Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Jan. 01, 2023 | Feb. 24, 2023 | Jul. 03, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 01, 2023 | ||
Current Fiscal Year End Date | --01-01 | ||
Document Transition Report | false | ||
Entity File Number | 001-11796 | ||
Entity Registrant Name | Masonite International Corporation | ||
Entity Incorporation, State or Country Code | Z4 | ||
Entity Tax Identification Number | 98-0377314 | ||
Entity Address, Address Line One | 2771 Rutherford Road | ||
Entity Address, City or Town | Concord | ||
Entity Address, State or Province | ON | ||
Entity Address, Postal Zip Code | L4K 2N6 | ||
Entity Address, Country | CA | ||
City Area Code | 800 | ||
Local Phone Number | 895-2723 | ||
Title of 12(b) Security | Common Stock (no par value) | ||
Trading Symbol | DOOR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.7 | ||
Entity Bankruptcy Proceedings, Reporting Current | true | ||
Entity Common Stock, Shares Outstanding | 22,179,074 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for its 2023 Annual General Meeting of Shareholders scheduled to be held on May 11, 2023, to be filed with the Securities and Exchange Commission not later than 120 days after January 1, 2023, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0000893691 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Jan. 01, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Tampa, Florida |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net sales | $ 2,891,687 | $ 2,596,920 | $ 2,257,075 |
Cost of goods sold | 2,217,792 | 1,985,141 | 1,684,571 |
Gross profit | 673,895 | 611,779 | 572,504 |
Selling, general and administration expenses | 344,614 | 308,430 | 366,772 |
Restructuring costs | 1,904 | 5,567 | 8,236 |
Asset impairment | 0 | 69,900 | 51,515 |
Loss on disposal of subsidiaries | 850 | 8,590 | 2,091 |
Operating income | 326,527 | 219,292 | 143,890 |
Interest expense, net | 41,331 | 46,123 | 46,807 |
Loss on extinguishment of debt | 0 | 13,583 | 0 |
Other (income) expense, net | 5,001 | (15,620) | 5,217 |
Income before income tax expense | 290,197 | 143,966 | 102,300 |
Income tax expense | 71,753 | 44,772 | 28,611 |
Net income | 218,444 | 99,194 | 73,689 |
Less: net income attributable to non-controlling interests | 4,211 | 4,693 | 4,652 |
Net income attributable to Masonite | $ 214,233 | $ 94,501 | $ 69,037 |
Earnings (loss) per common share attributable to Masonite: | |||
Basic earnings per common share attributable to Masonite (in dollars per share) | $ 9.51 | $ 3.91 | $ 2.81 |
Diluted earnings per common share attributable to Masonite (in dollars per share) | $ 9.41 | $ 3.85 | $ 2.77 |
Other comprehensive (loss) income: | |||
Net income | $ 218,444 | $ 99,194 | $ 73,689 |
Foreign currency translation (loss) gain | (35,637) | (3,175) | 19,820 |
Pension and other post-retirement adjustment | (4,718) | 2,250 | (3,163) |
Pension settlement charges | 0 | 15,654 | 0 |
Amortization of actuarial net losses | 22 | 1,336 | 1,002 |
Income tax (expense) benefit related to other comprehensive (loss) income | (846) | (5,518) | 632 |
Other comprehensive (loss) income, net of tax: | (41,179) | 10,547 | 18,291 |
Comprehensive income | 177,265 | 109,741 | 91,980 |
Less: comprehensive income attributable to non-controlling interests | 3,674 | 4,759 | 4,837 |
Comprehensive income attributable to Masonite | $ 173,591 | $ 104,982 | $ 87,143 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 296,922 | $ 381,395 |
Restricted cash | 11,999 | 10,110 |
Accounts receivable, net | 375,918 | 343,414 |
Inventories, net | 406,828 | 347,476 |
Prepaid expenses and other assets | 55,051 | 50,399 |
Income taxes receivable | 16,922 | 1,332 |
Total current assets | 1,163,640 | 1,134,126 |
Property, plant and equipment, net | 652,329 | 626,797 |
Operating lease right-of-use assets | 160,695 | 176,445 |
Investment in equity investees | 16,111 | 14,994 |
Goodwill | 69,868 | 77,102 |
Intangible assets, net | 136,056 | 150,487 |
Deferred income taxes | 16,133 | 20,764 |
Other assets | 33,346 | 45,903 |
Total assets | 2,248,178 | 2,246,618 |
Current liabilities: | ||
Accounts payable | 111,526 | 138,788 |
Accrued expenses | 223,046 | 237,300 |
Income taxes payable | 14,361 | 8,551 |
Total current liabilities | 348,933 | 384,639 |
Long-term debt | 866,116 | 865,721 |
Long-term operating lease liabilities | 151,242 | 165,670 |
Deferred income taxes | 79,590 | 77,936 |
Other liabilities | 59,515 | 52,874 |
Total liabilities | 1,505,396 | 1,546,840 |
Commitments and Contingencies (Note 10) | ||
Equity: | ||
Share capital: unlimited shares authorized, no par value, 22,155,035 and 23,623,887 shares issued and outstanding as of January 1, 2023, and January 2, 2022, respectively | 520,003 | 543,400 |
Additional paid-in capital | 226,514 | 222,177 |
Retained earnings | 127,826 | 24,244 |
Accumulated other comprehensive loss | (142,224) | (101,582) |
Total equity attributable to Masonite | 732,119 | 688,239 |
Equity attributable to non-controlling interests | 10,663 | 11,539 |
Total equity | 742,782 | 699,778 |
Total liabilities and equity | $ 2,248,178 | $ 2,246,618 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Jan. 01, 2023 | Jan. 02, 2022 |
Statement of Financial Position [Abstract] | ||
Shares issued (in shares) | 22,155,035 | 23,623,887 |
Shares outstanding (in shares) | 22,155,035 | 23,623,887 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive loss | Equity attributable to non-controlling interests |
Opening balance, value at Dec. 29, 2019 | $ 636,862 | $ 558,514 | $ 216,584 | $ (20,047) | $ (130,169) | $ 11,980 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share based compensation expense | 19,423 | |||||
Common shares issued for delivery of share based awards | 8,269 | (8,269) | ||||
Common shares withheld to cover income taxes payable due to delivery of share based awards | (3,623) | |||||
Common shares issued under employee stock purchase plan | 1,305 | (449) | ||||
Net income | 73,689 | 69,037 | 4,652 | |||
Common shares repurchased and retired | (15,119) | (28,605) | ||||
Other comprehensive income (loss), net of tax | 18,291 | 18,106 | 185 | |||
Dividends to non-controlling interests | (6,657) | |||||
Ending balance, value at Jan. 03, 2021 | 695,117 | $ 552,969 | 223,666 | 20,385 | (112,063) | 10,160 |
Opening balance (in shares) at Dec. 29, 2019 | 24,869,921 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards (in shares) | 209,407 | |||||
Common shares issued under employee stock purchase plan (in shares) | 16,505 | |||||
Common shares repurchased and retired (in shares) | (672,899) | |||||
Ending balance (in shares) at Jan. 03, 2021 | 24,422,934 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share based compensation expense | 15,959 | |||||
Common shares issued for delivery of share based awards | $ 12,125 | (12,125) | ||||
Common shares withheld to cover income taxes payable due to delivery of share based awards | (5,001) | |||||
Common shares issued under employee stock purchase plan | 1,593 | (322) | ||||
Net income | 99,194 | 94,501 | 4,693 | |||
Common shares repurchased and retired | (23,287) | (90,642) | ||||
Other comprehensive income (loss), net of tax | 10,547 | 10,481 | 66 | |||
Dividends to non-controlling interests | (3,380) | |||||
Ending balance, value at Jan. 02, 2022 | $ 699,778 | $ 543,400 | 222,177 | 24,244 | (101,582) | 11,539 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards (in shares) | 199,865 | |||||
Common shares issued under employee stock purchase plan (in shares) | 15,091 | |||||
Common shares repurchased and retired (in shares) | (1,014,003) | |||||
Ending balance (in shares) at Jan. 02, 2022 | 23,623,887 | 23,623,887 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share based compensation expense | 21,771 | |||||
Common shares issued for delivery of share based awards | $ 13,868 | (13,868) | ||||
Common shares withheld to cover income taxes payable due to delivery of share based awards | (3,359) | |||||
Common shares issued under employee stock purchase plan | 1,573 | (207) | ||||
Net income | $ 218,444 | 214,233 | 4,211 | |||
Common shares repurchased and retired | (38,838) | (110,651) | ||||
Other comprehensive income (loss), net of tax | (41,179) | (40,642) | (537) | |||
Dividends to non-controlling interests | (4,550) | |||||
Ending balance, value at Jan. 01, 2023 | $ 742,782 | $ 520,003 | $ 226,514 | $ 127,826 | $ (142,224) | $ 10,663 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common shares issued for delivery of share based awards (in shares) | 194,500 | |||||
Common shares issued under employee stock purchase plan (in shares) | 16,567 | |||||
Common shares repurchased and retired (in shares) | (1,679,919) | |||||
Ending balance (in shares) at Jan. 01, 2023 | 22,155,035 | 22,155,035 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 218,444 | $ 99,194 | $ 73,689 |
Adjustments to reconcile net income to net cash flow provided by operating activities: | |||
Loss on disposal of subsidiaries | 850 | 8,590 | 2,091 |
Loss on extinguishment of debt | 0 | 13,583 | 0 |
Depreciation | 71,168 | 70,641 | 68,350 |
Amortization | 17,127 | 21,341 | 23,423 |
Share based compensation expense | 21,771 | 15,959 | 19,423 |
Deferred income taxes | 6,024 | 4,881 | (10,085) |
Unrealized foreign exchange loss (gain) | 820 | (1,244) | (324) |
Share of income from equity investees, net of tax | (4,768) | (4,858) | (2,811) |
Dividend from equity investee | 4,500 | 4,500 | 4,275 |
Pension and post-retirement funding, net of expense | (2,342) | 15,448 | (4,654) |
Non-cash accruals and interest | (511) | 1,678 | 1,601 |
(Gain) loss on sale of property, plant and equipment | (378) | 1,316 | 6,234 |
Asset impairment | 0 | 69,900 | 51,515 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (39,056) | (56,831) | (13,006) |
Inventories | (66,372) | (92,641) | (15,568) |
Prepaid expenses and other assets | 7,266 | (8,021) | (9,179) |
Accounts payable and accrued expenses | (33,302) | 1,473 | 107,129 |
Other assets and liabilities | (12,044) | (8,452) | 19,077 |
Net cash flow provided by operating activities | 189,197 | 156,457 | 321,180 |
Cash flows from investing activities: | |||
Additions to property, plant and equipment | (114,307) | (86,670) | (72,908) |
Acquisition of businesses, net of cash acquired | 0 | (160) | (5,814) |
Proceeds from sale of subsidiaries, net of cash disposed | (74) | 7,001 | 0 |
Proceeds from sale of property, plant and equipment | 6,413 | 6,027 | 7,362 |
Other investing activities | (3,130) | (2,340) | (2,530) |
Net cash flow used in investing activities | (111,098) | (76,142) | (73,890) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 0 | 375,000 | 0 |
Repayments of long-term debt | 0 | (300,945) | (57) |
Payment of debt extinguishment costs | 0 | (10,810) | 0 |
Payment of debt issuance costs | 0 | (4,672) | 0 |
Tax withholding on share based awards | (3,359) | (5,001) | (3,623) |
Distributions to non-controlling interests | (4,550) | (3,380) | (6,657) |
Repurchases of common shares | (149,489) | (113,929) | (43,724) |
Net cash flow used in financing activities | (157,398) | (63,737) | (54,061) |
Net foreign currency translation adjustment on cash | (3,285) | (307) | 4,397 |
(Decrease) Increase in cash, cash equivalents and restricted cash | (82,584) | 16,271 | 197,626 |
Cash, cash equivalents and restricted cash, beginning of period | 391,505 | 375,234 | 177,608 |
Cash, cash equivalents and restricted cash, at end of period | $ 308,921 | $ 391,505 | $ 375,234 |
Business Overview and Significa
Business Overview and Significant Accounting Policies | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Business Overview and Significant Accounting Policies | Business Overview and Significant Accounting Policies Unless we state otherwise or the context otherwise requires, references to "Masonite," "we," "our," "us" and the "Company" in these notes to the consolidated financial statements refer to Masonite International Corporation and its subsidiaries. Description of Business Masonite International Corporation is one of the largest manufacturers of doors in the world, with significant market share in both interior and exterior door products. Masonite operates 59 manufacturing locations in seven countries and sells doors to customers throughout the world, including the United States, Canada and the United Kingdom. Basis of Presentation We prepare these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These consolidated financial statements include the accounts of Masonite International Corporation, a company incorporated under the laws of British Columbia, and its subsidiaries, as of January 1, 2023, and January 2, 2022, and for the years ended January 1, 2023, January 2, 2022, and January 3, 2021. Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. In a 52-week year, each fiscal quarter consists of 13 weeks. For ease of disclosure, the 13-week periods are referred to as three-month periods and the 52- or 53-week periods are referred to as years. Our 2020 fiscal year, which ended on January 3, 2021, contained 53 weeks of operating results, with the additional week occurring in the fourth quarter. Changes in Accounting Standards and Policies Adoption of Recent Accounting Pronouncements In December 2021, the Financial Accounting Standards Board ("FASB") issued ASU 2021-10, "Government Assistance," which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity's financial statements. The guidance was effective for annual periods beginning after December 15, 2021, with early adoption permitted. We have adopted the new guidance as of January 3, 2022, the beginning of fiscal year 2022, and the adoption did not have a material impact on our financial statements or disclosures. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. We adopted the new guidance prospectively as of January 4, 2021, the beginning of fiscal year 2021, and the adoption did not have a material impact on our financial statements. Other Recent Accounting Pronouncements not yet Adopted In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09," Revenue from Contracts with Customers" as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, with early application permitted. We did not early adopt and believe the adoption of this new guidance will not have a material impact on our financial statements. Summary of Significant Accounting Policies (a) Principles of consolidation: These consolidated financial statements include the accounts of Masonite and our subsidiaries and the accounts of any variable interest entities for which we are the primary beneficiary. Intercompany accounts and transactions have been eliminated upon consolidation. The results of subsidiaries acquired during the periods presented are consolidated from their respective dates of acquisition using the acquisition method. Subsidiaries are prospectively deconsolidated as of the date we no longer have effective control of the entity. (b) Translation of consolidated financial statements into U.S. dollars: These consolidated financial statements are expressed in U.S. dollars. The accounts of the majority of our self-sustaining foreign operations are maintained in functional currencies other than the U.S. dollar. Assets and liabilities for these subsidiaries have been translated into U.S. dollars at the exchange rates prevailing at the end of the period and results of operations at the average exchange rates for the period. Unrealized exchange gains and losses arising from the translation of the financial statements of our non-U.S. functional currency operations are accumulated in the cumulative translation adjustments account in accumulated other comprehensive loss. For our foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency-denominated accounts are remeasured into U.S. dollars. Unrealized exchange gains and losses arising from remeasurements of foreign currency-denominated assets and liabilities are included within other (income) expense, net in the consolidated statements of income and comprehensive income. Gains and losses arising from international intercompany transactions that are of a long-term investment nature are reported in the same manner as translation gains and losses. Realized exchange gains and losses are included in net income for the periods presented. (c) Cash and cash equivalents: Cash includes cash equivalents which are short-term highly liquid investments with original maturities of three months or less. (d) Restricted cash: Restricted cash includes cash we have placed as collateral for standby letters of credit. The letters of credit guarantee payment to third parties in the event the company is in breach of contract terms as detailed in each letter of credit. As of January 1, 2023, and January 2, 2022, we had standby letters of credit totaling $2.1 million and $2.6 million, respectively. There were no amounts drawn upon these letters of credit as of January 1, 2023, or January 2, 2022. (e) Accounts receivable: Our customers are primarily retailers, distributors and contractors. We record an allowance for credit losses at the time that accounts receivable are initially recorded based on the historical write-off experience and the current economic environment as well as our expectations of future economic conditions. We reassess the allowance at each reporting date. When it becomes apparent, based on age or customer circumstances, that such amounts will not be collected, they are charged to the allowance. Payments subsequently received are credited to the credit loss expense account included within selling, general and administration expenses in the consolidated statements of income and comprehensive income. Generally, we do not require collateral for our accounts receivable. (f) Inventories: Raw materials and finished goods are valued at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. In determining the net realizable value, we consider factors such as yield, turnover, expected future demand and past experience. The cost of inventories includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include costs directly related to the units of production, such as direct labor. They also include a systematic allocation of fixed and variable production overheads that are incurred in converting raw materials into finished goods. Fixed production overheads are those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory buildings and equipment, and the cost of factory management and administration. Variable production overheads are those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labor. To determine the cost of inventory, we allocate fixed expenses to the cost of production based on the normal capacity, which refers to a range of production levels and is considered the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Fixed overhead costs allocated to each unit of production are not increased due to abnormally low production. Those excess costs are recognized as a current period expense. When a production facility is completely shut down temporarily, it is considered idle, and all related expenses are charged to cost of goods sold. (g) Property, plant and equipment: Property, plant and equipment are stated at cost. Depreciation is recorded based on the carrying values of buildings, machinery and equipment using the straight-line method over the estimated useful lives set forth as follows: Useful Life (Years) Buildings 20 - 40 Machinery and equipment Tooling 10 - 25 Machinery and equipment 5 - 25 Molds and dies 12 - 25 Office equipment, fixtures and fittings 3 - 12 Information technology systems 5 - 15 Improvements and major maintenance that extend the life of an asset are capitalized; other repairs and maintenance are expensed as incurred. When assets are retired or otherwise disposed, their carrying values and accumulated depreciation are removed from the accounts. Property, plant and equipment are tested for impairment when events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset or asset group being tested for recoverability exceeds the sum of the undiscounted cash flows expected from its use and disposal. Impairments are measured as the amount by which the carrying amount of the asset or asset group exceeds its fair value, as determined using a discounted cash flows approach when quoted market prices are not available. (h) Leases: We determine if a contract is a lease at inception or upon acquisition and reevaluate each time a lease contract is amended or otherwise modified. A lease will be classified as an operating lease if it does not meet any of the criteria for a finance lease. Those criteria include the transfer of ownership of the underlying asset by the end of the lease term; an option to purchase the underlying asset that we would be reasonably certain to exercise; the lease term is for the major part of the remaining economic life of the underlying asset; the present value of the sum of the lease payments and any residual value guaranteed by us that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or if the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. The assets and liabilities relating to operating leases are included in operating lease right-of-use assets, accrued expenses, and long-term operating lease liabilities in our consolidated balance sheets. The assets and liabilities relating to finance leases are included in property, plant and equipment, net and other liabilities in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the respective lease commencement date based on the present value of lease payments over the expected lease term. Since our leases do not specify implicit discount rates, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any initial direct costs and is adjusted for lease incentives and prepaid or accrued rent. The lease term begins on the date when the lessor makes the underlying asset available for use to us, and our expected lease terms include options to extend the lease when it is reasonably certain that we will exercise those options. Lease payments are recognized in the consolidated statements of income and comprehensive income on a straight-line basis over the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet, with the related lease expense recognized on a straight-line basis over the lease term. Lease and non-lease components of a contract are combined into a single lease component for accounting purposes. Our operating leases include leases for real estate (including manufacturing sites, warehouses and offices) and machinery and equipment and our finance leases include leases for real estate. We have no material subleases. Certain of our operating leases contain provisions for renewal ranging from one to four options of one (i) Goodwill: We use the acquisition method of accounting for all business combinations, and we evaluate all business combinations for intangible assets that should be recognized apart from goodwill. Goodwill adjustments are recorded for the effect on goodwill of changes to net assets acquired during the measurement period (up to one year from the date of acquisition) for new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Goodwill is not amortized, but instead is tested annually for impairment on the last day of fiscal November, or more frequently if events or changes in circumstances indicate the carrying amount may not be recoverable. The test for impairment is performed at the reporting unit level by comparing the reporting unit’s carrying amount to its fair value. Possible impairment in goodwill is first analyzed using qualitative factors such as macroeconomic and market conditions, changing costs and actual and projected performance, amongst others, to determine whether it is more likely than not that the book value of the reporting unit exceeds its fair value. If it is determined more likely than not that the book value exceeds fair value, a quantitative analysis is performed to test for impairment. When quantitative steps are determined necessary, the fair values of the reporting units are estimated through the use of discounted cash flow analysis and market multiples. If the carrying amount exceeds fair value, then goodwill is impaired. Any impairment in goodwill is measured as the excess of the carrying value of goodwill over the fair value. There were no impairment charges recorded against goodwill in 2022. When developing our discounted cash flow analyses, a number of assumptions and estimates are involved to forecast operating cash flows, including future net sales growth, EBITDA margin growth, benefits from restructuring initiatives, income tax rates, capital spending, business initiatives and working capital changes. These assumptions may vary significantly among the reporting units. Operating cash flow forecasts are based on operating plans for the early years and historical relationships and long-term economic outlooks for our industry in later years. The discount rate is estimated for each specific reporting unit. Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of our impairment analyses. In 2021 and 2020, we recorded $59.5 million and $51.5 million, respectively, in impairment charges related to the Architectural reporting unit. See Note 14 for further information. (j) Intangible assets: Intangible assets with definite lives include customer relationships, patents, system software development and acquired trademarks and tradenames. Definite lived intangible assets are amortized over their estimated useful lives. Information pertaining to the estimated useful lives of intangible assets is as follows: Estimated Useful Life Customer relationships Over expected relationship period Patents Over expected useful life System software development Over expected useful life Acquired trademarks and tradenames Straight-line over expected useful life Amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may be greater than fair value. An impairment loss is recognized when the estimate of undiscounted future cash flows generated by such assets is less than the carrying amount. Measurement of the impairment loss is based on the fair value of the asset. Fair value is measured using discounted cash flows. Indefinite lived intangible assets are not amortized, but instead are tested for impairment annually on the last day of fiscal November, or more frequently if events or circumstances indicate the carrying value may exceed the fair value. (k) Income taxes: As a multinational corporation, we are subject to taxation in many jurisdictions and the calculation of our tax liabilities involves dealing with inherent uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. We assess the income tax positions and record tax liabilities for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. Our global structure required an assessment of the Company’s interpretation and application of tax laws in multiple jurisdictions including the income tax impact of the legal entity ownership structure and intercompany transactions. We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets 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 due to a change in tax rates is recognized in income in the period that includes the date of enactment. A valuation allowance is recorded to reduce deferred tax assets to an amount that is anticipated to be realized on a more likely than not basis. We account for uncertain taxes in accordance with ASC 740, "Income Taxes." The initial benefit recognition model follows a two-step approach. First, we evaluate if the tax position is more likely than not of being sustained if audited based solely on the technical merits of the position. Second, we measure the appropriate amount of benefit to recognize. This is calculated as the largest amount of tax benefit that has a greater than 50% likelihood of ultimately being realized upon settlement. Subsequently at each reporting date, the largest amount that has a greater than 50% likelihood of ultimately being realized, based on information available at that date, will be measured and recognized. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the consolidated statements of income and comprehensive income. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. (l) Employee future benefits: We maintain defined benefit pension plans. Benefits under the plans were frozen or curtailed at various times in the past. Earnings are charged with the cost of benefits earned by employees as services are rendered. The cost reflects management’s best estimates of the pension plans’ expected investment yields, wage and salary escalation, mortality of members, terminations and the ages at which members will retire. Changes in these assumptions could impact future pension expense. Service cost components are recognized within cost of goods sold and non-service cost components are recognized within other (income) expense, net in the consolidated statements of income and comprehensive income. The excess of the net actuarial gain (loss) over 10% of the greater of the benefit obligation or fair value of plan assets at the beginning of the year is amortized over the average remaining service lives of the members. Assets are valued at fair value for the purpose of calculating the expected return on plan assets. Past service costs arising from plan amendments are amortized on a straight-line basis over the average remaining service period of employees active at the date of amendment. When a restructuring of a benefit plan gives rise to both a curtailment and a settlement of obligations, the curtailment is accounted for prior to the settlement. Curtailment gains are offset against unrecognized losses and any excess gains and all curtailment losses are recorded in the period in which the curtailment occurs. (m) Restructuring costs: Restructuring costs include all salary-related severance benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management and the benefit is probable and reasonably estimable. In addition to salary-related costs, we incur other restructuring costs when facilities are closed or capacity is realigned within the organization. Upon termination of a contract we record liabilities and expenses pursuant to the terms of the relevant agreement. For non-contractual restructuring activities, liabilities and expenses are measured and recorded at fair value in the period in which they are incurred. Restructuring-related costs are presented separately in the consolidated statements of income and comprehensive income whereas non-restructuring severance benefits are charged to cost of goods sold or selling, general and administration expense depending on the nature of the job responsibilities. (n) Financial instruments: We have applied a framework consistent with ASC 820, "Fair Value Measurement and Disclosure," and have disclosed all financial assets and liabilities measured at fair value and non-financial assets and liabilities measured at fair value on a non-recurring basis (at least annually). We classify and disclose assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The estimated fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. These estimates, although based on the relevant market information about the financial instrument, are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. (o) Share based compensation expense: We have a share based compensation plan, which is described in detail in Note 12. We apply the fair value method of accounting using comprehensive valuation models, including the Black-Scholes-Merton option pricing model, to determine the compensation expense. (p) Revenue recognition: Revenue from the sale of products is recognized when control of the promised goods is transferred to our customers based on the agreed-upon shipping terms, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Volume rebates, expected returns, discounts and other incentives to customers are considered variable consideration and we estimate these amounts based on the expected amount to be provided to customers and reduce the revenues we recognize accordingly. Sales taxes and value added taxes assessed by governmental entities are excluded from the measurement of consideration expected to be received. Shipping and handling costs incurred after a customer has taken possession of our goods are treated as a fulfillment cost and are not considered a separate performance obligation. Shipping and other transportation costs charged to customers are recorded in both revenues and cost of goods sold in the consolidated statements of income and comprehensive income. (q) Product warranties: We warrant certain qualitative attributes of our door products. We have recorded provisions for estimated warranty and related costs within accrued expenses on the consolidated balance sheets, based on historical experience and we periodically adjust these provisions to reflect actual experience. The rollforward of our warranty provision is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 4,015 $ 4,635 $ 4,414 Additions charged to expense 5,085 4,646 6,807 Deductions (5,219) (5,266) (6,586) Balance at end of period $ 3,881 $ 4,015 $ 4,635 (r) Vendor rebates: We account for cash consideration received from a vendor as a reduction of cost of goods sold and inventory, in the consolidated statements of income and comprehensive income and consolidated balance sheets, respectively. The cash consideration received represents agreed-upon vendor rebates that are earned in the normal course of operations. (s) Advertising costs: We recognize advertising costs as they are incurred. Advertising costs incurred primarily relate to tradeshows and are included within selling, general and administration expense in the consolidated statements of income and comprehensive income. Advertising costs were $16.9 million, $14.2 million and $10.8 million in the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. (t) Research and development costs: We recognize research and development costs as they are incurred. Research and development costs incurred primarily relate to the development of new products and the improvement of manufacturing processes, and are primarily included within cost of goods sold in the consolidated statements of income and comprehensive income. These costs exclude the significant investments in other areas such as advanced automation. Research and development costs were $21.2 million, $18.4 million and $17.0 million in the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. (u) Insurance losses and proceeds: All involuntary conversions of property, plant and equipment are recorded as losses within loss (gain) on disposal of property, plant and equipment, which is included within selling, general and administration expense in the consolidated statements of income and comprehensive income and as reductions to property, plant and equipment in the consolidated balance sheets. Any subsequent proceeds received for insured losses of property, plant and equipment are also recorded as gains within loss (gain) on disposal of property, plant and equipment, and are classified as cash flows from investing activities in the consolidated statements of cash flows in the period in which the cash is received. Proceeds received for business interruption recoveries are recorded as a reduction to selling, general and administration expense in the consolidated statements of income and comprehensive income and are classified as cash flows from operating activities in the consolidated statements of cash flows in the period in which an acknowledgment from the insurance carrier of settlement or partial settlement of a non-refundable nature has been presented to us. (v) Equity investments: We account for investments in affiliates of between 20% and 50% ownership, over which we have significant influence, using the equity method. We record our share of earnings of the affiliate within other income, net of expense, in the consolidated statements of income and comprehensive income and dividends as a reduction of the investment in the affiliate in the consolidated balance sheets when declared. (w) Segment reporting: Our reportable segments are organized and managed principally by end market: North American Residential, Europe and Architectural. The Corporate & Other category includes unallocated corporate costs and the results of immaterial operating segments that were not aggregated into any reportable segment. In addition to similar economic characteristics we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. (x) Use of estimates: The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reporting periods. During 2022, there were no material changes in the methods or policies used to establish estimates and assumptions. Actual results may differ from our estimates. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Jan. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions On January 3, 2023, we completed the acquisition of Endura Products for approximately $375.0 million in cash using a combination of cash on hand and borrowings under our Term Loan Facility and ABL Facility. In connection with the acquisition, we borrowed $250.0 million under our Term Loan Facility and $100.0 million under our ABL Facility. Endura is a leading innovator and manufacturer of high-performance door frames and door system components in the United States. Refer to Note 23. Subsequent Events for additional information. On December 4, 2020, we completed the acquisition of a Lowe's Companies, Inc. door fabrication facility in the United States for cash consideration of $3.9 million. During the first quarter of 2021, as a result of the working capital adjustments we paid an additional $0.2 million. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for the acquisition are not presented as they were not material for any period presented. On August 31, 2020, we acquired intellectual property and other assets related to an interior door technology for cash consideration of $1.9 million. The purchase price allocation, net sales, net income (loss) attributable to Masonite and pro forma information for the acquisition are not presented as they were not material for any period presented. Divestitures During the fourth quarter of 2022, we completed the liquidation of our legal entity in Turkey. As a result, we recognized $0.9 million in loss on disposal of subsidiaries. The total charge consists of $0.7 million relating to the recognition of cumulative translation adjustment out of accumulated other comprehensive loss and $0.2 million relating to the write-off of net assets. On June 14, 2021, we completed the sale of all the capital stock of our Czech business ("Czech") for consideration of $7.0 million, net of cash disposed. The divestiture of this business resulted in a loss on disposal of subsidiaries of $8.6 million, which was recognized in the second quarter of 2021 in the Europe segment. The total charge consisted of $5.1 million relating to the write-off of the net assets sold and other professional fees and $3.5 million relating to the recognition of the cumulative translation adjustment out of accumulated other comprehensive loss. During the second quarter of 2020, we completed the liquidation of our legal entity in India. As a result, we recognized $2.1 million in loss on disposal of subsidiaries. The total charge consists of $2.3 million relating to the recognition of cumulative translation adjustment out of accumulated other comprehensive loss and $0.2 million relating to the write-off of net assets and other professional fees. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Jan. 01, 2023 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Our customers consist mainly of retailers, distributors and contractors. Our ten largest customers accounted for 62.3% and 56.7% of total accounts receivable as of January 1, 2023, and January 2, 2022, respectively. Our largest customer, The Home Depot, Inc. accounted for more than 10% of the consolidated gross accounts receivable balance as of January 1, 2023, and January 2, 2022. No other individual customer accounted for greater than 10% of the consolidated gross accounts receivable balance at either January 1, 2023, or January 2, 2022. The changes in the allowance for doubtful accounts were as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 2,087 $ 2,809 $ 1,752 Additions charged to expense 1,062 242 1,443 Deductions (669) (964) (386) Balance at end of period $ 2,480 $ 2,087 $ 2,809 We maintain an accounts receivable sales program with a third party (the "AR Sales Program"). Under the AR Sales Program, we can transfer ownership of eligible trade accounts receivable of certain customers. Receivables are sold outright to a third party who assumes the full risk of collection, without recourse to us in the event of a loss. Transfers of receivables under this program are accounted for as sales. Proceeds from the transfers reflect the face value of the accounts receivable less a discount. Receivables sold under the AR Sales Program are excluded from trade accounts receivable in the consolidated balance sheets and are included in cash flows from operating activities in the consolidated statements of cash flows. The discounts on the sales of trade accounts receivable sold under the AR Sales Program were not material for any of the periods presented and were recorded in selling, general and administration expense within the consolidated statements of income and comprehensive income. In most countries we pay and collect Value Added Tax ("VAT") when procuring goods and services within the normal course of business. VAT receivables are established in jurisdictions where VAT paid exceeds VAT collected and are recoverable through the filing of refund claims. Certain wood moldings and millwork products being imported into the United States are subject to import tariffs. Tariff deposits are paid to the government and are recoverable through an assessment process. |
Inventories
Inventories | 12 Months Ended |
Jan. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The amounts of inventory on hand were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Raw materials $ 320,553 $ 275,269 Finished goods 95,005 78,324 Provision for obsolete or aged inventory (8,730) (6,117) Inventories, net $ 406,828 $ 347,476 We carry an inventory provision which is the result of obsolete or aged inventory. The rollforward of our inventory provision is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 6,117 $ 6,305 $ 7,136 Additions charged to expense 7,692 3,402 5,150 Deductions (5,079) (3,590) (5,981) Balance at end of period $ 8,730 $ 6,117 $ 6,305 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jan. 01, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment The carrying amounts of our property, plant and equipment and accumulated depreciation were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Land $ 21,415 $ 22,851 Buildings 222,340 216,510 Machinery and equipment 837,407 783,913 Property, plant and equipment, gross 1,081,162 1,023,274 Accumulated depreciation (428,833) (396,477) Property, plant and equipment, net $ 652,329 $ 626,797 Total depreciation expense was $71.2 million, $70.6 million and $68.4 million for the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. Depreciation expense is included primarily within cost of goods sold in the consolidated statements of income and comprehensive income. |
Leases
Leases | 12 Months Ended |
Jan. 01, 2023 | |
Leases [Abstract] | |
Leases | Leases The following table summarizes the components of lease expense recorded in the consolidated statements of income and comprehensive income for the periods indicated: (In thousands) Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Operating lease expense $ 49,972 $ 47,263 $ 38,922 Finance lease expense Amortization of leased assets 1,123 865 882 Interest on lease liabilities 1,356 1,443 1,458 Total lease expense $ 52,451 $ 49,571 $ 41,262 The following table includes a detail of lease assets and liabilities included in the consolidated balance sheet as of the period indicated: (In thousands) January 1, 2023 January 2, 2022 Operating lease right-of-use assets $ 160,695 $ 176,445 Finance lease right-of-use assets (1) 25,409 23,931 Total lease assets, net $ 186,104 $ 200,376 Current portion of operating lease liabilities $ 24,372 $ 25,551 Long-term operating lease liabilities 151,242 165,670 Long-term finance lease liabilities 29,561 27,043 Total lease liabilities $ 205,175 $ 218,264 ____________ (1) Net of accumulated amortization of $3.5 million and $2.4 million, as of January 1, 2023 , and January 2, 2022 , respectively. The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases as of the period indicated: January 1, 2023 January 2, 2022 Weighted-average remaining lease term (years) Operating leases 11.2 11.8 Finance leases 26.6 27.6 Weighted-average discount rate (1) Operating leases 4.3 % 4.1 % Finance leases 4.8 % 5.4 % ____________ (1) Based on the Company's incremental borrowing rate at lease commencement or modification. As of January 1, 2023, the future minimum lease payments under non-cancelable leases are as follows: (In thousands) Operating Leases Finance Leases Fiscal year: 2023 $ 31,073 $ 1,311 2024 28,862 1,471 2025 25,331 1,515 2026 18,362 1,693 2027 14,622 1,612 Thereafter 113,393 49,127 Total minimum lease payments 231,643 56,729 Less imputed interest (56,029) (27,168) Present value of future lease payments $ 175,614 $ 29,561 As of January 1, 2023, we have one undiscounted commitment for an operating lease that had not yet commenced of $25.8 million. This operating lease will commence during fiscal year 2023 with a lease term of 7.2 years. |
Leases | Leases The following table summarizes the components of lease expense recorded in the consolidated statements of income and comprehensive income for the periods indicated: (In thousands) Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Operating lease expense $ 49,972 $ 47,263 $ 38,922 Finance lease expense Amortization of leased assets 1,123 865 882 Interest on lease liabilities 1,356 1,443 1,458 Total lease expense $ 52,451 $ 49,571 $ 41,262 The following table includes a detail of lease assets and liabilities included in the consolidated balance sheet as of the period indicated: (In thousands) January 1, 2023 January 2, 2022 Operating lease right-of-use assets $ 160,695 $ 176,445 Finance lease right-of-use assets (1) 25,409 23,931 Total lease assets, net $ 186,104 $ 200,376 Current portion of operating lease liabilities $ 24,372 $ 25,551 Long-term operating lease liabilities 151,242 165,670 Long-term finance lease liabilities 29,561 27,043 Total lease liabilities $ 205,175 $ 218,264 ____________ (1) Net of accumulated amortization of $3.5 million and $2.4 million, as of January 1, 2023 , and January 2, 2022 , respectively. The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases as of the period indicated: January 1, 2023 January 2, 2022 Weighted-average remaining lease term (years) Operating leases 11.2 11.8 Finance leases 26.6 27.6 Weighted-average discount rate (1) Operating leases 4.3 % 4.1 % Finance leases 4.8 % 5.4 % ____________ (1) Based on the Company's incremental borrowing rate at lease commencement or modification. As of January 1, 2023, the future minimum lease payments under non-cancelable leases are as follows: (In thousands) Operating Leases Finance Leases Fiscal year: 2023 $ 31,073 $ 1,311 2024 28,862 1,471 2025 25,331 1,515 2026 18,362 1,693 2027 14,622 1,612 Thereafter 113,393 49,127 Total minimum lease payments 231,643 56,729 Less imputed interest (56,029) (27,168) Present value of future lease payments $ 175,614 $ 29,561 As of January 1, 2023, we have one undiscounted commitment for an operating lease that had not yet commenced of $25.8 million. This operating lease will commence during fiscal year 2023 with a lease term of 7.2 years. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jan. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Changes in the carrying amount of goodwill were as follows as of the dates indicated: (In thousands) North American Residential Europe Architectural Total January 3, 2021 $ 9,730 $ 69,439 $ 59,523 $ 138,692 Measurement period adjustment 160 — — 160 Goodwill related to 2021 divestiture — (1,395) — (1,395) Goodwill impairment — — (59,526) (59,526) Foreign exchange fluctuations 3 (835) 3 (829) January 2, 2022 9,893 67,209 — 77,102 Foreign exchange fluctuations (19) (7,215) — (7,234) January 1, 2023 $ 9,874 $ 59,994 $ — $ 69,868 Gross goodwill before cumulative impairment charges in the Architectural reporting unit was $111.0 million as of January 1, 2023, January 2, 2022, and January 3, 2021. In the third quarter of 2020, we determined the continued decreased demand in the Architectural door market due to the impact of COVID-19 in the year, along with the uncertainty of the duration and intensity of the pandemic on the Architectural door market for future periods were indicators that goodwill impairment was present in the Architectural reporting unit. A goodwill impairment charge of $51.5 million was recorded to selling, general and administration expenses. The charge represents the amount by which the carrying value of the Architectural reporting unit exceeded its fair value and reduced the goodwill balance in the Architectural reporting unit from $111.0 million to $59.5 million. See Note 14 for further information. We performed an annual qualitative impairment test of each of our reporting units during the fourth quarter of 2021. As a result of manufacturing constraints in the Architectural reporting unit due to COVID-19 related absenteeism, material availability and production challenges, a goodwill impairment charge of $59.5 million was recorded to selling, general and administration expenses in 2021. The charge represents the amount by which the carrying value of the Architectural reporting unit exceeded its fair value and reduced the goodwill balance in the Architectural reporting unit from $59.5 million to zero. See Note 14 for further information. The cost and accumulated amortization values of our intangible assets were as follows as of the dates indicated: January 1, 2023 January 2, 2022 (In thousands) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Definite life intangible assets: Customer relationships $ 165,700 $ (135,518) $ 30,182 $ 176,779 $ (132,840) $ 43,939 Patents 34,776 (29,665) 5,111 34,438 (28,148) 6,290 Software 37,187 (33,900) 3,287 36,354 (33,281) 3,073 Trademarks and tradenames 30,918 (15,827) 15,091 34,210 (14,063) 20,147 License rights and other 6,584 (84) 6,500 94 (94) — Total definite life intangible assets 275,165 (214,994) 60,171 281,875 (208,426) 73,449 Indefinite life intangible assets: Trademarks and tradenames 75,885 — 75,885 77,038 — 77,038 Total intangible assets $ 351,050 $ (214,994) $ 136,056 $ 358,913 $ (208,426) $ 150,487 Amortization of intangible assets was $15.8 million, $20.2 million and $22.2 million for the years ended January 1, 2023, January 2, 2022, and January 3, 2021 respectively. Amortization expense is classified within selling, general and administration expenses in the consolidated statements of income and comprehensive income. The estimated future amortization of intangible assets with definite lives as of January 1, 2023, is as follows: (In thousands) Fiscal year: 2023 $ 15,487 2024 14,054 2025 12,063 2026 8,617 2027 8,305 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jan. 01, 2023 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued Expenses The details of our accrued expenses were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Accrued payroll $ 69,224 $ 66,048 Accrued rebates 50,200 51,200 Current portion of operating lease liabilities 24,372 25,551 Accrued interest 16,480 17,125 Other accruals 62,770 77,376 Total accrued expenses $ 223,046 $ 237,300 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Jan. 01, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt (In thousands) January 1, 2023 January 2, 2022 3.50% senior unsecured notes due 2030 $ 375,000 $ 375,000 5.375% senior unsecured notes due 2028 500,000 500,000 Debt issuance costs (8,884) (9,279) Total long-term debt $ 866,116 $ 865,721 Interest expense on our long-term debt was $41.3 million, $43.9 million and $45.5 million for years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively, and primarily related to our consolidated indebtedness under senior unsecured notes. Debt issuance costs incurred in connection with the 2030 Notes and the 2028 Notes were capitalized as a reduction to the carrying value of debt and are being accreted to interest expense over their respective terms. Additionally, we pay interest on any outstanding principal under our Term Loan Facility and ABL Facility, each as defined below, and we are required to pay a commitment fee for unutilized commitments under the ABL Facility, both of which are recorded in interest expense as incurred. 3.50% Senior Notes due 2030 On July 26, 2021, we issued $375.0 million aggregate principal senior unsecured notes (the "2030 Notes"). The 2030 Notes were issued in a private placement for resale to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), and to buyers outside of the United States pursuant to Regulation S under the Securities Act. The 2030 Notes bear interest at 3.50% per annum, payable in cash semiannually in arrears on February 15 and August 15 of each year and the principal is due February 15, 2030. The 2030 Notes were issued at par. We received net proceeds of $370.3 million after deducting $4.7 million of debt issuance costs. The debt issuance costs were capitalized as a reduction to the carrying value of debt and are being accreted to interest expense over the term of the 2030 Notes using the effective interest method. The net proceeds from the issuance of the 2030 Notes were used to redeem the remaining $300.0 million aggregate principal amount of the 2026 Notes (as described below), including the payment of related premiums, fees and expenses, with the balance of the proceeds available for general corporate purposes. Obligations under the 2030 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by certain of our directly or indirectly wholly-owned subsidiaries. We may redeem the 2030 Notes, in whole or in part, at any time, at the applicable redemption prices specified under the indenture governing the 2030 Notes, plus accrued and unpaid interest, if any, to the date of redemption. If we experience certain changes of control, we must offer to repurchase all of the 2030 Notes at a purchase price of 101.00% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. The indenture governing the 2030 Notes contains limited covenants that, among other things, limit our ability and the ability of our subsidiaries to (i) incur certain secured debt, (ii) engage in certain sale and leaseback transactions and (iii) merge or consolidate with other entities. The foregoing limitations are subject to exceptions as set forth in the indenture governing the 2030 Notes. The indenture governing the 2030 Notes contains customary events of default (subject to certain cases to customary grace and cure periods). As of January 1, 2023, we were in compliance with all covenants under the indenture governing the 2030 Notes. 5.375% Senior Notes due 2028 On July 25, 2019, we issued $500.0 million aggregate principal senior unsecured notes (the "2028 Notes"). The 2028 Notes were issued in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to buyers outside of the United States pursuant to Regulation S under the Securities Act. The 2028 Notes were issued without registration rights and are not listed on any securities exchange. The 2028 Notes bear interest at 5.375% per annum, payable in cash semiannually in arrears on February 1 and August 1 of each year and the principal is due February 1, 2028. The 2028 notes were issued at par. We received net proceeds of $493.3 million after deducting $6.7 million of debt issuance costs. The debt issuance costs were capitalized as a reduction to the carrying value of debt and are being accreted to interest expense over the term of the 2028 Notes using the effective interest method. The net proceeds from issuance of the 2028 Notes, together with available cash balances, were used to redeem the remaining $500.0 million aggregate principal amount of similar senior unsecured notes. Obligations under the 2028 Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by certain of our directly or indirectly wholly-owned subsidiaries. We may redeem the 2028 Notes, in whole or in part, at any time on or after February 1, 2023, at the applicable redemption prices specified under the indenture governing the 2028 Notes, plus accrued and unpaid interest, if any, to the date of redemption. If we experience certain changes of control or consummate certain asset sales and do not reinvest the net proceeds, we must offer to repurchase all of the 2028 Notes at a purchase price of 101.00% (in the case of changes in control) or 100.00% (in the case of asset sales) of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. The indenture governing the 2028 Notes contains restrictive covenants that, among other things, limit our ability and the ability of our subsidiaries to: (i) incur additional debt and issue disqualified or preferred stock, (ii) make restricted payments, (iii) sell assets, (iv) create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to the parent company, (v) create or incur certain liens, (vi) enter into sale and leaseback transactions, (vii) merge or consolidate with other entities and (viii) enter into transactions with affiliates. The foregoing limitations are subject to exceptions as set forth in the indenture governing the 2028 Notes. In addition, if in the future the 2028 Notes have an investment grade rating from at least two nationally recognized statistical rating organizations, certain of these covenants will be terminated. The indenture governing the 2028 Notes contains customary events of default (subject in certain cases to customary grace and cure periods). As of January 1, 2023, we were in compliance with all covenants under the indenture governing the 2028 Notes. 5.750% Senior Notes due 2026 On August 27, 2018, we issued $300.0 million aggregate principal senior unsecured notes (the "2026 Notes"). The 2026 Notes were issued in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to buyers outside of the United States pursuant to Regulation S under the Securities Act. The 2026 Notes were issued without registration rights and are not listed on any securities exchange. The 2026 Notes bore interest at 5.75% per annum, payable in cash semiannually in arrears on March 15 and September 15 of each year and were originally due September 15, 2026. The 2026 notes were issued at par. We received net proceeds of $295.7 million after deducting $4.3 million of debt issuance costs. The debt issuance costs were capitalized as a reduction to the carrying value of debt and were accreted to interest expense over the term of the 2026 Notes using the effective interest method. Subsequent to the closing of the 2030 Notes offering, the 2026 Notes were redeemed, and the notes were considered extinguished as of July 26, 2021. Under the terms of the indenture governing the 2026 Notes, we paid the applicable premium of $10.8 million. Additionally, the unamortized debt issuance costs of $2.8 million relating to the 2026 Notes were written off in conjunction with the extinguishment of the 2026 Notes. The resulting loss on extinguishment of debt was $13.6 million and was recorded as part of income from continuing operations before income tax expense in the condensed consolidated statements of income and comprehensive income in 2021. Additionally, the cash payment of interest accrued to, but not including, the redemption date was accelerated to the redemption date. Term Loan Facility On December 13, 2022, we and certain of our subsidiaries entered into a new delayed-draw term loan credit agreement (the "Term Loan Credit Agreement") maturing on December 12, 2027 (the "Term Loan Maturity Date"). The Term Loan Credit Agreement provides for a senior secured five-year delayed-draw term loan facility of $250.0 million (the "Term Loan Facility"). Loans under the Term Loan Facility (the "Term Loans") will bear interest at a rate equal to, at our option, (1) the Adjusted Term SOFR Rate (as defined in the Term Loan Credit Agreement) plus an applicable margin of 2.25% or (2) an alternate base rate equal to the greatest of (i) the "Prime Rate" in the U.S. last quoted by The Wall Street Journal, (ii) 0.50% above the greater of the federal funds rate and the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars, (iii) 1.00% above the Adjusted Term SOFR Rate for a one month interest period and (iv) 1.00%, plus, in each case, an applicable margin of 1.25%, subject to, in each of cases (1) and (2), an agreed interest rate floor. The Term Loans are repayable in equal quarterly installments for an annual aggregate amortization payment equal to 15% of the aggregate principal amount of the Term Loans, with the balance of the principal being due on the Term Loan Maturity Date. The Term Loan Credit Agreement also includes a quarterly ticking fee of 25 basis points per annum payable to the lenders under the Term Loan Facility beginning on January 3, 2023 (the "Closing Date") in respect of the unutilized commitments thereunder. As a result of the incurrence of the Term Loans on the Closing Date such ticking fees were not (and shall not be) payable to the Lenders. The Borrower also pays customary agency fees. Obligations under the Term Loan Credit Agreement are fully and unconditionally guaranteed, jointly and severally, by us and by certain of our directly or indirectly wholly-owned subsidiaries organized in the United States and are secured by the equity in, and substantially all the assets of, such subsidiaries. The Term Loans were funded in an amount of $250.0 million and applied to finance a portion of the consideration payable in connection with the consummation of the Endura acquisition on January 3, 2023. The Term Loan Credit Agreement contains restrictive covenants that, among other things, limit our ability and the ability of our subsidiaries to: (i) pay dividends on our common shares and make other restricted payments, (ii) make investments and acquisitions, (iii) engage in transactions with our affiliates, (iv) sell assets, (v) merge, (vi) incur additional debt and (vii) create liens. The Term Loan Credit Agreement includes certain exceptions and exemptions under the restricted payment, investment, dispositions, liens and indebtedness covenants. The Term Loan Credit Agreement requires us to maintain at all times a total leverage ratio of no more than 4.50:1.00. The Term Loan Credit Agreement contains change of control provisions and certain customary affirmative covenants and events of default. As of January 1, 2023, we were in compliance with all covenants under the credit agreement governing the Term Loan Facility and there were no amounts outstanding. ABL Facility On January 31, 2019, we and certain of our subsidiaries entered into a $250.0 million asset-based revolving credit facility (the "ABL Facility") maturing on January 31, 2024, which replaced the previous facility. On October 28, 2022, we and certain of our subsidiaries entered into an amendment which, among other things, (i) increased the revolving credit commitments available thereunder by $100.0 million to an aggregate amount of $350.0 million and (ii) replaced the LIBOR-based interest rate applicable to borrowings thereunder in U.S. dollars with an interest rate based on the sum of (x) a "Term SOFR" rate published by the CME Group Benchmark Administration Limited (CBA) plus (y) 10 basis points ("Adjusted Term SOFR"). Additionally, on December 12, 2022, we entered into an amendment to the ABL Facility, which, among other things, extended the maturity of the ABL Facility from January 31, 2024 to December 12, 2027. The terms of the ABL Facility remained otherwise substantially unchanged. Obligations under the ABL Facility are secured by a first priority security interest in such accounts receivable, inventory and other related assets of Masonite and our subsidiaries. In addition, obligations under the ABL Facility are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis, by certain of our directly or indirectly wholly-owned subsidiaries. Borrowings under the ABL Facility bear interest at a rate equal to, at our option, (i) the United States, Canadian or United Kingdom Base Rate (each as defined in the credit agreement relating to the ABL Facility, the "Amended and Restated Credit Agreement") plus a margin ranging from 0.25% to 0.50% per annum, or (ii) the Adjusted Term SOFR or BA Rate (each as defined in the Amended and Restated Credit Agreement), plus a margin ranging from 1.25% to 1.50% per annum. In addition to paying interest on any outstanding principal under the ABL Facility, a commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter. The ABL Facility contains various customary representations, warranties and covenants by us that, among other things, and subject to certain exceptions, restrict Masonite's ability and the ability of our subsidiaries to: (i) pay dividends on our common shares and make other restricted payments, (ii) make investments and acquisitions, (iii) engage in transactions with our affiliates, (iv) sell assets, (v) merge and (vi) create liens. The ABL Facility, among other things, (i) permits us to incur unlimited unsecured debt as long as such debt does not contain covenants or default provisions that are more restrictive than those contained in the ABL Facility, (ii) permits us to incur debt as long as the pro forma |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 01, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We may become involved from time-to-time in litigation and regulatory compliance matters incidental to our business, including employment and wage and hour claims, antitrust, tax, product liability, environmental, health and safety, commercial disputes, intellectual property, contracts and other matters arising out of the normal conduct of our business. Since litigation is inherently unpredictable and unfavorable resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. We regularly review and accrue for contingencies related to litigation and regulatory compliance matters, if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on current information, in the opinion of management, the ultimate resolution of these matters, individually or in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows. Antitrust Class Action Proceedings - Canada On May 19, 2020, an intended class proceeding was commenced in the Province of Québec, Canada naming as defendants Masonite Corporation, Corporation Internationale Masonite, JELD-WEN, Inc., JELD-WEN Holding, Inc. and JELD-WEN of Canada, Ltd. The plaintiff alleges that the Masonite and JELD-WEN defendants engaged in anticompetitive conduct, including price-fixing involving interior molded doors. The intended class proceeding seeks damages, punitive damages, and other relief. On December 22, 2020, the parties filed a motion with the court seeking to stay the proceeding. On October 2, 2020, an intended class proceeding was commenced in the Federal Court of Canada naming as defendants Masonite International Corporation, Masonite Corporation, JELD-WEN, Inc., JELD-WEN Holding, Inc. and JELD-WEN of Canada, Ltd. The plaintiff alleges that the Masonite and JELD-WEN defendants engaged in anticompetitive conduct, including price-fixing involving interior molded doors. The intended class proceeding seeks damages, punitive damages, and other relief. The plaintiff served its certification record on March 31, 2021. The parties are waiting confirmation from the Federal Court of hearing dates in 2023 for a two-day certification hearing. |
Revenues
Revenues | 12 Months Ended |
Jan. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues We derive our revenues primarily from the manufacture and delivery of doors and door components as performance obligations that arise from our contracts with customers are satisfied. Materially all of our revenues are generated from contracts with customers and the nature, timing and any uncertainty in the recognition of revenues are not affected by the type of good, customer or geographical region to which the performance obligation relates. Our contracts with our customers are generally in the form of purchase orders and the performance obligation arises upon receipt of the purchase order and agreement upon the transaction price. The performance obligations are satisfied at a point in time when control of the promised goods is transferred to the customer and payment terms vary from customer to customer. Payment terms are short-term, are customary for our industry and in some cases, early payment incentives are offered. The transaction price recognized as revenue and accounts receivable is determined based upon a number of estimates, including: • Incentive-based volume rebates, which are based on individual rebate agreements with our customers, as well as historical and expected performance of each individual customer, • Estimated sales returns, which are based on historical returns as a percentage of revenues, and • Adjustments for early payment discounts offered by us. Contract assets are represented by our trade accounts receivable balances on the consolidated balance sheets, and are described in Note 3. Accounts Receivable. There were no other material contract assets or liabilities as of January 1, 2023, or January 2, 2022. Our warranties are assurance-type warranties and do not represent separate performance obligations to our customers. There were no material impairment losses related to contract assets during the years ended January 1, 2023, January 2, 2022, or January 3, 2021. |
Share Based Compensation Plans
Share Based Compensation Plans | 12 Months Ended |
Jan. 01, 2023 | |
Share-based Payment Arrangement [Abstract] | |
Share Based Compensation Plans | Share Based Compensation Plans Share based compensation expense was $21.8 million, $16.0 million and $19.4 million for the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. As of January 1, 2023, the total remaining unrecognized compensation expense related to share based compensation amounted to $27.1 million, which will be amortized over the weighted average remaining requisite service period of 1.7 years. Share based compensation expense is recognized using a graded-method approach, or to a lesser extent a straight-line approach, depending on the terms of the individual award, and is classified within selling, general and administration expenses in the consolidated statements of income and comprehensive income. All forfeitures are accounted for as they occur. All share based awards are settled through issuance of new shares of our common stock. The share based award agreements contain restrictions on sale or transfer other than in limited circumstances. All other transfers would cause the share based awards to become null and void. Equity Incentive Plan On March 10, 2021, the Board of Directors adopted the Masonite International Corporation 2021 Omnibus Incentive Equity Plan (the "2021 Equity Plan"), which was approved by our shareholders at the Annual General Meeting of Shareholders on May 13, 2021. The 2021 Equity Plan is effective for ten years from the date of approval. The aggregate number of common shares that can be issued with respect to equity awards under the 2021 Equity Plan cannot exceed 880,000 shares; plus the number of shares reserved for the 2012 Plan that is in excess of the number of shares related to outstanding grants; plus the number of shares subject to existing grants under the 2012 Plan that may expire or be forfeited or cancelled. On July 12, 2012, the Board of Directors adopted the Masonite International Corporation 2012 Equity Incentive Plan, which was amended on June 21, 2013, by our Board of Directors, further amended and restated by our Board of Directors on February 23, 2015, and approved by our shareholders on May 12, 2015 (as amended and restated, the "2012 Plan"). The 2021 Equity Plan and the 2012 Plan ("the Plans") were adopted because the Board of Directors believes that long-term incentive awards granted under the Plans will help to attract, motivate and retain employees and non-employee directors, align employee and stockholder interests and encourage a performance-based culture built on employee stock ownership. The Plans permit us to offer eligible directors, employees and consultants cash and share-based incentives, including stock options, stock appreciation rights, restricted stock, other share-based awards (including restricted stock units) and cash-based awards. The Plans are effective for ten years from the date of its adoption. Awards granted under the Plans are at the discretion of the Human Resources and Compensation Committee of the Board of Directors. The Human Resources and Compensation Committee may grant any award under the Plans in the form of a performance award. The Plans may be amended, suspended or terminated by the Board at any time; provided, that any amendment, suspension or termination which impairs the rights of a participant is subject to such participant's consent and; provided further, that certain material amendments are subject to shareholder approval. As of January 1, 2023, there were 938,667 shares of common stock available for future issuance under the 2021 Equity Plan. Deferred Compensation Plan We offer to certain of our employees and directors a Deferred Compensation Plan ("DCP"). The DCP is an unfunded non-qualified deferred compensation plan that permits those certain employees and directors to defer a portion of their compensation to a future time. Eligible employees may elect to defer a portion of their base salary, bonus and/or restricted stock units and eligible directors may defer a portion of their director fees or restricted stock units. All contributions to the DCP on behalf of the participant are fully vested (other than restricted stock unit deferrals which remain subject to the vesting terms of the applicable equity incentive plan) and placed into a grantor trust, commonly referred to as a "rabbi trust." Although we are permitted to make matching contributions under the terms of the DCP, we have not elected to do so. The DCP invests the contributions in diversified securities from a selection of investments and the participants choose their investments and may periodically reallocate the assets in their respective accounts. Participants are entitled to receive the benefits in their accounts upon separation of service or upon a specified date, with benefits payable as a single lump sum or in annual installments. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework. Assets of the rabbi trust, other than Company stock, are recorded at fair value and included in other assets in the consolidated balance sheets. These assets in the rabbi trust are classified as trading securities and changes in their fair values are recorded in other (income) expense, net in the consolidated statements of income and comprehensive income. The liability relating to deferred compensation represents our obligation to distribute funds to the participants in the future and is included in other liabilities in the consolidated balance sheets. As of January 1, 2023, the liability and asset relating to deferred compensation had a fair value of $7.2 million and $7.0 million, respectively. As of January 2, 2022, the liability and asset relating to deferred compensation had a fair value of $8.9 million and $9.0 million, respectively. Any gain or loss relating to changes in the fair value of the deferred compensation liability is recognized in selling, general and administration expense in the consolidated statements of income and comprehensive income. As of January 1, 2023, participation in the DCP is limited and no restricted stock awards have been deferred into the DCP. Stock Appreciation Rights We have granted Stock Appreciation Rights ("SARs") to certain employees, which entitle the recipient to the appreciation in value of a number of common shares over the exercise price over a period of time, each as specified in the applicable award agreement. The exercise price of any SAR granted may not be less than the fair market value of our common shares on the date of grant. The compensation expense for the SARs is measured based on the fair value of the SARs at the date of grant and is recognized over the requisite service period. The SARs vest over a maximum of four years, have a life of ten years and settle in common shares. It is assumed that all time-based SARs will vest. The total fair value of SARs vested was $0.8 million, $0.8 million and $1.0 million, in the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. Twelve Months Ended January 1, 2023 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 158,725 $ 7,324 $ 71.81 7.5 Granted 33,803 88.43 Exercised (4,580) 169 56.51 Forfeited (3,743) 96.15 Outstanding, end of period 184,205 $ 2,153 $ 74.75 7.0 Exercisable, end of period 124,842 $ 2,118 $ 66.14 6.3 Twelve Months Ended January 2, 2022 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 207,094 $ 7,409 $ 62.56 7.5 Granted 28,707 107.68 Exercised (69,223) 4,305 57.79 Forfeited (7,853) 82.76 Outstanding, end of period 158,725 $ 7,324 $ 71.81 7.5 Exercisable, end of period 81,474 $ 4,451 $ 63.32 6.9 Twelve Months Ended January 3, 2021 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 404,447 $ 7,615 $ 53.62 4.7 Granted 32,435 83.39 Exercised (209,793) 7,033 48.59 Forfeited (19,995) 62.10 Outstanding, end of period 207,094 $ 7,409 $ 62.56 7.5 Exercisable, end of period 94,883 $ 3,736 $ 58.97 6.4 The value of SARs granted in the year ended January 1, 2023, as determined using the Black-Scholes-Merton valuation model, was $0.9 million and is expected to be recognized over the average requisite service period of 2.0 years. Expected volatility is based upon the historical volatility of our common shares amongst other considerations. The expected term is calculated based on historical employee behavior and the contractual term of the options amongst other considerations. The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated: 2022 Grants 2021 Grants 2020 Grants SAR value (model conclusion) $ 26.52 $ 28.08 $ 20.56 Risk-free rate 2.0 % 0.8 % 1.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 26.5 % 25.2 % 22.6 % Expected term (years) 6.0 6.0 6.0 Restricted Stock Units We have granted Restricted Stock Units ("RSUs") to directors and certain employees under the 2021 Equity Plan and the 2012 Plan. The RSUs confer the right to receive shares of our common stock at a specified future date or when certain conditions are met. The compensation expense for the RSUs awarded is based on the fair value of the RSUs at the date of grant, which is equal to the stock price on the date of grant, and is recognized over the requisite service period. The RSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted. It is assumed that all time-based RSUs will vest. Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 291,925 $ 88.66 319,675 $ 68.33 318,520 $ 58.89 Granted 216,774 88.22 142,540 111.02 154,332 79.66 Delivered (138,682) 78.51 (116,663) 66.40 (115,340) 60.30 Withheld to cover (1) (23,319) (24,471) (16,234) Forfeited (32,945) 95.83 (29,156) 82.85 (21,603) 58.15 Outstanding, end of period 313,753 $ 92.85 291,925 $ 88.66 319,675 $ 68.33 ____________ (1) A portion of the vested RSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting. RSUs granted during the year ended January 1, 2023, vest at specified future dates with only service requirements. The value of RSUs granted in the year ended January 1, 2023, was $19.1 million and is being recognized over the weighted average requisite service period of 1.9 years. During the year ended January 1, 2023, 162,001 RSUs vested at a fair value of $12.7 million. Performance-based Restricted Stock Units We have granted certain Performance-based Restricted Stock Units ("PRSUs") under the 2021 Equity Plan and the 2012 Plan. These PRSUs are settled with payouts ranging from zero to 200% of the target award value depending on performance goal achievement. The compensation expense for the PRSUs awarded is based on the fair value of the PRSUs at the date of grant, which is equal to the stock price on the date of grant, and is recognized over the requisite service period. The PRSUs vest over a maximum of three years and call for the underlying shares to be delivered no later than 30 days following the vesting date unless the participant is subject to a blackout period. In such case, the shares are to be delivered once the blackout restriction has been lifted. Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 150,181 $ 84.47 168,382 $ 67.80 204,687 $ 60.66 Granted 211,251 88.37 59,728 109.25 64,611 79.83 Performance adjustment (1) 25,234 57.19 14,474 63.05 (59,936) 67.50 Delivered (52,265) 57.19 (60,252) 63.05 — — Withheld to cover (2) (11,809) (9,518) — Forfeited (11,914) 94.50 (22,633) 78.20 (40,980) 51.51 Outstanding, end of period 310,678 $ 90.15 150,181 $ 84.47 168,382 $ 67.80 ____________ (1) PRSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These awards are settled with payouts ranging from zero to 200% of the target award value depending on performance goal achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target. (2) A portion of the vested PRSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting. PRSUs granted during the year ended January 1, 2023, vest at specified future dates based on both performance and service requirements. The value of PRSUs granted in the year ended January 1, 2023, was $18.7 million and is being recognized over the weighted average requisite service period of 3.0 years. During the year ended January 1, 2023, 64,074 PRSUs vested at a fair value of $3.7 million. |
Restructuring Costs
Restructuring Costs | 12 Months Ended |
Jan. 01, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | Restructuring Costs Over the past several years, we have engaged in a series of restructuring programs related to exiting certain geographies and non-core businesses, consolidating certain internal support functions and engaging in other actions designed to reduce our cost structure and improve productivity. These initiatives primarily consist of severance actions and plant closure costs. Management continues to evaluate our business; therefore, in future years, there may be additional provisions for new plan initiatives, as well as changes in previously recorded estimates, as payments are made or actions are completed. Asset impairment charges were also incurred in connection with these restructuring actions for certain assets sold, abandoned or made obsolete as a result of these programs. In December 2022, we began implementing a plan to improve overall business performance that includes the optimization of our manufacturing capacity and reduction of our overhead and selling, general and administration workforce primarily in our North American Residential reportable segment as well as actions in the Architectural reportable segment and in our head offices (collectively, the "2022 Plan"). The optimization of our manufacturing capacity involves specific plants in the North American Residential segment and costs associated with the closure of these plants and related headcount reductions. Costs associated with the 2022 Plan include severance and closure charges and will continue through 2023. As of January 1, 2023, we expect to incur approximately $13 million to $18 million of additional charges related to the 2022 Plan. In May 2021, we initiated further actions to improve overall business performance including the reorganization of our specialty door manufacturing capacity in our Architectural reportable segment. The reorganization of our manufacturing capacity involves specific facilities in the Architectural segment and costs associated with the reorganization of these facilities, which resulted in the closure of one existing stile and rail facility and related headcount reductions beginning in the second quarter of 2021 (collectively, the "2021 Plan"). Costs associated with the 2021 Plan include severance and closure charges and continued through 2021. In November 2020, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce primarily in our Architectural reportable segment as well as limited actions in the North American Residential reportable segment. The reorganization of our manufacturing capacity involves specific facilities in the Architectural segment and costs associated with the closure of these facilities and related headcount reductions began taking place in the fourth quarter of 2020 (collectively, the "2020 Plan"). Costs associated with the 2020 Plan include severance and closure charges and continued through 2021. In February 2019, we began implementing a plan to improve overall business performance that includes the reorganization of our manufacturing capacity and a reduction of our overhead and selling, general and administration workforce across all of our reportable segments and in our head offices. The reorganization of our manufacturing capacity involves specific plants in the North American Residential and Architectural segments and costs associated with the closure of these plants and related headcount reductions began taking place in the first quarter of 2019 (collectively, the "2019 Plan"). Costs associated with the 2019 Plan include severance, retention and closure charges and continued through 2021. Additionally, the plan to divest non-core assets was determined to be a triggering event requiring a test of the carrying value of the definite-lived assets relating to the divestitures, as further described in Note 14. In the fourth quarter of 2019, we initiated additional restructuring actions related to both manufacturing capacity and reduction of our overhead and selling, general and administration workforce. During the fourth quarter of 2018, we began implementing a plan to reorganize and consolidate certain aspects of our United Kingdom head office function and optimize our portfolio by divesting non-core assets to enable more effective and consistent business processes in the Europe segment. In addition, in the North American Residential segment we announced a new facility that will optimize and expand capacity through increased automation, which resulted in the closure of one existing facility and related headcount reductions beginning in the second quarter of 2019 (collectively, the "2018 Plan"). Costs associated with the 2018 Plan included severance, retention and closure charges and continued throughout 2019. As of January 1, 2023, we do not expect to incur any material future charges related to the 2021 Plan, 2020 Plan, 2019 Plan or 2018 Plan. The following table summarizes the restructuring charges recorded for the periods indicated: Year Ended January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2022 Plan $ 2,131 $ — $ — $ — $ 2,131 2021 Plan — — 17 — 17 2020 Plan — — 62 16 78 2019 Plan (395) — — 73 (322) Total Restructuring Costs $ 1,736 $ — $ 79 $ 89 $ 1,904 Year Ended January 2, 2022 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2021 Plan $ — $ — $ 1,666 $ — $ 1,666 2020 Plan 23 — 3,499 23 3,545 2019 Plan (172) — — 528 356 Total Restructuring Costs $ (149) $ — $ 5,165 $ 551 $ 5,567 Year Ended January 3, 2021 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2020 Plan $ 29 $ — $ 1,733 $ — $ 1,762 2019 Plan 3,863 (37) 1,165 1,048 6,039 2018 Plan 435 — — — 435 Total Restructuring Costs $ 4,327 $ (37) $ 2,898 $ 1,048 $ 8,236 Cumulative Amount Incurred Through January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2022 Plan $ 2,131 $ — $ — $ — $ 2,131 2021 Plan — — 1,683 — 1,683 2020 Plan 52 — 5,294 39 5,385 2019 Plan 8,755 359 1,671 2,668 13,453 Total Restructuring Costs $ 10,938 $ 359 $ 8,648 $ 2,707 $ 22,652 The changes in the accrual for restructuring by activity were as follows for the periods indicated: (In thousands) January 2, Severance Closure Costs Cash Payments January 1, 2022 Plan $ — $ 143 $ 1,988 $ (2,131) $ — 2021 Plan 25 (26) 43 (42) — 2020 Plan 22 (35) 113 (100) — 2019 Plan 2 31 (353) 320 — Total $ 49 $ 113 $ 1,791 $ (1,953) $ — (In thousands) January 3, Severance Closure Costs Cash Payments January 2, 2021 Plan $ — $ 513 $ 1,153 $ (1,641) $ 25 2020 Plan 1,492 264 3,281 (5,015) 22 2019 Plan 291 175 181 (645) 2 Total $ 1,783 $ 952 $ 4,615 $ (7,301) $ 49 |
Asset Impairment
Asset Impairment | 12 Months Ended |
Jan. 01, 2023 | |
Asset Impairment Charges [Abstract] | |
Asset Impairment | Asset Impairment During the year ended January 2, 2022, we recognized asset impairment charges of $69.9 million, of which $59.5 million related to a goodwill impairment charge in the Architectural reporting unit as a result of manufacturing constraints due to COVID-19 related absenteeism, material availability and production challenges and $10.4 million related to assets in the Architectural segment and an asset in the Corporate & Other category as a result of announced plant closures under the 2021 and 2020 Plans. The quantitative impairment test was conducted using multiple valuation techniques, including a discounted cash flow analysis and market approach, which utilizes Level 3 fair value inputs, and resulted in a goodwill impairment charge of $59.5 million. The charge represents the amount by which the carrying value of the Architectural reporting unit exceeded its fair value and reduced the goodwill balance in the Architectural reporting unit from $59.5 million to zero. The $10.4 million asset impairment charge was determined based upon the excess of the carrying values of property, plant and equipment over the respective fair values of such assets, determined using a discounted cash flows approach for each asset group. Each of these valuations was performed on a non-recurring basis and is categorized as having Level 3 valuation inputs as established by the FASB's Fair Value Framework. The Level 3 unobservable inputs include an estimate of future cash flows and the salvage value for each of the assets. The fair value of the assets was determined to be $6.3 million, compared to a book value of $16.7 million, with the difference representing the asset impairment charges recorded in the consolidated statements of income and comprehensive income.During the year ended January 3, 2021, we recognized asset impairment charges of $51.5 million related to the Architectural reporting unit, as a result of continued decreased demand in the Architectural door market due to the impact of COVID-19 in the year, along with the uncertainty of the duration and intensity of the pandemic on the Architectural door market for future periods were indicators that goodwill impairment was present in the Architectural unit. The quantitative impairment test was conducted using multiple valuation techniques, including a discounted cash flow analysis and market approach, which utilizes Level 3 fair value inputs, and resulted in a goodwill impairment charge of $51.5 million. The charge represents the amount by which the carrying value of the Architectural reporting unit exceeded its fair value. The fair value of the reporting unit was determined to be $59.5 million, compared to a book value of $111.0 million, with the difference representing the asset impairment charge recorded in the consolidated statements of income and comprehensive income. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For financial reporting purposes, income before income taxes includes the following components: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Income before income tax expense: Canada $ 78,768 $ 44,935 $ 54,355 Foreign 211,429 99,031 47,945 Total income before income tax expense $ 290,197 $ 143,966 $ 102,300 Income tax expense for income taxes consists of the following: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Current income tax expense: Canada $ 15,266 $ 9,392 $ 8,283 Foreign 50,463 30,499 30,413 Total current income tax expense: 65,729 39,891 38,696 Deferred income tax expense (benefit): Canada 7,931 3,626 (235) Foreign (1,907) 1,255 (9,850) Total deferred income tax expense (benefit): 6,024 4,881 (10,085) Income tax expense $ 71,753 $ 44,772 $ 28,611 The Canadian statutory rate (inclusive of provincial rates) is 26.1%, 26.5% and 26.5% for the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. A summary of the differences between expected income tax expense calculated at the Canadian statutory rate and the reported consolidated income tax expense (benefit) is as follows: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Income tax expense computed at statutory income tax rate $ 75,829 $ 38,137 $ 27,130 Foreign rate differential (10,045) (12,370) (4,900) Permanent differences (2,012) 3,843 (1,286) Disposal of subsidiaries 287 1,651 493 Income attributable to a permanent establishment (6,517) 2,608 2,253 Change in valuation allowance 5,202 1,569 (9,271) Income tax credits 2,673 (5,591) (1,831) Change in tax rate 1,120 2,706 883 Goodwill impairment — 11,296 7,965 Limitation on executive compensation 2,273 1,904 2,209 Withholding and other taxes 2,100 1,761 2,435 Nondeductible interest 1,970 — 1,714 Other (1,127) (2,742) 817 Income tax expense $ 71,753 $ 44,772 $ 28,611 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: Year Ended (In thousands) January 1, 2023 January 2, 2022 Deferred tax assets: Non-capital loss carryforwards $ 12,525 $ 11,142 Capital loss carryforwards 7,753 6,740 Deferred interest expense 9,052 12,518 Accruals and reserves currently not deductible for tax purposes 20,268 18,208 Share based compensation 4,887 4,456 Income tax credits 872 5,466 Lease right-of-use assets 53,985 57,735 Capitalized research and development 5,732 — Other 2,031 1,319 Total deferred tax assets 117,105 117,584 Valuation allowance (14,102) (10,286) Total deferred tax assets, net of valuation allowance 103,003 107,298 Deferred tax liabilities: Plant and equipment (86,337) (77,807) Intangibles (21,043) (23,147) Basis difference in subsidiaries (7,469) (7,488) Unrealized foreign exchange loss (gain) 1,850 (287) Lease liabilities (48,889) (52,955) Other (4,572) (2,786) Total deferred tax liabilities (166,460) (164,470) Net deferred tax liability $ (63,457) $ (57,172) Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. As of January 1, 2023, and January 2, 2022, a valuation allowance of $14.1 million and $10.3 million, respectively, has been established to reduce the deferred tax assets to an amount that is more likely than not to be realized. We have established valuation allowances on certain deferred tax assets resulting from loss carryforwards and other assets in Canada, Costa Rica and the United Kingdom. The following is a rollforward of the valuation allowance for deferred tax assets: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 10,286 $ 5,970 $ 15,569 Additions charged to expense and other 10,252 4,473 851 Deductions (6,436) (157) (10,450) Balance at end of period $ 14,102 $ 10,286 $ 5,970 The losses carried forward for tax purposes are available to reduce future taxable income by $47.2 million. We can apply these losses against future taxable income based on the period of expiration as follows: (In thousands) Canada Other Foreign Total 2023-2028 $ — $ 3,237 $ 3,237 2029-2043 39,482 — 39,482 Indefinitely — 4,502 4,502 Total tax losses carried forward $ 39,482 $ 7,739 $ 47,221 We have outside basis differences, including undistributed earnings in our foreign subsidiaries. For those subsidiaries in which we are considered to be indefinitely reinvested, no provision for Canadian income or local country withholding taxes has been recorded. Upon reversal of the outside basis difference and/or repatriation of those earnings, in the form of dividends or otherwise, we may be subject to both Canadian income taxes and withholding taxes payable to the various foreign countries. For those subsidiaries where the earnings are not considered indefinitely reinvested, taxes have been accrued. The determination of the unrecorded deferred tax liability for temporary differences related to investments in foreign subsidiaries that are considered to be indefinitely reinvested is not considered practicable. As of January 1, 2023, and January 2, 2022, our unrecognized tax benefits were $7.7 million and $7.6 million, respectively, excluding interest and penalties. The unrecognized tax benefits would favorably impact the effective tax rate if the tax benefits were recognized. The unrecognized tax benefits are recorded in other long-term liabilities and as a reduction to related long-term deferred income taxes in the consolidated balance sheets. The changes to our unrecognized tax benefits were as follows: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Unrecognized tax benefit at beginning of period $ 7,592 $ 8,108 $ 8,156 Gross increases in tax positions in current period 151 103 62 Gross decreases in tax positions in prior period (173) (108) (110) Gross increases in tax positions in prior period 110 — 1 Lapse of statute of limitations — (511) (1) Unrecognized tax benefit at end of period $ 7,680 $ 7,592 $ 8,108 We recognize interest and penalties accrued related to unrecognized tax benefits as income tax expense. During the years ended January 1, 2023, January 2, 2022, and January 3, 2021, we recorded accrued interest of $0.6 million, $0.4 million and $0.6 million, respectively. Additionally, we have recognized a liability for accumulated penalties of $0.3 million, $0.3 million and $0.3 million, and accumulated interest of $3.1 million, $2.8 million and $3.1 million, respectively. The interest and penalties accrued related to unrecognized tax benefits would also favorably impact the effective tax rate if those benefits were recognized. We estimate that the amount of unrecognized tax benefits will not significantly increase or decrease within the 12 months following the reporting date. We are subject to taxation in Canada, the United States and other foreign jurisdictions. As of January 1, 2023, we are no longer subject to Canadian income tax examination for years prior to 2018. Additionally, we are no longer subject to U.S. federal tax examinations for years prior to 2019. To the extent that income tax attributes such as net operating losses and tax credits have been carried forward from years prior to 2019, those attributes can still be audited when utilized on returns subject to audit. In state and local jurisdictions, we are no longer subject to income tax examination for years prior to 2016. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 ("IRA") into law. The IRA includes several changes to existing tax law, including a minimum tax on adjusted financial statement income of applicable corporations and an excise tax on certain corporate stock buybacks. The tax provisions included in the IRA |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jan. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is calculated by dividing earnings attributable to Masonite by the weighted average number of our common shares outstanding during the period. Diluted EPS is calculated by dividing earnings attributable to Masonite by the weighted average number of common shares plus the incremental number of shares issuable from non-vested and vested RSUs and SARs outstanding during the period. Year Ended (In thousands, except share and per share information) January 1, 2023 January 2, 2022 January 3, 2021 Net income attributable to Masonite $ 214,233 $ 94,501 $ 69,037 Shares used in computing basic earnings per share 22,532,722 24,176,846 24,569,727 Effect of dilutive securities: Incremental shares issuable under share compensation plans 239,743 385,687 373,451 Shares used in computing diluted earnings per share 22,772,465 24,562,533 24,943,178 Basic earnings per common share attributable to Masonite $ 9.51 $ 3.91 $ 2.81 Diluted earnings per common share attributable to Masonite $ 9.41 $ 3.85 $ 2.77 Anti-dilutive instruments excluded from diluted earnings per common share 223,968 28,707 215,563 The weighted average number of shares outstanding utilized for the diluted EPS calculation contemplates the exercise of all currently outstanding SARs and the conversion of all RSUs. The dilutive effect of such equity awards is calculated based on the weighted average share price for each fiscal period using the treasury stock method. The Company's Board of Directors has approved five share repurchase authorizations, the most recent being an incremental $200.0 million share repurchase program approved on February 21, 2022. In addition, the Company announced that its Board of Directors authorized it to enter into an accelerated share repurchase ("ASR") transaction as part of the new share repurchase program. The Company entered into an ASR transaction during the first quarter of 2022 with a third-party financial institution for the repurchase of $100.0 million of its outstanding common shares. At inception, pursuant to the agreement, the Company paid $100.0 million to the financial institution using cash on hand and received an initial delivery of 848,087 common shares on the same day. The final delivery of 319,678 common shares occurred in the second quarter. The $100.0 million ASR transaction was therefore completed in the second quarter with a total delivery of 1,167,765 common shares at a volume-weighted average price ("VWAP") per share minus an agreed upon discount totaling 85.63 per share. The cash paid was reflected as a reduction of equity at the initial delivery of shares and the number of shares outstanding were reduced at the dates of physical delivery. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 01, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our management reviews net sales and Adjusted EBITDA (as defined below) to evaluate segment performance and allocate resources. Net assets are not allocated to the reportable segments. Adjusted EBITDA is a non-GAAP financial measure which does not have a standardized meaning under GAAP and is unlikely to be comparable to similar measures used by other companies. Adjusted EBITDA should not be considered as an alternative to either net income or operating cash flows determined in accordance with GAAP. Adjusted EBITDA is defined as net income (loss) attributable to Masonite adjusted to exclude the following items: • depreciation; • amortization; • share based compensation expense; • loss (gain) on disposal of property, plant and equipment; • registration and listing fees; • restructuring costs (benefit); • asset impairment; • loss (gain) on disposal of subsidiaries; • interest expense (income), net; • loss on extinguishment of debt; • other expense (income), net; • income tax expense (benefit); • other items; • loss (income) from discontinued operations, net of tax; and • net income (loss) attributable to non-controlling interest. The definition of Adjusted EBITDA differs from the definitions of EBITDA contained in the indenture governing the 2030 Notes and the 2028 Notes and the credit agreements governing the Term Loan Facility and the ABL Facility. Although Adjusted EBITDA is not a measure of financial condition or performance determined in accordance with GAAP, it is used to evaluate and compare the operating performance of the segments and it is one of the primary measures used to determine employee incentive compensation. Intersegment sales are recorded using market prices. Certain information with respect to reportable segments is as follows for the periods indicated: Year Ended January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 2,286,098 $ 282,989 $ 323,175 $ 20,293 $ 2,912,555 Intersegment sales (2,456) (2,220) (16,192) — (20,868) Net sales to external customers $ 2,283,642 $ 280,769 $ 306,983 $ 20,293 $ 2,891,687 Adjusted EBITDA $ 461,750 $ 28,774 $ (3,748) $ (40,978) $ 445,798 Depreciation and amortization 42,958 21,061 12,374 11,902 88,295 Interest expense, net — — — 41,331 41,331 Income tax expense — — — 71,753 71,753 Year Ended January 2, 2022 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 1,955,424 $ 342,172 $ 303,078 $ 20,014 $ 2,620,688 Intersegment sales (2,526) (7,640) (13,602) — (23,768) Net sales to external customers $ 1,952,898 $ 334,532 $ 289,476 $ 20,014 $ 2,596,920 Adjusted EBITDA $ 374,452 $ 60,624 $ (2,704) $ (19,766) $ 412,606 Depreciation and amortization 39,504 23,825 14,620 14,033 91,982 Interest expense, net — — — 46,123 46,123 Income tax expense — — — 44,772 44,772 Year Ended January 3, 2021 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 1,640,323 $ 260,834 $ 358,049 $ 19,947 $ 2,279,153 Intersegment sales (2,204) (2,721) (17,153) — (22,078) Net sales to external customers $ 1,638,119 $ 258,113 $ 340,896 $ 19,947 $ 2,257,075 Adjusted EBITDA $ 347,822 $ 40,474 $ 34,201 $ (58,785) $ 363,712 Depreciation and amortization 37,705 23,732 17,735 12,601 91,773 Interest expense, net — — — 46,807 46,807 Income tax benefit — — — 28,611 28,611 A reconciliation of our consolidated net income attributable to Masonite to Adjusted EBITDA is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net income attributable to Masonite $ 214,233 $ 94,501 $ 69,037 Plus: Depreciation 71,168 70,641 68,350 Amortization 17,127 21,341 23,423 Share based compensation expense 21,771 15,959 19,423 (Gain) loss on disposal of property, plant and equipment (378) 1,316 6,234 Restructuring costs 1,904 5,567 8,236 Asset impairment — 69,900 51,515 Loss on disposal of subsidiaries 850 8,590 2,091 Interest expense, net 41,331 46,123 46,807 Loss on extinguishment of debt — 13,583 — Other (income) expense, net (5,001) 15,620 (5,217) Income tax expense 71,753 44,772 28,611 Other items (1) 6,829 — 40,550 Net income attributable to non-controlling interest 4,211 4,693 4,652 Adjusted EBITDA $ 445,798 $ 412,606 $ 363,712 ____________ (1) Other items include $6,829 in acquisition and due diligence related costs in the year ended January 1, 2023, and $40,550 in legal reserves related to the settlement of U.S. class action litigation in the year ended January 3, 2021, and were recorded in selling, general and administration expenses within the consolidated statements of income and comprehensive income. We derive revenues from two major product lines: interior and exterior products. Additionally, we sell door components to external customers which are not otherwise consumed in our vertical operations. Sales for the product lines are summarized as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net sales to external customers: Interior products $ 1,871,103 $ 1,654,379 $ 1,479,196 Exterior products 892,945 813,605 647,241 Components 127,639 128,936 130,638 Total $ 2,891,687 $ 2,596,920 $ 2,257,075 Net sales information with respect to geographic areas exceeding 10% of consolidated net sales is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net sales to external customers from facilities in: United States $ 2,153,689 $ 1,776,180 $ 1,595,398 Canada 395,938 364,179 319,937 United Kingdom 259,944 300,008 218,382 Other 82,116 156,553 123,358 Total $ 2,891,687 $ 2,596,920 $ 2,257,075 In the years ended January 1, 2023, January 2, 2022, and January 3, 2021, net sales to The Home Depot, Inc., were $630.7 million, $491.5 million and $411.1 million, respectively, which are included in the North American Residential segment. No other individual customer's net sales exceeded 10% of consolidated net sales for any of the periods presented. Geographic information regarding property, plant and equipment which exceed 10% of consolidated property, plant and equipment is as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 United States $ 443,105 $ 413,289 Other (1) 209,224 213,508 Total $ 652,329 $ 626,797 ____________ (1) Except for the United States, property, plant and equipment in any single country was less than 10% of consolidated property, plant and equipment, net. |
Employee Future Benefits
Employee Future Benefits | 12 Months Ended |
Jan. 01, 2023 | |
Retirement Benefits [Abstract] | |
Employee Future Benefits | Employee Future Benefits United States Defined Benefit Pension Plan We had a defined benefit pension plan covering certain active and former employees in the United States ("U.S. Pension Plan"). Benefits under the plan were frozen at various times in the past. On December 9, 2020, the Board of Directors approved a resolution to terminate the U.S. Pension Plan and we initiated the process to terminate and annuitize the plan, which continued into 2021. During the fourth quarter of 2021, we completed balance sheet risk mitigation actions related to the U.S. Pension Plan and terminated the plan. In connection with the plan termination, we settled all future obligations under the U.S. Pension Plan through a combination of lump-sum payments to eligible participants who elected to receive them, and the transfer of any remaining benefit obligations to a third-party insurance company under a group annuity contract, which resulted in the settlement of liabilities to affected participants. As a result of these actions, we recognized a pre-tax pension settlement charge of $23.3 million in the fourth quarter of 2021, primarily comprised of the recognition of past actuarial losses. This charge is recorded within other (income) expense, net in the consolidated statements of income and comprehensive income. Information about the U.S. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Components of net periodic benefit cost: Service cost $ — $ 331 $ 309 Interest cost — 1,516 2,183 Expected return on assets — (2,953) (5,328) Amortization of actuarial net losses — 1,047 662 Settlement loss 23,343 — Net pension expense (benefit) $ — $ 23,284 $ (2,174) Information with respect to the assets, liabilities and net plan assets of the U.S. Pension Plan is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Pension assets: Fair value of plan assets, beginning of year $ — $ 86,464 Company contributions — 5,550 Actual return on plan assets — (2,347) Plan settlements — (84,573) Benefits paid — (3,711) Administrative expenses paid — (1,383) Fair value of plan assets, end of year — — Pension liability: Accrued benefit obligation, beginning of year — 85,330 Current service cost — 331 Interest cost — 1,516 Plan settlements — (84,573) Actuarial loss — 2,490 Benefits paid — (3,711) Administrative expenses paid — (1,383) Accrued benefit obligation, end of year — — Net plan assets, end of year $ — $ — A reconciliation of the change in accumulated other comprehensive loss ("AOCL") is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss $ — $ 7,790 Amortization of: Curtailment recognition of prior service cost — (15) Settlement recognition of net loss — (24,375) Change in AOCL, pre-tax $ — $ (16,600) The weighted average actuarial assumptions adopted in measuring our U.S. accrued benefit obligations and costs prior to termination were as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Discount rate applied for: Accrued benefit obligation — % 2.4 % 2.4 % Net periodic pension cost — % 2.4 % 3.3 % Expected long-term rate of return on plan assets — % 3.5 % 3.5 % The rate of compensation increase for the accrued benefit obligation and net periodic pension costs for the U.S. Pension Plan is not applicable, as benefits under the plan are not affected by compensation increases. The expected long-term rate of return on plan assets assumption was derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model was used to develop an expected range of returns on the plan investments over a 30-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. United Kingdom Defined Benefit Pension Plan We have a defined benefit pension plan in the United Kingdom ("U.K. Pension Plan"), which has been curtailed in prior years. The measurement date used for the accounting valuation of the U.K. Pension Plan was January 1, 2023. Information about the U.K. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Components of net periodic benefit cost: Interest cost $ 504 $ 366 $ 536 Expected return on assets (934) (1,292) (1,021) Amortization of actuarial net losses 22 289 340 Settlement loss — — 127 Net pension benefit $ (408) $ (637) $ (18) Information with respect to the assets, liabilities and net plan assets (accrued benefit obligation) of the U.K. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Pension assets: Fair value of plan assets, beginning of year $ 33,389 $ 31,222 Company contributions 2,021 1,376 Actual return on plan assets (13,071) 2,159 Benefits paid (1,006) (919) Translation adjustment (3,251) (449) Fair value of plan assets, end of year 18,082 33,389 Pension liability Accrued benefit obligation, beginning of year 33,002 35,394 Interest cost 504 366 Actuarial gain (9,153) (1,431) Benefits paid (1,006) (919) Translation adjustment (3,276) (408) Accrued benefit obligation, end of year 20,071 33,002 Net (accrued benefit obligation) plan assets, end of year $ (1,989) $ 387 There were $9.2 million of actuarial gains during fiscal year 2022 primarily as a result of a change in the discount rate from 1.83% to 4.81% driven by an increase in both government and corporate bond yields. There were $1.4 million of actuarial gains during fiscal year 2021 primarily as a result of a change in the discount rate from 1.27% to 1.83%. There were no material changes to any other key assumptions nor was there a significant demographic gain or loss. Amounts deferred in AOCL is set forth for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss $ 7,212 $ 2,794 Prior service cost 440 518 Total amount recognized in AOCL, pre-tax $ 7,652 $ 3,312 A reconciliation of the change in AOCL is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss (gain) $ 4,852 $ (2,298) Amortization of: Prior service cost (22) (25) Net actuarial loss from prior years — (264) Translation adjustment (490) (22) Change in AOCL, pre-tax $ 4,340 $ (2,609) The net plan assets are recorded within other assets in the consolidated balance sheets. Pension fund assets are invested primarily in equity and debt securities. Asset allocation between equity and debt securities and cash is adjusted based on the expected life of the plan and the expected retirement age of the plan participants. Information with respect to the amounts and types of securities that are held in the U.K. Pension Plan is set forth as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 (In thousands) Amount % of Total Plan Amount % of Total Plan Equity securities $ 3,740 20.7 % $ 8,327 24.9 % Debt securities — — % — — % Other 14,342 79.3 % 25,062 75.1 % $ 18,082 100.0 % $ 33,389 100.0 % Under the plan's investment policy and strategy, plan assets are invested to achieve a fully funded status based on actuarial calculations, maintain a level of liquidity that is sufficient to pay benefit and expense obligations when due, maintain flexibility in determining the future level of contributions and maximize returns within the limits of risk. The target asset allocation for plan assets in the U.K. Pension Plan for 2022 is 80% other securities and 20% equity securities. Other securities represent investments that are primarily invested in a mixture of debt and equity securities. The weighted average actuarial assumptions adopted in measuring our U.K. accrued benefit obligations and costs were as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Discount rate applied for: Accrued benefit obligation 4.8 % 1.8 % 1.3 % Net periodic pension cost 1.7 % 1.0 % 1.0 % Expected long-term rate of return on plan assets 3.0 % 4.1 % 4.1 % The rate of compensation increase for the accrued benefit obligation and net pension cost for the U.K. Pension Plan is not applicable, as the plan was curtailed in prior years and benefits under the plan are not affected by compensation increases. The expected long-term rate of return on plan assets assumption is derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model is used to develop an expected range of returns on the plan investments over a 10-year period, with the expected rate of return selected from a best estimate range within the total range of projected results. As of January 1, 2023, the estimated future benefit payments from the U.K. Pension Plan for the following future periods are set forth as follows: (In thousands) Expected Future Benefit Payments Fiscal year: 2023 $ 977 2024 1,079 2025 1,162 2026 1,120 2027 1,168 2028 through 2032 6,750 Total estimated future benefit payments $ 12,256 Expected contributions to the U.K. Pension Plan during 2023 are $2.0 million. Overall Pension Obligation For all periods presented, the U.S. and U.K. Pension Plans were invested in equity securities, equity funds, bonds, bond funds and cash and cash equivalents. All investments are publicly traded and possess a high level of marketability or liquidity. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework. The change in the net difference between the pension plan assets and projected benefit obligation that is not attributed to our recognition of pension expense or funding of the plan is recognized in other comprehensive (loss) income within the consolidated statements of income and comprehensive income and the balance of such changes is included in AOCL in the consolidated balance sheets. Defined Contribution Benefit Plans We have defined contribution benefit plans covering certain U.S. and foreign subsidiary employees subject to eligibility requirements set up in accordance with local statutory requirements. Contributions made to these plans were $16.1 million, $15.6 million and $13.7 million for the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income and Other Comprehensive Income | 12 Months Ended |
Jan. 01, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income and Other Comprehensive Income | Accumulated Other Comprehensive Loss and Other Comprehensive (Loss) Income A rollforward of the components of accumulated other comprehensive loss is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Accumulated foreign exchange losses, beginning of period $ (96,919) $ (93,684) $ (113,336) Foreign currency translation (loss) gain (36,369) (6,719) 17,566 Income tax benefit on foreign currency translation (loss) gain 18 6 17 Cumulative translation adjustment recognized upon deconsolidation of subsidiaries 732 3,544 2,254 Less: foreign exchange (loss) gain attributable to non-controlling interest (537) 66 185 Accumulated foreign exchange losses, end of period (132,001) (96,919) (93,684) Accumulated pension and other post-retirement adjustments, beginning of period (4,663) (18,379) (16,833) Pension and other post-retirement adjustments (4,718) 2,250 (3,163) Income tax (expense) benefit on pension and other post-retirement adjustments (858) (437) 851 Amortization of actuarial net losses 22 1,336 1,002 Income tax expense on amortization of actuarial net losses (6) (258) (236) Pension settlement charges — 15,654 — Income tax expense on pension settlement charges — (4,829) — Accumulated pension and other post-retirement adjustments, end of period (10,223) (4,663) (18,379) Accumulated other comprehensive loss $ (142,224) $ (101,582) $ (112,063) Other comprehensive (loss) income, net of tax: $ (41,179) $ 10,547 $ 18,291 Less: other comprehensive (loss) income attributable to non-controlling interest (537) 66 185 Other comprehensive (loss) income attributable to Masonite $ (40,642) $ 10,481 $ 18,106 Cumulative translation adjustments are reclassified out of accumulated other comprehensive loss into loss on disposal of subsidiaries in the years ended January 1, 2023, and January 2, 2022, in the consolidated statements of income and comprehensive income. Actuarial net losses are reclassified out of accumulated other comprehensive loss into cost of goods sold in the consolidated statements of income and comprehensive income. Pension settlement charges are reclassified out of accumulated other comprehensive loss into other (income) expense, net, in the consolidated statements of income and comprehensive income. Foreign currency translation losses as a result of translating our foreign assets and liabilities into U.S. dollars during the year ended January 1, 2023, were $36.4 million, primarily driven by weakening of the Pound Sterling, the Canadian dollar and the Euro in comparison to the U.S. dollar during the period. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Jan. 01, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Certain cash and non-cash transactions were as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Transactions involving cash: Interest paid $ 41,846 $ 42,703 $ 45,380 Interest received 2,783 250 1,110 Income taxes paid 77,500 40,506 24,336 Income tax refunds 1,596 875 805 Cash paid for operating lease liabilities 33,451 29,886 29,943 Cash paid for finance lease liabilities 1,359 1,470 1,393 Non-cash transactions from operating activities: Right-of-use assets acquired under operating leases 9,307 49,703 51,381 The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated: January 1, 2023 January 2, 2022 Cash and cash equivalents $ 296,922 $ 381,395 Restricted cash 11,999 10,110 Total cash, cash equivalents and restricted cash $ 308,921 $ 391,505 Property, plant and equipment additions in accounts payable were $10.4 million and $10.7 million as of January 1, 2023, and January 2, 2022, respectively. During the fourth quarter of 2018, we provided debt financing to a distribution company via an interest-bearing note that is scheduled to mature in 2028. The interest-bearing note receivable is carried at amortized cost, with the interest payable in kind at the election of the borrower. The note receivable balance was $12.6 million as of January 1, 2023, and January 2, 2022. The note receivable was recorded in the consolidated balance sheets as a component of prepaid expenses and other assets, and as a component of other assets as of January 1, 2023, and January 2, 2022, respectively. On January 26, 2023, the note receivable was redeemed and fully repaid. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Jan. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Variable Interest Entity As of January 1, 2023, and January 2, 2022, we held an interest in one variable interest entity ("VIE"), Magna Foremost Sdn Bhd, which is located in Bintulu, Malaysia. The VIE is integrated into our supply chain and manufactures door facings. We are the primary beneficiary of the VIE based on the terms of the existing supply agreement with the VIE. As primary beneficiary via the supply agreement, we receive a disproportionate amount of earnings on sales to third parties in relation to our voting interest, and as a result, receive a majority of the VIE’s residual returns. Sales to third parties did not have a material impact on our consolidated financial statements. We also have the power to direct activities of the VIE that most significantly impact the entity’s economic performance. As its primary beneficiary, we have consolidated the results of the VIE. Our net cumulative investment in the VIE was comprised of the following as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Current assets $ 5,699 $ 9,057 Property, plant and equipment, net 8,056 8,573 Long-term deferred income taxes 1,170 1,023 Other assets 4,067 4,202 Current liabilities (1,396) (3,895) Other long-term liabilities (4) (139) Non-controlling interest (3,229) (3,803) Net assets of the VIE consolidated by Masonite $ 14,363 $ 15,018 Current assets include $1.0 million and $4.9 million of cash and cash equivalents as of January 1, 2023, and January 2, 2022, respectively. Assets recognized as a result of consolidating this VIE do not represent additional assets that could be used to satisfy claims against our general assets. Furthermore, liabilities recognized as a result of consolidating these entities do not represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIE. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Jan. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable approximate fair value because of the short-term maturity of those instruments. The estimated fair values and carrying values of our long-term debt instruments were as follows for the periods indicated: January 1, 2023 January 2, 2022 (In millions) Fair Value Carrying Value Fair Value Carrying Value 3.50% senior unsecured notes due 2030 $ 303,870 $ 371,136 $ 373,238 $ 370,593 5.375% senior unsecured notes due 2028 $ 462,495 $ 495,868 $ 526,730 $ 495,128 These estimates are based on market quotes and calculations based on current market rates available to us and are categorized as having Level 2 valuation inputs as established by the FASB’s Fair Value Framework. Market quotes used in these calculations are based on bid prices for our debt instruments and are obtained from and corroborated with multiple independent sources. The market quotes obtained from independent sources are within the range of management’s expectations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 01, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of Endura On January 3, 2023, we completed the acquisition of 100% of the outstanding equity of EPI Holdings, Inc. ("Endura"), for approximately $375.0 million in cash. Endura is a leading innovator and manufacturer of high-performance door frames and door system components in the United States. Endura’s product offerings include engineered frames, self-adjusting sill systems, weather sealing, multi-point locks and installation accessories used by builders and contractors in residential new construction as well as repair and remodeling applications. The acquisition will allow us to accelerate our Doors That Do More TM strategy and maximize our growth potential. The acquisition will be accounted for as a business combination, with the goodwill being non-deductible for tax purposes. Since the closing of the acquisition occurred subsequent to the Company's fiscal year end, the allocation of the purchase price to the underlying assets acquired and liabilities assumed is subject to a formal valuation process, which has not yet been completed. The major classes of assets acquired will include trade receivables, inventories, trade payables and goodwill and intangibles. Our 2023 operating results will include the results from Endura from the date of acquisition. Based on the timing of the acquisition and lack of available information, we determined it to be impracticable to disclose a preliminary purchase price allocation or proforma financial information at this time. During the year ended January 1, 2023, we recorded $6.8 million of acquisition and due diligence related costs. These costs were recorded in selling, general and administration expense within the consolidated statements of income and comprehensive income. Term Loan Facility and ABL Facility In connection with the acquisition of Endura on January 3, 2023, we borrowed $250.0 million under our Term Loan Facility and $100.0 million under our ABL Facility in order to fund a portion of the cash consideration paid. On February 3, 2023, we subsequently repaid $50.0 million of the outstanding borrowings under our ABL Facility. In the first quarter of 2023, we incurred $2.7 million of incremental debt issuance costs on our Term Loan Facility. |
Business Overview and Signifi_2
Business Overview and Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We prepare these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These consolidated financial statements include the accounts of Masonite International Corporation, a company incorporated under the laws of British Columbia, and its subsidiaries, as of January 1, 2023, and January 2, 2022, and for the years ended January 1, 2023, January 2, 2022, and January 3, 2021. Our fiscal year is the 52- or 53-week period ending on the Sunday closest to December 31. In a 52-week year, each fiscal quarter consists of 13 weeks. For ease of disclosure, the 13-week periods are referred to as three-month periods and the 52- or 53-week periods are referred to as years. Our 2020 fiscal year, which ended on January 3, 2021, contained 53 weeks of operating results, with the additional week occurring in the fourth quarter. |
Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements In December 2021, the Financial Accounting Standards Board ("FASB") issued ASU 2021-10, "Government Assistance," which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity's financial statements. The guidance was effective for annual periods beginning after December 15, 2021, with early adoption permitted. We have adopted the new guidance as of January 3, 2022, the beginning of fiscal year 2022, and the adoption did not have a material impact on our financial statements or disclosures. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes," as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. We adopted the new guidance prospectively as of January 4, 2021, the beginning of fiscal year 2021, and the adoption did not have a material impact on our financial statements. Other Recent Accounting Pronouncements not yet Adopted In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09," Revenue from Contracts with Customers" as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022, with early application permitted. We did not early adopt and believe the adoption of this new guidance will not have a material impact on our financial statements. |
Principles of consolidation | Principles of consolidation:These consolidated financial statements include the accounts of Masonite and our subsidiaries and the accounts of any variable interest entities for which we are the primary beneficiary. Intercompany accounts and transactions have been eliminated upon consolidation. The results of subsidiaries acquired during the periods presented are consolidated from their respective dates of acquisition using the acquisition method. Subsidiaries are prospectively deconsolidated as of the date we no longer have effective control of the entity. |
Translation of consolidated financial statements into U.S. dollars | Translation of consolidated financial statements into U.S. dollars:These consolidated financial statements are expressed in U.S. dollars. The accounts of the majority of our self-sustaining foreign operations are maintained in functional currencies other than the U.S. dollar. Assets and liabilities for these subsidiaries have been translated into U.S. dollars at the exchange rates prevailing at the end of the period and results of operations at the average exchange rates for the period. Unrealized exchange gains and losses arising from the translation of the financial statements of our non-U.S. functional currency operations are accumulated in the cumulative translation adjustments account in accumulated other comprehensive loss. For our foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency-denominated accounts are remeasured into U.S. dollars. Unrealized exchange gains and losses arising from remeasurements of foreign currency-denominated assets and liabilities are included within other (income) expense, net in the consolidated statements of income and comprehensive income. Gains and losses arising from international intercompany transactions that are of a long-term investment nature are reported in the same manner as translation gains and losses. Realized exchange gains and losses are included in net income for the periods presented. |
Cash and cash equivalents | Cash and cash equivalents:Cash includes cash equivalents which are short-term highly liquid investments with original maturities of three months or less. |
Restricted cash | Restricted cash:Restricted cash includes cash we have placed as collateral for standby letters of credit. The letters of credit guarantee payment to third parties in the event the company is in breach of contract terms as detailed in each letter of credit. |
Accounts receivable | Accounts receivable:Our customers are primarily retailers, distributors and contractors. We record an allowance for credit losses at the time that accounts receivable are initially recorded based on the historical write-off experience and the current economic environment as well as our expectations of future economic conditions. We reassess the allowance at each reporting date. When it becomes apparent, based on age or customer circumstances, that such amounts will not be collected, they are charged to the allowance. Payments subsequently received are credited to the credit loss expense account included within selling, general and administration expenses in the consolidated statements of income and comprehensive income. Generally, we do not require collateral for our accounts receivable. |
Inventories | Inventories: Raw materials and finished goods are valued at the lower of cost or net realizable value. Cost is determined on a first in, first out basis. In determining the net realizable value, we consider factors such as yield, turnover, expected future demand and past experience. The cost of inventories includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include costs directly related to the units of production, such as direct labor. They also include a systematic allocation of fixed and variable production overheads that are incurred in converting raw materials into finished goods. Fixed production overheads are those indirect costs of production that remain relatively constant regardless of the volume of production, such as depreciation and maintenance of factory buildings and equipment, and the cost of factory management and administration. Variable production overheads are those indirect costs of production that vary directly, or nearly directly, with the volume of production, such as indirect materials and indirect labor. To determine the cost of inventory, we allocate fixed expenses to the cost of production based on the normal capacity, which refers to a range of production levels and is considered the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. Fixed overhead costs allocated to each unit of production are not increased due to abnormally low production. Those excess costs are recognized as a current period expense. When a production facility is completely shut down temporarily, it is considered idle, and all related expenses are charged to cost of goods sold. |
Property, plant and equipment | Property, plant and equipment: Property, plant and equipment are stated at cost. Depreciation is recorded based on the carrying values of buildings, machinery and equipment using the straight-line method over the estimated useful lives set forth as follows: Useful Life (Years) Buildings 20 - 40 Machinery and equipment Tooling 10 - 25 Machinery and equipment 5 - 25 Molds and dies 12 - 25 Office equipment, fixtures and fittings 3 - 12 Information technology systems 5 - 15 Improvements and major maintenance that extend the life of an asset are capitalized; other repairs and maintenance are expensed as incurred. When assets are retired or otherwise disposed, their carrying values and accumulated depreciation are removed from the accounts. Property, plant and equipment are tested for impairment when events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset or asset group being tested for recoverability exceeds the sum of the undiscounted cash flows expected from its use and disposal. Impairments are measured as the amount by which the carrying amount of the asset or asset group exceeds its fair value, as determined using a discounted cash flows approach when quoted market prices are not available. |
Leases | Leases: We determine if a contract is a lease at inception or upon acquisition and reevaluate each time a lease contract is amended or otherwise modified. A lease will be classified as an operating lease if it does not meet any of the criteria for a finance lease. Those criteria include the transfer of ownership of the underlying asset by the end of the lease term; an option to purchase the underlying asset that we would be reasonably certain to exercise; the lease term is for the major part of the remaining economic life of the underlying asset; the present value of the sum of the lease payments and any residual value guaranteed by us that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or if the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. The assets and liabilities relating to operating leases are included in operating lease right-of-use assets, accrued expenses, and long-term operating lease liabilities in our consolidated balance sheets. The assets and liabilities relating to finance leases are included in property, plant and equipment, net and other liabilities in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the respective lease commencement date based on the present value of lease payments over the expected lease term. Since our leases do not specify implicit discount rates, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any initial direct costs and is adjusted for lease incentives and prepaid or accrued rent. The lease term begins on the date when the lessor makes the underlying asset available for use to us, and our expected lease terms include options to extend the lease when it is reasonably certain that we will exercise those options. Lease payments are recognized in the consolidated statements of income and comprehensive income on a straight-line basis over the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet, with the related lease expense recognized on a straight-line basis over the lease term. Lease and non-lease components of a contract are combined into a single lease component for accounting purposes. one |
Goodwill | Goodwill: We use the acquisition method of accounting for all business combinations, and we evaluate all business combinations for intangible assets that should be recognized apart from goodwill. Goodwill adjustments are recorded for the effect on goodwill of changes to net assets acquired during the measurement period (up to one year from the date of acquisition) for new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Goodwill is not amortized, but instead is tested annually for impairment on the last day of fiscal November, or more frequently if events or changes in circumstances indicate the carrying amount may not be recoverable. The test for impairment is performed at the reporting unit level by comparing the reporting unit’s carrying amount to its fair value. Possible impairment in goodwill is first analyzed using qualitative factors such as macroeconomic and market conditions, changing costs and actual and projected performance, amongst others, to determine whether it is more likely than not that the book value of the reporting unit exceeds its fair value. If it is determined more likely than not that the book value exceeds fair value, a quantitative analysis is performed to test for impairment. When quantitative steps are determined necessary, the fair values of the reporting units are estimated through the use of discounted cash flow analysis and market multiples. If the carrying amount exceeds fair value, then goodwill is impaired. Any impairment in goodwill is measured as the excess of the carrying value of goodwill over the fair value. There were no impairment charges recorded against goodwill in 2022. |
Intangible assets | Intangible assets: Intangible assets with definite lives include customer relationships, patents, system software development and acquired trademarks and tradenames. Definite lived intangible assets are amortized over their estimated useful lives. Information pertaining to the estimated useful lives of intangible assets is as follows: Estimated Useful Life Customer relationships Over expected relationship period Patents Over expected useful life System software development Over expected useful life Acquired trademarks and tradenames Straight-line over expected useful life Amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may be greater than fair value. An impairment loss is recognized when the estimate of undiscounted future cash flows generated by such assets is less than the carrying amount. Measurement of the impairment loss is based on the fair value of the asset. Fair value is measured using discounted cash flows. Indefinite lived intangible assets are not amortized, but instead are tested for impairment annually on the last day of fiscal November, or more frequently if events or circumstances indicate the carrying value may exceed the fair value. |
Income taxes | Income taxes: As a multinational corporation, we are subject to taxation in many jurisdictions and the calculation of our tax liabilities involves dealing with inherent uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. We assess the income tax positions and record tax liabilities for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. Our global structure required an assessment of the Company’s interpretation and application of tax laws in multiple jurisdictions including the income tax impact of the legal entity ownership structure and intercompany transactions. We use the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets 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 due to a change in tax rates is recognized in income in the period that includes the date of enactment. A valuation allowance is recorded to reduce deferred tax assets to an amount that is anticipated to be realized on a more likely than not basis. We account for uncertain taxes in accordance with ASC 740, "Income Taxes." The initial benefit recognition model follows a two-step approach. First, we evaluate if the tax position is more likely than not of being sustained if audited based solely on the technical merits of the position. Second, we measure the appropriate amount of benefit to recognize. This is calculated as the largest amount of tax benefit that has a greater than 50% likelihood of ultimately being realized upon settlement. Subsequently at each reporting date, the largest amount that has a greater than 50% likelihood of ultimately being realized, based on information available at that date, will be measured and recognized. We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the consolidated statements of income and comprehensive income. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. |
Employee future benefits | Employee future benefits:We maintain defined benefit pension plans. Benefits under the plans were frozen or curtailed at various times in the past. Earnings are charged with the cost of benefits earned by employees as services are rendered. The cost reflects management’s best estimates of the pension plans’ expected investment yields, wage and salary escalation, mortality of members, terminations and the ages at which members will retire. Changes in these assumptions could impact future pension expense. Service cost components are recognized within cost of goods sold and non-service cost components are recognized within other (income) expense, net in the consolidated statements of income and comprehensive income. The excess of the net actuarial gain (loss) over 10% of the greater of the benefit obligation or fair value of plan assets at the beginning of the year is amortized over the average remaining service lives of the members. Assets are valued at fair value for the purpose of calculating the expected return on plan assets. Past service costs arising from plan amendments are amortized on a straight-line basis over the average remaining service period of employees active at the date of amendment. When a restructuring of a benefit plan gives rise to both a curtailment and a settlement of obligations, the curtailment is accounted for prior to the settlement. Curtailment gains are offset against unrecognized losses and any excess gains and all curtailment losses are recorded in the period in which the curtailment occurs. |
Restructuring costs | Restructuring costs: Restructuring costs include all salary-related severance benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management and the benefit is probable and reasonably estimable. In addition to salary-related costs, we incur other restructuring costs when facilities are closed or capacity is realigned within the organization. Upon termination of a contract we record liabilities and expenses pursuant to the terms of the relevant agreement. For non-contractual restructuring activities, liabilities and expenses are measured and recorded at fair value in the period in which they are incurred. Restructuring-related costs are presented separately in the consolidated statements of income and comprehensive income whereas non-restructuring severance benefits are charged to cost of goods sold or selling, general and administration expense depending on the nature of the job responsibilities. |
Financial instruments | Financial instruments: We have applied a framework consistent with ASC 820, "Fair Value Measurement and Disclosure," and have disclosed all financial assets and liabilities measured at fair value and non-financial assets and liabilities measured at fair value on a non-recurring basis (at least annually). We classify and disclose assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The estimated fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. These estimates, although based on the relevant market information about the financial instrument, are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Revenue recognition and Vendor rebates | Revenue recognition:Revenue from the sale of products is recognized when control of the promised goods is transferred to our customers based on the agreed-upon shipping terms, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Volume rebates, expected returns, discounts and other incentives to customers are considered variable consideration and we estimate these amounts based on the expected amount to be provided to customers and reduce the revenues we recognize accordingly. Sales taxes and value added taxes assessed by governmental entities are excluded from the measurement of consideration expected to be received. Shipping and handling costs incurred after a customer has taken possession of our goods are treated as a fulfillment cost and are not considered a separate performance obligation. Shipping and other transportation costs charged to customers are recorded in both revenues and cost of goods sold in the consolidated statements of income and comprehensive income.Vendor rebates:We account for cash consideration received from a vendor as a reduction of cost of goods sold and inventory, in the consolidated statements of income and comprehensive income and consolidated balance sheets, respectively. The cash consideration received represents agreed-upon vendor rebates that are earned in the normal course of operations. |
Product warranties | Product warranties:We warrant certain qualitative attributes of our door products. We have recorded provisions for estimated warranty and related costs within accrued expenses on the consolidated balance sheets, based on historical experience and we periodically adjust these provisions to reflect actual experience. |
Advertising costs | Advertising costs:We recognize advertising costs as they are incurred. Advertising costs incurred primarily relate to tradeshows and are included within selling, general and administration expense in the consolidated statements of income and comprehensive income. Advertising costs were $16.9 million, $14.2 million and $10.8 million in the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. |
Research and development costs | Research and development costs:We recognize research and development costs as they are incurred. Research and development costs incurred primarily relate to the development of new products and the improvement of manufacturing processes, and are primarily included within cost of goods sold in the consolidated statements of income and comprehensive income. These costs exclude the significant investments in other areas such as advanced automation. Research and development costs were $21.2 million, $18.4 million and $17.0 million in the years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively. |
Insurance losses and proceeds | Insurance losses and proceeds:All involuntary conversions of property, plant and equipment are recorded as losses within loss (gain) on disposal of property, plant and equipment, which is included within selling, general and administration expense in the consolidated statements of income and comprehensive income and as reductions to property, plant and equipment in the consolidated balance sheets. Any subsequent proceeds received for insured losses of property, plant and equipment are also recorded as gains within loss (gain) on disposal of property, plant and equipment, and are classified as cash flows from investing activities in the consolidated statements of cash flows in the period in which the cash is received. Proceeds received for business interruption recoveries are recorded as a reduction to selling, general and administration expense in the consolidated statements of income and comprehensive income and are classified as cash flows from operating activities in the consolidated statements of cash flows in the period in which an acknowledgment from the insurance carrier of settlement or partial settlement of a non-refundable nature has been presented to us. |
Equity investments | Equity investments:We account for investments in affiliates of between 20% and 50% ownership, over which we have significant influence, using the equity method. We record our share of earnings of the affiliate within other income, net of expense, in the consolidated statements of income and comprehensive income and dividends as a reduction of the investment in the affiliate in the consolidated balance sheets when declared. |
Segment Reporting | Segment reporting:Our reportable segments are organized and managed principally by end market: North American Residential, Europe and Architectural. The Corporate & Other category includes unallocated corporate costs and the results of immaterial operating segments that were not aggregated into any reportable segment. In addition to similar economic characteristics we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. |
Use of estimates | Use of estimates:The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of net sales and expenses during the reporting periods. During 2022, there were no material changes in the methods or policies used to establish estimates and assumptions. Actual results may differ from our estimates. |
Compensation Related Costs, Policy | Share based compensation expense:We have a share based compensation plan, which is described in detail in Note 12. We apply the fair value method of accounting using comprehensive valuation models, including the Black-Scholes-Merton option pricing model, to determine the compensation expense. |
Business Overview and Signifi_3
Business Overview and Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment Useful Lives | Depreciation is recorded based on the carrying values of buildings, machinery and equipment using the straight-line method over the estimated useful lives set forth as follows: Useful Life (Years) Buildings 20 - 40 Machinery and equipment Tooling 10 - 25 Machinery and equipment 5 - 25 Molds and dies 12 - 25 Office equipment, fixtures and fittings 3 - 12 Information technology systems 5 - 15 |
Schedule of Useful Lives of Intangible Assets | Definite lived intangible assets are amortized over their estimated useful lives. Information pertaining to the estimated useful lives of intangible assets is as follows: Estimated Useful Life Customer relationships Over expected relationship period Patents Over expected useful life System software development Over expected useful life Acquired trademarks and tradenames Straight-line over expected useful life |
Schedule of Product Warranty Liability | The rollforward of our warranty provision is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 4,015 $ 4,635 $ 4,414 Additions charged to expense 5,085 4,646 6,807 Deductions (5,219) (5,266) (6,586) Balance at end of period $ 3,881 $ 4,015 $ 4,635 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Receivables [Abstract] | |
Rollforward of Allowance for Doubtful Accounts | The changes in the allowance for doubtful accounts were as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 2,087 $ 2,809 $ 1,752 Additions charged to expense 1,062 242 1,443 Deductions (669) (964) (386) Balance at end of period $ 2,480 $ 2,087 $ 2,809 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | The amounts of inventory on hand were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Raw materials $ 320,553 $ 275,269 Finished goods 95,005 78,324 Provision for obsolete or aged inventory (8,730) (6,117) Inventories, net $ 406,828 $ 347,476 |
Schedule of inventory provision | The rollforward of our inventory provision is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 6,117 $ 6,305 $ 7,136 Additions charged to expense 7,692 3,402 5,150 Deductions (5,079) (3,590) (5,981) Balance at end of period $ 8,730 $ 6,117 $ 6,305 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Property, Plant and Equipment [Abstract] | |
Amounts of property, plant, and equipment | The carrying amounts of our property, plant and equipment and accumulated depreciation were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Land $ 21,415 $ 22,851 Buildings 222,340 216,510 Machinery and equipment 837,407 783,913 Property, plant and equipment, gross 1,081,162 1,023,274 Accumulated depreciation (428,833) (396,477) Property, plant and equipment, net $ 652,329 $ 626,797 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Leases [Abstract] | |
Lease cost | The following table summarizes the components of lease expense recorded in the consolidated statements of income and comprehensive income for the periods indicated: (In thousands) Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Operating lease expense $ 49,972 $ 47,263 $ 38,922 Finance lease expense Amortization of leased assets 1,123 865 882 Interest on lease liabilities 1,356 1,443 1,458 Total lease expense $ 52,451 $ 49,571 $ 41,262 The following table includes a detail of lease assets and liabilities included in the consolidated balance sheet as of the period indicated: (In thousands) January 1, 2023 January 2, 2022 Operating lease right-of-use assets $ 160,695 $ 176,445 Finance lease right-of-use assets (1) 25,409 23,931 Total lease assets, net $ 186,104 $ 200,376 Current portion of operating lease liabilities $ 24,372 $ 25,551 Long-term operating lease liabilities 151,242 165,670 Long-term finance lease liabilities 29,561 27,043 Total lease liabilities $ 205,175 $ 218,264 ____________ (1) Net of accumulated amortization of $3.5 million and $2.4 million, as of January 1, 2023 , and January 2, 2022 , respectively. The following table is a summary of the weighted-average remaining lease terms and weighted-average discount rates of the Company's leases as of the period indicated: January 1, 2023 January 2, 2022 Weighted-average remaining lease term (years) Operating leases 11.2 11.8 Finance leases 26.6 27.6 Weighted-average discount rate (1) Operating leases 4.3 % 4.1 % Finance leases 4.8 % 5.4 % ____________ (1) Based on the Company's incremental borrowing rate at lease commencement or modification. |
Maturities of operating lease liabilities | As of January 1, 2023, the future minimum lease payments under non-cancelable leases are as follows: (In thousands) Operating Leases Finance Leases Fiscal year: 2023 $ 31,073 $ 1,311 2024 28,862 1,471 2025 25,331 1,515 2026 18,362 1,693 2027 14,622 1,612 Thereafter 113,393 49,127 Total minimum lease payments 231,643 56,729 Less imputed interest (56,029) (27,168) Present value of future lease payments $ 175,614 $ 29,561 |
Maturities of finance lease liabilities | As of January 1, 2023, the future minimum lease payments under non-cancelable leases are as follows: (In thousands) Operating Leases Finance Leases Fiscal year: 2023 $ 31,073 $ 1,311 2024 28,862 1,471 2025 25,331 1,515 2026 18,362 1,693 2027 14,622 1,612 Thereafter 113,393 49,127 Total minimum lease payments 231,643 56,729 Less imputed interest (56,029) (27,168) Present value of future lease payments $ 175,614 $ 29,561 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | Changes in the carrying amount of goodwill were as follows as of the dates indicated: (In thousands) North American Residential Europe Architectural Total January 3, 2021 $ 9,730 $ 69,439 $ 59,523 $ 138,692 Measurement period adjustment 160 — — 160 Goodwill related to 2021 divestiture — (1,395) — (1,395) Goodwill impairment — — (59,526) (59,526) Foreign exchange fluctuations 3 (835) 3 (829) January 2, 2022 9,893 67,209 — 77,102 Foreign exchange fluctuations (19) (7,215) — (7,234) January 1, 2023 $ 9,874 $ 59,994 $ — $ 69,868 |
Cost and accumulated amortized values of intangible assets | The cost and accumulated amortization values of our intangible assets were as follows as of the dates indicated: January 1, 2023 January 2, 2022 (In thousands) Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Definite life intangible assets: Customer relationships $ 165,700 $ (135,518) $ 30,182 $ 176,779 $ (132,840) $ 43,939 Patents 34,776 (29,665) 5,111 34,438 (28,148) 6,290 Software 37,187 (33,900) 3,287 36,354 (33,281) 3,073 Trademarks and tradenames 30,918 (15,827) 15,091 34,210 (14,063) 20,147 License rights and other 6,584 (84) 6,500 94 (94) — Total definite life intangible assets 275,165 (214,994) 60,171 281,875 (208,426) 73,449 Indefinite life intangible assets: Trademarks and tradenames 75,885 — 75,885 77,038 — 77,038 Total intangible assets $ 351,050 $ (214,994) $ 136,056 $ 358,913 $ (208,426) $ 150,487 |
Estimated future amortization of intangible assets with definite lives | The estimated future amortization of intangible assets with definite lives as of January 1, 2023, is as follows: (In thousands) Fiscal year: 2023 $ 15,487 2024 14,054 2025 12,063 2026 8,617 2027 8,305 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Expenses | The details of our accrued expenses were as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Accrued payroll $ 69,224 $ 66,048 Accrued rebates 50,200 51,200 Current portion of operating lease liabilities 24,372 25,551 Accrued interest 16,480 17,125 Other accruals 62,770 77,376 Total accrued expenses $ 223,046 $ 237,300 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | (In thousands) January 1, 2023 January 2, 2022 3.50% senior unsecured notes due 2030 $ 375,000 $ 375,000 5.375% senior unsecured notes due 2028 500,000 500,000 Debt issuance costs (8,884) (9,279) Total long-term debt $ 866,116 $ 865,721 |
Share Based Compensation Plans
Share Based Compensation Plans (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Share-based Payment Arrangement [Abstract] | |
Stock appreciation rights award activity | Twelve Months Ended January 1, 2023 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 158,725 $ 7,324 $ 71.81 7.5 Granted 33,803 88.43 Exercised (4,580) 169 56.51 Forfeited (3,743) 96.15 Outstanding, end of period 184,205 $ 2,153 $ 74.75 7.0 Exercisable, end of period 124,842 $ 2,118 $ 66.14 6.3 Twelve Months Ended January 2, 2022 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 207,094 $ 7,409 $ 62.56 7.5 Granted 28,707 107.68 Exercised (69,223) 4,305 57.79 Forfeited (7,853) 82.76 Outstanding, end of period 158,725 $ 7,324 $ 71.81 7.5 Exercisable, end of period 81,474 $ 4,451 $ 63.32 6.9 Twelve Months Ended January 3, 2021 Stock Appreciation Rights Aggregate Intrinsic Value (in thousands) Weighted Average Exercise Price Average Remaining Contractual Life (Years) Outstanding, beginning of period 404,447 $ 7,615 $ 53.62 4.7 Granted 32,435 83.39 Exercised (209,793) 7,033 48.59 Forfeited (19,995) 62.10 Outstanding, end of period 207,094 $ 7,409 $ 62.56 7.5 Exercisable, end of period 94,883 $ 3,736 $ 58.97 6.4 |
Schedule of Share-based Compensation, Stock Appreciation Rights, Valuation Assumptions | The weighted average grant date assumptions used for the SARs granted were as follows for the periods indicated: 2022 Grants 2021 Grants 2020 Grants SAR value (model conclusion) $ 26.52 $ 28.08 $ 20.56 Risk-free rate 2.0 % 0.8 % 1.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 26.5 % 25.2 % 22.6 % Expected term (years) 6.0 6.0 6.0 |
Restricted stock units award activity | Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 291,925 $ 88.66 319,675 $ 68.33 318,520 $ 58.89 Granted 216,774 88.22 142,540 111.02 154,332 79.66 Delivered (138,682) 78.51 (116,663) 66.40 (115,340) 60.30 Withheld to cover (1) (23,319) (24,471) (16,234) Forfeited (32,945) 95.83 (29,156) 82.85 (21,603) 58.15 Outstanding, end of period 313,753 $ 92.85 291,925 $ 88.66 319,675 $ 68.33 ____________ (1) A portion of the vested RSUs delivered were net share settled to cover statutory requirements for income and other employment taxes. We remit the equivalent cash to the appropriate taxing authorities. These net share settlements had the effect of share repurchases by us as we reduced and retired the number of shares that would have otherwise been issued as a result of the vesting. |
Performance based restricted stock award activity | Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Total Performance Restricted Stock Units Outstanding Weighted Average Grant Date Fair Value Outstanding, beginning of period 150,181 $ 84.47 168,382 $ 67.80 204,687 $ 60.66 Granted 211,251 88.37 59,728 109.25 64,611 79.83 Performance adjustment (1) 25,234 57.19 14,474 63.05 (59,936) 67.50 Delivered (52,265) 57.19 (60,252) 63.05 — — Withheld to cover (2) (11,809) (9,518) — Forfeited (11,914) 94.50 (22,633) 78.20 (40,980) 51.51 Outstanding, end of period 310,678 $ 90.15 150,181 $ 84.47 168,382 $ 67.80 ____________ (1) PRSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. These awards are settled with payouts ranging from zero to 200% of the target award value depending on performance goal achievement. The performance adjustment represents the difference in shares ultimately awarded due to performance attainment above or below target. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Restructuring and Related Activities [Abstract] | |
Total restructuring costs by plan | The following table summarizes the restructuring charges recorded for the periods indicated: Year Ended January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2022 Plan $ 2,131 $ — $ — $ — $ 2,131 2021 Plan — — 17 — 17 2020 Plan — — 62 16 78 2019 Plan (395) — — 73 (322) Total Restructuring Costs $ 1,736 $ — $ 79 $ 89 $ 1,904 Year Ended January 2, 2022 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2021 Plan $ — $ — $ 1,666 $ — $ 1,666 2020 Plan 23 — 3,499 23 3,545 2019 Plan (172) — — 528 356 Total Restructuring Costs $ (149) $ — $ 5,165 $ 551 $ 5,567 Year Ended January 3, 2021 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2020 Plan $ 29 $ — $ 1,733 $ — $ 1,762 2019 Plan 3,863 (37) 1,165 1,048 6,039 2018 Plan 435 — — — 435 Total Restructuring Costs $ 4,327 $ (37) $ 2,898 $ 1,048 $ 8,236 Cumulative Amount Incurred Through January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total 2022 Plan $ 2,131 $ — $ — $ — $ 2,131 2021 Plan — — 1,683 — 1,683 2020 Plan 52 — 5,294 39 5,385 2019 Plan 8,755 359 1,671 2,668 13,453 Total Restructuring Costs $ 10,938 $ 359 $ 8,648 $ 2,707 $ 22,652 |
Schedule of restructuring reserve by type of cost | The changes in the accrual for restructuring by activity were as follows for the periods indicated: (In thousands) January 2, Severance Closure Costs Cash Payments January 1, 2022 Plan $ — $ 143 $ 1,988 $ (2,131) $ — 2021 Plan 25 (26) 43 (42) — 2020 Plan 22 (35) 113 (100) — 2019 Plan 2 31 (353) 320 — Total $ 49 $ 113 $ 1,791 $ (1,953) $ — (In thousands) January 3, Severance Closure Costs Cash Payments January 2, 2021 Plan $ — $ 513 $ 1,153 $ (1,641) $ 25 2020 Plan 1,492 264 3,281 (5,015) 22 2019 Plan 291 175 181 (645) 2 Total $ 1,783 $ 952 $ 4,615 $ (7,301) $ 49 (In thousands) December 29, Severance Closure Costs Cash Payments January 3, 2020 Plan $ — $ 1,506 $ 256 $ (270) $ 1,492 2019 Plan 1,535 1,752 4,287 (7,283) 291 2018 Plan — 163 272 (435) — Total $ 1,535 $ 3,421 $ 4,815 $ (7,988) $ 1,783 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | For financial reporting purposes, income before income taxes includes the following components: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Income before income tax expense: Canada $ 78,768 $ 44,935 $ 54,355 Foreign 211,429 99,031 47,945 Total income before income tax expense $ 290,197 $ 143,966 $ 102,300 |
Income tax expense (benefit) for income taxes | Income tax expense for income taxes consists of the following: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Current income tax expense: Canada $ 15,266 $ 9,392 $ 8,283 Foreign 50,463 30,499 30,413 Total current income tax expense: 65,729 39,891 38,696 Deferred income tax expense (benefit): Canada 7,931 3,626 (235) Foreign (1,907) 1,255 (9,850) Total deferred income tax expense (benefit): 6,024 4,881 (10,085) Income tax expense $ 71,753 $ 44,772 $ 28,611 |
Schedule of Effective Income Tax Rate Reconciliation | A summary of the differences between expected income tax expense calculated at the Canadian statutory rate and the reported consolidated income tax expense (benefit) is as follows: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Income tax expense computed at statutory income tax rate $ 75,829 $ 38,137 $ 27,130 Foreign rate differential (10,045) (12,370) (4,900) Permanent differences (2,012) 3,843 (1,286) Disposal of subsidiaries 287 1,651 493 Income attributable to a permanent establishment (6,517) 2,608 2,253 Change in valuation allowance 5,202 1,569 (9,271) Income tax credits 2,673 (5,591) (1,831) Change in tax rate 1,120 2,706 883 Goodwill impairment — 11,296 7,965 Limitation on executive compensation 2,273 1,904 2,209 Withholding and other taxes 2,100 1,761 2,435 Nondeductible interest 1,970 — 1,714 Other (1,127) (2,742) 817 Income tax expense $ 71,753 $ 44,772 $ 28,611 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: Year Ended (In thousands) January 1, 2023 January 2, 2022 Deferred tax assets: Non-capital loss carryforwards $ 12,525 $ 11,142 Capital loss carryforwards 7,753 6,740 Deferred interest expense 9,052 12,518 Accruals and reserves currently not deductible for tax purposes 20,268 18,208 Share based compensation 4,887 4,456 Income tax credits 872 5,466 Lease right-of-use assets 53,985 57,735 Capitalized research and development 5,732 — Other 2,031 1,319 Total deferred tax assets 117,105 117,584 Valuation allowance (14,102) (10,286) Total deferred tax assets, net of valuation allowance 103,003 107,298 Deferred tax liabilities: Plant and equipment (86,337) (77,807) Intangibles (21,043) (23,147) Basis difference in subsidiaries (7,469) (7,488) Unrealized foreign exchange loss (gain) 1,850 (287) Lease liabilities (48,889) (52,955) Other (4,572) (2,786) Total deferred tax liabilities (166,460) (164,470) Net deferred tax liability $ (63,457) $ (57,172) |
Summary of Valuation Allowance | The following is a rollforward of the valuation allowance for deferred tax assets: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Balance at beginning of period $ 10,286 $ 5,970 $ 15,569 Additions charged to expense and other 10,252 4,473 851 Deductions (6,436) (157) (10,450) Balance at end of period $ 14,102 $ 10,286 $ 5,970 |
Summary of Operating Loss Carryforwards | We can apply these losses against future taxable income based on the period of expiration as follows: (In thousands) Canada Other Foreign Total 2023-2028 $ — $ 3,237 $ 3,237 2029-2043 39,482 — 39,482 Indefinitely — 4,502 4,502 Total tax losses carried forward $ 39,482 $ 7,739 $ 47,221 |
Schedule of Unrecognized Tax Benefits Roll Forward | The changes to our unrecognized tax benefits were as follows: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Unrecognized tax benefit at beginning of period $ 7,592 $ 8,108 $ 8,156 Gross increases in tax positions in current period 151 103 62 Gross decreases in tax positions in prior period (173) (108) (110) Gross increases in tax positions in prior period 110 — 1 Lapse of statute of limitations — (511) (1) Unrecognized tax benefit at end of period $ 7,680 $ 7,592 $ 8,108 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Year Ended (In thousands, except share and per share information) January 1, 2023 January 2, 2022 January 3, 2021 Net income attributable to Masonite $ 214,233 $ 94,501 $ 69,037 Shares used in computing basic earnings per share 22,532,722 24,176,846 24,569,727 Effect of dilutive securities: Incremental shares issuable under share compensation plans 239,743 385,687 373,451 Shares used in computing diluted earnings per share 22,772,465 24,562,533 24,943,178 Basic earnings per common share attributable to Masonite $ 9.51 $ 3.91 $ 2.81 Diluted earnings per common share attributable to Masonite $ 9.41 $ 3.85 $ 2.77 Anti-dilutive instruments excluded from diluted earnings per common share 223,968 28,707 215,563 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Certain information with respect to reportable segments is as follows for the periods indicated: Year Ended January 1, 2023 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 2,286,098 $ 282,989 $ 323,175 $ 20,293 $ 2,912,555 Intersegment sales (2,456) (2,220) (16,192) — (20,868) Net sales to external customers $ 2,283,642 $ 280,769 $ 306,983 $ 20,293 $ 2,891,687 Adjusted EBITDA $ 461,750 $ 28,774 $ (3,748) $ (40,978) $ 445,798 Depreciation and amortization 42,958 21,061 12,374 11,902 88,295 Interest expense, net — — — 41,331 41,331 Income tax expense — — — 71,753 71,753 Year Ended January 2, 2022 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 1,955,424 $ 342,172 $ 303,078 $ 20,014 $ 2,620,688 Intersegment sales (2,526) (7,640) (13,602) — (23,768) Net sales to external customers $ 1,952,898 $ 334,532 $ 289,476 $ 20,014 $ 2,596,920 Adjusted EBITDA $ 374,452 $ 60,624 $ (2,704) $ (19,766) $ 412,606 Depreciation and amortization 39,504 23,825 14,620 14,033 91,982 Interest expense, net — — — 46,123 46,123 Income tax expense — — — 44,772 44,772 Year Ended January 3, 2021 (In thousands) North American Residential Europe Architectural Corporate & Other Total Sales $ 1,640,323 $ 260,834 $ 358,049 $ 19,947 $ 2,279,153 Intersegment sales (2,204) (2,721) (17,153) — (22,078) Net sales to external customers $ 1,638,119 $ 258,113 $ 340,896 $ 19,947 $ 2,257,075 Adjusted EBITDA $ 347,822 $ 40,474 $ 34,201 $ (58,785) $ 363,712 Depreciation and amortization 37,705 23,732 17,735 12,601 91,773 Interest expense, net — — — 46,807 46,807 Income tax benefit — — — 28,611 28,611 |
Reconciliation of consolidated Adjusted EBITDA to net income (loss) attributable to Masonite | A reconciliation of our consolidated net income attributable to Masonite to Adjusted EBITDA is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net income attributable to Masonite $ 214,233 $ 94,501 $ 69,037 Plus: Depreciation 71,168 70,641 68,350 Amortization 17,127 21,341 23,423 Share based compensation expense 21,771 15,959 19,423 (Gain) loss on disposal of property, plant and equipment (378) 1,316 6,234 Restructuring costs 1,904 5,567 8,236 Asset impairment — 69,900 51,515 Loss on disposal of subsidiaries 850 8,590 2,091 Interest expense, net 41,331 46,123 46,807 Loss on extinguishment of debt — 13,583 — Other (income) expense, net (5,001) 15,620 (5,217) Income tax expense 71,753 44,772 28,611 Other items (1) 6,829 — 40,550 Net income attributable to non-controlling interest 4,211 4,693 4,652 Adjusted EBITDA $ 445,798 $ 412,606 $ 363,712 ____________ |
Revenue from External Customers by Products and Services | Sales for the product lines are summarized as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net sales to external customers: Interior products $ 1,871,103 $ 1,654,379 $ 1,479,196 Exterior products 892,945 813,605 647,241 Components 127,639 128,936 130,638 Total $ 2,891,687 $ 2,596,920 $ 2,257,075 |
Revenue from External Customers by Geographic Areas | Net sales information with respect to geographic areas exceeding 10% of consolidated net sales is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Net sales to external customers from facilities in: United States $ 2,153,689 $ 1,776,180 $ 1,595,398 Canada 395,938 364,179 319,937 United Kingdom 259,944 300,008 218,382 Other 82,116 156,553 123,358 Total $ 2,891,687 $ 2,596,920 $ 2,257,075 |
Property, Plant and Equipment by Country | Geographic information regarding property, plant and equipment which exceed 10% of consolidated property, plant and equipment is as follows as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 United States $ 443,105 $ 413,289 Other (1) 209,224 213,508 Total $ 652,329 $ 626,797 ____________ (1) Except for the United States, property, plant and equipment in any single country was less than 10% of consolidated property, plant and equipment, net. |
Employee Future Benefits (Table
Employee Future Benefits (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Expected Benefit Payments | As of January 1, 2023, the estimated future benefit payments from the U.K. Pension Plan for the following future periods are set forth as follows: (In thousands) Expected Future Benefit Payments Fiscal year: 2023 $ 977 2024 1,079 2025 1,162 2026 1,120 2027 1,168 2028 through 2032 6,750 Total estimated future benefit payments $ 12,256 |
UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of AOCL Amounts | A reconciliation of the change in accumulated other comprehensive loss ("AOCL") is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss $ — $ 7,790 Amortization of: Curtailment recognition of prior service cost — (15) Settlement recognition of net loss — (24,375) Change in AOCL, pre-tax $ — $ (16,600) |
UNITED STATES | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Benefit Costs | Information about the U.S. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Components of net periodic benefit cost: Service cost $ — $ 331 $ 309 Interest cost — 1,516 2,183 Expected return on assets — (2,953) (5,328) Amortization of actuarial net losses — 1,047 662 Settlement loss 23,343 — Net pension expense (benefit) $ — $ 23,284 $ (2,174) |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | Information with respect to the assets, liabilities and net plan assets of the U.S. Pension Plan is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Pension assets: Fair value of plan assets, beginning of year $ — $ 86,464 Company contributions — 5,550 Actual return on plan assets — (2,347) Plan settlements — (84,573) Benefits paid — (3,711) Administrative expenses paid — (1,383) Fair value of plan assets, end of year — — Pension liability: Accrued benefit obligation, beginning of year — 85,330 Current service cost — 331 Interest cost — 1,516 Plan settlements — (84,573) Actuarial loss — 2,490 Benefits paid — (3,711) Administrative expenses paid — (1,383) Accrued benefit obligation, end of year — — Net plan assets, end of year $ — $ — |
Schedule of Assumptions Used | The weighted average actuarial assumptions adopted in measuring our U.S. accrued benefit obligations and costs prior to termination were as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Discount rate applied for: Accrued benefit obligation — % 2.4 % 2.4 % Net periodic pension cost — % 2.4 % 3.3 % Expected long-term rate of return on plan assets — % 3.5 % 3.5 % |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of AOCL Amounts | Amounts deferred in AOCL is set forth for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss $ 7,212 $ 2,794 Prior service cost 440 518 Total amount recognized in AOCL, pre-tax $ 7,652 $ 3,312 A reconciliation of the change in AOCL is set forth as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Net actuarial loss (gain) $ 4,852 $ (2,298) Amortization of: Prior service cost (22) (25) Net actuarial loss from prior years — (264) Translation adjustment (490) (22) Change in AOCL, pre-tax $ 4,340 $ (2,609) |
United Kingdom | Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Benefit Costs | Information about the U.K. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Components of net periodic benefit cost: Interest cost $ 504 $ 366 $ 536 Expected return on assets (934) (1,292) (1,021) Amortization of actuarial net losses 22 289 340 Settlement loss — — 127 Net pension benefit $ (408) $ (637) $ (18) |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | Information with respect to the assets, liabilities and net plan assets (accrued benefit obligation) of the U.K. Pension Plan is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 Pension assets: Fair value of plan assets, beginning of year $ 33,389 $ 31,222 Company contributions 2,021 1,376 Actual return on plan assets (13,071) 2,159 Benefits paid (1,006) (919) Translation adjustment (3,251) (449) Fair value of plan assets, end of year 18,082 33,389 Pension liability Accrued benefit obligation, beginning of year 33,002 35,394 Interest cost 504 366 Actuarial gain (9,153) (1,431) Benefits paid (1,006) (919) Translation adjustment (3,276) (408) Accrued benefit obligation, end of year 20,071 33,002 Net (accrued benefit obligation) plan assets, end of year $ (1,989) $ 387 |
Schedule of Allocation of Plan Assets | Information with respect to the amounts and types of securities that are held in the U.K. Pension Plan is set forth as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 (In thousands) Amount % of Total Plan Amount % of Total Plan Equity securities $ 3,740 20.7 % $ 8,327 24.9 % Debt securities — — % — — % Other 14,342 79.3 % 25,062 75.1 % $ 18,082 100.0 % $ 33,389 100.0 % |
Schedule of Assumptions Used | The weighted average actuarial assumptions adopted in measuring our U.K. accrued benefit obligations and costs were as follows for the periods indicated: Year Ended January 1, 2023 January 2, 2022 January 3, 2021 Discount rate applied for: Accrued benefit obligation 4.8 % 1.8 % 1.3 % Net periodic pension cost 1.7 % 1.0 % 1.0 % Expected long-term rate of return on plan assets 3.0 % 4.1 % 4.1 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income and Other Comprehensive Income (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive income (loss) | A rollforward of the components of accumulated other comprehensive loss is as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Accumulated foreign exchange losses, beginning of period $ (96,919) $ (93,684) $ (113,336) Foreign currency translation (loss) gain (36,369) (6,719) 17,566 Income tax benefit on foreign currency translation (loss) gain 18 6 17 Cumulative translation adjustment recognized upon deconsolidation of subsidiaries 732 3,544 2,254 Less: foreign exchange (loss) gain attributable to non-controlling interest (537) 66 185 Accumulated foreign exchange losses, end of period (132,001) (96,919) (93,684) Accumulated pension and other post-retirement adjustments, beginning of period (4,663) (18,379) (16,833) Pension and other post-retirement adjustments (4,718) 2,250 (3,163) Income tax (expense) benefit on pension and other post-retirement adjustments (858) (437) 851 Amortization of actuarial net losses 22 1,336 1,002 Income tax expense on amortization of actuarial net losses (6) (258) (236) Pension settlement charges — 15,654 — Income tax expense on pension settlement charges — (4,829) — Accumulated pension and other post-retirement adjustments, end of period (10,223) (4,663) (18,379) Accumulated other comprehensive loss $ (142,224) $ (101,582) $ (112,063) Other comprehensive (loss) income, net of tax: $ (41,179) $ 10,547 $ 18,291 Less: other comprehensive (loss) income attributable to non-controlling interest (537) 66 185 Other comprehensive (loss) income attributable to Masonite $ (40,642) $ 10,481 $ 18,106 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash and non-cash transactions | Certain cash and non-cash transactions were as follows for the periods indicated: Year Ended (In thousands) January 1, 2023 January 2, 2022 January 3, 2021 Transactions involving cash: Interest paid $ 41,846 $ 42,703 $ 45,380 Interest received 2,783 250 1,110 Income taxes paid 77,500 40,506 24,336 Income tax refunds 1,596 875 805 Cash paid for operating lease liabilities 33,451 29,886 29,943 Cash paid for finance lease liabilities 1,359 1,470 1,393 Non-cash transactions from operating activities: Right-of-use assets acquired under operating leases 9,307 49,703 51,381 |
Schedule of cash and cash equivalents | The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated: January 1, 2023 January 2, 2022 Cash and cash equivalents $ 296,922 $ 381,395 Restricted cash 11,999 10,110 Total cash, cash equivalents and restricted cash $ 308,921 $ 391,505 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated results of the VIE | Our net cumulative investment in the VIE was comprised of the following as of the dates indicated: (In thousands) January 1, 2023 January 2, 2022 Current assets $ 5,699 $ 9,057 Property, plant and equipment, net 8,056 8,573 Long-term deferred income taxes 1,170 1,023 Other assets 4,067 4,202 Current liabilities (1,396) (3,895) Other long-term liabilities (4) (139) Non-controlling interest (3,229) (3,803) Net assets of the VIE consolidated by Masonite $ 14,363 $ 15,018 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Jan. 01, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The estimated fair values and carrying values of our long-term debt instruments were as follows for the periods indicated: January 1, 2023 January 2, 2022 (In millions) Fair Value Carrying Value Fair Value Carrying Value 3.50% senior unsecured notes due 2030 $ 303,870 $ 371,136 $ 373,238 $ 370,593 5.375% senior unsecured notes due 2028 $ 462,495 $ 495,868 $ 526,730 $ 495,128 |
Business Overview and Signifi_4
Business Overview and Significant Accounting Policies (Business Overview and Significant Accounting Policies) (Details) | 12 Months Ended | ||
Jan. 01, 2023 USD ($) facility Country Lease_Option | Jan. 02, 2022 USD ($) | Jan. 03, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Manufacturing locations | facility | 59 | ||
Number of countries | Country | 7 | ||
Amount drawn on letters of credit | $ 0 | $ 0 | |
Asset impairment | 0 | 69,900,000 | $ 51,515,000 |
Advertising costs | 16,900,000 | 14,200,000 | 10,800,000 |
Research and development costs | $ 21,200,000 | 18,400,000 | 17,000,000 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Lease renewal options | Lease_Option | 1 | ||
Lease renewal term | 1 year | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Lease renewal options | Lease_Option | 4 | ||
Lease renewal term | 10 years | ||
Buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 20 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 40 years | ||
Tooling | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 10 years | ||
Tooling | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 25 years | ||
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 5 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 25 years | ||
Molds and Dies | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 12 years | ||
Molds and Dies | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 25 years | ||
Office Equipment, Fixtures and Fittings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 3 years | ||
Office Equipment, Fixtures and Fittings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 12 years | ||
Information Technology Systems | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 5 years | ||
Information Technology Systems | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful lives of property, plant and equipment | 15 years | ||
North American Residential | |||
Property, Plant and Equipment [Line Items] | |||
Goodwill impairment | 0 | ||
Asset impairment | $ 0 | $ 51,500,000 | |
Standby Letters of Credit | |||
Property, Plant and Equipment [Line Items] | |||
Maximum borrowing capacity | $ 2,100,000 | $ 2,600,000 |
Business Overview and Signifi_5
Business Overview and Significant Accounting Policies (Product Warranty Rollforward) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Warranty Provision [Rollforward] | |||
Balance at beginning of period | $ 4,015 | $ 4,635 | $ 4,414 |
Additions charged to expense | 5,085 | 4,646 | 6,807 |
Deductions | (5,219) | (5,266) | (6,586) |
Balance at end of period | $ 3,881 | $ 4,015 | $ 4,635 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Jun. 14, 2021 | Dec. 04, 2020 | Aug. 31, 2020 | Jan. 01, 2023 | Apr. 04, 2021 | Jun. 28, 2020 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Business Acquisition [Line Items] | |||||||||
Cash consideration, net of cash acquired | $ 0 | $ 160 | $ 5,814 | ||||||
Loss on disposal of subsidiaries | $ 900 | 850 | 8,590 | 2,091 | |||||
Translation adjustment functional to reporting currency, gain (loss), reclassified to earnings, net of tax | (732) | (3,544) | (2,254) | ||||||
Loss on disposal of subsidiaries | $ 850 | $ 8,590 | $ 2,091 | ||||||
Czech Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration for the sale of subsidiaries, net of cash disposed | $ 7,000 | ||||||||
Gain (loss) on write-off of assets and other professional fees | 5,100 | ||||||||
Translation adjustment functional to reporting currency, net of tax, period increase (decrease) | 3,500 | ||||||||
Loss on disposal of subsidiaries | $ 8,600 | ||||||||
India Entity | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration for the sale of subsidiaries, net of cash disposed | $ 200 | ||||||||
Translation adjustment functional to reporting currency, net of tax, period increase (decrease) | 2,300 | ||||||||
Loss on disposal of subsidiaries | $ 2,100 | ||||||||
Turkey Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Gain (loss) on write-off of assets and other professional fees | 200 | ||||||||
Translation adjustment functional to reporting currency, net of tax, period increase (decrease) | $ 700 | ||||||||
Lowe's Door Fabrication Facility | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash payments for acquisition | $ 3,900 | ||||||||
Lowes Door Manufacturing Facility | |||||||||
Business Acquisition [Line Items] | |||||||||
Other payments to acquire businesses | $ 200 | ||||||||
Development Entity | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash payments for acquisition | $ 1,900 |
Accounts Receivable (Details)
Accounts Receivable (Details) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 USD ($) Customer | Jan. 02, 2022 USD ($) Customer | Jan. 03, 2021 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of period | $ 2,087 | $ 2,809 | $ 1,752 |
Additions charged to expense | 1,062 | 242 | 1,443 |
Deductions | (669) | (964) | (386) |
Balance at end of period | $ 2,480 | $ 2,087 | $ 2,809 |
Accounts Receivable | Customer Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Concentration risk, customers | Customer | 10 | 10 | |
Ten Largest Customers | Accounts Receivable | Customer Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Concentration risk, percent (greater than for Home Depot) | 62.30% | 56.70% | |
The Home Depot, Inc. | Accounts Receivable | Customer Concentration Risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Concentration risk, percent (greater than for Home Depot) | 10% | 10% |
Inventories - Inventory on Hand
Inventories - Inventory on Hand (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 320,553 | $ 275,269 | ||
Finished goods | 95,005 | 78,324 | ||
Provision for obsolete or aged inventory | (8,730) | (6,117) | $ (6,305) | $ (7,136) |
Inventories, net | $ 406,828 | $ 347,476 |
Inventories Inventory Provision
Inventories Inventory Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Inventory Valuation [Roll Forward] | |||
Balance at beginning of period | $ 6,117 | $ 6,305 | $ 7,136 |
Additions charged to expense | 7,692 | 3,402 | 5,150 |
Deductions | (5,079) | (3,590) | (5,981) |
Balance at end of period | $ 8,730 | $ 6,117 | $ 6,305 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,081,162 | $ 1,023,274 |
Accumulated depreciation | (428,833) | (396,477) |
Property, plant and equipment, net | 652,329 | 626,797 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 21,415 | 22,851 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 222,340 | 216,510 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 837,407 | $ 783,913 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 71,168 | $ 70,641 | $ 68,350 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Lease, Cost [Abstract] | |||
Operating lease cost | $ 49,972 | $ 47,263 | |
Operating lease expense | $ 38,922 | ||
Finance lease amortization of right-of-use asset | 1,123 | 865 | 882 |
Finance lease interest expense | 1,356 | 1,443 | 1,458 |
Total lease expense | $ 52,451 | $ 49,571 | $ 41,262 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 160,695 | $ 176,445 |
Finance lease right-of-use asset | 25,409 | 23,931 |
Right-of-use Assets | 186,104 | 200,376 |
Current portion of operating lease liabilities | 24,372 | 25,551 |
Long-term operating lease liabilities | 151,242 | 165,670 |
Long-term finance lease liabilities | 29,561 | 27,043 |
Total lease liabilities | $ 205,175 | $ 218,264 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | Property, plant and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses | Accrued expenses |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Finance lease, accumulated amortization | $ 3,500 | $ 2,400 |
Operating lease weighted average remaining lease term | 11 years 2 months 12 days | 11 years 9 months 18 days |
Finance lease, weighted average remaining lease term | 26 years 7 months 6 days | 27 years 7 months 6 days |
Operating lease weighted average discount rate | 4.30% | 4.10% |
Finance lease weighted average discount rate percent | 4.80% | 5.40% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands | Jan. 01, 2023 USD ($) |
Operating Leases | |
2023 | $ 31,073 |
2024 | 28,862 |
2025 | 25,331 |
2026 | 18,362 |
2027 | 14,622 |
Thereafter | 113,393 |
Total minimum lease payments | 231,643 |
Less imputed interest | (56,029) |
Present value of future lease payments | 175,614 |
Finance Leases | |
2023 | 1,311 |
2024 | 1,471 |
2025 | 1,515 |
2026 | 1,693 |
2027 | 1,612 |
Thereafter | 49,127 |
Total undiscounted lease payments | 56,729 |
Less imputed interest | (27,168) |
Total | $ 29,561 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Jan. 01, 2023 USD ($) lease |
Leases [Abstract] | |
Number of undiscounted commitments for operating leases | lease | 1 |
Undiscounted commitment for operating leases | $ | $ 25.8 |
Term of operating leases not yet commenced | 7 years 2 months 12 days |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning | $ 77,102 | ||
Goodwill, ending | 69,868 | $ 77,102 | |
North American Residential | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 9,893 | 9,730 | |
Measurement period adjustment | 160 | ||
Goodwill related to divestiture | 0 | ||
Goodwill impairment | 0 | ||
Foreign exchange fluctuations | (19) | 3 | |
Goodwill, ending | 9,874 | 9,893 | $ 9,730 |
Europe | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 67,209 | 69,439 | |
Measurement period adjustment | 0 | ||
Goodwill related to divestiture | (1,395) | ||
Goodwill impairment | 0 | ||
Foreign exchange fluctuations | (7,215) | (835) | |
Goodwill, ending | 59,994 | 67,209 | 69,439 |
Architectural | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 0 | 59,523 | 111,000 |
Measurement period adjustment | 0 | ||
Goodwill related to divestiture | 0 | ||
Goodwill impairment | (59,526) | (51,500) | |
Foreign exchange fluctuations | 0 | 3 | |
Goodwill, ending | 0 | 0 | 59,523 |
Operating Segments | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning | 77,102 | 138,692 | |
Measurement period adjustment | 160 | ||
Goodwill related to divestiture | (1,395) | ||
Goodwill impairment | (59,526) | ||
Foreign exchange fluctuations | (7,234) | (829) | |
Goodwill, ending | $ 69,868 | $ 77,102 | $ 138,692 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Goodwill [Line Items] | ||||
Goodwill | $ 69,868 | $ 77,102 | ||
Amortization of intangible assets | 15,800 | 20,200 | $ 22,200 | |
Architectural | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 0 | 0 | 59,523 | $ 111,000 |
Goodwill impairment | $ 59,526 | $ 51,500 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Cost and Accumulated Amortized Values) (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | $ 275,165 | $ 281,875 |
Accumulated Amortization | (214,994) | (208,426) |
Net Book Value | 60,171 | 73,449 |
Total intangible assets, gross | 351,050 | 358,913 |
Intangible Assets, Net (Excluding Goodwill) | 136,056 | 150,487 |
Customer relationships | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 165,700 | 176,779 |
Accumulated Amortization | (135,518) | (132,840) |
Net Book Value | 30,182 | 43,939 |
Patents | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 34,776 | 34,438 |
Accumulated Amortization | (29,665) | (28,148) |
Net Book Value | 5,111 | 6,290 |
Software | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 37,187 | 36,354 |
Accumulated Amortization | (33,900) | (33,281) |
Net Book Value | 3,287 | 3,073 |
Trademarks and tradenames | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 30,918 | 34,210 |
Accumulated Amortization | (15,827) | (14,063) |
Net Book Value | 15,091 | 20,147 |
License rights and other | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 6,584 | 94 |
Accumulated Amortization | (84) | (94) |
Net Book Value | 6,500 | 0 |
Trademarks and Trade Names | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, gross | $ 75,885 | $ 77,038 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Estimated Future Amortization of Intangible Assets) (Details) $ in Thousands | Jan. 01, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 15,487 |
2024 | 14,054 |
2025 | 12,063 |
2026 | 8,617 |
2027 | $ 8,305 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Accrued Expenses [Abstract] | ||
Accrued payroll | $ 69,224 | $ 66,048 |
Accrued rebates | 50,200 | 51,200 |
Current portion of operating lease liabilities | 24,372 | 25,551 |
Accrued interest | 16,480 | 17,125 |
Other accruals | 62,770 | 77,376 |
Total accrued expenses | $ 223,046 | $ 237,300 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total accrued expenses | Total accrued expenses |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 866,116 | $ 865,721 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | (8,884) | (9,279) |
Senior Notes | Senior Notes Due 2030 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 375,000 | 375,000 |
Senior Notes | Senior Notes Due 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500,000 | $ 500,000 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | 12 Months Ended | |||||||||
Dec. 13, 2022 USD ($) | Dec. 12, 2022 | Jul. 26, 2021 USD ($) | Aug. 10, 2019 USD ($) | Jul. 25, 2019 USD ($) | Aug. 27, 2018 USD ($) | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) | Jan. 03, 2021 USD ($) | Jan. 31, 2019 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of long-term debt | $ 0 | $ 375,000,000 | $ 0 | |||||||
Loss on extinguishment of debt | $ 0 | $ 13,583,000 | 0 | |||||||
Senior Notes Due 2028 | Debt Instrument, Redemption, Period One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101% | |||||||||
Senior Notes Due 2028 | Debt Instrument, Redemption, Period Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100% | |||||||||
ABL Facility 2020 | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Line of credit, amount outstanding | $ 0 | |||||||||
Maximum pro forma secured leverage ratio | 4.5 | |||||||||
Remaining borrowing capacity | 324,900,000 | |||||||||
ABL Facility 2020 | Revolving Credit Facility | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unutilized commitment fee percentage | 0.25% | |||||||||
ABL Facility 2020 | Revolving Credit Facility | Base Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 0.25% | |||||||||
ABL Facility 2020 | Revolving Credit Facility | Base Rate | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 0.50% | |||||||||
ABL Facility 2020 | Revolving Credit Facility | Eurodollar Rate | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1.25% | |||||||||
ABL Facility 2020 | Revolving Credit Facility | Eurodollar Rate | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1.50% | |||||||||
Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest expense | $ 41,300,000 | $ 43,900,000 | $ 45,500,000 | |||||||
Senior Notes | Senior Notes Due 2030 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal of debt issued | $ 375,000,000 | |||||||||
Interest rate stated percentage | 3.50% | |||||||||
Proceeds from issuance of long-term debt | $ 370,300,000 | |||||||||
Debt issuance cost | 4,700,000 | |||||||||
Senior Notes | Senior Notes Due 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal of debt issued | $ 300,000,000 | |||||||||
Interest rate stated percentage | 5.75% | |||||||||
Proceeds from issuance of long-term debt | 295,700,000 | |||||||||
Debt issuance cost | $ 4,300,000 | |||||||||
Extinguishment of debt, amount | 300,000,000 | |||||||||
Extinguishment of debt, premium paid | 10,800,000 | |||||||||
Write off of debt issuance costs | 2,800,000 | |||||||||
Loss on extinguishment of debt | $ 13,600,000 | |||||||||
Senior Notes | Senior Notes Due 2028 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal of debt issued | $ 500,000,000 | |||||||||
Interest rate stated percentage | 5.375% | |||||||||
Proceeds from issuance of long-term debt | 493,300,000 | |||||||||
Debt issuance cost | $ 6,700,000 | |||||||||
Senior Notes | Senior Notes Due 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Extinguishment of debt, amount | $ 500,000,000 | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal of debt issued | $ 250,000,000 | |||||||||
Debt instrument, term | 5 years | |||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||||
Annual principal payment, percentage | 15% | |||||||||
Unused borrowing capacity, fee, percentage | 0.25% | |||||||||
Debt instrument, leverage ratio | 450% | |||||||||
Line of credit, amount outstanding | $ 0 | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | Adjusted Term Secured Overnight Financing Rate (SOFR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.25% | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | Adjusted Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 0.50% | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | Premium Adjusted Term Secured Overnight Financing Rate (SOFR) | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1% | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1% | |||||||||
Line of Credit | Term Loan Credit Agreement | Secured Debt | Applicable Margin | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1.25% |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2022 | Jan. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Legal reserve | $ 0 | $ 40,550 |
Share Based Compensation Plan_2
Share Based Compensation Plans - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Mar. 10, 2021 | Jul. 12, 2012 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation | $ 21,771 | $ 15,959 | $ 19,423 | ||
Share based compensation unrecognized | $ 27,100 | ||||
Weighted average remaining requisite service period | 1 year 8 months 12 days | ||||
Deferred compensation liability | $ 7,200 | 8,900 | |||
Deferred compensation asset | $ 7,000 | 9,000 | |||
2012 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan term | 10 years | ||||
2012 Plan | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock available for future issuance (in shares) | 938,667 | ||||
2021 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock incentive plan, period in force | 10 years | ||||
2021 Plan | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards not to exceed (in shares) | 880,000 | ||||
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan term | 10 years | ||||
Award vesting period | 4 years | ||||
Fair value of shares vested | $ 800 | $ 800 | $ 1,000 | ||
Award granted, fair value | $ 900 | ||||
Average requisite service period | 2 years | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of shares vested | $ 12,700 | ||||
Award granted, fair value | $ 19,100 | ||||
Average requisite service period | 1 year 10 months 24 days | ||||
Units vested | 162,001 | ||||
Performance-based Restricted Stock Units (PRSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Fair value of shares vested | $ 3,700 | ||||
Award granted, fair value | $ 18,700 | ||||
Average requisite service period | 3 years | ||||
Units vested | 64,074 | ||||
Service Requirements Only | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting requirements (percent) | 51% | ||||
Service and Performance Requirements | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting requirements (percent) | 49% |
Share Based Compensation Plan_3
Share Based Compensation Plans (SARs) (Details) - Stock Appreciation Rights (SARs) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding, beginning of period, shares | 158,725 | 207,094 | 404,447 | |
Granted, shares | 33,803 | 28,707 | 32,435 | |
Exercised, shares | (4,580) | (69,223) | (209,793) | |
Forfeited, shares | (3,743) | (7,853) | (19,995) | |
Outstanding, end of period, shares | 184,205 | 158,725 | 207,094 | 404,447 |
Exercisable, end of period, shares | 124,842 | 81,474 | 94,883 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value & Average Remaining Contractual Life [Abstract] | ||||
Outstanding, beginning of period, aggregate intrinsic value | $ 7,324 | $ 7,409 | $ 7,615 | |
Exercised, aggregate intrinsic value | 169 | 4,305 | 7,033 | |
Outstanding, end period, aggregate intrinsic value | 2,153 | 7,324 | 7,409 | $ 7,615 |
Exercisable, end of period, aggregate intrinsic value | $ 2,118 | $ 4,451 | $ 3,736 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Outstanding, beginning of period, weighted average exercise price | $ 71.81 | $ 62.56 | $ 53.62 | |
Granted, weighted average exercise price | 88.43 | 107.68 | 83.39 | |
Exercised, weighted average exercise price | 56.51 | 57.79 | 48.59 | |
Forfeited, weighted average exercise price | 96.15 | 82.76 | 62.10 | |
Outstanding, end of period, weighted average exercise price | 74.75 | 71.81 | 62.56 | $ 53.62 |
Exercisable, end of period, weighted average exercise price | $ 66.14 | $ 63.32 | $ 58.97 | |
Outstanding, beginning of period, weighted average remaining contractual term | 7 years | 7 years 6 months | 7 years 6 months | 4 years 8 months 12 days |
Outstanding, end of period, weighted average remaining contractual term | 7 years | 7 years 6 months | 7 years 6 months | 4 years 8 months 12 days |
Exercisable, end of period, weighted average remaining contractual term | 6 years 3 months 18 days | 6 years 10 months 24 days | 6 years 4 months 24 days |
Share Based Compensation Plan_4
Share Based Compensation Plans (Weighted Average Grant Date Assumptions) (Details) - Stock Appreciation Rights (SARs) - $ / shares | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
SAR value (model conclusion) | $ 26.52 | $ 28.08 | $ 20.56 |
Risk-free rate | 2% | 0.80% | 1.20% |
Expected dividend yield | 0% | 0% | 0% |
Expected volatility | 26.50% | 25.20% | 22.60% |
Expected term (years) | 6 years | 6 years | 6 years |
Share Based Compensation Plan_5
Share Based Compensation Plans (RSUs) (Details) - $ / shares | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Restricted Stock Units (RSUs) | |||
Total Outstanding | |||
Outstanding, beginning of period (shares) | 291,925 | 319,675 | 318,520 |
Granted (shares) | 216,774 | 142,540 | 154,332 |
Delivered (shares) | (138,682) | (116,663) | (115,340) |
Withheld to cover (shares) | (23,319) | (24,471) | (16,234) |
Forfeited (shares) | (32,945) | (29,156) | (21,603) |
Outstanding, end of period (shares) | 313,753 | 291,925 | 319,675 |
Weighted Average Grant Date Fair Value | |||
Outstanding, beginning of period (dollars per share) | $ 88.66 | $ 68.33 | $ 58.89 |
Granted (dollars per share) | 88.22 | 111.02 | 79.66 |
Delivered (dollars per share) | 78.51 | 66.40 | 60.30 |
Forfeited (dollars per share) | 95.83 | 82.85 | 58.15 |
Outstanding, end of period (dollars per share) | $ 92.85 | $ 88.66 | $ 68.33 |
Performance-based Restricted Stock Units (PRSUs) | |||
Total Outstanding | |||
Outstanding, beginning of period (shares) | 150,181 | 168,382 | 204,687 |
Granted (shares) | 211,251 | 59,728 | 64,611 |
Performance adjustment (shares) | 25,234 | 14,474 | (59,936) |
Delivered (shares) | (52,265) | (60,252) | 0 |
Withheld to cover (shares) | (11,809) | (9,518) | 0 |
Forfeited (shares) | (11,914) | (22,633) | (40,980) |
Outstanding, end of period (shares) | 310,678 | 150,181 | 168,382 |
Weighted Average Grant Date Fair Value | |||
Outstanding, beginning of period (dollars per share) | $ 84.47 | $ 67.80 | $ 60.66 |
Granted (dollars per share) | 88.37 | 109.25 | 79.83 |
Performance adjustment (dollars per share) | 57.19 | 63.05 | 67.50 |
Delivered (dollars per share) | 57.19 | 63.05 | 0 |
Forfeited (dollars per share) | 94.50 | 78.20 | 51.51 |
Outstanding, end of period (dollars per share) | $ 90.15 | $ 84.47 | $ 67.80 |
Restructuring Costs (Restructur
Restructuring Costs (Restructuring Costs by Plan) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | $ 1,904 | $ 5,567 | $ 8,236 | |
Cumulative amount incurred to date | 22,652 | |||
Restructuring Reserve | 0 | 49 | 1,783 | $ 1,535 |
Payments for Restructuring | (1,953) | (7,301) | (7,988) | |
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 113 | 952 | 3,421 | |
Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 1,791 | 4,615 | 4,815 | |
North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 1,736 | (149) | 4,327 | |
Cumulative amount incurred to date | 10,938 | |||
Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | (37) | |
Cumulative amount incurred to date | 359 | |||
Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 79 | 5,165 | 2,898 | |
Cumulative amount incurred to date | 8,648 | |||
Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 89 | 551 | 1,048 | |
Cumulative amount incurred to date | 2,707 | |||
2022 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 2,131 | |||
Cumulative amount incurred to date | 2,131 | |||
Restructuring Reserve | 0 | 0 | ||
Payments for Restructuring | (2,131) | |||
2022 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 143 | |||
2022 Plan | Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 1,988 | |||
2022 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 2,131 | |||
Cumulative amount incurred to date | 2,131 | |||
2022 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | |||
Cumulative amount incurred to date | 0 | |||
2022 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | |||
Cumulative amount incurred to date | 0 | |||
2022 Plan | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | |||
Cumulative amount incurred to date | 0 | |||
2021 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 17 | 1,666 | ||
Cumulative amount incurred to date | 1,683 | |||
Restructuring Reserve | 0 | 25 | 0 | |
Payments for Restructuring | (42) | (1,641) | ||
2021 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | (26) | 513 | ||
2021 Plan | Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 43 | 1,153 | ||
2021 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | ||
Cumulative amount incurred to date | 0 | |||
2021 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | ||
Cumulative amount incurred to date | 0 | |||
2021 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 17 | 1,666 | ||
Cumulative amount incurred to date | 1,683 | |||
2021 Plan | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | ||
Cumulative amount incurred to date | 0 | |||
2020 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 78 | 3,545 | 1,762 | |
Cumulative amount incurred to date | 5,385 | |||
Restructuring Reserve | 0 | 22 | 1,492 | 0 |
Payments for Restructuring | (100) | (5,015) | (270) | |
2020 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | (35) | 264 | 1,506 | |
2020 Plan | Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 113 | 3,281 | 256 | |
2020 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 23 | 29 | |
Cumulative amount incurred to date | 52 | |||
2020 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | 0 | |
Cumulative amount incurred to date | 0 | |||
2020 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 62 | 3,499 | 1,733 | |
Cumulative amount incurred to date | 5,294 | |||
2020 Plan | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 16 | 23 | 0 | |
Cumulative amount incurred to date | 39 | |||
2019 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | (322) | 356 | 6,039 | |
Cumulative amount incurred to date | 13,453 | |||
Restructuring Reserve | 0 | 2 | 291 | 1,535 |
Payments for Restructuring | (320) | (645) | (7,283) | |
2019 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 31 | 175 | 1,752 | |
2019 Plan | Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | (353) | 181 | 4,287 | |
2019 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | (395) | (172) | 3,863 | |
Cumulative amount incurred to date | 8,755 | |||
2019 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | (37) | |
Cumulative amount incurred to date | 359 | |||
2019 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | 0 | 1,165 | |
Cumulative amount incurred to date | 1,671 | |||
2019 Plan | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 73 | $ 528 | 1,048 | |
Cumulative amount incurred to date | $ 2,668 | |||
2018 Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 435 | |||
Restructuring Reserve | 0 | $ 0 | ||
Payments for Restructuring | (435) | |||
2018 Plan | Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 163 | |||
2018 Plan | Closure Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 272 | |||
2018 Plan | North American Residential | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 435 | |||
2018 Plan | Europe | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | |||
2018 Plan | Architectural | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | 0 | |||
2018 Plan | Corporate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring cost, net | $ 0 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | $ 49 | $ 1,783 | $ 1,535 |
Restructuring costs | 1,904 | 5,567 | 8,236 |
Payments for Restructuring | (1,953) | (7,301) | (7,988) |
Restructuring reserve, ending balance | 0 | 49 | 1,783 |
Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 113 | 952 | 3,421 |
Closure Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 1,791 | 4,615 | 4,815 |
2021 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 25 | 0 | |
Restructuring costs | 17 | 1,666 | |
Payments for Restructuring | (42) | (1,641) | |
Restructuring reserve, ending balance | 0 | 25 | 0 |
2021 Plan | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | (26) | 513 | |
2021 Plan | Closure Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 43 | 1,153 | |
2020 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 22 | 1,492 | 0 |
Restructuring costs | 78 | 3,545 | 1,762 |
Payments for Restructuring | (100) | (5,015) | (270) |
Restructuring reserve, ending balance | 0 | 22 | 1,492 |
2020 Plan | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | (35) | 264 | 1,506 |
2020 Plan | Closure Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 113 | 3,281 | 256 |
2019 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | 2 | 291 | 1,535 |
Restructuring costs | (322) | 356 | 6,039 |
Payments for Restructuring | (320) | (645) | (7,283) |
Restructuring reserve, ending balance | 0 | 2 | 291 |
2019 Plan | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 31 | 175 | 1,752 |
2019 Plan | Closure Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | $ (353) | 181 | 4,287 |
2018 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve, beginning balance | $ 0 | 0 | |
Restructuring costs | 435 | ||
Payments for Restructuring | (435) | ||
Restructuring reserve, ending balance | 0 | ||
2018 Plan | Severance | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | 163 | ||
2018 Plan | Closure Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring costs | $ 272 |
Restructuring Costs (Narrative)
Restructuring Costs (Narrative) (Details) - 2022 Plan $ in Millions | Jan. 01, 2023 USD ($) |
Minimum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring cost | $ 13 |
Maximum | |
Restructuring Cost and Reserve [Line Items] | |
Expected restructuring cost | $ 18 |
Asset Impairment (Details)
Asset Impairment (Details) - USD ($) | 12 Months Ended | |||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Asset impairment | $ 0 | $ 69,900,000 | $ 51,515,000 | |
Goodwill | 69,868,000 | 77,102,000 | ||
Architectural | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Asset impairment | 10,400,000 | 51,500,000 | ||
Goodwill impairment | 59,526,000 | 51,500,000 | ||
Goodwill | 0 | 0 | 59,523,000 | $ 111,000,000 |
Architectural and Corporate & Other | Reported Value Measurement | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Book value of asset group | 16,700,000 | |||
Architectural and Corporate & Other | Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of asset group based on estimated discounted future cash flows, including salvage values or market values | 6,300,000 | |||
North American Residential | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Asset impairment | 0 | 51,500,000 | ||
Goodwill impairment | 0 | |||
Goodwill | $ 9,874,000 | $ 9,893,000 | 9,730,000 | |
North American Residential | Reported Value Measurement | Asset Group Three | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Book value of asset group | 111,000,000 | |||
North American Residential | Fair Value, Inputs, Level 3 | Asset Group Three | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of asset group based on estimated discounted future cash flows, including salvage values or market values | $ 59,500,000 |
Income Taxes (Income From Conti
Income Taxes (Income From Continuing Operations Before Tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Income Tax Disclosure [Abstract] | |||
Canada | $ 78,768 | $ 44,935 | $ 54,355 |
Foreign | 211,429 | 99,031 | 47,945 |
Total income before income tax expense (benefit) | $ (290,197) | $ (143,966) | $ (102,300) |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Current income tax expense (benefit): | |||
Canada | $ 15,266 | $ 9,392 | $ 8,283 |
Foreign | 50,463 | 30,499 | 30,413 |
Total current income tax expense | 65,729 | 39,891 | 38,696 |
Deferred income tax expense (benefit): | |||
Canada | 7,931 | 3,626 | (235) |
Foreign | (1,907) | 1,255 | (9,850) |
Total deferred income tax expense (benefit) | 6,024 | 4,881 | (10,085) |
Income tax expense | $ 71,753 | $ 44,772 | $ 28,611 |
Income Taxes (Income Tax Rate R
Income Taxes (Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Canadian federal statutory rate, (percent) | 26.10% | 26.50% | 26.50% |
Income tax expense computed at statutory income tax rate | $ 75,829 | $ 38,137 | $ 27,130 |
Foreign rate differential | (10,045) | (12,370) | (4,900) |
Permanent differences | (2,012) | 3,843 | (1,286) |
Disposal of subsidiaries | 287 | 1,651 | 493 |
Income attributable to a permanent establishment | (6,517) | 2,608 | 2,253 |
Change in valuation allowance | 5,202 | 1,569 | (9,271) |
Income tax credits | 2,673 | 5,591 | 1,831 |
Change in tax rate | 1,120 | 2,706 | 883 |
Goodwill impairment | 0 | 11,296 | 7,965 |
Limitation on executive compensation | 2,273 | 1,904 | 2,209 |
Withholding and other taxes | 2,100 | 1,761 | 2,435 |
Nondeductible interest | 1,970 | 0 | 1,714 |
Other | (1,127) | (2,742) | 817 |
Income tax expense (benefit) | $ 71,753 | $ 44,772 | $ 28,611 |
Income Taxes (Deferred Income T
Income Taxes (Deferred Income Taxes) (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Deferred tax assets: | ||||
Non-capital loss carryforwards | $ 12,525 | $ 11,142 | ||
Capital loss carryforwards | 7,753 | 6,740 | ||
Deferred interest expense | 9,052 | 12,518 | ||
Accruals and reserves currently not deductible for tax purposes | 20,268 | 18,208 | ||
Share based compensation | 4,887 | 4,456 | ||
Income tax credits | 872 | 5,466 | ||
Lease right-of-use assets | 53,985 | 57,735 | ||
Capitalized research and development | 5,732 | 0 | ||
Other | 2,031 | 1,319 | ||
Total deferred tax assets | 117,105 | 117,584 | ||
Valuation allowance | (14,102) | (10,286) | $ (5,970) | $ (15,569) |
Total deferred tax assets, net of valuation allowance | 103,003 | 107,298 | ||
Deferred tax liabilities: | ||||
Plant and equipment | (86,337) | (77,807) | ||
Intangibles | (21,043) | (23,147) | ||
Basis difference in subsidiaries | (7,469) | (7,488) | ||
Unrealized foreign exchange loss (gain) | 1,850 | (287) | ||
Lease liabilities | (48,889) | (52,955) | ||
Other | (4,572) | (2,786) | ||
Total deferred tax liabilities | (166,460) | (164,470) | ||
Net deferred tax liability | $ 63,457 | $ 57,172 |
Income Taxes (Valuation Allowan
Income Taxes (Valuation Allowance Rollforward) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 10,286 | $ 5,970 | $ 15,569 |
Additions charged to expense and other | 10,252 | 4,473 | 851 |
Deductions | (6,436) | (157) | (10,450) |
Balance at end of period | $ 14,102 | $ 10,286 | $ 5,970 |
Income Taxes (Loss Carryforward
Income Taxes (Loss Carryforwards) (Details) $ in Thousands | Jan. 01, 2023 USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 47,221 |
Canada | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 39,482 |
Other Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 7,739 |
2023-2028 | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 3,237 |
2023-2028 | Canada | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 0 |
2023-2028 | Other Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 3,237 |
2029-2043 | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 39,482 |
2029-2043 | Canada | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 39,482 |
2029-2043 | Other Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 0 |
Indefinitely | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 4,502 |
Indefinitely | Canada | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | 0 |
Indefinitely | Other Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 4,502 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits | $ 7,680 | $ 7,592 | $ 8,108 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit at beginning of period | 7,592 | 8,108 | 8,156 |
Gross increases in tax positions in current period | 151 | 103 | 62 |
Gross decreases in tax positions in prior period | (173) | (108) | (110) |
Gross increases in tax positions in prior period | 110 | 0 | 1 |
Lapse of statute of limitations | 0 | (511) | (1) |
Unrecognized tax benefit at end of period | 7,680 | 7,592 | 8,108 |
Unrecognized tax benefits, interest expense | 600 | 400 | 600 |
Unrecognized tax benefits, penalties accrued | 300 | 300 | 300 |
Unrecognized tax benefits, interest accrued | $ 3,100 | $ 2,800 | $ 3,100 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net income attributable to Masonite | $ 214,233 | $ 94,501 | $ 69,037 |
Shares used in computing basic earnings per share (in shares) | 22,532,722 | 24,176,846 | 24,569,727 |
Effect of dilutive securities: | |||
Incremental shares issuable under share compensation plans (in shares) | 239,743 | 385,687 | 373,451 |
Shares used in computing diluted earnings per share) | 22,772,465 | 24,562,533 | 24,943,178 |
Basic earnings per common share attributable to Masonite (in dollars per share) | $ 9.51 | $ 3.91 | $ 2.81 |
Diluted earnings per common share attributable to Masonite (in dollars per share) | $ 9.41 | $ 3.85 | $ 2.77 |
Anti-dilutive instruments excluded from diluted earnings per common share | |||
Effect of dilutive securities: | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 223,968 | 28,707 | 215,563 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Jul. 03, 2022 USD ($) shares | Apr. 03, 2022 USD ($) shares | Jan. 01, 2023 authorization $ / shares shares | Feb. 21, 2022 USD ($) | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of share repurchase authorizations | authorization | 5 | |||
Stock repurchase program, authorized amount | $ 200,000,000 | |||
Accelerated Share Repurchase | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock repurchase program, authorized amount | $ 100,000,000 | $ 100,000,000 | ||
Share repurchases, settlement (payment) | $ 100,000,000 | |||
Treasury stock, acquired (in shares) | shares | 319,678 | 848,087 | 1,167,765 | |
Treasury stock, acquired (in dollars per share) | $ / shares | $ 85.63 |
Segment Information (Schedule o
Segment Information (Schedule of Segment Reporting Information, by Segment) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | $ 2,891,687 | $ 2,596,920 | $ 2,257,075 |
Adjusted EBITDA | 445,798 | 412,606 | 363,712 |
Depreciation and Amortization | 88,295 | 91,982 | 91,773 |
Interest expense, net | 41,331 | 46,123 | 46,807 |
Income tax expense | 71,753 | 44,772 | 28,611 |
Operating Segments | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 2,912,555 | 2,620,688 | 2,279,153 |
Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | (20,868) | (23,768) | (22,078) |
North American Residential | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 2,283,642 | 1,952,898 | 1,638,119 |
Adjusted EBITDA | 461,750 | 374,452 | 347,822 |
Depreciation and Amortization | 42,958 | 39,504 | 37,705 |
Interest expense, net | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
North American Residential | Operating Segments | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 2,286,098 | 1,955,424 | 1,640,323 |
North American Residential | Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | (2,456) | (2,526) | (2,204) |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 280,769 | 334,532 | 258,113 |
Adjusted EBITDA | 28,774 | 60,624 | 40,474 |
Depreciation and Amortization | 21,061 | 23,825 | 23,732 |
Interest expense, net | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
Europe | Operating Segments | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 282,989 | 342,172 | 260,834 |
Europe | Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | (2,220) | (7,640) | (2,721) |
Architectural | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 306,983 | 289,476 | 340,896 |
Adjusted EBITDA | (3,748) | (2,704) | 34,201 |
Depreciation and Amortization | 12,374 | 14,620 | 17,735 |
Interest expense, net | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 |
Architectural | Operating Segments | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 323,175 | 303,078 | 358,049 |
Architectural | Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | (16,192) | (13,602) | (17,153) |
Corporate and Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 20,293 | 20,014 | 19,947 |
Adjusted EBITDA | (40,978) | (19,766) | (58,785) |
Depreciation and Amortization | 11,902 | 14,033 | 12,601 |
Interest expense, net | 41,331 | 46,123 | 46,807 |
Income tax expense | 71,753 | 44,772 | 28,611 |
Corporate and Other | Operating Segments | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 20,293 | 20,014 | 19,947 |
Corporate and Other | Intersegment Eliminations | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | $ 0 | $ 0 | $ 0 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Consolidated Adjusted EBITDA to Net Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Segment Reporting [Abstract] | ||||
Net income attributable to Masonite | $ 214,233 | $ 94,501 | $ 69,037 | |
Depreciation | 71,168 | 70,641 | 68,350 | |
Amortization | 17,127 | 21,341 | 23,423 | |
Share based compensation expense | 21,771 | 15,959 | 19,423 | |
Loss on disposal of property, plant and equipment | (378) | 1,316 | 6,234 | |
Restructuring costs | 1,904 | 5,567 | 8,236 | |
Asset impairment | 0 | 69,900 | 51,515 | |
Loss on disposal of subsidiaries | $ 900 | 850 | 8,590 | 2,091 |
Interest expense, net | 41,331 | 46,123 | 46,807 | |
Loss on extinguishment of debt | 0 | 13,583 | 0 | |
Other (income) expense, net | 5,001 | (15,620) | 5,217 | |
Income tax expense (benefit) | 71,753 | 44,772 | 28,611 | |
Legal reserve | 0 | 40,550 | ||
Net income attributable to non-controlling interest | 4,211 | 4,693 | 4,652 | |
Adjusted EBITDA | 445,798 | $ 412,606 | $ 363,712 | |
Acquisition related costs | $ 6,829 |
Segment Information (Net Sales)
Segment Information (Net Sales) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 2,891,687 | $ 2,596,920 | $ 2,257,075 |
The Home Depot, Inc. | |||
Segment Reporting Information [Line Items] | |||
Net sales | 630,700 | 491,500 | 411,100 |
UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,153,689 | 1,776,180 | 1,595,398 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Net sales | 395,938 | 364,179 | 319,937 |
United Kingdom | |||
Segment Reporting Information [Line Items] | |||
Net sales | 259,944 | 300,008 | 218,382 |
Other Countries | |||
Segment Reporting Information [Line Items] | |||
Net sales | 82,116 | 156,553 | 123,358 |
Interior Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,871,103 | 1,654,379 | 1,479,196 |
Exterior Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 892,945 | 813,605 | 647,241 |
Components | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 127,639 | $ 128,936 | $ 130,638 |
Segment Information (Property,
Segment Information (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 652,329 | $ 626,797 |
UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | 443,105 | 413,289 |
Other Countries | ||
Segment Reporting Information [Line Items] | ||
Property, plant and equipment, net | $ 209,224 | $ 213,508 |
Employee Future Benefits (Infor
Employee Future Benefits (Information about the Plans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 02, 2022 | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Components of net periodic benefit cost: | ||||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Pension settlement charges | Pension settlement charges | Pension settlement charges | |
Settlement loss | $ 0 | $ 0 | $ 127 | |
Defined contribution plan, contributions | 16,100 | 15,600 | 13,700 | |
UNITED STATES | Pension Plan | ||||
Components of net periodic benefit cost: | ||||
Service cost | 0 | 331 | 309 | |
Interest cost | 0 | 1,516 | 2,183 | |
Expected return on assets | 0 | (2,953) | (5,328) | |
Amortization of actuarial net losses | 0 | 1,047 | 662 | |
Settlement loss | $ 23,300 | 23,343 | 0 | |
Net pension expense | 0 | 23,284 | (2,174) | |
United Kingdom | Pension Plan | ||||
Components of net periodic benefit cost: | ||||
Interest cost | 504 | 366 | 536 | |
Expected return on assets | (934) | (1,292) | (1,021) | |
Amortization of actuarial net losses | 22 | 289 | 340 | |
Net pension expense | $ (408) | $ (637) | $ (18) |
Employee Future Benefits (Plan
Employee Future Benefits (Plan Activity) (Details) - Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
United Kingdom | |||
Pension assets: | |||
Fair value of plan assets, beginning of year | $ 33,389 | $ 31,222 | |
Company contributions | 2,021 | 1,376 | |
Actual return on plan assets | (13,071) | 2,159 | |
Benefits paid | (1,006) | (919) | |
Translation adjustment | 3,251 | 449 | |
Fair value of plan assets, end of year | 18,082 | 33,389 | $ 31,222 |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Accrued benefit obligation, beginning of year | 33,002 | 35,394 | |
Interest cost | 504 | 366 | 536 |
Actuarial loss (gain) | 9,153 | 1,431 | |
Benefits paid | (1,006) | (919) | |
Accrued benefit obligation, end of year | 20,071 | 33,002 | $ 35,394 |
Translation adjustment | (3,276) | (408) | |
Net accrued benefit obligation, end of year | $ (1,989) | $ 387 | |
Accrued benefit obligation, discount rate (percent) | 4.81% | 1.83% | 1.27% |
UNITED STATES | |||
Pension assets: | |||
Fair value of plan assets, beginning of year | $ 0 | $ 86,464 | |
Company contributions | 0 | 5,550 | |
Actual return on plan assets | 0 | (2,347) | |
Plan settlements | 0 | (84,573) | |
Benefits paid | 0 | (3,711) | |
Administration expenses paid | 0 | (1,383) | |
Fair value of plan assets, end of year | 0 | 0 | $ 86,464 |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Accrued benefit obligation, beginning of year | 0 | 85,330 | |
Current service cost | 0 | 331 | 309 |
Interest cost | 0 | 1,516 | 2,183 |
Plan settlements | 0 | (84,573) | |
Actuarial loss (gain) | 0 | 2,490 | |
Benefits paid | 0 | (3,711) | |
Administrative expenses paid | 0 | (1,383) | |
Accrued benefit obligation, end of year | 0 | 0 | $ 85,330 |
Net accrued benefit obligation, end of year | $ 0 | $ 0 | |
Accrued benefit obligation, discount rate (percent) | 0% | 2.40% | 2.40% |
Employee Future Benefits - AOCL
Employee Future Benefits - AOCL (Details) - United Kingdom - Pension Plan - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Net actuarial loss | $ 7,212 | $ 2,794 |
Prior service cost | 440 | 518 |
Total amount recognized in AOCL, pre-tax | $ 7,652 | $ 3,312 |
Employee Future Benefits - Chan
Employee Future Benefits - Change in AOCL (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Settlement recognition of net loss | $ 0 | $ (15,654) | $ 0 |
Net actuarial loss from prior years | (22) | (1,336) | $ (1,002) |
United Kingdom | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss | 4,852 | (2,298) | |
Prior service cost | 22 | 25 | |
Net actuarial loss from prior years | 0 | (264) | |
Translation adjustment | (490) | (22) | |
Change in AOCL, pre-tax | 4,340 | (2,609) | |
UNITED STATES | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss | 0 | 7,790 | |
Curtailment recognition of prior service cost | 0 | (15) | |
Settlement recognition of net loss | 0 | (24,375) | |
Change in AOCL, pre-tax | $ 0 | $ (16,600) |
Employee Future Benefits (Alloc
Employee Future Benefits (Allocation of Plan Assets) (Details) - Pension Plan - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 |
UNITED STATES | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Allocation of plan assets | $ 0 | $ 0 | $ 86,464 |
United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Allocation of plan assets | $ 18,082 | $ 33,389 | $ 31,222 |
Allocation of plan assets, percent | 100% | 100% | |
United Kingdom | Equity Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Allocation of plan assets | $ 3,740 | $ 8,327 | |
Allocation of plan assets, percent | 20.70% | 24.90% | |
Target plan asset allocations, percent | 20% | ||
United Kingdom | Debt Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Allocation of plan assets | $ 0 | $ 0 | |
Allocation of plan assets, percent | 0% | 0% | |
United Kingdom | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Allocation of plan assets | $ 14,342 | $ 25,062 | |
Allocation of plan assets, percent | 79.30% | 75.10% | |
Target plan asset allocations, percent | 80% |
Employee Future Benefits (Actua
Employee Future Benefits (Actuarial Assumptions) (Details) - Pension Plan | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
UNITED STATES | |||
Discount rate applied for: | |||
Accrued benefit obligation | 0% | 2.40% | 2.40% |
Net periodic pension cost | 0% | 2.40% | 3.30% |
Expected long-term rate of return on plan assets | 0% | 3.50% | 3.50% |
United Kingdom | |||
Discount rate applied for: | |||
Accrued benefit obligation | 4.81% | 1.83% | 1.27% |
Net periodic pension cost | 1.70% | 1% | 1% |
Expected long-term rate of return on plan assets | 3% | 4.10% | 4.10% |
Expected long-term return on assets, (in Years) | 10 years |
Employee Future Benefits (Overa
Employee Future Benefits (Overall Pension Obligation) (Details) $ in Thousands | Jan. 01, 2023 USD ($) |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2023 | $ 977 |
2024 | 1,079 |
2025 | 1,162 |
2026 | 1,120 |
2027 | 1,168 |
2028 through 2032 | 6,750 |
Expected future benefit payments | 12,256 |
Expected contributions to the plans in the next fiscal year | $ 2,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income and Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Accumulated Foreign Exchange Gains (Losses) [Roll Forward] | |||
Accumulated foreign exchange losses, beginning of period | $ (96,919) | $ (93,684) | $ (113,336) |
Foreign currency translation (loss) gain | (36,369) | (6,719) | 17,566 |
Income tax benefit on foreign currency translation (loss) gain | 18 | 6 | 17 |
Cumulative translation adjustment recognized upon deconsolidation of subsidiaries | 732 | 3,544 | 2,254 |
Less: foreign exchange (loss) gain attributable to non-controlling interest | (537) | 66 | 185 |
Accumulated foreign exchange losses, end of period | (132,001) | (96,919) | (93,684) |
Accumulated Amortization of Actuarial Net Losses [Roll Forward] | |||
Accumulated pension and other post-retirement adjustments, beginning of period | (4,663) | (18,379) | (16,833) |
Pension and other post-retirement adjustment | (4,718) | 2,250 | (3,163) |
Income tax (expense) benefit on pension and other post-retirement adjustments | (858) | (437) | 851 |
Amortization of actuarial net losses | 22 | 1,336 | 1,002 |
Income tax expense on amortization of actuarial net losses | (6) | (258) | (236) |
Pension settlement charges | 0 | 15,654 | 0 |
Income tax expense on pension settlement charges | 0 | (4,829) | 0 |
Accumulated pension and other post-retirement adjustments, end of period | (10,223) | (4,663) | (18,379) |
Accumulated other comprehensive loss | (142,224) | (101,582) | (112,063) |
Other comprehensive (loss) income, net of tax: | (41,179) | 10,547 | 18,291 |
Less: other comprehensive (loss) income attributable to non-controlling interest | (537) | 66 | 185 |
Other comprehensive (loss) income attributable to Masonite | $ (40,642) | $ 10,481 | $ 18,106 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | |
Transactions involving cash: | |||
Interest paid | $ 41,846 | $ 42,703 | $ 45,380 |
Interest received | 2,783 | 250 | 1,110 |
Income taxes paid | 77,500 | 40,506 | 24,336 |
Income tax refunds | 1,596 | 875 | 805 |
Cash paid for operating lease liabilities | 33,451 | 29,886 | 29,943 |
Cash paid for finance lease liabilities | 1,359 | 1,470 | 1,393 |
Right-of-use assets acquired under operating leases | $ 9,307 | $ 49,703 | $ 51,381 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 | Jan. 03, 2021 | Dec. 29, 2019 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 296,922 | $ 381,395 | ||
Restricted cash | 11,999 | 10,110 | ||
Total cash, cash equivalents and restricted cash | $ 308,921 | $ 391,505 | $ 375,234 | $ 177,608 |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2023 | Jan. 02, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Property, plant and equipment additions in accounts payable | $ 10.4 | $ 10.7 |
Notes receivable, current | $ 12.6 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 1,163,640 | $ 1,134,126 |
Property, plant and equipment, net | 652,329 | 626,797 |
Long-term deferred income taxes | 16,133 | 20,764 |
Other assets | 33,346 | 45,903 |
Current liabilities | (348,933) | (384,639) |
Other long-term liabilities | (59,515) | (52,874) |
Net assets of the VIE consolidated by Masonite | 732,119 | 688,239 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Current assets | 5,699 | 9,057 |
Property, plant and equipment, net | 8,056 | 8,573 |
Long-term deferred income taxes | 1,170 | 1,023 |
Other assets | 4,067 | 4,202 |
Current liabilities | (1,396) | (3,895) |
Other long-term liabilities | (4) | (139) |
Non-controlling interest | (3,229) | (3,803) |
Net assets of the VIE consolidated by Masonite | $ 14,363 | $ 15,018 |
Variable Interest Entity (Narra
Variable Interest Entity (Narrative) (Details) $ in Thousands | Jan. 01, 2023 USD ($) | Jan. 02, 2022 USD ($) |
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 296,922 | $ 381,395 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Number of variable interest entities | 1 | 1 |
Cash and cash equivalents | $ 1,000 | $ 4,900 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Senior Notes - Fair Value, Inputs, Level 2 - USD ($) $ in Thousands | Jan. 01, 2023 | Jan. 02, 2022 |
Senior Notes Due 2030 | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | $ 303,870 | $ 373,238 |
Senior Notes Due 2030 | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | 371,136 | 370,593 |
Senior Notes Due 2028 | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | 462,495 | 526,730 |
Senior Notes Due 2028 | Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of senior notes | $ 495,868 | $ 495,128 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 03, 2023 | Jan. 01, 2023 | Feb. 24, 2023 | |
Subsequent Event [Line Items] | ||||
Acquisition related costs | $ 6,829,000 | |||
Subsequent Event | Term Loan Credit Agreement | Secured Debt | ||||
Subsequent Event [Line Items] | ||||
Proceeds from issuance of secured debt | $ 250,000,000 | |||
Debt issuance costs | $ 2,700,000 | |||
Subsequent Event | ABL Facility 2020 | Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Proceeds from lines of credit | $ 100,000,000 | |||
Repayments of lines of credit | $ 50,000,000 | |||
Subsequent Event | EPI Holdings, Inc. | ||||
Subsequent Event [Line Items] | ||||
Acquired equity interests, percent | 100% | |||
Cash payments for acquisition | $ 375,000,000 |