JELD - Earnings call transcript Q3 2021

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Operator

Good morning. My name is Julie. And I will be your conference operator today. At this time, I would like to welcome everyone to the JELD-WEN Holding, Inc.

Third Quarter 2021 Earnings Conference Call. placed to been noise. any have lines on prevent mote background All the be will presentation question-and-answer After there a speaker session. [Operator Instructions] Thank you. like Investor I Chris, now to call the would over Director of of Relations. turn to sir. Please go ahead,

Chris Teachout

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

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

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

Gary Michel

Thanks, Chris. thank Good everyone. for you And us. joining morning,

related improvement actions and XXXX. business system high to capacity us fourth how customer how our and productivity, expect quickly is page Please recent well improve team defined cycle and challenges, supply in will counteract measures in continued of give to to share a operating expansion global turn our call, the demand, constraints time inflation today's implemented pressures, four. number growth to I'll for headwinds and chain meet performance During confidence how our labor we driving quarter

the It's have to Over position and our several and years, while focused with customers that their on for teams why the agility through trade wouldn't last our we operate demonstrated I our proven in anyone. once staying QX. term, agility long again deliver uncertainty,

our business Our JELD-WEN values-based and approach of JEM to the us a operating as Excellence discipline Model, system, has employer. business, the separated partner coupled with supply

our result throughout driven and excellence dynamic external this years. the solutions. record quarter, weather market in In in to demand by quarter, initiatives matter in due affected industry. challenge, an innovation of certain over constraints, our orders housing with COVID-XX last Orders adjust or rapidly end customers remodel deliver. that is backlog No responds strategy R&R the been the and Our leadership each adverse in and disruptions, demand for commitment long-term amazed I labor strength limitations markets. the as to belief and underlying and more of housing that And long-term demand replace high posted across our America and the the markets, all be the we strong this environment. team teams strength by world commercial accelerated the segment. of in operating supporting we events, new remained third our never supply accelerate was so Fulfilling universal to constant and our confident lockdowns results, and improvement book-to-bill We chain this few in team. continue increase the I North our why in and by largest grew around our highlighting challenges have in deliver

results to took leading team month decisive these in address and going and global to challenges, action Our swift of the confidence September forward. improved our

factors term in impacted full our and As we growth EBITDA. external-driven for year shared revenue these outlook business October, short

remain set to committed the However, deliver financial growth, steadfastly capital accelerate May Day for we in Investor at exceptional expand shareholder XXXX we returns. targets margin, and allocate cash to deliver our to

only the which our head creative the proactively fact, In evolving seeking on, commitments. near obstacles, have confidence approached to way our our term XXXX in ability in to enterprise has associates challenges rapidly reinforced throughout my solutions deliver these

consolidated revenue In page revenue on grew continued quarter. Now X%. I'll led accelerated core third gains, X% segment highlights quarter, revenue the which X%. for core by Every price the grew turn five, to and performance realization, to specific delivered

we quarters, of we the originally realized expected material inflation consecutive at is in particularly inflation, accelerated excess what raw in a which XX over material beginning is For have of face pricing multiple that year. of the impressive of the

we XXXX. and and fourth to broad-based into during segments. the regions expect and was We certain the headwind supply mix a operating additional in volume, have that actions despite to across and strong chain order that Labor, deployed realize growth quarter restrictions and were announced productivity challenges mandated pricing backlog

growth. most Australasia and core signs in quarter. recovery retain revenue in minutes, were contribution the we X%, beginning the by unable France, a of September driven backlog UK markets, the X% and and experienced improved reduce related realization. significant cycle North Europe rate a solid of actions gains. to in growth price. economic In key facing contribution which continue which a quarter, homes. ultimately, backlog new conversion September. revenue in In few expansion market supply the many attract, to grew led chain order the posted to implemented gain quarter starts price. a labor consecutive Australasia and includes The commercial program, develop low of lead In we're including as solid residential growth times operations industry-leading Demand America. interest execute throughout XX% continues on North revenue the with share. of disruptions single of result quarter restrictions to Europe Focus rates fifth experienced fourth direct despite the from and and same remodel initiatives accelerated record which XXXX. from and in delivered and talent, initiatives time, growth as in greatest this highlight While quarter, in existing well, remains fuel homebuilder that challenges challenges, this we improving have from supply metrics external construction housing raw have Europe, and that quarter continues I'll share chain a meet on the and near facing recovery consecutive X%, was the core inflation price JEM strong grew mitigating to material severe incentive in to is it the drive demand Order excellence X% repair to revenue labor X%, in term operational to America, the capacity Despite team and a all robust were our and segment's contribution growth, revenue excellence see core to and grew quarter core COVID-XX. the and core of

delays not our critical consistent customers. inflation materials certain ensuring supply and tariffs. advantage. production lead will are accelerating as favorable the in we investing North believe capabilities, shortages, labor, we challenges and while constraints are are many to the that components more supply chain leading product separate production product fundamentals to strong to our helped machining In historically world, when teams how in-source logistics available. competitive able managing and relating And to proving capabilities government the processes plant key modified logistics and turn supply inflation and demand, was page certain routes challenges, quickly Please meet offset and for be To door In global thicknesses well supply locations were term demand three standard supply. dynamically of restrictions and in of to chain to to we supply self-sufficiency six. one requirements temporarily times industry the industry-leading to centers. our not However, and a performance. continuous were acceptable capabilities have We reliable and new the unable components, alternative components are to and customer congestion is backlog mitigate chain avoid our substitute advantages, sizes imposed our are shipping America, sourcing used strong all extending around cycle and To in build conversion. operating our Globally, as reiterate, believe In ports competitive rework levels, manufacturing segments. to in Europe, and for short we labor at procure we by global underlying high which delivery and market commercially

and the Most longer we enterprise. material focused benefit to usage on initiatives raw short capabilities. of We reduced To address driving signed quarter, to solutions the included and widespread and also approach deployed recruiting, value a a and North By America, and inflation. with partners which across from frontline particularly co-creating deployed with JEM our strategic value material are will lower hyper-local listening demand. we robust the ensuring on to analysis, operations we these have of in during in to workforce, productivity using program, material efforts, benefits commodities. industry key considerable problem-solving labor engineering our challenges, employee initiatives mitigating and more advertising enhancements shift in strategic The costs supply to term sourcing our relative pipeline ensuring a new flexibility availability, ongoing agreements seeing referral period of We're time. market deployment progress our local structures, our innovative pay notably, competitive

this meaningful fourth closed an XX% of backlog accelerate are in in customer by immediate September, a these gap our and voluntary examples actions demand. engagement. customer in associate increase expect minimize a few on North external resulted turnover, daily American and and progress, has taken the headwinds in staffing a significant in in sequential XX%, This capacity to in throughput high satisfaction. we improvements Just just meet conversion reduction in experienced reduction quarter. Based to increase our the a absenteeism we've we These

JEM early for XX made the stream deployment quarter problem provide support we results and We appointment the sites, value of sites, long-term in separation solving productivity. extrapolated JEM RIEs these capacity We XX% in improvement have expansion our time expansion across completed targets, events. visibility performance from when through model operations at labor delivering to the are of also drivers acceleration which great on value including streams of that improvements the our cycle and value greater progress and to these demonstrating our productivity. financial In the leading growth model all, the and capacity believe direct rapid

of divestiture our conclude significant the JELD-WEN, perceived litigation, in of Sons, resolution Towanda planned to history. seven, Steves attractive Some chapter is when the valuation the as as is our sold includes Onex completed, affording This and this previously stake now amount opportunity will well. Page closed. now business other repurchase its a us The & long-standing as overhangs on in announced, with Earlier eliminated our have of in material the our valuations. been including of plant forward shares moving at which please. remaining quarter,

We X.X% excellent believe far a roughly use of repurchased to million million the The for cash. of represent our so quarter great shares the an represent shares shares and year-to-date. year. our X.X year the million outstanding continue at for $XXX during X.X this us beginning million investment shares shares million for repurchased and of $XXX X.X We

who commercial and XX,XXX instituted progress build the capabilities, building Not I'd recognition values-based detail thank proactively great section recipient every more for but culture ethically operational to Corporate financials, NAVEX a Award the Before company began, culture. XXXX and Impact. this out of John give and turn training premier highlighting we way. JELD-WEN North our only have to over our drive live and I right associates values systems values performance on driven Culture the the congratulate NAVEX I business to we our the this and the recognizes its Global Excellence Customer quarter it This award October, In JELD-WEN to made are We safely. processes, day. named also as we've the like American Linker in close for

Finally, our as a I global we and to global a of past pandemic, our prioritizing safety importance continue remains and reinforce environmental, social well-being. signing this of by recommitted expectations themselves that and pillar want health utmost of our to and governance all key safety the This people navigate core pledge quarter, strategy. the values new outlining for leadership to associate leaders health

John, And As now financial responsibility continue detail who talent, hire we over will retain accountability. on a attract, built reinforcing we I'll to values-based it and provide are to our leadership hand on and culture performance. personal additional

John Linker

start page nine. And I'll Thanks, on everyone. Gary. good morning,

driven increase well core broad-based segments to Notably, by as revenue, foreign with revenue quarter second from growth The as $X.XX as X% all favorable billion. quarter. a increased exchange. a demonstrating core X% primarily pricing impact as well net sequentially increase X% Third acceleration year-over-year, was the improvements from in three revenue delivered both in

Third challenges quarter X.X%, and result by volume declined environment from lower primarily operating gross discussed of external Gary. the profit a throughput limitations revenue

was unfavorably the ramp-up efficiency demand. and by market manufacturing training impacted labor labor of associates constraints and meet and new Additionally, on-boarding to

approximately X magnitude of we than inflation in approximately year $XX year. quarter that inflation. quarter well leverage price commercial than meaningfully inflation year operating results, as our call more offset points higher freight material the our significant third expected context, sufficient freight initiatives was and all XX what volume, XXXX. margin or year Finally, the inflation. expanded to basis, and at compared on million the we of was productivity material as from last in higher quarter favorable times and our positive time put was the than third than material and a Despite earnings last third higher and in pricing demonstrated basis year-to-date sharply calendar gross saw higher than To headwind, prior offset inflation freight August, to excellence realization of as prior On and

declined Third quarter $X.X SG&A million.

I'll throughput-related the actions price our inflation. sequentially rounds with revenue highlight pricing due of record earlier. and by X% third for which in of page X% with actions. led with now discussed effective Based of XX% X% of the and the period of pricing, Income detail provides tax while in increased by tax Australasia a X%. we the lapped Volume, the the Several XX% detail. mix a same in COVID-XX we Pricing pricing additional in XX improved quarter, in Page GILTI the election America that benefit as take quarter quarter. largest in tax teens, compared throughput expense the XXXX X.X%, XX%. we items the way move impacts impact to basis. our the impact benefit of an North reduction million more driven for benefit the performance in the in reform, million quarter the realization GAAP in to tax drivers underlying and XXXX, on third the the Europe exclusion quarter legacy was revenue third expect XX, these I'll Net year. of X% North was we to be through under realized cost America $XX.X Excluding headwinds. of rate the partially will ongoing the benefit to $X.X associated legislation. on segment offset of Please declined where expense offset high tax of volume the prior SG&A tax with the rate range year, as limitations for of the you book the the discrete litigation-related an increased the of to year-to-date to quarter, last high contributed

August housing order additional healthy pricing in a contributed backlog the from to and implemented quarter. inflation. Continued rounds was realization as North strong accelerating quarter, growth second rate price a demand we the America's of sequential exiting XX% improvement to offset

did from With this price the not results. level in however, the third benefit see our increase August backlog we of the quarter full

a recent pricing, offset fourth than in of Moving inflation. should expect which this full a improvement into quarter, quarter increase and we sequential the impact more

as in of channel we constraints components. greater work a that improvement offset the growth. revenue the done offset channel declined from to X% labor activity to favorable retail as higher well business. increased that pricing was offset of have slight already housing the in related X.X% continue EBITDA revenue partially were we primarily a inflation I adjusted local overcome X.X% we pricing impact for fourth labor North due consisted mix year. supply Europe cost reduced Additionally, acceleration the contributed X.X% supply took the and mix, we Strong fully quarter from disruptions disruptions. by seeing a compared as and margin to volume of was benefit Australasia a declined not Europe we was improved a chain quarter, headwind. lesser inflation headwind mix offset than primarily accelerating revenue sequentially increased volume prior the to volume, in price, demand. a overall efficiency. as to versus the see critical fourth in by chain saw and revenue adjusted additional we the exchange. To our project-oriented we America lower which X% in From by sequential and result in quarter overall expect benefited Volume throughput EBITDA more where pricing extent, XX.X% constraints to foreign quarter, quarter. sharp excluding to actions currency in This as will the pricing fully mentioned in the expect in third headwind in standpoint, X% XX.X%

pricing $XX.X productivity Australasia higher the to Similar growth overhead restrictions. offset related offset However, EBITDA this from price, million higher flow $XX.X of capital was million. actions, Adjusted revenue declined based improved realization sequentially. expect Please well adjusted lower operating $XXX.X remain as adjusted as primarily CapEx. higher from The lower declined due improve we Pricing headwinds a to X% strong cash were and segments, operating government-mandated free XX. both Australasia demand decrease operating and to cash the The and segment slightly upcoming other and recent operations was to quarters. turn by absorption balance operations Year-to-date to liquidity government-mandated page fantastic investment restrictions due taxes. cash to decrease as sheet year-over-year COVID-XX. volume cash positive and in inflation due working by higher cost from volume to million, flow in shape. totaled in of costs cash flow on seasonal

up cash used which in of $XXX.X and million times, X.X stock the net at $XXX.X million quarter, of debt third as the Our to $XXX quarter. end to we sits flexibility balance X operating earnings declined stepped was repurchase Liquidity to growth. future range us initiatives million, in the leverage opportunity attractive gives as repurchase shares and due our X.X times to slightly that of the revenue invest compelling to target leverage above quarter, will in an Net the at our drive to valuation.

provide expect free We manner generate over in on to it returns-focused deploying net Gary? our focused improvement returns the leverage on margin quarters, I'll and over reduction cash as remain cash that that, who With time. our in will upcoming execute flow. a We closing compounding and plans comments. disciplined we Gary, back on cash turn

Gary Michel

turn order since throughout tangible this and we North And that October retain we from Thanks, John. is The to again and Demand seen acceleration Please and in day September results to America expect improve labor trend supply August produced August. and to page taken to improving strong, September fortify rates quarter. shipments have continue actions in to be per attract talent, to significantly September we've into and from XX. the average sequentially and and our continues chain October. productivity

fourth consistent we slide. quarter, us backlog, throughput our activity give on deliver growth in and with this the accelerating full will confidence year updated outlook improving healthy and revenue Our that earnings shown order

in year than XX. a will quarter material the turn freight that full and page more both Please fourth inflation and headwind, pricing offset While XXXX. expect inflation our actions remains we to

multi-year In segments buyer to continue each as remains but for built will R&R. from In to trends, underlying in and and demand housing demand drive moderated continues favorable demand see residential slightly demand residential our our continue a beginning housing under recession. sentiment growth including we America, rates, housing has from construction we Australia, well. fundamentals are elevated products. new North housing and to expect healthy, the ahead, strong in interest to supportive in demand in to Looking Europe, recover R&R overall stocks an supportive of commercial shift In increase drive levels,

XX. of lifted, accelerated addressing As and in to is benefits of eventual COVID-XX operating solving being borders we restrictions problems meet key the market, to seeing. Please to immigration are recovery demand turn is expected to reopening ability driver a The multifamily long-term housing we construction see approach new demand support are the of our system demand. continuing, page and our to

innovation engines well. as Our fired up are

our small, foundation ideas have innovation We big growth. our the some over and of funnel, which some are XXX in

are XXXX presented strategy in include now ideas of pillars platform relate earlier customer creating that of and for and the differentiated well. and superior sustainability these and the the year accelerated our connected as experience. universal growth Investor we Some our delivering These are for ideas products, growth energy-efficient, to a Day in at

we shipping Our from product VPI growth Coast paying as now investment significant off facility is in as XXXX. are well, new expect and East our

door I X% organic innovation our also now EBITDA energy-efficient investments sharing introductions coupled your to more product forth will in premier growth sustainable margin. New in to platforms, our product ability We coming adjusted window and with and confidence will in you The continued joining product John May, and system to today. operating the take growth, to window quarters. XX% and and our in and with innovation you of give connected performing achieve XXXX accelerate us including questions. even culture, forward target composite Thank our the spur in XXXX XX% benefits growth look X% internal including offerings us set new growth new annual products. lines, for

Operator

ahead. Thank you. [Operator first Please Fargo question Deepa from with Instructions] Raghavan your And go Securities. comes Wells

Deepa Raghavan

for John. questions. Gary, morning, Thanks taking Good my Hi.

little on focusing a sales guidance. your bit Just

growth Your range. a implied has wide sales QX

indicate EBITDA digit, conversion pulled a does of it example, high current at mid-single outlook digits, your growth for revenue sales single range you what and growth to your year the sales mid-point, little QX? down so. throughput kept You for But at understandably indicate? bit, single full QX at even your low Does looking though your digit

John Linker

the it's your you would expect fourth year I of Deepa. do Yes, terms improvement third moving to do as morning, in the Good we quarter. And What the guide in we on pricing from is quarter. improvement volume, still expect relatively in that from - third fourth year volume, still being a a versus mix Probably fourth imply a would the the and slight the moving revenue sequential sequential unchanged, in mix noted. question full to then the a neutral quarter side, in quarter. say fourth the around headwind slight prior FX

Deepa Raghavan

Thanks Okay. that. for That's fair.

Let CapEx point is me did the switch What because the course And seeing? quarter? ask pretty and are projects the change just that over at of gears Or output. constraints time? and you eliminating labor of else your something are kind about lower you in of material this that much

Gary Michel

of opportunities, as a not it finding be JEM much operational timing where necessity productivity significant end, something. with wouldn't But of events, - issue as the in pointed productivity and characterize is improvement prepared of and projects are we're virtuous we for see investment are out rapid we're now remarks, there. in in the it beginning continue Yeah. to throughput and take improvements we're and - come around that continue in several capital without launch we invested. JEM quite in up our our products particular we're its to value And in as a really Deepa, the because years. the on where we're just we value What growth multifamily. get investing projects we're and the of to the streams we're investing our we're cycle investing point to starting and bit I we to at when lot we're model that as investment have focused we're that doesn't get frankly, last continuing to innovation, benefit It's also, pieces. and at into Quite invest to starting VPI been a own do ready to

continue but to and meet forward ENERGY that products also world, our around well the move as new windows, as connectivity the then and composite products space in Our sustainability. nice to some energy-efficient regulations really STAR in to

invest. the matter continuing just at year. the of capital where spend of to we're and So timing is view really a of It's this our point

Deepa Raghavan

the Great. on. Thanks for pass I'll it color.

Operator

go And Patterson Research. question from with next Truman Please ahead. your Wolfe comes

Truman Patterson

Hey. question. everyone. Good taking morning, Thanks for my

expecting of the in amount, were you're kind fourth a rebound atypically decent both EBITDA third quarter, year-over-year the So up and quarter-over-quarter. in margins a and the quarter, down

can you the major pricing of the through, primarily of of you've chain easing is. some some why parts hoping through initiatives done. Just some the there, run that it flowing constraints, that internal Is of supply

there. Just confidence level trying understand to the

John Linker

Yeah. Thanks, Truman.

put into pieces made I will cost QX QX, for pricing that maybe around more it, place. QX actions think in say price, QX we'll think of I than walk would in favorable the about the be we QX comment the we it was terms to to in of just additional of the given implied QX - the guidance as kind and sequentially way

is workforce. associates we levels in a the lot course QX. our contribution that and our productivity on that made piece significant will but other of the getting QX summer again, progress the we've the think than productivity and more staffing be meet to new still the in favorable then in very in I we a the So more associates and from is longer more over price, inflation us, demand. for cost stability hired was are the that us, headwind with of And see it those And

work amount gap, positions. head closing of in so of count that done great And filling a kind we've

sequential side some that more really the Those that. what we're moving we're seeing Gary sequentially as of able looking to for. the so on drivers to in a terms see I'd more mentioned, already well - workforce. level that you're having quarter, the third we are we high But confidence from stable both third as over in the a productivity benefits as sequentially big the just throughput improvement that being And fourth of October saw that say of in deliver kind in labor quarter, of of terms margins in efficiency in

Truman Patterson

Okay.

kind understood raw was Clearly, now. called I'm Could then some peak quarter? pressure freight demand there. fourth or in first inflation you think No, John, - $XX On not of quarter of will inflation issue it pressure you believe - when thinking quarter. million points? I through you kind run be of run of the Okay. through major hoping third can buckets right the through when of the out, peak? inflationary And pressures or and the it is material you Will

John Linker

of coming in in don't freight, buy but would freight Packaging, going lot our Truman. seeing a going was a inflation significant really, now. is to terms all. most per the log containers. And when But when lumber, I I going question, pretty point, at are it's to are the lumber it right don't of off, this QX, to And now peak, other seems in we're lumber mean, buy indicated just know. and which been sawmill. worse on side, to I has to at Asia day. metals go the in big Logs When it, of do every and still the see be in ocean terms place right seeing Tough from offset know first basis we're does of than se, we're I say - on I'd change we in but that while around price that as peak. sort in of I peak? be in to don't lot inflation acute categories it terms we've dollar freight, logs. your the true it. issues particular seeing call of millwork in surcharges on got Sure. inflation are It where where we into just well that advertised we come more has can't QX a call I

- So say the percentage is and the on a increases most logs, on basis but most in we percentage basis. of was quarter, sort of acute freight that saw piece, millwork I'd where a the kind

Truman Patterson

all. you, Thank right. All

John Linker

you. Thank

Operator

Barclays. go And your comes question next ahead. with Bouley from Matthew Please

Matthew Bouley

products? strong. Was September you. that channels thinking order It Thank like comment Hey. Good are new made that where of about that the versus I North you particularly taking on and markets morning, sounded ask accelerating seeing everyone. Thanks wanted R&R construction sort end order in across and questions. Just to exactly you America. activity for was acceleration?

Gary Michel

pretty So thanks in particularly North seeing We're broad question. the based, it for really America.

the product on space and from experience. like those with And been and activities coupled really excellence have our updated markets. piece number not in commercially exterior example. really still commercial in earlier, improving several they in our a last focused of customer really, our our are the with our operational relationships times improving years We We been actually, over and the focused are I doors, necessarily historic level, lead acceptable where but windows for industry-leading, particularly a said lines

to that. even able share. we've able quarter, at very accelerate. we're quarter But pick quarter which starting to the this some end been the into first strong We've was of signs been continue is So drive see in to that's And up to demand, the continuing. the

areas and that the improving experience. but broad-based, line like share, we're kind much on customer in I very gaining seeing we focused So our our product said, it, of

Matthew Bouley

Got for it. that Thanks guys. color,

backlog do priced to price, sounds back sort one, - product like expect you on shipping cost higher got you've contemplated sounds and QX, price, of part the Thank that? of we right there's side. remain also the like in of should Second pricing kind positive reflecting in how about into cost leg it the think quite Are that's additional It clear. there wasn't I actions actions you. now. just 'XX? of as next pricing being Or

Gary Michel

Yeah.

number took We it. what we're on more really throughout hit we - third the that of are actions quarter expecting kind the some took and we're you of year, in So a the backlog those our see the to be to to It's and reflected we through price part increases as ship the in shipments. going benefit start quarter. of in going fourth be hit

ahead where in are process kind the trying and of pricing to really We XXXX on into for normal the actions additional the cycle inflation of effect of that announcing are. go we stay

in quarter of the our John to through bit implemented way needs already fourth is really pricing we'll shipments. its see earlier some benefits work a of So the walked little just and that through the

Matthew Bouley

All right. very Well, much. great. you Great, thank

Operator

Susan question next Goldman from Sachs. your with comes Please And ahead. Maklari go

Susan Maklari

we you. quarter the the Europe. fourth perhaps about think talk think first year? we end the the know, Good the about on where My factors of morning, ended is Can Thank you as cadence going about margin, and into touching as quarter that of you question you everyone. this

John Linker

that where did favorable. an to of for price, quarter specifically, third expect, third quarter, that That the I'd be fourth cost the favorable. see Sure. about that's sort in we any an Gary Europe into as itself, was say not we sort as would And talking be would - cost actions, price, of we've In implemented were got quarter, was of. area move we not we Europe just pricing the area where segment benefit actions the new that

price the to was in Europe So not. specifically, inflation, did offset we but whole able offset company

then and think cost improvement the supply that to there, the a is of about throughput side, behind of us, And manage to going We've got profile is of disruptions the the as XQ, getting and XQ improving. lot pricing the chain some throughput benefit margin pickup were from price, improved you we've really able so been in that just through if QX. of headwind a those on

so on operating throughput well. And that from better we'll leverage as get and the productivity

the will Europe. in So what that's drive XQ in improvements margin

Susan Maklari

where little America, in Gary your this that the Okay. That's and a in all on kind quarters, despite back you that then you've lot of Do are of Or the relative continuing quarter think headwinds the are last mentioned caused his can are I gains, But that to, share? think share touch you that? in just to response. peers you basis, headwinds going any know of in you operational terms about And helpful. on bit there? you more previous North of those shift a talked couple outperform actually a

Gary Michel

investments, – that I and of is we've We our product all the for Yeah. they're business, popular. some made know great - very mean product-by-product, we talked exterior fiberglass about example.

the while advantage. we've exterior. an really growth, like at those And lead particularly Our our in still it. commercially, times, - partners in or to And market customers and outpace been able are channel they've stretched competitively competitive out

think and I look the market across that. see you can

So is of very operational had windows across in remain a better problems improvements exterior. our tight lead right the with ensure the least our space, we our to we markets. much example. us That's great are up they products market where use where windows to on segmentation get ability generally - We're there benefiting But we've and that a buying segment across commercially now our we're position that have all years from got board market. than picking windows customers some ago, put share times in winner need at as better there Several JELD-WEN the are work and a able them.

to as able So in share share we've wallet additional pick some some and case that of been well. market particular up

examples operational are view the of those and a view. two other really a So product being product, being one one an

Susan Maklari

you. Got

Okay. color. Thanks the all for

Operator

question next from Thompson Ramsey Research Please Group. your And comes Steven ahead. go with

Steven Ramsey

then the Hi, and coming demand situation I sure versus good in will issues in in to there? make like will the backlogs here? are constraints the there morning. and any exacerbate back. similar And understood light back, coming France of the times? What France Wanted the Are to backlog Europe incremental UK that UK demand normal -

Gary Michel

Yeah.

UK of order So rates France bounce back. kind and we're the in seeing

kind that COVID and fact, the shutdowns - we're of several see starting the periods. the the In most over by they last areas the were like hit to were

than the something two side We've stresses running. seen our more supply certainly France, of constraints. And times we've rates demand. with of rest chain got order So bit, - keeping and running a like think an that up but in Europe operations issue we're I what of in Europe the labor that was the UK

which has ensuring really in that Europe. been supply to able we're demand the shoring it's chain, work is on around really that So up meet been based where our

Steven Ramsey

new of story so guys much are came understand I versus now how is then improvement in to that labor is going, the maybe how and and that driving, is sure if fall? of improvement where And overall then efficiency far? mostly attracting that make North And you kind labor much of the Excellent. it's about think in of the new it the that earlier summer America the labor I labor

Gary Michel

when theme the the attracting It's on also the in worked new went feel piece plan. that America, we at some Yeah. segments. variation really a in kind bit corner. particular, we of a trough worked we We issues same look kind to, and really saw and called of a local retention personnel our to the on work of middle into quarter. folks in third and turned you of to it, as beginning well. parts with hit But little different the We labor within as hyper the like I our North But own approach

When little that was into that average retain - filled, and with tenure The we the then So a work of plant suffers throughput. is stemmed tide down, to like XX%, productivity. of that that to the obviously, bit the October. and sure we've September your turned improve best folks we've make productivity - kind XX% the managed gap get being in into to that

on throughput focus focus daily day So initiative, on really plants. starting improve our of over we're retention day those basis see the to training, on JEM benefits is a towards paying off in and

us that for quarter as earlier, - from work that's out continue where in that's going and will the John comes of So bridged benefit fourth where to part forward.

Steven Ramsey

Excellent. Thanks.

Operator

with Please next from Your ahead. Ng comes go Philip Jefferies. question

Philip Ng

it strong your Hey, Europe? is then to whether basis negative year-over-year probably you a on How to the how modest volumes correctly, be normal fourth America you positive do hear a actually I backlog going John sounds, in Any sequentially. it's to given guys. quarter, when throughput Encouraging in expect if heard quarter? year-over-year? North is flip color Because fourth and still are up from sequentially? it's up far just how much And the

John Linker

Yeah, Phil, was of fourth still We're question quarter. headwind part your that's expecting last volume, correct. a The correct. in the mix

meeting still the and is at a made not that's to obviously, North we're XX% America backlog. sequentially point. close to of can would back in average demand shipments high the October the specifically, in early this of ballpark in day, where it's I we seeing average quarter be of lot in But terms from third to single shipments while terms digits in all in say improvements, improvement we're day. the what in And of sort of So - we've to per September over sort of sort per of our -

with we level our do results. more the the there's that So to hopefully, magnitude seeing it's of Clearly, though, backlog meaningful are work there.

Gary Michel

up. is if And opening about back you just think Australia Yeah.

bit So COVID, to of Australia after order a shutdowns in mandated rates great had quite we've due well. as

So But the nice up opening there. of backlogs back there. are we're lot in just areas pretty a

be going be significant off take we and contractors to to a It's they throughput on can also up. in going ramp that's order. what back fast capacity dependent spike actually So as how

that So for a as time on expect throughput we well. quite some to tailwind be

Philip Ng

pockets additional it's any helpful. where to stay The to margins price, in appreciating is to That's seeing in stabilization you inflation need Got from on hard any of actions predict, pricing stable your are it. inflation? sounds of really a a I favorable out expanding. XXXX? look quarter, when do from it is you be are asked out, here like And And reason we spot should standpoint pretty because good if you cost why fourth

on that trying you. just Will drop-throughs? next going pricing Thank a So the for year. bigger potentially you margin guys better to a are impact after have feel get of

Gary Michel

Yeah.

any the you're is still a happening we overcoming. we to of at right stabilization price, cost expect But higher have quarter, in tailwind will in quarter level, excuse that - the and think a there's the headwind, into - carry that favorable happening we're or and new me, bit that in the I fourth is the that year.

as new So that. look we and inflation, to the freight at various continues looks commodities pricing, look to at cover and inflationary it,

on, level on We of that, expect add a into of start but more cost. new be that normal of to that more at getting will kind accelerated the pricing top cycle

Philip Ng

Appreciate color. okay. the it, Got

Operator

Baird. Chan next from question Josh from go comes Please your And ahead.

Josh Chan

us change my got the to kind am worse? what to I I And first QX you guess Good Gary, and guidance, Chris. Could right for between relative John, expectation? on headwind assume now the your EBITDA question Hi. is morning, incremental of just ballpark that October. versus

John Linker

It to specifically more freight. down on and Josh. morning. Good inflation really comes

EBITDA, million came of that And early primarily update a yes, were just or when very in dynamic it, in that we're now, seeing. terms about call full terms of terms we we at in $X.X mid-point expecting what an a year in what month was the ago. implied October the terms reduction it's out In of environment gave so until of of of QX for the,

Josh Chan

nature then like Okay, components the And get ability that is that really getting of and maybe on to you a Thanks. kind of your overall, so then produce constraint sounds less and has - fair. constrained forward? feel of okay. to less and of side troughed labor it That's things better. that the supplies, going ability Could talk supply becomes of the things, sort about and

Gary Michel

Yeah.

think right. you're I

we're the on troughed we've think I upswing. and

for do to cut supply. been to we opportunity also - look we currently or us that at have, can be to take which We to that the to, fair, is at have. do components care components For to size and cut to parts in-source in-source right to we ensure or customer from able to we've We've to that the we're places, that able and somewhat - make to piece, able we've most able different it. the supply. to to supply been it's certain call what look our We've it's that chain to able part, resource. And stability continue way sure the We been through been been structured, we're on we in an been cut modify them them what flexibility discrete. worked the of

us implied And part, the is of that, address cost able for sitting clearly customers. I better the idle. most it to think been a takes for - most Of to of But care than there's is we've that. doing throughput but some and lot clearly course, leverage

Our bigger piece about. throughput that was talked America - biggest the we constraint in North

that - that's Northern I in I improvements sequential think we'll up that you the know improvements that's same we opens Australia And the as as and to see continue behind there behind - the Europe. us. in see throughput, see

to forward. going see we're as we're starting think able to moving sequentially revenue improved I results that get forward

Josh Chan

Thank for both Okay, color. great. you the

Operator

go Mike next Capital ahead. your with Dahl Please from Markets. question And RBC comes

Chris Kalata

of you abate? and that actually is questions. And you going the taking saw when quarter growth guys exclude fourth this dynamic guide my that, volume that your help if a is year-over-year does us Thanks the channel impact This Hi. Chris headwind Mike. you Kalata for assume to negative core Can on mix basis? quantify is still on for quarter

John Linker

to Good channel the call quarter. talked mix specific million on That it, that Europe, year-over-year as the, just in we retail morning. business versus to basis. that The it about EBITDA $X third in was range was headwind $X project million of to really relates a

better, fourth us the but As I'd say fourth quarter. moving into we're we assuming fully that in gets think not the quarter, it's behind about

to company, So comment but it's was the Europe. not total specific material the hugely to

Chris Kalata

of the regional for EBITDA it. margin just back Got on second to been a sense. margins amount And in That implied a there's variability decent going question, makes outlook. Clearly, basis. my

was I not year-over-year terms or flesh out segments? margin performance some in could margin hoping of assumptions you So of across you your all the and whether expect your regions across expansion

John Linker

and that Sure. be Europe, Australia quarter of shutdowns some door. unable the America improvement, strongest product to guidance the those and a the locations headwind we we we out some the the that were in fourth other just Victoria to margin in quarter still so coming the fourth would North implied in quarter be with then still in I shutdowns had into given some of call our slight get started probably where - in close would flat, what's would say - that it,

the So without all getting absorbing we're the throughput. overhead all

sort profile in say fourth strongest of the quarter. three of America the So year-over-year margin terms of I'd the be improvement North in would

Chris Kalata

the Understood. color. Appreciate

Operator

from Rehaut question And JPMorgan. Please your with Michael comes ahead. next go

Unidentified Analyst

This for Mike. morning. is Maggie good Hi, on

share on question repurchase. First

us areas million about Could repurchase the shares left other And Following your is forward on of remind \authorization? quarter. X repurchased versus talk you going maybe the for share allocation? potential third much further capital in the how

John Linker

And us. valuation we to quarter, of authorization. about we're that third future the risk-adjusted it the And So And on growth, saw would allocation, updated million left expectations sort say and that most at in about - authorization disciplined outsized are that here earlier third on recent given the investments in a quarter. return $XXX prioritizing as the year, compelling I'd that investment make to capital for very a lens. share was an in we certainly returns-focused activity look terms of basis in opportunity, highest repurchase approximately think the we we have in through

move As share what on front M&A, forward, in be opportunities investments, we it us. repurchases, depending have of balanced between internal we will

from drive to return committed on we're improvements that perspective. So capital in

Unidentified Analyst

Thank it. the mentioned you mix back headwind going then Europe. And Got you. that the channel second, last was question, to to specific

next segment? As America, I of new about that look about mix you of thinking over that the that you any at America quarters talk the the you're then products North in to as some volume, mix for begin few shifts highlighted can those component you've forward volume-driven? North I flow the And was look and how through, entirely potential

John Linker

third in pickup the slight North Sure. In quarter in to special see started resume. there order activity was as actually a year-over-year America, mix, we

just headwinds the that we've had labor volume of of standpoint favorable. constraints throughput was able from some we the a from dwarfed the that was So Unfortunately, the had. that to of being get amount COVID door out by product and not that

of the we was mix a to that there, the just that in see side of benefit really results didn't get things. the in slight there was but So given benefit reported throughput

Unidentified Analyst

Okay. Thank you.

Operator

go comes Garner with Your next from Benchmark. ahead. Reuben question Please

Reuben Garner

I answered. is shipped? Good Thank have product Most you. clarification backlog. the the - when the order time my questions of Did on just one have been or morning, the everybody. of

Gary Michel

- first the about missed pricing ask you part did Was Sorry, pricing? we that. the of

Reuben Garner

Yeah.

that's at when those time for or shipped? the product the product products are backlog, the backlog, is of - in the On the is the the pricing order

Gary Michel

clarification. Yeah. - you Yeah. that was This thank for

the is in Typically, protracted short cycle order For particular the been time period, unusual. at this it's cycles. They've we the part, most little set - which a have relatively of order. bit

see needs the quarter. we'll the put way in, why that we pricing in third fourth see And the most the work that's in that to quarter through for that benefit So pricing we - of part, its backlog.

Reuben Garner

Got the it. luck. Good the Navigating year. you. rest of through Thank

Gary Michel

you. Thank

Operator

at Gary questions will call the further closing no this back turn are for remarks. to over I there time. And

Gary Michel

with you our our through Well, interest quarter the this quarter, your We our for JELD-WEN participating for our fourth performance Look earlier all catching that growth trajectory Investor us call. in all for about up. in you and our year. our forward Again, targets strategy and talking up look morning the forward in for to and Day we and XXXX to thank put long-term commitment joining the in to morning. this the catching at forth you thank

Operator

today's concludes call. This conference

disconnect. now may You

JELD-WEN Holding (JELD) 1 Nov 212021 Q3 Earnings call transcript