Q2 2026 James Hardie Industries PLC Earnings Call

Kennedy to ask questions. Please.

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I would now like to hand, the call over to Joe <unk>, Vice President of Investor Relations. Please go ahead.

Thank you operator, and thank you to everyone for joining today's call I am joined today by Aaron <unk>, Chief Executive Officer of James Hardie, and John Sculley President of ASIC residential.

Before we begin the call. Please note that during prepared remarks, and Q&A, we may refer to non-GAAP financial measures and make forward looking statements.

You can refer to several related cautionary and other notes on slide two for more information.

Forward looking statements made during today's conference call and in the earnings materials speak only as of the date of this presentation forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Accordingly investors are cautioned not to place undue reliance on forward looking statements.

Unless otherwise indicated our materials and comments refer to figures in U S dollars and any comparisons made are to the corresponding period in the prior fiscal year and with that I'm pleased to hand, the call over to Aaron.

Good morning, and thanks for joining us today with me on today's call are John Sculley, President of our <unk> business and Joe I'll admire our vice President of Investor Relations before we get into the second quarter results I wanted to provide an update on some important developments for the company today.

We announced the appointment of Nigel steam as chair of the James Hardie Board of Directors. Nigel has extensive board experience understanding of James Hardie and his leadership come at a transformative time as we focus on execution and long term value creation for our shareholders.

Our board also announced the creation of an integration and performance committee to support the successful integration of <unk> and the performance of the combined businesses. The committee will be chaired by Jessie Sing and will include board members. Howard Heck is <unk> Lisboa and myself I look forward to working with Nigel and.

The entire board to advance our strategy and continue strengthening the company for the future.

As you may have seen in our press release, Rachel Wilson will be leaving James Hardie to pursue other opportunities Rachel has been a valued partner and an important part of our team during her tenure at James Hardie I want to thank Rachel for her many contributions over the last two years.

Finally, I am very pleased to announce that Ryan Lada will join us as our new Chief Financial Officer, Brian comes to Us from what's water, where he recently served as CFO. Many of you know him from his prior role as CFO at <unk>, Brian is a proven leader who brings strong operational and financial experience.

And a deep knowledge of the building products industry. He is the right person to partner with me and leading James Hardie in this next phase of growth. We have every confidence in a smooth CFO transition.

We released our second quarter results yesterday, which were consistent with what we shared in our pre release in early October.

While we continue to navigate a dynamic market environment. We are actively focused on driving improved performance in our results.

Identified several opportunities to enhance how we operate today, while positioning James Hardie to take full advantage of the favorable long term fundamentals of the U S housing market.

Our strategy remains grounded in profitable growth disciplined execution and ongoing material conversion across our businesses from wood and inferior materials to composite alternatives and fiber cement.

Before getting into the details of these initiatives I wanted to address the changes we made to our outlook since we lowered our full year guidance in August.

At the time, what we were hearing from our customers and what was evident in their ordering rates was more cautious positioning and the possibility of additional inventory tightening in the channel.

The magnitude of the August guidance reduction was deliberate and based on the information we had at the time.

Since then we've seen conditions stabilized with recent customer conversations and data shared by customers showing a more stable market at normalized inventory levels and based on that we're modestly raising our full year guidance.

Still expect a broader market to be challenging in the near term and that view is embedded in our guidance range.

The variability in our guidance. This year has highlighted the need for greater consistency and discipline in our financial forecasting process.

We know we can do better and.

And we've taken decisive action to strengthen execution improved predictability and drive consistency in our results.

We have been working with our customers and are now receiving more frequent granular data from them, giving us a clear view of inventory and market demand.

These improvements among others will help us deliver more predictable results going forward.

Our two largest segments siding and trim and deck rail and accessories.

And the company was 80% of our net sales from North America.

Our strong record of structural growth and substantial material conversion runway across both segments of the business.

The balance of our net sales are generated in Australia, and New Zealand, where we run a highly profitable fiber cement business and in Europe, with an improving financial profile and an attractive fiber gypsum business in North America, our partnership with large one step dealers and our success.

Converting homebuilders from vinyl to fiber cement have driven new construction to approximately 40% of our North America revenue inclusive of ASIC with repair and remodel at approximately 60% of sales over time, we expect repair and remodel to grow faster.

Even favorable structural fundamentals and deliberate focus to accelerate fiber cement penetration in that end market.

In siding and trim current conditions remain mixed reflecting the categories higher exposure to new construction in the southern states from.

From a channel inventory perspective customers are appropriately positioned for this time of year relative to forward demand expectations.

And while the new home market is still uncertain demand trends have improved relative to our expectations. In August we now expect mid single digit organic net sales declines for the full year.

We are focused on returning our siding and trim segment to growth in the future.

Few examples of our growth plan in the segment include.

On the wall cost reduction pilots and Detroit, Pittsburgh, Indianapolis, and the Ohio area are delivering early wins in some cases, we've cut the relative cost gap versus vinyl by about 50%, thanks to improved material availability and new installation methods.

Statement essentials with Boise Cascade simplifies our color plus lineup.

At a 90% SKU reduction versus the full statement collection.

With products reliably stocked at dealers and pilot regions.

Speaker #1: Strategy remains grounded in profitable growth, disciplined execution, and ongoing material conversion across our businesses from wood and inferior materials to composite alternatives and fiber cement.

Aaron Erter: Strategy remains grounded in profitable growth, discipline, execution, and ongoing material conversion across our businesses from wood and inferior materials to composite alternatives and fiber cement. Before getting into the details of these initiatives, I wanted to address the changes we made to our outlook since we lowered our full-year guidance in August. At the time, what we were hearing from our customers and what was evident in their ordering rates was more cautious positioning and the possibility of additional inventory tightening in the channel. The magnitude of the August guidance reduction was deliberate and based on the information we had at the time. Since then, we've seen conditions stabilize, with recent customer conversations and data shared by customers showing a more stable market and normalized inventory levels. Based on that, we're modestly raising our full-year guidance.

Aaron Erter: Strategy remains grounded in profitable growth, discipline, execution, and ongoing material conversion across our businesses from wood and inferior materials to composite alternatives and fiber cement. Before getting into the details of these initiatives, I wanted to address the changes we made to our outlook since we lowered our full-year guidance in August. At the time, what we were hearing from our customers and what was evident in their ordering rates was more cautious positioning and the possibility of additional inventory tightening in the channel.

This improves availability and reduces project delays, which directly helps contractors win more jobs intuitive edge training and productivity programs are expanding we're teaching contractors the trim over method, which can improve productivity by about 35% that means less.

Speaker #1: Before getting into the details of these initiatives, I wanted to address the changes we made to our outlook since we lowered our full-year guidance in August.

I'm measuring cutting and caulking these steps make it simpler and more affordable for contractors to install our products and help attract new users to fiber cement.

Speaker #1: At the time, what we were hearing from our customers and what was evident in their ordering rates was more cautious of additional inventory tightening in positioning and the possibility the channel.

Plan to scale these efforts across major Midwest northeast and mid Atlantic markets in early calendar year, 2026, and close partnership with Boise Cascade.

The magnitude of the August guidance reduction was deliberate and based on the information we had at the time. Since then, we've seen conditions stabilize with recent customer conversations, and data shared by customers showing a more stable market and normalized inventory levels. Based on that, we're modestly raising our full-year guidance. We still expect a broader market to be challenging in the near term, and that view is embedded in our guidance range.

Speaker #1: The magnitude of the August guidance reduction was deliberate and based on the information we had at the conditions stabilize with recent customer conversations and data shared by customers showing a more stable market and normalized inventory levels.

Based on the early results, we see meaningful expansion potential in those regions.

And the installation, we believe color plus is a differentiated product with large opportunities and repair and remodel, especially in the northeast and Midwest or aging housing stock supports conversion from vinyl.

Speaker #1: And based on that, we're modestly raising our full-year guidance. We still expect a broader market to be challenging in the near term, and that view is embedded in our guidance range.

Aaron Erter: We still expect a broader market to be challenging in the near term, and that view is embedded in our guidance range. The variability in our guidance this year has highlighted the need for greater consistency and discipline in our financial forecasting process. We know we can do better, and we've taken decisive action to strengthen execution, improve predictability, and drive consistency in our results. We have been working with our customers and are now receiving more frequent, granular data from them, giving us a clearer view of inventory and market demand. These improvements, among others, will help us deliver more predictable results going forward. Our two largest segments, siding and trim, and deck rail and accessories, position the company with 80% of our net sales from North America, with a strong record of structural growth and substantial material conversion runway across both segments of the business.

The variability in our guidance this year has highlighted the need for greater consistency and discipline in our financial forecasting process. We know we can do better, and we've taken decisive action to strengthen execution, improve predictability, and drive consistency in our results. We have been working with our customers and are now receiving more frequent, granular data from them, giving us a clearer view of inventory and market demand. These improvements, among others, will help us deliver more predictable results going forward.

Speaker #1: The variability in our guidance this year has highlighted the need for greater consistency and discipline in our financial forecasting process. We know we can do better.

Continue to invest in contractor conversion and we're seeing strong performance in color plus versus prime products with growing momentum among our sales team and dealer partners.

Speaker #1: And we've taken decisive action to strengthen execution, prove predictability, and drive consistency in our results. We have been working with our customers and are now receiving more frequent, granular data from them, giving us a clearer view of inventory and market demand.

Organic net sales in the legacy James Hardie in North America fiber cement business declined 3% in the second quarter.

Given mainly by lower volumes, partly offset by higher average sales price.

Single family exteriors volumes were down mid single digits within tears down low double digits and multifamily up mid single digits.

Speaker #1: These improvements among others will help us deliver more predictable results going forward. R2's largest segments starting in trim and deck rail and accessories position the company with 80% of our net sales from North America with a strong record of structural growth and substantial material conversion runway across both segments of the business.

On a pro forma organic basis, <unk> grew revenue up 5% in the quarter and up 7% in the first half and siding and trim, which reflects both our core James Hardie fiber cement business in APAC exteriors, adjusted EBITDA was $224 million in the second quarter.

Our two largest segments, Siding and Trim, and Deck, Rail, and Accessories, position the company with 80% of our net sales from North America, with a strong record of structural growth and substantial material conversion runway across both segments of the business. The balance of our net sales are generated in Australia and New Zealand, where we run a highly profitable Fiber Cement business, and in Europe with an improving financial profile and an attractive Fiber Gypsum business.

With adjusted EBIT margin of 29, 2% down year over year, primarily due to approximately 400 basis points of margin decline in our north American fiber cement business virtually reflecting underutilization in our plants.

Speaker #1: The balance of our net sales are generated in Australia and New Zealand where we run a highly profitable fiber cement business. And in Europe, with an improving financial profile and an attractive fiber gypsum business.

Aaron Erter: The balance of our net sales are generated in Australia and New Zealand, where we run a highly profitable fiber cement business, and in Europe with an improving financial profile and an attractive fiber gypsum business. In North America, our partnership with large one-step dealers and our success converting home builders from vinyl to fiber cement have driven new construction to approximately 40% of our North America revenue, inclusive of AZEK, with repair and remodel at approximately 60% of sales. Over time, we expect repair and remodel to grow faster given favorable structural fundamentals, and deliberate focus to accelerate fiber cement penetration in that end market. In siding and trim, current conditions remain mixed, reflecting the category's higher exposure to new construction in the southern states. From a channel inventory perspective, customers are appropriately positioned for this time of year relative to forward demand expectations.

In North America, our partnership with large one-step dealers and our success converting home builders from vinyl to fiber cement have driven new construction to approximately 40% of our North America revenue, inclusive of AZEK, with repair and remodel at approximately 60% of sales. Over time, we expect repair and remodel to grow faster given favorable structural fundamentals, and deliberate focus to accelerate fiber cement penetration in that end market.

Speaker #1: In North America, our partnership with large one-step dealers and our success converting homebuilders from vinyl to fiber cement have driven new construction to approximately 40% of our North America revenue, inclusive of ASAC, with repair and remodel at sales.

We're not satisfied with our performance in the quarter and we are taking action to improve future performance, including accelerating identified cost synergies from the ASR combination reducing variable costs in our plants and optimizing our manufacturing network to improve utilization. These steps are.

Speaker #1: Approximately 60% of overtime, we expect repair and remodel to grow faster given favorable structural fundamentals and a deliberate focus to accelerate fiber cement penetration in that end market.

Already underway and will drive meaningful margin improvement.

Going forward, we expect utilization to improve in margin expansion as we move into fiscal 2027.

For the full year, we now expect total raw material inflation and the organic business to run mid single digits.

Speaker #1: In siding and trim, current conditions remain mixed, reflecting the category's higher exposure to new construction and the southern states. From a channel inventory perspective, customers are appropriately positioned for this time of year relative to forward demand expectations.

In Siding and Trim, current conditions remain mixed, reflecting the category's higher exposure to new construction in the southern states. From a channel inventory perspective, customers are appropriately positioned for this time of year relative to forward demand expectations. While the new home market is still uncertain, demand trends have improved relative to our expectations in August. We now expect mid-single-digit organic net sales declines for the full year.

Better than the high single digits, we expected earlier.

Pricing is expected to offset cost inflation.

Hoss hearty operating system will help dampen impacts of under utilization.

Aaron Erter: While the new home market is still uncertain, demand trends have improved relative to our expectations in August. We now expect mid-single-digit organic net sales declines for the full year. We are focused on returning our siding and trim segment to growth in the future. A few examples of our growth plan in the segment include on-the-wall cost reduction pilots in Detroit, Pittsburgh, Indianapolis, and the Ohio area, which are delivering early wins. In some cases, we've cut the relative cost gap versus vinyl by about 50%, thanks to improved material availability and new installation methods. Statement Essentials with Boise Cascade simplifies our Color Plus lineup, about a 90% SKU reduction versus the full Statement collection, with products reliably stocked at dealers and pilot regions. This improves availability and reduces project delays, which directly helps contractors win more jobs. Intuitive Edge training and productivity programs are expanding.

Speaker #1: is still uncertain, demand trends have improved relative to our And while the new home market expectations in August. We now expect mid-single-digit organic net sales declines for the full year.

Now, let's turn to deck rail and accessories and that rail and accessories performance remained strong with mid single digit sell through growth in a market that is down in the low single digits.

We are focused on returning our Siding and Trim segment to growth in the future. A few examples of our growth plan in the segment include on-the-wall cost reduction pilots in Detroit, Pittsburgh, Indianapolis, and the Ohio area, which are delivering early wins. In some cases, we've cut the relative cost gap versus vinyl by about 50%, thanks to improved material availability and new installation methods.

Speaker #1: We are focused on returning our siding and trim segment to growth in the future. A few examples of our growth plan in the segment include on-the-wall cost reduction pilots in Detroit, Pittsburgh, Indianapolis, and the Ohio area that are delivering early wins.

<unk> continues to outperform through our proven playbook focused on wood conversion, new product development channel expansion and strong downstream execution.

This business continues to demonstrate that we can deliver above market growth and profitability through customer focused execution.

Speaker #1: In cost gap versus vinyl, in some cases, we've cut the relative cost by about 50% thanks to improved material availability and new installation methods. Statement Essentials with Boise Cascade simplifies our ColorPlus lineup.

And in this segment remains solid supported by a higher mix of repair and remodel work and a large presence in the north and Midwest regions.

Statement Essentials with Boise Cascade simplifies our ColorPlus lineup, about a 90% SKU reduction versus the full Statement Collection, with products reliably stocked at dealers and pilot regions. This improves availability and reduces project delays, which directly helps contractors win more jobs. Intuitive Edge training and productivity programs are expanding. We're teaching contractors the Trim-Over Method, which can improve productivity by about 35%. That means less time measuring, cutting, and caulking.

We delivered mid single digit sell through growth in the quarter again outperforming the broader market by several hundred basis points.

Speaker #1: About a 90% SKU reduction versus the full statement collection. With products reliably stocked at dealers and pilot regions. This improves availability and reduces project delays which directly helps contractors win more jobs.

Timber tech continues to drive conversion by doing what it's always done well consistent downstream execution.

<unk> on material conversion deeper engagement with timber tech pros, expanding our channel presence with dealers and distributors and new product development.

Speaker #1: Intuitive Edge training and productivity programs are expanding. We're method which can improve productivity teaching contractors to trim over by about 35%. That means less time measuring, cutting, and caulking.

Aaron Erter: We're teaching contractors the trim-over method, which can improve productivity by about 35%. That means less time measuring, cutting, and caulking. These steps make it simpler and more affordable for contractors to install our products, and help attract new users to fiber cement. We plan to scale these efforts across major Midwest, Northeast, and Mid-Atlantic markets in early calendar year 2026 in close partnership with Boise Cascade. Based on the early results, we see meaningful expansion potential in those regions. Beyond installation, we believe Color Plus is a differentiated product with large opportunities in repair and remodel, especially in the Northeast and Midwest, where aging housing stock supports conversion from vinyl. We continue to invest in contractor conversion, and we're seeing strong performance in Color Plus versus Prime products, with growing momentum among our sales team and dealer partners.

Over the last 12 months timber Tech brand awareness has increased by seven points to its highest level. Since we began tracking this measure five years ago.

These steps make it simpler and more affordable for contractors to install our products, and help attract new users to fiber cement. We plan to scale these efforts across major Midwest, Northeast, and Mid-Atlantic markets in early calendar year 2026 in close partnership with Boise Cascade. Based on the early results, we see meaningful expansion potential in those regions. Beyond installation, we believe ColorPlus is a differentiated product with large opportunities in repair and remodel, especially in the Northeast and Midwest, where aging housing stock supports conversion from vinyl.

Speaker #1: affordable for contractors to install our products and help attract new users to fiber cement. We plan to scale these efforts and Mid-Atlantic markets in These steps make it simpler and more early calendar year 2026 and close partnership with Boise Cascade.

New products are also adding momentum the recently announced timber Tech advantage rail is a great example of how we continue to innovate and strengthen our position in outdoor living by launching products that provide the highest levels of quality style and design, while improving contractor productivity.

Speaker #1: Based on the early results, we see meaningful expansion potential in those regions. Beyond installation, we believe color plus is a differentiated product with large opportunities in repair and remodel, especially in the Northeast and Midwest, where aging housing stock supports conversion from vinyl.

Our quarterly survey of timber Tech pros shows a stable market. Our contractors continue to report approximately seven weeks of project backlog consistent with both prior quarters in the same period last year. They also expect future market conditions to remain relatively stable in line with recent quarter.

We continue to invest in contractor conversion, and we're seeing strong performance in ColorPlus versus Prime products, with growing momentum among our sales team and dealer partners. Organic net sales in the legacy James Hardie North America Fiber Cement business declined 3% in the second quarter, driven mainly by lower volumes, partly offset by higher average sales price.

Speaker #1: We continue to invest in contractor conversion, and we're seeing strong performance in Color Plus versus prime products, with growing momentum among our sales team and dealer partners.

<unk> in the prior year's outlook.

Based on this and other data points, we expect both sell through and net sales to grow low to mid single digits on a full year basis in FY 'twenty six for the post close period July one through March 31, compared to the same pre acquisition period, we expect.

Speaker #1: Organic net sales in the legacy James Hardie North America fiber cement business declined 3% in the second quarter. Driven mainly by lower volumes, partly offset by higher average sales price.

Aaron Erter: Organic net sales in the legacy James Hardie North America fiber cement business declined 3% in the second quarter, driven mainly by lower volumes, partly offset by higher average sales price. Single-family exteriors volumes were down mid-single digits, with interiors down low double digits, and multi-family up mid-single digits. On a pro forma organic basis, ASAC exteriors grew revenue up 5% in the quarter and up 7% in the first half. In siding and trim, which reflects both our core James Hardie fiber cement business and ASAC exteriors, adjusted EBITDA was $224 million in the second quarter, with adjusted EBITDA margin of 29.2%, down year over year, primarily due to approximately 400 basis points of margin decline in our North America fiber cement business, actually reflecting underutilization in our plants.

<unk> growth from the December to March quarter boosted by new product launches and expanded distribution ahead of the spring season, and we are anticipating our partners to carry a seasonally normal level of inventory through the balance of our fiscal year.

Single-family exteriors volumes were down mid-single digits, with interiors down low double digits, and multi-family up mid-single digits. On a pro forma organic basis, AZEK Exteriors grew revenue up 5% in the quarter and up 7% in the first half. In Siding and Trim, which reflects both our core James Hardie Fiber Cement business and AZEK Exteriors, adjusted EBITDA was $224 million in the second quarter, with adjusted EBITDA margin of 29.2%, down year over year, primarily due to approximately 400 basis points of margin decline in our North America Fiber Cement business, actually reflecting underutilization in our plants.

Speaker #1: Single-family exteriors volumes were down mid-single digits, with interiors down low double digits and multi-family up mid-single digits. On a pro forma basis, exteriors grew revenue by 5% on an organic basis, ASAC in the quarter, and up 7% in the first half.

The integration with <unk> remains on track, we've already aligned key functions like marketing and operations under single leadership.

Speaker #1: In siding and trim, which reflects both our core James Hardie fiber cement business and ASAC Exteriors, adjusted EBITDA was $224 million in the second quarter.

Most recently, we appointed Sam tool as Chief marketing Officer of James Hardie.

<unk> has done an outstanding job, leading <unk> marketing organization for the past four years under her leadership, we will strengthen our marketing capabilities deepen customer engagement and expand our reach across North America.

Speaker #1: With adjusted EBITDA margin of $29.2%, to approximately 400 basis down year over year primarily due points of margin decline in our North American fiber cement business.

Speaker #1: Virtually reflecting underutilization in our plants. We're not satisfied with our performance in the quarter, and we are taking action to improve future performance. This includes accelerating identified cost synergies from the ASAC combination, reducing variable costs in our plants, and optimizing our manufacturing network to improve utilization.

On cost synergies, we've moved quickly on G&A opportunities, while being deliberate in how we integrate manufacturing and commercial operations.

Aaron Erter: We're not satisfied with our performance in the quarter, and we are taking action to improve future performance, including accelerating identified cost synergies from the ASAC combination, reducing variable costs in our plants, and optimizing our manufacturing network to improve utilization. These steps are already underway and will drive meaningful margin improvement. Going forward, we expect utilization to improve and margin expansion as we move into fiscal 2027. For the full year, we now expect total raw material inflation in the organic business to run mid-single digits, better than the high single digits we expected earlier. Pricing is expected to offset cost inflation, while HOS, or the Hardie Operating System, will help dampen the impacts of underutilization. Now let's turn to deck rail and accessories. In deck rail and accessories, performance remains strong, with mid-single digit sell-through growth in a market that is down in the low single digits.

We're not satisfied with our performance in the quarter, and we are taking action to improve future performance, including accelerating identified cost synergies from the AZEK combination, reducing variable costs in our plants, and optimizing our manufacturing network to improve utilization. These steps are already underway and will drive meaningful margin improvement. Going forward, we expect utilization to improve and margin expansion as we move into fiscal 2027.

With six months left in FY 'twenty six we've already surpassed our first year cost synergy goal and we're pushing hard towards our $125 million total cost synergy target.

Speaker #1: These steps are already underway and will drive meaningful margin improvement. Going forward, we expect utilization to improve and margin expansion as we move into fiscal 2027.

Dealer feedback has been very positive several key partners have already chosen to make as act or exclusive PVC trim brand drawn by the combination with James Hardie and the strong loyalty contractors have to our combined portfolio.

For the full year, we now expect total raw material inflation in the organic business to run mid-single digits, better than the high single digits we expected earlier. Pricing is expected to offset cost inflation, while HOS, or the Hardie Operating System, will help dampen the impacts of underutilization.

Speaker #1: For the full year, we now expect total raw material inflation in the organic business to run mid-single digits. Better than the high single digits, we expect it earlier.

Our sales teams are leaning in turning these opportunities into revenue and setting us up for faster growth ahead.

Speaker #1: Pricing is expected to offset cost inflation. While Haas or the Hardie operating system will help dampen the impacts of underutilization. Now let's turn to deck, rail, and accessories.

Distributor feedback has also been positive last month, we announced a multiyear expansion with Boise Cascade in select markets.

Now let's turn to Deck, Rail, and Accessories. In Deck, Rail, and Accessories, performance remains strong, with mid-single digit sell-through growth in a market that is down in the low single digits. TimberTech continues to outperform through our proven playbook focused on wood conversion, new product development, channel expansion, and strong downstream execution. This business continues to demonstrate that we can deliver above-market growth and profitability through customer-focused execution.

This agreement expands our strategic statement essentials, offering and adds the timber tech and asos exterior brands into our longstanding relationship with Boise.

Speaker #1: In deck, rail, and accessories, performance remains strong with mid-single-digit sell-through growth and a market that is down in the low single digits. TimberTech continues to outperform through our proven playbook focused on wood conversion, new product development, channel expansion, and strong downstream execution.

The strong feedback we are hearing across every level of the channel reinforces our confidence in delivering over $500 million of revenue synergies over the next five years from the ASR combination and.

Aaron Erter: TimberTech continues to outperform through our proven playbook focused on wood conversion, new product development, channel expansion, and strong downstream execution. This business continues to demonstrate that we can deliver above-market growth and profitability through customer-focused execution. Demand in this segment remains solid, supported by a higher mix of repair and remodel work, and a large presence in the North and Midwest regions. We delivered mid-single digit sell-through growth in the quarter, again outperforming the broader market by several hundred basis points. TimberTech continues to drive conversion by doing what it's always done well: consistent downstream execution, focusing on material conversion, deeper engagement with TimberTech pros, expanding our channel presence with dealers and distributors, and new product development. Over the last 12 months, TimberTech's brand awareness has increased by 7 points to its highest level since we began tracking this measure five years ago. New products are also adding momentum.

And it's important to note that this isn't coming from one group or one region, that's broad based across our dealer network and the contractors and builders, who use our leading brands every day through.

Speaker #1: This business continues to demonstrate that we can deliver above-market growth and profitability through customer-focused execution. Demand in this segment remains solid, supported by a higher mix of repair and remodel work and a large presence in the North and Midwest regions.

Demand in this segment remains solid, supported by a higher mix of repair and remodel work, and a large presence in the North and Midwest regions. We delivered mid-single digit sell-through growth in the quarter, again outperforming the broader market by several hundred basis points. TimberTech continues to drive conversion by doing what it's always done well: consistent downstream execution, focusing on material conversion, deeper engagement with TimberTech pros, expanding our channel presence with dealers and distributors, and new product development.

Through countless meetings over the past few months, we are seeing firsthand how the combined portfolio is resonating our teams are executing together in the field and how we can bring to bear the relative strengths of the two companies those early signals give us conviction in the value creation opportunity ahead.

Speaker #1: We delivered mid-single-digit sell-through growth in the quarter, again outperforming the broader market by several hundred basis points. TimberTech continues to drive conversion by doing what it's always done well: consistent downstream execution, focusing on deeper engagement with TimberTech on material conversion, pros, expanding our channel presence with dealers and distributors, and new product development.

I will now turn it over to Joe to run through the financials Joe.

Thanks, Darren starting with consolidated results for the second quarter total net sales grew 34% to $1 3 billion, including $345 million of acquired ASX sales organic sales declined 1%.

Speaker #1: Over the last 12 months, TimberTech's brand awareness has increased by seven points to its highest level since we began tracking this measure five years ago.

Over the last 12 months, TimberTech's brand awareness has increased by 7 points to its highest level since we began tracking this measure five years ago. New products are also adding momentum. The recently announced TimberTech Advantage Rail is a great example of how we continue to innovate and strengthen our position in outdoor living by launching products that provide the highest levels of quality, style, and design, while improving contractor productivity.

Adjusted EBITDA was $330 million with a 25, 5% adjusted EBITDA margin.

Speaker #1: New products are also adding momentum. The recently announced TimberTech Advantage Rail is a great example of how we continue to innovate and strengthen our position in outdoor living by launching products that provide the highest levels of quality, style, and design while enhancing productivity.

Aaron Erter: The recently announced TimberTech Advantage Rail is a great example of how we continue to innovate and strengthen our position in outdoor living by launching products that provide the highest levels of quality, style, and design, while improving contractor productivity. Our quarterly survey of TimberTech pros shows a stable market. Our contractors continue to report approximately seven weeks of project backlog, consistent with both prior quarters and the same period last year. They also expect future market conditions to remain relatively stable, in line with recent quarters and the prior year's outlook. Based on this and other data points, we expect both sell-through and net sales to grow low to mid-single digits on a full-year basis in FY26 for the post-close period, 1 July through 31 March, compared to the same pre-acquisition period.

Adjusted General corporate and unallocated R&D costs totaled $39 million in the quarter benefiting from favorable stock based compensation expense during the second half, we anticipate around $50 million per quarter of general corporate and unallocated R&D costs.

Our quarterly survey of TimberTech pros shows a stable market. Our contractors continue to report approximately seven weeks of project backlog, consistent with both prior quarters and the same period last year. They also expect future market conditions to remain relatively stable, in line with recent quarters and the prior year's outlook. Based on this and other data points, we expect both sell-through and net sales to grow low to mid-single digits on a full-year basis in FY 2026 for the post-close period, 1 July through 31 March, compared to the same pre-acquisition period.

Speaker #1: Our quarterly survey of the improving contractor market shows that our contractors, TimberTech Pros, continue to report approximately seven weeks of project backlog, which is consistent with both prior quarters and with the same period last year.

Corporate expense is where the majority of our $24 million P&L benefit from cost synergies resides for FY 'twenty six.

Adjusted effective tax rate was 16, 9%, reflecting our updated expectation for FY 'twenty six of approximately 20%.

Speaker #1: They also expect future market conditions to remain relatively stable, in line with recent quarters and the prior year's outlook. Based on this and other data points, we expect both sell-through and net sales to grow low to mid-single digits on a full-year basis in FY26 for the post-close period, July 1 through March 31, compared to the same pre-acquisition period.

Adjusted net interest was $68 million and weighted average diluted share count used for adjusted diluted EPS was $582 million.

We anticipate these items will remain consistent throughout the third and fourth quarter.

Adjusted net income was $154 million and adjusted diluted earnings per share was 26.

Year to date free cash flow was $58 million, reflecting transaction and integration costs, partially offsetting strong cash generation and reduced capital spending.

Speaker #1: We expect sequential growth from the December to March quarter, boosted by new product launches and expanded distribution ahead of the spring season. We are anticipating our partners to carry a seasonally normal level of inventory through the balance of our fiscal year.

Aaron Erter: We expect sequential growth from the December to March quarter, boosted by new product launches and expanded distribution ahead of the spring season. We are anticipating our partners to carry a seasonally normal level of inventory through the balance of our fiscal year. The integration with AZEK remains on track. We've already aligned key functions like marketing and operations under single leadership. Most recently, we appointed Sam Tool as Chief Marketing Officer of James Hardie. Sam has done an outstanding job leading AZEK's marketing organization for the past four years. Under her leadership, we'll strengthen our marketing capabilities, deepen customer engagement, and expand our reach across North America. On cost synergies, we've moved quickly on G&A opportunities while being deliberate in how we integrate manufacturing and commercial operations.

We expect sequential growth from the December to March quarter, boosted by new product launches and expanded distribution ahead of the spring season. We are anticipating our partners to carry a seasonally normal level of inventory through the balance of our fiscal year.

Turning to our siding and trim segment, which combines our north America fiber cement business with ASIC exteriors.

Net sales were up 10%, including $89 million from a full quarter of ASIC.

The integration with AZEK remains on track. We've already aligned key functions like marketing and operations under single leadership. Most recently, we appointed Sam Toole as Chief Marketing Officer of James Hardie. Sam has done an outstanding job leading AZEK's marketing organization for the past four years. Under her leadership, we'll strengthen our marketing capabilities, deepen customer engagement, and expand our reach across North America.

Speaker #1: The integration with ASAC remains on track. We've already aligned key functions like marketing and operations under single leadership. Most recently, we appointed Sam Tool as chief marketing officer of James Hardie.

As Ike exteriors grew net sales, 5% for the quarter and 7% for the first half on a pro forma basis.

Siding and trim organic net sales declined 3% in the quarter as lower volumes were partially offset by a 2% rise in ASP with solid single family realization.

Speaker #1: Sam has done an outstanding job leading ASAC's marketing organization for the past four years. Under her leadership, we'll strengthen our marketing capabilities, deepen customer engagement, and expand our reach across North America.

Adjusted EBITDA was $224 million with adjusted EBITDA margin of 29, 2% down 530 basis points year over year, including over 100 basis points of impact from $8 million of R&D costs previously expense within corporate and now allocated to the segment.

Speaker #1: On cost synergies, we've moved quickly on G&A opportunities while being deliberate in how we integrate manufacturing and commercial operations. With six months left in FY26, we've already surpassed our first-year cost synergy goal.

On cost synergies, we've moved quickly on G&A opportunities while being deliberate in how we integrate manufacturing and commercial operations. With six months left in FY 2026, we've already surpassed our first-year cost synergy goal, and we're pushing hard toward our $125 million total cost synergy target. Dealer feedback has been very positive. Several key partners have already chosen to make AZEK their exclusive PVC trim brand, drawn by the combination with James Hardie and the strong loyalty contractors have to our combined portfolio.

Excluding the impact of this allocation adjusted EBITDA margin would have been approximately 32% a decrease of around 430 basis points.

Aaron Erter: With six months left in FY26, we've already surpassed our first-year cost synergy goal, and we're pushing hard toward our $125 million total cost synergy target. Dealer feedback has been very positive. Several key partners have already chosen to make AZEK their exclusive PVC trim brand, drawn by the combination with James Hardie and the strong loyalty contractors have to our combined portfolio. Our sales teams are leaning in, turning these opportunities into revenue, and setting us up for faster growth ahead. Distributor feedback has also been positive. Last month, we announced a multi-year expansion with Boise Cascade in select markets. This agreement expands our strategic Statement Essentials offering and adds the TimberTech and AZEK exterior brands into our long-standing relationship with Boise.

Speaker #1: And we're pushing hard toward our $125 million total cost synergy target. Dealer feedback has been very positive. Several key partners have already chosen to make ASAC their exclusive PVC trim brand drawn by the combination with James Hardie.

The key drivers of the comparable change in margins were lower volumes unfavorable absorption and raw material inflation.

In the quarter, we experienced a $25 million underutilization impact, partially offset by $10 million in efficiency gains from the Hardie operating system.

Speaker #1: And the strong loyalty contractors have to our combined portfolio. Our sales teams are leaning in, turning these opportunities into revenue and setting us up for faster growth ahead.

Our sales teams are leaning in, turning these opportunities into revenue, and setting us up for faster growth ahead. Distributor feedback has also been positive. Last month, we announced a multi-year expansion with Boise Cascade in select markets. This agreement expands our strategic Statement Essentials offering and adds the TimberTech and AZEK Exterior brands into our long-standing relationship with Boise.

We're addressing the margin decline aggressively through network optimization cost synergies and structural efficiency improvements. These actions will position the business for margin recovery and stronger performance going forward.

Speaker #1: Distributor feedback has also been positive. Last month, we announced a multi-year expansion with Boise Cascade and Select Markets. This agreement expands our strategic statement of central offering and adds the TimberTech and ASAC exterior brands into our longstanding relationship with Boise.

For decorative accessories, which includes <unk> residential decking railing and pergola lines led by timber Tech net sales increased 6% on a pro forma basis and sell through was up mid single digits consistent with performance in the first quarter adjusted.

Speaker #1: The strong feedback we are hearing across every level of the channel reinforces our confidence in delivering over 500 million of revenue synergies over the next five years from the ASAC combination.

Aaron Erter: The strong feedback we are hearing across every level of the channel reinforces our confidence in delivering over $500 million of revenue synergies over the next five years from the ASAC combination. It is important to note that this is not coming from one group or one region. It is broad-based across our dealer network, and the contractors and builders who use our leading brands every day. Through countless meetings over the past few months, we are seeing firsthand how the combined portfolio is resonating, how our teams are executing together in the field, and how we can bring to bear the relative strengths of the two companies. Those early signals give us conviction in the value creation opportunity ahead. I will now turn it over to Joe to run through the financials. Joe? Thanks, Aaron.

The strong feedback we are hearing across every level of the channel reinforces our confidence in delivering over $500 million of revenue synergies over the next five years from the AZEK combination. It is important to note that this is not coming from one group or one region. It is broad-based across our dealer network, and the contractors and builders who use our leading brands every day.

Adjusted EBITDA was $79 million, resulting in a 37% adjusted EBITDA margin the deck rail and accessories margin outlook remains strong with upside from recycling initiatives improved absorption at our Boise manufacturing location and the application of the Hardie operating system across the manufacturing base.

Speaker #1: And it's important to note that this isn't coming from one group or one region. It's broad-based across our dealer network and the contractors and builders who use our leading brands every day.

Our fiscal third quarter has historically been the smallest seasonal period for our <unk> accessories business and we anticipate a sequential step down in margins consistent with these historical patterns.

Through countless meetings over the past few months, we are seeing firsthand how the combined portfolio is resonating, how our teams are executing together in the field, and how we can bring to bear the relative strengths of the two companies. Those early signals give us conviction in the value creation opportunity ahead. I will now turn it over to Joe to run through the financials. Joe?

Speaker #1: Through countless meetings over the past few months, we are seeing firsthand how the combined portfolio is resonating, how our teams are executing together in the field, and how we can bring to bear the relative strengths of the two companies.

Turning to Australia, and New Zealand, formerly Asia Pacific fiber cement.

Speaker #1: Those early signals give us conviction in the value creation opportunity ahead. I will now turn it over to Joe to run through the financials.

Including the impact of winding down operations in the Philippines, net sales declined 10% or 8% in Australia.

Due to a 20% decline in volumes, partly offset by a 14% rise in ASP.

Speaker #1: Joe.

Joe Ahlersmeyer: Thanks, Aaron. Starting with consolidated results for Q2, total net sales grew 34% to $1.3 billion, including $345 million of acquired AZEK sales. Organic sales declined 1%. Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin. Adjusted general corporate and unallocated R&D costs totaled $39 million in the quarter, benefiting from favorable stock-based compensation expense.

Speaker #2: Thanks, Aaron. Starting with consolidated results for the second quarter. Total net sales grew 34% to $1.3 billion. Including 345 million dollars of acquired ASAC sales.

Aaron Erter: Starting with consolidated results for the second quarter, total net sales grew 34% to $1.3 billion, including $345 million of acquired AZEK sales. Organic sales declined 1%. Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin. Adjusted general corporate and unallocated R&D costs totaled $39 million in the quarter, benefiting from favorable stock-based compensation expense. During the second half, we anticipate around $50 million per quarter of general corporate and unallocated R&D costs. Corporate expense is where the majority of our $24 million P&L benefit from cost synergies resides for FY26. Adjusted effective tax rate was 16.9%, reflecting our updated expectation for FY26 of approximately 20%. Adjusted net interest was $68 million, and weighted average diluted share count used for adjusted diluted EPS was 582 million. We anticipate these items will remain consistent throughout the third and fourth quarter.

Adjusted EBITDA was down 19% to $44 million with adjusted EBITDA margin down 380 basis points to 32, 7%.

Speaker #2: Organic sales declined 1%. Adjusted EBITDA was $330 million. With a 25.5% adjusted EBITDA margin.

Excluding the impact of the Philippines, Australia, and New Zealand net sales declined low single digits and Australia.

With a low single digit volume decline, partially offset by modest ASP growth.

Speaker #3: Adjusted general corporate and unallocated R&D costs total $39 million in the quarter, benefiting from favorable stock-based compensation expense. During the second half, we anticipate around $50 million per quarter of general corporate and unallocated R&D costs.

Lower margins reflect softer volumes, R&D allocations, and higher SG&A expense, including lease exit costs and added growth investments.

During the second half, we anticipate around $50 million per quarter of general corporate and unallocated R&D costs. Corporate expense is where the majority of our $24 million P&L benefit from cost synergies resides for FY 2026. Adjusted effective tax rate was 16.9%, reflecting our updated expectation for FY 2026 of approximately 20%. Adjusted net interest was $68 million, and weighted average diluted share count used for adjusted diluted EPS was 582 million. We anticipate these items will remain consistent throughout Q3 and Q4.

And in Europe, net sales were up 18% or 11% in euros, driven by strong fiber gypsum volume and average net sales price consistent with the prior year. Adjusted EBITDA margin was up 80 basis points to 15, 3% helped by volume leverage lower freight and paper costs and solid manufacturing efficiency.

Speaker #3: Corporate expense is where the majority of our $24 million P&L benefit from cost synergies resides for FY26.

Speaker #2: The adjusted effective tax rate was 16.9%, reflecting our updated expectation for FY26 of approximately...

Speaker #2: 20%. Adjusted net

Speaker #3: Interest was $68 million, and the weighted average diluted share count used for adjusted diluted EPS was $582 million. We anticipate these items will remain consistent throughout the third and fourth quarters.

We're continuing to invest in sales and marketing in Europe to support higher value product growth and drive long term margin expansion.

And with that I'll turn it back to Aaron.

Thanks, Joe turning to our full year outlook for siding and trim. We expect continued challenges in our end markets to result in mid single digit organic sales declines in the second half with Q3 net sales dollars below Q4 due to normal seasonality.

Aaron Erter: Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26. Year-to-date free cash flow was $58 million, reflecting transaction and integration costs partially offsetting strong cash generation and reduced capital spending. Turning to our siding and trim segment, which combines our North America fiber cement business with ASAC exteriors, net sales were up 10%, including $89 million from a full quarter of ASAC. ASAC exteriors grew net sales 5% for the quarter and 7% for the first half on a pro forma basis. Siding and trim organic net sales declined 3% in the quarter as lower volumes were partially offset by a 2% rise in ASP, with solid single-family realization.

Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26. Year-to-date free cash flow was $58 million, reflecting transaction and integration costs partially offsetting strong cash generation and reduced capital spending. Turning to our Siding and Trim segment, which combines our North America Fiber Cement business with AZEK Exteriors, net sales were up 10%, including $89 million from a full quarter of AZEK.

Speaker #2: Adjusted net income was $154 million, and adjusted diluted earnings per share was $26. Year-to-date free cash flow was $58 million, reflecting transaction and integration costs that partially offset strong cash generation and reduced capital spending.

Timing of our annual price increase.

Speaker #2: Turning to our siding and trim segment, which combines our North America fiber cement business with ASAC Exteriors. Net sales were up 10%, including $89 million from a full quarter of ASAC.

Based on updated planning assumptions, we are raising our siding and trim net sales guidance to $2 92, five to 2.9 dollars 95 billion.

AZEK Exteriors grew net sales 5% for the quarter and 7% for the first half on a pro forma basis. Siding and Trim organic net sales declined 3% in the quarter as lower volumes were partially offset by a 2% rise in ASP, with solid single-family realization. Adjusted EBITDA was $224 million, with adjusted EBITDA margin of 29.2%, down 530 basis points year-over-year, including over 100 basis points of impact from $8 million of R&D costs previously expensed within corporate and now allocated to the segment.

Speaker #2: ASAC Exteriors grew net sales by 5% for the quarter and 7% for the first half on a pro forma basis. Siding and trim organic net sales declined by 3% in the quarter, as lower volumes were partially offset by a 2% rise in ASP, with solid single-family.

And today, we are issuing siding and trim adjusted EBIT guidance of $920 million to $955 million.

At the midpoint. This implies a full year organic net sales decline of approximately 6% and adjusted EBIT margin of just over 31, 5%.

Speaker #2: realization. Adjusted EBITDA was

Aaron Erter: Adjusted EBITDA was $224 million, with adjusted EBITDA margin of 29.2%, down 530 basis points year over year, including over 100 basis points of impact from $8 million of R&D costs previously expensed within corporate and now allocated to the segment. Excluding the impact of this allocation, adjusted EBITDA margin would have been approximately 30.2%, a decrease of around 430 basis points. The key drivers of the comparable change in margins were lower volumes, unfavorable absorption, and raw material inflation. In the quarter, we experienced a $25 million underutilization impact, partially offset by $10 million in efficiency gains from the Hardie Operating System. We're addressing the margin decline aggressively through network optimization, cost synergies, and structural efficiency improvements. These actions will position the business for margin recovery and stronger performance going forward.

Speaker #3: $224 million, with an adjusted EBITDA margin of 29.2%. This is down 530 basis points year over year, including over 100 basis points of impact from $8 million of R&D costs previously expensed within corporate, which are now allocated to the segment.

For deck rail and accessories, we are modestly increasing the low end of our net sales guidance to $780 million with the high end remaining at $800 million for the post close period of FY 'twenty six.

Excluding the impact of this allocation, adjusted EBITDA margin would have been approximately 30.2%, a decrease of around 430 basis points. The key drivers of the comparable change in margins were lower volumes, unfavorable absorption, and raw material inflation. In the quarter, we experienced a $25 million underutilization impact, partially offset by $10 million in efficiency gains from the Hardie Operating System. We're addressing the margin decline aggressively through network optimization, cost synergies, and structural efficiency improvements. These actions will position the business for margin recovery and stronger performance going forward.

This assumes sell through up low to mid single digits, consistent with recent quarters and above prior expectations, reflecting outdoor living tailwind and continued material conversion.

Speaker #3: Excluding the impact of this allocation, adjusted EBITDA margin would have been approximately 30.2%. This represents a decrease of around 430 basis points. The key drivers of the comparable change in margins were lower volumes, unfavorable absorption, and raw material inflation.

Just on these demand expectations, we expect that rail and accessories, adjusted EBITDA of $215 million to $225 million for the.

Speaker #3: In the quarter, we experienced a 25 million dollar underutilization impact, partially offset by $10 Hardie operating system. We're addressing the margin decline million in efficiency gains from the aggressively.

The total company, we now expect FY 'twenty six adjusted EBITDA of one two to $1 billion to $5 billion.

Speaker #3: Through network optimization, cost synergies, and structural efficiency improvements, these actions will position the business for margin recovery and stronger performance going forward. For deck rail and accessories, which includes ASAC's residential decking, railing, and pergola lines led by TimberTech, net sales increased 6% on a pro form of basis.

We're confident in our long term cash generation, we expect it to accelerate as integration costs wind down and interest expense declines with debt paydown or.

Aaron Erter: For deck rail and accessories, which includes AZEK's residential decking, railing, and pergola lines led by TimberTech, net sales increased 6% on a pro forma basis, and sell-through was up mid-single digits, consistent with performance in the first quarter. Adjusted EBITDA was $79 million, resulting in a 30.7% adjusted EBITDA margin. The deck rail and accessories margin outlook remains strong, with upside from recycling initiatives, improved absorption at our Boise manufacturing location, and the application of the Hardie Operating System across the manufacturing base. Our fiscal third quarter has historically been the smallest seasonal period for our deck rail and accessories business, and we anticipate a sequential step down in margins consistent with these historical patterns. Turning to Australia and New Zealand, formerly Asia Pacific fiber cement.

For Deck, Rail, and Accessories, which includes AZEK's residential decking, railing, and pergola lines led by TimberTech, net sales increased 6% on a pro forma basis, and sell-through was up mid-single digits, consistent with performance in the first quarter. Adjusted EBITDA was $79 million, resulting in a 30.7% adjusted EBITDA margin.

Our capital expenditures outlook remains unchanged at approximately $400 million.

For FY, 'twenty, six including $75 million for ASIC investments over the long term, we expect capex across our north American businesses to run around 6% to 7% a combined North America sales.

Speaker #3: Sell-through was up mid-single digits, consistent with performance in Q1. Adjusted EBITDA was $79 million, resulting in a 30.7% adjusted EBITDA margin.

The Deck, Rail, and Accessories margin outlook remains strong, with upside from recycling initiatives, improved absorption at our Boise manufacturing location, and the application of the Hardie Operating System across the manufacturing base. Our fiscal Q3 has historically been the smallest seasonal period for our Deck, Rail, and Accessories business, and we anticipate a sequential step down in margins consistent with these historical patterns.

We still expect to generate at least $200 million and free cash flow for the year net.

Speaker #3: The deck rail and accessories margin outlook remains strong, with upside from recycling initiatives, improved absorption at the application of the Hardie Boise manufacturing location, and the operating system across the manufacturing base.

Net debt ended the quarter at $4 5 billion.

Pro forma for the <unk> acquisition, and the midpoint of our updated guidance FY 'twenty six net leverage stands at approximately three two times.

Speaker #3: Our fiscal third quarter has historically been the smallest seasonal period for our deck rail and accessories business. And we margins consistent with these anticipate a sequential step down in historical patterns.

We remain committed to getting our leverage under two turns within two years post close as we grow EBITDA generate cash and pay down the debt.

Turning to Australia and New Zealand, formerly Asia Pacific Fiber Cement. Including the impact of winding down operations in the Philippines, net sales declined 10%, or 8% in Australian dollars, due to a 20% decline in volumes, partly offset by a 14% rise in ASP. Adjusted EBITDA was down 19% to $44 million, with adjusted EBITDA margin down 380 basis points to 32.7%.

Speaker #3: Turning to Australia and New Zealand. Formerly Asia Pacific fiber cement. Including the impact of winding down operations in the Philippines, net sales declined 10% or 8% in Australian dollars due to a 20% decline in volumes partly offset by a 14% rise in ASP.

So to wrap things up looking ahead, our priorities are clear continue driving material conversion from wood and inferior materials to composite alternatives and fiber cement sharpening execution across the business.

Aaron Erter: Including the impact of winding down operations in the Philippines, net sales declined 10%, or 8% in Australian dollars, due to a 20% decline in volumes, partly offset by a 14% rise in ASP. Adjusted EBITDA was down 19% to $44 million, with adjusted EBITDA margin down 380 basis points to 32.7%. Excluding the impact of the Philippines, Australia and New Zealand net sales declined low single digits in Australian dollars, with a low single-digit volume decline, partially offset by modest ASP growth. Lower margins reflect softer volumes, R&D allocations, and higher SG&A expense, including lease exit costs and added growth investments. In Europe, net sales were up 18%, or 11% in euros, driven by strong fiber gypsum volume and average net sales price consistent with the prior year.

In delivering on synergy and deleveraging commitments.

Speaker #3: Adjusted EBITDA was down 19% to $44 million, with adjusted EBITDA margin down $380 basis points to $32.7%. Excluding the impact of the Philippines, Australia and New Zealand net sales declined low single digits in Australian dollars, with a low single digit volume decline partially offset by modest ASP growth.

Only four five months post closing, we are more optimistic than ever on the opportunity in front of us and remain confident that our strategy our team and our leading brands put us in a strong position to deliver consistent long term value for our shareholders.

Excluding the impact of the Philippines, Australia and New Zealand net sales declined low single digits in Australian dollars, with a low single-digit volume decline, partially offset by modest ASP growth. Lower margins reflect softer volumes, R&D allocations, and higher SG&A expense, including lease exit costs and added growth investments.

Operator, please open the line for questions.

Speaker #3: Lower margins reflect softer volumes, R&D allocations, and higher SG&A expense, including lease exit costs and added growth investments. In Europe, net sales were up 18%, or 11% in euros, driven by strong fiber gypsum volume and an average net sales price consistent with the prior year.

Thank you.

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In Europe, net sales were up 18%, or 11% in euros, driven by strong Fiber Gypsum volume and average net sales price consistent with the prior year. Adjusted EBITDA margin was up 80 basis points to 15.3%, helped by volume leverage, lower freight and paper costs, and solid manufacturing efficiency. We're continuing to invest in sales and marketing in Europe to support higher value product growth, and drive long-term margin expansion. With that, I'll turn it back to Aaron.

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Speaker #3: Adjusted EBITDA margin was up 80 basis points to $15.3%, helped by volume leverage, lower freight and paper costs, and solid We're continuing to invest in sales and marketing in Europe to support higher value product growth and drive long-term margin expansion.

Aaron Erter: Adjusted EBITDA margin was up 80 basis points to 15.3%, helped by volume leverage, lower freight and paper costs, and solid manufacturing efficiency. We're continuing to invest in sales and marketing in Europe to support higher value product growth, and drive long-term margin expansion. With that, I'll turn it back to Aaron. Thanks, Joe. Turning to our full-year outlook. For siding and trim, we expect continued challenges in our end markets to result in mid-single digit organic sales declines in the second half, with Q3 net sales dollars below Q4 due to normal seasonality and the timing of our annual price increase. Based on updated planning assumptions, we are raising our siding and trim net sales guidance to $2.925 to 2.995 billion. Today, we are issuing siding and trim adjusted EBITDA guidance of $920 million to 955 million.

If you are on speakerphone, please pick up your handset to ask your question.

The first question today comes from Trevor Allinson with Wolfe Research. Please go ahead.

Hi, Good morning. Thank you for taking my questions. First question is on some of the trends youre seeing in siding and trim and particularly with your builder customers in South I think last quarter, you mentioned about a third of your reduced guidance was due to slower market conditions now it seems like perhaps your expectation is for market conditions to not be quite as bad as you were previously.

Speaker #3: And with that, I'll turn it back to Aaron.

Aaron Erter: Thanks, Joe. Turning to our full-year outlook. For Siding and Trim, we expect continued challenges in our end markets to result in mid-single digit organic sales declines in the second half, with Q3 net sales dollars below Q4 due to normal seasonality and the timing of our annual price increase. Based on updated planning assumptions, we are raising our Siding and Trim net sales guidance to $2.925 to 2.995 billion. Today, we are issuing Siding and Trim adjusted EBITDA guidance of $920 million to 955 million. At the mid-points, this implies a full-year organic net sales decline of approximately 6%, and an adjusted EBITDA margin of just over 31.5%.

Speaker #1: Thanks, Outlook. For siding and trim, we expect continued challenges in our end markets to result in mid-single-digit organic sales declines in the second half, with Q3 net sales dollars below Q4 due to normal seasonality and the timing of our annual price increase.

Anticipating despite your builders continuing to reduce starts youre. So can you just talk about from an end market perspective, what's different than what you previously expected previously expected, perhaps any differences by geography worth noting that supporting our outlook.

Speaker #1: Based on updated planning assumptions, we are raising our siding and trim net sales guidance to $2.925 billion to $2.995 billion. Additionally, we are issuing siding and trim adjusted EBITDA guidance of $920 million to $955 million.

Yes, sure Trevor Thanks for the question.

And I think very simply just to begin the magnitude of that deterioration has been less severe than what we embedded in our guidance I mean for instance, the sound.

Single family New construction for instance, the declines were less severe than the 20 plus percent.

Speaker #1: At the midpoints, this implies a full year organic net sales decline of approximately 6%. And an adjusted EBITDA margin of just over $31.5%. For deck rail and accessories, we are modestly increasing the low end of our net sales guidance to $780 million.

Aaron Erter: At the mid-points, this implies a full-year organic net sales decline of approximately 6% and an adjusted EBITDA margin of just over 31.5%. For deck rail and accessories, we are modestly increasing the low end of our net sales guidance to $780 million, with the high end remaining at $800 million for the post-close period of FY26. This assumes sell-through up low to mid-single digits, consistent with recent quarters, and above prior expectations, reflecting outdoor living tailwinds and continued material conversion. Based on these demand expectations, we expect deck rail and accessories adjusted EBITDA of $215 to $225 million. For the total company, we now expect FY26 adjusted EBITDA of $1.20 to $1.25 billion. We're confident in our long-term cash generation. We expect it to accelerate as integration costs wind down and interest expense declines with debt paydown.

Clients that we previously embedded but let me take this opportunity since you throw the question out there just to give you a little bit of a lay of the landscape here as we think about new construction.

For Deck, Rail, and Accessories, we are modestly increasing the low end of our net sales guidance to $780 million, with the high end remaining at $800 million for the post-close period of FY 2026. This assumes sell-through up low to mid-single digits, consistent with recent quarters, and above prior expectations, reflecting outdoor living tailwinds and continued material conversion. Based on these demand expectations, we expect Deck, Rail, and Accessories adjusted EBITDA of $215 to $225 million.

Starts activity really remains challenging for most of the country.

We decided this before and it continues, particularly Texas and the southeast are really having the greatest impact, particularly given their relative size and how index. We are to new construction in these areas. So Texas for instance, we see builders continue to manage their inventory levels builder activity.

Speaker #1: With the high end remaining at $800 million for the post-close period of FY26, this assumes sell-through up low to mid-single digits, consistent with recent quarters, and above prior tailwinds and continued expectations reflecting outdoor living material conversion.

Continues to slow with builders starting homes at a slower pace than they are selling homes.

Speaker #1: Based on these demand expectations, we expect deck rail and accessories adjusted EBITDA of $215 to $225 million. For the total company, we now expect FY26 adjusted EBITDA of $1.20 to $1.25 billion.

In the second quarter, we again saw double digit volume declines in this market.

For the total company, we now expect FY 2026 adjusted EBITDA of $1.20 to $1.25 billion. We're confident in our long-term cash generation. We expect it to accelerate as integration costs wind down and interest expense declines with debt paydown. Our capital expenditures outlook remains unchanged at approximately $400 million for FY 2026, including $75 million for AZEK investments.

The second quarter declines reflected even softer market than <unk>, even as <unk> was more impacted by the channel inventory impacts.

And we've seen continued weakness and deterioration in October with even stronger double digit volume declines if we shift over to Florida, and Georgia, which is a big market for us as well demand Similarly remains challenging with the volumes down year over year in Q.

Speaker #1: We're confident in our long-term cash generation. We expect it to accelerate as integration costs wind down and interest expense declines with debt paydown. Our capital expenditures outlook remains unchanged at approximately $400 million for FY26.

Aaron Erter: Our capital expenditures outlook remains unchanged at approximately $400 million for FY26, including $75 million for AZEK investments. Over the long term, we expect CapEx across our North American businesses to run around 6% to 7% of combined North America sales. We still expect to generate at least $200 million in free cash flow for the year. Net debt ended the quarter at $4.5 billion. Pro forma for the AZEK acquisition in the midpoint of our updated guidance, FY26 net leverage stands at approximately 3.2x. We remain committed to getting our leverage under two turns within two years post-close as we grow EBITDA, generate cash, and pay down the debt. To wrap things up, looking ahead, our priorities are clear: continue driving material conversion from wood and inferior materials to composite alternatives and fiber cement, sharpening execution across the business, and delivering on synergy and deleveraging commitments.

Housing inventory, we do see some mix there housing inventory across key markets like Orlando and Jacksonville remains elevator elevated and builders continue to manage their inventories.

Speaker #1: Including $75 million for ASAC investments. Over the long term, we expect CapEx across our North American businesses to run around 6% to 7% of combined North America sales.

Over the long term, we expect CapEx across our North American businesses to run around 6% to 7% of combined North America sales. We still expect to generate at least $200 million in free cash flow for the year. Net debt ended the quarter at $4.5 billion. Pro forma for the AZEK acquisition in the midpoint of our updated guidance, FY 2026 net leverage stands at approximately 3.2x. We remain committed to getting our leverage under two turns within two years post-close as we grow EBITDA, generate cash, and pay down the debt.

And then in areas housing inventories have begin to approach normal such as southwest, Florida, we've seen some relief.

Speaker #1: We still expect to generate at least $200 million in free cash flow for the year. Net debt ended the quarter at $4.5 billion. Pro forma for the ASAC acquisition, in the midpoint of our updated guidance, FY26 net leverage stands at approximately 3.2 times.

So we're continuing to see more stable activity in areas like the Carolinas market, where we're outperforming as we convert builders from vinyl to color.

In the West we expect starts to be down high single digits to low double digits for the year as builders across the southwest and the mountain States also slow their starts.

Speaker #1: To remain committed to getting our leverage under two turns within two years post-close as we grow EBITDA, generate cash, and pay down the debt.

And then if we look at areas like the mid in the Midwest, We continue to see more resilience in activity, particularly in what we would call. The barbell ends of the market. So more affordably priced homes and then top of the market so well.

To wrap things up, looking ahead, our priorities are clear: continue driving material conversion from wood and inferior materials to composite alternatives and fiber cement, sharpening execution across the business, and delivering on synergy and deleveraging commitments. Only four and a half months post-closing, we are more optimistic than ever on the opportunity in front of us and remain confident that our strategy, our team, and our leading brands put us in a strong position to deliver consistent long-term value for our shareholders. With that, operator, please open the line for questions.

Speaker #1: Up, looking ahead, our priorities are clear. To wrap things up, we will continue driving material conversion from wood and inferior materials to composite alternatives and fiber cement.

Just to sum it up generally speaking new construction has softened continued to soften across our key regions, but as I started out and begin with not as significantly as we factor in our previous guidance, but look even with that said, we continually strive to figure out ways to continually bring value to our builder customers to our deal.

Speaker #1: Sharpening execution across the business and delivering on synergy and de-leveraging commitments. Only four and a half months post-closing, we are more optimistic than ever on the opportunity in front of us and remain confident that our strategy, our team, and our leading brands put us in a strong position to deliver consistent, long-term value for our shareholders.

Aaron Erter: Only four and a half months post-closing, we are more optimistic than ever on the opportunity in front of us and remain confident that our strategy, our team, and our leading brands put us in a strong position to deliver consistent long-term value for our shareholders. With that, operator, please open the line for questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. We ask that you limit yourself to one question and one follow-up. If you are on a speakerphone, please pick up your handset to ask your question. The first question today comes from Trevor Allenson with Wolf Research. Please go ahead. Hi, good morning. Thank you for taking my questions.

We're partners and try to outperform the market.

Thank you for all that color Eric Super helpful. And then switching to decking and railing a peer of yours recently talked about seeing a more competitive environment theyre talking about an expectation expectation for SG&A spend to ramp meaningfully here versus where it's trended in recent years are you also seeing market conditions become more competitive in our <unk>.

Speaker #1: With that, Operator, please open the line for questions.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. We ask that you limit yourself to one question and one follow-up. If you are on a speakerphone, please pick up your handset to ask your question. The first question today comes from Trevor Allinson with Wolf Research. Please go ahead.

Speaker #2: Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2.

You're expecting marketing spend or rebates to be materially higher moving forward versus what you would have expected six or eight months ago any color on the competitive dynamics than decking and railing would be helpful. Thanks.

Speaker #2: We ask that you limit yourself to one question and one follow-up. If you are on a speakerphone, please pick up your handset to ask your question.

Speaker #2: The first question today comes from Trevor Allenson with Wolf Research. Please go ahead.

Yes, Robert.

I think to start out when we introduced this deal one of the things that was interesting and similar.

Trevor Allinson: Hi, good morning. Thank you for taking my questions. First question is on some of the trends you're seeing in Siding and Trim, particularly with your builder customers in the South. I think last quarter you mentioned about a third of your reduced guidance was due to slower market conditions. Now, it seems like perhaps your expectation is for market conditions to not be quite as bad as you were previously anticipating, despite the builders continuing to reduce starts here. Can you just talk about, from an end market perspective, what's different than what you previously expected, perhaps any differences by geography worth noting that is supporting your outlook?

With James Hardie in APAC is how we went to market and we focus on the entire customer value chain, we always say homeowner focused customer and contractor driven.

Speaker #3: Hi, good morning. Thank you. The question is on some of the trends you're seeing in siding and trim, particularly with your builder customers in the South.

Aaron Erter: First question is on some of the trends you're seeing in siding and trim, particularly with your builder customers in the South. I think last quarter you mentioned about 1/3 of your reduced guidance was due to slower market conditions. Now, it seems like perhaps your expectation is for market conditions to not be quite as bad as you were previously anticipating, despite the builders continuing to reduce starts here. Can you just talk about, from an end market perspective, what's different than what you previously expected, perhaps any differences by geography worth noting that is supporting your outlook? Yeah, sure, Trevor. Thanks for the question. I think very simply, just to begin, the magnitude of that deterioration has been less severe than what we embedded in our guidance.

Speaker #3: I think last quarter you mentioned that about a third of your reduced guidance was due to slower market conditions. Now, it seems like perhaps your expectation is for market conditions to not be quite as bad as you were previously anticipating, despite the builders continuing to reduce starts here.

You see that with what we've been doing with <unk> and they've been doing it for years look our strategy with HVAC has has been consistent and it's been working and I don't see any need to change that so as I said, we've been focused on downstream marketing, but look I have John who runs the business for us and has for years. He can give a little more.

Speaker #3: So can you just talk about from an end market perspective what's different than what you previously expected, perhaps any differences by geography worth noting that is supporting your outlook?

Color there yes.

That's a driver again I think it is just pretty consistent execution of the playbook.

Aaron Erter: Sure, Trevor. Thanks for the question. I think very simply, just to begin, the magnitude of that deterioration has been less severe than what we embedded in our guidance. I mean, for instance, the South, single-family new construction, for instance, the declines were less severe than the 20%+ declines that we previously embedded. Let me take this opportunity to send you through the question out there just to give you a little bit of a lay of the landscape here as we think about new construction.

Speaker #4: Yeah, sure, Trevor. Thanks for the question. I think very simply, just to begin, the magnitude of that deterioration has been less severe than what we expected. In the South, for instance, single-family new construction declines were less severe than the 20-plus percent declines that we previously embedded in our guidance.

Speaker #4: Yeah, sure, Trevor. Thanks for the question. Yeah, I think very simply just to begin, the magnitude of that deterioration has been less severe than what we the South, single-family new construction, for instance, the declines were less severe than the 20-plus percent declines that we embedded in our guidance.

<unk>.

We haven't seen any any reason why we need to alter that right. So we've consistently.

Communicated.

Aaron Erter: I mean, for instance, the South, single-family new construction, for instance, the declines were less severe than the 20% plus declines that we previously embedded. Let me take this opportunity to send you through the question out there just to give you a little bit of a lay of the landscape here as we think about new construction. Look, starts activity really remains challenging for most of the country. We've cited this before, and it continues. Particularly, Texas and the Southeast are really having the greatest impact, particularly given their relative size and how indexed we are to new construction in these areas. Texas, for instance, we see builders continue to manage their inventory levels. Builder activity continues to slow, with builders starting homes at a slower pace than they are selling homes. In the second quarter, we again saw double-digit volume declines in this market.

Certainly that we believe we can beat we can beat the market by 500 plus basis points of growth.

And that's been our experience in the recent quarter is another example of that outperformance.

Development downstream sales and marketing execution channel expansion, and just getting really sticky with our customer base.

Look, starts activity really remains challenging for most of the country. We've cited this before, and it continues. Particularly, Texas and the Southeast are really having the greatest impact, particularly given their relative size and how indexed we are to new construction in these areas. Texas, for instance, we see builders continue to manage their inventory levels. Builder activity continues to slow, with builders starting homes at a slower pace than they are selling homes.

That's proven to be a successful formula for us. So we're just kind of continue to execute that playbook.

Speaker #4: the Southeast are really having the greatest impact. Particularly given their relative size, and how indexed we are to new construction in these areas. So Texas, for instance, we see builders continue to manage their inventory levels.

Can you take care of our customers.

You can take care of our people if we keep doing that we'll continue to outperform.

The next question comes from Keith Hughes with Truest. Please go ahead.

Speaker #4: activity continues to slow with builders starting homes at a slower I mean, for instance, Builder pace than they're selling homes. And the second quarter we again saw double-digit volume declines in this market.

Okay.

Your line is open you may ask your question.

In Q2, we again saw double-digit volume declines in this market. The Q2 declines reflect an even softer market than Q1, even as Q1 was more impacted by the channel inventory impacts. We've seen continued weakness and deterioration in October with even stronger double-digit volume declines. If we shift over to Florida and Georgia, which is a big market for us as well, demand similarly remains challenging, with the volumes down year-over-year in Q2.

Sorry can you hear me now.

Yes, Keith.

Speaker #4: The second quarter declines reflect an even softer market than 1Q, even as 1Q was more impacted by the channel inventory impacts. And we've seen continued weakness and deterioration in October, with even stronger double-digit volume declines.

Aaron Erter: The second quarter declines reflect an even softer market than Q1, even as Q1 was more impacted by the channel inventory impacts. We've seen continued weakness and deterioration in October with even stronger double-digit volume declines. If we shift over to Florida and Georgia, which is a big market for us as well, demand similarly remains challenging, with the volumes down year over year in Q2. Housing inventory, we do see some mix there. Housing inventory across key markets like Orlando and Jacksonville remains elevated, and builders continue to manage their inventories. In areas where housing inventories have begun to approach normal, such as Southwest Florida, we've seen some relief. We're continuing to see more stable activity in areas like the Carolinas, a market where we're outperforming as we convert builders from vinyl to Color Plus.

Hello, I'm, sorry on what happened.

Let me go back to the question building on the last question.

You saw a couple of points of price I believe in the deck.

If you could talk more about price as we end the year and potentially into next year.

Speaker #4: If we shift over to Florida and Georgia, which is a big market for us as well, demand similarly remains challenging with the volumes down year over year in 2Q.

Previous questioner said.

Most competitors set of dynamic like theres going to be discounting in this market what is your expectation for price for the next year or so.

Housing inventory, we do see some mix there. Housing inventory across key markets like Orlando and Jacksonville remains elevated, and builders continue to manage their inventories. In areas where housing inventories have begun to approach normal, such as Southwest Florida, we've seen some relief. We're continuing to see more stable activity in areas like the Carolinas, a market where we're outperforming as we convert builders from vinyl to ColorPlus.

Speaker #4: Housing inventory, we do see some mix there. Housing inventory across key markets like Orlando, and Jacksonville remains elevated, and builders continue to manage their inventories.

Yes, Keith are you talking specifically of the RNA or fiber cement.

Specifically ducking.

Yes, yes.

Yes look I'll take that and John chime in here, if you feel the need look we've taken price we've seen other competitors take price as well and we will continually remain consistent in our actions and our approach to price.

Speaker #4: And then in areas, housing inventories have begun to approach normal, such as Southwest Florida. We've seen some relief. So we're continuing to see more stable activity in areas like the Carolinas, a market where we're outperforming as we convert builders from vinyl to color.

We don't see that changing at all.

Nothing nothing has changed versus yes.

What we've communicated to you.

Speaker #4: In the West, we expect starts to be down high single digits to low double digits for the year, as builders across the Southwest and the Mountain States also slow their starts.

Aaron Erter: In the West, we expect starts to be down high single digits to low double digits for the year as builders across the Southwest and the Mountain States also slow their starts. If we look at areas like the Midwest, we continue to see more resilience and activity, particularly at what we would call the barbell ends of the market, so more affordably priced homes, and then top of the market. Just to sum it up, generally speaking, new construction has continued to soften across our key regions, as I started out and began with, not as significantly as we factored in our previous guidance. Even with that said, we continually strive to figure out ways to continually bring value to our builder customers, to our dealer partners, and try to outperform the market. Thanks for all the color, Aaron. That's super helpful.

In the West, we expect starts to be down high single digits to low double digits for the year as builders across the Southwest and the Mountain States also slow their starts. If we look at areas like the Midwest, we continue to see more resilience and activity, particularly at what we would call the barbell ends of the market, so more affordably priced homes, and then top of the market.

Over the last multiple years right I mean, we believe we can.

Can you take inflationary pricing in the marketplace.

Hasn't changed and we continue to execute and realize some price.

Speaker #4: And then, if we look at areas like the Midwest, we continue to see more resilience in activity, particularly at what we would call the barbell ends of affordably priced homes and then the top of the market.

Okay.

Switch to railing.

What are your plans in the future for Rolling are you seeing any new launches of different stripes great materials.

Just to sum it up, generally speaking, new construction has continued to soften across our key regions, as I started out and began with, not as significantly as we factored in our previous guidance. Even with that said, we continually strive to figure out ways to continually bring value to our builder customers, to our dealer partners, and try to outperform the market.

Speaker #4: So, look, just to sum it up, generally speaking, the construction market has softened and continued to soften across our key regions. But as I started out and began with, not as significantly as we factored in our previous guidance.

The question is around the new rent reductions.

Don do you want to talk to some of our new product introductions. We've had some exciting ones that just came out yes. So the most the most recent one we just talked about in the prepared remarks is advantage rail and what that is Keith is.

Speaker #4: But look, even with that said, we continually strive to figure out ways to continually bring value to our builder customers and to our dealer.

Consistent with your decking portfolio, where we have a good better best premium.

Speaker #4: market. Thanks for all the color,

Trevor Allinson: Thanks for all the color, Aaron. That's super helpful. Switching to decking and railing, a peer of yours recently talked about seeing a more competitive environment. They're talking about an expectation for SG&A spend to ramp meaningfully here versus where it's trended in recent years. Are you also seeing market conditions become more competitive? Are you expecting marketing spend or rebates to be materially higher moving forward, versus what you would have expected six or eight months ago? Any color on the competitive dynamics within decking and railing would be helpful. Thanks.

Consider this a.

Better slash best offer in the composite category.

Speaker #3: Aaron, that's super helpful. And then switching to decking and railing, a peer of yours recently talked about seeing a more competitive environment. Their SG&A spend is ramping meaningfully here versus where it has trended in recent years.

Aaron Erter: Switching to decking and railing, a peer of yours recently talked about seeing a more competitive environment. They're talking about an expectation for SG&A spend to ramp meaningfully here versus where it's trended in recent years. Are you also seeing market conditions become more competitive? Are you expecting marketing spend or rebates to be materially higher moving forward versus what you would have expected six or eight months ago? Any color on the competitive dynamics within decking and railing would be helpful. Thanks. Yeah, Trevor. Hey, I think to start out, when we introduced this deal, one of the things that was interesting and similar with James Hardie and AZEK is how we went to market. We focus on the entire customer value chain. We always say homeowner-focused, customer and contractor-driven.

One of the things we've been doing over the last multiple years with rail is filling out the portfolio.

So again as we look for those continued shelf space gain opportunities.

Speaker #3: Are you also seeing market conditions becoming more competitive? And are you expecting that marketing spend or rebates will be materially higher moving forward versus what you would have expected six or eight months ago?

We can walk into a one of our dealer partners with a full portfolio.

Historically, our portfolio was much more drove around composite and aluminum, but now we have a complete portfolio you've got entry level. So youre good category with a differentiated vinyl product you've got to step up into the steel category.

Speaker #3: Any color on the competitive dynamics within decking and railing would be helpful. Thanks.

Aaron Erter: Yeah, Trevor. Hey, I think to start out, when we introduced this deal, one of the things that was interesting and similar with James Hardie and AZEK is how we went to market. We focus on the entire customer value chain. We always say homeowner-focused, customer and contractor-driven. I think you see that with what we've been doing with AZEK, and they've been doing it for years.

Speaker #4: Yeah, Trevor. Hey, I think to start out, when we introduced this deal, one of the things that was interesting and similar with James Hardie and Aizak is how we went to market.

That should be better and then the best of the premium is rounded out with our aluminum offer and with a few different versions of composites and then our most premium in PBC. So that that really provides us with a great opportunity to help.

Speaker #4: And we focused on the entire customer value chain. We always say homeowner-focused, customer and contractor-driven. And I think you see that with what we've been doing with Aizak, and they've been doing it for years.

Aaron Erter: I think you see that with what we've been doing with AZEK, and they've been doing it for years. Look, our strategy with AZEK has been consistent, and it's been working. I don't see a need to change that. As I said, we've been focused on downstream marketing. I have John, who runs the business for us and has for years. He can give a little more color there. Yeah, Trevor, again, I think it's just pretty consistent execution of the playbook. We haven't seen any reason why we need to alter that, right? We've consistently communicated externally that we believe we can beat the market by 500-plus basis points of growth, and that's been our experience. The recent quarter is another example of that outperformance.

Our strategy with AZEK has been consistent, and it's been working. I don't see a need to change that. As I said, we've been focused on downstream marketing. I have Jon, who runs the business for us and has for years. He can give a little more color there.

Speaker #4: Look, our strategy with Aizak has been consistent, and it's been working. And I don't see a need to change that. So as I said, we've been focused on downstream marketing.

Our dealer partners consolidate the number of rail types. They have on offer with a full portfolio.

The strength of the timber tech brand and all the demand generation downstream demand generation, we provide now.

Speaker #4: But look, I have John, who runs the business for us and has for years. He can give a little more color.

Jon Skelly: Yeah, Trevor, again, I think it's just pretty consistent execution of the playbook. We haven't seen any reason why we need to alter that. We've consistently communicated externally that we believe we can beat the market by 500+ basis points of growth, and that's been our experience.

Speaker #3: Yeah, so Trevor, again,

And that brand. So we think that's a really powerful opportunity for offer our customers.

Speaker #3: I think it's just pretty consistent execution of the playbook there. And we haven't seen any reason why we need to alter that, right? So we've consistently communicated externally that we believe we can beat the market by 500-plus basis points of growth.

It's been interesting as we've learned that as I've learned in this business more and more and been out with our customers with John and the team. This is John mentioned it is a very fragmented category you go into a dealer partner, you're going to dealers and you see many different types of railing out there so to John's point, we're trying to be able to bring the complete offering.

Speaker #3: And that's been our experience. And the recent quarter is another example of that outperformance: new product development, downstream sales and marketing execution, channel expansion, and just getting really sticky with our customer base.

The recent quarter is another example of that outperformance. New product development, downstream sales and marketing, execution, channel expansion, and just getting really sticky with our customer base, that's proven to be a successful formula for us. We're just going to continue to execute that playbook, continue to take care of our customers, and continue to take care of our people. If we keep doing that, we'll continue to outperform.

Aaron Erter: New product development, downstream sales and marketing, execution, channel expansion, and just getting really sticky with our customer base, that's proven to be a successful formula for us. We're just going to continue to execute that playbook, continue to take care of our customers, and continue to take care of our people. If we keep doing that, we'll continue to outperform. The next question comes from Keith Hughes with Truist. Please go ahead. Keith, your line is open. You may ask your question. Sorry, can you hear me now? We got you, Keith. Hello? Okay, sorry. I know what happened. Let me go back to the question. Building on the last question, you saw a couple of points of price, I believe, in the decking business.

And be able to make it simpler for our dealer partners make it simpler for the customer as well and look just like we did in fiber cement if you sell a fiber cement job youre going to sell the trim with it. It's the same thing we sell a timber stacking job, we're going to sell the rail with it as well that's a focus of ours.

Speaker #3: That's proven to be a successful formula for us, so we're just going to continue to execute that playbook and continue to take care of our customers and continue to take care of our people.

Speaker #3: If we keep doing that, we'll continue to

Speaker #3: outperform. The next question comes

The next question comes from Lee power with J P. Morgan. Please go ahead.

Operator: The next question comes from Keith Hughes with Truist. Please go ahead. Keith, your line is open. You may ask your question.

Speaker #1: From Keith Hughes with Truist. Please go ahead. Keith, your line is open. You may ask your question.

Hi, John.

John.

Eric.

The organic strategy.

Yes.

<unk> outlined again there is.

This is obviously a few moving.

This is the just around <unk> some of it goes to productivity some of it goes to the price gap versus vinyl some of it goes to the dealer and the contracted network what do you think that the.

Speaker #5: Sorry, can you hear me

Keith Hughes: Can you hear me now?

Speaker #4: Yes,

Aaron Erter: We got you, Keith.

Keith Hughes: Hello? Okay, sorry. I know what happened. Let me go back to the question. Building on the last question, you saw a couple of points of price, I believe, in the decking business. If you could talk more about price as we end the year and potentially to next year, as you said, as the previous questioner said, the most competitive set of dynamic, like there's going to be discounting in this market. What is your expectation for price for the next year or so?

Speaker #5: Hello. Okay, sorry. I know what happened. Let me go back to the question. Building on the last question, you saw a couple of points of price, I believe, in the decking business.

Cole raisin.

Have struggled probably in the northeast with with color plus in the past is it is it one of those more than the others.

Speaker #5: If you could talk more about price as we end the year and potentially into next year, as you said, the previous questioner mentioned, most competitors said a dynamic like there’s going to be discounting in this market.

Aaron Erter: If you could talk more about price as we end the year and potentially to next year, as you said, as the previous questioner said, the most competitive set of dynamic, like there's going to be discounting in this market. What is your expectation for price for the next year or so? Yeah, Keith, are you talking specifically of DR&A or fiber cement? Specifically decking. Yeah. Yeah, look, I'll take that. John, chime in here if you feel the need. Look, we've taken price. We've seen other competitors take price as well. We'll continually remain consistent in our actions and our approach to price. We don't see that changing at all. Yeah. I mean, Keith, nothing's changed versus what we've communicated to you over the last multiple years, right? I mean, we believe we can continue to take inflationary pricing in the marketplace. That hasn't changed.

Yes good.

Good question look I think if we look at our opportunity to grow the organic fiber cement business.

Speaker #5: What is your expectation for price for the next year or so?

Aaron Erter: Yeah. Keith, are you talking specifically of DR&A or fiber cement?

Speaker #4: Yeah, Keith, are you talking specifically about DR&A or fiber cement?

It's a couple of things if we look at the northeast and we look at the Midwest.

Keith Hughes: Specifically decking.

Speaker #5: Specifically decking.

Aaron Erter: Yeah. I'll take that. Jon, chime in here if you feel the need. Look, we've taken price. We've seen other competitors take price as well. We'll continually remain consistent in our actions and our approach to price. We don't see that changing at all.

Those are the areas from a repair and remodel standpoint to have the most opportunity because you have an aging housing stock out there.

Speaker #4: Yeah. Yeah, look, I'll take that. And John, chime in here if you feel the need. Look, we've taken price. We've seen other competitors take price as well.

The Big challenge for Us or I should say opportunity is how do we decreased the price differential versus inferior substrates. So vinyl for instance.

Speaker #4: And we'll continually remain consistent in our actions and our approach to price. We don't see that changing at all.

Jon Skelly: Yeah. I mean, Keith, nothing's changed versus what we've communicated to you over the last multiple years. We believe we can continue to take inflationary pricing in the marketplace. That hasn't changed. We continue to execute and realize the price.

Speaker #3: Yeah, I mean, Keith, nothing's changed versus what we've communicated to you over the last multiple years, right? I mean, we believe we can continue to take inflationary pricing in the marketplace.

No as if our contractors are sitting at the kitchen table and trying to sell of James Hardie job. If we can get that price differential versus say vinyl for instance, about 50% to a premium we're going to we're going to win the majority of those jobs.

Speaker #3: That hasn't changed. And we continue to execute and realize the

Aaron Erter: We continue to execute and realize the price. Okay, thank you. Let me switch to railing. What are your plans in the future for railing? Will we be seeing any new launches of different substrate materials? The question is around new introductions. John, do you want to talk to some of our new product introductions? We've had some exciting ones that just came out. Yeah. The most recent one we just talked about in the prepared remarks is Advantage Rail. What that is, Keith, is consistent with our decking portfolio where we have good, better, best premium. Consider this a better/best offer in the composite category. One of the things we've been doing over the last multiple years with rail is filling out the portfolio.

Speaker #3: price.

Keith Hughes: Okay, thank you. Let me switch to railing. What are your plans in the future for railing? Will we be seeing any new launches of different substrate materials? The question is around new introductions.

Speaker #5: Okay, thank you. And let me

Speaker #5: Switching to railing, what are your plans for the future regarding railing? Will we be seeing any new launches of different substrate materials? I'm really questioning this in light of the new introductions.

As we walk through the presentation, and we talked about reducing on the wall cost we.

Firmly believe and are confident we have an answer to that.

This has been one of the biggest combined R&D efforts supply chain efforts and also working with our customer partners to bring this all together and over the last year. We've had this pilot out there and what we're seeing in this area, where we're having the pilot call it the central northeast.

Aaron Erter: Jon, do you want to talk to some of our new product introductions? We've had some exciting ones that just came out.

Speaker #4: Introductions? We've had some exciting ones that just, John, do you want to talk to some of our new products?

Speaker #4: came out.

Jon Skelly: Yeah. The most recent one we just talked about in the prepared remarks is Advantage Rail. What that is, Keith, is consistent with our decking portfolio where we have good, better, best premium. Consider this a better/best offer in the composite category.

Speaker #3: Yeah, so the most

Speaker #3: The recent topic we discussed in the prepared remarks is Advantage Rail. Keith, this aligns with your decking portfolio where we have good, better, best, and premium options. Consider this a better/best offering in the composite category.

As we're seeing our color plus volume up 17%.

That's giving us tremendous amount of confidence to wheel this out to more locations like the Midwest to the Carolinas to the mid Atlantic.

One of the things we've been doing over the last multiple years with rail is filling out the portfolio. Again, as we look for those continued shelf space gain opportunities, when we can walk into one of our dealer partners with a full portfolio, historically, our portfolio was much more driven around composite and aluminum. Now, we have a complete portfolio. You've got entry-level, so your good category with a differentiated vinyl product.

Speaker #3: And one of the things we've been doing over the last multiple years with rail is filling out the portfolio. So again, as we look for those continued shelf space gain opportunities, when we can walk into one of our dealer partners with a full portfolio. Historically, our portfolio was much more driven around composite and aluminum.

Aaron Erter: Again, as we look for those continued shelf space gain opportunities, when we can walk into one of our dealer partners with a full portfolio, historically, our portfolio was much more driven around composite and aluminum. Now we have a complete portfolio. You've got entry-level, so your good category with a differentiated vinyl product. You've got to step up into the steel category, sort of that better. The best of the premium is rounded out with our aluminum offer and with a few different versions of composite, and then our most premium at PVC. That really provides us with a great opportunity to help our dealer partners consolidate the number of rail types they have on offer with a full portfolio. They get the strength of the TimberTech brand, and all the downstream demand generation we provide them behind that brand.

What's been critical you saw the announcement with Boise a lot of that has been focused on timber tack in APAC in some regions, but what's critical on that announcement is Boise partnering with us to get this extended statement collection out there to more areas of the country. So that allows us to really be able to.

Speaker #3: But now we have a complete portfolio. You've got entry-level, so your good category with a differentiated vinyl product. You've got to step up into the steel category.

Our repair and remodel conversion out there and look we believe from a color plus standpoint. The methods that we have this intuitive edge program that we're going to be able to double our color plus volume.

You've got to step up into the steel category, sort of that better. The best of the premium is rounded out with our aluminum offer and with a few different versions of composite, and then our most premium at PVC. That really provides us with a great opportunity to help our dealer partners consolidate the number of rail types they have on offer with a full portfolio. They get the strength of the TimberTech brand, and all the downstream demand generation we provide them behind that brand. We think that's a really powerful opportunity for our customers.

Speaker #3: Sort of that better. And then the best and the premium is rounded out with our aluminum offer and with a few different versions of composite, and then our most premium at PVC.

Just with this program. So we're really excited about it I know we've talked about it but we're seeing it working and we're going to have it be launch a.

Speaker #3: So, that really provides us with a great opportunity to help our dealer partners consolidate the number of rail types they have on offer with a full portfolio.

A couple of different areas and continue to launch.

Appropriate areas across the country as we get into the back half of our year.

Speaker #3: And then they get the strength of the TimberTech brand and all the demand generation downstream demand generation we provide them behind that brand. So we think that's a really powerful opportunity for our.

Okay. Thanks, and then just a follow up you talked to trim attachment.

Attachment rates before.

Aaron Erter: We think that's a really powerful opportunity for our customers. Keith, what's been interesting is we've learned, as I've learned this business more and more and been out with our customers, with John and the team, as John mentioned, it is a very fragmented category. You go into a dealer partner, you go into dealers, and you see many different types of railing out there. To John's point, we're trying to be able to bring the complete offering and be able to make it simpler for our dealer partners, make it simpler for the customer as well. Look, just like we did in fiber cement, if you sell a fiber cement job, you're going to sell the trim with it. It's the same thing. We sell a TimberTech decking job, we're going to sell the rail with it as well. That's a focus of ours.

Tell us where you are tracking now to touch on is right.

Speaker #3: customers.

Aaron Erter: Keith, what's been interesting is we've learned, as I've learned this business more and more and been out with our customers, with Jon and the team, as Jon mentioned, it is a very fragmented category. You go into a dealer partner, you go into dealers, and you see many different types of railing out there. To Jon's point, we're trying to be able to bring the complete offering and be able to make it simpler for our dealer partners, make it simpler for the customer as well. Just like we did in fiber cement, if you sell a fiber cement job, you're going to sell the trim with it. It's the same thing. We sell a TimberTech decking job, we're going to sell the rail with it as well. That's a focus of ours.

Speaker #4: Keith, what's been

Speaker #4: Interesting is we've learned that, as I've learned this business more and more and been out with our customers with John and the team. As John mentioned, it is a very fragmented category.

Housing in R&R, and maybe how <unk> helped that.

Yes. Good. Good question, we look we continue to see progress in our trim attachment and a lot of our agreements with our large homebuilders, which has been new over the last couple of years have included adding trim attachment as well.

Speaker #4: You go into a dealer partner, you go into dealers, and you see many different types of railing out there. So to John's point, we're trying to be able to bring the complete offering and be able to make it simpler for our dealer partners, make it simpler for the customer, as well.

We see a tremendous amount of opportunity just synergies in total obviously with APAC, but areas of the country that are not utilizing fiber cement. So take for instance, the northeast that's where we think we have opportunity to be able to bring APAC in inverse attacks as well and look I think.

Speaker #4: And look, just like we did in fiber cement, if you sell a fiber cement job, you're going to sell the trim with it. It's the same thing.

Speaker #4: We sell a TimberTech decking job, we're going to sell the rail with it as well. That's a focus of

Speaker #4: Ours. The next question comes from.

Whats been really encouraging as well as we brought this complete proposition to some of our large one step dealers out there theyre excited about it and they are adopting it so we're seeing progress.

Aaron Erter: The next question comes from Lee Power with JP Morgan. Please go ahead. Hi, Aaron, John, and Joe. Aaron, the organic strategy piece that you've kind of outlined again, there's obviously a few moving pieces there just around Color Plus. Some of it goes to productivity, some of it goes to the price gap versus vinyl, some of it goes to the dealer and the contractor network. What do you think the core reason that you have struggled probably in the Northeast with Color Plus in the past? Is it one of those more than the others? Yeah, Lee, good question. Look, I think if we look at our opportunity to grow the organic fiber cement business, it's a couple of things.

Operator: The next question comes from Lee Power with JPMorgan. Please go ahead.

Speaker #1: Lee Power with J.P. Morgan. Please go ahead.

Speaker #1: ahead. Hi, Aaron, John,

Lee Power: Hi, Aaron, Jon, and Joe. Aaron, the organic strategy piece that you've kind of outlined again, there's obviously a few moving pieces there just around ColorPlus. Some of it goes to productivity, some of it goes to the price gap versus vinyl, some of it goes to the dealer and the contractor network. What do you think the core reason that you have struggled probably in the Northeast with ColorPlus in the past? Is it one of those more than the others?

Speaker #6: and Joe. Aaron, the organic strategy piece that you've kind of outlined again, there is obviously a few moving pieces there just around color plus.

The next question comes from Ryan Merkel with William Blair. Please go ahead.

Hey, everyone. Thanks for the question and nice job. This quarter. My first question is on margins. It looks like guidance implies the second quarter EBITDA margins at the bottom for the year can you talk about what's driving the improvement in the second half and particularly because it looks like siding volumes might be a little worse than the second.

Speaker #6: Some of it goes to productivity. Some of it goes to the price gap between the dealer and the contractor versus vinyl. Some of it goes to network.

Speaker #6: What do you think is the core reason that you have struggled, probably in the Northeast with ColorPlus, in the past? Is it one of those more than the others?

Half year over year.

Aaron Erter: Yeah. Lee, good question. I think if we look at our opportunity to grow the organic Fiber Cement business, it's a couple of things. If we look at the Northeast and we look at the Midwest, those are the areas from a repair and remodel standpoint that have the most opportunity because you have an aging housing stock out there.

Speaker #4: Yeah, Lee, good question. Look, I think if we look at our opportunity to grow the organic fiber cement business, it's a couple of things.

Yes, Ryan Good question look we're continuing to we're going to have soft volumes, we think in the back half I mentioned that in the beginning when we think about fiber cement.

Speaker #4: If we look at the Northeast and we look at the Midwest, those are the areas from a repair and remodel standpoint that have the most opportunity because you have an aging housing stock out there.

Aaron Erter: If we look at the Northeast and we look at the Midwest, those are the areas from a repair and remodel standpoint that have the most opportunity because you have an aging housing stock out there. The big challenge for us, or I should say opportunity, is how do we decrease the price differential versus inferior substrates, so vinyl, for instance. What we know is if our contractors are sitting at a kitchen table and trying to sell a James Hardie job, if we can get that price differential versus, say, vinyl, for instance, about 50% to a premium, we're going to win the majority of those jobs. As we walk through the presentation and we talked about reducing on-the-wall costs, we firmly believe and are confident we have an answer to that.

That's still our guidance shows more modest margin compression on a year over year basis.

I think it's important to contextualize that our second half expected margin performance would be more consistent with what you would expect with our cost structure and decremental profile.

The big challenge for us, or I should say opportunity, is how do we decrease the price differential versus inferior substrates, so vinyl, for instance. What we know is if our contractors are sitting at a kitchen table and trying to sell a James Hardie job, if we can get that price differential versus, say, vinyl, for instance, about 50% to a premium, we're going to win the majority of those jobs.

Speaker #4: The big challenge for us, or I should say opportunity, is how do we decrease the price differential versus inferior substrates? So vinyl, for instance.

We've seen a lot of inflation headwinds continue from FY 'twenty five that we've flagged and that carried over.

Speaker #4: What we know is if our contractors are sitting at a kitchen table and trying to sell a James Hardie job, if we can get that price differential versus, say, vinyl—about 50% to a premium—we're going to win the majority of those jobs.

So there were impacts related to short term under absorption variable cost that really weighed on the first half.

But as we get into the second half, we expect to see more pronounced benefits from some of our hottest initiatives healthy price mix benefits, some incremental benefits of cost synergies and really some potentially early improvements from the actions, we're taking to really optimize our.

As we walk through the presentation and we talked about reducing on-the-wall costs, we firmly believe and are confident we have an answer to that. This has been one of the biggest combined R&D efforts, supply chain efforts, and also working with our customer partners to bring this all together. Over the last year, we've had this pilot out there. What we're seeing in this area where we're having the pilot, call it the Central Northeast, is we're seeing our ColorPlus volume up 17%.

Speaker #4: presentation and we talked about reducing on-the-wall So as we walk through the costs, we firmly believe and are confident we have an answer to that.

Speaker #4: This has been one of the biggest combined R&D efforts, supply chain efforts, and also working with our customer partners to bring this all together.

Aaron Erter: This has been one of the biggest combined R&D efforts, supply chain efforts, and also working with our customer partners to bring this all together. Over the last year, we've had this pilot out there. What we're seeing in this area where we're having the pilot, call it the Central Northeast, is we're seeing our Color Plus volume up 17%. That's giving us a tremendous amount of confidence to wheel this out to more locations like the Midwest, the Carolinas, and the Mid-Atlantic. What's been critical, you saw the announcement with Boise. A lot of that has been focused on TimberTech and AZEK in some regions. What's critical in that announcement is Boise partnering with us to get this extended Statement Essentials collection out there to more areas of the country.

<unk> network, so as I think about margins moving forward.

We're not giving guidance, but I would expect we continue to see the same type of volumes.

Speaker #4: And over the last year, we've had this pilot out there. What we're seeing in this area where we're having the pilot, call it the Central Northeast, is we're seeing our color plus volume up 17%.

The second half is going to be more representative of what we would see if not a little better.

Got it alright, that's helpful. And then just stepping back you know Aaron if I go back to the guidance cut in August there were a lot of fears that fiber cement was losing share.

That's giving us a tremendous amount of confidence to wheel this out to more locations like the Midwest, the Carolinas, and the Mid-Atlantic. What's been critical, you saw the announcement with Boise. A lot of that has been focused on TimberTech and AZEK in some regions. What's critical in that announcement is Boise partnering with us to get this extended Statement Essentials collection out there to more areas of the country. That allows us to really be able to accelerate our repair and remodel conversion out there.

Speaker #4: So that's giving us tremendous amount of confidence to wheel this out to more locations. Like the Midwest, to the Carolinas, to the Mid-Atlantic. And what's been critical, you saw the announcement with Boise, a lot of that has been focused on TimberTech and ASAC in some regions.

Now it seems like your exposure in the south.

Cautious guide where really the key issues. So my question is can you comment on how fiber cement is performing versus other materials and a market where affordability is a big issue are you taking share you are holding share. Thank you.

Speaker #4: But what's critical in that announcement is Boise partnering with us to get this extended statement collection out there to more areas of the country.

Yeah. Good question look as we look at share I mean, certainly we are not happy or satisfied with our performance we need to be growing.

Speaker #4: So, that allows us to really accelerate our repair and remodel conversion out there. And look, we believe that from a ColorPlus standpoint, with the methods we have in this Intuitive Edge program, we're going to be able to double our ColorPlus volume just with this program.

Aaron Erter: That allows us to really be able to accelerate our repair and remodel conversion out there. Look, we believe from a Color Plus standpoint, the methods that we have, this Intuitive Edge program, that we're going to be able to double our Color Plus volume just with this program. We're really excited about it. I know we've talked about it, but we're seeing it working. We're going to have it be launched to a couple of different areas and continue to launch appropriate areas across the country as we get into the back half of our year. Thanks. Just a follow-up. You talked to trim attachment rates before. Can you tell us where you are tracking now, trim attachment rates in new housing and R&R, and maybe how AZEK's helped that? Yeah, good question, Lee.

Look, we believe from a ColorPlus standpoint, the methods that we have, this Intuitive Edge program, that we're going to be able to double our ColorPlus volume just with this program. We're really excited about it. I know we've talked about it, but we're seeing it working. We're going to have it be launched to a couple of different areas and continue to launch appropriate areas across the country as we get into the back half of our year.

Now with that said and not using it as an excuse but we do face some challenges with our exposure to new construction and certainly areas like the south but I talked about some opportunities that we have moving forward. Leah just asked me. The question about the improvement on the wall cost, we think that's a game changer.

Speaker #4: So we're really excited about it. I know we've talked about it, but we're seeing it working, and we're going to have it be launched to a couple of different areas and continue to launch appropriate areas across the country as we get into the back half of our year.

For us and we expect to really accelerate that I think the other thing is the momentum behind resilient materials is structural so if we think about risks such as wildfires sustainability goals insurance reform fiber cement really aligns perfectly with the trend to meet evolving building codes.

Lee Power: Thanks. Just a follow-up. You talked to trim attachment rates before. Can you tell us where you are tracking now, trim attachment rates in new housing and R&R, and maybe how AZEK's helped that?

Speaker #6: Thanks. And then just a follow-up. You talked about trim attachment rights before. Can you tell me about trim attachment rights in new housing and R&R, and maybe how ASICs helped that?

There's the curb appear curb appeal and then look lastly, I would say builders remained focus on what helps them sell more houses quicker and we're finding that James Hardie homes do that.

Aaron Erter: Yeah. Good question, Lee. Look, we continue to see progress in our trim attachment. A lot of our agreements with our large home builders, which has been new over the last couple of years, have included adding trim attachment as well. We see a tremendous amount of opportunity, just synergies in total, obviously, with AZEK, but areas of the country that are not utilizing fiber cement.

Speaker #4: Yeah, good question, Lee. Look, we continue to see progress in our trim attachment. And a lot of our agreements with our large home builders, which has been new over the last couple of years, have included adding trim attachment as well.

Aaron Erter: Look, we continue to see progress in our trim attachment. A lot of our agreements with our large home builders, which has been new over the last couple of years, have included adding trim attachment as well. We see a tremendous amount of opportunity, just synergies in total, obviously, with AZEK, but areas of the country that are not utilizing fiber cement. Take, for instance, the Northeast. That's where we think we have opportunity to be able to bring AZEK in and Versitex as well. I think what's been really encouraging as well, as we brought this complete proposition to some of our large one-step dealers out there, they're excited about it, and they're adopting it. We're seeing progress. The next question comes from Ryan Merkel with William Blair. Please go ahead. Hey, everyone. Thanks for the question, and nice job this quarter.

So as we think about over the longer term, we think we're well positioned.

Speaker #4: We see a tremendous amount of opportunity just synergies in total obviously with ASAC, but areas of the country that are not utilizing fiber cement, so take for instance the Northeast, that's where we think we have opportunity to be able to bring ASAC in and Versatex.

The next question comes from Tim Weiss with Baird. Please go ahead.

Hey, guys. Good morning, Thanks, Thanks for all the details.

Take, for instance, the Northeast. That's where we think we have opportunity to be able to bring AZEK in and Versilux as well. I think what's been really encouraging as well, as we brought this complete proposition to some of our large one-step dealers out there, they're excited about it, and they're adopting it. We're seeing progress.

I guess first my question just on cost synergies.

Speaker #4: And look, I think what's been really encouraging as we've brought this complete proposition to some of our large one-step dealers out there. They're excited about it, and they're adopting it.

You raised that.

Exit rate on the run rate.

For fiscal 'twenty, six, but if you could just speak to kind of what you were able to attack on the cost synergy front earlier than you expected and then as you think about kind of a $125 million cost synergy target any any kind of timing change there and do you kind of attack the rest of the bucket.

Speaker #4: So we're seeing progress.

Operator: The next question comes from Ryan Merkel with William Blair. Please go ahead.

Speaker #1: The next question comes from Ryan Merkel with William Blair. Please go

Speaker #1: The next question comes from Ryan Merkel with William Blair. Please go ahead. Hey, everyone.

Yes, Tim Good question look I think the key here is we focus on G&A right away. So really I think 85% of the target that we had for G&A. We've achieved so the natural question is are you going to think are you going to get these done earlier or are you going to raise the cost synergy.

Ryan Merkel: Hey, everyone. Thanks for the question, and nice job this quarter. My first question is on margins. It looks like guidance implies the Q2 EBITDA margins are at the bottom for the year. Can you talk about what's driving the improvement in the second half, and particularly because it looks like siding volumes might be a little worse in the second half year-over-year?

Speaker #7: Thanks for the question and nice job this quarter. My first question is on margins; it looks like guidance implies the second quarter EBITDA margins at the bottom for the year.

Aaron Erter: My first question is on margins. It looks like guidance implies the second quarter EBITDA margins are at the bottom for the year. Can you talk about what's driving the improvement in the second half, and particularly because it looks like siding volumes might be a little worse in the second half year over year? Yeah, Ryan, good question. Look, we're continuing to—we're going to have soft volumes, we think, in the back half. I mentioned that in the beginning when we think about fiber cement. Even still, our guidance shows more modest margin compression on a year-over-year basis. I think it's important to contextualize that our second half expected margin performance would be more consistent with what you would expect with our cost structure and decremental profile. We've seen a lot of inflation headwinds continue from FY25 that we've flagged and have carried over.

Speaker #7: Can you talk about what's driving the improvement in the second half, particularly because it looks like siding volumes might be a little worse in the second half year over year?

What I'd like to do first is lets see these show up in the P&L for US and then be able to look at potentially doing that but I am very pleased with the focus and how the team is working on are approaching these cost synergies the other.

Aaron Erter: Yeah. Ryan, good question. Look, we're going to have soft volumes, we think, in the back half. I mentioned that in the beginning when we think about fiber cement. Even still, our guidance shows more modest margin compression on a year-over-year basis. I think it's important to contextualize that our second half expected margin performance would be more consistent with what you would expect with our cost structure and decremental profile. We've seen a lot of inflation headwinds continue from FY 2025 that we've flagged and have carried over.

Speaker #4: Yeah, Ryan, good question. Look, we're continuing to—we're going to have soft volumes, we think, in the back half. I mentioned that in the beginning when we think about fiber cement.

The key is you don't want any disruption to your base business or disruption to your customers and we have not seen that so theres been a tremendous amount of focus from the team.

Speaker #4: Even still, our guidance shows more modest margin compression on a year-over-year basis. I think it's important to contextualize that our second-half expected margin performance would be more consistent with what you would expect with our cost structure and decremental profile.

Okay. Okay. That's helpful. And then just kind of piggybacking on Ryans question about margins specifically in the siding and trim business is there anything internally that you're specifically doing to kind of.

Speaker #4: We've seen a lot of inflation headwinds continue from FY25 that we flagged and have carried over. So there were impacts related to short-term underabsorption and variable costs that really weighed on the first half.

Some of the Decrementals on volume because I mean, it's still kind of a high single digit volume decline I think implied in there.

Aaron Erter: There were impacts related to short-term underabsorption and variable costs that really weighed on the first half. As we get into the second half, we expect to see more pronounced benefits from some of our HOS initiatives, healthy price mix benefits, some incremental benefits of cost synergies, and really some potentially early improvements from the actions we're taking to really optimize our manufacturing network. As I think about margins moving forward, we're not giving guidance, but I would expect if we continue to see the same type of volumes, that the second half is going to be more representative of what we would see, if not a little better. Got it. All right. That's helpful. Then just stepping back, Aaron, if I go back to the guidance cut in August, there were a lot of fears that fiber cement was losing share.

There were impacts related to short-term underabsorption and variable costs that really weighed on the first half. As we get into the second half, we expect to see more pronounced benefits from some of our HOS initiatives, healthy price mix benefits, some incremental benefits of cost synergies, and really some potentially early improvements from the actions we're taking to really optimize our manufacturing network. As I think about margins moving forward, we're not giving guidance, but I would expect if we continue to see the same type of volumes, that the second half is going to be more representative of what we would see, if not a little better.

The back half of the year, but youre going to see much better incrementals as it is at the top.

Speaker #4: But as we get into the second half, we expect to see more pronounced benefits from some of our Haas initiatives. Healthy price-mix benefits, some incremental benefits of cost synergies, and really some potentially early improvements from the actions we're taking to optimize our manufacturing network.

Meaning of raws as it is at some things you're doing on variable costs and things like that.

Kind of manage that just just some more color there I think it would be about helpful. Thank you.

Yes, certainly we've had.

But our cost inflation, but look we've talked we always say we focus on what we can control.

Speaker #4: So, as I think about margins moving forward, we're not giving guidance, but I would expect that if we continue to see the same type of volumes, the second half is going to be more representative of what we would see, if not a little better.

So we are taking actions.

If you look at some of the things that we're doing in our manufacturing plants were managing shifts.

We're working as best as we can manage our variable costs.

Also we're looking at.

Our footprint as well.

Ryan Merkel: Got it. Then just stepping back, Aaron, if I go back to the guidance cut in August, there were a lot of fears that fiber cement was losing share. It now seems like your exposure in the South and a cautious guide were really the key issues. My question is, can you comment on how fiber cement is performing versus other materials in a market where affordability is a big issue? Are you taking share? Are you holding share? Thank you.

What are the rate.

Speaker #7: Got it. All right. That's helpful. And then, just stepping back, Aaron, if I go back to the guidance cut in August, there were a lot of fears that fiber cement was losing share.

Type of capacity levels, we need at this time that speaks to us.

<unk> us working through the right amount of shifts to half. So there's a whole host of things I still go back to areas like the Hardie operating system that is key for us to manage our costs, whether that'd be from a procurement standpoint, whether that'd be from a formulation standpoint.

Speaker #7: It now seems like your exposure in the South and a cautious guide were really the key issues. So my question is, can you comment on how fiber cement is performing versus other materials in a market where affordability is a big issue?

Aaron Erter: It now seems like your exposure in the south and a cautious guide were really the key issues. My question is, can you comment on how fiber cement is performing versus other materials in a market where affordability is a big issue? Are you taking share? Are you holding share? Thank you. Yeah. Good question. Look, as we look at share, I mean, certainly we are not happy or satisfied with our performance. We need to be growing. Now, with that said, not using an excuse, we do face some challenges with our exposure to new construction and certainly areas like the south. I talked about some opportunities that we have moving forward. Lee had just asked me the question about the improvement on the wall cost. We think that's a game changer for us, and we expect to really accelerate that.

So we're looking at that from a legacy Hardy standpoint, but also implementing that and the the legacy <unk> business.

Speaker #7: Are you taking share? Are you holding share? Thank you.

Aaron Erter: Yeah. Good question. Look, as we look at share, I mean, certainly, we are not happy or satisfied with our performance. We need to be growing. Now, with that said, not using an excuse, we do face some challenges with our exposure to new construction and certainly areas like the South. I talked about some opportunities that we have moving forward. Lee had just asked me the question about the improvement on the wall cost. We think that's a game changer for us, and we expect to really accelerate that.

Speaker #4: Yeah, good question. Look, as we look at share, I mean, certainly we are not happy or satisfied with our performance. We need to be growing.

So those are some of the things that we're doing and we've already taken action on some of these already that we should see the benefits as we complete our Q3.

Speaker #4: that said, and not using an excuse, but Now, with we do face some challenges with our exposure to new construction and certainly areas like the South.

The next question comes from Peterson with Macquarie. Please go ahead.

Speaker #4: But I talked about some opportunities that we have moving forward. Lee had just asked me the question about the improvement on the wall cost.

Good morning, and thanks very much for the opportunity.

You've mentioned one step.

Speaker #4: We think that's a game changer for us, and we expect to really accelerate that. I think the other thing is the momentum behind resilient materials is structural.

Once the dealer network.

Relationships the number of times could you give us a little bit more of a sense of what you're experiencing in that space, obviously, it's easy to see.

Aaron Erter: I think the other thing is the momentum behind resilient materials is structural. If we think about risks such as wildfires, sustainability goals, insurance reform, fiber cement really aligns perfectly with the trend to meet evolving building codes. There's the curb appeal. Lastly, I would say builders remain focused on what helps them sell more houses quicker. We're finding that James Hardie Homes do that. As we think about over the longer term, we think we're well positioned. The next question comes from Tim Weiss with Baird. Please go ahead. Hey, guys. Good morning. Thanks for all the details. I guess first, my question just on cost synergies. You raised kind of the exit rate on the run rate for fiscal 2026.

I think the other thing is the momentum behind resilient materials is structural. If we think about risks such as wildfires, sustainability goals, insurance reform, fiber cement really aligns perfectly with the trend to meet evolving building codes. There's the curb appeal. Lastly, I would say builders remain focused on what helps them sell more houses quicker. We're finding that James Hardie Homes do that. As we think about over the longer term, we think we're well positioned.

Speaker #4: So if we think about risks such as wildfires, sustainability goals, insurance reform, fiber cement really aligns perfectly with the trend to meet evolving building codes.

The Boise.

Like that.

So once the context.

What reception, you're getting what impact it's having on the business and how you're thinking about the strategic positioning of your channel mix.

Speaker #4: There's the curb appeal. Curb appeal, and then, lastly, I would say builders remain focused on what helps them sell more houses quicker. We're finding that James Hardie homes do that.

Across the portfolio.

Yes, Peter maybe to start out.

Speaker #4: So as we think about over the longer term, we think we're well-positioned.

Boise, we have not lifted is.

Operator: The next question comes from Tim Weiss with Baird. Please go ahead.

Our synergy, meaning a commercial synergy synergy happens downstream and so if we think about our distribution partners. It is really important in our strategy has always been at James Hardie and it's been the same at <unk> is to make sure that we're teamed up.

Speaker #1: Tim Weiss with Baird. Please go ahead.

Tim Weiss: Hey, guys. Good morning. Thanks for all the details. I guess first, my question just on cost synergies. You raised kind of the exit rate on the run rate for fiscal 2026. If you could just speak to what you were able to attack on the cost synergy front earlier than you expected. As you think about the $125 million cost synergy target, any kind of timing change there as you kind of attack the rest of the bucket?

Speaker #8: morning. Thanks for all the details. I guess first my The next question comes from Hey, guys. Good synergies. You raised kind of the exit rate on the run rate for fiscal 26.

With the best distribution partners that are going to service.

Our customers if we go to our one step dealers certainly we have tremendous relationships with them and call. It day, two we've talked to them and we spent a lot of time with them and bringing them. What is the complete value proposition of the two companies combined.

Speaker #8: If you could just speak to kind of what you were able to attack on the cost synergy front earlier than you expected. And then, as you think about kind of the $125 million cost synergy target, any kind of timing change there as you kind of attack the rest of the bucket?

Aaron Erter: If you could just speak to kind of what you were able to attack on the cost synergy front earlier than you expected. As you think about kind of the $125 million cost synergy target, any kind of timing change there as you kind of attack the rest of the bucket? Yeah. Tim, good question. Look, I think the key here is we focus on G&A right away. Really, I think 85% of the target that we had for G&A, we've achieved. The natural question is, are you going to think, are you going to get these done earlier? Are you going to raise the cost synergy target? What I'd like to do first is let's see these show up in the P&L for us, and then be able to look at potentially doing that.

Aaron Erter: Yeah. Tim, good question. Look, I think the key here is we focus on G&A right away. Really, I think 85% of the target that we had for G&A, we've achieved. The natural question is, are you going to get these done earlier? Are you going to raise the cost synergy target? What I'd like to do first is let's see these show up in the P&L for us, and then be able to look at potentially doing that. I'm very pleased with the focus and how the team is working on approaching these cost synergies. The other key is you don't want any disruption to your base business or disruption to your customers. We have not seen that. There's been a tremendous amount of focus from the team.

Speaker #4: Yeah, Tim, good question. Look, I think the key here is we focus on G&A right away. So really, I think we've achieved 85% of the target that we had for G&A.

So again want to be able to demonstrate in the P&L because of confidentiality reasons.

I'll go into some of the early wins that we've had but we have had early wins with some of our large one step dealers, particularly in the areas of PVC trim. So they see the value in the complete offering.

Speaker #4: So the natural question is, are you going to think you are going to get these done earlier? Are you going to raise the cost synergy target?

Speaker #4: What I'd like to do first is see these show up in the P&L for us, and then be able to look at potentially doing that.

Anytime.

You ask okay, why would they want to change why would they want to bring in a complete offering them. What is the new James Hardie. It goes back to that demand creation, and John talked a little bit about the downstream marketing the downstream focus that really has us focused on our.

Speaker #4: But I'm very pleased with the focus and how the team is working on approaching these cost synergies. The other key is you don't want any disruption to your base business or disruption to your customers.

Aaron Erter: I'm very pleased with the focus and how the team is working on approaching these cost synergies. The other key is you don't want any disruption to your base business or disruption to your customers. We have not seen that. There's been a tremendous amount of focus from the team. Okay. That's helpful. Then just kind of piggybacking on Ryan's question about margins, specifically in the siding and trim business, is there anything internally that you're specifically doing to kind of limit some of the decrementals on volume? I mean, it still is kind of a high single-digit volume decline, I think, implied in the back half of the year, but you're going to see much better incrementals. Is it the timing of ROS? Is it some things you're doing on variable costs and things like that, kind of manage it?

Speaker #4: And we have not seen that. So there's been a tremendous amount of focus from the team.

<unk> and our ability to drive them through our dealers branches and we do that because outstanding product. We can do that because of outstanding service and we do that because of outstanding brands. The timber Tech brand is the number one brand for the frozen decade, the James Hardie brand is the number one <unk>.

Tim Weiss: That's helpful. Just kind of piggybacking on Ryan's question about margins, specifically in the Siding and Trim business, is there anything internally that you're specifically doing to limit some of the decrementals on volume? I mean, it still is kind of a high single-digit volume decline, I think, implied in the back half of the year, but you're going to see much better incrementals. Is it the timing of ROS? Is it some things you're doing on variable costs and things like that, kind of manage it? Just some more color there, I think, would be a lot helpful. Thank you.

<unk> side, we have the number one brand from a trend standpoint, so that really is the value that we bring and why they would be interested in bringing in the complete offering.

Yes.

Aaron Erter: Just some more color there, I think, would be a lot helpful. Thank you. Yeah. Certainly, we've had our cost inflation. Look, we always say we focus on what we can control. We are taking actions. If you look at some of the things that we're doing in our manufacturing plants, we're managing shifts. We're working as best as we can to manage our variable costs. Also, we're looking at our footprint as well and what are the right type of capacity levels we need at this time. That speaks to us working through the right amount of shifts to have. There's a whole host of things. I still go back to areas like the Hardie Operating System. That is key for us to manage our costs, whether that be from a procurement standpoint, whether that be from a formulation standpoint.

As a quick follow on in the direct one at that.

Aaron Erter: Yeah. Certainly, we've had our cost inflation. Look, we always say we focus on what we can control. We are taking actions. If you look at some of the things that we're doing in our manufacturing plants, we're managing shifts. We're working as best as we can to manage our variable costs. Also, we're looking at our footprint as well and what are the right type of capacity levels we need at this time. That speaks to us working through the right amount of shifts to have.

You mentioned continued strong performance in premium decking.

How much is.

A varied.

Channel mix relative to some of your peers got to do with some of the experience you're having in your business relative to.

Pier commentaries.

Yes, and I'll, let the expert here John Sculley take that one John.

So again I think if you look back at the strategy and the execution that we've talked about.

Continuing to deliver against.

There are a whole host of things. I still go back to areas like the Hardie Operating System. That is key for us to manage our costs, whether that be from a procurement standpoint, whether that be from a formulation standpoint. We're looking at that from a legacy Hardie standpoint, but also implementing that in the legacy AZEK business. Those are some of the things that we're doing. We've already taken action on some of these already that we should see the benefits as we complete our Q3.

You have shelf space gains and net channel expansion has been critical to our success.

And so.

Continuing to execute against that playbook I think historically as we've talked about we tend to be a more pro leading business.

Aaron Erter: We're looking at that from a legacy Hardie standpoint, but also implementing that in the legacy AZEK business. Those are some of the things that we're doing. We've already taken action on some of these already that we should see the benefits as we complete our Q3. The next question comes from Peterson with Macquarie. Please go ahead. Good morning, Aaron. Thanks very much for the opportunity. You've mentioned OneStep, your OneStep dealer network and relationships a number of times. Could you give us a little bit more of a sense of what you're experiencing in that space? Obviously, it's easy to see the Boise and the like, but less so in the OneStep context. What perception you're getting, what impact it's having on the business, and how you're thinking about the strategic positioning of your channel mix across the portfolio? Yeah.

So a lot of our channel expansion in shelf gains have been coming at the pro level.

The independent Pro channel is critical for us and as Eric articulated well.

The one step channel has also been good historically for timber tech in APAC, but obviously.

Operator: The next question comes from Peterson with Macquarie. Please go ahead.

Roofing and siding.

Focused one step dealers.

James Hardie, a stronger base of relationships, there and so we're able to have really powerful joint conversations.

Peter Steyn: Good morning, Aaron. Thanks very much for the opportunity. You've mentioned your one-step dealer network and relationships a number of times. Could you give us a little bit more of a sense of what you're experiencing in that space? Obviously, it's easy to see the Boise and the like, but less so in the one-step context. What perception you're getting, what impact it's having on the business, and how you're thinking about the strategic positioning of your channel mix across the portfolio?

With that channel so.

That's been our strategy, we've been executing yet again, our portfolio has been.

In decking experienced.

Balanced growth.

Again, our mix tends to lean more premium.

But we are seeing growth.

Across the portfolio.

<unk> seen continued strength in the pro channel.

The next question comes from filling with Jefferies. Please go ahead.

Hey, guys.

Congrats on the strong quarter, I mean pretty encouraging in terms of the quarter and the outlook.

Aaron Erter: Yeah. Peter, maybe to start out, Boise, we have not listed as a synergy, meaning a commercial synergy. Synergy happens downstream. If we think about our distribution partners, it's really important in our strategy, has always been at James Hardie, and it's been the same at AZEK, to make sure that we're teamed up with the best distribution partners that are going to service our customers.

John It's a treat that we have you on this call. So I guess question for you.

Aaron Erter: Peter, maybe to start out, Boise, we have not listed as a synergy, meaning a commercial synergy. Synergy happens downstream. If we think about our distribution partners, it's really important in our strategy, has always been at James Hardie, and it's been the same at ASAC, to make sure that we're teamed up with the best distribution partners that are going to service our customers. If we go to our OneStep dealers, certainly we have tremendous relationships with them. Call it day two, we've talked to them, and we spend a lot of time with them, bringing them what is the complete value proposition of the two companies combined.

When we look at Mary Hardy and <unk> These two companies and businesses.

Perhaps the go to market strategy, similar and different from your previous life, Zac and any opportunities that could be different I'm curious what are some of the new levers in your toolkit now with a much larger entity and larger portfolio are there things that you can offer that wasn't as obvious before later three day.

If we go to our one-step dealers, certainly we have tremendous relationships with them. Call it day two, we've talked to them, and we spend a lot of time with them, bringing them what is the complete value proposition of the two companies combined. Again, want to be able to demonstrate in the P&L, and because of confidentiality reasons, we won't go into some of the early wins that we've had, but we have had early wins with some of our large one-step dealers, particularly in the areas of PVC trim.

The ease of doing business pricing, just kind of help us think through some of those opportunities and any noticeable shelf space. When do you want to call out for 'twenty, six whether it's retail or the two steppers.

Sure.

Hey, great to talk to you again, Phil So first and foremost what I've been most encouraged about is the shared culture across both businesses. So when you look at whether you are attempting to protect rates accelerant, James Hardie seller.

Aaron Erter: Again, want to be able to demonstrate in the P&L, and because of confidentiality reasons, we won't go into some of the early wins that we've had, but we have had early wins with some of our large OneStep dealers, particularly in the areas of PVC trim. They see the value in the complete offering. I think anytime you ask, "Okay, why would they want to change? Why would they want to bring in a complete offering of what is the new James Hardie?" it goes back to that demand creation. John talked a little bit about the downstream marketing, the downstream focus. That really is us focused on our contractors and our ability to drive them through our dealers' branches. We do that because outstanding product, we do that because of outstanding service, and we do that because of outstanding brands.

Just to focus downstream on driving contractor conversions and pull through.

The channel is just and it should been terrific. So our teams have been working incredibly well together.

They see the value in the complete offering. I think anytime you ask, "Okay, why would they want to change? Why would they want to bring in a complete offering of what is the new James Hardie?" It goes back to that demand creation. Jon talked a little bit about the downstream marketing, the downstream focus. That really is us focused on our contractors and our ability to drive them through our dealers' branches. We do that because outstanding product, we do that because of outstanding service, and we do that because of outstanding brands.

And they've been doing a terrific job of sharing opportunities and trying to generate some quick wins out of the gate, So first and foremost.

That's been really powerful so on a combined basis. We believe we now have the largest sales team among any building products manufacturer and that's that's critical to our growth and our synergy capture here in the future.

If you think about what's the opportunity the opportunity as we can.

Tremendous relationships with them and, you know, call it Day 2, uh, we've talked to them and we spent a lot of time with them and bringing them. What is the complete value? Proposition of the 2 companies combined. So again, want to be able to demonstrate in the p&l and because of confidentiality reasons, uh, we won't go into some of the the early wins that we've had but we have had early wins with some of our, our large 1 set dealers for particularly in the areas of PVC trim. So they see the value in the complete offering. I think anytime you know you you ask okay why would they want to change? Why would they want to bring in a complete offering of what is the new James Hardie? It goes back to that demand creation and John talked a little bit about the downstream marketing. The downstream Focus that really is US focused on our contractors.

We service the entire exterior of the home now so that that is just a great strategic advantage and we can go in and have conversations with customers about having leading brands in every exterior product category. So that's great.

Aaron Erter: The TimberTech brand is the number one brand for the pros in decking. The James Hardie brand is the number one brand in siding. We have the number one brand from a trim standpoint. That really is the value that we bring and why they would be interested in bringing in the complete offering. Yeah. As a quick follow-on, and a direct one at that, you mentioned continued strong performance in premium decking. How much has a varied channel mix relative to some of your peers got to do with some of the experience you're having in your business relative to peer commentaries? Yeah. You know what? I'll let the expert here, John, take that one, John. Yeah.

The TimberTech brand is the number one brand for the pros in decking. The James Hardie brand is the number one brand in siding. We have the number one brand from a trim standpoint. That really is the value that we bring and why they would be interested in bringing in the complete offering.

Great for us and great for our team is that we are.

Now I'll have the opportunity to be more important and more customers. So whether that's the independent channel. The one step channel or distribution partners. We have the broadest portfolio of market, leading brands and that allows you to have really great conversations with customers about how we grow our businesses together on a combined basis.

Peter Steyn: Yeah. As a quick follow-on, and a direct one at that, you mentioned continued strong performance in premium decking. How much has a varied channel mix relative to some of your peers got to do with some of the experience you're having in your business relative to peer commentaries?

And our ability to drive them through our dealers' branches. We do that because of outstanding products, we do that because of outstanding service, and we do that because of outstanding brands. The TimberTech brand is the number one brand for the pros in decking. The James Hardie brand is the number one brand in siding. We have the number one brand from a trim standpoint. So that really is the value that we bring and why they would be interested in bringing in the.

Complete offering.

Yes.

Okay Super that's great color and.

And Erinn.

The comments around how you are looking to reduce the on the wall cost with some of these.

All the programs and training was pretty encouraging how should we think about that opportunity as you scale that up.

Aaron Erter: Yeah. You know what? I'll let the expert here, Jon Skelly, take that one. Jon.

Yeah. As a quick follow-up on, uh, in a direct 1 at that, um, you mentioned, uh, continued strong performance in premium decking. Uh, how much has, uh, a varied, uh, channel mix relative to some of your peers got to do with some of the experience you're having in your business relative to peer commentaries?

Is it going to be a meaningful needle mover in fiscal 'twenty seven or its going to take a multi year process is is there any aspirational goal like in three years, we want this half with the branches that we sell to being rolled out or whatnot, just give us some color in terms of <unk>.

Aaron Erter: I think if you look back at the strategy and the execution that we talked about, continuing to deliver against shelf space gains and that channel expansion has been critical to our success. We're just continuing to execute against that playbook. I think historically, as we've talked about, we tend to be a more pro-leaning business, and a lot of our channel expansion and shelf gains have been coming at the pro level. The independent pro channel is critical for us. As Aaron articulated well, the OneStep channel has also been good historically for TimberTech and AZEK, but obviously, roofing and siding-focused OneStep dealers, James Hardie has stronger base relationships there. We're able to have really powerful joint conversations with that channel. That's been our strategy. We've been executing it. Our portfolio has been a decking experienced balanced growth.

Jon Skelly: Yeah. I think if you look back at the strategy and the execution that we talked about, continuing to deliver against shelf space gains and that channel expansion has been critical to our success. We're just continuing to execute against that playbook. I think historically, as we've talked about, we tend to be a more pro-leaning business, and a lot of our channel expansion and shelf gains have been coming at the pro level. The independent pro channel is critical for us.

Aspirational targets in next few years as you build this.

Yes.

Yes, so very simply we are going to start scale.

Scaling this up in the back half which is now.

So I mentioned the partnership that we have with Boise. So we believe the mid Atlantic the northeast the Carolinas in the Midwest are all areas that are huge opportunities for us.

As Aaron articulated well, the one-step channel has also been good historically for TimberTech and AZEK, but obviously, roofing and siding-focused one-step dealers, James Hardie has stronger base relationships there. We're able to have really powerful joint conversations with that channel. That's been our strategy. We've been executing it. Our portfolio has been a decking experienced balanced growth. Again, our mix tends to lean more premium, but we are seeing growth across the portfolio, and we are seeing continued strength in the pro channel.

Particularly in repair and remodel so we're going to be working with them to start rolling this out in this back half of the year.

Look I think as far as longer term kpis on this the opportunity is tremendous I'll save that for when we have an investor day, but as I mentioned before.

Yeah, you know what? I'll let the expert here. John Skelly. Uh, take that 1 John. Yeah, yeah. So, again, I think if you look back at at the strategy and the execution that that, you know, that we talked about, um, you're continuing to deliver uh, against um, you know, shelf space gains, and that channel expansion. It's been been critical to, to, to Our Success. Um, and so, uh, we we're just continuing to execute against that Playbook. I think historically as we've talked about, you know, we tend to be a more Prolean business. Um, and so a lot of our, you know, Channel expansion and shelf gains have been coming at the pro level. Um uh so the independent uh Pro channel is is critical for us and as Aaron uh, articulated well um the 1 Step channel has also been been been good historically for TimberTech and ASAC, but obviously, um, you know, Roofing, um, and citing, um, a focused 1 Step dealers. Um, James Hardie has a stronger base relationships there and so we're able to have really powerful, you know, joint conversations. Um,

Our color plus volume, which is roughly call it 25% of what our fiber cement exterior volume is now we believe we can double that through.

Wakefield with that channel. So um that's been our strategy. We've been executing it. Uh again our portfolio has been uh

conducting experienced.

Uh, balance.

Aaron Erter: Again, our mix tends to lean more premium, but we are seeing growth across the portfolio, and we are seeing continued strength in the pro channel. The next question comes from Phil Ng with Jefferies. Please go ahead. Hey, guys. Congrats on the strong quarter. I mean, pretty encouraging in terms of the quarter and the outlook. John, it's a treat that we have you on this call. I guess question for you. When we look at marrying Hardie and AZEK, these two companies and businesses, how is perhaps a go-to-market strategy similar and different from your previous life at AZEK? The opportunities that could be different. I'm curious, what are some of the new levers in your toolkit now with a much larger entity, a larger portfolio?

Growth.

Through this initiative. So we're very encouraged by this like I said.

Uh, again.

This has been something that has been an on purpose plan and we've put a lot of resources behind this or last year and a half.

Operator: The next question comes from Phil Ng with Jefferies. Please go ahead.

Our mix tends to lean more premium, um, but we are seeing growth, um, across the portfolio. Um, and we are seeing continued strength in the Pro Channel.

It is something that has had many different parts of the organization combined and work to for this common goal. So hats off for the team through the team that we got to go execute it and scale it up in a much bigger way.

Phil Ng: Hey, guys. Congrats on the strong quarter. I mean, pretty encouraging in terms of the quarter and the outlook. Jon, it's a treat that we have you on this call. I guess question for you. When we look at marrying Hardie and AZEK, these two companies and businesses, how is perhaps a go-to-market strategy similar and different from your previous life at AZEK? The opportunities that could be different.

The next question comes from Phil Inc with Jeffrey. Please go ahead.

The next question comes from Keith Chau with MST Marquee. Please go ahead.

Good morning, Erin Joe and Jonathan I don't know what can answer your question I don't know its been asked before so this is a bit of a follow up ups, you quarterly assumptions for siding and trim from the third and the fourth quarter.

I'm curious, what are some of the new levers in your toolkit now with a much larger entity, a larger portfolio? Are there things that you can offer that weren't as obvious before, whether it's rebates, the ease of doing business, pricing? Just kind of help us think through some of those opportunities. Any noticeable shelf space wins you want to call out for 2026, whether it's retail or the two-steppers?

Aaron Erter: Are there things that you can offer that weren't as obvious before, whether it's rebates, the ease of doing business, pricing? Just kind of help us think through some of those opportunities. Any noticeable shelf space wins you want to call out for 2026, whether it's retail or the two-steppers? Sure. Hey, great to talk to you again, Phil. First and foremost, what I've been most encouraged about is the shared culture across both businesses. When you look at whether you're a TimberTech or AZEK seller or James Hardie seller, just the focus downstream on driving contractor conversions and pull-through of the channel has just been terrific. Our teams have been working incredibly well together, and they've been doing a terrific job of sharing opportunities and trying to generate some quick wins out of the gate. First and foremost, that's been really powerful.

So rather than looking at it versus last year, just looking at it sequentially.

So I think the call and thank you for your bonds are the guidance that in markets and soft, but more stable than expected.

Against this backdrop, we would expect.

Demand to improve on a seasonal basis in the fourth quarter not only for the highest delinquencies on business amazing interiors exteriors.

Jon Skelly: Sure. Hey, great to talk to you again, Phil. First and foremost, what I've been most encouraged about is the shared culture across both businesses. When you look at whether you're a TimberTech or AZEK seller or James Hardie seller, just the focus downstream on driving contractor conversions and pull-through of the channel has just been terrific. Our teams have been working incredibly well together, and they've been doing a terrific job of sharing opportunities and trying to generate some quick wins out of the gate. First and foremost, that's been really powerful.

Hey guys, uh, congrats on the strong quarter. I mean, pretty encouraging uh in terms of the quarter in the Outlook, um, John it's a treat that we have you on this call. So I guess question for you, uh, when we look at marrying, you know, Hardy and AAC, these 2 companies and businesses. Um, how is perhaps to go to market strategy, similar in different from your previous life at ASAC and and the opportunities that could be different, you know, I'm curious, you know, what are some of the new lovers in your toolkit. Now with a much larger entity, a larger portfolio or are there things that you can offer that, you know, wasn't as obvious before whether it's rebates uh the ease of doing business pricing just kind of help us in through some of those opportunities and any noticeable shelf space wins. You want to call out the 26th, whether it's retail or the 2-Step, or

Experience.

And you also mentioned the one January price increase as well so.

In combination with <unk> and also raw materials moving favorably.

Sequentially I'm surprised you've guided to margins being down in the fourth quarter.

I would've thought nationally that they should be higher so.

Is there anything going on between those two quarters that we should be aware of because it helps us.

That helps us inform us of the slide 27, you can see.

Aaron Erter: On a combined basis, we believe we now have the largest sales team among any building products manufacturer. That's critical to our growth and our synergy capture here in the future. If you think about what's the opportunity, the opportunity is we can completely service the entire exterior of the home now. That is just a great strategic advantage. We can go in and have conversations with customers about having leading brands in every exterior product category. That's great for us, and great for our team is that we now have the opportunity to be more important to more customers. Whether that's the independent channel, the OneStep channel, or distribution partners, we have the broadest portfolio of market-leading brands. That allows you to have really great conversations with customers about how we grow our businesses together on a combined basis. Okay. Super.

On a combined basis, we believe we now have the largest sales team among any building products manufacturer. That's critical to our growth and our synergy capture here in the future. If you think about what's the opportunity, the opportunity is we can completely service the entire exterior of the home now. That is just a great strategic advantage. We can go in and have conversations with customers about having leading brands in every exterior product category.

Alright to margins. Thank you.

Yeah, Keith so here's what I would say simply we expect.

High single digit declines in volume when we think of our siding and trim business as we get to the back half of the year and then we expect roughly call. It 3% price realization. So then you get to the mid single digits.

Very simply the outlook, Joe anything else you would add yes, we know theres a lot of moving pieces between the acquisition and the allocation of the R&D. So just thinking about the organic NFC business and stripping out the R&D impact.

Great for us and great for our team is that we now have the opportunity to be more important to more customers. Whether that's the independent channel, the one-step channel, or distribution partners, we have the broadest portfolio of market-leading brands. That allows you to have really great conversations with customers about how we grow our businesses together on a combined basis.

It's important to look at first half versus second half the first half decrementals were over 80% the second half Decrementals in NFC ex R&D are under 50%. So that's why when we think about the back half is a good baseline we're really looking at the decrementals relative to the high single digit decline in volume that Aaron mentioned.

So, on a combined basis, um, we believe we now have the largest, you know, sales team among any Building Products manufacturer. Uh, and that's, uh, that's critical to our growth and our Synergy capture here in the future. Um, if you think about what's the opportunity, you know, the opportunity is, you know, we can completely service the entire exterior of the home now. Um, so that that is just a great, uh, strategic advantage. And we can go in and have conversations with customers about having meeting brands in every exterior product category. So so that's uh, you know, great for us and great for for, for our team is that we are, um, now have the, the opportunity to be more important and more customers. So whether that's the independent channel, the 1 Step Channel,

And Keith to your point about what is the right run rate going forward to adding back in the R&D because that is now how we allocated to the segment, we're implying 32% to 33% adjusted EBITDA margins in the back half for NFC and Thats relatively consistent with ASIC exterior. So that's the way you think about it.

Or distribution Partners. Um, we have the broadest portfolio of Market leading Brands um and that allows you to have, you know, really great conversations with customers about how we grow our businesses together uh on a combined basis.

Phil Ng: Super. That's great color. Aaron, I thought the comments around how you're looking to reduce the on-the-wall cost with some of these pilot programs and training was pretty encouraging. How should we think about that opportunity as you scale that up? Is it going to be a meaningful needle-mover in fiscal 2027, or is it going to take a multi-year process? Is there any aspirational goal like, in three years, we want this half of the branches that we sell to being rolled out or whatnot? Just give us some color in terms of aspirational targets in the next few years as you roll this after.

Aaron Erter: That's great color. Aaron, I thought the comments around how you're looking to reduce the on-the-wall cost with some of these pilot programs and training was pretty encouraging. How should we think about that opportunity as you scale that up? Is it going to be a meaningful needle-mover in fiscal 2027, or is it going to take a multi-year process? Is there any aspirational goal like, in three years, we want this half of the branches that we sell to being rolled out or whatnot? Just give us some color in terms of aspirational targets in the next few years as you roll this after. Yeah, very simply, we are going to start scaling this up in the back half, which is now. I mentioned the partnership that we have with Boise.

Okay. Thank you and then a follow up just on these trials in the pilot plants and reduce the number won't call. So nothing kind of mixing.

Work streams here, but can you help us understand what the current revenue generation from those pilot programs. Thank you.

Okay. Super, that's a great color. Uh, and Aaron um, I thought the uh, comments around how you're looking to reduce the on the-wall cost with some of these, um, how the programs and training was pretty, uh, encouraging. How can we think about that opportunity as you scale that up? Um, is it going to be a meaningful needle, mover in fiscal 27? It's always going to take a multi-year process is, is there any aspirational goal? Like, in 3 years? We want this half of the branches that we sell to being rolled out or what not?

Yes, so the way that we're looking at this right now is we have the central northeast. So we haven't defined area.

Aaron Erter: Yeah. Very simply, we are going to start scaling this up in the back half, which is now. I mentioned the partnership that we have with Boise. We believe the Mid-Atlantic, the Northeast, the Carolinas, and the Midwest are all areas that are huge opportunities for us, particularly in repair and remodel. We're going to be working with them to start reeling this out in this back half of the year.

Just give us some color in terms of aspirational targets in the next few years as you roll this out.

And we looked really over a six month period of time.

What our increase from our color plus volume as Sam standpoint.

Aaron Erter: We believe the Mid-Atlantic, the Northeast, the Carolinas, and the Midwest are all areas that are huge opportunities for us, particularly in repair and remodel. We're going to be working with them to start reeling this out in this back half of the year. I think as far as longer-term KPIs on this, the opportunity is tremendous. I'll save that for when we have Investor Day. As I mentioned before, we think our Color Plus volume, which is roughly, call it 25% of what our fiber cement exterior volume is now, we believe we can double that through this initiative. We're very encouraged by this. Like I said, this has been something that has been an on-purpose plan, and we've put a lot of resources behind this over the last year and a half.

We've seen that being close to 20% increase so what we're really doing a couple of things. We're shrinking the differential when we think about quoting versus call. It a vinyl job, but also because of the price that we're seeing in the on the well cost reductions. We are seeing is contractors are able to go.

I think as far as longer-term KPIs on this, the opportunity is tremendous. I'll save that for when we have Investor Day. As I mentioned before, we think our ColorPlus volume, which is roughly, call it 25% of what our Fiber Cement Exterior volume is now, we believe we can double that through this initiative. We're very encouraged by this. Like I said, this has been something that has been an on-purpose plan, and we've put a lot of resources behind this over the last year and a half. It is something that has had many different parts of the organization combine and work to for this common goal. Hats off to the team. Now we got to go execute it and scale it up in a much bigger way.

After price points of homes.

They usually haven't been able to do so with so meaning our total addressable market increases quite a bit as well. So not only are we excited about the differential with being able to shrink that premium versus call. It vinyl, but it opens up the addressable market that's much larger.

So that's very exciting.

Yeah, yeah. So very simply we are going to start, uh, scaling this up, in, in the back half, which is now. Uh, so I mentioned the, the partnership that we have with Boise. Uh, so we believe the, the Mid-Atlantic, the Northeast, the Carolinas. And the Midwest are all areas that are huge opportunities for us, uh, particularly in repair and remodel. So we're going to be working with them to start reeling this out. And, uh, this back half of the year and look, I I think, as far as longer term kpis on this, the opportunity is tremendous. I, I'll save that for when we have investor day, but as I mentioned before, uh we think our color plus volume, which is, you know, roughly call it, you know, 25% of what our, our fiber cement exterior volume is now, we believe we can double that uh, through this initiative. So we're very encouraged by this. Like I said, uh, this has been something that has been an on-purpose plan and we put a

Thanks.

<unk> today comes from Adam Baumgarten with vertical research. Please go ahead.

Aaron Erter: It is something that has had many different parts of the organization combine and work to for this common goal. Hats off to the team. Now we got to go execute it and scale it up in a much bigger way. The next question comes from Keith Cho with MST Markey. Please go ahead. Good morning, Aaron, John, and Joe. Aaron, I can ask you a question. I know it's been asked before, so this is a bit of a follow-up, but your quarterly assumptions for siding and trim from the third and the fourth quarter. Rather than looking at it versus last year, just looking at it sequentially. I think the context you provide for the guidance is that in-markets are soft, but more stable than expected.

Hey, guys good morning.

I guess just I assume you guys are still in <unk> at getting that quarterly surveys that the company has talked about in the past I know you talked about backlogs around seven weeks, but any additional color on how your customers are thinking calendar 'twenty six at this point.

A lot of resources have gone into this over the last year and a half. It is something that has had many different parts of the organization combined and working toward this common goal. So, hats off to the team. Now, we’ve got to go execute it and scale it up in a much bigger way.

Operator: The next question comes from Keith Chau with MST Markey. Please go ahead.

John go ahead, yeah, so again.

Keith Chau: Good morning, Aaron, Jon, and Joe. Aaron, Can I ask you a question? I know it's been asked before, so this is a bit of a follow-up, but your quarterly assumptions for Siding and Trim from Q3 and Q4. Rather than looking at it versus last year, just looking at it sequentially. I think the context you provide for the guidance is that in-markets are soft, but more stable than expected. Against this backdrop, we would expect demand to improve on a seasonal basis in Q4, not only for the Hardie legacy side of the business and AZEK Exteriors.

The next question comes from Keith Joe with MST Marquee. Please go ahead.

What we've what we highlighted in the prepared remarks around the survey and what we're hearing.

Is that.

So backlogs are consistent outlook outlook is consistent.

And then obviously, we get other data points as well, but what we've seen is you by and large while repair and remodel is down outdoor living.

Good morning. Uh, Aaron John and Joe, um, Aaron I want. Can I ask you a question? And I know it's been asked before. So this is a bit of a follow-up but uh your quarterly assumptions for signing in trim from the third and the fourth quarter. So arriving looking at it versus last year, just looking at it sequentially.

Is is one of the more positive categories.

Aaron Erter: Against this backdrop, we would expect demand to improve on a seasonal basis in the fourth quarter, not only for the Hardie legacy side of the business and ASAC exteriors. You also mentioned the 1 January price increase as well. In combination with that and also raw materials moving favorably sequentially, I'm surprised you've guided to margins being down in the fourth quarter. I would have thought naturally that they should be higher. Is there anything going on between those two quarters that we should be aware of? It helps inform us of the FY27 entry run rate for margins. Thank you. Yeah. Hey, Keith. Here's what I'd say simply. We expect high single-digit declines in volume when we think of our siding and trim business as we get to the back half of the year.

So I think the context you provided for the guidance is that in markets are soft uh but more stable than expected. So

Within repair remodel.

I guess it's backdrop. We would expect.

Then timber tech has been performing the best within within the category.

Again, it's a really attractive market, it's driven by material conversion and it's driven by.

You also mentioned the 1 January price increase as well. In combination with that and also raw materials moving favorably sequentially, I'm surprised you've guided to margins being down in the Q4. I would have thought naturally that they should be higher. Is there anything going on between those two quarters that we should be aware of? It helps inform us of the FY 2027 entry run rate for margins. Thank you.

demand to improve on a seasonal basis. In the fourth quarter, not only for the highs Legacy signs, and businesses and Asic Interiors uh sorry Exteriors.

By the consumer's desire to spend more time outdoors right. So you have to have the kind of structural tailwind here in terms of desire for outdoor living and then obviously we continue to convert.

And, you know, you also mentioned the, the 1 January price increase as well. So,

<unk> and other inferior materials into our products.

And that is what's driving that stable outlook in that stable backlog for our contractors our dealers.

Dan One thing I would just add to that is we talk so much about the best of both with <unk> and James Hardie and what we've adopted as a total company are these dealer and contractor surveys and we have that own the fiber cement side as well so helps us to get closer to our customer and partners and get them.

Aaron Erter: Yeah. Hey, Keith. Here's what I'd say simply. We expect high single-digit declines in volume when we think of our Siding and Trim business as we get to the back half of the year. We expect roughly, call it 3% price realization, so then you get to the mid-single digits. That's very simply the outlook. Joe, anything else you'd add?

Uh, in combination with that and also raw materials moving favorably sequentially, I'm surprised you've guided to margins being down in the fourth quarter. Um, I would have thought naturally that they should be higher. So, uh, is there anything going on between those two quarters that, uh, we should be aware of? Because it helps with us for, um, that helps on us and for us of the run rate for margins. Thank you.

Aaron Erter: We expect roughly, call it 3% price realization. You get to the mid-single digits. That's very simply the outlook. Joe, anything else you'd add? Yeah, we know there's a lot of moving pieces between the acquisition and the allocation of the R&D. Just thinking about the organic NAFC business and stripping out the R&D impact, I think it's important to look at first half versus second half. The first half decrementals were over 80%. The second half decrementals in NAFC, excluding R&D, are under 50%. That's why when we think about the back half as a good baseline, we're really looking at the decrementals relative to the high single-digit decline in volume that Aaron mentioned.

You point in the future as well so very helpful.

Okay I think.

Oh, I'm, sorry, Adam a follow up.

Joe Ahlersmeyer: Yeah. We know there are a lot of moving pieces between the acquisition and the allocation of the R&D. Just thinking about the organic NAFC business and stripping out the R&D impact, I think it's important to look at first half versus second half. The first half decrementals were over 80%. The second half decrementals in NAFC, excluding R&D, are under 50%. That's why when we think about the back half as a good baseline, we're really looking at the decrementals relative to the high single-digit decline in volume that Aaron mentioned.

All set thanks, guys appreciate it.

Yeah.

Okay very good. Thank you everyone. Thanks for the time.

Look I want to thank all the James Hardie team members for all their hard work.

And working to service our customers.

What I want to leave you with is look we haven't handle on the business and our fiber cement business, although we're not satisfied.

With our growth trajectory, we think we have a good plan and our business is healthy.

We have a handle on the fiber cement margins the actions are underway and coming and Youll see that as we look at our margin profile and our decking businesses continue to remains highly attractive and our Asia business is performing very well so with that I'll leave you. All thank you very much for the time.

Aaron Erter: Keith, to your point about what is the right run rate going forward, adding back in the R&D, because that is now how we allocate to the segment, we're implying 32% to 33% adjusted EBITDA margins in the back half for NAFC. That's relatively consistent with ASAC exteriors. That's the way you think about it. Okay. Thank you. Maybe a follow-up just on these trials and the pilot plants and reducing on the raw costs. I know I'm kind of mixing work streams here, but can you help us understand, Aaron, what the current revenue generation is from those pilot programs? Thank you. Yeah. The way that we're looking at this right now is we have a central northeast. We have a defined area, Keith.

Keith, to your point about what is the right run rate going forward, adding back in the R&D, because that is now how we allocate to the segment, we're implying 32% to 33% adjusted EBITDA margins in the back half for NAFC. That's relatively consistent with AZEK Exteriors. That's the way you think about it.

Keith Chau: Okay. Thank you. Maybe a follow-up just on these trials and the pilot plants and reducing on the raw costs. I know I'm kind of mixing work streams here, but can you help us understand, Aaron, what the current revenue generation is from those pilot programs? Thank you.

C XR and D are under 50%. So that's why when we think about the back half as a good Baseline, uh we're really looking at the decimals relative to the high single digit decline in volume there to mentioned. And in key to your point about what is the right run rate going forward. So adding back in the R&D because that is now how we allocate to the segment. We're implying 32 to 33 percent uh adjusted ebit down margins in back, half for NFC and that's relatively consistent with ASC exterior. So that's that's the way you think about it.

That does conclude our conference for today. Thank you for participating you may now disconnect.

Aaron Erter: Yeah. The way that we're looking at this right now is we have a central northeast. We have a defined area, Keith. We looked really over a six-month period of time at what our increase from a ColorPlus volume standpoint was, and we've seen that being close to a 20% increase. What we're really doing is a couple of things. We're shrinking the differential when we think about quoting versus, call it, a vinyl job.

Okay, thank you and leave a follow-up just on these trials, in the pilot plants uh and reducing on the world call. So I know I'm kind of mixing our work streams here but can you help us understand? And what the current Revenue generation is from those pilot programs. Thank you.

Aaron Erter: We looked really over a six-month period of time at what our increase from a Color Plus volume standpoint was, and we've seen that being close to a 20% increase. What we're really doing is a couple of things. We're shrinking the differential when we think about quoting versus, call it, a vinyl job. Also, because of the price that we're seeing and the on-the-wall cost reductions we're seeing, contractors are able to go after price points of homes that they usually haven't been able to do so with. Meaning our total addressable market increases quite a bit as well. Not only are we excited about the differential and being able to shrink that premium versus, call it, vinyl, but it opens up an addressable market that's much larger for us. That's very exciting. Thanks. The last question today comes from Adam Baumgarden with Vertical Research.

Also, because of the price that we're seeing and the on-the-wall cost reductions we're seeing, contractors are able to go after price points of homes that they usually haven't been able to do so with. Meaning our total addressable market increases quite a bit as well. Not only are we excited about the differential and being able to shrink that premium versus, call it, vinyl, but it opens up an addressable market that's much larger for us. That's very exciting. Thanks.

Yeah, so the the way that we're looking at this right now is we have the Central Northeast so we have a defined area Keith and we looked really over a 6-month period of time. Um, you know what, our increase from a color plus volume is stand standpoint and we've seen that being close to 20% increase. So what we're really doing a couple things, we're shrinking the differential when we think about quoting versus call it a a vinyl job but also because of the price that we're seeing in the on the wall costs reductions we're seeing is contractors. Are able to go after price points of homes that they they usually haven't been able to

Do sell with. So meaning our total addressable Market increases quite a bit as well. So not only are we excited about the differential and being able to shrink that premium versus call it vinyl, but it opens up addressable Market, that's much larger for us. Um, so that's very exciting.

Operator: The last question today comes from Adam Baumgarten with Vertical Research. Please go ahead.

Aaron Erter: Please go ahead. Hey, guys. Morning. I guess just I assume you guys are still in ASAC doing the quarterly surveys that the company has talked about in the past. I know you talked about backlogs around seven weeks, but any additional color on how your customers are thinking about calendar 2026 at this point? John, go ahead. Yeah. What we highlighted in the prepared remarks around the surveys and what we're hearing is that it's consistent, right? Backlogs are consistent, outlook is consistent, and obviously, we get other data points as well. What we've seen is, by and large, while repair and remodel is down, outdoor living is one of the more positive categories within repair and remodel. TimberTech has been performing the best within the category. Again, it's a really attractive market.

Adam Baumgarten: Hey, guys. Morning. I guess just I assume you guys are still in AZEK doing the quarterly surveys that the Company has talked about in the past. I know you talked about backlogs around seven weeks, but any additional color on how your customers are thinking about calendar 2026 at this point?

Thanks, the last question today comes from Adam baumgarten with vertical research. Please go ahead.

Hey guys, good morning. I assume you are still in AAC doing the quarterly surveys that the company has talked about in the past.

Aaron Erter: Jon, go ahead.

I know you talked about backlogs around 7 weeks, but any additional caller on how your customers are thinking about calendar 26 at this point.

Jon Skelly: Yeah. What we highlighted in the prepared remarks around the surveys and what we're hearing is that it's consistent. Backlogs are consistent, outlook is consistent, and obviously, we get other data points as well. What we've seen is, by and large, while repair and remodel is down, outdoor living is one of the more positive categories within repair and remodel.

TimberTech has been performing the best within the category. Again, it's a really attractive market. It's driven by material conversion, and it's driven by the consumer's desire to spend more time outdoors. You have two kind of structural tailwinds here in terms of the desire for outdoor living. Obviously, we continue to convert wood and other inferior materials into our products. That is what's driving that stable outlook and that stable backlog for our contractors and our dealers.

Aaron Erter: It's driven by material conversion, and it's driven by the consumer's desire to spend more time outdoors, right? You have two kind of structural tailwinds here in terms of the desire for outdoor living. Obviously, we continue to convert wood and other inferior materials into our products. That is what's driving that stable outlook and that stable backlog for our contractors and our dealers. One thing I would just add to that is we talk so much about the best of both with AZEK and James Hardie. What we've adopted as a total company are these dealer and contractor surveys. We have that on the fiber cement side as well. It helps us to get closer to our customer partners and get a viewpoint of the future as well. Very helpful. Okay. I think we're—oh, sorry, Adam, a follow-up. All set.

John go ahead. Yeah, so again, uh, uh what what we've, what we highlighted in the prepared, remarks are on the surveys and and what we're hearing um, is that? Um, it's consistent, right? So backlogs are consistent, uh, Outlaw, uh, Outlook is consistent. Um, and then obviously, we we get other data points as well, and what we've seen is, you know, by and large while, uh, repair and remodel is down Outdoor Living. Um, is, is 1 of the more positive categories, um, within repair and remodel, um, and then, you know, keer Tech, um, has been performing the best within within the category. Um, again, it's a really attractive Market. It's driven by material conversion, um, and it's driven, um, by

Aaron Erter: One thing I would just add to that is we talk so much about the best of both with AZEK and James Hardie. What we've adopted as a total company are these dealer and contractor surveys. We have that on the fiber cement side as well. It helps us to get closer to our customer partners and get a viewpoint of the future as well. Very helpful. Okay. Adam, a follow-up?

I, you know, the consumer's desire to spend more time Outdoors, right? So you have 2 kind of structural uh, Tailwind here in terms of the dot desire for outdoor living. And then obviously, we continue to convert Uh, Wood and other inferior materials, uh, into our products. Um, and and that is what's driving, um, that stable, um, you know, Outlook and that stable backlog for, uh, for our contractors and our dealers.

Yeah, 1 1 thing, I would just add to that is, we talked so much about the best of both with with these exact and James Hardie and and what we've adopted is a total company are these dealer and contractor surveys. And we have that on the fiber cement side as well. So helps us to get closer to our customer partners and uh get a Viewpoint of the future as well. So very helpful.

okay, I think we

Adam Baumgarten: All set. Thanks, guys. Appreciate it.

Aaron Erter: Thanks, guys. Appreciate it. Okay. Very good. Hey, everyone. Thanks for the time. Look, I want to thank all the James Hardie team members for all their hard work in working to service our customers. Really, what I want to leave you with is, look, we have a handle on the business. In our fiber cement business, although we're not satisfied with our growth trajectory, we think we have a good plan, and our business is healthy. We have a handle on the fiber cement margins. The actions are underway and coming, and you'll see that as we look at our margin profile. Our decking business has continued to remain highly attractive, and our AZEK business is performing very well. With that, I'll leave you all. Thank you very much for the time. That does conclude our conference for today. Thank you for participating. You may now disconnect.

No, sorry. Adam to follow up.

Aaron Erter: Okay. Very good. Hey, everyone. Thanks for the time. What I want to leave you with is, look, we have a handle on the business. In our Fiber Cement business, although we're not satisfied with our growth trajectory, we think we have a good plan, and our business is healthy. We have a handle on the fiber cement margins. The actions are underway and coming, and you'll see that as we look at our margin profile. Our decking business has continued to remain highly attractive, and our AZEK business is performing very well. With that, I'll leave you all. Thank you very much for the time.

Uh, all set. Thanks guys appreciate it.

Okay, very good. Hey everyone. Thanks for the time. Um, look, I I want to thank all the the James Hardie team members for all their hard work, um, and working the service. Our customers really. What I want to leave you with is look. We have a handle on the business, and our fiber cement business. Although we're not satisfied, uh, with our growth trajectory, we think we have a good plan and our business is healthy. Um, we have a handle on the fiber cement margins, the actions are underway and coming, and you'll see that as we look at our margin profile and

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

Our decking business is continued to remains, highly attractive and our AAC business is performing very well. So with that, I'll leave you all, thank you very much for the time.

That does conclude our conference for today. Thank you for participating. You may now disconnect