2014 First Quarter Earnings Presentation May 7, 2014 NYSE: DOOR - PowerPoint PPT Presentation

2014 First Quarter Earnings Presentation May 7, 2014 NYSE: DOOR

Safe Harbor / Non-GAAP Financial Measure SAFE HARBOR / FORWARD LOOKING STATEMENTS This investor presentation contains forward-looking information and other forward-looking statements within the meaning of applicable Canadian and/or U.S. securities laws, including our discussion of improvements in the housing market and related markets and the effects of our pricing and other strategies. When used in this Investor Presentation, such forward-looking statements may be identified by the use of such words as “may,” might, “could,” “will,” would,” “should,” “expect,” “believes,” “outlook,” “predict,” “forecast,” “objective,” “remain,” “anticipate,” “estimate,” “potential,” “continue,” “plan,” “project,” “targeting,” or the negative of these terms or other similar terminology. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Masonite, or industry results, to be materially different from any future plans, goals, targets, objectives, results, performance or achievements expressed or implied by such forward- looking statements. As a result, such forward-looking statements should not be read as guarantees of future performance or results, should not be unduly relied upon, and will not necessarily be accurate indications of whether or not such results will be achieved. Factors that could cause actual results to differ materially from the results discussed in the forward-looking statements include, but are not limited to, general economic, market and business conditions; levels of residential new construction, residential repair, renovation and remodeling and non-residential building construction activity; competition; our ability to successfully implement our business strategy; our ability to manage our operations including integrating our recent acquisitions and companies or assets we acquire in the future; our ability to generate sufficient cash flows to fund our capital expenditure requirements and to meet our debt service obligations, including our obligations under our senior notes and our senior secured asset-backed credit facility; labor relations (i.e., disruptions, strikes or work stoppages), labor costs, and availability of labor; increases in the costs of raw materials or any shortage in supplies; our ability to keep pace with technological developments; the actions by, and the continued success of, certain key customers; our ability to maintain relationships with certain customers; new contractual commitments; our ability to generate the benefits of our restructuring activities; retention of key management personnel; environmental and other government regulations; limitations on operating our business as a result of covenant restrictions under our existing and future indebtedness, including our senior notes and senior secured asset-based credit facility; and other factors publicly disclosed by the company from time to time. NON-GAAP FINANCIAL MEASURE Adjusted EBITDA is a measure used by management to measure operating performance. It is defined as net income (loss) attributable to Masonite plus depreciation, amortization of intangible assets, restructuring costs, loss (gain) on sale of property, plant and equipment, impairment of property, plant and equipment, registration and listing fees, interest expense, net, other expense (income), net, income tax expense (benefit), loss (income) from discontinued operations, net of tax, net income attributable to non-controlling interest and share based compensation expense. Adjusted EBITDA is not a measure of financial condition or profitability under GAAP, and should not be considered as an alternative to (i) net income (loss) or net income (loss) attributable to Masonite determined in accordance with GAAP or (ii) operating cash flow determined in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not include certain cash requirements such as interest payments, tax payments and debt service requirements. We believe that the inclusion of Adjusted EBITDA in this press release is appropriate to provide additional information to investors about our operating performance. Not all companies use identical calculations, and as a result, this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Moreover, Adjusted EBITDA as presented for financial reporting purposes herein, although similar, is not the same as similar terms in the applicable covenants in our ABL Facility or our senior notes. Adjusted EBITDA, as calculated under our ABL Facility or senior notes would also include, among other things, additional add-backs for amounts related to: cost savings projected by us in good faith to be realized as a result of actions taken or expected to be taken prior to or during the relevant period; fees and expenses in connection with certain plant closures and layoffs; and the amount of any restructuring charges, integration costs or other business optimization expenses or reserve deducted in the relevant period in computing consolidated net income, including any one-time costs incurred in connection with acquisitions. The appendix sets forth a reconciliation of Adjusted EBITDA to net income (loss) attributable to Masonite for the periods indicated. 2

① Company / Industry Update ② Financial Review ③ Summary / Q&A

Company / Industry Update North American Door Volume Growth Masonite’s North American Door Volume Key Drivers (in millions) Unit Volume Has Trended Up 30 Acquisitions and a recovering U.S. +5.3% +8.3% vs. YA housing market has been driving North vs. YA 25 American unit volume 20 Volume Softness in Q1’14 Harsh winter conditions and Lowe’s* 15 business loss led to a decline in unit volume versus Q1’13 10 -3.0% vs. YA Macro Factors Remain Positive 5 New housing inventory remains low • Interest rates remain low • 0 NAHB estimates 1,055,000 new U.S. • 2011 2012 2013 Q1'13 Q1'14 housing starts in 2014 (+14%) Non-residential construction • Acquisition volume recovery expected to follow residential (*) Previously announced partial business loss in the Northeast U.S. and Texas related to Lowe’s Q4 2012 PLR. NA Volume in Q1’14 Was Impacted By Harsh Winter Conditions 4

Company / Industry Update North American Average Unit Price Has Been Improving North American Average Unit Price Increasing Key Drivers 8.0% U.S. Wholesale Price Increases* Mid single digit price increases • 6.0% in Q1’13 & Q4’13. Mid to high single digit price • 4.0% increases in Q1’14. (AUP Growth %, year over year) 2.0% NA Retail Price Increases* 0.0% Mid to high single digit price increases in Q1 2014. -2.0% -4.0% Product Mix More specialized products with higher average unit prices, like -6.0% Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Stile & Rail, are helping increase average unit price. (*) – Net of 2013 retail price concessions, the 2014 net impact of NA pricing is estimated at mid single digits across ~55% of global revenue for the remaining three quarters in 2014. NA Average Unit Price Has Increased for 4 Consecutive Quarters 5

Company / Industry Update North American Product Mix Is Benefiting From Stile & Rail Stile & Rail Doors: Anatomy 101 Stile & Rail: Good / Better / Best Rails Top, cross, lock and bottom horizontal rail sections Stiles Edge and center vertical stile sections Muntin Bars Vertical and horizontal Retail price Retail price Retail price wood bars separating ~$114 ~$549 ~$285 the glass panels Stile & Rail Unit Volume Progression Glass Panels Glass sections that fit +39% vs. within the stile & rail Q1’12 sections and/or the wood muntin bars Wood Panels Wood sections that fit within the stile & rail section Q1'12 Q1'13 Q1'14 Lemieux & Chile Acquisitions Created A Leadership Position in Stile & Rail 6

Company / Industry Update Five Focus Areas Designed to Create Shareholder Value Automation Product Line Leadership Electronic Enablement Sales and Marketing Excellence Strategic Tuck-In Acquisitions Goal: Grow Share & Expand Margins Beyond Macro Economic Recovery 7

① Company / Industry Update ② Financial Review ③ Summary / Q&A

2014 First Quarter Financial Results Door Volume, Net Sales and Adjusted EBITDA Door Volume ^ Net Sales Adj. EBITDA* (in millions) (millions of USD) (millions of USD) 10.0 $500.0 $30.0 9.0 $450.0 $424.5 $422.5 8.1 $25.0 7.8 8.0 $400.0 # $21.7 7.0 $350.0 $19.7 $20.0 $300.0 6.0 $15.0 $250.0 5.0 Q1'13 Q1'14 Q1'13 Q1'14 Q1'13 Q1'14 Q1’13 Q1’14 Q1’13 Q1’14 Q1’13 Q1’14 (^) – Does not include South Africa segment. (*) – See appendix for non-GAAP reconciliations. (#) – Q1’13 Adj. EBITDA (as reported) was $26.2mm. However, this included a $4.5 million net recovery related to the final resolution of the Marshfield business interruption insurance claim. Harsh Winter Impacted Door Volume, Net Sales & Adjusted EBITDA 9