JELD - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the JELD-WEN Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

I will now hand today's call over to James Armstrong, Vice President, Investor Relations. Please go ahead, sir.

James Armstrong

Thank you, and good morning. found quarter presentation release portion to website, can third posted night, of our which slide a the be issued XXXX last earnings and our We investors.jeld-wen.com. at Investor Relations

by Officer. referencing be and our I'm Executive presentation We Bill Chief will Chief Financial this Christensen, Stoddard, call. during Today, joined Samantha Officer;

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

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

to that, now the Bill. to I turn With would call like over

William Christensen

call everyone you and today. thank James, you, the to Thank joining

demand times. made ongoing navigate did which ourselves work impact below and results areas, quarter, came key start to I progress softer in during hard in continue our expectations. environment said, market to commitment these the our several our team we As journey, That the tough recognizing want transformation of this conditions. the We've our challenging positioning by

the while groundwork confident for the costs our current to future laying our ability with However, we align growth. in remain market,

quarterly I will then provide to to before thinking taking the performance, conditions we're discuss the overview Samantha and how adapt through an first are I of the quarter, return future. to will market current we Today, the walk you about actions

our highlights Slide X. I'll on begin quarter third with

and from in to volume across due both and sales expectations, America quarter below our EBITDA continued Third came softer largely North and Europe. challenges mix

of the While they some were our of offset projects enough headwinds mitigate these to not positive productivity we experienced. helped impact ongoing the fully pressures,

the for as progress continue However, initiatives of us performance position we to stronger by stabilize. conditions remain encouraged which these market

work, quarter. hard challenges the we several Despite encountered during our team's

our while windows in the continue than in the with to Consumers that and projects remained more down doors. typically market, involve line remodeling First, delay volume overall mix North and impacted trade large-scale anticipated. was America

has and higher-end construction although Additionally, multifamily the sharp significantly remained have LaCantina starts housing and thrive decline which these affected in home our businesses, VPI in resilient, markets.

Second, and delivery we directly our continued performance. capitalizing faced across our know on it an units. growth several as we is focus from impacts challenges prevented of area manufacturing issues pockets, select quality us of financial and These

partnership. Midwest impact. our focus renewed sparked represents a source customer opted of retailer despite lost windows to on business we Additionally, who offset acquisition from also a This challenge, stock near-term China long-standing has it a this to but a decision

at increased in third reduce with Finally, however, to actions the did, productivity we've of capacity reached at shifts, running below a quarter. is X lower-than-expected volume demand plant X shifts the overtime where now We decreased and inflection shift. several in in facilities point demand full resulting markets take

conditions. challenges, and response accelerated current to In to these several cost adapt to reduction efficiency we initiatives improve market

in the costs fast-tracking to rightsize reduce to weaker product actions programs completed we spending, First, SG&A mix. response to our

progress market the the actively are opportunities. improvement quality improving capitalize our select quarter. ability in marked our last has production, shown made on over that significant which limited addressing to skin door we've issues quality we In Second, particular,

we expectations ensure that is to needed meeting are businesses. However, customer work and we all reducing more recognize that of waste our across

to customer showing rooms positive organize win acquisition we and to are Additionally, track already new which our established efforts, results. initiatives, address growth

operations Lastly, consolidation. we continue to streamline through our footprint

the for as closure Wedowee, efficient our efforts facility, strategic improves. During more Alabama Denmark production we structure, and to well and and will the ensuring facility. Løgstør, cost quarter, initiated the capacity manufacturing we announced market These our long-term into moves transitioning profitability U.K. are enhance optimize positioned highly of by Penrith

to to financial discuss the in now I'll over turn it Samantha results more detail.

Samantha Stoddard

Bill. Thanks,

Now looking Slide at X.

year. due $XXX mostly affordability. revenues This as products prior down mix decrease America larger-than-expected expected and in higher with a to North in both million, from from lower-priced in by on third our the shift declines driven reduction Europe, priced market-driven America the Our to was customers were a focus XX% combined quarter revenues core North volume

margin EBITDA million adjusted $XX an EBITDA quarter, $XX was Our million of to X.X%. third in adjusted down year-over-year, leading the

use free a cash which During included was capital million of million, quarter, third $X flow the $XX cash investments. of of

our which invest result target debt of above a transformation, cash is use and EBITDA As leverage our our range. ratio net in our is of lower to at X.Xx,

on of the trends products. shortly. provide North price from America about lower higher shift As I'll you driven third was X, Slide Europe decline comments lower-priced average quarter about see our by products volume to the mix decline XX%, selling XX% additional of and our with mix revenue into due market

productivity quarter On cost year-over-year. and by EBITDA Despite our pricing Slide volume solid third stable significant you that $XX profit X, mix strong contribution decreased from we million generated headwinds, see adjusted can year-over-year improvements. and

expected the in primarily to other inflation negative were Unfortunately, driven commodities, material is were higher throughout pressures continue cost. main of year. The than this price/cost to price dynamic remainder and and contributors glass by anticipated, labor the and cost the

below gains lower from expectations While were our productivity robust, to our due were slightly volumes. they inefficiencies

improvements, driven these quarter. lower significantly by from addition the costs, during benefited we to took we In also the SG&A actions productivity partially

$XXX expected to cost We targeted $XXX million. annual savings approximately our the exceeding million, savings for to now our communicated are previously we and Importantly, be year. be cost

of revenue, to X. segment This a the results which was quarter, Moving on in third $XXX year. America our In decline XX% was segment North from our prior million Slide generated by prefer mix. as reduction a More volume XX% was affordable by than decline volume more currently driven due consumers of of the revenues core to products. in rather driven mix lower

We also some had dilutive margins. exited high-priced products that

in North just America's mix million negative lower was quarter, million decline and $XX well the lower to as referenced adjusted partially decreased EBITDA This volume improved offset from year-over-year. due by price/cost $XXX only I to the productivity SG&A. as

in and In Europe, million million $XX adjusted quarter. the in we generated revenue third in EBITDA $XXX

price attributed mix was by declined almost to volumes decremental by Adjusted exclusively driven X.X%. million, EBITDA of partially The cost Core impact XX%, to revenues productivity by solid volume. decreased by and volume XX% year-over-year, $X leading mitigated lower improvements. of lower from negative margins

to to turning much for relative to market on towards XX. earnings market the persistent the weaker to second headwinds. Now end the trend call, outlook year macroeconomic due change the our not to market although do outlook quarter Slide see the We continues

whereas outlook at decade-low single-family sales new home digits, and activity still construction Despite by lowering interest rates challenging and rates recently, continue low affordability remodel single as rates remains Consumer existing repair Fed will levels. by remain for remain market concern. an North elevated. We and as the we interest confidence weakened state remains declining ongoing digits the the mortgage to double be especially see low higher that American home

and mid- to single high repair range. towards expect high to be digits, We activity the remodel down single-digit trending by

though Furthermore, pace small. of is relatively is very our multifamily significant. exposure The market declines

also more continue be multifamily the expect guidance down to Canadian combined to under volumes down region and the towards trending end remains market due European to we and weaker macroeconomic and in anticipate continue is of than double the pressure, to market Overall, digits. to by be ongoing the challenges. low year-over-year. The We XX% geopolitical our continued

turn I'll now to transformational back our journey. about to talk Bill it

William Christensen

X my Thanks, and people, people Samantha. Despite to current and with continue be areas strategy, performance the key on focus near-term focus our performance. headwinds,

you we to our we strategic performance. XX, and around have pillars, long-term of As a on see number these are initiatives increased driving our improve investments Slide

in to an to reduction. investment focus growth with life, our on well on initial culture initiatives trust Our and as every cost centers transparency and numerous place in values as through improving day balance bringing

completed of monitor organization Through our our to we a part the survey in quarter, progress. third

of improvements complete across full significant training, tied culture survey alignment our have pulse survey. and observed of leader sprint cultural company the training an board. already further and additional a to and our the By statistically sprints have the end launched As company another cultural we result competency values, will year, we the

As we've our of transformation a also before, the slides. done like few showcase X more to in examples next I would

with the our Slide The first XX is our I'd order highlight to focus special on customers. retail process like on improving project

associates cumbersome would it they review a sit using associate with when often us This easier order, manually valuable system, led calling that input clicks specifications needed customer the navigate, outdated entries, to past, an confusing to inefficient. product was leading costing and a inefficiencies the place business. requiring a made to a to which order, custom and switching errors, and and competitor's numerous store or to to down store to us line either In

and reduce friction now enriched both process, These content the it and products. have enhancements more assist with user-friendly to and engagement upgraded professional making offering special builders We order homeowners. our boost

have first XXXX. purchasing. store refreshing quarter chance product of year, of remainder to end physically give expect customers By updated, the to experience samples the to more over XXX we're with follow stores before to displays Additionally, the the we next and the in

and journey will margins. our business sales special the optimizing accretive, is Our and customer both order enhance

operations. is project on second highlight the I'd Page The like manufacturing our XX transformation of U.K. to

England for a strong engagement Our record. is Northern Penrith high standout known and facility safety employee in location, its

past, restrictions this we on contract at due site capacity. customer to the in However, limited historical were

an refocused our identified in U.K. door through manufacture assemble To network we additional evaluated slabs capacity or supply systems. opportunity footprint, our we achieve door long-term utilize our and better facility this, expansion. either renegotiated to As Penrith to agreement, we the invested

mentioned as too are I've part of have facilities many producing many before, we optimizing we footprint our how our This of the is transformation. As products. of example same another too

and We expect our to North continue both these efforts American operations. across European

the the approach improvements in XXXX. changes the journey, the you'll first full across driving to of Slide XX, numerous see anticipate for transformation value EBITDA year are we we company. end we've implemented that our As Referring

million XXXX. our an start from $XX $XX we At million initiatives in XXXX new from taken the and additional actions the carryover in year, of benefits projected

We also to builds savings This additional for of year our in to $XXX $XXX the achieved certain expected achieve million accelerated savings XXXX. $XX SG&A our we savings, million on total bringing in the aspects an million. transformation in

also have of our ahead pulling have some and measures. initiatives, market cost The select growth our delayed we headwinds recalibrated initiatives

ahead. significant However, opportunity there is still

automating and As our our cost outpace the network actions business. the without where we also with processes forward, and core working continue savings. drive market. our we closely look accelerating customers to disrupting areas, we'll be We'll partnerships potential to focused on optimizing We'll see stay our most our strengthen

XXXX to guidance. I'd now like our discuss

of decline loss of large As call, our to impact, quality I experienced the have the expectations. and fourth mix along the mentioned the to in of when we a further expect at with compared quarter performance. sharper-than-expected our beginning do ongoing affect business issues, mix We a customer the our

to to we a are X%. $X.X revising to revenue XXXX expected XX% to down $X.X the $X.X of decline, $X.XX of a range to result, deeper billion net previous to core now adjustment This our projection X% down As to our billion. down of reflects previous compared from a XX% estimate guidance billion, billion be revenue for

EBITDA from anticipated Consequently, the rate, X% impact we $XXX decremental reflects of with cost to XX% lowering lower the guidance is to expected revenue $XXX million our price estimated $XXX an range combined adjusted a to and year-over-year. range the of million for This are lower decline prior million approximately to productivity with $XXX base that also of million. year

savings challenges, Despite new million in roughly completed savings initiatives, this million to $XXX of we by this driven along continue $XX last benefits carryforward expect with actions year. $XX cost from million cost year's in these be year, to

to to $XX be of year now updated approximately million. year. anticipate into our that million be nonoperating drive This fund $XXX after XXXX journey continued see Due $XXX operating softness, account cash expenses cash we our deficit million after this to million for full and you cash year's guidance, With flow higher outlook flow continued estimated will this future expect inventories we cash to this update, is lower our incur to to our investments. market an we XX, Slide flow portions earnings. for $XX commitment approximately transformational the taking our capital of On

million, with XXXX. last EBITDA $XXX now roughly Turning volume we XX. evenly We of of to behind approximately the million the between for mix, drivers split year's Starting EBITDA X. and Slide our from $XXX outlined adjusted headwind anticipate year-over-year updated guidance a

have $XX from Additionally, pricing as price/cost headwind million we expect costs stable. while has a relatively remained increased,

actions substantial would modest us likely toward these EBITDA million. pressures guide taking in the journey, Without market-related a our of led transformation we're adjusted $XXX have to

million However, midpoint. positioning allowing emphasized, approximately our navigate challenging $XXX market million is savings target an us in to our normalize. conditions as These of us a as environment actions we've set and improvements results, cost driving this $XXX helping and transformation year are EBITDA when us for yielding

the near-term are investors our the the with is on Given guidance team longer-term believe to facing, provide benefits deliver. financial headwinds we we time we this initial to right expect

from EBITDA have projects from planned to carryover for XXXX projects generating independent sequenced benefit Slide our on XXXX. actions market-related XXX transformation in further includes more million that and XX, of benefits potential currently approximately than It's This shown As this as we well of anticipate $XX note additional in million completed $XXX an is improvements. next active We projects. year. as any important in

CapEx million. currently additional when does $XXX of we to elevated, the XXXX, the driving between continue approximately improvements from $XXX To the market be we remain volume. incremental planned slightly XXXX, and expect in we achieving these XX% market recover, anticipate with margins While million in down expect investments XX% to to

anticipate we our footprint rightsize Additionally, further actions to network. taking

unprecedented million full increase. improvement our accelerate be existing assume we without optimistic opportunities offsets. possibility actively with the likely second the as be the million expect we'll another the improvements of interest decline be rates flow through challenging in improvements To clear, and $XXX is are additional market Therefore, not We some XXXX sufficient, sales sales to half $XXX will and we know year, in home to exploring transformation decline. to given the

XXXX for February. more guidance next provide call detailed will our in We during

in $XXX Looking to our further ahead, projects million the over the midterm of annual in benefit on pipeline. number we based expect continue the

significant the available to on us. focus to continue We self-help opportunities

demonstrated our today conditions more be a to well and the will efficient financials, network. results. market our reflected When As we in with improved on is transformation rebounds, positioned delivering leaner, capitalize

outcome, that to today's result. Today day well States. Regardless Let's the of Slide I election United emphasize success, want matter are the in turn XX. positioned we do no is for to

want sourced these that about our on been could tariffs, One these cycle have and materials X% of major of materials significant to the topics other could some from clarify election without regions we only our by operations. speculate our that a during significant this has impact disruption tariffs easily China, import business. from of be I cost and most to

back significant and JELD-WEN, been our a team driving of significant future. progress challenges, business Despite undoubtedly it the cost year solid out has challenging XXXX, for make with our these in to Looking headwinds. positioning a for us at transformation, continues

margins volume XX both the mix decline years am I will confident in sales low last this in we period a months. and point that on the in as experienced XXXX on based seen be to when reflect come, the

the term, goals. making are long the place we and extremely many for hard continue execute and this ahead. our I'm proud period. value and I work I'm effectively confident difficult opportunities see right putting right for decisions remain optimistic future, we to in and I the team about achieve of team's people However, systems are creation investments, will during our our long-term that the to

turn over for interest. your you it I'll continued for And the that, with now James Q&A. Thank to

James Armstrong

we're begin ready Operator, to Bill. Thanks, now Q&A.

Operator

Instructions] [Operator

William Christensen

for we a to Towanda moment will court taken proceedings. we've the the work continue I'd I question step of morning, divestiture. court update divestiture that to reiterate us, like brief required At in this following goal take process a first mandated pull the process. we through has time, court to every to is As the anticipation give our this and this our question, resolution it fair of and to a related both on reach

though Towanda motion we To divestiture by is that of our will unwarranted, be our stand end, motion arguing the that granted. cannot guarantee we

ongoing I'm Q&A remains matter, in details an unable today. provide this legal any of to As the further

Now have first we our operator, ready? question do

Operator

Yes.

with of Lovallo line comes UBS. question John first from Your the

John Lovallo

here, of at that mean, the just us about? one first color you talked have bit been can you fully Midwest then The point? of in And drivers loss this the customer, were And I a more the on you EBITDA? one size terms that they issues of resolved then quality in the of Midwest little terms customer? of it can revenue these give and

William Christensen

Yes, sure.

the it quality second customer, the your are question, of to Midwest issues, quality. in a of result coming where So to answer not back them loss we was

tight there as on that both in market and able in focused some and opportunity, some is to and areas we different And given windows, the specific have those low, of certain doors not plant we inventories was this of volume So sites. issues are were are areas. deliver

it So improvements catching up deferred are some deferred capital that and maintenance like topics making think with about maintenance of the required. was the that we're

So strong making But customers. gave process skins that we getting dramatically and volume still improved. really clearly, the areas, there's right pretty has example quality, better for the equipment And on sites been quality we're progress. at to right on right of in we're the other a process through. focus door which our our a an our number high I have John, working

base in and have some just because there's to that of that's So which the led part of we're base, in have, downtime, of has paying asset unplanned the that issues. aged some we and these areas reinvigorate these we're an process to we the asset quality price

details, year but run on of the to think some roughly a high million go maybe we're and $XXX kind full sizing million on rate. level talking the more $XX the I loss, that can mean, Samantha Midwest So we if to of on

Samantha Stoddard

on of impact full that react for ] the about 'XX specifically at $XX to circumstance. $XX customer that quality any in the needs, just impact. was all. business year quicker mitigation retailer customers [ lost talked issues about did The on hard approximately. targeting million yes, John, not very Midwest and the the sales is loss Bill million We're plans, focusing then positioning on to ourselves working by impact

John Lovallo

the And sequential to close seems of fourth midpoint XX% decremental quarter. imply the the Understood. outlook in a to then

issues guys normalize? the with of You would But when quality and you decrementals challenges some the have about these to expect utilization capacity and so forth. talked

William Christensen

change next expect in reality the part So high level, year. roll John, of or mix significant first we volume a the as into don't we

do that we trigger to in a on both low America we like reach say, either actually set action shift process to need we're continue or need sites level, define threshold up Europe. in closing going we in complete internal in clearly out on So expect take I'd volume planning North more shifts to sites. a when We lower and dramatic our where we points to

expectation is from turning a our will And standpoint. a be 'XX that volume point

in that hopefully, expect would rightsizing see, volume. the we back And tailwind the state yet to also, some improve not the of base asset half investing that's delivered, we're been the leverage parallel, in as I pipeline for start So has also and more bringing 'XX, be the in should the online future of year. automation delivered next our and on but will

Samantha Stoddard

of XX% income had That margin just QX expect other about a the quite that repeat XX% the understanding QX to did the back One in year-over-year bridge, we The taking we XX% year. be factor But $XX essentially note, other a XXXX and significant is in decremental kind thing in million. at neighborhood to not do look in is this mix volume that decremental. of XXXX. of to

kind that to probably flow-through of that's you're also seeing. EBITDA So bridge adding

Operator

the Phil question Jefferies. is line with Your of next from Ng

Philip Ng

how then did how into a the progress and standpoint, a through similar And year? that the sales quarter question, does progress curious, mix from Bill, through October?

gave that is as And curtailing But that got channel fourth your nuance margins some then there Sam, you the it's any much well? too with helpful production around depressed quarter, you inventory because noise color has in income. other being

William Christensen

Okay.

year, continued Phil, hasn't business, would when especially the what of market the to materialized. we as at looked the that and say is mix more anticipating R&R deteriorate. end we I'd volume stable actually has doors we look So our be that were into

R&R trajectory, know, big we're in as And we, so expecting at that a high deterioration. exposure and to has we're pretty not short-term so continued single-digit R&R improvements of soften there. you that kind have And

at look of kind we into we're we month run to of As lower rate. that in the where tracking continue be October,

both going improve worse. dramatically, So change no because to that mix going that discretionary window to it's but dramatically signal see to we major spend us door or would things and get any signals on volume pullbacks are that nothing continued or it's projects. And again,

commercial thing which part, it's rate. to important Canada just other the million top that's It's significant run it's million $XXX small is of and as business. $XXX full year though think on Think line business, think small a through, I windows a share, our VPI of deterioration headwind. it even to our a but

going that I to the And think for inventories relevant for your be say last softness in are what's stable point, the with I'd softer R&R, environment. question is,

sell-in currently. So we're for we're dramatic a not seeing on movements based expecting what any

Philip Ng

of pickup way you're volumes Okay. and a have your multiply half That's cost But is XXXX and XQ, mirror take out, back for bake assuming guidance the be year, like the in in what in half delivered next half view. $XXX of would by some that run simplistic rate that back off year, million perhaps if for just implied in X very I helpful. of XXXX. This overly we that back take and know maybe this probably I base?

million headwinds does would maybe incremental back front the of reversed? to Does outside is pretty or it equally But how help half cost-out the us have Would may savings, in helpful. [indiscernible] weighted getting and half some spread? $XXX the weighted, in you be of savings to And more back better that half through back 'XX the seen that demand the helpful be cadence kind think of of half.

William Christensen

], XX Phil, You're talking [ [ XXX the ]?

Philip Ng

as pretty by back million out half think for back and more a of got what 'XX, kind and guiding So my of consistently that you in XXXX right? on first today. the EBITDA Or that take delivered X the the $XXX layer Does based incremental Just coming year? question good through XXXX, cost you're I is multiply know having to through half? can and is, framework through, you it help us that

William Christensen

Got it.

Okay.

headwinds think that's we I to mean the We're assumption. in assuming We're a and of neutral I currently forward a that America. the half the second That's obviously, neutral. have down year. fair So down definitely XQ that, We're expecting volumes slightly expecting full North in rolls year for expecting volumes in Europe.

Europe at Our to our if to close is but there's you've that perception gestation is longer to, through start. not think products the to got get in bottom, a period built

markets So rates to may we're even away, XX kind though turning certain of starts down. months in be come X as

we Europe to expect in challenging. remain So 'XX

The of currently the North 'XX upside half in we America. back is that see today in

that So attributed we $XXX pricing, are topic. that and cost-driven roughly million, going have growth initiatives XX% XX% in to initiatives is of to growth tactical

the the $XXX be and that's it's balanced be throughout year. going to to evenly of roll-through million, the So going

on given us. Phil, today's line, it's the As top said, we've for reality enough not

we're at we of these we're accelerate So do ways see getting that And things efficiency, the teed disrupt but the out are looking increase up. costs opportunities, and take that business, opportunities to I can business. not

mean going footprint, market, we we've and And But through suffered the upside get high which R&R, and some market medium mix start and is of thumb, with trickling capacity controlling think rates new settle the U.S. a we I year mix they to the rebound, we're on we that making your underbuilt at half construction level, the upside engage, really year. think a have look start of at but starts that's look have then from at cost and when the a our positioned And the I this for hard of hard rule what as is has resale really we can back and we we're the a to units. to sure potential just which means downturn. to broader the where where take-up works high end, control. taking the taking need math, initiatives, occur. That also a

Philip Ng

sneak it And basis, in, a got but worse full sorry a the standpoint, price on to in XXXX. Bill. about year From one of back X%, half cost it's

look place about a this So should run price rate? at next when back we standpoint, cost initiatives for than think do it pricing the cost point? have year, be from 'XX Or better how you price could for at we in and half

William Christensen

the we to Phil. Yes, need tackle headwind, cost

our costs now that Our we're and to cost 'XX. of it year, held price right spun we're modeling the aspiration year. countermeasure thinking and to going as need neutrality through some is this up, We've have price in but next

part So initiatives, we we making that's have neutrality cost full the going to year. look be a as transformation of the but also sure of price that kind at

up neutral assume the third fourth in you in and which So our we cost price should model, quarter. means seen come need to counteract headwinds the we've that

Samantha Stoddard

be mean, I gotten has of it worse that to outlook. cost color, second And give the our to goal just or always yes, our Phil, half, price is better. neutral mean, I although, was part Yes. in

And our tracking in line of top is so this that's as next expected. And going we with year, minds well. what into

Operator

line the is Steven Research. Thompson Ramsey question of next with from Your

Steven Ramsey

the Maybe if how share about to that's first this the Can play to capturing that, talk towards could 'XX business through lost second and more looking this about to you regaining if likely other successful, or help talk half? is out half customers. realistically something

William Christensen

the Thanks Steven. question, Yes. for

profile. because pruning that So a was were what on margin was certain doing tactical look that were business projects we if fit not we other there and back earnings call, post the good you meeting for our remember, we communicated in launch, there was given that if our expectations QX weren't said that us, reflect we there and

we that so And was be we'd $XXX about out. that signaled taking million

share Samantha with as loss that talked small a Midwest I customer. and through There's

is that's a small which up million of things, -- to said, a couple of clearly we've million, scheme And the but in structured grand couple a we so okay, manner. of pretty hundred hundred very this to need in tackle

of the up what bringing simple. organization operation organization as with windows the decisions market, together, pretty and is opportunities on doing rooms, we're doors product able teams the teams, win which both sales we're being it may the some opportunities. quick to very to course, make set react sound be and as But the short-term the to of we've possible So agile to the teams and the in demand organization

of portfolio. portfolio starting we're we our and a that we're we that for volume, are with for very us rigor we share. close that And to have sure the to the that's to, an as can't control be we've process, see And also ourselves going We're what and through that pivot business making market windows positioned. candidly are to to get but our but control communicated staying opportunity focused running it. some a can't targeting We transformation we well losing, reload we

So that longer this gestation. has is a something

this up tailwind think ready set 'XX to HX we So where as our [ we about time to impact everything see in the and by some potential go, spec-ed and of as XXXX. that's an is the ] look modeling

Steven Ramsey

second that a in the or And half first headwind easier improvement think Okay. is a That's had driver some XXXX. comps with just the of the in XXXX? your mix then And half all is occurs positive for later it something Do year? you helpful. mix, outlook, if benefit

benefit, other help maybe get is mix some mix one that XXXX? on that here, thing discretionary spend any or in could then And color that to rising factors

William Christensen

Yes.

of happening, price project or completely this serve. a pushed be general across a the if safe a that point. would year I So would assumption from standpoint markets it's out been flat. a being lower It's all going to There's say either are theme transactions we

quarters. ongoing So for clearly, of a been mix the down has number

given Yes, baseline But on to investors higher-end a for expect not side next start confidence, project-related don't are that driving But is does have hard also we'll financing any and change a the in significant what when mix project-related portfolio but businesses the long-term for. next mix that cap that to year. a to comps. it very based be when in will specifically we rich order uptick, that project to a improvement drive happens, more automatically to anticipating consumer currently get have plan because we to better conviction and we year And We again or improve there's happen, business. rates us going need dramatically of dramatically have. consumers, we to that's

Operator

of next with question line Susan the Goldman from Sachs. Maklari Your is

Susan Maklari

have first How ability of you you can are on you get My are things in the these pull ahead going in projects on quality given you're to question that underlying to make with the projects? going your can that environment? track And continuing the about more metrics in how or business. and given in much to What ahead these teams more you're how deterioration thinking pipeline, some what's mentioned that and pull those is, to do the for? the handle sure aligning looking you capacity much you stay the the through is

William Christensen

question, for the Thanks Yes. Susan.

structure. than end the in XXX completed those and have you of different what's of cost improvement projects all we been areas, more So the spread organization that's can in as are see obviously driving across XQ, that and the the

and we currently actually what in doing opportunities execution. XXX, close we over are or those that on we're just would What see. resequencing have challenges we now is that call to are live based We projects

We having the had the a clearly package down. we mix which are shift given robust and headwind initiatives, recalibrate of market growth to

retail I the now, of getting about those half was lot and shape a that that for is initiatives refreshes the projects into of the driving in environment One in remarks next right stores improvement so first pushed of year. really prepared retail JELD-WEN. in my are tough And talked

cost We're growth and fewer with investment drive on side. right performance. a operating in one So on the where opportunity of long-term need really that's levels efficiency dialing the And is -- of we've see we we we're areas a long-term seeing initiatives. lot to the shifts this sites footprint organization, and we're said better And consistently, our pretty X things. doing for accelerating

at and So XX X sites. model. too and then additional drive of we're off still of reducing today, take by we will can an X in see in process efficiencies XX on end that optimal a year. we future end a improvements, lot create the we're which the really this of many, investing the is by finished the focusing how which cost we shift automation 'XX, state coming That's of off at number sites the and baseline XXXX We'll reductions sites

million which ] XX then of working have we're next positioning benefit and we key [ So XX a sight rolling that the $XXX currently on, is would over be line year, as lever that for kind on [ a incremental which above of and ] new.

And great the our facing, of enough. been organization, of But We've deterioration improvements. given that market the doing get these line, the lot it's and clearly, a with headwinds we're a to on ourselves focused trying not job time, challenging a knocking with top of challenges it's all really down. on the

do what have working we as up look that's and amp things XXXX, we into so And to we're on.

be robust But a levers automation our in are going there's pipeline efficiency going sequencing. clearly, of key projects. for footprint, across through the and to us network. So We're

Susan Maklari

year? Okay. get to about ability your can those you'd positioned That's where kind you line then be with how are And too, color. channel next those a loss in is that talk one like of bit Is and much other? the how more mix? them heading great versus the skewed versus to of I inventories retail impact today, that, revenue, And of into the it guess to part of volume

William Christensen

Yes.

that patio but would is while. very the saying the It's for been doors, it's discretionary we've I -- lot et our say unfortunately, a channel, windows, in for pull this larger-sized stable. So which into of to balanced kind is products, low, of It's goes a There's cetera. the spend thin. inventory

most reality, customers to the retail our So balanced tight year-end dramatically especially going change have given that don't year. the in that's market that's but as of it's roll given the quarter, and the we first we fairly into new think

that's to the driving. that. be the later and going that's for others. that, consumer roughly going the be products our given to sentiment we happen lower will rates state Susan, where 'XX, And where resale get channel is. I'd confidence that's are consumer it's of reinvigorated, a need view, we our think that and in and order, affairs we XX-XX right in And now, need, is need we need to And to drive market then And rates through we mix, what the and in better, interest volume the to be pull say in probably to but 'XX, create and unlock for And retail us.

Operator

Matthew line with Your next the question is Barclays. Bouley of from

Matthew Bouley

actually. I wanted to point, on that touch last

So X%. X% reducing to revenue versus guide prior core, to the down XX% to down XX%

You're know about holding markets same. drifting the you said they're kind end. end low of the I to the

And you change mix the is kind say of of seems significant heard just really a delta mix. just it's in portion it. like So volume it the I very XX-XX

to kind So really mix unpack move I just that don't historically. know seen significant if really we've to wanted in you that a because degree with of guys that's that I

what are anniversarying is hundred that headwind? do some some least think specifics? is of And XXXX? case I really of the you basis a guess it how at So several mix out point that in flattening And about at and point the kind

Samantha Stoddard

Matt, yes, seeing we're is that the mix really unprecedented.

is would more volume. QX, in not it's that you say that In QX in saw absolutely the particular. was little mix but think I I So something this volume than mix, a in than And we've past. more experienced QX

So the XX-XX roughly talking Bill that's about. is

not sales it's $XX softer looking retail is the unpack but revision, include all really R&R XX% guidance across North play just approximately retail of program it's in. That channels some million, the does That's at we kind the you in pushouts, the America. When channel. that

that's the at seen their seeing the experiencing in home sales of mix sales that lowest we've that this and decade. And we're in lower portion piece have over other the that market, a kind level are you we're unprecedented being Then existing mix, impact. unfortunately

let's then Europe's market the think the million. really about we when multifamily of is talked up, Then essentially another And headwinds that million, in the you $XX Midwest have retail $XX And call sales revision softness, $XX it, some million, breakdown that of $XX customer picking guidance. the another the about, loss million. continued $XX you million.

Matthew Bouley

correctly, something And there. imports. heard curious, internationally. saying at I if customer, seen the Midwest with, because I that we've you're category helpful typically presence just large Really historically And the where a Okay. they're windows, then windows you guess, I'm so of is imported think sourced I not secondly, going least something

of the the where are lack of you're code cracking imported kind if and hearing of figuring wondering out mixing if I'm lower-priced to makes [indiscernible], question that of actually down, of prior actually, maybe that goes sense with maybe folks for kind a some phenomenon how a window competitors bring imports cyclical the U.S. to these better if is just if of anything in or So with more kind this are term,

competitive So imported about how of just dynamic I'm do you that curious windows? kind with think

William Christensen

Matt. sure, Yes,

the with cetera. et current environment tariffs, facing So given we're I would say counterintuitive it's that chains, supply with

significant increase Asia. from We windows in a seeing are not import

our and made we different. So would We obviously reacting call unique to reload are to can choice want a be windows I try North speak And decision this in are America. people I something requiring that to that to for don't for making customers. sure a capacity

given the not, a candidly, et based cetera. potential election trend. view, plays is tariffs, this how this rather a chain implications supply one-off. in of see term out longer So It's today our we'll the And and on some

Operator

is with line Loop Capital. question Stevenson of from next the Your Jeff

Unknown Analyst

one on [ the just for is Zack mix. This Jeff on ] Pacheco more today. Maybe

we've product? again, think how growth factor it, guys production the this is a much in to seen Just general just you a the of is? builder slowdown year Or curious high-end outside mid-

William Christensen

significant it's hit driver for this production it's product. Yes. down that we've end in big underrepresented a because are to major our a building mix as the business, doors on And therefore, And major the sector. builders a homes the said are Clearly, that a they're of are and windows on into hit. a market. are us, those lower-end we That's that's and lower get looking taking people lot

Unknown Analyst

-- back -- on bought Or you on back sense. about Makes quickly the moving more last bunch that forward? are given a guys given that offset of is guys investments? shares strategic In how capital other allocation. now you And back opportunistically then dilution, bought the quarter, thinking to burner

William Christensen

definitely say on burner. the Yes. back I would

think I ratio our leverage above Xx. is

significant a We through the a the we're now, and work our capital to to right which ratio then ourselves investing that in we short not lot the as to EBITDA, do improve appropriate area reset But corridor. out, is but we have of described today, ruling forward. and anything focus focus as of main outlay going term. be We're that's will never clearly, go an

Operator

the Trevor is line Allinson with Wolfe from question Research. Your of next

Trevor Allinson

following one, First up XXXX on CapEx.

of back about in America the volume next in potentially talked You've rebound half North year. seeing a

back If volume pretty that on expect volumes you I the projects concert go to guess, spending expect cash? up earlier, next projects, that if that, some the back some and pull XXXX year, any of locked in? mind, that would side CapEx is say, more And number little to bit? Or a some forward growth you that you other to your CapEx don't see of taking come rebound, pull in maybe of then, would first half

William Christensen

Yes.

So of we a to that have needs foundation ample opportunity work improve still be there's lot and to done. our

in place, back, So think the very these XX unless projects we're adjustment. market capital a lead we long months. dramatic don't tune of to pull There's going some there's very times have I that on of

additional in it's of lot capital. releasing a also So We're flight.

we've get effectively that's more CapEx, outlay we're what today doubled doing know used way on much higher If we're have. great than don't handle better, cadence. and a getting our that to necessarily things can organization problem if our still to I because

and suggest So into probably we the it given I see especially some to do capital to continue right expect position. that that really we takes But at would this the unlikely. that's get footprint, just rate, opportunity

Trevor Allinson

makes XX% have you now Got for VPI down and Clearly, about talked you. sense. here. a soft And then starts Okay. while plus multifamily, being been year. That the for multifamily

little revenue? before the here bottom business specifically, end for your think when So that if if go can for nearing your that to then further a impacts multifamily there's market, between remind of get just you that bit you lag a start you're there? a kind you us and And

William Christensen

Right.

a arduous is projects process. multifamily permitting very So

we going windows expect the we're into But to lag. has and of that in anywhere structure, product interior. up, the to our and on, So you let's today, take of X that the need up starts they the the X back kick finish should out they range course, to assume that of can because want out so button permitting and putting the a equation months that just

X to So are. on get from longer to poured there's where you there's a to start, start, But of being period at depending time meaning months. concrete that a X

made salespeople projects and portfolio regions cost, to for but from serve is additional to bear that markets don't are and this in of investments, one have the with growth our initiatives robust a that other customers spots is hire building us. start We the in more of we building white

we're expect haven't it's nice just year. next multifamily are a building projects, back because to a we But look into seen going portfolio we of a half So we we turn and start those of moderate the harvesting uptick, as especially on yet.

Operator

Capital next line from of the question Markets. Your Mike RBC is Dahl,

Michael Dahl

I just want to to go minute. back dynamic the mix for a

of much a I of XX% is when home. Can at doors and volume it. would dynamic? dynamic, missed per you the of think being about look mix. And kind flat is in and lower that when specify the and R&R, just headwind new builder just the addressed dynamic but mix that meaning you of how this 'XX, down peg, I continued potentially you Or a the kind make you construction, heard smaller of of when revision maybe footage to I is you volume you and at volume little year, fewer other the that inclusive revision, kind know look of that more over? production windows of say homes is a I comment you of kind carrying pure retail

Samantha Stoddard

Yes.

$XX that million guidance we the again, the or channel. softer clarify, of products in talked the that traditional so R&R, around I revision is higher-end then, of and retail just some approximately some XX% said to So about

You is were it builders. fewer production as the It's dynamic of as kind not mentioning end. with much mix lower

but quantity, the these the going necessarily are not production it's into homes. So that products lower-priced

back expect we said, bit. haven't going half a to we the pick of next that year be clear HX But I signals So I do is to of do different. as little dramatically up had kind expect,

that right dynamic. that's phasing I kind now, would the of, say, So our mix view of

Michael Dahl

to year, flat combined down mix flat be it's year? that is next if of like clear, volume on comment down kind to But is volume your Okay. if on next

Samantha Stoddard

to would next on year. down flat I volume Yes. mix say

right think mix call shift. now be the early would mix I say volume versus it'd it's too to quantity volume I combined. the

Michael Dahl

business I cost I'm then terms, that And for I but the a this your with quoting these if the of had, bit if it and reductions, wouldn't basically at by basically of in -- struggling it I year. question little have know transformation Okay. your look not I kind mean, other that, profitable it suggests been like being EBITDA concept I bridge, implies guess it this you're journey were

talking of kind you truly of seen rightsizing when business, I XX% to this today, while loss of sales really cost much that you've kind volume incremental. versus so is that way terms just only are And net appreciate normal XX% to in EPS if some where of the degradation out. the you're incrementals normal to reflects much getting which saying kind is pretty and on a How from the of up, transformational still you're

I volumes do So this and than have thought come some stuff you is historical kind much back? more better structural, see that of those norms when guess, if potential really was on I the incrementals of would

William Christensen

Yes.

do want on rigor initiatives. organization, giving So our visibility ownership macro from also I and how but invest, guess we this of to and prioritizing I so combination would a say, process a level, within is us where

good we some way job that If I in don't our we doing had. think of tackling of back were you a history, foundational challenges think the very

daily of some process, those in of creating decisions. a the sizable fairly make return activities the we tough the what's would the to this this many term there also there, there's mix but rigor allocating what is piece in are so on business organization capital, process, yes, transformation a and And as projects, how also

I'll of and doing decisions. in strong the have going we're and not remind year. make to a line that streams. oral have hitting hurdles, on visibility we're work we're tracking, you our we're If And now this to we these organization exit our tough delivering the very because

we're starting need now we to we have And shifts we utilization our challenges the below sites. shift, X we've sites, many down network. across and get said beginning, that capacity X challenge very have have that is fewer from to decremental we and too The

that We to that sites overinvest to to quality the driving. those have customers. that's to deliver great our that's feel level safely the transformation and to And get products list, up we in on fewer appropriate the time, we're main them

drive the say tough and do a future in headwind, get growth, So and a the low very ground I'd on given North that's footprint America market a the demand what fruit we on state the long-term soft to and very market Europe. hanging been volatile very we're has up that really environment how picked on, in working has to of right, become view in now all going

the So broader a base. hopefully, answers that question on

Operator

back the remarks. hand At this Mr. any I time, to call for will over closing Armstrong

James Armstrong

Yes. joining for you Thank today. our call

out, questions, be them you happy If please to have answer follow-up you. reach I'd for any and

great This ends day. our call, a and have

Operator

joining. for you Thank call. today's concludes This

lines. your disconnect now may You

JELD-WEN Holding (JELD) 5 Nov 242024 Q3 Earnings call transcript