We generally record warranty expense related to contractual warranty terms at the time of sale. We may also provide customer concessions for claims made outside of the contractual warranty terms and those expenses are recorded in the period in which the concession is made. We offer our customers various warranty terms based on the type of product that is sold. Warranty expense is determined based on historic claim experience and the nature of the product category. The following table summarizes activity related to our product warranty liability for the thirteen and twenty-six weeks ended June 28, 2026 and June 29, 2025.


	13 Weeks Ended				26 Weeks Ended
(U.S. Dollars presented in millions)	June 28, 2026		June 29, 2025		June 28, 2026		June 29, 2025
Reserve balance at the beginning of the period	$	7.4	$	8.8	$	7.3	$	9.3
Provision liability assumed from acquisition	3.4		—		3.4		—
Provision for warranties issued	7.2		5.5		14.0		11.4
Settlements made (in cash or in kind)	(7.0)		(6.4)		(13.7)		(12.8)
Reserve balance at the end of the period	$	11.0	$	7.9	$	11.0	$	7.9

The Company is a defendant in lawsuits that are ordinary routine litigation matters incidental to our business and operations. In addition, other matters, including tax assessments, audits, claims and governmental investigations and proceedings covering a wide range of matters are pending against us. It is not possible to predict the outcome of the pending actions, and, as with any such matters, it is possible that these actions could be decided unfavorably to the Company. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect upon the Company’s results of operations, cash flows or financial condition, and where appropriate, these actions are being vigorously contested. Accordingly, the Company believes the likelihood of material loss is remote. However, such matters are subject to inherent uncertainties and unfavorable rulings or other events could occur. The Company regularly undergoes tax audits in various jurisdictions in which our products are sold or manufactured. In the future, costs related to such audits or an unfavorable outcome could have a material impact on our condensed consolidated results of operations, cash flows and financial condition.

Following an audit for the 2018 tax year, the Mexican tax administration service, the Servicio de Administración Tributaria, (the “SAT”), issued a tax assessment in the amount of 944.8 million Mexican pesos (approximately $54.0 million U.S. dollars as of June 28, 2026) to our subsidiary, Woodcrafters Home Products, S. de R.L. de C.V., for allegedly failing to make certain tax payments and to export timely certain merchandise. The Company disputed these findings, and the SAT annulled their decision on January 11, 2024. In order to prevent the 2018 tax year from further audit by the SAT, the Company has filed an action to declare this annulment final in the specialized court of trade and customs in Monterrey, Nuevo Leon, Sala Especializada en Materia de Comercio Exterior y Auxiliar – Noreste, Tribunal Federal de Justicia Administrativa. We reserved an immaterial amount related to the 2018 tax year audit as our best estimate of our probable liability as of June 28, 2026 and December 28, 2025. While we cannot predict with certainty the outcome of any future review relating to the 2018 tax year or other open tax years, based on currently known information, we believe our risk of additional loss is remote and not estimable.

The Company is defending a wrongful death action filed in October 2024 in Arizona state court arising from a loading dock accident at a legacy American Woodmark facility in Kingman, Arizona. The complaint asserts negligence-based claims and seeks compensatory, punitive and other damages. The matter remains pending in Mohave County Superior Court, with discovery ongoing and mediation scheduled for August 25, 2026. The Company disputes liability and intends to defend the matter vigorously. The Company is evaluating applicable insurance coverage. At this time, the Company is unable to reasonably estimate a loss or range of potential loss.

In February 2020, certain domestic manufacturers filed scope and circumvention petitions with the U.S. Department of Commerce and the U.S. International Trade Commission seeking antidumping and countervailing duties on hardwood plywood assembled in Vietnam using Chinese-sourced cores. The Department of Commerce issued an affirmative preliminary determination in July 2022 and a final determination in July 2023.

The Final Determination identified Vietnamese suppliers that were not eligible for certification, which required antidumping and countervailing duty cash deposits of 206 percent on imports from those suppliers. Two of American Woodmark’s primary Vietnamese plywood vendors remained on that list, and American Woodmark recorded a $4.9 million loss in fiscal 2024, or $3.7 million net of tax, on unliquidated customs entries. Through the conclusion of American Woodmark’s fiscal 2025, American Woodmark remitted $3.8 million of deposits. American Woodmark last placed orders with these vendors in June 2022.

In May 2025, the Department of Commerce issued final administrative review results finding the two American Woodmark vendors eligible for certification. The petitioners did not appeal, and the Department of Commerce had six months to issue refunds of the deposits remitted by American Woodmark. U.S. Customs and Border Protection began liquidating the remaining applicable customs entries on November 7, 2025. Before the Merger became effective on May 28, 2026, American Woodmark received a refund of the full $3.8 million of deposits, and we consider this matter to be fully resolved.

We reserve for remediation activities to clean up potential environmental liabilities as required by federal and state laws based on our best estimate of undiscounted future costs, excluding possible insurance recoveries or recoveries from other third parties. There were no material environmental accruals as of June 28, 2026 and December 28, 2025.