3. Fiberon Strategic Review

The Company announced on May 27, 2026 that, in collaboration with the Board of Directors, management initiated a formal strategic review of its Fiberon composite decking business. The review explores a range of strategic alternatives while Fiberon continues to operate its business, serve customers, and execute its commercial priorities.

The Company performed an interim impairment test for the Fiberon indefinite-lived tradename within the Outdoors segment as of June 27, 2026. As the strategic review process advanced and potential strategic alternatives were further evaluated, management concluded that a triggering event existed as of quarter-end. Fair value was estimated using the relief-from-royalty method, which estimates the value of the tradename by applying a market participant royalty rate to projected revenues attributable to the asset and discounting the resulting cash flows using a market participant discount rate. Significant assumptions utilized in the valuation include estimated future cash flows, a royalty rate, discount rates, long-term growth rates, and other market factors. The Company utilized a discount rate of 14.5%, a long-term growth rate of 2%, and a royalty rate of 2.5% in its analysis. Based on the results of the analysis, the Company determined that the carrying value of the tradename exceeded its estimated fair value and recorded an impairment of $7.5 million within Asset impairment charges in the Condensed Consolidated Statements of Comprehensive Income in the Outdoors segment.

As of June 27, 2026, the Company performed a recoverability test of the Fiberon asset group within the Outdoors segment under ASC 360 – Property, Plant and Equipment, triggered by the advancement of the strategic review of the Fiberon business. The recoverability analysis incorporated probability-weighted estimates of undiscounted future cash flows associated with various strategic alternatives under evaluation. Based on this analysis, the Company concluded as of June 27, 2026 that the carrying value of the Fiberon asset group was not recoverable because the estimated undiscounted future cash flows were less than the carrying value of the asset group.

Because the carrying value of the Fiberon asset group was determined to be not recoverable as of June 27, 2026, the Company estimated the fair value of the Fiberon asset group to measure the impairment loss. The Company engaged third-party valuation specialists to assist in estimating the fair values of the Fiberon asset group. Fair value was determined by using market and cost approaches that utilized third-party data from various industry-accepted sources. Under the market approach, fair value reflects prices for comparable assets in an arm’s length transaction. The cost approach reflects the amount for which an asset could be replaced or reproduced in its current condition adjusted based on physical condition and economic age of the asset. The significant assumptions utilized in the cost approach are base replacement costs and trending factors. The estimated future cash flows of the strategic alternatives under evaluation and market participant assumptions represent a Level 3 fair value measurement due to the use of significant unobservable inputs and management assumptions.

The Company recorded a long-lived asset impairment of $221.2 million as of June 27, 2026, measured by the amount of carrying value that exceeded the estimated fair value. The impairment charge reduced the carrying value of the Fiberon customer relationship intangible asset and property and equipment in the amounts of $71.3 million and $149.9 million, respectively, and is included within Asset impairment charges in the Condensed Consolidated Statements of Comprehensive Income within the Outdoors segment.

The fair value estimates used in the impairment analysis are sensitive to changes in assumptions, including projected future cash flows, a royalty rate, discount rates, long-term growth rates, market participant assumptions and the outcome of the strategic review process. Changes in these assumptions or future decisions regarding strategic alternatives could result in additional impairment charges in future periods.