10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: July 1, 2023

or

 

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

For the transition period from          to

Commission file number: 1-14315

 

Cornerstone Building Brands, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	76-0127701
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5020 Weston Parkway	Suite 400	Cary	NC	27513
(Address of principal executive offices)				(Zip Code)

(866) 419-0042

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ý No

APPLICABLE ONLY TO CORPORATE ISSUERS

There are no longer publicly traded shares of common stock of Cornerstone Building Brands, Inc.

TABLE OF CONTENTS 

	Part I — Financial Information
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Statements of (Loss) Income	1
	Condensed Consolidated Statements of Comprehensive (Loss) Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
	Part II — Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	34

i

PART I — FINANCIAL INFORMATION 

Item 1. Condensed Consolidated Financial Statements. 

CORNERSTONE BUILDING BRANDS, INC. 

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(In thousands, except per share data)

(Unaudited)

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639
Cost of sales	1,130,381		1,404,721		2,127,608		2,637,652
Gross profit	297,837		399,080		579,698		732,987
Selling, general and administrative expenses	247,006		245,607		474,807		476,773
Gain on divestitures	—		(401,413)		—		(401,413)
Gain on legal settlements	—		—		—		(76,575)
Income from operations	50,831		554,886		104,891		734,202
Interest expense	(92,314)		(45,571)		(186,425)		(89,677)
Foreign exchange gain (loss)	4,430		(304)		6,447		1,140
Gain (loss) on extinguishment of debt	379		3,553		(184)		3,553
Other income (expense), net	3,632		(8)		4,805		(13)
(Loss) income before income taxes	(33,042)		512,556		(70,466)		649,205
Income tax (benefit) provision	(10,716)		132,497		(19,325)		166,863
Net (loss) income	(22,326)		380,059		(51,141)		482,342
Net income allocated to participating securities	—		(3,132)		—		(3,538)
Net (loss) income applicable to common shares	$	(22,326)	$	376,927	$	(51,141)	$	478,804
Income per common share:
Basic			$	2.96			$	3.76
Diluted			$	2.92			$	3.72
Weighted average number of common shares outstanding:
Basic			127,449				127,288
Diluted			129,046				128,864

See accompanying notes to the condensed consolidated financial statements.

1

CORNERSTONE BUILDING BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Comprehensive (loss) income:
Net (loss) income	$	(22,326)	$	380,059	$	(51,141)	$	482,342
Other comprehensive income, net of tax:
Foreign currency translation adjustments	483		(6,266)		(480)		(1,482)
Unrealized gain on derivative instruments, net of income tax of $(4,573), $(4,335) and $(1,219), $(15,960)	14,854		2,544		3,962		63,240
Amount reclassified from accumulated other comprehensive (loss) income into earnings relating to derivative instruments	—		7,288		—		14,576
Changes in retirement related benefit plans	—		(1,122)		—		(1,122)
Other comprehensive income	15,337		2,444		3,482		75,212
Comprehensive (loss) income	$	(6,989)	$	382,503	$	(47,659)	$	557,554

See accompanying notes to the condensed consolidated financial statements.

2

CORNERSTONE BUILDING BRANDS, INC. 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	Successor
	July 1, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	445,128	$	553,551
Accounts receivable, net	720,903		665,936
Inventories	534,073		551,828
Other current assets	78,516		125,306
Total current assets	1,778,620		1,896,621
Property, plant and equipment, net	835,497		618,064
Lease right-of-use assets	363,520		365,552
Goodwill	1,596,111		1,688,548
Intangible assets, net	2,264,546		2,519,023
Other assets, net	105,428		105,842
Total assets	$	6,943,722	$	7,193,650
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	29,000	$	29,000
Current portion of lease liabilities	60,081		61,899
Accounts payable	266,057		288,938
Accrued income and other taxes	47,102		21,867
Employee-related liabilities	88,662		184,187
Rebates, warranties and other customer-related liabilities	145,788		157,752
Other current liabilities	144,240		149,596
Total current liabilities	780,930		893,239
Long-term debt	3,356,765		3,366,588
Long-term lease liabilities	281,989		302,339
Deferred income tax liabilities	594,637		653,745
Other long-term liabilities	243,308		248,794
Total liabilities	5,257,629		5,464,705
Commitments and contingencies (Note 12)
Equity:
Common stock, $0.01 par value, 1,000 shares authorized, issued and outstanding at July 1, 2023 and December 31, 2022	—		—
Additional paid-in capital	1,762,739		1,757,932
Accumulated deficit	(114,637)		(63,496)
Accumulated other comprehensive income	37,991		34,509
Total equity	1,686,093		1,728,945
Total liabilities and equity	$	6,943,722	$	7,193,650

See accompanying notes to the condensed consolidated financial statements.

3

CORNERSTONE BUILDING BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except share data)
(Unaudited)
	Common Stock			Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Equity
	Shares	Amount								Shares	Amount
Balance, April 1, 2023 (Successor)	1,000	$	—	$	1,760,254	$	(92,311)	$	22,654	—	$	—	$	1,690,597
Other comprehensive income	—	—		—		—		15,337		—	—		15,337
Share-based compensation	—	—		2,485		—		—		—	—		2,485
Net loss	—	—		—		(22,326)		—		—	—		(22,326)
Balance, July 1, 2023 (Successor)	1,000	$	—	$	1,762,739	$	(114,637)	$	37,991	—	$	—	$	1,686,093
Balance, April 2, 2022 (Predecessor)	127,329,476	$	1,273	$	1,287,237	$	3,457	$	67,156	—	$	—	$	1,359,123
Treasury stock purchases	—	—		—		—		—		(22,373)	(545)		(545)
Retirement of treasury shares	(22,373)	—		(545)		—		—		22,373	545		—
Issuance of restricted stock	138,657	1		(1)		—		—		—	—		—
Stock options exercised	98,281	1		1,056		—		—		—	—		1,057
Other comprehensive income	—	—		—		—		2,444		—	—		2,444
Share-based compensation	—	—		4,711		—		—		—	—		4,711
Net income	—	—		—		380,059		—		—	—		380,059
Balance, July 2, 2022 (Predecessor)	127,544,041	$	1,275	$	1,292,458	$	383,516	$	69,600	—	$	—	$	1,746,849

4

CORNERSTONE BUILDING BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(In thousands, except share data)
(Unaudited)
	Common Stock			Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Equity
	Shares	Amount								Shares	Amount
Balance, December 31, 2022 (Successor)	1,000	$	—	$	1,757,932	$	(63,496)	$	34,509	—	$	—	$	1,728,945
Other comprehensive income	—	—		—		—		3,482		—	—		3,482
Share-based compensation	—	—		4,977		—		—		—	—		4,977
Other	—	—		(170)		—		—		—	—		(170)
Net loss	—	—		—		(51,141)		—		—	—		(51,141)
Balance, July 1, 2023 (Successor)	1,000	$	—	$	1,762,739	$	(114,637)	$	37,991	—	$	—	$	1,686,093
Balance, December 31, 2021 (Predecessor)	126,992,107	$	1,270	$	1,279,931	$	(98,826)	$	(5,612)	(21,071)	$	(424)	$	1,176,339
Treasury stock purchases	—	—		—		—		—		(192,773)	(4,627)		(4,627)
Retirement of treasury shares	(192,773)	(2)		(4,625)		—		—		192,773	4,627		—
Issuance of restricted stock	611,178	6		(6)		—		—		—	—		—
Stock options exercised	133,529	1		1,420		—		—		—	—		1,421
Other comprehensive income	—	—		—		—		75,212		—	—		75,212
Deferred compensation obligation	—	—		(424)		—		—		21,071	424		—
Share-based compensation	—	—		16,162		—		—		—	—		16,162
Net income	—	—		—		482,342		—		—	—		482,342
Balance, July 2, 2022 (Predecessor)	127,544,041	$	1,275	$	1,292,458	$	383,516	$	69,600	—	$	—	$	1,746,849

See accompanying notes to the condensed consolidated financial statements.

5

CORNERSTONE BUILDING BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Cash flows from operating activities:
Net (loss) income	$	(51,141)	$	482,342
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization	237,824		147,890
Amortization of debt issuance costs, debt discount and fair values	44,955		17,881
Share-based compensation expense	4,977		16,162
Gain on extinguishment of debt	184		(3,553)
Unrealized gain on foreign currency exchange rates	(2,200)		—
Asset impairments	—		368
Gain on divestiture	—		(401,413)
Gain on sale of assets	(5)		(2,670)
Amortization of inventory and other fair value step-ups	—		1,238
Provision for credit losses	3,858		3,158
Deferred income taxes	(89,458)		(15,205)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable	(57,882)		(130,200)
Inventories	17,206		(5,317)
Income taxes	27,404		12,821
Prepaid expenses and other	12,576		36,066
Accounts payable	(24,370)		22,463
Accrued expenses	(97,612)		108,712
Other, net	(5,654)		3,025
Net cash provided by operating activities	20,662		293,768
Cash flows from investing activities:
Acquisitions, net of cash acquired	—		4,396
Capital expenditures	(79,100)		(60,206)
Proceeds from divestitures, net of cash divested	—		510,883
Proceeds from sale of property, plant and equipment	—		6,070
Net cash (used in) provided by investing activities	(79,100)		461,143
Cash flows from financing activities:
Payments on term loans	(14,500)		(13,000)
Repurchases of senior notes	(33,885)		(7,281)
Payments on derivative financing obligations	—		(6,564)
Other	—		(3,206)
Net cash used in financing activities	(48,385)		(30,051)
Effect of exchange rate changes on cash and cash equivalents	(2,063)		(63)
Net (decrease) increase in cash, cash equivalents and restricted cash	(108,886)		724,797
Cash, cash equivalents and restricted cash at beginning of period	554,014		396,658
Cash, cash equivalents and restricted cash at end of period	$	445,128	$	1,121,455

 See accompanying notes to the condensed consolidated financial statements.

6

CORNERSTONE BUILDING BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data, unless otherwise noted)

(Unaudited)

Note 1 — Basis of Presentation

Description of Business

Cornerstone Building Brands, Inc. (“Cornerstone Building Brands” or, collectively with its subsidiaries, unless the context requires otherwise, the “Company”) is a holding company incorporated in Delaware. The Company is the largest exterior building products manufacturer by sales in North America and serves residential and commercial customers across new construction and the repair and remodel end markets. The Company is organized in three reportable segments: Aperture Solutions, Surface Solutions and Shelter Solutions.

Organization and Ownership Structure

On July 25, 2022 and pursuant to an Agreement and Plan of Merger dated March 5, 2022 (the “Merger Agreement”) by and among the Company, Camelot Return Intermediate Holdings, LLC (“Camelot Parent”) and Camelot Return Merger Sub, Inc. (“Merger Sub”), investment funds managed by Clayton, Dubilier and Rice, LLC (“CD&R”) became the indirect owners of all the issued and outstanding shares of common stock of Cornerstone Building Brands. Pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a subsidiary of Camelot Parent (the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”), the Company became a privately held company and its shares were no longer traded on the New York Stock Exchange.

At the Effective Time, in accordance with the terms and conditions set forth in the Merger Agreement, each share of Company common stock outstanding immediately prior to the Effective Time of the Merger (other than (i) shares of Company common stock that were cancelled or converted into shares of common stock of the Surviving Corporation in accordance with the Merger Agreement and (ii) shares of Company common stock held by stockholders of the Company (other than CD&R, certain investment funds managed by CD&R and other affiliates of CD&R that held shares of Company common stock) who did not vote in favor of the Merger Agreement or the Merger and who have perfected and not withdrawn a demand for appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware), was converted into the right to receive cash in an amount equal to $24.65 in cash per share, without interest and subject to any required withholding taxes.

On July 25, 2022, the Company amended its Certificate of Incorporation to authorize 1,000 shares of common stock, par value of $0.01. Each share of common stock will have one vote and all shares of common stock vote together as a single class.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements have been prepared with the Company's accounting policies and on the same basis as those financial statements included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2022 and should be read in conjunction with those Consolidated Financial Statements and the Notes thereto. Certain disclosures normally included in the Company’s Consolidated Financial Statements prepared in accordance with U.S. GAAP have been omitted on a basis consistent with the rules and regulations of the SEC.

The accompanying Condensed Consolidated Financial Statements include the accounts and operations of the Company and its majority-owned subsidiaries and all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. All significant intercompany accounts and transactions have been eliminated in consolidation. Through application of pushdown accounting, the Company’s Condensed Consolidated Financial Statements are presented as Predecessor for periods prior to the Merger and Successor for subsequent periods. The Company has reclassified certain prior year amounts to conform to the current year’s presentation. The results reported in these Condensed Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

7

Note 2 — Significant Accounting Policies

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the Condensed Consolidated Financial Statements and accompanying notes. These estimates include, but are not limited to: establishing the allowance for expected credit losses; allowance for obsolete inventory; the impairment of goodwill and intangible assets; establishing useful lives for and evaluating the recovery of long-lived assets; recognizing the fair value of assets acquired and liabilities assumed in business combinations; accounting for rebates and product warranties; the valuation and expensing for share-based compensation; certain assumptions made in accounting for pension benefits; accounting for contingencies and uncertainties and accounting for income taxes. Actual results may differ from the estimates used in preparing the Condensed Consolidated Financial Statements.

Cash and Cash Equivalents

Cash and cash equivalents mainly consist of highly liquid, unrestricted savings, checking, money market funds with maturities of less than three months and other bank accounts.

The following table sets forth the components of cash and cash equivalents:

	Successor
	July 1, 2023		December 31, 2022
Cash	$	235,128	$	553,551
Money market funds (Level 1 securities)	210,000		—
Total cash and cash equivalents	$	445,128	$	553,551

Accounts Receivable, Net

The Company reports accounts receivable net of an allowance for expected credit losses. The Company establishes provisions for expected credit losses based on the Company’s assessment of the collectability of amounts owed to the Company by its customers. In establishing the allowance, the Company considers changes in the financial position of a customer, age of the accounts receivable balances, availability of security, unusual macroeconomic conditions, lien rights and bond rights as well as disputes, if any, with its customers. The Company’s allowance for expected credit losses was $4.7 million and $2.1 million at July 1, 2023 and December 31, 2022.

Fair Value Measurements

The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable approximate fair value as of July 1, 2023 and December 31, 2022 given the instruments’ relatively short maturities. The carrying amounts of the indebtedness under revolving credit facilities approximate fair value as the interest rates are variable and reflective of market rates. Fair values for our other debt instruments are measured using Level 1 and Level 2 inputs. U.S. GAAP requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

8

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“Topic 848”), which provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the reference rate transition. The amendments in these ASUs are elective, apply to all entities that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, that deferred the sunset date of Topic 848 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. During the second quarter of 2023, as the Company transitioned from LIBOR to alternative reference rates, the Company adopted Topic 848 which did not have a material impact on its Condensed Consolidated Financial Statements or accompanying notes.

Note 3 — Merger

CD&R Merger Transaction

On July 25, 2022, Merger Sub merged with and into the Company, with the Company surviving the Merger as a subsidiary of Camelot Parent. CD&R previously held 61.9 million shares of Company common stock immediately prior to the Merger. As a result of the Merger, CD&R became the indirect owners of all the issued and outstanding shares of Company common stock that CD&R did not already own.

The Merger was accounted for as a business combination. The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair market value at the date of the Merger.

The Merger was funded in part with proceeds from the following issuances:

•$300.0 million aggregate principal amount term loan facility, due August 2028;

•$710.0 million of 8.750% Senior Secured Notes due August 2028;

•$564.4 million of cash from the Company;

•$464.4 million aggregate principal amount of 2.99% senior payment-in-kind notes due 2029 that were issued by Camelot Return Parent, LLC (“Camelot Return Parent”), an indirect parent of the Company, and are held by Arawak X, L.P. (“Arawak X”), an affiliate of CD&R; and

•$195.0 million from preferred shares of Camelot Return Parent.

Neither the Company nor any of its subsidiaries is a guarantor of or is obligated to make any payments related to the 2.99% senior payment-in-kind notes due 2029 issued by Camelot Return Parent.

The calculation of the total consideration paid is as follows:

	Consideration
Common shares purchased	65,613,349
Common share closing price	$	24.65
Merger consideration, common shares purchased	$	1,617,369
Effective settlement of pre-existing relationships (1)	128,721
Total merger consideration	1,746,090
Fair value of common shares previously held by CD&R and other adjustments (2)	1,526,591
Total equity value	$	3,272,681

(1)    Consists mainly of employee share-based compensation awards that were outstanding at that time the Merger was consummated.

(2)    Consists of 61.9 million common shares, held by CD&R prior to the Merger which were rolled over or acquired by Camelot Parent.

9

The following table summarizes the fair value of net assets acquired:

	Fair Value
Merger consideration	$	1,746,090
Fair value of common shares previously held by CD&R and other adjustments	1,526,591
Total equity value	$	3,272,681
Cash and cash equivalent	$	1,087,586
Accounts receivable	793,858
Inventories	767,460
Property, plant and equipment	873,167
Lease right-of-use assets	275,050
Goodwill	1,599,327
Intangible assets	2,436,000
Other assets	119,920
Total assets acquired	7,952,368
Accounts payable	329,896
Accrued liabilities	634,915
Long-term debt	2,467,210
Long-term lease liabilities	252,262
Deferred income tax liabilities	706,768
Other liabilities	288,636
Total liabilities assumed	4,679,687
Net assets acquired	$	3,272,681

During the measurement period, the Company obtained new information regarding facts and circumstances that existed as of the date of the Merger that resulted in revised estimated values of those assets or liabilities. During the three months ended July 1, 2023, the Company made measurement period adjustments, which were mainly composed of a $291.5 million increase to property, plant and equipment and a $174.7 million decrease to intangible assets. The effect of measurement period adjustments on the estimated fair value elements were reflected as if the adjustments had been made as of the date of the Merger, including a $66.5 million cumulative catch-up to depreciation and amortization expense recorded during the three months ended July 1, 2023 resulting from the update in the fair market value of property, plant and equipment and intangible assets. The table below presents the Consolidated Statements of (Loss) Income line items impacted by the aforementioned adjustments for previously reported periods.

	Increase / (Decrease) due to Depreciation and Amortization
Consolidated Statements of (Loss) Income Line Item	July 25, 2022 through December 31, 2022		Three Months Ended  April 1, 2023		Cumulative Catch-Up Recorded During Three Months Ended July 1, 2023
Cost of sales	$	38,852	$	26,303	$	65,155
Gross profit	(38,852)		(26,303)		(65,155)
Selling, general and administrative expenses	(1,632)		2,963		1,331
Income (loss) from operations	(37,220)		(29,266)		(66,486)

As part of pushdown accounting, the Company recorded goodwill to the reporting units expected to benefit from the business combination. The goodwill is mainly attributable to costs savings in manufacturing productivity; freight and logistics; procurement; and other operating costs, as well as operational improvements in recent acquisitions to be achieved subsequent to the Merger. The goodwill recorded is not deductible for income tax purposes. The following table sets forth the allocation of goodwill by the Company’s reportable segments as of the date of the Merger:

Aperture Solutions		Surface Solutions		Shelter Solutions		Total Goodwill
$	714,394	$	681,822	$	203,111	$	1,599,327

10

The Company identified intangible assets for customer relationships and trade names and other. Intangible assets are amortized on a straight-line basis over their expected useful lives. The fair value and weighted average estimated useful life of identifiable intangible assets consists of the following:

	Fair Value		Weighted Average Useful Life (in years)
Customer lists and relationships	$	1,816,000	17
Trademarks, trade names and other	620,000		15
Total	$	2,436,000

The Company incurred transaction costs of $29.4 million associated with the Merger, of which $0.7 million was recognized in the period from July 25, 2022 through December 31, 2022 and $28.7 million was recognized in the period from January 1, 2022 through July 24, 2022. These costs are included in selling, general and administrative expenses on the Condensed Consolidated Statements of (Loss) Income.

Unaudited Pro Forma Financial Information

Had the Merger occurred at the beginning of 2022, unaudited pro forma revenues and net income for the three and six months ended July 1, 2023 and July 2, 2022 would not have been materially different than the amounts reported as the pro forma adjustments would primarily reflect the amortization of intangibles and depreciation of property, plant and equipment that received a step up in basis and the cost to finance the transaction, net of the related tax effects. The unaudited supplemental pro forma financial information would not give effect to the potential impact of current financial conditions, operating efficiencies or cost savings that may result from the Merger or any integration costs. Unaudited pro forma balances would not necessarily be indicative of operating results had the Merger occurred on January 1, 2022 or of future results.

Note 4 — Inventories

The following table sets forth the components of inventories:

	Successor
	July 1, 2023		December 31, 2022
Raw materials	$	308,693	$	312,380
Work in process	60,049		67,424
Finished goods	165,331		172,024
Total inventories	$	534,073	$	551,828

Note 5 — Goodwill and Intangible Assets

Goodwill

The following table sets forth the changes in the carrying amount of goodwill by reportable segment:

	Aperture Solutions		Surface Solutions		Shelter Solutions		Total
Balance, December 31, 2022 (Successor)	$	624,009	$	790,452	$	274,087	$	1,688,548
Measurement period adjustments (1)	87,498		(110,791)		(70,976)		(94,269)
Currency translation	1,048		784		—		1,832
Balance, July 1, 2023 (Successor)	$	712,555	$	680,445	$	203,111	$	1,596,111

(1)     Measurement period adjustments have been recorded as the Company has obtained additional information during the remeasurement of the assets and liabilities acquired in connection with the Merger. See Note 3 — Merger for additional information.

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Intangible Assets, Net

The following table sets forth the major components of intangible assets:

	Range of Life (Years)			Weighted Average Amortization Period Remaining (Years)	Cost		Accumulated Amortization		Net Carrying Value
As of July 1, 2023 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	15	–	15	14	$	620,000	$	(38,838)	$	581,162
Customer lists and relationships	3	–	19	17	1,816,000		(132,616)		1,683,384
Total intangible assets					$	2,436,000	$	(171,454)	$	2,264,546
As of December 31, 2022 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	13	–	13	13	$	522,137	$	(18,332)	$	503,805
Customer lists and relationships	13	–	13	13	2,088,548		(73,330)		2,015,218
Total intangible assets					$	2,610,685	$	(91,662)	$	2,519,023

Intangible assets are amortized on a straight-line basis. The following table sets forth the amortization expense related to intangible assets:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Amortization expense	$	33,698	$	48,048	$	81,602	$	97,056

Note 6 — Product Warranties

The following table sets forth the changes in the carrying amount of product warranties liability:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Balance, beginning of period	$	202,463	$	218,356
Acquisitions	—		189
Divestiture	—		(4,345)
Warranties sold	659		937
Revenue recognized	(1,223)		(1,228)
Expense	22,004		23,499
Settlements	(21,695)		(18,462)
Balance, end of period	$	202,208	$	218,946
Reflected as:
Current liabilities – Rebates, warranties and other customer-related liabilities	$	26,654	$	26,586
Noncurrent liabilities – Other long-term liabilities	175,554		192,360
Total product warranty liability	$	202,208	$	218,946

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Note 7 — Long-Term Debt

The following table sets forth the components of long-term debt:

			Successor
			July 1, 2023								December 31, 2022
	Effective Interest Rate		Principal Outstanding		Unamortized Fair Value Adjustment (1)		Unamortized Discount and Issuance Costs		Carrying Amount		Principal Outstanding		Unamortized Fair Value Adjustment(1)		Unamortized Discount and Issuance Costs		Carrying Amount
Term loan facility, due April 2028	8.57	%	$	2,541,500	$	(321,325)	$	—	$	2,220,175	$	2,554,500	$	(348,769)	$	—	$	2,205,731
Term loan facility, due August 2028	9.69	%	298,500		—		(19,998)		278,502		300,000		—		(21,538)		278,462
6.125% Senior Notes, due January 2029	13.51	%	318,699		(92,805)		—		225,894		365,541		(111,524)		—		254,017
8.750% Senior Secured Notes, due August 2028	10.61	%	710,000		—		(48,806)		661,194		710,000		—		(52,622)		657,378
Total long-term debt			$	3,868,699	$	(414,130)	$	(68,804)	$	3,385,765	$	3,930,041	$	(460,293)	$	(74,160)	$	3,395,588
Reflected as:
Current liabilities - Current portion of long-term debt									$	29,000							$	29,000
Non-current liabilities - Long-term debt									3,356,765								3,366,588
Total long-term debt									$	3,385,765							$	3,395,588
Fair value - Senior notes - Level 1									$	928,941							$	907,993
Fair value - Term loans - Level 2									2,739,854								2,580,000
Total fair value									$	3,668,795							$	3,487,993

(1)    On July 25, 2022, as a result of the pushdown accounting related to the Merger, the carrying values of the term loan facility due April 2028 and the 6.125% Senior Notes (as defined below) were adjusted to fair value.

Revolving Credit Facilities

The following table sets forth the Company’s availability under its credit facilities:

	Successor
	July 1, 2023						December 31, 2022
	Available		Borrowings		Letters of Credit and Priority Payables		Available		Borrowings		Letters of Credit and Priority Payables
Asset-based lending facility	$	850,000	$	—	$	47,000	$	850,000	$	—	$	48,000
Cash flow revolver (1)	92,000		—		—		115,000		—		—
First-in-last-out tranche asset-based lending facility	95,000		—		—		95,000		—		—
Total	$	1,037,000	$	—	$	47,000	$	1,060,000	$	—	$	48,000

(1)     Cash flow revolver commitments of $23.0 million matured in April 2023 and $92.0 million will mature in April 2026.

Term Loan Facility due April 2028 and Cash Flow Revolver

In April 2018, Ply Gem Midco, Inc. (“Ply Gem Midco”) entered into a Cash Flow Agreement (as amended from time to time, the “Cash Flow Credit Agreement”), which provides for (i) a term loan facility (the “Term Loan Facility”) in the aggregate principal amount of $2,600.0 million, issued with a discount of 0.5% and (ii) a cash flow-based revolving credit facility (the “Cash Flow Revolver”) of up to $115.0 million with $92.0 million remaining as of July 1, 2023. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Borrower (as defined in the Cash Flow Credit Agreement) under the Term Loan Facility and Cash Flow Revolver (together the “Cash Flow Facilities”). On April 11, 2023, the Company amended the Cash Flow Credit Agreement to replace the adjusted LIBOR rate with the Secured Overnight Financing Rate (“SOFR”) rate.

The Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity. The Term Loan Facility bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Term SOFR rate with a credit spread adjustment of 0.10% (subject to a floor of 0.50%) plus an applicable margin of 3.25% per annum or (ii) an alternate base rate plus an applicable margin of 2.25% per annum.

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Loans outstanding under the Cash Flow Revolver bear annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Daily Simple SOFR rate or a Term SOFR rate with (only in the case of Term SOFR rate borrowings with an interest period greater than one month) a credit spread adjustment of 0.10% (subject to a floor of 0.00%) plus an applicable margin ranging from 2.50% to 3.00% per annum depending on the Company’s secured leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 1.50% to 2.00% per annum depending on the Company’s secured leverage ratio. There are no amortization payments under the Cash Flow Revolver. Additionally, unused commitments under the Cash Flow Revolver are subject to a fee ranging from 0.25% to 0.50% per annum depending on the Company’s secured leverage ratio.

Subject to certain exceptions, the Term Loan Facility is subject to mandatory prepayments in an amount equal to:

•the net cash proceeds of (i) certain asset sales, (ii) certain debt offerings and (iii) certain insurance recovery and condemnation events; and

•50% of annual excess cash flow (as defined in the Cash Flow Credit Agreement), subject to reduction to 25% and 0% if specified secured leverage ratio targets are met to the extent that the amount of such excess cash flow exceeds $10.0 million. No payments were required in 2022 under the year 2021 excess cash flow calculation.

Both the Term Loan Facility and Cash Flow Revolver may be prepaid at the Company’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal amount requirements.

ABL Facility due July 2027

On April 12, 2018, Ply Gem Midco entered into an ABL Credit Agreement (as amended from time to time, the “ABL Credit Agreement”), which provides for (a) an asset-based revolving credit facility of up to $850.0 million (amended from time to time the “ABL Facility”), a portion of which is (i) available to United States (“U.S.”) borrowers and (ii) available to U.S. and Canadian borrowers. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Parent Borrower (as defined in the ABL Credit Agreement) under the ABL Facility, and (b) a first-in-last-out tranche asset-based revolving credit facility of up to $95.0 million (the “ABL FILO Facility”) available to U.S. borrowers.

Borrowing availability under the ABL Facility and the ABL FILO Facility (collectively, the “ABL Facilities”) is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of eligible inventory, accounts receivable, less certain allowances and subject to certain other adjustments as set forth in the ABL Credit Agreement. Availability is reduced by issuance of letters of credit as well as any borrowings.

Loans outstanding under the ABL Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility. Additionally, unused commitments under the ABL Facility are subject to a 0.25% per annum fee.

Loans outstanding under the ABL FILO Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 2.25% to 2.75% per annum depending on the average daily excess availability under the ABL FILO Facility or (ii) an alternate base rate plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL FILO Facility. Additionally, unused commitments under the ABL FILO Facility are subject to a 0.25% per annum fee.

Side Car Term Loan Facility due August 2028

On July 25, 2022, the Company entered into a Term Loan Credit Agreement (as amended from time to time, the “Side Car Term Loan Credit Agreement”) which provides for a term loan facility (the “Side Car Term Loan Facility”) in an original aggregate principal amount of $300.0 million. The Side Car Term Loan Credit Agreement will mature on August 1, 2028.

Loans outstanding under the Side Car Term Loan Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate plus 5.625% (subject to a SOFR floor of 0.50%) or (ii) an alternate base rate plus 4.625%. Borrowings under the Side Term Loan Credit Agreement amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.

The Side Car Term Loan Facility may be prepaid at the Company’s option at any time, subject to certain prepayment premiums if prepaid prior to August 1, 2026.

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6.125% Senior Notes due January 2029

On September 24, 2020, the Company issued $500.0 million in aggregate principal amount of 6.125% Senior Notes due January 2029 (the “6.125% Senior Notes”). The 6.125% Senior Notes bear interest at 6.125% per annum and will mature on January 15, 2029. Interest is payable semi-annually in arrears on January 15 and July 15.

The 6.125% Senior Notes are unsecured senior indebtedness and are effectively subordinated to all of the Company’s existing and future senior secured indebtedness, including indebtedness under the Term Loan Facility, the Cash Flow Revolver, the Side Car Term Loan Facility, the 8.750% Senior Secured Notes (as defined below) and the ABL Facilities, and are senior in right of payment to future subordinated indebtedness of the Company.

The Company may redeem the 6.125% Senior Notes in whole or in part at any time subject to certain prepayment premiums if the 6.125% Senior Notes were to be redeemed prior to September 15, 2025.

Repurchase of 6.125% Senior Notes

The Company repurchased an aggregate principal amount of $25.2 million and $46.8 million of 6.125% Senior Notes for $18.4 million and $33.9 million in cash during the three and six months ended July 1, 2023. The repurchases, which resulted in a write-off of associated unamortized debt discount and deferred financing costs, resulted in a gain of $0.4 million and a loss of $0.2 million during the three and six months ended July 1, 2023.

8.750% Senior Secured Notes due August 2028

On July 25, 2022, the Company issued $710.0 million in aggregate principal amount of 8.750% Senior Secured Notes due August 2028 (the “8.750% Senior Secured Notes”). The 8.750% Senior Secured Notes bear interest at 8.750% per annum and will mature on August 1, 2028. Interest is payable semi-annually in arrears on January 15 and July 15 of each year.

The 8.750% Senior Secured Notes are secured senior indebtedness and rank equal in right of payment with all existing and future senior indebtedness and are senior in right of payment to all existing and future subordinated indebtedness of the Company, including the 6.125% Senior Notes.

The Company may redeem the 8.750% Senior Secured Notes in whole or in part at any time subject to certain prepayment premiums if the 8.750% Senior Secured Notes were to be redeemed prior to August 1, 2026.

Other Information

The obligations under the Company’s debt agreements are generally guaranteed by each direct and indirect wholly owned U.S. restricted subsidiary of the Company, subject to certain exceptions. In addition, the obligations of the Canadian borrowers under the ABL Facility are guaranteed by each direct and indirect wholly owned Canadian restricted subsidiary of the Canadian borrowers, subject to certain exceptions. In addition, the obligations under the Cash Flow Credit Agreement, the ABL Credit Agreement, the Side Car Term Loan Facility and the Company’s various secured notes are guaranteed by Camelot Parent, which guarantee is non-recourse and limited to the equity interests of the Company. The obligations under the Cash Flow Credit Agreement, the ABL Credit Agreement, the Side Car Term Loan Facility and the Company’s various secured notes are also secured by a perfected security interest in substantially all tangible and intangible assets of the Company and each subsidiary guarantor and in the capital stock of the Company, subject to certain exceptions and subject to priority of security interests provided therein.

Covenant Compliance

The ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. The Cash Flow Credit Agreement includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter.

The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The Company is in compliance with all of its covenants as of July 1, 2023.

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Interest Rate Swaps

The Company uses certain interest rate swaps to manage a portion of the interest rate risk on its term loans. The following table sets forth the terms of the Company’s interest rate swap agreements:

	May 2019 Swap (1)			April 2021 Swaps
Notional amount	$	500,000		$	1,000,000
Forecasted term loan interest payments being hedged	1-month SOFR			1-month SOFR
SOFR floor (per annum - matches floor in hedged item)	0.00		%	0.40		%
Fixed rate paid on $500,000 and $1,500,000 notional amounts	2.1680		%	2.0038		%
Fixed rate received on $(500,000) notional amount	n/a			(2.1680)		%
Origination date (3)	July 12, 2019			April 17, 2023
Maturity - Fixed rate paid	July 12, 2023			April 15, 2026
Maturity - Fixed rate received	n/a			July 12, 2023
Fair value at July 1, 2023:
Other current assets	$	465		$	—
Other assets, net	$	—		$	94,552
Other current liabilities	$	—		$	465
Fair value at December 31, 2022:
Other current assets	$	7,000		$	—
Other assets, net	$	—		$	95,361
Other current liabilities	$	—		$	7,000
Level in fair value hierarchy (2)	Level 2			Level 2

(1)The May 2019 swap was de-designated from cash flow hedge accounting in April 2021.

(2)Interest rate swaps are based on cash flow hedge contracts that have fixed rate structures and are measured against market based SOFR yield curves. These interest rate swaps are classified within Level 2 of the fair value hierarchy because they are valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates.

(3)During the three months ended July 1, 2023, and in conjunction with the transition from LIBOR to SOFR, the origination date of the April 2021 Swaps was amended to April 17, 2023.

Note 8 — Accumulated Other Comprehensive Income

The following tables set forth the change in accumulated other comprehensive income attributable to the Company by each component of accumulated other comprehensive income, net of applicable income taxes:

	Foreign Currency Translation Adjustments		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, April 1, 2023 (Successor)	$	(7,752)	$	30,070	$	336	$	22,654
Activity	483		14,854		—		15,337
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, April 2, 2022 (Predecessor)	$	27,525	$	44,577	$	(4,946)	$	67,156
Activity	(6,266)		9,832		(1,122)		2,444
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

16

	Foreign Currency Translation Adjustment		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, December 31, 2022 (Successor)	$	(6,789)	$	40,962	$	336	$	34,509
Activity	(480)		3,962		—		3,482
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, December 31, 2021 (Predecessor)	$	22,741	$	(23,407)	$	(4,946)	$	(5,612)
Activity	(1,482)		77,816		(1,122)		75,212
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

Note 9 — Share-Based Compensation

Merger Transaction

Prior to July 24, 2022, under its long-term stock incentive plan, the Company had several share-based compensation award types, including stock options, restricted stock units and performance share unit awards (collectively, the “Pre-Merger Awards”). In connection with the Merger, outstanding vested stock option awards were canceled and converted to the right to receive a fixed amount of cash equal to the intrinsic value of the awards and were paid in August 2022. Performance share units (“PSUs”) granted to certain key, non-executive employees in March 2021 were paid in cash in September 2022 with the applicable total shareholder return metric determined using a per share price equal to the Merger Consideration and the EBITDA-based metric determined based on target performance.

Resulting from the Merger, unvested restricted stock units were cancelled and converted into a contingent contractual right to receive a payment in cash equal to the Merger consideration per award and unvested stock options were cancelled and converted into a contingent contractual right to receive a payment in cash equal to the intrinsic value of the awards, subject to the same vesting conditions as the original awards.

Resulting from the Merger, unvested PSUs that were granted to key employees and executives in March 2020 and to executives in March 2021 were cancelled and converted into a contingent contractual right to receive a cash payment from the Company equal to the product of the number of PSUs earned under the terms of the applicable award agreement, with the applicable total stockholder return metric determined using a per share price equal to the Merger consideration and the EBITDA-based metric determined based on actual performance as of the end of the three-year performance period applicable to such PSUs. PSUs granted in March 2020 vested and were paid out in cash during the three months ended April 1, 2023. PSUs granted in March 2021 to executives are expected to be paid out in cash in the first quarter of 2024. The Pre-Merger Awards are accounted for under ASC Topic 710.

As of July 1, 2023, the Company has liabilities of $18.3 million and $0.3 million classified within employee-related liabilities and other long-term liabilities on its Condensed Consolidated Balance Sheet related to the Pre-Merger Awards that will be settled in cash. For the six months ended July 1, 2023, the Company paid out $89.5 million of cash to settle Pre-Merger Awards, which mainly related to those PSUs granted in March 2020 and vested in March 2023.

Incentive Units

Beginning in the fourth quarter of 2022, pursuant to an incentive unit grant agreement, certain participants were granted incentive units in Camelot Return Ultimate, L.P. (the “Partnership”). The incentive units provide the holder with the opportunity to receive, upon certain vesting events and subject to Partnership repurchase rights and conditions, a return based upon the appreciation of the Partnership’s equity value from the date of grant. The incentive units vest over a five-year period on a straight-line basis. For the six months ended July 1, 2023, 55 thousand incentive units were granted at an average grant date fair value of $49.76 per incentive unit.

Compensation Expense

For the three months ended July 1, 2023, the Company recognized $2.5 million and $3.4 million of expense from incentive units and Pre-Merger Awards. For the six months ended July 1, 2023, the Company recognized $5.0 million of expense from incentive units and a gain of $1.4 million from the Pre-Merger Awards. The gain recognized on the Pre-Merger Awards during the six months ended July 1, 2023 mainly related to the Company updating its vesting expectations for certain PSU awards which have a range of payouts based on an EBITDA-based metric.

17

As of July 1, 2023, the Company estimates that unrecognized expense is expected to be recognized over a weighted-average period of 3.4 years totaling $43.3 million, of which $34.0 million relates to incentive units and $9.3 million relates to Pre-Merger Awards.

Note 10 — Income Taxes

For the Predecessor and Successor periods, the Company’s effective tax rate includes state income taxes, foreign tax rate differentials and changes in the valuation allowance.

The following table sets forth the effective tax rate for the three and six month period ended July 1, 2023 and July 2, 2022:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Effective tax rate	32.4	%	25.9	%	27.4	%	25.7	%

Note 11 — Reportable Segment and Geographical Information

The Company is organized in three reportable segments: Aperture Solutions, Surface Solutions and Shelter Solutions, which operate principally in the U.S. with limited operations in Canada.

•The Aperture Solutions reportable segment offers a broad line of windows and doors at multiple price-points for residential new construction and repair and remodel end markets in the U.S. and Canada. Its main products include vinyl, aluminum, wood-composite and aluminum clad-wood windows and patio doors, as well as steel, wood-composite and fiberglass entry doors.

•The Surface Solutions reportable segment offers a broad suite of surface solutions products and accessories at multiple price-points for the residential new construction and repair and remodel end markets as well as stone installation services. Its main products include vinyl siding and accessories, cellular polyvinyl chloride trim, vinyl fencing and railing, stone veneer and gutter protection products.

•The Shelter Solutions reportable segment designs, engineers, manufactures and distributes extensive lines of metal products for the low-rise commercial construction market under multiple brand names and through a nationwide network of manufacturing plants and distribution centers. The Company defines low-rise commercial construction as building applications of up to five stories.

Management monitors the operations results of its reportable segments separately for purposes of making decisions about resources and evaluating performance. Management evaluates performance on the basis of segment earnings before interest, income taxes, depreciation and amortization (“Adjusted reportable segment EBITDA”).

Corporate operating expenses are not allocated to reportable segments. Corporate and Other consists specifically of corporate operating expenses that are generally not allocated to reportable segments, related-party management fees, and other items that are not assigned or allocated to reportable segments. Any intercompany revenues or expenses are eliminated in consolidation.

18

The following table sets forth net sales, Adjusted reportable segment EBITDA and a reconciliation to income before income taxes:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Net sales:
Aperture Solutions	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions	335,522		421,106		604,113		754,096
Shelter Solutions	445,021		605,225		850,949		1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639
Adjusted reportable segment EBITDA:
Aperture Solutions	$	103,293	$	105,131	$	168,086	$	187,510
Surface Solutions	61,499		78,654		87,806		135,126
Shelter Solutions	105,970		97,851		189,384		187,419
Total Adjusted reportable segment EBITDA	270,762		281,636		445,276		510,055
Corporate and other	(54,769)		347,208		(102,561)		372,037
Depreciation and amortization	(165,162)		(73,958)		(237,824)		(147,890)
Interest expense	(92,314)		(45,571)		(186,425)		(89,677)
Foreign exchange (loss) gain	4,430		(304)		6,447		1,140
Gain (loss) on extinguishment of debt	379		3,553		(184)		3,553
Other income (expense), net	3,632		(8)		4,805		(13)
(Loss) income before income taxes	$	(33,042)	$	512,556	$	(70,466)	$	649,205

The following table sets forth net sales disaggregated by reportable segment:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Aperture Solutions:
Vinyl windows	$	622,062	$	731,433	$	1,189,255	$	1,389,229
Aluminum windows and other	25,613		46,037		62,989		90,351
Total	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions:
Vinyl siding	$	162,841	$	211,016	$	295,026	$	372,216
Metal siding	86,066		92,283		146,503		165,985
Injection molded siding	15,556		19,418		28,042		38,191
Stone	19,450		26,635		37,469		46,957
Stone veneer installation and other	51,609		71,754		97,073		130,747
Total	$	335,522	$	421,106	$	604,113	$	754,096
Shelter Solutions:
Metal building products	$	445,021	$	547,429	$	850,949	$	1,023,887
Metal coil coating	—		57,796		—		113,076
Total	$	445,021	$	605,225	$	850,949	$	1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639

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The following table sets forth total assets disaggregated by reportable segment:

	Successor
	July 1, 2023		December 31, 2022
Total assets:
Aperture Solutions	$	2,865,264	$	2,153,378
Surface Solutions	2,275,282		2,099,244
Shelter Solutions	1,130,791		973,718
Corporate	672,385		1,967,310
Total assets	$	6,943,722	$	7,193,650

Note 12 — Commitments and Contingencies

As a manufacturer of products primarily for use in building construction, the Company is inherently exposed to various types of contingent claims, both asserted and unasserted, in the ordinary course of business. As a result, from time to time, the Company may become involved in various legal proceedings or other contingent matters arising from claims or potential claims arising out of its operations and businesses that cover a wide range of matters, including, among others, environmental, contract, employment, intellectual property, securities, personal injury, property damage, product liability, warranty, and modification, adjustment or replacement of component parts or units sold, which may include product recalls. The Company insures (or self-insures) against these risks to the extent deemed prudent by its management and to the extent insurance is available. Management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. However, such matters are subject to many uncertainties and outcomes and are not predictable with assurance.

Environmental

The Company’s operations are subject to various federal, state, local and foreign environmental, health and safety laws. Among other things, these laws regulate the emissions or discharge of contaminants into the environment; govern the use, storage, treatment, disposal and management of hazardous substances and wastes; protect employee health and safety, public health and welfare and the end-users of its products; regulate the chemicals used in its products; and impose liability for the costs of investigating and remediating (as well as other damages resulting from) present and past releases of hazardous substances. Violations of these laws or of any conditions contained in environmental permits could impact the Company's current and future operations.

The Company believes it is in material compliance with all applicable laws and regulations and has recorded a liability of $8.8 million at July 1, 2023 and December 31, 2022 for certain subsurface investigation and remedial matters.

Litigation

The Company is a party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. The Company is also included in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines or penalties and other costs in substantial amounts and are described below.

Stockholder Litigation

In January 2023, purported former stockholders filed two separate complaints challenging the fairness of the CD&R Merger. The complaints are captioned Firefighters’ Pension System of the City of Kansas City, Missouri Trust and Gary D. Voigt v. Affeldt et al., C.A. No. 2023-0091-JTL (Del. Ch.) and Whitebark Value Partners LP and Robert Garfield v. Clayton Dubilier & Rice, LLC et al., C.A. No. 2023-0092-JTL (Del. Ch.). In both complaints, the plaintiffs allege that CD&R and its affiliates controlled the Company prior to the transaction and that certain directors and officers of the Company, as well as CD&R and its affiliates, breached their fiduciary duties and engaged in conduct resulting in a sale of the Cornerstone Building Brands public stockholders’ shares to CD&R at an unfair price. The plaintiffs seek unspecified monetary damages, attorneys’ fees, expenses, and costs. The court consolidated the two cases, and on May 3, 2023, selected Whitebark Value Partners LP as lead plaintiff. The Company does not believe these claims have merit and intend to vigorously defend against them. On July 14, 2023, the defendants moved to dismiss the operative complaint. The Company cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liabilities. The Company also cannot provide an estimate of the possible loss or range of loss. The Company does not believe, based on currently available information, that the outcome of these proceedings will have a material adverse effect on its financial condition.

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In June 2023, a purported former stockholder filed a class action complaint in the United States District Court for the District of Delaware alleging that the Company’s disclosures issued in connection with the CD&R Merger were materially misleading in violation of Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934. The complaint is captioned Water Island Merger Arbitrage Institutional Commingled Master Fund, L.P. v. Cornerstone Building Brands et al., Case No. 1:23-cv-00701 (D. Del.). The complaint alleges that the Company’s directors and officers issued misleading disclosures, which caused stockholders to approve the CD&R Merger at an unfair price. The plaintiff seeks unspecified monetary damages, interest, attorneys’ fees, expenses, and costs. The Company does not believe these claims have merit and intend to vigorously defend against them. The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities. The Company also cannot provide an estimate of the possible loss or range of loss. The Company does not believe, based on currently available information, that the outcome of these proceedings will have a material adverse effect on its financial condition.

Note 13 — Earnings Per Common Share

Basic earnings per common share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding. Diluted income per common share, if applicable, considers the dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common share is as follows:

	Predecessor
	Three Months Ended   July 2, 2022		Six Months Ended   July 2, 2022
Numerator for Basic and Diluted Earnings Per Common Share
Net income applicable to common shares	$	376,927	$	478,804
Denominator for Basic and Diluted Earnings Per Common Share:
Weighted average basic number of common shares outstanding	127,449		127,288
Common stock equivalents:
Employee stock options	1,597		1,576
Weighted average diluted number of common shares outstanding	129,046		128,864
Basic earnings per common share	$	2.96	$	3.76
Diluted earnings per common share	$	2.92	$	3.72
Incentive plan securities excluded from dilution (1)	—		34

(1)Represents securities not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

The Company calculates earnings per share using the “two-class” method, whereby unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and, therefore, these participating securities are treated as a separate class in computing earnings per share. The calculation of earnings per share presented here excludes the income attributable to unvested restricted stock units related to our Incentive Plan from the numerator and excludes the dilutive impact of those shares from the denominator. Awards subject to the achievement of performance conditions or market conditions for which such conditions had been met at the end of any of the periods presented are included in the computation of diluted earnings per common share if their effect was dilutive.

Earnings per common share is not presented for the Successor period as the Company’s common stock is no longer publicly traded either on a stock exchange or in the over-the-counter market.

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Note 14 — Supplemental Cash Flow Information

The following table sets forth supplemental cash flow information:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	141,856	$	77,432
Income taxes paid	15,774		55,849

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CORNERSTONE BUILDING BRANDS, INC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following is management’s discussion and analysis of certain significant factors that have affected our consolidated financial condition and results of operations during the periods presented (the “MD&A”). This information should be read in conjunction with the Condensed Consolidated Financial Statements included herein “Item 1. Condensed Consolidated Financial Statements” and the Consolidated Financial Statements and the Notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Forward-Looking Statements

This Quarterly Report includes statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. In some cases, our forward-looking statements can be identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will,” “target” or other similar words. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these expectations and the related statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected. These risks, uncertainties and other factors include, but are not limited to:

•seasonality of the business and adverse weather conditions;

•challenging macroeconomic conditions affecting the residential, commercial and repair and remodeling construction industry and markets, including increasing interest rates, and demand in new construction and repair and remodeling;

•commodity price volatility and/or limited availability of raw materials, including steel, polyvinyl chloride (“PVC”) resin, aluminum, and glass due to supply chain disruptions;

•increases in the macroeconomic inflationary environment and our ability to react accordingly;

•our ability to identify and develop relationships with a sufficient number of qualified suppliers to mitigate risk in the event a significant supplier experiences a significant production or supply chain interruption;

•the increasing difficulty of consumers and builders in obtaining credit or financing;

•our ability to successfully implement operational efficiency initiatives, including to increase automation and mitigate increases in our manufacturing costs;

•our ability to successfully achieve price increases to offset cost increases;

•ability to compete effectively against competitors;

•our ability to successfully integrate our acquired businesses and to realize anticipated benefits;

•our ability to employ, train and retain qualified personnel;

•increases in labor costs, labor market pressures, potential labor disputes, union organizing activity and work stoppages at our facilities or the facilities of our suppliers;

•increases in energy costs;

•increases in freight and transportation costs;

•volatility in the United States (“U.S.”) and international economies and in the credit markets;

•the severity, duration and spread of the COVID-19 pandemic and its variants (collectively, the “COVID-19 pandemic”), as well as actions that may be taken by the Company or governmental authorities due to any resurgence of the COVID-19 pandemic or to treat its impact and the resulting impact on supply chain and labor pressures;

•an impairment of our goodwill and/or intangible assets;

•our ability to successfully develop new products or improve existing products;

•enforcement and obsolescence of our intellectual property rights;

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•costs related to compliance with, violations of or liabilities under environmental, health and safety laws;

•our ability to make strategic acquisitions accretive to earnings and dispositions at favorable prices and terms;

•our ability to fund operations, provide increased working capital necessary to support our strategy and acquisitions using available liquidity;

•global climate change, and compliance with new or changed laws or regulations relating to environmental, social and governance (“ESG”);

•breaches of our information system security measures;

•damage to our computer infrastructure and software systems;

•necessary maintenance or replacements to our enterprise resource planning technologies;

•potential personal injury, property damage or product liability claims or other types of litigation, including stockholder litigation related to the Merger (as defined herein);

•compliance with certain laws related to our international business operations;

•significant changes in factors and assumptions used to measure certain of our defined benefit plan obligations and the effect of actual investment returns on pension assets;

•additional costs from new regulations which relate to the utilization or manufacturing of our products or services, including changes in building codes and standards;

•increases in tariffs or import and trade restrictions;

•our controlling stockholder’s interests differing from the interests of holders of our indebtedness;

•our substantial indebtedness and our ability to incur substantially more indebtedness;

•limitations that our debt agreements place on our ability to engage in certain business and financial transactions;

•our ability to obtain financing on acceptable terms;

•exchange rate fluctuations;

•downgrades of our credit ratings;

•the effect of increased interest rates on our ability to service our debt;

•uncertainty as to the acceptance of Secured Overnight Financing Rate (“SOFR”) and phasing out of London Interbank Offered Rate (“LIBOR”) interest rates; and

•other risks detailed under the caption “Risk Factors” in this Quarterly Report on Form 10-Q, in Part I, Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”), and other filings we make with the SEC.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. However, we caution you that assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this report, including those described under the caption “Risk Factors” in this report and the 2022 Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the SEC. We expressly disclaim any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in our expectations unless the securities laws require us to do so. 

Company Overview

Our Company

Cornerstone Building Brands, Inc. (“Cornerstone Building Brands”, together with its subsidiaries, unless the context requires otherwise, the “Company,” “we,” “us” or “our”) is a holding company incorporated in Delaware. We are the largest manufacturer of exterior building products in North America by sales and serve residential and commercial customers across both the new construction and repair and remodel markets.

Our operations are organized as three reportable segments: Aperture Solutions, Surface Solutions and Shelter Solutions. We have:

•One of the broadest product offerings and the most well-regarded brand portfolio in our industry. Our total addressable market is diverse and expands across multiple geographies, end markets, channels, customers and products providing us with significant benefits.

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•A leading market position in various North American markets we serve, including, among others, vinyl windows, vinyl siding, stone veneer installations, metal accessories, metal roofing and wall systems and engineered metal building systems.

•An extensive coast-to-coast network of manufacturing, distribution and branch office facilities throughout North America.

•A vertically integrated manufacturing process that enables us to deliver better service and positions us to be a cost-advantaged manufacturer.

We are mindful of the harmful effects of global climate change and the contributions to climate change from manufacturing operations and the end-use of building construction products. We have made and continue to make progress on our work related to ESG matters.

Merger Transaction

On July 25, 2022 and pursuant to an Agreement and Plan of Merger dated March 5, 2022 (the “Merger Agreement”) by and among the Company, Camelot Return Intermediate Holdings, LLC (“Camelot Parent”), and Camelot Return Merger Sub, Inc. (“Merger Sub”), investment funds managed by Clayton, Dubilier and Rice, LLC (“CD&R”) became the indirect owners of all the issued and outstanding shares of common stock of Cornerstone Building Brands. Pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a subsidiary of Camelot Parent (the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”), we became a privately held company and our shares were no longer traded on the New York Stock Exchange.

At the Effective Time, in accordance with the terms and conditions set forth in the Merger Agreement, each share of Company common stock outstanding immediately prior to the Effective Time of the Merger (other than (i) shares of Company common stock that were cancelled or converted into shares of common stock of the Surviving Corporation in accordance with the Merger Agreement and (ii) shares of Company common stock held by stockholders of the Company (other than CD&R, certain investment funds managed by CD&R and other affiliates of CD&R that held shares of Company common stock) who did not vote in favor of the Merger Agreement or the Merger and who have perfected and not withdrawn a demand for appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware), was converted into the right to receive cash in an amount equal to $24.65 in cash per share, without interest and subject to any required withholding taxes.

Non-GAAP Financial Measures

We use several measures derived from consolidated financial information, but not presented in our Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). These measures are considered non-GAAP financial measures. Specifically, in this report, we refer to adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA as a percentage of net sales, which are non-GAAP financial measures (collectively, our “non-GAAP financial measures”). Our non-GAAP financial measures are not intended to replace the presentation of the comparable measures under U.S. GAAP. However, we believe the presentation of the non-GAAP financial measures, when considered together with the comparable U.S. GAAP financial measure, along with a reconciliation to its respective U.S. GAAP financial measure, enables investors to better understand the factors and trends affecting our underlying business that could not be obtained absent these disclosures. Additionally, we believe that the presentation of our non-GAAP financial measures enables investors to evaluate trends in the business excluding certain items which are not entirely a result of our core operations.

Furthermore, the presentation of these non-GAAP financial measures supplements other metrics we use to internally evaluate our business and facilitates the comparison of past and present operations. The non-GAAP financial measures we use may differ from non-GAAP financial measures used by other companies, and other companies may not define non-GAAP financial measures we use in the same way, even if similarly titled.

Predecessor and Successor Periods

The MD&A provides an overview of our financial condition as of July 1, 2023 and the results of operations for the periods subsequent to July 25, 2022 (“Successor”) and for periods prior to July 25, 2022 (“Predecessor”). Our Condensed Consolidated Statements of (Loss) Income as reported in our Condensed Consolidated Financial Statements for these periods are prepared in accordance with U.S. GAAP.

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Reconciliation of Net (Loss) Income to Adjusted EBITDA and Adjusted EBITDA as a Percentage of Net Sales

The following table presents the reconciliation of net income (loss) to Adjusted EBITDA and computes Adjusted EBITDA as a percentage of net sales:

	Successor			Predecessor			Successor			Predecessor
(Amounts in thousands)	Three Months Ended  July 1, 2023			Three Months Ended  July 2, 2022			Six Months Ended  July 1, 2023			Six Months Ended  July 2, 2022
Net (loss) income	$	(22,326)		$	380,059		$	(51,141)		$	482,342
Depreciation and amortization	165,162			73,958			237,824			147,890
Interest expense	92,314			45,571			186,425			89,677
Income tax (benefit) provision	(10,716)			132,497			(19,325)			166,863
Earnings before interest, income taxes, depreciation and amortization	224,434			632,085			353,783			886,772
Strategic development and acquisition related costs	8,915			15,874			16,537			20,665
Asset impairments	—			—			—			368
Acquired inventory step-up amortization	—			1,238			—			1,238
Gain on divestitures	—			(401,413)			—			(401,413)
Gain on legal settlements	—			—			—			(76,575)
Long-term incentive plan compensation (1)	6,128			4,711			3,773			16,162
Foreign exchange (gain) loss	(4,430)			304			(6,447)			(1,140)
(Gain) loss on extinguishment of debt	(379)			(3,553)			184			(3,553)
Employee separation and facility closure charges	2,609			829			11,431			1,133
Other (income) expense, net	(3,632)			8			(4,805)			13
Other	4,877			(2,606)			5,246			(2,278)
Adjusted EBITDA (2)	$	238,522		$	247,477		$	379,702		$	441,392
Adjusted EBITDA as a percentage of net sales	16.7		%	13.7		%	14.0		%	13.1		%

(1)Reflects expenses related to long-term incentive compensation plans, which primarily includes awards that were granted prior to the Merger (“Pre-Merger Awards”) and incentive unit grants that occurred subsequent to the Merger. For the six months ended July 1, 2023, we recognized a gain of $1.4 million from Pre-Merger Awards. The gain recognized on the Pre-Merger Awards during the six months ended July 1, 2023 mainly related to updating our vesting expectations for certain performance-based awards which have a range of payouts based on an EBITDA-based metric.

(2)The above periods, to the extent applicable, exclude the operations of divestitures as noted below in the “Impact of Divestitures” section.

Seasonality

Our sales volume is generally higher during our second and third quarters, which is historically the peak season for construction and remodeling in North America. Seasonal variations in our operational results may be negatively impacted by inclement weather and other conditions. Working capital requirements have generally been greatest during the first half of our fiscal year due to the timing of the buildup of inventory to support the heavier construction season. In our Shelter Solutions reportable segment, low-rise building application construction typically lags housing cycles by 12 to 24 months.

Impact of Divestitures

In our MD&A, the impact of divestitures, when presented, is quantified as the portion of the preceding twelve months post- or pre-transaction where no comparable period is available. Specifically, in our Shelter Solutions reportable segment, we completed the sale of our coil coatings business in June 2022.

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Results of Operations

The following table represents key results of operations on a consolidated basis for the interim periods indicated, and the changes between periods:

	Successor			Predecessor			Successor			Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023			Three Months Ended   July 2, 2022			Six Months Ended   July 1, 2023			Six Months Ended   July 2, 2022
Net sales	$	1,428,218		$	1,803,801		$	2,707,306		$	3,370,639
Gross profit	297,837			399,080			579,698			732,987
% of net sales	20.9		%	22.1		%	21.4		%	21.7		%
Selling, general and administrative expenses	247,006			245,607			474,807			476,773
% of net sales	17.3		%	13.6		%	17.5		%	14.1		%
Gain on divestitures	—			(401,413)			—			(401,413)
Gain on legal settlements	—			—			—			(76,575)
Income from operations	50,831			554,886			104,891			734,202
Interest expense	(92,314)			(45,571)			(186,425)			(89,677)
Foreign exchange gain (loss)	4,430			(304)			6,447			1,140
Gain (loss) on extinguishment of debt	379			3,553			(184)			3,553
Other income (expense), net	3,632			(8)			4,805			(13)
(Loss) income before income taxes	(33,042)			512,556			(70,466)			649,205
Income tax (benefit) provision	(10,716)			132,497			(19,325)			166,863
Net (loss) income	$	(22,326)		$	380,059		$	(51,141)		$	482,342
Non-GAAP financial measures*:
Adjusted EBITDA	$	238,522		$	247,477		$	379,702		$	441,392
Adjusted EBITDA as a percentage of net sales	16.7		%	13.7		%	14.0		%	13.1		%
* Refer to Non-GAAP Financial Measures for further discussion.

Net sales decreased $375.6 million, or 20.8%, for the three months ended July 1, 2023 compared to the three months ended July 2, 2022 and $663.3 million, or 19.7%, for the six months ended July 1, 2023 compared to the six months ended July 2, 2022 mainly due to lower volume across all reportable segments and the impact from the strategic divestiture of our coil coatings business in June 2022.

Gross profit as a percentage of net sales was 20.9% for the three months ended July 1, 2023, compared to 22.1% for the three months ended July 2, 2022, and 21.4% for the six months ended July 1, 2023, compared to 21.7% for the six months ended July 2, 2022. These declines were mainly due to an increase in depreciation expense, including a cumulative catch-up adjustment of $65.2 million recorded during the three months ended July 1, 2023, driven from the update in the fair market value of property, plant and equipment acquired resulting from the Merger, partially offset by favorable product mix, price net of inflation and manufacturing net efficiencies.

Selling, general and administrative expenses increased $1.4 million, or 0.6%, for the three months ended July 1, 2023 mainly due to a net increase in depreciation and amortization expense, including a cumulative catch-up adjustment of $1.3 million recorded during the three months ended July 1, 2023, driven from the update in the fair market value of property, plant and equipment and intangible assets acquired resulting from the Merger.

Selling, general and administrative expenses decreased $2.0 million, or 0.4%, for the six months ended July 1, 2023 mainly due to the impact from the strategic divestiture of our coil coatings business in June 2022, partially offset by a net increase in depreciation and amortization expense, including a cumulative catch-up adjustment of $1.3 million recorded during the three months ended July 1, 2023, resulting from the update in the fair market value of property, plant and equipment and intangible assets acquired resulting from the Merger.

Gain on divestitures mainly consists of a gain recognized in June 2022 of $394.2 million from the strategic divestiture of our coil coatings business.

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Gain on legal settlements consists of a gain recognized in March 2022 of $76.6 million related to shareholder litigation.

Interest expense increased by $46.7 million for the three month period and $96.7 million for the six months ended July 1, 2023. The following table sets forth the components of interest expense:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Interest expense on outstanding borrowings (1)	$	80,982	$	35,245	$	161,161	$	67,574
Interest (income) expense attributable to interest rate swaps	(7,961)		8,585		(14,005)		18,658
Amortization of debt discount, debt issuance costs and purchase accounting fair value adjustment	19,197		1,665		38,965		3,305
Other	96		76		304		140
Total interest expense	$	92,314	$	45,571	$	186,425	$	89,677

(1)The incremental interest expense incurred for the three and six months ended July 1, 2023 compared to the three and six months ended July 2, 2022 is mainly a result of the additional financing obtained to consummate the Merger.

Foreign exchange (gain) loss were $4.4 million and $6.4 million of gains for the three and six months ended July 1, 2023 and a $0.3 million loss and a $1.1 million gain for the three and six months ended July 2, 2022. These incremental gains period over period are due to favorable foreign exchange rate changes on intercompany loans based in Canadian currency.

Gain (loss) on extinguishment of debt includes a gain of $0.4 million, which included a $6.3 million write-off of unamortized deferred financing costs, and a loss of $0.2 million, which included a $13.1 million write-off of unamortized deferred financing costs, from the repurchase of our 6.125% senior notes during the three and six months ended July 1, 2023. A gain of $3.6 million for the three and six months ended July 2, 2022 resulted from the repurchase of our 6.125% senior notes.

Income tax (benefit) provision decreased by $143.2 million for the three months ended July 1, 2023 and decreased by $186.2 million for the six months ended July 1, 2023 mainly due to lower pre-tax earnings for the reasons discussed above.

Reportable Segment Results of Operations

The following table sets forth the continuing results of operations for our reportable segments:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended  July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended  July 1, 2023		Six Months Ended   July 2, 2022
Net sales:
Aperture Solutions	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions	335,522		421,106		604,113		754,096
Shelter Solutions	445,021		605,225		850,949		1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639
Adjusted reportable segment EBITDA*:
Aperture Solutions	$	103,293	$	105,131	$	168,086	$	187,510
Surface Solutions	61,499		78,654		87,806		135,126
Shelter Solutions	105,970		97,851		189,384		187,419
Corporate and Other	(54,769)		347,208		(102,561)		372,037
Depreciation and amortization	(165,162)		(73,958)		(237,824)		(147,890)
Income from operations	$	50,831	$	554,886	$	104,891	$	734,202
* Refer to Non-GAAP Financial Measures for further discussion.

28

Aperture Solutions

The following table sets forth the continuing results of operations for the Aperture Solutions reportable segment:

	Successor			Predecessor			Successor			Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023			Three Months Ended   July 2, 2022			Six Months Ended   July 1, 2023			Six Months Ended   July 2, 2022
Net sales	$	647,675		$	777,470		$	1,252,244		$	1,479,580
Adjusted reportable segment EBITDA*	103,293			105,131			168,086			187,510
% of net sales	15.9		%	13.5		%	13.4		%	12.7		%
Depreciation and amortization	$	68,007		$	36,381		$	103,932		$	71,511
* Refer to Non-GAAP Financial Measures for further discussion

Net sales for the three-months ended July 1, 2023 decreased $129.8 million, or 16.7%, and for the six months ended July 1, 2023 decreased $227.3 million, or 15.4%, mainly driven by lower volumes, partially offset by favorable price and product mix.

Adjusted segment EBITDA for the three-months ended July 1, 2023 decreased $1.8 million and for the six months ended July 1, 2023 decreased $19.4 million, mainly due to lower volume, partially offset by favorable price net of inflation, product mix and manufacturing net efficiencies.

Surface Solutions

The following table sets forth the continuing results of operations for the Surface Solutions reportable segment:

	Successor			Predecessor			Successor			Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023			Three Months Ended   July 2, 2022			Six Months Ended   July 1, 2023			Six Months Ended   July 2, 2022
Net sales	$	335,522		$	421,106		$	604,113		$	754,096
Adjusted reportable segment EBITDA*	61,499			78,654			87,806			135,126
% of net sales	18.3		%	18.7		%	14.5		%	17.9		%
Depreciation and amortization	$	10,406		$	28,122		$	39,739		$	57,184
* Refer to Non-GAAP Financial Measures for further discussion

Net sales for the three-months ended July 1, 2023 decreased $85.6 million, or 20.3%, and for the six months ended July 1, 2023 decreased $150.0 million, or 19.9%, mainly driven by lower volumes and lower prices from declining material costs.

Adjusted reportable segment EBITDA for the three months ended July 1, 2023 decreased $17.2 million and for the six months ended July 1, 2023 decreased $47.3 million mainly due to lower volume and unfavorable price net of inflation and product mix, partially offset by manufacturing net efficiencies.

Shelter Solutions

The following table sets forth the continuing results of operations for the Shelter Solutions reportable segment:

	Successor			Predecessor			Successor			Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023			Three Months Ended   July 2, 2022			Six Months Ended   July 1, 2023			Six Months Ended   July 2, 2022
Net sales	$	445,021		$	605,225		$	850,949		$	1,136,963
Adjusted reportable segment EBITDA*	105,970			97,851			189,384			187,419
% of net sales	23.8		%	16.2		%	22.3		%	16.5		%
Depreciation and amortization	$	84,883		$	8,296		$	90,683		$	16,464
* Refer to Non-GAAP Financial Measures for further discussion

Net sales for the three months ended July 1, 2023 decreased $160.2 million, or 26.5%, and for the six months ended July 1, 2023 decreased $286.0 million, or 25.2%, mainly driven by lower volume, the impact from the strategic divestiture of our coil coatings business in June 2022 and lower price from declining material costs.

29

Adjusted reportable segment EBITDA for the three months ended July 1, 2023 increased $8.1 million and for the six months ended July 1, 2023 increased by $2.0 million mainly due to favorable price net of inflation, product mix and manufacturing net efficiencies, partially offset by lower volume and the impact from the strategic divestiture of our coil coatings business in June 2022.

Corporate and Other

The following table sets forth Corporate and other:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Corporate costs	$	32,240	$	35,397	$	65,574	$	69,901
Strategic development and acquisition related costs	8,915		15,874		16,537		20,665
Asset impairments	—		—		—		368
Gain on legal settlements	—		—		—		(76,575)
Gain on divestitures	—		(401,413)		—		(401,413)
Long-term incentive plan compensation	6,128		4,711		3,773		16,162
Employee separation and facility closure charges	2,609		829		11,431		1,133
Other	4,877		(2,606)		5,246		(2,278)
Total Corporate and other	$	54,769	$	(347,208)	$	102,561	$	(372,037)

Corporate costs decreased by $3.2 million and $4.3 million for the three and six months ended July 1, 2023 mainly on lower compensation and personnel costs.

Depreciation and Amortization

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Depreciation:
Cost of sales	$	99,790	$	20,515	$	119,137	$	40,721
Selling, general and administrative expenses	31,674		5,395		37,085		10,113
Total depreciation	131,464		25,910		156,222		50,834
Amortization:
Selling, general and administrative expenses	33,698		48,048		81,602		97,056
Total amortization	33,698		48,048		81,602		97,056
Total depreciation and amortization	$	165,162	$	73,958	$	237,824	$	147,890

Depreciation and amortization increased by $91.2 million and $89.9 million for the three and six months ended July 1, 2023, primarily due to the update in the fair market value of property, plant and equipment and intangible assets acquired resulting from the Merger. During the three months ended July 1, 2023, the Company recorded a cumulative catch-up adjustment resulting in increases of $65.2 million and $1.3 million to cost of sales and selling, general and administrative expenses to account for the update in fair value of these assets as if the adjustments had been made as of the date of the Merger.

Liquidity and Capital Resources

Our main liquidity and capital resource needs are payments to service our debt, ongoing operations and working capital requirements, capital expenditures and the cost of acquisitions. Our primary source of liquidity is cash generated from our continuing operations, as well as borrowings under our credit facilities. We believe that funds provided by these sources will be adequate to meet our liquidity and capital resource needs for at least the next 12 months under current operating conditions.

30

We may from time to time take steps to reduce our debt. These actions may include repurchases or opportunistic refinancing of debt. The amount of debt, if any, that may be repurchased or refinanced will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations. Our affiliates may also purchase our debt from time to time, through open market purchases or other transactions. In such cases, our debt may not be retired, in which case we would continue to pay interest in accordance with the terms of such debt, and we would continue to reflect the debt as outstanding in our condensed consolidated balance sheets.

The following table sets forth our total net liquidity position as of July 1, 2023:

(Amounts in thousands)	Amount
Cash and cash equivalents	$	445,128
Revolving credit facilities:
Asset-based lending facility (1)	850,000
Cash flow revolving facility	92,000
First-in-last-out tranche asset-based lending facility (1)	95,000
Total revolving credit facilities	1,037,000
Less:
Debt issued under the facilities	—
Letters of credit outstanding and priority payables	47,000
Net credit facility	990,000
Net liquidity	$	1,435,128

(1)    Borrowing availability under the ABL Facilities is determined based on specified percentages of the value of eligible inventory, accounts receivable, less certain allowances and subject to certain other adjustments as set forth in the ABL Credit Agreement. Availability is also reduced by issuance of letters of credit.

Cash Flows

	Successor		Predecessor
(Amounts in thousands)	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Net cash provided by operating activities	$	20,662	$	293,768
Net cash (used in) provided by investing activities	(79,100)		461,143
Net cash flows used in financing activities	(48,385)		(30,051)

Net Cash Provided by Operating Activities

Net cash provided by operating activities consists mainly of: (i) cash collections on credit sales to our customers, (ii) purchases of commodity based raw materials, (iii) labor and other employee-related expenditures, (iv) other non-labor costs, such as, among other items, supplies, insurance, advertising and marketing costs, (v) interest paid on our long-term debt, and (vi) payments for income taxes.

Net cash provided by operating activities was $20.7 million for the six months ended July 1, 2023, a decrease from the $293.8 million provided by operations in the prior year which resulted from a decrease in operating working capital mainly due to an increase in payments made to satisfy employee-related liabilities, including short-term and long-term incentive plan payouts, lower earnings generation and a net increase in depreciation and amortization expense due to a cumulative catch-up adjustment to account for the update in the fair value of property, plant and equipment and intangible assets as if the adjustments had been made as of the date of the Merger.

Net Cash (Used In) Provided by Investing Activities

Our main uses of cash for investing activities are for payments for property and equipment and acquisitions of businesses.

Net cash used in investing activities was $79.1 million for the six months ended July 1, 2023 compared to $461.1 million provided by investing activities for the six months ended July 2, 2022. The $540.2 million decrease is mainly driven by $500.0 million received in proceeds from the sale of the Company’s coil coatings business in June 2022.

31

Net Cash Used In Financing Activities

Our main uses of cash for financing activities include activity to consummate the Merger, repurchases and payments on long-term debt, distributions to owners, and payments for financing fees. Our main sources of cash from financing activities include the proceeds from issuances of debt and contributions from owners.

Net cash used in financing activities was $48.4 million for the six months ended July 1, 2023 compared to $30.1 million used in financing activities for the six months ended July 2, 2022. This $18.3 million increase is mainly driven by the payment of $33.9 million for the repurchase of an aggregate principal amount of $46.8 million of our 6.125% Senior Notes during the six months ended July 1, 2023, partially offset by $6.6 million of payments related to the financing component of interest rate swaps during the six months ended July 2, 2022.

Contingent Liabilities and Commitments

Leases

We have leases for certain manufacturing, warehouse, distribution locations, offices, vehicles and equipment. As of July 1, 2023 the Company had total future lease payments of $497.0 million, with $60.1 million payable within 12 months.

Debt

We have certain long-term debt instruments outstanding. As of July 1, 2023 the Company had total future payments of $3.9 billion, with $29.0 million payable within 12 months. See Note 7  — Long-Term Debt in the Notes to the Condensed Consolidated Financial Statements for additional information.

Critical Accounting Estimates

There have been no material changes in our critical accounting policies and estimates during the six months ended July 1, 2023. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a description of the Company’s critical accounting estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes in our exposure to market risk during the six months ended July 1, 2023. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for a description of the Company’s market risks.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of July 1, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures by a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding the required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management believes that our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and based on the evaluation of our disclosure controls and procedures as of July 1, 2023, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at such reasonable assurance level. 

Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended July 1, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

32

CORNERSTONE BUILDING BRANDS, INC.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

See Part I, Item 1, “Condensed Consolidated Financial Statements”, Note 12 — Commitments and Contingencies, which is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The risks disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and information provided elsewhere in this report, could materially affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known or we currently deem to be immaterial may materially adversely affect our business, financial condition or results of operations. Except for such additional information, we believe there have been no other material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

As of July 25, 2022, the Company’s common stock is no longer publicly traded either on a stock exchange or in the over-the-counter market.

33

Item 6. Exhibits.

Index to Exhibits

Exhibit No.	Description
*31.1	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
*31.2	Rule 13a-14(a)/15d-14(a) Certifications (Section 302 of the Sarbanes-Oxley Act of 2002)
**32.1	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)
**32.2	Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (Section 906 of the Sarbanes-Oxley Act of 2002)
*101.INS	Inline XBRL Instance Document
*101.SCH	Inline XBRL Taxonomy Extension Schema Document
*101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
*101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
*101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith
**	Furnished herewith

34

SIGNATURES

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

	CORNERSTONE BUILDING BRANDS, INC.
Date: August 4, 2023	By:	/s/ Jeffrey S. Lee
		Jeffrey S. Lee
		Executive Vice President and Chief Financial Officer
Date: August 4, 2023	By:	/s/ Wayne F. Irmiter
		Wayne F. Irmiter
		Senior Vice President and Chief Accounting Officer

35

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(b)/15d-14(a)

I, Rose Lee, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cornerstone Building Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2023

/s/ Rose Lee

Rose Lee

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(b)/15d-14(a)

I, Jeffrey S. Lee, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cornerstone Building Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2023

/s/ Jeffrey S. Lee

Jeffrey S. Lee

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT

In connection with the quarterly report on Form 10-Q of Cornerstone Building Brands, Inc. (the “Company”) for the quarter ended July 1, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rose Lee, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. I have reviewed this Report of the Company;

2. This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

3. The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2023

/s/ Rose Lee

Rose Lee

President and Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Cornerstone Building Brands, Inc. and will be retained by Cornerstone Building Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT

In connection with the quarterly report on Form 10-Q of Cornerstone Building Brands, Inc. (the “Company”) for the quarter ended July 1, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey S. Lee, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. I have reviewed this Report of the Company;

2. This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

3. The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2023

/s/ Jeffrey S. Lee

Jeffrey S. Lee

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Cornerstone Building Brands, Inc. and will be retained by Cornerstone Building Brands, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification shall not be deemed to be “filed” or part of the Report or incorporated by reference into any of the registrant’s filings with the Securities and Exchange Commission by implication or by any reference in any such filing to the Report.

XML

Cover	6 Months Ended
	Jul. 01, 2023 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 01, 2023
Document Transition Report	false
Entity File Number	1-14315
Entity Registrant Name	Cornerstone Building Brands, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0127701
Entity Address, Address Line One	5020 Weston Parkway
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Cary
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27513
City Area Code	866
Local Phone Number	419-0042
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	0
Entity Central Index Key	0000883902
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Income Statement [Abstract]
Net sales	$ 1,428,218	$ 1,803,801	$ 2,707,306	$ 3,370,639
Cost of sales	1,130,381	1,404,721	2,127,608	2,637,652
Gross profit	297,837	399,080	579,698	732,987
Selling, general and administrative expenses	247,006	245,607	474,807	476,773
Gain on divestitures	0	(401,413)	0	(401,413)
Gain on legal settlements	0	0	0	(76,575)
Income from operations	50,831	554,886	104,891	734,202
Interest expense	(92,314)	(45,571)	(186,425)	(89,677)
Foreign exchange gain (loss)	4,430	(304)	6,447	1,140
Gain (loss) on extinguishment of debt	379	3,553	(184)	3,553
Other income (expense), net	3,632	(8)	4,805	(13)
(Loss) income before income taxes	(33,042)	512,556	(70,466)	649,205
Income tax (benefit) provision	(10,716)	132,497	(19,325)	166,863
Net (loss) income	(22,326)	380,059	(51,141)	482,342
Net income allocated to participating securities	0	(3,132)	0	(3,538)
Net (loss) income applicable to common shares	$ (22,326)	$ 376,927	$ (51,141)	$ 478,804
Income per common share:
Basic (in dollars per share)		$ 2.96		$ 3.76
Diluted (in dollars per share)		$ 2.92		$ 3.72
Weighted average number of common shares outstanding:
Basic (in shares)		127,449		127,288
Diluted (in shares)		129,046		128,864

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Comprehensive (loss) income:
Net (loss) income	$ (22,326)	$ 380,059	$ (51,141)	$ 482,342
Other comprehensive income, net of tax:
Foreign currency translation adjustments	483	(6,266)	(480)	(1,482)
Unrealized gain on derivative instruments, net of income tax of $(4,573), $(4,335) and $(1,219), $(15,960)	14,854	2,544	3,962	63,240
Amount reclassified from accumulated other comprehensive (loss) income into earnings relating to derivative instruments	0	7,288	0	14,576
Changes in retirement related benefit plans	0	(1,122)	0	(1,122)
Other comprehensive income	15,337	2,444	3,482	75,212
Comprehensive (loss) income	$ (6,989)	$ 382,503	$ (47,659)	$ 557,554

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Statement of Comprehensive Income [Abstract]
Unrealized gain on derivative instruments, tax	$ (4,573)	$ (4,335)	$ (1,219)	$ (15,960)

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 445,128	$ 553,551
Accounts receivable, net	720,903	665,936
Inventories	534,073	551,828
Other current assets	78,516	125,306
Total current assets	1,778,620	1,896,621
Property, plant and equipment, net	835,497	618,064
Lease right-of-use assets	363,520	365,552
Goodwill	1,596,111	1,688,548
Intangible assets, net	2,264,546	2,519,023
Other assets, net	105,428	105,842
Total assets	6,943,722	7,193,650
Current liabilities:
Current portion of long-term debt	29,000	29,000
Current portion of lease liabilities	60,081	61,899
Accounts payable	266,057	288,938
Accrued income and other taxes	47,102	21,867
Employee-related liabilities	88,662	184,187
Rebates, warranties and other customer-related liabilities	145,788	157,752
Other current liabilities	144,240	149,596
Total current liabilities	780,930	893,239
Long-term debt	3,356,765	3,366,588
Long-term lease liabilities	281,989	302,339
Deferred income tax liabilities	594,637	653,745
Other long-term liabilities	243,308	248,794
Total liabilities	5,257,629	5,464,705
Commitments and contingencies (Note 12)
Equity:
Common stock, $0.01 par value, 1,000 shares authorized, issued and outstanding at July 1, 2023 and December 31, 2022	0	0
Additional paid-in capital	1,762,739	1,757,932
Accumulated deficit	(114,637)	(63,496)
Accumulated other comprehensive income	37,991	34,509
Total equity	1,686,093	1,728,945
Total liabilities and equity	$ 6,943,722	$ 7,193,650

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 01, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000
Common stock, shares outstanding (in shares)	1,000	1,000

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	(Accumulated Deficit) Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Beginning balance (in shares) at Dec. 31, 2021		126,992,107
Beginning balance at Dec. 31, 2021	$ 1,176,339	$ 1,270	$ 1,279,931	$ (98,826)	$ (5,612)	$ (424)
Beginning balance (in shares) at Dec. 31, 2021						(21,071)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock purchases (in shares)						(192,773)
Treasury stock purchases	(4,627)					$ (4,627)
Retirement of treasury shares (in shares)		(192,773)				(192,773)
Retirement of treasury shares	0	$ (2)	(4,625)			$ 4,627
Issuance of restricted stock (in shares)		611,178
Issuance of restricted stock	0	$ 6	(6)
Stock options exercised (in shares)		133,529
Stock options exercised	1,421	$ 1	1,420
Other comprehensive income	75,212				75,212
Deferred compensation obligation	0		(424)			$ 424
Deferred compensation obligation (in shares)						21,071
Share-based compensation	16,162		16,162
Net (loss) income	482,342			482,342
Ending balance (in shares) at Jul. 02, 2022		127,544,041
Ending balance at Jul. 02, 2022	1,746,849	$ 1,275	1,292,458	383,516	69,600	$ 0
Ending balance (in shares) at Jul. 02, 2022						0
Beginning balance (in shares) at Apr. 02, 2022		127,329,476
Beginning balance at Apr. 02, 2022	1,359,123	$ 1,273	1,287,237	3,457	67,156	$ 0
Beginning balance (in shares) at Apr. 02, 2022						0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock purchases (in shares)						(22,373)
Treasury stock purchases	(545)					$ (545)
Retirement of treasury shares (in shares)		(22,373)				(22,373)
Retirement of treasury shares	0		(545)			$ 545
Issuance of restricted stock (in shares)		138,657
Issuance of restricted stock	0	$ 1	(1)
Stock options exercised (in shares)		98,281
Stock options exercised	1,057	$ 1	1,056
Other comprehensive income	2,444				2,444
Share-based compensation	4,711		4,711
Net (loss) income	380,059			380,059
Ending balance (in shares) at Jul. 02, 2022		127,544,041
Ending balance at Jul. 02, 2022	$ 1,746,849	$ 1,275	1,292,458	383,516	69,600	$ 0
Ending balance (in shares) at Jul. 02, 2022						0
Beginning balance (in shares) at Dec. 31, 2022	1,000	1,000
Beginning balance at Dec. 31, 2022	$ 1,728,945	$ 0	1,757,932	(63,496)	34,509	$ 0
Beginning balance (in shares) at Dec. 31, 2022						0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income	3,482				3,482
Share-based compensation	4,977		4,977
Other	(170)		(170)
Net (loss) income	$ (51,141)			(51,141)
Ending balance (in shares) at Jul. 01, 2023	1,000	1,000
Ending balance at Jul. 01, 2023	$ 1,686,093	$ 0	1,762,739	(114,637)	37,991	$ 0
Ending balance (in shares) at Jul. 01, 2023						0
Beginning balance (in shares) at Apr. 01, 2023		1,000
Beginning balance at Apr. 01, 2023	1,690,597	$ 0	1,760,254	(92,311)	22,654	$ 0
Beginning balance (in shares) at Apr. 01, 2023						0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Other comprehensive income	15,337				15,337
Share-based compensation	2,485		2,485
Net (loss) income	$ (22,326)			(22,326)
Ending balance (in shares) at Jul. 01, 2023	1,000	1,000
Ending balance at Jul. 01, 2023	$ 1,686,093	$ 0	$ 1,762,739	$ (114,637)	$ 37,991	$ 0
Ending balance (in shares) at Jul. 01, 2023						0

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Cash flows from operating activities:
Net (loss) income	$ (51,141)	$ 482,342
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation and amortization	237,824	147,890
Amortization of debt issuance costs, debt discount and fair values	44,955	17,881
Share-based compensation expense	4,977	16,162
Gain on extinguishment of debt	184	(3,553)
Unrealized gain on foreign currency exchange rates	(2,200)	0
Asset impairments	0	368
Gain on divestiture	0	(401,413)
Gain on sale of assets	(5)	(2,670)
Amortization of inventory and other fair value step-ups	0	1,238
Provision for credit losses	3,858	3,158
Deferred income taxes	(89,458)	(15,205)
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures:
Accounts receivable	(57,882)	(130,200)
Inventories	17,206	(5,317)
Income taxes	27,404	12,821
Prepaid expenses and other	12,576	36,066
Accounts payable	(24,370)	22,463
Accrued expenses	(97,612)	108,712
Other, net	(5,654)	3,025
Net cash provided by operating activities	20,662	293,768
Cash flows from investing activities:
Acquisitions, net of cash acquired	0	4,396
Capital expenditures	(79,100)	(60,206)
Proceeds from divestitures, net of cash divested	0	510,883
Proceeds from sale of property, plant and equipment	0	6,070
Net cash (used in) provided by investing activities	(79,100)	461,143
Cash flows from financing activities:
Payments on term loans	(14,500)	(13,000)
Repurchases of senior notes	(33,885)	(7,281)
Payments on derivative financing obligations	0	(6,564)
Other	0	(3,206)
Net cash used in financing activities	(48,385)	(30,051)
Effect of exchange rate changes on cash and cash equivalents	(2,063)	(63)
Net (decrease) increase in cash, cash equivalents and restricted cash	(108,886)	724,797
Cash, cash equivalents and restricted cash at beginning of period	554,014	396,658
Cash, cash equivalents and restricted cash at end of period	$ 445,128	$ 1,121,455

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Basis of Presentation

6 Months Ended

Jul. 01, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

Description of Business

Cornerstone Building Brands, Inc. (“Cornerstone Building Brands” or, collectively with its subsidiaries, unless the context requires otherwise, the “Company”) is a holding company incorporated in Delaware. The Company is the largest exterior building products manufacturer by sales in North America and serves residential and commercial customers across new construction and the repair and remodel end markets. The Company is organized in three reportable segments: Aperture Solutions, Surface Solutions and Shelter Solutions.

Organization and Ownership Structure

On July 25, 2022 and pursuant to an Agreement and Plan of Merger dated March 5, 2022 (the “Merger Agreement”) by and among the Company, Camelot Return Intermediate Holdings, LLC (“Camelot Parent”) and Camelot Return Merger Sub, Inc. (“Merger Sub”), investment funds managed by Clayton, Dubilier and Rice, LLC (“CD&R”) became the indirect owners of all the issued and outstanding shares of common stock of Cornerstone Building Brands. Pursuant to the Merger Agreement, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a subsidiary of Camelot Parent (the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”), the Company became a privately held company and its shares were no longer traded on the New York Stock Exchange.

At the Effective Time, in accordance with the terms and conditions set forth in the Merger Agreement, each share of Company common stock outstanding immediately prior to the Effective Time of the Merger (other than (i) shares of Company common stock that were cancelled or converted into shares of common stock of the Surviving Corporation in accordance with the Merger Agreement and (ii) shares of Company common stock held by stockholders of the Company (other than CD&R, certain investment funds managed by CD&R and other affiliates of CD&R that held shares of Company common stock) who did not vote in favor of the Merger Agreement or the Merger and who have perfected and not withdrawn a demand for appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware), was converted into the right to receive cash in an amount equal to $24.65 in cash per share, without interest and subject to any required withholding taxes.

On July 25, 2022, the Company amended its Certificate of Incorporation to authorize 1,000 shares of common stock, par value of $0.01. Each share of common stock will have one vote and all shares of common stock vote together as a single class.

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements have been prepared with the Company's accounting policies and on the same basis as those financial statements included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2022 and should be read in conjunction with those Consolidated Financial Statements and the Notes thereto. Certain disclosures normally included in the Company’s Consolidated Financial Statements prepared in accordance with U.S. GAAP have been omitted on a basis consistent with the rules and regulations of the SEC.

The accompanying Condensed Consolidated Financial Statements include the accounts and operations of the Company and its majority-owned subsidiaries and all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. All significant intercompany accounts and transactions have been eliminated in consolidation. Through application of pushdown accounting, the Company’s Condensed Consolidated Financial Statements are presented as Predecessor for periods prior to the Merger and Successor for subsequent periods. The Company has reclassified certain prior year amounts to conform to the current year’s presentation. The results reported in these Condensed Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

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Significant Accounting Policies

6 Months Ended

Jul. 01, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the Condensed Consolidated Financial Statements and accompanying notes. These estimates include, but are not limited to: establishing the allowance for expected credit losses; allowance for obsolete inventory; the impairment of goodwill and intangible assets; establishing useful lives for and evaluating the recovery of long-lived assets; recognizing the fair value of assets acquired and liabilities assumed in business combinations; accounting for rebates and product warranties; the valuation and expensing for share-based compensation; certain assumptions made in accounting for pension benefits; accounting for contingencies and uncertainties and accounting for income taxes. Actual results may differ from the estimates used in preparing the Condensed Consolidated Financial Statements.

Cash and Cash Equivalents

Cash and cash equivalents mainly consist of highly liquid, unrestricted savings, checking, money market funds with maturities of less than three months and other bank accounts.

The following table sets forth the components of cash and cash equivalents:

	Successor
	July 1, 2023		December 31, 2022
Cash	$	235,128	$	553,551
Money market funds (Level 1 securities)	210,000		—
Total cash and cash equivalents	$	445,128	$	553,551

Accounts Receivable, Net

The Company reports accounts receivable net of an allowance for expected credit losses. The Company establishes provisions for expected credit losses based on the Company’s assessment of the collectability of amounts owed to the Company by its customers. In establishing the allowance, the Company considers changes in the financial position of a customer, age of the accounts receivable balances, availability of security, unusual macroeconomic conditions, lien rights and bond rights as well as disputes, if any, with its customers. The Company’s allowance for expected credit losses was $4.7 million and $2.1 million at July 1, 2023 and December 31, 2022.

Fair Value Measurements

The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable approximate fair value as of July 1, 2023 and December 31, 2022 given the instruments’ relatively short maturities. The carrying amounts of the indebtedness under revolving credit facilities approximate fair value as the interest rates are variable and reflective of market rates. Fair values for our other debt instruments are measured using Level 1 and Level 2 inputs. U.S. GAAP requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“Topic 848”), which provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the reference rate transition. The amendments in these ASUs are elective, apply to all entities that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, that deferred the sunset date of Topic 848 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. During the second quarter of 2023, as the Company transitioned from LIBOR to alternative reference rates, the Company adopted Topic 848 which did not have a material impact on its Condensed Consolidated Financial Statements or accompanying notes.

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Merger

6 Months Ended

Jul. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Merger

Merger

CD&R Merger Transaction

On July 25, 2022, Merger Sub merged with and into the Company, with the Company surviving the Merger as a subsidiary of Camelot Parent. CD&R previously held 61.9 million shares of Company common stock immediately prior to the Merger. As a result of the Merger, CD&R became the indirect owners of all the issued and outstanding shares of Company common stock that CD&R did not already own.

The Merger was accounted for as a business combination. The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair market value at the date of the Merger.

The Merger was funded in part with proceeds from the following issuances:

•$300.0 million aggregate principal amount term loan facility, due August 2028;

•$710.0 million of 8.750% Senior Secured Notes due August 2028;

•$564.4 million of cash from the Company;

•$464.4 million aggregate principal amount of 2.99% senior payment-in-kind notes due 2029 that were issued by Camelot Return Parent, LLC (“Camelot Return Parent”), an indirect parent of the Company, and are held by Arawak X, L.P. (“Arawak X”), an affiliate of CD&R; and

•$195.0 million from preferred shares of Camelot Return Parent.

Neither the Company nor any of its subsidiaries is a guarantor of or is obligated to make any payments related to the 2.99% senior payment-in-kind notes due 2029 issued by Camelot Return Parent.

The calculation of the total consideration paid is as follows:

	Consideration
Common shares purchased	65,613,349
Common share closing price	$	24.65
Merger consideration, common shares purchased	$	1,617,369
Effective settlement of pre-existing relationships (1)	128,721
Total merger consideration	1,746,090
Fair value of common shares previously held by CD&R and other adjustments (2)	1,526,591
Total equity value	$	3,272,681

(1)    Consists mainly of employee share-based compensation awards that were outstanding at that time the Merger was consummated.

(2)    Consists of 61.9 million common shares, held by CD&R prior to the Merger which were rolled over or acquired by Camelot Parent.

The following table summarizes the fair value of net assets acquired:

	Fair Value
Merger consideration	$	1,746,090
Fair value of common shares previously held by CD&R and other adjustments	1,526,591
Total equity value	$	3,272,681
Cash and cash equivalent	$	1,087,586
Accounts receivable	793,858
Inventories	767,460
Property, plant and equipment	873,167
Lease right-of-use assets	275,050
Goodwill	1,599,327
Intangible assets	2,436,000
Other assets	119,920
Total assets acquired	7,952,368
Accounts payable	329,896
Accrued liabilities	634,915
Long-term debt	2,467,210
Long-term lease liabilities	252,262
Deferred income tax liabilities	706,768
Other liabilities	288,636
Total liabilities assumed	4,679,687
Net assets acquired	$	3,272,681

During the measurement period, the Company obtained new information regarding facts and circumstances that existed as of the date of the Merger that resulted in revised estimated values of those assets or liabilities. During the three months ended July 1, 2023, the Company made measurement period adjustments, which were mainly composed of a $291.5 million increase to property, plant and equipment and a $174.7 million decrease to intangible assets. The effect of measurement period adjustments on the estimated fair value elements were reflected as if the adjustments had been made as of the date of the Merger, including a $66.5 million cumulative catch-up to depreciation and amortization expense recorded during the three months ended July 1, 2023 resulting from the update in the fair market value of property, plant and equipment and intangible assets. The table below presents the Consolidated Statements of (Loss) Income line items impacted by the aforementioned adjustments for previously reported periods.

	Increase / (Decrease) due to Depreciation and Amortization
Consolidated Statements of (Loss) Income Line Item	July 25, 2022 through December 31, 2022		Three Months Ended  April 1, 2023		Cumulative Catch-Up Recorded During Three Months Ended July 1, 2023
Cost of sales	$	38,852	$	26,303	$	65,155
Gross profit	(38,852)		(26,303)		(65,155)
Selling, general and administrative expenses	(1,632)		2,963		1,331
Income (loss) from operations	(37,220)		(29,266)		(66,486)

As part of pushdown accounting, the Company recorded goodwill to the reporting units expected to benefit from the business combination. The goodwill is mainly attributable to costs savings in manufacturing productivity; freight and logistics; procurement; and other operating costs, as well as operational improvements in recent acquisitions to be achieved subsequent to the Merger. The goodwill recorded is not deductible for income tax purposes. The following table sets forth the allocation of goodwill by the Company’s reportable segments as of the date of the Merger:

Aperture Solutions		Surface Solutions		Shelter Solutions		Total Goodwill
$	714,394	$	681,822	$	203,111	$	1,599,327

The Company identified intangible assets for customer relationships and trade names and other. Intangible assets are amortized on a straight-line basis over their expected useful lives. The fair value and weighted average estimated useful life of identifiable intangible assets consists of the following:

	Fair Value		Weighted Average Useful Life (in years)
Customer lists and relationships	$	1,816,000	17
Trademarks, trade names and other	620,000		15
Total	$	2,436,000

The Company incurred transaction costs of $29.4 million associated with the Merger, of which $0.7 million was recognized in the period from July 25, 2022 through December 31, 2022 and $28.7 million was recognized in the period from January 1, 2022 through July 24, 2022. These costs are included in selling, general and administrative expenses on the Condensed Consolidated Statements of (Loss) Income.

Unaudited Pro Forma Financial Information

Had the Merger occurred at the beginning of 2022, unaudited pro forma revenues and net income for the three and six months ended July 1, 2023 and July 2, 2022 would not have been materially different than the amounts reported as the pro forma adjustments would primarily reflect the amortization of intangibles and depreciation of property, plant and equipment that received a step up in basis and the cost to finance the transaction, net of the related tax effects. The unaudited supplemental pro forma financial information would not give effect to the potential impact of current financial conditions, operating efficiencies or cost savings that may result from the Merger or any integration costs. Unaudited pro forma balances would not necessarily be indicative of operating results had the Merger occurred on January 1, 2022 or of future results.

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Inventories

6 Months Ended

Jul. 01, 2023

Inventory Disclosure [Abstract]

Inventories

InventoriesThe following table sets forth the components of inventories:

	Successor
	July 1, 2023		December 31, 2022
Raw materials	$	308,693	$	312,380
Work in process	60,049		67,424
Finished goods	165,331		172,024
Total inventories	$	534,073	$	551,828

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Goodwill and Intangible Assets

6 Months Ended

Jul. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

The following table sets forth the changes in the carrying amount of goodwill by reportable segment:

	Aperture Solutions		Surface Solutions		Shelter Solutions		Total
Balance, December 31, 2022 (Successor)	$	624,009	$	790,452	$	274,087	$	1,688,548
Measurement period adjustments (1)	87,498		(110,791)		(70,976)		(94,269)
Currency translation	1,048		784		—		1,832
Balance, July 1, 2023 (Successor)	$	712,555	$	680,445	$	203,111	$	1,596,111

(1)     Measurement period adjustments have been recorded as the Company has obtained additional information during the remeasurement of the assets and liabilities acquired in connection with the Merger. See Note 3 — Merger for additional information.

Intangible Assets, Net

The following table sets forth the major components of intangible assets:

	Range of Life (Years)			Weighted Average Amortization Period Remaining (Years)	Cost		Accumulated Amortization		Net Carrying Value
As of July 1, 2023 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	15	–	15	14	$	620,000	$	(38,838)	$	581,162
Customer lists and relationships	3	–	19	17	1,816,000		(132,616)		1,683,384
Total intangible assets					$	2,436,000	$	(171,454)	$	2,264,546
As of December 31, 2022 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	13	–	13	13	$	522,137	$	(18,332)	$	503,805
Customer lists and relationships	13	–	13	13	2,088,548		(73,330)		2,015,218
Total intangible assets					$	2,610,685	$	(91,662)	$	2,519,023

Intangible assets are amortized on a straight-line basis. The following table sets forth the amortization expense related to intangible assets:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Amortization expense	$	33,698	$	48,048	$	81,602	$	97,056

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Product Warranties

6 Months Ended

Jul. 01, 2023

Product Warranties Disclosures [Abstract]

Product Warranties

Product Warranties

The following table sets forth the changes in the carrying amount of product warranties liability:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Balance, beginning of period	$	202,463	$	218,356
Acquisitions	—		189
Divestiture	—		(4,345)
Warranties sold	659		937
Revenue recognized	(1,223)		(1,228)
Expense	22,004		23,499
Settlements	(21,695)		(18,462)
Balance, end of period	$	202,208	$	218,946
Reflected as:
Current liabilities – Rebates, warranties and other customer-related liabilities	$	26,654	$	26,586
Noncurrent liabilities – Other long-term liabilities	175,554		192,360
Total product warranty liability	$	202,208	$	218,946

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Long-Term Debt

6 Months Ended

Jul. 01, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The following table sets forth the components of long-term debt:

			Successor
			July 1, 2023								December 31, 2022
	Effective Interest Rate		Principal Outstanding		Unamortized Fair Value Adjustment (1)		Unamortized Discount and Issuance Costs		Carrying Amount		Principal Outstanding		Unamortized Fair Value Adjustment(1)		Unamortized Discount and Issuance Costs		Carrying Amount
Term loan facility, due April 2028	8.57	%	$	2,541,500	$	(321,325)	$	—	$	2,220,175	$	2,554,500	$	(348,769)	$	—	$	2,205,731
Term loan facility, due August 2028	9.69	%	298,500		—		(19,998)		278,502		300,000		—		(21,538)		278,462
6.125% Senior Notes, due January 2029	13.51	%	318,699		(92,805)		—		225,894		365,541		(111,524)		—		254,017
8.750% Senior Secured Notes, due August 2028	10.61	%	710,000		—		(48,806)		661,194		710,000		—		(52,622)		657,378
Total long-term debt			$	3,868,699	$	(414,130)	$	(68,804)	$	3,385,765	$	3,930,041	$	(460,293)	$	(74,160)	$	3,395,588
Reflected as:
Current liabilities - Current portion of long-term debt									$	29,000							$	29,000
Non-current liabilities - Long-term debt									3,356,765								3,366,588
Total long-term debt									$	3,385,765							$	3,395,588
Fair value - Senior notes - Level 1									$	928,941							$	907,993
Fair value - Term loans - Level 2									2,739,854								2,580,000
Total fair value									$	3,668,795							$	3,487,993

(1)    On July 25, 2022, as a result of the pushdown accounting related to the Merger, the carrying values of the term loan facility due April 2028 and the 6.125% Senior Notes (as defined below) were adjusted to fair value.

Revolving Credit Facilities

The following table sets forth the Company’s availability under its credit facilities:

	Successor
	July 1, 2023						December 31, 2022
	Available		Borrowings		Letters of Credit and Priority Payables		Available		Borrowings		Letters of Credit and Priority Payables
Asset-based lending facility	$	850,000	$	—	$	47,000	$	850,000	$	—	$	48,000
Cash flow revolver (1)	92,000		—		—		115,000		—		—
First-in-last-out tranche asset-based lending facility	95,000		—		—		95,000		—		—
Total	$	1,037,000	$	—	$	47,000	$	1,060,000	$	—	$	48,000

(1)     Cash flow revolver commitments of $23.0 million matured in April 2023 and $92.0 million will mature in April 2026.

Term Loan Facility due April 2028 and Cash Flow Revolver

In April 2018, Ply Gem Midco, Inc. (“Ply Gem Midco”) entered into a Cash Flow Agreement (as amended from time to time, the “Cash Flow Credit Agreement”), which provides for (i) a term loan facility (the “Term Loan Facility”) in the aggregate principal amount of $2,600.0 million, issued with a discount of 0.5% and (ii) a cash flow-based revolving credit facility (the “Cash Flow Revolver”) of up to $115.0 million with $92.0 million remaining as of July 1, 2023. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Borrower (as defined in the Cash Flow Credit Agreement) under the Term Loan Facility and Cash Flow Revolver (together the “Cash Flow Facilities”). On April 11, 2023, the Company amended the Cash Flow Credit Agreement to replace the adjusted LIBOR rate with the Secured Overnight Financing Rate (“SOFR”) rate.

The Term Loan Facility amortizes in nominal quarterly installments equal to one percent of the aggregate initial principal amount thereof per annum, with the remaining balance payable upon final maturity. The Term Loan Facility bears annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Term SOFR rate with a credit spread adjustment of 0.10% (subject to a floor of 0.50%) plus an applicable margin of 3.25% per annum or (ii) an alternate base rate plus an applicable margin of 2.25% per annum.

Loans outstanding under the Cash Flow Revolver bear annual interest at a floating rate measured by reference to, at the Company’s option, either (i) a Daily Simple SOFR rate or a Term SOFR rate with (only in the case of Term SOFR rate borrowings with an interest period greater than one month) a credit spread adjustment of 0.10% (subject to a floor of 0.00%) plus an applicable margin ranging from 2.50% to 3.00% per annum depending on the Company’s secured leverage ratio or (ii) an alternate base rate plus an applicable margin ranging from 1.50% to 2.00% per annum depending on the Company’s secured leverage ratio. There are no amortization payments under the Cash Flow Revolver. Additionally, unused commitments under the Cash Flow Revolver are subject to a fee ranging from 0.25% to 0.50% per annum depending on the Company’s secured leverage ratio.

Subject to certain exceptions, the Term Loan Facility is subject to mandatory prepayments in an amount equal to:

•the net cash proceeds of (i) certain asset sales, (ii) certain debt offerings and (iii) certain insurance recovery and condemnation events; and

•50% of annual excess cash flow (as defined in the Cash Flow Credit Agreement), subject to reduction to 25% and 0% if specified secured leverage ratio targets are met to the extent that the amount of such excess cash flow exceeds $10.0 million. No payments were required in 2022 under the year 2021 excess cash flow calculation.

Both the Term Loan Facility and Cash Flow Revolver may be prepaid at the Company’s option at any time without premium or penalty (other than customary breakage costs), subject to minimum principal amount requirements.

ABL Facility due July 2027

On April 12, 2018, Ply Gem Midco entered into an ABL Credit Agreement (as amended from time to time, the “ABL Credit Agreement”), which provides for (a) an asset-based revolving credit facility of up to $850.0 million (amended from time to time the “ABL Facility”), a portion of which is (i) available to United States (“U.S.”) borrowers and (ii) available to U.S. and Canadian borrowers. In connection with the consummation of the Ply Gem merger, the Company and Ply Gem Midco entered into a joinder agreement in which the Company became the Parent Borrower (as defined in the ABL Credit Agreement) under the ABL Facility, and (b) a first-in-last-out tranche asset-based revolving credit facility of up to $95.0 million (the “ABL FILO Facility”) available to U.S. borrowers.

Borrowing availability under the ABL Facility and the ABL FILO Facility (collectively, the “ABL Facilities”) is determined by a monthly borrowing base collateral calculation that is based on specified percentages of the value of eligible inventory, accounts receivable, less certain allowances and subject to certain other adjustments as set forth in the ABL Credit Agreement. Availability is reduced by issuance of letters of credit as well as any borrowings.

Loans outstanding under the ABL Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL Facility or (ii) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% per annum depending on the average daily excess availability under the ABL Facility. Additionally, unused commitments under the ABL Facility are subject to a 0.25% per annum fee.

Loans outstanding under the ABL FILO Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate (subject to a SOFR floor of 0.00%) plus an applicable margin ranging from 2.25% to 2.75% per annum depending on the average daily excess availability under the ABL FILO Facility or (ii) an alternate base rate plus an applicable margin ranging from 1.25% to 1.75% per annum depending on the average daily excess availability under the ABL FILO Facility. Additionally, unused commitments under the ABL FILO Facility are subject to a 0.25% per annum fee.

Side Car Term Loan Facility due August 2028

On July 25, 2022, the Company entered into a Term Loan Credit Agreement (as amended from time to time, the “Side Car Term Loan Credit Agreement”) which provides for a term loan facility (the “Side Car Term Loan Facility”) in an original aggregate principal amount of $300.0 million. The Side Car Term Loan Credit Agreement will mature on August 1, 2028.

Loans outstanding under the Side Car Term Loan Facility bear interest at a floating rate measured by reference to, at the Company’s option, either (i) a term SOFR rate plus 5.625% (subject to a SOFR floor of 0.50%) or (ii) an alternate base rate plus 4.625%. Borrowings under the Side Term Loan Credit Agreement amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.

The Side Car Term Loan Facility may be prepaid at the Company’s option at any time, subject to certain prepayment premiums if prepaid prior to August 1, 2026.

6.125% Senior Notes due January 2029

On September 24, 2020, the Company issued $500.0 million in aggregate principal amount of 6.125% Senior Notes due January 2029 (the “6.125% Senior Notes”). The 6.125% Senior Notes bear interest at 6.125% per annum and will mature on January 15, 2029. Interest is payable semi-annually in arrears on January 15 and July 15.

The 6.125% Senior Notes are unsecured senior indebtedness and are effectively subordinated to all of the Company’s existing and future senior secured indebtedness, including indebtedness under the Term Loan Facility, the Cash Flow Revolver, the Side Car Term Loan Facility, the 8.750% Senior Secured Notes (as defined below) and the ABL Facilities, and are senior in right of payment to future subordinated indebtedness of the Company.

The Company may redeem the 6.125% Senior Notes in whole or in part at any time subject to certain prepayment premiums if the 6.125% Senior Notes were to be redeemed prior to September 15, 2025.

Repurchase of 6.125% Senior Notes

The Company repurchased an aggregate principal amount of $25.2 million and $46.8 million of 6.125% Senior Notes for $18.4 million and $33.9 million in cash during the three and six months ended July 1, 2023. The repurchases, which resulted in a write-off of associated unamortized debt discount and deferred financing costs, resulted in a gain of $0.4 million and a loss of $0.2 million during the three and six months ended July 1, 2023.

8.750% Senior Secured Notes due August 2028

On July 25, 2022, the Company issued $710.0 million in aggregate principal amount of 8.750% Senior Secured Notes due August 2028 (the “8.750% Senior Secured Notes”). The 8.750% Senior Secured Notes bear interest at 8.750% per annum and will mature on August 1, 2028. Interest is payable semi-annually in arrears on January 15 and July 15 of each year.

The 8.750% Senior Secured Notes are secured senior indebtedness and rank equal in right of payment with all existing and future senior indebtedness and are senior in right of payment to all existing and future subordinated indebtedness of the Company, including the 6.125% Senior Notes.

The Company may redeem the 8.750% Senior Secured Notes in whole or in part at any time subject to certain prepayment premiums if the 8.750% Senior Secured Notes were to be redeemed prior to August 1, 2026.

Other Information

The obligations under the Company’s debt agreements are generally guaranteed by each direct and indirect wholly owned U.S. restricted subsidiary of the Company, subject to certain exceptions. In addition, the obligations of the Canadian borrowers under the ABL Facility are guaranteed by each direct and indirect wholly owned Canadian restricted subsidiary of the Canadian borrowers, subject to certain exceptions. In addition, the obligations under the Cash Flow Credit Agreement, the ABL Credit Agreement, the Side Car Term Loan Facility and the Company’s various secured notes are guaranteed by Camelot Parent, which guarantee is non-recourse and limited to the equity interests of the Company. The obligations under the Cash Flow Credit Agreement, the ABL Credit Agreement, the Side Car Term Loan Facility and the Company’s various secured notes are also secured by a perfected security interest in substantially all tangible and intangible assets of the Company and each subsidiary guarantor and in the capital stock of the Company, subject to certain exceptions and subject to priority of security interests provided therein.

Covenant Compliance

The ABL Credit Agreement includes a minimum fixed charge coverage ratio of 1.00:1.00, which is tested only when specified availability is less than 10.0% of the lesser of (x) the then applicable borrowing base and (y) the then aggregate effective commitments under the ABL Facility, and continuing until such time as specified availability has been in excess of such threshold for a period of 20 consecutive calendar days. The Cash Flow Credit Agreement includes a financial covenant set at a maximum secured leverage ratio of 7.75:1.00, which will apply if the outstanding amount of loans and drawings under letters of credit which have not then been reimbursed exceeds a specified threshold at the end of any fiscal quarter.

The Company’s debt agreements contain a number of covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; make dividends and other restricted payments; incur additional liens; consolidate, merge, sell or otherwise dispose of all or substantially all assets; make investments; transfer or sell assets; enter into restrictive agreements; change the nature of the business; and enter into certain transactions with affiliates. The Company is in compliance with all of its covenants as of July 1, 2023.

Interest Rate Swaps

The Company uses certain interest rate swaps to manage a portion of the interest rate risk on its term loans. The following table sets forth the terms of the Company’s interest rate swap agreements:

	May 2019 Swap (1)			April 2021 Swaps
Notional amount	$	500,000		$	1,000,000
Forecasted term loan interest payments being hedged	1-month SOFR			1-month SOFR
SOFR floor (per annum - matches floor in hedged item)	0.00		%	0.40		%
Fixed rate paid on $500,000 and $1,500,000 notional amounts	2.1680		%	2.0038		%
Fixed rate received on $(500,000) notional amount	n/a			(2.1680)		%
Origination date (3)	July 12, 2019			April 17, 2023
Maturity - Fixed rate paid	July 12, 2023			April 15, 2026
Maturity - Fixed rate received	n/a			July 12, 2023
Fair value at July 1, 2023:
Other current assets	$	465		$	—
Other assets, net	$	—		$	94,552
Other current liabilities	$	—		$	465
Fair value at December 31, 2022:
Other current assets	$	7,000		$	—
Other assets, net	$	—		$	95,361
Other current liabilities	$	—		$	7,000
Level in fair value hierarchy (2)	Level 2			Level 2

(1)The May 2019 swap was de-designated from cash flow hedge accounting in April 2021.

(2)Interest rate swaps are based on cash flow hedge contracts that have fixed rate structures and are measured against market based SOFR yield curves. These interest rate swaps are classified within Level 2 of the fair value hierarchy because they are valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates.

(3)During the three months ended July 1, 2023, and in conjunction with the transition from LIBOR to SOFR, the origination date of the April 2021 Swaps was amended to April 17, 2023.

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Accumulated Other Comprehensive Income

6 Months Ended

Jul. 01, 2023

Equity [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following tables set forth the change in accumulated other comprehensive income attributable to the Company by each component of accumulated other comprehensive income, net of applicable income taxes:

	Foreign Currency Translation Adjustments		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, April 1, 2023 (Successor)	$	(7,752)	$	30,070	$	336	$	22,654
Activity	483		14,854		—		15,337
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, April 2, 2022 (Predecessor)	$	27,525	$	44,577	$	(4,946)	$	67,156
Activity	(6,266)		9,832		(1,122)		2,444
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

	Foreign Currency Translation Adjustment		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, December 31, 2022 (Successor)	$	(6,789)	$	40,962	$	336	$	34,509
Activity	(480)		3,962		—		3,482
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, December 31, 2021 (Predecessor)	$	22,741	$	(23,407)	$	(4,946)	$	(5,612)
Activity	(1,482)		77,816		(1,122)		75,212
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

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Share-Based Compensation

6 Months Ended

Jul. 01, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

Merger Transaction

Prior to July 24, 2022, under its long-term stock incentive plan, the Company had several share-based compensation award types, including stock options, restricted stock units and performance share unit awards (collectively, the “Pre-Merger Awards”). In connection with the Merger, outstanding vested stock option awards were canceled and converted to the right to receive a fixed amount of cash equal to the intrinsic value of the awards and were paid in August 2022. Performance share units (“PSUs”) granted to certain key, non-executive employees in March 2021 were paid in cash in September 2022 with the applicable total shareholder return metric determined using a per share price equal to the Merger Consideration and the EBITDA-based metric determined based on target performance.

Resulting from the Merger, unvested restricted stock units were cancelled and converted into a contingent contractual right to receive a payment in cash equal to the Merger consideration per award and unvested stock options were cancelled and converted into a contingent contractual right to receive a payment in cash equal to the intrinsic value of the awards, subject to the same vesting conditions as the original awards.

Resulting from the Merger, unvested PSUs that were granted to key employees and executives in March 2020 and to executives in March 2021 were cancelled and converted into a contingent contractual right to receive a cash payment from the Company equal to the product of the number of PSUs earned under the terms of the applicable award agreement, with the applicable total stockholder return metric determined using a per share price equal to the Merger consideration and the EBITDA-based metric determined based on actual performance as of the end of the three-year performance period applicable to such PSUs. PSUs granted in March 2020 vested and were paid out in cash during the three months ended April 1, 2023. PSUs granted in March 2021 to executives are expected to be paid out in cash in the first quarter of 2024. The Pre-Merger Awards are accounted for under ASC Topic 710.

As of July 1, 2023, the Company has liabilities of $18.3 million and $0.3 million classified within employee-related liabilities and other long-term liabilities on its Condensed Consolidated Balance Sheet related to the Pre-Merger Awards that will be settled in cash. For the six months ended July 1, 2023, the Company paid out $89.5 million of cash to settle Pre-Merger Awards, which mainly related to those PSUs granted in March 2020 and vested in March 2023.

Incentive Units

Beginning in the fourth quarter of 2022, pursuant to an incentive unit grant agreement, certain participants were granted incentive units in Camelot Return Ultimate, L.P. (the “Partnership”). The incentive units provide the holder with the opportunity to receive, upon certain vesting events and subject to Partnership repurchase rights and conditions, a return based upon the appreciation of the Partnership’s equity value from the date of grant. The incentive units vest over a five-year period on a straight-line basis. For the six months ended July 1, 2023, 55 thousand incentive units were granted at an average grant date fair value of $49.76 per incentive unit.

Compensation Expense

For the three months ended July 1, 2023, the Company recognized $2.5 million and $3.4 million of expense from incentive units and Pre-Merger Awards. For the six months ended July 1, 2023, the Company recognized $5.0 million of expense from incentive units and a gain of $1.4 million from the Pre-Merger Awards. The gain recognized on the Pre-Merger Awards during the six months ended July 1, 2023 mainly related to the Company updating its vesting expectations for certain PSU awards which have a range of payouts based on an EBITDA-based metric.

As of July 1, 2023, the Company estimates that unrecognized expense is expected to be recognized over a weighted-average period of 3.4 years totaling $43.3 million, of which $34.0 million relates to incentive units and $9.3 million relates to Pre-Merger Awards.

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Income Taxes

6 Months Ended

Jul. 01, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the Predecessor and Successor periods, the Company’s effective tax rate includes state income taxes, foreign tax rate differentials and changes in the valuation allowance.

The following table sets forth the effective tax rate for the three and six month period ended July 1, 2023 and July 2, 2022:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Effective tax rate	32.4	%	25.9	%	27.4	%	25.7	%

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Reportable Segment and Geographical Information

6 Months Ended

Jul. 01, 2023

Segment Reporting [Abstract]

Reportable Segment and Geographical Information

Reportable Segment and Geographical Information

The Company is organized in three reportable segments: Aperture Solutions, Surface Solutions and Shelter Solutions, which operate principally in the U.S. with limited operations in Canada.

•The Aperture Solutions reportable segment offers a broad line of windows and doors at multiple price-points for residential new construction and repair and remodel end markets in the U.S. and Canada. Its main products include vinyl, aluminum, wood-composite and aluminum clad-wood windows and patio doors, as well as steel, wood-composite and fiberglass entry doors.

•The Surface Solutions reportable segment offers a broad suite of surface solutions products and accessories at multiple price-points for the residential new construction and repair and remodel end markets as well as stone installation services. Its main products include vinyl siding and accessories, cellular polyvinyl chloride trim, vinyl fencing and railing, stone veneer and gutter protection products.

•The Shelter Solutions reportable segment designs, engineers, manufactures and distributes extensive lines of metal products for the low-rise commercial construction market under multiple brand names and through a nationwide network of manufacturing plants and distribution centers. The Company defines low-rise commercial construction as building applications of up to five stories.

Management monitors the operations results of its reportable segments separately for purposes of making decisions about resources and evaluating performance. Management evaluates performance on the basis of segment earnings before interest, income taxes, depreciation and amortization (“Adjusted reportable segment EBITDA”).

Corporate operating expenses are not allocated to reportable segments. Corporate and Other consists specifically of corporate operating expenses that are generally not allocated to reportable segments, related-party management fees, and other items that are not assigned or allocated to reportable segments. Any intercompany revenues or expenses are eliminated in consolidation.

The following table sets forth net sales, Adjusted reportable segment EBITDA and a reconciliation to income before income taxes:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Net sales:
Aperture Solutions	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions	335,522		421,106		604,113		754,096
Shelter Solutions	445,021		605,225		850,949		1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639
Adjusted reportable segment EBITDA:
Aperture Solutions	$	103,293	$	105,131	$	168,086	$	187,510
Surface Solutions	61,499		78,654		87,806		135,126
Shelter Solutions	105,970		97,851		189,384		187,419
Total Adjusted reportable segment EBITDA	270,762		281,636		445,276		510,055
Corporate and other	(54,769)		347,208		(102,561)		372,037
Depreciation and amortization	(165,162)		(73,958)		(237,824)		(147,890)
Interest expense	(92,314)		(45,571)		(186,425)		(89,677)
Foreign exchange (loss) gain	4,430		(304)		6,447		1,140
Gain (loss) on extinguishment of debt	379		3,553		(184)		3,553
Other income (expense), net	3,632		(8)		4,805		(13)
(Loss) income before income taxes	$	(33,042)	$	512,556	$	(70,466)	$	649,205

The following table sets forth net sales disaggregated by reportable segment:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Aperture Solutions:
Vinyl windows	$	622,062	$	731,433	$	1,189,255	$	1,389,229
Aluminum windows and other	25,613		46,037		62,989		90,351
Total	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions:
Vinyl siding	$	162,841	$	211,016	$	295,026	$	372,216
Metal siding	86,066		92,283		146,503		165,985
Injection molded siding	15,556		19,418		28,042		38,191
Stone	19,450		26,635		37,469		46,957
Stone veneer installation and other	51,609		71,754		97,073		130,747
Total	$	335,522	$	421,106	$	604,113	$	754,096
Shelter Solutions:
Metal building products	$	445,021	$	547,429	$	850,949	$	1,023,887
Metal coil coating	—		57,796		—		113,076
Total	$	445,021	$	605,225	$	850,949	$	1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639

The following table sets forth total assets disaggregated by reportable segment:

	Successor
	July 1, 2023		December 31, 2022
Total assets:
Aperture Solutions	$	2,865,264	$	2,153,378
Surface Solutions	2,275,282		2,099,244
Shelter Solutions	1,130,791		973,718
Corporate	672,385		1,967,310
Total assets	$	6,943,722	$	7,193,650

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Commitments and Contingencies

6 Months Ended

Jul. 01, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As a manufacturer of products primarily for use in building construction, the Company is inherently exposed to various types of contingent claims, both asserted and unasserted, in the ordinary course of business. As a result, from time to time, the Company may become involved in various legal proceedings or other contingent matters arising from claims or potential claims arising out of its operations and businesses that cover a wide range of matters, including, among others, environmental, contract, employment, intellectual property, securities, personal injury, property damage, product liability, warranty, and modification, adjustment or replacement of component parts or units sold, which may include product recalls. The Company insures (or self-insures) against these risks to the extent deemed prudent by its management and to the extent insurance is available. Management believes that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. However, such matters are subject to many uncertainties and outcomes and are not predictable with assurance.

Environmental

The Company’s operations are subject to various federal, state, local and foreign environmental, health and safety laws. Among other things, these laws regulate the emissions or discharge of contaminants into the environment; govern the use, storage, treatment, disposal and management of hazardous substances and wastes; protect employee health and safety, public health and welfare and the end-users of its products; regulate the chemicals used in its products; and impose liability for the costs of investigating and remediating (as well as other damages resulting from) present and past releases of hazardous substances. Violations of these laws or of any conditions contained in environmental permits could impact the Company's current and future operations.

The Company believes it is in material compliance with all applicable laws and regulations and has recorded a liability of $8.8 million at July 1, 2023 and December 31, 2022 for certain subsurface investigation and remedial matters.

Litigation

The Company is a party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. The Company is also included in other kinds of legal actions, some of which assert or may assert claims or seek to impose fines or penalties and other costs in substantial amounts and are described below.

Stockholder Litigation

In January 2023, purported former stockholders filed two separate complaints challenging the fairness of the CD&R Merger. The complaints are captioned Firefighters’ Pension System of the City of Kansas City, Missouri Trust and Gary D. Voigt v. Affeldt et al., C.A. No. 2023-0091-JTL (Del. Ch.) and Whitebark Value Partners LP and Robert Garfield v. Clayton Dubilier & Rice, LLC et al., C.A. No. 2023-0092-JTL (Del. Ch.). In both complaints, the plaintiffs allege that CD&R and its affiliates controlled the Company prior to the transaction and that certain directors and officers of the Company, as well as CD&R and its affiliates, breached their fiduciary duties and engaged in conduct resulting in a sale of the Cornerstone Building Brands public stockholders’ shares to CD&R at an unfair price. The plaintiffs seek unspecified monetary damages, attorneys’ fees, expenses, and costs. The court consolidated the two cases, and on May 3, 2023, selected Whitebark Value Partners LP as lead plaintiff. The Company does not believe these claims have merit and intend to vigorously defend against them. On July 14, 2023, the defendants moved to dismiss the operative complaint. The Company cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liabilities. The Company also cannot provide an estimate of the possible loss or range of loss. The Company does not believe, based on currently available information, that the outcome of these proceedings will have a material adverse effect on its financial condition.

In June 2023, a purported former stockholder filed a class action complaint in the United States District Court for the District of Delaware alleging that the Company’s disclosures issued in connection with the CD&R Merger were materially misleading in violation of Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934. The complaint is captioned Water Island Merger Arbitrage Institutional Commingled Master Fund, L.P. v. Cornerstone Building Brands et al., Case No. 1:23-cv-00701 (D. Del.). The complaint alleges that the Company’s directors and officers issued misleading disclosures, which caused stockholders to approve the CD&R Merger at an unfair price. The plaintiff seeks unspecified monetary damages, interest, attorneys’ fees, expenses, and costs. The Company does not believe these claims have merit and intend to vigorously defend against them. The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities. The Company also cannot provide an estimate of the possible loss or range of loss. The Company does not believe, based on currently available information, that the outcome of these proceedings will have a material adverse effect on its financial condition.

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Earnings Per Common Share

6 Months Ended

Jul. 01, 2023

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic earnings per common share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding. Diluted income per common share, if applicable, considers the dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common share is as follows:

	Predecessor
	Three Months Ended   July 2, 2022		Six Months Ended   July 2, 2022
Numerator for Basic and Diluted Earnings Per Common Share
Net income applicable to common shares	$	376,927	$	478,804
Denominator for Basic and Diluted Earnings Per Common Share:
Weighted average basic number of common shares outstanding	127,449		127,288
Common stock equivalents:
Employee stock options	1,597		1,576
Weighted average diluted number of common shares outstanding	129,046		128,864
Basic earnings per common share	$	2.96	$	3.76
Diluted earnings per common share	$	2.92	$	3.72
Incentive plan securities excluded from dilution (1)	—		34

(1)Represents securities not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

The Company calculates earnings per share using the “two-class” method, whereby unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating securities” and, therefore, these participating securities are treated as a separate class in computing earnings per share. The calculation of earnings per share presented here excludes the income attributable to unvested restricted stock units related to our Incentive Plan from the numerator and excludes the dilutive impact of those shares from the denominator. Awards subject to the achievement of performance conditions or market conditions for which such conditions had been met at the end of any of the periods presented are included in the computation of diluted earnings per common share if their effect was dilutive.

Earnings per common share is not presented for the Successor period as the Company’s common stock is no longer publicly traded either on a stock exchange or in the over-the-counter market.

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Supplemental Cash Flow Information

6 Months Ended

Jul. 01, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

The following table sets forth supplemental cash flow information:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	141,856	$	77,432
Income taxes paid	15,774		55,849

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Significant Accounting Policies (Policies)

6 Months Ended

Jul. 01, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Condensed Consolidated Financial Statements have been prepared with the Company's accounting policies and on the same basis as those financial statements included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2022 and should be read in conjunction with those Consolidated Financial Statements and the Notes thereto. Certain disclosures normally included in the Company’s Consolidated Financial Statements prepared in accordance with U.S. GAAP have been omitted on a basis consistent with the rules and regulations of the SEC.

The accompanying Condensed Consolidated Financial Statements include the accounts and operations of the Company and its majority-owned subsidiaries and all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. All significant intercompany accounts and transactions have been eliminated in consolidation. Through application of pushdown accounting, the Company’s Condensed Consolidated Financial Statements are presented as Predecessor for periods prior to the Merger and Successor for subsequent periods. The Company has reclassified certain prior year amounts to conform to the current year’s presentation. The results reported in these Condensed Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the Condensed Consolidated Financial Statements and accompanying notes. These estimates include, but are not limited to: establishing the allowance for expected credit losses; allowance for obsolete inventory; the impairment of goodwill and intangible assets; establishing useful lives for and evaluating the recovery of long-lived assets; recognizing the fair value of assets acquired and liabilities assumed in business combinations; accounting for rebates and product warranties; the valuation and expensing for share-based compensation; certain assumptions made in accounting for pension benefits; accounting for contingencies and uncertainties and accounting for income taxes. Actual results may differ from the estimates used in preparing the Condensed Consolidated Financial Statements.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents mainly consist of highly liquid, unrestricted savings, checking, money market funds with maturities of less than three months and other bank accounts.

Accounts Receivable, Net

Accounts Receivable, Net

The Company reports accounts receivable net of an allowance for expected credit losses. The Company establishes provisions for expected credit losses based on the Company’s assessment of the collectability of amounts owed to the Company by its customers. In establishing the allowance, the Company considers changes in the financial position of a customer, age of the accounts receivable balances, availability of security, unusual macroeconomic conditions, lien rights and bond rights as well as disputes, if any, with its customers. The Company’s allowance for expected credit losses was $4.7 million and $2.1 million at July 1, 2023 and December 31, 2022.

Fair Value Measurements

Fair Value Measurements

The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable approximate fair value as of July 1, 2023 and December 31, 2022 given the instruments’ relatively short maturities. The carrying amounts of the indebtedness under revolving credit facilities approximate fair value as the interest rates are variable and reflective of market rates. Fair values for our other debt instruments are measured using Level 1 and Level 2 inputs. U.S. GAAP requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“Topic 848”), which provides optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the reference rate transition. The amendments in these ASUs are elective, apply to all entities that have contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of rate reform. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, that deferred the sunset date of Topic 848 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. During the second quarter of 2023, as the Company transitioned from LIBOR to alternative reference rates, the Company adopted Topic 848 which did not have a material impact on its Condensed Consolidated Financial Statements or accompanying notes.

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Significant Accounting Policies (Tables)

6 Months Ended

Jul. 01, 2023

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table sets forth the components of cash and cash equivalents:

	Successor
	July 1, 2023		December 31, 2022
Cash	$	235,128	$	553,551
Money market funds (Level 1 securities)	210,000		—
Total cash and cash equivalents	$	445,128	$	553,551

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Merger (Tables)

6 Months Ended

Jul. 01, 2023

Business Combination and Asset Acquisition [Abstract]

Summary of Total Consideration

The calculation of the total consideration paid is as follows:

	Consideration
Common shares purchased	65,613,349
Common share closing price	$	24.65
Merger consideration, common shares purchased	$	1,617,369
Effective settlement of pre-existing relationships (1)	128,721
Total merger consideration	1,746,090
Fair value of common shares previously held by CD&R and other adjustments (2)	1,526,591
Total equity value	$	3,272,681

(1)    Consists mainly of employee share-based compensation awards that were outstanding at that time the Merger was consummated.

(2)    Consists of 61.9 million common shares, held by CD&R prior to the Merger which were rolled over or acquired by Camelot Parent.

Summary of the Fair Value of Net Assets Acquired

The following table summarizes the fair value of net assets acquired:

	Fair Value
Merger consideration	$	1,746,090
Fair value of common shares previously held by CD&R and other adjustments	1,526,591
Total equity value	$	3,272,681
Cash and cash equivalent	$	1,087,586
Accounts receivable	793,858
Inventories	767,460
Property, plant and equipment	873,167
Lease right-of-use assets	275,050
Goodwill	1,599,327
Intangible assets	2,436,000
Other assets	119,920
Total assets acquired	7,952,368
Accounts payable	329,896
Accrued liabilities	634,915
Long-term debt	2,467,210
Long-term lease liabilities	252,262
Deferred income tax liabilities	706,768
Other liabilities	288,636
Total liabilities assumed	4,679,687
Net assets acquired	$	3,272,681

Summary of Nonrecurring Adjustments

The table below presents the Consolidated Statements of (Loss) Income line items impacted by the aforementioned adjustments for previously reported periods.

	Increase / (Decrease) due to Depreciation and Amortization
Consolidated Statements of (Loss) Income Line Item	July 25, 2022 through December 31, 2022		Three Months Ended  April 1, 2023		Cumulative Catch-Up Recorded During Three Months Ended July 1, 2023
Cost of sales	$	38,852	$	26,303	$	65,155
Gross profit	(38,852)		(26,303)		(65,155)
Selling, general and administrative expenses	(1,632)		2,963		1,331
Income (loss) from operations	(37,220)		(29,266)		(66,486)

Schedule of Goodwill

The following table sets forth the allocation of goodwill by the Company’s reportable segments as of the date of the Merger:

Aperture Solutions		Surface Solutions		Shelter Solutions		Total Goodwill
$	714,394	$	681,822	$	203,111	$	1,599,327

The following table sets forth the changes in the carrying amount of goodwill by reportable segment:

	Aperture Solutions		Surface Solutions		Shelter Solutions		Total
Balance, December 31, 2022 (Successor)	$	624,009	$	790,452	$	274,087	$	1,688,548
Measurement period adjustments (1)	87,498		(110,791)		(70,976)		(94,269)
Currency translation	1,048		784		—		1,832
Balance, July 1, 2023 (Successor)	$	712,555	$	680,445	$	203,111	$	1,596,111

(1)     Measurement period adjustments have been recorded as the Company has obtained additional information during the remeasurement of the assets and liabilities acquired in connection with the Merger. See Note 3 — Merger for additional information.

Summary of Acquired Identifiable Intangible Assets

The fair value and weighted average estimated useful life of identifiable intangible assets consists of the following:

	Fair Value		Weighted Average Useful Life (in years)
Customer lists and relationships	$	1,816,000	17
Trademarks, trade names and other	620,000		15
Total	$	2,436,000

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Inventories (Tables)

6 Months Ended

Jul. 01, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory Components

The following table sets forth the components of inventories:

	Successor
	July 1, 2023		December 31, 2022
Raw materials	$	308,693	$	312,380
Work in process	60,049		67,424
Finished goods	165,331		172,024
Total inventories	$	534,073	$	551,828

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jul. 01, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table sets forth the allocation of goodwill by the Company’s reportable segments as of the date of the Merger:

Aperture Solutions		Surface Solutions		Shelter Solutions		Total Goodwill
$	714,394	$	681,822	$	203,111	$	1,599,327

The following table sets forth the changes in the carrying amount of goodwill by reportable segment:

	Aperture Solutions		Surface Solutions		Shelter Solutions		Total
Balance, December 31, 2022 (Successor)	$	624,009	$	790,452	$	274,087	$	1,688,548
Measurement period adjustments (1)	87,498		(110,791)		(70,976)		(94,269)
Currency translation	1,048		784		—		1,832
Balance, July 1, 2023 (Successor)	$	712,555	$	680,445	$	203,111	$	1,596,111

(1)     Measurement period adjustments have been recorded as the Company has obtained additional information during the remeasurement of the assets and liabilities acquired in connection with the Merger. See Note 3 — Merger for additional information.

Schedule of Finite-Lived Intangible Activity

The following table sets forth the major components of intangible assets:

	Range of Life (Years)			Weighted Average Amortization Period Remaining (Years)	Cost		Accumulated Amortization		Net Carrying Value
As of July 1, 2023 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	15	–	15	14	$	620,000	$	(38,838)	$	581,162
Customer lists and relationships	3	–	19	17	1,816,000		(132,616)		1,683,384
Total intangible assets					$	2,436,000	$	(171,454)	$	2,264,546
As of December 31, 2022 (Successor)
Amortized intangible assets:
Trademarks, trade names and other	13	–	13	13	$	522,137	$	(18,332)	$	503,805
Customer lists and relationships	13	–	13	13	2,088,548		(73,330)		2,015,218
Total intangible assets					$	2,610,685	$	(91,662)	$	2,519,023

Schedule of Amortization Expense Related to Intangible Assets

The following table sets forth the amortization expense related to intangible assets:

	Successor		Predecessor		Successor		Predecessor
(Amounts in thousands)	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Amortization expense	$	33,698	$	48,048	$	81,602	$	97,056

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Product Warranties (Tables)

6 Months Ended

Jul. 01, 2023

Product Warranties Disclosures [Abstract]

Rollforward of Accrued Warranty Obligation and Deferred Warranty Revenue

The following table sets forth the changes in the carrying amount of product warranties liability:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Balance, beginning of period	$	202,463	$	218,356
Acquisitions	—		189
Divestiture	—		(4,345)
Warranties sold	659		937
Revenue recognized	(1,223)		(1,228)
Expense	22,004		23,499
Settlements	(21,695)		(18,462)
Balance, end of period	$	202,208	$	218,946
Reflected as:
Current liabilities – Rebates, warranties and other customer-related liabilities	$	26,654	$	26,586
Noncurrent liabilities – Other long-term liabilities	175,554		192,360
Total product warranty liability	$	202,208	$	218,946

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Long-Term Debt (Tables)

6 Months Ended

Jul. 01, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

The following table sets forth the components of long-term debt:

			Successor
			July 1, 2023								December 31, 2022
	Effective Interest Rate		Principal Outstanding		Unamortized Fair Value Adjustment (1)		Unamortized Discount and Issuance Costs		Carrying Amount		Principal Outstanding		Unamortized Fair Value Adjustment(1)		Unamortized Discount and Issuance Costs		Carrying Amount
Term loan facility, due April 2028	8.57	%	$	2,541,500	$	(321,325)	$	—	$	2,220,175	$	2,554,500	$	(348,769)	$	—	$	2,205,731
Term loan facility, due August 2028	9.69	%	298,500		—		(19,998)		278,502		300,000		—		(21,538)		278,462
6.125% Senior Notes, due January 2029	13.51	%	318,699		(92,805)		—		225,894		365,541		(111,524)		—		254,017
8.750% Senior Secured Notes, due August 2028	10.61	%	710,000		—		(48,806)		661,194		710,000		—		(52,622)		657,378
Total long-term debt			$	3,868,699	$	(414,130)	$	(68,804)	$	3,385,765	$	3,930,041	$	(460,293)	$	(74,160)	$	3,395,588
Reflected as:
Current liabilities - Current portion of long-term debt									$	29,000							$	29,000
Non-current liabilities - Long-term debt									3,356,765								3,366,588
Total long-term debt									$	3,385,765							$	3,395,588
Fair value - Senior notes - Level 1									$	928,941							$	907,993
Fair value - Term loans - Level 2									2,739,854								2,580,000
Total fair value									$	3,668,795							$	3,487,993

(1)    On July 25, 2022, as a result of the pushdown accounting related to the Merger, the carrying values of the term loan facility due April 2028 and the 6.125% Senior Notes (as defined below) were adjusted to fair value.

Schedule of Availability Under Credit Facilities

The following table sets forth the Company’s availability under its credit facilities:

	Successor
	July 1, 2023						December 31, 2022
	Available		Borrowings		Letters of Credit and Priority Payables		Available		Borrowings		Letters of Credit and Priority Payables
Asset-based lending facility	$	850,000	$	—	$	47,000	$	850,000	$	—	$	48,000
Cash flow revolver (1)	92,000		—		—		115,000		—		—
First-in-last-out tranche asset-based lending facility	95,000		—		—		95,000		—		—
Total	$	1,037,000	$	—	$	47,000	$	1,060,000	$	—	$	48,000

(1)     Cash flow revolver commitments of $23.0 million matured in April 2023 and $92.0 million will mature in April 2026.

Schedule of Interest Rate Swap Agreement

The following table sets forth the terms of the Company’s interest rate swap agreements:

	May 2019 Swap (1)			April 2021 Swaps
Notional amount	$	500,000		$	1,000,000
Forecasted term loan interest payments being hedged	1-month SOFR			1-month SOFR
SOFR floor (per annum - matches floor in hedged item)	0.00		%	0.40		%
Fixed rate paid on $500,000 and $1,500,000 notional amounts	2.1680		%	2.0038		%
Fixed rate received on $(500,000) notional amount	n/a			(2.1680)		%
Origination date (3)	July 12, 2019			April 17, 2023
Maturity - Fixed rate paid	July 12, 2023			April 15, 2026
Maturity - Fixed rate received	n/a			July 12, 2023
Fair value at July 1, 2023:
Other current assets	$	465		$	—
Other assets, net	$	—		$	94,552
Other current liabilities	$	—		$	465
Fair value at December 31, 2022:
Other current assets	$	7,000		$	—
Other assets, net	$	—		$	95,361
Other current liabilities	$	—		$	7,000
Level in fair value hierarchy (2)	Level 2			Level 2

(1)The May 2019 swap was de-designated from cash flow hedge accounting in April 2021.

(2)Interest rate swaps are based on cash flow hedge contracts that have fixed rate structures and are measured against market based SOFR yield curves. These interest rate swaps are classified within Level 2 of the fair value hierarchy because they are valued using alternative pricing sources or models that utilized market observable inputs, including current and forward interest rates.

(3)During the three months ended July 1, 2023, and in conjunction with the transition from LIBOR to SOFR, the origination date of the April 2021 Swaps was amended to April 17, 2023.

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jul. 01, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income

The following tables set forth the change in accumulated other comprehensive income attributable to the Company by each component of accumulated other comprehensive income, net of applicable income taxes:

	Foreign Currency Translation Adjustments		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, April 1, 2023 (Successor)	$	(7,752)	$	30,070	$	336	$	22,654
Activity	483		14,854		—		15,337
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, April 2, 2022 (Predecessor)	$	27,525	$	44,577	$	(4,946)	$	67,156
Activity	(6,266)		9,832		(1,122)		2,444
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

	Foreign Currency Translation Adjustment		Derivative Instruments		Unrecognized Gain (Loss) on Retirement Benefits		Total Accumulated Other Comprehensive Income
Balance, December 31, 2022 (Successor)	$	(6,789)	$	40,962	$	336	$	34,509
Activity	(480)		3,962		—		3,482
Balance, July 1, 2023 (Successor)	$	(7,269)	$	44,924	$	336	$	37,991
Balance, December 31, 2021 (Predecessor)	$	22,741	$	(23,407)	$	(4,946)	$	(5,612)
Activity	(1,482)		77,816		(1,122)		75,212
Balance, July 2, 2022 (Predecessor)	$	21,259	$	54,409	$	(6,068)	$	69,600

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Income Taxes (Tables)

6 Months Ended

Jul. 01, 2023

Income Tax Disclosure [Abstract]

Schedule of Effective Tax Rate

The following table sets forth the effective tax rate for the three and six month period ended July 1, 2023 and July 2, 2022:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Effective tax rate	32.4	%	25.9	%	27.4	%	25.7	%

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Reportable Segment and Geographical Information (Tables)

6 Months Ended

Jul. 01, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table sets forth net sales, Adjusted reportable segment EBITDA and a reconciliation to income before income taxes:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Net sales:
Aperture Solutions	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions	335,522		421,106		604,113		754,096
Shelter Solutions	445,021		605,225		850,949		1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639
Adjusted reportable segment EBITDA:
Aperture Solutions	$	103,293	$	105,131	$	168,086	$	187,510
Surface Solutions	61,499		78,654		87,806		135,126
Shelter Solutions	105,970		97,851		189,384		187,419
Total Adjusted reportable segment EBITDA	270,762		281,636		445,276		510,055
Corporate and other	(54,769)		347,208		(102,561)		372,037
Depreciation and amortization	(165,162)		(73,958)		(237,824)		(147,890)
Interest expense	(92,314)		(45,571)		(186,425)		(89,677)
Foreign exchange (loss) gain	4,430		(304)		6,447		1,140
Gain (loss) on extinguishment of debt	379		3,553		(184)		3,553
Other income (expense), net	3,632		(8)		4,805		(13)
(Loss) income before income taxes	$	(33,042)	$	512,556	$	(70,466)	$	649,205

The following table sets forth total assets disaggregated by reportable segment:

	Successor
	July 1, 2023		December 31, 2022
Total assets:
Aperture Solutions	$	2,865,264	$	2,153,378
Surface Solutions	2,275,282		2,099,244
Shelter Solutions	1,130,791		973,718
Corporate	672,385		1,967,310
Total assets	$	6,943,722	$	7,193,650

Summary of Disaggregation of Revenue

The following table sets forth net sales disaggregated by reportable segment:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended   July 1, 2023		Three Months Ended   July 2, 2022		Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Aperture Solutions:
Vinyl windows	$	622,062	$	731,433	$	1,189,255	$	1,389,229
Aluminum windows and other	25,613		46,037		62,989		90,351
Total	$	647,675	$	777,470	$	1,252,244	$	1,479,580
Surface Solutions:
Vinyl siding	$	162,841	$	211,016	$	295,026	$	372,216
Metal siding	86,066		92,283		146,503		165,985
Injection molded siding	15,556		19,418		28,042		38,191
Stone	19,450		26,635		37,469		46,957
Stone veneer installation and other	51,609		71,754		97,073		130,747
Total	$	335,522	$	421,106	$	604,113	$	754,096
Shelter Solutions:
Metal building products	$	445,021	$	547,429	$	850,949	$	1,023,887
Metal coil coating	—		57,796		—		113,076
Total	$	445,021	$	605,225	$	850,949	$	1,136,963
Total net sales	$	1,428,218	$	1,803,801	$	2,707,306	$	3,370,639

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Earnings Per Common Share (Tables)

6 Months Ended

Jul. 01, 2023

Earnings Per Share [Abstract]

Reconciliation of Numerator and Denominator Used for Earnings Per Common Share

The reconciliation of the numerator and denominator used for the computation of basic and diluted earnings per common share is as follows:

	Predecessor
	Three Months Ended   July 2, 2022		Six Months Ended   July 2, 2022
Numerator for Basic and Diluted Earnings Per Common Share
Net income applicable to common shares	$	376,927	$	478,804
Denominator for Basic and Diluted Earnings Per Common Share:
Weighted average basic number of common shares outstanding	127,449		127,288
Common stock equivalents:
Employee stock options	1,597		1,576
Weighted average diluted number of common shares outstanding	129,046		128,864
Basic earnings per common share	$	2.96	$	3.76
Diluted earnings per common share	$	2.92	$	3.72
Incentive plan securities excluded from dilution (1)	—		34

(1)Represents securities not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jul. 01, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Cash Flow Supplemental Information

The following table sets forth supplemental cash flow information:

	Successor		Predecessor
	Six Months Ended   July 1, 2023		Six Months Ended   July 2, 2022
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	141,856	$	77,432
Income taxes paid	15,774		55,849

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Basis of Presentation- Narrative (Details)	6 Months Ended
	Jul. 01, 2023 segment $ / shares shares	Dec. 31, 2022 $ / shares shares	Jul. 25, 2022 vote $ / shares shares
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments | segment	3
Cash used to settle award, par value (in dollars per share)			$ 24.65
Common stock, shares authorized (in shares) | shares	1,000	1,000	1,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, number of votes per share | vote			1

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Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash	$ 235,128	$ 553,551
Money market funds (Level 1 securities)	210,000	0
Total cash and cash equivalents	$ 445,128	$ 553,551

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Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions	Jul. 01, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Allowance for credit loss	$ 4.7	$ 2.1

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Merger - Narrative (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		5 Months Ended	6 Months Ended		7 Months Ended
	Jul. 25, 2022	Jul. 01, 2023	Jul. 02, 2022	Dec. 31, 2022	Jul. 01, 2023	Jul. 02, 2022	Jul. 24, 2022
Business Acquisition [Line Items]
Cash		$ 235,128		$ 553,551	$ 235,128
Loss from operations		(50,831)	$ (554,886)		$ (104,891)	$ (734,202)
Cornerstone Building Brands, Inc Merger
Business Acquisition [Line Items]
Cash	$ 564,400
Measurement period adjustments, increase to property, plant and equipment		291,500
Measurement period adjustments, decrease to intangible assets		174,700
Acquisition related expenses	29,400			$ 700			$ 28,700
Cornerstone Building Brands, Inc Merger | Recorded Costs
Business Acquisition [Line Items]
Loss from operations		$ 66,486
Cornerstone Building Brands, Inc Merger | 8.750% Senior Secured Notes due August 2028 | Secured Debt
Business Acquisition [Line Items]
Aggregate principal amount	$ 710,000
Debt instrument, interest rate, stated percentage	8.75%
Cornerstone Building Brands, Inc Merger | Secured Debt | Term loan facility, due August 2028 | Line of Credit
Business Acquisition [Line Items]
Aggregate principal amount	$ 300,000
Cornerstone Building Brands, Inc Merger | CD&R
Business Acquisition [Line Items]
Number of shares previously held by CD&R (in shares)	61.9						61.9
Cornerstone Building Brands, Inc Merger | Arawak X, L.P. | 2.99% Senior Payment-In-Kind Notes Due 2029 | Payment in Kind (PIK) Note
Business Acquisition [Line Items]
Aggregate principal amount	$ 464,400
Debt instrument, interest rate, stated percentage	2.99%
Cornerstone Building Brands, Inc Merger | Camelot Return Parent, LLC
Business Acquisition [Line Items]
Preferred stock value	$ 195,000
Cornerstone Building Brands, Inc Merger | Camelot Return Parent, LLC | 2.99% Senior Payment-In-Kind Notes Due 2029 | Payment in Kind (PIK) Note
Business Acquisition [Line Items]
Debt instrument, interest rate, stated percentage	2.99%

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Merger - Total Consideration in Merger (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 25, 2022	Jul. 01, 2023	Dec. 31, 2022	Jul. 24, 2022
Business Acquisition [Line Items]
Common shares purchased (in shares)		1,000	1,000
Cornerstone Building Brands, Inc Merger
Business Acquisition [Line Items]
Common shares purchased (in shares)	65,613,349
Common share closing price (in dollars per share)	$ 24.65
Merger consideration, common shares purchased	$ 1,617,369
Cornerstone Building Brands, Inc Merger | CD&R
Business Acquisition [Line Items]
Effective settlement of pre-existing relationships	128,721
Merger consideration	1,746,090
Fair value of common shares previously held by CD&R and other adjustments	1,526,591
Total equity value	$ 3,272,681
Number of shares previously held by CD&R (in shares)	61,900,000			61,900,000

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Merger - Schedule of Assets and Liabilities in Merger (Details) - USD ($) $ in Thousands	Jul. 25, 2022	Jul. 01, 2023	Dec. 31, 2022
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Goodwill	$ 1,599,327	$ 1,596,111	$ 1,688,548
Cornerstone Building Brands, Inc Merger | CD&R
Business Acquisition [Line Items]
Merger consideration	1,746,090
Fair value of common shares previously held by CD&R and other adjustments	1,526,591
Total equity value	3,272,681
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract]
Cash and cash equivalent	1,087,586
Accounts receivable	793,858
Inventories	767,460
Property, plant and equipment	873,167
Lease right-of-use assets	275,050
Goodwill	1,599,327
Intangible assets	2,436,000
Other assets	119,920
Total assets acquired	7,952,368
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract]
Accounts payable	329,896
Accrued liabilities	634,915
Long-term debt	2,467,210
Long-term lease liabilities	252,262
Deferred income tax liabilities	706,768
Other liabilities	288,636
Total liabilities assumed	4,679,687
Net assets acquired	$ 3,272,681

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Merger - Schedule of Statements of (loss) Income Impacted by Adjustments for Previously Reported Periods (Details) - USD ($) $ in Thousands	3 Months Ended			5 Months Ended	6 Months Ended
	Jul. 01, 2023	Apr. 01, 2023	Jul. 02, 2022	Dec. 31, 2022	Jul. 01, 2023	Jul. 02, 2022
Business Acquisition [Line Items]
Cost of sales	$ 1,130,381		$ 1,404,721		$ 2,127,608	$ 2,637,652
Gross profit	297,837		399,080		579,698	732,987
Income (loss) from operations	50,831		$ 554,886		$ 104,891	$ 734,202
Cornerstone Building Brands, Inc Merger | Unrecorded Costs
Business Acquisition [Line Items]
Cost of sales		$ 26,303		$ 38,852
Gross profit		(26,303)		(38,852)
Selling, general and administrative expenses		2,963		(1,632)
Income (loss) from operations		$ (29,266)		$ (37,220)
Cornerstone Building Brands, Inc Merger | Recorded Costs
Business Acquisition [Line Items]
Cost of sales	65,155
Gross profit	(65,155)
Selling, general and administrative expenses	1,331
Income (loss) from operations	$ (66,486)

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Merger - Goodwill by Reportable Segments (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022	Jul. 25, 2022
Business Acquisition [Line Items]
Goodwill	$ 1,596,111	$ 1,688,548	$ 1,599,327
Aperture Solutions
Business Acquisition [Line Items]
Goodwill	712,555	624,009	714,394
Surface Solutions
Business Acquisition [Line Items]
Goodwill	680,445	790,452	681,822
Shelter Solutions
Business Acquisition [Line Items]
Goodwill	$ 203,111	$ 274,087	$ 203,111

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Merger - Intangible Assets in Merger (Details) - Cornerstone Building Brands, Inc Merger - CD&R $ in Thousands	Jul. 25, 2022 USD ($)
Business Acquisition [Line Items]
Intangible assets	$ 2,436,000
Customer lists and relationships
Business Acquisition [Line Items]
Intangible assets	$ 1,816,000
Weighted Average Useful Life (in years)	17 years
Trademarks, trade names and other
Business Acquisition [Line Items]
Intangible assets	$ 620,000
Weighted Average Useful Life (in years)	15 years

XML

Inventories (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 308,693	$ 312,380
Work in process	60,049	67,424
Finished goods	165,331	172,024
Total inventories	$ 534,073	$ 551,828

XML

Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	6 Months Ended
	Jul. 01, 2023 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 1,688,548
Measurement period adjustments	(94,269)
Currency translation	1,832
Ending balance	1,596,111
Aperture Solutions
Goodwill [Roll Forward]
Beginning balance	624,009
Measurement period adjustments	87,498
Currency translation	1,048
Ending balance	712,555
Surface Solutions
Goodwill [Roll Forward]
Beginning balance	790,452
Measurement period adjustments	(110,791)
Currency translation	784
Ending balance	680,445
Shelter Solutions
Goodwill [Roll Forward]
Beginning balance	274,087
Measurement period adjustments	(70,976)
Currency translation	0
Ending balance	$ 203,111

XML

Goodwill and Intangible Assets - Intangible Asset Activity (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Goodwill [Line Items]
Cost	$ 2,436,000	$ 2,610,685
Accumulated Amortization	(171,454)	(91,662)
Net Carrying Value	2,264,546	2,519,023
Trademarks, trade names and other
Goodwill [Line Items]
Cost	620,000	522,137
Accumulated Amortization	(38,838)	(18,332)
Net Carrying Value	581,162	503,805
Customer lists and relationships
Goodwill [Line Items]
Cost	1,816,000	2,088,548
Accumulated Amortization	(132,616)	(73,330)
Net Carrying Value	$ 1,683,384	$ 2,015,218
Minimum | Trademarks, trade names and other
Goodwill [Line Items]
Range of Life (Years)	15 years	13 years
Minimum | Customer lists and relationships
Goodwill [Line Items]
Range of Life (Years)	3 years	13 years
Maximum | Trademarks, trade names and other
Goodwill [Line Items]
Range of Life (Years)	15 years	13 years
Maximum | Customer lists and relationships
Goodwill [Line Items]
Range of Life (Years)	19 years	13 years
Weighted Average | Trademarks, trade names and other
Goodwill [Line Items]
Range of Life (Years)	14 years	13 years
Weighted Average | Customer lists and relationships
Goodwill [Line Items]
Range of Life (Years)	17 years	13 years

XML

Goodwill and Intangible Assets - Schedule of Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 33,698	$ 48,048	$ 81,602	$ 97,056

XML

Product Warranties (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance, beginning of period	$ 202,463	$ 218,356
Acquisitions	0	189
Divestiture	0	(4,345)
Warranties sold	659	937
Revenue recognized	(1,223)	(1,228)
Expense	22,004	23,499
Settlements	(21,695)	(18,462)
Balance, end of period	202,208	218,946
Current liabilities – Rebates, warranties and other customer-related liabilities	26,654	26,586
Noncurrent liabilities – Other long-term liabilities	175,554	192,360
Total product warranty liability	$ 202,208	$ 218,946

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Long-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022	Jul. 25, 2022	Sep. 24, 2020
Debt Instrument [Line Items]
Principal Outstanding	$ 3,868,699	$ 3,930,041
Unamortized fair value adjustment	(414,130)	(460,293)
Unamortized Discount and Issuance Costs	(68,804)	(74,160)
Carrying Amount	3,385,765	3,395,588
Current liabilities - Current portion of long-term debt	29,000	29,000
Non-current liabilities - Long-term debt	3,356,765	3,366,588
Fair value	3,668,795	3,487,993
Senior Notes | Level 1
Debt Instrument [Line Items]
Fair value	928,941	907,993
Term Loans | Level 2
Debt Instrument [Line Items]
Fair value	$ 2,739,854	2,580,000
Term loan facility, due April 2028
Debt Instrument [Line Items]
Effective Interest Rate	8.57%
Principal Outstanding	$ 2,541,500	2,554,500
Unamortized fair value adjustment	(321,325)	(348,769)
Unamortized Discount and Issuance Costs	0	0
Carrying Amount	$ 2,220,175	2,205,731
Term loan facility, due August 2028
Debt Instrument [Line Items]
Effective Interest Rate	9.69%
Principal Outstanding	$ 298,500	300,000
Unamortized fair value adjustment	0	0
Unamortized Discount and Issuance Costs	(19,998)	(21,538)
Carrying Amount	$ 278,502	278,462
6.125% Senior Notes, due January 2029
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	6.125%		6.125%	6.125%
Effective Interest Rate	13.51%
Principal Outstanding	$ 318,699	365,541
Unamortized fair value adjustment	(92,805)	(111,524)
Unamortized Discount and Issuance Costs	0	0
Carrying Amount	$ 225,894	254,017
8.750% Senior Secured Notes, due August 2028
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	8.75%		8.75%
Effective Interest Rate	10.61%
Principal Outstanding	$ 710,000	710,000
Unamortized fair value adjustment	0	0
Unamortized Discount and Issuance Costs	(48,806)	(52,622)
Carrying Amount	$ 661,194	$ 657,378

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Long-Term Debt - Revolving Credit Facilities (Details) - Line of Credit - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Revolving Credit Facility and Letter of Credit
Line of Credit Facility [Line Items]
Available	$ 1,037,000	$ 1,060,000
Revolving Credit Facility and Letter of Credit | Asset-based lending facility
Line of Credit Facility [Line Items]
Available	850,000	850,000
Revolving Credit Facility and Letter of Credit | Cash flow revolver
Line of Credit Facility [Line Items]
Available	92,000	115,000
Revolving Credit Facility and Letter of Credit | Revolver due April 2023
Line of Credit Facility [Line Items]
Available	23,000
Revolving Credit Facility and Letter of Credit | Revolver due April 2026
Line of Credit Facility [Line Items]
Available	92,000
Revolving Credit Facility and Letter of Credit | First-in-last-out tranche asset-based lending facility
Line of Credit Facility [Line Items]
Available	95,000	95,000
Borrowings
Line of Credit Facility [Line Items]
Long-term line of credit	0	0
Borrowings | Asset-based lending facility
Line of Credit Facility [Line Items]
Long-term line of credit	0	0
Borrowings | Cash flow revolver
Line of Credit Facility [Line Items]
Long-term line of credit	0	0
Borrowings | First-in-last-out tranche asset-based lending facility
Line of Credit Facility [Line Items]
Long-term line of credit	0	0
Letters of Credit and Priority Payables
Line of Credit Facility [Line Items]
Long-term line of credit	47,000	48,000
Letters of Credit and Priority Payables | Asset-based lending facility
Line of Credit Facility [Line Items]
Long-term line of credit	47,000	48,000
Letters of Credit and Priority Payables | Cash flow revolver
Line of Credit Facility [Line Items]
Long-term line of credit	0	0
Letters of Credit and Priority Payables | First-in-last-out tranche asset-based lending facility
Line of Credit Facility [Line Items]
Long-term line of credit	$ 0	$ 0

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Long-Term Debt - Term Loan Facility Due April 2028 and Cash Flow Revolver (Details) - USD ($)	1 Months Ended
	Apr. 30, 2018	Jul. 01, 2023	Dec. 31, 2022
Revolving Credit Facility and Letter of Credit | Line of Credit
Debt Instrument [Line Items]
Available		$ 1,037,000,000	$ 1,060,000,000
Term Loan Facility
Debt Instrument [Line Items]
Discount rate (as a percent)	0.50%
Quarterly amortization installment percentage factor	1.00%
Mandatory prepayment, percentage of annual excess cash flow	50.00%
Covenant compliance, excess cash flow, minimum	$ 10,000,000
Term Loan Facility | Minimum | Leverage Ratio Target Achieved
Debt Instrument [Line Items]
Mandatory prepayment, percentage of annual excess cash flow	25.00%
Term Loan Facility | Maximum | Leverage Ratio Target Achieved
Debt Instrument [Line Items]
Mandatory prepayment, percentage of annual excess cash flow	0.00%
Term Loan Facility | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Credit spread adjustment	0.10%
Spread on variable rate, floor	0.50%
Basis spread on variable rate	3.25%
Term Loan Facility | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Term Loan Facility | Ply Gem
Debt Instrument [Line Items]
Aggregate principal amount	$ 2,600,000,000
Cash flow revolver | Minimum | Commitment Fee Percentage One
Debt Instrument [Line Items]
Unused commitment fee	0.25%
Cash flow revolver | Maximum | Commitment Fee Percentage One
Debt Instrument [Line Items]
Unused commitment fee	0.50%
Cash flow revolver | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Credit spread adjustment	0.10%
Spread on variable rate, floor	0.00%
Cash flow revolver | Secured Overnight Financing Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%
Cash flow revolver | Secured Overnight Financing Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
Cash flow revolver | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Cash flow revolver | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Cash flow revolver | Revolving Credit Facility and Letter of Credit | Line of Credit
Debt Instrument [Line Items]
Available		92,000,000	$ 115,000,000
Cash flow revolver | Ply Gem
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 115,000,000
Revolver due April 2026 | Revolving Credit Facility and Letter of Credit | Line of Credit
Debt Instrument [Line Items]
Available		$ 92,000,000

XML

Long-Term Debt - ABL Facility due July 2027 (Details)	Apr. 12, 2018 USD ($)
ABL FILO Facility | Minimum | Commitment Fee Percentage One
Debt Instrument [Line Items]
Unused commitment fee	0.25%
ABL FILO Facility | Line of Credit | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Spread on variable rate, floor	0.00%
ABL FILO Facility | Line of Credit | Secured Overnight Financing Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
ABL FILO Facility | Line of Credit | Secured Overnight Financing Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.75%
ABL FILO Facility | Line of Credit | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.25%
ABL FILO Facility | Line of Credit | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
ABL Facility | Minimum | Commitment Fee Percentage One
Debt Instrument [Line Items]
Unused commitment fee	0.25%
ABL Facility | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Spread on variable rate, floor	0.00%
ABL Facility | Secured Overnight Financing Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.25%
ABL Facility | Secured Overnight Financing Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
ABL Facility | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.25%
ABL Facility | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	0.75%
Revolving Credit Facility | ABL FILO Facility | Line of Credit
Debt Instrument [Line Items]
Accordion feature, increase limit	$ 95,000,000
Revolving Credit Facility | ABL Facility
Debt Instrument [Line Items]
Available	$ 850,000,000

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Long-Term Debt - Side Car Term Loan Facility due August 2028 (Details) - Secured Debt - Side Car Term Loan Facility	Jul. 25, 2022 USD ($)
Secured Overnight Financing Rate
Debt Instrument [Line Items]
Basis spread on variable rate	5.625%
Spread on variable rate, floor	0.50%
Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	4.625%
Line of Credit
Debt Instrument [Line Items]
Aggregate principal amount	$ 300,000,000
Percentage of principal amount to be paid quarterly	1.00%

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Long-Term Debt - Senior Notes due January 2029 (Details) - USD ($)	Jul. 01, 2023	Jul. 25, 2022	Sep. 24, 2020
6.125% Senior Notes, due January 2029
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	6.125%	6.125%	6.125%
6.125% Senior Notes, due January 2029 | Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount			$ 500,000,000
8.750% Senior Secured Notes, due August 2028
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	8.75%	8.75%
8.750% Senior Secured Notes, due August 2028 | Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount		$ 710,000,000

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Long-Term Debt - Repurchase of 6.125% Senior Notes (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2023	Jul. 01, 2023	Jul. 02, 2022	Jul. 25, 2022	Sep. 24, 2020
Debt Instrument [Line Items]
Repurchase of senior notes		$ 33,885	$ 7,281
6.125% Senior Notes, due January 2029
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	6.125%	6.125%		6.125%	6.125%
6.125% Senior Notes, due January 2029 | Senior Notes
Debt Instrument [Line Items]
Aggregate principal amount repurchased in period	$ 25,200	$ 46,800
Repurchase of senior notes	18,400	33,900
Recognized gain (loss) on repurchase of debt	$ 400	$ (200)

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Long-Term Debt - Senior Secured Notes due August 2028 (Details) - USD ($)	Jul. 01, 2023	Jul. 25, 2022	Sep. 24, 2020
8.750% Senior Secured Notes, due August 2028
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	8.75%	8.75%
8.750% Senior Secured Notes, due August 2028 | Senior Notes
Debt Instrument [Line Items]
Principal outstanding		$ 710,000,000
6.125% Senior Notes, due January 2029
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage	6.125%	6.125%	6.125%
6.125% Senior Notes, due January 2029 | Senior Notes
Debt Instrument [Line Items]
Principal outstanding			$ 500,000,000

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Long-Term Debt - Covenant Compliance (Details) - ABL Credit Agreement - Line of Credit	6 Months Ended
	Jul. 01, 2023 day
Debt Instrument [Line Items]
Covenant, fixed charge coverage ratio, minimum	1.00
Covenant, specified availability (less than)	10.00%
Trading days	20
Covenant, secured leverage ratio, maximum	7.75

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Long-Term Debt - Interest Rate Swaps (Details) - USD ($)	Jul. 01, 2023	Dec. 31, 2022
May 2019 Swap
Debt Instrument [Line Items]
Notional amount	$ 500,000,000
Notional amount paid	$ 500,000,000
Fixed rate paid (received)	2.168%
May 2019 Swap | Other current assets
Debt Instrument [Line Items]
Asset	$ 465,000	$ 7,000,000
May 2019 Swap | Other assets, net
Debt Instrument [Line Items]
Asset	0	0
May 2019 Swap | Other current liabilities
Debt Instrument [Line Items]
Liabilities	$ 0	0
May 2019 Swap | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Derivative, floor interest rate	0.00%
April 2021 Swaps
Debt Instrument [Line Items]
Notional amount	$ 1,000,000,000
Notional amount paid	$ 1,500,000,000
Fixed rate paid (received)	2.0038%
Notional amount received	$ (500,000,000)
Fixed interest rate received	(2.168%)
April 2021 Swaps | Other current assets
Debt Instrument [Line Items]
Asset	$ 0	0
April 2021 Swaps | Other assets, net
Debt Instrument [Line Items]
Asset	94,552,000	95,361,000
April 2021 Swaps | Other current liabilities
Debt Instrument [Line Items]
Liabilities	$ 465,000	$ 7,000,000
April 2021 Swaps | Secured Overnight Financing Rate
Debt Instrument [Line Items]
Derivative, floor interest rate	0.40%

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 1,690,597	$ 1,359,123	$ 1,728,945	$ 1,176,339
Activity	15,337	2,444	3,482	75,212
Ending balance	1,686,093	1,746,849	1,686,093	1,746,849
Total Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	22,654	67,156	34,509	(5,612)
Activity	15,337	2,444	3,482	75,212
Ending balance	37,991	69,600	37,991	69,600
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(7,752)	27,525	(6,789)	22,741
Activity	483	(6,266)	(480)	(1,482)
Ending balance	(7,269)	21,259	(7,269)	21,259
Derivative Instruments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	30,070	44,577	40,962	(23,407)
Activity	14,854	9,832	3,962	77,816
Ending balance	44,924	54,409	44,924	54,409
Unrecognized Gain (Loss) on Retirement Benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	336	(4,946)	336	(4,946)
Activity	0	(1,122)	0	(1,122)
Ending balance	$ 336	$ (6,068)	$ 336	$ (6,068)

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Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended	6 Months Ended
	Jul. 01, 2023 USD ($)	Jul. 01, 2023 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition		3 years 4 months 24 days
Unrecognized share-based compensation expense	$ 43.3	$ 43.3
PSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period		3 years
Pre-Merger Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash used to settle award		$ 89.5
Allocated share-based compensation expense (gain)	3.4	(1.4)
Unrecognized share-based compensation expense	9.3	9.3
Pre-Merger Awards | Employee-Related Liabilities
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based liability to be cash settled	18.3	18.3
Pre-Merger Awards | Other Long-term Liabilities
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based liability to be cash settled	0.3	$ 0.3
Incentive Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		5 years
Granted during period (in shares) | shares		55
Average grant date fair value (in dollars per share) | $ / shares		$ 49.76
Allocated share-based compensation expense (gain)	2.5	$ 5.0
Unrecognized share-based compensation expense	$ 34.0	$ 34.0

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	32.40%	25.90%	27.40%	25.70%

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Reportable Segment and Geographical Information - Adjusted Segment EBITDA (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023 USD ($)	Jul. 02, 2022 USD ($)	Jul. 01, 2023 USD ($) segment	Jul. 02, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			3
Total net sales	$ 1,428,218	$ 1,803,801	$ 2,707,306	$ 3,370,639
Adjusted reportable segment EBITDA	270,762	281,636	445,276	510,055
Corporate and other	(54,769)	347,208	(102,561)	372,037
Depreciation and amortization	(165,162)	(73,958)	(237,824)	(147,890)
Interest expense	(92,314)	(45,571)	(186,425)	(89,677)
Foreign exchange gain (loss)	4,430	(304)	6,447	1,140
Gain (loss) on extinguishment of debt	379	3,553	(184)	3,553
Other income (expense), net	3,632	(8)	4,805	(13)
(Loss) income before income taxes	(33,042)	512,556	(70,466)	649,205
Aperture Solutions
Segment Reporting Information [Line Items]
Total net sales	647,675	777,470	1,252,244	1,479,580
Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	335,522	421,106	604,113	754,096
Shelter Solutions
Segment Reporting Information [Line Items]
Total net sales	445,021	605,225	850,949	1,136,963
Operating Segments | Aperture Solutions
Segment Reporting Information [Line Items]
Total net sales	647,675	777,470	1,252,244	1,479,580
Adjusted reportable segment EBITDA	103,293	105,131	168,086	187,510
Operating Segments | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	335,522	421,106	604,113	754,096
Adjusted reportable segment EBITDA	61,499	78,654	87,806	135,126
Operating Segments | Shelter Solutions
Segment Reporting Information [Line Items]
Total net sales	445,021	605,225	850,949	1,136,963
Adjusted reportable segment EBITDA	$ 105,970	$ 97,851	$ 189,384	$ 187,419

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Reportable Segment and Geographical Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Segment Reporting Information [Line Items]
Total net sales	$ 1,428,218	$ 1,803,801	$ 2,707,306	$ 3,370,639
Aperture Solutions
Segment Reporting Information [Line Items]
Total net sales	647,675	777,470	1,252,244	1,479,580
Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	335,522	421,106	604,113	754,096
Shelter Solutions
Segment Reporting Information [Line Items]
Total net sales	445,021	605,225	850,949	1,136,963
Vinyl windows | Aperture Solutions
Segment Reporting Information [Line Items]
Total net sales	622,062	731,433	1,189,255	1,389,229
Aluminum windows and other | Aperture Solutions
Segment Reporting Information [Line Items]
Total net sales	25,613	46,037	62,989	90,351
Vinyl siding | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	162,841	211,016	295,026	372,216
Metal siding | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	86,066	92,283	146,503	165,985
Injection molded siding | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	15,556	19,418	28,042	38,191
Stone | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	19,450	26,635	37,469	46,957
Stone veneer installation and other | Surface Solutions
Segment Reporting Information [Line Items]
Total net sales	51,609	71,754	97,073	130,747
Metal building products | Shelter Solutions
Segment Reporting Information [Line Items]
Total net sales	445,021	547,429	850,949	1,023,887
Metal coil coating | Shelter Solutions
Segment Reporting Information [Line Items]
Total net sales	$ 0	$ 57,796	$ 0	$ 113,076

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Reportable Segment and Geographical Information - Total Assets Disaggregated by Reportable Segment (Details) - USD ($) $ in Thousands	Jul. 01, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Total assets	$ 6,943,722	$ 7,193,650
Operating Segments | Aperture Solutions
Segment Reporting Information [Line Items]
Total assets	2,865,264	2,153,378
Operating Segments | Surface Solutions
Segment Reporting Information [Line Items]
Total assets	2,275,282	2,099,244
Operating Segments | Shelter Solutions
Segment Reporting Information [Line Items]
Total assets	1,130,791	973,718
Corporate
Segment Reporting Information [Line Items]
Total assets	$ 672,385	$ 1,967,310

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Commitments and Contingencies (Details) $ in Millions	1 Months Ended
	Jan. 31, 2023 complaint	Jul. 01, 2023 USD ($)	Dec. 31, 2022 USD ($)
Environmental Matters
Loss Contingencies [Line Items]
Liability accrual | $		$ 8.8	$ 8.8
CD&R Merger
Loss Contingencies [Line Items]
Number of complaints filed | complaint	2

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022	Jul. 01, 2023	Jul. 02, 2022
Numerator for Basic and Diluted Earnings Per Common Share
Net income applicable to common shares, basic	$ (22,326)	$ 376,927	$ (51,141)	$ 478,804
Net income applicable to common shares, diluted		$ 376,927		$ 478,804
Denominator for Basic and Diluted Earnings Per Common Share:
Weighted average basic number of common shares outstanding (in shares)		127,449		127,288
Common stock equivalents:
Weighted average diluted number of common shares outstanding (in shares)		129,046		128,864
Basic earnings per common share (in dollars per share)		$ 2.96		$ 3.76
Diluted earnings per common share (in dollars per share)		$ 2.92		$ 3.72
Incentive plan securities excluded from dilution (in shares)		0		34
Employee stock options
Common stock equivalents:
Employee stock options (in shares)		1,597		1,576

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2023	Jul. 02, 2022
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$ 141,856	$ 77,432
Income taxes paid	$ 15,774	$ 55,849