UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

¨ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file numbers: 333-119696 and 333-114924

Norcraft Holdings, L.P.

Norcraft Companies, L.P.

(Exact name of registrants as specified in their certificates of limited partnership)

Delaware	75-3132727
Delaware	36-4231718
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3020 Denmark Avenue, Suite 100

Eagan, MN 55121

(Address of Principal Executive Offices)

(800) 297-0661

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x.

Indicate by check mark if the registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  x     No  ¨

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) have been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨.

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, or non-accelerated filers.

Large Accelerated Filer  ¨    Accelerated Filer  ¨    Non-Accelerated Filer  x

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x.

The aggregate market value of voting and non-voting common equity held by non-affiliates in the case of Norcraft Companies, L.P. is $0 and in the case of Norcraft Holdings, L.P. is approximately $6.2 million.

This Form 10-K is a combined annual report being filed separately by two registrants: Norcraft Holdings, L.P. and Norcraft Companies, L.P. Unless the context indicates otherwise, any reference in this report to “Holdings” refers to Norcraft Holdings, L.P. and any reference to “Norcraft” refers to Norcraft Companies, L.P., the wholly-owned operating subsidiary of Holdings. The “Company”, “we”, “us”, and “our” refer to Norcraft Holdings, L.P., together with Norcraft Companies, L.P.

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Tab le of Contents

		Page
PART I.
Item 1.	Business	3
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	12
Item 2.	Properties	12
Item 3.	Legal Proceedings	12
Item 4.	Submission of Matters to a Vote of Security Holders	12
PART II.
Item 5.	Market For Registrants’ Common Equity and Related Equity Holder Matters and Issuers’ Purchases of Equity Securities	13
Item 6.	Selected Financial Data	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	23
Item 9A.	Controls and Procedures	23
Item 9B.	Other Information	24
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	28
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Equity Holder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	38
Item 14.	Principal Accountant Fees and Services	39
PART IV.
Item15.	Exhibits and Financial Statement Schedules	40

This combined Form 10-K is separately filed by Norcraft Holdings, L.P. and Norcraft Companies, L.P. Each Registrant hereto is filing on its own behalf all of the information contained in this annual report that relates to such Registrant. Each Registrant hereto is not filing any information that does not relate to such Registrant, and therefore makes no representation as to any such information.

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P ART I

Item 1. Business

OUR COMPANY

We are a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the United States. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets. Our products are manufactured in both framed and frameless or full access construction. We market our products through five brands: Mid Continent Cabinetry^®, UltraCraft^®, StarMark^®, Fieldstone^® and Brookwood^®. Each of these brands represents a distinct line of cabinetry and has been in operation for over 20 years. Mid Continent, our original brand, was established in 1966. We believe each brand is well recognized and highly respected throughout the industry for its attractive style, flexibility, quality and value.

We believe our product offering, developed through strategic acquisitions and substantial internal enhancements, represents one of the most comprehensive in the industry, with a broad range of price points, styles, materials and customization levels. In 2000, we acquired UltraCraft, a semi-custom full access cabinet line. In 2002, we acquired StarMark, consisting of the StarMark and Brookwood brands, semi-custom framed cabinet lines, and the Fieldstone brand, a high-end semi-custom and custom framed cabinet line. These acquisitions, combined with our stock and designer-stock framed cabinet line, Mid Continent Cabinetry, have formed a well-balanced platform that has generated significant growth. We have also made substantial investments to enhance our existing product lines, introduce new products and expand capacity at our manufacturing facilities. As a result of our strategy, we currently offer more than 35,000 door and finish combinations for wood, thermofoil, high-pressure laminate and melamine cabinets. With such a broad range of cabinetry products, we are able to compete in multiple segments of the market.

We primarily sell our products to kitchen and bathroom cabinetry dealers as well as to wholesale retailers, or wholetailers, and directly to home builders. We have an extensive network of active customers and internal and independent sales representatives. Our products are sold in the repair and remodeling and new home construction markets. We have national distribution capabilities for all of our brands through six manufacturing facilities, four service and distribution centers, four warehouses and five retail locations strategically located throughout the United States. As a result, our net sales are balanced throughout the United States.

We have experienced significant growth, both organically and through acquisitions, over the past five years. We believe that our broad product line coupled with our new product offerings, new customer additions, primary focus on the dealer channel, delivery of quality customer service and investment in manufacturing capacity provides a strong platform for continued growth in sales and profitability.

This annual report is that of Norcraft Holdings, L.P. (“Holdings”) and one of its wholly owned subsidiaries Norcraft Companies, L.P. (“Norcraft”). Holdings had no activity prior to its acquisition of Norcraft Companies L.L.C. (the “Predecessor” company of Norcraft) on October 21, 2003 (“the Acquisition”). Norcraft is a separate public reporting company, and a 100% owned subsidiary of Holdings. Holdings and Norcraft are also collectively referred to as the “Company”, “we”, “us” or “our”.

The Company has one reportable segment, consisting of its three divisions (Mid Continent, UltraCraft and StarMark) and one subsidiary (Norcraft Canada Corporation). As they all have similar products, production processes, types of customers, distribution methods and economic characteristics and operate in identical positions with regards to regulatory requirements, the Company has deemed it appropriate to aggregate them into one reportable segment.

OUR PRODUCTS

We offer a broad product line that encompasses a complete range of price points, styles, materials, and customization levels. Our product offering includes stock, semi-custom and custom cabinets. We offer cabinets in both framed and full access construction and offer more than 35,000 door and finish combinations for wood, thermofoil, high-pressure laminate, and melamine cabinets.

Our business is conducted through three business divisions: Mid Continent Cabinetry, UltraCraft Cabinetry and StarMark Cabinetry (which includes the StarMark, Fieldstone and Brookwood brands). Within these divisions, we market our products through five brands: Mid Continent, UltraCraft, StarMark, Fieldstone and Brookwood. Mid Continent is our original brand, dating back to 1966. The UltraCraft brand, acquired by us in 2000, was established in 1986. The StarMark, Fieldstone and Brookwood brands were acquired by us in 2002. The StarMark and Fieldstone brands were established in 1975 and 1978, respectively. Our Brookwood brand was established in the mid 1980’s to differentiate our product sold through large home centers. Today, the Brookwood brand is sold only through a catalog sales organization. Each brand represents a distinct product line with little or no overlap. As a result, we are able to aggressively market each of our brands to a broad range of customers without significantly competing with our other brands. We believe our attention to brand positioning provides an advantage over some of our larger competitors who offer multiple brands in the same price point.

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MID CONTINENT CABINETRY

Mid Continent manufactures a broad range of stock framed cabinetry, offering 66 door styles and approximately 479 door and finish combinations. The Mid Continent product offering includes two distinct product lines: Signature Series and Pro Series, which are differentiated by door style and finish, as well as design options and construction features. Mid Continent’s products accounted for approximately 61% of our sales during the fiscal year ended December 31, 2006.

Signature Series

Mid Continent’s Signature Series, the division’s most popular product line, provides features and customization options comparable to a semi-custom product at price points competitive with stock cabinetry. The Signature Series offers numerous door style selections in various wood species with multiple door and finish combinations. In addition, the Signature Series offers a wide variety of construction upgrades and design options, such as plywood sides and full-extension, dovetail maple drawers, for added style and design. We believe that our Signature Series cabinetry appeals to consumers undertaking remodeling projects, who seek superior design flexibility and attractive appearance relative to stock cabinetry and lower cost and shorter lead-times compared to semi-custom and custom cabinetry. We also believe we appeal to home builders who seek cabinetry that differentiates their homes and gives home buyers the look and feel of custom cabinetry at an affordable price.

Pro Series

Mid Continent’s Pro Series is designed for the value-conscious customer. The Pro Series is manufactured in high quantities and a limited range of finishes with few modification options. We believe that our Pro Series cabinetry primarily appeals to builders who are seeking products for single family and multi-unit dwellings.

ULTRACRAFT CABINETRY

UltraCraft manufactures a full range of stock and semi-custom wall, base, tall, vanity, and specialty cabinets. UltraCraft offers 78 door styles and over 10,000 door and finish combinations.

UltraCraft cabinets are full access, offering true full-overlay doors with concealed hinges and functional hardware. Full access cabinets provide flush, furniture-style, finished ends and provide greater storage space than traditional framed cabinets. The UltraCraft product offering is comprised of three distinct product lines: Destiny, Vision, and Entrée, each of which are differentiated by features, finish, color, style selection, design options and price. UltraCraft’s products accounted for approximately 15%, of our sales during the fiscal year ended December 31, 2006.

Destiny Line

UltraCraft’s Destiny line is our high-end semi-custom full access product offering with extensive customization options. Destiny cabinets include thousands of door and finish combinations constructed of wood, thermofoil, and melamine. Over the years we have continued to significantly expand Destiny’s product offering, adding new wood species, door styles and finishes. Destiny line products are targeted at affluent, established customers who desire upscale, smartly designed, fully-featured cabinets.

Vision Line

UltraCraft’s Vision product line has experienced significant growth every year since its introduction in April 2002. The Vision line includes five door styles and ten Italian “Eurotek” veneer finish combinations, a unique technology of an Italian manufacturer. The Vision manufacturing process utilizes this state of the art technology to create a high-end semi-custom style and look at a mid-range price. As a result, we believe our Vision line products are well positioned to target younger, more fashion-oriented consumers.

Entrée Line

UltraCraft’s Entrée line is value priced full access cabinetry manufactured in high quantities and in a limited range of sizes and styles, with few modification options. Entrée cabinets are manufactured using  ⁵/8 inch melamine board with full edgebanding, and as such are a higher-quality product than most entry level cabinets. Entrée cabinets are targeted to be sold primarily to builders for use in new construction projects.

STARMARK CABINETRY

The StarMark, Fieldstone and Brookwood brands collectively comprise our StarMark Cabinetry business division, offering 246 door styles and more than 25,000 door and finish combinations. This business division provides high quality, attractively designed semi-custom cabinets incorporating many features of custom cabinetry at a lower price. StarMark Cabinetry collectively accounted for approximately 24%, of our revenues for the fiscal year ended December 31, 2006.

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StarMark

StarMark is semi-custom framed cabinetry distributed through independent kitchen and bath retailers. Kitchens are personalized for the homeowner’s lifestyle and designed by trained professionals who are experienced in using the depth of the StarMark product line to achieve a unique look and value investment for the home. StarMark’s products are targeted at both middle and upper income consumers.

Fieldstone

Fieldstone is our higher-end, semi-custom framed cabinetry brand, also distributed through independent kitchen and bath retailers. This brand features an exclusive selection of products, finishes and modifications above and beyond what is available in the StarMark brand. Each kitchen is individually designed and accented by industry experts who use Fieldstone modifications, migration and exclusive finishes to achieve a custom room for their clients without a premium price. Fieldstone’s products are targeted at both middle and upper income consumers.

Brookwood

Brookwood cabinets are semi-custom, framed cabinets sold through a catalog sales organization. Brookwood Cabinets are extensively modified and personalized for each homeowner. Brookwood’s products are targeted at both middle and upper income consumers.

MANUFACTURING

We operate six manufacturing facilities strategically located throughout the United States and Canada. Our largest facility, in Newton, Kansas, is vertically integrated, enabling it to fully assemble cabinet doors, as well as perform machining, assembly and finishing operations for oak and other wood species. Additionally, it receives much of its supply of frame parts from our Winnipeg facility. Our five remaining plants are primarily machining, assembly and finishing operations. At all of our sites, prior to assembly, rough milled lumber is machined. Panels, shelves, drawers, drawer fronts, doors, floors and back parts are then assembled. The cabinetry is then finished (sanded, stained, varnished and cured) and then assembled. Hardware is then added, and the final product is inspected, packaged and staged for shipment. Our products are made to order and not to stock and accordingly, our finished goods inventory levels are low. Following production at one of our facilities, the finished product is shipped to our customers either directly or indirectly or via one of our four distribution centers.

Newton, along with Cottonwood, Minnesota and Lynchburg, Virginia are Mid Continent facilities, with Cottonwood and Lynchburg receiving doors manufactured by Newton and outsourcing their rough mill production of raw materials to third party vendors. Our Liberty, North Carolina facility is an UltraCraft facility, and our Sioux Falls, South Dakota facility is a StarMark facility, producing StarMark, Fieldstone and Brookwood cabinets. Liberty and Sioux Falls each outsource rough mill production. Liberty outsources door manufacturing in all wood species to third party vendors while Sioux Falls builds approximately 1,000 doors per day.

We are currently increasing the level of insourcing of products currently purchased from third parties. Our StarMark division is insourcing an increasing amount of door production that will result in savings from the amounts formerly paid to third parties for these products. Our facility in Winnipeg, Canada produces wood components which were formerly purchased from third parties. The Winnipeg plant primarily produces product for our Mid Continent division. Depending on exchange rates, the Winnipeg plant can provide cost savings when compared to purchasing these components from domestic suppliers. Additionally, this facility supplies frame parts which can reduce our dependence on certain vendors.

SALES, MARKETING AND DISTRIBUTION

We sell our products principally through our network of internal and independent sales representatives, and five Kitchen and Bath Ideas retail stores. The majority of our sales are through our sales representatives, who cover all areas of the United States, and with whom we believe we have established strong relationships by providing superior customer service, timely delivery and quality products at competitive pricing.

Our sales and marketing strategy is focused on distributing our products primarily to kitchen and bath dealers and wholetailers. According to Kitchen and Bath Business, the dealer and wholetailer channels accounted for 62.0% of U.S. cabinet industry sales in 2005. In certain markets, we also sell our products directly to builders. We have developed strong relationships with our dealers by delivering superior customer service, accurate and timely deliveries, quality products and competitive pricing. We believe these relationships provide us an advantage as dealers often influence the consumer’s decision at the point-of-sale, particularly since consumers are generally not familiar with a specific brand or style of cabinetry prior to their interaction with the dealer.

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We have national distribution capabilities for all of our brands and our net sales are balanced throughout the United States. In addition, we continually monitor the sales volume and credit worthiness of our dealers to further enhance our network and we aim to maximize the sales potential of our customers by providing frequent dealer training, extensive product literature and attractive displays.

We also distribute our products through other channels on a limited basis, including national galleries, our Kitchen and Bath Ideas retail stores, a catalog sales organization and other distributors. Our retail stores, which represented approximately 2.4% of our overall revenues in 2006, sell products from each of our divisions, as well as kitchen appliances, countertops and other kitchen and bath items.

CUSTOMERS

We primarily sell our products to kitchen and bathroom cabinetry dealers and wholesale retailers, or wholetailers, as well as directly to home builders. We have an extensive network of over 2,800 active customers. Our largest customer in 2006 accounted for 8.1% of our sales, and our largest 10 customers accounted for approximately 26.3% of sales during such time. Our customers sell our products in the repair and remodeling and new home construction markets. Other than through our retail locations, we do not generally sell our products directly to home owners.

We seek to attract and retain customers by:

• delivering our products on time, in the specification and quantity ordered;

• producing a quality product offering that is regularly updated with new introductions;

• providing superior customer service and product warranties;

• supporting dealer and distributor employees through providing cabinet displays, extensive educational programs and substantial promotional materials; and

• utilizing a professional, nationwide network of sales representatives who have close relationships with desirable dealers.

COMPETITION

The cabinet industry is mature, competitive, large and fragmented, with approximately 5,000 cabinet manufacturers competing for approximately $13.5 billion in sales during 2005 (as estimated by Kitchen and Bath Business) with only eight competitors having in excess of $200 million in annual sales in 2005. Key competitive factors in the cabinetry industry include product quality, accurate and timely delivery, value and price.

We have numerous competitors and we expect competition to increase. Our competitors manufacture stock, semi-custom and custom cabinetry. There are relatively low capital requirements for cabinetry assembly, and therefore it is relatively easy for small competitors to enter the industry. Many of our competitors compete on a local or regional basis, but others, like us, compete on a national basis as well. Our competitors include large consolidated operations which house their manufacturing facilities in large and efficient plants as well as relatively small, local cabinetwork manufacturers. Moreover, companies in other building products industries may compete with us.

We believe that we compete favorably with other manufacturers due to the breadth of our product offerings, production capacity and delivery and service. Many of our competitors are larger than we are and may have access to more resources than we do.

INTELLECTUAL PROPERTY

We rely on a combination of trademarks, copyrights and trade secret protection, employee and third party non-disclosure agreements, and domain name registrations to protect our intellectual property. We sell many of our products under a number of registered trademarks, which we believe are widely recognized in the cabinetry industry. With respect to proprietary know-how, we rely on trade secret protection and confidentiality agreements. Monitoring the unauthorized use of our intellectual property is difficult, and the steps we have taken may not prevent unauthorized use of our intellectual property. The disclosure or misappropriation of our intellectual property could harm our ability to protect our rights and our competitive position. To date, we have not relied on patents in operating our business.

EMPLOYEES

As of December 31, 2006 we had 2,538 employees. This total included 2,104 manufacturing employees. Of our total employees, 1,580 were at Mid Continent and corporate, 329 were at UltraCraft and 629 were at StarMark. None of our employees is subject to any collective bargaining agreement.

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ENVIRONMENTAL REGULATION

Our operations are subject to extensive federal, state and local environmental laws and regulations relating to, among other things, the generation, storage, handling, emission, transportation and discharge of regulated materials into the environment. Permits are required for certain of our operations, and these permits are subject to revocation, modification and renewal by issuing authorities. Governmental authorities have the power to enforce compliance with their regulations, and violations may result in the payment of fines or the entry of injunctions, or both. We may also incur liability for investigation and clean-up of soil or groundwater contamination on or emanating from current or formerly owned and operated properties, or at offsite locations at which regulated materials are located where we are identified as a responsible party. We do not believe we will be required under existing environmental laws and enforcement policies to expend amounts that will have a material adverse effect on our results of operations, financial condition or cash flows. The requirements of such laws and enforcement policies, however, have generally become more stringent over time. Also discovery of currently unknown conditions could require responses that could result in significant costs. Accordingly, we are unable to predict the ultimate cost of compliance with environmental laws and enforcement policies.

Item 1A. Risk Factors

Our business, operations and financial condition are subject to various risks. Some of these risks are described below, and you should take these risks into account in evaluating us or making any investment decision involving us. This section does not describe all risks applicable to us, our industry or our business, and it is intended only as a summary of the material risk factors.

Our substantial level of indebtedness could adversely affect our financial condition.

We have a significant amount of indebtedness which could adversely affect our financial condition and business.

At December 31, 2006, we had $256.6 million of indebtedness outstanding, including $150.0 million of 9% senior subordinated notes due 2011 of Norcraft and Norcraft Finance Corp. (a 100% owned finance subsidiary of Norcraft) (the “Senior Subordinated Notes”), $100.7 million of 9  ³/4% senior discount notes due 2012 of Holdings and Norcraft Capital Corp. (a 100% owned finance subsidiary of Holdings) (the “Senior Discount Notes”) and $5.9 million of unsecured notes issued by Holdings in connection with its repurchase of certain equity interest from two former members. In addition, on such date, we had approximately $54.6 million of additional borrowing availability under Norcraft’s senior secured credit facility and approximately $5.4 million of outstanding letters of credit.

Our high level of indebtedness could:

• make it more difficult for us to satisfy our obligations on the Senior Subordinated Notes or Senior Discount Notes;

• reduce the availability of our cash flow for other purposes, such as capital expenditures, acquisitions and working capital;

• place us at a disadvantage compared to our competitors that have less debt;

• expose us to fluctuations in the interest rate environment because the senior credit facility is at a variable rate of interest; and

• limit our ability to borrow additional funds.

We expect to obtain the money to pay our expenses and to pay the interest on the Senior Subordinated Notes, the Senior Discount Notes, and other debt from cash flow from our operations and from additional loans under our senior credit facility. Our ability to meet our expenses thus depends on our future performance, which will be affected by financial, business, economic and other factors which we will not be able to control. Our cash flow may not be sufficient to allow us to pay principal and interest on our debt (including the notes) and to meet our other obligations. If we do not have enough money, we may be required to refinance all or part of our existing debt (including the notes), sell assets or borrow more money. We may not be able to do so on terms acceptable to us or at all. In addition, the terms of existing or future debt agreements, including our senior credit facility, the indenture governing the Senior Subordinated Notes, and the indenture governing the Senior Discount Notes, may restrict us from adopting any of these alternatives. The failure to generate sufficient cash flow or to achieve such alternatives could significantly adversely affect the value of the Senior Subordinated Notes or the Senior Discount Notes and our ability to pay principal of and interest on the notes.

For a more detailed discussion of our debt, please see Note 5 “Long-term debt” to the consolidated financial statements.

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The indentures for the Senior Subordinated Notes and the Senior Discount Notes, respectively, and our senior credit facility impose significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities.

The indentures for the Senior Subordinated Notes and the Senior Discount Notes, and our senior credit facility impose significant operating and financial restrictions on us. These restrictions will limit our ability and our subsidiaries to, among other things, incur additional indebtedness, make investments, sell assets, incur certain liens, enter into agreements restricting our subsidiaries’ ability to pay dividends, or merge or consolidate. In addition, our senior credit facility requires us to maintain specified financial ratios. These covenants may adversely affect our ability to finance our future operations or capital needs or to pursue available business opportunities. A breach of any of these covenants or our inability to maintain the required financial ratios could result in a default under the related indebtedness. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness.

We will be able to incur more indebtedness and the risks associated with our substantial leverage, including our ability to service our indebtedness, will increase.

The indentures relating to the Senior Subordinated Notes and the Senior Discount Notes, and the credit agreement governing Norcraft’s senior credit facility permit us and/or our subsidiaries, subject to specified conditions, to incur additional indebtedness, including secured indebtedness, under certain circumstances. If we incur additional debt, the risks associated with our substantial leverage, including risks relating to our ability to service our debt, would increase. If we incur any secured debt in the future, holders of this secured debt will have claims that are prior to your claims as holders of the notes to the extent of the value of the assets securing that other debt. In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to us, holders of secured debt will have a prior claim to the assets that constitute their collateral.

Holdings and Norcraft Capital Corp. are the sole obligors under the Senior Discount Notes. Holdings’ subsidiaries, including Norcraft, do not guarantee Holdings’ obligations under the Senior Discount Notes and do not have any obligation with respect to the Senior Discount Notes; the Senior Discount Notes are effectively subordinated to the debt and liabilities of Holdings’ subsidiaries, including Norcraft, and are effectively subordinated to any of our future secured debt to the extent of the value of the assets secured by such debt.

Holdings has no operations of its own and derives all of its revenues and cash flow from its subsidiaries. Holdings’ subsidiaries are separate and distinct legal entities and other than Norcraft Capital Corp., have no obligation, contingent or otherwise, to pay amounts due under the exchange notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payments.

The Senior Discount Notes are structurally subordinated to all debt and liabilities, including trade payables, of Holdings’ subsidiaries, including Norcraft, and are effectively subordinated to any of Holdings’ future secured debt to the extent of the value of the assets securing such debt. Holdings’ subsidiaries may not have sufficient funds or assets to permit payments to Holdings in amounts sufficient to permit Holdings to pay all or any portion of its indebtedness and other obligations, including its obligations on the Senior Discount Notes. As of December 31, 2006 the aggregate debt of Holdings’ subsidiaries (other than Norcraft Capital Corp., which has no additional debt) was $256.6 million.

Increases in interest rates and the reduced availability of financing for home improvements may cause our sales and profitability to decrease.

In general, demand for home improvement products may be adversely affected by increases in interest rates and the reduced availability of financing. Also, trends in the financial industry which influence the requirements used by lenders to evaluate potential buyers can result in reduced availability of financing. If interest rates or lending requirements increase and consequently, the ability of prospective buyers to finance purchases of home improvement products is adversely affected, our business, financial condition and results of operations may also be adversely impacted and the impact may be material.

Downturns in the home building industry or the economy could negatively affect the demand for and pricing of our products and our operating results.

The home building industry may be significantly affected by changes in economic and other conditions such as gross domestic product levels, employment levels, demographic trends, availability of financing, interest rates and consumer confidence. A decrease in employment levels, consumer confidence or the availability of financing could negatively affect the demand for and pricing of our products which would adversely affect our results of operations.

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Increased prices for raw materials or finished goods used in our products could increase our cost of sales and decrease demand for our products, which could adversely affect our profitability or revenues.

Our profitability is affected by the prices of the raw materials and finished goods used in the manufacturing of our products. These prices may fluctuate based on a number of factors beyond our control, including, among others, changes in supply and demand, general economic conditions, labor costs, competition, import duties, tariffs, currency exchange rates and, in some cases, government regulation. Continued increases could adversely affect our profitability or revenues. We have no long-term supply contracts for the raw materials and finished goods used in the manufacturing of our products. This means that we are subject to changes in the prices charged by our suppliers. Significant increases in the prices of raw materials or finished goods could adversely affect our profit margins, especially if we are not able to recover these costs by increasing the prices we charge our customers for our products. We enter into pricing agreements with certain customers which fix their pricing for specified periods ranging from one to six months.

Interruptions in deliveries of raw materials or finished goods could adversely affect our profitability or revenues.

Our dependency upon regular deliveries from particular suppliers means that interruptions or stoppages in such deliveries could adversely affect our operations until arrangements with alternate suppliers could be made. If any of our suppliers were unable to deliver materials to us for an extended period of time, as the result of financial difficulties, catastrophic events affecting their facilities or other factors beyond our control, or if we were unable to negotiate acceptable terms for the supply of materials with these or alternative suppliers, our business could suffer. We may not be able to find acceptable alternatives, and any such alternatives could result in increased costs for us. Even if acceptable alternatives are found, the process of locating and securing such alternatives might be disruptive to our business. Extended unavailability of a necessary raw material or finished good could cause us to cease manufacturing of one or more products for a period of time. In addition, the manufacturing process for UltraCraft’s Vision product line includes components which are made by an Italian manufacturer using proprietary technology. The manufacturer’s failure to deliver components could cause us to cease manufacturing the Vision line products.

Our international sourcing subjects us to additional risks and costs, which may differ in each country in which we do business and may cause our profitability to decline.

During the fiscal year ended December 31, 2006, approximately 13.0% of our purchases of raw materials were from vendors outside of the United States. We may decide to increase our international sourcing in the future. Consequently, our business is subject to the risks generally associated with doing business abroad. We cannot predict the effect of various factors in the countries in which we sell our products or where our suppliers are located, including, among others: (i) introduction of non-native invasive organisms into new environments, (ii) recessionary trends in international markets; (iii) legal and regulatory changes and the burdens and costs of our compliance with a variety of laws, including trade restrictions and tariffs; (iv) difficulties in enforcing intellectual property rights; (v) increases in transportation costs or transportation delays; (vi) work stoppages and labor strikes; (vii) fluctuations in exchange rates (particularly the value of the U.S. dollar relative to other currencies); and (viii) political unrest, terrorism and economic instability. If any of these or other factors were to render the conduct of our business in a particular country undesirable of impractical, our business and financial condition could be adversely affected.

The loss of, or deterioration of relationships with, our sales representatives could adversely affect our sales and profits.

We depend on the services of independent sales representatives to sell the majority of our products and provide services and aftermarket support to our customers. The sales representative agreements we have are typically cancelable by the sales representative after a short notice period, if any at all. Furthermore, many of these sales representatives also sell our competitors’ products. The loss of a substantial number of these relationships, or our failure to maintain good relationships with these sales representatives, could materially reduce our sales and profits.

Environmental requirements applicable to our manufacturing and distribution facilities may impose significant environmental compliance costs and liabilities, which would adversely affect our results of operation.

Our facilities are subject to numerous federal, state and local laws and regulations relating to pollution and the protection of the environment, including those governing emissions to air, discharges to water, storage, treatment and disposal of waste, remediation of contaminated sites, and protection of worker health and safety. We believe we are in substantial compliance

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with all applicable requirements. However, our efforts to comply with environmental requirements do not remove the risk that we may be held liable, or incur fines or penalties, and that the amount of liability, fines or penalties may be material, for, among other things, releases of hazardous substances occurring on or emanating from current or formerly owned or operated properties or any associated offsite disposal location, or for contamination discovered at any of our properties from activities conducted by previous occupants.

Changes in environmental laws and regulations or the discovery of previously unknown contamination or other liabilities relating to our properties and operations could result in significant environmental liabilities which could make it difficult to pay the interest or principal amount of the notes when due. In addition, we might incur significant capital and other costs to comply with increasingly stringent air emission control laws and enforcement policies which would decrease our cash flow available to service our indebtedness.

We may not effectively compete in the highly fragmented and very competitive cabinet industry market, which may adversely affect our revenues.

We operate in the highly fragmented and very competitive cabinetry industry. Our competitors include national and local cabinetry manufacturers. These can be large consolidated operations which house their manufacturing facilities in large and efficient plants, as well as relatively small, local cabinetmakers. Some of our competitors have achieved substantially more market penetration in certain of the markets in which we operate. Some of our competitors have greater resources available and are less highly leveraged, which may provide them with greater financial flexibility. Moreover, companies in other building products industries may compete with us. To remain competitive, we will need to invest continuously in manufacturing, customer service and support, marketing and our dealer network. We may have to adjust the prices of some of our products to stay competitive, which would reduce our revenues. We may not have sufficient resources to continue to make such investments or maintain our competitive position within each of the markets we serve.

Manufacturing or assembly realignments as a result of our continued review of operations may result in a decrease in our near-term earnings or not result in cost reductions as expected, which would harm our profitability.

We continually review our manufacturing and assembly operations and sourcing capabilities. Effects of periodic manufacturing realignments and cost savings programs could result in a decrease in our near-term earnings until the expected cost reductions are achieved or may not result in expected cost savings at all. Such programs may include the consolidation and integration of facilities, functions, systems and procedures. Certain products may also be shifted from one manufacturing or assembly facility to another. Such actions may not be accomplished as quickly as anticipated and the expected cost reductions may not be achieved, either of which would harm our profitability.

Increases in the cost of labor, union organizing activity, and work stoppages at our facilities or the facilities of our suppliers could materially affect our financial performance.

Our business is labor intensive, and, as a result, our financial performance is affected by the availability of qualified personnel and the cost of labor. Currently, none of our employees are represented by labor unions. Strikes or other types of conflicts with personnel could arise or we may become a target for union organizing activity. Some of our direct and indirect suppliers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these suppliers could result in slowdowns or closures of facilities where components of our products are manufactured. In addition, organizations responsible for shipping our products may be impacted by occasional strikes staged by the Teamsters Union. Any interruption in the production or delivery of our products could reduce sales of our products and increase our costs.

We could face potential product liability claims relating to products we manufacture or distribute which could result in significant costs and liabilities, which would reduce our profitability.

We face an inherent business risk of exposure to product liability claims in the event that the use of any of our products results in personal injury or property damage. In the event that any of our products prove to be defective, we may be required to recall or redesign such products, which would result in significant unexpected costs. Any insurance we maintain may not be available on terms acceptable to us or such coverage may not be adequate for liabilities actually incurred. Further, any claim or product recall could result in adverse publicity against us, which could adversely affect our sales or increase our costs.

We are dependent on certain key personnel, the loss of whom could materially affect our financial performance and prospects.

Our continued success depends to a large extent upon the continued services of our senior management and certain key employees. Our chief executive officer, Mark Buller, has over 19 years of experience in the cabinetry industry. Our other

10

senior executives have an average of over 20 years experience in the building product industry. The loss of the experience and services of any of these individuals could have a material adverse effect on our revenue, our financial performance and our results of operations.

If we cannot adequately protect our intellectual property rights we may lose exclusivity in our brand, which could reduce our sales and revenue.

As a company that manufactures and markets consumer products, we rely heavily on trademarks and copyrights to protect our cabinetry brands. We believe that brand recognition is one of several important factors in a consumer’s choice of cabinetry. Current protections may not adequately safeguard our intellectual property and we may incur significant costs to defend our intellectual property rights, which may harm our operating results. Although we are not aware that any of our intellectual property rights infringes upon the proprietary rights of third parties, third parties may make such claims in the future. Any infringement claims, whether with or without merit, could be time-consuming, result in costly litigation or damages, undermine the exclusivity and value of our brands, decrease sales or require us to enter into royalty or licensing agreements that may not be on terms acceptable to us.

We may in the future acquire related businesses, which we may not be able to successfully integrate, in which case we may be unable to recoup our investment in those acquisitions.

We may, from time to time, explore opportunities to acquire related businesses, some of which could be material to us. As of the date of this report, we have no agreements and are not in any discussions to acquire any material businesses or assets. If we do make acquisitions in the future, our ability to continue to grow will depend upon effectively integrating these acquired companies, achieving cost efficiencies and managing these businesses as part of our company. While we believe we have successfully integrated the two operations we have acquired within the last seven years, we may not be able to effectively integrate newly acquired companies or successfully implement appropriate operational, financial and management systems and controls to achieve the benefits expected to result from these acquisitions. If we are unable to successfully integrate acquisitions we may not be able to recoup our investment in those acquisitions. Our efforts to integrate these businesses could be affected by a number of factors beyond our control, such as general economic conditions and increased competition. In addition, the process of integrating these businesses could cause the interruption of, or loss of momentum in, the activities of our existing business. The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of these businesses could negatively impact our business and results of operations. Further, the economic benefits that we anticipate from these acquisitions may not develop.

Changes in consumer preferences for cabinet designs and configurations, and our failure to respond to such changes, could adversely affect demand for our product and our results of operations.

The cabinetry industry in general is subject to changing consumer trends, demands and preferences. Our continued success depends largely on the introduction and acceptance by our customers of new product lines that respond to such trends, demands and preferences. Our organic growth has been driven in part by our frequent new product introductions. We may not be able to successfully develop and design new brands. Trends within the industry change often and our failure to anticipate, identify or react to changes in these trends could lead to, among other things, rejection of a new product line, reduced demand and price reductions for our products, and could adversely affect our sales.

In the event of consolidation of our dealers, through whom we primarily sell our products, pressure may be put on our operating margins, which could harm our profitability.

If our dealer base were to consolidate, competition for the business of fewer dealers would intensify. If we do not provide product offerings and price points that meet the needs of our dealers, or if we lose a substantial amount of our dealer base, our profitability could decrease.

We are controlled by our principal equity holders, which have the power to take unilateral action that could be adverse to the interests of holders of the notes.

Investors controlled by SKM Equity Fund III, L.P. and Trimaran Fund II, L.L.C., through their control of our general partner, control our affairs and policies. Circumstances may occur in which the interests of these equity holders could be in conflict with the interests of the holders of the notes. In addition, these equity holders may have an interest in pursuing acquisitions, divestitures or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to holders of the notes. See Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Equity Holder Matters” and Item 13 “Certain Relationships and Related Transactions, and Director Independence.”

11

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease our executive offices located in Eagan, Minnesota. We own six separate manufacturing facilities, four of which manufacture Mid Continent cabinets, one of which manufactures UltraCraft cabinets, and one of which manufactures StarMark, Fieldstone and Brookwood cabinets. In addition, we lease eight other non-retail facilities which are used for service and distribution functions and storage. Finally, we lease two and own three retail stores that are engaged in the retail distribution of our products and other non-cabinet products of other industry participants.

Each of our facilities, by function and division, is set forth in the table below:

Location	Owned/ Leased	Approximate Square Footage	Function
Eagan, Minnesota	Leased	17,708	Headquarters
Cottonwood, Minnesota	Owned	210,000	Manufacturing—Mid Continent
Winnipeg, Manitoba	Owned	54,000	Manufacturing—Mid Continent
Lynchburg, Virginia	Owned	147,600	Manufacturing—Mid Continent
Newton, Kansas	Owned	268,600	Manufacturing—Mid Continent
Liberty, North Carolina	Owned	214,600	Manufacturing—UltraCraft
Sioux Falls, South Dakota	Owned	233,000	Manufacturing—StarMark
Livermore, California	Leased	30,500	Distribution/Service Center
Tampa, Florida	Leased	41,300	Distribution/Service Center
Gilbert, Arizona	Leased	31,500	Distribution/Service Center
Vista, California	Leased	25,900	Distribution/Service Center
Liberty, North Carolina	Leased	15,000	Warehouse
Newton, Kansas	Leased	44,000	Warehouse
Staley, North Carolina	Leased	21,900	Warehouse
Lynchburg, Virginia	Leased	1,875	Warehouse
Brandon, Florida	Leased	3,000	Kitchen and Bath Ideas Retail Store
Clearwater, Florida	Leased	1,600	Kitchen and Bath Ideas Retail Store
Colorado Springs, Colorado	Owned	21,500	Kitchen and Bath Ideas Retail Store
Lynchburg, Virginia	Owned	5,000	Kitchen and Bath Ideas Retail Store
Sioux Falls, South Dakota	Owned	4,000	Kitchen and Bath Ideas Retail Store

Item 3. Legal Proceedings

During the ordinary course of business, we have become and may in the future become subject to pending and threatened legal actions and proceedings. All of the current legal actions and proceedings that we are a party to are of an ordinary or routine nature incidental to our operations, the resolution of which should not have a material adverse effect on our financial condition, results of operations or cash flows. We are not currently a party to any product liability claims. The majority of the pending legal proceedings involve claims for workers compensation. These claims are generally covered by insurance, but there can be no assurance that our insurance coverage will be adequate to cover any such liability.

Item 4. Submission of Matters to a Vote of Security Holders

None.

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PART II

Item 5. Market for Registrants’ Common Equity, Related Equity Holder Matters and Issuer Purchases of Equity Securities

Neither Holdings nor Norcraft has publicly traded stock. Holdings indirectly owns all of the outstanding equity interests in Norcraft. There are approximately 35 holders of equity interests in Holdings. Holdings made distributions to its members of approximately $36.5 million and $80.0 million in 2006 and 2004, respectively.

Norcraft may make distributions to Holdings, subject to certain limitations to permit it to make further distributions to its equity holders to pay taxes on our net income allocated to them. Tax distributions for the years ended December 31, 2006 and 2005 were $15.3 million and $9.9 million, respectively.

Item 6. Selected Financial Data

The selected data presented below is derived from our audited financial statements, which are included elsewhere in this report.

	Norcraft Holdings L.P.
(dollar amounts in thousands)	For the Period October 21 through December 31,		Fiscal Year Ended December 31,
	2003		2004			2005		2006
Statement of Operations Data:
Net sales	$	52,777	$	330,275		$	404,639	$	440,478
Cost of sales		36,341		227,433			282,541		300,764
Gross profit		16,436		102,842			122,098		139,714
Selling, general and administrative expense		10,168		58,244			64,874		75,919
Other		—		—			—		—
Income from operations		6,268		44,598			57,224		63,795
Interest expense, net		3,217		18,815			23,208		22,654
Amortization of deferred financing costs		391		2,714			4,127		1,498
Other, net		610		(58	)		220		150
Total other expense		4,218		21,471			27,555		24,302
Income from continuing operations		2,050		23,127			29,669		39,493
Net income	$	2,050	$	23,127		$	29,669	$	39,493
Other Financial Data:
Ratio of earnings to fixed charges (2)		1.6x		2.0x			2.1x		2.6x

	(dollar amounts in thousands)
	December 31,
	2003		2004		2005		2006
Balance Sheet Data:
Total assets	$	356,842	$	369,992	$	372,157	$	368,802
Total debt		195,000		263,752		241,567		256,590
Members’ equity subject to put request		22,354		26,377		46,094		48,835
Members’ equity		109,409		52,676		51,476		31,248

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	Norcraft Companies, L.P.
	Predecessor				Successor
	Fiscal Year Ended December 31,		For the Period January 1, 2003 through October 20,		For the Period October 21 through December 31,		Fiscal Year Ended December 31,
(dollar amounts in thousands)	2002		2003		2003		2004			2005		2006
Statement of Operations Data:
Net sales	$	203,860	$	203,899	$	52,777	$	330,275		$	404,639	$	440,478
Cost of sales		141,705		135,918		36,341		227,433			282,541		300,764
Gross profit		62,155		67,981		16,436		102,842			122,098		139,714
Selling, general and administrative expense		36,031		37,721		10,168		58,244			64,874		75,919
Other		—		4,127		—		—			—		—
Income from operations		26,124		26,133		6,268		44,598			57,224		63,795
Interest expense, net		2,574		1,422		3,217		15,897			14,893		13,370
Amortization of deferred financing costs		301		267		391		2,589			3,772		1,108
Other, net		641		638		610		(58	)		220		150
Total other expense		3,516		2,327		4,218		18,428			18,885		14,628
Income from continuing operations		22,608		23,806		2,050		26,170			38,339		49,167
Net income	$	22,608	$	23,806	$	2,050	$	26,170		$	38,339	$	49,167
Other Financial Data:
Ratio of earnings to fixed charges (2)		8.2x		12.8x		1.6x		2.4x			3.0x		4.2x

	(dollar amounts in thousands)
	December 31,
	2002(1)		2003		2004		2005		2006
Balance Sheet Data:
Total assets	$	103,940	$	356,842	$	366,585	$	369,105	$	366,250
Total debt		24,749		195,000		180,500		150,000		150,000
Members’ equity		53,959		131,763		158,898		186,085		184,121

(1) Predecessor company.

(2) For purposes of determining the ratio of earnings to fixed charges, earnings consist of net income before fixed charges. Fixed charges consist of interest expense, net on indebtedness, the amortization of deferred debt issuance costs, and the interest portion of our rent expense (assumed to be one-third of total rent expense).

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Uncertainty of Forward Looking Statements and Information

This report contains “forward looking statements.” All statements other than statements of historical acts included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward looking statements. Forward looking statements give our current expectations and projections relating to the financial condition, results of operations, plans, objectives, future performance and business of our company. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.

These forward looking statements are based on our expectations and beliefs concerning future events affecting us. They are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Although we believe that the expectations reflected in our forward looking statements are reasonable, we do not know whether our expectations will prove correct. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in our discussion in this report, including the risks outlined under “Risk Factors,” will be important in determining future results.

14

Because of these factors, we caution that investors should not place undue reliance on any of our forward looking statements. Further, any forward looking statement speaks only as of the date on which it is made and except as required by law we undertake no obligation to update any forward looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Company Overview

The following discussion of our financial condition and results of operations should be read together with the consolidated financial statements and the accompanying notes included elsewhere in this annual report.

All of our operations are conducted through Norcraft which is an indirect wholly-owned subsidiary of Holdings.

Our fiscal year is the calendar year ending December 31. References to “fiscal year” mean the year ending December 31. For example, “fiscal year 2006” or “fiscal 2006” means the period from January 1, 2006 to December 31, 2006.

General

We are a leader in manufacturing, assembling and finishing kitchen and bathroom cabinetry in the United States. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets. Our cabinets are manufactured in both framed and full access construction. We market our products through five brands: Mid Continent Cabinetry, UltraCraft, StarMark, Fieldstone and Brookwood. The Mid Continent and UltraCraft brands correspond to those divisions, while the StarMark, Fieldstone and Brookwood brands correspond to the StarMark division.

The Company’s revenue increased 8.9% for the year ended December 31, 2006 as compared to the year ended December 31, 2005. Revenue increases were due to Norcraft’s ability to offer a wide range of quality products and deliver those products on time. Net income increased 33.1% for Holdings, and 28.2% for Norcraft for the year ended December 31, 2006 as compared to the year ended December 31, 2005, primarily due to the increase in sales, margin improvement and reduction in amortization of deferred financing costs. Holdings interest and amortization of deferred financing expenses fell 11.6% in 2006, as compared to 2005, since the term note was repaid in full in 2005.

Significant events during 2006 include a cash distribution to the holders of Class A and Class B units in Holdings totaling $36.5 million and Holdings’ repurchase of equity interests of two former members. Consideration for these repurchases was in the form of $2.0 million in cash and $5.9 million in unsecured notes payable.

Effective January 1, 2005, Norcraft changed its vacation policy which reduced its employee vacation accrual by approximately $1.7 million as of January 1, 2005 and reduced vacation expense by $1.3 million in cost of sales and $0.4 million in selling, general and administrative expenses in 2005.

FINANCIAL STATEMENT PRESENTATION

Net Sales. Our net sales represent gross sales less deductions taken for sales returns, freight chargebacks and incentive rebate programs. Revenue is recorded upon delivery of product, which represents the point at which ownership transfers to the customer.

Cost of Sales. Our cost of sales is comprised of the cost of raw materials and plant costs such as labor, packaging, utilities and other facility expenses. Dimensioned wood components, wood doors, particle board, thermofoil doors and veneer panels and plywood are the most significant raw materials we purchase. We also classify shipping and handling costs as a component of cost of sales.

Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of salaries, trade promotions, advertising, commissions, amortization of expenses relating to our display cabinets installed at our customers, other marketing costs, general management, insurance, accounting, tax and legal expenses, management fees payable to our principal equity holders and other expenses. We expense advertising costs as incurred.

Other Expenses. Our non-operating expenses consist of interest, amortization of deferred financing costs, and various state and local taxes.

15

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. On an ongoing basis, management evaluates its estimates which are based on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following accounting policies are the most critical to us in that they are important to our financial statements and they require our most difficult, subjective or complex judgments in the preparation of our financial statements.

Allowance for Bad Debts

Our customers operate in the repair and remodeling and new home construction markets and, accordingly, their credit worthiness is affected by cyclical trends and general conditions in those markets. Concentrations of credit risk with respect to trade receivables are limited to some extent by our large number of customers and their geographic dispersion. In 2004, 2005, and 2006, no one customer accounted for more than 9% of net sales. We generally do not require collateral from our customers, but do maintain allowances for the estimated uncollectibility of accounts receivable based on historical experience and specifically identified at-risk accounts. The adequacy of the allowance is evaluated on an ongoing, periodic basis and adjustments are made in the period in which a change in condition occurs.

Inventory

We state inventory at the lower of cost or market using the first-in, first-out (FIFO) method. We make provisions for estimated obsolete or excess inventories. These provisions are based on historical experience, market conditions and other assumptions and judgment by management. Estimated costs to be incurred for such obsolete or excess inventory are recorded in the periods in which those conditions arise.

Goodwill and Identifiable Intangibles

Identifiable intangible assets consist of customer relationships and brand names. The customer relationship intangible asset is being amortized using the straight-line method over its estimated useful life of 15 years. We believe the use of straight-line amortization reflects an appropriate allocation of the cost of the intangible assets to earnings in proportion to the amount of economic benefits obtained by the company in each reporting period.

It is our policy to value intangible assets at the lower of unamortized cost or fair value. Management reviews the valuation and amortization of intangible assets on a periodic basis, taking into consideration any events or circumstances that might result in diminished fair value. We periodically review the estimated useful lives of our identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life.

Brand names, consisting of Mid Continent, UltraCraft, StarMark and Fieldstone, are considered indefinite lived intangible assets. The fair value of indefinite-lived assets is determined, for annual impairment testing, using the royalty savings method, which is a variation of the income approach. The method requires us to make assumptions and estimates about the royalty payments we would incur to use the various brand names. We have had no such impairment of identifiable intangible assets through December 31, 2006.

Goodwill arises principally from business acquisitions. Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Goodwill is tested annually, or as events or circumstances indicate a potential impairment in relation to the estimated fair value. Impairment testing is done at the reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of the reporting unit is based on a discounted future cash flows analysis. We have had no impairment of goodwill through December 31, 2006.

Product Warranties

We provide warranties for our products for a period ranging from three years to a lifetime warranty. Estimated costs to be incurred for such warranties are provided in the period of sale. These reserves are based on historical experience, market conditions and other assumptions and judgment by management.

Management Incentive Plan

Prior to January 1, 2006, we accounted for stock-based compensation using the minimum value method prescribed in Statement of Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.” On January 1, 2006,

16

we adopted SFAS No. 123 (Revised 2004) Share-Based Payments (“SFAS No. 123R”), using the prospective transition method, which requires the application of the accounting standard on the first day of our fiscal year 2006 for grants issued or modified subsequent to the date of adoption.

Revenue Recognition

Revenue is recognized upon delivery of product, which represents the point at which ownership transfers to the customer.

Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement clarifies the definition of fair value, establishes a framework for measuring fair value and expands disclosures on fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS 157 is not expected to materially impact the Company’s financial statements.

Results of Operations

The following table outlines for the periods indicated, selected operating data as a percentage of net sales.

	Norcraft Holdings, L.P.
	Year Ended December 31,
	2006		2005		2004
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	68.3	%	69.8	%	68.9	%
Gross profit	31.7	%	30.2	%	31.1	%
Selling, general and administrative expenses	17.2	%	16.1	%	17.6	%
Other	—		—		—
Income from operations	14.5	%	14.1	%	13.5	%
Interest expense, net	5.2	%	5.7	%	5.7	%
Amortization of deferred financing costs	0.3	%	1.0	%	0.8	%
Other, net	—		0.1	%	—
Net income	9.0	%	7.3	%	7.0	%

	Norcraft Companies, L.P.
	Year Ended December 31,
	2006		2005		2004
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	68.3	%	69.8	%	68.9	%
Gross profit	31.7	%	30.2	%	31.1	%
Selling, general and administrative expenses	17.2	%	16.1	%	17.6	%
	—		—		—
Income from operations	14.5	%	14.1	%	13.5	%
Interest expense, net	3.0	%	3.6	%	4.8	%
Amortization of deferred financing costs	0.3	%	0.9	%	0.8	%
Other, net	—		0.1	%	—
Net income	11.2	%	9.5	%	7.9	%

17

Year Ended December 31, 2006 Compared with Year Ended December 31, 2005

Net Sales. Net sales increased by $35.9 million, or 8.9%, from $404.6 million for the year ended December 31, 2005 to $440.5 million for the year ended December 31, 2006. Each division contributed to the strong growth in sales with Mid Continent representing over half of the overall increase in net sales, StarMark representing under half of the increase and UltraCraft which was slightly higher than prior year. Norcraft has been able to increase sales because of our ability to deliver innovative, quality products on time. During the year, we implemented price increases which contributed approximately 4.0% of the total increase in sales.

Cost of Sales. Cost of sales increased by $18.3 million, or 6.4% from $282.5 million for the year ended December 31, 2005 to $300.8 million for same period of 2006. The increase was primarily attributable to our increased sales volume. Cost of sales as a percentage of net sales decreased from 69.8% for the year ended December 31, 2005 to 68.3% for the same period of 2006. This decrease is due to production efficiencies.

Gross Profit. Gross profit increased by $17.6 million, or 14.4%, from $122.1 million for the year ended December 31, 2005 to $139.7 million for the year ended December 31, 2006. Gross profit as a percentage of net sales increased from 30.2% for the year ended December 31, 2005 to 31.7% for 2006. Gross profit was positively impacted by production efficiencies and an increase in average selling price. Additionally, fiscal 2005 had the benefit from the change in vacation policy which impacted results as described above.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $11.0 million, or 17.0%, from $64.9 million for the year ended December 31, 2005 to $75.9 million for the same period of 2006. Selling, general and administrative expenses were $7.4 million higher than the prior year because of increased sales and marketing expense to generate new customers, market our new products and support our increased sales volume. The remaining increase in selling, general and administrative expenses was in administrative costs that indirectly support our increased sales volume. Selling, general and administrative expenses as a percentage of net sales increased from 16.1% for the year ended December 31, 2005 to 17.2% for the same period of 2006. Additionally, fiscal 2005 had the benefit from the change in vacation policy which impacted results as described above.

Income from Operations. Income from operations increased by $6.6 million, or 11.5%, from $57.2 million for the year ended December 31, 2005 to $63.8 million for fiscal 2006. The increase in income from operations was a result of factors described above. Income from operations as a percentage of net sales increased from 14.1% for the year ended December 31, 2005 to 14.5% for fiscal 2006.

Interest, Amortization of Deferred Financing fees, and Other Expenses. Holdings’ consolidated net interest, amortization of deferred financing fees, and other expenses decreased $3.3 million, or 11.8%, from $27.6 million for the year ended December 31, 2005 to $24.3 million for fiscal 2006. Net interest expense decreased $0.6 million from decreased indebtedness and higher average cash balances, due to the early payment of the term loan in 2005. The average debt balance was $249.1 million and $252.7 during the years ended December 31, 2006 and 2005, respectively. The average borrowing rate on the term note payable to the agent bank was 6.6% during the year ended December 31, 2005. The borrowing rates on the Senior Subordinated Notes and the Senior Discount Notes are fixed at 9.0% and 9.75%, respectively. The borrowing rate on the unsecured notes used to repurchase the equity interest of two former members is 8.45%. Amortization of deferred financing charges decreased $2.6 million compared to the year ended December 31, 2005, due to the accelerated pay-down of the term note in 2005. Net interest, amortization of deferred financing fees, and other expenses as a percentage of net sales decreased from 6.8% for the year ended December 31, 2005 to 5.5% for fiscal 2006.

Interest, amortization of deferred financing fees, and other expenses for Norcraft decreased $4.3 million, or 22.5%, from $18.9 million for the year ended December 31, 2005 to $14.6 million for fiscal 2006. Interest, amortization of deferred financing fees, and other expenses as a percentage of net sales decreased from 4.6% for the year ended December 31, 2005 to 3.3% for fiscal 2006.

Net Income. Holdings’ net income increased by $9.8 million, or 33.1%, from $29.7 million for the year ended December 31, 2005 compared with $39.5 million for fiscal 2006, for the reasons described above. Net income as a percentage of net sales for Holdings increased from 7.3% for the year ended December 31, 2005 to 9.0% for 2006.

Norcraft’s net income increased by $10.8 million, or 28.2%, from $38.3 million for the year ended December 31, 2005, compared with $49.1 million for fiscal 2006, for the reasons described above. Net income as a percentage of net sales for Norcraft increased from 9.5% for the year ended December 31, 2005 to 11.2% for fiscal 2006.

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Year Ended December 31, 2005 Compared with Year Ended December 31, 2004

Net Sales. Net sales increased by $74.3 million, or 22.5%, from $330.3 million for the year ended December 31, 2004 to $404.6 million for the year ended December 31, 2005. Each division contributed to the strong growth in sales with Mid Continent representing approximately half of the overall increase in net sales, StarMark representing approximately one-third of the increase and UltraCraft making up the remainder. As the housing market grows, Norcraft has been able to capture a larger share of the market in each division, due to our ability to deliver innovative, quality products on time. During the year, we implemented price increases which contributed approximately 3.5% of the total increase in sales.

Cost of Sales. Cost of sales increased by $55.1 million, or 24.2% from $227.4 million for the year ended December 31, 2004 to $282.5 million for same period of 2005. The increase was primarily attributable to our increased sales volume. Cost of sales as a percentage of net sales increased from 68.9% for the year ended December 31, 2004 to 69.8% for the same period of 2005.

Gross Profit. Gross profit increased by $19.3 million, or 18.7%, from $102.8 million for the year ended December 31, 2004 to $122.1 million for the year ended December 31, 2005. Gross profit as a percentage of net sales decreased from 31.1% for the year ended December 31, 2004 to 30.2% for 2005. Gross profit was impacted by a number of offsetting factors. The Company changed its vacation policy which impacted results as described above. Second, gross profit was negatively impacted by increased freight costs and production inefficiencies. Additionally, Norcraft experienced material cost increases from suppliers in 2004. To offset the impact of these cost increases, Norcraft introduced price increases to customers in the last half of 2004 and first quarter of 2005. The full impact of these price increases was realized as 2005 progressed. We continue to adjust our production schedule to improve the production inefficiencies.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $6.7 million, or 11.4%, from $58.2 million for the year ended December 31, 2004 to $64.9 million for the same period of 2005. Selling, general and administrative expenses were impacted by a number of offsetting factors. The Company changed its vacation policy which impacted results as described above. Selling, general and administrative expenses were $4.1 million higher than the prior-year period because of increased sales and marketing expense to generate new customers, market our new products, and support our increased sales volume. The remaining increase in selling, general and administrative expenses was in administrative costs that indirectly support our increased sales volume. Selling, general and administrative expenses as a percentage of net sales decreased from 17.6% for the year ended December 31, 2004 to 16.1% for the same period of 2005.

Income from Operations. Income from operations increased by $12.6 million, or 28.3%, from $44.6 million for the year ended December 31, 2004 to $57.2 million for 2005. The increase in income from operations was a result of factors described above, including the increase in net sales and gross profit which outpaced the increase in selling, general and administrative expenses. Income from operations as a percentage of net sales increased from 13.5% for the year ended December 31, 2004 to 14.1% for fiscal 2005.

Interest, Amortization of Deferred Financing fees, and Other Expenses. Holdings’ consolidated interest, amortization of deferred financing fees, and other expenses increased $6.1 million, or 28.3%, from $21.5 million for the year ended December 31, 2004 to $27.6 million for fiscal 2005. Interest expense increased $4.4 million from increased indebtedness, as a result of the issuance of the Senior Discount Notes in August of 2004. The average debt balance was $252.7 million and $226.9 during the years ended December 31, 2005 and 2004, respectively. The average borrowing rate on the term note payable to the agent bank was 6.6% and 4.6% during the year ended December 31, 2005 and 2004, respectively. The borrowing rates on the Senior Subordinated Notes and the Senior Discount Notes are fixed at 9.0% and 9.75%, respectively. Amortization of deferred financing charges increased $1.4 million during the year ended December 31, 2005 and compared to the year ended December 31, 2004, due to the accelerated pay-down of the term note. Interest, amortization of deferred financing fees, and other expenses as a percentage of net sales increased from 6.5% for the year ended December 31, 2004 to 6.8% for fiscal 2005.

Interest, amortization of deferred financing fees, and other expenses for Norcraft increased $0.5 million, or 2.5%, from $18.4 million for the year ended December 31, 2004 to $18.9 million for fiscal 2005. Interest, amortization of deferred financing fees, and other expenses as a percentage of net sales decreased from 5.6% for the year ended December 31, 2004 to 4.6% for fiscal 2005.

Net Income. Holdings’ net income increased by $6.6 million, or 28.3%, from $23.1 million for the year ended December 31, 2004 compared with $29.7 million for fiscal 2005, for the reasons described above. Net income as a percentage of net sales for Holdings increased from 7.0% for the year ended December 31, 2004 to 7.3% for 2005.

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Norcraft’s net income increased by $12.1 million, or 46.5%, from $26.2 million for the year ended December 31, 2004, compared with $38.3 million for fiscal 2005, for the reasons described above. Net income as a percentage of net sales for Norcraft increased from 7.9% for the year ended December 31, 2004 to 9.5% for fiscal 2005.

Liquidity and Capital Resources

Cash Flows

Our primary cash needs are working capital, capital expenditures, display cabinets, tax distributions, and debt service. We finance these cash requirements through internally-generated cash flow and, if necessary, funds borrowed under our senior credit facility.

Cash provided by operating activities of Holdings was $70.4 million for the year ended December 31, 2006, compared with $53.2 million for fiscal 2005, an increase of $17.2 million. The increase was primarily due to the increase in net income of $9.8 million. This was complimented by the change in operating assets of $9.4 million offset by the change in operating liabilities of $2.4 million.

Cash provided by operating activities of Norcraft was $70.5 million for the year ended December 31, 2006, compared with $53.2 million for fiscal 2005, an increase of $17.3 million. The increase was primarily due to the increase in net income of $10.8 million. This was complimented by the change in operating assets of $9.4 million offset by the change in operating liabilities of $2.4 million. Additionally, in the fourth quarter of 2006, there was a $0.1 million item which resulted in a difference in the cash balance between Holdings and Norcraft due to the timing of a cash transfer.

Cash used in investing activities was $12.7 million for the years ended December 31, 2006 and 2005. Capital expenditures were $6.7 million for the year ended December 31, 2006 compared to $6.1 million during fiscal 2005, an increase of $0.6 million. Additionally, additions to display cabinets were $6.1 million and $6.7 million for the years ended December 31, 2006 and 2005, respectively, a decrease of $0.6 million.

Cash used in financing activities was $54.7 million for the year ended December 31, 2006, compared with $40.2 million in fiscal 2005, an increase of $14.5 million. This increased usage was primarily due to distributions to members of $51.8 million in 2006, compared to $9.9 million during 2005, an increase of $41.9 million and a change in book overdrafts payable of $3.3 million. This was offset by payments on the term loan made during fiscal 2005 of $30.5 million to pay off the facility.

Debt Structure

On October 21, 2003, concurrent with the Acquisition, Norcraft Companies, L.P. entered into a $70.0 million senior credit facility with third parties for up to $25.0 million in available revolving funds and a $45.0 million term loan with an original maturity of October 21, 2008 (the “Original Agreement”). Advance debt payments were made on this term loan, and it was repaid in full during 2005.

On May 2, 2006, the Company entered into an amended and restated credit facility with the same parties as the Original Agreement. The amendment increased the revolving credit facility to $60.0 million, removed the term loan facility, modified the interest rate and changed certain covenants as described further below.

Borrowings under the amended revolving credit facility are available until its maturity for use for general corporate purposes, including acquisitions of assets and capital stock of other companies, to the extent permitted by the amendment. The amended revolving credit facility matures on May 2, 2011 and has no scheduled amortization or commitment reductions.

Borrowings under the amended revolving credit facility bear interest at a variable interest rate based on either LIBOR or the prime rate plus an applicable margin of 1.75% and 0.75%, respectively. The margin is based on the leverage ratio of the Company. Commitment fees of 0.375% of any unused commitments are due quarterly.

The amended senior credit facility contains covenants which, among other things, limit: (i) additional indebtedness; (ii) dividends; (iii) capital expenditures and (iv) acquisitions, mergers and consolidations. Indebtedness under the amended senior credit facility is secured by substantially all of Norcraft’s assets, including its real and personal property, inventory, accounts receivable, intellectual property and other intangibles. In addition, the amended senior credit facility is guaranteed by Intermediate Holdings and secured by its assets (including Norcraft’s equity interests), as well as guaranteed by and secured by the equity interests and substantially all of the assets of Norcraft’s subsidiaries.

The amended senior credit facility also contains customary events of default, and upon the occurrence of such events of default, the outstanding obligations may be accelerated and become due and payable immediately.

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Additionally, the terms of the indenture governing the senior credit facility limit the Company’s ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions.

The facility also contains certain financial covenants, including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. The Company was in compliance with these financial covenants at December 31, 2006.

Approximately $5.4 million of letters of credit were outstanding at December 31, 2006. The total available under the senior credit facility, which is reduced by any outstanding letters of credit, was $54.6 million at December 31, 2006 as per the amended agreement.

Approximately $5.0 million of letters of credit were outstanding at December 31, 2005. The total available credit under the revolver at December 31, 2005 was $20.0 million. No amounts were outstanding under the senior credit facility at December 31, 2005.

On October 21, 2003, Norcraft and Norcraft Finance Corp., a 100% owned finance subsidiary of Norcraft, issued, on a joint and several basis, $150 million, 9% senior subordinated notes due in 2011 (the “Senior Subordinated Notes”). Norcraft Finance Corp. was formed on September 26, 2003 and has no operations. Interest accrues on the Senior Subordinated Notes and is payable semiannually on May 1 and November 1 of each year, commencing May 1, 2004 at a rate of 9% per annum. The Senior Subordinated Notes are subordinated to all existing and future senior debt, including indebtedness under the senior credit facility.

Subsequent to November 1, 2007, Norcraft has the option to redeem the notes, in whole or part, at a redemption price equal to 100% of the principal amount plus a premium declining ratably to par, plus accrued and unpaid interest.

If Norcraft experiences a change of control prior to November 1, 2007, we may redeem all, but not less than all, of the Senior Subordinated Notes at a redemption price equal to 100% of the principal amount plus a make-whole premium as defined.

If Norcraft experiences a change of control subsequent to November 1, 2007, we may be required to offer to purchase the Senior Subordinated Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.

Additionally, the terms of the indenture governing the Senior Subordinated Notes limit the Company’s ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions.

The indenture also contains certain financial covenants including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. Norcraft was in compliance with these financial covenants at December 31, 2006.

On August 17, 2004, Holdings and Norcraft Capital Corp., a 100% owned finance subsidiary of Holdings, issued, on a joint and several basis, $118.0 million aggregate principal amount at maturity ($80.3 million gross proceeds) of 9 3/4% Senior Discount Notes due 2012. The net proceeds of this offering were used to make a distribution to Holdings’ limited partners. Norcraft Capital Corp. was formed on August 12, 2004 and has no operations. Interest accrues on the Senior Discount Notes in the form of an increase in the accreted value of the note prior to September 1, 2008. Thereafter, cash interest on the Senior Discount Notes will accrue and be payable semiannually in arrears on March 1 and September 1 of each year, commencing March 1, 2009 at a rate of 9 3/4% per annum. Holdings has no independent operating assets or liabilities other than its investment in Norcraft.

At any time on or after September 1, 2008, Holdings may redeem the Senior Discount Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a premium, declining ratably to par, plus accrued and unpaid interest. At any time on or prior to September 1, 2007, Holdings’ may redeem up to 35% of the aggregate accreted value of the Senior Discount Notes with the proceeds of qualified equity offerings at a redemption price equal to 109.75% of the accreted value.

If Holdings experiences a change in control prior to September 1, 2008, it may redeem all, but not less than all, of the Senior Discount Notes at a purchase price equal to 100% of the accreted value plus a make-whole premium as defined.

If Holdings experiences a change in control prior to September 1, 2008, it may be required to offer to purchase the Senior Discount Notes at a purchase price equal to 101% of the accreted value plus accrued and unpaid interest. Additionally, the terms of the indenture governing the Senior Discount Notes limit Holdings’ ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions. The indenture also contains certain financial covenants including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. Holdings was in compliance with these financial covenants at December 31, 2006.

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Norcraft’s senior credit facility and the indenture governing the Senior Subordinated Notes each contain restrictions on Norcraft’s ability to pay dividends and make certain other payments to Holdings. Pursuant to each arrangement, Norcraft may be subject to certain limitations, including with respect to its ability to pay dividends or make such payments in connection with (i) repurchases of certain interests of Holdings, (ii) the payment by Holdings of taxes, costs and other expenses required to maintain its legal existence and legal, accounting and other overhead costs in the ordinary course of business and (iii) permitted income tax distributions by Holdings to its limited partners.

We anticipate that the funds generated by operations and funds available under our new amended revolving credit facility will be sufficient to meet working capital requirements, make required member tax distributions, and to finance capital expenditures over the next several years. There can be no assurance, however, that our business will generate sufficient cash flow from operations, that anticipated net sales growth and operating improvements will be realized or that future borrowings will be available under our senior credit facility in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs.

CONTRACTUAL OBLIGATIONS

The following is a summary of our contractual cash obligations as of December 31, 2006, including payments to be made pursuant to the management and monitoring agreement, but excluding borrowings and repayments of revolving loans under our senior credit facility:

	Norcraft Holdings, L.P.
Contractual Obligations	Total		Less Than 1 year		1-2 years		3-5 years		After 5 Years
	(in millions)
Operating leases	$	6.2	$	2.0	$	3.3	$	0.9	$	—
Senior subordinated notes (principal)		150.0		—		—		150.0		—
Senior subordinated notes (interest)		64.1		13.5		27.0		23.6		—
Senior discount notes (principal)		118.0		—		—		118.0		—
Senior discount notes (interest)		46.0		—		11.5		34.5		—
Unsecured notes (principal)		5.9		1.9		2.0		2.0		—
Unsecured notes (interest)		.9		.5		.3		.1		—
Management fees (1)		7.0		1.0		2.0		3.0		1.0
Total contractual cash obligations	$	398.1	$	18.9	$	46.1	$	332.1	$	1.0

	Norcraft Companies, L.P.
Contractual Obligations	Total		Less Than 1 year		1-2 years		3-5 years		After 5 Years
	(in millions)
Operating leases	$	6.2	$	2.0	$	3.3	$	0.9	$	—
Senior subordinated notes (principal)		150.0		—		—		150.0		—
Senior subordinated notes (interest)		64.1		13.5		27.0		23.6		—
Management fees (1)		7.0		1.0		2.0		3.0		1.0
Total contractual cash obligations	$	227.3	$	16.5	$	32.3	$	177.5	$	1.0

(1) In connection with the Acquisition, we entered into a management and monitoring agreement with affiliates of each of SKM Equity Fund III, L.P. and Trimaran Fund II, L.L.C. Pursuant to the management and monitoring agreement, we will pay such affiliate entities an aggregate annual fee of $1.0 million for so long as they maintain certain levels of equity ownership in our parent.

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Taxes; Distributions to our Limited Partners

We are a limited partnership. As such, our income is allocated to our limited partners for inclusion in their respective tax returns. Accordingly, no liability or provision for federal income taxes and deferred income taxes attributable to our operations are included in our financial statements. We are subject to various state and local taxes.

Norcraft’s senior credit facility and the indentures governing the Senior Subordinated Notes significantly restrict Norcraft and its subsidiaries from paying dividends and otherwise transferring assets to Holdings. Norcraft may, however, make distributions to Holdings, subject to certain limitations to permit it to make further distributions to its equity holders to pay taxes on our net income allocated to them. Tax distributions for the years ended December 31, 2006 and 2005 were $15.3 million and $9.9 million, respectively.

On October 4, 2006, The Company made a cash distribution to the holders of its Class A and Class B units in Holdings totaling $36.5 million. In addition, the exercise price of the Class D units in Holdings subject to the management incentive plan was modified (as described in Part IV, Item 15, “Exhibits and Financial Statement Schedules,” Note 7, “Members’ Equity”). There was no significant impact to its financial statements resulting from the modification in exercise price of the Class D units.

Inflation; Seasonality

Our cost of sales is subject to inflationary pressures and price fluctuations of the raw materials we use. We have generally been able over time to recover the effects of inflation and price fluctuations through sales price increases.

Our sales have historically been moderately seasonal and have been strongest in April through October.

Item 7A. Quantitati ve and Qualitative Disclosures About Market Risk

As of December 31, 2006, the Company has a $60.0 million revolving credit facility which has a variable rate of interest and has the potential to expose the Company to fluctuations in the interest rate market. However, as of December 31, 2006, there were no borrowings under this facility. The available credit under this revolver is reduced by any outstanding letters of credit. Approximately $5.4 million of letters of credit were outstanding as of December 31, 2006.

Item 8. Financial Statements and Supple mentary Data

The financial statements required by this item are set forth starting on page F-1 and the related financial schedule is set forth on page S-1.

Item 9. Changes in and Di sagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2006 to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control over Financial Reporting

Holdings’ internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Holdings’ internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in

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the United States of America, and that receipts and expenditures of Holdings’ are being made only in accordance with authorizations of management and directors and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Holdings’ assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers a nd Corporate Governance

Norcraft GP, L.L.C. (“Norcraft GP”) is the general partner of both Norcraft and Holdings. The following table sets forth information about the members of the board of managers of our general partner and our executive officers:

Name	Age	Position(s)
Mark Buller	42	President, Chief Executive Officer and Manager
Kurt Wanninger	46	President, Mid Continent
David Romeo	47	Chief Executive Officer, UltraCraft
John Swedeen	56	President, StarMark
Leigh Ginter	41	Chief Financial Officer
Herb Buller	65	Chairman of the Board of Managers
Jay Bloom	51	Manager
David Kim	40	Manager
Michael Maselli	47	Manager
Christopher Reilly	44	Manager
Sean Britain	31	Manager

Set forth below is a brief description of the business experience of each of the members of the board of managers of our general partner and our executive officers.

Mark Buller became our chief executive officer and a member of our general partner’s board of managers upon consummation of the Acquisition. Mr. Buller has over 19 years of experience in the cabinetry industry and has been a chief executive officer or division president of a cabinet manufacturer during the past nine years. From 1987 to 1996, Mr. Buller served in various management positions at Kitchen Craft Cabinets, a Canadian cabinetry maker. From 1996 to 1999, Mr. Buller was president of Kitchen Craft and following its acquisition by Omega Cabinets, Ltd., Mr. Buller continued as president of Kitchen Craft from 1999 to 2000. Mr. Buller was appointed chief executive officer of Omega in 2000 and remained in that position until 2002, leaving Omega after it was sold to Fortune Brands, Inc.

Kurt Wanninger became president of our Mid Continent division in January of 2006. Mr. Wanninger has over 27 years of manufacturing industry experience, including over 7 years with MasterBrand Cabinets, Inc. While at MasterBrand Cabinets, Mr. Wanninger served as the executive vice president of operations. His responsibilities included the supply chain for this $2.0 billion organization, leading 16 plants and 7,500 employees, producing 30,000 cabinets per day. Prior to Mr. Wanninger’s kitchen cabinet experience, he worked for Electrolux as the general manager of the Poulan Weedeater Division supporting $600.0 million in annual revenue producing gas weedeaters, chain saws and leaf blowers. Prior to joining Electrolux, Mr. Wanninger spent 17 years at a significant supplier to the automotive industry holding various operational positions. Mr. Wanninger received a bachelor’s degree in business administration from Bellevue University and an associate’s degree from Iowa Western in operations management.

David Romeo became chief executive officer of our UltraCraft division in March of 2006. Mr. Romeo has over 26 years of manufacturing industry experience, including 3 years as president of Omega Cabinetry, a division of the former Omega LTD Group. Prior to joining Omega, Mr. Romeo enjoyed a diverse 17 year career with Schneider North America/Square D Company, a $3.0 billion market leader of electrical distribution and industrial control, and held senior management positions including: vice president/controller; vice president of operations, with responsibility for 12 manufacturing facilities in the US, Canada, Mexico, and Ireland; and director of marketing. Mr. Romeo received a bachelor’s degree in accountancy from Northeastern Missouri State University.

John Swedeen joined our company in 2002 when we purchased StarMark. Mr. Swedeen has been in his current role as the president of StarMark since 1998. Prior to joining StarMark, he served as vice president of sales and marketing for Weiser Lock, a subsidiary of Masco Corporation. Prior to joining Masco, he served in various capacities for Ingersoll-Rand Company, most recently as vice president of marketing for its Architectural Hardware Group. Mr. Swedeen received a bachelor’s degree in business administration from Georgia State University and completed an executive education program at Stanford Graduate School of Business.

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Leigh Ginter joined our company in December 1997 as corporate controller and became our chief financial officer upon consummation of the Acquisition. In October 2001, he was appointed our vice president and controller, responsible for overseeing the finances of all of our business divisions as well as monitoring our overall financial performance. Prior to joining our company, Mr. Ginter spent five years as controller for Beckman Produce, an $80 million wholesale produce distributor in St. Paul, Minnesota. Mr. Ginter began his career at Lampert Lumber, serving in a variety of accounting positions during his five years with the company. Mr. Ginter received a bachelor’s degree in accounting from Metropolitan University.

Herb Buller joined our company as chairman of our general partner’s board of managers upon the consummation of the Acquisition. Prior to joining our company, Mr. Buller founded Kitchen Craft Cabinets, a Canadian cabinetry maker, in 1971. Mr. Buller served as chief executive officer of Kitchen Craft until December 2002. Mr. Buller received a bachelor’s degree and a certificate of education from University of Manitoba. He is on the advisory board of Palliser Furniture, and serves on the board of Teen Challenge and Family Life Network.

Jay Bloom joined our company as a member of our general partner’s board of managers upon consummation of the Acquisition. Mr. Bloom is a founder and managing partner of Trimaran Fund Management L.L.C. In addition, he is a member of the board of directors of CIBC World Markets Corp. Prior to joining CIBC World Markets Corp. in 1995, Mr. Bloom was a founder and managing director of the Argosy Group L.P. Mr. Bloom received a bachelor’s degree and a master’s degree in business administration from Cornell University and a juris doctor from Columbia University School of Law. Mr. Bloom currently serves on the board of directors of Educational Services of America, Inc., PrimeCo Wireless Communications L.L.C., Standard Steel, L.L.C., Millennium Digital Media, L.L.C. and Fortunoff, L.L.C.

David Kim joined our company as a member of our general partner’s board of managers upon the consummation of the Acquisition. Mr. Kim is currently a partner at Apax Partners, L.P. and was involved in Apax Partners’ investments in Contech Construction Products, Empire Pacific Windows, Tommy Bahama and RSI Home Products. Before joining Saunders, Karp & Megrue, LLC, a predecessor to Apax Partners, in March 2000, Mr. Kim was a principal with Butler Capital Corporation, a middle market private equity firm. While there, Mr. Kim was involved in Butler Capital’s investments in Omega Cabinets, Ltd., Contech Construction Products and the Beckley-Cardy Group. Prior to Butler Capital, Mr. Kim graduated from the U.S. Army Airborne and Ranger schools and served as an artillery officer. Mr. Kim received a bachelor’s degree, with honors, from West Point and a master’s degree in business administration from Harvard Business School. Mr. Kim currently serves as a member of the boards of Contech Construction Products and Empire Pacific Windows.

Michael Maselli joined our company as a member of our general partner’s board of managers upon consummation of the Acquisition. Mr. Maselli is a managing director of Trimaran Fund Management, L.L.C. Before joining Trimaran in February 2003, Mr. Maselli worked in the Corporate and Leverage Finance Groups of CIBC World Markets. Prior to joining CIBC in 1997, Mr. Maselli served as a managing director in Bear Stearns’ corporate finance group and, prior to that, as a vice president at Kidder Peabody. Mr. Maselli received a bachelor’s degree in economics from the University of Colorado and a master’s degree in business administration, with distinction, from The A.B. Freeman School at Tulane University.

Christopher Reilly joined our company as a member of our general partner’s board of managers upon consummation of the Acquisition. Mr. Reilly is a founding partner at Karp Reilly, LLC. Until recently, he was also a partner at Apax Partners, L.P. Before joining Saunders, Karp & Megrue, LLC, the predecessor to Apax Partners, in 1990, Mr. Reilly served in the Merchant Banking and Finance, Administration and Operations Departments of Morgan Stanley & Co. Incorporated. Prior to joining Morgan Stanley, Mr. Reilly spent two years at Bankers Trust. Mr. Reilly received a bachelor’s degree from Providence College and a master’s degree in business administration from New York University’s Leonard N. Stern School of Business. Mr. Reilly serves as a member on the boards of Encompass Home Health, Comark, Inc., S. B. Restaurant Co., Performance, Inc., and Wilshire Pies, Inc.

Sean Britain joined our company as a member of our general partner’s board of managers in November 2005. Mr. Britain is currently a principal at Apax Partners, L.P. Before joining Saunders, Karp & Megrue, LLC, the predecessor to Apax Partners, in 2000, Mr. Britain worked at First Union Securities as an associate in the Private Equity Coverage Group and a financial analyst in the Leveraged Capital Group. Mr. Britain received a bachelor’s degree in business from Wake Forest University. Mr. Britain currently serves as a member on the boards of Bob’s Discount Furniture and Empire Pacific Windows.

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Other than with respect to Herb Buller and Mark Buller, who are father and son, respectively, there are no family relationships among members of our general partner’s board of managers and our executive officers.

Corporate Governance

Our general partner’s board of managers manages our business and affairs as provided by its limited liability company agreement and conducts its business through meetings of the board of managers. Pursuant to the general partner’s limited liability company agreement, each of the representatives of Apax Partners who sit on our general partner’s board of managers, Mr. Reilly, Mr. Kim and Mr. Britain, are each entitled to cast 2.5 votes with respect to each matter which is submitted to a vote before our general partner’s board of managers. Trimaran is entitled to designate two managers, and an entity associated with our Chief Executive Officer, Mark Buller is entitled to designate two managers, each of which will have one vote. As a result, the managers appointed by Apax Partners investors together hold a majority of the votes to be cast on each matter submitted to a vote before our general partner’s board of managers. See Item 13 “Certain Relationships and Related Transactions, and Director Independence—Arrangements with Our Investors.”

Audit Committee

The board of managers of Norcraft GP has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The members of the audit committee are Christopher Reilly, David Kim, and Michael Maselli.

The board of managers of Norcraft GP has not determined whether or not any of its members who serve on the audit committee of the board of managers of Norcraft GP is an “audit committee financial expert” as that term is defined by SEC rules. The board of managers of Norcraft GP has determined, however, that the absence from its audit committee of a person who would qualify as an audit committee financial expert does not impair the ability of its audit committee to provide effective oversight of the Company’s external financial reporting and internal control over financial reporting. Accordingly, the board of managers of Norcraft GP does not intend to add a person to its membership solely for the purpose of adding an audit committee financial expert. In reaching its determination that the members of the audit committee, as it is presently constituted, have sufficient knowledge and experience to exercise effective oversight without the addition of an audit committee financial expert, the board of managers of Norcraft GP considered the knowledge gained by the current members of the audit committee in connection with their prior experience.

Code of Ethics

We have adopted a code of business conduct and ethics for managers, officers (including the principal executive officer and principal financial officer) and employees, known as the “Code of Business Ethics and Conduct”. The Code of Business Ethics and Conduct is available on our website at http://www.norcraftcompanies.com. Interested parties may request a free copy of a Code of Business Ethics and Conduct from:

Norcraft Companies, L.P.

3020 Denmark Avenue, Suite 100

Eagan, MN 55121

Phone: (651)234-3300

Fax: (651)234-3398

E-mail: leigh.ginter@norcraftcompanies.com

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Item 11. Executive Compensation

This compensation discussion describes the material elements of the compensation awarded to, earned by, or paid to our directors and officers who are considered “named executive officers” during our last completed fiscal year. Named executive officers consist of the individual who served as our chief executive officer in 2006, Mark Buller, the individual who served as our chief financial officer in 2006, Leigh Ginter, and the three most-highly compensated individuals serving as executive officers at the end of 2006, Kurt Wanninger, the president of our Mid Continent division, David Romeo, the president of our UltraCraft division, and John Swedeen, the president of our StarMark division. The named executive officers also include Simon Solomon, the former president of our UltraCraft division, since Mr. Solomon would have been one of the three most-highly compensated individuals serving as executive officers at the end of 2006 if Mr. Solomon had still been with our company at that time. Mr. Solomon’s employment was terminated as of August 31, 2006.

Compensation Discussion and Analysis

Compensation Philosophy

Our compensation programs are intended to attract and retain vital employees; motivating and rewarding them for outstanding performance. Some programs are geared towards the short-term, while others are intended to foster long-term performance with the goal of increasing member value over the long term. Executive compensation programs can influence all employees by establishing general compensation levels and creating an atmosphere of goals, rewards and expectations. Because we believe that every employee’s performance is important to our success, we are careful of the effect of executive compensation and incentive programs on all of our employees.

Our Compensation Committee and Compensation Process

The board of managers of Norcraft GP has a separately designated compensation committee composed of three non-employee, independent directors. The committee is responsible for establishing and administering the policies that govern both annual compensation and equity ownership. They review and approve salaries, bonus and incentive compensation, equity compensation, and all other forms of compensation for our named executive officers. The compensation committee is also responsible for reviewing and administering our incentive compensation plans, equity incentive programs and other benefit plans. Currently, the members of our compensation committee are Christopher Reilly, David Kim, and Michael Maselli.

Components of our executive compensation include salary, bonus, equity incentive awards, health insurance, disability and life insurance. Executive base salaries are set by the compensation committee. Our compensation committee also approves and adopts the management incentive plan for the new fiscal year and grants Class D unit awards to all of our executive officers and certain other eligible employees.

The Class D unit awards represent grants of “profits interests” in Holdings pursuant to its incentive plan. These units receive tax distributions based on our net income allocated to them. The Class D awards are subject to time and performance-based vesting set forth in our incentive plan and the individual award certificate (the terms of which are set at the time of grant). Vested Class D units are convertible at the option of the holder into Class A units of Holdings at a price equal to the fair market value of a Class A unit on the date such Class D unit was granted.

We maintain health and dental insurance plans for the benefit of eligible employees, including the named executive officers. Each of these benefit plans requires the employee to pay a portion of the premium, with our company paying the remainder. We also maintain a 401(k) retirement plan that is available to all eligible employees. We currently match elective employee-participant contributions on the basis of 100% of the employee’s contribution up to $300 and a 40% match up to 6% of their total compensation. Life, accidental death and dismemberment and short and long term disability insurance coverage is also offered to all eligible employees and premiums are paid in full by us. We also provide company

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paid travel and living expense benefits, company paid automobiles and severance to eligible employees. Other voluntary benefits, such as supplemental life and accidental death insurance are also made available and paid for by the employee. The foregoing benefits are available to named executive officers on the same basis as all other eligible employees, subject to relevant regulatory requirements.

Our compensation committee performs an annual review of each executive’s complete compensation history over each of the past five years and compares it to the compensation of executives in an appropriate market comparison group. Mark Buller, the chief executive officer makes compensation recommendations to the compensation committee for the executive officers who report to him. These executive officers are not present at the time of these discussions. Herb Buller, the chairman of our board of managers, then makes a compensation recommendation to the compensation committee for Mark Buller, our chief executive officer. As noted above, Herb Buller is Mark Buller’s father. The compensation committee ultimately determines Mark Buller’s compensation and he is not present at the time of these discussions.

We select each component of compensation to attract and retain vital executive talent, reward annual performance and provide incentive for long-term focus on strategic goals. The amount of each component of compensation is determined by or under the control of our compensation committee, which uses the following factors to determine the amount of salary and other benefits to pay each executive:

• performance against corporate and individual goals for the previous year;

• difficulty of achieving desired goals in the coming year;

• value of their unique skills to support long-term performance of the company;

• performance of their general management responsibilities; and

• contribution as a member of the executive management team.

These components of our overall compensation program help to achieve the potential of our operations, growing sales and profitability, providing proper compliance and regulatory guidance, and helping to create a productive team.

Our allocation between current and long-term compensation attempts to ensure adequate base compensation to attract and retain vital personnel, while providing incentives to maximize long-term value for our members. We pay cash base salaries to meet the competition and reward performance on an annual basis in the form of bonus compensation. We provide non-cash compensation to reward superior long-term performance and to improve retention.

In connection with joining our company, Mr. Wanninger and Mr. Romeo executed employment agreements and received Class D unit awards in 2006. Additionally, Mr. Wanninger and Mr. Romeo were given the opportunity to purchase Class A units in Holdings. In recognition of performance, Mr. Ginter received a Class D unit award in 2006. Details of these transactions are contained in the tables that follow.

On October 4, 2006, Holdings made a cash distribution to the holders of its Class A and Class B units in Holdings totaling $36.5 million. This equated to approximately $0.27 per A and B unit. In addition, the exercise price of the Class D units in Holdings, subject to the management incentive plan, was modified. There was no significant impact to our financial statements resulting from the modification in exercise price of the Class D units.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2006, none of the members of our compensation committee was ever an employee or officer of our company. Furthermore, none of our executive officers have ever served as a director or a member of the compensation committee of another entity, one of whose executive officers served in a similar capacity at our company.

Compensation Committee Report

As described above, the current members of the compensation committee are Christopher Reilly, David Kim, and Michael Maselli. Our compensation committee has reviewed and discussed the compensation process described above. Based on its review and discussion of this process, the compensation committee recommended to the board of managers of Norcraft GP that this process be included within this 10-K.

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Specific Executive Compensation Disclosure

Summary Compensation Table

The following table sets forth the compensation earned by our named executive officers in 2006.

	Salary ($)	Bonus ($)	Option Awards ($) (1)	Non-Equity Incentive Plan Compensation Earnings ($)	All Other Compensation ($) (2)		Total ($)
Mark Buller
Chief Executive Officer	386,387	298,945	—	—	4,203,097	(3)	4,888,429
Leigh Ginter
Chief Financial Officer	171,262	135,536	54,323	—	147,607	(4)	508,728
John Swedeen
President, StarMark	237,745	175,016	—	—	188,898	(5)	601,659
Kurt Wanninger
President, Mid Continent	307,693	302,307	813,923	—	44,196	(6)	1,468,119
David Romeo
President, UltraCraft	177,404	20,000	512,225	—	173,522	(7)	883,151
Simon Solomon
Former President, UltraCraft	183,265	—	—	—	6,192,375	(8)	6,375,640

(1) Represents Class D Units of Holdings granted, but not yet fully vested, to our executive officers. All Class D units granted remain subject to time and performance-based vesting. Amounts shown represent the estimated fair value of the Class D units calculated pursuant to SFAS No. 123R. For a full discussion of these calculations, see Part IV, Item 15, “Exhibits and Financial Statement Schedules,” Note 7, “Members’ Equity.”

(2) Amounts shown include (a) company paid life insurance premiums; (b) the matching contributions made to the 401(k) savings plan on behalf of the named executive officer; (c) travel and living expense benefits; (d) automobile; (e) cash payout of equity due to termination of employment; (f) unsecured note payable for payout of equity due to termination of employment; (g) interest paid on note payable due to termination of employment; (h) severance payments; and (i) the October 2006 member distribution as described above.

(3) Includes member distribution of $4,202,707 paid to Buller Norcraft Holdings, L.L.C. which is controlled by Mr. Mark Buller and Mr. Herbert Buller. Additionally, includes $390 of life insurance premiums.

(4) Includes member distribution of $141,437, $5,780 of matching contribution of 401(k) savings plan and $390 of life insurance premiums.

(5) Includes member distribution of $182,208, $6,300 of matching contribution of 401(k) savings plan and $390 of life insurance premiums.

(6) Includes member distribution of $42,652, $1,186 of matching contribution of 401(k) savings plan and $358 of life insurance premiums.

(7) Includes member distribution of $129,733, $26,772 for travel benefits, $12,729 for living expense benefits, $3,996 for automobile and $292 for life insurance premiums.

(8) Includes $4,500,972 for unsecured note payable and $1,500,324 for cash payout of equity due to termination of employment. In exchange for Mr. Solomon’s agreement to maintain confidential information and a non-compete agreement, severance will be paid for a period of eighteen months. Severance paid in 2006 was $83,492. Additionally, includes $107,327 of interest paid on unsecured note payable and $260 for life insurance premiums.

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Grants of Plan-Based Awards

The following table sets forth each grant of an award made to a named executive officer in the last completed fiscal year under any plan.

		Estimated Future Payouts Under Non-Equity Incentive Plan Awards			Estimated Future Payouts Under Equity Incentive Plan Awards
	Grant Date	Threshold ($)	Target ($) (1)	Maximum ($)	Threshold ($)	Target ($)	Maximum ($)	All other Option Awards: Number of Securities Underlying Options (#) (2)	Exercise or Base Price of Option Awards ($ / Sh))	Grant Date Fair Value of Option Awards ($/ Sh)
Mark Buller, Chief Executive Officer
Class D Grants	—	—	—	—	—	—	—	—	—	—
Bonus	—	—	298,945	—	—	—	—	—	—	—
Leigh Ginter, Chief Financial Officer
Class D Grants	3/13/06	—	—	—	—	—	—	78,647	1.82	54,323
Bonus	—	—	135,536	—	—	—	—	—	—	—
John Swedeen, President, StarMark
Class D Grants	—	—	—	—	—	—	—	—	—	—
Bonus	—	—	175,016	—	—	—	—	—	—	—
Kurt Wanninger, President, Mid Continent
Class D Grants	2/14/06	—	—	—	—	—	—	1,054,304	1.74	813,923
Bonus	—	—	227,307	—	—	—	—	—	—	—
David Romeo, President, UltraCraft
Class D Grants	3/13/06	—	—	—	—	—	—	632,089	1.82	512,225
Bonus	—	—	20,000	—	—	—	—	—	—	—
Simon Solomon, Former President, UltraCraft
Class D Grants	—	—	—	—	—	—	—	—	—	—
Bonus	—	—	—	—	—	—	—	—	—	—

(1) Amounts shown represent actual amounts earned under the 2006 annual incentive bonus plan payable in 2007.

(2) Represents Class D units of Holdings granted, but not yet fully vested, to these executive officers during 2006. All Class D units remain subject to time and performance-based vesting. Amounts shown represent the estimated fair value of the Class D units calculated pursuant to SFAS No. 123R. For a full discussion of these calculations, see Part IV, Item 15, “Exhibits and Financial Statement Schedules,” Note 7, “Members’ Equity.”

Management Equity Incentive Plan

Holdings adopted an Amended and Restated Management Incentive Plan in 2003, which we refer to as the incentive plan. The incentive plan provides for the grants of incentive Class D units to selected employees and other persons providing services for us. The purposes of the incentive plan are to attract and retain the best available personnel, provide additional incentives to our employees and promote the success of our business.

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The compensation committee of the board of managers of Norcraft GP administers the incentive plan. The administrator has the sole discretion to grant options to employees and to determine the awards and incentive units granted under the plan. Incentive units may not be transferred other than in accordance with the agreement of limited partnership of Holdings.

Class D unit awards issued under the plan are subject to both time-based and performance-based vesting. The time-based awards generally represent 50% of the Class D units granted to each holder and generally vest in equal increments over a 5 year period, with the first vesting typically to occur at the end of the first fully completed fiscal year after the date of grant. The performance-based awards generally represent 50% of the Class D units granted to each holder and are subject to vesting in equal increments at the end of each year over a five year period if and to the extent we have met certain financial targets established by the Norcraft GP board of managers at the time it establishes the budget for each such year. In connection with a change of control of our company, any time-based awards will be immediately vested and any performance-based awards will be subject to immediate vesting in the event that the return received by certain of our investors as a result of such change of control transaction exceeds a specified amount. The compensation committee has discretion to change these vesting terms at the time it approves a grant of any individual award and otherwise in accordance with the terms of the plan. It further has discretion to accelerate the vesting of any award at any time. Unless otherwise determined by the compensation committee, all vesting of Class D units is contingent upon a participant’s continued employment by us and in the event of a termination of employment, any unvested Class D units are immediately forfeited.

Class D units issued under the incentive plan, to the extent vested, may be converted to Class A units of Holdings at any time by the holder thereof by paying a conversion price which is generally equal to the value of a Class A unit award on the date such Class D unit award was granted. In the alternative, the Class D unit awards may be converted to Class A units through a “cashless exercise” feature set forth in the incentive plan. Upon termination of a participant’s employment other than by us for cause, the incentive plan provides that any vested Class D units must be converted to Class A units of Holdings by the participant within 30 days or such units will terminate and be forfeited. Upon termination of a participant’s employment by us for cause, the incentive plan provides that any vested Class D units will be immediately forfeited.

The incentive plan will terminate in October 2013. The board of managers of Norcraft GP may terminate the incentive plan at any time in its sole discretion. The board of managers of Norcraft GP may amend the incentive plan subject to limited restrictions.

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth the Class D units that have vested and that remain subject to vesting in the future for each of our named executive officers outstanding as of the end of 2006.

	Option Awards (1)
	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)	Option Exercise Price ($)
Mark Buller
Chief Executive Officer	1,742,195	1,161,464	0.17
Leigh Ginter
Chief Financial Officer	197,199	157,682	0.54
John Swedeen
President, StarMark	154,723	103,148	0.17
Kurt Wanninger
President, Mid Continent	210,861	843,444	1.74
David Romeo
President, UltraCraft	126,418	505,672	1.82
Simon Solomon
Former President, UltraCraft	—	—	—

(1) Represents Class D units of Holdings granted, but not yet fully vested, to these executive officers. All Class D units remain subject to time and performance-based vesting. Under the terms of the Plan the Class D units generally begin to vest on the December 31 of the first full year following the date of grant with 50% of the units typically vesting over a 5 year period and 50% vesting over a 5 year period subject to the Company meeting certain performance based criteria in each of those years. Upon vesting, each Class D unit entitles the unit holder the option to purchase one Class A unit in Holdings. All Class D units will be issued with an exercise price equal to the then fair value of Holdings’ Class A units.

Employment Agreements and Arrangements Upon Termination or Change of Control

Arrangements with Mark Buller

Mr. Buller entered into an employment agreement with us on October 21, 2003, the initial term of which expired October 20, 2006. This term was automatically extended for another one-year term, and the employment term will be automatically extended for consecutive one-year periods unless he or Holdings declines to extend the term. Pursuant to his employment agreement, Mr. Buller is entitled to receive $400,000 as his base salary for 2007, with eligibility to receive a bonus of up to 50% of base salary, which bonus will be tied to certain financial performance objectives set by the board of managers of Norcraft GP. Pursuant to his employment agreement, Mr. Buller has, among other things, agreed that (i) he will not disclose any of our trade secrets or confidential information, during and after the term of his employment, (ii) he will assign and disclose to us all intellectual property and proprietary rights developed or reduced to practice that relate to our business, during and for 3 months after the term of his employment, and (iii) he will not compete against us and will not solicit nor hire any of our current employees, regardless of the reason for his termination, during and for two years after the term of his employment.

In the event we terminate Mr. Buller’s employment without cause (as defined in his agreement) or if he terminates his employment for good reason (as defined in his agreement), he will continue to receive his base salary for 18 months following the date of termination. He will also be entitled to receive a pro-rated portion of any bonus accrued for the year in

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which termination occurred (payable when the bonus would have otherwise been paid) and certain other health and welfare benefits in accordance with his agreement. If we had terminated Mr. Buller’s employment without cause or if he had terminated his employment for good reason as of December 31, 2006, Mr. Buller would have been entitled to receive an aggregate $898,945 pursuant to such provisions in his employment agreement (payment of which would be made over time and subject to the provisions of such agreement).

In the event we terminate Mr. Buller’s employment for cause or if he terminates his employment other than for good reason, we are not obligated to provide Mr. Buller any severance other than his accrued and unpaid base salary and certain other health and welfare benefits in accordance with his agreement.

In the event of Mr. Buller’s death or disability, he is entitled to receive his accrued and unpaid base salary, a pro-rated portion of any bonus accrued for the year in which his employment ceased (payable when the bonus would have otherwise been paid) and certain other health and welfare benefits in accordance with his agreement.

Buller Norcraft Holdings, L.L.C., an entity affiliated with Mr. Buller, Herb Buller and certain other members of the Buller family, currently holds 15.5 million Class A units in Holdings, and MEB Norcraft, L.L.C., another entity affiliated with Mr. Buller, currently holds approximately 2.9 million Class D units in Holdings. In connection with any termination of Mr. Buller’s employment, such Class D units will be immediately forfeited. However, in the event that such termination is not by us for cause, immediately prior to such forfeiture, the holder will be entitled to convert each of the vested Class D units held by it to Class A units at a conversion price equal to the fair market value of a Class A unit of Holdings at the time such Class D unit was originally granted. In connection with the recent distribution by Holdings, we adjusted the conversion price for these Class D units to $0.17.

In accordance with the Holdings limited partnership agreement, if Mr. Buller’s employment is terminated by us for cause, Holdings has the option to repurchase all units held by Buller Norcraft Holdings, L.L.C. and all units held by MEB Norcraft, L.L.C. at a purchase price equal to, in the case of units considered to be beneficially held by Mr. Buller, the lower of cost or the fair market value of such units, and in the case of all other such units, the fair market value of such units. If Mr. Buller’s employment is terminated by Mr. Buller other than for good reason, Holdings has the option to repurchase all units held by Buller Norcraft Holdings, L.L.C. at a purchase price equal to the fair market value of such units. If Mr. Buller’s employment is terminated for any reason other than by us for cause, Holdings has the option to repurchase all units held by MEB Norcraft, L.L.C. at a purchase price equal to the fair market value of such units.

In addition, in the event Mr. Buller’s employment is terminated due to his death or a disability, he or his estate may request that Holdings purchase his outstanding interests in Holdings for fair market value. Pursuant to its limited partnership agreement, Holdings agrees to undertake commercially reasonable effectors to purchase such interests, subject to its current financial condition permits, including without limitation the restrictions imposed by its then outstanding debt agreements.

Upon certain corporate events, including a change of control of our company, Buller Norcraft Holdings, L.L.C. is entitled to receive a change of control bonus of up to $4.0 million (pending the company successfully achieving various financial goals and rates of return for certain investors) and have the right to purchase up to 1,478,553.86 additional Class A units for $2.17 per unit and an additional 1,478,553.86 Class A units for $2.67 per unit.

Finally, pursuant to the Holdings limited partnership agreement, Buller Norcraft Holdings, L.L.C. has a right of first offer to purchase our company upon a decision by Norcraft GP’s board of managers to engage in a sale transaction. See Item 13 “Certain Relationships and Related Transactions, and Director Independence - Arrangements with Buller Investors.”

Arrangements with Other Employed Named Executive Managers

Each of Mr. Ginter and Mr. Swedeen entered into an employment agreement with us on October 21, 2003, the initial term of which expired December 31, 2004. Pursuant to each employment agreement, the employment term is automatically extended for consecutive one-year periods unless either Mr. Ginter or Mr. Swedeen, or Holdings declines to extend the term. Mr. Wanninger entered into an employment agreement with us, effective as of January 17, 2006, the initial term of which will expire on December 31, 2007. Mr. Romeo entered into an employment agreement with us on March 13, 2006, the initial term of which expired on December 31, 2006. Pursuant to Mr. Romeo’s employment agreement, the employment term is automatically extended for consecutive one-year periods unless he or Holdings declines to extend the term.

Pursuant to his employment agreement, Mr. Ginter is entitled to receive $200,000, Mr. Swedeen is entitled to receive $252,000, Mr. Wanninger is entitled to receive $365,000 and Mr. Romeo is entitled to receive $225,000, in each case, as such officer’s base salary for 2007, with eligibility to receive a bonus tied to certain financial performance objectives set by the board of managers of Norcraft GP. Pursuant to each employment agreement, each such named executive officer has,

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among other things, agreed that (i) he will not disclose any of our trade secrets or confidential information, during and after the term of his employment; (ii) he will assign and disclose to us all intellectual property and proprietary rights developed or reduced to practice that relate to our business, during and for 3 months after the term of his employment; (iii) he will not compete against us (x) until receipt of his last severance payment in the case of Mr. Ginter or Mr. Swedeen, and (y) for one year following the end of employment in the case of Mr. Wanninger or Mr. Romeo; and (iv) following the end of employment, he will not solicit or hire any of our current employees for (x) one year in the case of Mr. Ginter or Mr. Swedeen and (y) two years in the case of Mr. Wanninger or Mr. Romeo.

In the event we terminate such officer’s employment without cause (as defined in his agreement) or if he terminates his employment for good reason (as defined in his agreement) he will continue to receive, in the case of Mr. Ginter and Mr. Swedeen, his base salary for at least 3 months following the date of termination, and in the case of Mr. Wanninger or Mr. Romeo, his base salary for 1 year following the date of termination, plus, in each case, a pro-rated portion of any bonus accrued for the year in which termination occurred (payable when the bonus would have otherwise been paid) and certain other health and welfare benefits in accordance with his agreement. If we had terminated Mr. Ginter’s employment without cause or if he had terminated his employment for good reason as of December 31, 2006, Mr. Ginter would have been entitled to receive an aggregate $179,286 pursuant to such provisions in his employment agreement (payment of which would be made over time and subject to the provisions of such agreement). If we had terminated Mr. Swedeen’s employment without cause or if he had terminated his employment for good reason as of December 31, 2006, Mr. Swedeen would have been entitled to receive an aggregate $234,891 pursuant to such provisions in his employment agreement (payment of which would be made over time and subject to the provisions of such agreement). If we had terminated Mr. Wanninger’s employment without cause or if he had terminated his employment for good reason as of December 31, 2006, Mr. Wanninger would have been entitled to receive an aggregate $547,307 pursuant to such provisions in his employment agreement (payment of which would be made over time and subject to the provisions of such agreement). If we had terminated Mr. Romeo’s employment without cause or if he had terminated his employment for good reason as of December 31, 2006, Mr. Romeo would have been entitled to receive an aggregate $245,000 pursuant to such provisions in his employment agreement (payment of which would be made over time and subject to the provisions of such agreement).

In the event we terminate either officer’s employment for cause or if he terminates his employment other than for good reason, we are not obligated to provide such officer any severance other than his accrued and unpaid base salary and certain other health and welfare benefits in accordance with his agreement.

In the event of either officer’s death or disability, he is entitled to receive his accrued and unpaid base salary, a pro-rated portion of any bonus accrued for the year in which his employment ceased (payable when the bonus would have otherwise been paid) and certain other health and welfare benefits in accordance with his agreement.

Mr. Ginter currently holds 0.2 million Class A units, 0.4 million Class B units and 0.4 million Class D units in Holdings. In addition, upon certain events (including a change of control or termination of employment), Mr. Ginter is entitled to receive 0.4 million Class C units in Holdings. In connection with any termination of Mr. Ginter’s employment, such Class D units will be immediately forfeited. However, in the event that such termination is not by us for cause, immediately prior to such forfeiture, Mr. Ginter will be entitled to convert each of the vested Class D units held by him to Class A units at a conversion price equal to the fair market value of a Class A unit of Holdings at the time such Class D unit was originally granted. In connection with the recent distribution by Holdings, we adjusted the conversion price for 0.3 million of the Class D units held by Mr. Ginter to $0.17 and the conversion price for the remaining Class D units held by him to $1.82. In accordance with the Holdings limited partnership agreement, if Mr. Ginter’s employment is terminated by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the lower of cost or the fair market value of such units. If Mr. Ginter’s employment is terminated for any reason other than by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the fair market value of such units.

Mr. Swedeen currently holds 0.5 million Class A units, 0.2 million Class B units and 0.3 million Class D units in Holdings. In addition, upon certain events (including a change of control or termination of employment), Mr. Swedeen is entitled to receive 0.2 million Class C units in Holdings. In connection with any termination of Mr. Swedeen’s employment, such Class D units will be immediately forfeited. However, in the event that such termination is not by us for cause, immediately prior to such forfeiture, Mr. Swedeen will be entitled to convert each of the vested Class D units held by him to Class A units at a conversion price equal to the fair market value of a Class A unit of Holdings at the time such Class D unit was originally granted. In connection with the recent distribution by Holdings, we adjusted the conversion price for the Class D units held by Mr. Swedeen to $0.17. In accordance with the Holdings limited partnership agreement, if Mr. Swedeen’s employment is terminated by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the lower of cost or the fair market value of such units. If Mr. Swedeen’s employment is terminated for any reason other than by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the fair market value of such units.

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Mr. Wanninger currently holds 0.2 million Class A units and 1.1 million Class D units in Holdings. In connection with any termination of Mr. Wanninger’s employment, such Class D units will be immediately forfeited. However, in the event that such termination is not by us for cause, immediately prior to such forfeiture, Mr. Wanninger will be entitled to convert each of the vested Class D units held by him to Class A units at a conversion price equal to the fair market value of a Class A unit of Holdings at the time such Class D unit was originally granted. In connection with the recent distribution by Holdings, we adjusted the conversion price for the Class D units held by Mr. Wanninger to $1.74. In accordance with the Holdings limited partnership agreement, if Mr. Wanninger’s employment is terminated by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the lower of cost or the fair market value of such units. If Mr. Wanninger’s employment is terminated for any reason other than by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the fair market value of such units.

Mr. Romeo currently holds 0.5 million Class A units and 0.6 million Class D units in Holdings. In connection with any termination of Mr. Romeo’s employment, such Class D units will be immediately forfeited. However, in the event that such termination is not by us for cause, immediately prior to such forfeiture, Mr. Romeo will be entitled to convert each of the vested Class D units held by him to Class A units at a conversion price equal to the fair market value of a Class A unit of Holdings at the time such Class D unit was originally granted. In connection with the recent distribution by Holdings, we adjusted the conversion price for the Class D units held by Mr. Romeo to $1.82. In accordance with the Holdings limited partnership agreement, if Mr. Romeo’s employment is terminated by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the lower of cost or the fair market value of such units. If Mr. Romeo’s employment is terminated for any reason other than by us for cause, Holdings has the option to repurchase all units held by him at a purchase price equal to the fair market value of such units.

Arrangements with Simon Solomon

Simon Solomon’s employment with us terminated on August 31, 2006. At that time, we entered into a separation agreement with Mr. Solomon pursuant to which we agreed to (i) continue to pay him his regular salary, at his final base rate, for a period of 18 months following his termination date, (ii) pay him a pro-rated portion of the bonus he would have been entitled to had he remained an employee through the year; and (iii) repurchase all of his limited partnership units. The aggregate payments to be made to Mr. Solomon, including the purchase price for his units, pursuant to his separation agreement is equal to $6.0 million, a portion of which has been paid by delivery of an unsecured note. The terms of such note are described in Note 5 “Long-term debt” —Unsecured Notes to our audited financial statements appearing elsewhere in this annual report. Pursuant to his severance agreement, Mr. Solomon has agreed, among things, to (i) continue to not disclose any of our trade secrets or confidential information, (ii) not disparage or criticize us, and (iii) not compete against us and not solicit or hire any of our employees until August 31, 2008.

Manager Compensation

The members of our general partner’s board of managers are not separately compensated for their services as a manager, other than reimbursement of out-of-pocket expenses incurred in connection with rendering such services.

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Item 12. Security O wnership of Certain Beneficial Owners and Management and Related Stockholder Matters

All of Norcraft’s outstanding limited partnership units are held by Norcraft Intermediate Holdings, L.P., which is in turn held entirely by Holdings. Norcraft GP is the general partner of both Norcraft and Holdings. Norcraft GP does not hold any equity interest in Norcraft or Holdings, but, as a general partner of each entity, it controls both entities. The members of our general partner are SKM Norcraft Corp., Trimaran Cabinet Corp. and HMB Norcraft Corp.

The following table provides certain information as of December 31, 2006 with respect to the beneficial ownership of the limited partnership interests of Holdings by (i) each holder known by us who beneficially owns 5% or more of the outstanding limited partnership units of Holdings, (ii) each of the members of the board of managers of the general partner of Holdings, (iii) each of our named executive officers, and (iv) all of the members of the board of managers of Norcraft GP and our executive officers as a group. Unless otherwise indicated in a footnote, the business address of each equity holder is our corporate address.

Name of Partner	Class A Units (1)		Percentage Ownership Interest Class A		Class B Units (2)		Percentage Ownership Interest Class B		Class D Units (3)		Percentage Ownership Interest Class D
Norcraft GP, L.L.C.	—	(4)	—		—	(4)	—		—	(4)	—
SKM Norcraft Corp.(5)	75,950,957		57.0	%	—		—		—		—
Trimaran Cabinet Corp.(6)	37,975,478		28.5	%	—		—		—		—
Buller Norcraft Holdings, L.L.C.(7)	15,500,000		11.6	%	—		—		—		—
Mark Buller	—	(8)	—		—		—		2,903,658	(9)	43.6	%
Leigh Ginter	171,633		*		350,000		26.6	%	354,880		5.3	%
John Swedeen	472,000		*		200,000		15.2	%	257,872		3.9	%
Kurt Wanninger	157,306		*		—		—		1,054,304		15.8	%
David Romeo	478,469		*		—		—		632,089		9.5	%
Christopher Reilly	—	(10)	—		—		—		—		—
David Kim	—	(11)	—		—		—		—		—
Sean Britain	—		—		—		—		—		—
Jay Bloom	—	(12)	—		—		—		—		—
Michael Maselli	—		—		—		—		—		—
Herb Buller	—	(13)	—		—		—		—		—
All managers and executive officers as a group, including the 11 persons listed here.	1,279,408	(14)	*		550,000		41.8	%	5,202,803		78.0	%

* Represents less than 1%.

(1) Class A units are fully paid non-voting units of Holdings. These units, together with the other limited partnership units described below, are entitled to receive all assets available for distribution upon liquidation. The holders of Class A units are entitled to receive distributions of their allocated percentages of our taxable net income to make tax payments.

(2) The holder of a Class B unit is also entitled to receive, contingent upon certain corporate events, a number of Class C units equal to the number of Class B units held by the holder. The combination of the outstanding Class B units and the contingent right provided by the Class C units provides rights and privileges consistent with that of a Class A unit holder.

(3) Class D units are “profits interests” issued pursuant to Holdings’ incentive plan. These units receive tax distributions based on our net income allocated to them. Vested Class D units are convertible into Class A units at a price equal to the fair market value of a Class A unit at the time of the grant of the Class D unit. All Class D units remain subject to time and performance-based vesting.

(4) Norcraft GP does not hold any equity interest in Norcraft or Holdings, but as general partner of each entity, controls both Norcraft and Holdings. Norcraft GP is controlled by its board of managers which is comprised of Christopher Reilly, David Kim, Sean Britain, Michael Maselli, Jay Bloom, Mark Buller and Herb Buller.

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(5) SKM Equity Fund III, L.P. is the controlling shareholder of SKM Norcraft Corp. SKM Equity Fund III, L.P. is controlled by its general partner, SKM Partners, L.L.C., which is in turn controlled by its board of managers. SKM Partners, L.L.C.’s board of managers is comprised of Allan Karp and John Megrue.

(6) The shareholders of Trimaran Cabinet Corp. are Trimaran Fund II, L.L.C., Trimaran Parallel Fund II, L.P., Trimaran Capital, L.L.C., CIBC Employee Private Equity Partners and CIBC MB Inc. Each of these shareholders has given a proxy of its voting rights in Trimaran Cabinet Corp. to Trimaran Fund Management, L.L.C. Trimaran Fund Management, L.L.C. is controlled by its managing members who are Jay R. Bloom, Andrew R. Heyer and Dean C. Kehler.

(7) Buller Norcraft Holdings, L.L.C. is controlled by Mr. Mark Buller and Mr. Herbert Buller, both of whom are members.

(8) Does not include 15,500,000 limited partnership units owned by Buller Norcraft Holdings, L.L.C. Mr. Buller, as a member and manager of Buller Norcraft Holdings, L.L.C., may be deemed to beneficially own the shares beneficially owned by Buller Norcraft Holdings, L.L.C. Mr. Buller disclaims ownership of such shares.

(9) Mr. Mark Buller holds all of his Class D units through MEB Norcraft, L.L.C., of which he is the sole member.

(10) Does not include 75,950,957 limited partnership units owned by SKM Norcraft Corp. Mr. Reilly as a partner of the general partner of the majority shareholder of SKM Norcraft Corp. may be deemed to beneficially own the shares beneficially owned by SKM Norcraft Corp. Mr. Reilly disclaims ownership of such shares except to the extent of his pecuniary interest therein.

(11) Does not include 75,950,957 limited partnership units owned by SKM Norcraft Corp. Mr. Kim as a partner of the general partner of the majority shareholder of SKM Norcraft Corp. may be deemed to beneficially own the shares beneficially owned by SKM Norcraft Corp. Mr. Kim disclaims ownership of such shares except to the extent of his pecuniary interest therein.

(12) Does not include 37,975,478 limited partnership units owned by Trimaran Cabinet Corp. Mr. Bloom as a partner of the general partner of the majority shareholder of Trimaran Cabinet Corp. may be deemed to beneficially own the shares beneficially owned by Trimaran Cabinet Corp. Mr. Bloom disclaims ownership of such shares except to the extent of his pecuniary interest therein.

(13) Does not include 15,500,000 limited partnership units owned by Buller Norcraft Holdings, L.L.C. Mr. H. Buller, as a member of Buller Norcraft Holdings, L.L.C. may be deemed to beneficially own the shares beneficially owned by Buller Norcraft Holdings, L.L.C. Mr. H. Buller disclaims ownership of such shares except to the extent of his pecuniary interest therein.

(14) Does not include 15,500,000 limited partnership units owned by Buller Norcraft Holdings, L.L.C. Mr. Mark Buller as a member and manager of Buller Norcraft Holdings, L.L.C. and Mr. Herbert Buller as a member of Buller Norcraft Holdings, L.L.C. may be deemed to beneficially own the shares beneficially owned by Buller Norcraft Holdings, L.L.C. Both Mr. Mark Buller and Mr. Herbert Buller disclaim ownership of such shares except, in each case, to the extent of his pecuniary interest therein. Also does not include 75,950,957 limited partnership units owned by SKM Norcraft Corp. Mr. Reilly and Mr. Kim, as partners of the general partner of the majority shareholder of SKM Norcraft Corp. may be deemed to beneficially own the shares beneficially owned by SKM Norcraft Corp. Mr. Reilly and Mr. Kim each disclaim ownership of such shares. Also does not include 37,975,478 limited partnership units owned by Trimaran Cabinet Corp. Mr. Bloom, as partner of the general partner of the majority shareholder of Trimaran Cabinet Corp. may be deemed to beneficially own the shares beneficially owned by Trimaran Cabinet Corp. Mr. Bloom disclaims ownership of such shares except to the extent of his pecuniary interest therein.

Item 13. Cert ain Relationships and Related Transactions, and Director Independence

ARRANGEMENTS WITH OUR INVESTORS

The holders of limited partnership units of Holdings entered into a limited partnership agreement simultaneous with the closing of the Acquisition. The limited partnership agreement contains agreements among the holders of Holdings’ limited partnership units with respect to the transfer of such units, including rights of first offer, tag-along rights, drag-along rights, preemptive rights and registration rights. Units held by our managers and the investors associated with Mark Buller are subject to a right of repurchase by Holdings.

The Apax Partners and Trimaran holders and the Buller holders entered into a limited liability company agreement of Norcraft GP. Pursuant to this limited liability company agreement, each of the representatives of the Apax Partners holders

38

who sit on Norcraft GP’s board of managers, currently Mr. Reilly, Mr. Kim and Mr. Britain, is entitled to cast 2.5 votes with respect to each matter which is submitted to a vote before Norcraft GP’s board of managers. The Trimaran holders designated two managers, and the Buller holders designated two managers, each of which have one vote. As a result, the managers appointed by the Apax Partners holders together hold a majority of the votes to be cast on each matter submitted to a vote before Norcraft GP’s board of managers. In addition, pursuant to the limited liability company agreement, the Apax Partners and Trimaran holders and the Buller holders have the right to approve various transactions.

Upon completion of the Acquisition, we entered into a management and monitoring agreement with an affiliate of SKM Equity Fund III, L.P. and an affiliate of Trimaran Fund II, L.L.C. pursuant to which such entities provide management and monitoring services to us. These entities receive an aggregate annual management fee of $1.0 million and annual reimbursement for out-of-pocket expenses incurred in connection with the provision of such services. In 2006, management fees charged to expense was $1.0 million.

Arrangements with the Buller Investors

In connection with their investment, the Buller holders are entitled to a right of first offer to purchase our company upon a decision by Norcraft GP’s board of managers to engage in a sale transaction. Any offer made by the Buller investors pursuant to any exercise of this right is required to be an offer which allows us the time to solicit additional competing offers that we may accept in the event they are at a higher valuation or on such other material terms and conditions more favorable to us than those set forth in the offer made by the Buller holders.

In consideration of their contribution of the Winnipeg facility, the Buller holders are entitled to receive additional cash payments of up to $4.0 million and the right to acquire up to approximately 2,957,068 Class A units of Holdings upon a change of control involving a sale by the Apax Partners and Trimaran holders exceeding specified financial hurdles, if our owners following such a change of control elect not to continue Mr. Buller’s employment with us.

Other Arrangements with Named Executive Officers

We have entered into various agreements with our named executive officers. See Item 11 “Executive Compensation.”

Item 14. Princip al Accountant Fees and Services

The following table presents fees for professional services billed by PricewaterhouseCoopers LLP for the audit of our annual financial statements for the fiscal years ended December 31, 2006 and December 31, 2005, and fees for other services billed PricewaterhouseCoopers LLP during the respective periods.

Type of Fees (dollars in thousands)	2006		2005
Audit fees (1)	$	384	$	431
Audit Related Fees (2)		—		—
Tax fees (3)		132		242
All other fees (4)		—		—

(1) Audit fees consist of services rendered for the audit of the annual financial statements, including required quarterly reviews, statutory and regulatory filings or engagements and services that generally only the independent registered public accounting firm can reasonably be expected to provide.

(2) Audit related fees are for assurance and related services related to consultations concerning financial accounting and reporting standards.

(3) Tax fees are for professional services rendered for tax compliance, tax advice and tax planning.

(4) All other fees are for services other than those in the previous categories.

All decisions regarding selection of independent accounting firms and approval of accounting services and fees are made by our Audit Committee in accordance with the provisions of the Sarbanes-Oxley Act of 2002 and related SEC rules. There are no exceptions to the policy of securing prior approval by our Audit Committee for any service provided by our independent registered public accounting firm.

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PART IV

Item 15. Exhibits and Financial State ment Schedules

1. Financial Statements. See Index to Consolidated Financial Statements included on Page F-1.

2. Financial Statement Schedule. See Schedule II, which is included on page S-1.

3. List of Exhibits. See Index of Exhibits included on page E-1.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NORCRAFT HOLDINGS, L.P.

(Registrant)

NORCRAFT COMPANIES, L.P.

(Registrant)

/s/ Mark Buller	/s/ Leigh Ginter
Mark Buller	Leigh Ginter
President and Chief Executive Officer	Chief Financial Officer
Date: April 2, 2007	Date: April 2, 2007
Signing on behalf of the	Signing on behalf of the
Registrants and as principal officer	Registrants and as principal accounting officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrants and in the capacities as of this 2^nd day of April, 2007.

/s/ Herbert Buller	Chairman of the Board of Managers of Norcraft GP, L.L.C., the General Partner of the Registrants
Herbert Buller
/s/ Jay Bloom	Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
Jay Bloom
/s/ David Kim	Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
David Kim
/s/ Michael Maselli	Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
Michael Maselli
/s/ Christopher Reilly	Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
Christopher Reilly
/s/ Sean Britain	Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
Sean Britain
/s/ Mark Buller	President, Chief Executive Officer and Manager of Norcraft GP, L.L.C., the General Partner of the Registrants
Mark Buller

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Norcraft Holdings, L.P.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at December 31, 2006 and 2005	F-4
Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004	F-5
Consolidated Statements of Changes in Members’ Equity and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004	F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004	F-9
Notes to Consolidated Financial Statements	F-11

Norcraft Companies, L.P.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets at December 31, 2006 and 2005	F-4
Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004	F-6
Consolidated Statements of Changes in Member’s Equity and Comprehensive Income for the years ended December 31, 2006, 2005 and 2004	F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004	F-10
Notes to Consolidated Financial Statements	F-11

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Managers of

Norcraft GP, L.L.C.

In our opinion, the accompanying consolidated financial statements listed in the accompanying index on page F-1 present fairly, in all material respects, the financial position of Norcraft Holdings, L.P. as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing on page S-1 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

March 23, 2007

F-2

Report of In dependent Registered Public Accounting Firm

To the Board of Managers of

Norcraft GP, L.L.C.

In our opinion, the accompanying consolidated financial statements listed in the accompanying index on page F-1 present fairly, in all material respects, the financial position of Norcraft Companies, L.P. as of December 31 2006 and 2005, and the results of their operation and their cash flows for each of the three years in the period ended December 31, 2006, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule appearing on page S-1 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

March 23, 2007

F-3

C onsolidated Balance Sheets

(dollar amounts in thousands)

	Norcraft Holdings, L.P.				Norcraft Companies, L.P.
	December 31,				December 31,
	2006		2005		2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	3,928	$	933	$	4,038	$	933
Trade accounts receivable, net		35,718		37,015		35,718		37,015
Inventories		21,997		24,197		21,997		24,197
Prepaid expenses		1,885		1,921		1,885		1,921
Total current assets		63,528		64,066		63,638		64,066
Property, plant and equipment, net		38,115		36,485		38,115		36,485
Other assets:
Goodwill		148,459		148,459		148,459		148,459
Customer relationships, net		52,731		57,197		52,731		57,197
Brand names		49,000		49,000		49,000		49,000
Deferred financing costs, net		7,656		8,396		4,994		5,344
Display cabinets, net		9,006		8,443		9,006		8,443
Other		307		111		307		111
Total other assets		267,159		271,606		264,497		268,554
Total assets	$	368,802	$	372,157	$	366,250	$	369,105
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	1,959	$	—	$	—	$	—
Book overdrafts payable		—		1,666		—		1,666
Accounts payable		8,301		10,817		8,301		10,817
Accrued expenses		23,828		20,537		23,828		20,537
Total current liabilities		34,088		33,020		32,129		33,020
Long-term debt		254,631		241,567		150,000		150,000
Commitments and contingencies
Members’ equity subject to put request		48,835		46,094		—		—
Members’ equity		31,248		51,476		184,121		186,085
Total liabilities and members’ equity	$	368,802	$	372,157	$	366,250	$	369,105

See notes to consolidated financial statements.

F-4

Co nsolidated Statements of Income

(dollar amounts in thousands)

	Norcraft Holdings, L.P.
	Year Ended December 31,
	2006	2005		2004
Net sales	$440,478	$	404,639	$	330,275
Cost of sales	300,764		282,541		227,433
Gross profit	139,714		122,098		102,842
Selling, general and administrative expenses	75,919		64,874		58,244
Income from operations	63,795		57,224		44,598
Other expense (income):
Interest expense, net	22,654		23,208		18,815
Amortization of deferred financing costs	1,498		4,127		2,714
Other, net	150		220		(58	)
	24,302		27,555		21,471
Net income	$39,493	$	29,669	$	23,127

See notes to consolidated financial statements.

F-5

Consolidated Statements of Income

(dollar amounts in thousands)

	Norcraft Companies, L.P.
	Year Ended December 31,
	2006		2005		2004
Net sales	$	440,478	$	404,639	$	330,275
Cost of sales		300,764		282,541		227,433
Gross profit		139,714		122,098		102,842
Selling, general and administrative expenses		75,919		64,874		58,244
Income from operations		63,795		57,224		44,598
Other expense (income):
Interest expense, net		13,370		14,893		15,897
Amortization of deferred financing costs		1,108		3,772		2,589
Other, net		150		220		(58	)
		14,628		18,885		18,428
Net income		$49,167	$	38,339	$	26,170

See notes to consolidated financial statements.

F-6

Consolidated Statements of Chang es in Members’ Equity and Comprehensive Income

(dollar amounts in thousands)

	Norcraft Holdings, L.P.
	Members’ Equity			Accumulated other comprehensive income (loss)			Total Accumulated comprehensive income (loss)
Members’ equity at December 31, 2003	$	109,409		$	55		$	2,105
Issuance of members’ interest		3,608			—			—
Distribution to members		(78,832	)		—			—
Repurchase of members’ interest		(535	)		—			—
Accretion on members’ interest subject to put request		(4,023	)		—			—
Cumulative translation adjustment		(78	)		(78	)		(78	)
Net income		23,127			—			23,127
Comprehensive income		—			—			23,049
Members’ equity at December 31, 2004		52,676			(23	)		25,154
Issuance of members’ interest		849			—			—
Accretion on members’ interest subject to put request		(19,717	)		—			—
Distribution to members		(9,945	)		—			—
Repurchase of members’ interest		(1,949	)		—
Cumulative translation adjustment		(107	)		(107	)		(107	)
Net income		29,669			—			29,669
Comprehensive income		—			—			29,562
Members’ equity at December 31, 2005		51,476			(130	)		54,716
Issuance of members’ interest		1,900			—			—
Stock compensation expense		1,090			—			—
Accretion of members’ interest subject to put request		(2,741	)		—			—
Distributions to members		(51,812	)		—			—
Repurchase of members’ interest		(8,233	)		—			—
Cumulative translation adjustment		75			75			75
Net income		39,493			—			39,493
Comprehensive income		—			—			39,568
Members’ equity at December 31, 2006	$	31,248		$	(55	)	$	94,284

See notes to consolidated financial statements.

F-7

Consolidated Statements of Changes in Member’s Equity and Comprehensive Income

(dollar amounts in thousands)

	Norcraft Companies, L.P.
	Member’s Equity			Accumulated other comprehensive income (loss)			Total Accumulated comprehensive income (loss)
Member’s equity at December 31, 2003	$	131,763		$	55		$	2,105
Issuance of member’s interest		3,608			—			—
Distribution to member		(2,030	)		—			—
Repurchase of member interest		(535	)		—			—
Cumulative translation adjustment		(78	)		(78	)		(78	)
Net income		26,170			—			26,170
Comprehensive income		—			—			26,092
Member’s equity at December 31, 2004		158,898			(23	)		28,197
Issuance of member’s interest		849			—			—
Distribution to member		(9,945	)		—			—
Repurchase of member interest		(1,949	)		—			—
Cumulative translation adjustment		(107	)		(107	)		(107	)
Net income		38,339			—			38,339
Comprehensive income		—			—			38,232
Member’s equity at December 31, 2005		186,085			(130	)		66,429
Issuance of member’s interest		1,900
Stock compensation expense		1,090
Distributions to member		(51,841	)
Repurchase of member interest		(2,355	)
Cumulative translation adjustment		75			75			75
Net income		49,167						49,167
Comprehensive income		—						49,242
Member’s equity at December 31, 2006	$	184,121		$	(55	)	$	115,671

See notes to consolidated financial statements.

F-8

Consolidat ed Statements of Cash Flows

(dollar amounts in thousands)

	Norcraft Holdings, L.P.
	Year Ended December 31,
	2006			2005			2004
Cash flows from operating activities:
Net income	$	39,493		$	29,669		$	23,127
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment		4,660			4,800			4,278
Amortization:
Customer relationships		4,466			4,467			4,467
Deferred financing costs		1,498			4,127			2,714
Display cabinets		5,575			4,301			3,179
Provision for uncollectible accounts receivable		3,187			3,050			2,206
Provision for obsolete and excess inventory		199			(247	)		(36	)
Provision for warranty claims		4,480			4,595			2,329
Accreted interest on senior notes		9,145			8,315			2,918
Stock compensation expense		1,090			277			386
Loss (gain) on disposal of assets		30			255			(7	)
Change in operating assets and liabilities:
Trade accounts receivable		(1,922	)		(6,973	)		(11,193	)
Inventories		2,123			(1,943	)		(4,942	)
Prepaid expenses		35			(424	)		504
Other assets		(196	)		(20	)		29
Accounts payable and accrued liabilities		(3,437	)		(1,020	)		(2,788	)
Net cash provided by operating activities		70,426			53,229			27,171
Cash flows from investing activities:
Proceeds from sale of property and equipment		97			83			77
Purchase of property, plant and equipment		(6,659	)		(6,110	)		(7,036	)
Additions to display cabinets		(6,138	)		(6,710	)		(5,352	)
Net cash used in investing activities		(12,700	)		(12,737	)		(12,311	)
Cash flows from financing activities:
Borrowings on senior discount notes payable		—			—			80,334
Payment of financing costs		(758	)		—			(3,728	)
Book overdrafts payable		(1,666	)		1,666			—
Payments on bank revolving loan		—			—			(8,500	)
Borrowings on bank revolving loan		—			—			8,500
Payments on term loan		—			(30,500	)		(14,500	)
Proceeds from issuance of member interests		1,900			572			553
Repurchase of members’ interests		(2,355	)		(1,949	)		(535	)
Distributions to members		(51,812	)		(9,945	)		(78,832	)
Net cash used in financing activities		(54,691	)		(40,156	)		(16,708	)
Effect of exchange rates on cash		(40	)		(226	)		88
Net increase (decrease) in cash		2,995			110			(1,760	)
Cash, beginning of the period		933			823			2,583
Cash, end of period	$	3,928		$	933		$	823
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	14,184		$	14,986		$	19,235
Supplemental disclosure of non-cash transactions:
Members’ interest repurchase for consideration other than cash	$	5,878		$	—		$	—
Purchases of property, plant and equipment included in accounts payable	$	517		$	794		$	216

F-9

Consolidated Statements of Cash Flows

(dollar amounts in thousands)

	Norcraft Companies, L.P.
	Year Ended December 31,
	2006			2005			2004
Cash flows from operating activities:
Net income	$	49,167		$	38,339		$	26,170
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment		4,660			4,800			4,278
Amortization:
Customer relationships		4,466			4,467			4,467
Deferred financing costs		1,108			3,772			2,589
Display cabinets		5,575			4,301			3,179
Provision for uncollectible accounts receivable		3,187			3,050			2,206
Provision for obsolete and excess inventory		199			(247	)		(36	)
Provision for warranty claims		4,480			4,595			2,329
Stock compensation expense		1,090			277			386
Loss (gain) on disposal of assets		30			255			(7	)
Change in operating assets and liabilities:
Trade accounts receivable		(1,922	)		(6,973	)		(11,193	)
Inventories		2,123			(1,943	)		(4,942	)
Prepaid expenses		35			(424	)		504
Other assets		(196	)		(20	)		29
Accounts payable and accrued liabilities		(3,437	)		(1,020	)		(2,788	)
Net cash provided by operating activities		70,565			53,229			27,171
Cash flows from investing activities:
Proceeds from sale of property and equipment		97			83			77
Purchase of property, plant and equipment		(6,659	)		(6,110	)		(7,036	)
Additions to display cabinets		(6,138	)		(6,710	)		(5,352	)
Net cash used in investing activities		(12,700	)		(12,737	)		(12,311	)
Cash flows from financing activities:
Payment of financing costs		(758	)		—			(196	)
Book overdrafts payable		(1,666	)		1,666			—
Payments on bank revolving loan		—			—			(8,500	)
Borrowings on bank revolving loan		—			—			8,500
Payments on term loan		—			(30,500	)		(14,500	)
Proceeds from issuance of member interests		1,900			572			553
Repurchase of members interests		(2,355	)		(1,949	)		(535	)
Distributions to member		(51,841	)		(9,945	)		(2,030	)
Net cash used in financing activities		(54,720	)		(40,156	)		(16,708	)
Effect of exchange rates on cash		(40	)		(226	)		88
Net increase (decrease) in cash		3,105			110			(1,760	)
Cash, beginning of the period		933			823			2,583
Cash, end of period	$	4,038		$	933		$	823
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	14,045		$	14,986		$	19,235
Supplemental disclosure of non-cash transactions:
Purchases of property, plant and equipment included in accounts payable	$	517		$	794		$	216

F-10

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

1. Basis of Presentation and Change in Reporting Entity

The accompanying financial statements are those of Norcraft Holdings, L.P. (“Holdings”) and one of its wholly owned subsidiaries Norcraft Companies, L.P. (“Norcraft”). Holdings had no activity prior to its acquisition of Norcraft Companies L.L.C. (the “Predecessor” company of Norcraft) on October 21, 2003 (“the Acquisition”). Norcraft is a separate public reporting company, and a 100% owned subsidiary of Holdings. Holdings and Norcraft are also collectively referred to as the “Company”.

The consolidated financial statements of Holdings include the accounts of its 100% owned subsidiary, Norcraft Intermediate Holdings, L.P., whose sole assets are Norcraft and Norcraft Capital Corp. In August 2004, Holdings and Norcraft Capital Corp. issued $118.0 million of 9 ³/4% senior discount notes generating gross proceeds of $80.3 million. Holdings and Norcraft Capital Corp. are the sole obligors of these notes. The net proceeds of this offering were used to make a distribution to Holdings’ limited partners. Other than the foregoing debt obligations, related deferred issuance costs, and related interest and amortization expense, all other assets, liabilities, income, expenses and cash flows of the consolidated financial statements of Holdings presented for all periods represent those of its wholly-owned subsidiary Norcraft. Additionally, for the fourth quarter of 2006, there was a difference in cash and members’ equity between Holdings and Norcraft due to the timing of cash transfers.

Norcraft GP, L.L.C. (“Norcraft GP”), a Delaware limited liability company, is the general partner of Holdings and Norcraft. Norcraft GP does not hold any equity interest in Holdings or Norcraft, but as a general partner of each entity, it controls both entities. The members of Norcraft GP are SKM Norcraft Corp., Trimaran Cabinet Corp. and Buller Norcraft Holdings, L.L.C. Norcraft GP has not been capitalized and has no assets or liabilities as of December 31, 2006 or 2005. Furthermore, Norcraft GP has no commitment to fund cash flow deficits or furnish direct or indirect financial assistance to the Company.

Unless separately stated, the information in the notes herein relate to both Holdings and Norcraft.

2. Nature of Company

The Company is a manufacturer and national distributor of kitchen and bathroom cabinetry to dealers, wholetailers who sell to end users in the repair and remodeling and new home construction markets, contractors, builders and home centers. Manufacturing is conducted from owned premises located in Kansas, Minnesota, North Carolina, South Dakota, Virginia and Winnipeg, Canada.

The Company has one reportable segment, consisting of its three divisions (Mid Continent, UltraCraft and StarMark) and one subsidiary (Norcraft Canada Corporation). As they all have similar products, production processes, types of customers, distribution methods and economic characteristics and operate in identical positions with regards to regulatory requirements, the Company has deemed it appropriate to aggregate them into one reportable segment.

3. Significant Accounting Policies

Cash and Cash Equivalents

For purposes of reporting cash and cash equivalents, the Company considers all highly liquid investments having original maturities of three months or less to be cash equivalents. A substantial portion of the Company’s cash is held by a single financial institution.

Accounts Receivable and Concentrations of Credit Risk

The Company’s customers operate in the repair and remodeling and new home construction markets; accordingly, their credit worthiness is affected by cyclical trends and general conditions in those markets. Concentrations of credit risk with respect to trade receivables are limited to some extent by its large number of customers and their geographic dispersion. The Company generally does not require collateral from its customers, but does maintain

F-11

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

allowances for estimated uncollectible accounts receivable based on historical experience and specifically identified at-risk accounts. The adequacy of the allowance is evaluated on an ongoing and periodic basis and adjustments are made in the period in which a change in condition occurs.

Inventories

The Company states inventory at the lower of cost or market using the first-in, first-out (FIFO) method. The Company makes provisions for estimated obsolete or excess inventories. These provisions are based on historical experience, market conditions and other assumptions and judgment by management. Estimated losses for such obsolete or excess inventory are recorded in the periods in which those conditions arise.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Expenditures for major renewals and betterments that extend lives of assets are capitalized, while expenditures for maintenance and repairs are charged to operations as incurred. Depreciation and amortization is computed using the straight-line method over the estimated useful lives: buildings and leasehold improvements – 20 years or the life of the underlying lease, factory equipment – 7 years, vehicles – 5 years, office and data processing equipment – 3 to 5 years. The cost and related accumulated depreciation and amortization of assets sold or otherwise disposed of are removed from the related accounts, and resulting gains or losses are reflected in operations.

Display Cabinets

The cost of cabinetry displays are capitalized when provided to the Company’s dealers and are amortized over 36 months, which represents the period they are expected to be on display for customer viewing.

Goodwill

Goodwill arises principally from business acquisitions. Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Goodwill is tested annually, or as events or circumstances indicate a potential impairment in relation to the estimated fair value. Impairment testing is done at the reporting unit level. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of the reporting unit is based on a discounted future cash flows analysis. There have been no impairment charges in 2006, 2005 or 2004.

Intangible Assets

Identifiable intangible assets consist of customer relationships and brand names. The customer relationship intangible asset is being amortized using the straight-line method over its estimated useful life of 15 years. Straight-line amortization reflects an appropriate allocation of cost of intangible assets to earnings in proportion to the amount of economic benefits obtained by the Company in each reporting period. Brand names, consisting of Mid Continent^®, UltraCraft^®, StarMark^® and Fieldstone^® are considered indefinite lived intangible assets. Indefinite lived intangible assets are not amortized. Instead, the Company makes annual assessments, or as events or circumstances indicate that the asset might be impaired, separately from goodwill, to evaluate realizability of carrying values. The fair value of the indefinite-lived assets is determined for the annual impairment test using the Royalty Savings Method, which is a variation of the income approach.

Amortization expense related to customer relationships of $4.5 million for each of the years ended December 31, 2006, 2005 and 2004 is included in selling, general, and administrative expenses in the consolidated statements of income. Annual amortization expense for each of the next five years is expected to be $4.5 million per year.

It is the Company’s policy to value intangible assets at the lower of unamortized cost or fair value. Management reviews the valuation and amortization of intangible assets on a periodic basis, taking into consideration any events or circumstances that might result in diminished fair value. The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances which might result in a diminished fair value or revised useful life.

F-12

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

Impairment of Long-lived Assets

The Company assesses the recoverability of long-lived assets periodically to determine if facts or changes in circumstances indicate that expected future undiscounted cash flows might not be sufficient to support the carrying value of an asset. Recoverability of assets to be held and used is measured by a comparison of the carrying value of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds fair value of the assets.

Deferred Financing Costs

Debt issuance costs are deferred and amortized to deferred financing expense using the interest method over the terms of the related debt. Holdings’ amortization of such costs for fiscal year 2006, 2005 and 2004 totaled approximately $1.5 million, $4.1 million, and $2.7 million, respectively.

Norcraft’s amortization of such costs for fiscal year 2006, 2005 and 2004 totaled approximately $1.1 million, $3.8 million, and $2.6 million, respectively.

The decreased costs for both Holdings and Norcraft were due to the early payment of the term loan in 2005.

Future estimated aggregate amortization expense at December 31, 2006 is as follows:

Year Ending December 31,	Norcraft Holdings, L.P.		Norcraft Companies, L.P.
2007	$	1,506	$	1,077
2008		1,546		1,077
2009		1,554		1,077
2010		1,554		1,077
2011		1,163		686

Foreign Currency Translation/Transactions

The financial statements of the Company’s Canadian subsidiary are translated into U.S. dollars for consolidation. All assets and liabilities are translated using period-end exchange rates and statement of operations items are translated using average exchange rates for the period. The resulting translation adjustments are recorded as a separate component of members’ equity. Also recorded as translation adjustments in members’ equity are transaction gains and losses on long-term intercompany balances for which settlement is not planned or anticipated in the foreseeable future. Other foreign currency transaction gains and losses are included in determining net income, but have not been material in any of the periods presented.

Revenue Recognition

Revenue is recognized upon delivery of product, which represents the point at which ownership transfers to the customer.

Shipping and Handling Costs

The Company classifies freight chargeback billings to customers as a component of net sales in the statement of income and the related cost is included as a component of cost of sales.

F-13

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

Advertising

The Company expenses all advertising costs as incurred. Advertising expense was $0.5 million, $0.4 million and $0.6 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Volume-Based Incentives

These incentives typically involve rebates or refunds of a specified amount of cash consideration that are redeemable only if the customer completes a specified cumulative level of sales transactions. Under incentive programs of this nature, the Company estimates the anticipated rebate to be paid and allocates a portion of the estimated cost of the rebate to each underlying sales transaction with the customer. The estimated rebates are recorded as a reduction of revenue in the period of sale based on historical redemption rates.

Marketing Programs

Under these arrangements the Company agrees to reimburse certain of its customers for a portion of the costs incurred by the customer to advertise and promote certain of the Company’s products. The Company recognizes the cost of cooperative advertising programs in the period in which the advertising and promotional activity takes place. The actual costs of these programs are included in selling, general and administrative expenses in the statement of income.

Product Warranties

The Company provides warranties for its products ranging from three years up to the life of the product. Estimated costs to be incurred for such warranties are provided for in the period of sale based on historical claim rates as a component of cost of sales in the statement of income.

Income Taxes

The Company is a limited partnership, whereby the Company’s income is allocated to its limited partners for inclusion in their respective tax returns. Accordingly, no liability or provision for federal income taxes and deferred income taxes attributable to the Company’s operations are included in the accompanying financial statements. However, the Company is subject to various state and local taxes.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

4. Supplemental Financial Statement Information

Trade Accounts Receivable

Trade accounts receivable consists of the following:

	2006			2005
Trade accounts receivable, gross	$	36,812		$	38,235
Less: allowance for uncollectible accounts		(1,094	)		(1,220	)
Trade accounts receivable, net	$	35,718		$	37,015

F-14

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

Inventories

Inventories consist of the following:

	2006		2005
Raw materials and supplies	$	12,164	$	11,982
Work in process		6,243		7,231
Finished goods		3,590		4,984
	$	21,997	$	24,197

Supplier Concentration

The Company purchased approximately 15.2%, 17.4% and 17.8% of its raw materials during 2006, 2005 and 2004, respectively, from its largest supplier, to take advantage of a favorable pricing relationship with that entity.

Property, Plant and Equipment

Property, plant and equipment consist of the following:

	2006			2005
Land	$	2,851		$	2,831
Buildings and improvements		22,248			21,931
Factory equipment		20,342			15,452
Vehicles		105			86
Office and data processing equipment		4,114			3,960
Construction in progress		1,833			1,491
		51,493			45,751
Less: accumulated depreciation		(13,378	)		(9,266	)
	$	38,115		$	36,485

Accrued expenses

Accrued expenses consist of the following:

	2006		2005
Salaries, wages and employee benefits	$	10,775	$	8,573
Commissions, rebates and marketing programs		4,661		4,430
Interest		2,250		2,250
Other		6,142		5,284
	$	23,828	$	20,537

Product Warranties

Product warranty activity is as follows:

	2006			2005			2004
Beginning Balance	$	843		$	520		$	372
Accruals for warranties - current		4,480			4,595			2,329
Settlements made during the period		(4,452	)		(4,272	)		(2,181	)
Ending Balance	$	871		$	843		$	520

F-15

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

5. Long-term debt

Long-term debt consists of the following:

	Norcraft Holdings, L.P.				Norcraft Companies, L.P.
	2006		2005		2006		2005
Senior subordinated notes payable (due in 2011 with semi-annual interest payments at 9%)	$	150,000	$	150,000	$	150,000	$	150,000
Unsecured notes (due in 2009 with interest at 8.45%)		5,878		—		—		—
Senior discount notes payable (due in 2012 with interest payments accreting at 9.75%)		118,000		118,000		—		—
Total debt		273,878		268,000		150,000		150,000
Less discount		17,288		26,433
Less current portion		1,959		—		—		—
Long-term debt	$	254,631	$	241,567	$	150,000	$	150,000

Future maturities of long-term debt at December 31, 2006 are as follows:

Year Ending December 31,	Norcraft Holdings, L.P.		Norcraft Companies, L.P.
2007	$	1,959	$	—
2008		1,959		—
2009		1,960		—
2010		—		—
2011		150,000		150,000
Thereafter		118,000		—
	$	273,878	$	150,000

Senior Credit Facility

The Company has entered into a senior credit facility, as amended, with a financial institution providing up to $60 million in borrowings available through a revolving credit facility which matures on May 2, 2011 and has no scheduled amortization or commitment reductions. Borrowings bear interest at a variable interest rate based on either LIBOR or prime rate plus an applicable margin. The margin is based on the leverage ratio of the Company. Interest is payable quarterly at 1.75% over LIBOR (5.4% at December 31, 2006) or 0.75% over prime (8.3% at December 31, 2006).

The amended senior credit facility contains covenants which, among other things, limit: (i) additional indebtedness; (ii) dividends; (iii) capital expenditures and (iv) acquisitions, mergers and consolidations. Indebtedness under the amended senior credit facility is secured by substantially all of Norcraft’s assets, including its real and personal property, inventory, accounts receivable, intellectual property and other intangibles. In addition, the amended senior credit facility is guaranteed by Intermediate Holdings and secured by its assets (including Norcraft’s equity interests), as well as guaranteed by and secured by the equity interests and substantially all of the assets of Norcraft’s subsidiaries.

The amended senior credit facility also contains customary events of default, and upon the occurrence of such events of default, the outstanding obligations may be accelerated and become due and payable immediately.

Additionally, the terms of the indenture governing the senior credit facility limit the Company’s ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions.

F-16

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

The facility also contains certain financial covenants, including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. The Company was in compliance with these financial covenants at December 31, 2006.

Commitment fees are due quarterly at a rate of .375% of any unused commitments.

Approximately $5.4 million of letters of credit were outstanding at December 31, 2006. The total available under the senior credit facility, which is reduced by any outstanding letters of credit, was $54.6 million at December 31, 2006 as per the amended agreement.

Approximately $5.0 million of letters of credit were outstanding at December 31, 2005. The total available credit under the revolver at December 31, 2005 was $20.0 million. No amounts were outstanding under the senior credit facility at December 31, 2005.

Senior Subordinated Notes

On October 21, 2003, Norcraft and Norcraft Finance Corp., a 100% owned finance subsidiary of Norcraft, issued, on a joint and several basis, $150 million, 9% senior subordinated notes due in 2011 (the “Senior Subordinated Notes”). Norcraft Finance Corp. was formed on September 26, 2003 and has no operations. Interest accrues on the Senior Subordinated Notes and is payable semiannually on May 1 and November 1 of each year, commencing May 1, 2004 at a rate of 9% per annum. The Senior Subordinated Notes are subordinated to all existing and future senior debt, including indebtedness under the senior credit facility.

Subsequent to November 1, 2007, the Company has the option to redeem the notes, in whole or part, at a redemption price equal to 100% of the principal amount plus a premium declining ratably to par, plus accrued and unpaid interest.

If the Company experiences a change of control prior to November 1, 2007, they may redeem all, but not less than all, of the Senior Subordinated Notes at a redemption price equal to 100% of the principal amount plus a make-whole premium as defined.

If the Company experiences a change of control subsequent to November 1, 2007, it may be required to offer to purchase the Senior Subordinated Notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest.

Additionally, the terms of the indenture governing the Senior Subordinated Notes limit the Company’s ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions.

The indenture also contains certain financial covenants including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio.

The Senior Discount Notes are structurally subordinated to all debt and liabilities, including trade payables, of Holdings’ subsidiaries, including Norcraft, and are effectively subordinated to any of Holdings’ future secured debt to the extent of the value of the assets securing such debt. Holdings’ subsidiaries may not have sufficient funds or assets to permit payments to Holdings in amounts sufficient to permit Holdings to pay all or any portion of its indebtedness and other obligations, including its obligations on the Senior Discount Notes. As of December 31, 2006 the aggregate debt of Holdings’ subsidiaries (other than Norcraft Capital Corp., which has no additional debt) was $256.6 million.

F-17

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

Unsecured Notes

In September 2006, Holdings repurchased the equity interests of two former members. Consideration for these repurchases was in the form of $2.0 million in cash and $5.9 million in unsecured notes payable (the “Unsecured Notes”). Principal on the Unsecured Notes is payable in three equal, annual payments. These notes accrue interest at 8.45%, which is payable quarterly.

Holdings Senior Discount Notes

On August 17, 2004, Holdings and Norcraft Capital Corp., a 100% owned finance subsidiary of Holdings, issued, on a joint and several basis, $118.0 million aggregate principal amount at maturity ($80.3 million gross proceeds) of 9 3/4% Senior Discount Notes due 2012 (the “Senior Discount Notes”). The net proceeds of this offering were used to make a distribution to Holdings’ limited partners. Norcraft Capital Corp. was formed on August 12, 2004 and has no operations. Interest accrues on the Senior Discount Notes in the form of an increase in the accreted value of the note prior to September 1, 2008. Thereafter, cash interest on the Senior Discount Notes will accrue and be payable semiannually in arrears on March 1 and September 1 of each year, commencing March 1, 2009 at a rate of 9 ³/4% per annum. Holdings has no independent operating assets or liabilities other than its investment in Norcraft.

At any time on or after September 1, 2008, Holdings may redeem the Senior Discount Notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a premium, declining ratably to par, plus accrued and unpaid interest. At any time on or prior to September 1, 2007, Holdings’ may redeem up to 35% of the aggregate accreted value of the Senior Discount Notes with the proceeds of qualified equity offerings at a redemption price equal to 109.75% of the accreted value.

If Holdings experiences a change in control prior to September 1, 2008, it may redeem all, but not less than all, of the Senior Discount Notes at a purchase price equal to 100% of the accreted value plus a make-whole premium as defined.

If Holdings experiences a change in control prior to September 1, 2008, it may be required to offer to purchase the Senior Discount Notes at a purchase price equal to 101% of the accreted value plus accrued and unpaid interest. Additionally, the terms of the indenture governing the Senior Discount Notes limit Holdings’ ability to, among other things, incur additional indebtedness, dispose of assets, make acquisitions, make other investments, pay dividends and make various other payments. The terms also include cross-default provisions. The indenture also contains certain financial covenants including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. Holdings was in compliance with these financial covenants at December 31, 2006.

Norcraft’s senior credit facility and the indenture governing the Senior Subordinated Notes each contain restrictions on Norcraft’s ability to pay dividends and make certain other payments to Holdings. Pursuant to each arrangement, Norcraft may be subject to certain limitations, including with respect to its ability to pay dividends or make such payments in connection with (i) repurchases of certain interests of Holdings, (ii) the payment by Holdings of taxes, costs and other expenses required to maintain its legal existence and legal, accounting and other overhead costs in the ordinary course of business and (iii) permitted income tax distributions by Holdings to its limited partners.

The following represents certain condensed consolidating financial information as of December 31, 2006 and 2005 and for the years ended December 31, 2006, 2005, and 2004 for the issuers and for Norcraft Canada Corporation, a wholly-owned subsidiary of Norcraft, which fully and unconditionally guarantees the senior subordinated notes. In addition, the terms and conditions of the Senior Subordinated Notes limit Norcraft’s ability to pay dividends or other payments to Holdings. In this regard, the net assets of Norcraft are restricted assets of Holdings. As such, condensed financial information for Holdings (the parent company) is also presented.

F-18

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2006

	Norcraft Companies, L.P. (1)		Norcraft Finance Corp (1)		Norcraft Canada		Eliminations			Consolidated Norcraft Companies, L.P.		Norcraft Holdings, L.P.			Eliminations			Consolidated Norcraft Holdings, L.P.
Current Assets	$	61,710	$	—	$	1,928	$	—		$	63,638	$	(110	)	$	—		$	63,528
Property, plant & equipment, net		33,639		—		4,476		—			38,115		—			—			38,115
Investments in subsidiary		1,886		—		—		(1,886	)		—		184,121			(184,121	)		—
Other assets		268,569		—		213		(4,285	)		264,497		2,662			—			267,159
Total assets	$	365,804	$	—	$	6,617	$	(6,171	)	$	366,250	$	186,673		$	(184,121	)	$	368,802
Current liabilities	$	31,683	$	—	$	446	$	—		$	32,129	$	1,959		$	—		$	34,088
Long-term debt		150,000		—		4,285		(4,285	)		150,000		104,631			—			254,631
Members’ equity subject to put request		—		—		—		—			—		48,835			—			48,835
Members’ equity		184,121		—		1,886		(1,886	)		184,121		31,248			(184,121	)		31,248
Total liabilities & members’ equity	$	365,804	$	—	$	6,617	$	(6,171	)	$	366,250	$	186,673		$	(184,121	)	$	368,802

As of December 31, 2005

	Norcraft Companies, L.P. (1)		Norcraft Finance Corp (1)		Norcraft Canada		Eliminations			Consolidated Norcraft Companies, L.P.		Norcraft Holdings, L.P.		Eliminations			Consolidated Norcraft Holdings, L.P.
Current Assets	$	62,207	$	—	$	1,859	$	—		$	64,066	$	—	$	—		$	64,066
Property, plant & equipment, net		31,958		—		4,527		—			36,485		—		—			36,485
Investments in subsidiary		2,099		—		—		(2,099	)		—		186,085		(186,085	)		—
Other assets		272,242		—		213		(3,901	)		268,554		3,052		—			271,606
Total assets	$	368,506	$	—	$	6,599	$	(6,000	)	$	369,105	$	189,137	$	(186,085	)	$	372,157
Current liabilities	$	32,421	$	—	$	599	$	—		$	33,020	$	—	$	—		$	33,020
Long-term debt		150,000		—		3,901		(3,901	)		150,000		91,567		—			241,567
Members’ equity subject to put request		—		—		—		—			—		46,094		—			46,094
Members’ equity		186,085		—		2,099		(2,099	)		186,085		51,476		(186,085	)		51,476
Total liabilities & members’ equity	$	368,506	$	—	$	6,599	$	(6,000	)	$	369,105	$	189,137	$	(186,085	)	$	372,157

(1) Co-issuers

F-19

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

CONDENSED CONSOLIDATING INCOME STATEMENTS

For the Year Ended December 31, 2006

	Norcraft Companies, L.P. (1)			Norcraft Finance Corp (1)		Norcraft Canada			Eliminations			Consolidated Norcraft Companies, L.P.		Norcraft Holdings, L.P.		Eliminations			Consolidated Norcraft Holdings, L.P.
Net sales	$	440,478		$	—	$	15,919		$	(15,919	)	$	440,478	$	—	$	—		$	440,478
Cost of sales		300,953			—		15,730			(15,919	)		300,764		—		—			300,764
Gross profit		139,525			—		189			—			139,714		—		—			139,714
Equity in earnings of subsidiary		(288	)		—		—			288			—		49,167		(49,167	)		—
Selling, general and administrative expenses		75,465			—		454			—			75,919		—		—			75,919
Income (loss) from operations		63,772			—		(265	)		288			63,795		49,167		(49,167	)		63,795
Other expense (income):
Interest expense, net		13,372			—		(2	)		—			13,370		9,284		—			22,654
Amortization of deferred financing costs		1,108			—		—			—			1,108		390		—			1,498
Other, net		125			—		25			—			150		—		—			150
		14,605			—		23			—			14,628		9,674		—			24,302
Net income	$	49,167		$	—	$	(288	)	$	288		$	49,167	$	39,493	$	(49,167	)	$	39,493

For the Year Ended December 31, 2005

	Norcraft Companies, L.P. (1)		Norcraft Finance Corp (1)		Norcraft Canada		Eliminations			Consolidated Norcraft Companies, L.P.		Norcraft Holdings, L.P.		Eliminations			Consolidated Norcraft Holdings, L.P.
Net sales	$	404,639	$	—	$	13,097	$	(13,097	)	$	404,639	$	—	$	—		$	404,639
Cost of sales		283,121		—		12,517		(13,097	)		282,541		—		—			282,541
Gross profit		121,518		—		580		—			122,098		—		—			122,098
Equity in earnings of subsidiary		192		—		—		(192	)		—		38,339		(38,339	)		—
Selling, general and administrative expenses		64,498		—		376		—			64,874		—		—			64,874
Income (loss) from operations		57,212		—		204		(192	)		57,224		38,339		(38,339	)		57,224
Other expense (income):
Interest expense, net		14,893		—		—		—			14,893		8,315		—			23,208
Amortization of deferred financing costs		3,772		—		—		—			3,772		355		—			4,127
Other, net		208		—		12		—			220		—		—			220
		18,873		—		12		—			18,885		8,670		—			27,555
Net income	$	38,339	$	—	$	192	$	(192	)	$	38,339	$	29,669	$	(38,339	)	$	29,669

F-20

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

CONDENSED CONSOLIDATING INCOME STATEMENTS

For the Year Ended December 31, 2004

	Norcraft Companies, L.P. (1)			Norcraft Finance Corp (1)		Norcraft Canada			Eliminations			Consolidated Norcraft Companies, L.P.			Norcraft Holdings, L.P.		Eliminations			Consolidated Norcraft Holdings, L.P.
Net sales	$	330,275		$	—	$	6,114		$	(6,114	)	$	330,275		$	—	$	—		$	330,275
Cost of sales		226,880			—		6,667			(6,114	)		227,433			—		—			227,433
Gross profit		103,395			—		(553	)		—			102,842			—		—			102,842
Equity in earnings of subsidiary		(783	)		—		—			783			—			26,170		(26,170	)		—
Selling, general and administrative expenses		58,019			—		225			—			58,244			—		—			58,244
Income (loss) from operations		44,593			—		(778	)		783			44,598			26,170		(26,170	)		44,598
Other expense (income):
Interest expense, net		15,897			—		—			—			15,897			2,918		—			18,815
Amortization of deferred financing costs		2,589			—		—			—			2,589			125		—			2,714
Other, net		(63	)		—		5			—			(58	)		—		—			(58	)
		18,423			—		5			—			18,428			3,043		—			21,471
Net income	$	26,170		$	—	$	(783	)	$	783		$	26,170		$	23,127	$	(26,170	)	$	23,127

(1) Co-issuers

F-21

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2006

	Norcraft Companies, L.P. (1)			Norcraft Finance Corp (1)		Norcraft Canada			Eliminations			Consolidated Norcraft Companies, L.P.			Norcraft Holdings, L.P.			Eliminations			Consolidated Norcraft Holdings, L.P.
Cash flows provided by (used in) operating activities	$	70,400		$	—	$	190		$	—		$	70,565		$	52,157		$	(52,296	)	$	70,426
Cash flows provided by (used in) investing activities		(12,641	)		—		(468	)		384			(12,700	)		—			—			(12,700	)
Cash flows provided by (used in) financing activities		(54,720	)		—		384			(384	)		(54,720	)		(52,267	)		52,296			(54,691	)
Effect of exchange rates on cash		—			—		(40	)		—			(40	)		—			—			(40	)
Net increase (decrease) in cash		3,039			—		66			—			3,105			(110	)		—			2,995
Cash, beginning of period		854			—		79			—			933			—			—			933
Cash, end of period	$	3,893		$	—	$	145		$	—		$	4,038		$	(110	)	$	—		$	3,928

For the Year Ended December 31, 2005

	Norcraft Companies, L.P. (1)			Norcraft Finance Corp (1)		Norcraft Canada			Eliminations			Consolidated Norcraft Companies, L.P.			Norcraft Holdings, L.P.			Eliminations			Consolidated Norcraft Holdings, L.P.
Cash flows provided by (used in) operating activities	$	53,059		$	—	$	170		$	—		$	53,229		$	9,945		$	(9,945	)	$	53,229
Cash flows provided by (used in) investing activities		(12,713	)		—		(817	)		793			(12,737	)		—			—			(12,737	)
Cash flows provided by (used in) financing activities		(40,156	)		—		793			(793	)		(40,156	)		(9,945	)		9,945			(40,156	)
Effect of exchange rates on cash		—			—		(226	)		—			(226	)		—			—			(226	)
Net increase (decrease) in cash		190			—		(80	)		—			110			—			—			110
Cash, beginning of period		664			—		159			—			823			—			—			823
Cash, end of period	$	854		$	—	$	79		$	0		$	933		$	—		$	—		$	933

For the Year Ended December 31, 2004

	Norcraft Companies, L.P. (1)			Norcraft Finance Corp (1)		Norcraft Canada			Eliminations			Consolidated Norcraft Companies, L.P.			Norcraft Holdings, L.P.			Eliminations			Consolidated Norcraft Holdings, L.P.
Cash flows provided by (used in) operating activities	$	28,072		$	—	$	(901	)	$	—		$	27,171		$	1,651		$	(1,651	)	$	27,171
Cash flows provided by (used in) investing activities		(13,233	)		—		(913	)		1,835			(12,311	)		—			—			(12,311	)
Cash flows provided by (used in) financing activities		(16,708	)		—		1,835			(1,835	)		(16,708	)		(1,651	)		1,651			(16,708	)
Effect of exchange rates on cash		—			—		88			—			88			—			—			88
Net increase (decrease) in cash		(1,869	)		—		109			—			(1,760	)		—			—			(1,760	)
Cash, beginning of period		2,533			—		50			—			2,583			—			—			2,583
Cash, end of period	$	664		$	—	$	159		$	—		$	823		$	—		$	—		$	823

(1) Co-issuers

F-22

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

6. Disclosures About Fair Value of Financial Instruments

The following tables present the carrying amounts and estimated fair market values of financial instruments at December 31, 2006 and 2005. The fair value of a financial instrument is deemed to be the amount at which the instrument could be exchanged in a current transaction between willing parties.

	Norcraft Holdings, L.P.
	2006				2005
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
9.00% Senior Subordinated Notes	$	150,000	$	154,590	$	150,000	$	155,250
9.75% Senior Discount Notes		100,712		86,804		91,567		84,370

	Norcraft Companies, L.P.
	2006				2005
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
9.00% Senior Subordinated Notes	$	150,000	$	154,590	$	150,000	$	155,250

The fair market values of financial instruments were estimated based on market conditions and perceived risks at December 31, 2006 and 2005, and require varying degrees of management judgment. The factors used to estimate these values may not be valid on any subsequent date. Accordingly, the fair market value of the financial instruments presented may not be indicative of their future values.

7. Members’ Equity

At December 31, 2006 and 2005, there were 133,325,441and 135,213,997 Class A units issued and outstanding, respectively. Class A limited partners are entitled to one vote per unit held. As provided in the limited partnership agreement, income, gain, loss, deduction or credit are allocated to the members pro rata, in accordance with their respective percentage interests, except as required by the Internal Revenue Code and related regulations. The limited partnership agreement also provides for the Company to make estimated distributions to Holdings for payment of estimated federal and state income taxes arising from the Company’s operations.

At December 31, 2006 and 2005, there were 1,317,242 and 1,669,364 Class B units issued and outstanding, respectively. The holder of a Class B unit is also entitled to receive, contingent upon certain corporate events, a number of Class C units equal to the number of Class B units held by the holder. The combination of the outstanding Class B units and the contingent right provided by the Class C units provides rights and privileges consistent with that of a Class A unit holder.

Management Incentive Plan

Prior to January 1, 2006, the Company accounted for stock-based compensation using the minimum value method prescribed in Statement of Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation.” On January 1, 2006, the Company adopted SFAS No. 123 (Revised 2004) Share-Based Payments (“SFAS No. 123R”), using the prospective transition method, which requires the application of the accounting standard on the first day of the Company’s fiscal year 2006 for grants issued or modified subsequent to the date of adoption.

Holdings has a Management Incentive Plan, (the “Plan”) which provides for the grants of incentive Class D units in Holdings to selected employees of the Company. Under the terms of the Plan the Class D units generally begin to vest on the December 31 of the first full year following the date of grant with 50% of the units typically vesting over a 5 year period

F-23

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

and 50% vesting over a 5 year period subject to the Company meeting certain performance based criteria in each of those years. Upon vesting, each Class D unit entitles the unit holder the option to purchase one Class A unit in Holdings. All Class D units will be issued with an exercise price equal to the then fair value of Holdings’ Class A units.

The fair value of the Class D units granted is based on the Black-Scholes option-pricing model. Upon adoption of SFAS No. 123R the Company is required to incorporate a volatility factor in the fair value calculation. The volatility factor is developed through the use of a sample of peer group companies. The peer group consists of publicly-traded companies that operate in the Company’s same industry. The Company granted 2,994,210 incentive Class D units during the year ended December 31, 2006 the cumulative fair value of which was determined to be $2.5 million.

Compensation expense related to Class D units was $1.1 million, $0.3 million and $0.4 million for the years ended December 31, 2006, 2005 and 2004, respectively. Prior to the adoption of SFAS No. 123R, compensation expense related to Class D units would have been $0.7 million for the year ended December 31. As such the impact of adopting SFAS No. 123R was to increase 2006 compensation expense by $0.4 million.

The following table sets forth information about the fair value of the Class D unit grant on the date of grant using the Black-Scholes option-pricing model and the weighted average assumptions used for such grant:

	2006			2005			2004
Weighted-average fair value of Class D units granted	$	0.82		$	0.58		$	0.68
Dividend yield		0.0	%		0.0	%		0.0	%
Risk-free interest rate		4.69	%		3.68	%		3.39	%
Volatility		34.5	%		0.0	%		0.0	%
Expected lives		4.92			4.00			4.86

A summary of Class D unit activity under the plan is as follows:

	2006				2005				2004
	Units		Weighted- Average Exercise Price (1)		Units		Weighted- Average Exercise Price		Units		Weighted- Average Exercise Price (1)
Beginning balance	4,386,217		$	0.45	4,964,991		$	0.45	5,149,147		$	0.45
Granted	2,994,210		$	1.92	147,434		$	0.45	285,714		$	0.45
Exercised	—			—	—			—	—			—
Forfeited/Expired	(713,828	)	$	0.31	(726,208	)	$	0.45	(469,870	)	$	0.45
Ending balance	6,666,599		$	0.95	4,386,217		$	0.45	4,964,991		$	0.45
Exercisable balance	2,833,561		$	0.55	1,754,487		$	0.45	992,998		$	0.45

(1) Price-per-share amounts shown are adjusted to reflect the effect of modifications of exercise price in 2006 and 2004.

The intrinsic values of the issued Class D units and exercisable Class D units at December 31, 2006 were $9.6 million and $5.2 million, respectively.

F-24

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

Members’ Equity Subject to Put Request

The limited partnership agreement of Holdings provides that certain employee equity Holders may request that Holdings repurchase limited partnership units upon their death or disability at the then fair market value. Following such a request, Holdings must use commercially reasonable efforts to repurchase such units, subject to limitations on the repurchase of equity contained in the senior credit facility and the indentures governing the Senior Discount Notes and Senior Subordinated Notes, respectively. The fair market value of these units is recorded outside of permanent equity. Any changes in the fair market value of these units are reported as changes in members’ equity subject to put request in the statement of members’ equity and comprehensive income. As of December 31, 2006, 2005, and 2004, there were 20.7 million, 23.0 million, and 23.9 million units subject to the put request, respectively.

8. Employee Benefit Plan

The Company sponsors a contributory defined contribution plan, established under the provisions of Section 401(k) of the Internal Revenue Code, which provides, among other things, for the Company to make discretionary contributions. Company contributions to this plan were $.6 million for each of the years ended December 31, 2006, 2005 and 2004.

9. Related Party Transactions

The Company has agreements with affiliates of two of its majority limited partners, Apax Partners, L.P. and Trimaran Fund Management, L.L.C., to provide management services to the Company. Under the terms of the agreement, the Company will pay a $1.0 million annual management fee plus reimbursement of any out-of-pocket expenses incurred. The agreement expires upon sale to an unaffiliated third party of substantially all of the Company’s assets or interests. Management fees charged to expense was $1.0 million for each of the years ended December 31, 2006, 2005 and 2004.

10. Leases

The Company leases its corporate office and distribution facilities under operating leases expiring on various dates. In addition to the base rent, certain leases require the Company to pay as additional rent a portion of the real estate taxes and common area expenses of the leased premises. Total rent expense was $2.4 million, $2.0 million and $1.6 million for the years ended December 31, 2006, 2005 and 2004, respectively. The Company has historically entered and will continue to enter into leases of a temporary or short-term nature that do not extend beyond December 31, 2006 and that do not have future non-cancelable commitments.

Future minimum lease payments under non-cancelable operating leases at December 31, 2006, are as follows:

Year Ending December 31,	Amount
2007	$	2,024
2008		1,935
2009		1,349
2010		540
2011		321
	$	6,169

F-25

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

11. Commitments and Contingencies

The Company is party to legal actions and contingencies arising during the normal course of business. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

12. Unaudited Supplemental Quarterly Data

	Norcraft Holdings, L.P.
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2006
Net sales	$	108,666	$	121,876	$	114,044	$	95,892
Cost of sales		76,550		82,459		76,675		65,080
Gross profit		32,116		39,417		37,369		30,812
Selling, general and administrative expenses		17,816		20,707		19,235		18,161
Income from operations		14,300		18,710		18,134		12,651
Other expense (income):
Interest expense, net		5,589		5,640		5,488		5,937
Amortization of deferred financing costs		384		374		368		372
Other, net		52		22		57		19
		6,025		6,036		5,913		6,328
Net income	$	8,275	$	12,674	$	12,221	$	6,323

	Norcraft Companies, L.P.
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2006
Net sales	$	108,666	$	121,876	$	114,044	$	95,892
Cost of sales		76,550		82,459		76,675		65,080
Gross profit		32,116		39,417		37,369		30,812
Selling, general and administrative expenses		17,816		20,707		19,235		18,161
Income from operations		14,300		18,710		18,134		12,651
Other expense (income):
Interest expense, net		3,392		3,373		3,171		3,434
Amortization of deferred financing costs		290		278		269		271
Other, net		52		22		57		19
		3,734		3,673		3,497		3,724
Net income	$	10,566	$	15,037	$	14,637	$	8,927

F-26

Norcraft Holdings, L.P. Norcraft Companies, L.P.

Notes to Consolidated Financial Statements

(dollar amounts in thousands)

	Norcraft Holdings, L.P.
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2005
Net sales	$	91,954	$	104,087	$	105,630	$	102,968
Cost of sales		63,102		72,840		74,160		72,439
Gross profit		28,852		31,247		31,470		30,529
Selling, general and administrative expenses		15,034		16,685		15,998		17,157
Income from operations		13,818		14,562		15,472		13,372
Other expense (income):
Interest expense, net		5,891		5,893		5,765		5,659
Amortization of deferred financing costs		688		673		1,154		1,612
Other, net		—		112		18		90
		6,579		6,678		6,937		7,361
Net income	$	7,239	$	7,884	$	8,535	$	6,011

	Norcraft Companies, L.P.
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2005
Net sales	$	91,954	$	104,087	$	105,630	$	102,968
Cost of sales		63,102		72,840		74,160		72,439
Gross profit		28,852		31,247		31,470		30,529
Selling, general and administrative expenses		15,034		16,685		15,998		17,157
Income from operations		13,818		14,562		15,472		13,372
Other expense (income):
Interest expense, net		3,893		3,832		3,670		3,498
Amortization of deferred financing costs		602		585		1,066		1,519
Other, net		—		112		18		90
		4,495		4,529		4,754		5,107
Net income	$	9,323	$	10,033	$	10,718	$	8,265

13. Recently Issued Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 157, Fair Value Measurements. This Statement clarifies the definition of fair value, establishes a framework for measuring fair value and expands disclosures on fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS 157 is not expected to materially impact the Company’s financial statements.

F-27

Norcraft Holdings, L.P. Norcraft Companies L.P.

Schedule II – Consolidated Valuation and Qualifying Accounts

(dollar amounts in thousands)

	Beginning Balance		Additions		Deductions			Ending Balance
2006
Allowance for uncollectible accounts	$	1,220	$	3,187	$	(3,313	)	$	1,094
2005
Allowance for uncollectible accounts	$	1,250	$	3,050	$	(3,080	)	$	1,220
2004
Allowance for uncollectible accounts	$	1,861	$	2,206	$	(2,817	)	$	1,250

S-1

Exhibit	Description
3.1	Certificate of Limited Partnership of Norcraft Holdings, L.P. (incorporated by reference to Exhibit 3.1 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on October 12, 2004).
3.2	Second Amended and Restated Agreement of Limited Partnership of Norcraft Holdings, L.P., dated as of October 4, 2006 (incorporated by reference to Exhibit 3.1 to Norcraft Holdings, L.P.’s Form 10-Q filed on November 14, 2006)
3.3	Certificate of Formation of Norcraft G.P., L.L.C. (incorporated by reference to Exhibit 3.5 to Norcraft Companies, L.P. Form S-4, filed on April 27, 2004).
3.4	Norcraft GP, L.L.C Amended and Restated Limited Liability Agreement, dated as of October 21, 2003 (incorporated by reference to Exhibit 3.6 to Norcraft Companies, L.P. Form S-4, filed on April 27, 2004).
4.1	Indenture with respect to the 9  3/4 % Senior Discount Notes due 2012 between Norcraft Holdings, L.L.P, Norcraft Capital Corp. and U.S. Bank, National Association as Trustee, dated August 17, 2004 (incorporated by reference to Exhibit 4.1 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on October 12, 2004).
4.2	Form of 9  3/4 % Senior Discount Notes due 2012 (included in Exhibit 4.1).
4.3	Indenture with respect to the 9 % Senior Subordinated Notes due 2011 between Norcraft Companies, L.P, Norcraft Finance Corp., the Guarantors names therein and U.S. Bank, National Association as Trustee, dated October 21, 2003 (incorporated by reference to Exhibit 4.1 to Norcraft Companies, L.P. Form S-4 filed on April 27, 2004).
4.4	Form of 9 % Senior Subordinated Notes due 2011 (included in Exhibit 4.3).
10.1	Amended and Restated Credit Agreement dated as of May 2, 2006, among Norcraft Companies, L.P., Norcraft Intermediate Holdings, L.P. the other Guarantors named therein, the lenders named therein and UBS Securities LLC, as Lead Arranger, Wachovia Bank, National Association, as Syndication Agent, Wachovia Capital Markets, LLC, as Co-Arranger, UBS Loan Finance LLC as Swingline Lender, UBS AG, Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent, and CIT Lending Services Corporation, as Documentation Agent (incorporated by reference to Exhibit 10.1 to Norcraft Holdings, LP.’s Form 8-K filed on May 8, 2006).
10.2	Credit Agreement dated as of October 21, 2003, among Norcraft Companies, L.P., (as successor in interest to Norcraft Holdings, L.P.) the other Guarantors named therein, the lenders named therein and UBS Securities LLC, as Bookmanager and Lead Arranger, Wachovia Bank, National Association, as Syndication Agent, Wachovia Capital Markets, LLC as Swingline Lender and UBS AG, Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.4 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on August 3, 2004).
10.3	Amendment No. 1 to Credit Agreement, dated as of August 17, 2004, to the Credit Agreement, dated as of October 21, 2003 among Norcraft Companies, L.P., Norcraft Holdings, L.P., the other Guarantors party thereto and the Lenders party thereto, UBS AG, Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent and UBS Securities LLC, as Bookmanager and Lead Arranger, Wachovia Bank, National Association, as Syndication Agent, Wachovia Capital Markets, LLC, as Co-Arranger, CIT Lending Services Corporation, as Documentation Agent, and UBS Loan Finance LLC, as Swingline Lender, is entered into by and among the Borrower and the several Lenders that have executed a signature page thereto (incorporated by reference to Exhibit 10.4 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on October 12, 2004).
10.4	Assumption Agreement, dated as of August 13, 2004, made by Norcraft Intermediate Holdings, L.P., in favor of UBS AG, Stamford Branch, as Administrative Agent and Collateral Agent for the banks and other Lenders parties to the Credit Agreement, dated as of October 21, 2003, as amended (incorporated by reference to Exhibit 10.5 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on October 12, 2004).

E-1

Exhibit	Description
10.5	Assignment of Interests, dated August 17, 2004, between Norcraft Holdings, L.P. and Norcraft Intermediate Holdings, L.P. (incorporated by reference to Exhibit 10.6 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on October 12, 2004).
10.6	U.S. Security Agreement by Norcraft Companies, L.P., Norcraft Intermediate Holdings, L.P. (as successor in interest to Norcraft Holdings, L.P.), Norcraft Finance Corp., the Guarantors named therein and UBS AG, Stamford Branch, as Collateral Agent, dated as of October 21, 2003 (incorporated by reference to Exhibit 10.5 to Norcraft Companies, L.P.’s Form S-4 filed on April 27, 2004).
10.7	Canadian Security Agreement by Norcraft Canada Corporation and UBS AG, Stamford Branch, as Collateral Agent, dated as of October 21, 2003 (incorporated by reference to Exhibit 10.6 to Norcraft Companies, L.P. Form S-4, filed June 27, 2004).
10.8	Employment Letter, dated October 21, 2003, from Norcraft Holdings, L.P. to Mark Buller (incorporated by reference to Exhibit 10.7 to Norcraft Companies, L.P. Form S-4 filed on April 27, 2004).
10.9	Amendments to Employment Letter, dated August 17, 2004, from Norcraft Holdings, L.P. to Mark Buller (incorporated by reference to Exhibit 10.10 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on June 25, 2004).
10.10	Norcraft Holdings, L.P. Amended and Restated Management Incentive Plan (incorporated by reference to Exhibit 10.11 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on June 25, 2004).
10.11	Contribution Agreement, dated as of October 21, 2003 by and among Norcraft Holdings, L.P., Buller Norcraft Holdings, L.L.C., Mark Buller, David Buller, James, Buller, Phil Buller, Herb Buller and Erna Buller (incorporated by reference to Exhibit 10.14 to Norcraft Companies, L.P. Form S-4 filed on June 25, 2004).
10.12	Amendment to Contribution Agreement Letter, dated August 17, 2004, from Norcraft Holdings, L.P. to Buller Norcraft Holdings, L.L.C. (incorporated by reference to Exhibit 10.13 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on June 25, 2004).
10.13*	Amendment No. 2 to Contribution Letter, dated October 4, 2006, from Norcraft Holdings, L.P. to Buller Norcraft Holdings, L.L.C.
10.14	Management and Monitoring Agreement Letter, dated October 21, 2003, from Sanders Karp & Mergrue, LLC and Trimaran Fund Management L.L.C. to Norcraft Holdings, L.P. and Norcraft Companies, L.P. (incorporated by reference to Exhibit 10.14 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on June 25, 2004).
10.16	Employment Letter, dated October 21, 2003, from Norcraft Companies, L.P. to Simon Solomon (incorporated by reference to Exhibit 10.10 to Norcraft Companies, L.P. Form S-4 filed on April 27, 2004).
10.17	Employment Letter, dated October 21, 2003, from Norcraft Companies, L.P. to John Swedeen (incorporated by reference to Exhibit 10.11 to Norcraft Companies, L.P. Form S-4 filed on April 27, 2004).
10.18	Employment Letter, dated December 1, 2005, from Norcraft Companies, L.P. to Kurt Wanninger (incorporated by reference to Exhibit 10.19 to Norcraft Companies, L.P. Form 10-K on March 31, 2006).
10.19	Employment Letter, dated March 9, 2006, from Norcraft Companies, L.P. to David Romeo (incorporated by reference to Exhibit 10.20 to Norcraft Companies, L.P. Form 10-K filed on March 31, 2006).
12.1 *	Statements re: Computation of Ratios.
21.1	List of Subsidiaries (incorporated by reference to Exhibit 21.1 to Norcraft Holdings, L.P.’s Registration Statement on Form S-4 filed on June 25, 2004).
31.1 *	Certification by Mark Buller pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *	Certification by Leigh Ginter pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 *	Certification by Mark Buller pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 *	Certification by Leigh Ginter pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith.

E-2