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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



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FORM 10-Q



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| ̈ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2007

OR



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

For the transition period from  to

Commission file numbers: 333-119696 and 333-114924



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Norcraft
Holdings, L.P.

Norcraft Companies, L.P.

(Exact name of registrants as specified in their charters)



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

3020 Denmark Avenue, Suite 100

Eagan, MN 55121

(Address of Principal Executive Offices)

(800) 297-0661

(Registrants
Telephone Number, Including Area Code)



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

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

Large Accelerated Filer ̈Accelerated Filer ̈Non-Accelerated Filer  x

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

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



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##### Table of Contents

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

Table of Contents



|           |  |                                                                                                                          |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | ----
|           |  |                                                                                                                          |  | Page
|PART I     |  | FINANCIAL INFORMATION                                                                                                    |  |     
|           |  |                                                                                                                         
|Item 1.    |  | Unaudited Condensed Consolidated Financial Statements                                                                    |  |     
|           |  | Consolidated Balance Sheets at March 31, 2007 and December 31, 2006                                                      |  | 3   
|           |  | Consolidated Statements of Income for the three months ended March 31, 2007 and 2006                                     |  | 4   
|           |  | Consolidated Statements of Changes in Members Equity and Comprehensive Income for the three months ended March 31, 2007 |  | 5   
|           |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006                                 |  | 7   
|           |  | Notes to Consolidated Financial Statements                                                                               |  | 8   
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                    |  | 17  
|Item 3.    |  | Quantitative and Qualitative Disclosures of Market Risk                                                                  |  | 20  
|Item 4.    |  | Controls and Procedures                                                                                                  |  | 20  
|           |  |                                                                                                                         
|PART II    |  | OTHER INFORMATION                                                                                                        |  |     
|Item 1.    |  | Legal Proceedings                                                                                                        |  | 22  
|Item 1A.   |  | Risk Factors                                                                                                             |  | 22  
|Item 6.    |  | Exhibits                                                                                                                 |  | 22  
|           | 
|SIGNATURES |  | 23                                                                                                                      

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



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.

Consolidated Balance Sheets

(dollar amounts in thousands)

(unaudited)



|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|-------------------------------------- |  | ----------------------- | ------- | ------------------------ | - | ------------- |  | ---------------- | ------- |  | - | -------
|                                       |  | Norcraft Holdings, L.P. |         | Norcraft Companies, L.P.
|                                       |  | March 31, 2007          |         | December 31,2006         |   | March 31,2007 |  | December 31,2006
|ASSETS                                 |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Current assets:                        |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Cash                                   |  | $                       | 20,246  |                          | $ | 3,928         |  | $                | 20,246  |  | $ | 4,038  
|Trade accounts receivable, net         |  |                         | 33,179  |                          |   | 35,718        |  |                  | 33,179  |  |   | 35,718 
|Inventories                            |  |                         | 22,990  |                          |   | 21,997        |  |                  | 22,990  |  |   | 21,997 
|Prepaid expenses                       |  |                         | 1,209   |                          |   | 1,885         |  |                  | 1,209   |  |   | 1,885  
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total current assets                   |  |                         | 77,624  |                          |   | 63,528        |  |                  | 77,624  |  |   | 63,638 
|                                       |  |                         |         |                         
|Property, plant and equipment, net     |  |                         | 38,314  |                          |   | 38,115        |  |                  | 38,314  |  |   | 38,115 
|                                       |  |                         |         |                         
|Other assets:                          |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Goodwill                               |  |                         | 148,459 |                          |   | 148,459       |  |                  | 148,459 |  |   | 148,459
|Customer relationships, net            |  |                         | 51,615  |                          |   | 52,731        |  |                  | 51,615  |  |   | 52,731 
|Brand names                            |  |                         | 49,000  |                          |   | 49,000        |  |                  | 49,000  |  |   | 49,000 
|Deferred financing costs, net          |  |                         | 7,283   |                          |   | 7,656         |  |                  | 4,725   |  |   | 4,994  
|Display cabinets, net                  |  |                         | 8,982   |                          |   | 9,006         |  |                  | 8,982   |  |   | 9,006  
|Other                                  |  |                         | 277     |                          |   | 307           |  |                  | 277     |  |   | 307    
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total other assets                     |  |                         | 265,616 |                          |   | 267,159       |  |                  | 263,058 |  |   | 264,497
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total assets                           |  | $                       | 381,554 |                          | $ | 368,802       |  | $                | 378,996 |  | $ | 366,250
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|LIABILITIES AND MEMBERS EQUITY        |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Current liabilities:                   |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Current portion of long-term debt      |  | $                       | 1,959   |                          | $ | 1,959         |  | $                |        |  | $ |       
|Accounts payable                       |  |                         | 11,827  |                          |   | 8,301         |  |                  | 11,827  |  |   | 8,301  
|Accrued expenses                       |  |                         | 24,508  |                          |   | 23,828        |  |                  | 24,508  |  |   | 23,828 
|Members distribution payable          |  |                         | 2,420   |                          |   |              |  |                  | 2,420   |  |   |       
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total current liabilities              |  |                         | 40,714  |                          |   | 34,088        |  |                  | 38,755  |  |   | 32,129 
|                                       |  |                         |         |                         
|Long-term debt                         |  |                         | 257,047 |                          |   | 254,631       |  |                  | 150,000 |  |   | 150,000
|Other liabilities                      |  |                         | 438     |                          |   |              |  |                  | 438     |  |   |       
|                                       |  |                         |         |                         
|Commitments and contingencies          |  |                         |        |                          |   |              |  |                  |        |  |   |       
|                                       |  |                         |         |                         
|Members equity subject to put request |  |                         | 48,571  |                          |   | 48,835        |  |                  |        |  |   |       
|                                       |  |                         |         |                         
|Members equity                        |  |                         | 34,784  |                          |   | 31,248        |  |                  | 189,803 |  |   | 184,121
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total liabilities and members equity  |  | $                       | 381,554 |                          | $ | 368,802       |  | $                | 378,996 |  | $ | 366,250
|                                       |  |                         |         |                          |   |               |  |                  |         |  |   |        

See notes to consolidated financial statements.



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##### Table of Contents

Consolidated Statements of Income

(dollar amounts in thousands)

(unaudited)



|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        
|-------------------------------------------- |  | --------------------------- | ------ | --------------------------- | - | ------- |  | ---- | ------ |  | - | -------
|                                             |  | Norcraft Holdings, L.P.     |        | Norcraft Companies, L.P.   
|                                             |  | Three Months EndedMarch 31, |        | Three Months EndedMarch 31,
|                                             |  | 2007                        |        | 2006                        |   | 2007    |  | 2006
|Net sales                                    |  | $                           | 93,907 |                             | $ | 108,666 |  | $    | 93,907 |  | $ | 108,666
|Cost of sales                                |  |                             | 63,656 |                             |   | 76,550  |  |      | 63,656 |  |   | 76,550 
|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        
|Gross profit                                 |  |                             | 30,251 |                             |   | 32,116  |  |      | 30,251 |  |   | 32,116 
|                                             |  |                             |        |                            
|Selling, general and administrative expenses |  |                             | 17,668 |                             |   | 17,816  |  |      | 17,668 |  |   | 17,816 
|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        
|Income from operations                       |  |                             | 12,583 |                             |   | 14,300  |  |      | 12,583 |  |   | 14,300 
|                                             |  |                             |        |                            
|Other expense (income):                      |  |                             |        |                             |   |         |  |      |        |  |   |        
|Interest expense, net                        |  |                             | 5,920  |                             |   | 5,589   |  |      | 3,382  |  |   | 3,392  
|Amortization of deferred financing costs     |  |                             | 373    |                             |   | 384     |  |      | 269    |  |   | 290    
|Other, net                                   |  |                             | 32     |                             |   | 52      |  |      | 32     |  |   | 52     
|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        
|Total other expense (income)                 |  |                             | 6,325  |                             |   | 6,025   |  |      | 3,683  |  |   | 3,734  
|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        
|Net income                                   |  | $                           | 6,258  |                             | $ | 8,275   |  | $    | 8,900  |  | $ | 10,566 
|                                             |  |                             |        |                             |   |         |  |      |        |  |   |        

See notes to consolidated financial statements.



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Consolidated Statements of Changes in Members Equity and Comprehensive Income

(dollar amounts in
thousands)

(unaudited)



|                                                      |  |                         |        |   |                                            |   |     |                                 |  |   |       |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | ------------------------------------------ | - | --- | ------------------------------- |  | - | ----- | -
|                                                      |  | Norcraft Holdings, L.P. |       
|                                                      |  | Members Equity         |        |   | Accumulatedothercomprehensiveincome (loss) |   |     | Totalcomprehensiveincome (loss) | 
|Members equity at December 31, 2006                  |  | $                       | 31,248 |   |                                            | $ | (55 | )                               |  |   |       |  
|Adoption of FIN 48                                    |  |                         | (438   | ) |                                            |   |     |                                 |  |   |       |  
|Stock compensation expense                            |  |                         | 187    |   |                                            |   |     |                                 |  |   |       |  
|Accretion on members interest subject to put request |  |                         | 264    |   |                                            |   |     |                                 |  |   |       |  
|Distributions to members                              |  |                         | (2,420 | ) |                                            |   |     |                                 |  |   |       |  
|Repurchase of members interest                       |  |                         | (312   | ) |                                            |   |     |                                 |  |   |       |  
|Cumulative translation adjustment                     |  |                         | (3     | ) |                                            |   | (3  | )                               |  |   | (3    | )
|Net income                                            |  |                         | 6,258  |   |                                            |   |     |                                 |  |   | 6,258 |  
|                                                      |  |                         |        |   |                                            |   |     |                                 |  |   |       |  
|Total comprehensive income                            |  |                         |        |   |                                            |   |     |                                 |  | $ | 6,255 |  
|                                                      |  |                         |        |   |                                            |   |     |                                 |  |   |       |  
|Members equity at March 31, 2007                     |  | $                       | 34,784 |   |                                            | $ | (58 | )                               |  |   |       |  
|                                                      |  |                         |        |   |                                            |   |     |                                 |  |   |       |  

See notes to consolidated financial statements.



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##### Table of Contents

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

(dollar amounts in thousands)

(unaudited)



|                                     |  |                          |         |   |                                            |   |     |                                 |  |   |       |  
|------------------------------------ |  | ------------------------ | ------- | - | ------------------------------------------ | - | --- | ------------------------------- |  | - | ----- | -
|                                     |  | Norcraft Companies, L.P. |        
|                                     |  | Members Equity          |         |   | Accumulatedothercomprehensiveincome (loss) |   |     | Totalcomprehensiveincome (loss) | 
|Members equity at December 31, 2006 |  | $                        | 184,121 |   |                                            | $ | (55 | )                               |  |   |       |  
|Adoption of FIN 48                   |  |                          | (438    | ) |                                            |   |     |                                 |  |   |       |  
|Stock compensation expense           |  |                          | 187     |   |                                            |   |     |                                 |  |   |       |  
|Distribution to member               |  |                          | (2,652  | ) |                                            |   |     |                                 |  |   |       |  
|Repurchase of member interest        |  |                          | (312    | ) |                                            |   |     |                                 |  |   |       |  
|Cumulative translation adjustment    |  |                          | (3      | ) |                                            |   | (3  | )                               |  |   | (3    | )
|Net income                           |  |                          | 8,900   |   |                                            |   |     |                                 |  |   | 8,900 |  
|                                     |  |                          |         |   |                                            |   |     |                                 |  |   |       |  
|Total comprehensive income           |  |                          |         |   |                                            |   |     |                                 |  | $ | 8,897 |  
|                                     |  |                          |         |   |                                            |   |     |                                 |  |   |       |  
|Members equity at March 31, 2007    |  | $                        | 189,803 |   |                                            | $ | (58 | )                               |  |   |       |  
|                                     |  |                          |         |   |                                            |   |     |                                 |  |   |       |  

See notes to consolidated financial statements.



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Consolidated Statements of Cash Flows

(dollar amounts in thousands)

(unaudited)



|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | --------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                  |  | Norcraft Holdings, L.P.     |        |   | Norcraft Companies, L.P.    |  
|                                                                                  |  | Three Months EndedMarch 31, |        |   | Three Months EndedMarch 31, |  
|                                                                                  |  | 2007                        |        |   | 2006                        |   |        | 2007 |  |   | 2006   |  
|Cash flows from operating activities:                                             |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Net income                                                                        |  | $                           | 6,258  |   |                             | $ | 8,275  |      |  | $ | 8,900  |   |  | $ | 10,566 |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Depreciation and amortization of property, plant and equipment                    |  |                             | 1,243  |   |                             |   | 1,120  |      |  |   | 1,243  |   |  |   | 1,120  |  
|Amortization:                                                                     |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Customer relationships                                                            |  |                             | 1,116  |   |                             |   | 1,116  |      |  |   | 1,116  |   |  |   | 1,116  |  
|Deferred financing costs                                                          |  |                             | 373    |   |                             |   | 384    |      |  |   | 269    |   |  |   | 290    |  
|Display cabinets                                                                  |  |                             | 1,472  |   |                             |   | 1,247  |      |  |   | 1,472  |   |  |   | 1,247  |  
|Provision for uncollectible accounts receivable                                   |  |                             | 259    |   |                             |   | 116    |      |  |   | 259    |   |  |   | 116    |  
|Provision for obsolete and excess inventory                                       |  |                             | 106    |   |                             |   | 180    |      |  |   | 106    |   |  |   | 180    |  
|Provision for warranty claims                                                     |  |                             | 807    |   |                             |   | 1,261  |      |  |   | 807    |   |  |   | 1,261  |  
|Accreted interest on senior notes                                                 |  |                             | 2,416  |   |                             |   | 2,197  |      |  |   |       |   |  |   |       |  
|Stock compensation expense                                                        |  |                             | 187    |   |                             |   | 184    |      |  |   | 187    |   |  |   | 184    |  
|Loss (gain) on disposal of assets                                                 |  |                             | 10     |   |                             |   | (15    | )    |  |   | 10     |   |  |   | (15    | )
|Change in operating assets and liabilities:                                       |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Trade accounts receivable, net                                                    |  |                             | 2,280  |   |                             |   | (3,063 | )    |  |   | 2,280  |   |  |   | (3,063 | )
|Inventories                                                                       |  |                             | (1,121 | ) |                             |   | (2,179 | )    |  |   | (1,121 | ) |  |   | (2,179 | )
|Prepaid expenses                                                                  |  |                             | 676    |   |                             |   | (358   | )    |  |   | 676    |   |  |   | (883   | )
|Other assets                                                                      |  |                             | 30     |   |                             |   | 15     |      |  |   | 30     |   |  |   | 15     |  
|Accounts payable and accrued liabilities                                          |  |                             | 3,913  |   |                             |   | 6,640  |      |  |   | 3,913  |   |  |   | 6,640  |  
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Net cash provided by operating activities                                         |  |                             | 20,025 |   |                             |   | 17,120 |      |  |   | 20,147 |   |  |   | 16,595 |  
|                                                                                  |  |                             |        |  
|Cash flows from investing activities:                                             |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Proceeds from sale of property and equipment                                      |  |                             |       |   |                             |   | 54     |      |  |   |       |   |  |   | 54     |  
|Purchase of property, plant and equipment                                         |  |                             | (1,970 | ) |                             |   | (1,776 | )    |  |   | (1,970 | ) |  |   | (1,776 | )
|Additions to display cabinets                                                     |  |                             | (1,448 | ) |                             |   | (1,857 | )    |  |   | (1,448 | ) |  |   | (1,857 | )
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Net cash used in investing activities                                             |  |                             | (3,418 | ) |                             |   | (3,579 | )    |  |   | (3,418 | ) |  |   | (3,579 | )
|                                                                                  |  |                             |        |  
|Cash flows from financing activities:                                             |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Book overdrafts payable                                                           |  |                             |       |   |                             |   | (1,642 | )    |  |   |       |   |  |   | (1,642 | )
|Proceeds from issuance of members interests                                      |  |                             |       |   |                             |   | 840    |      |  |   |       |   |  |   | 840    |  
|Repurchase of members interests                                                  |  |                             | (312   | ) |                             |   | (112   | )    |  |   | (312   | ) |  |   | (112   | )
|Distributions to members                                                          |  |                             |       |   |                             |   | 10     |      |  |   | (232   | ) |  |   | 10     |  
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Net cash used in financing activities                                             |  |                             | (312   | ) |                             |   | (904   | )    |  |   | (544   | ) |  |   | (904   | )
|Effect of exchange rates on cash                                                  |  |                             | 23     |   |                             |   | (31    | )    |  |   | 23     |   |  |   | (31    | )
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Net increase in cash                                                              |  |                             | 16,318 |   |                             |   | 12,606 |      |  |   | 16,208 |   |  |   | 12,081 |  
|                                                                                  |  |                             |        |  
|Cash, beginning of the period                                                     |  |                             | 3,928  |   |                             |   | 933    |      |  |   | 4,038  |   |  |   | 933    |  
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Cash, end of period                                                               |  | $                           | 20,246 |   |                             | $ | 13,539 |      |  | $ | 20,246 |   |  | $ | 13,014 |  
|                                                                                  |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Supplemental disclosure of cash flow information:                                 |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Cash paid during the period for interest                                          |  | $                           | 275    |   |                             | $ | 97     |      |  | $ | 153    |   |  | $ | 97     |  
|                                                                                  |  |                             |        |  
|Supplemental disclosure of non-cash transactions:                                 |  |                             |        |   |                             |   |        |      |  |   |        |   |  |   |        |  
|Tax distributions declared but not paid                                           |  | $                           | 2,420  |   |                             | $ | 3,360  |      |  | $ | 2,420  |   |  | $ | 3,360  |  

See notes to consolidated financial statements.



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##### Table of Contents

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

Notes to Consolidated Financial Statements

(in thousands)

(unaudited)



|1. | Basis of Presentation
|-- | ---------------------

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

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

The accompanying financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the interim consolidated financial statements and accompanying notes included herein should be read in conjunction
with the more detailed information contained in the Companys annual report on form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission. The unaudited interim consolidated financial statements as
of March 31, 2007 and 2006 and for the three months ended March 31, 2007 and 2006 include all normal recurring adjustments which management considers necessary for the fair presentation of financial position, results of operations and cash
flows for the interim periods.

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



|2. | Stock-Based Compensation
|-- | ------------------------

Holdings has a Management
Incentive Plan, (the Plan) which provides for the grants of incentive Class D limited partnership units in Holdings to selected employees of the Company. Under the terms of the Plan, the Class D units generally begin to vest on the
December 31 of the first full year following the date of grant, with 50% of the units typically vesting over a 5 year period, and 50% vesting over a 5 year period subject to the Company meeting certain performance based criteria in each of
those years. Upon vesting, each Class D unit entitles the unit holder the option to purchase one Class A unit in Holdings. All Class D units will be issued with an exercise price equal to the then fair value of Holdings Class A
units.

The fair value of the Class D units granted is based on the Black-Scholes option-pricing model. Upon adoption of SFAS No. 123R
the Company is required to incorporate a volatility factor in the fair value calculation. The volatility factor is developed through the use of a sample of peer group companies. The peer group consists of publicly-traded companies that operate in
the Companys same industry. The Company granted 185,000 incentive Class D units during the three months ended March 31, 2007; the cumulative fair value of which was determined to be $0.2 million.

Compensation expense related to Class D units was $0.2 million for the three months ended March 31, 2007 and 2006. Because individuals receiving
these Class D unit awards are employees of Norcraft, the compensation expense is recorded at the Norcraft level.



8



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##### Table of Contents

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



|                                                     |  |                                   |      |   |                              |   |      |  
|---------------------------------------------------- |  | --------------------------------- | ---- | - | ---------------------------- | - | ---- | -
|                                                     |  | Three Months ended March 31, 2007 |      |   | Year Ended December 31, 2006 |  
|Weighted-average fair value of Class D Units granted |  | $                                 | 0.91 |   |                              | $ | 0.82 |  
|Dividend yield                                       |  |                                   | 0.00 | % |                              |   | 0.00 | %
|Risk-free interest rate                              |  |                                   | 4.53 | % |                              |   | 4.69 | %
|Volatility                                           |  |                                   | 35.0 | % |                              |   | 34.5 | %
|Expected lives                                       |  |                                   | 5.00 |   |                              |   | 4.92 |  

A summary of Class D Unit activity under the Plan is as follows:



|                    |  |                                   |   |  |                                |     
|------------------- |  | --------------------------------- | - |  | ------------------------------ | ----
|                    |  | Three Months Ended March 31, 2007
|                    |  | Units                             |   |  | Weighted-AverageExercise Price
|Beginning balance   |  | 6,666,599                         |   |  | $                              | 0.95
|Granted             |  | 185,000                           |   |  | $                              | 2.36
|Exercised           |  | (88,460                           | ) |  | $                              | 0.17
|Forfeited           |  | (110,609                          | ) |  | $                              | 0.94
|                    |  |                                   |   |  |                                |     
|Ending balance      |  | 6,652,530                         |   |  | $                              | 1.01
|                    |  |                                   |   |  |                                |     
|Exercisable balance |  | 2,734,773                         |   |  | $                              | 0.57
|                    |  |                                   |   |  |                                |     

The intrinsic values of the issued Class D units and exercisable Class D units at March 31,
2007 were $9.2 million and $5.0 million, respectively.



|3. | Trade Accounts Receivable
|-- | -------------------------

Trade accounts
receivable consists of the following:



|                                           |  |               |        |   |                  |   |        |  
|------------------------------------------ |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                           |  | March 31,2007 |        |   | December 31,2006 |  
|Trade accounts receivable, gross           |  | $             | 34,437 |   |                  | $ | 36,812 |  
|Less: Allowance for uncollectible accounts |  |               | (1,258 | ) |                  |   | (1,094 | )
|                                           |  |               |        |   |                  |   |        |  
|                                           |  | $             | 33,179 |   |                  | $ | 35,718 |  
|                                           |  |               |        |   |                  |   |        |  



|4. | Inventories
|-- | -----------

Inventories consist of the following:



|                           |  |               |        |                  |   |       
|-------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                           |  | March 31,2007 |        | December 31,2006
|Raw materials and supplies |  | $             | 11,995 |                  | $ | 12,164
|Work in process            |  |               | 6,458  |                  |   | 6,243 
|Finished goods             |  |               | 4,537  |                  |   | 3,590 
|                           |  |               |        |                  |   |       
|                           |  | $             | 22,990 |                  | $ | 21,997
|                           |  |               |        |                  |   |       



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|5. | Intangible Assets
|-- | -----------------

Amortizable intangible assets
consist of the following:



|                         |  |                          |        |                         |                   |         |                      |  |                         |        |  |   |         |  
|------------------------ |  | ------------------------ | ------ | ----------------------- | ----------------- | ------- | -------------------- |  | ----------------------- | ------ |  | - | ------- | -
|                         |  | Norcraft Holdings, L.P.  |       
|                         |  | March 31, 2007           |        |                         | December 31, 2006 |        
|                         |  | Gross CarryingAmount     |        | AccumulatedAmortization |                   |         | Gross CarryingAmount |  | AccumulatedAmortization |       
|Customer relationships   |  | $                        | 67,000 |                         | $                 | (15,385 | )                    |  | $                       | 67,000 |  | $ | (14,269 | )
|Deferred financing costs |  |                          | 16,386 |                         |                   | (9,103  | )                    |  |                         | 16,386 |  |   | (8,730  | )
|                         |  |                          |        |                         |                   |         |                      |  |                         |        |  |   |         |  
|Total                    |  | $                        | 83,386 |                         | $                 | (24,488 | )                    |  | $                       | 83,386 |  | $ | (22,999 | )
|                         |  |                          |        |                         |                   |         |                      |  |                         |        |  |   |         |  
|                         | 
|                         |  | Norcraft Companies, L.P. |       
|                         |  | March 31, 2007           |        |                         | December 31, 2006 |        
|                         |  | Gross CarryingAmount     |        | AccumulatedAmortization |                   |         | Gross CarryingAmount |  | AccumulatedAmortization |       
|Customer relationships   |  | $                        | 67,000 |                         | $                 | (15,385 | )                    |  | $                       | 67,000 |  | $ | (14,269 | )
|Deferred financing costs |  |                          | 12,853 |                         |                   | (8,128  | )                    |  |                         | 12,853 |  |   | (7,859  | )
|                         |  |                          |        |                         |                   |         |                      |  |                         |        |  |   |         |  
|Total                    |  | $                        | 79,853 |                         | $                 | (23,513 | )                    |  | $                       | 79,853 |  | $ | (22,128 | )
|                         |  |                          |        |                         |                   |         |                      |  |                         |        |  |   |         |  

Intangible assets not subject to amortization consist of the following:



|            |  |                |         |                  |   |        
|----------- |  | -------------- | ------- | ---------------- | - | -------
|            |  | March 31, 2007 |         | December 31,2006
|Goodwill    |  | $              | 148,459 |                  | $ | 148,459
|Brand names |  |                | 49,000  |                  |   | 49,000 
|            |  |                |         |                  |   |        
|Total       |  | $              | 197,459 |                  | $ | 197,459
|            |  |                |         |                  |   |        

There were no impairment losses or other gains and losses on disposal of intangible assets for the
three months ended March 31, 2007 and 2006.



|6. | Accrued Expenses
|-- | ----------------

Accrued expenses consist of the
following:



|                                            |  |               |        |                  |   |       
|------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                            |  | March 31,2007 |        | December 31,2006
|Salaries, wages and employee benefits       |  | $             | 8,506  |                  | $ | 10,775
|Commissions, rebates and marketing programs |  |               | 4,068  |                  |   | 4,661 
|Interest                                    |  |               | 5,625  |                  |   | 2,250 
|Other                                       |  |               | 6,309  |                  |   | 6,142 
|                                            |  |               |        |                  |   |       
|                                            |  | $             | 24,508 |                  | $ | 23,828
|                                            |  |               |        |                  |   |       

Product warranty activity is as follows:



|                                   |  |               |      |   |               |   |        |  
|---------------------------------- |  | ------------- | ---- | - | ------------- | - | ------ | -
|                                   |  | March 31,2007 |      |   | March 31,2006 |  
|Beginning Balance  December 31    |  | $             | 871  |   |               | $ | 843    |  
|Accruals for warranties  current  |  |               | 807  |   |               |   | 1,261  |  
|Settlements made during the period |  |               | (891 | ) |               |   | (1,182 | )
|                                   |  |               |      |   |               |   |        |  
|Ending Balance  March 31          |  | $             | 787  |   |               | $ | 922    |  
|                                   |  |               |      |   |               |   |        |  

Product warranty is a component of the Other category in the accrued expenses table
above.



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##### Table of Contents

|7. | Income TaxesAdoption of FIN 48
|-- | -------------------------------

The Company
is a limited partnership, whereby the Companys income is allocated to its limited partners for inclusion in their respective tax returns. Accordingly, no liability or provision for federal income taxes and deferred income taxes attributable to
the Companys operations are included in the accompanying financial statements. However, the Company is subject to various state and local taxes at the entity level and files income tax returns in various jurisdictions. Effective
January 1, 2007, the Company adopted FIN 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109 (FIN 48), which provides a comprehensive model for the recognition, measurement and
disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves
have been established consistent with jurisdictional tax laws. Upon the adoption of FIN 48, the Company recorded a reserve for unrecognized state and local tax benefits totaling $0.4 million as an increase to other long-term liabilities, with a
corresponding decrease to retained earnings. The transition adjustment includes $0.2 million of interest and penalties, as of January 1, 2007. The Company classifies taxes, interest and penalties as a component of other expense.

The Company is subject to tax examinations by tax authorities in numerous states until the applicable statute of limitations expire. The Company does not
anticipate significant changes in the amount of unrecognized tax benefits over the next year.



|8. | Long-term Debt
|-- | --------------

Long-term debt consists of the
following:



|                                                                                         |  |                         |         |                          |   |               |  |                  |         |  |   |        
|---------------------------------------------------------------------------------------- |  | ----------------------- | ------- | ------------------------ | - | ------------- |  | ---------------- | ------- |  | - | -------
|                                                                                         |  | Norcraft Holdings, L.P. |         | Norcraft Companies, L.P.
|                                                                                         |  | March 31,2007           |         | December 31,2006         |   | March 31,2007 |  | December 31,2006
|Senior subordinated notes payable (due in 2011 with semi-annual interest payments at 9%) |  | $                       | 150,000 |                          | $ | 150,000       |  | $                | 150,000 |  | $ | 150,000
|Unsecured notes (due in 2009 with interest at 8.45%)                                     |  |                         | 5,878   |                          |   | 5,878         |  |                  |        |  |   |       
|Senior discount notes payable (due in 2012 with interest accreting at 9.75%)             |  |                         | 118,000 |                          |   | 118,000       |  |                  |        |  |   |       
|                                                                                         |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Total debt                                                                               |  |                         | 273,878 |                          |   | 273,878       |  |                  | 150,000 |  |   | 150,000
|Less discount                                                                            |  |                         | 14,872  |                          |   | 17,288        |  |                  |        |  |   |       
|Less current portion                                                                     |  |                         | 1,959   |                          |   | 1,959         |  |                  |        |  |   |       
|                                                                                         |  |                         |         |                          |   |               |  |                  |         |  |   |        
|Long term debt                                                                           |  | $                       | 257,047 |                          | $ | 254,631       |  | $                | 150,000 |  | $ | 150,000
|                                                                                         |  |                         |         |                          |   |               |  |                  |         |  |   |        

Senior Credit Facility

Norcraft has entered into a senior credit facility, as amended, with a syndicate of financial institutions providing for up to $60 million in borrowings
available through a revolving loan facility which matures on May 2, 2011 and has no scheduled amortization or commitment reductions. At the Companys option, borrowings bear interest at a variable interest rate based on either LIBOR or
prime rate plus an applicable margin. The margin is based on the leverage ratio of Norcraft. Interest is payable quarterly at 1.75% over LIBOR (5.32% at March 31, 2007) or 0.75% over prime (8.25% at March 31, 2007). As of March 31,
2007 and December 31, 2006, no amounts were outstanding under the revolving loan facility.

The senior credit facility contains
covenants, which, among other things, limit: (i) additional indebtedness; (ii) dividends; (iii) capital expenditures and (iv) acquisitions, mergers and consolidations. Indebtedness under the senior credit facility is secured by
substantially all of Norcrafts assets, including its real and personal property, inventory, accounts receivable, intellectual property and other intangibles. The facility also contains certain financial covenants, including maximum leverage
ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio.

In addition, the senior credit facility is guaranteed by
Intermediate Holdings and secured by its assets (including Norcrafts equity interests), as well as guaranteed by and secured by the equity interests and substantially all of the assets of Norcrafts subsidiaries.

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



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##### Table of Contents

Commitment fees are due quarterly at a rate of 0.375% of any unused commitments.

Approximately $5.4 million of letters of credit were outstanding at March 31, 2007 and December 31, 2006. The total available under the senior
credit facility, which is reduced by any outstanding letters of credit, was $54.6 million at March 31, 2007 and December 31, 2006 as per the amended agreement.

Senior Subordinated Notes

On October 21, 2003, Norcraft and Norcraft Finance Corp., a 100%
owned finance subsidiary of Norcraft, issued, on a joint and several basis, $150.0 million, 9% senior subordinated notes due in 2011 (the Senior Subordinated Notes). Norcraft Finance Corp. was formed on September 26, 2003 and has no
operations. Interest accrues on the Senior Subordinated Notes and is payable semiannually on May 1 and November 1of each year at a rate of 9% per annum. The Senior Subordinated Notes are subordinated to all existing and future senior
debt, including indebtedness under the senior credit facility.

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

If Norcraft experiences a change of control prior to November 1, 2007, they may redeem all, but not less than all, of the Senior Subordinated Notes at a redemption price equal to 100% of the principal amount plus
a make-whole premium as defined. If Norcraft experiences a change of control subsequent to November 1, 2007, it may be required to offer to purchase the Senior Subordinated Notes at a purchase price equal to 101% of the principal amount, plus
accrued and unpaid interest.

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

Holdings Senior Discount Notes

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

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

If Holdings experiences a
change in control prior to September 1, 2008, it may redeem all, but not less than all, of the Senior Discount Notes at a purchase price equal to 100% of the accreted value plus a make-whole premium as defined. If Holdings experiences a change
in control prior to September 1, 2008, it may be required to offer to purchase the Senior Discount Notes at a purchase price equal to 101% of the accreted value plus accrued and unpaid interest.

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

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



12



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##### Table of Contents

The Senior Discount Notes are structurally subordinated to all debt and liabilities, including trade
payables, of Holdings subsidiaries, including Norcraft, and are effectively subordinated to any of Holdings future secured debt to the extent of the value of the assets securing such debt. Holdings subsidiaries may not have
sufficient funds or assets to permit payments to Holdings in amounts sufficient to permit Holdings to pay all or any portion of its indebtedness and other obligations, including its obligations on the Senior Discount Notes. As of March 31, 2007
and December 31, 2006 the aggregate debt of Holdings subsidiaries (other than Norcraft Capital Corp., which has no additional debt) was $259.0 million and $256.6 million, respectively.

Unsecured Notes

In September 2006,
Holdings repurchased the equity interests of two former members. Consideration for these repurchases was in the form of $2.0 million in cash and $5.9 million in unsecured notes payable (the Unsecured Notes). Principal on the Unsecured
Notes is payable in three equal, annual payments beginning September 30, 2007. These notes accrue interest at 8.45%, which is payable quarterly.



13



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##### Table of Contents

The following represents certain condensed consolidating financial information as of March 31, 2007 and
December 31, 2006 and for the periods ended March 31, 2007 and 2006 for the issuers and for Norcraft Canada Corporation, a wholly-owned subsidiary of Norcraft, which fully and unconditionally guarantees the Senior Subordinated Notes. In
addition, the terms and conditions of the Senior Subordinated Notes limit Norcrafts ability to pay dividends or other payments to Holdings. In this regard, the net assets of Norcraft are restricted assets of Holdings. As such, condensed
financial information for Holdings (the parent company) is also presented.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of March 31, 2007



|                                       |  |                             |         |                         |   |                 |  |              |       |  |                                      |        |                       |  |              |         |  |                                   |         |  |   |          |   |  |   |        
|-------------------------------------- |  | --------------------------- | ------- | ----------------------- | - | --------------- |  | ------------ | ----- |  | ------------------------------------ | ------ | --------------------- |  | ------------ | ------- |  | --------------------------------- | ------- |  | - | -------- | - |  | - | -------
|                                       |  | Norcraft Companies,L.P. (1) |         | NorcraftFinanceCorp (1) |   | Norcraft Canada |  | Eliminations |       |  | Consolidated Norcraft Companies,L.P. |        | NorcraftHoldings,L.P. |  | Eliminations |         |  | ConsolidatedNorcraftHoldings,L.P.
|Current assets                         |  | $                           | 76,096  |                         | $ |                |  | $            | 1,528 |  | $                                    |       |                       |  | $            | 77,624  |  | $                                 |        |  | $ |         |   |  | $ | 77,624 
|Property, plant & equipment, net       |  |                             | 33,968  |                         |   |                |  |              | 4,346 |  |                                      |       |                       |  |              | 38,314  |  |                                   |        |  |   |         |   |  |   | 38,314 
|Investments in subsidiary              |  |                             | 1,830   |                         |   |                |  |              |      |  |                                      | (1,830 | )                     |  |              |        |  |                                   | 189,803 |  |   | (189,803 | ) |  |   |       
|Other assets                           |  |                             | 266,666 |                         |   |                |  |              | 213   |  |                                      | (3,821 | )                     |  |              | 263,058 |  |                                   | 2,558   |  |   |         |   |  |   | 265,616
|                                       |  |                             |         |                         |   |                 |  |              |       |  |                                      |        |                       |  |              |         |  |                                   |         |  |   |          |   |  |   |        
|Total assets                           |  | $                           | 378,560 |                         | $ |                |  | $            | 6,087 |  | $                                    | (5,651 | )                     |  | $            | 378,996 |  | $                                 | 192,361 |  | $ | (189,803 | ) |  | $ | 381,554
|                                       |  |                             |         |                         |   |                 |  |              |       |  |                                      |        |                       |  |              |         |  |                                   |         |  |   |          |   |  |   |        
|Current liabilities                    |  | $                           | 38,319  |                         | $ |                |  | $            | 436   |  | $                                    |       |                       |  | $            | 38,755  |  | $                                 | 1,959   |  | $ |         |   |  | $ | 40,714 
|Long-term debt                         |  |                             | 150,000 |                         |   |                |  |              | 3,821 |  |                                      | (3,821 | )                     |  |              | 150,000 |  |                                   | 107,047 |  |   |         |   |  |   | 257,047
|Other liabilities                      |  |                             | 438     |                         |   |                |  |              |      |  |                                      |       |                       |  |              | 438     |  |                                   |        |  |   |         |   |  |   | 438    
|Members equity subject to put request |  |                             |        |                         |   |                |  |              |      |  |                                      |       |                       |  |              |        |  |                                   | 48,571  |  |   |         |   |  |   | 48,571 
|Members equity                        |  |                             | 189,803 |                         |   |                |  |              | 1,830 |  |                                      | (1,830 | )                     |  |              | 189,803 |  |                                   | 34,784  |  |   | (189,803 | ) |  |   | 34,784 
|                                       |  |                             |         |                         |   |                 |  |              |       |  |                                      |        |                       |  |              |         |  |                                   |         |  |   |          |   |  |   |        
|Total liabilities & members equity    |  | $                           | 378,560 |                         | $ |                |  | $            | 6,087 |  | $                                    | (5,651 | )                     |  | $            | 378,996 |  | $                                 | 192,361 |  | $ | (189,803 | ) |  | $ | 381,554
|                                       |  |                             |         |                         |   |                 |  |              |       |  |                                      |        |                       |  |              |         |  |                                   |         |  |   |          |   |  |   |        

As of December 31, 2006



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

---

|(1) | Co-issuers
|--- | ----------



14



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CONDENSED CONSOLIDATING INCOME STATEMENTS

For the Three Months Ended March 31, 2007



|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|-------------------------------------------- |  | --------------------------- | ------- | - | ----------------------- | - | --------------- |  | - | ------------ | - |  | ------------------------------------ | ------ | --------------------- |  | ------------ | ------- |  | --------------------------------- | ------ |  | - | ------- | - |  | - | -------
|                                             |  | Norcraft Companies,L.P. (1) |         |   | NorcraftFinanceCorp (1) |   | Norcraft Canada |  |   | Eliminations |   |  | Consolidated Norcraft Companies,L.P. |        | NorcraftHoldings,L.P. |  | Eliminations |         |  | ConsolidatedNorcraftHoldings,L.P.
|Net sales                                    |  | $                           | 93,907  |   |                         | $ |                |  | $ | 3,277        |   |  | $                                    | (3,277 | )                     |  | $            | 93,907  |  | $                                 |       |  | $ |        |   |  | $ | 93,907 
|Cost of sales                                |  |                             | 63,703  |   |                         |   |                |  |   | 3,230        |   |  |                                      | (3,277 | )                     |  |              | 63,656  |  |                                   |       |  |   |        |   |  |   | 63,656 
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Gross profit                                 |  |                             | 30,204  |   |                         |   |                |  |   | 47           |   |  |                                      |       |                       |  |              | 30,251  |  |                                   |       |  |   |        |   |  |   | 30,251 
|Equity in earnings of subsidiary             |  |                             | (53     | ) |                         |   |                |  |   |             |   |  |                                      | 53     |                       |  |              |        |  |                                   | 8,900  |  |   | (8,900  | ) |  |   |       
|Selling, general and administrative expenses |  |                             | 17,580  |   |                         |   |                |  |   | 88           |   |  |                                      |       |                       |  |              | 17,668  |  |                                   |       |  |   |        |   |  |   | 17,668 
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Income (loss) from operations                |  |                             | 12,571  |   |                         |   |                |  |   | (41          | ) |  |                                      | 53     |                       |  |              | 12,583  |  |                                   | 8,900  |  |   | (8,900  | ) |  |   | 12,583 
|Other expense (income):                      |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Interest expense, net                        |  |                             | 3,373   |   |                         |   |                |  |   | 9            |   |  |                                      |       |                       |  |              | 3,382   |  |                                   | 2,538  |  |   |        |   |  |   | 5,920  
|Amortization of deferred financing costs     |  |                             | 269     |   |                         |   |                |  |   |             |   |  |                                      |       |                       |  |              | 269     |  |                                   | 104    |  |   |        |   |  |   | 373    
|Other, net                                   |  |                             | 29      |   |                         |   |                |  |   | 3            |   |  |                                      |       |                       |  |              | 32      |  |                                   |       |  |   |        |   |  |   | 32     
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|                                             |  |                             | 3,671   |   |                         |   |                |  |   | 12           |   |  |                                      |       |                       |  |              | 3,683   |  |                                   | 2,642  |  |   |        |   |  |   | 6,325  
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Net income                                   |  | $                           | 8,900   |   |                         | $ |                |  | $ | (53          | ) |  | $                                    | 53     |                       |  | $            | 8,900   |  | $                                 | 6,258  |  | $ | (8,900  | ) |  | $ | 6,258  
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|For the Three Months Ended March 31,
2006   
|                                             |  |                             |         |   |                         |   |                 | 
|                                             |  | Norcraft Companies,L.P. (1) |         |   | NorcraftFinanceCorp (1) |   | Norcraft Canada |  |   | Eliminations |   |  | Consolidated Norcraft Companies,L.P. |        | NorcraftHoldings,L.P. |  | Eliminations |         |  | ConsolidatedNorcraftHoldings,L.P.
|Net sales                                    |  | $                           | 108,666 |   |                         | $ |                |  | $ | 4,479        |   |  | $                                    | (4,479 | )                     |  | $            | 108,666 |  | $                                 |       |  | $ |        |   |  | $ | 108,666
|Cost of sales                                |  |                             | 76,755  |   |                         |   |                |  |   | 4,274        |   |  |                                      | (4,479 | )                     |  |              | 76,550  |  |                                   |       |  |   |        |   |  |   | 76,550 
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Gross profit                                 |  |                             | 31,911  |   |                         |   |                |  |   | 205          |   |  |                                      |       |                       |  |              | 32,116  |  |                                   |       |  |   |        |   |  |   | 32,116 
|Equity in earnings of subsidiary             |  |                             | 62      |   |                         |   |                |  |   |             |   |  |                                      | (62    | )                     |  |              |        |  |                                   | 10,566 |  |   | (10,566 | ) |  |   |       
|Selling, general and administrative expenses |  |                             | 17,693  |   |                         |   |                |  |   | 123          |   |  |                                      |       |                       |  |              | 17,816  |  |                                   |       |  |   |        |   |  |   | 17,816 
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Income (loss) from operations                |  |                             | 14,280  |   |                         |   |                |  |   | 82           |   |  |                                      | (62    | )                     |  |              | 14,300  |  |                                   | 10,566 |  |   | (10,566 | ) |  |   | 14,300 
|Other expense (income):                      |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Interest expense, net                        |  |                             | 3,392   |   |                         |   |                |  |   |             |   |  |                                      |       |                       |  |              | 3,392   |  |                                   | 2,197  |  |   |        |   |  |   | 5,589  
|Amortization of deferred financing costs     |  |                             | 290     |   |                         |   |                |  |   |             |   |  |                                      |       |                       |  |              | 290     |  |                                   | 94     |  |   |        |   |  |   | 384    
|Other, net                                   |  |                             | 32      |   |                         |   |                |  |   | 20           |   |  |                                      |       |                       |  |              | 52      |  |                                   |       |  |   |        |   |  |   | 52     
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|                                             |  |                             | 3,714   |   |                         |   |                |  |   | 20           |   |  |                                      |       |                       |  |              | 3,734   |  |                                   | 2,291  |  |   |        |   |  |   | 6,025  
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        
|Net income                                   |  | $                           | 10,566  |   |                         | $ |                |  | $ | 62           |   |  | $                                    | (62    | )                     |  | $            | 10,566  |  | $                                 | 8,275  |  | $ | (10,566 | ) |  | $ | 8,275  
|                                             |  |                             |         |   |                         |   |                 |  |   |              |   |  |                                      |        |                       |  |              |         |  |                                   |        |  |   |         |   |  |   |        



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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Three Months Ended March 31, 2007



|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|----------------------------------------------------- |  | --------------------------- | ------ | - | ----------------------- | - | --------------- |  | - | ---------------------------------- | - |  | ---------------------- | ------ | - | ------------ | - | ---- | ------------------------------------ |  | - | ---- | - |  | - | ------ | -
|                                                      |  | Norcraft Companies,L.P. (1) |        |   | NorcraftFinanceCorp (1) |   | Norcraft Canada |  |   | ConsolidatedNorcraftCompanies,L.P. |   |  | Norcraft Holdings,L.P. |        |   | Eliminations |   |      | Consolidated Norcraft Holdings, L.P. | 
|Cash flows provided by (used in) operating activities |  | $                           | 20,167 |   |                         | $ |                |  | $ | (20                                | ) |  | $                      | 20,147 |   |              | $ | 422  |                                      |  | $ | (544 | ) |  | $ | 20,025 |  
|Cash flows provided by (used in) investing activities |  |                             | (3,406 | ) |                         |   |                |  |   | (12                                | ) |  |                        | (3,418 | ) |              |   |     |                                      |  |   |     |   |  |   | (3,418 | )
|Cash flows provided by (used in) financing activities |  |                             | (544   | ) |                         |   |                |  |   |                                   |   |  |                        | (544   | ) |              |   | (312 | )                                    |  |   | 544  |   |  |   | (312   | )
|Effect of exchange rates on cash                      |  |                             |       |   |                         |   |                |  |   | 23                                 |   |  |                        | 23     |   |              |   |     |                                      |  |   |     |   |  |   | 23     |  
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|Net increase (decrease) in cash                       |  |                             | 16,217 |   |                         |   |                |  |   | (9                                 | ) |  |                        | 16,208 |   |              |   | 110  |                                      |  |   |     |   |  |   | 16,318 |  
|Cash, beginning of period                             |  |                             | 3,893  |   |                         |   |                |  |   | 145                                |   |  |                        | 4,038  |   |              |   | (110 | )                                    |  |   |     |   |  |   | 3,928  |  
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|Cash, end of period                                   |  | $                           | 20,110 |   |                         | $ |                |  | $ | 136                                |   |  | $                      | 20,246 |   |              | $ |     |                                      |  | $ |     |   |  | $ | 20,246 |  
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  

For the Three Months Ended March 31, 2006



|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|----------------------------------------------------- |  | --------------------------- | ------ | - | ----------------------- | - | --------------- |  | - | ---------------------------------- | - |  | ---------------------- | ------ | - | ------------ | - | ---- | ------------------------------------ |  | - | ---- | - |  | - | ------ | -
|                                                      |  | Norcraft Companies,L.P. (1) |        |   | NorcraftFinanceCorp (1) |   | Norcraft Canada |  |   | ConsolidatedNorcraftCompanies,L.P. |   |  | Norcraft Holdings,L.P. |        |   | Eliminations |   |      | Consolidated Norcraft Holdings, L.P. | 
|Cash flows provided by (used in) operating activities |  | $                           | 16,487 |   |                         | $ |                |  | $ | 108                                |   |  | $                      | 16,595 |   |              | $ | 627  |                                      |  | $ | (102 | ) |  | $ | 17,120 |  
|Cash flows provided by (used in) investing activities |  |                             | (3,423 | ) |                         |   |                |  |   | (156                               | ) |  |                        | (3,579 | ) |              |   |     |                                      |  |   |     |   |  |   | (3,579 | )
|Cash flows provided by (used in) financing activities |  |                             | (904   | ) |                         |   |                |  |   |                                   |   |  |                        | (904   | ) |              |   | (102 | )                                    |  |   | 102  |   |  |   | (904   | )
|Effect of exchange rates on cash                      |  |                             |       |   |                         |   |                |  |   | (31                                | ) |  |                        | (31    | ) |              |   |     |                                      |  |   |     |   |  |   | (31    | )
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|Net increase (decrease) in cash                       |  |                             | 12,160 |   |                         |   |                |  |   | (79                                | ) |  |                        | 12,081 |   |              |   | 525  |                                      |  |   |     |   |  |   | 12,606 |  
|Cash, beginning of period                             |  |                             | 854    |   |                         |   |                |  |   | 79                                 |   |  |                        | 933    |   |              |   |     |                                      |  |   |     |   |  |   | 933    |  
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  
|Cash, end of period                                   |  | $                           | 13,014 |   |                         | $ |                |  | $ |                                   |   |  | $                      | 13,014 |   |              | $ | 525  |                                      |  | $ |     |   |  | $ | 13,539 |  
|                                                      |  |                             |        |   |                         |   |                 |  |   |                                    |   |  |                        |        |   |              |   |      |                                      |  |   |      |   |  |   |        |  

---

|(1) | Co-issuers
|--- | ----------



16



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Uncertainty of Forward Looking Statements and Information

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

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

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

Company Overview

The following discussion of our financial condition and results of operations should be read
together with the consolidated financial statements and the accompanying notes included elsewhere in this quarterly report. Additionally, the following discussion should be read together with the Selected Financial Data and our consolidated
financial statements and the accompanying notes included in our 2006 annual report on Form 10-K.

All of our operations are conducted through Norcraft
Companies, L.P. (Norcraft). Norcraft is an indirect wholly-owned subsidiary of Norcraft Holdings, L.P. (Holdings). The words Company, we, us, and our refer to Holdings together
with Norcraft.

We are experiencing a significant slow-down in the number of incoming orders due to the industry slow-down. Our profitability at the gross
margin level is improved due to production efficiencies and product mix.

General

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



17



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##### Table of Contents

Results of Operations

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



|                                             |  |                             |   |  |                             |   |  |       |   |  |       |  
|-------------------------------------------- |  | --------------------------- | - |  | --------------------------- | - |  | ----- | - |  | ----- | -
|                                             |  | Norcraft Holdings, L.P.     |   |  | Norcraft Companies, L.P     |  
|                                             |  | Three Months EndedMarch 31, |   |  | Three Months EndedMarch 31, |  
|                                             |  | 2007                        |   |  | 2006                        |   |  | 2007  |   |  | 2006  |  
|Net sales                                    |  | 100.0                       | % |  | 100.0                       | % |  | 100.0 | % |  | 100.0 | %
|Cost of sales                                |  | 67.8                        | % |  | 70.4                        | % |  | 67.8  | % |  | 70.4  | %
|                                             |  |                             |   |  |                             |   |  |       |   |  |       |  
|Gross profit                                 |  | 32.2                        | % |  | 29.6                        | % |  | 32.2  | % |  | 29.6  | %
|Selling, general and administrative expenses |  | 18.8                        | % |  | 16.4                        | % |  | 18.8  | % |  | 16.4  | %
|                                             |  |                             |   |  |                             |   |  |       |   |  |       |  
|Income from operations                       |  | 13.4                        | % |  | 13.2                        | % |  | 13.4  | % |  | 13.2  | %
|                                             |  |                             |   | 
|Interest expense, net                        |  | 6.3                         | % |  | 5.1                         | % |  | 3.6   | % |  | 3.1   | %
|Amortization of deferred financing costs     |  | 0.4                         | % |  | 0.4                         | % |  | 0.3   | % |  | 0.3   | %
|                                             |  |                             |   |  |                             |   |  |       |   |  |       |  
|Net income                                   |  | 6.7                         | % |  | 7.6                         | % |  | 9.5   | % |  | 9.7   | %
|                                             |  |                             |   |  |                             |   |  |       |   |  |       |  

Three Months Ended March 31, 2007 Compared with Three Months Ended March 31, 2006

Net Sales. Net sales decreased by $14.8 million, or 13.6%, from $108.7 million for the three months ended March 31, 2006 to $93.9 million for the same period
of 2007. Various customers, channels and product lines have been impacted differently by these market conditions because of price points, geographies and various other factors. The varied impact of the slow-down caused the divisions within Norcraft
to be impacted differently. The decline in sales was mainly attributable to the Mid Continent division which made up most of the overall decrease in net sales. The UltraCraft division was also down, but was largely offset by the StarMark division
which was up. Norcrafts sales are down due to the industry wide slow-down in the U.S. housing market.

Cost of Sales. Cost of sales decreased
by $12.9 million, or 16.8%, from $76.6 million for the three months ended March 31, 2006 to $63.7 million for same period of 2007. The decrease was primarily attributable to our decreased sales volume. Cost of sales as a percentage of net sales
decreased from 70.4% for the three months ended March 31, 2006 to 67.8% for the same period of 2007.

Gross Profit. Gross profit decreased by
$1.8 million, or 5.8%, from $32.1 million for the three months ended March 31, 2006 to $30.3 million for the same period of 2007. Gross profit as a percentage of net sales increased from 29.6% for the three months ended March 31, 2006 to
32.2% for the same period of 2007. Gross profit margin was positively impacted by production efficiencies and an increase in average selling price.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by $0.1 million, or 0.8%, from $17.8 million for the three months ended March 31, 2006 to $17.7 million for the same period of
2007. Selling, general and administrative expenses were $0.2 million higher than the prior-year period because of increased sales and marketing expense to generate new customers and market our new products. The offsetting decrease in selling,
general and administrative expenses of $0.3 million was in administrative costs. Selling, general and administrative expenses as a percentage of net sales increased from 16.4% for the three months ended March 31, 2006 to 18.8% for the same
period of 2007.

Income from Operations.Income from operations decreased by $1.7 million, or 12.0%, from $14.3 million for the three months ended
March 31, 2006 compared to $12.6 million for the same period of 2007. The decrease in income from operations was a result of factors described above. Income from operations as a percentage of net sales, however, increased slightly from 13.2%
for the three months ended March 31, 2006 to 13.4% for the same period of 2007.

Interest, Amortization of Deferred Financing Fees, and Other
Expenses. Holdings consolidated interest, amortization of deferred financing fees, and other expenses increased by $0.3 million, or 5.0%, from $6.0 million for the three months ended March 31, 2006 to $6.3 million for the same period
of 2007. Interest expense increased $0.3 million from increased indebtedness, mainly attributable to the increase in the Senior Discount Notes due to accretion. The average debt balances were $257.8 million and $242.7 during the three months ended
March 31, 2007 and 2006, respectively. The borrowing rates on the Senior Subordinated Notes and the Senior Discount Notes are fixed at 9.0% and 9.75%, respectively. Amortization of deferred financing charges was flat during the three months
ended March 31, 2007 compared to the three



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months ended March 31, 2006. Interest, amortization of deferred financing fees, and other expenses for Holdings as a percentage of net sales increased
from 5.5% for the three months ended March 31, 2006 to 6.7% for the same period of 2007.

Interest, amortization of deferred financing fees, and other
expenses were flat for Norcraft at $3.7 million for the three months ended March 31, 2007 and 2006. Interest, amortization of deferred financing fees, and other expenses for Norcraft as a percentage of net sales increased from 3.4% for the
three months ended March 31, 2006 to 3.9% for the same period of 2007.

Net Income. Holdings net income decreased $2.0 million from $8.3
million for the three months ended March 31, 2006 to $6.3 million for the same period of 2007, for the reasons described above. Net income as a percentage of net sales for Holdings decreased from 7.6% for the three months ended March 31,
2006 to 6.7% for the same period of 2007.

Norcrafts net income decreased $1.7 million from $10.6 million for the three months ended March 31,
2006 to $8.9 million for the same period of 2007, for the reasons described above. Net income as a percentage of net sales for Norcraft decreased from 9.7% for the three months ended March 31, 2006 to 9.5% for the same period of 2007.

Liquidity and Capital Resources

Cash Flows

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

Cash provided by
operating activities of Holdings was $20.0 million for the three months ended March 31, 2007, compared with $17.1 million for the same period of 2006, an increase of $2.9 million. The increase was primarily due to a change in operating assets
of $7.5 million, offset by a change in operating liabilities of $2.7 million and a decrease in net income of $2.0 million.

Cash provided by operating
activities of Norcraft was $20.1 million for the three months ended March 31, 2007, compared with $16.6 million for the same period of 2006, an increase of $3.5 million. The increase was primarily due to a change in operating assets of $8.0
million, offset by a change in operating liabilities of $2.7 million and a decrease in net income of $1.7 million.

Cash used in investing activities was
$3.4 million for the three months ended March 31, 2007, compared with $3.6 million for the same period of 2006, a decrease of $0.2 million. Additions to display cabinets were $1.5 million for the three months ended March 31, 2007, compared
with $1.9 million for the same period of 2006, a decrease of $0.4 million. Additionally, capital expenditures were $2.0 million for the three months ended March 31, 2007, compared with $1.8 million for the same period of 2006, an increase of
$0.2 million.

Cash used in financing activities of Holdings was $0.3 million for the three months ended March 31, 2007, compared with $0.9 million
used in the same period of 2006, a decrease of $0.6 million. This decreased usage was primarily due to a change in book overdrafts payable of $1.6 million, offset by a decrease in proceeds used for the issuance of member interests of $0.8 million
and a decrease in repurchases of member interests of $0.2 million.

Cash used in financing activities of Norcraft was $0.6 million for the three months
ended March 31, 2007, compared with $0.9 million used in the same period of 2006, a decrease of $0.3 million. This decreased usage was primarily due to a change in book overdrafts payable of $1.6 million, offset by a decrease in proceeds used
for the issuance of member interests of $0.8 million, a decrease in repurchases of member interests of $0.2 million and a $.2 million distribution to member.

Debt Structure

We have $259.0 million of outstanding debt, consisting of $150.0 million in Senior Subordinated Notes (with
semi-annual interest payments at 9%), $103.1 million in Senior Discount Notes (due in 2012, with interest accreting at 9.75%) and $5.9 million in Unsecured Notes (due in 2009, with annual principal payments and quarterly interest payments of 8.45%).
Please see Part I, Item 1, Notes to Consolidated Financial Statements, Note 8, Long Term Debt for details.

Norcrafts
senior credit facility contains covenants, which, among other things, limit: (i) additional indebtedness; (ii) dividends; (iii) capital expenditures and (iv) acquisitions, mergers and consolidations. Indebtedness under the senior
credit facility is secured by substantially all of Norcrafts assets, including its real and personal property, inventory, accounts receivable, intellectual property and other intangibles. The facility also contains certain financial covenants,
including maximum leverage ratio, minimum interest coverage ratio and minimum fixed charge coverage ratio. Norcraft was in compliance with these financial covenants at March 31, 2007.



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

Taxes; Distributions to our Limited Partners

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

Norcrafts senior
credit facility and the indenture governing the Senior Subordinated Notes significantly restrict Norcraft and its subsidiaries from paying dividends and otherwise transferring assets to Holdings. Norcraft may, however, make distributions to
Holdings, subject to certain limitations, to permit it to make further distributions to its equity holders to pay taxes on our net income allocated to them. There was no tax distribution paid for the three months ended March 31, 2007.

Inflation; Seasonality

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

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



|Item 3. | Quantitative and Qualitative Disclosures of Market Risk
|------- | -------------------------------------------------------

As of
March 31, 2007, the Company has a $60.0 million revolving credit facility which has a variable rate of interest and has the potential to expose the Company to fluctuations in the interest rate market. As of March 31, 2007, there were no
borrowings under this facility. The available credit under this revolver is reduced by any outstanding letters of credit. Approximately $5.4 million of letters of credit were outstanding at March 31, 2007.



|Item 4. | Controls and Procedures
|------- | -----------------------

The Companys management, with the
participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures as of March 31, 2007. Based on that evaluation, the Companys
Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures were effective as of March 31, 2007 to provide reasonable assurance that the information required to be disclosed by the
Company in the reports it files or submits with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There have not been any changes in the Companys internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act, during the Companys fiscal quarter ended March 31, 2007 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Companys
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. The Companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United
States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the financial statements.



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



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PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

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



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material changes to the risk
factors disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2006. The materialization of any risks and uncertainties identified in Part I, Item 2, Uncertainty of Forward Looking Statements and
Information Statements contained in this report together with those previously disclosed in the Form 10-K or those that are presently unforeseen could result in significant adverse effects on our financial condition, results of operations and
cash flows.



|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification by Mark Buller pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                             
|     | 
|31.2 |  | Certification by Leigh Ginter pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                            
|     | 
|32.1 |  | Certification by Mark Buller pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
|     | 
|32.2 |  | Certification by Leigh Ginter pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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SIGNATURES

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



NORCRAFT HOLDINGS, L.P.(Registrant)NORCRAFT COMPANIES, L.P.(Registrant)




|                                                             |  |                                                                        
|------------------------------------------------------------ |  | -----------------------------------------------------------------------
|/s/ Mark Buller                                              |  | /s/ Leigh Ginter                                                       
|Mark Buller                                                  |  | Leigh Ginter                                                           
|Chief Executive Officer                                      |  | Chief Financial Officer                                                
|                                                             | 
|Date: May 15, 2007                                           |  | Date: May 15, 2007                                                     
|Signing on behalf of the Registrant and as
principal Officer |  | Signing on behalf of the Registrant and as
principal accounting officer



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