Q2 2024 Mohawk Industries Inc Earnings Call

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Operator: Good morning everyone, and welcome to the Mohawk Industries second quarter 2024 earnings conference call. All participants will be in a listen-only mode.

Operator: Good morning, everyone, and welcome to the Mohawk Industries 2nd quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please sing to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch-tone telephones. Please also note today's event is being recorded.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key and then 1 on your touchtone telephone.

Operator: Please also note today's event is being recorded. At this time, I'd like to turn the floor over to James Brunk. Please do so.

Please also note today's event is being recorded.

James Brunk: At this time, I'd like to turn the floor over to James Brunk.

At this time I'd like to turn the floor over to James Brown. Please go ahead. Thank.

James F. Brunk: Thank you, Jamie. Good morning, everyone. Welcome to Mohawk Industries' quarterly investor call. Joining me on today's call are Jeff Lorberbaum, Chairman and Chief Executive Officer, and Chris Wellborn, President and Chief Operating Officer. Today, we'll update you on the company's second quarter performance and provide guidance for the third quarter of 2024. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission.

James F. Brunk: Thank you Jamie good morning.

Speaker Change: Everyone welcome to the Mohawk Industries quarterly Investor call. Joining me on today's call are Jeff <unk>, Chairman and Chief Executive Officer, and Chris Wellborn, President and Chief operating Officer today, We will update you on the company's second quarter performance and provide guidance for the third quarter of 2024, I'd like to remind everyone that our.

James Brunk: Please join me on today's caller, Jeff Lorberbaum, Chairman and Chief Executive Officer, and Chris Wellborn, President and Chief Operating Officer. Today, we'll update you on the company's 2nd quarter performance and provide guidance for the 3rd quarter of 2024.

James Brunk: I'd like to remind everyone that our press release and statements that we make during this call may include former looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including but not limited to those that are forth in our press release and our periodic filing with the Securities and Change Commission. This call may include discussion of non-GAAP numbers.

Speaker Change: Our press release and statements that we make during this call may include forward looking statements as defined in the private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including but not limited to those set forth in our press release and our periodic filings with Securities and Exchange Commission.

James F. Brunk: This call may include discussion of non-GAAP numbers. For a reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8K and press release in the Investor section of our website. With that, I'll turn the call over to Jeff. Thanks, Jim.

Speaker Change: This call May include discussion of non-GAAP numbers.

James Brunk: For a reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8-K and press release in the investor section of our website.

Speaker Change: For a reconciliation of any non-GAAP to GAAP amounts. Please refer to our form 8-K and press release in the investors section of our website with that I'll turn the call over to Jeff.

Jeff Lorberbaum: With that, I'll turn the call over to Jeff. Thanks, Jim. Our 2nd quarter performance reflected our focus on the controllable factors of our business, including sales initiatives, cost containment, and restructuring actions. Our net sales for the quarter were 2.8 billion, down 5.1 percent compared to last year. Our adjusted earnings per share were $3.00, up 9 percent year over year as a result of productivity initiatives and restructuring, as well as lower energy and material costs, partially offset by market pressures on pricing and mix and foreign exchange headwinds. We generated free cash flow of approximately 142 million during the quarter for a total of 239 million year to date.

Jeff: Thanks, Jim.

Jeffrey S. Lorberbaum: Our second quarter performance reflected our focus on the controllable factors of our business, including sales initiatives, cost containment, and restructuring actions. Our net sales for the quarter were $2.8 billion, down 5.1% compared to last year. Our adjusted earnings per share were $3, up 9% year-over-year, as a result of productivity initiatives and restructuring, as well as lower energy and material costs, partially offset by market pressures on pricing and mix and foreign exchange headwinds. We generated free cash flow of approximately $142 million during the quarter for a total of $239 million year to date.

Jeff: Our second quarter performance reflected our focus on the controllable factors of our business, including sales initiatives cost containment and restructuring actions. Our net sales for the quarter were $2 8 billion down five 1% compared to last year.

Jeff: Adjusted earnings per share were $3 up 9% year over year as a result of productivity initiatives and restructuring as well as lower energy and material costs, partially offset by market pressures on pricing and mix and foreign exchange headwinds, we generated free cash flow of <unk>.

Jeff: 142 million during the quarter for a total of 239 million year to date.

Jeff Lorberbaum: In the quarter, we purchased 755,000 shares, or 1.2 percent of our stock, for approximately $90 million. We remain optimistic about the future of our business and confident that, in time, our worldwide markets will recover. Our 2nd quarter results exceeded our expectations despite soft market conditions around the globe. The commercial channel continues to outperform residential, although some softness in the category is occurring. While the long-term demand for our products is strong, residential purchases across our geographies remain weak. During the quarter, the actions we have taken to improve volumes in many product categories. helped us, though the gains were offset by consumers trading down and competitive pricing.

Jeffrey S. Lorberbaum: In a quarter, we purchased 755,000 shares, or 1.2% of our stock, for approximately $90 million. We remain optimistic about the future of our business and confident that, in time, our worldwide markets will recover. Our second quarter results exceeded our expectations despite soft market conditions around the globe. The commercial channel continues to outperform residential, although some softness in the category is occurring. While the long-term demand for our products is strong, residential purchases across our geographies remain weak.

Jeff: Quarter, we purchased 755000 shares of one 2% of our stock for approximately $90 million, we remain optimistic about the future of our business and confident that in time, our worldwide markets will recover.

Jeff: Our second quarter results exceeded our expectations, despite soft market conditions around the globe. The commercial channel continues to outperform performed residential although some softness in the category is occurring.

Jeff: While the long term demand for our products is strong residential purchases across our geographies remains weak during the quarter. The actions we've taken to improve volumes in many product categories.

Jeffrey S. Lorberbaum: During the quarter, the actions we've taken to improve volumes in many product categories. All of these helped us, though the gains were offset by consumers trading down and competitive prices. Residential remodeling is under the greatest pressure as consumers defer large discretionary purchases due to inflation and uncertainties about the future.

Jeff: Helped us, though the gains were offset by consumers trading down and competitive pricing resident.

Jeff Lorberbaum: Residential remodeling is under the greatest pressure as consumers defer large discretionary purchases due to inflation and uncertainties about the future. In addition, flooring remodeling is significantly influenced by housing turnover rates, which remains suppressed due to elevated mortgage rates, high home prices, and the locked-in effect on homeowners.

Jeff: Residential remodeling is under the greatest pressure as consumers deferred large discretionary purchases due to inflation and uncertainties about the future and.

Jeffrey S. Lorberbaum: In addition, flooring remodeling is significantly influenced by housing turnover rates, which remain suppressed due to elevated mortgage rates, high home prices, and the locked-in effect on homeowners. To reduce costs and align our business with current conditions, we are initiating additional restructuring actions across all our segments that will generate annualized savings of approximately $100 million, of which $20 to $25 million will be recognized this year. The cash cost of these actions is about $40 million, with a total cost of approximately $130 million.

Jeff: In addition, flooring remodeling is significantly influenced by housing turnover rates, which remain suppressed due to elevated mortgage rates high home prices and a locked in effect on homeowners.

Jeff Lorberbaum: To reduce costs and align our business with current conditions, we're initiating additional restructuring actions across all our segments that would generate annualized savings of approximately $100 million, of which $20-25 million will be recognized this year. The cash cost of these actions is about $40 million, with a total cost of approximately $130 million. The execution timelines will vary by project, with some extending throughout 2025 and into 26. In our global ceramic segment, we will optimize manufacturing by idling some less productive operations and aligning production to increase efficiency, will consolidate regional warehouses, further reduce product complexity, and leverage technology to lower administrative costs.

Speaker Change: To reduce costs and align our business with current conditions, we're initiating additional restructuring actions across all of our segments that will generate annualized savings of approximately $100 million of which 20 to 25 million will be recognized this year.

Speaker Change: The cash cost of these actions is about $40 million with a total cost of approximately $130 million.

Jeffrey S. Lorberbaum: The execution timeline will vary by project, with some extending throughout 2025 and into 2026. For example, in our global ceramics segment, we will optimize manufacturing by idling some less productive operations and aligning production to increase efficiency, will consolidate regional warehouses, further reduce product complexity, and leverage technology to lower administrative costs. We'll rationalize some of our North America manufacturing to enhance plant utilization, retire less efficient equipment, and simplify our offerings. The floor and the rest of the world will lower our administrative and operating costs, streamline our private portfolio and distribution, and decommission inefficient assets.

Speaker Change: The execution timelines will vary by project with some extending through out 2025 and into 'twenty six.

Speaker Change: In our global ceramic segment, we will optimize manufacturing by idling, some less productive operations and aligning production to increase efficiencies will consolidate regional warehouses further reduce product complexity and leverage technology to lower administrative costs.

Jeff Lorberbaum: We'll rationalize some of our flooring North American manufacturing to enhance plant utilization, retire less efficient equipment, and simplify our offering. And flooring rest of the world will lower our administrative and operating costs, streamline our portfolio and distribution, and decommissioned inefficient assets. These actions will complement our previous restructuring initiatives that will reduce costs by approximately $60 million in 2024. Along with these, our teams are implementing many measures to manage current conditions, including enhancing sales opportunities, increasing productivity, and managing our overhead and working capital. Economists had anticipated that the Federal Reserve would lower rates this year to stimulate the U.S.

Speaker Change: Well rationalize some of our flooring North America manufacturing to enhance plant utilization retire less efficient equipment and simplify our offering.

Speaker Change: And flooring rest of world will lower our administrative and operating costs streamline our product portfolio and distribution and decommission inefficient assets.

Jeffrey S. Lorberbaum: These actions will complement our previous restructuring initiatives that will reduce costs by approximately $60 million in 2024. Along with these, our teams are implementing many measures to manage current conditions, including enhancing sales opportunities, increasing productivity, and managing our overhead and working capital. Economists had anticipated that the Federal Reserve would lower rates this year to stimulate the U.S. housing sector. However, our central banks and some of our markets have already begun to lower rates. The Fed has indicated it intends to wait until inflation and economic activity are sufficiently slow before taking action.

Speaker Change: These actions will complement our previous restructuring initiatives that will reduce costs by approximately $60 million in 2024.

Speaker Change: Along with these our teams are implementing many measures to manage current conditions, including enhancing sales opportunities, increasing productivity and managing our overhead and working capital.

Speaker Change: Economists had anticipated that the federal reserve with lower rates this year to stimulate the U S housing sector.

Jeff Lorberbaum: housing sector. On central banks and some of our markets have already begun to reduce rates, the Fed has indicated it intends to wait until inflation and economic activities sufficiently slow before taking actions. After the U.S. Consumer Price Index dropped in June; many are predicting a September rate cut. If the Fed begins to lower rates at that time, we anticipate our industry should benefit next year as pen-up consumer demand increases flooring purchases. In April, U.S.

Speaker Change: Central banks and some of our markets have already begun to do reduce rates. The fed has indicated it intends to wait until inflation and economic activity sufficiently slow before taking actions.

Jeffrey S. Lorberbaum: After the U.S. Consumer Price Index dropped in June, many are predicting a September rate cut. If the Fed begins to lower rates at that time, we anticipate our industry should benefit next year as pent-up consumer demand increases flooring purchases. In April, U.S. Today once again named Mohawk one of America's climate leaders, given our reduction in greenhouse gas emissions over the past four years.

Speaker Change: After the U S consumer price index dropped in June many are predicting a September rate cut.

Speaker Change: The fed begins to lower rates at that time, we anticipate our industry should benefit next year as pent up consumer demand increases flooring purchases and.

Speaker Change: In April U S. Today, once again named Mohawk one of Americas climate leaders, given a reduction in greenhouse gas emissions over the past four years on July six think we'd start 15th annual sustainability report, which can be found online at Mohawk sustainability Dot com now.

Jeff Lorberbaum: Today, once again, they mohawk one of America's climate leaders, given our reduction in greenhouse gas emissions over the past four years. On July 16th, we published our 15th annual Sustainability Report, which can be found online at mohawksustainability.com.

Jeffrey S. Lorberbaum: On July 16th, we published our 15th annual sustainability report, which can be found online at mohawksustainability.com. Now Jim will review our financial performance for the second quarter. Thank you, Jeff.

Jim: Now, Jim will review our financial performance for the second quarter. Thank you, Jeff. Sales for the quarter were just over $2.8 billion. It's a 5.1% decline as reported, or 4.5% on an adjusted basis, with global ceramic having the strongest quarter versus the prior year. All segments continue to see price and mixed pressures, with residential remodeling trailing the new construction and commercial channels in the quarter. Gross margin for the quarter was 25.8% as reported and 27.1% on just the basis versus 25.9% in the prior year, with lower input costs and increased productivity offsetting the weakness in price and mix.

James F. Brunk: Sales for the quarter were just over $2.8 billion. That's a 5.1% decline as reported, or 4.5% on an adjusted basis, with Global Ceramic having the strongest quarter versus the prior year. All segments continue to see price and mix pressures, with residential remodeling trailing the new construction and commercial channels in the quarter. Gross Margin for the quarter was 25.8% as reported and 27.1% on an adjusted basis versus 25.9% in the prior year, with lower input costs and increased productivity offsetting the weakness in price and mix. SG&A expense was 18.2% as reported and 17.9% on an adjusted basis.

Speaker Change: Jim will review, our financial performance for the second quarter.

Jim: Thank you Jeff sales for the quarter were just over $2 $8 billion. That's a five 1% decline as reported or four 5% on adjusted basis with global ceramic having the strongest quarter versus the prior year.

Jim: All segments continue to see price and mix pressures with residential remodeling trailing the new construction and commercial channels in the quarter.

Jim: Gross margin for the quarter was 25, 8% as reported and 27, 1% on adjusted basis versus 25, 9% in the prior year with lower input costs and increased productivity offsetting the weakness in price and mix.

Jim: G&A expense was 18, 2% as reported and 17, 9% on an adjusted basis. This is in line with the prior year operating income as reported was $214 million or seven 6%.

James F. Brunk: This is in line with the prior year. Operating income as reported was $214 million, or 7.6%. Non-recurring charges for the quarter were $43 million, primarily due to restructuring expenses in the period. That gives us an operating income on an adjusted basis of $257 million, or 9.2%. That's a 90 basis points improvement versus the prior year, as our lower input costs of $83 million and productivity gains of $49 million offset the unfavorable price mix of $111 million and FX of $11 million. Interest expense for the quarter was $13 million.

Jim: $214 million or $7.6%. Non-recurring charges for the quarter were $43 million, primarily due to restructuring expenses in the period. That gives us an operating income on an adjusted basis of 257 million, or 9.2%. That's a 90 basis points improvement versus the prior year, as our lower input costs of $83 million and productivity gains of $49 million. Offset the unfavorable price mix of $111 million and FX of $11 million. Interest expense for the quarter was $13 million; that's down $10 million from the prior year due to strong overall cash flow and the payoff of the turn loans earlier in the year.

Jim: Nonrecurring charges for the quarter were $43 million, primarily due to restructuring expenses.

Jim: In the period.

Jim: That gives us some operating income on an adjusted basis of 257 million or nine 2%, that's a 90 basis points improvement versus the prior year as our lower input cost of $83 million and productivity gains of $49 million.

Jim: The unfavorable price mix of $111 million and FX of $11 million interest expense for the quarter was $13 million thats down $10 million from the prior year due to strong overall cash flow and the payoff of the term loans earlier in the year, our non-GAAP tax rate was 20.

James F. Brunk: That's down $10 million from the prior year due to strong overall cash flow and the payoff of the term loans earlier in the year. Our non-GAAP tax rate was 20.9% versus 19.6% in the prior year. We expect Q3's rate to be between 19 and 20% and the full-year rate to be between 20 and 21%. That gives us an earnings per share on a reported basis of $2.46, or on an adjusted basis of $3.

Jim: Our non-GAAP tax rate was 20.9% versus 19.6% in the prior year. We expect Q3 rates to be between 19 and 20% and the full year rate to be between 20 and 21%. That gives us an earnings per share on a reported basis of $2.46, or on an adjusted basis of $3. That's an increase of approximately 9% versus prior year.

Jim: 9% versus 19, 6% in the prior year, we expect Q3's rate to be between 19% and 20% and the full year rate to be between 20 and 21%.

James F. Brunk: That's an increase of approximately 9% versus the prior year. Turning to the segments, Global Ceramic had sales of just over $1.1 billion. That's a 3.4% decrease as reported and 2.9% on an adjusted basis. Industry volume remains constrained and pricing aggressive, while we are investing in new products to try to improve our mix. Across our various geographies, residential new construction is outperforming remodeling, and commercial, though slowing, is stronger than residential. Operating income on an adjusted basis was $95 million, or 8.5%, which was in line with the prior year.

Jim: It gives us an earnings per share on a reported basis or $2.46 or on adjusted basis of $3. That's an increase of approximately 9% versus prior year.

Jim: Turning to the segments, global ceramic had sales of just over $1.1 billion. That's a 3.4% decrease, as reported, and 2.9% on an adjusted basis. Our industry volume remains constrained, and pricing aggressive while we are investing in new products to try to improve our mix. Across our various geographies, residential news construction is outperforming; remodeling and commercial, though slowing, is stronger than residential. Operating and coming on an adjusted basis was $95 million or 8.5%, which was in line with the prior year. As lower input costs of 17.5 million, an increase in productivity of 14 million, offset the unfavorable price and mix of 25 million, FX of 10 million, and the lower overall volume.

Speaker Change: Turning to the segments global ceramic had sales of just over $1 $1 billion. That's a three 4% decrease as reported and two 9% on adjusted basis, our industry volume remains constrained and pricing aggressive while we are investing in new products to try to improve our mix.

Speaker Change: Across our various geographies residential new construction is outperforming remodeling and commercial does slowing is stronger than residential.

Speaker Change: Operating income on an adjusted basis was $95 million or eight 5%, which was in line with the prior year as lower input costs of $17 5 million, an increase in productivity of $14 million.

James F. Brunk: As lower input costs of $17.5 million and an increase in productivity of $14 million offset the unfavorable price and mix of $25 million, FX of $10 million, and the lower overall volume. In Flooring North America, sales were $959 million, or a 4.3% decrease as reported, even though our laminate product continues to take share as a waterproof wood alternative and our LVT product is expanding in the retail and builder channels. In commercial, the hospitality, government, and education channels are driving the outperformance versus the residential sector. Operating income on an adjusted basis was $82 million, or 8.6%.

Speaker Change: Set the unfavorable price and mix of $25 million FX, a $10 million and the lower overall volume.

Jim: In flooring in North America, sales were $959 million or a 4.3% decrease as reported, even though our laminate product continues to take share as a waterproof wood alternative, and with our LVT product is expanding in the retail and builder channels. In commercial, the hospitality, government, and education channels are driving the outperformance versus the residential sector. Operating and coming on an adjusted basis was $82 million or 8.6%; that's an increase of 260 basis points versus the prior year. As lower input costs of $36 million and the strength of our productivity of $19 million offset the weakness and price and mix of $36 million.

Speaker Change: In flooring, North America sales were $959 million or four 3% decrease as reported even though our laminate product continues to take share as a waterproof what alternatives and what their Lv project is expanding in the retail and builder channels in commercial so hospitality government and.

Speaker Change: Education channels are driving the outperformance versus the residential sector.

Speaker Change: Operating income on an adjusted basis was $82 million or eight 6%. That's an increase of 260 basis points versus the prior year as lower input costs of $36 million and the strength of our productivity of 19 million offset the weakness in price and mix of $36 million.

James F. Brunk: That's an increase of 260 basis points versus the prior year, as lower input costs of $36 million and the strength of our productivity of $19 million offset the weakness in price and mix of $36 million. And exploring the rest of the world, net sales were $727 million, that is an 8.3% decrease as reported and 7% decrease on an adjusted basis, as market conditions remain slow with weak consumer discretionary spending on larger ticket home projects.

Jim: and a floating rest of the world, net sales were 727 million; that is an 8.3% decrease as reported, and 7% decrease on adjusted basis, as market conditions remain slow with weak consumer discretionary spending on larger ticket home projects. The expansion of our customer base did lead to an increase in uniformum in laminate, LVT, and panels. Operating income on adjusted basis was 91 million dollars, at the 12.6% operating margin, that's a 40 basis points increase versus prior year, led by a reduction in the input cost of 30 million, positive impact of increased productivity of 15 million, offset by unfavorable price and mix of 50 million.

Speaker Change: And in flooring rest of the World net sales were $727 million that is an eight 3% decrease as reported and 7% decrease on an adjusted basis as market conditions remain slow with weak consumer discretionary spending on larger ticket home projects.

James F. Brunk: Pricing and mix are also continuing under pressure. However, those sales actions taken by our team through the introduction of new products and expansion of our customer base did lead to an increase in unit volume in laminate, LVT, and panel. Operating income on an adjusted basis was $91 million; that's a 12.6% operating margin. That's a 40 basis points increase versus the prior year, led by a reduction in input costs of $30 million, the positive impact of increased productivity of $15 million, offset by unfavorable price and mix of $50 million.

Speaker Change: Pricing and mix as also continue under pressure, though so those sales actions taken by our team through the introduction of new products and expansion of our customer base did lead to an increase in unit volume and laminate L V T and panels.

Speaker Change: Operating income on an adjusted basis was $91 million. That's a 12, 6% operating margin as 40 40 basis points increase versus prior year led by a reduction in the input costs of $30 million positive impact of increased productivity of $15 million offset by unfavorable price.

Speaker Change: A mix of $50 million.

Jim: Corporate and eliminations were 12 million dollars during the quarter and line with the prior year, with 2024 expected to be approximately 45 million dollars.

James F. Brunk: Corporate eliminations were $12 million during the quarter, in line with the prior year, with 2024 expected to be approximately $45 million. Now, turning to the balance sheet, cash and cash equivalents were just shy of $500 million, with free cash flow during the period of $142 million, bringing our year-to-date total to almost $240 million.

Speaker Change: Corporate and eliminations were $12 million during the quarter in line with the prior year with 2024 expected to be approximately $45 million.

Jim: Now turning to the balance, cash and cash equivalents were just shy of 500 million dollars, with free cash flow during the period of $142 million, bringing our year-to-date total of almost $240 million. Inventories were just shy of 2.6 billion; that's a year-over-year decrease of approximately 40 million dollars due to reductions in cost and impact of effects as volume slightly increased. Inventory days increased to 128 versus 120 in the prior year. The current plan, though, is to keep inventory relatively flat versus the prior year by year end.

Speaker Change: Now turning to the balance sheet cash and cash equivalents were just shy of $500 million with free cash flow during the period of $142 million, bringing our year to date total of almost $240 million inventories were just shy of $2 6 billion, that's a year over year decrease.

James F. Brunk: Inventories were just shy of $2.6 billion. That's a year-over-year decrease of approximately $40 million due to reductions in cost and the impact of FX as volume slightly increased. Inventory days increased to 128 versus 120 in the prior year. The current plan, though, is to keep inventory relatively flat versus the prior year by year-end.

<unk> of approximately $40 million due to reductions in costs and impact of FX as volumes slightly increased inventory days increased to 128 versus 120 in the prior year. The current plan, though is to keep inventory relatively flat versus the prior year by year and property.

Jim: Property plan equipment stands at just under $4.8 billion, with capex of 91 million in the quarter compared to DNA of 172 million. The company plans to invest approximately $480 million in the year, with DNA at approximately $630 million. And the balance sheet overall and cash flow remained very strong, with net debt of $1.9 billion, leverage at 1.3 times, and liquidity at approximately $1.3 billion, with the company purchasing approximately 90 million of shares in the quarter.

James F. Brunk: Property plant equipment stands at just under $4.8 billion, with CapEx of $91 million in the quarter, compared to DNA of $172 million. The company plans to invest approximately $480 million in the year, with DNA at approximately $630 million. And the balance sheet overall and cash flow remain very strong, with net debt of $1.9 billion, leverage at 1.3 times, and liquidity at approximately $1.3 billion, with the company purchasing approximately 90 million shares in the quarter. With that, I will turn it over to Chris to review our Q2 operational performance. Thank you, Jen.

Speaker Change: Plant equipment stands at just under $4.8 billion with Capex of $91 million in the quarter compared to DNA of $172 million. The company plans to invest approximately $480 million in the year with DNA and approximately $630 million.

Speaker Change: And the balance sheet overall and cash flow remained very strong with net debt of $1 9 billion leverage at one three times and liquidity of approximately $1 $3 billion with the company purchasing approximately 90 million of shares in the quarter.

Chris Wellborn: With that, I will turn it over to Chris to review our Q2 operational performance. Thank you, Jen. In global ceramic, our markets remain highly competitive as reduced industry utilization continues to impact pricing and margins. Our mixes weaker given soft residential remodeling activity and consumers trading down to lower price points. In the quarter, the impact of labor and freight inflation was offset by decreases in material and energy costs. In addition to our restructuring initiatives, we are implementing numerous cost reduction projects across the segment, including product reengineering, process improvements, and streamlining administrative functions. To improve our mix, we are investing in product differentiation with leading edge printing, polishing, and rectifying technology.

Speaker Change: With that I will turn it over to Chris to review, our Q2 operational performance.

William Christopher Wellborn: In global ceramics, our markets remain highly competitive as reduced industry utilization continues to impact pricing and margins. Our mix is weaker given soft residential remodeling activity and consumers trading down to lower price points. In the quarter, the impact of labor and freight inflation was offset by decreases in material and energy costs.

Chris: Thank you Jan and global ceramic our markets remain highly competitive as reduced industry utilization continues to impact pricing and margins.

Chris: Our mix is weaker given soft residential remodeling activity and consumers trading down to lower price points in the quarter the impact of labor and freight inflation was offset by decreases in material and energy costs.

William Christopher Wellborn: In addition to our restructuring initiatives, we are implementing numerous cost-reduction projects across the segment, including product reengineering, process improvements, and streamlining administrative functions. Furthermore, to improve our mix, we are investing in product differentiation with leading-edge printing, polishing, and rectifying technology. These assets allow us to create floor and wall tile collections with superior visuals and higher value sizes, styles, and formats. On May 10th, the U.S. Department of Commerce announced the commencement of anti-dumping and countervailing duty investigations on ceramic tile imported from India.

Chris: In addition to our restructuring initiatives, we are implementing numerous cost reduction projects across the segment, including product reengineering process improvement and streamlining administrative functions to.

Chris: To improve our mix, we are investing in product differentiation with leading edge printing polishing and rectifying technologies.

Chris Wellborn: These assets allow us to create floor and wall tile collections with superior visuals and higher value sizes, styles, and formats.

Chris: These assets allow us to create floor and wall tile collections with superior visuals and higher value sizes styles and formats.

Chris Wellborn: On May 10th, the U.S. Department of Commerce announced the commencement of anti-dumping and countervailing duty investigations of ceramic tile imported from India. The U.S. Tile organization believed this could lead to tariffs between 400% and 800%. Given India's widespread dumping, Mexico has increased import duties, and other markets are currently investigating similar options. In the U.S., our high-end design capabilities, domestic manufacturing, and extensive distribution infrastructure are enhancing our participation in the builder and commercial sectors. In Europe, our unit sales exceeded last year as we leveraged our manufacturing and styling advantages to create higher value products. Our porcelain slab expansion has enhanced our offering as demand continues to increase across the flooring, furniture, and countertop markets.

Speaker Change: [noise] may 10th the U S Department of Commerce announced the commitment commencement of anti dumping and countervailing duty investigations of ceramic tile imported from India.

William Christopher Wellborn: The U.S. Tile Trade Organization believes this could lead to tariffs between 400 and 800 percent. Given India's widespread dumping, Mexico has increased import duties, and other markets are currently investigating similar options. In the U.S., our high-end design capabilities, domestic manufacturing, and extensive distribution infrastructure are enhancing our participation in the builder and commercial sectors. In Europe, our unit sales exceeded last year as we leveraged our manufacturing and styling advantages to create higher-value products.

Speaker Change: The U S tile organization trade organization believes this could lead to tariffs between 400 and 800%.

Speaker Change: Given India's widespread dumping Mexico has increased import duties and other markets are currently investigating similar options in the U S. Our high end design capabilities domestic manufacturing and extensive distribution infrastructure are enhancing our participation in the builder and commercial sectors.

Speaker Change: In Europe, our unit sales exceeded last year, as we leveraged our manufacturing and styling advantages to create higher value products.

William Christopher Wellborn: Our porcelain slab expansion has enhanced our offering as demand continues to increase across the flooring, furniture, and countertop markets. European energy prices declined from last year, which should help increase consumer discretionary spending. However, markets in Latin America remain difficult despite central banks initiating interest rate cuts.

Speaker Change: Our porcelain slab expansion has enhanced our offering as demand continues to increase across the flooring furniture and countertop markets.

Chris Wellborn: European energy prices declined from last year, which should help increase consumer discretionary spending.

Speaker Change: European energy prices declined from last year, which should help increase consumer discretionary spending.

Chris Wellborn: Markets in Latin America remain difficult despite central banks initiating interest rate cuts. In Mexico, we have announced price increases to offset inflationary pressures and import duties. In Mexico and Brazil, we are initiating additional sales and operational improvements to maximize the performance of our acquisitions. In both countries, we have restructured the organizations and implemented new product and distribution strategies.

Speaker Change: Markets in Latin America remain difficult despite central banks initiating interest rate cuts in Mexico, we have announced price increases to offset inflationary pressures and import duties in Mexico, and Brazil, we are initiating additional sales and operational improvements to maximize the performance of our acquisitions in both countries.

William Christopher Wellborn: In Mexico, we have announced price increases to offset inflationary pressures and import duties. In Mexico and Brazil, we are initiating additional sales and operational improvements to maximize the performance of our acquisitions. In both countries, we have restructured the organizations and implemented new product and distribution strategies. In our Flooring Rest of World segment, market conditions remain slow, with constrained consumer discretionary spending. Declining inflation led the European Central Bank to lower key interest rates on June 6th, and additional cuts may follow.

Speaker Change: We have restructured the organization and implemented new product and distribution strategies.

Chris Wellborn: In our flooring rest of world segment, market conditions remain slow with constrained consumer discretionary spending. The cliente inflation led the European Central Bank to lower key rates on June 6th, and additional cuts may follow. In this challenging environment, we focused on actions to drive sales, such as enhancing our product offering, executing promotions, and implementing strategic marketing campaigns. As a result of these sales initiatives, our volumes and laminate, LVT, and panels improved from prior year low levels. Pricing and mix remained under pressure, partially offset by lower input costs. In addition to our restructuring actions, we are launching many projects to improve productivity, enhance yields, and lower labor costs.

Speaker Change: And our flooring rest of World segment market conditions remained slow with constrained consumer discretionary spending declining inflation led the European Central Bank to lower key rates on June 6th and additional cuts may follow in this challenging environment, we focused on actions to drive sales such as enhancing our product off.

William Christopher Wellborn: In this challenging environment, we focused on actions to drive sales, such as enhancing our product offering, executing promotions, and implementing strategic marketing campaigns. As a result of these sales initiatives, our volumes in laminate, LVT, and panels improved from prior year low levels. However, pricing and mix remained under pressure, partially offset by lower input costs.

Speaker Change: Bring executing promotions and implementing strategic marketing campaigns.

Speaker Change: As a result of these sales initiatives our volumes in laminate LBP in panels improved from prior year low levels pricing and mix remained under pressure, partially offset by lower input costs.

William Christopher Wellborn: In addition to our restructuring actions, we are launching many projects to improve productivity, enhance yields, and lower labor costs. We are consolidating regional flooring distribution centers and reducing logistics costs to align with present conditions. We are completing the conversion of our residential LVT program from flexible to rigid products, and we are improving our mix in our sheet vinyl category. Laminate volumes grew as we expanded our customer base and enhanced sales with existing customers. The margins of our installation and panels businesses have declined as fewer projects are being initiated and industry competition escalates.

Speaker Change: In addition to our restructuring actions, we are launching many projects to improve productivity enhance yields and lower labor costs, we are consolidating regional flooring distribution centers and reducing logistics costs to align with present conditions.

Chris Wellborn: We are consolidating regional flooring distribution centers and reducing logistics costs to align with present conditions. We are completing the conversion of our residential LVT program from flexible to rigid products, and we are improving our mix in our sheet vinyl category. Our laminate volumes grew as we expanded our customer base and enhanced sales with existing customers. The margins of our insulation and panels businesses have declined as fewer projects are being initiated in industry; competition escalates. In Australia and New Zealand, our results were stronger given our actions to improve price and mix, though new products and retail, through new products and retail promotions.

Speaker Change: We are completing the conversion of our residential L. B T program from flexible to rigid products and we're improving our mix and our sheet vinyl category.

Speaker Change: <unk> volumes grew as we expanded our customer base and enhance sales with existing customers. The.

Speaker Change: The margins of our installation and panels businesses have declined as fewer projects are being initiated and industry competition escalates.

William Christopher Wellborn: In Australia and New Zealand, our results were stronger given our actions to improve price and mix through new products and retail promotion. Additionally, increased manufacturing volume and associated productivity gains contributed to margin improvement in our business. In Flooring North America, despite challenging market conditions, volumes improved year-over-year in some markets and channels, though partially offset by price and mixed dynamics. Our margins benefited from productivity gains driven by operational improvements, lower input costs, logistics efficiencies, and restructuring.

Speaker Change: Australia, and New Zealand, our results were stronger given our actions to improve price and mix the new products in retail through new products and retail promotions.

Chris Wellborn: Increased manufacturing volume and associated productivity gains contributed to margin improvement in our business. In flooring North America segment, despite challenging market conditions, volumes improved year by year in some markets and channels, though partially offset by price and mixed dynamics. Our margins benefited from productivity gains driven by operational improvements, lower input costs, logistics efficiencies, and restructuring. This year we have expanded our relationships with larger US home builders who are increasing in the share of the market. Residential remains weak, with home sales turnover at the lowest level since 2008 and consumers continuing to delay remodeling projects. Both of our luxury carpet collections and our value-oriented polyester products are accelerating.

Speaker Change: Increased manufacturing volume and associated productivity gains contributed to margin improvement in our business.

Speaker Change: In flooring, North America segment, despite challenging market conditions volumes improved year over year in some markets and channels.

Speaker Change: So partially offset by price and mix dynamics, our margins benefited from productivity gains driven by operational improvements lower input cost logistics efficiencies and restructuring.

William Christopher Wellborn: This year, we have expanded our relationships with larger U.S. homebuilders who are increasing their share of the market. However, residential remains weak, with home sales turnover at the lowest level since 2008 and consumers continuing to delay remodeling projects.

Speaker Change: This year, we have expanded our relationships with larger U S. Homebuilders, who are increasing their share of the market residential remains weak with home sales turnover at the lowest level since 2008 and consumers continuing to delay remodeling projects.

William Christopher Wellborn: Both of our luxury carpet collections and our value-oriented polyester products are accelerating. Sales of our LVT and laminate collections were stronger at the Retailer and Builder Champs. Our recent laminate expansion is ramping up to satisfy higher demand for our waterproof flooring. The commercial sector continues to outperform residential, with hospitality, government, and education channels leading, though fewer projects are being initiated. Jeff, I'll return the call to you for closing remarks. Thank you.

Speaker Change: Both of our luxury carpet collections in our value oriented polyester products are accelerating.

Chris Wellborn: Sales of our LVT and laminate collections were stronger in the retailer and builder channels. Our recent laminate expansion is ramping up to satisfy higher demand for our waterproof flooring.

Speaker Change: A R L. B T N laminate collections were stronger in the retailer and builder channels.

Speaker Change: Our recent laminate expansion is ramping up to satisfy higher demand for waterproof flooring.

Chris Wellborn: The commercial sector continues to outperform residential, with hospitality, government, and education channels leading, though fewer projects are being initiated.

Speaker Change: The commercial sector continues to outperform residential with hospitality government and education channels, leading than fewer projects are being initiated.

Jeff Lorberbaum: Jeff, I'll return the call to you for closing remarks. Thank you. We anticipate present conditions continuing in the third quarter with elevated interest rates, inflation, and weak housing sales impact on markets. In a current environment, we're executing plans to optimize our revenues and costs. We're managing the controllable aspects of our business, including innovative product introductions, reducing overhead, and rationalizing less efficient assets. We're streamlining operations by reducing complexity in our processes and product portfolios. Our restructuring initiatives will deliver significant savings and enhance our performance when our markets recover. We continue to benefit from lower energy and raw material costs, partially offset by labor and freight inflation.

Speaker Change: Jeff I'll return the call to you for closing remarks.

Jeffrey S. Lorberbaum: We anticipate present conditions continuing in the third quarter with elevated interest rates, inflation, and weak housing sales impacting our market. In the current environment, we're executing plans to optimize our revenues and costs. We're managing the controllable aspects of our business, including innovative product introductions, reducing overhead, and rationalizing less efficient assets. We're streamlining operations by reducing complexity in our processes and product portfolios. Our restructuring initiatives will deliver significant savings and enhance our performance when our markets recover.

Jeff: Thank you.

Speaker Change: We anticipate present conditions continuing in the third quarter with elevated interest rates inflation and weak housing sales impacting our markets and our current environment, we're executing plans to optimize our revenues and costs, we're managing the controllable aspects of our business, including innovative product introductions, reducing overhead and <unk>.

Speaker Change: <unk> less efficient assets, we're streamlining operations by reducing complexity in our processes and product portfolios.

Our restructuring initiatives will deliver significant savings and enhance our performance when our markets recover we continue to benefit from lower energy and raw material costs, partially offset by labor and freight inflation.

Jeffrey S. Lorberbaum: We continue to benefit from lower energy and raw material costs, partially offset by labor and freight inflation. In the third quarter, we anticipate pricing pressures will continue given low industry volumes, constrained consumer spending on large purchases, and consumers trading down. As usual, European summer holidays will seasonally impact our sales and performance. Given these factors, we anticipate our third-quarter adjusted EPS to be between $2.80 and $2.90, excluding restructuring or other one-time charges.

Jeff Lorberbaum: In a third quarter, we anticipate pricing pressures will continue given low industry volumes, constrained consumer spending on large purchases, and consumers trading down. As usual, European summer holidays will seasonally impact our sales and performance. Given these factors, we anticipate our third quarter adjusted EPS to be between $2.80 and $2.90, excluding restructuring or other one-time charges. While we manage the short-term environment, we're preparing to capitalize on the demand that occurs when the industry rebounds. Residential remodeling is our industry's largest category and should lead the recovery as the interest rates decline and consumer confidence improves. Across our region's new home construction is needed to satisfy demand, and aging homes will require remodeling to meet homeowners' needs.

Speaker Change: In the third quarter, we anticipate pricing pressures will continue given low industry volumes constrained consumer spending on large purchases and consumers trading down.

Speaker Change: As usual European summer holidays will seasonally impact our sales and performance given these factors, we anticipate our third quarter adjusted EPS to be between $2 80 and $2.90.

Speaker Change: Excluding restructuring or other one time charges.

Jeffrey S. Lorberbaum: While we manage the short-term environment, we're preparing to capitalize on the demand that occurs when the industry recovers. Residential remodeling is our industry's largest category and should lead the recovery as interest rates decline and consumer confidence improves. Across our regions, new home construction is needed to satisfy demand, and aging homes will require remodeling to meet homeowners' needs.

Speaker Change: While we manage the short term environment, we're preparing to capitalize on the demand that occurs when the industry rebounds residential remodeling as our industry's largest category and should lead the recovery as interest rates decline and consumer confidence improves across our regions new home construction as needed to satisfy demand in AG.

Speaker Change: Homes will require remodeling to meet homeowners needs. In addition, nuc apart commercial projects will be initiated as the economy strengthens and our product investments will enhance our participation.

Jeff Lorberbaum: In addition, new commercial projects will be initiated as the economy strengthens, and our product investments will enhance our participation.

Jeffrey S. Lorberbaum: In addition, new commercial projects will be initiated as the economy strengthens, and our product investments will enhance our participation. As the world's largest flooring manufacturer, we have the products, capabilities, and financial strength to optimize our results as the market recovers. We'll now be glad to take your questions. Ladies and gentlemen, at this time, we'll begin that question and answer session. To ask a question, you may press the star and then one using a touch screen and telephone.

Operator: As the world's largest flowing manufacturer with the products, capabilities, and financial strength to optimize our results as the market recovery, we will now be glad to take your questions. Ladies and gentlemen, at this time we'll begin that question-and-answer session. To ask a question, you may press star and then one using a touch of your telephone. If you are using a speaker phone, would you ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. In the interest of time, we do ask that you please limit yourselves to one question and a single follow-up.

Speaker Change: As the world's largest flooring manufacturer was the products capabilities and financial strength to optimize our results as the market recovers well.

Speaker Change: I will now be glad to take your questions.

Speaker Change: Ladies and gentlemen at this time, we'll begin the question and answer session.

Speaker Change: To ask a question you May press Star and then one using a touchtone telephone.

Operator: If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star. In the interest of time, we do ask that you please limit yourselves to one question and a single follow-up. At this time, we'll pause momentarily to assemble the roster. And our first question today comes from... Eric Bosshard from Cleveland Research. Please go ahead with your question. Good morning.

Speaker Change: If you are using a speaker phone, we do ask that you. Please pickup your handset prior to pressing the keys to ensure the best sound quality to.

Speaker Change: To withdraw your question you May press Star two.

Speaker Change: In the interest of time, we do ask that you. Please limit yourselves to one question and a single follow up.

Operator: At this time, we'll pause momentarily to assemble the roster. And our first question today comes from...

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: And our first question today comes from.

Eric Bosshard: Eric Bosshard from Cleveland Research. Please go ahead with your question. Good morning, thanks. The restructuring or cost-out program, whichever you call it, I'm just curious; you've gone through a couple of these the last few years. The projects that you've identified here, why were they not included in the last one or asked a different way, like why take cost and capacity out now? Well, when we're looking at the market, the where it is now, we think there'll still be some time before we see this significant recovery in the next year. And so we're trying to work through how we're going to optimize the profits both in the short term and the long term.

Speaker Change: Eric Bosshardt from Cleveland Research. Please go ahead with your question.

Eric Bosshard: Thanks. The restructuring or cost out program, whichever you call it. I'm just curious if you've gone through a couple of these in the last few years.

Eric Bosshard: Good morning. Thanks.

Speaker Change: The restructuring or cost out program.

Speaker Change: Whichever you call it.

Eric Bosshard: Just curious you've gone through a couple of these the last two years.

Speaker Change: The projects that you've identified here why are they not included in the last one.

Jeffrey S. Lorberbaum: The projects that you've identified here, why were they not included in the last one? Or put another way, like why take cost and capacity out now? Well, when we compare the market to where it is now, we think there'll still be some time before we see a significant recovery into next year. And so we're trying to work through how we're going to optimize profits both in the short term and the long term.

Speaker Change: Or asked a different way like why take cost and capacity out now.

Speaker Change: Uh huh.

Jeffrey S. Lorberbaum: And we believe that taking more costs out will position us better in the second half, and it will also increase our profitability as the market recovers. Within this, I guess, the second component of this is you think about solving for the growth scenarios in 25. How much capacity do you have to support growth next year or embedded in that? What is the growth assumption you're considering as you right-size capacity or optimize?

Speaker Change: Well when we're looking at the market where it is now we think there'll still be some time before we see the significant recovery.

Speaker Change: Into next year and so we're trying to work through how we're going to optimize the profits both on a short term and a long term and we believe that taking more cost out will position us better in the second half and it will also increase our profitability as the market recovers.

Jeff Lorberbaum: And we believe that taking more cost out will position us better in the second half, and it will also increase our profitability as the market recovers.

Jeff Lorberbaum: Within this, I guess the second component of this is you think about solving for the growth scenarios in 25. How much capacity do you have to support growth next year or embedded in that? What is the growth assumption you're considering as you rate size capacity or optimize capacity? As we think about next year, we think that we're going to start seeing the cycle move from what the low point is at. The demand for housing today remains strong, and we think there's pen-up demand in the remodeling markets, but we can't predict the timing of it. The decline of inflation, the change in interest rates will positively impact consumer confidence, housing sales, home remodeling, commercial activity, which all should have a significant impact.

Speaker Change: Within this I guess the second component of this as you think about.

Speaker Change: Solving for the growth scenarios in 'twenty five.

Speaker Change: Yeah.

Speaker Change: How much capacity do you have to support growth next year or embedded in that what is the growth assumption, you're considering as you right size capacity or optimize capacity.

Speaker Change:

Jeffrey S. Lorberbaum: As we think about next year, we think that we're going to start seeing the cycle move from where it is now. Demand for housing today remains strong, and we think there's pent-up demand in the remodeling market, but we can't predict the timing of it. The decline of inflation and the change in interest rates will possibly impact consumer confidence, housing sales, home remodeling, and commercial activity, which should all have a significant impact on our category.

Speaker Change: But as we think about next year, we think that we're going to start seeing the cycle moved from from what the low point is at the.

Speaker Change: Demand for housing today remains strong and we think there's pent up demand in our remodeling markets, but we can't predict the timing of it the decline of inflation. The change in interest rates will positively impact consumer confidence housing sales home remodeling commercial activity, but you all should have a significant impact on our category.

Jeff Lorberbaum: I mean, if an impact on our category, as it improves, we think we'll get the leverage in these cost structures in our product mix. On an individual business, we have that we put investments in in the areas where we thought we would have the most growth rate in the pieces and those the businesses that we're putting new stuff in is the laminate business, the counter top business with courts, the slab business in Europe, and the insulation businesses.

Jeffrey S. Lorberbaum: As it improves, we think we'll get leverage in these cost structures and our product mix, on an individual business we have that we put investments in in the areas where we thought we would have the most growth rate in the pieces and those, uh, the businesses that we're putting new stuff in are the laminate business, the countertop business with quartz, the slab business in Europe, and the insulation businesses. We believe those have the most opportunities for higher growth, and we have invested in them so we're ready to take advantage of the next few years as they improve. Thank you.

Speaker Change: As it improves we think we'll get the leveraging these cost structures in our product mix on an individual business. We have the we put investments in the areas, where we thought we would have the most.

Speaker Change: Growth rate and the pieces and those.

Speaker Change: The.

The businesses that we're putting this stuff in as the laminate business.

Speaker Change: A countertop business with courts.

Speaker Change: The slab business in Europe, and the installation businesses. We believe those have the most opportunities for higher growth and we have invested in those so we're ready to take advantage of the next few years as they improve.

Jeff Lorberbaum: We believe those have the most opportunities for higher growth, and we have invested in those, so we're ready to take advantage of the next few years as they improve.

David McGregor: Thank you. Our next question comes from David McGregor from Longbow Research. Please go ahead with your question. Yes. Good morning. Thanks for taking the questions.

Speaker Change: Thank you.

David Sutherland MacGregor: Our next question comes from David McGregor from Longbow Research. Please go ahead with your question. Good morning.

Speaker Change: Our next question comes from David Macgregor from Longbow Research. Please go ahead with your question.

David Sutherland MacGregor: Thanks for taking the questions. I guess just thinking, while we're on the topic of restructuring and cost reductions, can you just talk about how the anticipated savings, which I think you shared some aggregate numbers on that, would fall across the three reporting segments? As you look at the restructuring savings, first of all, the initial reactions that we took last year, we've realized about $110 million through the second quarter and should see approximately $130 million by year end. That program was fairly evenly spread across all three of the segments, maybe with Flooring North America a little bit more.

David Macgregor: Yes, good morning, thanks for taking the questions.

Jeff Lorberbaum: I guess just thinking about what we're on the topic of restructuring and the cost reductions. Can you just talk about how the anticipated savings, which I think you shared some aggregate numbers on, that how that would fall across the three reporting segments? As you look at the restructuring savings, first of all, the initial reactions that we took last year, we've realized about of the 150 million that we announced about 110 million through the second quarter and just see approximately about 130 million by year end. That program was fairly evenly spread across all three of the segments, maybe with the Florida North America, a little bit more.

David Macgregor: I guess, just thinking well, we're on the topic of restructuring and cost reductions can you just talk about how the anticipated savings, which I think you've shared some aggregate numbers on that how that would fall across the three reporting segments.

As you look at the restructuring savings first of all the initial react actions that we took last year, we've realized about of the $150 million that we announced about $110 million through the second quarter and should see approximately about $130 million by <unk>.

Speaker Change: Year end that program was fairly evenly spread across all three of the segments, maybe with flooring North America, a little bit more.

Jeff Lorberbaum: With the announcement today of the additional 100 million dollars, as we said, 20 to 25 would be recognized this year, a much larger piece into the following year. And then all businesses are continuing to look at reductions in S&A operations and logistics. And as you look at that, Florida North America will have more benefits than the other segments in the recently announced action.

James F. Brunk: With the announcement today of the additional $100 million, as we've said, 20 to 25 would be recognized this year, a much larger piece into the following year. And then all businesses are continuing to look at reductions in SG&A operations and logistics. And as you look at that, Florey North America, you know, will have more benefits than the other segments in the recently announced action. Thank you for that color.

Speaker Change: With the announcement today of the additional $100 million as we said 20 to 25, we'd be recognized this year a.

Speaker Change: A much larger piece.

Speaker Change: Two the following year and then all businesses are continuing to look at reductions in SG&A APA.

Speaker Change: Operations and logistics.

Speaker Change: And as you look at that.

Speaker Change: Flooring, North America will have more benefit than the other segments and the recently announced actions.

David McGregor: Thank you for that color. And this is a follow-up.

Speaker Change: Okay. Thank you for that color.

David Sutherland MacGregor: And this is a follow-up, I wanted to get you to talk a little more about the commercial business where you're seeing a little more strength, and you are in residential, and you noted some softness, though, is now starting to creep into this business through, you know, fewer projects being initiated. Just talk about what you're seeing there. And you know, is there a difference between the main street commercial versus institutional business?

Just as a follow up I wanted to get you to talk a little more about the commercial business, where youre seeing a little more strikes and yard residential you noted.

Jeff Lorberbaum: I wanted to get you to talk a little more about the commercial business where you're seeing a little more strength than you are in residential. And you noted some softest, though, is now starting to creep into this business through, you know, fewer projects being initiated. Just talk about what you're seeing there. And, you know, is there a difference between the mainstream commercial versus institutional business, and what level of growth should we anticipate through the second half from commercial? You're correct. Commercial is holding up better than residential. We are seeing some slowing and new project and postponement of it.

Speaker Change: Some softness though is now starting to creep into this business through fewer projects being initiated can you just talk about what youre seeing there and is there a difference between the main street commercial versus institutional business what level of growth should we anticipate the second half from commercial.

David Sutherland MacGregor: And what level of growth should we anticipate through the second half from commercial? You're correct; commercial is holding up better than residential. We are seeing some slowing and new projects and the postponement of them. If you look by channel... The ones that are outperforming for us are hospitality, retail, government, and education. We're also taking actions to increase our penetration with large strategic accounts, and we're increasing our participation with them. The good news is that in these categories, pricing is more resilient given the greater differentiation in the marketplace.

Speaker Change: Youre correct commercial is holding up better than residential.

Speaker Change: We're seeing some slowing in new projects.

Speaker Change: Postponement of it if you look by channels.

Jeff Lorberbaum: If you look by channels, the ones that are outperforming for us are hospitality, retail, government, and education. We're also taking actions to increase our penetration with large strategic accounts, and we're increasing our participation with them. The good news is that in these categories, pricing is more resilient and give them more differentiation in the marketplace. And then just keep in mind, as we come out of this thing, commercial improvement takes longer because even though the macro things change, the planning and construction times take longer to do so that there's a lag between them. Can you talk about what the growth is through the second half, which you think you might see there?

The ones that are outperforming for us or hospitality retail government and education.

Speaker Change: We're also taking actions to increase our penetration with large strategic accounts.

Speaker Change: Sure.

Speaker Change: Increasing our participation with them.

Speaker Change: Yeah.

Speaker Change: The good news is that in these categories pricing is more resilient and give them more differentiation in the marketplace.

David Sutherland MacGregor: And then just keep in mind as we come out of this thing; commercial improvement takes longer because even though the macro things change, the planning and construction times take longer to do so that there's a lag between them. Can you talk about what the growth is for the second half? What do you think you might see there?

Speaker Change: And then just keep in mind as we come out of this thing commercial to improvement takes longer because even though the macro things change.

Speaker Change: Planning and construction times take longer to do so that there's a lag between them.

Speaker Change: Okay and can you talk about what the growth is in the second half what do you think you might see there.

Jeff Lorberbaum: We're projecting it's going to be down somewhat, and it's different by market, by channel all over the place, but I mean, it is slowing someone. Okay.

David Sutherland MacGregor: We're projecting it's going to be down somewhat. It's different by market, by channel, all over the place, but I mean, it is slowing.

Speaker Change: We're projecting it's going to be down somewhat.

Speaker Change: It's different by market by channel all over the place, but I mean, it is slowing somewhat.

Susan Marie Maklari: Okay, thanks, Jeff. Our next question comes from Susan Maklari from Goldman Sachs. Please go ahead with your question. Thank you. Good morning, everyone.

Susan McClarry: Thanks, Chef. Our next question comes from Susan McClarry from Goldman Sachs. Please go ahead with your question. Thank you. Good morning, everyone. Just my first question is a bit about how you're driving the business through the products. One of the things that you've mentioned is the product differentiation that you're focused on, as well as the cost side of things. Can you talk a bit about what some of those benefits or those features are that you're stressing in those products? And as those gain traction over the coming quarters, how should we think about what they can contribute in either the back half of this year or even into next year in terms of perhaps mixed shift and what that could mean for the business on a top line as well as a profitability perspective?

Jeff: Okay. Thanks, Jeff.

Jeff: Our next question comes from Susan Macquarie from Goldman Sachs. Please go ahead with your question.

Susan Marie Maklari: Thank you good morning, everyone. Good morning.

Susan Marie Maklari: Good morning, Jeff. One of the things that you've mentioned is the product differentiation that you're focused on as well as the cost side of things. Can you talk a bit about what some of those benefits or those features are that you're stressing in those products?

Susan Marie Maklari: Good morning.

Susan Marie Maklari: I guess my first question is a bit about how you're driving the business through the products one of the things that you've mentioned is the product differentiation that you're focused on as well as the cost side of things can you talk a bit about what some of those benefits to those features are that you are stressing in those products.

Jeffrey S. Lorberbaum: And as those gain traction over the coming quarters, how should we think about what they can contribute in either the back half of this year or even into next year in terms of perhaps mix shift and what that could mean for the business on a top line as well as a profitability perspective? == Notes: The new products, in the new products, one is that we've continued to invest in putting them out in the marketplace and bringing new products. And every category participates. In ceramics, we put in new assets that can make tiles with different color intensities, textures, three-dimensional surfaces, different shapes, and sizes.

Speaker Change: Gain traction over the coming quarters, how should we think about what they can contribute in either the back half of this year or even into next year in terms of perhaps mix shift and what that could mean for the business on the top line as well as a profitability perspective.

Jeff Lorberbaum: Sure. The new products in the new products, one is we've continued to invest in putting them out in the marketplace and bringing new products. And every category is participating. In ceramic, we put in new assets that can make tiles with different color intensity, textures, three-dimensional surfaces, different shapes, and sizes. In LVT, we've taken actions that we can actually enhance the coloration and textures. And we've also introduced a different core, a renewable polymer core, as another category. In LAMINET, which we've introduced features that will impact both the durability and the sound acoustics with it as we go through.

Speaker Change: Sure.

Speaker Change: The new products.

Speaker Change: In the new products. One is we've continued to invest in putting them out in the marketplace and bringing new products in every categories participating.

Speaker Change: In ceramic we put in new assets it can.

Speaker Change: Cows with different color intensity textures, three dimensional surfaces different shapes and sizes.

Jeffrey S. Lorberbaum: In LVT, we've taken actions that can actually enhance the coloration and textures, and we've also introduced a different core we call a renewable polymer core as another category, and Laminit, which we've introduced features that will impact both the durability and the sound acoustics with it as we go through. And even in the different countertop businesses, in our quartz countertop business, we're introducing higher-value veining technologies in the mid-price points, and every product category has features like this that we're doing as we come out.

Speaker Change: And L. T. We've taken actions that we can actually enhance the coloration and textures and we've also introduced a different core we call. It a renewable polymer core is another category.

Speaker Change: In laminate, which we've introduced features that will impact both the durability and the sound acoustics with it as we go through.

Jeff Lorberbaum: And even in the different countertop businesses, in our quartz countertop, we're introducing higher value vaning technologies and the MIS price points. And every product category has... features like this that we're doing as we come out. What's happened is the biggest part of the market that's been affected. The bottom end is doing better and the high end.

Speaker Change: And even in the different countertop businesses and our quartz countertop, we're introducing.

Speaker Change: Higher value veining technologies, and the mid price points in every product category has feature.

Speaker Change: Features like this that we're doing as we come out.

Jeffrey S. Lorberbaum: What's happened is the biggest part of the market that's been affected, the bottom end is doing better, and the high end, the middle part, which goes through retail, is the most affected, and these features and benefits will have a lot of positive impact when the retail business picks up as consumers come back into the marketplace and get more comfortable. Okay, that's helpful. And then it was encouraging to see that you did $90 million in share buybacks in the quarter. Can you talk a bit about what drove your decision to do that?

Speaker Change: What's happened is the biggest part of the market. That's been affected the bottom end is doing better than the high in the middle part, which goes through retail is the most affected and these features and benefits will have a lot of positive impact when the retail business picks up as consumers come back in the marketplace and get more confident.

Susan McClarry: The middle part which goes through retail is the most affected, and these features and benefits will have a lot of positive impact when the retail business picks up as consumers come back in the marketplace and get more confident. Okay, that's helpful. And then I'll think it was encouraging to see that you did $90 million of share buybacks in the quarter. Can you talk a bit about what drove your decision to do that? And should we take it as a sign, perhaps, of you having some greater confidence in the visibility and the forward trajectory of the business?

Speaker Change: Yeah.

Susan Marie Maklari: And should we take it as a sign perhaps of you having some greater confidence in the visibility and the forward trajectory of the business? Is it a sign that maybe we've turned the corner and you're feeling better about things from here? You probably answered my question for me.

Speaker Change: Okay. That's that's.

Speaker Change: That's helpful.

Speaker Change: And then it was encouraging to see that you did $90 million of share buybacks in the quarter.

Speaker Change: Can you talk a bit about what drove your decision to do that and should we take it.

Speaker Change: Perhaps our view, having some greater confidence in the visibility and the forward trajectory of the business is it a sign that maybe we've turned the corner and you're feeling better about things from here.

Jeff Lorberbaum: Is it a sign that maybe we've turned the corner, and you're feeling better about things from here? I think you probably answered my question for me. We're more confident that we are reaching the end of the cycle. We have taken additional actions to manage the short-term pressures by taking additional costs out. We're confident that the markets are going to recover. We can't predict the moment, but we know they're going to recover. So it's a good time to buy shares. And does that mean maybe that you'll do more of them in the future? Well, our balance sheet, as you know, is strong, and past cycles we've had multiple opportunities coming out of these things as the industry recovers with acquisitions.

Jeffrey S. Lorberbaum: We're more confident that we are reaching the end of the cycle. We have taken additional actions to manage the short-term pressure by taking additional costs out. We're confident that the markets are going to recover. We can't predict the moment, but we know they're going to recover. So it's a good time to buy shares. And does that mean maybe you'll do more of them in the future?

Speaker Change: I think you probably answered my question for me.

Speaker Change: We're more confident that we are reaching the end of the cycle. We have taken additional actions to manage the short term pressures by taking additional costs out.

Speaker Change: We're confident that the markets are going to recover.

Speaker Change: We can't predict the moment, but we know theyre going to recover so it's a good time to buy shares.

Speaker Change: And does that mean, maybe that youll do more of them in the future.

Jeffrey S. Lorberbaum: Well, our balance sheet, as you know, is strong. In previous cycles, we've had multiple opportunities coming out of these things as the industry recovers with acquisitions, and we'll continue to evaluate share repurchases as a part of our capital allocation strategy. Okay, thank you. Good luck with everything.

Speaker Change: Well our balance sheet as you know is strong.

Speaker Change: In past cycles, we've had multiple opportunities coming out of these things as the industry recovers with acquisitions and we'll continue to evaluate share repurchases as a part of our capital allocation strategy.

Susan McClarry: And we'll continue to evaluate share repurchases as a part of our capital allocation strategy. Okay, thank you. Good luck with everything.

Speaker Change: Okay. Thank you good luck with everything thank you.

Mike: Thank you. Our next question comes from Mike, call from RBC Capital Markets. Please go ahead with your question. All right, thanks for taking my questions.

Michael Jason Rehaut: Thank you. Our next question comes from Michael from RBC Capital Markets. Please go ahead with your question. All right. Thanks for taking my questions.

Michael Jason Rehaut: Our next question comes from Mike <unk> from RBC Capital markets. Please go ahead with your question.

Michael Jason Rehaut: I think the prior question around second half growth sounded like that was specific to commercial. Maybe could we zoom out and just, you know, you've been organically down mid-single digits from a top line standpoint, and in the first half, can you talk about what's embedded from a top line standpoint for 3Q and how you're thinking about that into 4Q as well? Sure.

Michael Jason Rehaut: Alright, thanks for taking my questions.

Mike: Just I think the prior question I'm second half growth made it sounded like that was specific to commercial maybe could we zoom out and just you know you've been organically down. I'm in single digits from a top line standpoint, and in the first half, you talk about what's embedded from a top line standpoint for three Q and how you're thinking about that into four Q as well. Sure. We at this point don't anticipate anything changing the present conditions in the third quarter. And we built in just a continuation of weak demand and pressure on pricing and all, and continued low industry utilization.

Speaker Change: I think the prior question.

Matt: Half growth Matt.

Speaker Change: It sounded like that was specific to commercial maybe could we assume now.

Speaker Change: <unk> been organically down mid single digits from top line standpoint in the first half.

Speaker Change: Talk about what's embedded from a topline standpoint for <unk> and how youre thinking about that into <unk> as well.

Speaker Change: Sure.

Speaker Change: <unk>.

Jeffrey S. Lorberbaum: At this point, we don't anticipate anything changing the present conditions in the third quarter. And we've built in just a continuation of weak demand and Pressure on Pricing and Continued Low Industry Utilization. We don't see the mix changing with consumers in the period much from where it is.

Speaker Change: Well at this point, we don't anticipate anything changing the present conditions in the third quarter and we built in just a continuation of weak demand.

Speaker Change: <unk>.

Speaker Change: Pressure on pricing and all and continued low industry utilization.

Jeff Lorberbaum: We don't see the mix changing with a consumer in the period much from where it is. And so that we see the trading down continuing. We see a new construction; you know, maybe softening a little bit, but not a lot. And then we still have remodeling that's compressed, and just remind everybody the remodeling business is our highest margin business because they tend to buy better quality products than the other residential channels. In addition to remind everybody, the third quarter is always seasonally slower, and don't forget European holidays. They take off, and it pulls down our third quarter.

Speaker Change: We don't see the mix changing with the consumer in the period much from where it is.

Jeffrey S. Lorberbaum: So, we see the trading down continuing. We see new construction, you know, maybe softening a little bit, but not a lot. And then we still have remodeling that's compressed.

So that.

We see the trading down continuing we see new construction may be softening, a little bit, but not a lot and then we still have remodeling that's compressed and just to remind everybody. The remodeling business is our highest margin business because they tend to buy better quality products than the other residential channels.

Jeffrey S. Lorberbaum: And just to remind everybody, the remodeling business is our highest-margin business because they tend to buy better quality products and other residential chambers. In addition, to remind everybody, the third quarter is always seasonally slower, and don't forget European holidays. They take off, and it pulls down our third quarter, and then...

Speaker Change: <unk>.

Speaker Change: In addition to remind everybody the third quarter is always seasonally slower and don't forget European holidays.

Speaker Change: They take off and it pulls down our third quarter and then.

Jeff Lorberbaum: and in general, we're anticipating compared to last year, we're going to see some improvements from all the different actions we've been taking. If you go into the fourth quarter, we think that central banks will start reducing rates, but we expect that the impact on us, we probably won't feel until we go into the next year. And then, again, the seasonality of it declines with the holidays, where people spend on other things than home and commercial projects. And then with this, given where we are, built into ours is continued low volume of our industry, which means we're going to have shutdowns and other absorbed overhead as we maintain the discipline in our inventory levels as we go through.

Jeffrey S. Lorberbaum: In general, we're anticipating, compared to last year, we're going to see some improvements from all the different actions we've been taking as we go into the fourth quarter. We think that central banks will probably start reducing rates, but we expect that... The impact on us probably won't be felt until we go into the next year. And then, again, the seasonality of it declines with the holidays, when people spend on other things than home and commercial projects.

Speaker Change: In general, we're anticipating compared to last year, we're going to see some improvements from all of the different actions we've been taking.

Speaker Change: If you go into the fourth quarter.

Speaker Change: We think that the central banks will probably start reducing rates, but we expect that.

Speaker Change: The impact on us, we probably won't feel until we go into the next period into next year.

Speaker Change: And then again the seasonality of it declines with.

Speaker Change: The holidays, where people spend on other things that home and commercial projects.

Speaker Change:

Jeffrey S. Lorberbaum: And then with this, given where we are, built into ours is a continued low volume in our industry, which means we're going to have shutdowns and unabsorbed overheads as we maintain the discipline in our... and our inventory levels as we go through. Other than that, I guess, as we get out in that area there and further out, we could start seeing cost increases in different pieces. And as those things happen, we'll have to consider, you know, do we need to make any changes and raise prices in the future? The Bulletproof Executive 2013, What else is there? In the fourth quarter, one other comment. We actually have two additional days in the period due to just the way the calendar follows.

Speaker Change: And then with this given where we are built into ours is continued low volume of our industry, which means we're going to have shutdowns and unabsorbed overheads as we maintain the discipline in our.

Speaker Change: And our inventory levels as we go through.

Jeff Lorberbaum: Other than that, I guess as we get out in that air and further out, we could start seeing cost increases in different pieces, and as those things happen, we'll have to consider, you know, do we need to make any changes and raise prices in the future as the markets change. What else is there?

Speaker Change: Other than that I guess as.

Speaker Change: As we get out in that area for their and further out.

Speaker Change: We could start seeing cost increases in different pieces.

Speaker Change: And as those things happen, we will have to consider.

Speaker Change: We need to make any changes and raise prices in the future.

Speaker Change: As the markets change.

Speaker Change: What else is there in the fourth quarter one other comment.

Jim: In the fourth quarter, one other comment: we actually have two additional days in the period due to just the way the calendar falls. Got it. Okay, that's really comprehensive. Thank you for that. As a follow-up question, you know, so top line in the near term sounds like status quo. I guess your guide, then it implies that I think the operating margin, but, eventually, is still kind of flatish, which, to your point, you have some normal seasonality, but there's obviously puts and takes around a seasonality, but then some of the actions that you're taking. So can you, you know, can you can you speak to, I guess, the ability to continue to improve margins from here in the back half of the year despite these top line pressures?

Speaker Change: We actually have two additional days in the period due to just the way the calendar falls.

Michael Jason Rehaut: Got it. Okay. That's really comprehensive. Thank you for that.

Speaker Change: Got it okay. That's really comprehensive thank you for that.

Speaker Change: As a follow up question.

Michael Jason Rehaut: As a follow-up question, You know it sounds like top line and then your term sounds like status quo. I guess your guide then implies that I think the operating margin sequentially is still kind of flattish, which to your point, you have some normal seasonality, but there's obviously puts and takes around that seasonality, but then some of the actions that you're taking. So can you, you know, can you speak to, I guess, the ability to continue to improve margins from here in the back half of the year despite these top line pressures? Well, I mean, we gave you our expectations for the third quarter.

Speaker Change: So top line in the near term sounds sounds like status quo I guess your guide there.

Speaker Change: Is that I think the operating.

Speaker Change: Margin.

Speaker Change: So are you still kind of flattish.

Speaker Change: Which to your point you have some normal seasonality, but there's obviously puts and takes around that.

Speaker Change: But then some of the actions that you're taking.

Speaker Change: So can you can you can you speak to.

Speaker Change: Yes.

Speaker Change: The ability to continue to improve margins from here in.

Speaker Change: In the back half of the.

Speaker Change: For the year. Despite these top line pressures.

Speaker Change:

Jim: Well, I mean, we gave you the expectations for the third quarter. Is that most of the improvements coming from the internal actions were taking rather than the marketplace. However, we are seeing some improvements in volume, as we said, and I don't know, it couldn't be as almost maybe half the product categories are different places. And, but at the same time, there's still huge pressure on pricing and mix. So anything that we're picking up in the volume piece is being offset by the pricing and mix in the marketplace in the second half. Got it.

Speaker Change: We gave you the XP.

Speaker Change: Expectations for the third quarter as yet.

Jeffrey S. Lorberbaum: Please see the complete disclaimer at https://sites.google.com or at www.sites.google.com. However, we are seeing some improvements in volume, as we said. I don't know if it could be as almost, maybe half the product categories are different places, but at the same time, there's still huge pressure on pricing and mix. So anything that we're picking up in the volume piece is being offset by the pricing of mix in the marketplace in the second. Got it. Okay. Thanks, Jeff.

Speaker Change: Most of the improvement is coming from the internal actions, we're taking rather in the marketplace. However, we are seeing some improvements in volume as we said.

Speaker Change: And I don't know it could be is almost at maybe half the product categories are different places.

But at the same time, there is still huge pressure on pricing and mix.

Speaker Change: So anything that we're picking up in the volume piece is being offset by the pricing and mix in the marketplace in the second half.

Keith Hughes: Okay. Thanks, Jeff. Our next question comes from Keith Hughes from Truist. Please go ahead with your question. Thank you. In the release in Florida, North America, and in the prepare comments, you called out LVT and laminate. Yes, question: were those businesses up year over year? LVT and laminate. The volumes have improved. We've improved some of the margins in those businesses we go through. You have to remember last year, there was all kinds of also negative pressures in the comparisons. So, laminate is gaining share and we're doing our self-help actions in LVT. It's helping those. And those were two of the categories, Keith, that Jeff was mentioning that, from a unit volume, was up.

Jeff: Okay. Thanks, Jeff.

Keith Brian Hughes: Our next question comes from Keith Hughes from Truist. Please go ahead with your question. Thank you.

Jeff: Our next question comes from Keith Hughes from Truest. Please go ahead with your question.

Keith Brian Hughes: In the release in Flooring North America and in the prepared comments, you called out LVT and laminate. This question, were those businesses up year over year?

Keith Brian Hughes: Thank you and the release in flooring, North America and in the prepared comments, you called out <unk> and laminate.

Keith Brian Hughes: Just a question of where those businesses up year over year.

Keith Brian Hughes:

Speaker Change: Lv and laminate.

Jeffrey S. Lorberbaum: The volumes have improved, we've improved some of the margins in those businesses we go through. You have to remember last year there was all kinds of negative pressures in the comparison. So, Laminate is gaining share, and we're doing our self-help actions in LVT. And those were two of the categories, Keith, that Jeff was mentioning that from a unit volume standpoint, units were up. Okay, great.

Speaker Change: The volumes have improved we've improved some of the margins in those businesses as we go through you have to remember last year. There was all kinds of also negative pressures and the comparisons so.

Speaker Change: Laminate is gaining share and we're doing our self help actions in Lv T is helping those yes. Those were two of the categories. Keith said, Jeff was mentioning that from a unit volume was up.

Jeff Lorberbaum: You know, units were up and up. Okay, great. And here, earlier, a comment to the last question that I think you said half your product categories are up in volume. It's a remarkable statement if I heard it correctly. That feels like share gain. I don't think your markets are that strong. Is that fair to say?

Speaker Change: Units were up in both okay, great and your earlier comment to the last question that I think you said half of your product categories are up and volume is a remarkable statement if I heard it correctly.

Keith Brian Hughes: And your earlier comment to the last question, that I think you said half your product categories are up in volume, that's a remarkable statement if I heard it correctly. That feels like share gain. I don't think your markets are that strong. Is that fair to say?

Speaker Change: That feels like share gain I don't think Youre markets are that strong is that fair to say.

Jeff Lorberbaum: Remember, I'm talking about a worldwide market with a lot of different parts of it. Yeah, right, I get it. With different comparisons in Europe. I mean, the market's really depressed. So, and in Europe a year ago, we were struggling with some cost structures with high gas prices. And pieces. It was more difficult to compete against the import. So, I mean, we've taken actions in different marketplaces to help us. I think that we're increasing our distribution and some. And I mean, it's a tough market, but I think we're executing well. Right, right.

Jeffrey S. Lorberbaum: Remember, I'm talking about a worldwide market with a lot of different parts. Yeah, right. I guess with different comparisons. In Europe, I mean, the market's really depressed. So and in Europe, a year ago, we were struggling with some cost structures, with high gas prices and pieces; it was more difficult to compete against imports. I mean, we took actions in different marketplaces to help us. I think that we're increasing our distribution in some markets and, although it's a tough market, I think we're executing well. Okay, great, thank you.

Speaker Change: Remember I'm talking about a worldwide market with a lot of different parts right.

Speaker Change: With different comparisons in.

Speaker Change: In Europe, I mean, the market's really depressed.

Speaker Change: And in Europe, a year ago, we were struggling with some cost structures with high gas prices and pieces. It was both.

Speaker Change: Difficult to compete against the imports I mean, we've taken actions in different marketplaces to help us.

Speaker Change: We're increasing our distribution and some and.

Speaker Change: This is a tough market, but I think we're executing well.

Michael Ray Hut: Thank you. Our next question comes from Michael Ray Hut from JP Morgan. Please go ahead with your question. All right. Thanks. Good morning, everyone. Question.

Speaker Change: Okay, great. Thank you.

Speaker Change: Yes.

Yeah.

Michael Jason Rehaut: Our next question comes from Michael Rehaut from J.P. Morgan. Please go ahead with your question. I'd love to try and get a sense from your perspective of what drove the upside to the second quarter, if there were specific areas, within perhaps, for example, North America, that maybe came in a little better than expected, either on either the sales or the margin side. And if you see any of these trends, perhaps, continuing into the third quarter, that might cause a similar result, you know, if those trends kind of remain in place, that might ostensibly also drive some upside to the 3Q guide.

Speaker Change: Our next question comes from Michael Rehaut from JP Morgan. Please go ahead with your question.

Alright. Thanks.

Speaker Change: Everyone.

Michael Jason Rehaut: Question I'd love to get a sense from your perspective.

Michael Ray Hut: I'd love to try and get a sense from your perspective of what drove the upside to the second quarter through specific areas within perhaps, for example, North America that maybe came in a little better than expected. Either, and this more broadly, either the sales or the margin side. And if you see any of these trends, perhaps continuing into the third quarter, that might, you know, cause a similar result. You know, if those trends kind of remain in place, that that might ostensibly also drive some upside to the 3Q guide. The 3Q guide has, as I just said, it's got the assumption that the present conditions in the second quarter continuing to the third quarter.

Speaker Change: What drove the upside to the second quarter.

Speaker Change: Specific areas.

Speaker Change: Within perhaps for example, North America that maybe came in a little better than expected.

Speaker Change: Either and just more broadly on either the sales or the margin side.

Speaker Change: And if you see any of these trends perhaps.

Speaker Change: Continuing into the third quarter that might.

Cause a similar result.

Speaker Change: Trends remain in place.

Speaker Change: That might've Sensibly also drive some upside to the <unk> guide.

Michael Jason Rehaut: The 3Q Guide, as I just said, it's got the assumption that the present conditions in the second quarter will continue into the third quarter. Don't forget Europe. You have to know that when people go on vacation, they quit spending money, and whatever's happening, it takes a huge dip, and the holidays are different in every country, pulls down our period. The Pressure is on Pricing and Mix. I can't...

Speaker Change: On the <unk> guide has as I just said, it's got the assumption that the present conditions in the second quarter continue into the third quarter. It had don't forget Europe.

Jeff Lorberbaum: It had, don't forget Europe. I mean, you have to know that when I go on vacation, people quit spending money, and whatever's happening, it takes a huge dip, and the holidays are different in every country. So it pulls down our period. The pressure is on pricing and mix. I can't, I can't, I can't emphasize enough. I mean, the markets when you have industries with huge capital investments running at low throughputs. Everybody's trying to optimize the marketplaces, and our aggressiveness in trying to bring new markets, satisfy people different, expand our distribution, or helpiness. But it's difficult.

Speaker Change: You have to know that when they go on vacation people quit spending money and whatever is happening. It takes a huge dip in a different the holidays are different in every country. So it pulls down our period.

The pressures on pricing and mix I can't I can't.

Jeffrey S. Lorberbaum: I can't emphasize enough, I mean the markets, when you have industries with huge capital investments running at low Throughputs, everybody's trying to optimize the marketplace, and our aggressiveness in trying to bring new markets, satisfy different people, and expand our distribution is helping us, but it's difficult. You know, Dan, on your question, Mike, on, you know, specifically flooring North America, I mean, generally across all three segments, you know, Jeff's prepared remarks talking about managing controllable costs, and the business is really benefiting from those cost reduction and restructuring activities, while we're still investing in new products, which should improve our mix and profitability as some of this pent-up demand gets released later in the recovery. Okay, no, I appreciate that.

Speaker Change: Can't emphasize enough I mean, the markets when you have.

Speaker Change: Industries with huge capital investments running at low.

Speaker Change: Throughput everybody is trying to optimize the marketplaces and our aggressiveness in trying to bring new market satisfied people different expand our distribution are helping us but it's difficult.

Jim: You know, then your question, Mike, on specifically like flooring North America, I mean, generally across all three segments, you know, and just prepare remarks talking about managing the controllable costs and the business is really benefiting from those costs reduction and restructuring activities. While we're still investing in new products, which should improve our mix and profitability as some of this pent-up demand gets released later in the recovery. Okay. Now I appreciate that.

Speaker Change: Yes.

Mike: <unk> Mike.

Mike: Specifically like flooring North America.

Mike: Generally across all three segments.

Mike: Jeff's prepared remarks talking about managing the controllable costs and the business has really benefited from those cost reduction and restructuring activities, while we're still investing in new products, which should improve our mix and profitability as some of this pent up demand gets released later.

Mike: And the recovery.

Michael Jason Rehaut: Secondly, just wanted to get your sense in terms of how to think about the top line in the back half of the year. You know, currently, we're looking for a slight decline on a consolidated sales basis for both 3Q and 4Q. I was wondering if that is, similar to how you're thinking about the business, particularly in the fourth quarter, where there is an easier comp. And then just technically, if I could just throw in an additional technical question, the share count really didn't move that much. The average share count didn't really move that much in 2Q. You had the share buyback, though.

Speaker Change: Okay No I appreciate that.

Michael Ray Hut: Secondly, just wanted to get your sense in terms of how to think about the top line in the back half of the year. You know, currently we're looking for a flight decline on a consolidated sales basis for both 3Q and 4Q. I was wondering if that is similar to how we're going to do that. You're thinking about the business, particularly in the fourth quarter, where there is an easier prompt.

Speaker Change: Secondly.

Speaker Change: Just wanted to get your sense in terms of how you're thinking about the top line.

Speaker Change #100: In the back half of the year.

Speaker Change:

Speaker Change #101: Currently we're looking for a slight decline.

Speaker Change #102: On a consolidated sales basis for both <unk> and <unk> I was wondering if that is.

Speaker Change #103: Two are you thinking about the business.

Speaker Change #103: Particularly in the fourth quarter, where there is an easier comp.

Jim: And then just technically, if I could just throw in an additional technical question, the share count really didn't move that much. The average share count didn't really move that much in 2Q. You had to share by back though, would we expect to see that fully reflected in the share count in 3Q or is there any offset, you know, share issuance that might still keep the share count around 64 million. But the last question, it is a way to average. And so it depends on when, when obviously each of the shares was purchased. So you'll start to see more of the impact as you go into Q3 and then for the four years.

Speaker Change #104: And then just technically if I could just throw it in a digital technical question the share count really didn't move that much the average share count didn't really move that much in <unk> you had the share buyback, though I would should we expect to see that fully reflected in the share count in <unk> or is there any offset.

Michael Jason Rehaut: Should we expect to see that fully, you know, reflected in the share count in 3Q, or is there any offset, you know, share issuance that might still keep the share count around 64 million? Well, the last question: it is a weighted average, and so it depends on when, obviously, each of the shares was purchased. So you'll start to see more of the impact as we go into Q3 and then for the full year.

Speaker Change #105: You know share issuance that might still keep the share count around $64 million.

Speaker Change #106: So the last question. It is a it is a weighted average and so it depends on win win obviously each of the shares was purchased so you'll start to see more of the impact as you go into Q3, and then for the full year. So there will be some some change.

Michael Jason Rehaut: So there will be some changes as you go out the balance of the year. In terms of the top line, you know, for the back half, as we've said, we are seeing some unit expansion in some of our product categories. But remember, as Jeff just emphasized, you also have price and mix. So even if you're up a little bit on units, it will either be offset or partially offset at the very least by price and mix. Thank you.

Jim: So there will be some, some change as you go out of the balance of the year in terms of the top line, you know, for the back half. As we said, we are seeing some unit expansion in some of our product categories. But remember, as Jeff just emphasized, you also have price and mix. So even if you're up a little bit on units, it's being basically either offset or partially offset. It's the very least by price and mix. Okay, thank you.

Speaker Change #106: The balance of the year.

Speaker Change #106: In terms of the top line for the back half as we've said we are seeing some union expansion in some of our product categories, but remember as Jeff just emphasize you also have pricing and mix. So even if you are up a little bit on units.

Speaker Change #107: Being basically.

Jeff: Either offset or partially offset at the very least by price and mix.

Speaker Change #106: Okay.

Speaker Change #108: Okay. Thank you.

Phil: Our next question comes from Phil and I from Jeffries. Please go ahead with your question. Hey guys, congrats on the really strong quarter and in a tough environment. So Jeff, if I heard you correctly, you were kind of hinting at maybe you're seeing higher costs; you could consider raising prices. Certainly, ocean freight, shipping containers, depending on where it's coming from, I think like Asia might be up like three to four X. At least that's what we're hearing. So it's put a lot of pressure for some of your competitors that import products into U.S. like LVT and lab and all that sorts.

Philip H. Ng: Our next question comes from Phil Nye from Jefferies. Please go ahead with your question. Hey guys, congrats on a really strong quarter and in a tough environment.

Philip H. Ng: Our next question comes from Phil <unk> from Jefferies. Please go ahead with your question.

Phil: Hey, guys congrats on a really strong quarter in a tough environment.

Philip H. Ng: So, Jeff, if I heard you correctly, you were kind of hinting at maybe you're seeing higher costs; you could consider raising prices, certainly ocean freight, shipping containers, depending where it's coming from, I think like Asia, might be up like three to four times X, at least that's what we're hearing. So it's putting a lot of pressure on some of your competitors that import products into the US, like LVT and Lamin, of that sort. At least we're hearing maybe there's rumblings of price increases in the back half. I'm curious what you're hearing on that front. So what does that mean for Mohawk?

Philip H. Ng: So just if I heard you correctly, you were kind of hinting at maybe youre seeing higher costs, you could consider raising prices certainly ocean freight shipping containers, depending where it's coming from I think like Asia might be up like three or four X at least that's what we're hearing so it's put a lot of pressure for some of your competitors that important products in the U S like <unk>.

Phil: Let me know that sorts.

Jeff Lorberbaum: At least we're hearing maybe there's a lot of price increases in the back half. I'm curious what you're hearing on that front. And what does that mean for Mulhock? Is that a cost everyone? Does that provide a price umbrella? And how does that potentially impact your portfolio?

Speaker Change #111: At least we're hearing maybe here's rumblings of price increases in the back half I'm curious what you're hearing on that front. So what does that mean for Mohawk is that a cost headwind does that provide a pricing umbrella and how does that potentially impact your portfolio.

Jeffrey S. Lorberbaum: Is that a cost headwind? Does that provide a pricing umbrella? And how does that potentially impact your portfolio? Well, I'll just comment that the increased ocean freight and potential tariff should improve or should benefit our domestic manufacturing. And then on the other side, the imported products, where we'd have them, we'll have to pass through the ocean freight changes as everyone else will as it changes. I guess the... We think that on the material side of it, we think that prices have bottomed, and we are seeing some increases now, and this marketplace is really hard to determine where they're going to be six months from now.

Jeff Lorberbaum: Well, I'll just comment that the increased ocean freight and potential tariffs should improve our or should benefit our manufacturing domestic manufacturing. And then the other side, the imported products where we'd have them will have to pass through the ocean freight changes as everyone else will as it changes. I guess the, I think you had another material side of it. We think that the prices of bottom and we are seeing some increases now. In this marketplace, it is really hard to determine where they're going to be six months from now. So, given the low demand, you know, we see it coming; we'll just have to find out if it's going to happen sooner or later.

Well I'll just comment that the increased ocean freight and potential tariff should improve our our should benefit our manufacturing domestic manufacturing.

And then the other side the imported products, where we'd have them.

Speaker Change #111: We'll have to pass through the ocean freight changes as everyone else well as it changes.

Speaker Change #112: I guess the.

Speaker Change #113: I think you had another on the materials side of it we think that the prices have bottomed and we are seeing some increases now in this marketplace is really hard to determine where they're going to be six months from now.

Speaker Change #113: So given the low demand.

Speaker Change #113: Where we know we see it coming we'll just have to we will have to find out if it's going to happen sooner or later, usually when you have low demand like we have theres not much pricing.

Jeff Lorberbaum: Usually, when you have low demand like we have, there's not much pricing. Upward Movement Materials, but we'll have to react to whatever happened and manage through it as we go through. Would you recommend hearing any rub links? Importers are looking to raise prices at this point? I don't hear anything, but they're going to have to. It's not if. I mean, these freight rights are up significantly.

Jeffrey S. Lorberbaum: [inaudible] Upward Movement Materials, but we'll have to react to whatever happens and manage through it as we go. But Jeffrey, am I hearing any rumblings? Importers are looking to raise prices at this point. I don't hear anything, but they're going to have to, it's not if.

Speaker Change #113: Upward movement materials, but we'll have to react to whatever happens.

Speaker Change #113: And manage through it as we go through.

Speaker Change #113: So jeffrey not hearing any rumblings importers are looking to raise prices at this point.

Jeffrey: I don't hear anything, but theyre going to have to it's not if I mean these freight rates are up significantly.

Philip H. Ng: These freight rates are up significantly. And then maybe this is a tough question to ask because you mentioned a few times that it's hard to predict timing, but let's say if we do get rate cuts this fall, whether it's the U.S. and Europe, how does that kind of ripple through? Could you see the uplift as soon as spring next year?

Speaker Change #113: Bob.

Jeff Lorberbaum: And then maybe this is a tough question to ask, because you mentioned a few times that it's harder to predict timing. But let's say if we do get rate cuts this fall, whether it's the US and Europe, how does that kind of ripple through? Could you see the up list as soon as spring next year? Like I want to get a sense of what the lag works and how different parts of your end markets should kind of shake out. Do we need to actually see existing home sales turn, or rate cuts coming down provides that confidence.

Speaker Change #116: And then maybe this is a tough question to ask because you've mentioned a few times that it's hard to predict timing.

Speaker Change #115: But let's say if we do get rate cuts. This fall, whether it's the U S and Europe, how does that kind of ripple through could you see the uplifts as soon as spring next year like wanted to get a sense of what lag works.

Jeffrey S. Lorberbaum: Like, I want to get a sense of what the lag works and how different parts of your end markets should kind of shake out. Do we need to actually see existing home sales turn, or do rate cuts coming down provide that confidence? and maybe Unlock HELOC, just kind of help us unpack what it means from a rate cut standpoint and how that, the lag, and how it impacts different parts of your portfolio if it works the same as historical, which it may or may not.

Speaker Change #115: How different parts of your end markets.

Speaker Change #117: Check out do we needed to actually see existing home sales turn or rate cuts coming down provides that confidence and maybe unlocks HELOC just kind of help us unpack what it means from a rate cut standpoint, and how that the lag and how it impacts different parts of your portfolio.

Jeff Lorberbaum: Maybe it unlocks you lock just kind of help us unpack what it means from a rate cuts standpoint and how that the lag and how it impacts different parts of group portfolio. If it works the same as a historical, which it may or may not, when rates start coming down, the market, the people's confidence goes up. And what happens is you have this multiple years of pushed out remodeling that happened. So usually the consumer that's sitting there when they start feeling better about the economy and different pieces, the remodeling industry picks up and there's very limited lag times when it starts.

Speaker Change #118: If it works the same as historical which it may or may not.

Philip H. Ng: When rates start coming down, the market, people's confidence goes up, and what happens is you have these multiple years of pushed out remodeling that happens. So usually, the consumer that's sitting there, when they start feeling better about the economy and different pieces, the remodeling industry picks up, and there are very limited lag times when it starts. That's typically followed by new housing, and existing houses; people start moving more and more confident in doing it.

Speaker Change #118: When rates start coming down.

Speaker Change #119: The markets the People's confidence goes up and what happens is you have this multiple years of pushed out remodeling that happened. So usually the consumer that's sitting there when they start feeling better about the economy and different pieces. The remodeling industry picks up and there is very limited lag times when it starts.

Jeff Lorberbaum: That's typically followed by the new housing and existing houses. People start moving more and more confidence in doing it. And then you typically have anywhere from a nine to 12 month lag from that point before the commercial sector, which takes longer to plan, get budgets approved, before you start seeing those type of things; help tends to be the typical recovery. And when you start with the timing of it, I mean, your guess is as good as mine. Sooner is better for me. But you would expect your on our side to come back first. That's there in particular North America.

Speaker Change #119: That's typically followed by the new housing.

Speaker Change #119: And existing houses.

Speaker Change #119: People start moving more.

Speaker Change #119: And more confidence in doing it and then you typically have anywhere from a nine to 12 month lag from that point before the commercial sector, which takes longer to plan get budgets approved before you start seeing those type of things help tends to be the typical recovery.

Philip H. Ng: And then you typically have anywhere from a nine to twelve month lag from that point before the commercial sector, which takes longer to plan, get budgets approved, before you start seeing those types of things, help tends to be the typical recovery. When you start with the timing of it, I mean, your guess is as good as mine. Earlier is better for me.

Speaker Change #120: And when you start with the timing of it I mean, your guess is as good as mine sooner is better for me.

Jeffrey S. Lorberbaum: Okay. But you would expect your R&R side to come back first, is that fair, in particular North America? It always does.

Speaker Change #121: Okay, but you would expect your R&R side to come back first is that fair in particular North America. It always does it.

Jeff Lorberbaum: It always does it.

Jeff Lorberbaum: All right, that's helpful.

Okay, Alright, thats helpful color really appreciate it.

Philip H. Ng: All right, that's helpful, Collin. I really appreciate it. Our next question comes from Matthew Bouley from Barclays. Please go ahead with your question. Hey, good morning, everyone.

Jeff Lorberbaum: I really appreciate it.

Matthew Bowley: Our next question comes from Matthew Bowley from Barclays. Please go ahead with your question. Hey, morning, everyone. Thanks for taking the questions back on the new restructuring. I'm curious if it was if it was more kind of a change to your near medium term outlook for that recovery or, you know, it was part of this something more structural around kind of the longer term need for capacity in certain product categories. I think you mentioned it might be a little more weighted to the flooring North America. So, yeah, any color on that kind of decision process.

Speaker Change #121: Our next question comes from Matthew Bouley from Barclays. Please go ahead with your question.

Matthew Adrien Bouley: Thanks for taking the questions. Back on the new restructuring, I'm curious if it was more kind of a change to your near or medium-term outlook for that recovery, or, you know, was part of this something more structural around kind of the longer-term need for capacity in certain product categories? I think you mentioned it might be a little more weighted to the floor in North America.

Matthew Adrien Bouley: Hey, good morning, everyone. Thanks for taking the questions.

Speaker Change #123: Back on the the new restructuring.

Matthew Adrien Bouley: I'm curious if it was if it was more kind of a changed here near or medium term outlook for that recovery or was part of this something more structural around kind of the longer term need for capacity in certain product categories. I think you mentioned it might be a little more weighted to <unk>.

Jeffrey S. Lorberbaum: So yeah, any color on that kind of decision process? Thank you. We have to manage the circumstances we're in. We know the market's going to turn in the future, but we don't know the timing it's going to turn.

Speaker Change #124: <unk> flooring North America, so yeah any color on that kind of decision process. Thank you.

Jeff Lorberbaum: Thank you. We have to manage the circumstances we're in. We know that markets going to turn in the future. We don't know the timing it's going to turn. We know that our view was that the second half of the year will continue to be difficult. So we encouraged all of our businesses to find ways to improve their margins to get through the near term without hurting our long-term potential in the future. And all of them put together projects to improve their productivity to you like the assets. In some cases, we've itemed some assets that we can start back up.

Speaker Change #124: Okay.

Speaker Change #125: We have to manage the circumstances we're in.

Speaker Change #126: We know that market is going to turn in the future. We don't know the timing is going to turn.

Jeffrey S. Lorberbaum: We know that our view was that the second half of the year would continue to be difficult. So we encouraged all of our businesses to find ways to improve their margins to get through the near term without hurting our long-term... Potential in the future, and All of them put together projects to improve their productivity and utilize the assets. In some cases, we've idled some assets that we can start back up, and in other cases, we've shut down some higher-cost facilities. We've taken costs out with people.

Speaker Change #127: Know that.

Speaker Change #127: Our view was that the second half of the year or continue to be difficult. So we encourage all of our businesses to find ways to improve their margins.

Speaker Change #127: To get through the near term without hurting our long term potential in the future and all of them put together projects to improve their productivity to up to utilize the assets in some cases, we've island some assets that we can start back up and in other cases.

Jeff Lorberbaum: And in other cases, we've shut down some higher costs. We've taken costs out with people. We are managing the product portfolios aggressively to have them in the best shape we can have in. And we think we're doing all the right things to take advantage of when this thing turns, and don't forget when it turns, it's going to take several years. Typically, the industry runs it's slightly over GDP. And when this thing turns, you typically have multiple years of above-industry growth to get us back to the trend light. But given the restructuring we take, it's important to reiterate that we feel good about the capacity that we still have installed to react to, as Jeff said, that recovery period.

Speaker Change #127: We've shut down some higher cost ones.

Jeffrey S. Lorberbaum: We are managing the product portfolios aggressively to have them in the best shape we can have them in. And we think we're doing all the right things to take advantage of when this thing turns. And don't forget, when it turns, it's going to take several years.

Speaker Change #127: We've taken costs out with people, we are managing the product portfolios aggressively to have them in the best shape, we can have in it.

Speaker Change #127: And we think we're doing all the right things to take advantage of when this thing turns and don't forget when it terms, it's going to take several years typically the industry runs at slightly over GDP.

James F. Brunk: Typically, the industry runs it slightly over GDP, and when this thing turns, you typically have multiple years of above-industry growth to get us back to the trend. Given the restructuring you mentioned, it's important to reiterate that we feel good about the capacity that we still have installed to react to this recovery.

Its thing turns you typically have multiple years of above industry growth to get us back to the trend lines, where given the restructuring you've taken because it's important to reiterate that we feel good about the capacity that we still have installed to react to.

Speaker Change #127: Jeff said that recovery period.

Matthew Adrien Bouley: Okay, that's helpful. And then, kind of zooming into the near term, I think the difference between price and cost got a little wider in Q2 than in Q1. I think as we look forward, clearly, the year-over-year comparisons are very different on price and cost as we get into Q3. I mean, is the expectation that you would still stay a little bit negative on price-cost or any additional color on how that would play out over these next few months?

Jim: Got it. Okay, that's helpful. And then secondly, kind of zooming into the near term, I think the difference between price and cost got a little wider in Q2 than in Q1. I think as we look forward, clearly the year-over-year comparisons are very different on price and cost as we get into Q3. I mean, is the expectation that you would still stay a little bit negative on price cost or any additional color on how that would play out over these next few months. Thank you. You are correct that in the quarter, if you just look at material and energy, that's about $90 million of benefit from a year-over-year perspective compared to the weaker price mix of 111.

Okay got it okay. That's helpful.

Speaker Change #128: And then secondly.

Speaker Change #129: Zooming into the near term I think.

Speaker Change #130: The difference between price and cost got a little wider in Q2 than in Q1.

Speaker Change #130: I think as we look forward clearly the year over year comparisons are very different on price and cost as we get into Q3.

Speaker Change #131: Is the expectation that you would still stay a little bit negative on price cost or.

Speaker Change #132: Any additional color on how that would play out over these next few months. Thank you.

Matthew Adrien Bouley: You are correct that in the quarter, you know, if you just look at material and energy, about $90 million of benefit from a year-over-year perspective compared to the weaker price mix of $111 million. That's just material and energy. And then the productivity... As Jeff pointed out, we're implementing additional cost reductions and restructuring actions to manage the situation. Thanks, Jim. Thanks, everyone.

Speaker Change #133: You are correct.

In the quarter. If you just look at material and energy, that's about $90 million benefit from a year over year perspective.

Speaker Change #134: Paired to the weaker price mix of 111, Thats, just material and energy and then the productivity.

Jim: That's just material and energy. And then the productivity, which was close to 50 million, was really there to offset the increases in wages and benefits. Now, as you fast forward the second half of the year, we would expect each of the segments to see that continued price and mixed pressure. But from a year-over-year benefit, also there would be less benefit from input costs as you lap over the lower cost from last year. Now, that is one reason also, as Jeff point out, we're implementing additional cost reductions or restructuring actions to manage the situation. All right.

Speaker Change #134: She was close to $50 million was really there to offset the increases in wages and benefits.

Speaker Change #134: If you fast forward to the second half of the year, we would expect each of the segments and see that continued.

Speaker Change #134: Price and mix pressure.

Speaker Change #134: From a year over year benefit also there'll be less benefit.

Speaker Change #134: From input cost as you lap over the lower costs from last year now that is one reason also as Jeff pointed out we're implementing additional cost reductions and restructuring actions to manage the situation.

Alright, Thanks, Jim Thanks, everyone. Good luck.

Jim: Thanks, Jim.

Jim: Thanks, everyone. Good luck.

James F. Brunk: Our next question comes from Adam Baumgarten from Zellman & Associates. Please go ahead with your question. Hey, guys, you talked about the price or the cost piece on a year over year basis, maybe being less of a tailwind in the back half. Are you actually seeing input sequential input cost inflation as we've gone through the year so far? Prices have been fairly stable. I mean, we buy a lot of pieces, so there are some that are going up. We'll have to see how they evolve and where they're going to go.

Adam Baumgarten: Our next question comes from Adam Baumgarten from Zellman and Associates. Please go ahead with your question. Hey, guys. You talked about the price or the cost piece on a year-per-year basis, maybe being less of a tail and in the back half. Are you actually seeing sequential input cost inflation as we've gone through the year so far? The prices have been fairly stable. I mean, we buy a lot of pieces, so there are some that are going up. We'll have to see how they evolve and where they're going to go. But again, as you come out of these cycles, they're all going to go up.

Speaker Change #135: Our next question comes from Adam Baumgarten from Zelman and Associates. Please go ahead with your question.

Adam Michael Baumgarten: Hey, guys, you talked about the price or the cost piece on a year over year basis, maybe being less of a tailwind in the back half are you actually seeing sequential input cost inflation as we've gone through the year so far.

Speaker Change #137: Prices have been fairly stable I mean, we buy a lot of pieces. So there are some that are going up.

Adam Michael Baumgarten: Sure.

Speaker Change #138: We'll have to see how they evolve and where they're going to go but again you know as you come out of these cycles, they're all going to go up.

Jeff Lorberbaum: That is it. And so, we have to manage our way out of it when it occurs. The key point, Adam, was that we've been very consistent. You see the lower cost slowing through compared to last year. The high point was going to be in the first quarter. We saw a little bit less in the second quarter.

Speaker Change #138: And so we have to manage our way out of it when it occurs.

Speaker Change #138:

Adam Michael Baumgarten: But again, you know, as you come out of these cycles, they're all going to go up, isn't it? And so we have to manage our way out of it when it occurs. Yeah, the key point, Adam, was that, you know, we've been very consistent, as you see the lower costs flowing through compared to last year, the high point was going to be in the first quarter, we saw a little bit less in the second quarter, and I would expect that to continue as you go into the third and fourth quarters as well. Okay.

Speaker Change #138: The key point, Adam was that we've been very consistent.

Speaker Change #139: You see the lower costs flowing through compared to last year.

Adam Michael Baumgarten: High point was going to be in the first quarter, we saw a little bit.

In the second quarter I would expect that to continue as you go into the third and fourth quarter as well.

Adam Baumgarten: I would expect that to continue as you go into the third and fourth quarter as well. Well, okay, got it.

Adam Michael Baumgarten: And then maybe switching gears to laminate, that's been a good part of the story. I guess, where are you seeing from an end market perspective the most adoption there or sort of penetration? Is it in single-family new construction, or home improvement, or both? I guess just some more color there would be helpful.

Speaker Change #140: Okay got it and then maybe switching gears to Atlanta.

Jeff Lorberbaum: And then, maybe, Suction Gears, the laminate that's been a good part of the story. I guess, where are you seeing, from an in-market perspective, the most adoption there, or sort of penetration? Is it in single-family new construction, or home improvement, or both? I guess just some more color there to be helpful. It's really broad-based. What's happened is that laminate's becoming accepted as an alternative to wood flow. And then, in all the markets, builders are using it more than they have. And retail, the retailers are also picking it up and utilizing it. And then, when I'm missing, commercial business doesn't use it at all.

A good part of the story I guess, what are you seeing from an end market perspective, the most adoption there or sort of penetration is it in single family, new construction or home improvement or both I guess, just some more color there would be helpful.

Speaker Change #140: Yes.

Jeffrey S. Lorberbaum: It's really broad-based. What's happened is that laminate is becoming accepted as an alternative to wood floors and or LVT in all the markets. Builders are using it more than they have. Retail. The retailers are also picking it up and utilizing it. And then, Commercial Business doesn't use it at all.

Speaker Change #141: It's really broad based.

Speaker Change #142: What's happened is that laminates, becoming accepted as a alternative to wood floors indoor LDP.

Speaker Change #142: And.

Speaker Change #142: In all the markets.

Speaker Change #142: Builders are using it more than they have.

Speaker Change #142: In retail the retailers are also picking it up and utilizing it.

Speaker Change #142: And then.

Speaker Change #142: So am I missing.

Commercial business doesn't use it at all.

Jeff Lorberbaum: Is it a very limited? Is it? Our laminate, we have unique technologies that makes our laminate look better. And different visuals than other people can make. And so, if in the world markets, as well as the US, we have a huge share of the mid to upper end part of the laminate business. And we have none of the commodity at the bottom. Is it our equipment's different? Our products look different. And the value propositions are different.

Speaker Change #143: Is it a very limited.

Jeffrey S. Lorberbaum: Our laminate, we have unique technologies that make our laminate look better, different visuals than other people can make. So, in world markets as well as the U.S., we have a huge share of the mid to upper end part of the laminate business. We have none of the commodity at the bottom.

Speaker Change #142: Yet.

Speaker Change #144: Our laminate, we have unique technologies that makes our laminate look better and different visuals than other people can make and so if in the world markets as well as the U S. We have a huge share of the mid to upper end part of the laminate business and we have none of the <unk>.

Speaker Change #144: Commodity at the bottom.

Jeffrey S. Lorberbaum: Our equipment is different. Our products look different. The value propositions are different. Okay, I get it.

Speaker Change #144: Our equipment is different our product look different and the value propositions are different.

Jeff Lorberbaum: Okay, guys, thank you. Let's look.

Speaker Change #145: Okay got it thank you best of luck.

Speaker Change #144: Okay.

Katherine Thompson: Our nice question comes from Katherine Thompson from Thomson Research Group. Please go ahead with your question. Hi, thank you for taking my questions today. Based on some of our work and talking to the channel, if you've got some of the field, indicates that you've gained some market share this year. In order to see if you could clarify what games you're seeing either by channel or by product categories and how sustainable you think these games may be. Thank you. We've been aggressive in the marketplace, like everybody else is being in the market. We have good relationships with people.

Adam Michael Baumgarten: Thank you. Best of luck to you. Our next question comes from Kathryn Thompson from Thompson Research Group. Please go ahead with your question. Based on some of our work and talking to the channel, and feedback from the field, in the case that you've gained some market share this year, to see if you could clarify what gains you're seeing either by channel or by product category and how sustainable you think these gains may be. Thank you. We've been aggressive in the marketplace. Like everybody else, we have good relationships.

Speaker Change #144: Our next question comes from Kathryn Thompson from Thompson Research Group. Please go ahead with your question.

Kathryn Ingram Thompson: Hi, Thank you for taking my questions today.

Speaker Change #150: Based on Q bar work and talking to the channel feedback from the field.

Speaker Change #151: The case.

Speaker Change #154: Gained some.

Speaker Change #156: Market share this year.

Speaker Change #149: And we wanted to see if you could clarify.

Speaker Change #147: What gains youre seeing either by channel or by product categories.

Speaker Change #148: How sustainable you think these gains may be thank you.

Speaker Change #147:

Speaker Change #153: We've been aggressive in the marketplace.

Speaker Change #152: Like everybody else is being in the market.

Kathryn Ingram Thompson: We are bringing products and value propositions that are different. We've been investing through the downturn in our sales and marketing. We provide merchandising and promotions to help them maximize their business, and I think we're being rewarded in some places for that.

Speaker Change #155: We have good relationships with people, we are bringing products and value propositions that are different.

Jeff Lorberbaum: We are bringing products and value propositions that are different. We've been investing through the downturn in our sales and marketing activities. We continue to provide merchandising and promotions to help them maximize their business. And I think we're being rewarded in some places for that and increasing our distribution. We have things like with the freight and all the parts, our ceramic business, we have been able to satisfy the high end market of ceramic, for instance, in the commercial channels where there's been disruptions and timing. We've improved our styling and offering, so we've become alternatives for higher-end Italian tile, for instance.

Speaker Change #155: Investing through the downturn in our sales and marketing activities, we continue to.

Speaker Change #155: Provide merchandising and promotions to help them maximize their business and I think we're being rewarded in some places for that and increasing our distribution we have things like.

Jeffrey S. Lorberbaum: We are increasing our distribution. We have things like... With the freight and all the parts, our ceramic business, we have been able to satisfy the high-end market for ceramics, for instance, in the commercial channels, where there have been disruptions in timing. We've improved our styling and offerings, so we've become alternatives for higher-end Italian tile, for instance. So we're taking the right actions in each product category, while at the same time, we're managing our costs and cutting our costs. The management is really doing an excellent job.

Speaker Change #155: With the freight and all the parks our ceramic business, we have been able to satisfy the high end market of ceramic for instance in the commercial channels, where there's been disruptions in timing, we've improved our styling and offerings. So we've become alternatives for higher end Italian tile for instance.

Jeff Lorberbaum: So we're taking the right actions in each product category, while at the same time we're managing our costs and cutting our costs, and the management is really doing an excellent job. Another good example of Catherine is in Europe, in ceramic. With energy costs coming down, we are able to... The level of playing field and being more competitive in that marketplace, and we saw that in the quarter where we proved over Q1 and from a unit perspective and a cost perspective. So we were paying premium prices for everything, so I mean there's a huge change in our capacity to compete in the marketplace today in Europe, for instance, and there was a year ago.

Speaker Change #155: So we're taking the right actions in each product category, while at the same time, we're managing our costs and cutting our costs and it's the management is really doing an excellent job.

James F. Brunk: Another good example, Kathryn is in Europe in ceramics, you know, with energy costs coming down, we are able to... level the playing field and be more competitive in that marketplace. And we saw that in the quarter, where we improved over Q1. And from a unit perspective, and from a cost, this is just some more on Europe. In Europe, when gas prices were 300, the material prices were high. Our ability to compete was really hurt, because we didn't hedge any of our gas prices.

Speaker Change #155: Another. Good example, Kathryn is in Europe, and ceramic with energy costs coming down.

Speaker Change #155: We are able to.

Kathryn Ingram Thompson: Level, playing field and be more.

Kathryn Ingram Thompson: Competitive in that marketplace, and we saw that in the quarter, where we approved over Q1 and.

From a unit perspective, and a cost perspective, so just some more on Europe in Europe when gas prices were 300, the material prices were high.

Kathryn Ingram Thompson: I mean, our ability to compete was really hurt.

Kathryn Ingram Thompson: Didn't hedge any of our gas prices. So we're paying premium prices for everything. So I mean, there is a huge change in our capacity to compete in the marketplace today in Europe for instance, and there was a year ago.

Jeffrey S. Lorberbaum: So we were paying premium prices for everything. So there's a huge change in our capacity to compete in the marketplace today in Europe, for instance, and there was a year ago. Okay, great.

Jeff Lorberbaum: Okay, great. I had just a clarification from your press release yesterday afternoon, and one of the items that said, in terms of the cost-cutting measures, was leveraging technology to lower administrative cost. How much of this could you clarify more? Is this a euphemism for AI and incorporating that to help us understand a little bit more about that phrase. Thanks so much. AI, we're all looking at trying to find ways to use it. We're in the initial stages of understanding it. We're going through training programs with different parts of our organization to try to reutilize it.

Kathryn Ingram Thompson: I have just a clarification from your press release yesterday afternoon. One of the items you said in terms of the cost-cutting measures was leveraging technology to lower administrative costs. How much of this is this a euphemism for AI and incorporating that? Just help us understand a little bit more about that phrase. Thanks so much.

Kathryn Ingram Thompson: Okay great.

Speaker Change #157: Just a clarification from your press release yesterday afternoon, and one of the items set in terms of the cost cutting measures was leveraging technology to lower administrative cost.

Speaker Change #158: How much of this could you clarify bore.

Speaker Change #159: Ethan mentioned for AI, and incorporating that just help us understand a little bit more about that great. Thanks, so much.

Jeffrey S. Lorberbaum: In AI, we're all looking to find ways to use it. We're in the initial stages of understanding it. We're going through training programs with different parts of our organization, and much more in-depth analysis. Transcripts provided by Transcription Outsourcing, LLC. General Businesses, Information Systems.

Speaker Change #160: AI, we're all looking at trying to find ways to use it we're in the initial stages of understanding it we're going through training programs with different parts of our organization to try to utilize it we think it's going to help.

Jeff Lorberbaum: We think it's going to help do much more in depth analysis and see trends that we haven't seen before, so we're investing in it, but we're really at the front end and the opportunities are significant. The general businesses we continue to improve our internal information systems, and we keep using them to reduce our administrative structures and respond rapidly. So you're not, just to clarify, you're not to the point of having AI be part of cost improvement plans quite yet. Is that a fair statement? There's ideas, but I can't say that they have made a major change in the cost structures up to this point.

Speaker Change #160: Too much more in depth analysis, and see trends that we haven't seen before so we're investing in it but we're really at the front end and the opportunities are significant.

Speaker Change #160: The general businesses, we continued to improve our internal.

Speaker Change #160: Information systems, and we keep using them to reduce our administrative structures and respond rapidly.

Jeffrey S. Lorberbaum: We keep using them to reduce our administrative structure and respond rapidly. So you're not, just to clarify, you're not necessarily, you're not to the point of having AI be part of cost improvement plans quite yet. Is that a fair statement?

Speaker Change #161: So youre not just just to clarify.

Speaker Change #162: Not necessarily youre not to the point of having AI.

The part of our.

Speaker Change #163: Cost improvement plans quite yet is that a fair statement.

Jeffrey S. Lorberbaum: There are ideas, but I can't say that they have made a major change in the cost structures. Okay, great. Thank you. Our next question comes from Rafe. Jadrosich from Bank of America, please go ahead with your question. Good morning.

Speaker Change #164: It is but I can't say that they have made a major change in our cost structure is up to this point.

Rafe Jadrosich: Okay, great. Thank you. Our next question comes from race, general usage from Bank of America. Please go ahead with your question. Hi, good morning. Thanks for taking my questions. I just wanted to follow up on some of the productivity gains that you've spoken about, how that carries into the remainder of this year and into next year.

Speaker Change #165: Okay, great. Thank you.

Speaker Change #165: Our next question comes from Reis.

Jeffrey S. Lorberbaum: Geoff <unk> from Bank of America. Please go ahead with your question.

Rafe Jason Jadrosich: Thanks for taking my questions. I just wanted to follow up on some of the productivity gains that you've spoken about and how that carries into the remainder of this year and into next year. If we see volume continue to decline, and let's say it's flat-ish next year, do you think your productivity gains are still enough to drive margin expansion? And then within that, can you just talk about how, versus that $50 million you talked about in the second quarter, how do we think about the gains in 3Q and into 2024?

Hi, good morning, Thanks for taking my questions.

Geoff: I just wanted to follow up on some of the productivity gains.

That you've spoken about how that carries into the remainder of this year and into next year.

Jeff Lorberbaum: If we see volume continue to decline and let's say it's flatish next year, do you think your productivity gains are still enough to drive margin expansion? And then within that you just talk about how versus that 50 million you talk about in the second quarter, how do we think about the gains in 3Q and into 2024? Just from a general point of view, then I'll let Jim try to give you some more view. When the volume's going down, you have to make all these cost changes to try to keep the cut. You don't get any benefits and upticks. What you're having to do is trying to cut the cost out to manage the lower throughputs and pull them down.

Speaker Change #168: We see volume continue to decline.

Speaker Change #168: And let's say, it's flattish next year do you think your productivity gains are still enough to drive margin expansion.

Speaker Change #169: And then.

Speaker Change #170: Within that can you just talk about how versus that $50 million you talked about it in the second quarter, how do we think about the gains in <unk> and into 2024.

Rafe Jason Jadrosich: Just from a general point of view, then I'll let Jim try to give you some more. When the volume's going down, you have to make all these cost changes to try to keep the cut. You don't get any benefits from upticks.

Speaker Change #170: Just from a general point of view, then I'll, let Jim try to give you some more view.

Speaker Change #171: When the volumes going down you have to make all of these cost changes to try to keep the cut you don't get any benefit in upticks, what can happen to do is trying to cut the cost out to manage the lower throughput and pull them down to keep them in line now as we come out of it.

Jeffrey S. Lorberbaum: What you're having to do is trying to cut costs to manage the lower throughputs and pull them down to keep them in line. Now, as we come out of it, what will happen is, as the volume goes up, we're going to try to limit the expansion of these costs and leverage the margins and get them... back to double digits and higher from where we are today. Certainly, volume is the story, Rafe, as you... As you look for volume to pick up, you are also able to run the facilities at a more steady state. Therefore, you have less interruption and less shutdown costs, which certainly helps from an unabsorbed overhead perspective.

Jim: To keep them in line now as we come out of it, what will happen is the volume goes up. to try to limit the expansion of these costs and leverage the margins and get them back to double digits and higher from where we are today. Certainly, volume is the story, Rafe. As you look for volume to pick up, you also are able to run the facilities at a more steady state; therefore, you have less interruption and less shutdown costs, which certainly helps from an unabsorbed overhead perspective. From a productivity view, going through this year and to next, we expect all the businesses are continuing to bring ideas forward on cost reductions, as they talk about CAPEX. For example, about 45% of the capital spending is around cost reductions and product innovations.

Speaker Change #171: Happen is as the volume goes up we're going to try to limit the expansion of these costs and leverage the margins and get them.

Speaker Change #171: Back to double digits and higher.

Speaker Change #171: From where we are today.

Ralph: Certainly volume is a story of Ralph as you as you look for volume to pick you.

You also are able to run the facilities at a more steady state. Therefore, you have less interruption unless shutdown costs, which certainly helps from our unabsorbed overhead perspective from a productivity.

James F. Brunk: From a productivity view, going through this year into next, we expect all businesses to continue to bring ideas forward on cost reductions. As I talked about CapEx, for example, about 45% of capital spending is around cost reductions and product innovation. Those will continue to evolve as we go into next year. As I pointed out, on the restructuring savings of the $100 million we just announced, only, Okay, that's helpful. And then just on the pricing side, as you look across each of the three segments, I know on a year-over-year basis, it's down, but sequentially, are you seeing any type of stabilization? And then just to clarify on an earlier question, you have not yet seen any impact yet from the higher shipping costs in terms of competitors reacting to prices. Not yet, not with the competitors.

Ralph: View going through this year into next.

Ralph: We would expect.

Ralph: All of the businesses are continuing to bring ideas forward on cost reductions as I talk about Capex for example, about 45% of the capital spending is around cost reductions and product innovation. So those will continue to.

Jim: So those will continue to evolve as we go into next year, and as I pointed out under restructuring savings, of the 100 million we just announced, only 20 to 25 will be really recognized this year, and will still have a little bit of a carryover from the 150 million that we originally announced last year. Okay, that's helpful, and then just on the pricing side, as you look across each of the three segments, I know on a year-over-year basis it's down, but sequentially, are you seeing any type of stabilization? And then just to clarify on an earlier question, you have not seen any impact yet from the higher shipping cost in terms of the competitors reacting to price.

Ralph: To evolve as we go into next year and as I pointed out on the restructuring savings.

Ralph: Of the $100 million, we just know it's only 2025 will be.

Ralph: Really recognized this year and we will still have a little bit of a carryover from the $150 million.

Ralph: That we originally announced last year.

Speaker Change #173: Okay. That's helpful and then just on the pricing side.

Speaker Change #174: As you look across each of the three segments I know on a year over year basis, it's down but sequentially are you seeing any any type of stabilization.

Speaker Change #175: And then just to clarify an earlier question.

Speaker Change #176: Do you have not seen any impact yet from from the higher shipping costs in terms of competitors reacting to price.

Rafe Jason Jadrosich: No, on your sequential question. So the biggest move was from Q4 to Q1. Q1 to Q2, though, there are some declines, mostly in the price area, but it's certainly moderating as you go sequentially through the year, but you're still seeing some declines. So 3Q, from 2Q into 3Q, you'd expect it to be sequentially down, just still down, but less than it was down 1Q into 2

Jim: Not yet on the competitors, no, on your sequential question. So the biggest move was from Q4 to Q1, Q1, Q2 though, there are some declines mostly in the price area, but it's certainly moderating as you go sequentially through the year, but you're still seeing some declines.

Speaker Change #177: Not yet.

Speaker Change #178: And the competitors know on that your your sequential question.

Speaker Change #179: So the biggest move was from Q4 to Q1.

Speaker Change #179: Q1 to Q2, though there are some declines mostly in the price.

Speaker Change #179: Area, but its certainly moderating as you go.

Speaker Change #179: Quench really through the year, but you're still seeing declines.

Speaker Change #179: Yeah.

Speaker Change #180: So <unk> <unk> to <unk>, you would expect sequentially down.

Jim: So from Q2 to Q2, you'd expect sequentially down, just still down, but less than it was down, one came into Q2.

Speaker Change #180: Still down but less than it was down one carry into future yes.

Jim: Yes. Thank you.

Speaker Change #180: Alright.

Speaker Change #181: Thank you.

Yes.

Laura Champagne: Our next question comes from Laura Champagne from Loop Capital. Please go ahead with your question. Thanks for taking my question. It's just a follow-on to the last one, which in mix is mix getting, I don't know, it's negative year on year, but sequentially is it getting worse or better in your three major segments? We mix is a tough one because you have not only product mix, but you also have channel mix. So, as we said, as commercial slows, that will have a negative impact on mix, as Jeff talked about the commercial market earlier in the call.

James F. Brunk: Thank you. Our next question comes from Laura Champine from Loop Capital. Please go ahead with your question.

Speaker Change #181: Our next question comes from Laura Champine from Loop capital. Please go ahead with your question.

Laura Allyson Champine: Thanks for taking my question. It's just a follow-on to the last one, which is NICS, is NICS getting, and I know it's negative year-on-year, but sequentially, is it getting worse or better in your three major segments? Your mix is a tough one because you have not only a product mix.

Laura Allyson Champine: Thanks for taking my question just a follow on to the last one which in.

Laura Allyson Champine: Mick Mick getting I don't know its negative year on year.

Speaker Change #183: Is it getting worse or better than your three major segments.

Speaker Change #184: And mix is a tough one because you have not only <unk>.

Speaker Change #185: Product mix, but you also have channel mix, so as we said.

James F. Brunk: But you also have channel mix, so as we've said, as commercial slows, that will have a negative impact on mix, as Jeff talked about the commercial market earlier in the call. But on the flip side, on products, because of our investments that we have made, we are really trying to leverage that to see stronger mix. So you have the combination of the two, so as we look forward, price and mix, it's more about price. As we've said, we think we're going to see, You know, the conditions. We don't see a significant change as we go from second quarter into third quarter and even into fourth quarter.

Commercial.

Speaker Change #185: Slows that will have a negative impact on mix.

Speaker Change #185: Jeff talked about the commercial market earlier in the call.

Jim: But on the flip side, on the products, because of our investments that we have made, we are really trying to leverage that to see stronger. So you have the combination of the two. So as we look forward, price, price, and mix, it's more on the pricing side. So, as we said, we think we're going to see, you know, the conditions; we don't see a significant change as we go from second quarter to the third quarter and even the fourth quarter this year.

Jeff: But on the flip side on the products, we because of our investments that we have made.

Jeff: We are really trying to leverage that to see stronger mix. So you have the combination of the two so as we look forward price net price and mix, it's more on the pricing side as we said, we think we're going to see.

Jeff: The conditions, we don't see a significant change as we go from second quarter into third quarter and even into fourth quarter. This year.

Jeff Lorberbaum: And ladies and gentlemen, we'll conclude our question-and-answer session.

Operator: And, ladies and gentlemen, we've got a... We'll conclude our question and answer session. I'd like to turn the conference call back over to Jeff Lorberbaum for any closing comments. We're confident in the long-term fundamentals of our industry. We are well-positioned to take advantage of the recovery in the housing market, and we expect there to be some different timing of how they come out, but they're all going to come out and go back to more normal things in the next few years. Thank you for taking your time and spending it with us. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.

Speaker Change #186: And ladies and gentlemen.

Jeffrey S. Lorberbaum: We will conclude our question and answer session I'd like to turn the conference call back over to Jeff lower bounds for any closing comments.

Jeff Lorberbaum: I'd like to turn the comments call back over to Jeff Lauerbaum for any closing comment. We're confident in the long-term fundamentals of our industry. We are well positioned to take advantage of the recovery of the housing markets, and we expect to be some different timing of how they come out, but they're all going to come out and go back to more normal things in the next few years. Thank you for taking your time and spending it with us.

Speaker Change #187: We're confident in the long term fundamentals of our industry.

Speaker Change #187: We are well positioned to take advantage of the recovery.

Speaker Change #188: The housing markets and we expect there to be some different timing of how they come out, but they're all going to come out.

Speaker Change #187: And go back to more normal things in the next few years. Thank you for taking your time and spending it with us.

Speaker Change #187: Wow.

Operator: Ladies and gentlemen, with that, will conclude today's conference call and presentation. We do thank you for joining.

Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We do thank you for joining you.

Operator: You may now disconnect your lines.

Speaker Change #189: You may now disconnect your lines.