masonite international corporation (door)
Kx annual report submitted under section 13, 15 (d)
Under Section 13 or 15, in the securities trading act of fiscal 1934, 2017 or the transitional report (d)
Securities trading law during the transition period from ___ to ___ Commission file number on 1934: 001-
11796 per cent (
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State or other jurisdiction registered or organized)98-0377314(I. R. S.
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2771 Concord L4K 2N6 Rutherford Road, Ontario, Canada (
Address of main administrative office (zip code)(800)895-2723(
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This Chapter 405)
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Documents incorporated in the reference section of the final proxy statement of the registrant\'s 2017 annual general meeting, which is scheduled to be held on the 10 th of 2018 and submitted to the Securities and Exchange Commission no later than 120 days after decision 2017, reference is included in Part 3, item 10-
Report for the current year on Form 10-K.
MASONITE index of international companies-Table 10-Annual Report
KDecember31, page 2017 No.
Part I item 1 Business 1 ARisk FactorsItem 1 BUnresolved employee comments 2 property 3 legal procedure 4 mine safety disclosure IIItem 5 registrant common stock market, related shareholder matters of stock securities and the purchase of 6 Selected Financial Data Items 7 Management Discussion and Analysis of financial status and operational results 7 quantitative and qualitative disclosure of market risks with accountants in accounting and differences in financial disclosure project 10 directors, executive officers and corporate governance project 11 executive compensation project 12 security ownership of certain beneficial owners and management and related shareholders 13 certain relationships and related transactions, item 14 main accounting expenses and services section IVItem 15 exhibits and financial statements table 16 Table 10-
Summary of special precautions for forwarding
This annual report on Form 10
K contains \"forward-
\"Forward-looking statements in the sense of federal securities law, including but not limited to statements about our industry conditions, operations, economic performance and financial position, in particular, statement related to our business and growth strategy and product development work Management Discussion and Analysis of Financial Position and operational results. \" Forward-
Statements that appear to include all statements that are not only relevant to history or current facts, and can be identified by using words such as \"may\", \"will\", etc, \"should\", \"estimate\", \"project\", \"plan\", \"expectation\", \"intention\", \"outlook\" and other similar expressions.
Please note that do not rely too much on these advances --
Look at the report and speak only on their date. These forward-
Forward-looking statements are based on the estimates and assumptions of our management, and although we believe this is reasonable, they are inherently uncertain and subject to some risks and uncertainties.
These risks and uncertainties include, but are not limited to, the \"risk factors\" identified in this annual report and the risks and uncertainties identified elsewhere.
The list below represents some of the factors that may cause actual results to be different from historical results, but not necessarily all of them, or the factors that are expected or predicted by these forward results --
Forward-Looking Statement: our ability to successfully implement our business strategy;
(1) general economic, market and operating conditions;
New level of housing;
Renovation, renovation and reconstruction of residential buildings; and non-
Residential construction activities;
The United Kingdom has officially launched the two-year process of withdrawal from the European Union and related negotiations; competition;
We are able to manage our operations, including integrating our recent acquisitions and the companies or assets we acquire in the future;
We are able to generate sufficient cash flow to fund our capital expenditure needs, to meet our pension obligations, to meet our debt servicing obligations, including our obligations under senior notes and ABL loans;
Labor relations (i. e.
Interruption, strike or stoppage)
Labor costs and labor supply;
An increase in the cost of raw materials or wages or a shortage of supply or labor;
Our ability to keep pace with technological development;
Actions and continued success of certain key customers;
Ability to maintain good relations with customers;
The ability to bring benefits to our restructuring activities;
Retention of key management personnel;
Environmental and other government regulations;
And because of contractual restrictions under our existing and future liabilities, including our senior notes and ABL financing, the restrictions on our operations.
We remind you that the important factors listed above are not the only ones.
In addition, in view of these risks and uncertainties, forward-
Indeed, the outlook statement contained in this annual report may not appear.
We have no obligation to update or modify any forwarding publicly-
Forward-looking statements arising from new information, future events or other reasons, unless otherwise required by law.
Unless otherwise stated by us, or otherwise required by the context, in this annual report, where \"Masonite\", \"we\" are mentioned, \"We\" and \"Company\" refer to Masong International and its subsidiaries. Item 1.
Business soverview we are the world\'s leading interior and exterior door designers, manufacturers and distributors for new construction, repair, renovation and renovation of residential and non-residential buildings
Residential construction market.
Since 1925, we have provided our customers with innovative products and excellent services with attractive value.
In order to better serve our customers and create a sustainable competitive advantage, we focus on developing innovative products, advanced manufacturing capabilities and technologies.
Drive sales and service solutions.
Today, we believe that we are in the seven product categories of the North American target, whether it is the first or second market position: the interior mold door;
Gates and rail doors;
Door of glass fiber outside;
Residential outer door;
Wooden doors for interior buildings;
Wood veneers and molded door panels; and door core.
We sell and sell our products through well-to remodeling contractors, builders, homeowners, retailers, dealers, logging yards, commercial and general contractors and architects
Establish wholesale and retail distribution channels.
Our brand portfolio is very broad, including Masonite®Marchfield. ®, Premdor®Mohawk Hotel®Megan Church®, Algoma®The best®Door-
Stop tm, Harring DoorsTM, Performance Doorset solution STM and National HickmanTM are the most recognized in the door industry and are relevant to innovation, quality and value.
In 2017, we sold about 35 million doors to about customers in 65 countries.
Our accounting year net sales by market segment and global door net sales by final market are as follows: net sales by Market Segment
Global net sales of Doorby Terminal Market 2017-
2017 for more information about our department, please see Note 15 of our consolidated financial statements.
Over the past few years, we have invested in advanced technologies to improve the automation of our manufacturing processes, improve quality and shorten lead times, and have launched targeted electronics.
Improve our sales and marketing efforts as well as business and other marketing initiatives for the customer experience.
In addition, we have implemented a disciplined acquisition strategy, consolidating our presence in the UK\'s internal and external door market, the North American residential model and stile, and the railway interior door market, and created leadership in the attractive North American commercial and architectural interior wooden doors, door cores and wood finish markets.
We operate 64 manufacturing and distribution facilities in 8 countries in North America, Europe, South America and Asia, which are strategically located to serve our customers.
We are one of the few vertical integrated door manufacturers in the world, and one of the only two manufacturers in the North American residential modular interior door industry, and the only vertical integrated door manufacturer in North America in the wooden door industry.
Our vertical integration extends to all the steps of the production process, from the initial design, development and production of 1 sheet of steel content table, to the production of internal molding and external fiberglass facades, for example, the core of the door, the wood veneer and the molded panel to the door panel assembly.
We also passed the pre-
Hardware processing door, hanging door with glass and hardware frame and pre-processing door
Finish the door with paint or stains.
We believe that our vertical integration and automation improve our ability to develop new and proprietary products, provide greater value and improved customer service, and create high barriers to entry.
We also believe that vertical integration increases our ability to reduce costs, although our cost structure is affected by certain factors that we cannot control, such as global commodity shocks.
Competitive advantage we believe that the following competitive advantages make us different from other construction products companies and position us as a significant growth as part of diversified development
This year, our terminal market has experienced several stages of recovery.
Leading in the target end market of the North American door market, we believe that we either occupy the first or second market position in the seven product categories of our target.
We are one of the world\'s largest manufacturers of door and door components, selling nearly 35 million residential and building interior and exterior doors in 2017;
About 23 million of them are sold in the United States, our largest market.
We believe that our scale and leadership support our commitment to invest in advanced manufacturing and e-commerce
Business Plan and develop innovative new products, effectively serve regional and national customers, and provide a wide range of product lines in our market, while reducing our material and unit production costs.
Our extensive portfolio of brands is the most recognized in the industry and is relevant to superior design, innovation, reliability and quality.
Mason recognized by Builder Magazine®As one of the leading brands in the United States in 2017, the brand is divided into the following categories: brand familiarity, brands used in the past two years and brands with the most use. Long-
Customer Relationship and customer relationship
Due to our long-term commitment to customer service and product innovation, we have good Channel Distribution
Establish relationships within wholesale and retail channels.
Our top 20 customers have all purchased doors from us for at least 10 years, although we usually do not enter the long term
Enter into a regular contract with our customers who are generally not obliged to purchase our products.
In addition, our manufacturing and distribution facilities are strategically located to provide the best quality services to our customers.
We believe in our long term
Long term relationships with leading retailers, wholesale distributors, major home builders, contractors and architects will enable us to continue to increase our market penetration in the residential and construction markets.
Leading technology innovation in the door industry we believe that we are the leader in technology innovation in the design of door and door components and in the complex process required to quickly and consistently manufacture high-quality products.
We intend to continue to develop new innovative products at the 145,000 square foot innovation center in West Chicago, Illinois, while improving the key processes of product manufacturing and sales.
Our future success will depend on our ability to develop and introduce new products or improve products, continue to improve our manufacturing and product service processes, and protect our rights to the technologies used in the products.
We also created proprietary networks.
Sales and marketing tools including MAX Masonite Xpress Configurator®Provide residential and concierge rooms for our building customer network to improve selection and order processes, reduce order entry errors, create more accurate quotes, improve communication and promote a better customer experience.
As of 2017, we have 238 design patents and design patents in the United States, 176 practical patents and patent applications, 195 foreign design patents and patent applications, and foreign practical patents.
2 vertical integrated content table during production we are one of the few vertical integrated door manufacturers in the world.
In North America, we are one of the only two manufacturers of vertical integration of molded interior door, and the only manufacturer of vertical integration of non-molded interior door
Interior wooden door of residence.
Our vertical integration extends throughout the production process, and we believe this enhances our ability to develop products and respond quickly to changing consumer preferences, provide greater value to our customers and have the potential to reduce our costs.
We take advantage of our assets through vertically integrated operations, which are difficult to replicate without a large amount of capital investment.
The experienced management team has a strong track record of experience and success.
A proven track record of successfully managing multiple brands, winning new businesses, reducing costs, and identifying, executing and integrating strategic acquisitions.
Several members of our management team have worked in Fortune 500 companies such as Honeywell International. (
Former Union Signal Corporation)
General Motors and Newville rubber
Improve cost structure with advanced technology and create competitive advantage.
Growth strategy your vision is to be a major supplier of door and door components in the global door industry.
We are committed to implementing the following balanced and complementary strategies to continue to strengthen our leadership, create value for our customers, enhance our leading brand portfolio and achieve our highest and lowest growth goals.
Market for innovation
We will continue to develop new and innovative products to expand our sales and improve our returns.
We plan to continue to introduce new, valuable --
Added products based on our comprehensive portfolio of door styles, designs, textures, components, options, applications and materials.
We have been demonstrating the ability to develop products that stand out for compelling design features and are recognized for their reliability and quality.
For example, we recently launched our traditional series of external fiberglass doors to complement our traditional interior doors, combining clear, clean lines inspired by classic Craftsman buildings, and fiberglass
We have also recently added additional glass sizes and new fir textured products to our Vista Grande series exterior doors that integrate glass into the doors of seamless components, provide a wider view through doors and clean, modern design lines.
In our in-house product line, we have recently launched a hardware kit for barn doors to provide a modern style for the interior opening.
As more and more consumers demand the products completed by the factory, we continue to develop and invest in the finished products of the factory suitable for the demand of the residential and construction market.
We also focus on managing our product complexity by integrating products and components without compromising customer value, in addition to selectively removing products that are no longer popular or replaced by new products.
Expand our business in an attractive market to accelerate growth and increase profit margins. We plan to continue to focus our business on attractive new markets and channel opportunities.
For example, we believe that by focusing on strategic areas such as education, medical care and hotels, we can expand our leadership in the North American market for building wooden doors.
By expanding our market share and achieving a larger economy of scale, we intend to take advantage of the ongoing recovery in the United States. S. non-
Residential construction market
In addition, we believe that by introducing products with high design and performance attributes, we can expand the growth of the market for building wooden doors.
We also focus on expanding the business of the residential new building market and have professional maintenance, renovation and renovation contractors at home and abroad.
We are also adding to the contents of table 3. location in-
Home decoration for dealers and contractors.
This channel is expected to grow with certain demographic changes, from \"do it yourself\" to \"do it for you \".
Use enhanced marketing, training and electronics
Business tools, our team plans to target specific multiple
Location reshapes distributors and contractors and tries to increase our overall presence in important repairs, renovations and reshapes the business.
Drive sales further with our marketing, sales and customer service activities. We intend to use our extensive sales, marketing and customer service efforts in an innovative way to continue to seek additional growth opportunitiesIn 2017, we re-
Launched the Masonite brand with the goal of changing the conversation around the door by designing the compilation and sharing of trend knowledge.
This represents an investment in the success of our customers, driving higher consideration of the door in the process of house building and renovation, allowing us to give full play to the potential of the door and become a decisive factor in the family.
We have also developed several proprietary networks.
Basic tools for our customers including MAX Masonite Xpress configurator®MC2 and MConnectTM, enhance communication and information flow with customers in our wholesale dealer network by providing a more customized purchase experience, customer leads and quote capabilities, and streamlining the procurement process.
We also intend to help professional contractors with their sales efforts by helping them produce customized marketing materials to gain more share in the attractive professional repair, renovation and renovation market.
In addition, we plan to continue to develop an effective marketing plan to expand our business with professional dealers and home builders.
As part of our commitment to continuous improvement, we continue to pursue operational excellence with initiatives to make operations lean and efficient.
We take advantage of the Lean Six Sigma continuous improvement program, and recently we have expanded our commitment by adopting a complete lean operations philosophy known as MVantage.
During the 2017 period, we focused strategically on key manufacturing locations, working to improve quality, service and delivery performance.
In 2018, we intend to focus on three principles: plant transformation, process improvement and training.
We believe that our commitment to MVantage will not only help Masonite\'s efforts to set an industry benchmark for innovation, quality, delivery, service and support, but will also help improve safety, productivity and financial performance.
We intend to continue our disciplined approach to identifying, executing and integrating strategic acquisitions while maintaining a strong balance sheet, although we expect to compete for the best candidates.
Our goal is to produce components for our existing operations, to manufacture niche products and to provide value to the company --added services.
In addition, we aim for companies with strong brands, complementary technologies, an attractive geographic footprint, and opportunities for cost and distribution synergies.
For example, since 2011, we have made 14 strategic acquisitions (i)
By acquiring Porta Industries, Inc. , attract the North American market for building wooden doors and door cores(“Marshfield”)
, Algoma Holding Company (“Algoma”)
, Les popes Baillargeon, Inc. (“Baillargeon”)
Harlem Corporation (\"Harring\")
Wooden doors, United States(American wooden door]FyreWerks Inc. (\"FyreWerks\")
A & F Wood Products Co. , Ltd. (
\"A & F Wood Products \"), (ii)
By acquiring Portes Lemieux Inc. , the North American indoor stile and rail gateway market(“Lemieux”)
And the assets of the door manufacturing business in Chile (
Acquisition of \"Chile)
Providing services to the North American market ,(iii)
Acquisition of Birchwood Lumber & Veneer Co. , production and sale of wood Veneer, Inc. (“Birchwood”)and (iv)
With the acquisition of the door, various markets in the UK
Stop International Limited (\"Door-Stop\")
Performance door cover Solution Co. , Ltd (\"PDS\")
Hickman Industrial Co. , Ltd. \"Hickman\")
And DW3 Products Holding Co. , Ltd (\"DW3\").
Product range bathroom doors we sell a wide range of interior and exterior doors of design, materials and sizes.
Although basically all interior doors are made of wood and related materials such as hard boards (
Including wood composite molded peace door panel)
Over the past 20 years, thanks to increased penetration of steel and fiberglass doors, the use of wood from outer doors in North America and Europe has declined.
Our outer doors are mainly made of steel or fiberglass.
Our doors are molded panels, flush, stile and track, cabling media-
Density cardboard (“MDF”)
Steel or fiberglass.
The table of the 4 contentsmolled panel door is an indoor door with hollow or solid core, made by assembling two molded door panels around the wood or medium fiber board frame.
A molded panel door is usually used for wardrobes, bedrooms, bathrooms and corridors.
Our molding panel product line is divided into several different product groups: our original molding panel series is a combination of classic styling, when price sensitivity is a key component of product selection, durable structure and various designs preferred by customers;
Four doors in our anniversary series®Specific design that embodies the theme, time and architectural style;
West EndTMCollection strengthens our tradition of design innovation by introducing clean and simple aesthetics in modern linear design into the category of molded panel interior doors;
And heritage®Series with recessed, flat and sharp, rocking bed-
Style profile, while maintaining the comfort and familiarity of today\'s interior, shows a clean, modern aesthetic.
All of our molded panel doors can be upgraded with our proprietary wheat bar-based safety Sound®Door core or our eco-friendly EmeraldTMdoor building enables homeowners, builders and architects to meet specific product requirements and \"green\" specifications to obtain LEED for buildings or homes
Flush interior doors can be hollow, or solid, by assembling two faces of plywood, medium fiber board, composite wood or hard board on a wood or medium fiber board frame
These doors can have a wood finish surface suitable for paint or dyeing, or a composite wood surface suitable for paint.
Our flush doors range from flush doors, a basic residence consisting of unfinished composite wood, to ultra-high flush doors
End the exotic wood facing door.
Stile and rail doors are made of wood or medium-fiber plates with independent vertical stiles, horizontal rails and panels that have been cut, milled, veneered and assembled such as oak trees and cherries.
In our stile and rail lines, glass plates can be inserted to create what is commonly referred to as French doors, and we have over 50 glass designs for making French doors.
When the horizontal Batten is inserted between stiles and rails, the resulting door is called the shutter door.
The doors and iron doors are mainly used for corridors, room partitions, closets and bathrooms.
For external purposes, these doors are used as entrance doors with decorative glass plug-ins (known as lites)
Insert these doors frequently.
By using a computer-controlled router engraver to process a single piece of double-fine density board, the density board door for routing can be produced.
Our routing mid-fiber door category consists of two different product lines®And CymaTM.
This category of design products offers a wide range because the manufacture of the mid-fiber board door for wiring is based on a wiring procedure in which the milling machine selectively removes the material to show the final design.
The steel door is assembled by two interlocking steel surfaces (Tablet or tablet)
Or install two steel faces on wood or steel frames and inject them into the core with polyurethane insulation.
With our functional practical steel series, design-centric HD series and pre-processed Sta-
Tru®HD, we provide customers with the right combination of the design, protection and compliance they need to freely choose basically any paint grade exterior door application.
In addition, our product supply has increased significantly through our various compatible clear or decorative glass designs.
Fiberglass doors are considered top-of-the-line exterior doors, manufactured by assembling two fiberglass door panels onto wooden racks or composites and injecting the core with polyurethane insulation.
Led by Barrington Hotel®Our fiberglass door range offers innovative designs, structures, and finishes.
Barrington hotels®The door family is designed specifically to replicate the structure, appearance and feel of solid wooden doors. The Door-
The glass fiber door of the Stop tm brand is made into a pre-suspended door cover and shipped to our customers through industry
Lead delivery time.
We believe in our patented panel design, fine wood grain texture and a variety of applications --
The specific construction process for US Barrington®Belville®The fiberglass production line holds a unique role in future external product categories.
Building doors are usually highly designated products designed, built and tested to ensure compliance with regulatory requirements and to meet certification requirements such as FSC and LEED certification.
We offer a range of building interior doors that meet custom market requirements, from entry-level molded panel doors to high-end custom flush wooden doors with exotic veneer inlay designs.
Our building door is a density board for molded panels, flush, stile and rails or routes that can provide varying degrees of fire and sound insulation and radiation shielding.
The flush doors of our building can also be produced with veneer laminated veneer.
When durability and aesthetics are the main concerns of the customer, high pressure laminate materials are used, and low pressure laminate materials are used when the consistency of surface color, texture and value is the same requirement.
In addition to residential and building doors, we also sell several door components to the building materials industry.
In the market for new residential buildings, we offer interior facade, agricultural buildings
Door core, medium fiber board, and fiber and broken board for wood cutting
Stock components to multiple manufacturers.
In the construction market, we are the leading component supplier of various key door components and the largest supplier of wood veneer door skins.
In addition, we are one of the leading suppliers of mineral and crushed plate door cores in the North American building door market.
Molded door panels are thin sheets of molded cardboard produced by grinding or lowering wood chips, adding resin and other ingredients, making thick fiber mats consisting of dry wood fibers, and press the mat between the two steel plates to form a molded paper. the surface may be smooth or contain a wood pattern.
After pressing, the molding facade is trimmed, painted and transported to the door manufacturing plant to produce the molding door on the frame.
Door frame material, commonly referred to as cutting material, is a wood or mid-fiber plate component that constitutes a frame connecting the interior and exterior facades.
The door core is a fiber pad made of refined wood chips or agricultural products.
Fiber for construction of solid core door.
For doors that must reach a fire rating of more than 45 minutes, the door core consists of an inert mineral core or an inorganic expanded compound.
Sales and marketing our sales and marketing work revolves around several key initiatives designed to drive organic growth, impact the sales mix, and strengthen customer relationships. Multi-
We sell our products through wholesale distributors, retail stores, independent and professional distributors, builders, retractors, architects, door and hardware distributors and general contractors.
In the residential market, we have deployed the \"all products\" cross-selling strategy to provide access to our entire product range for some of our retail and wholesale customers.
Our \"all products\" customers benefit from integrating their purchases, leveraging our brand, marketing and sales strategies, and improving their ability to influence the sales portfolio to create greater value.
We serve our large box retail customers directly from our own door manufacturing facilities, which provide value-added services and logistics, including store direct delivery door and entrance system, as well as a full set of interiors
Store Merchandise display and on-site service.
Our residential wholesale channel customers are managed by our own sales professionals who focus on channel initiatives designed to ensure our products are \"pulled\" through our North American wholesale distribution network.
Our construction customers are served by an independent and unique sales team, the team provides architects, door and hardware distributors, general contractors and project owners with a variety of technical specifications, compliance and regulatory approvals for specific brand differentiated North America regions, product application proposals and multi-sectoral specialization.
In addition, our sales team is supported by marketing strategies designed to drive product specifications throughout the value chain through distributors, architects and end users.
Service Innovation we leverage our marketing, sales and customer service activities to ensure that our products are strategically delivered through our multiple distribution channels rather than deploying a more common one, tactics like some of our competitors \"drive\" the strategy.
Our marketing approach aims to increase the value of each door we fill with the door and entrance system, regardless of the channel used to access our products.
Our proprietary web-based tools are accessible on our website and also provide our customers with direct links to our information systems, customer Satisfaction for faster and easier access to a variety of information.
In our North American residential business, our network
MConnect-based tools®This is an online service that allows our customers to access several other electronic products
Commercial tools designed to empower manufacturers
Once connected to our system, customers have access to MAX®Xpress configurator for Masonite®, A web-based tool designed to design customized door systems and influence mixing, improve selection and ordering processes, reduce order entry and quotation errors, and improve overall communication across the channel; MC2, our self-
Service, custom document tools;
\"Product corner\" is a part that provides customers with 6 functions and advantages of our latest products;
Market intelligence provides some of the latest economic statistics affecting our industry;
Treasure chest is a collection of discontinued glass products that provide customers with promotional pricing of outdated products;
And order tracker that allows customers to track their purchase orders and confirm the delivery date during production.
MConnect®Work with our website to improve transaction execution, enhance communication and information flow with customers and their distributors, and provide a more customized purchase experience.
Our door in Europe
The Stop International website is a fully functional configuration and order platform that supports our entry customers in the UK.
Dynamic Integration of doors-
The ERP of Stop and its website ensure that the products customers see, configure and order are in stock, which ensures that we are able to deliver on our commitment to reliability.
In our construction business, we have built a dedicated ordering platform for our distribution customers through our US wooden door website, this gives customers the ability to configure and purchase prefabricated and machined wooden doors through the streamlined door Builder utility.
Building dealers are able to make, retain and track quotes in the US wooden door app.
During the fiscal year, we sold our products to about 7 thousand customers around the world.
Through our \"all products\" cross-selling strategy, we have built strong relationships with these customers.
Our vertical integration promotes our \"all products\" strategy through our door manufacturing facilities, in particular to provide value
Added manufacturing and logistics services to our customers, including store delivery pre-
Hang internal and external departments to our customers in North America.
Our top 20 customers have bought doors from us for at least 10 years.
Although we have a large number of customers worldwide, our largest customer, Home Depot, accounts for about 18% of our total net sales this fiscal year.
Due to the depth and breadth of the relationship with the customer, the customer operates in multiple geographic areas of North America and sells our various products, and our management believes that the relationship is likely to continue.
The doors are mainly sold through wholesale and retail distribution channels. Wholesale.
In wholesale channels, door manufacturers sell their products in two ways to residential builders, contractors, timber mills, distributors and building product retailers
Step by step or step. Two-
Step distributors usually buy doors in bulk from manufacturers and by installing windows or \"lites\" and pre-hanging them. One-
Step distribution sells doors directly to home builders and renovation contractors who install doors. Retail.
Retail channels are often aimed at consumers and small transformation contractors who purchase doors through retail home centres and small professional retailers.
The retail home Center provides retail space of large warehouse size with a large selection, while professional retailers are niche participants focused on certain styles and types of doors.
Building doors are mainly sold through professional doors
Wholesale distribution channels sold by distributors to contractors and installers.
We believe that we are in the leading position in the technological innovation and development of doors, door components and door entry systems and in the manufacturing process involved in manufacturing these products.
We believe that R & D is a competitive advantage for us and we intend to take advantage of our leadership in this area by developing more new and innovative products.
Our R & D and engineering capabilities enable us to develop and implement product and manufacturing process improvements that improve product manufacturing efficiency, improve quality and reduce costs.
As an integrated manufacturer, we believe that we are fully capable of taking advantage of the growing global demand for a variety of shaped facade designs.
We have the ability inside to create new molded facade designs and make our own molds for our own facilities.
We believe that this provides us with the ability to develop proprietary designs with a strong identity in the market;
More flexible in meeting customer needs;
Faster response time in production of new designs or design changes;
And respond more to customer needs.
This capability also enables us to develop and implement product and process improvements in the production of molded door panels and doors, thereby increasing production efficiency and reducing costs.
Over the past few years, our R & D activities have focused heavily on the process and material improvement of our products.
These improvements reduce manufacturing costs and improve product quality.
We also guide our design innovation to meet the growing demand for safety and security, sound insulation and fire prevention products in the building wooden door market.
Manufacturing process our manufacturing operation consists of three main manufacturing processes :(1)
Component manufacturing ,(2)
Door panel assembly and (3)value-
Increased preparation for installation door manufacturing.
We are in the leading position in the manufacture of door components, including internal frame components (Stile and rails)
Glass insert (lites)
, Door core, inner face (
Molding and veneering)
And the outer facade.
The manufacture of interior molded facades is the most complex of these processes and requires a significant investment in large-scale wood fiber processing equipment.
The facade of the internal molding is produced by combining fine wood particles, synthetic resin and other additives at a large number of temperatures and pressures
Open the automatic press using the Masonite proprietary steel plate.
Then, before packing good luck to our door assembly plant, primer, cut and inspect the panel in the second highly automated continuous operation.
We operate five interior molding facades around the world, two in North America, one in South America, Europe and Asia.
Our only US factory in Laurel, Mississippi is one of the largest door-facing factories in the world, and we believe it is one of the most technically advanced factories in the industry.
The internal residential hollow solid core door manufacturing is an assembly operation, mainly through the use of half
Skilled manual labor
The construction process of a standard flush or molded interior door is based on the assembly of the facade and various internal frames and supporting components, and then the door is trimmed to the final specification.
The assembly process varies depending on the type of door, from the relatively simple process of the flush door and the molded door, the facade is glued to the wood frame, in a more complex process, many solid wood and engineered wood are converted into blinds, stile and track door panels.
The interior doors of the building need to use solid core with different degrees of sound insulation and fire-proof properties, wood finish with furniture quality to achieve another level of customization and refinement, and secondary processing operations that include more complex commercial hardware, opener, and locks.
In addition, the building door is usually in
Complete before sales.
Steel and fiberglass outer door panels are made in half
The automation process requires the combination of laminated wood or non-perishable composite frame components between the two facades, and then the resulting hollow core structure is injected with an insulated polyurethane expanded foam core material.
We have invested in fiberglass manufacturing technology, including the vertical integration of our own fiberglass sheet forming composite plant at the Laurel plant in Mississippi in 2006.
In 2008, we integrated fiberglass plate manufacturing at multiple locations in North America into a highly automated factory in Dickson, Tennessee, while reducing costs and shortening lead times, significantly improve the reliability and quality of these products. Short set-
In order to realize a flexible process that can produce various door types, sizes, materials and styles, reasonable production scheduling and coordinated material movement are essential.
We primarily meet customer orders by using public carriers and minimize investment in finished product inventory, taking advantage of our vertical integration and flexible manufacturing operations as well as scalable logistics.
Ultimately, the interior is flat and molded, stile and rail, the blinds and exterior door panels manufactured at our door assembly plant are either sold directly to our customers or transferred to our door manufacturing facility, provide value-added services there.
These value-added services include processing doors for hinges and locks, installation of door panels to the position where the frame is ready to be installed, installation of hardware, addition of glass plug-ins and side parts, painting and dyeing, provide packaging and logistics services to our customers.
While Masonite is vertically integrated, we need to supply raw materials such as wood chips, some cutting material components, various composites, steel, glass, paint, stains and primer, and oil on a regular basis
Produce and assemble the base products of our products, such as adhesive, resin and plastic injection frame.
Our material cost accounts for about 53% of the total cost of the finished product.
In some cases, we rely on a single or limited number of suppliers for these supplies.
Wood chips, logs, resins, adhesives and other additives used to manufacture internal molded panels, external fiberglass door panels and door cores are purchased globally, taking into account the relative shipping costs of these materials, regional and local suppliers.
Internal frame components, medium fiber boards, cutting stock and internal door cores are manufactured inside our facility and are supplemented by suppliers around the world.
We use a network of suppliers located in North America, Europe, South America and Asia to purchase other components, including steel coils, for stamping steel door panels, medium fiber panels, plywood and hard panel panels, door frames and frames as well as glass frames and plug-ins.
We believe that safety is as important to our success as productivity and quality.
We also believe that accidents can be prevented through proper management, employee engagement, standardized operations and equipment, and attention to detail.
Provide safety plans and training throughout the company to ensure that employees and managers have effective tools to help identify situations where reconciliation is never safe and-risk behaviors.
Through continuous commitment to improving our safety performance, we have succeeded in reducing the number of injuries to our employees over the long term.
In, we experienced a total incidence of accidents, that is, 1 person per year for every 100 full-time equivalent employees. 5 to 1. 7 in 2016.
Environmental and other regulatory matters we strive to minimize any adverse environmental impact that our operations may have on our employees, the public and the community to which we belong.
We must abide by extensive environmental laws and regulations.
The geographical scope of our facilities enables us to comply with environmental laws, regulations and guidelines in a number of jurisdictions, including the United States, Canada, Mexico, the United Kingdom, Ireland, the Czech Republic, Chile and Malaysia.
These laws, regulations and guidelines involve, inter alia, the discharge of pollutants into water, air and land, the storage and handling of certain regulated materials used in the manufacturing process, minimize waste, dispose of waste and repair of contaminated sites.
Many of our products are also subject to various regulations such as building and building codes, product safety regulations, health and safety laws and regulations, and authorization related to energy efficiency.
Our efforts to ensure environmental compliance include an ongoing review of our operations
Staff are selected by a dedicated environmental consultant.
The environmental, health and safety team participates in industry groups, monitors the development of regulatory actions, and actively advises on specific issues.
In addition, for our potential acquisition targets, the environmental assessment is carried out as part of our due diligence review process.
Based on recent experience and current projections, environmental protection requirements and liabilities are not expected to have a significant impact on our business, capital expenditures, operations or financial position.
In addition to various environmental laws and regulations, our business is subject to many foreign, federal, state and local laws and regulations, including content related to the existence of hazardous materials and the protection of workers\' health and safety, consumer protection, trade, labor and employment, taxation, etc.
We are confident that, in all material respects, we comply with the existing applicable laws and regulations that affect our operations.
9 North American content intellectual property sheet, our door is mainly sold under Masonite®Brand.
Other North American brands include: Premdor®Belville®Barrington hotels®, Oak craft®, Sta-
Tru®AvantGuard HD®Flagstaff®Hollister®Sierra Leone®Professional®Fast-
Framework®Sound of safety®Palace series®Heritage®Bellagio®Capri Island®Treviso®Xia Yan,®Glen View. ®Riverside Hotel®Sadler Brook®Mohawk, Sean Wong®Megan Church®Marchfield. ®The best®, Algoma®, NovodorTM, ArtisanTM, Craftsman SFTM, Rhine Gate®, WeldrockTM, SuperstileTM, UnicolTM, Lemieux®, Harring doordemand FyreWerks®.
In Europe, doors are sold under the main stone gate. ®, Premdor®, CrosbyTM, door-
StopTM, performance Doorset solution demand national HickmanTMbrands.
We believe that the use of trademarks and trade names is important for the development of product awareness and the distinction between products and competitors and customers.
We protect intellectual property rights that we develop through patent applications in the United States and in various foreign countries.
In the United States, we currently have design patents and design patent applications, as well as practical patents and patent applications.
We currently have 5 foreign design patents and patent applications, 25 foreign practical patents and patent applications. Our U. S.
Utility patents are generally 20 years old from the earliest application date. S.
15 years of design patents and our United StatesS.
Registered trademarks and trade names can generally be used for 10 years and can be updated.
Our foreign patents and businesses are marked with terms specified by specific countries, although trademarks are generally renewable.
The North American sector is highly competitive, including many global and local players.
The main participants in the North American residential interior market are Matsu and JELD-
This is the only manufacturer of molded facades that are vertically integrated.
There are also some smaller competitors in the residential interior door market, mainly from third-party suppliers.
The main participants in the North American residential outgate market are Masonite, JELD-
Warm, plastic pro, Therma-
Feather, Feather River and Novatech.
Africa in North America
The market for construction doors for residential buildings, the main participants are the Mason, VT industries, Graham wooden doors and egger industries.
Our main market in Europe is the UK.
The UK sector is also competitive, including some global and local players.
The main participants in the UK are our subsidiary, Premdor, JELD-
Text, Vika and distinction door.
The competition in these markets is mainly based on product quality, design features, brand awareness, service capabilities, distribution capabilities and value.
We also face competition from other countries.
In Europe, South America and Asia, we are faced with great competition from many regional competitors and importers.
Most of our products are sold through large home centres and other large retailers.
Our integration of our customers and our reliance on fewer big customers have increased our competitive pressure as some of our largest customers, such as Home Depot, to conduct regular product line reviews to evaluate their products and suppliers.
We are one of the largest molded door panel manufacturers in the world.
The rest of the industry consists of another large integrated door manufacturer and some smaller regional manufacturers.
The competition in the mold facade industry is based on quality, price, product design, logistics and customer service.
In order to meet our own requirements, we produce molded door faces. outside North America, we are an important supplier of the entire door industry.
We make mold face in factories in Mississippi, Ireland, Chile, Canada and Malaysia.
We employ about 2017 employees and contract people.
This includes about 400 union employees, about 70% of whom are in North America and the rest in different foreign locations.
Our nine facilities in North America have separate collective bargaining agreements that are negotiated locally and their terms vary from location to location.
In 1925, William H established a form in Laurel, Mississippi, for the history of the content and the status of the report
Mason, use a large amount of available sawmill waste to make the final products available.
In August 2001, Premdor acquired Masonite from International Paper.
Before 2005, Masonite was a listed company listed on the New York and Toronto stock exchanges.
In March 2005, we were acquired by a subsidiary of Colberg Kravis Roberts. L. P.
On March 16, 2009, Masonite International Corporation and several affiliated companies voluntarily applied for restructuring under the corporate creditor Arrangements Act (the \"CCAA\")
High Court of Ontario, Canada.
In addition, Mason International and Mason(
Former parent company of the company)
And it\'s all AmericaS.
Subsidiaries submitted voluntary applications for restructuring according to Chapter 11 of the Financial TimesS.
Bankruptcy Code of the United StatesS.
Delaware bankruptcy court.
In June 9, 2009, we stood out from the restructuring process under Chapter 11 of Canada\'s CCAA and the United StatesS.
Bankruptcy Code of the United States.
According to the merger of the business company law, it will take effect from July 4, 2011 (
Colombia, UK), Masonite Inc.
Merged with Masong International to set up a merger company called Masong company
It was later renamed Mason International.
On September 9, 2013, our shares began to be listed on the New York Stock Exchange, with the symbol \"gate\", and under the US federal securities law, we are subject to the requirements of the periodic report.
We are currently not a reporting issuer or equivalent issuer in any province or region of Canada and our shares are not listed on any approved Canadian stock exchange.
Our US executive office is located in downtown Tampa, 201 North Franklin Street, 300 Tampa, Florida, suite 33602, Canada executive office is located at 2771 Rutherford Road, Concord, Ontario, Canada.
We make the annual report on Form 10.
Quarterly Report on table 10
Q: Current Report of Form 8
K and any amendments to these reports submitted or provided under section 13 (a)or 15(d)
According to the 1934 Securities Trading Act, which is provided free of charge on our website, after we submit these materials electronically to the Securities and Exchange Commission or provide them to the Securities and Exchange Commission, as soon as possible.
Our website is www. masonite. com.
The information on our website does not form part of the form 10 annual reportK. Item 1A.
Risk factors before investing in our common stock, in addition to the other information listed in this annual report, you should also carefully consider the following factors.
The risks and uncertainties described below are not the only ones we face.
If any of the following risks actually occur, our business, financial position or operational results may be affected.
In this case, the transaction price of our common stock may fall and you may lose all or part of your investment.
Risks associated with a downward trend of business in our final market or economic situation may have a negative impact on our business and financial performance.
Our business may be adversely affected by changes in the state of the US, Canada, Europe, Asia, South America or the global economy, including inflation, deflation, interest rates, capital supply and costs, consumer consumption rates, energy supply and costs, and the impact of government initiatives to manage the state of the economy.
The volatility of regional financial markets in which we operate and the deterioration of national and global economic conditions may have a significant adverse impact on our operations in the past and in the future, financial performance and liquidity.
The content table of our main terminal market (
New construction, renovation, renovation and non-construction of residential buildings
Construction of residential buildings)
Directly affect our financial performance as they are directly related to the needs of door and door components.
Therefore, the following factors may have a direct impact on the business of the countries and regions where our products are sold: economic strength;
Number and type of residential and non-residential
Sales and value of houses;
The stock of existing houses, the vacancy rate of houses and the number of years of foreclosure rights; non-
Occupancy rate of residential buildings;
Increased cost of raw materials or wages, or shortage of supply or labor;
Availability and cost of credit;
Employment rate and consumer confidence;
Demographic factors, such as migration and migration of the population and trends in family formation.
In the United States, the housing market crisis has had a negative impact on the suppliers of residential construction and related products.
In addition, the current housing recovery is characterized by the fact that the new building level is still far below the historical level, and sometimes more
The new home building has started, and our products are usually used less and have lower net sales compared to typical single family homes.
In the North American market where we produce and sell our products, the economic situation has deteriorated because each country has been affected by the global financial recession that began in 2006.
Some of our non-
The North American market is seriously affected by the housing downturn, and the future downturn may lead to overcapacity in housing and construction products, including door and door products, which may make it difficult for us to raise prices.
Over the past few years, we have withdrawn from certain markets, including Ukraine, Turkey, Romania, Hungary, Poland, Israel, France and South Africa, due to market and operating conditions.
Our focus on the construction products industry is relatively narrow, amplifying the risks inherent in the long-term downturn in the global market.
The impact of this weakness on our net sales, net income and profit margins will be determined by many factors, including industry capabilities, industry pricing, and our ability to implement our business plans.
Increased mortgage interest rates, changes in mortgage interest deductions, and reduced financing for the purchase of new homes and housing construction and improvement may have a significant adverse impact on our sales and profitability.
Generally speaking, due to the increase in mortgage interest rates and the reduction in consumer financing, demand for new homes and home improvement products may be adversely affected.
Mortgage rates are still close to historical lows, but they have risen recently and may rise in the future.
If the mortgage interest rate rises, therefore, the potential buyer\'s ability to finance the purchase of a new home or home improvement product is adversely affected, the financial status and results of our business, operations may be significantly adversely affected.
Members of Congress and government officials from time to time recommend the cancellation of the federal income tax mortgage interest deduction based on the borrower\'s income, the type of loan or the amount of principal.
The United States recently enacted tax cuts and employment bills set a ceiling on the amount of mortgage debt that can deduct interest, and set a non-interest on housing equity debt. deductible.
These changes and future changes in policies developed to encourage home ownership and improvement, such as changes in tax rules that allow the deduction of mortgage interest, may adversely affect the demand for our products, and have a major adverse impact on us.
Our performance may also depend on the ability of consumers to finance the purchase of new homes and other buildings and to repair and renovate projects through third-party creditparties.
The ability of consumers to fund these purchases is influenced by factors such as new and existing house prices, homeowner equity values, interest rates, and home foreclosure.
Adverse developments affecting any of these factors may lead financial institutions to tighten lending standards and reduce the ability of some consumers to fund spending on housing purchases or repairs and renovations.
The recent recession, including a decline in the value of houses and other buildings, an increase in home foreclosure rates and a tightening of credit standards by lending institutions, it has had a negative impact on new buildings in homes and other buildings, as well as the repair and reconstruction departments.
If these credit market trends continue or deteriorate, our net sales and net income may be adversely affected.
We operate in a competitive business environment.
If we can\'t compete successfully, we may lose our customers and our sales may decline.
Fierce competition in the construction products industry.
Some of our major competitors may have greater financial, marketing, and distribution resources than we do, and may be less leveraged than we are, provide them with greater flexibility to respond to new technologies or changing consumer needs.
Therefore, these competitors may be able to better withstand the changes in the conditions of the industry in which we operate and may have greater operational and financial flexibility than we do.
Also, some of our competitors may have excess capacity, which may lead to pressure to lower prices so that we can remain competitive, even in markets where economic and market conditions have improved, it may also limit our ability to raise prices.
Due to these and other reasons, these competitors may take up a larger share of sales, causing us to lose the business of our customers or harm our profits.