JELD - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to the JELD-WEN Holding Inc.

First Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [ Operator Instructions]. to call like Director, Christopher now Relations. Investor would turn over the Teachout, I ahead. go Please

Chris Teachout

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

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

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

Gary Michel

global for and morning for commitment customers joining dedication their by to this especially thank those Thanks, Chris. thanking I'll us. you Europe, time. Good start challenging morning, continued during serving and in and this associates, our everyone,

are the that by in thoughts impacted those war Ukraine. with are Our

in contributed more teams our associates, actively to with than Together refugees already local testament of JELD-WEN in Red our the the efforts Cross our generosity region, support, been values-driven and have support the recruiting a American providing we European has are direct true humanitarian culture. Our in operations. $XX,XXX of to

quarter the end and all quarter of by high achieved inflationary seventh solid the extraordinary exacerbated start have and That strong delivered Turning a core market price levers impact in to and by would in expectation impacts, we our step-up revenue results. on our our demand, said, financial quarter, war end row, mitigate had Absent the the Ukraine, a to our driven these key the at in our realization, the first pulling beyond. relative significant growth, significant progress quarter. a we We're inflation for of initiatives. range to another for pressures of on expected these XXXX commitment deliver results,

and to rationalization price consolidating to and our customers. value-added, with enhance initiatives operations facilities are improve efficiency and best and and to consumption modernization costs, to addition fixed material reduce partner design, raw executing and footprint including provide improving continuing at to we quality throughput, the expanding availability for cost the value-engineered actions, programs through In margins, suppliers labor product to focusing on minimizing technology our

global fundamentals demand our remain underlying of the primary pressures we most end by While inflationary encouraged across favorable markets. continue,

with by X, revenue segments turn in Please net and revenue, to share a growth. core increased delivering share to confident We initiatives of balance drive and will that these on year. shortly. few detail revenues from the initiatives have all on commitments. long-term on increase our core Page financial highlights a QX this laser-focused industry leading customer-centric the are solutions we I the expansion, driven the and contributing first more benefit as through deployed XXXX remain We three will us profitable quarter. margin XX% to scale with X.X%, growth I

this As quarter consolidated a the core I consecutive moment marks revenue mentioned ago, growth. of seventh

realized customer and quarter Adjusted and to to for and to we accretive decreased product and products, new this market-leading we've XX% our the price $XX.X customers, service, improved service EBITDA As due margin solutions, million. we deliver differentiated expect position. pricing, higher continue innovative to maintain to

actions Strong increased to and freight others both quarter, the impacts new from number from the controls to inflation. Russia's backlog cost executed uncertainty and drove crisis revenue of quarter, on pandemic. anticipated resourcing, grew in the mill saving coming price due to backlog, start on and partly also year-over-year In continued momentum, and offset than solid cost and price continued these the In variety in realize including repair key pricing anticipated metals, since in stemming the initiatives, North the reduction these logs, in and products Ukraine. We or to Europe, including to resulting over of a America, grew aimed Russian for core due construction, subsequent initiatives increases the residential, the of of both invasion While end Ukraine, raw and sanctions currently of activity. demand higher XX%, significant alleviating and X% by offset some and than material many volume due We benefit at the value on expect increase orders of volatility led from our engineered markets impact enacted or exports, energy, geopolitical in demand inputs, material prices inflation, underway work. certain VAVE greater throughout projects, revenue quarters. largely in inflationary value-added market sequential remodel, R&R highest and and a a most and realized softer substitution, core

as limited record than our by price Australasia by Australia out experienced future revenue in accelerating core increased project was we pushed was certain quarters, business largely X%, destocking customers. forecast and Demand offset remains realization mix. levels. into And at volume Some softer

delivery timing challenges, builder and on severe impact New in throughput. and had Wales, continued in a an Queensland increase However, labor flooding temporary South absenteeism, COVID-XX-related and

XX.X% the $XX.X in million the repurchased these total second We million to of conclude comments alleviate on during shares stock we of outstanding shares of our X% follows the my or we approximately XXXX. that purchased or expect issues in QX, quarter, This $XXX.X To outstanding. quarter.

We an represent investment excellent and continue Please to shares cash. turn believe that use of a great to X. for our Page us

quarter, to continue the into we on managing accretive and to the focus resources bolster customers. As costs service we second to most capabilities, carefully move and that making matter investments our

expansion. efforts on pursuing me of revenue the drive to are Let expand margin and growth some profitable we

new or Over sites in the business operating our XX-model last details transformation through deployment we're how excellence the the provided our of globe. to on transformation, on the Australasia, I've some evolution addition first provide factory. the aspects product of in the JELD-WEN details introduction the accelerating to sites this quarters, model few of and JEM, smart our efforts model, and stream across like of Europe value of sites I'd system, lines,

us the multiple unplanned market-leading stability benefits more increased savings standing in value per simultaneously. standard remaining we three our the improved and the to which we're We've also work. including rationalization a lines software, pipeline, in technology we us sites. we reducing event, three continue quality opportunity smart this out JEM similar lead meaningful first reduce to times, as issues deployed this our $XXX to work to accelerate quarters. from of continued mentioned, considerable and believe XXXX. across $XXX two second downtime, in gain standard footprint we cost. enables to factory optimize plus sites the to coming This site-specific process kept approach six To by This We additional streams to and efforts, further our and years, from also and supply improve throughput for on and revenue minimizing past almost in us improvements achieved smart additional forward the roll to we manufacturing throughput, allows on additional plans our improvement and have delivery of full to runway we've identify new sensors E, projects We've of Australasia, being look product than always, lines. from at performance, to labor, efficiency through on. underway sites in will and strategic product And between new more technology, chain. is and execute sharing improvement. roll as see focus With transformation, capabilities, in Europe factory. to deployment the In approach, generate million profitability single RI And improvement the create throughput, margin adding we're first the technology improving this facilities, throughput time dollars predictability have JELD-WEN or some magnitude Customers The modernization XX% rapid savings of To million our have these findings quarter, additional the unit more we've out of XX%. driven volume better and unlock to in sharp evolving model stranded pace maintain and As improvement platform and sourcing allows capacity. completed to quarter. approximately rely approach a can in they provide context have the that seeing, lead projects this cost proactively

of manufacture. we Our industry-leading source lead processes, chain to where This as manage and key and self-sufficiency us inflationary through maintain with sell resourcing approach the manufacture has to optimize supply flexibility decisions. and deliver JELD-WEN This customer markets philosophy and in is effects insourcing, us quality we to helped redesign times. products where gives at manufacturing we the rapid substitution, localized

the manage purchasing pivot a in to key sourcing suppliers, quickly regions we're us of identify we to position many scale more supply we've of have to world. reach our locations using And that And continued challenges power. us gives effectively. experience this material purchases Our allowed chain our as certain for and when customer multiple

to helping strategy strengthen of customers innovative challenges of that services choice. solve as position the business, supplier part new their our our and offering Another channel add partners our their by products value and is and helping to

we growing some and high in example, America demand pro-specific launch reduce Auraline skews on And doors, new addresses patio of are sustainably-sourced, the key announced a quick-shift systems, their don't installation offering help products piloting more prefinished, preconfigured that composite designed-focused, with labor windows year. requirements. programs integrated For focus the in while we're launch this have door North content. of deliver are lead of dealers production to of brief for This of estimated energy-efficient, times. I An runs and update rapidly lineup. of recycled also America. our recently drivers that production skews product efficient reduce North be customers in on-trend XX% share doors to products rationalizing a higher window that want, want today our volume our composite more to a degree We enabling and and to growth

the in this to product. the quarter, XXXX expect about Shipments commence opportunity this through excited composite them and for strong. we we're Auraline product provide expansion So, been Pre-orders for line. with second rapid next-generation, have margin-accretive will energy-efficient

continue business Additionally, capacity in the fourth driver in our with exterior JELD-WEN. our quarter, new as fiberglass to in States, and facility, coast Statesville, new the in and of builders growth We've coast west Windows XX% facility year. we North for with customers projects few gain drive the our Quality this expect doors and helped to United for share facility relationships throughout continue and secured in the us. with our leading and and a growth Wilkesboro expansion incremental customer the to we conversions, that multifamily growth are In seven weeks, skin online largest and Since Carolina, one share be gains of business. in our multifamily progresses. we deepen above to capacity to expect And new commercial continued our VPI year North customers door broaden bringing a XXXX, additional added secure see new east

housing accelerate these expect We continued positive drivers, unique demand, and topline growth. growth to

and the the taking ahead we’re in back XXXX. half expansion While of get of deliver steps will inflation, profitability margin to improved

it I'll hand more give over the David Now detail financials. to to on

David Guernsey

X% Net in XX% executed Page revenue increased revenue $X.XX Europe core revenue strongest the consecutive core in magnitude Good decreased and demand Core $X.XX We in to conversion X, increases XX% core which Gary. decreased the revenue core in quarter, Australasia adverse growth. material to partly sequentially, backlog by year-over-year increased turn X% drivers X% effects. the driven respectively, a quarter. day driven followed impacts. you, begin positive at of compared mix exchange morning, raw each growth, revenue EBITDA for impact and was by adjusted Pricing a compressed from first results. growth driven America Price per North improvement price Page having QX billion, increases basis growth, EPS significant quarter and quarter as by the X Australasia shows by in points. Page as margin provides detailed well $X.XX costs. we've to loss partially seventh mitigate EBITDA four with of I'll everyone. we our primarily over freight to XXX $XX.X inflation slower and Volume while foreign were inflation. of offset Adjusted segment. increases selling year Net another EPS Europe, one $X.XX, our $X.X with adjusted strong realization offset by share past the Adjusted mitigate at million, delivered Please increased lower and EPS XX%, to our the less quarter of and volume on mix. X Thank by to input a in pricing, XX%, as increased additional X%. sequential instituted quarter. revenue quarters, of marks ago. and price in breakdown consolidated of to and the the softer first

While was further was Inflation moderated than expected, for value inflation with initiatives. offset the material partnerships impact sourcing freight we and price. engineering greater successfully our and

become to through tailwind costs we move price the expect as a We year.

America primarily was growth. labor you can the improved realization, meaningful and setting the Moving drove improvement March. page revenue a due mix quarter, strong compared volume particularly strength higher primarily XXX to including strong, increased capacity. residential of energy, with growth future was impact and raw basis, in XX, growth channels, in costs, America new input labor digits XX% accelerated the to Revenue Europe construction. the up on North America inflation margin North driven over for margin decreased positive raw to first remain driven slight the Core with roughly March year Adjusted while basis rates EBITDA points, JEM exchange. and traditional highlights price pricing through in fully as in February new Order which our fourth XX%, quarter, actions volumes throughput with well X%, but revenue as dollar last X%, our weekly see through in mix North high productivity, and startup covered freight, the material, for volume the price strong has increased rate. by headwind. and first including single and by impact freight foreign costs both segment contributions to stage quarter, for diluted due a material quarter. the

offset Another price realization volume revenue growth, anticipated by than mix. strong quarter partially lower of drove core

in Our order strong, book remains particularly central Europe.

However, and improved pricing impacted basis of Europe other Ukraine, invasion markets. margin year-over-year XXX general pressures decreased uncertainty to EBITDA adjusted in a Russia's related and Again, inflation points. sequentially. demand

compared due for Orders were margin and higher X.X% the healthy, and However, work, temporarily revenue in delays severe local declining to in position deleverage housing. balance impacted high labor, new in and and by primarily driven lower to pressures, increased to volumes sheet, flow decreased year. by FX-adjusted. Eastern income. considerable quarter Volumes, cashflow of remain solid the of increase inflationary the capital headwinds. additional and the due impact mitigate used stepped Pricing working X% particularly inflation. market primarily in impacts a actions in was the on implemented inflation lower metals, were margin from deleverage meaningfully first and operating operations Australasia was used XX. The for Australasia $XXX.X turn uncertainty, impact currency, million project absenteeism. net flooding during the both due however, demand spike adjusted margin as very first quarter, Page $XX.X Please to million, reflecting market points lower basis the EBITDA XXX along COVID-XX-related our sequentially Operating volumes. to to continued in we seaboard up last cash year-on-year energy, of needs, impact strong

and investments to ultimately We convert expect as inventory year, conversion improved cash revenue cash. to this flow

due XX.X and about sizable XX.X Our Net from outstanding. remained of ended at to X.X million, quarter from to times year-end, We temporary total primarily position with times the cash million cash our and flow shares, and liquidity X% the of liquidity leverage solid respectively. purchase impact a $XXX.X increased inflation cash our or shares balance position. sheet total debt utilizing of and million, in our $XXX.X of the

continue this that on Our net to our leverage expect manner, X and the We'll year, cash compounding charter conversion. times remains returns and at to goal progress and margin in X.X accelerating make we cash disciplined, expansion a over considerable times, this time. growth cash through deploying towards and returns-focused

Input in uncertainty cost QX, we impact our to confident year will expect some full have remain and we inflation in negative market outlook. in forward, extended Looking continue Europe.

have in of balance QX year. realization of However, announced through the our pricing been markets, all the accelerate actions and will and

margin ongoing our towards we in back it comments. I'll closing will that, to to initiatives drive Additionally, have turn meaningful Gary, additional progressed goals. expansion place provide we've growth who XXXX our and over With financial as

Gary Michel

David. Thank you,

discuss would a a an acceptable no recommended building special the divestiture our of bids update the quarter to XXXX, of that report special the in market divestiture to February, fiber third one antitrust identified Pennsylvania. on concerns. the multiple business and wood we the the master appointed issued viable outlook, products to Towanda, as we oversee In for I process. that contender longer master a shared be due Before considered provide like bidders court process the in

the of is expected master's views delivered of be this court that month. for Justice which its part to later asked As special Department recommendation, the process, the on

transaction. the continue a master and advisors special and work the with his identify close to buyer We to

delivering healthy demand may each and during transition aging our on to we believe turn construction and demand, year, outlook. Page America, and will associates including activity. uncertain, continue ensuring is favorable an fair spending, housing orderly for durable while Please by potential residential temporary new In consumer to move-up, the and are recognize and affordability in stock. tailwinds strong be and and challenges second is for for outcome, our record market growth XX but migration and of possible demographics, high the and remain navigate R&R focused demand and to well create stakeholders. powerful equity, customers, a expect we saving driven lull the half North home value we timing more both demand While levels, personal long-lasting. We This a prepared to

Russia's Europe, near-term. uncertainty has of invasion created For Ukraine the in

However, we of and in strongest once our operations market housing recovery demand the on clarity multi-year remains are a for the many as economies, in accelerate its is Europe's there Australasia, And Ukraine. activity expect to the duration homes continues of new residential recession. greater from in country's robust, war

housing to low interest to turn Please and expect expect throughout and pent-up significant remain including to fundamentals, products we remain for supportive, record XX. year. We Page rates the of remainder the demand our strong demand and demand,

in While business the on we've under experienced focused control. aspects of extraordinary we acutely years, global that the past the two remain our are headwinds

favorable We on market new capitalize accretive. improvements growth productivity by from are through and offsetting launching price are that innovative internal realizing housing inflationary to realization, trends products well positioned margin impacts initiatives, our

year. has be our in done ahead, any work to over quarters remain As market successful we to environment, outlook few we we look the for past the and have positioned JELD-WEN the committed

our Thank industry-leading questions. now stakeholders. customer confident a for happy We differentiated I, will for to all to you will of efforts us capabilities, experience be today. your joining David, provide are long-term drive take our and value and that

Operator

[Operator Instructions].

ahead. comes Barclays. question from Your Matthew go first Please from Bouley

Matthew Bouley

everyone. questions. taking Hey, you the good morning, Thank for

sounded the would you for said at step-up your in of in like come but high think, end inflation. the additional Gary, QX I it expectations have

you. that are can relative looks of changes the a there understanding to just So, year on cadence prior kind how recovery if the guide fiscal the is guide, margin that you elaborate segment the little of unchanged, just outlooks? now to Thank and any

Gary Michel

to slightly our we full the first we an internal for the decline continue On of the quarter the growth the saw expectations, a guidance Thanks, sequential eternal We going on our the through due saw again, quarter. year. we improvement what's into our expect quarter inflation We'll to for you as and on that uncertainty from first that - bit through little Matt. missed to guide in are know, committed year, of we in Yes, in the this basis, full and and volume based quarter year. rest on Europe.

specifically had We're we talked actions. not more making earlier up on call, the have about JEM. sure correctly, but we year some of have late in into what in reestablishing, we just levers our rest that and the on As set that rational or we're year. then we've some - got we in to programs on, reaffirming growth drivers we're some kicking And reestablishing about the on on the We've last other the take working earlier unique second pulling pricing. that cost quarter modernization good talked pricing are

pretty for feel Primarily, metals. on about year. A and difference good of little the energy-related inflation. So, us energy, bit the some was

freight and acceleration to we tailwind to So, price related place, including in year. energy, But full for there. got we've a the utilities, we believe, anything become saw

Matthew Bouley

was if you changed that Are you. Got quarter, price, reducing in secondly, don't was volume segments. of color. that I that of of the all you the you purchases price half volume think of I growth expectation result quarter year? think customers that than price. know this And guidance, this that finding has growth more And said across mix organic and the down are last obviously, as a versus of for mix guidance Thank I terms that? volume kind in then for

Gary Michel

like Australia, as of bit price, the or new Sydney Sydney short to lot those a flooding as that and saw talking slowed the that or think growth in we've uncertainty seen exception the there. growth us, for most I door been in VPI volume the contractors down and in maybe through. - decline a for behind Yes. us. hard a because Europe plus. pull bit, a period just areas, online, Auraline we of the of don't us of saw drivers we products hit little new exterior necessarily we And the time that coming about, we've the a made of part, little with for that's capacity starting to expansion, it that That's but In

we stepping So, the quarter, improvements, would sequential the North And flow growth, sequential quarter, particularly through as through we expect in looked rest saw at the to America. we for that the through year. that that quarter pricing of levers taken and expect push this That we've additional we to got, some of we've offset some this and and beyond. new inflation in

Matthew Bouley

Gary, All good right. luck. Thank you, and

Operator

Your Mike go comes from JPMorgan. ahead. from next question Reinhart Please

Doug Weidner

Weidner by more wondering Good give was color on Mike. insight I I guys you kind was trend Hi. know earlier, morning. into give I but how Doug on varied from if you you mentioned sales briefly wondering bit little more can it if a channel. that. have of could

Gary Michel

Yes.

but to commercially-focused, happened traditional due seen demand new commercial to R&R construction we've did where with cancellations, residential supply good high are Those out R&R just very geared a more mix will behind bit in Australia, our there growth pushing traditional just Europe pretty crews pull the bit straight see contractors America. Anything is business. mix demand new in piece we no some demand we're North events that going northern the and a see that as then start say It and to we favorable been So, and strong. and that's and we mostly little is little channels. portions quarter. get shift in to of related in projects, doing to back the And to couldn't through in work a a and to work R&C bigger our or product. type seen Europe, us, more In related towards in has believe, residential pull-through some war, been the in again, mostly North the ship well. able Australasia, in construction be and there We've the good. less not all tend a residential of is. R&R channels there, flooding there has on just as very, America channel In not We to that in particular, destocking

Doug Weidner

in going towards say guess, you levels, you off I Thanks. that? back normal, that, moving or kind channel can they're more of on Great. little would bit give of terms inventory describing a

Gary Michel

quarter but and while. Yes, we've I bit so. quarter, normal as season would cycle we a probably to one normal be watching first seen season retail. more the build It's clearly a tends are little where inventories normal season. back. or supply looking the we slower to first that say Typically, ready We're a in in up We're go seeing for

So, we're cautious retail, but out would about traditional I our normal. call inventories, really about it, nothing yes, seeing we're - certainly And channels. in in to

times lead some our decent most have We on lines. of product

nothing terms really pandemic becoming little times, than would say retail the like pre-pandemic I there's anywhere normal. out a in continue of bit to I patterns We to kind beyond levels. of have feel call extended still commercially beneficial lead that even though are some other But stocking more are

Doug Weidner

you. Thank Awesome.

Operator

Wells from Your next question ahead. Please Raghavan comes Fargo from go Deepa Securities.

Deepa Raghavan

morning, Good everyone. Hi.

that you yet talking timeline for You've is today, savings be realized? initiatives been what's productivity dollar newer to we talk As the about and some about curious, value realization? stand the can just

Gary Michel

three-year So, that talking within to on was first first and be we we've action that I been million. around continue tell - the either would $XXX about majority programs, and in that the What million. program. to stay we about is rationalization, the the of same commitment initial realized year around or $XXX that numbers our made our you is, for is The modernization

second benefit now, that actually We beyond. see got additional we're start to continue initiating to even now, stay on and or executing pace, that and we'll quarter, third items quarter, that we've on in same the

that rationalization about several we as haven't would on stopped at say programs that program, last million. the that we've would I we been pace continue the original $XXX down our same So, the we for at continue years.

Deepa Raghavan

expect Okay, sometime? the - positive or from guide. end of forex of guide. there than Just how time Apart anticipated that that's not impact that to trying these there's fair. also see the appear the may may aspects you offsets Are at incremental high any headwinds that worse inflation,

Gary Michel

Deepa, say or? Did I'm sorry. you FX

Deepa Raghavan

yes. Currency. Yes, forex,

Gary Michel

Okay. Well, difficult now what kind I'd in little order say the is, directly headwinds. to of forex to speak a right it’s

see the that'll impact. we meaningful too forex a from wouldn't would balance bit impact the anything As terribly dollar But strengthen, over that beginning I an to little expect year. have of obviously of we say the a

Deepa Raghavan

Thank If squeeze Can timeline you. CFO at it. any is how to on time? and more in. one you Got I this progressing search talk can thoughts the

Gary Michel

Sure.

So, David's right here. He's been.

David Guernsey

What's the matter, Deepa? me? You don't like

Gary Michel

underway within our we search. expect the yes, complete to quarter. It's would and continuing But we’re that

Deepa Raghavan

it. thank ask externally, I you're Thanks. looking much. you Got but yes, going But to so no. was David, also if

David Guernsey

me, page here. Trust all the we're on same

Deepa Raghavan

All so Good much. luck. right. Thanks

Operator

Your Please go next John Lovallo UBS. comes from question ahead. from

John Lovallo

for Thank morning, questions. Good my guys. you taking

first want could to significant I assume quarterly down and to to so, on by is imply in outlooks, seem question the guess, - is back just Matt's similar quarter the fairly margin mean, as that that a be year-over-year I back first second that but should one, And the magnitude ramp quarter? if the half. would quarterly guys we cadence, to real you don't understanding The going it fair give specific

inflation incremental expecting half. so, curious level you're of I'm in And just back the what

Gary Michel

see pressure deployment of we to inflationary into of of to the will of occur the the QX. see that half do continue in over our say start I pricing improvement But tailwind full margins QX. see some saw the as get would we'll the over expect in I head in accelerate course year. We'll QX back QX. we that And we real to course as of an pricing the

John Lovallo

there, good guys is accelerated really it like just Okay, with And curious but putting got you some I'm cost place, then, these it. process incremental the it's that a in what associated those of are opportunity actions. with sounds transformations

Gary Michel

facilities. improving And capacity grow a is, our tell that and past. typically to what our of the at a that you the close, would in these less guide. gives built I quick to fairly in from out, return, been and The bring we've out is take tell we're to we've they're significantly What we that - you bigger. look I the from of would paybacks it's us call cost see smaller, we of able seen similar important that are ability JEM, capacity. some rate of are capacity plants and the our result that to number really to in work them we've into in nothing done There's in - continue

So, it's of latent talking taking very almost three that same point, for continue last programs the facilities, and lean to lean. on virtuous capacity out where the to the we've the become been offline of, additional similar kind investment about years, really, we take at and for capacity, making kind this cycle we where we room a

John Lovallo

Thank guys. you, Okay.

Operator

Truman ahead. Your Patterson next Research. question from from Wolfe comes Please go

Truman Patterson

Hey, good guys. morning,

inflation think about ‘XX we Just of guidance wanted question current the kind and to follow announcements the but as I a - up through on take Is Matt's for fair of on from incremental the EBITDA as way capture April, it? year. it’s reiteration of move clarity. Is price John it, to the based then that recent

Gary Michel

model inflation our half. and throughout anticipate, get back year. to gets continue the do into as though, the The we continues although significant anticipate, fair, better, fairly we to balance That’s

some unique the Those through drivers as continue year. through we had the continue talked growth will hit. we about remember, to that year, we which us benefit addition, In will

our Auraline and top levers our able that rationalization capacity the pulling put that product, of facility plant. launched continue our we're programs, we've on of And exterior As to new modernization on pull BPI of our restructuring and programs. out the our and to ship on you out we're

Truman Patterson

and offset quarter during pricing that labor it's quarter full I'm Okay. like ‘XX. and year the the what all trying during And the how inflation. saw then, you of trending for looks level it understand looks freight inflation to like material

Gary Michel

of Omicron beginning effect related inflation couple had weeks. the the of a and anything some utilities that for of really the the little the quarter, in effect. bit to but of was remainder transportation. related The It on anything energy-related, Europe, at labor particularly and certainly additional to meaningful a saw certainly of mostly - quarter, bigger in early was we freight But COVID, quarter. in So, the the not

Truman Patterson

final on capital then one for that. allocation. Thanks for Okay. And me

during given million You consistent more repurchaser, put that XX a toward just some all to do the uncertainties, this repurchased the or share you with understand, moving forward, turn a comfortable Trying you up continuing feel into reduction cash? of shoring debt is of shares level macro quarter. to or

Gary Michel

solid and I good balance invest have pretty standpoint. some think from position are a a that about great we're Obviously, sheet are. We to continue standpoint pretty generation high programs in cash we we So, in. that feel where internal we'll returning

at put sense. our past. guide. believe a full long-range that the year. shares last our well long for continue And buy Investor our as for our in lot Day we opportunistically of as our will levels, we We - the makes current We on to - believe in in plan as have year, range out the We

opportunity as in us as confident pretty always, accelerate strategy M&A those. we're potential our we're looking, continue to for grow So, And to the and a company. to at

Truman Patterson

Thank year. right. and you, in All good the coming luck

Operator

Dahl ahead. question next Markets. comes RBC from go Your Capital from Mike Please

Mike Dahl

here, to my given of Thanks XQ, some a Those mean, you're was morning. below the keep and inflation on plans, takes, maybe cost disruptions. it. follow around to taking of acknowledging some Good Gary, sorry on cadence near-term just but little are and questions. for more real. the harping time the internal the one realities puts up some I

is than to incremental does expected little to around more assumed of first but go incremental into you've that imply detail the plan better you and guide it So, to something you are a go year. positives on, prior some of really the original to Auraline relative kind about from new what as And the through coming talked be other help you go of can shortfall? half kind capacity bridge

Gary Michel

say We I guide got all, made year. full Mike, would look the give our really you’ve of to don't first at, that for guidance quarter-to-quarter. Yes, we

first have internal number. that - the slightly by in our So, quarter, internal did we miss We an but something insurmountable. not

been price the quarter. we already Additional saw the inflationary pressures initiated in that has first on based

talking our some add time. well. top of You We've quite that, been for really are operations about that running on

what demand and Our really strong in are underlying and markets the - ability to we're seeing.

to hitting very kind So, that. are JELD-WEN The here talking of about, had rationalization the addition price, drive -specific continue remainder very to of we have we're year. of we've season of accretive been and been start about the ability the that that. for to execute we’re acceleration continue help of we've But drivers obviously some Those fairly will programs growth - against excited - the which and drivers. modernization in margin around our that growth and the underway, have also will and well big

good very, those. So, feel very we about

Mike Dahl

Got it.

little kind what's the understand second is see what can bit of do on any closing an I be on ultimate sense given may a in resolution? the Okay, bid separated be by but around recommended taking of you of results timeline the that you terms the with divestiture? happens of there - you that or been limited is Would and want be or to timing question, finalization and special master, out? that, how thinking as uncertain, ultimate be should about for will And that at DOJ or actually a I when timeline those My that, on the divestiture, part of you we look thank guess what decision now about you. talk Towanda is will that on

Gary Michel

of it's process. you tell would It's first the - that an I interesting kind. its we're

the and we're from controlled certain awaiting decisions court's pace being the the the court. court, justice department. of by on the at point, of waiting it's So, this opinion And that

the away go, as the at in that probably forward. of court, the process would and of I the that from mercy to the the to we're having several results use extent, itself. weeks far a certain process the of we’re, that to phrase, court terms say timing move So, as continuing

time, we is based we advisors standpoint. recommend a position where the of that as at from far do deal and would that the of our the out, As on results what business, separate when would the appropriate

So, our there. for will remain being, results the they're in time and

Mike Dahl

Okay. Thanks, Gary.

Operator

Your Maklari question Please from comes from Goldman next go ahead. Susan Sachs.

Susan Maklari

saw through first is, go around as quarters, see March, mix the at mix the and you several about the could that sort volume the that half? America, shift cadence Good especially you. cadence looking of you're North commentary, your in terms when of Thank the of we and suggest next a face think then quarter the in morning, and you second does the question that be everyone. in the volume you there the volume positive that you seeing through My considering backlog can in that comps or or Gary, that back some sustained, cadence

Gary Michel

that. Yes, Susan, thanks for a lot

in our North more That first of even to business the sequentially towards retail improving the versus segment, traditional and specials as the stocks. seen well, American does move mix piece have R&C as favorably business through continues We quarter. mixed

of buildings. for favorable Good mix America the through a related in kind year. fundamentals market So, favorable North the - expect on would demand, progression volume we on to good -

So, that we progression. about good mix feel pretty

Susan Maklari

on builders up that's to when on Okay, that to targets help of terms conversations on coming the that's changing ground? order you mix they're focus on anything about that's then of there wholesale them helpful. And distribution your through customers, housing especially some of those to what's achieve get side, in in think in going ground trying there, terms your to that with following affordability anything I the the is some of in and do some guess, of you efforts of that, on on terms for to

Gary Michel

interesting. it's Yes,

able been and program efforts pick the that. on on-trend, as most popular prepared really type partners, kind I our working Something we've focus channel or with comments, to our been to well - where but skews some focus mentioned utilize type popular just-in-time do kind of some skew on-trend we've - and and just-as-they-need-it the quick-ship able in builders to most of rationalization on the with traditional programs, of programs

that's system, for for as advantage easier builders what us get around, easier really partners. our an still partners been customers And through the plan be to and easier them channel well forecast want, channel to as their move for select. to and here manufacturing So, they but to able builders, for

So, example things doing that's of the of that some one there. we're

exterior exterior install. door different think I winner, pre-hang a that entire do install, example, it past and system to it easier type systems, labor a which where allows taking talked easier put easier the Think about for being of to in to been we've we've of easier into to a makes select, transport, for system, in, to real able doors, that door our as to that's put entryway more.

on things and problems, we're adds and our the as that for with it working which great partners value, are some a as well. to solve us we're is So, working those thing of their channel customers

Susan Maklari

Okay. That's very helpful. Thank luck. you. Good

Operator

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

Philip Ng

Hey, guys.

Gary, a the US, Given to How half meant uncertainty the risk alluded law this maybe concerns your temporary some fairly Europe of year. in you do your affordability Europe to in - kind in potential and backlogs back you of the volumes backdrop, started you those from in orders just how again? seeing And kind of normalize of that extended? holding are have see given customers in you of up

Gary Michel

of question we a seen bit. - What bit we little unpack that see little I’d this. a just we've So, is,

out, some uncertainty uncertainty some out, the and in regions certain that that So, areas. where Europe, projects I'll first, or those businesses bit and seen a slow-down, of pushing we've pushing little take there's been of orders primarily of in our in commercial Europe, in destocking mostly

really good through more into news the seen strong. a we've and Right of second closely, going In based and on. to activity here be in that kind the going robust that America, we think favorable year, the and we some expect to be that through other some sitting mix. continue the sequential on now, see very quarter, we're We'll things to watching pretty on quarter, still North parts bit are we but just of continue little the continues backlog. growth fairly Europe. with I that's seeing Demand

of the to our exit continues to continue well. So, price energy really start we a And we expect some improve those as set half, of as to our - sequentially see that growth see VPI this going business well. in quarter going composite into quarter, kicking exterior inflationary quarter. is and of initiatives take exterior while this costs end second of kind that Auraline, freight, to really, it, on, we expansion as ship then that We've would really we announced here this we're products The new the business starting call new or the, shipping. second start product, lot pressures particularly we'll of

that to growth and we as natural half, talked expect for would about. second kick levers be we the in So, of in just all

Philip Ng

it's Got behind on that kind drag the standpoint, supply this labor Is last largely at you from bottleneck you. a been your of quarters. chain And then should a point, volumes few availability in standpoint XQ? supply volumes from inflect and And from any as lockdown impact any Russia-Ukraine and chain color we year-over-year material a actually expect whole on to situation and China well? the

Gary Michel

able shipments customer and we're there really across customer meet on some quickly couple in any - Yes. start you - issue. like the faster of some any right little get We've things, availability could working But at all or we time delays. we've to any is piece. to of missed moving feet have not the not a history, Is now, basis Yes, And couple outage demand. while absolutely. general material that underwater? - I'll there I of direct we've report on that's - had us any They've there's entire over or nothing us a there material with be are can't commodities, enterprise, the resourcing, maybe causing that insourcing, so. are a some the delay had been a XX really always But to you months or have kinds say always wish duck - bit to shipments. we But that through exacerbated products VID, right? last we the of would causing I

lead of the And big do in availability, through continue near - our And doors, But for work the and we quarter And really and the throughput, the industry-leading improving that year. the our door really products we've to last order labor programs of of on we've throughput, doing us for issue the we times, most sequential associates was side all is seeing the certainly the around that of JEM our On certainly our which part, are part. way in our third of saw we're in customers used improvements kind that of some to even end on addressed this or output lead seeing year. address that's say the it. that work the is really absenteeism, beginning of had our through We beginning that a side, period gotten improve, at short with on to been us. either close weeks we the have lead window most have what need - kind accelerated problems, would the kind some as seen of well. of of We've Omicron, we there on to but where sequentially couple solve into and on exterior, able to I this year behind times pre-pandemic a interior times saw been the the products. on why darn year,

we've staffed like it's throughput I customer, kind a for result of demonstrating improvement and feel that So, all work we’re the that done of that on the ensuring and we're correctly.

Philip Ng

guys you or half Gary, is volume back it materialize have more inflection we made, standpoint, a that progress XQ the loaded? to in expect given So, should from

Gary Michel

leverage on initiatives you the it say able will we're that top of I would continue backlog see definitely the would of to this in year, But of back see that some well. second in in as say that perfecting what second quarter, and the I the to up you're is to inflationary other that show price reduction, quarter. the going as half as growth happens pressures

Philip Ng

Okay, super. Thank you.

Operator

Credit comes question Daniel the Oppenheim line Please next from Suisse. Your go of from ahead.

Daniel Oppenheim

much. very Thanks Great.

answered, have about terms sort year. - you the in of questions second and half through based pricing, been coming most think talked in that the margin the but of I of

the mention the affordability-driven for second you're half. For also about sort in of America, that then talking lull that potential you're growth North seeing, but the

but Just to half, second acknowledgement through confirm, expectations in that's the an assuming point, this more the that continues growth at this you're not of the but risk, of correct?

Gary Michel

Yes.

are So, - those we're loads some what's fundamentals - markets. I strong, we’re tell we obviously a adding the the JELD-WEN-specific you, on watching on driving of see now, I top bunch that going lay that would be have. you to anything continue R&C on to doing. And are tell we the of continuing We're in that else based growth and yes, of what's right getting and that we're order products that in new things. backlogs our that would the that

as based on going to that that's into of for built drive to products, second So, the we those year continue some And in full half. presale our well. the that's and us us of see, forecast propel

Daniel Oppenheim

Got it.

much. Okay. Thanks very

Operator

question go Chan comes next Baird. from from Please Josh Your ahead.

Josh Chan

like Hi, good is taking that terms my America, for In windows you North growth quarter? the Thanks this performance between give questions. a David, morning, Gary, there Chris. any of doors and difference or perspective color from margin in in can

Gary Michel

heard trying it's doors growth some to margin windows? So, get and question - correctly, differentiation I in if understand and the in

Josh Chan

Correct.

Gary Michel

say Yes. margin don't standpoint. working standpoint. would on right direction. are moving we working and been I continue any both see both fundamental doors equally to windows. that from been from We can't We've the operational why on We've in expansion reason windows an a grow

the got good arena. mix particularly We margins some think issues any don't product there. had is themselves. initiatives, for we more us, well. some interior we in you ago, difference lines notable years the what will help any fundamental of window which we're of between important in ones, mix And about and sell accretive that selling the number - helps comes see way we've propel exterior It I When channel. where that two that's than we appreciable of that two. growth see as in the a know, down doors, you As issue product the an mean, the to more Auraline,

focused of both and kind both propel there's grow. got can't no continue we've So, reason and why on to structural

Josh Chan

markets and terms bit more part of volumes type Thank the of now, of seeing of that color you. you goes for there. kind guess, think, that resilient. your my areas in how the resilient All currently? kind right. Yes. business Europe more, for of in reservation question, of is Gary, just a are Thanks you end Could Europe I mentioned of into business of central was And how pretty ballpark us Europe second Europe, for the little much I much

David Guernsey

the we're and of resilience Europe kind So, UK was say have looking uncertainty. would where some where some impact. anticipating Europe more I I'll in across portion do seeing we're time. period that of pockets there's and a we're a that I is the What after In where bit Typically, because there's of seeing growth. some some take is then more impacts Europe for Europe. We Northern little is central broader

we that I set. I'm not pretty whole that's helps lot, that So, but much where a sure think you

Josh Chan

and All the right. Thanks for the thanks color, guys. time, for

Operator

call the all we is I time Gary had remarks. the back for to closing This that turn over for today. will

Gary Michel

thank for all Well, joining today. you us

Just to strong. reiterate, our operations are

we initiatives results growth thank We the of quarters, modernization look feel we been are about overcome some to talking based our full fundamentals our year, and interest. our reiterate for pricing, our forecast forward rationalization in - and coming and growth as feel guidance your housing for programs work markets, our our year about. and for again JELD-WEN-specific sharing you as good you about good with that in the our on inflation continuing We'll initiatives, with to with full the we've the and JEM, the well ability

Operator

call. conference today’s concludes This

now disconnect. may You

JELD-WEN Holding (JELD) 2 May 222022 Q1 Earnings call transcript