# EDGAR Filing Document

**Accession Number:** 0000893691
**File Stem:** 0000893691-23-000019
**Filing Date:** 2023-3
**Character Count:** 67382
**Document Hash:** a348584dbd630dd05668ec7fd8c35143
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000893691-23-000019.hdr.sgml**: 20230320

**ACCESSION NUMBER**: 0000893691-23-000019

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 22

**CONFORMED PERIOD OF REPORT**: 20221230

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230320

**DATE AS OF CHANGE**: 20230320

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MASONITE INTERNATIONAL CORP
- **CENTRAL INDEX KEY:** 0000893691
- **STANDARD INDUSTRIAL CLASSIFICATION:** MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS [2430]
- **IRS NUMBER:** 980377314
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 0101

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-11796
- **FILM NUMBER:** 23746725

**BUSINESS ADDRESS:**
- **STREET 1:** 1242 EAST 5TH AVENUE
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33605
- **BUSINESS PHONE:** 813-877-2726

**MAIL ADDRESS:**
- **STREET 1:** 1242 EAST 5TH AVENUE
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33605

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PREMDOR INC
- **DATE OF NAME CHANGE:** 19941208

?xml version="1.0" ? door-20221230

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549** 

_______________________________________

**FORM 8-K/A** 

________________________________________

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported):** December 30, 2022

&nbsp;&nbsp;&nbsp;&nbsp;________________________________________

![door-20221230_g1.jpg](door-20221230_g1.jpg)<br>

**Masonite International Corporation** 

(Exact name of registrant as specified in its charter)

&nbsp;&nbsp;&nbsp;&nbsp;________________________________________

---

| | | |
|:---|:---|:---|
| **British Columbia, Canada** | **001-11796** | **98-0377314** |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

---

**2771 Rutherford Road** 

**Concord, Ontario L4K 2N6 Canada** 

(Address of principal executive offices)

**(800) 895-2723** 

(Registrant's telephone number, including area code)

**NOT APPLICABLE**

(Former name or former address, if changed since last report)

________________________________________

---

| | | |
|:---|:---|:---|
| **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** |
| **Common Stock (no par value)** | **DOOR** | **New York Stock Exchange** |
| (Title of class) | (Trading symbol) | (Name of exchange on which registered) |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

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

------

**Explanatory Note**

This Current Report on Form 8-K/A (this "8-K/A") amends the Current Report on Form 8-K filed by Masonite International Corporation ("Masonite") on January 3, 2023 (the "Closing 8-K") in order to include the historical financial statements of EPI Holdings, Inc. and its subsidiaries (collectively, "Endura") and the pro forma financial information required by Item 9.01 of Form 8-K. The pro forma financial information included in this 8-K/A has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that Masonite and Endura would have achieved had the companies been combined during the periods presented in the pro forma financial statements and is not intended to project the future results of operations that the combined company may achieve after Masonite's acquisition of Endura through its wholly-owned subsidiary, Masonite Corporation. Except as described above, all other information in Masonite's Current Report on Form 8-K filed on January 3, 2023 remains unchanged.

---

| | |
|:---|:---|
| **Item 8.01** | **Other Events.** |

---

In connection with the acquisition of Endura on January 3, 2023, Masonite borrowed $100.0 million under its ABL Facility in order to fund a portion of the cash consideration paid. On February 3, 2023, Masonite subsequently repaid $50.0 million of the outstanding borrowings under its ABL Facility and then on March 3, 2023, repaid the remaining $50.0 million outstanding.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

*(a) Financial statements of business acquired.*

The historical audited consolidated financial statements of Endura as of November 30, 2022, the notes related thereto and the related report of Smith Leonard PLLC, Endura's independent auditors, are filed as Exhibit 99.1 hereto and are incorporated by reference into this Item 9.01(a).

*(b) Pro forma financial information.*

Unaudited pro forma condensed combined financial statements of Masonite and Endura for the fiscal year ended January 1, 2023 and the notes related thereto are filed as Exhibit 99.2 hereto and incorporated by reference into this Item 9.01(b).

---

| | |
|:---|:---|
| Exhibit No. | Description |
| <u>[23.1](a20230320ex231consent.htm)</u> | Consent of Smith Leonard PLLC, independent auditors of EPI Holdings, Inc. |
| <u>[99.1](a20230320ex991historicalfi.htm)</u> | The historical audited consolidated financial statements of EPI Holdings, Inc. as of November 30, 2022, the related notes thereto and the related report of Smith Leonard PLLC, EPI Holdings, Inc.'s independent auditors, dated February 24, 2023 |
| <u>[99.2](a20230320ex992pro-formafin.htm)</u> | Unaudited pro forma condensed combined financial statements of Masonite International Corporation and EPI Holdings, Inc. for the year ended January 1, 2023 and the related notes thereto |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

------

**SIGNATURES**

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

---

| | | | |
|:---|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MASONITE INTERNATIONAL CORPORATION | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MASONITE INTERNATIONAL CORPORATION | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MASONITE INTERNATIONAL CORPORATION |
| Date: | March 20, 2023 | By: | /s/ James C. Pelletier |
|  |  | Name: | James C. Pelletier |
|  |  | Title: | Senior Vice President, General Counsel and Corporate Secretary |

---

## Exhibit 23.1

**Exhibit 23.1**

The Board of Directors of Masonite International Corporation

Concord, Ontario Canada

We hereby consent to the inclusion by reference in this Form 8-K/A of Masonite International Corporation of our report dated February 24, 2023 relating to the consolidated financial statements of EPI Holdings, Inc. and Subsidiaries as of November 30, 2022.

/s/ Smith Leonard PLLC

High Point, North Carolina

March 20, 2023

## Exhibit 99.1

---

| |
|:---|
| **EPI Holdings, Inc.** <br>**and Subsidiaries** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>Consolidated Financial Statements <br>Year Ended November 30, 2022<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ![imagea.jpg](imagea.jpg) |

---

------

**EPI Holdings, Inc.**

**and Subsidiaries**![image_2a.jpg](image_2a.jpg)

Consolidated Financial Statements

Year Ended November 30, 2022 &nbsp;&nbsp;&nbsp;&nbsp;

------

---

| | |
|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** |
| **Contents** | **Contents** |
| **Independent Auditor's Report** | **3-4** |
| **Consolidated Financial Statements** | |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance sheet | **5-6** |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of income | **7** |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of stockholders' equity | **8** |
| &nbsp;&nbsp;&nbsp;&nbsp;Statement of cash flows | **9** |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes to financial statements | **10-19** |

---

**2**

------

![image_3a.jpg](image_3a.jpg)

**Independent Auditor's Report** 

To the Stockholders of

EPI Holdings, Inc. Greensboro, North Carolina

**Opinion** 

We have audited the accompanying consolidated financial statements of EPI Holdings, Inc. and Subsidiaries (the "Company"), which comprise the consolidated balance sheet as of November 30, 2022, and the related consolidated statements of income, stockholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 30, 2022, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion** 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Emphasis of Matter** 

As discussed in Note 1 to the consolidated financial statements, the Company elected to change its method of accounting for goodwill by retrospective application. Our opinion is not modified with respect to that matter.

**Responsibilities of Management for the Financial Statements** 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.

**3**

![image_4a.jpg](image_4a.jpg)

------

**Auditor's Responsibilities for the Audit of the Financial Statements** 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not absolute assurance and therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Exercise professional judgment and maintain professional skepticism throughout the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• &nbsp;&nbsp;&nbsp;&nbsp;Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

![image1a.jpg](image1a.jpg)

High Point, North Carolina February 24, 2023

**4**![image_5a.jpg](image_5a.jpg)

------

---

| | |
|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** |
| **Consolidated Balance Sheet** | **Consolidated Balance Sheet** |
| **November 30, 2022** | **November 30, 2022** |
| **Assets** | |
| **Current assets** | |
| &nbsp;&nbsp;Cash and cash equivalents | $30822661 |
| &nbsp;&nbsp;Accounts receivable, less allowance for doubtful accounts |  |
| &nbsp;&nbsp;&nbsp;&nbsp;of $187,000 | 14103238 |
| &nbsp;&nbsp;Inventories | 38622581 |
| &nbsp;&nbsp;Refundable income taxes | 1511878 |
| &nbsp;&nbsp;Prepaid expenses and other | 1565734 |
| **Total current assets** | 86626092 |
| **Property and equipment, net** | 40666225 |
| **Other assets** |  |
| &nbsp;&nbsp;Goodwill | 21360581 |
| &nbsp;&nbsp;Other intangible assets, net | 20890000 |
| &nbsp;&nbsp;Investment in Affiliate | 4365399 |
| **Total other assets** | 46615980 |
| **Total assets** | $173908297 |

---

*See accompanying notes to consolidated financial statements.* 

**5**

------

---

| | |
|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** |
| **Consolidated Balance Sheet** | **Consolidated Balance Sheet** |
| **November 30, 2022** | **November 30, 2022** |
| **Liabilities and Stockholders' Equity** | |
| **Current liabilities** | |
| &nbsp;&nbsp;Accounts payable | $4384763 |
| &nbsp;&nbsp;Accruals: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Compensation and benefits | 4045283 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividends | 728000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 3799143 |
| &nbsp;&nbsp;Current maturities of long-term debt | 7500000 |
| **Total current liabilities** | 20457189 |
| **Long-term debt, net** | 22786571 |
| **Deferred income taxes** | 10222000 |
| **Liability – equity incentive plan** | 1184452 |
| **Warrants liability** | 26458447 |
| **Total liabilities** | 81108659 |
| **Commitments and contingencies** (Notes 7, 8, and 11) |  |
| **Stockholders' equity** |  |
| &nbsp;&nbsp;Preferred stock, par value $0.0001 – authorized |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1,000,000 shares; issued and outstanding 200,625 shares | 20 |
| &nbsp;&nbsp;Common stock, par value $0.001 – authorized |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1,500,000 shares; issued and outstanding 433,071 shares | 433 |
| Additional paid-in capital | 75734644 |
| Retained earnings | 17064541 |
| **Total stockholders' equity** | 92799638 |
| **Total liabilities and stockholders' equity** | $173908297 |

---

*See accompanying notes to consolidated financial statements.* 

**6**

------

---

| | |
|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** |
| **Consolidated Statement of Income** | **Consolidated Statement of Income** |
| **Year Ended November 30, 2022** | **Year Ended November 30, 2022** |
| **Net sales** | $273894123 |
| **Cost of sales** | 212519327 |
| **Gross profit** | 61374796 |
| **Operating expenses** |  |
| &nbsp;&nbsp;Selling | 16426449 |
| &nbsp;&nbsp;Administrative | 18319327 |
| &nbsp;&nbsp;Amortization of other intangibles | 2570000 |
| **Total operating expenses** | 37315776 |
| **Operating income** | 24059020 |
| **Other income (expense)** |  |
| &nbsp;&nbsp;Equity in net income of Affiliate | 597992 |
| &nbsp;&nbsp;Change in warrants liability | (8450000) |
| &nbsp;&nbsp;Interest expense | (1332332) |
| &nbsp;&nbsp;Other income | 35658 |
| **Total other expense, net** | (9148682) |
| **Income before taxes** | 14910338 |
| **Income tax expense** | 6139835 |
| **Net income** | $8770503 |

---

*See accompanying notes to consolidated financial statements.* 

**7**

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** | **and Subsidiaries** |
| **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** | **Consolidated Statement of Stockholders' Equity** |
| | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | |
| | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance,** December 1, 2021, previously reported | 200625 | $20 | 433071 | $433 | $75734644 | $7215440 | $82950537 |
| Effect of accounting change (Note 1) |  |  |  |  |  | 4013116 | $4013116 |
| **Balance,** December 1, 2021, as adjusted | 200625 | 20 | 433071 | 433 | 75734644 | 11228556 | 86963653 |
| Dividends |  |  |  |  |  | (2934518) | (2934518) |
| Net income |  |  |  |  |  | 8770503 | 8770503 |
| **Balance,** November 30, 2022 | 200625 | $20 | 433071 | $433 | $75734644 | $17064541 | $92799638 |

---

*See accompanying notes to consolidated financial statements.* 

**8** 

------

---

| | |
|:---|:---|
| **EPI Holdings, Inc.** | **EPI Holdings, Inc.** |
| **and Subsidiaries** | **and Subsidiaries** |
| **Consolidated Statement of Cash Flows** | **Consolidated Statement of Cash Flows** |
| **Year Ended November 30, 2022** | **Year Ended November 30, 2022** |
| **Cash flows from operating activities** | |
| &nbsp;&nbsp;Net income | $8770503 |
| &nbsp;&nbsp;Adjustments to reconcile net income to net cash |  |
| &nbsp;&nbsp;&nbsp;&nbsp;provided by operating activities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in net income of Affiliate | (597992) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in warrants liability | 8450000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of property and equipment | 5687997 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of other intangibles | 2570000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 169215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in deferred taxes | 172000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for equity incentive benefits | 882348 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of equity incentive benefits | (53057) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recovery of doubtful accounts | (236792) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (1560693) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (3346652) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Refundable income taxes | (994514) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other | (830698) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (3396900) |
| Total adjustments | 6914262 |
| **Net cash provided by operating activities** | 15684765 |
| **Cash flows from investing activities** |  |
| &nbsp;&nbsp;Capital expenditures | (7584992) |
| &nbsp;&nbsp;Dividends received from Affiliate | 679000 |
| **Net cash used in investing activities** | (6905992) |
| **Cash flows from financing activities** |  |
| &nbsp;&nbsp;Principal payments on debt | (7500000) |
| &nbsp;&nbsp;Dividends paid | (8472080) |
| **Net cash used in financing activities** | (15972080) |
| **Net change in cash and cash equivalents** | (7193307) |
| **Cash and cash equivalents,** beginning of year | 38015968 |
| **Cash and cash equivalents,** end of year | 30822661 |
| **Supplemental disclosures of cash flow information:** |  |
| &nbsp;&nbsp;Cash paid for interest | $1096925 |
| &nbsp;&nbsp;Cash paid for income taxes | 6962285 |

---

*See accompanying notes to consolidated financial statements.* 

**9**

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Description of Business and Summary of Significant Accounting Policies**

***Consolidation***

The consolidated financial statements include the accounts of EPI Holdings, Inc. and its wholly owned subsidiaries: Endura Products, LLC, Endura Products Tennessee, LLC, Perfect!Wood Profiles, LLC, Betterdoor, LLC, and Endura Products OR, LLC (collectively, the "Company"). All material intercompany accounts and transactions have been eliminated in consolidation.

***Business***

The Company primarily manufactures door system component parts and engineered veneered moldings and millwork. The Company sells its products nationally through a network of sales agents, brokers, distributors, and wholesalers to customers that assemble door units primarily for residential construction. Customers are located throughout the United States.

***Revenue Recognition***

The Company recognizes revenue when it satisfies its performance obligation or when control of its product is passed to the customer, which is the point in time that the Company's customers are able to direct the use of and obtain substantially all the remaining economic benefit of the goods. The Company's shipping terms are primarily freight-on-board shipping point and risk of loss transfers to the customer at the time the product is shipped. Accordingly, sales are recognized when product leaves the Company's facility. There are no revenues for services recognized over time.

Net sales also include amounts billed to customers for freight charges. Related freight-out costs are included in selling expenses. The Company treats shipping activities that occur after the customer has obtained control of product as a fulfillment activity. The Company recognizes freight revenue and accrues freight-out costs when product is shipped.

For sales taxes, value-added taxes and similar taxes ("sales taxes"), the Company elected to apply the accounting policy election allowing an entity to exclude these from the transaction price and to present revenue net of sales taxes.

Revenue from contracts with customers is recorded net of sales allowances granted to customers. Allowances under volume rebate and similar programs are recognized when the related revenues are earned and are recorded as a reduction of net sales.

As payment is due within one year, the Company does not adjust sales for the effects of any financing component.

***Cash and Cash Equivalents*** 

For purposes of the cash flow statement, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company may have cash balances in financial institutions that at times exceed federally insured amounts.

***Accounts Receivable***

Accounts receivable are customer obligations due under normal trade terms. Management performs credit evaluations of its customers and generally does not require collateral. The Company records an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. Also recorded is an additional allowance based on historical experience and management's assessment of the general financial conditions affecting the Company's customer base. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, management believes the allowance for doubtful accounts as of November 30, 2022 is adequate. However, actual write-offs could exceed the recorded allowance.

**10** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Description of Business and Summary of Significant Accounting Policies (Continued)**

***Inventories***

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the last-in, first-out ("LIFO") method for 60% of inventories at November 30, 2022, and the first-in, first-out ("FIFO") method for other inventories.

***Property, Equipment, and Depreciation***

Property and equipment are stated at cost or acquired fair values. Depreciation is computed using the straight-line method.

***Goodwill and Other Intangibles***

Goodwill represents the excess of the cost of the acquired business over the fair value of the net assets acquired.

In prior years, the Company accounted for goodwill using elections available to private companies which require amortization of goodwill and allow alternative triggering event evaluation for goodwill impairment testing. The Company elected to account for goodwill using methods required for public entities by retrospective application resulting in previously recorded goodwill amortization being reversed.

The Company evaluates goodwill at fiscal year-end or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the business is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the business is less than its carrying amount, management conducts a quantitative goodwill impairment test. The impairment test involves comparing the fair value of the applicable business with its carrying value. If the carrying amount of the business exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded.

Identified intangible assets comprise customer relations, technology, and trademarks acquired. Customer relations and technology are carried at acquired value less accumulated amortization. Amortization is computed using the straight-line method. Trademarks are not amortized.

The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset's carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated.

No impairment losses on goodwill or other intangible assets were recorded in 2022.

**11** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Description of Business and Summary of Significant Accounting Policies (Continued)**

***Other Long-lived Assets***

Property, equipment, and other long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When any such impairment exists, the related assets will be written down to fair value. Any long-lived assets held for disposal are reported at the lower of their carrying amounts or fair value less cost to sell. No impairment losses were recorded in 2022.

***Income Taxes***

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense or benefit represents the change during the period in deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Tax benefits are recorded only for tax positions that would be more likely than not to be sustained upon examination by tax authorities. Unrecognized tax benefits are tax benefits claimed in the Company's tax returns that do not meet these recognition and measurement standards. There were no significant unrecognized tax benefits at November 30, 2022. The Company's policy is to classify any interest or penalties on unrecognized tax benefits as income tax expense, if applicable.

***Advertising***

Costs for advertising are expensed when incurred. The charges to expense approximated $985,000 in 2022.

***Fair Value of Financial Instruments***

The Company's financial instruments include cash and cash equivalents, accounts receivable, accounts payable, liability under equity incentive plan, warrants liability, and debt obligations. Warrants liability and liability under equity incentive plan are carried at management's estimate of fair value. The estimated fair value of debt instruments approximates fair value based on their interest rates and current rates available to the Company for debt of similar remaining maturities. Based on the nature of other financial instruments, their estimated fair value approximates carrying amounts.

The following liabilities are measured at fair value on a recurring basis during the year ended November 30, 2022, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Liability - equity incentive plan | $— | $1184452 | $— | $1184452 |
| Warrants liability |  | 26458447 |  | 26458447 |
|  | $— | $27642899 | $— | $27642899 |

---

**12** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**1.&nbsp;&nbsp;&nbsp;&nbsp;Description of Business and Summary of Significant Accounting Policies (Concluded)**

***Use of Estimates*** 

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

***Subsequent Events***

Management has evaluated events occurring subsequent to the balance sheet date through February 24, 2023, the date that the consolidated financial statements were available to be issued, determining no events require adjustment to or additional disclosure in the consolidated financial statements.

***Recent Accounting Pronouncements***

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, *Leases (Topic 842)*, which replaces all previous guidance on leases and will require entities to recognize assets and liabilities arising from operating leases. For private companies, the ASU (as amended) is effective for fiscal years beginning after December 15, 2021, with early application permitted. In July 2018, the FASB issued ASU No. 2018-11, *Leases (Topic 842): Targeted Improvements*, which provided an alternative transition method when initially applying ASU 2016-02. Companies may elect to apply ASU 2016-02 at the beginning of the earliest period presented or recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Management is currently assessing the impact that this guidance may have on the Company's future consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13*, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments*, which eliminates previous methodology for recognizing credit losses on financial instruments (including trade receivables) and requires companies to utilize an expected credit loss model. For private companies, the guidance, as amended, is effective for fiscal years beginning after December 15, 2022. Management is currently assessing the impact that this guidance may have on the Company's future consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12*, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes*, which simplifies and clarifies application of certain income tax-related guidance. For private companies, the amendments are effective for fiscal years beginning after December 15, 2021, with early application permitted. Management is currently assessing the impact that this guidance may have on the Company's future consolidated financial statements.

**13** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**2.&nbsp;&nbsp;&nbsp;&nbsp;Inventories**

Inventories consist of the following at November 30, 2022.

---

| | |
|:---|:---|
| Raw materials | $29073506 |
| Work in progress | 7353226 |
| Finished goods | 8228823 |
|  | 44655555 |
| Less LIFO reserve | 6032974 |
| Total inventories | $38622581 |

---

If the first-in, first-out method of inventory valuation had been used, net income reported by the Company would have been approximately $2,021,000 higher in 2022.

**3.&nbsp;&nbsp;&nbsp;&nbsp;Property and Equipment, Net**

Property and equipment, net consist of the following at November 30, 2022.

---

| | | |
|:---|:---|:---|
| | Life<br>(in Years) | |
| Land and land improvements | 15-20 | $1743710 |
| Buildings and improvements | 10-25 | 11787546 |
| Equipment | 3-12 | 37883045 |
| Office and computer equipment | 5-10 | 2137155 |
| Transportation equipment | 3-8 | 65900 |
| Projects in progress |  | 7304565 |
|  |  | 60921921 |
| Less accumulated depreciation |  | 20255696 |
| Property and equipment, net |  | $40666225 |

---

The Company estimates the costs to complete projects in progress at November 30, 2022 will be approximately $5.6 million.

**14** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**4.&nbsp;&nbsp;&nbsp;&nbsp;Other Intangibles, Net**

Other intangibles, net consist of the following at November 30, 2022.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | Life<br>(in Years) |<br>Gross | Accumulated<br>amortization |<br>Net |
| Amortized intangibles |  |  |  |  |
| Customer relations | 10 | $15700000 | $4710000 | $10990000 |
| Technology | 8 | 8000000 | 3000000 | 5000000 |
|  |  | 23700000 | 7710000 | 15990000 |
| Unamortized intangibles |  |  |  |  |
| Trademarks |  | 4900000 |  | 4900000 |
| Total other intangibles, net |  | $28600000 | $7710000 | $20890000 |

---

Amortization expense amounted to approximately $2,570,000 in 2022. The estimated amortization expense for the next five fiscal years and thereafter is as follows: 2023 through 2027 - $2,570,000 per annum and thereafter $3,140,000.

**5.&nbsp;&nbsp;&nbsp;&nbsp;Investment in Affiliate**

The Company has 48.5% interest in Gen Partners, LLC ("GP" or "Affiliate"). GP manages and leases a production facility in Stokesdale, North Carolina. The Company leases one of the properties from GP. GP's fiscal year-end is December 31. Equity in GP's net income is included in the consolidated statement of income through that date.

Summarized financial information for GP as of December 31, 2022 and for the year then ended are as follows:

---

| | |
|:---|:---|
| Income statement information: |  |
| &nbsp;&nbsp;Revenues | $1751000 |
| &nbsp;&nbsp;Net income | 1232973 |
| Financial position information: |  |
| &nbsp;&nbsp;Current assets | 259000 |
| &nbsp;&nbsp;Noncurrent assets | 3223000 |
| &nbsp;&nbsp;Current liabilities | 13000 |
| &nbsp;&nbsp;Noncurrent liabilities | 857000 |

---

**15** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**6.&nbsp;&nbsp;&nbsp;&nbsp;Long-term Debt, Net**

Long-term debt, net consists of the following at November 30, 2022.

---

| | |
|:---|:---|
| Term Loan | $30625000 |
| Less: |  |
| &nbsp;&nbsp;Current maturities | 7500000 |
| &nbsp;&nbsp;Deferred financing costs | 338429 |
| Long-term debt, net | $22786571 |

---

The bank loan agreement provides for a $45 million Term Loan and a $20 million Line of Credit. Availability on the Line of Credit is determined by eligible accounts receivable and inventory as defined. There were no borrowings on the Line of Credit in 2022. The Term Loan was interest only through January 2021 when monthly principal payments of $625,000 plus interest were required. The Term Loan and Line of Credit are due December 2024. Interest on the Term Loan accrues at LIBOR plus 2.0% (5.81% at November 30, 2022) and on the Line of Credit at LIBOR plus 1.75% (5.56% at November 30, 2022). The bank debt is secured by substantially all the assets of the Company and includes customary financial covenants related to leverage, fixed charges, and capital expenditure limits.

Annual maturities of the Company's long-term debt are as follows:

---

| | |
|:---|:---|
| 2023 | $7500000 |
| 2024 | 7500000 |
| 2025 | 15625000 |
|  | $30625000 |

---

**7.&nbsp;&nbsp;&nbsp;&nbsp;Equity Incentive Plan**

The EPI Holdings, Inc. 2020 Equity Incentive Plan (the "Plan") provides for both time and performance Restrictive Stock Units ("RSUs"). Time vesting RSUs generally vest ratably over three years from the award date. Performance-vesting RSUs vest based on the Company's performance when compared to budget. ASC 718, *Compensation – Stock Compensation* provides that share-based payment arrangements are classified as liabilities if settlement is in cash or other assets. The Company follows this guidance for awards under the Plan. 33,269 RSUs are reserved for issuance under the Plan. Fair value of RSUs is determined based on a trailing EBITDA multiple adjusted for levels of debt and cash divided by the number of the Company's shares plus RSUs outstanding. At November 30, 2022, 3,769 units had vested and in 2022 the Company recognized compensation of approximately $882,000 under the Plan.

**16** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**8.&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock and Warrants Liability**

On December 2, 2019, the Company issued 200,625 shares of preferred stock and 200,625 warrants to purchase common stock ("warrants") for a total purchase price of $36.5 million ("Purchase Price"). Using a third-party valuation, the fair value assigned to the warrants at issuance was $10,312,447. At November 30, 2022, the warrants liability had increased to $26,458,447.

Quarterly cumulative dividends accrue on a compounding basis at the rate of 8% per annum on the Purchase Price plus accumulated unpaid dividends. The preferred stock including unpaid dividends have a mandatory redemption in December 2026. Holders may redeem sooner if certain defined events occur. The Company may generally redeem at any time.

The warrants entitle the holder the right to purchase common stock for a nominal exercise price at any time prior to December 2026. The warrants also contain a put option that would compel the Company to buy back the warrants from the holder in December 2026 or upon certain triggering events for a cash settlement based upon the Company's fair market value, as defined. The Company has the right to call the warrants in December 2027 based upon the Company's fair market value. The change in fair value of the warrants is treated as other income or expense in the accompanying consolidated statements of income.

**9.&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes**

Significant components of the provision for income taxes for the year ended November 30, 2022 are as follows:

---

| | |
|:---|:---|
| Current: |  |
| &nbsp;&nbsp;Federal | $5068035 |
| &nbsp;&nbsp;State | 899800 |
| Total current | 5967835 |
| Deferred: |  |
| &nbsp;&nbsp;Federal | (500000) |
| &nbsp;&nbsp;State | 672000 |
| Total deferred | 172000 |
| Total income tax expense | $6139835 |

---

A reconciliation of the provision for income taxes with the amounts determined by applying the U.S. federal income tax rate for the year ended November 30, 2022 is as follows:

---

| | |
|:---|:---|
| Computed tax at the federal rate of 21% | $3131171 |
| State taxes, net of federal benefit | 672759 |
| Change in value of warrants | 1774500 |
| Other | 561405 |
| Total income tax expense | $6139835 |

---

**17** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**9.&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes (Concluded)**

Significant components of the Company's deferred tax assets and liabilities at November 30, 2022 consisted of:

---

| | |
|:---|:---|
| Accounts receivable | $86000 |
| Inventories | 327000 |
| Accrued expenses | 528000 |
| Total deferred tax assets | 941000 |
| Property and equipment | (6013000) |
| Other intangibles | (4528000) |
| Other | (622000) |
| Total deferred tax liabilities | (11163000) |
| Net deferred income taxes | $(10222000) |

---

Tax years 2019 through 2022 remain subject to examination by both federal and state authorities.

**10.&nbsp;&nbsp;&nbsp;&nbsp;Major Customers**

One customer accounted for approximately 15% of sales in 2022 and comprised approximately 20% of accounts receivable at November 30, 2022.

**11.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies**

***Leases – Related Parties***

Rent expense for the building leased from GP totaled approximately $586,000, net of sublease income of approximately $112,000 for 2022.

Future minimum payments by year under this lease consist of the following at November 30, 2022.

---

| | |
|:---|:---|
| 2023 | $929000 |
| 2024 | 943000 |
| 2025 | 957000 |
| 2026 | 971000 |
| 2027 | 986000 |
| Thereafter | 3357000 |
| Total minimum lease payments | $8143000 |

---

***Leases – Unrelated Parties***

The Company leases its Oregon facility under a lease ending December 2035. Rent escalation required by the agreement is between 2% and 3% annually. Payments under the arrangement amounted to approximately $540,000 in 2022.

The Company leases other administrative offices, as well as equipment and warehouse and production facilities, at various locations. Under some arrangements, the Company is generally responsible for taxes, insurance, common maintenance costs, and repairs.

Total rental and lease expense, including the Oregon facility, was approximately $989,000 in 2022.

**18** 

------

**EPI Holdings, Inc.** 

**and Subsidiaries**

**Notes to Consolidated Financial Statements**

**11.&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies (Concluded)**

***Leases – Unrelated Parties (Concluded)***

At November 30, 2022, future minimum rental payments required under operating leases with unrelated parties that have initial or remaining noncancelable terms in excess of one year are as follows:

---

| | |
|:---|:---|
| 2023 | $791000 |
| 2024 | 647000 |
| 2025 | 659000 |
| 2026 | 673000 |
| 2027 | 620000 |
| Thereafter | 5779000 |
| Total minimum lease payments | $9169000 |

---

***Health Insurance Plan***

The Company is self-insured for healthcare costs not to exceed $125,000 per participant and approximately $6.5 million in aggregate annual claims. Costs are accrued based upon the aggregate amount of liability for reported claims and an estimated amount for claims incurred but not reported. Accrued compensation and benefits include $441,000 related to healthcare costs at November 30, 2022.

***Workers' Compensation Plan***

The Company is self-insured for workers' compensation costs not to exceed $250,000 per occurrence. Costs are accrued based on actuarial estimates as determined by its claim administrator. Accrued compensation and benefits include an accrual for open claims of approximately $61,000 at November 30, 2022.

***Defined Contribution Retirement Plans***

The Company sponsors defined contribution retirement plans covering substantially all employees. Employer matching contributions are up to 4% of compensation. Contributions to these plans amounted to approximately $1,631,000 in 2022.

***Derivative Instruments and Hedging Activities***

The Company has limited involvement with derivative instruments and does not use them for trading purposes. To hedge against fluctuations in the cost of aluminum, a significant cost of certain components, the Company periodically enters into agreements with suppliers to fix the future price of this commodity. There were no open agreements in place at November 30, 2022.

**12.&nbsp;&nbsp;&nbsp;&nbsp;Subsequent Event**

Masonite Corporation acquired all the outstanding shares and warrants of the Company and the bank term loan was settled on January 3, 2023.

**19**

## Exhibit 99.2

**Exhibit 99.2**

**MASONITE INTERNATIONAL CORPORATION**

**Unaudited Pro Forma Condensed Combined Financial Statements**

The unaudited pro forma condensed combined financial statements (the "Pro Forma Statements") presented below are derived from the historical consolidated financial statements of Masonite International Corporation ("Masonite," "we," "our," "us" and the "Company") and the results of EPI Holdings, Inc. and its subsidiaries (collectively, "Endura").

On January 3, 2023, we completed the acquisition of 100% of the outstanding equity of Endura pursuant to the terms of the Securities Purchase Agreement, dated as of November 3, 2023 and as amended on December 30, 2022.

The Pro Forma Statements and accompanying notes are based on and should be read in conjunction with (i) the historical audited financial statements of the Company and the related notes included in the Company's Annual Report on Form 10-K for the year ended January 1, 2023, filed with the Securities and Exchange Commission on February 28, 2023, and (ii) the historical audited consolidated financial statements of Endura and the related notes for the year ended November 30, 2022, which are included in Exhibit 99.1 of this Form 8-K/A. The Pro Forma Statements have been prepared utilizing period end dates that differ by less than 93 days, as permitted by Rule 11-02 of Regulation S-X.

The Pro Forma Statements are prepared as a business combination reflecting Masonite's acquisition of Endura. The unaudited pro forma condensed combined statement of income for the year ended January 1, 2023, assumes the acquisition had been completed on January 3, 2022. The unaudited pro forma condensed combined balance sheet as of January 1, 2023 assumes the acquisition had been completed on January 1, 2023.

The Pro Forma Statements do not give effect to the realization of any expected cost savings or synergies from the acquisition. Certain historical assets of Endura were not acquired and have been excluded in deriving the unaudited pro forma balance sheet. The Pro Forma Statements include adjustments that are necessary to account for the acquisition as of the date specified above ("Pro Forma Adjustments"). The assumptions underlying the Pro Forma Adjustments are described in the accompanying notes and are based on information available to us during the preparation of the Pro Forma Statements.

Under the acquisition method of accounting, the purchase price is allocated to the underlying Masonite tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. The purchase price allocation may be revised by us as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments upon the completion of the acquisition may differ from the Pro Forma Adjustments, and it is possible the differences may be material.

The Pro Forma Statements are provided for informational purposes only and have been prepared in accordance with Article 11 of Regulation S-X. They do not necessarily reflect what the combined company's results of operations or financial position would have been had the acquisition occurred as of the dates indicated herein, nor do they purport to project the future operating results or financial position of the combined company.

------

**MASONITE INTERNATIONAL CORPORATION**

**Unaudited Pro Forma Condensed Combined Statement of Income**

(In thousands of U.S. dollars, except per share amounts)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Masonite for the Period Ended January 1, 2023** | **Endura for the Period Ended November 30, 2022** | **Pro Forma Adjustments** | | **Pro Forma Combined** |
| Net sales | $2891687 | $273894 | $(11690) | **(a)** | $3153891 |
| Cost of goods sold | 2217792 | 212519 | (5589) | **(a)(b)(c)** | 2424722 |
| **Gross profit** | 673895 | 61375 | (6101) |  | $729169 |
| Selling, general and administration expenses | 344614 | 37316 | 7140 | **(b)(d)** | 389070 |
| Restructuring costs | 1904 |  |  |  | 1904 |
| Loss on disposal of subsidiaries | 850 |  |  |  | 850 |
| **Operating income** | 326527 | 24059 | (13241) |  | 337345 |
| Interest expense, net | 41331 | 1332 | 16368 | **(e)** | 59031 |
| Other (income) expense, net | (5001) | 7816 | (7852) | **(f)** | (5037) |
| **Income before income tax expense** | 290197 | 14911 | (21757) |  | 283351 |
| Income tax expense | 71753 | 6140 | (7703) | **(k)** | 70190 |
| **Net income** | 218444 | 8771 | (14054) |  | 213161 |
| Less: net income attributable to non-controlling interests | 4211 |  |  |  | 4211 |
| **Net income attributable to Masonite** | $214233 | $8771 | $(14054) |  | $208950 |
| Basic earnings per common share | $9.51 |  |  |  | $9.27 |
| Diluted earnings per common share | $9.41 |  |  |  | $9.18 |
| Shares used in computing basic earnings per share | 22532722 |  |  |  | 22532722 |
| Shares used in computing diluted earnings per share | 22772465 |  |  |  | 22772465 |

---

See accompanying notes to unaudited pro forma financial statements.

------

**MASONITE INTERNATIONAL CORPORATION**

**Unaudited Pro Forma Condensed Combined Balance Sheet**

(In thousands of U.S. dollars)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **ASSETS** | **Masonite for the Period Ended January 1, 2023** | **Endura for the Period Ended November 30, 2022** | **Pro Forma Adjustments** | | **Pro Forma Combined** |
| **Current assets:** | | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $296922 | $30823 | $(56254) | **(g)** | $271491 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 11999 |  |  |  | 11999 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 375918 | 14103 |  |  | 390021 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 406828 | 38622 | 6033 | **(c)** | 451483 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 55051 | 1566 |  |  | 56617 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes receivable | 16922 |  |  |  | 16922 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current deferred income taxes |  | 1512 |  |  | 1512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 1163640 | 86626 | (50221) |  | 1200045 |
| Property, plant and equipment, net | 652329 | 40666 |  |  | 692995 |
| Operating lease right-of-use assets | 160695 |  |  |  | 160695 |
| Investment in equity investees | 16111 | 4365 | (4365) | **(f)** | 16111 |
| Goodwill | 69868 | 21361 | 101243 | **(h)** | 192472 |
| Intangible assets, net | 136056 | 20890 | 139599 | **(h)** | 296545 |
| Deferred income taxes | 16133 |  |  |  | 16133 |
| Other assets | 33346 |  |  |  | 33346 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $2248178 | $173908 | $186256 |  | $2608342 |
| **LIABILITIES AND EQUITY** |  |  |  |  |  |
| **Current liabilities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $111526 | $4385 | $— |  | $115911 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and current portion of long-term debt | 223046 | 16072 | 92500 | **(i)** | 331618 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable | 14361 |  |  |  | 14361 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 348933 | 20457 | 92500 |  | 461890 |
| Long-term debt | 866116 | 22787 | 227213 | **(i)** | 1116116 |
| Long-term operating lease liabilities | 151242 |  |  |  | 151242 |
| Deferred income taxes | 79590 | 10222 | (7703) | **(k)** | 82109 |
| Other liabilities | 59515 | 27643 | (6458) | **(f)** | 80700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 1505396 | 81109 | 305552 |  | 1892057 |
| **Equity:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share capital | 520003 |  |  |  | 520003 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 226514 | 75735 | (75735) | **(j)** | 226514 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 127826 | 17064 | (43561) | **(j)** | 101329 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (142224) |  |  |  | (142224) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total equity attributable to Masonite** | 732119 | 92799 | (119296) |  | 705622 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity attributable to non-controlling interests | 10663 |  |  |  | 10663 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total equity** | 742782 | 92799 | (119296) |  | 716285 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and equity** | $2248178 | $173908 | $186256 |  | $2608342 |

---

See accompanying notes to unaudited pro forma financial statements.

------

**MASONITE INTERNATIONAL CORPORATION**

**NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

**1. Basis of Presentation**

The accompanying Pro Forma Statements are prepared from the historical consolidated financial statements of Masonite and Endura after giving effect to the acquisition as if it occurred on January 3, 2022 for statement of income purposes and January 1, 2023 for balance sheet purposes and the Pro Forma Adjustments as described in the accompanying notes. The accompanying Pro Forma Statements have been prepared in accordance with Article 11 of Regulation S-X to illustrate the effects of the acquisition.

The Pro Forma Statements do not necessarily reflect what the combined company's results of operations or financial condition would have been had the acquisition occurred on the dates indicated and also may not be useful in predicting the future results of operations and financial position of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Masonite has accounted for the acquisition under the acquisition method, which requires recognizing and measuring the identifiable assets acquired and the liabilities assumed at fair value. Accordingly, Masonite has used its best estimates and assumptions to assign fair value to the tangible assets acquired, identifiable intangible asset and liabilities assumed as of the acquisition date.

The fair values assigned to Endura's tangible and identifiable intangible assets acquired and liabilities assumed, as described in Note 2, are based on management's estimates and assumptions. Masonite has estimated the fair value of Endura's assets acquired and liabilities assumed based on discussions with Endura's management, preliminary valuation studies, due diligence and information presented in Endura's historical audited financial statements. The estimated fair values of these assets acquired and liabilities assumed are considered preliminary and represent management's best estimates of fair value and may be revised as additional information is received. Thus, the provisional measurements of fair value are subject to change.

Certain reclassifications have been made to conform Endura's historical financial statements to the presentation used in Masonite's historical financial statements. Such reclassifications had no effect on Endura's previously reported historical audited consolidated financial statements. The Pro Forma Statements may not reflect all reclassifications necessary to conform Endura's presentation to that of Masonite as Masonite has not completed its review of Endura's accounting policies to be conformed. As a result, Masonite may identify differences between the accounting policies of the companies that, when conformed, could have a material impact on the Pro Forma Statements. At this time, Masonite is not aware of any differences that would have a material impact on the Pro Forma Statements.

The Pro Forma Adjustments have been made solely for the purpose of providing the unaudited pro forma financial information presented herein. The Pro Forma Adjustments do not give effect to Endura's adoption of Accounting Standards Codification 842, "Leases" as Endura was a privately held company not required to implement the provisions of ASC 842 and the detailed valuation work necessary to estimate the lease assets and liabilities acquired is not available at this time.

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**2. Purchase Price Allocation**

The unaudited pro forma condensed combined balance sheet has been adjusted to reflect a preliminary allocation of the estimated purchase price to Endura's identifiable assets to be acquired and liabilities to be assumed. The allocation of the purchase price has been prepared based on preliminary estimates of fair values. Actual amounts recorded upon finalization of the fair value estimates may differ from the information presented in these Pro Forma Statements. The following table summarizes the allocation of purchase price as of the acquisition date:

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| | |
|:---|:---|
| *(In thousands)* | **Amount** |
| **Purchase consideration** |  |
| Agreement purchase price | $375000 |
| Preliminary net working capital adjustment | 600 |
| Net cash acquired after extinguishment of debt acquired | 3960 |
| Estimated consideration, net of cash and debt acquired | $379560 |
| Net assets acquired | $82359 |
| Goodwill | 118880 |
| Intangible assets, net | 178321 |
| **Total** | $379560 |

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**3. Pro Forma Adjustments**

The following pro forma adjustments have been reflected in the unaudited pro forma financial statements. All adjustments are based on current assumptions and valuations, which are subject to change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Represents elimination of Endura sales to Masonite for the twelve months ended November 30, 2022

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Represents reclassification of outbound freight expenses from selling, general and administration expenses to cost of goods sold to align with Masonite's accounting policy

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Represents adjustment to cost of goods sold and inventory to eliminate impact of LIFO accounting to conform accounting method and reflect at fair value

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Represents straight-line amortization expense attributable to the intangible assets acquired in the acquisition assuming a useful life not to exceed 10 years and the removal of Endura's amortization expense

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Represents the interest expense attributed to debt related financing and the removal of Endura's interest expense as their debt was extinguished:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.Borrowed $250.0 million on our Term Loan Facility at a rate of 6.80% assumed to be outstanding for the entire year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.Borrowed $100.0 million on our ABL Facility at a rate of 5.90% assumed to be outstanding for 45 days

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Represents removal of assets not acquired:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.Remove equity method investment and corresponding equity method investment income for 48.5% interest in General Partners not acquired

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.Remove warrants liability and corresponding other expense for change in fair value of warrants that were extinguished

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Represents adjustments to cash and cash equivalents after giving effect to the debt assumed and cash paid, net of cash acquired

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Represents the allocation of goodwill and intangibles based on the purchase price and the removal of Endura's goodwill and intangibles

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Represents impact of debt related financing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.$250.0 million Term Loan Facility is reflected in long-term debt

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.$100.0 million ABL Facility is reflected in accrued expenses as it was short-term in nature

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.Extinguished Endura's long-term debt on date of acquisition

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Represents the elimination of Endura's historical equity as well as the adjustments described above to reflect the capital structure of the combined company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)Represents the tax effect of adjustments described above using an estimated combined statutory federal and state tax rate of 25.5%

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