MasterBrand, Inc. (MBC)

MasterBrand, Inc. is the largest manufacturer of residential cabinets in North America, based on 2021 net sales. Founded in 1954 as United Cabinet Incorporated, it became an independent, publicly traded company on December 14, 2022, when its former parent, Fortune Brands Innovations, Inc., completed a tax-free spin-off of its Cabinets segment. The company manages its business through "The MasterBrand Way," a lean-based business system built on the Four Basics, Continuous Improvement and Associate Engagement. It has added three initiatives to that system: Align to Grow, which reduces product complexity and moves to common platforms; Lead Through Lean; and Tech Enabled, which uses data and analytics. It also plans to pursue strategic acquisitions and to expand in e-commerce.

MasterBrand offers residential cabinetry for the kitchen, bathroom and other parts of the home, in a wide range of designs, finishes and styles. The portfolio spans three categories. Stock cabinets are entry-level products with low design complexity, standardized components and shorter lead times. Semi-custom cabinets offer more styles and features at a lower price than premium products. Premium cabinets are highly customized to exact specifications.

Products are sold throughout the United States and Canada to the remodeling and new construction markets through three primary channels: dealers, retailers and builders. The company has relationships with over 4,500 cabinet dealers, some focused on repair and remodel and others serving regional new construction builders. It also serves top North American retailers and partners with single-family home builders. It is growing in the e-commerce channel through partners' online presence. Lowe's accounted for about 20 percent of net sales in fiscal 2022 and 18 percent in 2021, and The Home Depot for about 17 percent and 18 percent. Roughly 6 percent of net sales in both years came from international markets. Sales are seasonally lower in the first quarter, when new home construction and remodeling activity are at their lowest.

MasterBrand is a holding company organized in Delaware in July 2022. Its principal operating subsidiaries are MasterBrand Cabinets, LLC, Norcraft Companies, L.P., Kitchen Craft of Canada and Woodcrafters Home Products, S. de R.L. de C.V. The company says standardized product platforms and components give it a flexible facility footprint and an efficient supply chain, and it uses global geographies to optimize procurement and manufacturing costs. Principal raw materials are hardwoods (maple, birch and oak), plywood and particleboard, which are available from a number of sources, though commodity and transportation cost volatility affects manufacturing costs. The company competes on quality, price, service and responsiveness in very competitive markets. It holds U.S. and foreign patents, though none is material to the business as a whole. At December 25, 2022, it had more than 13,000 associates, about 33 percent of them under collective bargaining agreements.