JELD - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the JELD-WEN Holding Inc.

Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only-mode. After the speaker’s presentation, there will be a question-and-answer session. now today, hand Chris would to conference I speaker your Teachout. Instructions] like the to over [Operator Thank you. Please go ahead sir.

Chris Teachout

CFO. to posted Thank issued you. we and joined slide will and call. during website, our CEO; today our We Relations our presentation a I'm earnings press be John of Good release this which morning, our the Investor everyone. by this Michel, portion referencing morning Linker, Gary

and will make Before undertake the the JELD-WEN expectations I and we guidance to during like pending in the this our statements earnings remind forward-looking for duty release any to we respect including expected results outcome Private Reform Act of and that statements we statements, of XX-K statements everyone filed does certain within are variety SEC. a XX-Q XXXX. provided those and including begin, would not certain of update future to forms Litigation in meaning uncertainties, forward-looking constitute forth that to with set These the call litigation. the subject regarding risks providing with are statements of Securities our

GAAP. The information to be under GAAP appendix found isolation Additionally, Gary. over I non-GAAP of the these we to we of now can non-GAAP our presentation. a will substitute turn useful be measures to measure their can as or reconciliation should in would additional presentation performance. the calculated comparable our A and with in this prepared directly earnings most in measures, to during in release call like believe financial this accordance not be evaluating in which discuss call, this considered results for

Gary Michel

and our Since pricing. Thank and led quarter, Thanks, Europe sequentially products you talked everyone. States improved to in fundamentals for morning, last Chris, the demand accelerating our call United and for today. joining improving housing we good

to associates our meeting for some to In addition wildfires manage. presented physical weather and challenges and of no events customer limited, facilities suffered the are short-term facilities we quality wildfires thankfully the These physically to one extremely associates demand. Unfortunately to our so as are hurricanes path, were extreme much many closure new damage but fellow unharmed. us experienced pandemic, air due but due proud on the online damage. back path wildfires, in Because including facility their recovery. JELD-WEN suffered people and personal came to assistance all of loss provide I'm home team some how property needed help them of to to together

wildfires with the globally everyone the and remain of pandemic. the ongoing by affected and hurricanes effects thoughts Our

Regarding I the the pandemic, are recovering. attribute COVID-XX we operational our and experienced number been rise have of in diagnosed only the containment of a and around safety disruptions focus quarter. all of the business in thankfully have third the with despite or world small now continued number some JELD-WEN virus this associates isolated to on the protect And people partners. enforcement to and the protocols cases

result versus margin profitable JEM results. XX% revenue through business sequentially page the modernization program. in and acquisitions improvement profitable financial prior and quarterly announce are operating We X, you segmentation is the delivered delivering growth. margin or X.X% North actions of quarter JELD-WEN can strategy realization. value am of and On customer year, a EBITDA of in margin our delivering ahead offset both delivered disciplined expansion to it. delivered performance basis on sequential see improved continued third once ongoing I of the Our units new of and first embrace the operational and adjusted core expectations the deliver benefits customer productivity, excellence improved challenges. we point safety market and highlights rationalization quarter regions. execution including pleased increase XXX associates improvements result growth to to that the and share Notably, expansion model third revenue and disciplined footprint work Operational any the of through our across through taken strong again performance and realization price all price capabilities is America, we This In gain. our a deployment

with You the is and homebuilder channels business. a may with quarter, in both doors for and for significant a recall U.S. windows us our we the primary customers penetration Southeast from secured prior focus In South growing and communications that profitably increasing a key commitment and Central national

across country gain our windows. channel and through doors both We national the also share in additional partners secured

have expect gains our profitability. share and growth line We top to on these an impact immediate

price also realized are the changes We year deployed sequentially and holding. QX, QX earlier this from to higher price

During quarter, certain we price of products and due increased to implemented regions, demand the third in strong increases our off-cycle utilization assets. and

The we Australasia communicated COVID-XX increases delivering impact reopen the continues third We in have demand Despite XXXX America. and we In and EBITDA headwinds Europe, demand of in market. delivered already recently in restrictions positive for line. across our market initiatives, be building core and pricing delivered price year-over-year the were to share growth in our coming lifted down of restrictions. the that consecutive manufacturing the by COVID-XX-related sales challenges supported market see fifth segment margin revenue delivered to We housing in addition, these Victoria to efficiencies, are gains by Australia Productivity to return challenged the North savings gain. market we quarter months. stabilized from and In quarter, product season the increased markets expect in in share and this demand strongest across expansion. saw major portfolio productivity sourcing bottom the and of Germany all and markets. delivered profitable our contributing U.K. growth the

through lower Joinery costs markets our giving while the to new designed capacity, will projects that growth. increase footage in in total Liquidity the allowing plant door future programs. Our square manufacturing growth X and fully and us to Page in invest with production region. us world. painting Indonesia remains and operational our making Cirebon These support for and is around operations strong, reducing business are progress flexibility every modernization we're shows rationalization

have good our modernization savings visibility $XXX and program. our million We of achieving commitment rationalization footprint to from

continue chart to the identifying expansion realized productivity this JEM margin we made program. additional see as foreseeable in pipeline initiatives, phases the a on positive with will And invest future. initiating you that the progress can Coupled the additional and into We deliver of program. from have

move deploying processes in programs are we have been these deployments. equipment that As earlier and proven forward,

modernization North XXXX. we will example, the door For program America early next phase of our in begin executing

proves to across our and keeping to safety working safety, significantly even of will first emerge partners focus businesses in We from suppliers for associates, always so the their to on were key and have associates sustainability growth. the associates, confidence our stronger and operating to continuous our that who excited this our deliver celebrate history organizations the adapted and grow our out. on our and me innovative our and their to partners, I system drive and demonstrated is improvement partners, that times year other. our Challenging October. and the and our and to our in more success. resiliency to values processes critical so pandemic have and very each We am of of board, and XXth JELD-WEN resilient solutions enterprise give channel mutual It business assure engagement continue adjust to effects will the focus issues commitment business customers, anniversary who the our with proud market service our of to

Dick as and Wendt a the JELD-WEN the know, started many are associates Oregon. around key Through small world. you leader October, grown As history has we commemorated from of long-tenured into the through And business our in our highlighted of global in founder, we family milestones today. vision

truly to our John I Linker, more it review grow on and company. honor legacy the such Our now world-class our unmatched turn financial results look company with associates. forward over will profitably to to dedicated working And to with It contributions I them service to quarter an detail. deliver continue this third to is to is a team. built and lead of carry in the products

John Linker

Thanks, Gary, X. I and page good start morning will everyone. on

a margins, playbook in continued meaningful Our third performance strategy of operating continued liquidity. and strong result This challenging quarter our environment, results we on multiple quarters execution our earnings, direct investments consistently and improvements in over our business running flow delivered operating a financial revenue, our cash is in demonstrate as focusing system.

unchanged. Third of revenue The favorable quarter net billion. increase was while to core $X.X was revenue X.X% the increased essentially foreign by driven exchange, impact

drivers Europe delivered While weakness points market points, in basis by XXX to improvement the the basis excludes growth this expanded offset margin The Adjusted and was core and COVID-lockdown and certain both a detail adjusted from Page of and expanded execution XX.X%, combination in drivers margin our and exchange of impact a up North XXX acquisitions quarter. volume restrictions. initiatives North of quarter EBITDA continued we XX price America for partially reduction our channel. and by ongoing JEM programs in geographies channels provides to productivity from favorable retail the The such and revenue mix third in volume tailwinds positive Australasia contributed mix cost of while the which compared any housing Australasia margin revenue impact foreign were strong core recent headwinds all structural performance. strong the sequential EBITDA second realization, to as offset step margin, the America, quarter. in

you both channels. the previous driven the core slide, volume volume products a America another revenue XX from the comprised X% performance. strong by pricing, increase by price X%, sequentially from move Net offset to for quarter was headwind revenue quarter. in that and a mix North our from of I'll in page improved and take certain second headwind Note a of I consolidated segment volume in in As benefit partially Please offset X% X% third mentioned mix detail increased X% flat pricing by from where the through mix.

across projects certainly distribution both higher-priced to avoid available in we construction environment improved U.S. product and as was to in in business, market in X.X% X% North SKUs by increased and customers As finally, and restore U.S. supports new North volume revenue where the our new and growth gain as revenue in teens in and revenue follows: revenue the We flat growth channels residential door doors including was and X% while of working activity to order low of revenue order remodel, America revenue that declined lower demand our single-digit our impact open represents such other retail all in to headwinds performance uncertain mix with mid which as low Europe waiting SKUs builders stock region growth typically shift and believe pricing. exceeded the revenue performance did and to America primarily channel, by mix a this doors approximately We impacted wholesale serves. retail inventories netted contractors that offset In channel products was low and different revenue offset comprised We and for an foreign in our revenue towards pushing on growth special see traditional the our U.S. by activity complete through in excluding Canada this overall shift levels. special mid markets. and increased, certain some as exchange. stock our channel, by also demonstrated single-digits quarter other the repair distribution SKUs. remodel currency quarter key well U.K. dynamics traditional repair revenue single-digit markets windows. by the was in order channel, to and Germany growth windows. mix retail Core share continued greater demand increased In lower customers both the lead and both channel local special target times and attribute of construction, overall unit with In unfavorable demand single-digits growth And this X% doors was in believe growth has rate.

local in case second year, Australia good challenged months, remains our declined over market XXXX. impact X.X% demand versus Australasia revenue half and although second did continue to growth from recent we has of see COVID for quarter. has the the recovery improve products. COVID Europe we accelerated the The of expecting currency delayed overall in are housing in to sequentially the prior While X% and see revenue

lifted market our slightly market for of challenges. COVID-related offer Victoria measures will businesses and continue new stimulus Victoria offset The progress. largest recently government Our the monitor of housing and that some projects. to supply services. was headwinds there stimulus faced install help June reopening creating we lockdown lockdown the and In the announced Australian a package We home incent will sales package anticipate renovation the to

housing housing in forecast further a latest new show through starts decline the XXXX. However,

was continued headwinds the from JEM quarter. footprint strong factors in from margin Moving and benefits continued margin These price driven expansion third the realization, deployment on from actions, our Overall to modernization and of volume program. earnings execution more mix. offset and savings rationalization cost by than tools,

of windows sequentially an cost XXX and due margin to QX, strong North points in in improvement improvement we have these year-over-year America, as XXX adjusted expanded business visibility year-over-year to with all major continue delivered consecutive margin actions Canada expansion. a with year-over-year, productivity, In improved core increase margin and a quarter margin nice into volume. including Europe improving doors, basis well. Looking basis drivers reduction for of profitability positive good fifth driving points lines, EBITDA

controls volume cost Our and Australasia solid productivity offset to segment weakness. delivered

$XXX.X total second quarter trend and While cash charges cash Please legacy notes billion $XX.X ended taken sheet free the offset and snapshot These year-over-year sequential movements equivalents SG&A $X.X you'll primarily proceeds of billion debt reduction partially to million where cash up due performance and from with declined litigation to XX, for quarter. and $XXX good page $X.X reflect by performance. cash respectively, compared debt of XXXX. actions. our and our see balance the turn the million We increased third year to million improved. the current year-end of flow issuance of margins a in flow at of cost matters, a

XXXX a times X.X of same from $XX.X improved million million of times of the nine from midterm JEM, of X.X down first months ago. to million, target times invested in we of $XX.X period free expenditures closer $XX.X the Year-to-date to decreased less. nine million power capital down to tracking or $XXX.X ratio the our leverage XXXX, net to demonstrating cash Our X.X flow first year months the compared

the in in height we a second the are While and during quarter high-return CapEx we at now uncertainty, attractive took COVID investing pause rate a normalized projects. of

page to XX. Turning

at liquidity it company. the and This highest undrawn With Gary stands for $XXX over currently will in in level and closing provide consists to liquidity cash credit is global comments. $XXX turn that, $XXX.X who the facilities. Our million ever million back of Gary? million of I'll

Gary Michel

for outlook, Q&A. and you then our the Thank on John. I'll open comment briefly business line

to mid the we While macroeconomic with expansion. Europe, to core of which improving and quarter both fourth Australasia, consistent around and COVID-XX quarter, to revenue solid build operational America uncertainty the and October margin expect revenue core fourth fourth growth expect our remains in on overall deliver continued visibility preliminary performance elevated revenue in headwinds conditions, also low and we expect In growth In quarter. we our is single-digits, results. North

of partially margin demand reopening by should sequentially. the expansion and However, investments. Fourth with mix supported will quarter restoration and Victoria pricing productivity improve be targeted by offset SG&A

XXXX through expect and performance agility of range commercial Given believe strong deliver and our business million million. $XXX EBITDA will restrictions, these JELD-WEN to significant continue to now our adjusted results. lockdown financial we new and associates year our $XXX full factors and has no proven COVID-XX we assuming strategy that and the fundamentals in

growth. we the us current disruptions, future our investments are longer-term making manage that for for As strategic through the position we also business market and preparing

into for every their this As adaptability successful results growth customer a to will and us for that I and want on have delivered future. needs acknowledge set close up and I focus associate the the to thank reflect assure JELD-WEN on XXXX year, and continued year

as questions. hope wrap we everyone that today like United open for voter vote. are questions, aware who on has call opportunity all the in we'll the registered up cast you Election is a I that the and for lines to note of States. that, day the the I'd is Before open Operator? With to your line

Operator

is Thank first you. now comes of your [Operator Truman line with ahead, open. Please question the Patterson Fargo. your And go line Wells Instructions] from here

Truman Patterson

results. Nice guys. morning good Hey

the over like through from processes as window have just ramped door seems it going can you you maybe I'm just in there won't window full really manufacturer start any you've Can COVID a at First, that I'm comfortable the but And rationalization. months manufacturing essentially capacity doesn't of put parts one-off some the us at You're and zero us thinking past. the of walk past manufacturing in you've of inefficiencies seem initiatives to over mean the help today? place headwinds that just in six occur capacity were global like the capacity come what JEM up you footprint of it the during elevated there's several North hoping there forward? past kind some done the just running quarter almost your of right? get moving I every American lot doing years

Gary Michel

JEM our improvement of sequential seeing use modernization as in we've can mostly last quite shutdowns related related and thanks various to is further question. with what the us which ability or seeing deeper into get the mostly work had and the our on. rationalization an of we've there well plant it of been been which margin and there consistency have the absenteeism working COVID-XX the seven our mostly to are certainly that and months consistently we've been to We're of kind through the tools. done the behind Obviously, Well, great as to and Truman governmental area here with that and municipality in deal six issues frankly, deployment expansion to into or kind take-up and on any post related is better the performance labor But you the of we've organization operations. that see

really door well a with moves meet better in we for ability this and in performance of our in made about talked that some that the we better over to seen But We mind. the the at get improvement. North better certainly things business talked been quite sequentially North our America just Windows business bit America quite where a demand on in improving modernization. about we've our it we history up to So, we've past our year frankly point and continue avoid the

Truman Patterson

Okay.

forward then just America, that. you actually prior some a I Thanks from pricing was Okay. improvement in up Is believe initiatives. said North in announced well. for sequential pricing that price handful hikes year? that And earlier And you then the you America, going in North realizing of X%. all have as the realized

Could are followed competitors for largest I your whether some really timeline think you of competitors just some what suit. And have discuss have you all? implementing? of not those the or some followed

John Linker

third Truman. North America just and X% Sure to really into went new. nothing Incremental effectively and the was in good quarter the we It's Pricing everything in quarter. the that have of reported sort X% benefited realization third in that quarter would place quarter third results. sticking John. second Attribute in just

of inflation of relates and need it of As certainly and at to demand or our expected balance aspects going at or assets. looking our sort we're supply inflation price business the offset of all always utilization certainly to tariffs forward the we looking where

tariffs XXXX we see And lines quarter. some season announced the so we've but disruptions. place quarter. into as prepared looking get the Gary or of price in to that supply That And in really in chain just business of to ahead have the or trying mentioned couple benefit in the really of third anticipated went again we in U.S., world inflation did building didn't increases ahead any a any then not increases remarks, the price the around also off-cycle any

in the guidance be we the at would place, this working tailwind, with that of sticking in than price say think point. -- what's but I a give but early cost it's we still where actively little favorable in to So, pretty are in anticipate visibility of this channels terms kind want and that? to of on around price process give this we XXXX year probably at we're the to don't another of really too to point, which a other forward-looking of process. early don't clear we globe process around you It's terms

Truman Patterson

I Yes. that's that Yes. fair absolutely enough. know

on A&L's Competitors suit follow-up largely that. have your one with Just followed actions.

John Linker

part, most taking anything next of aware the year. price For I'm for we're yes, not up competitors where not seeing

Truman Patterson

luck good and quarter. Thanks, upcoming the in Okay.

John Linker

Thanks.

Operator

go Your Lovallo next ahead. question line comes America. of from Bank of Please from John the

John Lovallo

Thank for guys. well. Hey, you as questions my taking

do I about it one, positive thinking in challenging, turn you know that stock mix how seems wholesale speed? could made-to-order But first I you guess, and and back The I channel up to are this volume mean, getting is North that anticipate could headwind America? when versus the again like but the improve.

Gary Michel

in talking versus the we're movement some Yes. channel you the which retail of be higher said, some that's strong as very the We're sell-through units. continues starting to We've see seen really orders there, about the -- to in stock and John to mix improvement move situation but stock where there is a the channel. special

a solid there: well. number So game the -- the those inventories trigger one of there's as of flow through double mixed and keeping kind to as up place building continues stock for

start or So shelves which us orders to of continue still mix. benefit special improve, we to it a but plays still in out is have the even restocking as

a we'll People with little exactly So I taking into only in as comfortable bit take to bit providing available starts stabilize projects to what stock. the what's year next contractors rather are than getting they a longer little start season more things more. -- think off need

we're think to going see that number change. mix I

John Linker

the add America I North looking having to of, overall headwind would our to be. mix given magnitude headwinds of, want for near-term, a certainly into anticipate we to sure. being Yes. tailwind even customers retail whole as be as quarter, and the are a mix certainly where as first sort retail very and inventories quarter a I'll thinking our where results year and that at But some would for think volume in not positive about the you relative them just on about XXXX a fourth of, still sort just

John Lovallo

million in but half growth? you some the this the me guys guys $X of I the in may this come mean in about I think about XQ? Okay. invest per That's outlook SG&A. year. missed $XX XQ? I was good XQ second progress into in I out we of what then quarter successfully of pulled you -- spending million as news. you're just Can the to in for was And if think SG&A What expecting have can you're pullout And anticipating you as you back tell on just XXXX And

John Linker

Sure.

certainly fairly quarter. we a of pieces good compensation were third we the and the specific that Underlying there discretionary the of the entertainment there's where tailwind and quarter, travel is items that significant GAAP were been in that quarter the discretionary a can this for items until year. and some a headwinds year-over-year last do we the around So spend market couple moving around and to non-GAAP has good charge defer adjusted of have in results. line heading. we out variable visibility from T&E got In results, SG&A In the cost legacy did the litigation-related see continue matters some which some of saves

might in that we sort we and to that's that for we did million and spend I'm there's year said number next next to of -- certainly, in what you about I in invest salary projects just like SG&A will and took million out back control trying furloughs we like we're as XXXX. that COVID-related terms want some There's to $XX sorry, forward moving year expenses before with which out took year as early of year this items even out of about -- we as that we took not can. come think next COVID. that tightly So to discretionary of going probably in to about a in look Thinking think $XX lapping what we SG&A from of on the be base pieces, a out reductions about things happen second quarter the but

So next planning And to grow in as the certainly some see well. we're that SG&A year. business top-line of the make to target addition investments expect to to go up

John Lovallo

guys. Thanks, Great.

John Lovallo

Yes.

Operator

from with the question go comes Bouley Matthew line ahead. next Please Your of Barclays.

Your now line is open.

Matthew Bouley

Good you questions. Thank for morning. taking the

impact within that to you. one, team, And quantify to X%. your I the America volume quantify John, actually impact the to those the how that number sorry hear some much of volume to number? did mix the back are as guess, about issues impact So, able wildfires the there. channels well? but disruptions on down about gave you of details also, North able mix, operational Thank you great you are mix

John Linker

America The in $XX that. of approximately EBITDA headwind quarter, from North Sure. the mix headwind attribute third million we would

last The well related overall sales we mostly So, to million third quarter end the the towards just dynamics shutdowns. of temporary of couple mix some just of special maybe the stock, compared channel headwind quarter other dynamic say to the that of pretty as I'd a as of year. the in wildfires was minor. dollars quarter as had some

hurricanes, nothing of ongoing, the bit significant a some facilities to million revenue, but and maybe Gary in mentioned other his in little as couple related a of had also downtime We remarks. nothing

Matthew Bouley

for Okay. Thank that. you

Secondly, on level a one the footprint higher rationalization.

But guess? still to you've impact in level basically to does of deliver there and positioned seen with sense the timing while Just companies. rationalizing make demand of or any any around So I you footprint that sort this with recovery, of rationalizing this on some capacity is other the this -- parallel? type are market it growth

Gary Michel

Yeah.

really we like. but we've timing learning what this, the our over the program best new as practices earlier stages, the about new a deploying de-risk activities the standard what certainly processes, our and did would time, in lot the about designing we were be de-risk to and work equipment, talked the would rationalization/modernization look So the deployment

changes. capacity redundant we the So through on kept

changing is flow, be to of cost North and to position, American a flexibility, that. particularly single continue our our a doors, The to modernization, overall capacity. us able manufacturing gives do more We mentality gives which a of better us capacity, from batch benefit lot adding really increases piece

better about, better. the that it the to get can capacity, would turn And keep roll. things otherwise that and improving running to time -- the and to it we until facilities close, learn off. capability. the really how new -- and of we're on faster had learned there de-risks So that we kind We we've now proven But ready equipment, processes that redundant know up can the we we the facilities have using again,

know and before when So the that's it taken really that. take programs. modeling it just been how I how or that's in would lines would kind we've anticipate in until how take out. look of proven pretty kind we line at redundant get wait and we a that capacity we've of We be out. have And demand laid don't out. we place a that out. itself, proven And They're of delay well to after, we

Matthew Bouley

it. you, Thanks, Thank Got Gary. John.

Operator

question of Sachs. the Susan Goldman next with ahead. from comes Your Maklari line go Please

Your is open. line now

Susan Maklari

morning, you. Thank Good everyone.

Gary Michel

morning. Good

John Linker

morning. Good

Susan Maklari

first And EBITDA? inflation us can color that costs, of you just those some My guidance give is you how thinking in seeing terms going maybe areas. How perhaps, what it of you're hearing are you're input in in about we're especially on in forward? for question the giving about that transportation, some is reflected

Gary Michel

really bit pockets which and Certainly, inflation, about. it varies depending world and talking on quite the of region a of category there's which you're

largely point. we're us, contract As you North at this under mentioned America, freight. it to relates In

inflation. would contracts next this those at freight assuming working -- hold into to the anticipate terms that metals. And any mitigate things forward point, couple of be not at for XXXX significant so, in at looking from a are hit least looking we would quarters, But of

of sort hit much aluminum here all-time recently. think pretty I low an So

some and So concern. of back. we the of only impact them don't as Millwork coming Logs, we around countervailing do a millwork That's that impact particularly acquisition of some process of are a the but seeing the from not an but in of lumber buy of general duties area inflation inflation coming sawmills. China. we government lot antidumping our are whole, metals buy logs in out

certainly pockets there's get that's some pricing watching. we've So why it's that actions. with are of say this at I'd we manageable our tried to point things and ahead

than would to we completely. more should about pricing that able we're be certainly it XXXX, we offset if I strategy was But So inflation with think our being believe, XXXX. successful in in

Susan Maklari

just Can comments that you you question about as phase Gary color Okay. give are what perhaps restructuring should flowing efforts? process? are to represents? we to is Thanks. mentioned How about That's stage in we think the this expecting your on program moving thinking look those next XXXX. to And be next us some next then And helpful. of And from you early them just your what in through? where this my we

Gary Michel

and modernization the we've real been comments American might the focus some in every the into that in terms what's we've to before are the of bit the reports done American quarter we're and some earlier have we've with business, So conditions North in done Australia, door we're on particularly had – talked giving We've first we progress is about door We've showed Where in North As we've on the deploying pulled Europe now phases of we quite the of modernization our programs of some North the further said presentation a portions we we kind we've in going are? offset done America. in in region and Obviously, of there. otherwise smaller what than early in that business. deployment. sooner done in projects I market probably where the well taking of learned world. we every

probably next So late to pretty while see that latter kind commence and year. in part we'll XXXX from in – that expect of to But benefits feel the of of phase early we about that. we good start the

are and identified teed of next stages really of those we're the that various them. group kind playing – and up next have We kind projects of of in

So that pretty we've plan. project well of say million a understood out committed two-thirds that of so laid is and the $XXX or all I'd in about,

the just of through piece at of we kind now the and looking already identified. we're see funnel we're we've kind of that last that expect next to So as over what XX that of out working months, deployment really fill the

Susan Maklari

with Okay. Great. everything. Thank you. Good luck

Gary Michel

you. Thank

Operator

of Your comes next Tim with Please ahead. Baird. from go the question line Wojs

Your line is now open.

Tim Wojs

morning. Hey, everybody. the job margins. on Nice Good

Gary Michel

Thanks. Good morning, Tim.

Tim Wojs

sure the to a of there for could Is inventory over to on weeks the of like inventory some I'm want of Just that? frame maybe or next what like couple things look Maybe inventories. to to like understand think quarters? of normal? much restocking trying positions us help if how channel the way just here first not inventory you channel relative

Gary Michel

best the year, position versus – and down X% product we partners. same channel have compared in And the it in by stock into up with by I to customer. mean right now Yes. year. as line last XX% varies to cases visibility of some inventories I I our prior our a would But to retail say, inventories retail those are SKUs down

room channel. there channel is We my into of lot to traditional less have that that there's still now a channel. probably seeing where the quite a might we're bit all But certainly visibility demand resolve that. given not distribution the gut just from to wholesale do be in go inventories right So,

Tim Wojs

Okay.

at then near-term Okay. look were have shutdowns And Europe from I there? any seen That's impacts quarter that of on you continent? mean happened the the particular regions the just the than any Thanks. over rest And helpful. you stronger just any that as have of

Gary Michel

Yes.

– really markets. as all we saw the able activities then we to too on. kind manufacturing our France to that. little opened Germany, don't And we're operations the the and produce. today and in we're to that a certainly the business certainly of announced, support up. monitor of stabilization open bit they've have expecting north, our new are effect is and seeing question on We'll strength Europe, longer kind continue saw So But was and different in going so continues in much third of piece been where as position of industries be up to really -- with our on obviously a effects. stay short-lived we Central to as quarter, particularly good the them construction time and of to We they're if And we're goes today continue for U.K. it COVID-XX opened expect open not Where that. are second could period a if to and in back

Tim Wojs

Okay.

luck you guys. to to That's the for Thanks Good hear. good Okay. question.

Gary Michel

Thank you, Tim

Operator

Your Jefferies. Please next question comes go from the line of ahead. Phil with Ng

is open. line Your now

Phil Ng

Hey, guys.

XQ. in a the very it more productivity and takes? implies Your puts expecting and and the all little pricing XQ Can you're like some sustainable? sounds slowdown on America saw modest in some growth now you you guidance still expand momentum North seems And in

John Linker

But yeah, will growth the prior still and down sort in of was volume Yeah, Phil. less getting low the it a Australia. and Europe a than year-over-year. headwind North year Hey, Australia single-digit in in think still to type in headwind in mix be QX, fourth the sort quarter, I projected down so of kind better. then of gave sales by terms remarks prepared of America of region Gary in of

to is inflation well countervailing tailwind be I a But in million be yet quarter of in last in feel we pretty not volume lap XQ a XQ. couple of in. And we but price duties from good mix millwork up Gary than tailwind that where partially America. price And noted better to say can third mentioned. we're was it we in went The increases wholesale seeing So the less Productivity that still then XQ a of because North a year as bit going the the particularly should dollars in as implementation also sequential we're some it November of SG&A as was some we're slightly than point the cost then be fourth seeing little issues. improvement. the quarter, in should antidumping is the

expansion we really solid in margin third the visibility margin point, this got at nice had So we've quarter. expansion like to

more or So It's the deceleration moving sequentially anything, right anything it's call I wouldn't everything a like is that. direction. in than it

Phil Ng

we're expect when broadly That's year, you America Okay. to assuming door track few North volume seeing a sustained. last at skin it's for And the And for resi some in have guess color. more next volumes up that kind there capacity we different there? in helpful segment growth Do And been North are at reasons. obviously I guess, demand? when end markets, you with for look supply meet America? to how Should I from set years, is down line of we in look we enough trends that the of

up get a just you a So handle better next to catch play trying year? little

Gary Michel

our throughput, our would well-structured the We growth improved favorable like. on business -- markets. of construction, about skins certainly the We piece won't to in but we expect expect special would for expect and continued XXXX, news our guidance only ability improvements We tailwind where door move And we Yes. ability for us see that RNC in the type to yet into not also well residential and as operations for XXXX. as windows favorably and with think our not space. Australasia business to retail But in we're that capacity new components that for and the sequential we in earlier mix our towards those we're as our more doors seeing the back we're both customer and shifts the meet order demand would well. a talked as North Europe America giving R&R strength in provide

Phil Ng

prepared partner up well. us think remarks up? really in of builder. ramps And opportunity? via large you channel as just me. it. one your a one for size a how timing Got Can recent Gary And That's you that I kind last talked helpful. of help that with And about wins some the

Gary Michel

Yes.

the us offer. also we story what an and a exclusivity to product as I the kind for -- of but all serve want what's windows But doors lot give needs, I customer. out. operational that exciting in tell with we standpoint, any you playing design would to gain markets is So for standpoint exciting line throughout pretty -- on really really not got our builders only ability We've about the of and to is particular don't meet specifics that both is from

for excited is and going This the we're it time us. as catching pretty an well home new sales we're about that. We starts. well at we're think play So as that right in to upswing seeing

wholesale expansion. the improvements. wallet other traditional seeing share side, partner. just side, not We're some of seeing our it's We're On channel one

them close choosing So the gotten We've not and with so and we've work we've that more gains the cetera. share talked is this very, grow and customer but of beyond. can us out that feel quarter advantage really products play next we into been full with, we existing year in go see proposition, our believe we doing, as very growing, about we into we'll are share, that selectively customers segmentation also feel that an that JELD-WEN of our really more et value these that in and wallet and customers but certainly we for

Phil Ng

lot, I Gary. Thanks a Okay. color. appreciate the

Operator

Your next open. JPMorgan. Rehaut Please the from line with Michael now line question your go comes is of ahead,

Elad Hillman

on Thanks for Hillman Elad my is taking This for Mike. question.

of sales some I want just first on a trends. to bit the clarify So

channel. the think you I wholesale for that decline then revenue but channel, windows saw retail in the you growth mentioned in windows

any seeing seeing So just And you're into in dynamics windows? there progress October? the of wondering you're the

John Linker

Yes.

to there is -- where in channel I dynamic our the this product for got right certain back comes -- lines think of are around some vinyl the story now. We've inventories windows.

in in limited example capacity the North got parts America, country. certain For we've of

that near-term growth at channel. And support stock vinyl. to potential we're away levels so and them working to the the be as areas on they our hard In and retail customers from want traditional to the get that very distribution wholesale takes

a headwind flip customers the So lag short-term That as side low growth talked also revenue on what between still And construction new activity. there's our in just say capacity support up The that the sort is of here that means between I'd we we're sort trade-off shows about to that single-digit of capacity in up seeing as bit using the windows other on but that a earlier. of for shows using retail. retail channels. a it little

construction orders on for us the revenue and wholesale announcements great from new around new has into Our increased supports seeing homebuilders typically a yet side window of of business manifested construction. while lot we're in terms demand activity window and not that and

we we the it to headwind in has all in -- channel. would next traditional. of as expect But expect our wood, growth here continued vinyl, very wholesale see look short-term, the be would I into think I traditional channels window on to So year, a retail,

Elad Hillman

it. Got

low And your baked at just for sales the improving further growth Okay. North I the wondering what some improved reflect is starting of mentioned teens. XQ? on I wholesale for order you that had -- And think you see low how have revenue homebuilders? that's on into trends the And do America? kind single-digit then is you XQ that guidance channel in following up expected up that there was of in doors, to the you

John Linker

it that mentioned attribute ourselves to some decided really with targeted Gary customers want align share that the I'd JELD-WEN. we've that Yes. at of more to to grow in traditional gains wholesale channel

And above so sort that who wholesale seeing of segmentation, we're seeing of -- in doors. well we're with top-tier growth our teens customers rates in are that low traditional level

So that's think market I don't growth.

who just grow of JELD-WEN want that's to customers with aligning the with country. and think I us targeted parts

see of more time to do in the in baked It's channel? believe growing and growing in for a homebuilder, go. of what is the So of, we top-tier customers when I when levels into in we Again, in channel. got on sort think, that market, that we the of kind still revenue here bit of with terms of little the tailwind quarter manifests these that what us. the is the that same more fourth But with above the short-term and of wholesale time goes from orders

Elad Hillman

you. Thank Great.

Operator

line comes Please with ahead. Baumgarten question go from Adam Credit of next Your the Suisse.

is now Your line open.

Adam Baumgarten

Hey Thanks for good morning. taking my questions.

being North restocking, help benefits and potential on restocking, in you some some Just a starting it maybe tailwind America? guys for your the maybe slight expect you to in the see do of could customers seasonally for of quarter fourth that

Gary Michel

those when to there. point ensure think an being we're certainly, us, when -- sale Yeah. for channel get that as we starts to the probably units building of the well I winter units advantage sale. up. to meet to there's And we're partners mean- we're season. well of is prior Typically, first get normally those of to doing both, point kind months, in delivery stock quarter, to the encouraged We're in Well decline, next I

in it the to as a what to think we be season then, going the the higher I and is, serve the continue position to spring. fill as season, now first we'll see And building build, shelves. we're comes in

the in do that's of see part think growth quarter. we'll So I that the yeah, that,

John Linker

it help see certainly fourth But And mix a profitability profitability standpoint, revenue a quarter. then, expect with just the in will to standpoint though, do from help stock we clarify to mix restock. persist that from from headwind, special a

Adam Baumgarten

to And your Thanks. expect then to year, and/or it. next tick return Got leverage share XXXX? down as repurchase the into we should starts acquisitions just, in sometime

Gary Michel

Yeah.

pretty to our think talked about there uncertainty. invest lot have high the of we through disciplined, pause, internally And a quarter, this really during a our returns. in just I capital projects we've modernization was allocation. second had some year small rationalization We in good And when we'll continue programs. maybe been with those. We

out programs. continue for opportunistic kind As we accelerating make look our continue those. And continue our look we'll bolt-on for look we to into next year, that fund strategy at sense to acquisitions building those strategy, to for we'll And growth. of

think yeah, spot-on. you're So I

Adam Baumgarten

Thanks guys. Great.

Operator

The ahead. Your next Please from the question Benchmark. comes from Reuben line Garner go of

Your line is now open.

Reuben Garner

Thank you. Good morning guys, everyone.

Gary Michel

morning, Good Reuben.

Reuben Garner

my you XXXX, the not half answered because your that this selling into pricing with out pre-buy I question to but so it the One you housing increases already able the I given potential in any And discussion this there questions on think, had that's take strength maybe but did place? price -- pre-buy. for right you'll been that is with year, most even increases or now be the embedded if quick of capacity put outlook, there? just first the heard will of apologize, be have one tight higher is you I that success one don't stronger

Gary Michel

Yeah, production demand -- that's been are is of correct. has mean, and kind today matched. where we demand I think I think I have

earlier, slowly we meet as side. there on side and As stock then, we'll in the the to said point-of-sale continuing and residential construction, the continue And see particularly demand increase inventories rebuilding retail that. I to we're meeting on

we've in this it's don't buying. a So there. think I I around what pre-buy go they're that, think People using are because modeled don't just

Reuben Garner

guys. Perfect. Thank you,

Operator

this any in not And at showing back comments. any the call closing further queue time. I'm questions to, the I Michel turn are that Gary will over for

Gary Michel

interest in JELD-WEN. morning all us you for Well, thank much. you this your joining very and thank And again

the ensuring committed we've meeting of Our partners, healthy that demonstrated the challenging ability conditions, the financial even and and safe needs market face our perform of while customers the to deliver, associates results, and seen. a in to and workplace. are commercial They've

to look forward for joining we've over future history, done safe. And you. As to grow with continue JELD-WEN. exciting And will sharing our innovate. we Thanks be Please this we XX-year us.

Operator

today's And ladies you call. concludes conference participating. and this gentlemen, Thank for

now disconnect. may You

JELD-WEN Holding (JELD) 3 Nov 202020 Q3 Earnings call transcript