0000893691-21-000068.txt : 20211109 0000893691-21-000068.hdr.sgml : 20211109 20211109142553 ACCESSION NUMBER: 0000893691-21-000068 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 75 CONFORMED PERIOD OF REPORT: 20211003 FILED AS OF DATE: 20211109 DATE AS OF CHANGE: 20211109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASONITE INTERNATIONAL CORP CENTRAL INDEX KEY: 0000893691 STANDARD INDUSTRIAL CLASSIFICATION: MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS [2430] IRS NUMBER: 980377314 STATE OF INCORPORATION: A1 FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11796 FILM NUMBER: 211391453 BUSINESS ADDRESS: STREET 1: 1242 EAST 5TH AVENUE CITY: TAMPA STATE: FL ZIP: 33605 BUSINESS PHONE: 813-877-2726 MAIL ADDRESS: STREET 1: 1242 EAST 5TH AVENUE CITY: TAMPA STATE: FL ZIP: 33605 FORMER COMPANY: FORMER CONFORMED NAME: PREMDOR INC DATE OF NAME CHANGE: 19941208 10-Q 1 door-20211003.htm 10-Q door-20211003
00008936911/22021Q3FALSEA1653500008936912021-01-042021-10-03xbrli:shares00008936912021-11-05iso4217:USD00008936912021-07-052021-10-0300008936912020-06-292020-09-2700008936912019-12-302020-09-270000893691door:CzechBusinessMember2021-07-052021-10-03iso4217:USDxbrli:shares00008936912021-10-0300008936912021-01-0300008936912021-07-0400008936912020-06-2800008936912019-12-290000893691us-gaap:CommonStockMember2021-07-040000893691us-gaap:CommonStockMember2020-06-280000893691us-gaap:CommonStockMember2021-01-030000893691us-gaap:CommonStockMember2019-12-290000893691us-gaap:CommonStockMember2021-07-052021-10-030000893691us-gaap:CommonStockMember2020-06-292020-09-270000893691us-gaap:CommonStockMember2021-01-042021-10-030000893691us-gaap:CommonStockMember2019-12-302020-09-270000893691us-gaap:CommonStockMember2021-10-030000893691us-gaap:CommonStockMember2020-09-270000893691us-gaap:AdditionalPaidInCapitalMember2021-07-040000893691us-gaap:AdditionalPaidInCapitalMember2020-06-280000893691us-gaap:AdditionalPaidInCapitalMember2021-01-030000893691us-gaap:AdditionalPaidInCapitalMember2019-12-290000893691us-gaap:AdditionalPaidInCapitalMember2021-07-052021-10-030000893691us-gaap:AdditionalPaidInCapitalMember2020-06-292020-09-270000893691us-gaap:AdditionalPaidInCapitalMember2021-01-042021-10-030000893691us-gaap:AdditionalPaidInCapitalMember2019-12-302020-09-270000893691us-gaap:AdditionalPaidInCapitalMember2021-10-030000893691us-gaap:AdditionalPaidInCapitalMember2020-09-270000893691us-gaap:RetainedEarningsMember2021-07-040000893691us-gaap:RetainedEarningsMember2020-06-280000893691us-gaap:RetainedEarningsMember2021-01-030000893691us-gaap:RetainedEarningsMember2019-12-290000893691us-gaap:RetainedEarningsMember2021-07-052021-10-030000893691us-gaap:RetainedEarningsMember2020-06-292020-09-270000893691us-gaap:RetainedEarningsMember2021-01-042021-10-030000893691us-gaap:RetainedEarningsMember2019-12-302020-09-270000893691us-gaap:RetainedEarningsMember2021-10-030000893691us-gaap:RetainedEarningsMember2020-09-270000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-040000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-280000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-290000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-052021-10-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-292020-09-270000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-042021-10-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-302020-09-270000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-030000893691us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-270000893691us-gaap:NoncontrollingInterestMember2021-07-040000893691us-gaap:NoncontrollingInterestMember2020-06-280000893691us-gaap:NoncontrollingInterestMember2021-01-030000893691us-gaap:NoncontrollingInterestMember2019-12-290000893691us-gaap:NoncontrollingInterestMember2021-07-052021-10-030000893691us-gaap:NoncontrollingInterestMember2020-06-292020-09-270000893691us-gaap:NoncontrollingInterestMember2021-01-042021-10-030000893691us-gaap:NoncontrollingInterestMember2019-12-302020-09-270000893691us-gaap:NoncontrollingInterestMember2021-10-030000893691us-gaap:NoncontrollingInterestMember2020-09-2700008936912020-09-27door:facilitydoor:Country0000893691door:LowesDoorManufacturingFacilityMember2020-12-042020-12-040000893691door:LowesDoorManufacturingFacilityMember2021-04-052021-07-040000893691door:DevelopmentEntityMember2020-08-312020-08-310000893691door:CzechBusinessMember2021-06-142021-06-140000893691door:IndiaEntityMember2020-09-282021-01-03door:Customer0000893691door:TenLargestCustomersMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-042021-07-040000893691door:TenLargestCustomersMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-042021-10-03xbrli:pure0000893691door:TenLargestCustomersMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2019-12-302021-01-030000893691door:TheHomeDepotIncMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-042021-10-030000893691door:TheHomeDepotIncMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2019-12-302021-01-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2030Member2021-10-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2030Member2021-01-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2021-10-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2021-01-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Member2021-10-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Member2021-01-030000893691us-gaap:SeniorNotesMember2021-10-030000893691us-gaap:SeniorNotesMember2021-01-030000893691us-gaap:SeniorNotesMember2021-07-052021-10-030000893691us-gaap:SeniorNotesMember2021-01-042021-10-030000893691us-gaap:SeniorNotesMember2020-06-292020-09-270000893691us-gaap:SeniorNotesMember2019-12-302020-09-270000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2030Member2021-07-260000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2030Member2021-07-262021-07-260000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Member2021-07-262021-07-260000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2028Member2019-07-250000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Member2018-08-270000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2019-01-310000893691srt:MinimumMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-01-042021-10-030000893691srt:MaximumMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-01-042021-10-030000893691srt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-01-042021-10-030000893691srt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-01-042021-10-030000893691srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-01-042021-10-030000893691us-gaap:RevolvingCreditFacilityMemberdoor:ABLFacility2024Member2021-10-030000893691door:InReInteriorMoldedDoorsIndirectPurchaserAntitrustLitigationMember2021-07-272021-08-100000893691us-gaap:SellingGeneralAndAdministrativeExpensesMember2019-12-302020-09-270000893691us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-06-292020-09-270000893691door:A2021PlanMember2021-03-102021-03-100000893691door:A2021PlanMemberus-gaap:CommonStockMember2021-03-100000893691door:A2021PlanMemberus-gaap:CommonStockMember2021-10-030000893691us-gaap:StockAppreciationRightsSARSMember2021-01-042021-10-030000893691us-gaap:StockAppreciationRightsSARSMember2021-01-030000893691us-gaap:StockAppreciationRightsSARSMember2021-01-042021-04-040000893691us-gaap:StockAppreciationRightsSARSMember2021-10-030000893691us-gaap:RestrictedStockUnitsRSUMember2021-01-042021-10-030000893691us-gaap:RestrictedStockUnitsRSUMember2021-01-030000893691us-gaap:RestrictedStockUnitsRSUMember2021-10-030000893691us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-01-042021-10-030000893691us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-042021-10-030000893691srt:MaximumMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691srt:MaximumMemberdoor:TwentyTwentyRestructuringPlansMember2021-10-030000893691srt:MaximumMemberdoor:TwentyNineteenRestructuringPlansMember2021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-07-052021-10-030000893691door:TwentyTwentyOneRestructuringPlansMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyRestructuringPlansMember2021-07-052021-10-030000893691door:TwentyTwentyRestructuringPlansMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyNineteenRestructuringPlansMember2021-07-052021-10-030000893691door:TwentyNineteenRestructuringPlansMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2020-06-292020-09-270000893691door:ArchitecturalSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2020-06-292020-09-270000893691us-gaap:CorporateAndOtherMemberdoor:TwentyNineteenRestructuringPlansMember2020-06-292020-09-270000893691door:TwentyNineteenRestructuringPlansMember2020-06-292020-09-270000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2020-06-292020-09-270000893691door:ArchitecturalSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2020-06-292020-09-270000893691us-gaap:CorporateAndOtherMemberdoor:TwentyEighteenRestructuringPlansMember2020-06-292020-09-270000893691door:TwentyEighteenRestructuringPlansMember2020-06-292020-09-270000893691door:NorthAmericanResidentialSegmentMember2020-06-292020-09-270000893691door:ArchitecturalSegmentMember2020-06-292020-09-270000893691us-gaap:CorporateAndOtherMember2020-06-292020-09-270000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyNineteenRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyNineteenRestructuringPlansMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2019-12-302020-09-270000893691door:TwentyNineteenRestructuringPlansMemberdoor:EuropeSegmentMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2019-12-302020-09-270000893691us-gaap:CorporateAndOtherMemberdoor:TwentyNineteenRestructuringPlansMember2019-12-302020-09-270000893691door:TwentyNineteenRestructuringPlansMember2019-12-302020-09-270000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691door:EuropeSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691us-gaap:CorporateAndOtherMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691door:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691door:NorthAmericanResidentialSegmentMember2019-12-302020-09-270000893691door:EuropeSegmentMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMember2019-12-302020-09-270000893691us-gaap:CorporateAndOtherMember2019-12-302020-09-270000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691door:EuropeSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691door:TwentyTwentyOneRestructuringPlansMember2021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-10-030000893691door:EuropeSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyTwentyRestructuringPlansMember2021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyTwentyRestructuringPlansMember2021-10-030000893691door:TwentyTwentyRestructuringPlansMember2021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-10-030000893691door:TwentyNineteenRestructuringPlansMemberdoor:EuropeSegmentMember2021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyNineteenRestructuringPlansMember2021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyNineteenRestructuringPlansMember2021-10-030000893691door:TwentyNineteenRestructuringPlansMember2021-10-030000893691door:NorthAmericanResidentialSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2021-10-030000893691door:EuropeSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2021-10-030000893691door:ArchitecturalSegmentMemberdoor:TwentyEighteenRestructuringPlansMember2021-10-030000893691us-gaap:CorporateAndOtherMemberdoor:TwentyEighteenRestructuringPlansMember2021-10-030000893691door:TwentyEighteenRestructuringPlansMember2021-10-030000893691door:NorthAmericanResidentialSegmentMember2021-10-030000893691door:EuropeSegmentMember2021-10-030000893691door:ArchitecturalSegmentMember2021-10-030000893691us-gaap:CorporateAndOtherMember2021-10-030000893691door:TwentyTwentyOneRestructuringPlansMember2021-01-030000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691us-gaap:FacilityClosingMemberdoor:TwentyTwentyOneRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyTwentyRestructuringPlansMember2021-01-030000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691us-gaap:FacilityClosingMemberdoor:TwentyTwentyRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyNineteenRestructuringPlansMember2021-01-030000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyNineteenRestructuringPlansMember2021-01-042021-10-030000893691door:TwentyNineteenRestructuringPlansMemberus-gaap:FacilityClosingMember2021-01-042021-10-030000893691us-gaap:EmployeeSeveranceMember2021-01-042021-10-030000893691us-gaap:FacilityClosingMember2021-01-042021-10-030000893691door:TwentyNineteenRestructuringPlansMember2019-12-290000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyNineteenRestructuringPlansMember2019-12-302020-09-270000893691door:TwentyNineteenRestructuringPlansMemberus-gaap:FacilityClosingMember2019-12-302020-09-270000893691door:TwentyNineteenRestructuringPlansMember2020-09-270000893691door:TwentyEighteenRestructuringPlansMember2019-12-290000893691us-gaap:EmployeeSeveranceMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691us-gaap:FacilityClosingMemberdoor:TwentyEighteenRestructuringPlansMember2019-12-302020-09-270000893691door:TwentyEighteenRestructuringPlansMember2020-09-270000893691us-gaap:EmployeeSeveranceMember2019-12-302020-09-270000893691us-gaap:FacilityClosingMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMember2019-12-290000893691door:ArchitecturalSegmentMember2020-09-270000893691us-gaap:FairValueInputsLevel3Memberdoor:ArchitecturalAndCorporateOtherMember2021-01-042021-10-030000893691us-gaap:CarryingReportedAmountFairValueDisclosureMemberdoor:ArchitecturalAndCorporateOtherMember2021-10-030000893691us-gaap:StockAppreciationRightsSARSMember2021-07-052021-10-030000893691us-gaap:StockAppreciationRightsSARSMember2020-06-292020-09-270000893691us-gaap:StockAppreciationRightsSARSMember2021-01-042021-10-030000893691us-gaap:StockAppreciationRightsSARSMember2019-12-302020-09-270000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2021-07-052021-10-030000893691us-gaap:OperatingSegmentsMemberdoor:EuropeSegmentMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMemberus-gaap:OperatingSegmentsMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2021-07-052021-10-030000893691us-gaap:OperatingSegmentsMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2021-07-052021-10-030000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2021-07-052021-10-030000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2021-07-052021-10-030000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2021-07-052021-10-030000893691us-gaap:IntersegmentEliminationMember2021-07-052021-10-030000893691door:EuropeSegmentMember2021-07-052021-10-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2020-06-292020-09-270000893691us-gaap:OperatingSegmentsMemberdoor:EuropeSegmentMember2020-06-292020-09-270000893691door:ArchitecturalSegmentMemberus-gaap:OperatingSegmentsMember2020-06-292020-09-270000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2020-06-292020-09-270000893691us-gaap:OperatingSegmentsMember2020-06-292020-09-270000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2020-06-292020-09-270000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2020-06-292020-09-270000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2020-06-292020-09-270000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2020-06-292020-09-270000893691us-gaap:IntersegmentEliminationMember2020-06-292020-09-270000893691door:EuropeSegmentMember2020-06-292020-09-270000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2021-01-042021-10-030000893691us-gaap:OperatingSegmentsMemberdoor:EuropeSegmentMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMemberus-gaap:OperatingSegmentsMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2021-01-042021-10-030000893691us-gaap:OperatingSegmentsMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2021-01-042021-10-030000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2021-01-042021-10-030000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2021-01-042021-10-030000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2021-01-042021-10-030000893691us-gaap:IntersegmentEliminationMember2021-01-042021-10-030000893691door:EuropeSegmentMember2021-01-042021-10-030000893691door:NorthAmericanResidentialSegmentMemberus-gaap:OperatingSegmentsMember2019-12-302020-09-270000893691us-gaap:OperatingSegmentsMemberdoor:EuropeSegmentMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMemberus-gaap:OperatingSegmentsMember2019-12-302020-09-270000893691us-gaap:CorporateAndOtherMemberus-gaap:OperatingSegmentsMember2019-12-302020-09-270000893691us-gaap:OperatingSegmentsMember2019-12-302020-09-270000893691door:NorthAmericanResidentialSegmentMemberus-gaap:IntersegmentEliminationMember2019-12-302020-09-270000893691door:EuropeSegmentMemberus-gaap:IntersegmentEliminationMember2019-12-302020-09-270000893691door:ArchitecturalSegmentMemberus-gaap:IntersegmentEliminationMember2019-12-302020-09-270000893691us-gaap:CorporateAndOtherMemberus-gaap:IntersegmentEliminationMember2019-12-302020-09-270000893691us-gaap:IntersegmentEliminationMember2019-12-302020-09-2700008936912019-12-302021-01-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberdoor:SeniorNotesDue2030Member2021-10-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberdoor:SeniorNotesDue2030Member2021-10-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberdoor:SeniorNotesDue2030Member2021-01-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberdoor:SeniorNotesDue2030Member2021-01-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberdoor:SeniorNotesDue2028Member2021-10-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberdoor:SeniorNotesDue2028Member2021-10-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberdoor:SeniorNotesDue2028Member2021-01-030000893691us-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMemberdoor:SeniorNotesDue2028Member2021-01-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-10-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-10-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-01-030000893691us-gaap:SeniorNotesMemberdoor:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Memberus-gaap:CarryingReportedAmountFairValueDisclosureMember2021-01-03


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 3, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number: 001-11796
____________________________
door-20211003_g1.jpg
Masonite International Corporation
(Exact name of registrant as specified in its charter)
____________________________
British Columbia, Canada98-0377314
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

2771 Rutherford Road
Concord, Ontario L4K 2N6 Canada
(Address of principal executive offices)
(800) 895-2723
(Registrant's telephone number, including area code)
____________________________
Securities registered pursuant to Section 12(b) of the Act:
Common Stock (no par value)DOORNew York Stock Exchange
(Title of class)(Trading symbol)(Name of exchange on which registered)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
The registrant had outstanding 23,778,958 shares of Common Stock, no par value, as of November 5, 2021.



door-20211003_g1.jpg

MASONITE INTERNATIONAL CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
October 3, 2021

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements concerning the conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and product development efforts under "Management's Discussion and Analysis of Financial Condition and Results of Operations." Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as "may," "might," "could," "will," "would," "should," "expect," "believes," "outlook," "predict," "forecast," "objective," "remain," "anticipate," "estimate," "potential," "continue," "plan," "project," "targeting," and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. These risks and uncertainties include, without limitation, those identified under "Risk Factors" in our Annual Report on Form 10-K for the year ended January 3, 2021, subsequent reports on Form 10-Q, and elsewhere in this Quarterly Report.
The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:
downward trends in our end markets and in economic conditions;
reduced levels of residential new construction; residential repair, renovation and remodeling; and non-residential building construction activity due to increases in mortgage rates, changes in mortgage interest deductions and related tax changes and reduced availability of financing;
competition;
the continued success of, and our ability to maintain relationships with, certain key customers in light of customer concentration and consolidation;
our ability to accurately anticipate demand for our products including seasonality;
scale and scope of the coronavirus ("COVID-19") pandemic and its impact on our operations, customer demand and supply chain, including any adverse effects of the U.S. government's COVID-19 vaccine mandates;
increases in prices of raw materials and fuel;
tariffs and evolving trade policy and friction between the United States and other countries, including China, and the impact of anti-dumping and countervailing duties;
increases in labor costs, the availability of labor or labor relations (i.e., disruptions, strikes or work stoppages);
our ability to manage our operations including potential disruptions, manufacturing realignments (including related restructuring charges) and customer credit risk;
product liability claims and product recalls;
our ability to generate sufficient cash flows to fund our capital expenditure requirements, to meet our pension obligations and to meet our debt service obligations, including our obligations under our senior notes and our asset-based revolving credit facility ("ABL Facility");
limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and ABL Facility;
fluctuating foreign exchange and interest rates;
our ability to replace our expiring patents and to innovate, keep pace with technological developments and successfully integrate acquisitions;
the continuous operation of our information technology and enterprise resource planning systems and management of potential cyber security threats and attacks;
political, economic and other risks that arise from operating a multinational business;
uncertainty relating to the United Kingdom's exit from the European Union;
retention of key management personnel; and
environmental and other government regulations, including the United States Foreign Corrupt Practices Act ("FCPA"), and any changes in such regulations.
We caution you that the foregoing list of important factors is not all-inclusive. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
ii

The Company may use its website and/or social media outlets, such as LinkedIn, as distribution channels of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at http://investor.masonite.com and its LinkedIn page at https://www.linkedin.com/company/masonitedoors/mycompany/. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section at http://investor.masonite.com.
iii

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements


MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net sales$652,208 $587,652 $1,960,955 $1,638,538 
Cost of goods sold498,103 427,331 1,483,870 1,207,582 
Gross profit154,105 160,321 477,085 430,956 
Selling, general and administration expenses76,632 118,354 242,774 272,077 
Restructuring costs1,311 1,895 5,146 4,984 
Asset impairment 51,515 10,374 51,515 
Loss on disposal of subsidiaries  8,590 2,091 
Operating income (loss)76,162 (11,443)210,201 100,289 
Interest expense, net11,349 11,805 35,213 34,911 
Loss on extinguishment of debt13,583  13,583  
Other (income) expense, net(1,471)(1,953)(4,400)(3,350)
Income (loss) before income tax expense52,701 (21,295)165,805 68,728 
Income tax expense (benefit)13,854 (804)42,713 23,522 
Net income (loss)38,847 (20,491)123,092 45,206 
Less: net income attributable to non-controlling interests1,156 1,275 3,374 3,090 
Net income (loss) attributable to Masonite$37,691 $(21,766)$119,718 $42,116 
Basic earnings (loss) per common share attributable to Masonite$1.57 $(0.89)$4.92 $1.71 
Diluted earnings (loss) per common share attributable to Masonite$1.54 $(0.89)$4.84 $1.69 
Comprehensive income (loss):
Net income (loss)$38,847 $(20,491)$123,092 $45,206 
Other comprehensive income (loss):
Foreign currency translation (loss) gain(9,164)14,137 (897)(9,818)
Amortization of actuarial net losses334 173 1,000 518 
Income tax expense related to other comprehensive income (loss)(83)(25)(196)(142)
Other comprehensive income (loss), net of tax:(8,913)14,285 (93)(9,442)
Comprehensive income (loss)29,934 (6,206)122,999 35,764 
Less: comprehensive income (loss) attributable to non-controlling interests990 1,481 3,477 2,947 
Comprehensive income (loss) attributable to Masonite$28,944 $(7,687)$119,522 $32,817 

See accompanying notes to the condensed consolidated financial statements.
1

MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
ASSETSOctober 3, 2021January 3, 2021
Current assets:
Cash and cash equivalents$393,730 $364,674 
Restricted cash10,246 10,560 
Accounts receivable, net352,167 290,508 
Inventories, net309,832 260,962 
Prepaid expenses and other assets41,186 42,538 
Income taxes receivable3,737 1,124 
Total current assets1,110,898 970,366 
Property, plant and equipment, net601,415 625,126 
Operating lease right-of-use assets183,284 146,806 
Investment in equity investees12,540 14,636 
Goodwill136,958 138,692 
Intangible assets, net154,816 169,392 
Deferred income taxes21,287 25,331 
Other assets48,802 47,411 
Total assets$2,270,000 $2,137,760 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$117,748 $97,211 
Accrued expenses221,932 277,716 
Income taxes payable12,912 11,086 
Total current liabilities352,592 386,013 
Long-term debt865,399 792,242 
Long-term operating lease liabilities171,940 136,235 
Deferred income taxes80,195 73,073 
Other liabilities59,393 55,080 
Total liabilities1,529,519 1,442,643 
Commitments and Contingencies (Note 7)
Equity:
Share capital: unlimited shares authorized, no par value, 23,896,040 and 24,422,934 shares issued and outstanding as of October 3, 2021, and January 3, 2021, respectively
549,468 552,969 
Additional paid-in capital218,127 223,666 
Accumulated earnings73,905 20,385 
Accumulated other comprehensive loss(112,259)(112,063)
Total equity attributable to Masonite729,241 684,957 
Equity attributable to non-controlling interests11,240 10,160 
Total equity740,481 695,117 
Total liabilities and equity$2,270,000 $2,137,760 

See accompanying notes to the condensed consolidated financial statements.
2

MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Changes in Equity
(In thousands of U.S. dollars, except share amounts)
(Unaudited)
Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Total equity, beginning of period$750,173 $646,245 $695,117 $636,862 
Share capital:
Beginning of period556,398 553,766 552,969 558,514 
Common shares issued for delivery of share based awards779 310 11,843 7,583 
Common shares issued under employee stock purchase plan769 597 1,593 1,305 
Common shares repurchased and retired(8,478) (16,937)(12,729)
End of period549,468 554,673 549,468 554,673 
Additional paid-in capital:
Beginning of period217,599 213,814 223,666 216,584 
Share based compensation expense2,336 6,299 11,460 13,509 
Common shares issued for delivery of share based awards(779)(310)(11,843)(7,583)
Common shares withheld to cover income taxes payable due to delivery of share based awards(890)(356)(4,834)(2,752)
Common shares issued under employee stock purchase plan(139)(140)(322)(451)
End of period218,127 219,307 218,127 219,307 
Accumulated earnings (deficit):
Beginning of period68,845 21,794 20,385 (20,047)
Net income attributable to Masonite37,691 (21,766)119,718 42,116 
Common shares repurchased and retired(32,631) (66,198)(22,041)
End of period73,905 28 73,905 28 
Accumulated other comprehensive loss:
Beginning of period(103,512)(153,547)(112,063)(130,169)
Other comprehensive income (loss) attributable to Masonite, net of tax(8,747)14,079 (196)(9,299)
End of period(112,259)(139,468)(112,259)(139,468)
Equity attributable to non-controlling interests:
Beginning of period10,843 10,418 10,160 11,980 
Net income attributable to non-controlling interests1,156 1,275 3,374 3,090 
Other comprehensive income (loss) attributable to non-controlling interests, net of tax(166)206 103 (143)
Dividends to non-controlling interests(593)(937)(2,397)(3,965)
End of period11,240 10,962 11,240 10,962 
Total equity, end of period$740,481 $645,502 $740,481 $645,502 
Common shares outstanding:
Beginning of period24,238,024 24,487,121 24,422,934 24,869,921 
Common shares issued for delivery of share based awards20,370 8,767 195,858 183,812 
Common shares issued under employee stock purchase plan6,794 7,079 15,091 16,505 
Common shares repurchased and retired(369,148) (737,843)(567,271)
End of period23,896,040 24,502,967 23,896,040 24,502,967 
See accompanying notes to the condensed consolidated financial statements.
3

MASONITE INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
(Unaudited)
Nine Months Ended
Cash flows from operating activities:October 3, 2021September 27, 2020
Net income$123,092 $45,206 
Adjustments to reconcile net income to net cash flow provided by operating activities:
Loss on disposal of subsidiaries8,590 2,091 
Loss on extinguishment of debt13,583  
Depreciation52,876 50,742 
Amortization16,749 17,900 
Share based compensation expense11,460 13,509 
Deferred income taxes11,989 (2,806)
Unrealized foreign exchange gain(490)(83)
Share of income from equity investees, net of tax(2,404)(1,972)
Dividend from equity investee4,500 4,275 
Pension and post-retirement funding, net of expense(3,708)(3,447)
Non-cash accruals and interest1,268 1,268 
Loss on sale of property, plant and equipment1,954 3,629 
Asset impairment10,374 51,515 
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(65,448)(51,071)
Inventories(54,425)(3,950)
Prepaid expenses and other assets1,261 2,823 
Accounts payable and accrued expenses(28,587)69,865 
Other assets and liabilities(2,615)19,762 
Net cash flow provided by operating activities100,019 219,256 
Cash flows from investing activities:
Additions to property, plant and equipment(46,626)(45,899)
Acquisition of businesses, net of cash acquired(160)(1,912)
Proceeds from sale of subsidiaries, net of cash disposed7,001  
Proceeds from sale of property, plant and equipment3,377 5,086 
Other investing activities(1,782)(1,762)
Net cash flow used in investing activities(38,190)(44,487)
Cash flows from financing activities:
Proceeds from issuance of long-term debt375,000  
Repayments of long-term debt(300,945)(57)
Payment of debt extinguishment costs(10,810) 
Payment of debt issuance costs(4,672) 
Tax withholding on share based awards(4,834)(2,752)
Distributions to non-controlling interests(2,397)(3,965)
Repurchases of common shares(83,135)(34,770)
Net cash flow used in financing activities(31,793)(41,544)
Net foreign currency translation adjustment on cash(1,294)524 
Increase in cash, cash equivalents and restricted cash28,742 133,749 
Cash, cash equivalents and restricted cash, beginning of period375,234 177,608 
Cash, cash equivalents and restricted cash, at end of period$403,976 $311,357 
See accompanying notes to the condensed consolidated financial statements.
4


MASONITE INTERNATIONAL CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. Business Overview and Significant Accounting Policies
Unless we state otherwise or the context otherwise requires, references to "Masonite," "we," "our," "us" and the "Company" in these notes to the condensed consolidated financial statements refer to Masonite International Corporation and its subsidiaries.
Description of Business
Masonite International Corporation is one of the largest manufacturers of doors in the world, with significant market share in both interior and exterior door products. Masonite operates 58 manufacturing and distribution facilities in seven countries and sells doors to customers throughout the world with our largest markets being the United States, Canada and the United Kingdom.
Basis of Presentation
We prepare these unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") and applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year.
These unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended January 3, 2021, as filed with the SEC. Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. In a 52-week year, each fiscal quarter consists of 13 weeks. For ease of disclosure, the 13-week periods are referred to as three-month periods and the 52- or 53-week periods are referred to as year.
Changes in Accounting Standards and Policies
There have been no changes in the significant accounting policies from those that were disclosed in the fiscal year 2020 audited consolidated financial statements, other than as noted below.
Adoption of Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. We have adopted the new guidance prospectively as of January 4, 2021, the beginning of fiscal year 2021, and the adoption did not have a material impact on our financial statements.
In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans," which amended ASC 715, "Compensation—Retirement Benefits." This standard is applicable for employers that sponsor defined benefit pension or other postretirement plans, and eliminates disclosures no longer considered cost beneficial, clarifies specific disclosure requirements for entities that provide aggregate disclosures for two or more plans and adds requirements for explanations for significant gains and losses related to changes in benefit obligations. We adopted the new guidance using a retrospective approach as of January 3, 2021, the end of fiscal year 2020, and the adoption did not have a material impact on our financial statements or disclosures.
5



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

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”, which replaced the incurred loss methodology for recognizing credit losses with a current expected credit losses model. This standard applied to most financial assets, including trade receivables. Our prior accounts receivable policy is described in detail in our Annual Report on Form 10-K for the year ended January 3, 2021. We adopted the new guidance using a modified retrospective approach as of December 30, 2019, the beginning of fiscal year 2020, and the adoption did not have a material impact on our financial statements and no adjustment was necessary to retained earnings on December 30, 2019.
2. Acquisitions and Divestitures
Acquisitions
On December 4, 2020, we completed the acquisition of a Lowe's Companies, Inc. door fabrication facility in the United States for cash consideration of $3.9 million. During the first quarter of 2021, as a result of working capital adjustments we paid an additional $0.2 million. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for the acquisition are not presented as they were not material for any period presented.
On August 31, 2020, we acquired intellectual property and other assets related to an interior door technology for cash consideration of $1.9 million. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for the acquisition are not presented as they were not material for any period presented.
Divestitures
On June 14, 2021, we completed the sale of all of the capital stock of our Czech business ("Czech") for consideration of $7.0 million, net of cash disposed. The purchasers are not considered to be a related party. The divestiture of this business resulted in a loss on disposal of subsidiaries of $8.6 million, which was recognized in the second quarter of 2021 in the Europe segment. The total charge consists of $5.1 million relating to the write-off of the net assets sold and other professional fees and $3.5 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss.
During the second quarter of 2020, we completed the liquidation of our legal entity in India. As a result, we recognized $2.1 million in loss on disposal of subsidiaries. The total charge consists of $2.3 million relating to the recognition of cumulative translation adjustment out of accumulated other comprehensive loss and $0.2 million relating to the write-off of net assets and other professional fees.
3. Accounts Receivable
Our customers consist mainly of retailers, distributors and contractors. Our ten largest customers accounted for 57.1% and 53.1% of total accounts receivable as of October 3, 2021, and January 3, 2021, respectively. Our largest customer, The Home Depot, Inc., accounted for more than 10% of the consolidated gross accounts receivable balance as of October 3, 2021, and January 3, 2021. The allowance for doubtful accounts balance was $2.2 million and $2.8 million as of October 3, 2021, and January 3, 2021, respectively.
We maintain an accounts receivable sales program with a third party (the "AR Sales Program"). Under the AR Sales Program, we can transfer ownership of eligible trade accounts receivable of certain customers. Receivables are sold outright to a third party who assumes the full risk of collection, without recourse to us in the event of a loss. Transfers of receivables under this program are accounted for as sales. Proceeds from the transfers reflect the face value of the accounts receivable less a discount. Receivables sold under the AR Sales Program are excluded from trade accounts receivable in the condensed consolidated balance sheets and are included in cash flows from operating activities in the condensed consolidated statements of cash flows. The discounts on the sales of trade accounts receivable sold, if any, under the AR Sales Program were not material for any of the periods presented and were recorded in selling, general and administration expenses within the condensed consolidated statements of comprehensive income (loss).
6



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

4. Inventories
The amounts of inventory on hand were as follows as of the dates indicated:
(In thousands)October 3, 2021January 3, 2021
Raw materials$235,553 $191,784 
Finished goods81,361 75,483 
Provision for obsolete or aged inventory(7,082)(6,305)
Inventories, net$309,832 $260,962 

5. Accrued Expenses
The details of our accrued expenses were as follows as of the dates indicated:
(In thousands)October 3, 2021January 3, 2021
Accrued payroll$64,361 $86,517 
Accrued rebates50,845 49,531 
Current portion of operating lease liabilities25,407 22,667 
Accrued interest7,126 16,435 
Accrued legal settlement 40,000 
Other accruals74,193 62,566 
Total accrued expenses$221,932 $277,716 

6. Long-Term Debt
(In thousands)October 3, 2021January 3, 2021
3.50% senior unsecured notes due 2030$375,000 $ 
5.375% senior unsecured notes due 2028500,000 500,000 
5.750% senior unsecured notes due 2026 300,000 
Debt issuance costs(9,601)(8,694)
Other long-term debt 936 
Total long-term debt$865,399 $792,242 
Interest expense related to our consolidated indebtedness under senior unsecured notes was $10.7 million and $33.5 million for the three and nine months ended October 3, 2021, respectively, and $11.4 million and $34.1 million for the three and nine months ended September 27, 2020, respectively.
3.50% Senior Notes due 2030
On July 26, 2021, we issued $375.0 million aggregate principal senior unsecured notes (the "2030 Notes"). The 2030 Notes were issued in a private placement for resale to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the "Securities Act), and to buyers outside of the United States pursuant to Regulation S under the Securities Act. The 2030 Notes bear interest at 3.50% per annum, payable in cash semiannually in arrears on February 15 and August 15 of each year commencing on February 15, 2022, and are due February 15, 2030. The 2030 Notes were issued at par. We received net proceeds of $370.3 million after deducting $4.7 million of debt issuance costs. The debt issuance costs were capitalized as a reduction to the carrying value of debt and are being accreted to interest expense over the term of the 2030 Notes using the effective interest method. The net proceeds from the issuance of the 2030 Notes were used to redeem the remaining $300.0 million aggregate principal amount of the 2026 Notes (as described below), including the payment of related premiums, fees and expenses, with the balance of the proceeds available for general corporate purposes.
7



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

Subsequent to the closing of the 2030 Notes offering, the 2026 Notes were redeemed, and the notes were considered extinguished as of July 26, 2021. Under the terms of the indenture governing the 2026 Notes, we paid the applicable premium of $10.8 million. Additionally, the unamortized debt issuance costs of $2.8 million relating to the 2026 Notes were written off in conjunction with the extinguishment of the 2026 Notes. The resulting loss on extinguishment of debt was $13.6 million and was recorded as part of income from continuing operations before income tax expense in the condensed consolidated statements of comprehensive income (loss) in the third quarter of 2021. Additionally, the cash payment of interest accrued to, but not including, the redemption date was accelerated to the redemption date.
Obligations under the 2030 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by certain of our directly or indirectly wholly-owned subsidiaries. We may redeem the 2030 Notes under certain circumstances specified therein.
The indenture governing the 2030 Notes contains limited covenants that, among other things, limit our ability and the ability of our subsidiaries to (i) incur certain secured debt, (ii) engage in certain sale and leaseback transactions and (iii) merge or consolidate with other entities. The foregoing limitations are subject to exceptions as set forth in the indenture governing the 2030 Notes. The indenture governing the 2030 Notes contains customary events of default (subject to certain cases to customary grace and cure periods). As of October 3, 2021, we were in compliance with all covenants under the indenture governing the 2030 Notes.
5.375% Senior Notes due 2028
On July 25, 2019, we issued $500.0 million aggregate principal senior unsecured notes (the "2028 Notes"). The 2028 Notes bear interest at 5.375%, payable in cash semiannually in arrears on February 1 and August 1 of each year and are due February 1, 2028. The 2028 Notes were issued at par.
Information concerning obligations under the 2028 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended January 3, 2021. As of October 3, 2021, we were in compliance with all covenants under the indenture governing the 2028 Notes.

5.750% Senior Notes due 2026
On August 27, 2018, we issued $300.0 million aggregate principal senior unsecured notes (the "2026 Notes"). The 2026 Notes bear interest at 5.750% per annum, payable in cash semiannually in arrears on March 15 and September 15 of each year and are due September 15, 2026. The 2026 Notes were issued at par.
Information concerning obligations under the 2026 Notes and the indenture governing them are described in detail in our Annual Report on Form 10-K for the year ended January 3, 2021. As of July 26, 2021, the 2026 Notes were fully redeemed, as described above.
ABL Facility
On January 31, 2019, we and certain of our subsidiaries entered into a $250.0 million asset-based revolving credit facility (the "ABL Facility") maturing on January 31, 2024, which replaced the previous facility. Borrowings under the ABL Facility bear interest at a rate equal to, at our option, (i) the United States, Canadian or United Kingdom Base Rate (each as defined in the credit agreement relating to the ABL Facility, the "Amended and Restated Credit Agreement") plus a margin ranging from 0.25% to 0.50% per annum, or (ii) the Adjusted LIBO Rate or BA Rate (each as defined in the Amended and Restated Credit Agreement), plus a margin ranging from 1.25% to 1.50% per annum. In addition to paying interest on any outstanding principal under the ABL Facility, a commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter.
The ABL Facility contains various customary representations, warranties by us and covenants that are described in detail in our Annual Report on Form 10-K for the year ended January 3, 2021. As of October 3, 2021, we were in compliance with all covenants under the credit agreement governing the ABL Facility. We had availability of $208.8 million under our ABL Facility and there were no amounts outstanding as of October 3, 2021.
8



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

7. Commitments and Contingencies
The following discussion describes material developments in previously disclosed legal proceedings that occurred since January 3, 2021. Refer to Note 10. Commitments and Contingencies in the consolidated financial statements in our Annual Report on Form 10-K for the year ended January 3, 2021, for a full description of the previously disclosed legal proceedings.
Indemnifications
We have provided customary indemnifications to our landlords under certain property lease agreements for claims by third parties in connection with their use of the premises. We also have provided routine indemnifications against adverse effects related to changes in tax laws and patent infringements by third parties. The maximum amount of these indemnifications cannot be reasonably estimated due to their nature. In some cases, we have recourse against other parties to mitigate the risk of loss from these indemnifications. Historically, we have not made any significant payments relating to such indemnifications.
Antitrust Class Action Proceedings - United States
With respect to the putative class action antitrust cases pending in the Eastern District of Virginia (the "Court"), on June 3, 2021, the Court granted final approval of the settlement with the direct purchaser plaintiffs and subsequently: (i) we paid the remainder of the previously agreed upon settlement in June 2021 that had been accrued for the direct purchaser settlement within accrued expenses in the condensed consolidated balance sheet, and (ii) the Court entered final judgment of dismissal as to defendants in the direct purchaser case. Additionally, on July 27, 2021, the Court granted final approval of the settlement with the indirect purchaser plaintiffs and subsequently: (i) we paid $9.25 million in August 2021, representing the remainder of the previously agreed upon settlement that had been accrued for the indirect purchaser settlement within accrued expenses in the condensed consolidated balance sheet, and (ii) the Court entered final judgment of dismissal as to defendants in the indirect purchaser case.
During the three months ended September 27, 2020, we recorded a legal reserve of $37.75 million in selling, general and administration expenses within the condensed consolidated statements of comprehensive income (loss) related to these settlements.
Class Action Proceedings - Canada
With respect to the putative class action antitrust case pending in Quebec, Canada, all parties in the Quebec proceeding filed a motion with the Quebec court seeking to stay the proceeding on December 22, 2020. The Quebec court has not yet released its decision regarding this motion.
With respect to the putative class action antitrust case pending in the Federal Court of Canada, the plaintiff served its certification record on March 31, 2021. The parties are conferring regarding a narrowing of issues and with respect to a mutually agreeable timeline of steps leading up to the plaintiff's certification motion. The parties have written to the Federal Court advising that the parties do not yet propose to set a timetable of steps leading to the certification motion and requesting that the parties be permitted to provide a further update to the Federal Court by January 31, 2022, and the court granted this request. We have not recognized an expense related to damages in connection with this matter because, although an adverse outcome is reasonably possible, the amount or range of any potential loss cannot be reasonably estimated.
While we intend to defend against these claims vigorously, there can be no assurance that the ultimate resolution of this litigation will not have a material, adverse effect on our consolidated financial condition or results of operations.
General
In addition to the above, from time to time, we are involved in various claims and legal actions, including but not limited to wage and hour and labor lawsuits. In the opinion of management, the ultimate disposition of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.
9



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

8. Share Based Compensation Plans
Share based compensation expense was $2.3 million and $11.5 million for the three and nine months ended October 3, 2021, respectively, and $6.3 million and $13.5 million for the three and nine months ended September 27, 2020, respectively. As of October 3, 2021, the total remaining unrecognized compensation expense related to share based compensation amounted to $19.7 million, which will be amortized over the weighted average remaining requisite service period of 1.5 years.
Equity Incentive Plans
On March 10, 2021, the Board of Directors adopted the Masonite International Corporation 2021 Omnibus Incentive Equity Plan (the "2021 Equity Plan"), which was approved by our shareholders at the Annual General Meeting of Shareholders on May 13, 2021. The 2021 Equity Plan is effective for ten years from the date of approval. The aggregate number of common shares that can be issued with respect to equity awards under the 2021 Equity Plan cannot exceed 880,000 shares; plus the number of shares reserved for the 2012 Plan that is in excess of the number of shares related to outstanding grants; plus the number of shares subject to existing grants under the 2012 Plan that may expire or be forfeited or cancelled. As of October 3, 2021, there were 1,555,528 shares of common stock available for future issuance under the 2021 Equity Plan.
Our equity incentive plans under the 2009 Plan and the 2012 Plan are described in detail and defined in our Annual Report on Form 10-K for the year ended January 3, 2021. Aside from shares issuable for outstanding awards, there are no further shares of common stock available for future issuance under the 2009 and 2012 Plans.
Deferred Compensation Plan
We offer to certain of our employees and directors a Deferred Compensation Plan, which is further described in our Annual Report on Form 10-K for the year ended January 3, 2021. As of October 3, 2021, the liability and asset relating to deferred compensation had a fair value of $8.9 million and $9.0 million, respectively. As of October 3, 2021, participation in the deferred compensation plan is limited and no restricted stock awards have been deferred into the deferred compensation plan. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework.
Stock Appreciation Rights
We have granted Stock Appreciation Rights ("SARs") to certain employees under both the 2009 Plan and the 2012 Plan, which entitle the recipient to the appreciation in value of a number of common shares over the exercise price over a period of time, each as specified in the applicable award agreement. The exercise price of any SAR granted may not be less than the fair market value of our common shares on the date of grant. The compensation expense for the SARs is measured based on the fair value of the SARs at the date of grant and is recognized over the requisite service period. The SARs vest over a maximum of three years, have a life of ten years and settle in common shares. It is assumed that all time-based SARs will vest. We recognize forfeitures of SARs in the period in which they occur.
The total fair value of SARs vested was $0.8 million during the nine months ended October 3, 2021.
Nine Months Ended October 3, 2021Stock Appreciation RightsAggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years)
Outstanding, beginning of period207,094 $7,409 $62.56 7.5
Granted28,707 107.68 
Exercised(61,916)3,943 56.67 
Forfeited(7,853)82.76 
Outstanding, end of period166,032 $6,260 $71.61 7.7
Exercisable, end of period88,781 $4,054 $63.64 7.1
10



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

The value of SARs granted is determined using the Black-Scholes-Merton valuation model, and the corresponding expense is expected to be recognized over the average requisite service period of 2.0 years. Expected volatility is based upon the historical volatility of our common shares amongst other considerations. The expected term is calculated using the simplified method, due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated:
2021 Grants
SAR value (model conclusion)$28.08
Risk-free rate0.8 %
Expected dividend yield0.0 %
Expected volatility25.2 %
Expected term (years)6.0
Restricted Stock Units
We have granted Restricted Stock Units ("RSUs") to directors and certain employees under the 2012 and 2021 Plans. The RSUs confer the right to receive shares of our common stock at a specified future date or when certain conditions are met. The compensation expense for the RSUs awarded is based on the fair value of the RSUs at the date of grant, which is equal to the stock price on the date of grant, and is recognized over the requisite service period. The RSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted. It is assumed that all time-based RSUs will vest. We recognize forfeitures of RSUs in the period in which they occur.
Nine Months Ended October 3, 2021Total Restricted Stock Units OutstandingWeighted Average Grant Date Fair Value
Outstanding, beginning of period488,057 $68.15 
Granted186,968 109.89 
Performance adjustment (1)
14,474 63.05 
Delivered(173,835)66.61 
Withheld to cover (2)
(33,061)
Forfeited(48,115)79.85 
Outstanding, end of period434,488 $85.95 
___________
(1) Performance-based RSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These awards are settled with payouts ranging from zero to 200% of the target award value depending on achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target.
(2) A portion of the vested RSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting.
Approximately two-thirds of the RSUs granted during the nine months ended October 3, 2021, vest at specified future dates with only service requirements, while the remaining portion of the RSUs vest based on both performance and service requirements. The value of RSUs granted in the nine months ended October 3, 2021, is being recognized over the weighted average requisite service period of 2.3 years. During the nine months ended October 3, 2021, 206,896 RSUs vested at a fair value of $13.5 million.
11



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

9. Restructuring Costs
In May 2021, we initiated further actions to improve overall business performance that includes the reorganization of our specialty door manufacturing capacity in our Architectural reportable segment. The reorganization of our manufacturing capacity resulted in the closure of one existing stile and rail facility and related headcount reductions beginning in the second quarter of 2021 (collectively, the "2021 Plan"). Costs associated with the 2021 Plan include severance and closure charges and will continue through 2022. As of October 3, 2021, we expect to incur up to $0.5 million of additional charges related to the 2021 Plan.
In November 2020, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce primarily in our Architectural reportable segment as well as limited actions in the North American Residential reportable segment. The reorganization of our manufacturing capacity involves specific facilities in the Architectural segment and costs associated with the closure of these facilities and related headcount reductions began taking place in the fourth quarter of 2020 (collectively, the "2020 Plan"). Costs associated with the 2020 Plan include severance and closure charges and will continue through 2021. As of October 3, 2021, we expect to incur up to $0.5 million of additional charges related to the 2020 Plan.
In February 2019, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce across all of our reportable segments and in our head offices. The reorganization of our manufacturing capacity involves specific plants in the North American Residential and Architectural segments and costs associated with the closure of these plants and related headcount reductions began taking place in the first quarter of 2019 (collectively, the "2019 Plan"). Costs associated with the 2019 Plan include severance, retention and closure charges and will continue through 2021. As of October 3, 2021, we expect to incur up to $0.5 million of additional charges related to the 2019 Plan.
During the fourth quarter of 2018, we began implementing a plan to reorganize and consolidate certain aspects of our United Kingdom head office function and optimize our portfolio by divesting non-core assets to enable more effective and consistent business processes in the Europe segment. In addition, in the North American Residential segment we announced a new facility that will optimize and expand capacity through increased automation, which resulted in the closure of one existing facility and related headcount reductions beginning in the second quarter of 2019 (collectively, the “2018 Plan”). Costs associated with the 2018 Plan included severance, retention and closure charges and continued throughout 2019. As of October 3, 2021, we do not expect to incur any material future charges related to the 2018 Plan.
The following tables summarize the restructuring charges recorded for the periods indicated:
Three Months Ended October 3, 2021
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2021 Plan$ $875 $ $875 
2020 Plan4 439  443 
2019 Plan(40) 33 (7)
Total Restructuring Costs$(36)$1,314 $33 $1,311 
Three Months Ended September 27, 2020
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2019 Plan$1,825 $82 $67 $1,974 
2018 Plan(79)  (79)
Total Restructuring Costs$1,746 $82 $67 $1,895 
12



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

Nine Months Ended October 3, 2021
(In thousands)North American ResidentialArchitecturalCorporate & OtherTotal
2021 Plan$ $1,414 $ $1,414 
2020 Plan23 3,454  3,477 
2019 Plan(68) 323 255 
Total Restructuring Costs$(45)$4,868 $323 $5,146 
Nine Months Ended September 27, 2020
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
2019 Plan$3,122 $(37)$1,030 $482 $4,597 
2018 Plan387    387 
Total Restructuring Costs$3,509 $(37)$1,030 $482 $4,984 
Cumulative Amount Incurred Through October 3, 2021
(In thousands)North American ResidentialEuropeArchitecturalCorporate & OtherTotal
2021 Plan$ $ $1,414 $ $1,414 
2020 Plan52  5,187  5,239 
2019 Plan9,254 359 1,671 2,390 13,674 
2018 Plan2,180 2,275   4,455 
Total Restructuring Costs$11,486 $2,634 $8,272 $2,390 $24,782 
The changes in the accrual for restructuring by activity were as follows for the periods indicated:
(In thousands)January 3,
2021
SeveranceClosure CostsCash PaymentsOctober 3,
2021
2021 Plan$ $546 $868 $(1,321)$93 
2020 Plan1,492 264 3,213 (4,945)24 
2019 Plan291 175 80 (456)90 
Total$1,783 $985 $4,161 $(6,722)$207 
(In thousands)December 29,
2019
SeveranceClosure CostsCash PaymentsSeptember 27,
2020
2019 Plan$1,535 $1,073 $3,524 $(5,475)$657 
2018 Plan 151 236 (387) 
Total$1,535 $1,224 $3,760 $(5,862)$657 
10. Asset Impairment
During the three months ended September 27, 2020, we determined the continued decreased demand in the Architectural door market due to the impact of COVID-19, along with the uncertainty of the duration and intensity of the pandemic on the Architectural door market for future periods were indicators that goodwill impairment was present in the Architectural reporting unit. The quantitative impairment test was conducted using multiple valuation techniques, including a discounted cash flow analysis and market approach, which utilizes Level 3 fair value inputs, and resulted in a goodwill impairment charge of $51.5 million. The charge represents the amount by which the carrying value of the
13



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

Architectural reporting unit exceeded its fair value and reduced the goodwill balance in the Architectural reporting unit from $111.0 million to $59.5 million.
During the nine months ended October 3, 2021, we recognized asset impairment charges of $10.4 million related to assets in the Architectural segment and an asset in the Corporate & Other category, as a result of announced plant closures under the 2021 and 2020 Plans. This amount was determined based upon the excess of the carrying values of property, plant and equipment over the respective fair values of such assets, determined using a discounted cash flows approach for each asset group. Each of these valuations was performed on a non-recurring basis and is categorized as having Level 3 valuation inputs as established by the FASB's Fair Value Framework. The Level 3 unobservable inputs include an estimate of future cash flows and the salvage value for each of the assets. The fair value of the assets was determined to be $6.3 million, compared to a book value of $16.7 million, with the difference representing the asset impairment charges recorded in the condensed consolidated statements of comprehensive income (loss).
11. Income Taxes
The effective tax rate differs from the Canadian statutory rate of 26.5% primarily due to mix of earnings in foreign jurisdictions that are subject to tax rates which differ from the Canadian statutory rate. In addition, we recognized $0.4 million and $2.7 million of income tax benefit due to the exercise and delivery of share-based awards during the three and nine months ended October 3, 2021, respectively, compared to $0.1 million and $0.9 million of income tax benefit during the three and nine months ended September 27, 2020, respectively.
12. Earnings Per Share
Basic earnings per share ("EPS") is calculated by dividing earnings attributable to Masonite by the weighted average number of our common shares outstanding during the period. Diluted EPS is calculated by dividing earnings attributable to Masonite by the weighted average number of common shares plus the incremental number of shares issuable from non-vested and vested RSUs and SARs outstanding during the period.
The weighted average number of shares outstanding utilized for the diluted EPS calculation contemplates the exercise of all currently outstanding SARs and the conversion of all RSUs. The dilutive effect of such equity awards is calculated based on the weighted average share price for each fiscal period using the treasury stock method.
(In thousands, except share and per share information)Three Months EndedNine Months Ended
October 3, 2021September 27, 2020October 3, 2021September 27, 2020
Net income (loss) attributable to Masonite$37,691 $(21,766)$119,718 $42,116 
Shares used in computing basic earnings per share24,068,744