Q3 2025 JELD-WEN Holding Inc Earnings Call

Hello and welcome to gelwan third quarter 2025 conference call please, note. That this call is being recorded after the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by 1 on your telephone keypad. Thank you. I'd now like to turn the call over to James Armstrong, vice president of investor relations, you may now. Go ahead, please.

Thank you, and good morning. We issued our third quarter 2025 earnings release last night and posted a slide presentation to the investor relations portion of our website, which can be found at investors.com.

We will be referencing this presentation during our call.

Today, I am joined by Bill Christensen chief executive officer and Samantha, Stoddard Chief Financial Officer.

Before I turn it over to Bill I would like to remind everyone that during this call we will make certain statements that constitute forward-looking statements within the meaning of the private Securities. Litigation Reform, Act of 1995.

The statements are subject to a variety of risks and certainties including those set forth in our earnings release and provided in our forums 10K and 10 Q filed with the SEC.

Children does not undertake any duty to update forward-looking statements, including the guidance. We are providing with respect to certain expectations for future results.

Additionally, during today's call, we will discuss non-gaap measures which we believe can be useful. In evaluating our performance, the presentation of this additional information should not be considered in isolation or as a substitute for the results prepared in accordance with gaap.

A reconciliation of these non-GAAP measures to their most directly comparable financial measures calculated under GAAP can be found in our earnings release and in the appendix of our earnings presentation.

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

Thank you, James and good morning, everyone.

Before we begin, I want to once again recognize our entire team for their ongoing commitment and continued hard work. In what has remained a environment.

The past quarter has tested our organization in many ways.

I'm grateful for the dedication, resilience, and collaboration shown across every part of Jeld-Wen.

It is because of their continued efforts that we remain able to navigate this environment and position the company for long term success.

The third quarter both in Europe and North America was marked by further softening in market conditions and an overall degradation in demand trends.

While we had anticipated stability at low levels, both new construction and repair and remodel activity weakened further.

Ability to capture additional market share.

With customer orders. Coming in below expectations.

As a result, our performance fell short of our plans.

And we are taking clear actions to address the areas that need Improvement.

Strength, and execution and ensure that we are better aligned with the current market conditions.

We continue to experience price cost headwinds across several areas of the business.

Inflation. In both labor and materials has persisted.

And given current market dynamics.

We have seen some push back on both tariff related pricing actions.

And price increases to offset Market inflation.

These factors have created additional short-term margin pressure.

Which we are actively working to offset through cost reductions operational efficiencies and focused performance Improvement initiatives.

Importantly.

We remain confident that the steps we are taking will help us better balance our cost structure with current demand.

While protecting our long-term strategic priorities.

Turning now to slide 4.

And our third quarter highlights.

The quarter reflected, a more difficult backdrop than anticipated.

Driven by softening demand and continued inflationary pressure.

In response, we are taking meaningful actions to address our cost base, including an approximately 11% reduction of our North America and corporate headquarters.

Additionally, we are preserving liquidity while continuing to advance our transformation efforts.

As part of that work, we are announcing a strategic review of our European business.

Evaluating all potential alternatives to strengthen our balance sheet and sharpen our strategic focus.

While the process is in its early stages and there is nothing further to announce at this time.

We believe this review will allow us to effectively address our upcoming maturities and enhance our long-term balance sheet flexibility.

We are also evaluating additional options around smaller non-core assets such as our distribution business and select sale leaseback transactions.

But have nothing specific to announce at this point in time.

Our liquidity position remains strong.

With approximately $100 million in cash.

And the proximately 400 million of revolver, availability.

As a reminder, we have no debt maturities on the December 2027.

Importantly, our only relative Covenant requires an approximate minimum of $40 million in total. Liquidity compared to our current position of approximately 500 million dollars.

We also continue to strengthen the North American team with the addition of Rachel Elliott as EVP of North America.

Rachel brings broad experience from our time with other notable Building Products companies and we are excited to have her join the organization.

While the near-term environment remains uncertain. We continue to focus on what we can't control, improving, execution, strengthening operations, and ensuring a strong financial Foundation.

These actions are designed to ensure that we remain. Well, positioned to capture growth as market conditions, improve,

With that, I'll hand it over to Samantha to review our financial results in Greater detail.

Thank you, Bill turning to slide 6 as Bill mentioned market conditions, remain challenging throughout the quarter and our results came in below our internal expectations.

The shortfall primarily reflects softer market demand operational challenges that limited our ability to capture incremental, share as expected and ongoing price and cost headwinds across several categories.

Revenue for the quarter was $809 million, with core revenue down 10% year-over-year.

Decline was driven mainly by lower volumes in both North America and Europe. As Market softness more than offset the benefits from our cost reduction initiatives and productivity efforts

Prior quarter, although below prior year and below our expectations.

The lower margin primarily reflected continued price cost pressure unfavorable volume and Staffing levels that were set in anticipation of market share gains that did not materialize.

Turning to cash flow. Earnings pressure and continued investment in transformation initiatives led to negative free cash flow in the quarter.

That said working Capital Performance remained disciplined contributing modestly to liquidity despite the softer sales environment.

Our net debt leverage increased to 7.4 times driven by lower year-over-year ibida rather than new borrowing.

Reducing leverage remains a top priority for us.

As part of that effort, we have initiated a strategic review of our European segments aimed in part at addressing this elevated leverage and, further, strengthening our balance sheet.

As shown on slide 7, the revenue decline. This quarter was driven primarily by lower volumes with core Revenue down 10% year-over-year.

The softness reflects continued Market weakness and share loss along with carryover from the loss of business, with a Midwest retailer that occurred in the third quarter of last year.

We also had a negative impact from the court ordered deveste of our Towanda operations, which weighed on the year-over-year comparison.

Product mix was slightly positive versus the prior year, but the benefit was not enough to offset the volume pressure.

In a few moments, I will provide additional context on the market factors. Influencing our performance and how we are positioning the business for the remainder of the year.

As shown on slide 8, adjusted ibida for the quarter was 44 million. A decline of about 38 million from the prior year.

This reflects the continued softness in demand and the unfavorable price and cost environment that persisted throughout the quarter.

Lower volumes were the main driver of the decline, as reduced production levels, weighed on earnings, and more than offset the benefits from our ongoing cost actions.

Product, mix width slightly positive.

But the benefit was not enough to offset the volume D leverage from lower demand.

At the same time price and cost pressures remain significant, particularly as labor and material inflation continued to outpace, our ability to recover pricing in the market.

These factors led to a sequential decline in margins and further compressed profitability year-over-year.

With these challenges, we can continue to make steady progress on our transformation and cost reduction programs.

Which provided a partial offset to these headwinds.

We also delivered additional savings within SG&A, reflecting disciplined expense control and execution of the cost actions we've put in place.

Turning to our segment results, on slide 9.

In North America, revenue declined 19% year-over-year, with volume and mix down 13%.

The decline was driven primarily by weaker market demand while mix was slightly positive for the quarter.

The remainder of the year-over-year decline, reflects the court ordered deveste of our Towanda operations.

Adjusted EBITDA for North America was $38 million compared with $75 million in the same quarter last year.

The decrease was largely the result of lower volumes and operational inefficiencies associated with reduced manufacturing throughput, in addition to the price-cost challenges mentioned previously.

These headwinds were partially offset by the benefits from our ongoing cost, reduction and transformation initiative.

In Europe, Revenue increased 2%, year-over-year with volume and mix down 6%.

As in North America mixed with slightly positive. But overall demand remained soft across several key markets.

Adjusted evida for Europe was 16 million, which was roughly flat compared to last year.

As the benefits of productivity improvements and cost actions, largely offset the impact of lower volumes.

Before turning it back to Bill. I want to take a moment to address tariffs which continue to be an area of focus.

At current rates, we estimate, the annualized impact of tariffs on our business to be around 45 million.

With roughly $17 million expected to materialize in our 2025 results.

While the situation remains fluid, we've been largely successful in passing through tariffs or charges to most of our customers.

However, in recent months, we've begun to experience greater resistance from some of our larger accounts which has slightly tempered, our overall recovery rates.

from a sourcing perspective, our exposure remains relatively modest,

Approximately 13% of our combined, Tier 1 and tier 2 supplier spend is subject to potential tariff impact.

As we have previously stated direct sourcing from China represents less than 1% of our total material spend.

Even when including tier 2 exposure China accounts for about 5% overall.

This limited exposure positions us well relative to others in the industry.

Overall, while the tariff environment remains uncertain, we're staying nimble in our approach, actively managing near-term impacts and maintaining a disciplined focus on pricing and sourcing strategies that help mitigate cost pressures.

With that, I'll turn it back over to Bill to discuss our updated Market Outlook and how we're positioning gelden for the path ahead.

Thanks Samantha.

Turning the slide 12. I want to provide some perspective on how the market environment has evolved since our last update.

Earlier this year.

We expected conditions to stabilize at relatively low levels during the back half of 2025.

However, over the past 3 months, we've seen a notable deterioration across our core markets.

Both new construction and repair and remodel activity have weakened further as both consumer confidence and housing. Affordability, remain under pressure

In Canada, the Slowdown has been, especially sharp, with housing starts down more than 40% year-over-year.

In the broader slowdown in the economy.

Given these developments we've updated our Market Outlook expectations in North America. We now anticipate full year demand for Windows and Doors to be down in the high single digits, compared to our prior view of a low to mid single-digit decline.

In Europe, we expect demand for doors to be down mid single digits versus the low single digit decline. We previously forecasted.

Across both regions, demand continues to be concentrated at the lower end of the market with affordability, driving, purchasing, decisions, and limiting overall, mixup Improvement.

Turning to slide 13. I'll walk through our updated full-year guidance.

Following the significant Market deterioration. We saw during the third quarter, we are lowering our 2025 Outlook to reflect current demand levels and operational performance.

We now expect sales of 3.1, to 3.2 billion dollars compared to our previous range of 3.2 to 3.4 billion.

Adjusted ebit da is now expected to be between 105 and 120 million.

Down from our prior range of 170 to 200 million.

Core revenue is expected to decline 10 to 13% compared, with our previous expectation of a 4 to 9% decline.

This change is primarily due to 3 factors.

First, we had limited success on converting, the market share gains. We had planned for, and staffed against earlier this year.

Second. This revision reflects the further weakening in market, demand that emerged late in the quarter and some of our own operational challenges.

On sales, we Face continued pressure in a weak market and experience the modest share loss tied to ongoing. Operational performance issues

Third. Well operations are improving. The pace of that Improvement is not yet where it needs to be and we continue to be focused on execution and consistency across the network.

Forecasted.

We also anticipate continued negative price cost. As pricing pressure, has intensified particularly around the edges of the market.

At the same time, some of our larger customers are pushing back more forcefully, on tariffs, or charges while cost inflation has accelerated across materials, Freight and labor.

On operating cash flow. We now expect the use of approximately 45 million

Compared to our prior forecast for a use of 10 million.

This includes approximately 15 million dollars of restructuring that will occur in the fourth quarter as part of our Workforce reduction.

Although EBITDA expectations have come down, we've taken a disciplined approach to working capital, and our focus on cash management remains unchanged.

We also expect Capital expenditures of approximately 125 million down from our prior forecast of 150 million reflecting a tighter, focus on critical Investments.

Looking ahead to 2026 while we're not providing formal guidance. We would expect capex to be lower than this year's level given the current demand Outlook and our intent to align spending with market conditions.

On Leverage, we are actively addressing the issue.

As part of this, we have announced a strategic review of our European operations.

While we cannot predict the outcome of that process.

It represents 1 potential Avenue to help reduce leverage and strengthen the balance sheet.

We continue to evaluate other strategic options.

Such as selective, smaller asset, reviews, and targeted sales lease backs.

Beyond the European review. However, we have no further updates at this time.

Finally, I want to reiterate that we continue to maintain sufficient liquidity for the midterm.

As of the end of the third quarter, we have not drawn on our revolver and we are taking proactive steps to ensure. Our liquidity position remains strong as we navigate through this challenging environment.

turning to slide 14 this chart Bridges, our 2024 adjusted ebit dub of 275 million to our 2025 guidance, midpoint of 113 million

As shown on the left.

The first step reflects the court order to Wanda divestiture which is expected to reduce ebit da by about fifty million dollars this year.

The most significant change comes from Market volume and mix, which we now expect to reduce earnings by roughly 100 million dollars.

Reflecting the broad-based deterioration. We have seen in both new construction and repair and remodel activity.

We're also seeing a modest impact from share loss. As operational. Challenges have limited our ability to recapture volume in several key product lines.

Moving left to right across the chart price and cost, headwinds have intensified when compared to our earlier expectations.

competitive pricing pressure has increased, especially at the lower end of the market while cost inflation and materials Freight and labor has accelerated

These Dynamics combined with lower base productivity driven by volume loss. Represent another significant drag on earnings.

On the positive side, we continue to benefit from headwind mitigation actions and transformation initiatives.

Which together are expected to contribute about 150 million dollars in savings this year.

These benefits include both carryover savings from 2024.

And the in-ear actions already implemented.

The remaining items include variable compensation and one-time reversals, which represent a modest headwind.

And foreign exchange and other which provide a small Tailwind.

Altogether. These factors bring us to our 2025 adjusted ebit. Dog guidance midpoint of 113 million

reflecting the additional price cost volume and productivity headwinds that have emerged since our last update

Moving the slide 15.

The current results, do not reflect the potential of gelwin and our disappointing.

Take broader actions, required to change your trajectory of gelwin, including addressing our cost base.

First, we have initiated a strategic review of our European business.

While the outcome of this review is not predetermined.

We know that significant and difficult decisions must be made.

Our European operations include well-known Brands, and highly skilled teams.

That have built leading positions in their respective markets.

The Strategic review will determine how we can unlock the value of our European assets to strengthen, our long-term Financial Foundation.

Second. We are right-sizing our North America cost space which includes a headcount reduction of approximately 11% by the end of this year.

The market for Windows, and Doors has contracted sharply over the past 3 years, and we do not expect a rapid recovery.

We can no longer maintain a structured designed for a level of demand, not expected in the near term.

Third.

We continue to simplify our product portfolio and are removing unnecessary complexity.

Our portfolio breadth has added complexity that must be balanced with our customers expectations on service and product costs.

We will send our efforts on a defined set of core product families. And when customers need bespoke Solutions, we must deliver them with precision and price them for their value.

This will lead to improved service levels and better operating efficiency.

These actions are not adjustments. They will redefine how this company operates, and competes.

The current environment requires the painful but necessary decisions to ensure performance accountability and free cash flow growth.

As we execute on these significant changes.

I want to take a moment to thank our teams across gelin for their dedication and hard work.

I also want to thank our customers for their continued partnership as we further strengthen our service and reliability.

We remain confident that the actions we are taking today. Both operational and strategic are setting up a stronger gel 1 in the years ahead.

Thank you. Once again for your continued support and interest.

With that, I will now turn the call back over to James for the Q&A.

Thanks Bill, operator. We're now ready to begin Q&A.

If you'd like to ask a question, please press, 1, please, press, please, press star. Followed by 1 on your telephone keypad, again, the star and then 1 on your telephone keypad. Your first question comes from the line of Susan McClary of Goldman Sachs your line is now open.

Thank you. Good morning everyone.

Good morning. Uh, my first question is going back to the share losses that you talked about, in your prepared. Remarks can you give us a bit more color on where those are coming from how they came through over the last quarter and then understanding that you've had a more challenging time regaining some of that chair but just how do you think about the path from here?

So thanks for the question, Susan. Uh, a couple comments as you're a member, there was a significant share loss last year with a Midwest retailer on the Windows side of the business so that lapse in September. So we were still tackling That Base effect. In Q3 second Point as we did note in our prepared remarks, uh, pricing remains challenging across the market in North America, particularly and there have been some aggressive pricing actions around the edges from some competitors, mainly on the door side of the business. So we have seen, uh, specific Regional share loss. Uh, but on balance not material. And I think the third point is, as we continue our simplification of our portfolio. Our Target is to reduce approximately 30% of our skus by year, end or Not by year end. Excuse me. We're in the process of reducing 30% of our skus. We're about 50% of the way there. So we have been trimming complexity, uh, which allows

Us then to optimize our service levels uh into our customers. I think the last point is then just a weak overall market. And we've said, we're really focused on rebalancing our shares.

Increase our window business. And the other way around, we've actually made some progress on the Windows side. Uh, but in general, the soft Market has created, I think opportunities for from aggressive pricing, as we've talked about, and our portfolio reduction, which is simplification driven has also led to a little bit of that. Uh, and as we look forward, we see that continuing into the fourth quarter from a market. Standpoint volumes remain soft nothing that we've seen in the month of October would suggest a different run rate. So we're expecting that through the end of the year and you can see that on the bridge.

and just

a then, when you

You're kind of our previous guidance to the bridge that we're sharing in this earnings release.

The share loss hasn't changed. You know, that is as Bill described most of this has already occurred. It's more about the volume mix that. We expected to gain that. Did not materialize. That's that's the big change on that.

Okay, that's very helpful. Thank you. And then, you know, turning to the productivity and the cost-saving efforts that you have been working on. Can you give us an update on where those projects are and how you're thinking about the carryover benefit into 2026? Appreciating, you're not giving guidance for next year yet. But just any thoughts on those projects specifically where they're falling in in the Outlook there.

Sure, Susan. As you've seen on our guidance Bridge page 14, we expect about 150 million dollars, uh, to offset the various headwinds that we've laid out as in Prior years, we would expect from our Transformations. Savings of about 100 million roughly half of that to roll forward.

And in addition, as we've announced and talked about today, in the prepared remarks, there are going to be some pretty significant headcount. Reductions taking place in the fourth quarter of this year and we would expect benefits of roughly 50 million. Uh, as we're thinking about a full year impact 2026. So that's roughly a hundred million currently. Uh, and I think we, we wouldn't want to give any more specific uh, guidance than that and and

win mitigation of 50 million that was already done and executed in the beginning part of this year. So, taking effect in Q2 the transformation initiatives that we have the 100 million, those are already underway, delivering results, things like playing a closures automation equipment, that is now up and running in production. So, you know, back to Bill's Point, these are already done and in our p&l, unfortunately, the other items like the more significantly negative price cost volume law. Essentially not the incremental share that we expected is offsetting those

Okay, that's very helpful caller. Thank you. Both and good luck with the quarter.

Thanks. Thanks Susan.

Comes from the line of John, lovallo of UBS. Your line is now open.

Hey guys, uh thank you for taking my questions as well and maybe just to follow up on Susan's question and just to put a finer point on it. Um, the Outlook implies, you know, 55 million of productivity sgna and other in the fourth quarter, I think there's only been about 307 million years to date. So what is driving that ramp? It sounds like if I if I understood the answer to Susan's question, um, that a lot of this is already baked and just and is waiting to come through. Is that the right way to think about it?

Yeah, so thanks for the question. John. It's a lot of the savings are fully baked. So the headwind mitigation, the transformation is fully baked the action that bill described in the recorded remarks are not expected to have a material impact in Q4, we would expect that full run rate going into 2026.

Where you see and just kind of isolating, maybe Q4. And you know, looking at that year-on-year, the biggest drivers I would say, on the negative side, are the volume mix which is let's call it in line with what we expected in in Q3 and in previous quarters.

Price cost, unfortunately, being more negative and part of, that is some of the resistance on tariff, surcharge pass throughs. So that is more negative in Q4 and then, you know the continued let's call it court-ordered domestic to Wanda's impact into our p&l. The mitigation efforts, those are, as I said, they're already done and dusted and they're in the p&l and so that's going to be helping to offset some of those.

55 million is coming from when there's been only 37 million year to date. What's, what's driving that 55 million?

Uh, you're talking about the 55 million of negative base productivity.

No savings.

so, when you, when you

The bridge.

What you're referring to the negative, the negativity on that is coming from the fact that we staffed up.

our, we staffed up our

Network in order to support incremental, share, gains that did not materialize. So, in in addition to essentially not having the volume flow through, we then had costs we had to come out.

so when you think about, I think your question John is looking at there's transformation of around a 100

And then there's going to be base productivity, offsetting that, and I think that's where you get to, essentially the combination of what you're driving at. So 150 Wright of let's call it good guys, from actions, we've already taken less that negative base productivity. Gets you to a net of let's call it 100.

Okay. Um, all right, um, we we'll follow up on that, just, I guess, you know, the

The 39% reduction in ebida expectations since August. I'm curious, you know, I mean, has the market gotten that much worse or, you know, were there things that just were not foreseen by you guys that maybe that maybe should have been. I mean, what what what drove that that 39% reduction

So let let me start with, let's start with sales, John at the top. So in in the second quarter, we had growth plans that we had staffed up for, in our Network as Samantha mentioned. And they did not materialize. There's a couple reasons for that number 1, the market was softer, and Q3 than we had anticipated. So that's Point number 1. The initiatives also that we were running, there was a basket of different initiatives to, you know, start trying to offset some of the headwinds in the market. And we were really focused on product line initiatives and the market was pivoting and wanting more portfolio baskets uh in in the different projects that they were run on across the network. So we were a product line focused and not uh, portfolio folks, which created challenges for us to be able to drive that penetration. And there was a lower take rate. And third, we've had

Some Selective Service issues across our network, uh, and we've made a ton of progress and I would say we're, we're very close to where we need to be, but we were still struggling in the third quarter and our ability to react on some specific areas was below our own expectations. So what are we doing? We're right sizing our cost structure to Market reality. We're further simplifying, our portfolio as I've noted, you know, we weren't taking about 30% of the skus out. We're about Midway through that and we've been really driving uh, the operating model rollout across our network of distribution windows and doors manufacturing sites in North America. Uh, and so we missed the market downturn, John, we thought we were going to be able to compensate some of it with our own initiatives with did not materialize based on limited take rates and we staffed up for that and you know that hit us

that hit us hard in the third quarter and we're correcting now, uh, that as we go on to the fourth quarter.

Okay, thanks Bill.

You're welcome, John.

Your next question comes from the line of Phillip. Now of Jeffrey's your line is now open.

Hey, you have Fiona on forville today. Thanks for taking my question. Um, just wondering, are you so your, I can you help us understand how much of that is coming from Europe. Uh, we're assuming about roughly half of the Consolidated. Total. Is that irrationally correct?

Yeah, that's directionally. Correct. So when you think about Europe and North America, how much is coming from each? It's it's about it's about in line. We've seen, let's call it an improvement of Europe. Um, and unfortunately, because of some of the challenges in the North American Market, a bit of a decline in North America year on Year from an e bit of standpoint. So that's the right way to look at it. Fiona, thank you for the question.

Um, our masters, I wouldn't really move the leverage that much. Um, so just wondering, can you provide more um, color on that. Um, maybe both on the leveraging and the liquidity? Thank you.

Yeah, so thanks for the question Fiona. So clearly we're not going to uh share any details of expectations. What I want to say is that if a decision made on the Strategic review would be 1, that generates Capital, we would use that to deliberate and strengthen our balance sheet and clearly that is a focus that we've been talking about for a number of quarters to make sure uh that we are managing our balance sheet effectively. I think the second comment in that area is there's no liquidity issues. We have a revolver, uh, we're expecting that we have ample liquidity and so we're managing the process and evaluating all options as you would in a strategic review. And once we have more clarity on that, we'll be back to the Capital Market to share details.

You're welcome.

Your next question comes from the line of Trevor Allison of wolf research. Your line is now open.

Hi, good morning, thank you for taking my questions. Uh, the first 1 just on uh, 4 q, Eva Guidance, the implied 4K, guidance from the bottom end of that is, you know, roughly Break. Even from an Evita perspective that that would be a pretty severe decline. Um, sequentially compared to what you guys are expecting from a revenue standpoint from 32 to 4 q. Can you just talk about what's driving that big drop off and even the expectations sequentially. Anything more, 1 time in nature occurring in 4 Q then that wouldn't repeat going forward.

Yeah, I I I can go through that. So A few things when we initially guided out,

Expected a non-seasonal Q4. So a much stronger Q4 in terms of both the volume, as well as the productivity. And unfortunately, we are seeing, I would say more of the seasonality that we've seen in previous years.

So, when you think about the range that we've got guided to you're correct on the low end of that range and that's tied to some of the uncertainty that we are seeing going into Q4.

The last month of the year is generally for us, a very soft year with different, you know, holiday period, customer, buying patterns and so it's hard to predict on that. But I would say when you look at kind of the midpoint of our range and how we're guiding to the the 2. Biggest drivers as I talked about earlier, are the volume mix?

Being I would say.

As down year on year, as Q3 with maybe a little bit more of softness.

And then the price cost negativity being almost double what we experienced in. Q3 we are seeing cost inflation. Let's start more in line with our expectations, maybe slightly higher, but more in line with what we expected, unfortunately, the pricing realization is lower than expected as we talked about earlier. So those 2 are I would say the biggest needle movers in driving and then some of the base productivity is we need to

Right size, our North America structure for the lower demand. That did not materialize from the incremental gains we initially expected.

Okay, thank you for that. That's very helpful and then circling back to liquidity here, more near-term liquidity. Uh assuming you know, Europe takes some time to play out here uh and any actions potentially in your distribution business. Take some time to play out. Is your expectation to lean into your revolver near-term? Just give them. We're going into a slower part of the year. Uh, and then you also talked about potential for sale and leaseback a actions, any color on how much liquidity those actions could generate thank you.

Sure. So, in terms of liquidity, as we've talked about, you know, we have not drawn the revolver to date. Um, our plans are to not drawn on the revolver. In Q4, we have not guided anything on 2026, nor are we providing guidance at this time, but from a liquidity standpoint, we are already working through some select sale lease backs to provide additional liquidity as a buffer. And when you look at

Q4 just in isolation.

Outside of some of the cost measures or the cost actions that we are taking, which will have restructuring costs tied to it.

Pulling back our capex, we are managing working capital in a much more. I would say rigorous and disciplined fashion and that would continue. So from a liquidity standpoint we are taking actions on, let's call it more select smaller pieces of our real estate portfolio and I would say nothing to guide into 26 at this time.

Okay, thank you for all that color is very helpful. Good luck. Moving forward.

Thank you, no problem.

Like to ask a question please press star. Followed by 1 on your telephone keypad that star followed by 1 on your telephone keypad. Your next question comes from the line of Steven Ramsey of Thompson research group, your line is now open,

Hi, good morning on on the share game that you expected to capture. Would you say that opportunity is gone? Or is that something that you hope to get in 26 to Greater fruition? And and then maybe, if you could share any detail on the opportunity itself if it was Windows or doors or Channel any color there,

Yep. Stephen good morning. Uh, so definitely something that we expect that we're going to be able to Target in 2026, you know, a number of a number of these things that we were targeting.

Would be in the bucket of share. We never should have lost and I'm linking that to some challenging performance across our network service levels specifically. Uh, and we felt we were ready to go and get it but the market obviously took a step down uh, in the third quarter and that was unexpected by our organization and we were challenged by that headwind. Uh, so clearly, uh, the we're making a great progress across our Network, getting our service levels where they need to be and we're going to be tackling this in 2026 on a different cost base and we do expect as we've said that. You know, there's not going to be dramatic changes in volume so we're going to have to control what we can control and that's what we're planning on doing in 26.

That that that's helpful color and then on the pricing push back, I think you attribute it to, uh, large customers. Um, Can can you share any more detail on that push back and, and is this something that uh continues to impact in 26 or or does this impact the usual annual pricing actions that you would be be taking as you would every year for 2026?

Yes. So there are a number of different questions in that question. Stephen. Let me just start with 2025 because that's you know, what we're talking through and what we have visibility to. So as you've seen from our Bridge, we're expecting roughly a 50 million price cost headwind for a full year and 25. And clearly, we can't continue at that rate. So we're taking a lot of actions addressing cost structure, driving efficiency, and simplification to more effectively manage the headwinds going forward. It's still remains a dynamic Market with tariffs.

Uh, still, I would put it in the dynamic bucket with potential changes ahead. We know what we need to do in order to drive mitigation and that's going to be our Focus. Uh, and already is our Focus this year and I, I don't want to guide or commit to anything that would be thinking through next year, but clearly we know that we have a lot of homework to be done. Uh, and it is a challenged environment. And we can see consumers are you know still being very discretionary on larger ticket items especially what we see through our Retail Partners. There's there's hesitation based on affordability and uncertainty and that's continuing putting additional pressure obviously on the price side of the equation.

All right. I appreciate the color, thanks.

All right. Thank you, thanks. Stephen.

Comes from the line of Matthew bully of workplace. Your line is now open.

Good morning. You have Annika dakia on forat today. Thank you for taking my questions. Uh, so wanted to start off, I'm wondering how sales trended through the quarter and into October, as we saw some interest rate relief, um, and similarly, I was mixed trended. As you see, relief on the right side, and I'm wondering, if people are willing to mix up and more broadly, what you think is necessary to improve the mixed Dynamics? Um, I know mix is positive this quarter but maybe it was more. So function of lapping easier year. We are comps.

The rate, the funds fed funds rate declined and that trickling, then down through, there's a couple different Dynamics. I mean, there's huge pent up demand. Obviously, there's a lot of home equity, that's, uh, there but not being acted on because there is uncertainty. If we think about mortgage rates and we're mortgage rates, currently need are and where they need to be to create some additional significant traction. I don't think we're yet at a point where we're going to see dramatic improvements. And again you need to remember after the FED funds rates decline. If it does flow through to the long end of the curve and mortgages are repriced, there is an expectation that doors and windows. Especially if it's new construction are probably 6 to 9 months behind the start. So they're clearly is a lag from rate reduction to products being, uh, purchased and built in to new homes. So don't expect, uh, a very close.

Connect between rate reductions and volume increases uh on the new construction side of the business. I think in general consumers still remain very cautious. I I I said before to Steven's question, Big Ticket items are still very slow and the retail side of the business and the expectations are that this continues. We haven't seen a significantly different Trend in October than we did through the third quarter. Uh and so I think to answer your question specifically

Basically, the FED funds, reductions did not move the needle for us in the month of October.

Understood, thank you. That's helpful.

For the revenue guide for courts. It's now down 10 to 13 from prior 4. To 9 seems to be largely driven by volume and mixed. As we look at the 25th Bridge. So just going back to that mixed point. If you can separate, how much is volume given, you know, you lowered the End Market assumptions for both new construction and Retail and then how much is made?

Yeah, I, I can take that question, a very small portion of that is mixed. Um, I would say, you know, there, maybe small mixed changes on the edges of some of the product groups. But at we are expecting in the near term as Bill talked about to be at a very low mix level. So we don't expect um mix further down from where we are but I mean just to Ballpark I mean it's more than 90% volume, you know it's a much bigger volume story than it is mixed.

Thank you and good luck.

Thank you.

Thank you. I'd now like to hand a call back to James Armstrong for final remarks.

Thank you for joining our call today. If you have any questions, please reach out to me and I'd happy to answer anything. I can this ends our call and have a great day.

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