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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549





FORM 10-Q







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

For the quarterly period ended September 30, 2010

OR



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

For the transition period from  to

Commission file numbers: 333-119696 and
333-114924





Norcraft Holdings, L.P.

Norcraft Companies, L.P.

(Exact name of registrants as specified in
their charters)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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)





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 (or
for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90
days.    Yes   ̈No  x.

Indicate by check mark whether the registrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈No   ̈.

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-Accelerated Filer   |  | x |  | Smaller Reporting Company |  |  ̈

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. and its subsidiaries.









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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 September 30, 2010 and December 31, 2009                                                                |    |      | 3  | 
|           |  | Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and
2009                                  |    |      | 4  | 
|           |  | Consolidated Statements of Changes in Members Equity (Deficit) and Comprehensive Income for the nine
 months ended September 30, 2010 |    |      | 5  | 
|           |  | Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and
2009                                            |    |      | 6  | 
|           |  | Notes to Consolidated Financial Statements                                                                                             |    |      | 7  | 
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of
Operations                                                  |    |      | 17 | 
|Item 3.    |  | Quantitative and Qualitative Disclosures of Market Risk                                                                                |    |      | 24 | 
|Item 4.    |  | Controls and Procedures                                                                                                                |    |      | 24 | 
|           |  |                                                                                                                                       
|PART II    |  | OTHER INFORMATION                                                                                                                      |    |      |    | 
|Item 1.    |  | Legal Proceedings                                                                                                                      |    |      | 25 | 
|Item 1A.   |  | Risk Factors                                                                                                                           |    |      | 25 | 
|Item 6.    |  | Exhibits                                                                                                                               |    |      | 25 | 
|           | 
|SIGNATURES |  |                                                                                                                                        | 26 |     

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.



2



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PART I.
FINANCIAL INFORMATION

Item 1.

Consolidated Balance Sheets

(dollar amounts in
thousands)



|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|----------------------------------------------- |  | ---------------------------- | ------- | - | ------------------------ | - | ------- | ---------------------------- |  | - | ---------------- | - |  | - | ------- | -
|                                                |  | Norcraft Holdings, L.P.      |         |   | Norcraft Companies, L.P. |  
|                                                |  | September 30,2010(unaudited) |         |   | December 31,2009         |   |         | September 30,2010(unaudited) |  |   | December 31,2009 |  
|ASSETS                                          |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|Current assets:                                 |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|Cash and cash equivalents                       |  | $                            | 29,834  |   |                          | $ | 20,863  |                              |  | $ | 29,834           |   |  | $ | 16,731  |  
|Trade accounts receivable, net                  |  |                              | 21,457  |   |                          |   | 17,987  |                              |  |   | 21,457           |   |  |   | 17,987  |  
|Inventories                                     |  |                              | 19,319  |   |                          |   | 16,380  |                              |  |   | 19,319           |   |  |   | 16,380  |  
|Prepaid expenses                                |  |                              | 982     |   |                          |   | 1,629   |                              |  |   | 982              |   |  |   | 1,629   |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|Total current assets                            |  |                              | 71,592  |   |                          |   | 56,859  |                              |  |   | 71,592           |   |  |   | 52,727  |  
|                                                |  |                              |         |  
|Property, plant and equipment, net              |  |                              | 29,291  |   |                          |   | 31,925  |                              |  |   | 29,291           |   |  |   | 31,925  |  
|                                                |  |                              |         |  
|Other assets:                                   |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|Goodwill                                        |  |                              | 88,421  |   |                          |   | 88,421  |                              |  |   | 88,421           |   |  |   | 88,421  |  
|Brand names                                     |  |                              | 35,100  |   |                          |   | 35,100  |                              |  |   | 35,100           |   |  |   | 35,100  |  
|Customer relationships, net                     |  |                              | 35,981  |   |                          |   | 39,332  |                              |  |   | 35,981           |   |  |   | 39,332  |  
|Deferred financing costs, net                   |  |                              | 7,132   |   |                          |   | 7,483   |                              |  |   | 6,717            |   |  |   | 6,908   |  
|Display cabinets, net                           |  |                              | 5,218   |   |                          |   | 5,394   |                              |  |   | 5,218            |   |  |   | 5,394   |  
|Other                                           |  |                              | 50      |   |                          |   | 70      |                              |  |   | 50               |   |  |   | 70      |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|Total other assets                              |  |                              | 171,902 |   |                          |   | 175,800 |                              |  |   | 171,487          |   |  |   | 175,225 |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|Total assets                                    |  | $                            | 272,785 |   |                          | $ | 264,584 |                              |  | $ | 272,370          |   |  | $ | 259,877 |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|LIABILITIES AND MEMBERS EQUITY (DEFICIT)       |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|Current liabilities:                            |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|Accounts payable                                |  | $                            | 9,542   |   |                          | $ | 6,626   |                              |  | $ | 9,542            |   |  | $ | 6,626   |  
|Accrued expenses                                |  |                              | 20,851  |   |                          |   | 16,841  |                              |  |   | 20,415           |   |  |   | 15,096  |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|Total current liabilities                       |  |                              | 30,393  |   |                          |   | 23,467  |                              |  |   | 29,957           |   |  |   | 21,722  |  
|                                                |  |                              |         |  
|Long-term debt                                  |  |                              | 233,700 |   |                          |   | 233,700 |                              |  |   | 180,000          |   |  |   | 180,000 |  
|Unamortized discount on bonds payable           |  |                              | (2,536  | ) |                          |   | (2,903  | )                            |  |   | (2,536           | ) |  |   | (2,903  | )
|Other liabilities                               |  |                              | 266     |   |                          |   | 287     |                              |  |   | 266              |   |  |   | 287     |  
|                                                |  |                              |         |  
|Commitments and contingencies                   |  |                              |        |   |                          |   |        |                              |  |   |                 |   |  |   |        |  
|                                                |  |                              |         |  
|Members equity subject to put request          |  |                              | 12,555  |   |                          |   | 7,546   |                              |  |   |                 |   |  |   |        |  
|                                                |  |                              |         |  
|Members equity (deficit)                       |  |                              | (1,593  | ) |                          |   | 2,487   |                              |  |   | 64,683           |   |  |   | 60,771  |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  
|                                                |  |                              |         |  
|Total liabilities and members equity (deficit) |  | $                            | 272,785 |   |                          | $ | 264,584 |                              |  | $ | 272,370          |   |  | $ | 259,877 |  
|                                                |  |                              |         |   |                          |   |         |                              |  |   |                  |   |  |   |         |  

See notes to consolidated financial statements.



3



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Consolidated Statements of Operations

(dollar amounts in thousands)

(unaudited)



|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|-------------------------------------------- |  | ------------------------------- | ------ |  | ------------------------------ | - | ------ | ---- |  | - | ------- |  |  | - | ------- | -
|                                             |  | Norcraft Holdings, L.P.         |       
|                                             |  | Three Months
EndedSeptember 30, |        |  | Nine Months
EndedSeptember 30, |  
|                                             |  | 2010                            |        |  | 2009                           |   |        | 2010 |  |   | 2009    | 
|Net sales                                    |  | $                               | 65,937 |  |                                | $ | 64,672 |      |  | $ | 201,877 |  |  | $ | 186,877 |  
|Cost of sales                                |  |                                 | 46,531 |  |                                |   | 44,387 |      |  |   | 142,469 |  |  |   | 133,155 |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Gross profit                                 |  |                                 | 19,406 |  |                                |   | 20,285 |      |  |   | 59,408  |  |  |   | 53,722  |  
|                                             |  |                                 |        | 
|Selling, general and administrative expenses |  |                                 | 12,278 |  |                                |   | 11,940 |      |  |   | 38,468  |  |  |   | 37,105  |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Income from operations                       |  |                                 | 7,128  |  |                                |   | 8,345  |      |  |   | 20,940  |  |  |   | 16,617  |  
|                                             |  |                                 |        | 
|Other expense:                               |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Interest expense, net                        |  |                                 | 6,335  |  |                                |   | 6,315  |      |  |   | 19,004  |  |  |   | 18,977  |  
|Amortization of deferred financing costs     |  |                                 | 427    |  |                                |   | 289    |      |  |   | 1,188   |  |  |   | 1,761   |  
|Other, net                                   |  |                                 | 18     |  |                                |   | 28     |      |  |   | 91      |  |  |   | 96      |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|                                             |  |                                 |        | 
|Total other expense                          |  |                                 | 6,780  |  |                                |   | 6,632  |      |  |   | 20,283  |  |  |   | 20,834  |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|                                             |  |                                 |        | 
|Net income (loss)                            |  | $                               | 348    |  |                                | $ | 1,713  |      |  | $ | 657     |  |  | $ | (4,217  | )
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|                                             | 
|                                             |  | Norcraft Companies, L.P.        |       
|                                             |  | Three Months EndedSeptember
30, |        |  | Nine Months EndedSeptember
30, |  
|                                             |  | 2010                            |        |  | 2009                           |   |        | 2010 |  |   | 2009    | 
|Net sales                                    |  | $                               | 65,937 |  |                                | $ | 64,672 |      |  | $ | 201,877 |  |  | $ | 186,877 |  
|Cost of sales                                |  |                                 | 46,531 |  |                                |   | 44,387 |      |  |   | 142,469 |  |  |   | 133,155 |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Gross profit                                 |  |                                 | 19,406 |  |                                |   | 20,285 |      |  |   | 59,408  |  |  |   | 53,722  |  
|                                             |  |                                 |        | 
|Selling, general and administrative expenses |  |                                 | 12,278 |  |                                |   | 11,940 |      |  |   | 38,468  |  |  |   | 37,105  |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Income from operations                       |  |                                 | 7,128  |  |                                |   | 8,345  |      |  |   | 20,940  |  |  |   | 16,617  |  
|                                             |  |                                 |        | 
|Other expense:                               |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|Interest expense, net                        |  |                                 | 5,026  |  |                                |   | 3,429  |      |  |   | 15,077  |  |  |   | 10,319  |  
|Amortization of deferred financing costs     |  |                                 | 374    |  |                                |   | 169    |      |  |   | 1,028   |  |  |   | 1,402   |  
|Other, net                                   |  |                                 | 18     |  |                                |   | 28     |      |  |   | 91      |  |  |   | 96      |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|                                             |  |                                 |        | 
|Total other expense                          |  |                                 | 5,418  |  |                                |   | 3,626  |      |  |   | 16,196  |  |  |   | 11,817  |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  
|                                             |  |                                 |        | 
|Net income                                   |  | $                               | 1,710  |  |                                | $ | 4,719  |      |  | $ | 4,744   |  |  | $ | 4,800   |  
|                                             |  |                                 |        |  |                                |   |        |      |  |   |         |  |  |   |         |  

See notes to consolidated financial statements.



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Consolidated Statements of Changes in Members Equity (Deficit) and Comprehensive Income

(dollar amounts in thousands)

(unaudited)



|                                                      |  |                          |        |   |                          |   |       | 
|----------------------------------------------------- |  | ------------------------ | ------ | - | ------------------------ | - | ----- | 
|                                                      |  | Norcraft Holdings, L.P.  |       
|                                                      |  | Members Equity(Deficit) |        |   | TotalComprehensiveIncome |  
|                                                      |  |                         
|Members equity at January 1, 2010                    |  | $                        | 2,487  |   |                          |   |       | 
|                                                      |  |                         
|Issuance of members interest                         |  |                          | 125    |   |                          |   |       | 
|                                                      |  |                         
|Stock compensation expense                            |  |                          | 138    |   |                          |   |       | 
|                                                      |  |                         
|Accretion on members interest subject to put request |  |                          | (5,009 | ) |                          |   |       | 
|                                                      |  |                         
|Foreign currency translation adjustment               |  |                          | 9      |   |                          |   | 9     | 
|                                                      |  |                         
|Net income                                            |  |                          | 657    |   |                          |   | 657   | 
|                                                      |  |                          |        |   |                          |   |       | 
|                                                      |  |                         
|Total comprehensive income                            |  |                          |        |   |                          | $ | 666   | 
|                                                      |  |                          |        |   |                          |   |       | 
|                                                      |  |                         
|Members deficit at September 30, 2010                |  | $                        | (1,593 | ) |                          |   |       | 
|                                                      |  |                          |        |   |                          |   |       | 
|                                                      | 
|                                                      |  | Norcraft Companies, L.P. |       
|                                                      |  | Members Equity(Deficit) |        |   | TotalComprehensiveIncome |  
|                                                      |  |                         
|Members equity at January 1, 2010                    |  | $                        | 60,771 |   |                          |   |       | 
|                                                      |  |                         
|Issuance of members interest                         |  |                          | 125    |   |                          |   |       | 
|                                                      |  |                         
|Stock compensation expense                            |  |                          | 138    |   |                          |   |       | 
|                                                      |  |                         
|Distribution to Member                                |  |                          | (1,104 | ) |                          |   |       | 
|                                                      |  |                         
|Foreign currency translation adjustment               |  |                          | 9      |   |                          |   | 9     | 
|                                                      |  |                         
|Net income                                            |  |                          | 4,744  |   |                          |   | 4,744 | 
|                                                      |  |                          |        |   |                          |   |       | 
|                                                      |  |                         
|Total comprehensive income                            |  |                          |        |   |                          | $ | 4,753 | 
|                                                      |  |                          |        |   |                          |   |       | 
|                                                      |  |                         
|Members equity at September 30, 2010                 |  | $                        | 64,683 |   |                          |   |       | 
|                                                      |  |                          |        |   |                          |   |       | 

See notes to consolidated financial statements.



5



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Consolidated Statements of Cash Flows

(dollar amounts in thousands)

(unaudited)



|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ------------------------------ | - | ------- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                                         |  | Norcraft Holdings, L.P.        |        |   | Norcraft Companies, L.P.       |  
|                                                                                         |  | Nine Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                                                                         |  | 2010                           |        |   | 2009                           |   |         | 2010 |  |   | 2009   |  
|Cash flows from operating activities:                                                    |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Net income (loss)                                                                        |  | $                              | 657    |   |                                | $ | (4,217  | )    |  | $ | 4,744  |   |  | $ | 4,800   |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Depreciation and amortization of property, plant and equipment                           |  |                                | 4,417  |   |                                |   | 4,330   |      |  |   | 4,417  |   |  |   | 4,330   |  
|Amortization:                                                                            |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Customer relationships                                                                   |  |                                | 3,351  |   |                                |   | 3,350   |      |  |   | 3,351  |   |  |   | 3,350   |  
|Deferred financing costs                                                                 |  |                                | 1,188  |   |                                |   | 1,761   |      |  |   | 1,028  |   |  |   | 1,402   |  
|Display cabinets                                                                         |  |                                | 3,210  |   |                                |   | 4,136   |      |  |   | 3,210  |   |  |   | 4,136   |  
|Discount amortization/accreted interest                                                  |  |                                | 367    |   |                                |   |        |      |  |   | 367    |   |  |   |        |  
|Provision for uncollectible accounts receivable                                          |  |                                | 140    |   |                                |   | 685     |      |  |   | 140    |   |  |   | 685     |  
|Provision for obsolete and excess inventories                                            |  |                                | 77     |   |                                |   | 878     |      |  |   | 77     |   |  |   | 878     |  
|Provision for warranty claims                                                            |  |                                | 2,058  |   |                                |   | 1,567   |      |  |   | 2,058  |   |  |   | 1,567   |  
|Stock compensation expense                                                               |  |                                | 138    |   |                                |   | 117     |      |  |   | 138    |   |  |   | 117     |  
|(Gain) loss on disposal of assets                                                        |  |                                | (43    | ) |                                |   | 118     |      |  |   | (43    | ) |  |   | 118     |  
|Change in operating assets and liabilities:                                              |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Trade accounts receivable                                                                |  |                                | (3,586 | ) |                                |   | (2,778  | )    |  |   | (3,586 | ) |  |   | (2,778  | )
|Inventories                                                                              |  |                                | (3,010 | ) |                                |   | 1,530   |      |  |   | (3,010 | ) |  |   | 1,530   |  
|Prepaid expenses                                                                         |  |                                | 648    |   |                                |   | 819     |      |  |   | 648    |   |  |   | 819     |  
|Other assets                                                                             |  |                                | 20     |   |                                |   | (4      | )    |  |   | 20     |   |  |   | (4      | )
|Accounts payable and accrued expenses                                                    |  |                                | 5,001  |   |                                |   | (1,642  | )    |  |   | 6,310  |   |  |   | 1,234   |  
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Net cash provided by operating activities                                                |  |                                | 14,633 |   |                                |   | 10,650  |      |  |   | 19,869 |   |  |   | 22,184  |  
|                                                                                         |  |                                |        |  
|Cash flows from investing activities:                                                    |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Proceeds from sale of property and equipment                                             |  |                                | 47     |   |                                |   | 9       |      |  |   | 47     |   |  |   | 9       |  
|Purchase of property, plant and equipment                                                |  |                                | (1,965 | ) |                                |   | (1,810  | )    |  |   | (1,965 | ) |  |   | (1,810  | )
|Additions to display cabinets                                                            |  |                                | (3,034 | ) |                                |   | (2,852  | )    |  |   | (3,034 | ) |  |   | (2,852  | )
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Net cash used in investing activities                                                    |  |                                | (4,952 | ) |                                |   | (4,653  | )    |  |   | (4,952 | ) |  |   | (4,653  | )
|                                                                                         |  |                                |        |  
|Cash flows from financing activities:                                                    |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Payment in financing costs                                                               |  |                                | (837   | ) |                                |   |        |      |  |   | (837   | ) |  |   |        |  
|Transfer to restricted cash                                                              |  |                                |       |   |                                |   | (5,618  | )    |  |   |       |   |  |   | (5,618  | )
|Payments on term loans to former equity holders                                          |  |                                |       |   |                                |   | (459    | )    |  |   |       |   |  |   |        |  
|Proceeds from issuance of member interests                                               |  |                                | 125    |   |                                |   |        |      |  |   | 125    |   |  |   |        |  
|Contributions from (distributions to) members                                            |  |                                |       |   |                                |   | 4       |      |  |   | (1,104 | ) |  |   | (16,237 | )
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Net cash used in financing activities                                                    |  |                                | (712   | ) |                                |   | (6,073  | )    |  |   | (1,816 | ) |  |   | (21,855 | )
|                                                                                         |  |                                |        |  
|Effect of exchange rates on cash                                                         |  |                                | 2      |   |                                |   | 26      |      |  |   | 2      |   |  |   | 26      |  
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                                | 8,971  |   |                                |   | (50     | )    |  |   | 13,103 |   |  |   | (4,298  | )
|                                                                                         |  |                                |        |  
|Cash and cash equivalents, beginning of the period                                       |  |                                | 20,863 |   |                                |   | 59,406  |      |  |   | 16,731 |   |  |   | 59,406  |  
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Cash and cash equivalents, end of period                                                 |  | $                              | 29,834 |   |                                | $ | 59,356  |      |  | $ | 29,834 |   |  | $ | 55,108  |  
|                                                                                         |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|                                                                                         |  |                                |        |  
|Supplemental disclosure of non-cash transactions:                                        |  |                                |        |   |                                |   |         |      |  |   |        |   |  |   |         |  
|Change in equity subject to put request                                                  |  | $                              | 5,009  |   |                                | $ | (15,668 | )    |  | $ |       |   |  | $ |        |  

See notes to
consolidated financial statements.



6



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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, Norcraft and its subsidiaries are collectively referred to as the Company.

The consolidated financial statements of Holdings include the accounts of its 100% owned subsidiaries, Norcraft Intermediate Holdings, L.P., which is the immediate parent of Norcraft, and Norcraft Capital
Corp. In August 2004, Holdings and Norcraft Capital Corp. issued $118.0 million of 9 3/4% senior discount notes for gross proceeds of $80.3 million. Holdings and Norcraft Capital Corp. are the sole obligors of these notes. In March 2009,
Norcraft distributed approximately $5.7 million to Holdings to enable it to make cash interest payments on the senior discount notes. On April 3, 2009, as described in Note 7 below, Norcraft distributed an additional $10.0 million to Holdings
to enable it to make future cash interest payments on these notes. On September 1, 2009, a cash interest payment of approximately $5.7 million was made for these notes out of the $10.0 million. In December 2009, $64.3 million of the senior
discount notes were repurchased resulting in a loss from debt extinguishment of $1.6 million. Other than the remaining $53.7 million of the senior discount notes, cash, related deferred issuance costs, related interest and amortization expense and
related debt extinguishment loss, 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.

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, 2009, as filed with the Securities and Exchange Commission. The unaudited interim consolidated financial statements as of September 30, 2010 and
2009 and for the three and nine months ended September 30, 2010 and 2009 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 information included in the notes herein relate to both Holdings and Norcraft.



|2. | Trade Accounts Receivable
|-- | -------------------------

Trade accounts receivable consists of the following:



|                                           |  |                   |        |   |                  |   |        |  
|------------------------------------------ |  | ----------------- | ------ | - | ---------------- | - | ------ | -
|                                           |  | September 30,2010 |        |   | December 31,2009 |  
|Trade accounts receivable                  |  | $                 | 22,747 |   |                  | $ | 18,985 |  
|Less: Allowance for uncollectible accounts |  |                   | (1,290 | ) |                  |   | (998   | )
|                                           |  |                   |        |   |                  |   |        |  
|Trade accounts receivable, net             |  | $                 | 21,457 |   |                  | $ | 17,987 |  
|                                           |  |                   |        |   |                  |   |        |  



|3. | Inventories
|-- | -----------

Inventories
consist of the following:



|                           |  |                   |        |  |                  |   |        | 
|-------------------------- |  | ----------------- | ------ |  | ---------------- | - | ------ | 
|                           |  | September 30,2010 |        |  | December 31,2009 |  
|Raw materials and supplies |  | $                 | 11,822 |  |                  | $ | 11,173 | 
|Work in process            |  |                   | 2,348  |  |                  |   | 2,610  | 
|Finished goods             |  |                   | 5,149  |  |                  |   | 2,597  | 
|                           |  |                   |        |  |                  |   |        | 
|                           |  | $                 | 19,319 |  |                  | $ | 16,380 | 
|                           |  |                   |        |  |                  |   |        | 



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|4. | Intangible Assets
|-- | -----------------

Intangible assets subject to amortization consist of the following:



|                         |  |                          |        |  |                         |   |         |                      |  |   |                         |  |  |   |         |  
|------------------------ |  | ------------------------ | ------ |  | ----------------------- | - | ------- | -------------------- |  | - | ----------------------- |  |  | - | ------- | -
|                         |  | Norcraft Holdings, L.P.  |       
|                         |  | September 30, 2010       |        |  | December 31, 2009       |  
|                         |  | Gross CarryingAmount     |        |  | AccumulatedAmortization |   |         | Gross CarryingAmount |  |   | AccumulatedAmortization | 
|Customer relationships   |  | $                        | 67,000 |  |                         | $ | (31,019 | )                    |  | $ | 67,000                  |  |  | $ | (27,668 | )
|Deferred financing costs |  |                          | 9,427  |  |                         |   | (2,295  | )                    |  |   | 8,590                   |  |  |   | (1,107  | )
|                         |  |                          |        |  |                         |   |         |                      |  |   |                         |  |  |   |         |  
|Total                    |  | $                        | 76,427 |  |                         | $ | (33,314 | )                    |  | $ | 75,590                  |  |  | $ | (28,775 | )
|                         |  |                          |        |  |                         |   |         |                      |  |   |                         |  |  |   |         |  
|                         | 
|                         |  | Norcraft Companies, L.P. |       
|                         |  | September 30, 2010       |        |  | December 31, 2009       |  
|                         |  | Gross CarryingAmount     |        |  | AccumulatedAmortization |   |         | Gross CarryingAmount |  |   | AccumulatedAmortization | 
|Customer relationships   |  | $                        | 67,000 |  |                         | $ | (31,019 | )                    |  | $ | 67,000                  |  |  | $ | (27,668 | )
|Deferred financing costs |  |                          | 7,819  |  |                         |   | (1,102  | )                    |  |   | 6,982                   |  |  |   | (74     | )
|                         |  |                          |        |  |                         |   |         |                      |  |   |                         |  |  |   |         |  
|Total                    |  | $                        | 74,819 |  |                         | $ | (32,121 | )                    |  | $ | 73,982                  |  |  | $ | (27,742 | )
|                         |  |                          |        |  |                         |   |         |                      |  |   |                         |  |  |   |         |  

There were no events or circumstances during the three or nine months ended September 30, 2010 to
indicate that the following assets not subject to amortization should be evaluated for potential impairment.



|            |  |                   |         |  |                  |   |         | 
|----------- |  | ----------------- | ------- |  | ---------------- | - | ------- | 
|            |  | September 30,2010 |         |  | December 31,2009 |  
|Goodwill    |  | $                 | 88,421  |  |                  | $ | 88,421  | 
|Brand names |  |                   | 35,100  |  |                  |   | 35,100  | 
|            |  |                   |         |  |                  |   |         | 
|Total       |  | $                 | 123,521 |  |                  | $ | 123,521 | 
|            |  |                   |         |  |                  |   |         | 



|5. | Accrued Expenses
|-- | ----------------

Accrued
expenses consist of the following:



|                                            |  |                          |        |  |                  |   |        | 
|------------------------------------------- |  | ------------------------ | ------ |  | ---------------- | - | ------ | 
|                                            |  | Norcraft Holdings, L.P.  |       
|                                            |  | September 30,2010        |        |  | December 31,2009 |  
|Salaries, wages and employee benefits       |  | $                        | 7,394  |  |                  | $ | 6,842  | 
|Commissions, rebates and marketing programs |  |                          | 2,623  |  |                  |   | 2,457  | 
|Workers compensation                       |  |                          | 2,008  |  |                  |   | 2,005  | 
|Interest                                    |  |                          | 6,057  |  |                  |   | 2,926  | 
|Other, including product warranty accruals  |  |                          | 2,769  |  |                  |   | 2,611  | 
|                                            |  |                          |        |  |                  |   |        | 
|                                            |  | $                        | 20,851 |  |                  | $ | 16,841 | 
|                                            |  |                          |        |  |                  |   |        | 
|                                            | 
|                                            |  | Norcraft Companies, L.P. |       
|                                            |  | September 30,2010        |        |  | December 31,2009 |  
|Salaries, wages and employee benefits       |  | $                        | 7,394  |  |                  | $ | 6,842  | 
|Commissions, rebates and marketing programs |  |                          | 2,623  |  |                  |   | 2,457  | 
|Workers compensation                       |  |                          | 2,008  |  |                  |   | 2,005  | 
|Interest                                    |  |                          | 5,621  |  |                  |   | 1,181  | 
|Other, including product warranty accruals  |  |                          | 2,769  |  |                  |   | 2,611  | 
|                                            |  |                          |        |  |                  |   |        | 
|                                            |  | $                        | 20,415 |  |                  | $ | 15,096 | 
|                                            |  |                          |        |  |                  |   |        | 



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Product warranty
accrual activity is as follows for Norcraft Holdings, L.P. and Norcraft Companies, L.P.:



|                        |  |                   |        |   |                   |   |        |  
|----------------------- |  | ----------------- | ------ | - | ----------------- | - | ------ | -
|                        |  | September 30,2010 |        |   | September 30,2009 |  
|Beginning balance       |  | $                 | 494    |   |                   | $ | 635    |  
|Accruals for warranties |  |                   | 2,058  |   |                   |   | 1,567  |  
|Claims paid             |  |                   | (1,813 | ) |                   |   | (1,656 | )
|                        |  |                   |        |   |                   |   |        |  
|Ending balance          |  | $                 | 739    |   |                   | $ | 546    |  
|                        |  |                   |        |   |                   |   |        |  



|6. | 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.

Previously, under the terms of the Plan, the Class D units generally
began to vest on December 31 of the first full year following the date of grant, with 50% of the units typically vesting over a five year period (time based vesting) and 50% vesting over a five year period subject to the Company meeting certain
performance based criteria in each of those years (probability based vesting).

During the first quarter of 2010, the vesting
terms for the outstanding Class D units were modified. The outstanding units, along with the newly issued units, will now vest with time-based vesting over a three year period. This change did not have a significant impact on stock compensation
expense. In addition, certain units exercise prices were reduced to the fair market value of a Class A unit of Holdings.

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 as determined by the Company.

The fair value of the Class D units granted is based on the
Black-Scholes option-pricing model. In accordance with ASC Topic 718, 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
consisting of publicly-traded companies that operate in the Companys same industry.

Compensation expense related to
Class D units was $0.05 million and $0.14 million for the three and nine months ended September 30, 2010, respectively. This compares to compensation expense of $0.04 million and $0.12 million for the three and nine months ended
September 30, 2009, respectively. Because individuals receiving these Class D unit awards are employees of Norcraft, the compensation expense is recorded at the Norcraft level.

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



|                    |  |                                     |            |   |                                    |   |      | 
|------------------- |  | ----------------------------------- | ---------- | - | ---------------------------------- | - | ---- | 
|                    |  | Nine Months EndedSeptember 30,
2010 |           
|                    |  | Units                               |            |   | Weighted-AverageExercise Price (1) |  
|Beginning balance   |  |                                     | 4,727,220  |   |                                    | $ | 0.24 | 
|Granted             |  |                                     | 3,620,199  |   |                                    | $ | 0.35 | 
|Forfeited/expired   |  |                                     | (1,535,842 | ) |                                    | $ | 1.81 | 
|                    |  |                                     |            |   |                                    |   |      | 
|                    |  |                                    
|Ending balance      |  |                                     | 6,811,577  |   |                                    | $ | 0.26 | 
|                    |  |                                     |            |   |                                    |   |      | 
|                    |  |                                    
|Exercisable balance |  |                                     | 3,125,152  |   |                                    | $ | 0.13 | 
|                    |  |                                     |            |   |                                    |   |      | 



| | (1) | As modified.
| | --- | ------------

The
intrinsic values of the issued Class D units and exercisable Class D units at September 30, 2010 were $2.3 million and $1.4 million, respectively.

The Plan will terminate in December 2015.



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|7. | Long-term Debt
|-- | --------------

Long-term
debt consists of the following:



|                                                                                                   |  |                         |         |  |                          |   |         |                   |  |   |                  |  |  |   |         | 
|-------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- |  | ------------------------ | - | ------- | ----------------- |  | - | ---------------- |  |  | - | ------- | 
|                                                                                                   |  | Norcraft Holdings, L.P. |         |  | Norcraft Companies, L.P. |  
|                                                                                                   |  | September 30,2010       |         |  | December 31,2009         |   |         | September 30,2010 |  |   | December 31,2009 | 
|Senior secured second lien notes payable (due in 2015 with semi-annual interest payments at 10.5%) |  | $                       | 180,000 |  |                          | $ | 180,000 |                   |  | $ | 180,000          |  |  | $ | 180,000 | 
|Senior discount notes (due in 2012 with semi-annual interest payments at 9.75%)                    |  |                         | 53,700  |  |                          |   | 53,700  |                   |  |   |                 |  |  |   |        | 
|                                                                                                   |  |                         |         |  |                          |   |         |                   |  |   |                  |  |  |   |         | 
|Long term debt                                                                                     |  | $                       | 233,700 |  |                          | $ | 233,700 |                   |  | $ | 180,000          |  |  | $ | 180,000 | 
|                                                                                                   |  |                         |         |  |                          |   |         |                   |  |   |                  |  |  |   |         | 

We anticipate that the funds generated by operations and current available cash balances will be sufficient
to meet working capital requirements, make required member tax distributions and to finance capital expenditures over the next 12 to 18 months.

ABL Facility

In December 2009, in connection with the issuance of the
senior secured second lien notes, Norcraft entered into a new senior secured first-lien asset-based revolving credit facility (the ABL Facility) pursuant to a credit agreement dated as of December 9, 2009 (the ABL Credit
Agreement) by and among Norcraft, as borrower, Norcraft Intermediate Holdings, L.P. and other guarantors party thereto, as guarantors, the lenders party thereto and UBS Securities LLC, as arranger, bookmanager, documentation agent and
syndication agent, and UBS AG, Stamford Branch, as issuing bank, administrative agent and collateral agent and UBS Loan Finance LLC, as swingline lender. The ABL Facility provides for aggregate commitments of up to $25.0 million, subject to a
current borrowing base of approximately $18.1 million, less a letter of credit sub-facility and has a maturity date of December 9, 2013.

The ABL Credit Agreement contains restrictive covenants that limit the ability of Norcraft Intermediate Holdings, L.P. and its subsidiaries from (1) selling assets, (2) altering the business
that Norcraft currently conducts, (3) engaging in mergers, acquisitions and other business combinations, (4) declaring dividends or redeeming or repurchasing the Companys equity interests, (5) incurring additional debt or
guarantees, (6) making loans and investments, (7) incurring liens, (8) entering into transactions with affiliates, (9) engaging in sale and leaseback transactions and (10) prepaying the senior secured second lien notes, the
senior discount notes and any subordinated debt. As of September 30, 2010, the Company was in compliance with these provisions.

Indebtedness incurred pursuant to the ABL Credit Agreement will be guaranteed by Norcraft Intermediate Holdings, L.P., Norcraft Finance Corp., Norcraft Canada Corporation and all of Norcrafts
current and future subsidiaries, subject to exceptions for foreign subsidiaries to the extent of adverse tax consequences, and is secured by a first priority security interest in substantially all of Norcrafts and the guarantors existing
and future property and assets, including accounts receivable, inventory, equipment, general intangibles, intellectual property, investment property, other personal property, owned real property, cash and proceeds of the foregoing.

As of September 30, 2010, there were no borrowings outstanding under the ABL Facility; however, there were approximately $5.4 million
of letters of credit outstanding under the ABL Facility at September 30, 2010, and therefore, the Companys total availability under the ABL Facility as of September 30, 2010, was approximately $12.7 million.

The Company has no unused letters of credit.

Senior Secured Second Lien Notes

In December 2009,
Norcraft and Norcraft Finance Corp., a 100% owned finance subsidiary of Norcraft, issued, on a joint and several basis, $180.0 million aggregate principal amount of 10 1/2% senior secured second lien notes (the senior secured second
lien notes). Interest accrues on the senior secured second lien notes and is payable semiannually on June 15 and December 15 of each year at a rate of 10 1/2% per annum, which commenced on June 15, 2010. Proceeds from
these senior secured second lien notes were used to redeem the 9% senior subordinated notes due 2011 and to make a distribution to Holdings to allow Holdings to repurchase a portion of the 9 3/4% senior discount notes due 2012.



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At any time before
December 15, 2012, Norcraft may redeem up to 35% of the aggregate principal amount of the senior secured second lien notes issued under the indenture with the proceeds of qualified equity offerings at a redemption price equal to 110.5% of the
principal amount, plus accrued interest.

Norcraft may redeem the senior secured second lien notes, in whole or in part, at any
time on or after December 15, 2012, at a redemption price equal to 100% of the principal amount of the senior secured second lien notes plus a premium declining ratably to par plus accrued interest.

If Norcraft experiences a change of control, Norcraft may be required to offer to purchase the senior secured second lien notes at a
purchase price equal to 101% of the principal amount, plus accrued interest.

Prior to December 15, 2012, Norcraft may
redeem the senior secured second lien notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium plus accrued interest.

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 accrued on the senior discount notes in
the form of an increase in the accreted value of the note prior to September 1, 2008. Since that time, cash interest on the senior discount notes accrues and is payable semiannually in arrears on March 1 and September 1 of each year
at a rate of 9 3/4% per annum. The first cash
interest payment was made on March 1, 2009. In December 2009, $64.3 million of the senior discount notes were repurchased resulting in a loss from debt extinguishment of $1.6 million.

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.

If Holdings experiences a change in control, it may be
required 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. As of September 30, 2010, Holdings was in compliance with these provisions.

Holdings currently relies on distributions from Norcraft in order to pay cash interest on the senior discount notes. The indenture
governing the senior secured second lien notes significantly restricts Norcraft and its subsidiaries from paying dividends and otherwise transferring assets to Holdings. Under the terms of the indenture governing the senior secured second lien
notes, Norcraft may make distributions of up to $25.0 million in the aggregate to Holdings or Norcraft Intermediate Holdings, L.P. to pay interest and principal on the debt issued by them. In 2009 and during the first nine months of 2010, Norcraft
distributed approximately $15.7 million and $1.1 million, respectively, to Holdings to enable it to make cash interest payments on the senior discount notes. In addition, in December 2009, a portion of the net proceeds from the senior secured second
lien notes offering were distributed to Holdings to allow Holdings to repurchase $64.3 million principal amount of its senior discount notes. Norcraft expects to make regular distributions to Holdings, subject to certain limitations, to permit
Holdings to make further distributions to its equity holders to pay taxes on the Companys net income allocated to them.

The Company currently anticipates that the distributions permitted under the indenture governing the Companys senior secured second
lien notes will be sufficient to allow Holdings to make cash interest payments on the senior discount notes through September 2012. No assurances can be made that such amounts will be sufficient, however, and if Norcraft is not permitted to make
additional cash distributions to Holdings, Holdings will be required to raise additional proceeds through equity or debt financings in order to fund such obligations. Such financing may not be available on terms acceptable to the Company or at all.



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The following
represents certain condensed consolidating financial information as of September 30, 2010 and December 31, 2009 and for the periods ended September 30, 2010 and 2009 for the issuers and for Norcraft Canada Corporation, a wholly-owned
subsidiary of Norcraft, which fully and unconditionally guarantees the senior secured second lien notes. In addition, the terms and conditions of the senior secured second lien 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. The information presented follows the equity method of
accounting except for consolidated amounts.

CONDENSED CONSOLIDATING BALANCE SHEETS

As of September 30, 2010 (unaudited)



|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|--------------------------------------------- |  | -------------------------- | ------- | - | ------------------------- | - | - | -------------- |  | - | ------------ | - |  | ---------------------------------- | ------- | - | --------------------- | - | ------- | ------------ |  | - | --------------------------------- | - |  | - | ------- | - |  | - | ------- | -
|                                              |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |         |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Current assets                                |  | $                          | 66,422  |   |                           | $ |  |                |  | $ | 5,170        |   |  | $                                  |        |   |                       | $ | 71,592  |              |  | $ |                                  |   |  | $ |        |   |  | $ | 71,592  |  
|Property, plant & equipment, net              |  |                            | 24,252  |   |                           |   |  |                |  |   | 5,039        |   |  |                                    |        |   |                       |   | 29,291  |              |  |   |                                  |   |  |   |        |   |  |   | 29,291  |  
|Investments in subsidiary                     |  |                            | (1,551  | ) |                           |   |  |                |  |   |             |   |  |                                    | 1,551   |   |                       |   |        |              |  |   | 64,683                            |   |  |   | (64,683 | ) |  |   |        |  
|Other assets                                  |  |                            | 181,520 |   |                           |   |  |                |  |   | 213          |   |  |                                    | (10,246 | ) |                       |   | 171,487 |              |  |   | 415                               |   |  |   |        |   |  |   | 171,902 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|Total assets                                  |  | $                          | 270,643 |   |                           | $ |  |                |  | $ | 10,422       |   |  | $                                  | (8,695  | ) |                       | $ | 272,370 |              |  | $ | 65,098                            |   |  | $ | (64,683 | ) |  | $ | 272,785 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|                                              |  |                            |         |   |                           |   |   |               
|Current liabilities                           |  | $                          | 28,230  |   |                           | $ |  |                |  | $ | 1,727        |   |  | $                                  |        |   |                       | $ | 29,957  |              |  | $ | 436                               |   |  | $ |        |   |  | $ | 30,393  |  
|Long-term debt                                |  |                            | 180,000 |   |                           |   |  |                |  |   | 10,246       |   |  |                                    | (10,246 | ) |                       |   | 180,000 |              |  |   | 53,700                            |   |  |   |        |   |  |   | 233,700 |  
|Unamortized discount on bonds payable         |  |                            | (2,536  | ) |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   | (2,536  | )            |  |   |                                  |   |  |   |        |   |  |   | (2,536  | )
|Other liabilities                             |  |                            | 266     |   |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   | 266     |              |  |   |                                  |   |  |   |        |   |  |   | 266     |  
|Members equity subject to put request        |  |                            |        |   |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   |        |              |  |   | 12,555                            |   |  |   |        |   |  |   | 12,555  |  
|Members equity (deficit)                     |  |                            | 64,683  |   |                           |   |  |                |  |   | (1,551       | ) |  |                                    | 1,551   |   |                       |   | 64,683  |              |  |   | (1,593                            | ) |  |   | (64,683 | ) |  |   | (1,593  | )
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|Total liabilities & members equity (deficit) |  | $                          | 270,643 |   |                           | $ |  |                |  | $ | 10,422       |   |  | $                                  | (8,695  | ) |                       | $ | 272,370 |              |  | $ | 65,098                            |   |  | $ | (64,683 | ) |  | $ | 272,785 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|                                             
|As of December 31, 2009 (unaudited)           | 
|                                              |  |                            |         |   |                           |   |   |               
|                                              |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |         |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Current assets                                |  | $                          | 48,475  |   |                           | $ |  |                |  | $ | 4,252        |   |  | $                                  |        |   |                       | $ | 52,727  |              |  | $ | 4,132                             |   |  | $ |        |   |  | $ | 56,859  |  
|Property, plant & equipment, net              |  |                            | 27,148  |   |                           |   |  |                |  |   | 4,777        |   |  |                                    |        |   |                       |   | 31,925  |              |  |   |                                  |   |  |   |        |   |  |   | 31,925  |  
|Investments in subsidiary                     |  |                            | (1,529  | ) |                           |   |  |                |  |   |             |   |  |                                    | 1,529   |   |                       |   |        |              |  |   | 60,771                            |   |  |   | (60,771 | ) |  |   |        |  
|Other assets                                  |  |                            | 184,346 |   |                           |   |  |                |  |   | 213          |   |  |                                    | (9,334  | ) |                       |   | 175,225 |              |  |   | 575                               |   |  |   |        |   |  |   | 175,800 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|Total assets                                  |  | $                          | 258,440 |   |                           | $ |  |                |  | $ | 9,242        |   |  | $                                  | (7,805  | ) |                       | $ | 259,877 |              |  | $ | 65,478                            |   |  | $ | (60,771 | ) |  | $ | 264,584 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|                                              |  |                            |         |   |                           |   |   |               
|Current liabilities                           |  | $                          | 20,285  |   |                           | $ |  |                |  | $ | 1,437        |   |  | $                                  |        |   |                       | $ | 21,722  |              |  | $ | 1,745                             |   |  | $ |        |   |  | $ | 23,467  |  
|Long-term debt                                |  |                            | 180,000 |   |                           |   |  |                |  |   | 9,334        |   |  |                                    | (9,334  | ) |                       |   | 180,000 |              |  |   | 53,700                            |   |  |   |        |   |  |   | 233,700 |  
|Unamortized discount on bonds payable         |  |                            | (2,903  | ) |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   | (2,903  | )            |  |   |                                  |   |  |   |        |   |  |   | (2,903  | )
|Other liabilities                             |  |                            | 287     |   |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   | 287     |              |  |   |                                  |   |  |   |        |   |  |   | 287     |  
|Members equity subject to put request        |  |                            |        |   |                           |   |  |                |  |   |             |   |  |                                    |        |   |                       |   |        |              |  |   | 7,546                             |   |  |   |        |   |  |   | 7,546   |  
|Members equity (deficit)                     |  |                            | 60,771  |   |                           |   |  |                |  |   | (1,529       | ) |  |                                    | 1,529   |   |                       |   | 60,771  |              |  |   | 2,487                             |   |  |   | (60,771 | ) |  |   | 2,487   |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  
|Total liabilities & members equity (deficit) |  | $                          | 258,440 |   |                           | $ |  |                |  | $ | 9,242        |   |  | $                                  | (7,805  | ) |                       | $ | 259,877 |              |  | $ | 65,478                            |   |  | $ | (60,771 | ) |  | $ | 264,584 |  
|                                              |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |         |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |         |  



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



12



---

##### Table of Contents



CONDENSED
CONSOLIDATING OPERATIONS STATEMENTS

For the Three Months Ended September 30, 2010 (unaudited)



|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|--------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | - | - | -------------- |  | - | ------------ | - |  | ---------------------------------- | ---- | - | --------------------- | - | ------ | ------------ |  | - | --------------------------------- |  |  | - | ------ | - |  | - | ------ | 
|                                                          |  | NorcraftCompanies,L.P. (1) |        |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |      |   | NorcraftHoldings,L.P. |   |        | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. | 
|Net sales                                                 |  | $                          | 61,563 |   |                           | $ |  |                |  | $ | 4,967        |   |  | $                                  | (593 | ) |                       | $ | 65,937 |              |  | $ |                                  |  |  | $ |       |   |  | $ | 65,937 | 
|Cost of sales                                             |  |                            | 42,834 |   |                           |   |  |                |  |   | 4,290        |   |  |                                    | (593 | ) |                       |   | 46,531 |              |  |   |                                  |  |  |   |       |   |  |   | 46,531 | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Gross profit                                              |  |                            | 18,729 |   |                           |   |  |                |  |   | 677          |   |  |                                    |     |   |                       |   | 19,406 |              |  |   |                                  |  |  |   |       |   |  |   | 19,406 | 
|Equity in earnings (losses) of subsidiary                 |  |                            | (75    | ) |                           |   |  |                |  |   |             |   |  |                                    | 75   |   |                       |   |       |              |  |   | 1,710                             |  |  |   | (1,710 | ) |  |   |       | 
|Selling, general and administrative expenses              |  |                            | 11,548 |   |                           |   |  |                |  |   | 730          |   |  |                                    |     |   |                       |   | 12,278 |              |  |   |                                  |  |  |   |       |   |  |   | 12,278 | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Income (loss) from operations                             |  |                            | 7,106  |   |                           |   |  |                |  |   | (53          | ) |  |                                    | 75   |   |                       |   | 7,128  |              |  |   | 1,710                             |  |  |   | (1,710 | ) |  |   | 7,128  | 
|Other expense (income):                                   |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Interest expense, net                                     |  |                            | 5,006  |   |                           |   |  |                |  |   | 20           |   |  |                                    |     |   |                       |   | 5,026  |              |  |   | 1,309                             |  |  |   |       |   |  |   | 6,335  | 
|Amortization of deferred financing costs                  |  |                            | 374    |   |                           |   |  |                |  |   |             |   |  |                                    |     |   |                       |   | 374    |              |  |   | 53                                |  |  |   |       |   |  |   | 427    | 
|Other, net                                                |  |                            | 16     |   |                           |   |  |                |  |   | 2            |   |  |                                    |     |   |                       |   | 18     |              |  |   |                                  |  |  |   |       |   |  |   | 18     | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Total other expense, net                                  |  |                            | 5,396  |   |                           |   |  |                |  |   | 22           |   |  |                                    |     |   |                       |   | 5,418  |              |  |   | 1,362                             |  |  |   |       |   |  |   | 6,780  | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Net income (loss)                                         |  | $                          | 1,710  |   |                           | $ |  |                |  | $ | (75          | ) |  | $                                  | 75   |   |                       | $ | 1,710  |              |  | $ | 348                               |  |  | $ | (1,710 | ) |  | $ | 348    | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|                                                         
|For the Three Months Ended September 30, 2009 (unaudited) | 
|                                                          |  |                            |        |   |                           |   |   |               
|                                                          |  | NorcraftCompanies,L.P. (1) |        |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |      |   | NorcraftHoldings,L.P. |   |        | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. | 
|Net sales                                                 |  | $                          | 61,285 |   |                           | $ |  |                |  | $ | 4,132        |   |  | $                                  | (745 | ) |                       | $ | 64,672 |              |  | $ |                                  |  |  | $ |       |   |  | $ | 64,672 | 
|Cost of sales                                             |  |                            | 41,502 |   |                           |   |  |                |  |   | 3,630        |   |  |                                    | (745 | ) |                       |   | 44,387 |              |  |   |                                  |  |  |   |       |   |  |   | 44,387 | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Gross profit                                              |  |                            | 19,783 |   |                           |   |  |                |  |   | 502          |   |  |                                    |     |   |                       |   | 20,285 |              |  |   |                                  |  |  |   |       |   |  |   | 20,285 | 
|Equity in earnings (losses) of subsidiary                 |  |                            | 1      |   |                           |   |  |                |  |   |             |   |  |                                    | (1   | ) |                       |   |       |              |  |   | 4,719                             |  |  |   | (4,719 | ) |  |   |       | 
|Selling, general and administrative expenses              |  |                            | 11,444 |   |                           |   |  |                |  |   | 496          |   |  |                                    |     |   |                       |   | 11,940 |              |  |   |                                  |  |  |   |       |   |  |   | 11,940 | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Income (loss) from operations                             |  |                            | 8,340  |   |                           |   |  |                |  |   | 6            |   |  |                                    | (1   | ) |                       |   | 8,345  |              |  |   | 4,719                             |  |  |   | (4,719 | ) |  |   | 8,345  | 
|Other expense (income):                                   |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Interest expense, net                                     |  |                            | 3,422  |   |                           |   |  |                |  |   | 7            |   |  |                                    |     |   |                       |   | 3,429  |              |  |   | 2,886                             |  |  |   |       |   |  |   | 6,315  | 
|Amortization of deferred financing costs                  |  |                            | 169    |   |                           |   |  |                |  |   |             |   |  |                                    |     |   |                       |   | 169    |              |  |   | 120                               |  |  |   |       |   |  |   | 289    | 
|Other, net                                                |  |                            | 30     |   |                           |   |  |                |  |   | (2           | ) |  |                                    |     |   |                       |   | 28     |              |  |   |                                  |  |  |   |       |   |  |   | 28     | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Total other expense, net                                  |  |                            | 3,621  |   |                           |   |  |                |  |   | 5            |   |  |                                    |     |   |                       |   | 3,626  |              |  |   | 3,006                             |  |  |   |       |   |  |   | 6,632  | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 
|Net income (loss)                                         |  | $                          | 4,719  |   |                           | $ |  |                |  | $ | 1            |   |  | $                                  | (1   | ) |                       | $ | 4,719  |              |  | $ | 1,713                             |  |  | $ | (4,719 | ) |  | $ | 1,713  | 
|                                                          |  |                            |        |   |                           |   |   |                |  |   |              |   |  |                                    |      |   |                       |   |        |              |  |   |                                   |  |  |   |        |   |  |   |        | 



13



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##### Table of Contents



CONDENSED
CONSOLIDATING OPERATIONS STATEMENTS

For the Nine Months Ended September 30, 2010 (unaudited)



|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------- | - | - | -------------- |  | - | ------------ | - |  | ---------------------------------- | ------ | - | --------------------- | - | ------- | ------------ |  | - | --------------------------------- | - |  | - | ------ | - |  | - | ------- | -
|                                                         |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |        |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Net sales                                                |  | $                          | 189,161 |   |                           | $ |  |                |  | $ | 14,817       |   |  | $                                  | (2,101 | ) |                       | $ | 201,877 |              |  | $ |                                  |   |  | $ |       |   |  | $ | 201,877 |  
|Cost of sales                                            |  |                            | 131,679 |   |                           |   |  |                |  |   | 12,891       |   |  |                                    | (2,101 | ) |                       |   | 142,469 |              |  |   |                                  |   |  |   |       |   |  |   | 142,469 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Gross profit                                             |  |                            | 57,482  |   |                           |   |  |                |  |   | 1,926        |   |  |                                    |       |   |                       |   | 59,408  |              |  |   |                                  |   |  |   |       |   |  |   | 59,408  |  
|Equity in earnings (losses) of subsidiary                |  |                            | (31     | ) |                           |   |  |                |  |   |             |   |  |                                    | 31     |   |                       |   |        |              |  |   | 4,744                             |   |  |   | (4,744 | ) |  |   |        |  
|Selling, general and administrative expenses             |  |                            | 36,549  |   |                           |   |  |                |  |   | 1,919        |   |  |                                    |       |   |                       |   | 38,468  |              |  |   |                                  |   |  |   |       |   |  |   | 38,468  |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Income (loss) from operations                            |  |                            | 20,902  |   |                           |   |  |                |  |   | 7            |   |  |                                    | 31     |   |                       |   | 20,940  |              |  |   | 4,744                             |   |  |   | (4,744 | ) |  |   | 20,940  |  
|Other expense (income):                                  |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Interest expense, net                                    |  |                            | 15,038  |   |                           |   |  |                |  |   | 39           |   |  |                                    |       |   |                       |   | 15,077  |              |  |   | 3,927                             |   |  |   |       |   |  |   | 19,004  |  
|Amortization of deferred financing costs                 |  |                            | 1,028   |   |                           |   |  |                |  |   |             |   |  |                                    |       |   |                       |   | 1,028   |              |  |   | 160                               |   |  |   |       |   |  |   | 1,188   |  
|Other, net                                               |  |                            | 92      |   |                           |   |  |                |  |   | (1           | ) |  |                                    |       |   |                       |   | 91      |              |  |   |                                  |   |  |   |       |   |  |   | 91      |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Total other expense, net                                 |  |                            | 16,158  |   |                           |   |  |                |  |   | 38           |   |  |                                    |       |   |                       |   | 16,196  |              |  |   | 4,087                             |   |  |   |       |   |  |   | 20,283  |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Net income (loss)                                        |  | $                          | 4,744   |   |                           | $ |  |                |  | $ | (31          | ) |  | $                                  | 31     |   |                       | $ | 4,744   |              |  | $ | 657                               |   |  | $ | (4,744 | ) |  | $ | 657     |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|                                                        
|For the Nine Months Ended September 30, 2009 (unaudited) | 
|                                                         |  |                            |         |   |                           |   |   |               
|                                                         |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |        |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Net sales                                                |  | $                          | 179,880 |   |                           | $ |  |                |  | $ | 9,345        |   |  | $                                  | (2,348 | ) |                       | $ | 186,877 |              |  | $ |                                  |   |  | $ |       |   |  | $ | 186,877 |  
|Cost of sales                                            |  |                            | 126,897 |   |                           |   |  |                |  |   | 8,606        |   |  |                                    | (2,348 | ) |                       |   | 133,155 |              |  |   |                                  |   |  |   |       |   |  |   | 133,155 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Gross profit                                             |  |                            | 52,983  |   |                           |   |  |                |  |   | 739          |   |  |                                    |       |   |                       |   | 53,722  |              |  |   |                                  |   |  |   |       |   |  |   | 53,722  |  
|Equity in earnings (losses) of subsidiary                |  |                            | (502    | ) |                           |   |  |                |  |   |             |   |  |                                    | 502    |   |                       |   |        |              |  |   | 4,800                             |   |  |   | (4,800 | ) |  |   |        |  
|Selling, general and administrative expenses             |  |                            | 35,873  |   |                           |   |  |                |  |   | 1,232        |   |  |                                    |       |   |                       |   | 37,105  |              |  |   |                                  |   |  |   |       |   |  |   | 37,105  |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Income (loss) from operations                            |  |                            | 16,608  |   |                           |   |  |                |  |   | (493         | ) |  |                                    | 502    |   |                       |   | 16,617  |              |  |   | 4,800                             |   |  |   | (4,800 | ) |  |   | 16,617  |  
|Other expense (income):                                  |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Interest expense, net                                    |  |                            | 10,306  |   |                           |   |  |                |  |   | 13           |   |  |                                    |       |   |                       |   | 10,319  |              |  |   | 8,658                             |   |  |   |       |   |  |   | 18,977  |  
|Amortization of deferred financing costs                 |  |                            | 1,402   |   |                           |   |  |                |  |   |             |   |  |                                    |       |   |                       |   | 1,402   |              |  |   | 359                               |   |  |   |       |   |  |   | 1,761   |  
|Other, net                                               |  |                            | 100     |   |                           |   |  |                |  |   | (4           | ) |  |                                    |       |   |                       |   | 96      |              |  |   |                                  |   |  |   |       |   |  |   | 96      |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Total other expense, net                                 |  |                            | 11,808  |   |                           |   |  |                |  |   | 9            |   |  |                                    |       |   |                       |   | 11,817  |              |  |   | 9,017                             |   |  |   |       |   |  |   | 20,834  |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  
|Net income (loss)                                        |  | $                          | 4,800   |   |                           | $ |  |                |  | $ | (502         | ) |  | $                                  | 502    |   |                       | $ | 4,800   |              |  | $ | (4,217                            | ) |  | $ | (4,800 | ) |  | $ | (4,217  | )
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |        |   |  |   |         |  



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CONDENSED
CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2010 (unaudited)



|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|-------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------- | - | - | -------------- |  | - | ------------ | - |  | ---------------------------------- | ------ | - | --------------------- | - | ------- | ------------ |  | - | --------------------------------- | - |  | - | ------- | - |  | - | ------ | -
|                                                         |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |        |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Cash flows provided by (used in) operating activities    |  | $                          | 20,268  |   |                           | $ |  |                |  | $ | (399         | ) |  | $                                  |       |   |                       | $ | 19,869  |              |  | $ | (4,257                            | ) |  | $ | (979    | ) |  | $ | 14,633 |  
|Cash flows provided by (used in) investing activities    |  |                            | (4,962  | ) |                           |   |  |                |  |   | (902         | ) |  |                                    | 912    |   |                       |   | (4,952  | )            |  |   |                                  |   |  |   |        |   |  |   | (4,952 | )
|Cash flows provided by (used in) financing activities    |  |                            | (1,816  | ) |                           |   |  |                |  |   | 912          |   |  |                                    | (912   | ) |                       |   | (1,816  | )            |  |   | 125                               |   |  |   | 979     |   |  |   | (712   | )
|Effect of exchange rates on cash                         |  |                            |        |   |                           |   |  |                |  |   | 2            |   |  |                                    |       |   |                       |   | 2       |              |  |   |                                  |   |  |   |        |   |  |   | 2      |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents     |  |                            | 13,490  |   |                           |   |  |                |  |   | (387         | ) |  |                                    |       |   |                       |   | 13,103  |              |  |   | (4,132                            | ) |  |   |        |   |  |   | 8,971  |  
|Cash and cash equivalents, beginning of period           |  |                            | 15,791  |   |                           |   |  |                |  |   | 940          |   |  |                                    |       |   |                       |   | 16,731  |              |  |   | 4,132                             |   |  |   |        |   |  |   | 20,863 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|Cash and cash equivalents, end of period                 |  | $                          | 29,281  |   |                           | $ |  |                |  | $ | 553          |   |  | $                                  |       |   |                       | $ | 29,834  |              |  | $ |                                  |   |  | $ |        |   |  | $ | 29,834 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|                                                        
|For the Nine Months Ended September 30, 2009 (unaudited) | 
|                                                         |  |                            |         |   |                           |   |   |               
|                                                         |  | NorcraftCompanies,L.P. (1) |         |   | NorcraftFinanceCorp. 
(1) |   |   | NorcraftCanada |  |   | Eliminations |   |  | ConsolidatedNorcraftCompanies,L.P. |        |   | NorcraftHoldings,L.P. |   |         | Eliminations |  |   | ConsolidatedNorcraftHoldings,L.P. |  
|Cash flows provided by (used in) operating activities    |  | $                          | 23,257  |   |                           | $ |  |                |  | $ | (1,073       | ) |  | $                                  |       |   |                       | $ | 22,184  |              |  | $ | 4,703                             |   |  | $ | (16,237 | ) |  | $ | 10,650 |  
|Cash flows provided by (used in) investing activities    |  |                            | (6,257  | ) |                           |   |  |                |  |   | (560         | ) |  |                                    | 2,164  |   |                       |   | (4,653  | )            |  |   |                                  |   |  |   |        |   |  |   | (4,653 | )
|Cash flows provided by (used in) financing activities    |  |                            | (21,855 | ) |                           |   |  |                |  |   | 2,164        |   |  |                                    | (2,164 | ) |                       |   | (21,855 | )            |  |   | (455                              | ) |  |   | 16,237  |   |  |   | (6,073 | )
|Effect of exchange rates on cash                         |  |                            |        |   |                           |   |  |                |  |   | 26           |   |  |                                    |       |   |                       |   | 26      |              |  |   |                                  |   |  |   |        |   |  |   | 26     |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|Net increase (decrease) in cash and cash equivalents     |  |                            | (4,855  | ) |                           |   |  |                |  |   | 557          |   |  |                                    |       |   |                       |   | (4,298  | )            |  |   | 4,248                             |   |  |   |        |   |  |   | (50    | )
|Cash and cash equivalents, beginning of period           |  |                            | 59,366  |   |                           |   |  |                |  |   | 40           |   |  |                                    |       |   |                       |   | 59,406  |              |  |   |                                  |   |  |   |        |   |  |   | 59,406 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  
|Cash and cash equivalents, end of period                 |  | $                          | 54,511  |   |                           | $ |  |                |  | $ | 597          |   |  | $                                  |       |   |                       | $ | 55,108  |              |  | $ | 4,248                             |   |  | $ |        |   |  | $ | 59,356 |  
|                                                         |  |                            |         |   |                           |   |   |                |  |   |              |   |  |                                    |        |   |                       |   |         |              |  |   |                                   |   |  |   |         |   |  |   |        |  



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



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|8. | Accounting Changes
|-- | ------------------

In
January 2010, the FASB issued Accounting Standards Update (ASU) 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements, amending ASC 820. ASU 2010-06 requires entities to
provide new disclosures and clarify existing disclosures relating to fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after
December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within
those fiscal years. The adoption of ASU 2010-06 had no current impact and is expected to have no subsequent impact on the consolidated financial statements.

In February 2010, the FASB issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements. The amendments to the FASB Accounting Standards Codification (ASC)
855, Subsequent Events, no longer requires SEC filers to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and did not have a material
effect on the Companys consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20, Disclosures
about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 requires additional disclosures to provide financial statement users with greater transparency about an entitys allowance for credit losses
and the credit quality of its financing receivables. The new disclosures are effective for interim and annual reporting periods beginning after December 15, 2010 and for interim periods within those fiscal years. ASU 2010-20 is not expected to
have a material effect on the Companys consolidated financial statements.



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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.

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 2009 Annual Report on Form 10-K. All of our
operations are conducted through Norcraft Companies, L.P. (Norcraft) and its subsidiaries. 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 and its subsidiaries.

We are a leader in
manufacturing, assembling and finishing kitchen and bathroom cabinetry in the U.S. We provide our customers with a single source for a broad range of high-quality cabinetry, including stock, semi-custom and custom cabinets manufactured in both
framed and frameless, or full access construction. We market our products through six brands: Mid Continent
CabinetryTM, Norcraft Cabinetry®, UltraCraft®, StarMark Cabinetry®,
FieldstoneTMand Brookwood®. The Mid Continent and Norcraft brands correspond to the Mid Continent division, while the UltraCraft brand
corresponds to that division and the StarMark, Fieldstone and Brookwood brands correspond to the StarMark division. Additionally, our Winnipeg, Canada facility sells cabinets into the Canadian market under the Norcraft Canada brand.

During the three and nine months ended September 30, 2010, the number of incoming orders has slightly improved relative to the three and nine months
ended September 30, 2009, however, overall demand remains below pre-recession levels. In addition, we had fewer incoming orders in the third quarter of 2010 as compared to the second quarter of 2010. We believe that this could be due to the
first-time home-buyers tax credit, which may have resulted in the acceleration of some of our orders (i.e., moving them from the latter part of the year to the earlier part of the year).



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Results of Operations

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



|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|-------------------------------------------- |  | ------------------------------- | ----- | - | ------------------------------ |  | ----- | ---- |  |  | ----- | - |  |  | ----- | --
|                                             |  | Norcraft Holdings, L.P.         |      
|                                             |  | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, | 
|                                             |  | 2010                            |       |   | 2009                           |  |       | 2010 |  |  | 2009  |  
|                                             |  |                                 |       |  
|Net sales                                    |  |                                 | 100.0 | % |                                |  | 100.0 | %    |  |  | 100.0 | % |  |  | 100.0 | % 
|Cost of sales                                |  |                                 | 70.6  | % |                                |  | 68.6  | %    |  |  | 70.6  | % |  |  | 71.2  | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Gross profit                                 |  |                                 | 29.4  | % |                                |  | 31.4  | %    |  |  | 29.4  | % |  |  | 28.8  | % 
|Selling, general and administrative expenses |  |                                 | 18.6  | % |                                |  | 18.5  | %    |  |  | 19.1  | % |  |  | 19.9  | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Income from operations                       |  |                                 | 10.8  | % |                                |  | 12.9  | %    |  |  | 10.3  | % |  |  | 8.9   | % 
|                                             |  |                                 |       |  
|Interest expense, net                        |  |                                 | 9.6   | % |                                |  | 9.8   | %    |  |  | 9.4   | % |  |  | 10.2  | % 
|Amortization of deferred financing costs     |  |                                 | 0.7   | % |                                |  | 0.5   | %    |  |  | 0.6   | % |  |  | 0.9   | % 
|Other, net                                   |  |                                 | 0.0   | % |                                |  | 0.0   | %    |  |  | 0.0   | % |  |  | 0.1   | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Net income (loss)                            |  |                                 | 0.5   | % |                                |  | 2.6   | %    |  |  | 0.3   | % |  |  | (2.3  | )%
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|                                             | 
|                                             |  | Norcraft Companies, L.P.        |      
|                                             |  | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, | 
|                                             |  | 2010                            |       |   | 2009                           |  |       | 2010 |  |  | 2009  |  
|                                             |  |                                 |       |  
|Net sales                                    |  |                                 | 100.0 | % |                                |  | 100.0 | %    |  |  | 100.0 | % |  |  | 100.0 | % 
|Cost of sales                                |  |                                 | 70.6  | % |                                |  | 68.6  | %    |  |  | 70.6  | % |  |  | 71.2  | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Gross profit                                 |  |                                 | 29.4  | % |                                |  | 31.4  | %    |  |  | 29.4  | % |  |  | 28.8  | % 
|Selling, general and administrative expenses |  |                                 | 18.6  | % |                                |  | 18.5  | %    |  |  | 19.1  | % |  |  | 19.9  | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Income from operations                       |  |                                 | 10.8  | % |                                |  | 12.9  | %    |  |  | 10.3  | % |  |  | 8.9   | % 
|                                             |  |                                 |       |  
|Interest expense, net                        |  |                                 | 7.6   | % |                                |  | 5.3   | %    |  |  | 7.5   | % |  |  | 5.5   | % 
|Amortization of deferred financing costs     |  |                                 | 0.6   | % |                                |  | 0.3   | %    |  |  | 0.5   | % |  |  | 0.7   | % 
|Other, net                                   |  |                                 | 0.0   | % |                                |  | 0.0   | %    |  |  | 0.0   | % |  |  | 0.1   | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   
|Net income                                   |  |                                 | 2.6   | % |                                |  | 7.3   | %    |  |  | 2.3   | % |  |  | 2.6   | % 
|                                             |  |                                 |       |   |                                |  |       |      |  |  |       |   |  |  |       |   

Three Months Ended September 30, 2010 Compared with Three Months Ended September 30, 2009

Net Sales. Net sales increased by $1.2 million, or 2.0%, from $64.7 million for the three months ended September 30, 2009 to $65.9 million for
the same period of 2010. This growth was attributable to the UltraCraft division and the Winnipeg, Canada facility while there were decreases in net sales in the Mid Continent and StarMark divisions. The increase in sales was driven by an increase
in the Companys market share.

Cost of Sales. Cost of sales increased by $2.1 million, or 4.8%, from $44.4 million for the three
months ended September 30, 2009 to $46.5 million for same period of 2010. This increase was attributable to a sales and use tax refund in the amount of $1.1 million during the three months ended September 30, 2009 and due to our increased
sales volume for the three months ended September 30, 2010. Cost of sales as a percentage of net sales increased from 68.6% for the three months ended September 30, 2009 to 70.6% for the same period of 2010.

Gross Profit. Gross profit decreased by $0.9 million, or 4.3%, from $20.3 million for the three months ended September 30, 2009 to $19.4
million for the same period of 2010. Gross profit as a percentage of net sales decreased from 31.4% for the three months ended September 30, 2009 to 29.4% for the same period of 2010.



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Selling, General and Administrative
Expenses. Selling, general and administrative expenses increased by $0.3 million, or 2.8%, from $12.0 million for the three months ended September 30, 2009 to $12.3 million for the same period of 2010. Selling, general and administrative
expenses were higher than the prior-year period because of increased sales and marketing expense to generate new customers, market our new products and support our increased sales volume. The remaining increase in selling, general and administrative
expenses was in finance costs that indirectly support our increased sales volume along with increased compensation incentives. Selling, general and administrative expenses as a percentage of net sales increased from 18.5% for the three months ended
September 30, 2009 to 18.6% for the same period of 2010.

Income from Operations.Income from operations decreased by $1.2
million, or 14.6%, from $8.3 million for the three months ended September 30, 2009 compared to $7.1 million for the same period of 2010. The decrease in income from operations was a result of factors described above. Income from operations as a
percentage of net sales decreased from 12.9% for the three months ended September 30, 2009 to 10.8% for the same period of 2010.

Interest, Amortization of Deferred Financing Fees and Other Expenses. Holdings consolidated interest, amortization of deferred financing
fees and other expenses increased by $0.2 million, or 2.2%, from $6.6 million for the three months ended September 30, 2009 to $6.8 million for the same period of 2010. This increase was mainly attributable to the increase in the amortization
of deferred financing fees due to the change in indebtedness as described in Note 7. Interest, amortization of deferred financing fees and other expenses for Holdings as a percentage of net sales was flat at 10.3% for the three months ended
September 30, 2009 and 2010.

Interest, amortization of deferred financing fees and other expenses increased for Norcraft by $1.8
million, or 49.4%, from $3.6 million for the three months ended September 30, 2009 to $5.4 million for the same period of 2010. This increase was mainly the result of an increase in interest expense for Norcraft of $1.6 million from $3.4
million for the three months ended September 30, 2009 to $5.0 million for the same period of 2010 due to the change in indebtedness as described in Note 7. Interest, amortization of deferred financing fees and other expenses for Norcraft as a
percentage of net sales increased from 5.6% for the three months ended September 30, 2009 to 8.2% for the same period of 2010.

Net
Income. Holdings net income decreased by $1.4 million from $1.7 million for the three months ended September 30, 2009 compared to $0.3 million for the same period of 2010, for the reasons described above. Net income as a percentage of
net sales for Holdings decreased from 2.6% for the three months ended September 30, 2009 to 0.5% for the same period of 2010.

Norcrafts net income decreased $3.0 million from $4.7 million for the three months ended September 30, 2009 compared to $1.7 million for the
same period of 2010, for the reasons described above. Net income as a percentage of net sales for Norcraft decreased from 7.3% for the three months ended September 30, 2009 to 2.6% for the same period of 2010.

Nine Months Ended September 30, 2010 Compared with Nine Months Ended September 30, 2009

Net Sales. Net sales increased by $15.0 million, or 8.0%, from $186.9 million for the nine months ended September 30, 2009 to $201.9 million
for the same period of 2010. Each division contributed to growth in net sales with UltraCraft and the Winnipeg, Canada facility each making up over one-third of the overall increase, Mid Continent making up nearly a quarter and StarMark making up
the remainder. The increase in sales was driven by an increase in the Companys market share.

Cost of Sales. Cost of sales
increased by $9.3 million, or 7.0%, from $133.2 million for the nine months ended September 30, 2009 to $142.5 million for same period of 2010. The increase was primarily attributable to our increased sales volume. Cost of sales as a percentage
of net sales decreased from 71.2% for the nine months ended September 30, 2009 to 70.6% for the same period of 2010. Cost of sales was positively impacted by a sales and use tax refund in the amount of $1.1 million and $1.0 million during the
nine months ended September 30, 2009 and 2010, respectively. Also, cost reductions and commodity pricing had a positive impact on gross profit margins.

Gross Profit. Gross profit increased by $5.7 million, or 10.6%, from $53.7 million for the nine months ended September 30, 2009 to $59.4 million for the same period of 2010. Gross profit as a
percentage of net sales increased from 28.8% for the nine months ended September 30, 2009 to 29.4% for the same period of 2010.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $1.4 million, or 3.7%, from $37.1 million
for the nine months ended September 30, 2009 to $38.5 million for the same period of 2010. Selling, general and administrative expenses were higher than the prior-year period because of increased administrative and finance expenses mainly
related to compensation incentives. Selling, general and administrative expenses as a percentage of net sales decreased from 19.9% for the nine months ended September 30, 2009 to 19.1% for the same period of 2010.



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Income from Operations.Income
from operations increased by $4.3 million, or 26.0%, from $16.6 million for the nine months ended September 30, 2009 compared to $20.9 million for the same period of 2010. The increase in income from operations was a result of factors described
above. Income from operations as a percentage of net sales increased from 8.9% for the nine months ended September 30, 2009 to 10.3% for the same period of 2010.

Interest, Amortization of Deferred Financing Fees and Other Expenses. Holdings consolidated interest, amortization of deferred financing fees and other expenses decreased by $0.6 million, or
2.6%, from $20.8 million for the nine months ended September 30, 2009 to $20.2 million for the same period of 2010. Amortization of deferred financing charges decreased by $0.6 million mostly related to the termination of our senior secured
credit facility during the first quarter of 2009. Interest, amortization of deferred financing fees and other expenses for Holdings as a percentage of net sales decreased from 11.2% for the nine months ended September 30, 2009 to 10.0% for the
same period of 2010.

Interest, amortization of deferred financing fees and other expenses increased for Norcraft by $4.4 million, or 37.1%,
from $11.8 million for the nine months ended September 30, 2009 to $16.2 million for the same period of 2010. This increase was the result of an increase in interest expense for Norcraft of $4.8 million from $10.3 million for the nine months
ended September 30, 2009 to $15.1 million for the same period of 2010 due to the change in indebtedness as described in Note 7. Interest, amortization of deferred financing fees and other expenses for Norcraft as a percentage of net sales
increased from 6.3% for the nine months ended September 30, 2009 to 8.0% for the same period of 2010.

Net Income (Loss).
Holdings net income (loss) increased by $4.9 million from a net loss of $4.2 million for the nine months ended September 30, 2009 compared to net income of $0.7 million for the same period of 2010, for the reasons described above. Net
income (loss) as a percentage of net sales for Holdings increased from (2.3)% for the nine months ended September 30, 2010 to 0.3% for the same period of 2010.

Norcrafts net income decreased $0.1 million from $4.8 million for the nine months ended September 30, 2009 compared to $4.7 million for the same period of 2010, for the reasons described above.
Net income as a percentage of net sales for Norcraft decreased from 2.6% for the nine months ended September 30, 2009 to 2.3% for the same period of 2010.

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.

Cash provided by operating activities of Holdings was $14.6 million for the nine
months ended September 30, 2010, compared with $10.7 million for the same period of 2009, an increase of $3.9 million. The increase was primarily due to an increase in net income (loss) of $4.9 million as discussed above and a $6.6 million
change in operating liabilities offset by a $5.5 million change in operating assets and $1.5 million of lower amortization costs for deferred financing and display cabinets.

Cash provided by operating activities of Norcraft was $19.9 million for the nine months ended September 30, 2010, compared with $22.2 million for the same period of 2009, a decrease of $2.3 million.
The decrease was primarily due to a $5.5 million change in operating assets and $1.3 million of lower amortization costs for deferred financing and display cabinets offset by an increase in net income (loss) of $0.1 million as discussed above and a
$5.1 million change in operating liabilities.

Cash used in investing activities was $5.0 million for the nine months ended September 30,
2010, compared with $4.7 million for the same period of 2009, an increase of $0.3 million. Capital expenditures were $2.0 million for the nine months ended September 30, 2010, compared with $1.8 million for the same period of 2009, an increase
of $0.2 million. Also, additions to display cabinets were $3.0 million for the nine months ended September 30, 2010, compared with $2.9 million for the same period of 2009, an increase of $0.1 million.

Cash used in financing activities of Holdings was $0.7 million for the nine months ended September 30, 2010, compared with $6.1 million used in the
same period of 2009, a decrease of $5.4 million. This decrease was mainly due to a transfer of restricted cash of $5.6 million during 2009.

Cash used in financing activities of Norcraft was $1.8 million for the nine months ended September 30, 2010, compared with $21.8 million used in the
same period of 2009, a decrease of $20.0 million. This decrease was mainly due to lower distributions to members of $15.1 million and a transfer of restricted cash of $5.6 million during 2009.



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We and our subsidiaries have from time
to time repurchased certain of our debt obligations and may in the future, as part of various financing and investment strategies we may elect to pursue, purchase additional outstanding indebtedness of ours or our subsidiaries or outstanding equity
securities of Holdings, in tender offers, open market purchases, privately negotiated transactions or otherwise. We may also sell certain assets or properties and use the proceeds to reduce our indebtedness or the indebtedness of our subsidiaries.
These purchases or sales, if any, could have a material positive or negative impact on our liquidity available to repay outstanding debt obligations or on our consolidated results of operations. These transactions could also require or result in
amendments to the agreements governing outstanding debt obligations or changes in our leverage or other financial ratios, which could have a material positive or negative impact on our ability to comply with the covenants contained in our debt
agreements. These transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Debt Structure

ABL
Facility. In December 2009, in connection with issuance of the senior secured second lien notes, Norcraft entered into a new senior secured first-lien asset-based revolving credit facility, or the ABL facility pursuant to a Credit Agreement
dated as of December 9, 2009, or the ABL credit agreement, by and among Norcraft, as borrower, Norcraft Intermediate Holdings, L.P. and other guarantors party thereto, as guarantors, the lenders party thereto and UBS Securities LLC, as
arranger, bookmanager, documentation agent and syndication agent, and UBS AG, Stamford Branch, as issuing bank, administrative agent and collateral agent and UBS Loan Finance LLC, as swingline lender. The ABL facility provides for aggregate
commitments of up to $25.0 million subject to a current borrowing base of approximately $18.1 million, including a letter of credit sub-facility and has a maturity date of December 9, 2013.

The ABL credit agreement contains restrictive covenants that limit the ability of Norcraft Intermediate Holdings, L.P. and its subsidiaries from
(1) selling assets, (2) altering the business that Norcraft currently conducts, (3) engaging in mergers, acquisitions and other business combinations, (4) declaring dividends or redeeming or repurchasing our equity interests,
(5) incurring additional debt or guarantees, (6) making loans and investments, (7) incurring liens, (8) entering into transactions with affiliates, (9) engaging in sale and leaseback transactions and (10) prepaying the
senior secured second lien notes, the senior discount notes and any subordinated debt.

Indebtedness incurred pursuant to the ABL credit
agreement will be guaranteed by Norcraft Intermediate Holdings, L.P., Norcraft Finance Corp., Norcraft Canada Corporation and all of Norcrafts current and future subsidiaries, subject to exceptions for foreign subsidiaries to the extent of
adverse tax consequences, and is secured by a first priority security interest in substantially all of Norcrafts and the guarantors existing and future property and assets, including accounts receivable, inventory, equipment, general
intangibles, intellectual property, investment property, other personal property, owned real property, cash and proceeds of the foregoing.

As
of September 30, 2010, there were no borrowings outstanding under the ABL facility; however, there were approximately $5.4 million of letters of credit outstanding under the ABL facility at September 30, 2010, and therefore, our total
availability under the ABL facility as of September 30, 2010, was approximately $12.7 million.

We and our subsidiaries have no unused
letters of credit.

Senior Secured Second Lien Notes. In December 2009, Norcraft and Norcraft Finance Corp., a 100%
owned finance subsidiary of Norcraft, issued, on a joint and several basis, $180.0 million aggregate principal amount of senior secured second lien notes. Interest accrues on the senior second lien notes and is payable semiannually on June 15
and December 15 of each year at a rate of 10 1/2% per annum, which commenced on June 15, 2010. Proceeds from these senior secured second lien notes were used to redeem the 9% senior subordinated notes due 2011 and to make a distribution to
Holdings to allow Holdings to repurchase a portion of the 9 3/4% senior discount notes due 2012. During the second quarter of 2010, we filed a registration statement with the Securities and Exchange Commission in connection with an exchange offer to exchange the
senior secured second lien notes for new notes with substantially identical terms that are registered under the Securities Act of 1933. Norcraft closed this exchange offer in the third quarter of 2010.

Norcraft may redeem the senior secured second lien notes, in whole or in part, at any time on or after December 15, 2012, at a redemption price
equal to 100% of the principal amount of the notes plus a premium declining ratably to par plus accrued interest.

At any time before
December 15, 2012, Norcraft may redeem up to 35% of the aggregate principal amount of the notes issued under the indenture with the offerings of proceeds of qualified equity interests at a redemption price equal to 110.5% of the principal
amount, plus accrued interest.



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If Norcraft experiences a change of
control, Norcraft may be required to offer to purchase the notes at a purchase price equal to 101% of the principal amount, plus accrued interest.

Prior to December 15, 2012, Norcraft may redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium plus accrued interest.

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 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 accrued on the senior discount notes in the form of an increase
in the accreted value of the note prior to September 1, 2008. Since that time, cash interest on the senior discount notes accrues and is payable semiannually in arrears on March 1 and September 1 of each year at a rate of 9 3/4% per annum. The first cash interest payment was made
on March 1, 2009. In December 2009, $64.3 million of the senior discount notes were repurchased resulting in a loss from debt extinguishment of $1.6 million. As of September 30, 2010, there was approximately $53.7 million principal amount
of senior discount notes outstanding.

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.

If Holdings experiences a
change in control, 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. As of September 30, 2010, Holdings was in compliance with these provisions.

Holdings currently relies on distributions from Norcraft in order to pay cash interest on the senior discount notes. The indenture governing our
senior secured second lien notes significantly restricts Norcraft and its subsidiaries from paying dividends and otherwise transferring assets to Holdings. Under the terms of the indenture governing our senior secured second lien notes, Norcraft may
make distributions of up to $25.0 million in the aggregate to Holdings or Norcraft Intermediate Holdings, L.P. to pay interest and principal on our debt issued by them. In 2009 and during the first nine months of 2010, Norcraft distributed
approximately $15.7 million and $1.1 million, respectively, to Holdings to enable it to make cash interest payments on the senior discount notes. In addition, in December 2009, a portion of the net proceeds from our senior secured second lien notes
offering were distributed to Holdings to allow Holdings to repurchase a portion of its senior discount notes. Norcraft expects to make regular distributions to Holdings, subject to certain limitations, to permit Holdings to pay interest on its debt
as well as to make further distributions to its equity holders to pay taxes on our net income allocated to them.

We currently anticipate that
the distributions permitted under the indenture governing our senior secured second lien notes will be sufficient to allow Holdings to make cash interest payments on the senior discount notes through September 2012. If Norcraft is not permitted to
make cash distributions to Holdings, Holdings will be required to raise additional proceeds through equity or debt financings in order to fund such obligations. Such financing may not be available on terms acceptable to us or at all.

Off balance sheet arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition,
capital expenditures or capital resources that are material to investors.

Taxes; Distributions to our Limited Partners

Holdings is 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.

The indenture governing our senior secured second lien notes significantly restricts Norcraft and its subsidiaries from paying dividends and otherwise
transferring assets to Holdings. Norcraft expects to make regular distributions to Holdings, subject to certain limitations, to permit Holdings to make further distributions to its equity holders to pay taxes on our net income allocated to them.



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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 which coincides with construction seasonality.

Critical Accounting
Polices

In our Annual Report on Form 10-K for the year ended December 31, 2009, we identified the critical accounting policies which
affect our more significant estimates and assumptions used in preparing our consolidated financial statements. The basis for developing the estimates and assumptions within our critical accounting policies is based on historical information and
known current trends and factors. The estimates and assumptions are evaluated on an ongoing basis and actual results have been within the Companys expectations. We have not changed these policies from those previously disclosed in our annual
report.



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Item 3. Quantitative and Qualitative Disclosures of Market Risk

We currently do not hedge against interest rate movements or foreign currency fluctuations. The risk inherent in our market-sensitive instruments and
positions is the potential loss arising from adverse changes to interest rates as discussed below.

Variable Interest Rates

Our earnings could be affected by changes in interest rates due to the impact those changes would have on interest expense from
variable rate debt instruments and on interest income generated from our cash and investment balances. At September 30, 2010, the Company had no borrowings on our variable rate ABL facility; however future earnings could be affected by changes
in interest rates.

Foreign Currency

We have minimal exposure to market risk from changes in foreign currency exchange rates and interest rates that could affect our results of operations and financial condition. Our largest exposure comes
from the Canadian dollar, where approximately 7% of our sales during the nine months ended September 30, 2010 were derived from Norcraft Canada and our revenues from such sales were denominated in Canadian dollar.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Companys management, with the
participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures as of September 30, 2010.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the
circumvention or overriding of the controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives.

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
September 30, 2010. Disclosure controls and procedures 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 and is accumulated and communicated to our management, including the principal executive and principal financial offers, or
persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Limitations on the
Effectiveness of Controls

The Companys internal control over financial reporting is a process designed by, or under the supervision
of, the registrants principal executive and principal financial officers, or persons performing similar functions, and effected by the registrants board of directors, management and other personnel 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.

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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



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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, 2009. The materialization of any risks and
uncertainties identified in Part I, Item 2, Uncertainty of Forward Looking Statements and Information 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: November 15, 2010     |  |  |  | Date: November 15, 2010    
|Signing on behalf of each   |  |  |  | Signing on behalf of each  
|Registrant and as Principal |  |  |  | Registrant and as Principal
|Executive Officer           |  |  |  | Accounting Officer         



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