Simpson Manufacturing Q4 2025 Simpson Manufacturing Co Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Simpson Manufacturing Co Inc Earnings Call
Accurate company fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
Now my pleasure to introduce your host Kim Orlando Investor Relations. Thank you Kim you may begin.
Good afternoon, ladies and gentlemen, and welcome to Simpson manufacturing companies fourth quarter and full year 2025 earnings conference call.
Any statements made on this call that are not statements of historical fact are forward looking statements.
Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties.
Future results may vary materially from those expressed or implied by the forward looking statements.
We encourage you to read the risks described in the company's public filings and reports, which are available on the sec's or the company's corporate website.
Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward looking statements that we make here today, whether as a result of new information future events or otherwise.
On this call. We will also refer to non-GAAP measures such as adjusted EBITA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release.
Please note that the earnings press release was issued today at approximately 415 P M Eastern time.
The earnings press release is available on the Investor Relations page of the company's website at IR Dot Simpson M F G Dot com.
Today's call is being webcast and a replay will also be available on the Investor Relations page of the company's website.
Now I would like to turn the conference over to Michael Lawsky, Simpson's President and Chief Executive Officer.
Thanks, Kim good afternoon, everyone and thank you for joining today's call I'm joined by Matt <unk>, Our Chief Financial Officer.
This afternoon I'll begin with an overview of our 2025 performance a review of trends across our end markets and an update on our strategic priorities.
It will follow with a deeper dive into our financial results.
Fiscal 2026 outlook.
Before we start I'm going to highlight that for the second consecutive year. We achieved a total recordable incident rate was over one pointed out our best result in company history.
Q4 2025 Simpson Manufacturing Co Inc Earnings Call
We also saw a meaningful reduction in lost time injuries and a decrease in incidents severity.
We are extremely proud of our employees for keeping safety at the forefront of everything we do.
Their commitment demonstrates the values that define simpson above all that everybody matters.
Now turning to our results I'm pleased to report full year 2025, net sales of $2 3 billion up four 5% from 2024 and a challenging market.
Operator: Greetings and welcome to the Simpson Manufacturing Co., Q4 and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando, Investor Relations. Thank you, Kim. You may begin.
As outlined in our Investor presentation, approximately 3% of this growth came from pricing, 1% from acquisitions and 1% from foreign exchange.
These gains were partially offset by an approximate 1% decline in volume due to weaker housing starts.
Speaker #2: Any question and answer session will follow the formal presentation. If anyone should require operator assistance, please press *0 on your telephone keypad. As a reminder, this conference is being recorded.
Historically, our volumetric focused on North American unit sales measured in pounds shipped which did not capture the growing contributions from our more premium offerings, including software services and equipment.
Speaker #2: It is now my pleasure to introduce your host, Kim Orlando, Investor Relations. Thank you, Kim. You may begin. Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Co., Q4 and FY 2025 earnings conference call.
We believe this revenue bridge provides a more complete view of our consolidated business.
Kim Orlando: Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Co., Q4 and full year 2025 earnings conference call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise.
Kim Orlando: Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Co., Q4 and full year 2025 earnings conference call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise.
In North America full year net sales were $1 8 billion up four 5% from prior year, including approximately $60 million benefit from pricing actions.
Speaker #2: Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties.
North American volumes were down year over year pressured by lower housing starts at more challenging regional mix with the most pronounced declines in the southern and Western United States.
Where our content per unit is typically higher due to stronger building codes.
Even with these headwinds our focus on innovation customer service and operational excellence continue to drive solid performance.
We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website.
We continue to win business and soft markets, demonstrating the resilience of our portfolio and the value we deliver to our customers.
And if you look at full year results across North American end markets performance was mixed by market segment, but we saw encouraging developments across several parts of the business.
Kim Orlando: On this call, we will also refer to non-GAAP measures such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4:15 PM Eastern Time. The earnings press release is available on the Investor Relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the Investor Relations page of the company's website. Now, I would like to turn the conference over to Mike Olosky, Simpson's President and Chief Executive Officer.
Kim Orlando: On this call, we will also refer to non-GAAP measures such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4:15 PM Eastern Time. The earnings press release is available on the Investor Relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the Investor Relations page of the company's website. Now, I would like to turn the conference over to Mike Olosky, Simpson's President and Chief Executive Officer.
Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise.
The OEM business delivered a strong year with volume up double digits we.
We saw particularly strong growth with off site construction manufacturers and mass timber projects.
On this call, we will also refer to non-GAAP measures such as Adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release.
Where our products and support model are a great fit for complex applications with high performance requirements.
Please note that the earnings press release was issued today at approximately 4:15 p.m. Eastern time.
We succeed by combining innovative products that meet demanding load requirements and improved ease of installation with deep technical and field support throughout the project lifecycle.
The earnings press release is available on the investor relations page of the company's website at irsmfg.com.
Although OEM remains a smaller part of our portfolio today, we believe we are growing well above market and see substantial runway for continued expansion.
Today's call is being webcast, and a replay will also be available on the Investor Relations page of the company's website.
Daniel Moore: Thanks, Kim. Good afternoon, everyone, and thank you for joining today's call. I'm joined by Matt Dunn, our Chief Financial Officer. This afternoon, I'll begin with an overview of our 2025 performance, a review of trends across our end markets, and an update on our strategic priorities. Matt will follow with a deeper dive into our financial results and our fiscal 2026 outlook. Before we start, I want to highlight that for the second consecutive year, we achieved a total recordable incident rate of less than 1.0, our best result in company history. We also saw a meaningful reduction in lost-time injuries and a decrease in incident severity. We are extremely proud of our employees for keeping safety at the forefront of everything we do. Their commitment demonstrates the values that define Simpson: above all, that everybody matters.
Mike Olosky: Thanks, Kim. Good afternoon, everyone, and thank you for joining today's call. I'm joined by Matt Dunn, our Chief Financial Officer. This afternoon, I'll begin with an overview of our 2025 performance, a review of trends across our end markets, and an update on our strategic priorities. Matt will follow with a deeper dive into our financial results and our fiscal 2026 outlook. Before we start, I want to highlight that for the second consecutive year, we achieved a total recordable incident rate of less than 1.0, our best result in company history. We also saw a meaningful reduction in lost-time injuries and a decrease in incident severity. We are extremely proud of our employees for keeping safety at the forefront of everything we do. Their commitment demonstrates the values that define Simpson: above all, that everybody matters.
Now, I would like to turn the conference over to Michael Olosky, Simpson's President and Chief Executive Officer.
The component manufacturing business continues to grow with volumes up in the low single digits, driven by new customer acquisitions and expanded capabilities, including software.
Thanks, Kim. Good afternoon, everyone, and thank you for joining today's call.
I'm joined by Matt Dunn, our Chief Financial Officer.
We continue to convert new customers to our software and trust plate solutions.
With growth supported by our design services again, a broader solution set.
This afternoon, I'll begin with an overview of our 2025 performance, a review of trends across our end markets, and an update on our strategic priorities.
As a reminder, C. As producer are cloud based truck production management software announced last quarter represents an important milestone in our digital roadmap extending our capabilities beyond design in your production planning and daily operations.
That will follow with the deeper dive into our financial results and our fiscal 2026 outlook.
Before we start, I want to highlight that for the second consecutive year, we achieved a total recordable incident rate of less than 1.0—our best result in company history.
In addition, our <unk> acquisition continues to perform well in a challenging market strengthening our equipment offerings and deepening customer relationships.
We also saw a meaningful reduction in lost time injuries and a decrease in incident severity.
Together these capabilities position us well to capitalize on what we view as one of our most attractive long term growth opportunities.
We are extremely proud of our employees for keeping safety at the forefront of everything we do.
Daniel Moore: Now, turning to our results, I'm pleased to report full year 2025 net sales of $2.3 billion, up 4.5% from 2024 in a challenging market. As outlined in our investor presentation, approximately 3% of this growth came from pricing, 1% from acquisitions, and 1% from foreign exchange. These gains were partially offset by an approximate 1% decline in volume due to weaker housing starts. Historically, our volume metrics focused on North American unit sales, measured in pound shipped, which did not capture the growing contributions from our more premium offerings, including software, services, and equipment. We believe this revenue bridge provides a more complete view of our consolidated business. In North America, full year net sales were $1.8 billion, up 4.5% from prior year, including an approximate $60 million benefit from pricing actions.
Mike Olosky: Now, turning to our results, I'm pleased to report full year 2025 net sales of $2.3 billion, up 4.5% from 2024 in a challenging market. As outlined in our investor presentation, approximately 3% of this growth came from pricing, 1% from acquisitions, and 1% from foreign exchange. These gains were partially offset by an approximate 1% decline in volume due to weaker housing starts. Historically, our volume metrics focused on North American unit sales, measured in pound shipped, which did not capture the growing contributions from our more premium offerings, including software, services, and equipment. We believe this revenue bridge provides a more complete view of our consolidated business. In North America, full year net sales were $1.8 billion, up 4.5% from prior year, including an approximate $60 million benefit from pricing actions.
Their commitment demonstrates the values that define Simpson above all—that everybody matters.
In our commercial business 2025 volumes were essentially flat year over year in our commercial market that was down mid single digits.
We saw strong growth in cold foreign steel and anchoring products supported by our takeoff service that streamlines design and procurement for customers.
Now, turning to our results, I'm pleased to report fully your 2025 net sales of $2.3 billion, up 4.5% from 2024, in a challenging market.
We are also seeing increased adoption of our third generation anchoring pieces, which deliver reliable performance across a wide range of applications and conditions backed by our testing code evaluation and engineering expertise.
As outlined in our investor presentation, approximately 3% of this growth came from pricing, 1% from acquisitions, and 1% from FX exchange.
These gains were partially offset by an approximately 1% decline in volume due to weaker housing starts.
Our residential business volume declined modestly, reflecting continued challenging market conditions, particularly in the west and the south.
Historically, our volumetrics focused on North American unit sales measured in pounds shipped, which did not capture the growing contributions from our more premium offerings, including software, services, and equipment.
Continued expand our digital solutions with <unk> and builder customers partnering with them to improve efficiency across estimating design a project workflows further reinforcing our value proposition to our customers.
We believe this revenue bridge provides a more complete view of our consolidated business.
We also saw steady growth in our multifamily business supported by increased quoting activity.
Daniel Moore: North American volumes were down year-over-year, pressured by lower housing starts and a more challenging regional mix, with the most pronounced declines in the southern and western United States, where our content per unit is typically higher due to stronger building codes. Even with these headwinds, our focus on innovation, customer service, and operational excellence continued to drive solid performance. We continue to win business in soft markets, demonstrating the resilience of our portfolio and the value we deliver to our customers. As we look at full year results across North American end markets, performance was mixed by market segment, but we saw encouraging developments across several parts of the business. The OEM business delivered a strong year with volume up double digits.
Mike Olosky: North American volumes were down year-over-year, pressured by lower housing starts and a more challenging regional mix, with the most pronounced declines in the southern and western United States, where our content per unit is typically higher due to stronger building codes. Even with these headwinds, our focus on innovation, customer service, and operational excellence continued to drive solid performance. We continue to win business in soft markets, demonstrating the resilience of our portfolio and the value we deliver to our customers. As we look at full year results across North American end markets, performance was mixed by market segment, but we saw encouraging developments across several parts of the business. The OEM business delivered a strong year with volume up double digits.
In North America, full-year sales were $1.8 billion, up 4.5% from the prior year, including an approximate $6 million benefit from pricing actions.
And single family, we strengthen our competitive position by securing multiyear renewals and new national contracts with key builders.
North American Vines are down year-over-year, pressured by lower housing starts and a more challenging regional mix, with the most pronounced declines in the southern and western United States.
These wins highlight the strength of our supply chain network proximity to customers and the value of our digital and technical capabilities.
Where our content per unit is typically higher due to stronger building codes.
With programs now in place with 25 of the top 30 U S National builders.
Even with these headwinds, our focus on innovation, customer service, and operational excellence continues to drive solid performance.
We're well positioned as the residential market recovers.
Our national retail business saw a mid single digit decline in shipments versus 2024, while point of sale volume performance declined in the low single digits.
We continue to win business in soft markets, demonstrating the resilience of our portfolio and the value we deliver to our customers.
This was driven in part by regional differences and a difficult comparison to new product listings and expanded retail space, we secured in late 2024.
As we look at full-year results across North America and markets, performance was mixed by market segment, but we saw encouraging developments across several parts of the business.
Daniel Moore: We saw particularly strong growth with off-site construction manufacturers and mass timber projects, where our products and support model are a great fit for complex applications with high performance requirements. We succeed by combining innovative products that meet demanding load requirements and improve ease of installation with deep technical and field support throughout the project lifecycle. Although OEM remains a smaller part of our portfolio today, we believe we are growing well above market and see substantial runway for continued expansion. The component manufacturing business continues to grow with volumes up in the low single digits, driven by new customer acquisitions and expanded capabilities, including software. We continue to convert new customers to our software and truss plate solutions, with growth supported by our design services and a broader solution set.
Mike Olosky: We saw particularly strong growth with off-site construction manufacturers and mass timber projects, where our products and support model are a great fit for complex applications with high performance requirements. We succeed by combining innovative products that meet demanding load requirements and improve ease of installation with deep technical and field support throughout the project lifecycle. Although OEM remains a smaller part of our portfolio today, we believe we are growing well above market and see substantial runway for continued expansion. The component manufacturing business continues to grow with volumes up in the low single digits, driven by new customer acquisitions and expanded capabilities, including software. We continue to convert new customers to our software and truss plate solutions, with growth supported by our design services and a broader solution set.
The OEM business delivered a strong year, with volume up double digits.
Throughout the year, we focused on bay expansion programs with our largest retail partners. We also expanded our decorative hardware portfolio with the launch of the outdoor accident stage system now testing in select markets.
We saw particularly strong growth with off-site construction, manufacturers, and mass timber projects.
Where our products and support, Mylar are a great fit for complex applications with high performance requirements.
Our emphasis on customer service disciplined execution merchandising support and in market testing continues to strengthen our retail partnerships and positions us well for ongoing growth.
We succeed by combining innovative products that meet the landing load requirements and improve ease of installation with deep technical and field support throughout the project life cycle.
In Europe full year net sales totaled $499 6 million up four 3% year over year, which was up slightly on a local currency basis.
The other day, we believe we are growing well above market and see substantial runway for continued expansion.
<unk> outperformed the market and were slightly higher compared to 2024.
The component manufacturing business continues to grow, with volumes up in the low single digits, driven by new customer acquisitions and expanded capabilities, including software.
Our consolidated gross margin was relatively flat year over year at 45, 9%.
We continue to convert new customers to our software and Trust Plate Solutions.
As previously discussed our 2025 price increases, which we expect will contribute at least $100 million in annualized net sales helped offset increased costs, including those attributed to tariffs.
Daniel Moore: As a reminder, CS Producer, our cloud-based truss production management software announced last quarter, represents an important milestone in our digital roadmap, extending our capabilities beyond design into production planning and daily operations. In addition, our Monet DeSauw acquisition continues to perform well in a challenging market, strengthening our equipment offering and deepening customer relationships. Together, these capabilities position us well to capitalize on what we view as one of our most attractive long-term growth opportunities. In our commercial business, 2025 volumes were essentially flat year-over-year in a commercial market that was down mid-single digits. We saw strong growth in cold-form steel and anchoring products, supported by our takeoff service that streamlines design and procurement for customers.
Mike Olosky: As a reminder, CS Producer, our cloud-based truss production management software announced last quarter, represents an important milestone in our digital roadmap, extending our capabilities beyond design into production planning and daily operations. In addition, our Monet DeSauw acquisition continues to perform well in a challenging market, strengthening our equipment offering and deepening customer relationships. Together, these capabilities position us well to capitalize on what we view as one of our most attractive long-term growth opportunities. In our commercial business, 2025 volumes were essentially flat year-over-year in a commercial market that was down mid-single digits. We saw strong growth in cold-form steel and anchoring products, supported by our takeoff service that streamlines design and procurement for customers.
With growth support from our Design Services and a broader solution set.
Our 2025 operating margin was 19, 6% up 30 basis points year over year, which included approximately $13 1 million in strategic cost savings initiatives and footprint optimization costs.
As a reminder, CS Producer, our cloud-based trust production management software announced last quarter, represents an important milestone in our digital roadmap, extending our capabilities beyond design into production planning and daily operations.
Our 2025 operating margin also included a $12 9 million gain from the sale of our Gallatin, Tennessee facility adjusted EBIT.
In addition, our Monae Daw acquisition continues to perform well in a challenging market, strengthening our equipment offering and deepening customer relationships.
Together, these capabilities position us well to capitalize on what we view as one of our most attractive long-term growth opportunities.
EBIT totaled $544 3 million or three three.
A 3% increase year over year.
In our Commercial business, 2025 volumes were essentially flat year-over-year in a commercial market that was down mid-single digits.
Next I'd like to detail the progress we made on our financial ambitions in 2025, which will guide our strategy throughout 2026.
Daniel Moore: We are also seeing increased adoption of our third-generation anchoring adhesives, which deliver reliable performance across a wide range of applications and conditions, backed by our testing, code evaluation, and engineering expertise. Our residential business volume declined modestly, reflecting continued challenging market conditions, particularly in the West and the South. We continue to expand our digital solutions with LBM and builder customers, partnering with them to improve efficiency across estimating, design, and project workflows, further reinforcing our value proposition to our customers. We also saw steady growth in our multifamily business, supported by increased quoting activity. In single-family, we strengthen our competitive position by securing multi-year renewals and new national contracts with key builders. These wins highlight the strength of our supply chain network, proximity to customers, and the value of our digital and technical capabilities. With programs now in place with 25 of the top 30 U.S.
Mike Olosky: We are also seeing increased adoption of our third-generation anchoring adhesives, which deliver reliable performance across a wide range of applications and conditions, backed by our testing, code evaluation, and engineering expertise. Our residential business volume declined modestly, reflecting continued challenging market conditions, particularly in the West and the South. We continue to expand our digital solutions with LBM and builder customers, partnering with them to improve efficiency across estimating, design, and project workflows, further reinforcing our value proposition to our customers. We also saw steady growth in our multifamily business, supported by increased quoting activity. In single-family, we strengthen our competitive position by securing multi-year renewals and new national contracts with key builders. These wins highlight the strength of our supply chain network, proximity to customers, and the value of our digital and technical capabilities. With programs now in place with 25 of the top 30 U.S.
We saw strong growth in cold-formed steel and anchoring products, supported by our takeoff service that streamlines design and procurement for customers.
First continuing above market volume growth relative to U S housing starts.
Since roughly half of our business remains tied to U S. Housing starts this continues to be the most accurate benchmark for evaluating our volume performance.
We are also seeing increased adoption of our third-generation anchoring adhesives, which deliver reliable performance across a wide range of applications and conditions, backed by our testing, code evaluation, and engineering expertise.
While the government shutdown delayed the release of official housing starts data from the census Bureau, we will resume this comparison once it becomes available.
That said, we continue to monitor starts estimates for multiple sources based on those benchmarks. We believe our consolidated volumes of down 1% in 2025 slightly outperformed an expected average market decline in the single digits.
Our residential business volume declined modestly, reflecting continued challenging market conditions, particularly in the West and the South.
We continue to expand our digital solutions with LBM and Builder, customers partnering with them to improve efficiency across estimating, design, and project workflows, further reinforcing our value proposition to our customers.
Second maintaining an operating income margin at or above 20%.
We also saw steady growth in our multifamily business, supported by an increase in quoting activity.
We made good progress in 2025, despite the down market, adding 30 basis points to our operating income margin narrowing the gap to our 20% target.
In single family, we strengthen our competitive position by securing multi-year renewals and new national contracts with key builders.
Even with housing starts being down approximately 500 basis points versus our initial market forecast.
And third as a growth focused company with industry, leading margins. We believe we can consistently drive EPS growth ahead of net sales growth.
These wins highlight the strengths of our supply chain, network proximity to customers, and the value of our digital and technical capabilities.
Daniel Moore: National builders, we are well positioned as the residential market recovers. Our national retail business saw a mid-single digit decline in shipments versus 2024, while point-of-sale volume performance declined in the low single digits. This was driven in part by regional differences and a difficult comparison to new product listings and expanded retail space we secured in late 2024. Throughout the year, we focused on bay expansion programs with our largest retail partners. We also expanded our decorative hardware portfolio with the launch of the Outdoor Accents Sage system, now testing in select markets. Our emphasis on customer service, disciplined execution, merchandising support, and in-market testing continues to strengthen our retail partnerships and positions us well for ongoing growth. In Europe, full year net sales totaled $499.6 million, up 4.3% year-over-year, which was up slightly on a local currency basis.
Mike Olosky: National builders, we are well positioned as the residential market recovers. Our national retail business saw a mid-single digit decline in shipments versus 2024, while point-of-sale volume performance declined in the low single digits. This was driven in part by regional differences and a difficult comparison to new product listings and expanded retail space we secured in late 2024. Throughout the year, we focused on bay expansion programs with our largest retail partners. We also expanded our decorative hardware portfolio with the launch of the Outdoor Accents Sage system, now testing in select markets. Our emphasis on customer service, disciplined execution, merchandising support, and in-market testing continues to strengthen our retail partnerships and positions us well for ongoing growth. In Europe, full year net sales totaled $499.6 million, up 4.3% year-over-year, which was up slightly on a local currency basis.
with programs now in place with 25 of the top 30 US national builders
In 2025, EPS growth outpaced revenue by 390 basis points, highlighting the leverage in our model and the durability of our margin profile.
We are well positioned as the residential market recovers.
In summary, 2025 was a year of strong execution. Despite continued softness in U S and European housing markets.
Our national retail business saw a mid-single-digit decline in shipments versus 2024, while point-of-sale volume performance declined in the low single digits.
We maintain an exceptional 98% product delivery fill rate and customer satisfaction remains high.
This was German in part by regional differences and a difficult comparison to new product listings and expanded retail space we secured in late 2024.
Contributing to eight major awards, recognizing our service and product innovation.
Throughout the year, we focused on bay expansion programs with our largest retail partners.
We made progress by launching new products, bringing new manufacturing capabilities online expanding our warehouse footprint and strengthening our digital capabilities.
We also expand our decorative hardware portfolio with the launch of the outdoor accent Sage system. Now, testing in select markets,
Combined with our pricing actions cost savings initiatives and new business wins, we believe we are well positioned for continued success.
Our emphasis on customer service discipline, execution, merchandising support, and in-market testing continues to strengthen our retail partnerships and positions us well for ongoing growth.
Looking ahead to 2026, we believe we can continue above market volume growth relative to U S housing starts, which we expect will be relatively flat year over year with continued challenging regional mix headwinds.
Daniel Moore: Volumes outperformed the market and were slightly higher compared to 2024. Our consolidated gross margin was relatively flat year-over-year at 45.9%. As previously discussed, our 2025 price increases, which we expect will contribute at least $100 million in annualized net sales, helped offset increased costs, including those attributed to tariffs. Our 2025 operating margin was 19.6%, up 30 basis points year-over-year, which included approximately $13.1 million in strategic cost savings initiatives and footprint optimization costs. Our 2025 operating margin also included a $12.9 million gain from the sale of our Gallatin, Tennessee, facility. Adjusted EBITDA total of $544.3 million, a 3.3% increase year-over-year. Next, I'd like to detail the progress we made on our financial ambitions in 2025, which will guide our strategy throughout 2026. First, continuing above-market volume growth relative to U.S. housing starts.
Mike Olosky: Volumes outperformed the market and were slightly higher compared to 2024. Our consolidated gross margin was relatively flat year-over-year at 45.9%. As previously discussed, our 2025 price increases, which we expect will contribute at least $100 million in annualized net sales, helped offset increased costs, including those attributed to tariffs. Our 2025 operating margin was 19.6%, up 30 basis points year-over-year, which included approximately $13.1 million in strategic cost savings initiatives and footprint optimization costs. Our 2025 operating margin also included a $12.9 million gain from the sale of our Gallatin, Tennessee, facility. Adjusted EBITDA total of $544.3 million, a 3.3% increase year-over-year. Next, I'd like to detail the progress we made on our financial ambitions in 2025, which will guide our strategy throughout 2026. First, continuing above-market volume growth relative to U.S. housing starts.
In Europe, full-year net sales totaled $499.6 million, up 4.3% year-over-year, which was up slightly on a local currency basis.
In Europe, we expect slight growth in the market in 2026.
My name is Outperformed the Market, and we're slightly higher compared to 2024.
I'd also like to highlight that 2026 marks a special milestone for Simpson strong tie as we celebrate 70 years of growth and innovation.
Our consolidated gross margin was relatively flat year-over-year at 45.9%.
Since our founding and $19 56 by Bart Simpson, our company has been defined by a spirit of problem solving integrity and unwavering commitment to building safer stronger structures.
As previously discussed, our 2025 price increases—which we expect will contribute at least $100 million in annualized net sales—helped offset increased costs, including those attributed to tariffs.
What began with a single joist hanger has grown into a global portfolio of trusted solutions backed by advanced technology rigorous testing and a team dedicated to excellence.
Our 2025 operating margin was 19.6%, up 30 basis points year-over-year, which included approximately $13.1 million in strategic cost savings initiatives and footprint optimization costs.
We're proud to honor the legacy the broadest here, while continuing to build our future together with our employees customers and partners as we break new ground for the next generation.
Our 2025 operating margin also included a $12.9 million gain from the sale of our Gallatin, Tennessee facility.
With that I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.
Adjusted EBITDA totaled $544.3 million, a 3.3% increase year-over-year.
Good afternoon, everyone. Thank you for joining us on our earnings call today before I begin I'd like to mention that unless otherwise stated all financial measures discussed in my prepared remarks refer to the fourth quarter of $2025 and all comparisons will be year over year comparisons versus the fourth quarter of 2024.
Next, I'd like to detail the progress we made in our financial ambitions in 2025, which will guide our strategy throughout 2026.
Daniel Moore: Since roughly half of our business remains tied to US housing starts, this continues to be the most accurate benchmark for evaluating our volume performance. While the government shutdown delayed the release of official housing starts data from the Census Bureau, we will resume this comparison once it becomes available. That said, we continue to monitor starts estimates from multiple sources. Based on those benchmarks, we believe our consolidated volumes of down 1% in 2025 slightly outperformed an expected average market decline in the single digits. Second, maintaining an operating income margin at or above 20%. We made good progress in 2025 despite the down market, adding 30 basis points to our operating income margin, narrowing the gap to our 20% target, even with housing starts being down approximately 500 basis points versus our initial market forecast.
Mike Olosky: Since roughly half of our business remains tied to US housing starts, this continues to be the most accurate benchmark for evaluating our volume performance. While the government shutdown delayed the release of official housing starts data from the Census Bureau, we will resume this comparison once it becomes available. That said, we continue to monitor starts estimates from multiple sources. Based on those benchmarks, we believe our consolidated volumes of down 1% in 2025 slightly outperformed an expected average market decline in the single digits. Second, maintaining an operating income margin at or above 20%. We made good progress in 2025 despite the down market, adding 30 basis points to our operating income margin, narrowing the gap to our 20% target, even with housing starts being down approximately 500 basis points versus our initial market forecast.
First, continuing above, market volume growth relative to the U.S. housing starts.
Since roughly half of our business remains tied to U.S. housing starts, this continues to be the most accurate benchmark for evaluating our volume performance.
Now turning to our results.
Our consolidated net sales increased four 2% year over year to $539 $3 million.
While the government shutdown delayed the release of official housing starts data from the Census Bureau, we will resume this comparison once it becomes available.
Within the North America segment, net sales increased 3% to $416 9 million.
Estimates for multiple sources.
In Europe, net sales increased nine 1% to $117 $9 million.
Primarily due to the positive effect of approximately $9 1 million and foreign currency translation and a modest improvement in sales volumes and pricing.
Based on those benchmarks, we believe our consolidated volumes were down 1% in 2025, which slightly outperformed the expected average market decline in the single digits.
Second, maintaining an operating income margin at or above 20%.
Globally wood construction products sales were up two 1% and concrete construction product sales were up 15, 3% as a larger percentage of these products are imported and included in tariff driven price increases.
Daniel Moore: And third, as a growth-focused company with industry-leading margins, we believe we can consistently drive EPS growth ahead of net sales growth. In 2025, EPS growth outpaced revenue by 390 basis points, highlighting the leverage in our model and the durability of our margin profile. In summary, 2025 was a year of strong execution despite continued softness in US and European housing markets. We maintained an exceptional 98% product delivery fill rate, and customer satisfaction remained high, contributing to eight major awards recognizing our service and product innovation. We made progress by launching new products, bringing new manufacturing capabilities online, expanding our warehouse footprint, and strengthening our digital capabilities. Combined with our pricing actions, cost savings initiatives, and new business wins, we believe we are well positioned for continued success. Looking ahead to 2026, we believe we can continue above-market volume growth relative to US.
Mike Olosky: And third, as a growth-focused company with industry-leading margins, we believe we can consistently drive EPS growth ahead of net sales growth. In 2025, EPS growth outpaced revenue by 390 basis points, highlighting the leverage in our model and the durability of our margin profile. In summary, 2025 was a year of strong execution despite continued softness in US and European housing markets. We maintained an exceptional 98% product delivery fill rate, and customer satisfaction remained high, contributing to eight major awards recognizing our service and product innovation. We made progress by launching new products, bringing new manufacturing capabilities online, expanding our warehouse footprint, and strengthening our digital capabilities. Combined with our pricing actions, cost savings initiatives, and new business wins, we believe we are well positioned for continued success. Looking ahead to 2026, we believe we can continue above-market volume growth relative to US.
We made good progress in 2025, despite the down market, adding 30 basis points to our operating income margin, narrowing the gap to our 20% target. Even with housing starts being down approximately 500 basis points versus our initial market forecast.
Consolidated gross profit increased three 4% $235 1 million.
And third, as a growth-focused company with industry-leading margins, we believe we can consistently drive EPS growth ahead of net sales growth.
Resulting in a gross margin of 43, 6% down 30 basis points from the fourth quarter of 2024.
On a segment basis, our gross margin in North America was 46, 2% below the 46, 9% reported in the prior year, reflecting the impact from tariffs and higher factory overhead and labor costs.
In 2025, EPS growth outpaced revenue by 390 basis points, highlighting the leverage in our model and the durability of our margin profile.
Okay, in summary, 2025 was the year of strong execution, despite continued softness in US and European housing markets.
Which were partially offset by lower warehouse costs as a percentage of net sales.
Our gross margin in Europe increased to 33, 6% from 32, 3%, primarily due to lower material and freight costs, partly offset by higher factory and overhead warehouse and labor costs as a percentage of net sales.
We maintain an exceptional 98% product delivery fill rate, and customer satisfaction remained high, contributing to eight major awards recognizing our service and product innovation.
We make progress by launching new products and bringing new manufacturing capabilities online.
Expanding our warehouse footprint and strengthening our digital capabilities.
From a product perspective, our fourth quarter gross margin was 43, 5% for wood products compared to 43, 4% in the prior year period for.
Combined with our pricing actions, cost savings initiatives, and new business wins, we believe we are well positioned for continued success.
Daniel Moore: Housing starts, which we expect will be relatively flat year-over-year with continued challenging regional mix headwinds. In Europe, we expect slight growth in the market in 2026. I'd also like to highlight that 2026 marks a special milestone for Simpson Strong-Tie as we celebrate 70 years of growth and innovation. Since our founding in 1956 by Bark Simpson, our company has been defined by a spirit of problem-solving, integrity, and unwavering commitment to building safer, stronger structures. What began with a single joist hanger has grown into a global portfolio of trusted solutions backed by advanced technology, rigorous testing, and a team dedicated to excellence. We're proud to honor the legacy that brought us here while continuing to build our future together with our employees, customers, and partners as we break new ground for the next generation.
Mike Olosky: Housing starts, which we expect will be relatively flat year-over-year with continued challenging regional mix headwinds. In Europe, we expect slight growth in the market in 2026. I'd also like to highlight that 2026 marks a special milestone for Simpson Strong-Tie as we celebrate 70 years of growth and innovation. Since our founding in 1956 by Bark Simpson, our company has been defined by a spirit of problem-solving, integrity, and unwavering commitment to building safer, stronger structures. What began with a single joist hanger has grown into a global portfolio of trusted solutions backed by advanced technology, rigorous testing, and a team dedicated to excellence. We're proud to honor the legacy that brought us here while continuing to build our future together with our employees, customers, and partners as we break new ground for the next generation.
Our concrete products gross margin was 46% compared to 45, 8% a year ago with the improvement partly due to the recent pricing actions.
Looking ahead to 2026, we believe we can continue above-market volume growth relative to U.S. housing starts, which we expect will be relatively flat year-over-year, with continued challenging regional mix items.
Now turning to expenses, while SG&A head count was down approximately 7% year over year total Q4 operating expenses increased eight 2% to $161 $8 million.
In Europe, we expect slight growth in the market in 2026.
I'd also like to highlight that 2026 marks a special milestone for Simpson Strong-Tie, as we celebrate 70 years of growth and innovation.
Primarily driven by the timing of higher charitable donations in advance of tax deductibility changes for 2026.
Variable incentive compensation and personnel costs, including severance related costs.
Since our founding in 1956 by Bark Simpson, our company has been defined by a spirit of problem-solving, integrity, and unwavering commitment to building safer, stronger structures.
For the full year of 2025 total operating expenses were $627 million, an increase of six 5%, primarily due to variable and incentive costs personnel costs, including severance related costs digital subscription cost and timing of charitable donations.
What began with a single joist hanger has grown into a global portfolio of trusted solutions, backed by advanced technology, rigorous testing, and a team dedicated to excellence.
As a percentage of net sales total 2025 operating expenses were 26, 9% compared to 26, 4% last year.
Daniel Moore: With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail. Good afternoon, everyone. Thank you for joining us on our earnings call today. Before I begin, I'd like to mention that unless otherwise stated, all financial measures discussed in my prepared remarks refer to Q4 2025, and all comparisons will be year-over-year comparisons versus Q4 2024. Now, turning to our results. Our consolidated net sales increased 4.2% year-over-year to $539.3 million. Within the North America segment, net sales increased 3% to $416.9 million. In Europe, net sales increased 9.1% to $117.9 million, primarily due to the positive effect of approximately $9.1 million in foreign currency translation and a modest improvement in sales volumes and pricing.
Mike Olosky: With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.
We're proud to honor the legacy that brought us here, while continuing to build our future together with our employees, customers, and partners, as we break new ground for the next generation.
Matt Dunn: Good afternoon, everyone. Thank you for joining us on our earnings call today. Before I begin, I'd like to mention that unless otherwise stated, all financial measures discussed in my prepared remarks refer to Q4 2025, and all comparisons will be year-over-year comparisons versus Q4 2024. Now, turning to our results. Our consolidated net sales increased 4.2% year-over-year to $539.3 million. Within the North America segment, net sales increased 3% to $416.9 million. In Europe, net sales increased 9.1% to $117.9 million, primarily due to the positive effect of approximately $9.1 million in foreign currency translation and a modest improvement in sales volumes and pricing.
With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.
Our full year 2025 operating expenses included approximately $8 million in severance related costs associated with our strategic cost savings initiatives, which we anticipate will deliver annualized cost savings of at least $30 million.
Good afternoon, everyone. Thank you for joining us on our earnings call today.
To further detail our fourth quarter SG&A.
Our research and development and engineering expenses decreased by four 8% to $21 $1 million, primarily due to the previous reclassification of digital technology from R&D to G&A.
Before I begin, I'd like to mention that, unless otherwise stated, all financial measures discussed in my prepared remarks refer to the fourth quarter of 2025, and all comparisons will be year-over-year comparisons versus the fourth quarter of 2024.
Now, turning to our results.
Our consolidated net sales increased 4.2% year-over-year to $539.3 million.
Selling expenses increased by six 3% to $56 1 million.
Merrily due to the higher variable compensation and commissions.
Within the North America segment, net sales increased 3% to $416.9 million.
On a segment basis selling expenses in North America were up 5% and in Europe. They are up 10, 4% primarily due to FX.
General and administrative expenses increased by 13, 5% to $84 $7 million due to the timing of charitable donations the aforementioned reclassification of digital technology from R&D.
Daniel Moore: Globally, wood construction product sales were up 2.1%, and concrete construction product sales were up 15.3%, as a larger percentage of these products are imported and included in tariff-driven price increases. Consolidated gross profit increased 3.4% to $235.1 million, resulting in a gross margin of 43.6%, down 30 basis points from the fourth quarter of 2024. On a segment basis, our gross margin in North America was 46.2%, below the 46.9% reported in the prior year, reflecting the impact from tariffs and higher factory overhead and labor costs, which were partially offset by lower warehouse costs as a percentage of net sales. Our gross margin in Europe increased to 33.6% from 32.3%, primarily due to lower material and freight costs, partly offset by higher factory and overhead, warehouse, and labor costs as a percentage of net sales.
Matt Dunn: Globally, wood construction product sales were up 2.1%, and concrete construction product sales were up 15.3%, as a larger percentage of these products are imported and included in tariff-driven price increases. Consolidated gross profit increased 3.4% to $235.1 million, resulting in a gross margin of 43.6%, down 30 basis points from the fourth quarter of 2024. On a segment basis, our gross margin in North America was 46.2%, below the 46.9% reported in the prior year, reflecting the impact from tariffs and higher factory overhead and labor costs, which were partially offset by lower warehouse costs as a percentage of net sales. Our gross margin in Europe increased to 33.6% from 32.3%, primarily due to lower material and freight costs, partly offset by higher factory and overhead, warehouse, and labor costs as a percentage of net sales.
In Europe, net sales increased 9.1% to $117.9 million, primarily due to the positive effect of approximately $9.1 million in foreign currency translation and a modest improvement in sales volumes and pricing.
<unk> related costs, and a negative foreign exchange effect as well as increases in variable compensation and software costs.
Globally, wood construction product sales were up 2.1%, and concrete construction product sales were up 15.3%, as a larger percentage of these products are imported and included in tariff-driven price increases.
As a result, our fourth quarter consolidated income from operations totaled $74 8 million.
Consolidated gross profit increased 3.4% to $235.1 million.
Decrease of two 7%.
From $76 9 million.
Our consolidated operating income margin was 13, 9% down from 14, 9% last year.
resulting in a gross margin of 43.6%, down 30 basis points from the fourth quarter of 2024,
In North America income from operations decreased three 6% to $82 $3 million.
Due to higher operating expenses, which were partly offset by higher gross profit our.
On a segment basis, our gross margin in North America was 46.2%, below the 46.9% reported in the prior year, reflecting the impact from tariffs and higher factory overhead and labor costs.
Our fourth quarter operating income margin in North America was 19, 7% compared to 21, 1% last year.
which were partially offset by lower warehouse costs as a percentage of net sales.
In Europe income from operations increased 260% to $2 8 million due primarily to increased gross profit, partly offset by increases in operating expenses due to the negative effect of approximately $2 9 million and foreign currency translation.
Daniel Moore: From a product perspective, our fourth quarter gross margin was 43.5% for wood products compared to 43.4% in the prior year period. For concrete products, gross margin was 46% compared to 45.8% a year ago, with the improvement partly due to the recent pricing actions. Now, turning to expenses. While SG&A headcount was down approximately 7% year-over-year, total Q4 operating expenses increased 8.2% to $161.8 million, primarily driven by the timing of higher charitable donations in advance of tax deductibility changes for 2026, variable incentive compensation, and personnel costs, including severance-related costs. For the full year of 2025, total operating expenses were $627 million, an increase of 6.5%, primarily due to variable incentive costs, personnel costs, including severance-related costs, digital subscription costs, and timing of charitable donations. As a percentage of net sales, total 2025 operating expenses were 26.9% compared to 26.4% last year.
Matt Dunn: From a product perspective, our fourth quarter gross margin was 43.5% for wood products compared to 43.4% in the prior year period. For concrete products, gross margin was 46% compared to 45.8% a year ago, with the improvement partly due to the recent pricing actions. Now, turning to expenses. While SG&A headcount was down approximately 7% year-over-year, total Q4 operating expenses increased 8.2% to $161.8 million, primarily driven by the timing of higher charitable donations in advance of tax deductibility changes for 2026, variable incentive compensation, and personnel costs, including severance-related costs. For the full year of 2025, total operating expenses were $627 million, an increase of 6.5%, primarily due to variable incentive costs, personnel costs, including severance-related costs, digital subscription costs, and timing of charitable donations. As a percentage of net sales, total 2025 operating expenses were 26.9% compared to 26.4% last year.
Our gross margin in Europe increased to 33.6% from 32.3%, primarily due to lower material and freight costs, partly offset by higher factory and overhead warehouse and labor costs as a percentage of net sales.
Income from operations included $4 $7 million, resulting from our footprint optimization and strategic cost saving efforts to enhance our profitability.
From a product perspective, our fourth quarter gross margin was 43.5% for wood products, compared to 43.4% in the prior year period.
Our fourth quarter operating income margin in Europe was two 3% compared to <unk>, 7% last year.
Due to the recent pricing actions.
Our fourth quarter effective tax rate was 24, 8% approximately 270 basis points below the prior year period.
Accordingly, net income totaled $56 2 million or $1 35 per fully diluted share compared to $55 5 million or $1 31 per fully diluted share.
Now, turning to expenses, while SG&A headcount was down approximately 7% year-over-year, total Q4 operating expenses increased 8.2% to $161.8 million, primarily driven by the timing of higher charitable donations in advance of tax deductibility changes for 2026.
Adjusted EBITDA for the fourth quarter was $104 $7 million, a decrease of <unk>, 9%, resulting in a margin of 19, 8%.
Variable incentive compensation and personnel costs, including severance-related costs.
Now turning to our balance sheet and liquidity.
For the full year of 2025, total operating expenses were $627 million, an increase of 6.5%, primarily due to variable incentive costs.
In the quarter, we amended and restated our credit agreement, which includes $600 million revolving credit facility and a $300 million five year term loan.
Personnel costs, including severance-related costs, digital subscription costs, and timing of charitable donations.
As of December 31, 2025, we had $74 $2 million drawn on our revolver, resulting in $525 8 million of remaining availability.
Daniel Moore: Our full year 2025 operating expenses included approximately $8 million in severance-related costs associated with our strategic cost savings initiatives, which we anticipate will deliver annualized cost savings of at least $30 million. To further detail our fourth quarter SG&A, our research and development and engineering expenses decreased by 4.8% to $21.1 million, primarily due to the previous reclassification of digital technology from R&D to G&A. Selling expenses increased by 6.3% to $56.1 million, primarily due to the higher variable compensation and commissions. On a segment basis, selling expenses in North America were up 5%, and in Europe, they were up 10.4%, primarily due to FX. General and administrative expenses increased by 13.5% to $84.7 million due to the timing of charitable donations, the aforementioned reclassification of digital technology from R&D, severance-related costs, and a negative foreign exchange effect, as well as increases in variable compensation and software costs.
Matt Dunn: Our full year 2025 operating expenses included approximately $8 million in severance-related costs associated with our strategic cost savings initiatives, which we anticipate will deliver annualized cost savings of at least $30 million. To further detail our fourth quarter SG&A, our research and development and engineering expenses decreased by 4.8% to $21.1 million, primarily due to the previous reclassification of digital technology from R&D to G&A. Selling expenses increased by 6.3% to $56.1 million, primarily due to the higher variable compensation and commissions. On a segment basis, selling expenses in North America were up 5%, and in Europe, they were up 10.4%, primarily due to FX. General and administrative expenses increased by 13.5% to $84.7 million due to the timing of charitable donations, the aforementioned reclassification of digital technology from R&D, severance-related costs, and a negative foreign exchange effect, as well as increases in variable compensation and software costs.
As a percentage of net sales, total 2025 operating expenses were 26.9%, compared to 26.4% last year.
Our debt balance was approximately $374 2 million down $16 9 million from December 31, 2024, and cash and cash equivalents totaled $384 1 million <unk>.
Our full year 2025 operating expenses included approximately $8 million in severance-related costs associated with our strategic cost-saving initiatives.
which we anticipate will deliver annualized cost savings of at least $30 million.
Resulting in a net cash position of $9 9 million.
To further detail our fourth quarter SGNA.
Our inventory position as of December 31, 2025 was $594 $2 million, which was essentially flat compared to December 31, 2024 and includes at approximately $16 million increase from foreign currency translation.
Our research and development and engineering expenses decreased by 4.8% to $21.1 million, primarily due to the previous reclassification of digital technology from R&D to G&A.
Selling expenses increased by 6.3% to $56.1 million.
Pounds of inventory on hand in North America were down double digits with a nearly double digit increase in cost per pound.
Primarily due to the higher variable compensation and commissions.
We generated strong cash flow from operations of $155 6 million for the fourth quarter and $458 6 million for the full year of 2025.
On a segment basis, selling expenses in North America are up 5%, and in Europe, they're up 10.4%, primarily due to FX.
With regard to capital allocation, our strategy remains duly focused on growth and shareholder returns.
In 2025, we invested $161 5 million for capital expenditures, including our investments for facility upgrades and expansions.
General and administrative expenses increased by 13.5% to $84.7 million due to the timing of charitable donations. The aforementioned reclassification of digital technology from R&D.
Daniel Moore: As a result, our fourth quarter consolidated income from operations totaled $74.8 million, a decrease of 2.7% from $76.9 million. Our consolidated operating income margin was 13.9%, down from 14.9% last year. In North America, income from operations decreased 3.6% to $82.3 million due to higher operating expenses, which were partly offset by higher gross profit. Our fourth quarter operating income margin in North America was 19.7% compared to 21.1% last year. In Europe, income from operations increased 260% to $2.8 million due primarily to increased gross profit, partly offset by increases in operating expenses due to the negative effect of approximately $2.9 million in foreign currency translation. Income from operations included $4.7 million, resulting from our footprint optimization and strategic cost savings efforts to enhance our profitability. Our fourth quarter operating income margin in Europe was 2.3% compared to 0.7% last year.
Matt Dunn: As a result, our fourth quarter consolidated income from operations totaled $74.8 million, a decrease of 2.7% from $76.9 million. Our consolidated operating income margin was 13.9%, down from 14.9% last year. In North America, income from operations decreased 3.6% to $82.3 million due to higher operating expenses, which were partly offset by higher gross profit. Our fourth quarter operating income margin in North America was 19.7% compared to 21.1% last year. In Europe, income from operations increased 260% to $2.8 million due primarily to increased gross profit, partly offset by increases in operating expenses due to the negative effect of approximately $2.9 million in foreign currency translation. Income from operations included $4.7 million, resulting from our footprint optimization and strategic cost savings efforts to enhance our profitability. Our fourth quarter operating income margin in Europe was 2.3% compared to 0.7% last year.
$37 6 million in dividends to our stockholders and $120 million and repurchases of our common stock.
Severance-related costs and a negative foreign exchange effect, as well as increases in variable compensation and software costs.
As a result, our fourth quarter consolidated income from operations totaled $74.8 million.
As previously announced in October the board authorized a new share repurchase program for 2026th to repurchase up to $150 million worth of our shares through the end of 2026.
A decrease of 2.7%.
From 76.9 million.
This reflects our confidence in the long term prospects of the business and our commitment to returning capital to shareholders.
Our consolidated operating income margin was 13.9%, down from 14.9% last year.
Next I'll turn to our 2026 financial outlook.
Based on business trends and conditions as of today February 9th our guidance for the full year ending December 31, 2026 is as follows.
In North America, income from operations decreased 3.6% to $82.3 million due to higher operating expenses, which were partly offset by higher gross profit.
We expect our consolidated operating margin to be in the range of 19, 5% to 25%.
Our fourth quarter operating income margin in North America was 19.7%, compared to 21.1% last year.
Additional key assumptions include a slightly lower overall gross margin based on imposed tariffs and increased depreciation costs.
Unexpected $3 million to $5 million of footprint optimization costs in Europe.
In Europe, income from operations increased 260% to $2.8 million, due primarily to increased gross profit, partly offset by increases in operating expenses due to the negative effect of approximately $2.9 million in foreign currency translation.
And a projected 10% to $12 million benefit on the sale of vacant land.
Our effective tax rate is estimated to be in the range of 25% to 26%, including both federal and state income tax rates based on current tax laws.
Income from operations included $4.7 million resulting from our footprint optimization and strategic cost-saving efforts to enhance our profitability.
Daniel Moore: Our fourth quarter effective tax rate was 24.8%, approximately 270 basis points below the prior year period. Accordingly, net income totaled $56.2 million or $1.35 per fully diluted share compared to $55.5 million or $1.31 per fully diluted share. Adjusted EBITDA for the fourth quarter was $104.7 million, a decrease of 0.9%, resulting in a margin of 19.8%. Now, turning to our balance sheet and liquidity. Late in the quarter, we amended and restated our credit agreement, which includes $600 million revolving credit facility and a $300 million five-year term loan. As of 31 December 2025, we had $74.2 million drawn on the revolver, resulting in $525.8 million of remaining availability. Our debt balance was approximately $374.2 million, down $16.9 million from 31 December 2024, and cash and cash equivalents totaled $384.1 million, resulting in a net cash position of $9.9 million.
Matt Dunn: Our fourth quarter effective tax rate was 24.8%, approximately 270 basis points below the prior year period. Accordingly, net income totaled $56.2 million or $1.35 per fully diluted share compared to $55.5 million or $1.31 per fully diluted share. Adjusted EBITDA for the fourth quarter was $104.7 million, a decrease of 0.9%, resulting in a margin of 19.8%. Now, turning to our balance sheet and liquidity. Late in the quarter, we amended and restated our credit agreement, which includes $600 million revolving credit facility and a $300 million five-year term loan. As of 31 December 2025, we had $74.2 million drawn on the revolver, resulting in $525.8 million of remaining availability. Our debt balance was approximately $374.2 million, down $16.9 million from 31 December 2024, and cash and cash equivalents totaled $384.1 million, resulting in a net cash position of $9.9 million.
Our fourth quarter operating income margin in Europe was 2.3%, compared to 0.7% last year.
And finally, our capital expenditures outlook is expected to be in the range of $75 million to $85 million.
In summary, we closed out a strong 2025, despite a challenging market environment.
Our fourth-quarter effective tax rate was 24.8%, approximately 270 basis points below the prior-year period.
Continue to execute with discipline across the business.
Our pricing actions helped offset tariff related cost pressures.
Reporting margin resilience, even as we navigated higher input costs.
Accordingly, net income totaled $56.2 million, or $1.35 per fully diluted share, compared to $55.5 million, or $1.31 per fully diluted share.
Cost savings initiatives implemented in the fall are beginning to take hold and will drive meaningful efficiencies as we move into 2026 as.
Adjusted EBITDA for the fourth quarter was $104.7 million, a decrease of 0.9%, resulting in a margin of 19.8%.
As we look ahead, we remain committed to disciplined capital deployment supported by our expanded share repurchase authorization and our plan to return at least 35% of free cash flow to shareholders.
Now turning to our balance sheet and liquidity, late in the quarter we amended and restated our credit agreement, which includes a $600 million revolving credit facility and a $100 million 5-year term loan.
With that I will now turn the call over to the operator to begin the Q&A session.
Thank you.
We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
As of December 31, 2025, we had $74.2 million drawn on the revolver, resulting in $5,025.8 million of remaining availability.
May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Daniel Moore: Our inventory position as of 31 December 2025 was $594.2 million, which was essentially flat compared to 31 December 2024, and includes an approximately $16 million increase from foreign currency translation. Pounds of inventory on hand in North America were down double digits, with a nearly double-digit increase in cost per pound. We generated strong cash flow from operations of $155.6 million for Q4 and $458.6 million for the full year of 2025. With regard to capital allocation, our strategy remains duly focused on growth and shareholder returns. In 2025, we invested $161.5 million for capital expenditures, including our investments for facility upgrades and expansions, $47.6 million in dividends to our stockholders, and $120 million in repurchases of our common stock.
Matt Dunn: Our inventory position as of 31 December 2025 was $594.2 million, which was essentially flat compared to 31 December 2024, and includes an approximately $16 million increase from foreign currency translation. Pounds of inventory on hand in North America were down double digits, with a nearly double-digit increase in cost per pound. We generated strong cash flow from operations of $155.6 million for Q4 and $458.6 million for the full year of 2025. With regard to capital allocation, our strategy remains duly focused on growth and shareholder returns. In 2025, we invested $161.5 million for capital expenditures, including our investments for facility upgrades and expansions, $47.6 million in dividends to our stockholders, and $120 million in repurchases of our common stock.
Our debt balance was approximately $374.2 million, down $16.9 million from December 31, 2024, and cash and cash equivalents totaled $384.1 million, resulting in a net cash position of $9.9 million.
One moment, please while we poll for questions.
Thank you.
Question comes from the line of Dan Moore with CGS Securities. Please proceed.
Our inventory position as of December 31, 2025, was $594.2 million, which was essentially flat compared to December 31, 2024, and includes an approximately $16 million increase from foreign currency translation.
Hi, This is will on for Dan.
Pounds of inventory on hand in North America are down double digits, with a nearly double-digit increase in cost per pound.
Can you talk about the upside and downside cases to your outlook for flat North American housing starts and can you also add some more color to your expectations for Simpson's growth in that environment.
Operations of $155.6 million for the fourth quarter and $458.6 million for the full year of 2025.
Hello, well it is off to you so well as you know the last couple of years housing market forecasts. It started pretty optimistically in the flat to down.
With regard to capital allocation, our strategy remains dually focused on growth and shareholder returns.
So our view just taking into account last year. As an example, we were coming into 2025 I think it was going to be up to two to three percentage points. We think now based off the consensus is going to be down maybe.
In 2025, we invested $161.5 million for capital expenditures, including our investments for facility upgrades and expansions.
Daniel Moore: As previously announced in October, the board authorized a new share repurchase program for 2026 to repurchase up to $150 million worth of our shares through the end of 2026. This reflects our confidence in the long-term prospects of the business and our commitment to returning capital to shareholders. Next, I'll turn to our 2026 financial outlook. Based on business trends and conditions as of today, February 9, our guidance for the full year ending December 31, 2026, is as follows. We expect our consolidated operating margin to be in the range of 19.5% to 20.5%. Additional key assumptions include a slightly lower overall gross margin based on imposed tariffs and increased depreciation costs, an expected $3 to $5 million of footprint optimization costs in Europe, and a projected $10 to $12 million benefit on the sale of vacant land.
Matt Dunn: As previously announced in October, the board authorized a new share repurchase program for 2026 to repurchase up to $150 million worth of our shares through the end of 2026. This reflects our confidence in the long-term prospects of the business and our commitment to returning capital to shareholders. Next, I'll turn to our 2026 financial outlook. Based on business trends and conditions as of today, February 9, our guidance for the full year ending December 31, 2026, is as follows. We expect our consolidated operating margin to be in the range of 19.5% to 20.5%. Additional key assumptions include a slightly lower overall gross margin based on imposed tariffs and increased depreciation costs, an expected $3 to $5 million of footprint optimization costs in Europe, and a projected $10 to $12 million benefit on the sale of vacant land.
$47.6 million in dividends to our stockholders and $120 million in repurchases of our common stock.
Two to three percentage points so Florida.
600 basis points swing.
As a result of that we're really taking a conservative view on the market. This year. So our assumptions are basically flattish.
As previously announced in October, the board authorized a new share repurchase program for 2026 to repurchase up to $150 million worth of our shares through the end of 2026.
And we're going to be pretty careful about how we invest until we really see the market pick up significantly.
This reflects our confidence in the long-term prospects of the business and our commitment to returning capital to shareholders.
Next, I'll turn to our 2026 Financial Outlook.
If you look at how we've done versus the market and this is 2020 is kind of the anchor year. Because 2020 housing starts were roughly the same as 2025.
Based on business trends and conditions as of today, February 9th, our guidance for the full year ending December 31st, 2026, is as follows:
Outpaces the market from a volume perspective by.
By roughly 300 basis points.
We expect our consolidated operating margins to be in the range of 19.5% to 20.5%.
Not always going to be a straight line up well some years, maybe plus or minus a little bit one way or another over the long haul or we hope to consistently see that long term average though.
Additional key assumptions include a slightly lower overall gross margin based on imposed tariffs and increased depreciation costs.
Yeah, well this is Matt and if you look at kind of how that impacts our growth as you asked on the second part of your question.
An expected $3 to $5 million of footprint optimization costs in Europe.
Daniel Moore: Our effective tax rate is estimated to be in the range of 25% to 26%, including both federal and state income tax rates based on current tax laws. Finally, our capital expenditures outlook is expected to be in the range of $75 million to $85 million. In summary, we closed out a strong 2025 despite a challenging market environment, and we continued to execute with discipline across the business. Our pricing actions helped offset tariff-related cost pressures, supporting margin resilience even as we navigated higher input costs. Cost savings initiatives implemented in the fall are beginning to take hold and will drive meaningful efficiencies as we move into 2026. As we look ahead, we remain committed to disciplined capital deployment, supported by our expanded share repurchase authorization and our plan to return at least 35% of free cash flow to shareholders.
Matt Dunn: Our effective tax rate is estimated to be in the range of 25% to 26%, including both federal and state income tax rates based on current tax laws. Finally, our capital expenditures outlook is expected to be in the range of $75 million to $85 million. In summary, we closed out a strong 2025 despite a challenging market environment, and we continued to execute with discipline across the business. Our pricing actions helped offset tariff-related cost pressures, supporting margin resilience even as we navigated higher input costs. Cost savings initiatives implemented in the fall are beginning to take hold and will drive meaningful efficiencies as we move into 2026. As we look ahead, we remain committed to disciplined capital deployment, supported by our expanded share repurchase authorization and our plan to return at least 35% of free cash flow to shareholders.
We expect to continue to outperform the market at some level consistent kind of what Mike was saying historical average knowing it's not always a perfect straight line at the historical average we do have some carryover impact of the pricing that we took in 2025.
And a projected $10 to $12 million benefit on the sale of vacant land.
Our effective tax rate is estimated to be in the range of 25% to 26%, including both federal and state income tax rates based on current tax laws.
Partly through the year and in the middle of our guidance of 19 to 25 is that 20% Mark that we want to be at so we believe we can get to that 20%.
And finally, our capital expenditures outlook is expected to be in the range of $75 million to $85 million.
A flattish market.
And then if there is upside in the market that would provide upside and if housing starts turned out to be down again, obviously create some some risk that we would have to work through but wanted to kind of capture that in our overall guidance.
In summary, we close out a strong 2025 despite a challenging market environment, and we continue to execute with discipline across the business.
Our pricing actions help offset tariff-related cost pressures.
Supporting margin resilience even as we navigated higher input costs.
Okay.
Thank you that's very helpful and just one more in Europe can you add some more color to the outlook for growth entering 2026, and what steps can you take to enhance growth should the overall market remains stagnant.
Cost savings initiatives implemented in the fall are beginning to take hold and will drive meaningful efficiencies as we move into 2026.
So first we're very happy with the progress of the European team has made over the last year, we've seen a meaningful improvement in margin. We believe they're also growing above.
Daniel Moore: With that, I will now turn the call over to the operator to begin the Q&A session.
Matt Dunn: With that, I will now turn the call over to the operator to begin the Q&A session.
As we look ahead, we remain committed to disciplined capital deployment, supported by our expanded share repurchase authorization and our plan to return at least 35% of free cash flow to shareholders.
With that, I will now turn the call over to the operator to begin the Q&A session.
Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Dan Moore with CJS Securities. Please proceed.
Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Dan Moore with CJS Securities. Please proceed.
And our European market and it's a mix based off the countries in this segments that we're operating in.
They've made some good progress.
Indications from a market perspective, let me just the market.
For the European RV.
Our European footprint as roughly low single digits for this year. So we are seeing a little bit of an uptick there in the European strategy really is to focus on the markets. We're in with the products and solutions that we're in.
Thank you. We'll now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment,
It may be necessary to pick up your handset before pressing the star keys.
One moment, please, while we pull up the questions.
And the customers who are currently serving to just basically expand share and continue to roll out new innovations across those markets.
We do that we hope to continue to drive.
Daniel Moore: Hi, this is Will on for Dan. Can you talk about the upside and downside cases to your outlook for flat North American housing starts, and can you also add some more color to your expectations for Simpson's growth in that environment?
[Analyst] (CJS Securities): Hi, this is Will on for Dan. Can you talk about the upside and downside cases to your outlook for flat North American housing starts, and can you also add some more color to your expectations for Simpson's growth in that environment?
Thank you. Our first question comes from the line of Dan Moore with CGS Securities. Please proceed.
Above market growth in Europe as well.
Hi, this is Will on for Dan?
As you know the ambition there is we wanted to get the European business focused.
<unk> ability.
We are targeting 15% in the midterm, we do need a little bit of growth to get us there. So we're being cautious on our investments and over indexing on profitability in Europe.
Mike Olosky: Hello, Will. Good to talk to you. So, Will, as you know, the last couple of years, the housing market forecasts have started pretty optimistically and ended flat to down. So our view, just taking into account last year as an example, we were coming into 2025 thinking it was going to be up 2 to 3 percentage points. We think now, based off the consensus, it's going to be down maybe 2 to 3 percentage points, so 400 to 600 basis points swing. As a result of that, we're really taking a conservative view on the market this year. So our assumptions are basically flat-ish, and we're going to be pretty careful about how we invest until we really see the market pick up significantly.
Mike Olosky: Hello, Will. Good to talk to you. So, Will, as you know, the last couple of years, the housing market forecasts have started pretty optimistically and ended flat to down. So our view, just taking into account last year as an example, we were coming into 2025 thinking it was going to be up 2 to 3 percentage points. We think now, based off the consensus, it's going to be down maybe 2 to 3 percentage points, so 400 to 600 basis points swing. As a result of that, we're really taking a conservative view on the market this year. So our assumptions are basically flat-ish, and we're going to be pretty careful about how we invest until we really see the market pick up significantly.
Can you talk about the upside and downside cases to your outlook for flat North American housing starts, and can you also add some more color to your expectations for Simpson's growth in that environment?
Thank you.
Hello, well, good to talk to you. Um, so, well, as you know, the last couple of years, uh, housing market forecasts have started pretty optimistically and ended, uh, flat to down.
Thank you. Thank you. Our next question comes from the line of Trey Grooms with Stephens. Please proceed.
Hey, it's Trey grooms with Stephens.
Hey, Mike, Mike and Matt how are you.
Um, so our view, just taking into account last year as an example, we were coming into 2025, I think it was going to be up 2 to 3 percentage points. We think now, based off the consensus, it's going to be down maybe 2 to 3 percentage points. So, a 400 to 600 basis points swing.
Hey, how are you doing.
Doing well thanks.
So I wanted to maybe stick with the end market.
Kind of outlook.
Youre kind of talking about flattish on the housing front.
Mike Olosky: If you look at how we've done versus the market, and let's use 2020 as kind of the anchor year because 2020 housing starts were roughly the same as 2025. We've outpaced the market from a volume perspective by roughly 300 basis points. That's not always going to be a straight line up. Will, some years may be plus or minus a little bit one way or another. Over the long haul, though, we hope to consistently beat that long-term average, though.
Mike Olosky: If you look at how we've done versus the market, and let's use 2020 as kind of the anchor year because 2020 housing starts were roughly the same as 2025. We've outpaced the market from a volume perspective by roughly 300 basis points. That's not always going to be a straight line up. Will, some years may be plus or minus a little bit one way or another. Over the long haul, though, we hope to consistently beat that long-term average, though.
As a result of that, we're really taking a conservative view on the market this year. So our assumptions are basically flattish, uh, and we're going to be pretty careful about how we invest until we really see the market pick up significantly.
And sorry, if I missed this but.
Maybe if you could dive into kind of any kind of expectations you have around the commercial side or maybe R&R here in the U S.
If you look at how we've done versus the market—and 2020 is kind of the anchor year, because 2020 housing starts are roughly the same as 2025.
So if you if you look at last year lets start with that and commercial.
Business that we use.
Provider Dodge to help us narrow in the numbers when we look at the commercial starts again relative to our business. We think the market growth was down mid single digits last year.
Matt Dunn: Yeah, Will, this is Matt. And if you look at kind of how that impacts our growth, as you asked on the second part of your question, we expect to continue to outperform the market at some level, consistent with kind of what Mike was saying, historical average, knowing it's not always a perfect straight line at that historical average. We do have some carryover impact of the pricing that we took in 2025, partly through the year. And then the middle of our guidance of 19.5 to 20.5 is that 20% mark that we want to be at. So we believe we can get to that 20% in a flat-ish market. And then if there's upside in the market, that would provide upside.
Matt Dunn: Yeah, Will, this is Matt. And if you look at kind of how that impacts our growth, as you asked on the second part of your question, we expect to continue to outperform the market at some level, consistent with kind of what Mike was saying, historical average, knowing it's not always a perfect straight line at that historical average. We do have some carryover impact of the pricing that we took in 2025, partly through the year. And then the middle of our guidance of 19.5 to 20.5 is that 20% mark that we want to be at. So we believe we can get to that 20% in a flat-ish market. And then if there's upside in the market, that would provide upside.
We've outpaced the market from a volume perspective by roughly 300 basis points. That's not always going to be a straight line up. Some years may be plus or minus a little bit one way or another. Over the long haul though, we hope to consistently beat that long-term average.
Anticipating the market growth of the commercial business to be I believe right around flattish for the year, maybe up one or 2%.
To be determined.
As things develop if you look at national retail for 2025 National retail lease Cleveland research. So that is a big bucket that we're looking at that was up low single digits.
The market forecast for the national retail business on what I've heard from some of the big box retailers as flat to low single digit going forward.
Matt Dunn: If the housing starts turn out to be down again, obviously creates some risk that we would have to work through, but wanted to kind of capture that in our overall guide.
Matt Dunn: If the housing starts turn out to be down again, obviously creates some risk that we would have to work through, but wanted to kind of capture that in our overall guide.
And again, our ambition is overall, we want to grow the company faster than U S housing starts but in each of those individual segments, we want our businesses to outperform those markets as well.
Of 19 and a half to 20 and a half, is that 20% mark that we want to be at? So we believe we can get to that 20% in a flat-ish market, and then if there's upside in the market, that would provide upside. And if the housing starts turning out to be down again, obviously, create some risk that we would have to work through, but wanted to kind of capture that in our overall guide.
Daniel Moore: Thank you. That's very helpful. And just one more. In Europe, can you add some more color to the outlook for growth entering 2026, and what steps can you take to enhance growth should the overall market remain stagnant?
[Analyst] (CJS Securities): Thank you. That's very helpful. And just one more. In Europe, can you add some more color to the outlook for growth entering 2026, and what steps can you take to enhance growth should the overall market remain stagnant?
Yes, yes got it okay.
Thank you for that and then.
Matt maybe if we could dive into your comment earlier on.
Mike Olosky: Yeah. So first, we're very happy with the progress the European team has made over the last year. We've seen a meaningful improvement in margin. We believe they're also growing above the kind of European market, and it's a mix based off the countries and the segments that we're operating in. So they've made some good progress. The indications from a market perspective, let me just do market. For the European, our European footprint is roughly low single digits for this year. So we are seeing a little bit of an uptick there. And the European strategy really is to focus on the markets that we're in with the products and solutions that we're in and the customers that we're currently serving to just basically expand share and continue to roll out new innovations across those markets.
Mike Olosky: Yeah. So first, we're very happy with the progress the European team has made over the last year. We've seen a meaningful improvement in margin. We believe they're also growing above the kind of European market, and it's a mix based off the countries and the segments that we're operating in. So they've made some good progress. The indications from a market perspective, let me just do market. For the European, our European footprint is roughly low single digits for this year. So we are seeing a little bit of an uptick there. And the European strategy really is to focus on the markets that we're in with the products and solutions that we're in and the customers that we're currently serving to just basically expand share and continue to roll out new innovations across those markets.
Thank you, that's very helpful. And just one more in Europe—can you add some more color to the outlook for growth, entering 2026? And what steps can you take to enhance growth, should the overall market remain stagnant?
On the gross margin outlook for 2006 I was expecting.
Maybe a slightly lower gross margin percent and he kind of went through some of the things there, but if he could maybe.
<unk> been a little deeper on the puts and takes.
You mentioned, we're going to see some some.
Kind of carryover pricing benefits I know theres, probably still some.
Negative incremental impact from tariffs tariff costs rolling through.
Those types of things, if maybe you could help us kind of.
Bridge into the gross margin expectation for slightly lower this year.
Sure and we've put a couple of extra slides. This time dray in our in our investor deck that kind of give a bridge or a waterfall on Q4 revenue and then totaled 25 revenue to kind of back up some of the numbers, we're talking here, but let's talk price first so the price increases that we took during 2025 one was effective late Q2.
Mike Olosky: And if we do that, we hope to continue to drive above-market growth in Europe as well. And as you know, Will, the ambition there is we want to get the European business focused on profitability, and we are targeting 15% in the midterm. But we do need a little bit of growth to get us there. So we're being cautious on our investments and over-indexing on profitability in Europe.
Mike Olosky: And if we do that, we hope to continue to drive above-market growth in Europe as well. And as you know, Will, the ambition there is we want to get the European business focused on profitability, and we are targeting 15% in the midterm. But we do need a little bit of growth to get us there. So we're being cautious on our investments and over-indexing on profitability in Europe.
So first, we're very happy with the progress the European team has made over the last year. We've seen a meaningful improvement in margin. We believe they are also growing above the, uh, kind of European market. And it's a mix based off the countries and the segments that we're operating in. So they've made, they've made some good progress, uh, the indications from a market perspective. Let me just do market, uh, for the European. Um, our European footprint is roughly low single digits for this year, so we are seeing a little bit, little bit of an uptick there. And the European strategy really is to focus on the markets we are in with the products and solutions that we're in, um, and the customers we're currently serving to just basically expand share and continue to roll out new innovations across those markets. And if we do that, we hope to continue to drive, uh, above market growth in Europe as well. And as you know, we'll, uh, the ambition that—
Middle or early June and the second was middle of October is when it when it affected quite a bit smaller than the first one on some of our tariff items, but.
We want to get the European business focused on profitability, and we are targeting 15% in the midterm. We do need a little bit of growth to get us there, so we're being cautious on our investments and over-indexing on profitability in Europe.
Daniel Moore: Thank you.
[Analyst] (CJS Securities): Thank you.
$100 million of annualized pricing Youll see in those charts that I referenced that we've realized about $60 million of that during 2025, So an incremental 40.
Thank you.
Mike Olosky: Thank you, Will.
Mike Olosky: Thank you, Will.
Operator: Thank you. Our next question comes from the line of Trey Grooms with Stephens. Please proceed.
Operator: Thank you. Our next question comes from the line of Trey Grooms with Stephens. Please proceed.
Following through and essentially in the first half of 2026.
Trey Grooms: Hey, it's Trey Grooms with Stephens. Hey, Mike and Matt, how are you?
Trey Grooms: Hey, it's Trey Grooms with Stephens. Hey, Mike and Matt, how are you?
Thank you. Well, thank you. Our next question comes from the line of Trey Gross with Stevens. Please proceed.
From a tariff standpoint, we also have about $100 million of annualized tariff costs.
Hey, it's Trey Grooms with Stevens. Uh,
Matt Dunn: Good, Trey.
Matt Dunn: Good, Trey.
Mike Olosky: Good, Trey. How are you doing?
Mike Olosky: Good, Trey. How are you doing?
Hey Mike. Uh, Mike and Matt, how are you?
Trey Grooms: Doing well, thanks. So I wanted to maybe stick with the in-market kind of outlook. You're kind of talking about flat-ish on the housing front. And sorry if I missed this, but maybe if you could dive into kind of any kind of expectations you have around the commercial side or maybe R&R here in the US.
Trey Grooms: Doing well, thanks. So I wanted to maybe stick with the in-market kind of outlook. You're kind of talking about flat-ish on the housing front. And sorry if I missed this, but maybe if you could dive into kind of any kind of expectations you have around the commercial side or maybe R&R here in the US.
Those map.
Good. Great. Trey, how are you doing?
<unk>, a little bit differently, when you look at them across fiscal years.
Because the tariffs didn't start until kind of partway through the year and then we also had inventory to cover us for a little bit at the beginning there and now what you are seeing as we kind of exit Q4 into Q1 is that essentially all of the products that are on its way out our doors are fully tariff and so you have the dynamic at the end of the day on the <unk>.
Doing well thanks. Um, so I wanted to maybe stick with the in Market. Uh, kind of Outlook. You know you're you're kind of talking about flattish on the housing front. Um and sorry if I missed this but um maybe if you could dive into, you know, kind of any kind of expectations you have around the commercial side or maybe RNR here uh in the US.
Annualized basis about $100 million in pricing and $100 million in tariff related cost increases, which create some gross margin erosion in and of itself just being the same absolute dollars and then.
Mike Olosky: Yeah. So if you look at last year, let's start with that. The commercial business, and we use a provider, Dodge, to help us narrow the numbers. When we look at the commercial starts, again, relative to our business, we think the market growth was down mid-single digits last year. We're anticipating the market growth for the commercial business to be, I believe, right around flat-ish for the year, maybe up 1 or 2%, to be determined as things develop. If you look at national retail for 2025, national retail, when we use Cleveland Research Company, so that is a big bucket that we're looking at that was up low single digits. The market forecast for the national retail business and what I've heard from some of the big-box retailers is flat to low single digit going forward.
Mike Olosky: Yeah. So if you look at last year, let's start with that. The commercial business, and we use a provider, Dodge, to help us narrow the numbers. When we look at the commercial starts, again, relative to our business, we think the market growth was down mid-single digits last year. We're anticipating the market growth for the commercial business to be, I believe, right around flat-ish for the year, maybe up 1 or 2%, to be determined as things develop. If you look at national retail for 2025, national retail, when we use Cleveland Research Company, so that is a big bucket that we're looking at that was up low single digits. The market forecast for the national retail business and what I've heard from some of the big-box retailers is flat to low single digit going forward.
From a timing standpoint, a little bit more favorable than <unk> 25, a little bit less of that favorability in 'twenty six because of the mix between those two buckets shifts a little bit so put that with.
Yes.
Little bit of increased depreciation from our new facilities certainly there was some cost offsets by getting into new those new facilities. So that's not a huge driver necessarily it's really a tariff story, but expecting that gross margin to be down a little bit in 2026.
And so, if you, if you look at uh, last year, let's start with that the commercial, um, business and we use uh, um, a provider Dodge to help us narrow the numbers, when we look at the commercial starts, again, relative to our business, we think the market growth was down mid single digits. Uh, last year, uh, we're anticipating the market growth, for the commercial business to be. I believe, right around 4,
That's assuming no more incremental tariffs and not planning any further price increases, but that's all included kind of in our overall guide of getting to that 20% is kind of the midpoint of our operating income guidance.
Mike Olosky: And again, our ambition is overall, we want to grow the company faster than US housing starts, but in each of those individual segments, we want our businesses to outperform those markets as well.
Mike Olosky: And again, our ambition is overall, we want to grow the company faster than US housing starts, but in each of those individual segments, we want our businesses to outperform those markets as well.
Yeah got it okay. Thank you for that was super helpful going through the detail and I guess.
I mean, the the outlook.
Outlook for the EBIT margin kind of getting into that our operating income margin.
Trey Grooms: Yep. Yep. Got it. Okay. Thank you for that. And then, Matt, maybe if we could dive into your comment earlier on the gross margin outlook for 2026, expecting maybe a slightly lower gross margin percent. And you kind of went through some of the things there, but if you could maybe dive in a little deeper on the puts and takes. You mentioned we're going to see some kind of carryover pricing benefits. I know there's probably still some negative incremental impacts from tariff costs rolling through, those types of things, if maybe you could help us kind of bridge into the gross margin expectation for slightly lower this year.
Trey Grooms: Yep. Yep. Got it. Okay. Thank you for that. And then, Matt, maybe if we could dive into your comment earlier on the gross margin outlook for 2026, expecting maybe a slightly lower gross margin percent. And you kind of went through some of the things there, but if you could maybe dive in a little deeper on the puts and takes. You mentioned we're going to see some kind of carryover pricing benefits. I know there's probably still some negative incremental impacts from tariff costs rolling through, those types of things, if maybe you could help us kind of bridge into the gross margin expectation for slightly lower this year.
For the year, maybe up 1 or 2%, um, to be determined, um, you know, as things develop, if you look at national retail for 2025 National Retail, um, when we use Cleveland research. So that is a, a big bucket, uh, that we're looking at. That was up low single digits. Uh, the market forecast for the national retail business. And what I've heard from some of the big box retailers is is flat to low single digit, going forward. And again, our our ambition is overall, we want to grow the company faster than us, housing starts, but in each of those individual segments, we want our businesses to outperform those markets as well.
Getting to that 20% range at your midpoint as you mentioned.
It sounds like there is.
The SG&A.
Youre going to see some some some leverage there I guess kind of benefiting from some of the cost outs and some things like that is that the right way to to kind of forecast or model in the SG&A.
Yes, absolutely.
We've referenced the cost savings initiatives work that we started earlier this year or sorry in 2025. During late Q3 early Q4, we saw a little bit of savings from that in Q4, but it was more than offset by the cost of it from a severance and restructuring standpoint, we're expecting absolute operating expense dollars to be down.
In fiscal 2026.
I don't know if we size it but in the $10 million to $15 million range in absolute versus the 2025 endpoint. So certainly going to get some leverage there as a as a percentage of net sales.
Matt Dunn: Sure. We've put a couple extra slides this time, Trey, in our investor deck to kind of give a bridge or a waterfall on Q4 revenue and then total 2025 revenue to kind of back up some of the numbers we're talking here. But let's talk price first. So the price increases that we took during 2025, one was effective late Q2, kind of middle or early June, and then the second was middle of October is when it went in effective. I know it was quite a bit smaller than the first one on some of our tariffed items. But $100 million of annualized pricing, you'll see in those charts that I referenced that we've realized about $60 million of that during 2025, so an incremental 40 flowing through essentially in the first half of 2026.
Matt Dunn: Sure. We've put a couple extra slides this time, Trey, in our investor deck to kind of give a bridge or a waterfall on Q4 revenue and then total 2025 revenue to kind of back up some of the numbers we're talking here. But let's talk price first. So the price increases that we took during 2025, one was effective late Q2, kind of middle or early June, and then the second was middle of October is when it went in effective. I know it was quite a bit smaller than the first one on some of our tariffed items. But $100 million of annualized pricing, you'll see in those charts that I referenced that we've realized about $60 million of that during 2025, so an incremental 40 flowing through essentially in the first half of 2026.
Yep. Yep. Yep, got it. Okay. Um, thank you for that and then uh Matt maybe if we could dive into your comment earlier on uh, on the gross margin outlook for 26, you know, expecting, uh, maybe a slightly lower gross, margin percent and and he kind of went through some of the things there. But if you could maybe, um, dive in a little deeper on the puts and takes, you know, you you mentioned we're going to see some some, uh, kind of carryover pricing benefits. I know, there's probably still some, uh, you know, negative incremental, impacts from ter, tariff costs rolling through uh, those types of things. If, if, maybe you could help us, kind of, um, you know, Bridge into the, the gross margin expectation for slightly lower this year.
Got it thanks again for taking my questions Greg.
Australia is yes, sorry go ahead, Mike sorry.
Yes.
Remember that includes some FX impact that we are also seeing and yes that includes about $5 million expected FX hurt in opex in 'twenty six so even with that kind of down 10% to $15 million, which do you think about it we size that $30 million cost savings up our savings from the cost savings initiatives that we took on we got a little bit of savings in Q4.
Majority of it is already kind of starting in 2026, a few offsets exchange rate certainly.
As well as there are other inflationary costs to go up from a benefit standpoint things, but even with all of that expecting.
Matt Dunn: From a tariff standpoint, we also have about $100 million of annualized tariff costs. Those map a little bit differently when you look at them across fiscal years because the tariffs didn't start until kind of partway through the year. Then we also had inventory to cover us for a little bit at the beginning there. Now what you're seeing as we kind of exit Q4 into Q1 is that essentially all the products that are on its way out, our doors, are fully tariffed. So you have the dynamic of, at the end of the day, on an annualized basis, about $100 million in pricing and $100 million in tariff-related cost increase, which creates some gross margin erosion in and of itself, just being the same absolute dollars.
Matt Dunn: From a tariff standpoint, we also have about $100 million of annualized tariff costs. Those map a little bit differently when you look at them across fiscal years because the tariffs didn't start until kind of partway through the year. Then we also had inventory to cover us for a little bit at the beginning there. Now what you're seeing as we kind of exit Q4 into Q1 is that essentially all the products that are on its way out, our doors, are fully tariffed. So you have the dynamic of, at the end of the day, on an annualized basis, about $100 million in pricing and $100 million in tariff-related cost increase, which creates some gross margin erosion in and of itself, just being the same absolute dollars.
I know it was quite a bit smaller than the first one on some of our tariff items, but, uh, $100 million of annualized pricing. You'll see in those charts that I referenced that we've realized about $60 million of that during 2025. So an incremental $40 million, uh, flowing through and, you know, essentially in the first half of 2026.
Total opex would be down 10% to $15 million versus 225 midpoint on dollars.
Perfect. Thanks, so much for the excellent color best of luck. Thank you guys. Thanks, Greg Thanks, Greg.
Yeah.
Thank you. Our next question comes from the line of Tim Weiss with Baird. Please proceed.
Hey, guys. Good afternoon, thanks for the time.
Yes.
Hey, I guess one of the things you Havent mentioned, Matt is steel.
And it has kind of perked up there recently, so I guess is that just something youre pretty comfortable with.
Matt Dunn: Then from a timing standpoint, a little bit more favorable in 2025, a little bit less of that favorability in 2026 because the mix between those two buckets shifts a little bit. Put that with a little bit of increased depreciation from our new facilities. Certainly, there were some cost offsets by getting into those new facilities, so that's not a huge driver necessarily. It's really a tariff story. Expecting that gross margin to be down a little bit in 2026, and that's assuming no more incremental tariffs and not planning any further price increases. That's all included kind of in our overall guide of getting to that 20%. That's kind of the midpoint of our operating income guide.
Matt Dunn: Then from a timing standpoint, a little bit more favorable in 2025, a little bit less of that favorability in 2026 because the mix between those two buckets shifts a little bit. Put that with a little bit of increased depreciation from our new facilities. Certainly, there were some cost offsets by getting into those new facilities, so that's not a huge driver necessarily. It's really a tariff story. Expecting that gross margin to be down a little bit in 2026, and that's assuming no more incremental tariffs and not planning any further price increases. That's all included kind of in our overall guide of getting to that 20%. That's kind of the midpoint of our operating income guide.
This year, just given kind of the inventory timing and those types of things that I guess, how do we think about steel kind of in the gross margin bridge this year relative to them.
Tim Let me, let me say remember, we're buying 150 plus different flavors, so theres not a direct correlation that some of the stuff that you see in the market and I'm going to also use our spot buys.
From a tariff standpoint. We also have about a hundred million dollars of annualized tariff costs, um, and those, uh, map, a little bit differently when you look at them across fiscal years, uh, because the tariffs didn't start until kind of partway through the year. And then we also had inventory uh, to cover us for a little bit at the beginning there. And and now what you're seeing is we kind of exit Q4 into q1 is that, you know, essentially, all the products that are on its way out, our doors are are fully tariff. And so, you have the dynamic of, at the end of the day, on an annualized basis, about a hundred million dollars in pricing and a hundred million dollars in tariff related cost increase, which creates some gross margin, you know, erosion in and of itself just being the same absolute dollars and then, um, you know, from a timing standpoint a little bit more favorable than 25 a little bit less of that favorability in 26, because the mix between those 2 buckets, shifts a little bit. So put that with um, you know, a little bit of increase depreciation from our from our new facilities. Certainly there was some cost off.
So we're not on a contracted.
We see some of the big swings that you may be seeing.
And the latest market data and.
And Tim I would say, we're comfortable kind of where we're at and what we're seeing in steel prices with kind of what we've been included in the guide as you know we we do these spot buys and we tend to.
Trey Grooms: Yep. Got it. Okay. Thank you for that. That was super helpful going through the detail. And I guess since the, I mean, the outlook for the EBIT margin, kind of getting into that or operating income margin, kind of getting to that 20% range at your midpoint, as you mentioned, sounds like there's the SG&A; you're going to see some leverage there, I guess, kind of benefiting from some of the cost outs and some things like that. Is that the right way to kind of forecast or model in the SG&A?
Trey Grooms: Yep. Got it. Okay. Thank you for that. That was super helpful going through the detail. And I guess since the, I mean, the outlook for the EBIT margin, kind of getting into that or operating income margin, kind of getting to that 20% range at your midpoint, as you mentioned, sounds like there's the SG&A; you're going to see some leverage there, I guess, kind of benefiting from some of the cost outs and some things like that. Is that the right way to kind of forecast or model in the SG&A?
Process by getting into new, those new facilities. So that's not a huge driver necessarily. It's really a, a tariff story but expecting that gross margin to be down a little bit in in 2026. And um, you know, that's assuming no more incremental tariffs and, and not planting any further price increases. Um, but that's all included, kind of in our overall guide of of getting to that 20%, that's kind of the midpoint of our operating income guide.
At least a few months out ahead in terms of having steel coverage in inventory or at least.
Sitting at the processor is ready to go so.
Not expecting any impact on our gross margin based on what we know now I mean, obviously steel changed significantly we'd have to revisit kind of the pricing equation, but what we're seeing now not expecting to have to do that in 2006.
Yep. Got it. Okay, thank you for that. That was super helpful, um, going through the details. And I guess, you know, since the—I mean, the outlook for the EBIT margin, you know, kind of getting into that, or operating income margin.
Okay. Okay. That's helpful. And then I guess as you guys think about the market in 2016, I know you use.
Third party forecast, but as Youre, starting to talk to your customers and how they are starting to prepare for 2026 is that forecast kind of merging with their expectations as you're getting you've kind of gone through the last three to four months.
Matt Dunn: Yeah, absolutely. We've referenced the cost savings initiative work that we started earlier this year or sorry, in 2025 during late Q3, early Q4. We saw a little bit of savings from that in Q4, but it was more than offset by the cost of it from a severance and restructuring standpoint. We're expecting absolute operating expense dollars to be down in fiscal 2026. I don't know if we've sized it, but in the $10 to 15 million range in absolute versus the 2025 endpoint. So certainly going to get some leverage there as a percentage of net sales.
Matt Dunn: Yeah, absolutely. We've referenced the cost savings initiative work that we started earlier this year or sorry, in 2025 during late Q3, early Q4. We saw a little bit of savings from that in Q4, but it was more than offset by the cost of it from a severance and restructuring standpoint. We're expecting absolute operating expense dollars to be down in fiscal 2026. I don't know if we've sized it, but in the $10 to 15 million range in absolute versus the 2025 endpoint. So certainly going to get some leverage there as a percentage of net sales.
Kind of getting to that 20% range at your midpoint. As you mentioned, uh, sounds like there's, uh, you know, the SG&A, uh, like you're going to see some, some, you know, some leverage there, I guess, kind of benefiting from some of the cost-outs and some things like that. Is that the right way to kind of, uh, forecast or, or model in the SG&A?
Yes, it is but I would say Tim as you know we have a very very fragmented and customer base.
So we're talking with a lot of the bigger builders were seeing their numbers.
We do core multifamily and we do some take off work and some engineering work and from a multifamily perspective pretty much everywhere, but the south we're seeing things are pretty busy we're especially optimistic on the western part of the U S, where we're seeing some of our partners and customers actually hire people and seeing them at pretty full workload. So.
Yeah, absolutely. Uh, you know, we've referenced the, the cost savings initiative work that we we started earlier this year or sorry in, uh, in 2025 during late Q3 or early Q4. Um, we saw a little bit of savings from that in Q4, but it was more than offset by the cost of it from a severance and uh, restructuring standpoint. We're expecting absolute operating expenses to be down, um, in fiscal 2026. Uh, I don't know if we sized it, but in the 10 to 15 million dollar range in absolute versus the 2025 endpoint. So
Trey Grooms: Got it. Thanks again for taking my question.
Trey Grooms: Got it. Thanks again for taking my question.
Certainly going to get some leverage there as a percentage of net sales.
Mike Olosky: Trey?
Mike Olosky: Trey?
Trey Grooms: Oh, Trey, is your question? Yeah, sorry. Go ahead, Mike. Sorry.
Trey Grooms: Oh, Trey, is your question? Yeah, sorry. Go ahead, Mike. Sorry.
Mike Olosky: Yeah, remember, that includes some FX impact that we are also seeing in Europe.
Mike Olosky: Yeah, remember, that includes some FX impact that we are also seeing in Europe.
Got it. Thanks again for taking my question. Yes, sorry. Go ahead, Mike. Sorry.
Matt Dunn: Yeah, that includes about a $5 million expected FX hurt in OpEx in 2026. So even with that, kind of down $10 to 15 million, which if you think about it, we sized that $30 million of cost savings up or savings from the cost savings initiatives that we took on. We got a little bit of the savings in Q4. Majority of it is already kind of starting in 2026, a few offsets, exchange rates, certainly, as well as the other inflationary costs that go up from a benefit standpoint and things. But even with all of that, expecting total OpEx to be down $10 to 15 million dollars versus 2025's endpoint on dollars.
Matt Dunn: Yeah, that includes about a $5 million expected FX hurt in OpEx in 2026. So even with that, kind of down $10 to 15 million, which if you think about it, we sized that $30 million of cost savings up or savings from the cost savings initiatives that we took on. We got a little bit of the savings in Q4. Majority of it is already kind of starting in 2026, a few offsets, exchange rates, certainly, as well as the other inflationary costs that go up from a benefit standpoint and things. But even with all of that, expecting total OpEx to be down $10 to 15 million dollars versus 2025's endpoint on dollars.
That's good news, but we added all up we don't really get.
Significantly detailed forecast across all of our markets from our customers. So we're just going with the assumption that we get from Amazon to who is a leading provider in there because they provide regional data. We're also working with another firm that can give us some local data and we're just going to be conservative on our forecast until we see an extended pickup.
Okay and then the fact that you called out the regional variance is that is that just you guys, stating.
The data point that you guys have more content in the south and the west is it just as simple as that or is there an expectation that that.
Trey Grooms: Perfect. Thanks so much for the excellent color. Best of luck. Thank you.
Trey Grooms: Perfect. Thanks so much for the excellent color. Best of luck. Thank you.
Yeah, that remember that includes some FX impact that we are also seeing in your yeah. That includes about a million dollar expected FX heard in Opex in 26. So even with that kind of down 10 to 15 million, which if you think about it, we size that million dollar cost savings or savings from the, the cost savings initiatives that we took on. We got a little bit of the Savings in Q4 majority of it is already kind of starting in 2026. A few offsets exchange rate. Certainly um, as well as the other, you know, inflationary costs that go up from a, you know, benefit standpoint and things. But even with all of that expecting um total off effects to be down 10 to 15 million dollars versus 2025 10 point on dollars,
Matt Dunn: Okay. Thanks, Trey.
Matt Dunn: Okay. Thanks, Trey.
Performance by region, changing changing significantly versus kind of what we're seeing today.
Mike Olosky: Thanks, Trey.
Mike Olosky: Thanks, Trey.
Perfect. Thanks so much for the, uh, excellent color. Best of luck. Thank you.
Thanks. Thanks. Thanks.
Operator: Thank you. Our next question comes from the line of Tim Wojs with Baird. Please proceed.
Operator: Thank you. Our next question comes from the line of Tim Wojs with Baird. Please proceed.
So.
The driver behind that and if you look at two markets in particular, Tim The California, Florida markets over the last couple of years have been balanced significantly.
Tim Wojs: Hey, guys. Good afternoon. Thanks for the time.
Tim Wojs: Hey, guys. Good afternoon. Thanks for the time.
Thank you. Our next question comes from the line of Tim, wife with beard. Please proceed.
Matt Dunn: Hey, Tim.
Matt Dunn: Hey, Tim.
Mike Olosky: Hello, Tim.
Mike Olosky: Hello, Tim.
Hey guys, good afternoon. Uh, thanks for the time.
Tim Wojs: Hey. I guess one of the things you haven't mentioned, Matt, is steel. It has kind of perked up here recently. So I guess, is that just something you're pretty comfortable with this year, just given kind of the inventory timing and those types of things? Or I guess how do we think about steel kind of in the gross margin bridge this year relative to what's in there?
Tim Wojs: Hey. I guess one of the things you haven't mentioned, Matt, is steel. It has kind of perked up here recently. So I guess, is that just something you're pretty comfortable with this year, just given kind of the inventory timing and those types of things? Or I guess how do we think about steel kind of in the gross margin bridge this year relative to what's in there?
We believe we've got probably 10 X the content in those houses that we would've had something in the middle of the U S.
And when those market slowdown appreciated significantly.
Significantly that gives us a pretty big headwind, we have not really seen.
Change in that mix story, yet at this point.
We're assuming that's not going to change at least in the short term and that's all part of it.
How we are thinking about the market going forward with the assumption that is going to be roughly flat, yes, I think Dan to answer your question a little further Tim I mean, we are not implying any difference in our share performance of markets. It's more of the mix impact of those states being where we have.
Mike Olosky: Tim, let me start. Remember, we're buying 150+ different flavors, so there's not a direct correlation to some of the stuff that you see in the market. And we also use spot buys. So we're not on a contract that typically sees some of the big swings that you maybe see in the latest market data.
Mike Olosky: Tim, let me start. Remember, we're buying 150+ different flavors, so there's not a direct correlation to some of the stuff that you see in the market. And we also use spot buys. So we're not on a contract that typically sees some of the big swings that you maybe see in the latest market data.
More exposure based on the content per home.
Okay, Yes, I completely understand okay awesome. Thank you guys.
Matt Dunn: Yeah. And then, Tim, I'd say we're comfortable kind of where we're at and what we're seeing in steel prices with kind of what we've included in the guide. As you know, we do these spot buys, and we tend to get at least a few months out ahead in terms of having steel coverage and inventory or at least sitting at the processors ready to go. So not expecting any impact on our gross margin based on what we know now. I mean, obviously, if steel changed significantly, we'd have to revisit kind of the pricing equation. But what we're seeing now, not expecting to have to do that in 2026.
Matt Dunn: Yeah. And then, Tim, I'd say we're comfortable kind of where we're at and what we're seeing in steel prices with kind of what we've included in the guide. As you know, we do these spot buys, and we tend to get at least a few months out ahead in terms of having steel coverage and inventory or at least sitting at the processors ready to go. So not expecting any impact on our gross margin based on what we know now. I mean, obviously, if steel changed significantly, we'd have to revisit kind of the pricing equation. But what we're seeing now, not expecting to have to do that in 2026.
Alright, Thanks, Tim.
Thank you. Our next question comes from the line of Kurt Yinger with D. A Davidson. Please proceed.
Great Thanks, and good afternoon.
Hey, Curt appreciate the <unk>.
Ridge in the presentation I guess by my math, it might imply North America volumes down maybe mid single digits, 5% in Q4, I guess as you think about the shape of 2026 and our flat housing starts here. It seems like we still have a gap at least through the first half.
Tim Wojs: Okay. Okay. That's helpful. And then I guess as you guys think about the market in 2026 and I know you use kind of third-party forecasts, but as you're starting to talk to your customers and how they're starting to prepare for 2026, is that forecast kind of merging with their expectations as you've kind of gone through the last three to four months?
Tim Wojs: Okay. Okay. That's helpful. And then I guess as you guys think about the market in 2026 and I know you use kind of third-party forecasts, but as you're starting to talk to your customers and how they're starting to prepare for 2026, is that forecast kind of merging with their expectations as you've kind of gone through the last three to four months?
We do the spot buys. And we tend to, uh, you know, get at least a few months out ahead in terms of, um, having steel coverage and inventory, or at least, uh, you know, sitting at the processors, ready to go. So, uh, not expecting any impact on our gross margin based on what we know now. I mean, obviously if steel changed significantly, we'd have to revisit, uh, kind of the pricing equation. But what we're seeing now, not expecting to have to do that in '26.
Do you expect.
That Q4 performance is sort of indicative of how we should be thinking about the first half of the year and then some improvements in the back half any color there would be great.
Yeah, Kurt as you know, it's a little lumpy. So we try not to do a quarter on quarter comparison, we tried to do that Trey.
Okay. Okay, that's helpful. And then I guess as you guys think about the market in in 2016 and I I know you use kind of third-party forecasts, but as you're starting to talk to your customers and how they're starting to prepare for 2026 is is that forecast kind of merging with their expectations as you you you've kind of gone through the last 3 to 4 months.
Trailing 12 month story and again the census data is not available all the way through the end of the year, but everything we've heard from our customers and all of the people that are doing the forecast volume is going to be down housing starts volume market now just to be specific going to be down probably two or 3% from year over year best guess.
Mike Olosky: Yes, it is. But I would say, Tim, as you know, we have a very, very fragmented end customer base. So we're talking with a lot of the bigger builders. We're seeing their numbers. We do quote multifamily, and we do some takeoff work and some engineering work. And from a multifamily perspective, pretty much everywhere but the South, we're seeing things are pretty busy. We're especially optimistic on the Western part of the US where we're seeing some of our partners and customers actually hire people and seeing them get pretty full workloads. So that's good news. But we add it all up. We don't really get significantly detailed forecasts across all of our markets from our customers. So we're just going with the assumption that we get from Zonda, who's our leading provider in there because they provide regional data.
Mike Olosky: Yes, it is. But I would say, Tim, as you know, we have a very, very fragmented end customer base. So we're talking with a lot of the bigger builders. We're seeing their numbers. We do quote multifamily, and we do some takeoff work and some engineering work. And from a multifamily perspective, pretty much everywhere but the South, we're seeing things are pretty busy. We're especially optimistic on the Western part of the US where we're seeing some of our partners and customers actually hire people and seeing them get pretty full workloads. So that's good news. But we add it all up. We don't really get significantly detailed forecasts across all of our markets from our customers. So we're just going with the assumption that we get from Zonda, who's our leading provider in there because they provide regional data.
<unk>.
Our total company volume down.
Yes, um, it is. But I would say, Tim as you know, we go, we have a very, very fragmented, uh, End customer base. So we're talking with a lot of the bigger Builders we're seeing their numbers. Uh, we do quote multifamily and we do some take off work and some engineering work. And from a multi-family perspective, pretty much everywhere, but the South
Roughly one.
1% per year U S a little bit lower than that.
But all told we continue to believe that we can drive good above market volume growth.
Not every year is going to be perfectly straight up there are some puts and takes but we tend to believe that we've got a good plan going forward to continue the long term average.
Okay. Okay. I appreciate that I guess, if I, just think about kind of the.
Mike Olosky: We're also working with another firm that can give us some local data, and we're just going to be conservative on the forecast until we see an extended pickup.
Mike Olosky: We're also working with another firm that can give us some local data, and we're just going to be conservative on the forecast until we see an extended pickup.
Trend in volume performance kind of through year end.
Tim Wojs: Okay. And then the fact that you called out the regional variance, is that just you guys stating the data point that you guys have more content in the South than the West, is it just that, as simple as that? Or is there an expectation that that performance by region changes significantly versus kind of what we're seeing today?
Tim Wojs: Okay. And then the fact that you called out the regional variance, is that just you guys stating the data point that you guys have more content in the South than the West, is it just that, as simple as that? Or is there an expectation that that performance by region changes significantly versus kind of what we're seeing today?
Where we will kind of start the year.
We're seeing things are pretty busy. We're especially optimistic on the western part of the US, where we're seeing some of our partners and customers actually hire people and seeing them at pretty full workloads. So that's good news. But, you know, we add it all up, we don't really get significantly detailed forecasts across all of our markets from our customers. So we're just going with the assumption that I gave you from Zonda, who's our leading provider in there because they provide regional data. We're also working with another firm that can give us some local data, and we're just going to be conservative on the forecast until we see an extended pickup.
Is there anything that youre seeing or hearing that would suggest we see any meaningful inflection of the near term or little bit of softness kind of lingering to start in 2026, Yes, I would just say if you watch the weather forecast and the weather news I think from an overall market.
Okay. And then the the fact that you called out the regional variance, is that, is that just you guys stating the, the, you know, the the data point that you guys have more content in the South and the West is, is it just that as simple as that or is, is there an expectation that that that
Mike Olosky: No. So the driver behind that is, and if you look at two markets in particular, Tim, the California and the Florida markets over the last couple of years have been down significantly. We believe we've got probably 10X the content in those houses that we would in something in the middle of the US. So when those markets slow down appreciably significantly, that gets a pretty big headwind. We have not really seen any change in that mixed story yet at this point. And we're assuming that's not going to change, at least in the short term. And that's all part of how we're thinking about the market going forward with the assumption it's going to be roughly flat.
Mike Olosky: No. So the driver behind that is, and if you look at two markets in particular, Tim, the California and the Florida markets over the last couple of years have been down significantly. We believe we've got probably 10X the content in those houses that we would in something in the middle of the US. So when those markets slow down appreciably significantly, that gets a pretty big headwind. We have not really seen any change in that mixed story yet at this point. And we're assuming that's not going to change, at least in the short term. And that's all part of how we're thinking about the market going forward with the assumption it's going to be roughly flat.
Performance by region—should it change, it changes significantly versus kind of what we're seeing today.
That probably didn't help it but we're not it's too early in the year Kurt to comment on it one way or another.
Okay I appreciate that.
Just on the $30 million cost reduction did any of that sort.
Now, so, um, the driver behind that— and if you look at two markets in particular, Tim, the California and the Florida markets over the last couple years have been balanced significantly.
Head and prove beneficial in Q4 or is that.
First of all a tailwind as we think about 2026 operating expenses.
Yes.
The 30, a little bit so if you take that $30 million roughly two thirds of it is in you would see the benefit that you will see the benefit in Opex and roughly a third of it youll see it in cost of goods.
You know, we believe we've got probably 10x the content in those houses that we would in something in the middle of the U.S. So, when those markets slow down and appreciate, you know, significantly, that gets to be a pretty big headwind. We have not really seen any change in that mix story yet at this point, and we're assuming that's not going to change—at least in the short term—and that's
Matt Dunn: Yeah. I think to answer your question a little further, Tim, I mean, we are not implying any difference in our share performance in those markets. It's more the mixed impact of those states being where we have more exposure based on the content per home.
Matt Dunn: Yeah. I think to answer your question a little further, Tim, I mean, we are not implying any difference in our share performance in those markets. It's more the mixed impact of those states being where we have more exposure based on the content per home.
Behind some kind of non manufacturing of choices that we made.
Did see.
A little bit of help in Q4.
Because a lot of the actions that we took were.
Tim Wojs: Okay. Yeah, I completely understand. Okay. Awesome. Thank you, guys.
Tim Wojs: Okay. Yeah, I completely understand. Okay. Awesome. Thank you, guys.
Right at the start of Q4 or even late Q3, but that was offset by the onetime cost for the most part so it's pretty neutral in terms of the P&L impact in Q4, and then we're going to get the incremental savings in 2026 above what we saw in Q4 and then obviously we don't have.
Part of, uh, you know, how we're thinking about the market going forward is with the assumption that it's going to be roughly flat. Yeah. And I think, to answer your question a little further, Tim—I mean, we are not implying any difference in our share performance in the markets. It's more the mixed impact of those states being, you know, where we have more exposure based on the content per home.
Matt Dunn: All right. Thanks, Tim.
Matt Dunn: All right. Thanks, Tim.
Okay. Yeah, I completely understand. Okay, awesome. Thank you, guys.
Operator: Thank you. Our next question comes from the line of Kurt Enger with D.A. Davidson. Please proceed.
Operator: Thank you. Our next question comes from the line of Kurt Enger with D.A. Davidson. Please proceed.
All right, thanks.
Kurt Yinger: Great. Thanks, and good afternoon.
Kurt Yinger: Great. Thanks, and good afternoon.
Thank you. Our next question comes from the line of Current Year with D.A. Davidson. Please proceed.
Matt Dunn: Hey, Kurt.
Matt Dunn: Hey, Kurt.
Kurt Yinger: Appreciate the bridge in the presentation. I guess by my math, it might imply North America volumes down maybe mid-single digits, 5% in Q4. I guess as you think about the shape of 2026 and the flat housing starts here, it seems like we still have a gap, at least through the first half. Do you expect that Q4 performance is sort of indicative of how we should be thinking about the first half of the year and then some improvements in the back half? Any color there would be great.
Kurt Yinger: Appreciate the bridge in the presentation. I guess by my math, it might imply North America volumes down maybe mid-single digits, 5% in Q4. I guess as you think about the shape of 2026 and the flat housing starts here, it seems like we still have a gap, at least through the first half. Do you expect that Q4 performance is sort of indicative of how we should be thinking about the first half of the year and then some improvements in the back half? Any color there would be great.
At the same amount of onetime cost or restructuring costs in 'twenty six although we did call out a little bit that we're going to have due to some.
European footprint optimization. So I think the net net of that is kind of what I was saying earlier I think to <unk> question.
We expect absolute opex.
To be down 15% to $20 million versus where they were where they ended 2025 and that includes $5 million of exchange are things, we're having to eat on other things that are going up in cost in terms of benefits in workhorse and things so I'm expecting to see those flow through pretty regularly throughout 'twenty six because the.
Great. Thanks and good afternoon. Um hey Kirk appreciate the the bridge in the presentation. I I guess by my map. It it might imply North America volumes down maybe mid single digits 5%. In Q4, I guess is, is you think about the shape of 2026 and the flat housing starts? Here, it seems like, we still have a gap at at least through the first half. Um, do you expect
Mike Olosky: Kurt, as you know, it's a little lumpy. So we try not to do a quarter-on-quarter comparison. We try to do that trailing 12-month story. And again, the census data is not available all the way through the end of the year, but everything we've heard from our customers and all the people that are doing the forecast, volume's going to be down. Housing starts volume, market now, just to be specific, going to be down probably 2% or 3% for the year, will be our best guess. As you saw, total company volume down roughly 1% for the year, US a little bit lower than that. But all told, we continue to believe that we can drive good above-market volume growth. Not every year is going to be perfectly straight up.
Mike Olosky: Kurt, as you know, it's a little lumpy. So we try not to do a quarter-on-quarter comparison. We try to do that trailing 12-month story. And again, the census data is not available all the way through the end of the year, but everything we've heard from our customers and all the people that are doing the forecast, volume's going to be down. Housing starts volume, market now, just to be specific, going to be down probably 2% or 3% for the year, will be our best guess. As you saw, total company volume down roughly 1% for the year, US a little bit lower than that. But all told, we continue to believe that we can drive good above-market volume growth. Not every year is going to be perfectly straight up.
That Q4 performance is sort of indicative of how we should be thinking about the first half of the year, and then some improvements in the back half. Any color there would be great.
The choices and the actions that we've taken are essentially already done so we're starting to realize those benefits.
Got it okay. Thanks for that Matt and lastly.
At the outset of the call you had kind of referenced.
Software and services and that adding an element to the bridge I guess.
At Kurt, as you know, it's, it's a little lumpy. So we try not to do a quarter on quarter comparison. We try to do that, uh, trailing 12 months story. And again, the Census Data is not available all the way through the end of the year, but everything we've heard from our customers and all the people that are doing, the forecast volume is going to be down.
Can you maybe provide a little bit more color, there and talk about any ways.
In which youre, maybe incrementally monetizing those as we kind of look into 2026.
Yes, I'll take the first part and then Mike chime in if you if you want to but.
As you know Kurt the way we used to.
Report volumes pounds shipped basis, which is really only on things that can be measured in pounds and that was really only applicable for our North America business. So didn't include things like equipment, where we've made acquisitions and investments and a big part of our go forward growth story and component manufacturing as well as software and services. So I feel like this is probably a more.
Mike Olosky: There are some puts and takes, but we tend to believe that we've got a good plan going forward to continue the long-term average.
Mike Olosky: There are some puts and takes, but we tend to believe that we've got a good plan going forward to continue the long-term average.
Housing start volume market. Now, just to be specific going to be down probably 2, or 3% for the OVR, best guess. Um, as you, um, saw a total company volume down, um, roughly 1, uh, 1% for the year us. A little bit lower than that. Um, but I I'll I'll told we, we continue to believe that we can drive good above Market volume growth. Um, not every year is going to be perfectly, straight up. There are some, uh, puts and takes, but we tend to believe that we've got a good plan going forward to uh continue the long-term average.
Kurt Yinger: Okay. Okay. I appreciate that. I guess if I would just think about kind of the trend in volume performance kind of through year-end, where we'll kind of start the year, is there anything that you're seeing or hearing that would suggest we see any meaningful inflection of the near term or a little bit of softness kind of lingering to start 2026?
Kurt Yinger: Okay. Okay. I appreciate that. I guess if I would just think about kind of the trend in volume performance kind of through year-end, where we'll kind of start the year, is there anything that you're seeing or hearing that would suggest we see any meaningful inflection of the near term or a little bit of softness kind of lingering to start 2026?
Common way to report volume backing things out of revenue in terms of acquisitions and exchange rate and pricing.
But as we head into 2026.
As you probably saw at our <unk>.
Some of our events that we've had where we talked about some of the software development.
Mike Olosky: Yeah. I would just say if you watch the weather forecasts and the weather news, I think from an overall market perspective, that probably didn't help it. But it's too early in the year, Kurt, to comment on it one way or another.
Mike Olosky: Yeah. I would just say if you watch the weather forecasts and the weather news, I think from an overall market perspective, that probably didn't help it. But it's too early in the year, Kurt, to comment on it one way or another.
We are focused on the component manufacturing related software and bringing that to market in 2026, which we believe opens up the largest growth opportunity for us which is in the hardware side of the component manufacturing, but requires a software to be there and then we also have a number of tools that we're working on in terms of like takeoff.
Kurt Yinger: Okay. I appreciate that. Just on the $30 million cost reduction, did any of that sort of hit and prove beneficial in Q4, or is that sort of all a tailwind as we think about kind of 2026 operating expenses?
Kurt Yinger: Okay. I appreciate that. Just on the $30 million cost reduction, did any of that sort of hit and prove beneficial in Q4, or is that sort of all a tailwind as we think about kind of 2026 operating expenses?
And you know where we'll kind of start the year. Um, is there anything that you're seeing or hearing that would suggest, you know, we see like any meaningful inflection of the near-term or or a little bit of softness, kind of lingering to start 2026. Yeah, I I would just say if you watch the weather forecast in the weather news, I I think from an overall Market perspective that probably didn't help it, but we're not. It's too early in the year. Uh, occurred to comment on when we're in another.
Services and software that we believe we can monetize its very early days, so wouldn't wouldn't have anything to call out there Mike using to add.
Good summary.
Very good summary.
Matt Dunn: Yeah. Let's break down the $30 a little bit, Kurt. So if you take that $30 million, roughly 2/3 of it is in you would see the benefit or you will see the benefit in roughly 1/3 of it. You'll see it in cost of goods behind some kind of non-manufacturing choices that we made. We did see a little bit of help in Q4 because a lot of the actions that we took were kind of right at the start of Q4 or even late Q3, but that was offset by the one-time cost for the most part. So it's pretty neutral in terms of the P&L impact in Q4. And then we're going to get the incremental savings in 2026 above what we saw in Q4.
Matt Dunn: Yeah. Let's break down the $30 a little bit, Kurt. So if you take that $30 million, roughly 2/3 of it is in you would see the benefit or you will see the benefit in roughly 1/3 of it. You'll see it in cost of goods behind some kind of non-manufacturing choices that we made. We did see a little bit of help in Q4 because a lot of the actions that we took were kind of right at the start of Q4 or even late Q3, but that was offset by the one-time cost for the most part. So it's pretty neutral in terms of the P&L impact in Q4. And then we're going to get the incremental savings in 2026 above what we saw in Q4.
We do believe that there is opportunity for digital services and solutions that help our customers.
Okay, I appreciate that. Um just on the the 30 million dollar cost reductions did did any of that sort of hit and and prove beneficial and and Q4 or is that sort of all a Tailwind as we think about kind of 2026 operating expenses?
Address the affordability story by just making them more productive and having a more accurate bill of materials, we've got a new pipeline tool.
Our released its in testing with some customers now we are having a pipeline auto takeoff tool that we're developing we've rolled out estimating services and.
In various parts of the business. So we think that there is some things that we can do to make a meaningful impact but the number is not big enough. At this point, we wanted to share, but we do think that that'll be part of our longer term growth story.
Got it okay I appreciate the color guys. Thank you.
Alright, Thanks Kurt.
Yeah, let's break down the 30 a little bit Kurt. So if you take that 30 million roughly 2/3 of it is in, you would see the the benefit or you will see the benefit in roughly a third of it, you'll see it in cost of goods, uh, behind some kind of non-manufacturing choices that we made. Um, we did see um, you know, a little bit of help in Q4 uh, because a lot of the actions that we took were, uh, kind of right at the start of Q4 or even late Q3, but that was offset by the 1-time cost for the most part. So it's pretty neutral in terms of the, the p&l impact in Q4 and then you're going to, then we're going to get the incremental Savings in 2020.
Matt Dunn: And then obviously, we don't have the same amount of one-time cost or restructuring cost in 2026, although we did call out a little bit that we're going to have due to some European footprint optimization. So I think the net-net of that is kind of what I was saying earlier, I think, to Trey's question of we expect absolute OPEX dollars to be down $15 to 20 million versus where they were where they ended 2025. And that includes $5 million of exchange hurt. Things we're having to eat on other things that are going up in cost in terms of benefits and workforce and things. So expecting to see those flow through pretty regularly throughout 2026 because the choices and the actions that we've taken are essentially already done. So we're starting to realize those benefits.
Matt Dunn: And then obviously, we don't have the same amount of one-time cost or restructuring cost in 2026, although we did call out a little bit that we're going to have due to some European footprint optimization. So I think the net-net of that is kind of what I was saying earlier, I think, to Trey's question of we expect absolute OPEX dollars to be down $15 to 20 million versus where they were where they ended 2025. And that includes $5 million of exchange hurt. Things we're having to eat on other things that are going up in cost in terms of benefits and workforce and things. So expecting to see those flow through pretty regularly throughout 2026 because the choices and the actions that we've taken are essentially already done. So we're starting to realize those benefits.
Thank you there are no further questions at this time.
6 above what we saw in Q4, and then obviously, we don't have, uh, the
With that this concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
Kurt Yinger: Got it. Okay. Thanks for that, Matt. And lastly, at the outset of the call, you had kind of referenced software and services and that adding an element to the bridge. I guess could you maybe provide a little bit more color there and talk about any ways in which you're maybe incrementally monetizing those as we kind of look into 2026?
Kurt Yinger: Got it. Okay. Thanks for that, Matt. And lastly, at the outset of the call, you had kind of referenced software and services and that adding an element to the bridge. I guess could you maybe provide a little bit more color there and talk about any ways in which you're maybe incrementally monetizing those as we kind of look into 2026?
The same amount of 1-time costs or restructuring costs in 26. Although we did call out a little bit that we're going to have due to some um, European footprint optimization. So, I think the net, net of that is kind of what I was saying earlier. Um, I think to trace question of we, we expect absolute Opex dollars to be down 15 to 20 million dollars versus where they were, where they ended 2025 and that includes 5 million of exchange hurt. You know, things were, were having to to eat on other things that are going up in cost in terms of benefits and, you know, Workforce and things. So, um, expecting to see those flow through pretty regularly throughout 26, because the, the choices and the actions that we've taken, or are essentially already done. So we're starting to realize those benefits.
Got it. Okay. Thanks for that, Matt. And lastly, at the outset of the call, you had kind of referenced software and services, and that adding an element to the bridge, I guess.
Matt Dunn: Yeah. I'll take the first part, and then Mike, chime in if you want to. But as you know, Kurt, the way we used to report volume was on a pounds shipped basis, which is really only on things that could be measured in pounds. And that was really only applicable for our North America business. So it didn't include things like equipment where we've made acquisitions and investments, is a big part of our go-forward growth story, and component manufacturing as well as software and services. So I feel like this is probably a more common way to report volume, backing things out of revenue in terms of acquisitions, exchange rate, and pricing.
Matt Dunn: Yeah. I'll take the first part, and then Mike, chime in if you want to. But as you know, Kurt, the way we used to report volume was on a pounds shipped basis, which is really only on things that could be measured in pounds. And that was really only applicable for our North America business. So it didn't include things like equipment where we've made acquisitions and investments, is a big part of our go-forward growth story, and component manufacturing as well as software and services. So I feel like this is probably a more common way to report volume, backing things out of revenue in terms of acquisitions, exchange rate, and pricing.
You maybe provide a little bit more color there and talk about any ways in which you're maybe incrementally monetizing those as we kind of look into 2026.
Y'all take the first part, and then, you know, Mike, chime in if you want to. But, um, you know, as you know, Kurt, the way we used to...
Matt Dunn: But as we head into 2026, as you probably saw at some of our events that we've had where we talked about some of the software development, we are focused on the component manufacturing-related software and bringing that to market in 2026, which we believe opens up the largest growth opportunity for us, which is in the hardware side of the component manufacturing but requires the software to be there. And then we also have a number of tools that we're working on in terms of takeoff, services, and software that we believe we can monetize. It's very early days. So wouldn't have anything to call out there, Mike. Anything to add?
Matt Dunn: But as we head into 2026, as you probably saw at some of our events that we've had where we talked about some of the software development, we are focused on the component manufacturing-related software and bringing that to market in 2026, which we believe opens up the largest growth opportunity for us, which is in the hardware side of the component manufacturing but requires the software to be there. And then we also have a number of tools that we're working on in terms of takeoff, services, and software that we believe we can monetize. It's very early days. So wouldn't have anything to call out there, Mike. Anything to add?
Report volumes on a pound ship basis which is really only on things that could be measured in pounds and that was really only applicable for our North America business. So didn't include things like equipment where we've made Acquisitions and Investments and and a big part of our, our go for ghost story and component manufacturing as well as software and services. So feel like this is a probably a more common way to report volume, you know, backing things out of Revenue in terms of Acquisitions and exchange rate and pricing. Um, but as we head into, uh, 2026, um, we we, as you probably saw at our, uh, you know, some of our events that we've had where we talked about some of the software development. We are, we are focused on the component, manufacturing related software and bringing that to Market in 2026, which we believe opens up the, the largest growth opportunity for us, which is in the, the hardware side of the component manufacturing, but requires the software to be there. And then we also have a number of tools that we're working on in, in terms of like takeoff and, uh, services and software that we
Mike Olosky: Good summary, Matt. Very good summary. Kurt, we do believe that there's opportunity for digital services and solutions to help our customers address the affordability story by just making it more productive and having a more accurate bill of materials. We've got a new Pipeline tool that we released. It's in testing with some customers now. We have a Pipeline auto takeoff tool that we're developing. We've rolled out estimating services in various parts of the business. So we think that there's some things that we can do to make a meaningful impact. The number is not big enough at this point that we want to share it, but we do think that that'll be part of our longer-term growth story.
Mike Olosky: Good summary, Matt. Very good summary. Kurt, we do believe that there's opportunity for digital services and solutions to help our customers address the affordability story by just making it more productive and having a more accurate bill of materials. We've got a new Pipeline tool that we released. It's in testing with some customers now. We have a Pipeline auto takeoff tool that we're developing. We've rolled out estimating services in various parts of the business. So we think that there's some things that we can do to make a meaningful impact. The number is not big enough at this point that we want to share it, but we do think that that'll be part of our longer-term growth story.
We believe we can monetize—it's very early days, so, you know, wouldn't have anything to call out there. Mike, anything to add? Good summary? Um, Matt, very good summary. Kurt, we do believe that there's opportunity for digital services and solutions to help our customers.
Kurt Yinger: Got it. Okay. Appreciate the color, guys. Thank you.
Kurt Yinger: Got it. Okay. Appreciate the color, guys. Thank you.
Address the affordability story by just making a more productive and having a more accurate bill of materials. We've got a new pipeline tool that we, uh, released—it's in testing with some customers now. We are having pipeline auto takeoff tool that we're developing. We've rolled out estimating services, um, in various parts of the business. So we think that there's some things that we are—can do to make a meaningful impact. The number is not big enough that we, at this point, want to share it, but we do think that that'll be part of our longer-term growth story.
Matt Dunn: All right. Thanks, Kurt.
Matt Dunn: All right. Thanks, Kurt.
Mike Olosky: Thanks, Kurt.
Mike Olosky: Thanks, Kurt.
Got it. Okay. Appreciate the color, guys. Thank you.
All right. Thank you.
Operator: Thank you. There are no further questions at this time. With that, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Operator: Thank you. There are no further questions at this time. With that, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Thank you. There are no further questions at this time.
