nof success to drive expansion in underpenetrated regions\n43\nSource: L.E.K. Market Study", "Strategic Regional Expansion of\n4\nQuick Ship Business Model\nQuick Ship business model dynamics offer highly compelling, margin-accretive regional grohwth expansion opportunities\nQuick Ship is a Regionally Focused, Low Capital Intensity Business Model Reliant on Local Relationships to Satisfy Critical Needs\nc\nWhy Customers Demand Quick Ship?\nMetric Thorofare, NJ Howell, MI Arlington, TX Columbus, OH(2) r\n\uf0fc Customers demand speed of delivery for critical service needs,\nu\nwhich heavily skew towards RRR (e.g., break / fix) as well as very\nTotal Units Sold ~118k ~59k ~22k ~25k\nshort lead-time and urgent needs\nh\n2022A Revenue(1) $41M $19M $9M N/A \uf0fc Customers prioritize speed and performance over price given the\nhigh cost of failure relative to the cost of the door\n\u201918A-\u201922A\n12% 8% 33% N/A c\nRevenue CAGR\n\uf0fc Classroom fire-rated and attack-resistant door\n% Gross Profit 40% 38% 29% N/An Example 1: broken. Municipal code stipulates remediation to\nMargin Classroom\nensure safety. Quick Ship is needed to replace\nBreak / Fix\ndoors expeditiously\nSq. Ft. 60,000 58,000 48,000 80,000\nn\n\uf0fc Three weeks before it is supposed to open, and the\nHeadcount 44 34 12 11\ny Example 2: general contractor is missing 20 doors. Quick Ship is\nHotel Floor needed to ensure doors are delivered on time to\nAvg. Order Size ~$1k Renovation avoid loss in revenue for every day each hotel room\nW\nis unavailable and liquidated damages to the GC\nCapital Invested as\n1%\n% of Sales (3 year)\nWillingness to Pay for Expedited Lead Times by Customer Type \u201cUSA Wood Doors are more expensive, but we recognize that we are\npaying for speed, and we are okay with that...\u201d\n% of survey respondents Yes No\nN=100 N=190 -Senior Partner, Distributor Customer\n25% 22%\n\u201cMasonite Architectural is well positioned to win in expedited\n75% 78%\npurchase scenariosgiven it has a discrete Quick Ship offering\u2026\u201d\n-Senior Architect, Channel Participant\nChannel Partners (Distributors) Downstream Customers\nSource: L.E.K. Market Study\n(1) Net Sales inclusive of deductions and other adjustments 44\n(2) Facility Acquired in 2023; Unit Production based on expected figures", "Strategic Regional Expansion of\n4\nQuick Ship Business Model (cont.)\nMasonite Architectural has a defined plan for regional Quick Ship expansion in high growth hareas\nc\n% of% 2 0o2f 2S Salaelse sw witihthinin a a3 0300 0M Mileil eR Radadiuiuss(1) Step 1: Scale Arlington\n\uf0a7 Arlington has demonstrated consistent growth (~33% Revenue CAGR from 2018-2022)\nas the Company raligns the commercial model for the needs of the region\n\uf0a7 Focus has been on customer identification, brand development and market penetration\n~75% \uf0a7 Meaningful uopportunity in the large and growing Texas market\n\uf0a7 Strategy forward includes increased selectivity in sales intake to build cluster within the\nSignificant region as well as pushing further south into Texas\nWhite Space h\nStep 2: Grow Into New Regions\n~65%\n\uf0a7 Expansion Region #1: ~6M people, ~16% pop. growth (2010-2022)\nc\n~25% Where? \uf0a7 Expansion Region #2: ~5M people, ~18% pop. growth (2010-2022)\n\uf0a7 Expansion Region #3: ~4M people, ~16% pop. growth (2010-2022)\nn\n\uf0a7 High growth geographies with large commercial market exposure\n\uf0a7 Limited players of scale with established Quick Ship capability\n\uf0a7 Architectural has a robust portfolio that includes vertical integration\nMap Legend\nn Why? to doors that allows quick ship access to a larger selection of\nproducts and customization capabilities\nIdeal Shipping Radius Quick Ship Plant Location \uf0a7 Architectural\u2019s Hollow Metal Door offering facilitates greater\nflexibility in responding to demanding needs\ny\nQuick Ship Historical Revenue W Quick Ship Historical EBITDA\n($USD in millions) ($USD in millions) EBITDA EBITDA Margin\n11% CAGR\n$71 15% CAGR\n$20\n$52\n$13\n28%\n25%\n2019A 2022A 2019A 2022A\nSource: L.E.K. Market Study 45\n(1) Size of circles on map represents amount of revenue shipped to location", "Upside to the Plan 5\nActionable Pricing Strategy\nMasonite Architectural\u2019s differentiated customer value proposition creates significant opportunithy for the Company to deliveron\nproven methods of setting price\nc\nMasonite Architectural is Currently Only Delivering\non One of the Four Methods to Capture Price\nStructure of Customer Buying Process r\nMakes Pricing Extremely Opaque \u2013\nArchitectural\nArchitectural Should be Empowered to Strategy Description Masoniute Architectural Today Opportunity\nUtilization Today\nbe Compensated for the Value it Delivers\nAnnually reviews pricing policies to\nh\n\uf0a7 There are no \u201cList Prices\u201d \u2013all products adjust for inflation\nare made to order and unique to each Inflation- Increase price\nPotential timing impact given Review pricing\ncustomer\u2019s needs Related Pricing to cover ccost\nrecent rapid increases in inflation more frequently to\n\uf0a7 All prices are quoted based on the job vs. when price increases capture additional\nand in a purpose-built, company-specific announced margin\nconfigurator \u2013customers cannot n\ncompare quotes easily (\u201cno online Limited pressure testing of the\nshopping\u201d) customer-specific pricing levers\nCustomer-\nValue-Basedn\n\uf0a7 Each OEM must custom-build specific Enhance evaluation\nPricing Opportunity to assess each\nquotes based on specifications, pricing levers of Value-Based\ncustomer\u2019s ability to pay (e.g.,\narchitect requirements and y price elasticity analyses) Pricing Levers\nproduct availability, which takes\ntime and creates differences\nacross OEMs W Tiered price Inconsistent in charging a premium\n\uf0a7 Creates disincentive for customers Attribute based on types for the specific mix of products; Build tiered pricing\nPricing of glazing, focused on price of materials vs. system for highly\nto request multiple quotes or seek\nfinishing, etc. value-added services customized\nto shop quotes\nproducts\n\uf0a7 Given the custom nature of\nArchitectural\u2019s offerings, small dollars\nrelative to the overall value of GC\u2019s Pricing to Reactionary to customer demands\nproject and importance of lead time, Behavioral influence vs. leveraging price to reduce Leverage price\ncustomers typically do not value shop \u2013 Pricing customer complexity or to cover the cost of when customers\nsmall dollars vs. timing is extremely behavior complexity demand\nimportant complexity\nArchitectural Strategy: Continue to Expand Degree to Which Price is Captured\n46", "6\nExecute Value Accretive M&A\nLarge marketplace with tremendous acquisition potential h\nStrategy Overview Sample M&A Targets Wood Dcoor Manufacturers Quick Ship Metal Door Manufacturers\nKey Criteria for M&A Opportunities Target Location rCategory Target Description\nu\nTarget #1 Lynden, WA Doors \uf0a7 Commercial and architectural interior doors\n\uf0fc\nQuick Ship regional expansion:\nenhance high margin Quick Ship Target #2 Winston, OhR Doors \uf0a7 Commercial solid core wood doors\nexpansion strategy, targeting\nTarget #3 La Habra, CA Doors \uf0a7 Commercial millwork\nhigh-growth geographies in c\nunderpenetrated regions Target #4 San Bernardino, CA Doors \uf0a7 Western-based interior wood products\nn\n\uf0fc Target #5 Carlstadt, NJ Doors \uf0a7 Commercial interior wood doors\nExpand \u201cDoors That Do More\u201d:\nn Ottawa, Ontario,\nadd value-added, attractive Target #6 Doors \uf0a7 Doors for commercial end markets\nCanada\nproducts in existing and adjacent\nyTarget #7 Wilmington, NC Quick Ship \uf0a7 Metal doors and frames\ndoor categories, notably including\nBrampton, Ontario,\nhollow metal doors Target #8 Quick Ship \uf0a7 Quick ship coverage throughout N.A.\nW Canada\nTarget #9 Little Rock, AR Quick Ship \uf0a7 Quick ship coverage across the U.S.\n\uf0fc\nBuild door hardware and frame\nplatform: leverage scale of Target #10 Gardena, CA Quick Ship \uf0a7 National commercial door distributor\nMasonite Architectural platform\nTarget #11 Fontana, CA Doors \uf0a7 Metal doors and frames\nacross regions to provide a full\nopening solutions offering to end Target #12 Commerce, CA Doors \uf0a7 Steel and metal doors\nusers\nTarget #13 Philadelphia, PA Doors \uf0a7 Custom metal doors and frames\nTarget #14 Albuquerque, NM Doors \uf0a7 Commercial steel doors and frames\n47\nSource: L.E.K. Market Study", "h\nc\nr\nu\nh\nc\nn\nn\nOperations Overview\ny\nW", "Masonite Architectural has Developed a Well-Invested and\nRobust Operating Platform\nMasonite\u2019s operational footprint underpins its unique ability to manage a highly complex, glohbal supply chain. Significant\nexisting manufacturing capacity with identified, incremental operational opportunities to drive meaningful upside\nc\nIntegrated Operating Footprint Doors Components Quick Ship\nr\nu\nMason City, IA Marshfield, WI Birchwood, WI Thorp, WI Howell, MI London, Ontario St. Ephrem, Quebec\nh\nc\nWestminster, CO Northumberland, PA\nn\nWashington Court House, OH n Thorofare, NJ\ny\nArlington, TX Jefferson City, TN\nW\nMasonite Architectural Key Plant Statistics\nDoors Components Quick Ship\n# of Locations 6 3 4\nTotal Production ~800,000 doors in 2022 ~70,000,000 components in 2022 ~200,000 doors in 2022\nAverage Capacity Utilization ~50% ~65% ~95%\nSystems Used Microsoft AX, Oracle, Macola, Great Plains Microsoft AX ERP One\nAverage Headcount Per Plant ~165 ~75 ~25\nAverage Sq Ft. ~215,000 per plant ~70,000 per plant ~62,000 per plant\n49", "Well-Invested National Footprint Supports Scale\n\uf0a1 High degree of operating leverage with ($ in millions) Targeted Maintenance Capex\nh\ncapacity to support significant incremental growth Maintenance CapEx Other CapEx Estimated Capacity Utilization\n\uf0a1 Facilities are strategically located (with expansion $19\nopportunities) and provide value-added services that $13 $15 c\nenable highly specified customization in addition to $15 35%\n50%\nQuick Ship capabilities $9 $13\n\uf0a1 Vast facility network gives Masonite Architectural a $4 $5 $2r 50% 65%\ncompetitive advantage in providing favorable freight\n2019A 2020A u2021A\nto customers Doors Skins / Cores\n% of Sales 1.1% 1.5% 0.7%\nSelect Product Types Quick\nSq. Ft. Leased/ E R P Primary S kins / Assembly /\nFacility (inthousands) Employees Owned System Focus Chomponents Commercial Architectural Stile & Rail Hollow Metal Fabrication Ship\nFlush Doors Flush Doors Doors Doors Service\n1. Birchwood, Wisconsin 139 145 Owned Microsoft AX Components\nc\n2. Thorp, Wisconsin 60 63 Owned Microsoft AX Components\nnComponents\n3. Westminster, Colorado 10 10 Leased Microsoft AX\n(Fire Core)\nDoors &\n4. Marshfield, Wisconsin 700 381 Owned Oracle\nn Components\n5. Northumberland, Pennsylvania 198 190 Owned Microsoft AX Doors\ny\n6. Mason City, Iowa 115 186 Owned Microsoft AX Doors\n7. Jefferson City, Tennessee 150 108 Leased Microsoft AX Doors\nW\n8. St. Ephrem, Quebec 70 84 Owned Great Plains Doors\n9. London, Ontario 55 57 Leased Macola Doors\nQuick Ship\n10. Thorofare, New Jersey 60 44 Leased ERP One\nService\nQuick Ship\n11. Howell, Michigan 58 34 Leased ERP One\nService\nQuick Ship\n12. Arlington, Texas 48 12 Leased ERP One\nService\nQuick Ship\n13. Washington Court House, Ohio 80 11 Leased ERP One\nService\nTotal 1,743 1,325\nDoors Components Quick Ship 50", "Facility Overview\nDoor Manufacturing Plants h\nPlant Employees Sq. Ft\n(1)\nMarshfield, Wisconsin c 312 700,000 ft2\nPrimary Products: Architectural Flush Doors and Door\nr Components (inputs)\nPrimary Production Processes: Layup, intricate machining,\nu staining and finishing, detailing\nPrimary Verticals Supported(2): Healthcare, Education, Office\nand Retail; Low level of stock doors relative to plant network\naverage\nh Warehouse Status: Local warehouse and offsite lease\nUnion vs. Non-Union: Carpenters and Joiners Union\nExterior Production Warehouse 2022 Flush Door Capacity: 228,000 Doors\nc Capacity Utilization(3): 50%\nNorthumberland, Pennsylvania 190 198,000 ft2\nn\nPrimary Products: Commercial Flush Doors (Cendura)\nPrimary Production Processes: Layup, intricate\nn machining, staining and finishing, detailing\nPrimary Verticals Supported(2): Healthcare, Hospitality,\nMultifamily and Retail; High level of stock doors relative to\nplant network average\ny Warehouse Status: Local warehouse and offsite lease\nUnion vs. Non-Union: Non-Union\nW\nExterior Trimming Machining 2022 Flush Door Capacity: 330,000 Doors\nCapacity Utilization(3): 50%\nMason City, Iowa 186 115,000 ft2\nPrimary Products: Architectural & Commercial Flush Doors\nPrimary Production Processes: Layup, intricate\nmachining, staining and finishing, detailing\nPrimary Verticals Supported(2): Healthcare, Education,\nOffice and Retail; Equal level of stock doors relative to plant\nnetwork average\nWarehouse Status: Local warehouse for finished goods\nand offsite lease for raw materials\nUnion vs. Non-Union: Non-Union\nExterior Production Warehouse 2022 Flush Door Capacity: 107,000 Doors\nCapacity Utilization(3): 55%\n(1) Shared space with door production at Marshfield, WI location; (2) Verticals noted account for 80%+ of the plant\u2019s project-based volume\n51\n(3) Capacity is driven by shift utilization given availability of machining capacity", "Facility Overview (cont.)\nDoor Manufacturing Plants h\nPlant Employees Sq. Ft\nJefferson City, Tennessee c 108 150,000 ft2\nPrimary Products: Architectural & Commercial Flush Doors\nr Primary Production Processes: Layup, intricate\nmachining, staining and finishing, detailing\nu Primary Verticals Supported(2): Healthcare, Education,\nOffice and Retail; High level of stock doors relative to plant\nnetwork average\nWarehouse Status: Local warehouse for finished goods\nh and offsite lease for raw materials\nUnion vs. Non-Union: Non-Union\nExterior Machining Finish Line 2022 Flush Door Capacity: 106,000 Doors\nc Capacity Utilization(1): 50%\nSt. Ephrem, Quebec 84 70,000 ft2\nn\nPrimary Products: Architectural Flush Doors\nPrimary Production Processes: Layup, intricate\nn machining, staining and finishing, detailing\nPrimary Verticals Supported(2): Healthcare, Education,\nOffice, Multifamily and Retail; Low level of stock doors\nrelative to plant network average\ny Warehouse Status: Offsite lease\nUnion vs. Non-Union: Non-Union\nW\nExterior Machining Shipping 2022 Flush Door Capacity: 101,000 Doors\nCapacity Utilization(1): 50%\nLondon, Ontario 57 55,000 ft2\nPrimary Products: Architectural Stile & Rail Doors\nPrimary Production Processes: Only stile and rail doors\n(High Spec)\nPrimary Verticals Supported(2): Hospitality, Multifamily,\nRetail and Religious; No stock doors\nWarehouse Status: Onsite warehouse\nUnion vs. Non-Union: Non-Union\nExterior Production Warehouse 2022 Assembly Capacity: 15,525 Doors\nCapacity Utilization(1): 50%\n(1) Capacity is driven by shift utilization given availability of machining capacity\n52\n(2) Verticals noted account for 80%+ of the plant\u2019s project-based volume", "Facility Overview (cont.)\nComponents Plants \u2013 Manufacturer Inputs for Slab Production h\nPlant Employees Sq. Ft\nMarshfield, Wisconsin (Particle Board and Mineral Cocre) 69 Shared Space(1)\nPrimary Products: Particle Board and Mineral Door Cores\nr Primary Verticals Supported: Internal plants and 3rdparty\ndoor manufacturing\nu Warehouse Status: Offsite Lease\nUnion vs. Non-Union: Mineral Core \u2013Carpenters and\nJoiners Union; Particle Board \u2013Steelworkers Union\nOther:Potential long-term supply agreement with Masonite\nh Corporate\nCore Capacity: 72 mm sq. ft equivalent at 3/8\u201d\nExterior Production Warehouse Capacity Utilization(2): 97% (Running 24 hours except 11\nc holidays); ~65% used internally\nBirchwood, Wisconsin 145 139,000 ft2\nn\nPrimary Products: Veneer Door Skins and Hard Wood Ply-\nWood\nn Primary Verticals Supported: Internal door plants, 3rdparty\ndoor OEM, cabinet manufacturers\nWarehouse Status: Local warehouse and offsite lease\nUnion vs. Non-Union: Non-Union\ny\nDoor Skins Capacity: 24mm sq. ft equivalent\nW Capacity Utilization(2): 50% (Running 2 40-hour shifts per\nExterior Production Warehouse\nweek)\nThorp, Wisconsin 6 3 6 0 , 0 0 0 f t 2 W estminster, Colorado 10 10,000 ft2\nPrimary Products: Door Skins Primary Products: Fire-Rated Cores\nPrimary Verticals Supported: Internal door Primary Verticals Supported: Internal door plants\nmanufacturing and external door customers and 3rdparty door OEM\nWarehouse Status: Local warehouse and offsite Warehouse Status: On-site warehouse (part of\nlease building)\nUnion vs. Non-Union: Non-Union Union vs. Non-Union: Non-Union\nDoor Skins Capacity: 28mm sq. ft equivalent Core Capacity: 26,000 equivalent pieces annually\nExterior Exterior\nCapacity Utilization(2): 50% Capacity Utilization(2): 50%\n(1) Shared space with door production at Marshfield, WI location\n53\n(2) Capacity is driven by shift utilization given availability of machining capacity", "Facility Overview (cont.)\nQuick-Ship Plants h\nPlant Employees Sq. Ft\nThorofare, New Jersey c 44 60,000 ft2\nPrimary Products: Commercial Doors and Stock\nr Components\n% of Volume to Flush Door Mill Customers: ~70% of\nu Shipments\nWarehouse Status: Primary warehouse leased; one\nauxiliary storage warehouse across the street (~10k sq. ft)\nUnion vs. Non-Union: Non-Union\nh\nExterior Production Warehouse 2022 Flush Door Capacity: ~117,000 Doors\nc Capacity Utilization: ~96%\nHowell, Michigan 34 58,000 ft2\nn\nPrimary Products: Commercial Doors and Stock\nComponents, Metal Doors\nn % of Volume to Flush Door Mill Customers: ~70% of\nshipments\nWarehouse Status: Leased\nUnion vs. Non-Union: Non-Union\ny\nW 2022 Capacity Rates: ~39,000 Wood Doors and ~21,000\nExterior Production Warehouse Metal Frames and Doors\nCapacity Utilization: ~96%\nArlington, Texas 12 48,000 ft2 Washington Court House, Ohio 11 80,000 ft2\nPrimary Products: Commercial Doors and Stock Primary Products: Commercial Doors and Stock\nComponents Components\n% of Volume to Flush Door Mill Customers: ~70% Warehouse Status: Leased\nof shipments Union vs. Non-Union: Non-Union\nWarehouse Status: Leased\nUnion vs. Non-Union: Non-Union\n2022 Flush Door Capacity: ~31,000 Doors Expected Door Capacity: ~25,000 Doors\nExterior Exterior\nCapacity Utilization: ~96% Capacity Utilization: ~96%\n54", "Differentiated Vertical Integration Strategy\nMasonite Architectural operates a differentiated vertically integrated business that is difficulht to replicate\nIllustrative\nc\nComponents Sold\nStep Source Raw Materials Develop Door Components Downstream Fabrication Customers\nInternal or to 3rdParty r\nArchitectural Component Plants Door Plantsu Quick Ship Plants\nLocation\nFinished Door\nProduct Stage Various Raw Materials Skins, Cores Unfinished Slhab\nProcesses: Paint, Finishing, Prehanging\nc\nWaste Wood\nnComponents Masonite Door\nSold to Plants Assembly Plants\nResins\nn\nTimber/ Channel Partners\nMasonite\nLumber\nComponents Plants\ny\nQuick Ship Plants\nComponents Sold\nto 3rdParties\nW\nVertical Integration Strategy Drives Efficiencies for Masonite Architectural\n\uf0fc Ability to offer a high degree of product customization across components and finished products to meet distributor and end user needs\n\uf0fc Masonite Architectural remains in control of the production process throughout the value chain and supports better visibility\n\uf0fc Architectural maintains control of costs, lead times and quality when not dealing with a third-party supplier\n\uf0fc Full portfolio of products offered with optimal mix of manufactured and sourced solutions\n55", "Established Relationships with Diverse Suppliers\nMasonite Architectural\u2019s sourcing strategy is focused on enabling reliable access to high-quhality input materials from a diverse\narray of global suppliers for its vertically integrated manufacturing processes\nc\n2022 Purchases by Material Type\n\uf0a1MasoniteArchitecturalhasinvestedinasourcingteamandstrategytocreateareliable\nandconsistentsourceofsupply\nr All others\n\uf0a1Architectural has developed close partnerships with multiple suppliers for key door 17% Veneer\ncomponents u Cores 24%\n\uf0a1For the manufacture of commercial interior wood doors, Masonite Archictectural\u2019s key 8%\npurchasesincludehighdensityfiberboards,woodveneers,structuralcompositelumber,\nPaints and Primers\nvermiculiteandparticleboardcores h\n3%\n\uf0a1In addition, Masonite Architectural also sources and sells components such as door\n(1)\nframes,glassandappliedmoldingstofacilitateamorerobustportfolioofofferings Stiles and Rails Doorskins\nc 13% 22%\n\uf0a1Architectural is generally able to pass through raw material price given the highly\nPlastics\nbespokenatureofeachdoororder\n13%\nn\nCrossband Supply Constraint Resolution 2022 Top 10 Materials Suppliers\nn ($ in millions)\nWhat Has Been Done PrimaryMaterials FY22\nWhat Happened? Vendor % of Total\nto Resolve the Issue? Purchased Spend\ny\n\uf0a7 A crossband is a component of the door \uf0a7 During the period of supply constraint, Supplier 1 Doorskins $14.5 12.7%\nface and is included in the production of Architectural was forced to quickly Supplier 2 Veneer, Doorskins $6.7 5.9%\n>70% of doors identifWy, qualify and ramp up production\nSupplier 3 Stiles and Rails, Cores $6.5 5.7%\nwith additional suppliers. One such\n\uf0a7 Masonite Architectural had two very supplier was based overseas and Supplier 4 Veneer $4.3 3.8%\nstable and consistent domestic sources resulted in much higher freight charges Supplier 5 Stiles and Rails $3.8 3.3%\nof crossband supply, with an average\ntenure of >5 years \uf0a7 Following an aggressive push, the Supplier 6 Veneer $3.6 3.2%\ncompany activated three additional Supplier 7 Veneer $3.4 3.0%\n\uf0a7 In 2022, one supplier went on allocation sources of crossband supply, globally,\nand another exited the business, while reinvesting in existing crossband Supplier 8 Cores, Doorskins $3.3 2.9%\nplacing a massive strain on the supply supply relationships Supplier 9 Stiles and Rails, Cores $3.1 2.7%\nchain and resulting in extended lead\ntimes \uf0a7 Inclusive in the new supply arrangement Supplier 10 Stiles and Rails $3.0 2.6%\nwas the identification and establishment Sub-Total $52.1 45.7%\n\uf0a7 Crossband constraint severely impacted of an internal solution, which will further\nability to satisfy demand enhance stability in the supply chain All Others $61.9 54.3%\nTotal Materials Purchases $114.0 100.0%\n(1) >85% of doorskins material are attributed to crossband purchases 56", "Focus on Continuous Operational Improvement\nManagement has built a culture rooted in operational excellence and continuous improvemehnt with a focus on effectively\nenabling scale and optimizing the cost structure\nc\n\uf0a7 Commitment to operational excellence utilizing a disciplined approach to identify, prioritize and execute operational initiatives \u2013all plant managers and\nemployees are empowered and incentivized to identify improvement opportunities across the organization\nr\n\uf0a7 Development of strong local management teams to oversee manufacturing facilities has contributed to the identification of opportunities to further\nu\noptimize facility footprint, manufacturing processes, freight costs and raw material procurement\nh\nCompleted Key Operational Initiatives\nInitiatives cDescription Impact\nInstallation of New Machining Cell \uf0a7 A machining cell facilitates improved downstream door processing for the addition of hardware and other peripherals Improved\n& Additional Investment in \uf0a7 Improved processes and greater automation nallows the Company to produce a higher volume of a more complex mix of doors\nThroughput,\nAutomated Vision a t t h e p lant while reducing the direct labor costs associated with the process\nin Jefferson City (2022) \uf0a7 Additional investment in automated vision inspection at finishing is in development; will drive improvement in field failures Reduced Cost\nn\n\uf0a7 Detailing is a downstream process step that matches doors to specified aesthetics to facilitate hardware\nExpansion of Detailing Capability \uf0a7 Invested in additional conveyers to run multiple detailing workstations as well as expanded the plant shift structure to include Improved\nweekend shifts as needed\nin Mason City (2022) \uf0a7 Improved detailing capabyility reduces lead time, reduces risk of rework and allows for the production of a higher value and more Lead Times\nconsistent product\n\uf0a7 An edge band iWs a veneer or similar trim along the edge of a door that provides a more consistent look and feel and is specified\nInstallation of Edge-Banding by customers / architects Improved\n\uf0a7 Edge-banding is an up-charge by Architectural and is a premium offering\nMachine at Mason City Plant (2022) \uf0a7 Increased edge-banding capacity and automation facilitates a high value product, delivers a consistent outcome and improves Productivity\nlead times at lower direct labor rates\n\uf0a7 Recent plant ERP conversions to Microsoft AX include Northumberland, Pennsylvania (Q4 2018) and Mason City, Iowa (Q4\nSystems Implementations 2 0 2 1) Improved\n\uf0a7 Conversions have been bigger than ERP alone \u2013they have also included an order engineering configurator, which is fully\n& Upgrades (2016-2022) customer facing and enables a higher level of service Productivity\n\uf0a7 Adoption of a standard / harmonized product nomenclature allowing for an easier transfer of orders from one plant to another\n\uf0a7 Consolidated redundant plants to create centers of excellence within select product categories, improve efficiency, enhance Reduced Fixed\nPlant Consolidation (2017-2022) operating leverage and reduce overall cost structure\n\uf0a7 Plant closures include Largo, Florida (2019), Megantic, Quebec (2020) and Springfield, Missouri (2021) Costs\n57", "Opportunities in Process for Further Upside\nMasonite Architectural has identified and is actioning several key initiatives to further contrihbute to operational excellence across\nthe entire integrated organization\nc\nOngoing Key Operational Initiatives \u2013 Selection of Various Initiatives Across the Organization\nr\nInitiatives Description u Impact\n\uf0a7 Masonite Architectural offers customers the ability to fully configure their orders to meet very unique, customer-specific needs\n\uf0a7 To facilitate a custom order, the Company\u2019s production processes are configured to offer unique sizes, color matching and wood faces,\namong other aspects h\nReduce SKU \uf0a7 This complexity in mix creates a higher level of direct labor burden per order Lower Fixed\n1\nComplexities \uf0a7 Opportunity exists to coordinate with the commercial organization to rationalize the door configurations available to customers while Costs\nguiding to higher value products. In addition, leverage components existing in inventory for \u201cconfigure-to-order\u201d\n\uf0a7 Opportunity exists to coordinate with the commercial organcization to reduce unnecessary variations across the door configurations\navailable to customers while guiding to higher value products\n\uf0a7 Various individual inefficiencies to be addressed including:\nn\nImprove \uf0a7 Digitization of pre-order samples sent to architects, designers and distributors Reduced Costs,\n\uf0a7 Consolidation of common production into specialty plants\n2 Production Shorter Lead\n\uf0a7 Given the highly configurable nature of the products offered, opportunity exists to increase automation in key processes (e.g., core\nEfficiency n Times\nproduction, finishing) to further reduce direct labor costs while accommodating more rapid order changeovers\n\uf0a7 Automation capabilities are possible in specific processes along the production line as well as within certain quality control areas\n\uf0a7 Architectural today is verticay lly integrated from input components to door slabs to Quick Ship service\nBalance the \uf0a7 Today, the Quick Ship business sources the vast majority of the doors it fabricates from the Doors & Components division. However,\nNetwork through these doors are currently sourced on an as-needed basis\n3 W Larger Scale\nQuick Ship \uf0a7 Given the rapid turn nature of the Quick Ship business, an opportunity exists to stock an internal supply of doors based on improved\nExpansion demand planning\n\uf0a7 Improves production throughput at the Doors plants while further allowing Quick Ship to scale\n\uf0a7 Inbound orders are currently half of full capacity; order targets are around 4,000 doors per week, and they are currently running about\n2,000 doors per week\nContinued \uf0a7 Mason City plant topped out at almost 6,400 backorders during the plant\u2019s least efficient time. As of March 2023, the plant\u2019sbackorders\n4 Improvement in are sitting at less than 500 Increased\nMason City Order \uf0a7 Added TI Program (Quick Ship Service) for top customers that reserves capacity at the plant to fill orders on a shorter lead time (~1,000 Inbound Orders\ndoors)\nFulfillment\n\uf0a7 Opportunity for further improvement of service levels to drive increase in the number of orders produced and ensure that Mason City is\nrunning at expected levels\nKey initiatives will continue to drive Masonite Architectural towards operational excellence\n58", "Performance-Focused Employee Base\nMasonite Architectural has a performance-focused employee base supported by senior leadhership\nEmployee Overview c\n\uf0a1 Headquartered in Tampa, Florida Production & Distribution bry Plant(1)\n\uf0a1 Significant investment in people and processes, Marshfield, Wisconsin(2) u 381\nincluding an experienced management team to Northumberland, Pennsylvania 190 1,346\nsupport Masonite Architectural\u2019s next phase of Mason City, Iowa 186\nh\ngrowth Jefferson City, Tennessee 108\nProduction &\nSt. Ephrem, Quebec 84\n\uf0a1 Scalable G&A organization capable of supporting a c Distribution\nLondon, Ontario 57\nmuch larger organization\nArlington, Texas 12\n\uf0a1 Fully deployed IT systems to support the organization n\nThorofare, New Jersey 44\nincluding:\nHowell, Michigan 34\n283\n\uf0a1 Integrated ERP solutions that support the nBirchwood, Wisconsin 145\ncomplete lifecycle of order fulfillment Thorp, Wisconsin 63\nGeneral &\n\uf0a1 Data warehousing and reporting tools that y Westminster, Colorado 10 Administrative\nstandardize and automate the delivery of Architectural Distribution HQ 32\nreporting not available in the configuratoWr or ERP Total 1,346\nsystems\n\uf0a1 CRM tools that elevate customer experience for General & Administrative(1) 1,629\neverything from warranty claims and order Administrative 96\nchanges to speed of order engineering Total Employees\nSelling 187\nTotal 283\n(1) Headcount as of April 2023\n(2) Marshfield Plant total also includes headcount for Particle Board 59", "h\nc\nr\nu\nh\nc\nn\nn\nFinancial Overview\ny\nW", "Architectural Financial Profile\nMasonite is well-positioned for above-market growth and margin expansion as a leading prohvider with the ability to offer flexible\nsolutions while leveraging existing footprint\nc\nNet Sales(1)\nCommentary\n($ in millions) r\nQuick Ship Doors & Components\nu$558 Multiple Levers for Organic Topline Growth\nCOVID Identified and Path to $516 \uf050 Underpinned by attractive, long-term\nImpact Discrete Challenges Normal $467\n$147 growth tailwinds with large commercial\n$418 h$133\n$380 $358 $374 $117 applications over-indexed to resilient\n$341 $52 $43 $303 $323 $83 $99 RRR demand\n$44 c\n$49 $71 \uf050 Recapturing share with existing\ncustomers\n$414\n$296 $329 $317 $292 $321n $352 $385 \uf050 Driving regional expansion within the\n$255 $254\nhigh-margin Quick Ship division\nn\n\uf050 Overall geographic penetration\n2018A 2019A 2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F leveraging customer pull and A&D\nPF Adjusted Carveout EBITDA(2) y influence\nExpanding Margin Profile:Primarily driven\nW $99 by favorable mix shift toward higher margin\n$83\nmanufactured Quick Ship offering, significant\n$65 operating leverage to drive scale within\nexisting infrastructure and continuous\n$51 $49 $49\n$42 improvement in production efficiency\n$37\nExperienced Management Team in place to\n$15 $18 continue to deliver on the clear growth and\noperational plan ahead\nStand-Alone Ready Organization with clear\n2018A 2019A 2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F\nidentification of carve-out necessities and\nopportunities for the go-forward organization\n~$15M corporate allocation and incremental stand-alone costs excluded from the above(2)\n(1) Net Sales Total is inclusive of \u201cHQ, Other Sales, Deductions and Adjustments\u201d 61\n(2) Figures exclude corporate allocation + incremental costs and include management, due-diligence and PF adjustments;2020-2022 historical figures from QofE recast analysis while 2018-2019 are from company reporting", "Historical Financial Performance\nAdjusted Historical Performance(1) h\n($ in millions) 2020A 2021A 2022A 2023E\nc\n1 Net Sales $358.1 $303.1 $323.1 $373.8\n% Growth (5.8%) r(15.3%) 6.6% 15.7%\nAdjusted COGS (excl. D&A and Corp. Allocation) (277.6) u (256.0) (277.4) (299.2)\n2 Adjusted Gross Profit 80.5 47.1 45.7 74.6\n% Margin 22.5h% 15.5% 14.1% 19.9%\n3 Adjusted SG&A (excl. D&A and Corp. Allocation) (34.9) (34.8) (36.5) (37.6)\n% Sales c9.8% 11.5% 11.3% 10.1%\nPro Forma and Run-Rate Adjustments 3.5 2.5 8.7 -\nn\n4 PF Adjusted Carveout EBITDA $49.1 $14.9 $18.0 $36.9\n% Margin 13.7% 4.9% 5.6% 9.9%\nn\n1 2 3 4\nNet Sales Gross Margin SG&A PF Adj. Carveout EBITDA\ny\n\uf0a7 Decline in net sales from FY20 to FY21 was \uf0a7 Gross margin declined from \uf0a7 Decrease in \uf0a7 Volume decreases resulted in\nprimarily due to volume decreases related to 22.5% in FY20 to 15.5% in administration deflated sales in FY21 and\nCOVID-related shutdowns, production W FY22 due to reduced fixed expense primarily FY22\nchallenges at certain facilities driving increased overhead leverage and direct driven by a decline in\n\uf0a7 Gross margin decline drove\nlead times and resulting wallet share loss with labor production inefficiencies compensation and\nEBITDA margins down\ncustomers benefits as average\n\uf0a7 Supply chain impacts related significantly in FY20 and FY21\n\uf0a7 Net sales increased from FY21 to FY22 largely headcount was\nto crossbands put significant\ndue to Quick Ship Expansion and successful rightsized \uf0a7 As volume returns to normal in\ndownward pressure on gross\nimplementation of price increases and partially \uf0a7 Teams and systems 2023, the company is poised\nmargins in historical period\noffset by critical crossband shortage driving in place without the for substantial revenue and\nreduced output in the door plants \uf0a7 Future margin expansion need for significant EBITDA growth\n\uf0a7 The Company is carrying strong momentum into expected through the capture adds to support \uf0a7 Historical Carveout EBITDA\n2023E with a critical mass of ERP conversions of operating efficiencies and growth throughout\nfigures do not include corporate\ncomplete, improved supply chain resiliency and structural reorganization the forecast period as\nallocations\nQuick Ship expansion, positioning the Company the Company scales\nfor significant top line growth potential\n(1) Figures exclude corporate allocation and include management, due-diligence and PF adjustments 62", "Standalone Considerations\nMasonite Architectural has thoroughly evaluated the impacts on the Company related to the hproposed corporate carve-out.\nBased on this review, the Company estimates the below standalone costs to be required post-transaction\nSubject to Refinement\nc\nStandalone Costs by Function Commentary\nr\n\uf0a7 Below represents a summary of the conservative bottoms-up build, by function, for the incremental \uf0fc Masonite Architectural is\nu largely a standalone segment\ncosts to support Architectural as a stand-alone business. These costs include both a replication of\nwithin Masonite Corporate\nthe current functions provided by Masonite Corporate as well as incremental stand-alone costs (e.g.,\nh \uf0fc The Company is currently\naudit fees). Excluded from the below are functional costs already reflected in the Architectural P&L\nreceiving an allocation of\n(e.g., CEO, CFO, Head of HR, etc.)\n~$12M from Masonite\n($USD) in millions c corporate for all support\nservices provided, including\nTotal Estimated People and\nFunction Function Description\nNon-People Costs headcount largely dedicated to\nn\nArchitectural\nExecutive Professional and Legal Fees $0.4 \uf0fc Architectural has built a\nn\nbottoms-up view of the cost to\nreplicate all support functions\nFinance AP, AR, Audits, Treasury and Tax $2.0\nprovided by the Parent in the\ny\ncurrent form and with\nConfigurator, ERP, MS Office, PBI, CRM, Cyber, Hardware and Website\nIT / Digital Support $7.5 substantially similar heads\nW\n\uf0fc Architectural has identified\nHuman Resources Recruiting, Payroll, Comp and Benefits, Facilities, HRIS $1.9 ~$4M of potential incremental\ncosts to stand-up the\nCI, EH&S, IBP, Sourcing, organization outside of\nOperations $1.7\nTransportation and Customs\nMasonite\nAgency Support, Trade Shows, Channel Marketing, Website Management, PR \uf0fc Significant opportunity to right\nMarketing $0.2\nand Branding size stand-alone costs as a\nsmaller, more nimble company\nMasonite Innovation Center Testing and Certifications $1.8 relative to the structure of a\nFortune 500 organization\nPeople and Non-People Costs $15.5\nTotal\nExisting Allocated and Incremental Headcount ~70\n63", "Basis of Preparation and Financial Forecast Assumptions\nBasis of Presentation\nh\n\uf0a7 The Architectural business is a stand-alone reporting segment of Masonite International, with financial information prepared in accordance with US\nc\nGAAP and included in the consolidated financial statements of Masonite International\nForecast Methodology Overview r\n\uf0a1 The projected financials presented in this CIP have been prepared by management and reflecut the Company\u2019s expected financial performance through 2027F\n\uf0a1 2023E projections are largely in-line with the Company\u2019s budgeted performance as presented to the Board of Directors\n\uf0a1 Management has prepared a separate standalone cost analysis reflecting the capital nheeds to run Masonite Architectural as a standalone entity. These figures\nwere developed assuming Architectural is structured as it is today and similar to how Masonite manages the organization from itsshared service center. These\nfigures are utilized in the projection period in place of the corporate cost allocation\n\uf0a1 The2023E-2027F projections have been developed on a plant-level basis andc reflect the following considerations:\n\uf0a1 Revenue:\n\uf0a1 Volume assumptions are informed by customer dialogue andn activity, growth in the broader marketplace as well as management\u2019s expected view of share\ncapture and regional expansion opportunities inherent within the business. Volume is underpinned by management\u2019s stated growth plan\n\uf0a1 Historical price capture by product / plant and ability to sustainably and conservatively capture price on an ongoing basis\nn\n\uf0a1 Quick Ship revenue growth includes continued volume and price capture within existing regions as each plant continues to scale as well as the anticipated\nactivation of additional greenfield locations in strategic geographic segments to further capture demand for rapid turn door needs\n\uf0a1 Gross Margin: y\n\uf0a1 Management forecast assumes freight and material costs are variable with sales and inflation and excludes potential opportunities for selective\nimprovement\nW\n\uf0a1 Operating leverage associated with labor utilization and fixed overhead expected to support incremental margin enhancement across the forecast period\n\uf0a1 Ongoing operational efficiency initiatives further underpin margin improvement trajectory\n\uf0a1 Anticipated cost structure changes capturing management\u2019s expectations to leverage efficiencies of scale with the existing footprint\n\uf0a1 SG&A:\n\uf0a1 ~75% of operating expenses are driven by labor costs. Labor costs are forecasted based on the outlook for wage inflation and merit increases as well as\nthe headcount required to support the forecasted growth\n\uf0a1 Other non-people cost categories are assessed on a largely fixed or largely variable basis by type (e.g., Marketing Expenses, T&E)\n\uf0a1 CapEx:\n\uf0a1 Consistent, modest maintenance capital expense requirements reflected in the forecast period\n\uf0a1 Ongoing growth investments including Quick Ship greenfield expansion, machining upgrades and further automation for debottlenecking actions\n64", "Projected Financials\nh\n($ in millions) Budget Projected CAGR\nc\n2023E 2024F 2025F 2026F 2027F '23E - '27F\nr\nSales by Division\nu\nDoors & Components $292.0 $321.0 $352.1 $384.5 $413.7 9.1%\nQuick Ship $83.5 $98.6 $117.1 $133.4 $147.2 15.2%\nh\nOther Sales, Deductions and Adjustments ($1.7) ($1.9) ($2.1) ($2.3) ($2.5) 10.6%\nNet Sales $373.8c$417.7 $467.2 $515.7 $558.4 10.6%\n% Growth 15.7% 11.7% 11.8% 10.4% 8.3%\nn\nAdjusted COGS (excl. D&A and Corp. Allocation) ($299.2) ($327.9) ($358.0) ($386.7) ($410.7) 8.2%\nAdjusted Gross Profit n $74.6 $89.9 $109.2 $128.9 $147.6 18.6%\n% Margin 19.9% 21.5% 23.4% 25.0% 26.4%\ny\nAdjusted SG&A (excl. D&A and Corp. Allocation) ($37.6) ($41.0) ($44.3) ($46.4) ($48.5) 6.5%\n% Sales 10.1% 9.8% 9.5% 9.0% 8.7%\nW\nAdjusted EBITDA (Pre-Standalone) $36.9 $48.8 $64.9 $82.5 $99.2 28.0%\n% Margin 9.9% 11.7% 13.9% 16.0% 17.8%\nCorporate Allocation and Standalone Costs ($15.5) ($15.5) ($15.5) ($15.5) ($15.5)\nAdjusted EBITDA w/ Standalone $21.4 $33.3 $49.4 $67.0 $83.7 40.6%\n% Margin 5.7% 8.0% 10.6% 13.0% 15.0%\n65", "Robust Gross Margin Profile\nMasonite Architectural has clear line of sight to gross margin recovery through investment ihn efficiencies and operating leverage\n\uf0a7 COGSarecomprisedof(i)materialcosts,(ii)directlabor,(iii)overheadand(iv)distributioncosts\nc\nPath to Normalized Gross Margins\n\uf0a7 Material costutilizes standard costing and accountsforfreight in, purchase price variances,inventory\nadjustmentsandvendorrebates/discounts\nr \uf0a7 Significantinherentoperatingleverage\n\uf0a7 Directlaboriscomprisedofcompensationandbenefitsforhourlyemployeesatplantlevel,alongwith\ncontractlaborutilizedtosupportproduction u \uf0a7 Investments in Jefferson City machining\n\uf0a7 Overheadiscomprisedofpeoplecosts,facilitycostsandutilities center and further automation across\n\uf0a7 Distributionexpenseiscomprisedof(i)third-partyfreightexpenseforbothshipmentstocustomersas operatingfootprint\nwell as intra-company shipments of products and (ii) compensation and benhefits associated with\n\uf0a7 Consistency of price capture (Masonite\ndistributionemployees(primarilyhourlyemployees)\nArchitectural has successfully rolled out\n\uf0a7 Leverage against fixed overhead costs and continuous operational improvements provide substantial,\npriceincreasesoverthepastdecade)\nachievableupsidetothemanagementforecast c\n\uf0a7 Conservativemanagementforecastassumespricelargelyequaltoinflation\nn\n2022A COGS (excl. D&A) Breakdown(1) Historical and Projected Gross Margin: 2019A \u20132027F(1)\nn ($ in millions)\nGross\nMargin\ny Adjusted Gross Profit Gross Margin Upside\n$148\n26%\nMaterial Cost of Sales\nW Deleveraging\n43% Distribution\n2022A\n$89\nCOGS Direct Labor $80 $75\nOverhead $47 $46 30%\n20% 26%\n23% 22%\n20%\n11% 16% 14%\n2019A 2020A 2021A 2022A 2023E 2027F 2027F\nHighly scalable cost structure with ~$15M corporate allocation and incremental stand-alone\nopportunity to leverage existing footprint to fuel growth costs excluded from the above\n(1) Figures exclude corporate allocation and include management, due-diligence and PF adjustments; 2020-2022 Historical Financials represent figures from the QofE Recast Analysis\n66\nwhile the 2019 Financials represent company reporting", "Scalable Operating Platform\nMasonite has created a highly leverageable platform to drive strong EBITDA growth throughh 2027F and beyond\n\uf0a7 SellingexpenseispredominatelycomprisedofcompensationandbenefitsassociatedwiththesalecsteamsupportingArchitectural\n\uf0a7 Administration expense is predominately comprised of (i) compensation and benefits associated with executives, operations and finance\nemployeesthatdirectlysupporttheArchitecturalbusiness,and(ii) non-peoplecostsassociartedwithsupplies,T&E,etc.\n\uf0a7 Teams are largely in place to drive significant growth \u2013 modest additional administruative heads and additional selling heads are projected\nthrough2027tosupporttheforecastandaugmentgrowth\n\uf0a7 Non-labor expenses are substantially fixed costs but include certain categorieshwhere management expects further investment to support key\ngrowthstrategies(e.g.,T&E,marketing)\nc\n2022A Operating Expense\nn\nHistorical and Projected Operating Expense: 2020A \u2013 2027F(1) (excl. D&A) Breakdown\n($ in millions)\nn\nSG&A (excl. D&A and Corporate Allocation)\n% of Net Sales\ny $48\n$46\n$44 11%\n$41\n$36 $38 W Salaries - Selling\n$35 $35\n2022A 41% Other Selling Expenses\nOperating Salaries - Administration\n35% Expenses\nOther Administration\nExpenses\n11% 11%\n10% 10% 10% 9% 9% 9%\n13%\n2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F\n~$15M corporate allocation and incremental stand-alone Infrastructure in place to support significant scale\ncosts excluded from the above(1) through Masonite\u2019s next phase of growth\n(1) ~$15M represents corporate costs currently allocated from Parent as well as additional costs expected to replicate stand-alone requirements 67", "Capital Expenditures\nAsset-efficient operational footprint enables investment in Greenfield expansion over projechtion period\n\uf0a7 Masonite Architectural has made significant investments in its operational footprint since 2017 to right size operations, address operational challenges\nc\nandsupportfuturegrowth:\n\uf0a7 MasonCity:ERPconversiontoMicrosoftAXthatwentliveOct\u201821andinvestmentsinanewedgebandingequipmenttoincreaseautomation.ERP\nspendalsorelatestoimplementationofthefullycustomer-facing,order-engineeringconfirgurator\n\uf0a7 JeffersonCity: Newmachiningcentertoimproveandautomateprocesses\u2013allowsutheplanttorunahigherandmorecomplexmix\n\uf0a7 MarshfieldParticleBoard:Large,regulatoryprojecttoreplacethesteamdryer (seeRegulatoryEHSInvestmentbelow)\n\uf0a7 Forecastrepresentsaconservativeviewoffutureinvestmentsneededtosupportprojectedgrowth\nh\n\uf0a7 ~$5-7Mongoingmaintenancecapexasneeded\n\uf0a7 ~$1.5-3MingrowthcapexthroughoutprojectionperiodtosupportfourGreenfieldlocationsforQuickShip,includingOhiofacilityopeningin2023\nc\nCapital Expenditure Detail(1)\nn\n($ in millions) Actual Budget Projected\n2020A 2021A 2022A 2023E 2024F 2025F 2026F 2027F\nn\nMaintenance Capital Expenditures $6.9 $4.8 $6.1 $5.5 $6.3 $7.0 $7.7 $8.4\ny\n% of Sales 1.9% 1.6% 1.9% 1.5% 1.5% 1.5% 1.5% 1.5%\nRegulatory EHS Investment 7.3 3.9 - - - - - -\nW\n% of Sales 2.0% 1.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%\nGrowth Capital Expenditures 5.3 6.5 4.3 1.5 3.1 3.5 3.9 4.2\n% of Sales 1.5% 2.1% 1.3% 0.4% 0.8% 0.8% 0.8% 0.8%\nOrganic Capital Expenditures $19.5 $15.2 $10.4 $7.0 $9.4 $10.5 $11.6 $12.6\n% of Sales 5.4% 5.0% 3.2% 1.9% 2.3% 2.3% 2.3% 2.3%\nQuick Ship Greenfield Expansion - - - 0.7 2.1 2.4 0.6 0.7\n% of Sales 0.0% 0.0% 0.0% 0.2% 0.5% 0.5% 0.1% 0.1%\nCombined Capital Expenditures $19.5 $15.2 $10.4 $7.7 $11.5 $12.9 $12.2 $13.3\n% of Sales 5.4% 5.0% 3.2% 2.1% 2.8% 2.8% 2.4% 2.4%\n(1) Historical figures are inclusive of management, due-diligence and PF adjustments 68", "Net Working Capital Summary\nThe Company's net working capital is presented below on a cash-free basis h\nc\nCash-Free Net Working Capital(1) Commentary\nr\n($ in millions) 2020A 2021A 2022A \uf0a7 Adjusted working capital is predominately comprised of inventory\nu\nand accounts receivable. The $14.1 million increase in average\nAccounts receivable $29.4 $29.0 $38.1\nadjustedNWCfrom FY20toFY22 was predominatelydrivenbya\nInventory 36.5 39.7 60.9\nh$15.1 million growth in inventory resulting from supply chain\nPrepaid assets 0.4 0.3 0.2\ndisruptions, inflation, higher freight costs, longer lead times and\nIntercompany receivables 0.7 0.9 0.6\nconservativeinventorybuildthatisbeingwounddown\nc\nTotal Current Assets $67.0 $69.8 $99.8\n\uf0a7 During FY22, the Company was required to source crossbands\nAccounts payable $5.8 $8n.1 $8.7 fromforeignsuppliers,resultingincrossbandsbeingpurchasedat\nIntercompany payables 0.2 0.4 0.3 higher unit prices and the Company incurring significant freight\nAccrued payroll 6.1 4.7 5.8 costs. The length of time required for ocean freight was partly\nn\nOther accrued liabilities 4.7 5.6 6.3 responsibleforlongerleadtimes\nTotal Current Liabilities $16.8 $18.8 $21.2\ny \uf0a7 Receivablebalances havefluctuatedinlinewithsales,offsetbya\n~6 day increase in average days sales outstanding (DSO) from\nAdjusted NWC $50.2 $51.0 $78.6\nW FY20 to FY22. Management attributes the increase in DSO to\nlonger lead times and an increase in orders not being filled in a\nAdjusted DSO 36 40 41\ntimely manner due to supply chain constraints whereby\nAdjusted DIO 51 58 73\ncustomers receivedpartial shipments andwouldpayuponreceipt\nAdjusted DPO 19 30 24\noffullorder\n(1) Working capital metrics reflect year end and are inclusive of the impact of definitional and due diligence adjustments 69", "h\nc\nr\nu\nh\nc\nAppendix\nn\nn\ny\nW", "Quality of Earnings Adjustments\nThe Company\u2019s financials are adjusted to exclude certain one-time or non-recurring expensehs in order to more accurately reflect\nMasonite Architectural\u2019s ongoing profitability and cash flow generation\nc\nAdjustments Overview\nr\nGoodwill impairment charge ($51.5M) recorded in Q1 \u201920, along with a write down\n($ in millions) 2020A 2021A 2022A\n($59.5M) in FY21, as a result of manufacturing constraints due to COVID-19 related\nu\nA absenteeism, material availability and production challenges. FY21 also includes\nNet Sales $358.0 $303.1 $323.2\n$10.4M related to fixed assets as a result of plant closures associated with\nReported EBITDA ($23.1) ($76.6) ($1.0) restructuring activities\nh\nManagement adjustments: Removes the impact of non-operational gains and losses associated with the sale of\nA Asset impairment 51.5 69.2 - B fixed assets, primarily associated with planned facility closures during the Historical\nPeriod (i.e., Largo, Springfield)\nB (Gain)/loss on disposal of PP&E 2.9 (0.4) (2.9)\nc\nC Restructuring costs 2.9 5.2 0.1 Comprised of severance and facility closure costs associated with planned\nC restructuring activities for the Largo and Springfield facility closures, which took\nD Non-recurring (income) expense (0.0) (0.3) 0.0\nplace in December 2019, December 2020 and June 2021, respectively\nn\nManagement EBITDA $34.2 ($3.0) ($3.7)\nRemoves non-operational income associated with the sale of scrap, primarily related\nD\nDue diligence adjustments: to the Springfield closure\nE Non-recurring expenses 0.3n 0.9 0.6\nE Non-recurring expenses identified during the Historical Period\nF One-time repairs & maintenance - 0.5 0.6\nG Rent normalization 0.0 0.3 0.3\nRemoves the impact of one-time repairs and maintenance expense incurred for (i)\nH Bonus true-up y0.7 1.3 (0.2)\nF various priority items required to be addressed by an insurance provider at the\nI Post-ERP implementation IT support - 0.3 0.2 Marshfield door plant, (ii) select other discrete, one-time equipment moves/closures\nJ Prepaid and non-recurring marketing - - 0.1\nK Volume rebate normalization W 0.1 0.1 (0.1) Normalizes rent expense over the Historical Period to (i) add back rent expense for\noffices that were not in use and subsequently exited, (ii) remove the impact of an\nL Intercompany sale write-offs 0.1 0.3 0.1 G\nout-of-period catch up payment and (iii) include rent expense that was recorded at\nM Property insurance normalization (0.2) (0.1) (0.0) Masonite Corporate\nN Post-close operating losses at closed facilities - 0.5 -\nAdjustment presents expenses for the actual bonus payments for the respective\nO Out-of period vendor rebates (0.2) - - H\nperiod\nAdjusted EBITDA $34.8 $1.2 ($2.2)\nNon-recurring IT support charges from Masonite Corporate associated with the\nPro forma and run-rate adjustments: I Mason City ERP implementation above normal IT support that are charged to the\nBusiness and included within administration salaries\nP Fixed and non-recurring costs at closed facilities 3.5 0.7 -\nQ Jefferson City machining center - 0.1 0.3 Relates to $110k expensed in Dec \u201822 for new samples to send to customers that\nR Mason City ERP implementation - 1.2 0.2 J were ordered for approval under the simplification program, as well as samples\nordered to hand out at tradeshow (DHI) that will take place in FY23\nS Birchwood supply chain impacts - 0.5 4.9\nT FY23 restructuring plan - - 3.4 Adjustment removes the out-of-period impact associated with true-ups to volume\nK\nrebates recorded at the time rebate payments are released\nPF Adjusted EBITDA $38.3 $3.8 $6.5\n71", "Quality of Earnings Adjustments (cont.)\nThe Company\u2019s financials are adjusted to exclude certain one-time or non-recurring expensehs in order to more accurately reflect\nMasonite Architectural\u2019s ongoing profitability and cash flow generation\nc\nAdjustments Overview\nr\n($ in millions) 2020A 2021A 2022A Reclass of bad debt write-offs associated with intercompany sales to Masonite\u2019s\nL uNorth America Residential (NAR) business\nNet Sales $358.0 $303.1 $323.2\nReported EBITDA ($23.1) ($76.6) ($1.0)\nM Normalizes property insurance expense for certain plants\nh\nManagement adjustments:\nA Asset impairment 51.5 69.2 - Removes losses incurred at Springfield plant subsequent to the facility\u2019s closure\nN\ndate\nB (Gain)/loss on disposal of PP&E 2.9 (0.4) (2.9)\nc\nC Restructuring costs 2.9 5.2 0.1\nO Removes a correcting entry recorded in FY20 relating to FY19 purchases\nD Non-recurring (income) expense (0.0) (0.3) 0.0\nManagement EBITDA $34.2 ($3n .0) ($3.7) Removes fixed costs from Adjusted EBITDA that were incurred prior to facility\nP closure as these costs were not required to support the volume shifts subsequent to\nDue diligence adjustments: consolidation\nE Non-recurring expenses 0.3n 0.9 0.6\nA $2.9 million machining center was installed at the Jefferson City door plant to\nF One-time repairs & maintenance - 0.5 0.6 improve and automate downstream machining capabilities within the network.\nG Rent normalization 0.0 0.3 0.3 Q During the installation period (Dec \u201821-Mar \u201822), the plant had a temporary loss in\nH Bonus true-up y0.7 1.3 (0.2) volume. Adjustment presented calculates the contribution margin associated with\nthe estimated volume loss during the installation period\nI Post-ERP implementation IT support - 0.3 0.2\nJ Prepaid and non-recurring marketing - - 0.1\nVolume declined significantly during the Mason City ERP implementation period due\nW\nK Volume rebate normalization 0.1 0.1 (0.1) to a change in the scheduling logic and order flow that impacted productivity. The\nL Intercompany sale write-offs 0.1 0.3 0.1 R plant is on a path to normal production levels. Adjustment calculates the contribution\nmargin associated with the estimated volume loss during the ERP implementation\nM Property insurance normalization (0.2) (0.1) (0.0)\nperiod (Oct \u201821-Jan \u201822)\nN Post-close operating losses at closed facilities - 0.5 -\nO Out-of period vendor rebates (0.2) - - Prior to FY22, crossbands used to manufacture door skins were sourced\ndomestically from two vendors. During FY22, one of these suppliers (~30% of\nAdjusted EBITDA $34.8 $1.2 ($2.2)\npurchases) went out of business and the other (~70% of purchases) implemented\nPro forma and run-rate adjustments: S an allocation process that significantly reduced the availability of crossbands. This\nadjustment quantifies the estimated EBITDA impact associated with the elevated\nP Fixed and non-recurring costs at closed facilities 3.5 0.7 -\nfreight costs to temporarily source from Asia during unprecedented freight costs\nQ Jefferson City machining center - 0.1 0.3\nR Mason City ERP implementation - 1.2 0.2 The pro forma adjustment represents savings in compensation and benefits\nexpected to be realized in FY23 as a result of (i) reduction in force restructuring\nS Birchwood supply chain impacts - 0.5 4.9\nT actions predominately implemented at the beginning of FY23, and (ii) the elimination\nT FY23 restructuring plan - - 3.4 of certain roles during FY22 that were deemed redundant or were replaced with\nexisting employees\nPF Adjusted EBITDA $38.3 $3.8 $6.5\n72"]}
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