JELD-WEN Holding, Inc. Stock

Thank you. Ladies and gentlemen, thank you for standing by. My name is Angela and I will be your conference operator today. At this time, I would like to welcome everyone to the ChildWend Second Quarter 2026 Earnings Conference Call. I'd like to remind everyone that this call is being recorded and that all lines have to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one in your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, press the star 1 again.

Thank you. I would now like to turn the call over to James Armstrong, Vice President of Investor Relations. Please go ahead.

Thank you and good morning. We issued our second quarter 2026 earnings release last night and posted a slide presentation to the investor relations portion of our website, which can be found at investors.jeldwin.com. We will be referencing this presentation during our call. Today I'm joined by Bill Christensen, Chief Executive Officer, and Samantha Stoddard, Chief Financial Officer. Before I turn it over to Bill, I would like to remind everyone that during this call, we will make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and included in our forms 10 K and 10 Q filed with the SEC. Gildwin does not undertake any duty to update forward looking statements, including the guidance we are providing with respect to certain expectations for future results. Additionally, during today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance.

The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. The reconciliation of these non-GAAP measures to their most directly comparable financial measures calculated under GAAP can be found in our earnings release and in the appendix to our earnings presentation. With that, I would like to now turn the call over to Bill. Thank you, James, and good morning, everyone. Before turning to our results, I want to begin by recognizing our associates at Jeldwyn. second quarter progress would not have been possible without their commitment, focus, and hard work. Our teams have continued to execute in a challenging environment, improve how we operate, and provide our customers with a more dependable and consistent service experience. to thank everyone across the organization for the role they played in delivering these results. I would also like to welcome Christian Mikkel, who joined GELDWIN in June as Executive Vice President and President of Europe.

Christian brings more than 25 years of international leadership experience across manufacturing and industrial businesses. His experience in operational improvement and business transformation will be valuable as we continue to strengthen and further optimize our European business. Turning to the business, the macro environment in the second quarter was in line with our expectations. we experienced the anticipated seasonal increase in activity as we moved out of the first quarter. Overall market volumes remain soft, but the pace of the year-over-year decline is beginning to moderate. Against that backdrop, we delivered results that were consistent with our expectations and continued to make progress on the priorities we outlined at the beginning of the year. As shown on slide 4, second quarter sales were $818 million. We continue to balance our labor and cost structure with current demand levels while maintaining the resources necessary to provide customers with the service they expect.

Our on-time in full performance declined modestly in June and remained in the high 80% range in July due to temporary disruptions. Those issues have largely subsided, and we are already seeing OTIF recover toward 90% and above. Importantly, our customers remain satisfied with our service, and sustaining consistent performance remains a key priority across the organization. Adjusted EBITDA was $42 million for the quarter, up from the prior year. Importantly, this was the first quarter in 10 quarters in which adjusted EBITDA increased year over year. Adjusted EBITDA margin improved to 5.2% compared to 4.7% last year, an increase of 50 basis points despite the continued pressure from lower market volumes. These results demonstrate the progress we are making through improved execution, productivity, and disciplined cost management.

Free cash flow with a $28 million use of cash during the quarter. We continue to tightly manage capital expenditures and remain disciplined in how we deploy cash across the business. As we move into the second half of this year, we expect the seasonal working capital cycle and improved earnings performance to support improved cash generation. Looking ahead, expect continued focus on what we can control as we remain concentrated on managing costs. At the same time, we continue to prioritize service and execution for our customers. Our improved performance is helping us compete for and win back business that we had previously lost, and we are beginning to see those efforts translate into improved commercial results. As a result, we still expect sales performance to be modestly better than the midpoint of our previous guidance.

We also continue to face significant price-cost headwinds, driven primarily by freight, including the impact of freight on material costs. We are managing through these pressures and expect to continue working constructively with our customers as these cost pressures persist. Despite these headwinds, our cost actions and improved operating performance support an increase of our EBITDA guidance midpoint. Before I turn it over to Samantha, I want to briefly address both our balance sheet and portfolio priorities. We continue to actively evaluate options to address our near-term debt maturities, working closely with our advisors, including potential refinancing alternatives. Our objective is to preserve liquidity, maintain financial flexibility, and provide the company with sufficient time to continue improving performance as market conditions stabilize. We also continue to make progress on the strategic review of our European business.

The process remains ongoing and we are carefully evaluating the available alternatives with a focus on long-term shareholder value. We have nothing further to announce at this time. With that, I will hand it over to Samantha to review our financial results in greater detail.

Thank you, Bill. Turning to the financial results on slide six, second quarter net revenue was $818 million compared to $824 million in the second quarter of 2025, a decline of 1% year over year. The decrease was driven by lower volume mix, partially offset by higher pricing and favorable foreign exchange. Adjusted EBITDA for the quarter was $42 million compared to $39 million in the prior year period, an increase of 8%. Improvement was driven primarily by continued productivity gains, which more than offset a portion of the ongoing price-cost headwinds and lower volume mix. Turning to cash flow, free cash flow was a $28 million use of cash in the second quarter due to higher working capital, specifically the timing of accounts receivable due to higher sales at the end of the current period. we continue to manage cash closely and remain focused on working capital discipline as we move through the second half of the year. Despite the use of cash during the quarter, higher adjusted EBITDA helped keep net debt leverage flat sequentially at 11.3 times at the end of the second quarter. To support the seasonal working capital investment, we have $80 million drawn on our revolving credit facility.

We remain focused on improving earnings, generating cash, and maintaining balance sheet flexibility as we continue to manage through the current market environment. Turning to slide 7, the year-over-year change in revenue was driven by lower volume mix, partially offset by higher pricing and favorable foreign exchange. Core revenue declined 2% while foreign exchange contributed a $9 million benefit. Taken together, these items resulted in a 1% decline in reported revenue for the quarter. Turning to slide 8, adjusted EBITDA for the second quarter was $42 million compared to $39 million in the prior year quarter. The year-over-year improvement was led by strong productivity across the business, contributed a $36 million benefit. We also delivered meaningful SG&A savings.

Those savings were partially offset by the non-recurrence of certain one-time benefits recognized in the prior year, resulting in a combined net benefit of $1 million from SG&A and other items. These improvements more than offset continued external and market-related pressures. Price cost was a $29 million headwind, reflecting ongoing inflation that exceeded the benefit from pricing. or volume mix represented an additional $5 million headwind. Overall, the bridge demonstrates the progress we are making on the areas within our control. Productivity and cost discipline enabled us to grow adjusted EBITDA year over year despite continued price cost pressure and soft market volumes. Turning to slide 9 and our segment results, North America revenue was $529 million, compared to $556 million in the prior year quarter. The year-over-year decline was driven by lower volume mix, with the majority of the impact coming from lower volumes.

Adjusted EBITDA for North America was $41 million compared to $35 million last year. adjusted EBITDA margin improved to 7.7% from 6.3%. The increase reflects continued productivity gains and meaningful SG&A improvements, which more than offset a portion of the pressure from ongoing price cost headwinds and lower volumes. In Europe, revenue was $289 million, compared to $268 million in the prior year quarter, an increase of 8%. The improvement was driven by better volume mix, favorable foreign exchange, and higher pricing. Foreign exchange contributed approximately three percentage points to the year-over-year revenue increase. adjusted EBITDA for Europe was $13 million compared to $17 million last year. The decline was driven primarily by price cost pressure. While we realized higher pricing year over year, it was not sufficient to offset additional material cost inflation during the quarter. these headwinds were partially offset by improved productivity and more favorable volume mix.

I will now hand it back to Bill to discuss our market outlook. Bill Walsh, Thanks, Samantha. Turning to slide 11,.

want to review our current market outlook and the assumptions supporting our expectations for the remainder of 2026. We continue to operate in a soft and uncertain demand environment. While the pace of year-over-year declines is beginning to moderate in certain areas, our outlook remains cautious and does not assume a meaningful near-term recovery. In North America, we continue to expect the overall windows and doors market to decline in the low to mid single digits. Within that outlook we anticipate new single family construction will be down low single digits what repair and remodel activity will decline in the mid single digit range. We expect U.S. multifamily to increase significantly year over year. In Canada, conditions remain more challenging and we continue to expect high single-digit declines due to broader economic softness and weak housing activity.

In Europe, market conditions appear to be stabilizing, and we continue to expect volumes to be approximately flat year over year, while demand remains subdued. are not expecting a further material deterioration from current levels. At the company level, our volume assumptions remain broadly aligned with the underlying markets. we continue to see benefits from improved service and customer engagement, which are supporting opportunities to regain share. At the same time, At the same time, we remain disciplined in how we approach pricing and commercial activity, given the continuing price-cost pressures across the business. Overall, our outlook is based on current demand levels and continued execution against the areas within our control. We are not relying on a market recovery to deliver our expectations. Instead, our focus remains on consistent service, disciplined cost management, and improved operating performance. Turning to slide 12, I'll walk through our updated full year 2026 guidance.

We are raising the low end of our revenue outlook as improved service levels begin to translate into share recovery and new incremental business. Thank you. we now expect net revenue in the range of $3.1 billion to $3.2 billion, compared to our previous range of $3.05 billion to $3.2 billion. As a result, we now expect core revenue to decline between 2 and 5% year over year compared to our previous expectation of a 3 to 6% revenue decline. We are also increasing the low end of our adjusted EBITDA guidance. We now expect adjusted EBITDA of $120 million to $150 million, compared to our previous range of $100 million to $150 million. Improved revenue outlook is expected to flow through at an incremental margin of approximately 25 to 30%. We also expect additional productivity benefits from our continued focus on SG&A and broader cost management. improvements are expected to be partially offset by continued inflation cost pressure.

Turning to cash flow, we are lowering our full year expectations primarily due to additional restructuring costs associated with rightsizing our SG&A structure and other one-time costs incurred during the year. We are partially offsetting these impacts through continued discipline on capital spending and now expect full-year capital expenditures of approximately $85 million. As a result, As a result, we now expect operating cash flow of approximately $10 million and free cash flow to be a use of approximately $75 million for the year. Finally, our guidance continues to assume no significant portfolio changes. Turning to slide 13, this chart bridges our 2025 adjusted EBITDA of $118 million to the updated midpoint of our 2026 adjusted EBITDA guidance of $135 million. Starting with the market, we continue to expect volume mix to represent an approximately $25 million headwind. This reflects the ongoing softness across our end markets and remains unchanged from our previous expectations.

The next two items reflect improving execution across the business. We now expect net share loss to be a $20 million headwind compared to $30 million previously. This improvement reflects the progress we are making on service and the resulting opportunities to regain business with our customers. We also now expect a total of approximately $120 million of productivity benefit compared to $110 million previously. This includes both the carryover benefit from our transformation initiatives and the impact of continued business rightsizing. The increase reflects stronger productivity, additional SG&A actions, and our continued focus on aligning the cost structure with current demand. These improvements are partially offset by greater price cost pressure.

We now expect price cost to be an approximately $50 million headwind compared to $40 million previously. The increase primarily reflects continued freight and material cost inflation that is still exceeding the benefit from pricing. We are managing these pressures closely, but as we have discussed, addressing persistent price-cost headwinds will require us to continue to work constructively with our customers. The remaining items represent a net headwind of approximately 8M dollars. This includes approximately $10 million of headwind from variable compensation and other timing-related factors partially offset by favorable foreign exchange and other items. Taken together, these elements bridge to the midpoint of our updated adjusted EBITDA guidance. The improvement reflects stronger productivity and less share loss, which more than offset the additional price cost pressure we now expect.

I want to spend a few minutes on the progress we continue to make with service across our North America business. Returning to slide 14, on-time in-full delivery, or OTIF, remains one of the most important measures of how well we are serving our customers. Over the past year, we have made significant progress in improving service performance and creating greater consistency across the network. As shown on the slide, OTIF declined modestly in June and remained below 90% in July. July performance was affected by temporary production disruptions related to Canadian wildfire smoke, which required us to shut down certain sites for a period of time. We are that did not deliver the level of service we require. The impact from the wildfire smoke has now largely subsided, and our effective facilities have returned to normal operations.

We are also actively addressing the freight challenges, working directly with our providers and taking the necessary actions to improve reliability. Based on the progress, we would expect OTIF to return above 90% going forward. Importantly, our customers are recognizing the quality and consistency of our service levels. Customer feedback continues to be positive. Confidence in our ability to deliver has improved, and we are seeing additional opportunities to compete for and win back business that we had previously lost. The progress we have made reflects the work of our teams to improve execution, respond quickly when issues arise, and build greater consistency across our operations. that stronger execution is also beginning to reshape our revenue trajectory. With service back to levels that meet customer expectations, we believe the business is better positioned to perform more in line with the market and benefit from normal market growth over time.

We are encouraged by the progress we have made, but need to improve consistency. Sustaining Europe's OTIF above 95% while returning North America to above 90% and maintaining that performance will help us further strengthen customer relationships, support our share position, and deliver improved performance over time. Finally, turning to slide 15, I'll close by stepping back and highlighting the priorities that will continue to guide us through the remainder of the year. First, customer service remains at the center of our focus. We have made meaningful progress in improving consistency, responsiveness, and delivery performance, and our customers are recognizing that improvement. Better service is helping us rebuild trust, strengthen relationships, and create opportunities to regain business that we had previously lost. We need to maintain that momentum and continue delivering at the level our customers expect.

Cash and cost management also remain critical priorities. We are laser focused on addressing the upcoming maturities in order to strengthen our balance sheet and provide additional time to improve our business performance in choppy market conditions. we remain diligent on working capital, capital spending, cost control, as well as the broader actions needed to preserve liquidity and improve free cash flow. Finally, I want to again thank our associates across Jeldwyn. We continue to operate in a difficult environment and the progress we are seeing would not be possible without their hard work, commitment, and resilience. Our results are improving, our customers are seeing the difference, and that progress is a direct reflection of the effort our teams are making every day. There is still more work to do, but we are moving in the right direction and are focused on building from here. With that, I'll turn the call over to James for questions.

Thanks Phil. Operator, we're now ready to begin Q&A. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 in your telephone keypad to raise your hand and enter the queue. If you would like to redraw your question, simply press star 1 again. For today's event, Q&A is open only to Southside Equity Analyst. Also, we kindly request everyone to please limit yourself to one question and one follow-up only. Thank you. Your first question comes from the line of Susan McClary with Goldman Sachs.

Your line is now open.

Good morning, Bill, Samantha, James. This is Charles Perron for Susan. Thanks for taking my question. Hey, Charles. Good morning. Good morning. Good morning. First, I want to talk about customer service. Bill, I think you mentioned in your prepared remarks your effort to address the freight challenges on service level and in the near term. Can you maybe first unpack some of the adjustments you're making? And as those service levels improve, how do you think about your implications to regain some of the share through the second half of the year and beyond? Yes, thanks for the question.

continue to make progress on our OTIF, which is on time in full delivery. That's the most important metric that we track, uh, both in Europe and in North America, and that basically represents our ability to meet customer expectations. As we shared in prepared remarks, there was a little bit of degradation, slightly below 90% in North America in June and July. There was a few wildfire related shutdowns, obviously unplanned, but things that we had to react to. We're already seeing August tracking based on expectations back up to above 90% marks, so we're feeling very comfortable. A second reflection is no significant significant negative customer feedback through the last three, four months on service levels. So we feel that we're continuing to regain some of the delivery challenges that we had coming out of last year and into the beginning of this year.

And that's starting to materialize into sales gains based on where we initially budgeted the year. So we picked up probably 25 million in our latest update of top line guidance. of additional sales based, we think, mainly on our ability to really perform against customer expectations. So we continue to make progress and the wildfires continue unfortunately to be a real challenge. You may be seeing some of the news Northwest of the US, there are some pretty significant wildfires burning again. that we're monitoring closely. Obviously, we wanna make sure all our associates and their families are safe, but trying to manage through some potential disruptions that we still expect over the next couple of months.

Got it. Okay, that's very helpful, Collar Bill. And then second, I want to shift to price cost. I think you mentioned that the dynamics have deteriorated a little bit from a cost perspective. Can you maybe unpack the drivers of the shift between what you're seeing from price versus inflation across region? And more broadly, how do you think about your ability to get price in this environment?.

Yep, thanks. That's probably a two part question and answer. Let me start just with some higher level comments on price cost. So there is continued select price pressure, but the larger change as we had signaled in our prepared remarks versus prior expectations is cost inflation and that's mainly inbound and outbound freight, as well as European energy price impact. So obviously our productivity and SG&A, as you can see on the waterfall, savings are helping to offset the near-term gap, But we are continuing to work with our customers to address the longer term price cost dynamics. I think Samantha can share a little bit more detail on the levers of that price cost dynamic. Sure, I do want to reiterate, we are seeing positive price. So we have been putting price into the market.

unfortunately it's been offset by the increased inflation and bill mentioned I would say. It's about a two third one third right now on material inflation and then freight inflate freight inflation across the company. And it's energy prices, we're seeing that in Europe, but it's mostly as Bill talked to, tied to fuel prices. So it's both the inbound on our material costs, as well as the input commodities that are going into our business,.

from the fuel. Got it. Thank you for the call, you guys, and good luck with the quarter. Yes. Thank you.

Your next question comes from the line of Stephen Ramsey with Thomson Research Group. Your line is now open.

Hi, good morning. I wanted to think a little bit more on winning back business, which is great to hear. Can you talk about where these wins are happening? if there's, you know, any concentration of where these winds are coming from.

I would say, hey, Steven, good morning, Bill. It's fairly balanced, definitely on the interior door side in North America. We are seeing some small pickups. It's, you know, the North American business. It's obviously a regional business model based on where we have assets in place and how we're servicing our customers. So I'd say in general, it's a very balanced rebound of of volume that we're regaining. And there are, I'd say hotspots.

I said one of them was on the interior door side. We continue to make progress also on regaining some of the vinyl window. which has been important and think about this as balance between both our traditional sales channel but also the R&R. Obviously, Obviously the market remains fairly soft as we know, but this is some share loss that we probably never should have lost that we're starting to pick back up connected with our OTIF improvements and the consistency that we're showing for our customers.

OKAY. THAT'S HELPFUL. AND THEN ON YOUR MULTI-FAMILY OUTLOOK BEING pretty robust. Can you talk about how your sales are tracking against this market demand? Is there any kind of share gain here? And do you expect any of the benefits to carry over into next year for multifamily? Right. So how we think about and how we actually comp that business, it's Canada and multifamily is kind of how we look at it. Canada is significantly down. Multifamily,.

significantly up as we've been signaling for awhile. This is our VPI business. Our teams are doing a phenomenal job of gaining new business and projects across North America, but also delivering on that. This will clearly, clearly roll in to next year. I mean, we're already looking right now at Q4 pipeline lines that continue to be very robust, so we feel comfortable and confident about the trajectory. However, it's a small relative share of our overall portfolio. So not sure if there's a market share gain in this segment, but for us, the year over year comps are significant on the growth side. One other thing, Steven, on VPI in particular, our multifamily business, we made an investment to grow.

grow some of our sales base in the East Coast a few years ago. And we're really starting to see that pay off as we continue to grow business on the eastern part of the US. This was primarily a northwestern business located out in Washington. And so that's been really positive to see. And we would expect that to continue into next year. Great, thank you Thank you.

Again, if you would like to ask a question, press star 1 and your telephone keypad. And your next question comes from the line of Matthew Bouley with Barclays. Your line is now open.

Good morning, you have Anika Delacqua on for Matt today. Thank you for taking my questions. So first off, I wanted to drill down on your productivity efforts where you guys are clearly seeing some progress. It's now contributing an incremental 10 million for the year. So just want to know how much has been action so far. I think last quarter, You spoke to 80% of the bucket being complete. So where does this stand now? And then how to think about the cadence of productivity in 3Q and 4Q and any early thoughts into 2027? Thanks.

Yes, thanks for the question. So we feel pretty good. I'd say the bucket is probably 100% action and we're going to take off obviously every month.

as we roll forward through the rest of the year. So we're feeling confident about that progress. Obviously understanding that productivity is connected to volume. And as volume moves, there could be positive or negative impacts based on how the second half materializes. We're also thinking, based on what we've shown in the waterfall, the total cost that we think we can deliver, or cost out we think we can deliver this year, think about roughly 30 million rolling in.

2027. Okay, great. That's really helpful. And then second off, so I know you guys outlined your tariff impact in the slides. So I'm curious to know what's changed in your tariff assumptions. And then I don't think there's an inclusion of a refund. So any details on that? And any incremental impact.

from the 301 tariffs that were implemented. Thanks. Yes, so as you can see in the slide, we are seeing, I would say, overall tariffs, you know, tempering slightly from when we kicked off the beginning of the year. But to your question on the tariff refund, we did receive an immaterial amount in 2Q. It was approximately $1 million. And we also did receive additional tariff refund in Q3. We expect the net benefit in Q3 will be in the mid single digit millions. So we'll be reporting that when we release our Q3 as well. Okay, great. Thank you both.

Thank you. That concludes our question and answer session. I will now turn the conference back over to Mr. James Armstrong for closing remarks.

Thanks everyone for joining us today. If you have any follow-up questions, please feel free to reach out. We appreciate your time and interest in GELDWIN. Have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today At this time, I would like to welcome everyone to the JELD-WEN First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to James Armstrong, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. We issued our first quarter 2026 earnings release last night and posted a slide presentation to the Investor Relations portion of our website, which can be found at investors.jeld-wen.com. We will be referencing this presentation during our call. Today, I'm joined by Bill Christensen, Chief Executive Officer; and Samantha Stoddard, Chief Financial Officer.

Before I turn it over to Bill, I would like to remind everyone that during this call, we will make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and provided in our Forms 10-K and 10-Q filed with the SEC.

JELD-WEN does not undertake any duty to update forward-looking statements, including the guidance we are providing with respect to certain expectations for future results. Additionally, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

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

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

Thank you, James, and good morning, everyone. Before turning to our results, I want to thank the teams across JELD-WEN. Even with continued market pressure, our organization is showing up every day with focus and urgency driving operational improvements, supporting customers and advancing the work needed to strengthen the company. A key element of that work is investing for our customers through improved service and customer experience.

As a company, we continue to place incremental focus into service and responsiveness, and we believe that this will create value as the year progresses. The macro environment remained soft in the first quarter consistent with our expectations. As a reminder, the first quarter is the seasonal low period, and we anticipate improvement as we move through the remainder of the year.

During the quarter, we also implemented a number of pricing increases, and we expect those increases to begin flowing through more meaningfully in the second quarter and beyond. Overall, we delivered the quarter within our expectations and managed through a difficult volume environment.

As seen on Slide 4, sales for the quarter were $722 million. As we have previously discussed, we took deliberate actions to align our labor with current market conditions, and we continue to adapt the cost structure of the business. At the same time, we are balancing investments in our customers by maintaining the resources needed to deliver quality and dependable service. We are already seeing significant service improvements across the company including our On-Time, In-Full Rates.

Adjusted EBITDA was a modestly positive $6 million for the quarter, and cash performance was generally in line with our expectations. As a reminder, the first quarter is typically the highest working capital quarter, and we would expect working capital to unwind as we move into the back half of the year consistent with the seasonality of the building products industry.

As we look ahead, we continue to focus on what we can control. As we mentioned last quarter, customers are very clear that consistent delivery and follow-through are what they value most. And we continue to direct investments towards these priorities. With the improvements we are seeing, we continue to discuss opportunities to regain volume, and we now expect improved execution and service levels to contribute to incremental sales versus the 2026 expectations we shared in the fourth quarter results call. We are strengthening the customer experience through better execution and consistency, and we expect that to support improved performance as the year progresses.

At the same time, we are also seeing higher cost pressure, particularly in freight and pricing remains competitive in certain areas versus what we expected previously. We are managing those dynamics, staying disciplined on what is within our control while continuing to prioritize customer service and operational execution.

Finally, we continue to progress the strategic review of our European business. While the process is ongoing and we have nothing to announce at this time, we believe this review could provide meaningful liquidity and help further strengthen our balance sheet. We are also evaluating various alternatives thoughtfully with a focus on improving financial flexibility while preserving long-term value.

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

Thank you, Bill. Turning to the financial results on Slide 6. First quarter net revenue was $722 million, down 7% year-over-year. The revenue decline was driven by lower volume/mix. While mix was down slightly year-over-year, most of the volume/mix decline was driven by lower volume. Adjusted EBITDA for the quarter was $6 million, down 72% year-over-year and adjusted EBITDA margin was 0.9%, down 190 basis points year-over-year.

The lower earnings performance was primarily driven by volume/mix, along with negative price/cost dynamics during the quarter as inflation was not fully offset by pricing. These headwinds were partially offset by significantly improved productivity year-over-year.

Turning to cash flow. Operating cash flow was a $91 million use of cash in the first quarter driven by lower EBITDA, combined with a $43 million use of working capital. As a reminder, the first quarter is typically the highest working capital quarter of the year, and we expect significant working capital improvement as we move through the remainder of 2026.

As a result of lower EBITDA and the use of cash, net debt leverage increased to 11.3x at the end of the first quarter. Given the seasonal use of working capital, we drew $40 million on our revolver. We continue to manage the business with a disciplined focus on cash, cost and balance sheet flexibility.

Turning to Slide 7. The year-over-year change in net revenue was driven primarily by lower volume/mix. First quarter sales were $722 million, compared to $776 million in the prior year, and core revenue declined 10% year-over-year. Pricing was a slight positive, but it was more than offset by the volume/mix decline, which drove the majority of the year-over-year reduction. The comparison also reflects a $30 million tailwind from foreign exchange driven by a stronger euro relative to the dollar. Taken together, these factors explain the year-over-year change in revenue and are consistent with the market conditions we discussed earlier.

Turning to Slide 8. Adjusted EBITDA for the first quarter was $6 million, compared to $22 million in the first quarter of last year. The year-over-year decline reflects a combination of cost pressure and lower volume/mix. Price/cost was a $21 million headwind as pricing was slightly positive, but it continued to be outweighed by cost inflation in areas like glass, metals and transportation. Volume/mix was also a $22 million headwind, and that impact was driven primarily by lower volumes year-over-year. These headwinds were partially offset by improved execution across the business. Productivity was a $22 million benefit year-over-year, and we also delivered a $6 million improvement in SG&A and other expense despite a $10 million other income headwind from prior year.

Turning to Slide 9 and our segment results. In North America, first quarter revenue was $453 million, compared to $531 million in the prior year. The year-over-year decline was driven primarily by lower volumes and the court-ordered Towanda Divestiture which had partial impact in the first quarter of 2025. Adjusted EBITDA for North America was $4 million, compared to $16 million last year. And adjusted EBITDA margin declined to 0.8% from 2.9%. Profitability was pressured by continued inflation and lower volumes, partially offset by significant year-over-year productivity and SG&A improvements.

In Europe, revenue was $269 million, up from $245 million in the prior year, an increase of 10% year-over-year. The improvement was driven primarily by foreign exchange and slightly better pricing, partially offset by continued volume decline. Foreign exchange contributed approximately 11.5 percentage points to the year-over-year revenue change. Adjusted EBITDA for Europe was $7 million compared to $11 million last year and adjusted EBITDA margin was 2.6% versus 4.3% in the prior year. Productivity was a slight positive, but those benefits were more than offset by lower volume/mix, along with higher SG&A expense.

With that, I will turn it back over to Bill to discuss our updated market outlook and how we are positioning JELD-WEN for the path ahead.

Thanks, Samantha. Turning to Slide 11. I want to walk through our market outlook for 2026 and the assumptions underlying our guidance. Importantly, our view of the market has not meaningfully changed from what we outlined previously in our fourth quarter 2025 results call. We continue to operate in a challenging and uncertain environment and our outlook reflects a cautious view rather than any expectation of a near-term recovery.

In North America, we expect the overall windows and doors market to be down low to mid-single digits. Within that, we see new single-family construction down low single digits and repair and remodel down mid-single digits. We now expect U.S. multifamily to be up significantly year-over-year, while Canada continues to face more significant pressure with high single-digit declines, reflecting ongoing economic softness and continued weak housing activity.

In Europe, conditions appear to be stabilizing. We expect volumes to be roughly flat year-over-year. Demand remains subdued, but we are not seeing further deterioration from current levels. At the company level, our volume assumptions are now more aligned with the underlying market. We continue to expect some impact from prior pricing actions but we are also beginning to see the benefits of improved service levels. Our guidance reflects a modest contribution from these service improvements while maintaining a clear focus on pricing discipline.

Overall, our framework remains consistent. Our guidance is based on current demand levels with pricing actions largely in place and a continued focus on margin protection and execution rather than relying on an improvement in end market conditions.

Turning to Slide 12. I I'll walk through our updated full year 2026 guidance. Overall, we are increasing our revenue outlook, holding our adjusted EBITDA range and maintaining cash flow expectations. We now expect net revenue in the range of $3.05 billion to $3.2 billion, up from our prior range of $2.95 billion to $3.1 billion. This reflects a modest benefit from improving service levels, which brings our company volume assumptions more in line with the underlying market. April sales have been in line with our expectations, which supports the updated view we are sharing today.

As a result, we now expect core revenue to decline between 3% and 6% year-over-year compared to 5% to 10% previously. The adjusted EBITDA range remains unchanged at $100 million to $150 million. While the higher revenues progress, we are seeing incremental price/cost headwinds relative to our prior assumptions, which offset the benefit from improved volumes.

Our outlook continues to reflect higher pricing and a focus on execution in a still changing demand environment. On cash flow, we continue to expect operating cash flow of approximately $40 million and a free cash flow use of approximately $60 million. We still anticipate capital expenditures of approximately $100 million that are largely maintenance in nature. Our guidance assumes no portfolio changes. However, as noted, we continue to evaluate strategic options, including our review of the European business, and additional actions to improve liquidity.

Turning to Slide 13. This chart bridges our 2025 adjusted EBITDA of $118 million to the midpoint of our 2026 adjusted EBITDA guidance of $125 million. Starting on the left, market volume/mix remains a headwind of approximately $25 million, reflecting the continued pressure we see across our end markets. The next item is net share loss which we now expect to be a $30 million headwind, improved from our prior expectation of $60 million. This reflects early progress on service and a more stable customer response as those improvements begin to take hold.

We now expect a greater headwind from price/cost, which we anticipate to be approximately $40 million, compared to $10 million previously. The environment remains highly competitive and as our service improves, we've been more active commercially, including targeted promotional activity to regain traction with certain customers.

In addition, we are seeing higher-than-expected cost pressure, most notably in freight. These external and commercial pressures are offset by actions within our control. We continue to expect approximately $75 million of benefit from rightsizing and base productivity, reflecting actions that are largely executed and will be realized over the course of the year. We also expect about $35 million of carryover benefit from our transformation initiatives, including automation, footprint optimization and systems improvements as those efforts continue to move in a more steady state operating model.

The remaining items include approximately $10 million of headwind from compensation and other timing-related factors, partially offset by foreign exchange and other items. Taken together, these elements bridge to the midpoint of our 2026 adjusted EBITDA guidance. While the mix of headwinds has shifted, the overall earnings outcome remains unchanged, reflecting both the ongoing pressure in the market and the impact of the actions we are taking to manage through it.

Before we wrap up, I want to step back and highlight the progress we are making on service across our North America business. On Time, in Full delivery or OTIF, is a key customer metric and it is where we have been intensely focused.

As you can see on Slide 14, our OTIF performance has improved significantly over the past year, moving to over 90%. This is a meaningful step change in how we are serving our customers, and we are seeing that reflected in the feedback we are getting across the business. Customers are noticing the improvement. We are seeing better engagement, more consistent order patterns and importantly, increased opportunities to quote and compete for new business as our service levels improve. This progress is being driven by both stronger execution and deliberate investment.

Operationally, we have now deployed our A3 management system across the network, which has improved how we identify issues, solve problems at the root cause and maintain consistency as well as ownership at the plant level. At the same time, we have made conscious decisions to prioritize service, including higher transportation spend, such as shipping partial loads when needed and maintaining staffing levels despite lower volumes. These are targeted investments to support service and rebuild trust with our customers. We believe that as service continues to improve, that trust will translate into volume recovery and share gains over time.

That said, we are not finished. Our goal is to consistently operate above 95% OTIF and reaching that level will require further progress, particularly with our vendor base and how we manage special order products. Overall, we are encouraged by the progress we are making. Service is improving, customers are responding, and we are beginning to see that translate into commercial opportunities.

Turning to Slide 15. I'll close by stepping back and putting our progress into perspective. Over the past year, we've made significant improvements in how we serve our customers. We have invested in service, strengthened our operating discipline and focused the organization on the metrics that matter most. Cash and liquidity remain a priority. We are taking actions to preserve cash, and we continue to evaluate opportunities to strengthen liquidity and maintain flexibility in an uncertain environment.

Our strategic review of Europe is ongoing, and we continue to evaluate other opportunities to improve liquidity and strengthen financial flexibility. Across the business, we are also aligning labor with current market conditions while continuing to invest in the organization for the long term. That includes work to improve culture and engagement.

We recently completed a company-wide baseline employee engagement survey, and our managers are actively using that feedback to create individual action plans focused on local level engagement. Importantly, our customers are seeing the difference. Service levels have improved, performance is more consistent, and we are beginning to rebuild trust. That is showing up in better engagement and increasing opportunities to compete for new business. However, we are not yet where we need to be. There's more work to do and we know that this will not happen overnight, but we are moving in the right direction and starting to see the early benefits.

At the same time, we are managing the business with a clear view of current market conditions. We are aligning the cost structure to demand, maintaining pricing discipline and staying focused on execution.

As I close, I want to recognize the work of our associates across JELD-WEN. The progress we are seeing is the result of their effort and focus every day. Our customers are noticing the improvement and it is important that we continue to build on that momentum. Overall, we are becoming a more consistent and disciplined company. We are improving service, rebuilding customer confidence and managing the business with a clear focus on cash and execution.

With that, I'll turn the call back over to James for questions.

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

[Operator Instructions] Your first question comes from the line of John Lovallo of UBS.

The first one is, at the midpoint, your outlook seems to imply 2Q adjusted EBITDA of about $31 million. That's versus about $6 million in the first quarter. Can you just help us kind of bridge the ramp from first quarter to second quarter?

John, yes, this is Samantha. I can help bridge that gap. So it's primarily driven by normal seasonality with the second quarter typically benefiting from higher sales volume and then better labor absorption as well. This year, we also expect to see the benefit of pricing actions that we implemented already in Q1, but begin flowing through more meaningfully at the start of Q2. And as you heard Bill say in the earlier remarks, we are already seeing the uptick in April. So we do feel good about going into Q2.

Got it. That's helpful. And then on the North American decremental margin, it is around 15%, which was pretty favorable, and I think it speaks to the cost controls and the cost takeout you guys have achieved. I mean how sustainable do you think this level of decremental is? And maybe more importantly, how are you thinking about incrementals in an improving volume environment?

Yes. So I can start, and then I'll let Bill jump in. I think that in the short term, you are going to see us holding the line with the costs in particular. So you're right in that a lot of the transformational actions and cost takeouts that we saw in '25 going into '26 are going to continue. With the improved volumes from what I just spoke about, the seasonality as well as some of the higher price, that should then flow, I would say, our normal incrementals, 25% to 30% on the upside.

John, it's Bill. So the only thing I'd add there is what I'm really pleased with is if you look at our bridge coming out of our full year '25 guide to where we are now, we've removed about $100 million of headwind. And that speaks to the hard work that our teams are doing every day to really make things work for our customers. So we're starting to gain traction and reducing the rate of decline, which is great. So we do have some share loss that's lapping from '25, but we feel pretty good here headed into the last 3 quarters of this year.

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

My first question is on the improved service levels. It's encouraging to hear that you're seeing such a nice lift there. I guess, can you talk more about how you're thinking of the path from here, the specific programs that you are working on and putting in place to support that? And I know last quarter, we talked about standardizing some of your operating systems and processes to help with that service. Is this part of what's driving that? And where you are in that process as well?

Yes, Susan. Thanks for the question. So absolutely, standard work across our network of sites, both in Europe and in North America is progressing very well. And you can see, based on what we showed on Chart 14 with the improvement on the OTIF metrics, clearly, there's still work to be done. But we are in a pretty choppy demand environment. And so our network needs to be very flexible and as we noted in the prepared remarks, we have incurred some additional costs based on not in full shipments, but making sure we're doing everything we can to meet our customers' expectations. So that's progressing well.

I think the second thing I'd want to call out is that the teams are working extremely hard to connect with our customers and define areas of opportunity where we can lean in together with them to regain some of the share that we've lost in the last couple of years, and that's starting to show up as well. So we think this bodes well for the back half of the year, even though we still are expecting a pretty soft market environment as we outlined in prepared remarks.

Okay. That's very helpful. And then can you give a bit more color on the magnitude of the inflation? How we should be thinking about that path for price/cost this year? I know you mentioned that you're starting to see some of the realization on the first quarter increase. And with that, how you're thinking about that balance between volume versus price in this environment?

Yes. Let me go ahead and start that, Susan. So on the inflation side, I think the biggest area that we're seeing inflation is going to be around the freight and energy prices. So we're seeing that both in North America as well as Europe.

On the better note, we are seeing slightly less tariff exposure that we did expect when we were starting the year. In terms of the magnitude, they're somewhat offsetting each other, not exactly, but materially, they're about offsetting. So when we think about the price/cost negativity, I think that there is some of that in inflationary pressures. And there is the affordability challenge from a price standpoint. We are seeing competitive pricing in different areas of the market. So while we have already gone out with price, that is why we're calling down some of the price/cost that we initially expected to be around negative 10% from an EBITDA bridge, we are now seeing that to be a little bit higher.

Your next question comes from the line of Matthew Bouley, Barclays.

Anika Dholakia on for Matt today. So first off, for Europe, you guys mentioned that you're not seeing any further demand pressure from current levels. So I'm curious if this suggests that pricing strength can continue in this region similar to 1Q? And then just kind of going off of that, how have some of the recent geopolitical dynamics maybe impacted the review of the European business, if at all? So yes, any color on that?

Thanks for your question. Yes. So we clearly are seeing more signals that we're at the bottom of the valley from a volume decline. So Europe has stabilized. We called it last quarter. We're seeing similar trends just to remind you, it takes 9 to 12 months post start to put our product in. So it's going to be a while until you see things tick up in the Doors world.

On pricing, we've done a great job across many European markets of introducing price to offset inflation and headwinds. The macro reality is going to have a pretty significant impact in Europe on energy, feedstock input prices, transportation costs, et cetera. We're already in market with pricing to offset a number of those headwinds. So I'd say we're feeling fairly balanced currently in Europe.

And then the third comment is we wouldn't really comment specifically on where we are on the strategic review and what the influences would or wouldn't be as we said in the prepared remarks, nothing further process is ongoing, but no further details today.

Okay. Great. That's really helpful. And then on the second question, so on the productivity initiatives on the $110 million, I'm curious, I think last quarter, you guys said 50% completed, 25% actioned, but hadn't hit and then 25% still needed to be actioned. Is this on track with what you guys expected? Or any updates to these numbers?

Sure. So breaking it down, the $35 million of the transformation carryover, that is 100% completed at this point. So these are structural costs. We talked about it on an earlier question that we are seeing the benefits of and they're 100% complete. On kind of the base productivity, rightsizing of the business, I would say we're greater than 80% of those initiatives that are done. So there's still a little bit of work to be done on some of the smaller initiatives, but the majority have been banked at this point, and we'll see that carry through in Q2 through Q4.

Your next question comes from the line of Jeffrey Stevenson with Loop Capital.

Can you talk more about the improvement in on-time deliveries you've seen over the last year and whether it's corresponded with the stabilization in your share position over that time period of service levels continue to improve?

Yes. So yes, that's the short answer. The longer answer is, obviously, we have a fairly broad portfolio in the North American market. So there's a number of different areas where we're performing very well and continue to do so. And there's other areas where clearly we weren't meeting expectations of our customers. And as we had described last year, there was some share loss, some pruning on our side, but also some share loss.

And we're definitely regaining share in certain pockets that our North America team is very focused on partnering with our customers to give them the product at the right time at the right place. So we're pleased with the improvements. And as I said, we've probably reduced by about half the headwind that we thought we would have this year from a top line standpoint. So we're making good progress, not finished. There's more work to be done, but I think that's a good signal that we're moving in the right direction, Jeff. I think that's the important message today on the call.

And Jeff, just highlighting back to the full year guidance bridge. As I talked about earlier with Susan, that the price/ cost, unfortunately, has become a little bit more negative but that share loss volume/mix, EBITDA impact, as Bill was talking about, has improved by about $30 million from last quarter.

That's very helpful. And then thanks for the update on the Europe strategic review. But previously, you talked about divestitures of smaller noncore assets as well, such as your distribution business in North America. And I just wondered if there are still opportunities across your footprint for other potential divestitures as well.

Yes. So Jeff, what we've said is we continue to evaluate other options in addition to the strategic review to improve liquidity, which clearly is a key focus point of ourselves given the current macro environment. And that includes assessing sale of other assets, potential sale-leaseback transactions. No further detail from our side. I think more importantly, we've said this a number of times, I want to reiterate, we expect to address our near-term maturities before they go current in December.

And for the time being, as Samantha laid out in her prepared remarks, we have ample liquidity, and we're actively managing cash in this soft macro environment. So I think that important combination. We continue to evaluate options. We have a number of options, and we're staying very close to the cash situation, combine that with improvements on service and better volume outlook from our side. We're feeling good about where we are currently.

There are no further questions at this time. And with that, I will now turn the call back over to James Armstrong for final closing remarks. Please go ahead.

Thanks, everyone, for joining us today. If you have any follow-up questions, please feel free to reach out. We appreciate your time and interest in JELD-WEN. Have a great day.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to the JELD-WEN's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to James Armstrong, Vice President of Investor Relations. James, please go ahead.

Thank you, and good morning. We issued our fourth quarter and full year 2025 earnings release last night and posted a slide presentation to the Investor Relations portion of our website. which can be found at investors.jeld-wen.com. We will be referencing this presentation during our call.

Today, I am joined by Bill Christensen, Chief Executive Officer; and Samantha Stoddard, Chief Financial Officer.

Before I turn it over to Bill, I would like to remind everyone that during this call, we will make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and provided in our Forms 10-K and 10-Q filed with the SEC. JELD-WEN does not undertake any duty to update forward-looking statements, including the guidance we are providing with respect to certain expectations for future results.

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

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

Thank you, James, and good morning, everyone. Before turning to results, I want to thank the teams across JELD-WEN. The fourth quarter remains challenging and the progress we made required sustained effort in an environment that continued to put volume pressure on the business. Our employees stayed focused on customers, operating with discipline and work through the realities of the market. I'm grateful for their commitment and their work continues to strengthen the foundation of the company as we move forward.

The macro environment remained very soft during the fourth quarter, consistent with what we expected coming into the period. End markets did not improve meaningfully and demand across both new construction and repair and remodel continue to be under pressure. Despite those market challenges, we delivered results at the high end of our expectations. That outcome reflects disciplined execution and sustained effort across the organization to manage through a difficult environment.

As seen on Slide 4, we delivered the high end of the sales and adjusted EBITDA range we forecasted through a combination of top line performance and cost actions. Sales came in stronger than we expected, driven by the hard work of our sales team combined with improving operational execution, including continued progress with on-time in full delivery.

At the same time, we took deliberate labor and cost actions to better align the business with market conditions, consistent with what we outlined in November, including reducing full-time positions by approximately 14% and or about 2,300 people in full year 2025. These actions were structural and reflected our view that demand is unlikely to improve meaningfully in the near term.

While cost actions played an important role, we remain focused on serving customers and securing the long-term health of the business.

Adjusted EBITDA also came in better than we expected. The quarter included a few million dollars of in-period items that were timing related and are not expected to recur. However, excluding those items, underlying adjusted EBITDA would have been above our guidance range.

Cash performance followed that improvement. Free cash flow came in approximately $20 million ahead of our expectations, even with higher capital spending due to carryover projects reflecting tighter working capital management and the benefits of the cost actions we have taken.

Additionally, we completed the sale leaseback of our Coral Springs, Florida facility in the fourth quarter giving us net proceeds of roughly $38 million, increasing our liquidity position. However, as the macro environment remains soft, volumes and margins continue to face pressure and while operational performance is improving, there is more work to be done.

For the full year, we delivered sales of $3.2 billion and adjusted EBITDA of $120 million. Will that result was at the high end of the guidance we provided after the third quarter, it is well below where we expected to finish the year when we began. The macro environment remained difficult throughout the year, particularly in retail and lower-priced new housing and demand did not recover as we had originally anticipated.

At the same time, we experienced more disruption from service challenges earlier in the year than we expected as we work to rightsize the business, reposition our operations, and implement more standard ways of working across our manufacturing landscape. That said, the business exits the year in a more stable position than it entered it.

Over the second half of the year, we made meaningful progress improving service levels as production transitions from consolidations were completed both in North America and Europe. Backlog was worked down and operations stabilized. Our on-time and full performance has improved as equipment ramped and processes have become more consistent, particularly late in the third quarter and into the fourth.

We are also implementing a common manufacturing operating system across the North American network, which is allowing us to identify issues faster and balance operations more effectively than we could earlier in the year. While we still have a lot of work to do, service performance is moving in the right direction.

As we look ahead, our focus remains on controlling what we can control. Customers continue to tell us that service matters most and where service has improved, we are seeing opportunities to regain volume. We have taken structural actions to align costs with current market realities while being careful not to undermine service. Market conditions remain soft, and we are not counting on a near-term recovery, but we are improving execution and putting in place operating practices that position the business to perform better when demand eventually improves.

In addition, we continue to work through the strategic review of our European business. While the process is ongoing and we have nothing to announce at this time, we believe this review or other potential actions could provide meaningful liquidity and help further strengthen the balance sheet.

We are evaluating alternatives thoughtfully and deliberately with a focus on improving financial flexibility while preserving long-term value.

In addition to the European review, we continue to evaluate other actions, including smaller noncore assets and selective sale-leaseback opportunities as seen with the Coral Springs transaction. Our liquidity position remains strong. At the end of the year, we had approximately $136 million of cash and about $350 million of availability on our revolver. We have no debt maturities until December of 2027 and while those maturities are not imminent, we expect to address them before they become current.

Importantly, our only relevant covenant requires a minimum of approximately $40 million in total liquidity, which is well below our current position. Over the past year, we have increasingly focused the business on execution and decisions within our control. We have taken meaningful steps to improve service, simplify operations, align costs with demand and secure our financial position. These actions are beginning to show up in more stable performance and better control of the business.

As market conditions eventually improve, we believe JELD-WEN will be operating from a stronger position with better service, greater discipline and a more resilient foundation.

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

Thank you, Bill. Turning to the financial results on Slide 6. Fourth quarter net revenue was $802 million, down 10% year-over-year from $896 million in the prior year. Core revenue declined 8%, driven primarily by lower volume. Mix was stable year-over-year following the shift towards lower cost products we saw in 2024 and pricing was a slight positive. Overall, the revenue performance reflects continued pressure from soft end markets rather than changes in customer mix or pricing discipline.

Adjusted EBITDA for the quarter was $15 million or 1.8% of sales. Compared to $40 million or 4.5% of sales in the fourth quarter of last year. The decline was driven primarily by lower volumes, resulting in unfavorable operating leverage as well as ongoing price and cost pressure. These headwinds were partially offset by continued productivity improvements and lower SG&A costs.

The fourth quarter is also seasonally weaker from a margin perspective and adjusted EBITDA was also impacted by approximately $7 million of timing-related items that are not expected to recur. Excluding those items, underlying adjusted EBITDA performance would have been higher.

From a cash flow perspective, we were roughly free cash flow neutral in the quarter. Operating cash flow was largely offset by capital spending, and we benefited from a $55 million reduction in net working capital, driven primarily by lower accounts receivable and inventory levels. consistent with normal fourth quarter seasonality. As Bill mentioned, we also completed a sale leaseback of our Coral Springs facility during the quarter, generating approximately $38 million in net proceeds.

Overall, our focus during the quarter was on disciplined cash usage and managing liquidity carefully in a very challenging macro environment. As a result of lower EBITDA, a net debt leverage increased to 8.6x at year-end. Importantly, this increase was driven by earnings pressure rather than incremental borrowing. We did not add debt or draw on our revolver during the fourth quarter. Reducing leverage remains a priority, and we continue to manage the business with a disciplined focus on cash, cost and balance sheet flexibility.

Turning to Slide 7. The year-over-year change in revenue was driven primarily by lower volumes. Fourth quarter sales were $802 million compared to $896 million in the prior year. Core revenue declined 8% and reflecting a $77 million headwind from volume mix, with the impact overwhelmingly volume-related. Pricing contributed a modest $2 million benefit in the quarter.

The year-over-year comparison also reflects a $41 million reduction related to the court order divestiture of the Towanda operation. Foreign exchange provided a $22 million tailwind driven by the weaker U.S. dollar. Taken together, these factors explain the revenue decline in the quarter and are consistent with the market conditions and operational dynamics we discussed earlier.

Turning to Slide 8. Adjusted EBITDA for the quarter was $15 million or 1.8% of sales compared to $40 million in the prior year. The year-over-year decline reflects a combination of volume-related pressure and ongoing price cost headwinds, partially offset by productivity improvements and lower SG&A. Lower volumes were a meaningful headwind. And reducing adjusted EBITDA by approximately $21 million. In addition, price/cost dynamics contributed to an additional $21 million headwind as cost inflation, particularly due to tariffs, glass and metals continued to outpace pricing recovery.

The year-over-year comparison also includes a $7 million reduction related to the court order divestiture of the Towanda operation. These headwinds were partially offset by improved execution across the business. Productivity contributed a $12 million benefit in the quarter, reflecting continued operational improvements, although that benefit was muted by lower production volume. SG&A was also $12 million lower year-over-year, driven by the cost actions we have taken throughout the year and into the fourth quarter to better align the organization with current market conditions.

Turning to Slide 9 and our segment results. In North America, fourth quarter revenue was $522 million, compared to $640 million in the prior year. The year-over-year decline was driven primarily by lower volume, along with the impact of the court order divestiture of the Towanda operation.

Adjusted EBITDA for North America was $14 million compared to $42 million last year, with adjusted EBITDA margin declining to 2.6% from 6.6%, the reduction in profitability reflects volume-related pressure and continued price cost headwinds, partially offset by productivity actions taken during the year.

In Europe, revenue was $280 million, up from $256 million in the prior year, primarily reflecting the benefit of a weaker U.S. dollar. On a constant currency basis, volumes and mix were lower year-over-year, consistent with continued soft demand across key markets. FX translation accounted for all of the 900 basis point year-over-year improvement in sales. Adjusted EBITDA for Europe was $12 million, compared to $17 million last year, with adjusted EBITDA margin of 4.1% versus 6.5% in the prior year. Productivity was slightly positive but those benefits were more than offset by lower volume mix, along with higher SG&A costs.

With that, I'll turn it back over to Bill to discuss our updated market outlook and how we're positioning JELD-WEN for the path ahead.

Thanks, Samantha. Turning to Slide 11. I want to provide our market outlook for 2026 and the assumptions that underpin our guidance. We continue to see a challenging and uncertain environment and our outlook reflects disciplined actions rather than any expectation of a meaningful near-term recovery.

In North America, we expect the overall market for windows and doors to be down low to mid-single digits. Within that, we anticipate new single-family construction to be down low single digits with repair and remodel activity down mid-single digits. Multifamily activity in the U.S. is expected to be relatively stable, while Canada remains under pressure. We continue to expect high single-digit declines in the Canadian market, reflecting the ongoing economic slowdown and weaker housing activity.

In Europe, we are seeing signs of stabilization. We expect volumes to be broadly flat year-over-year with no material improvements, but also no further deterioration from current levels. Demand remains subdued but year-over-year conditions appear to be more stable than what we have experienced earlier in the current cycle.

Importantly, our company volume expectations are more conservative than the underlying market. As we move through the last year, we have taken pricing actions to cover cost inflation. As a result, we do expect to lose some volume and are prioritizing pricing discipline. That share pressure is intentional and reflected in our guidance. While we are seeing improving service levels and have actions in place to regain share over time, we are not assuming any benefit from service-driven volume recovery in our outlook.

Taken together, this framework reflects a cautious view of the market and a disciplined approach as to how we are managing the business. Our guidance is built on our view of current demand levels with pricing actions largely already implemented and a focus on protecting margins while improving execution rather than relying on external market volume improvement.

Turning to Slide 12, I'll walk through our full year 2026 guidance. Our outlook reflects continued uncertainty in the market and disciplined assumptions around demand, pricing and execution.

For the year, we expect net revenue in the range of $2.95 billion to $3.1 billion. Core revenue is expected to decline between 5% and 10% driven by a combination of macroeconomic pressure and a continued competitive market as we work towards a more neutral price/cost position. While pricing remains slightly negative relative to cost inflation, much of our pricing action has already been implemented and our guidance assumes continued pricing discipline, consistent with how we have managed the business historically. We expect adjusted EBITDA to be in the range of $100 million to $150 million. The range is driven primarily by volume uncertainty rather than execution risk. Our outlook reflects current demand levels and does not assume a material improvement in the market over the course of the year.

On cash flow, we expect operating cash flow of approximately $40 million and capital expenditures of approximately $100 million, resulting in a free cash flow use of approximately $60 million for the year. Capital spending at this level is largely maintenance in nature. Cash usage is expected to be weighted toward the first quarter, which is typically our seasonally highest period for working capital. Restructuring cash outflows are not likely to be of similar magnitude compared to prior year, and we would expect working capital to improve as the year progresses.

Our guidance assumes no portfolio changes and reflects Europe continuing to operate as part of the company. At the same time, we continue to evaluate a range of strategic options, including our ongoing review of the European business, as well as additional actions to improve liquidity, such as selective sale-leaseback opportunities and reviews of other select parts of the portfolio.

Finally, we expect to use our revolver during the first quarter due to normal seasonal working capital needs and would expect to pay down much of that usage by year-end. Overall, our guidance reflects a cautious view of the market, disciplined pricing and cost management and a continued focus on executing through uncertainty.

Turning to Slide 13. This chart bridges our 2025 adjusted EBITDA of $120 million to the midpoint of our 2026 guidance of $125 million. Moving from left to right, the first headwind reflects market volume and mix, which we expect to reduce EBITDA by approximately $25 million, consistent with the continued pressure we see across our end markets.

We also expect a $60 million headwind from share loss driven by a combination of pricing discipline and the lingering impact of prior service challenges. As we discussed earlier, we have taken pricing actions to address ongoing cost inflation. And at the same time, we are continuing to work through the residual effects of poor service performance earlier in the cycle. This share impact is assumed to persist through the year and is reflected in our guidance.

Price and costs represent an additional $10 million headwind as cost inflation, particularly in paris, glass and metals continues to modestly outpace pricing. Much of our pricing action has already been implemented, and this assumption reflects a more normalized price cost relationship than we have seen in recent years.

These headwinds are more than offset by actions within our control. We expect approximately $75 million of benefits from rightsizing the business and improving base productivity, reflecting actions that are largely already executed and fully realized over the course of the year.

In addition, we expect about $35 million of carryover benefit from our multiyear transformation program. This carryover reflects automation, footprint changes and system improvements and represents a transition from a discrete program to a more steady state operating model. The remaining items include approximately $10 million of headwind from compensation and other timing-related items reflecting a more normal incentive compensation environment and reversal adjustments from prior periods, partially offset by foreign exchange and other items.

Taken together, these factors bridge us to the midpoint of our 2026 adjusted EBITDA guidance. This bridge reflects both the reality of the continued market pressure and the impact of disciplined actions we have taken to adapt the business. As we noted earlier, the range around our guidance is driven primarily by volume sensitivity rather than execution risk.

Before we close, I want to step back and talk about how we are improving execution and building greater consistency into the business. In the past, we operated under what we call the JELD-WEN Excellence Model, or JEM. While that framework brought structure, it was largely a one-size-fits-all approach. It relied heavily on top down-driven metrics and did not consistently trigger a structured problem-solving tied to local daily management routines. As a result, issues were often identified but not always addressed with the speed, rigor and accountability required to sustain improvement.

We have now moved to a more disciplined A3 operating system across our manufacturing network. This is a practical management system designed to improve how we define problems, identify root causes and execute countermeasures.

Unlike the prior model, it adapts to the specific needs of each site. It uses multiple KPIs across safety, quality, delivery, cost and growth and connects hourly, daily and longer-term work streams into a single layered operating rhythm. This structure creates clear ownership and faster escalation when performance drifts.

Slide 14 shows what this looks like in practice at our [ Kissimmee ] Florida facility, which was one of the first three plants to implement the new operating model. In 2024, our on-time in full right first-time performance at that facility was approximately 55%. Through 2025, that improved steadily. And by year-end, the plant was consistently operating above 95%.

Importantly, that improvement has been sustained. The system allows teams to identify disruptions early and correct them before they materially impacted customers. The same discipline is reflected in past due performance and inventory control. We entered 2025 with more than $5 million of past due orders at the facility. And by December, that had been reduced to approximately $200,000.

Inventory accuracy and material flow have also improved supporting more stable production and better day-to-day execution.

While [ Kissimmee ] is one example, this is not isolated. We have rolled out or are in the process of rolling out this operating model across North America, and we are seeing similar improvements as it takes hold. Our customers are beginning to see the impact of service becomes more consistent and reliable.

Moving to Slide 15. I want to close by stepping back and putting the quarter and the year into perspective. In the fourth quarter, we performed at the high end of our expectations even as conditions remain challenging and demand did not materially improve. That performance did not come from a change in the environment. It came from tighter execution across the business.

As we look ahead, our focus is on continuing what we've already put in motion. We are sizing the business to current market realities, not to a recovery that may take time to materialize. We are managing the company with a high degree of discipline, particularly around cost and cash, recognizing the importance of preserving flexibility in a soft and uncertain macro environment. These are not short-term measures. They reflect how we intend to run the business going forward.

At the same time, we are continuing to drive improvements in customer service and reliability. As you heard about the operating system example and the work underway at [ Kissimmee ], we are deploying systems that improve consistency and allow us to respond more quickly when performance trips.

Our goal is to rebuild trust and position JELD-WEN as the door and window supplier of choice by being dependable, responsive and disciplined every day. We are encouraged by the early signs that customers are beginning to see the difference but we know this must be proven over time. I want to briefly recognize the work of our teams across the organization. The progress we are making is a result of focused execution and a willingness to address difficult issues. There is more to do, and we are a clear eye about that.

We remain committed to running this company with consistency, accountability and discipline. The environment may remain challenging but we are taking responsibility for the outcomes we can influence and continuing to strengthen how JELD-WEN operates.

With that, I will turn the call over to James for questions.

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

[Operator Instructions] Your first question comes from Susan Maklari with Goldman Sachs.

Thank you. Good morning, everyone. My first question is around that price versus volume dynamic that you spoke to in your prepared remarks, can you talk a bit more about how we should think of the amount that price may decelerate as we move through the year? And how much of that you're willing to about in relation to volume as you continue to face some of those cost headwinds that you mentioned?

Yes. Thanks for the question, Susan. So as we signaled in the prepared remarks, our pricing actions are more or less into the market. So there was a lot of negotiation that work with our customers through the last number of months to get ourselves ready for 2026.

So as you can see on the bridge and where we're showing the look forward in 2026, we still expect slight headwind from a price cost standpoint, maybe due to some tail inflation and some of the input cost increases that we're seeing on glass.

But we believe that, that brings us back into a reasonable pocket, which clearly we have not been in through the last few years. So we feel fairly good headed into this year about where we are and the partnerships with our customers to drive performance and make sure we're delivering what we need to for our customers.

So just on that, Susan, from a phasing standpoint on price, so with price being implemented and being put in already, we're expecting that to be fully into our financials in Q2. So we do expect Q1 to be down year-over-year with slightly positive EBITDA, and that's really because of the price dynamic that I just spoke about, which you'll see that pick back up in Q2.

In addition, the year-over-year headwinds from Towanda being included in the majority of January 2025 and not in '26 and then some of the winter storms. So just wanted to give you kind of that pricing phasing as well.

Yes. No, that's very helpful, Susan. My second question is moving to the slide that you walked us through outlining the efforts of the [ Kissimmee ] facility. [indiscernible] if there's been some very basis blocking and tackling that's happened across your operations, and can you talk a bit about where you are in terms of implementing this across the business? And how do you think about that freeing you up to then tackle some of the larger productivity and efficiency projects that are sitting out there and also that ability to eventually regain share?

Yes. So thanks for the question. That's exactly why we wanted to share this progression, Susan, to make it very clear that we are making progress. And of course, in a down market environment. It's challenging because obviously, the volume reductions have eroded a lot of the efforts that we are making behind the scenes.

So the first message is we have a system that is working and is being implemented. I'd probably say we're 85% of the way there through 2025 meeting, spreading it across to all of our sites, really having the leadership in the layered audit structure and an ownership at site level on controlling their own destiny and serving the customer. So great progress there, and we're very happy with that.

I think the second fact is it still remains a challenging environment, but we are controlling what we can control. And a lot of the things that we're doing here or, say, shop floor based improvement activities and layered structuring of problem solving and less requiring large capital expenditures to drive scale improvement.

Of course, we think we'll get there when the volume returns. But again, this is more us focused on controlling what we can control.

And I think the third lever is productivity. There is also a lot of opportunity in productivity. Clearly, if the volume does recover, it's a lot easier for us to gain productivity benefit across our North American and European network and right now, that's one of the biggest challenges that we have, the scaling up of the volume is not allowing that productivity drop through.

So Susan, your comment is thought on about the blocking and tackling. And I think still highlighting and showing some of that improvement. We'll give color into some of the guidance bridge that you see. And that's the slide that we had in 13, it's the 2026 guidance. So the two large green bars add up to about $110 million. 50% or just more than 50% of that is structural cost actions that we executed, so that is in the bag that were done in '25, especially in Q4 that then carries over into '26. You have about 25% of it that are executed actions that need to be scaled full year. This is exactly what Bill is talking about when it comes to the operating model and scaling that from a full year standpoint. And then the remaining 25% is productivity projects that are identified and are in progress using this simple model that is really driving root cause and solving some of the challenges even despite the operating headwinds of lower volumes.

And that concludes our question-and-answer session. I will now turn the conference back over to James Armstrong for closing comments.

Thank you for joining our call today. If you have any follow-ups, please reach out, and I would be happy to answer any questions. this ends our call, and please have a great day.

This concludes today's call. Thank you for your participation, and you may now disconnect.

Hello, and welcome to JELD-WEN Third Quarter 2025 Conference Call. Please note that this call is being recorded. [Operator Instructions] Thank you. I'd now like to turn the call over to James Armstrong, Vice President of Investor Relations. You may now go ahead, please.

Thank you, and good morning. We issued our third quarter 2025 earnings release last night and posted a slide presentation to the Investor Relations portion of our website, which can be found at investors.jeld-wen.com. We will be referencing this presentation during our call. Today, I am joined by Bill Christensen, Chief Executive Officer; and Samantha Stoddard, Chief Financial Officer.

Before I turn it over to Bill, I would like to remind everyone that during this call, we will make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and provided in our Forms 10-K and 10-Q filed with the SEC. JELD-WEN does not undertake any duty to update forward-looking statements, including the guidance we are providing with respect to certain expectations for future results. Additionally, during today's call, we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for the results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to their most directly comparable financial measures calculated under GAAP can be found in our earnings release and in the appendix of our earnings presentation.

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

Thank you, James, and good morning, everyone. Before we begin, I want to once again recognize our entire team for their ongoing commitment and continued hard work in what has remained a challenging environment. The past quarter has tested our organization in many ways. I'm grateful for the dedication, resilience and collaboration shown across every part of JELD-WEN. It is because of their continued efforts that we remain able to navigate this environment and position the company for long-term success.

The third quarter, both in Europe and North America, was marked by further softening in market conditions and an overall degradation in demand trends. While we had anticipated stability at low levels both new construction and repair and remodel activity weakened further. We also faced operational challenges that limited our ability to capture additional market share with customer orders coming in below expectations. As a result, our performance fell short of our plans, and we are taking clear actions to address the areas that need improvement strengthen execution and ensure that we are better aligned with the current market conditions.

We continue to experience price cost headwinds across several areas of the business. Inflation in both labor and materials has persisted and given current market dynamics, we have seen some pushback on both tariff-related pricing actions and pricing increases to offset market inflation. These factors have created additional short-term margin pressure, which we are actively working to offset through cost reductions, operational efficiencies and focused performance improvement initiatives. Importantly, we remain confident that the steps we are taking will help us better balance our cost structure with current demand while protecting our long-term strategic priorities.

Turning now to Slide 4 and our third quarter highlights. The quarter reflected a more difficult backdrop than anticipated, driven by softening demand and continued inflationary pressure. In response, we are taking meaningful actions to address our cost base, including approximately 11% reduction of North America and corporate headcount. Additionally, we are preserving liquidity while continuing to advance our transformation efforts. As part of that work, we are announcing a strategic review of our European business, evaluating all potential alternatives to strengthen our balance sheet and sharpen our strategic focus. While the process is in its early stages and there is nothing further to announce at this time, we believe this review will allow us to effectively address our upcoming maturities and enhance our long-term balance sheet flexibility.

We are also evaluating additional options around smaller noncore assets such as our distribution business and select sale-leaseback transactions. But have nothing specific to announce at this point in time. Our liquidity position remains strong with approximately $100 million in cash, and approximately $400 million of revolver availability. As a reminder, we have no debt maturities until December 2027. Importantly, our only relevant covenant requires an approximate minimum of $40 million in total liquidity compared to our current position of approximately $500 million. We also continue to strengthen the North American team with the addition of Rachel Elliott as EVP of North America. Rachel brings broad experience from our time with other notable building products companies and we are excited to have her join the organization.

While the near-term environment remains uncertain, we continue to focus on what we can control: improving execution, strengthening operations and ensuring a strong financial foundation. These actions are designed to ensure that we remain well positioned to capture growth as market conditions improve.

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

Thank you, Bill. Turning to Slide 6. As Bill mentioned, market conditions remained challenging throughout the quarter, and our results came in below our internal expectations. The shortfall primarily reflects softer market demand. operational challenges that limited our ability to capture incremental share as expected and ongoing price and cost headwinds across several categories. Revenue for the quarter was $809 million, with core revenue down 10% year-over-year. This decline was driven mainly by lower volumes in both North America and Europe as market softness more than offset the benefits from our cost reduction initiatives and productivity efforts.

Adjusted EBITDA came in at $44 million or 5.5% of sales and was up sequentially from the prior quarter, although below prior year and below our expectations. The lower margin primarily reflected continued price/cost pressure, unfavorable volume and staffing levels that were set in anticipation of market share gains that did not materialize.

Turning to cash flow. Earnings pressure and continued investment in transformation initiatives led to negative free cash flow in the quarter. That said, working capital performance remained disciplined, contributing modestly to liquidity and despite the softer sales environment. Our net debt leverage increased to 7.4x driven by lower year-over-year EBITDA rather than new borrowing. Reducing leverage remains a top priority for us as part of that effort, we have initiated a strategic review of our European segment aimed in part at addressing this elevated leverage and further strengthening our balance sheet.

As shown on Slide 7, the revenue decline this quarter was driven primarily by lower volumes with core revenue down 10% year-over-year. The softness reflects continued market weakness and share loss, along with carryover from the loss of business with the Midwest retailer that occurred in the third quarter of last year. We also had a negative impact from the court order divestiture of our Towanda operations, which weighed on the year-over-year comparison. Product mix was slightly positive versus the prior year but the benefit was not enough to offset the volume pressure. In a few moments, I will provide additional context on the market factors influencing our performance and how we are positioning the business for the remainder of the year.

As shown on Slide 8, adjusted EBITDA for the quarter was $44 million, a decline of about $38 million from the prior year. This reflects the continued softness in demand and the unfavorable price and cost environment that persisted throughout the quarter. Lower volumes were the main driver of the decline as reduced production levels weighed on earnings and more than offset the benefits from our ongoing cost actions. Product mix was slightly positive, but the benefit was not enough to offset the volume deleverage from lower demand. At the same time, price and cost pressures remain significant, particularly as labor and material inflation continued to outpace our ability to recover pricing in the market. These factors led to a sequential decline in margins and further compressed profitability year-over-year. Even with these challenges, we continue to make steady progress on our transformation and cost reduction programs, which provided a partial offset to these headwinds. We also delivered additional savings within SG&A reflecting disciplined expense control and execution of the cost actions we've put in place.

Turning to our segment results on Slide 9. In North America, revenue declined 19% year-over-year, with volume and mix down 13%. The decline was driven primarily by weaker market demand while mix was slightly positive for the quarter. The remainder of the year-over-year decline reflects the court order divestiture of our Towanda operation. Adjusted EBITDA for North America was $38 million compared with $75 million in the same quarter last year. The decrease was largely the result of lower volumes and operational inefficiencies associated with reduced manufacturing throughput in addition to the price cost challenges mentioned previously. These headwinds were partially offset by the benefits from our ongoing cost reduction and transformation initiatives. In Europe, revenue increased 2% year-over-year with volume and mix down 6%. As in North America, mix was slightly positive, but overall demand remained soft across several key markets.

Adjusted EBITDA for Europe was $16 million, which was roughly flat compared to last year as the benefits of productivity improvements and cost actions largely offset the impact of lower volumes. Before turning it back to Bill, I want to take a moment to address tariffs, which continued to be an area of focus. If you turn to Slide 10, you'll see an overview of our current exposure under the most recent tariff framework. At current rates, we estimate the annualized impact of tariffs on our business to be around $45 million, with roughly $17 million expected to materialize in our 2025 results. While the situation remains fluid, we've been largely successful in passing through tariff surcharges to most of our customers. However, in recent months, we've begun to experience greater resistance from some of our larger accounts which has slightly tempered our overall recovery rate.

From a sourcing perspective, our exposure remains relatively modest. Approximately 13% of our combined Tier 1 and Tier 2 supplier spend is subject to potential tariff impact. As we have previously stated, direct sourcing from China represents less than 1% of our total material spend. Even when including Tier 2 exposure, China accounts for about 5% overall. This limited exposure positions us well relative to others in the industry. Overall, while the tariff environment remains uncertain, we're staying nimble in our approach, actively managing near-term impacts and maintaining a disciplined focus on pricing and sourcing strategies that help mitigate cost pressures.

With that, I'll turn it back over to Bill to discuss our updated market outlook and how we're positioning JELD-WEN for the path ahead.

Thanks, Samantha. Turning to Slide 12. I want to provide some perspective on how the market environment has evolved since our last update. Earlier this year, we expect the conditions to stabilize at relatively low levels during the back half of 2025. However, over the past 3 months, we've seen a notable deterioration across our core markets both new construction and repair and remodel activity have weakened further as both consumer confidence and housing affordability remain under pressure.

In Canada, the slowdown has been especially sharp with housing starts down more than 40% year-over-year, reflecting the broader slowdown in the economy. Given these developments, we've updated our market outlook expectations. In North America, we now anticipate full year demand for windows and doors to be down in the high single digits compared to our prior view of a low to mid-single-digit decline. In Europe, we expect demand for doors to be down mid-single digits versus the low single-digit decline we previously forecasted. Across both regions, demand continues to be concentrated at the lower end of the market with affordability driving purchasing decisions and limiting overall mix-up improvement.

Turning to Slide 13. I'll walk through our updated full year guidance. Following the significant market deterioration we saw during the third quarter, we are lowering our 2025 outlook to reflect current demand levels and operational performance. We now expect sales of $3.1 billion to $3.2 billion compared to our previous range of $3.2 billion to $3.4 billion. Adjusted EBITDA is now expected to be between $105 million and $120 million, down from our prior range of $170 million to $200 million. Core revenue is expected to decline 10% to 13% compared with our previous expectation of a 4% to 9% decline. This change is primarily due to 3 factors. First, we had limited success on converting the market share gains we had planned for and staff against earlier this year.

Second, this revision reflects the further weakening in market demand that emerged late in the quarter and some of our own operational challenges. On sales, we faced continued pressure in a weak market and experienced a modest share loss tied to ongoing operational performance issues.

Third, while operations are improving the pace of that improvement is not yet where it needs to be, and we continue to be focused on execution and consistency across the network. Because of these 3 challenges, we now expect a more typical seasonal pattern in the fourth quarter rather than the relative strength we had previously forecasted. We also anticipate continued negative price cost as pricing pressure has intensified, particularly around the edges of the market. At the same time, some of our larger customers are pushing back more forcefully on tariff surcharges, while cost inflation has accelerated across materials, freight and labor.

On operating cash flow, we now expect the use of approximately $45 million compared to our prior forecast for a use of $10 million. This includes approximately $15 million of restructuring that will occur in the fourth quarter as part of our workforce reduction. Although EBITDA expectations have come down, we've taken a disciplined approach to working capital and our focus on cash management remains unchanged. We also expect capital expenditures of approximately $125 million, down from our prior forecast of $150 million, reflecting a tighter focus on critical investments.

Looking ahead to 2026, while we're not providing formal guidance, we would expect CapEx to be lower than this year's level given the current demand outlook and our intent to align spending with market conditions. On leverage, we are actively addressing the issue. As part of this, we have announced a strategic review of our European operations. While we cannot predict the outcome of that process, it represents 1 potential avenue to help reduce leverage and strengthen the balance sheet. We continue to evaluate other strategic options such as selective smaller asset reviews and targeted sale leasebacks. Beyond the European review, however, we have no further updates at this time.

Finally, I want to reiterate that we continue to maintain sufficient liquidity for the midterm. As of the end of the third quarter, we have not drawn on our revolver, and we are taking proactive steps to ensure our liquidity position remains strong as we navigate through this challenging environment.

Turning to Slide 14. This chart bridges our 2024 adjusted EBITDA of $275 million to our 2025 guidance midpoint of $113 million. As shown on the left, the first step reflects the court order Towanda divestiture, which is expected to reduce EBITDA by about $50 million this year. The most significant change comes from market volume and mix, which we now expect to reduce earnings by roughly $100 million, reflecting the broad-based deterioration we have seen in both new construction and repair and remodel activity. We're also seeing a modest impact from share loss as operational challenges have limited our ability to recapture volume in several key product lines. Moving left to right across the chart, price and cost headwinds have intensified when compared to our earlier expectations.

Competitive pricing pressure has increased, especially at the lower end of the market, while cost inflation in materials, freight and labor has accelerated. These dynamics, combined with lower base productivity driven by volume loss represent another significant drag on earnings. On the positive side, we continue to benefit from headwind mitigation actions and transformation initiatives, which together are expected to contribute about $150 million in savings this year. These benefits include both carryover savings from 2024 and the in-year actions already implemented. The remaining items include variable compensation and onetime reversals which represent a modest headwind and foreign exchange and other, which provide a small tailwind. Altogether, these factors bring us to our 2025 adjusted EBITDA guidance midpoint of $113 million, reflecting the additional price, cost, volume and productivity headwinds and that have emerged since our last update.

Moving to Slide 15. The current results do not reflect the potential of JELD-WEN and our disappointing. We have begun and will continue to take broader actions required to change the trajectory of JELD-WEN, including addressing our cost base. First, we have initiated a strategic review of our European business, while the outcome of this -- we continue to simplify our product portfolio and are removing unnecessary complexity. Our portfolio breadth has added complexity that must be balanced with our customers' expectations on service and product costs.

We will center our efforts on a defined set of core product families. And when customers need bespoke solutions, we must deliver them with precision and price them for their value. This will lead to improved service levels and better operating efficiency. These actions are not adjustments and will redefine how this company operates and competes. The current environment requires the painful but necessary decisions to ensure performance, accountability and free cash flow growth. As we execute on these significant changes, I want to take a moment to thank our teams across JELD-WEN for their dedication and hard work. Their focus and commitment are driving real progress in our operations every day. I also want to thank our customers for their continued partnership as we further strengthen our service and reliability. We remain confident that the actions we are taking today, both operational and strategic are setting up a stronger JELD-WEN in the years ahead.

Thank you once again for your continued support and interest. With that, I will now turn the call back over to James for the Q&A.

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

Your first question comes from the line of Susan Macquarie of Goldman Sachs.

On everyone. My first question is going back to the share losses that you talked about in your prepared remarks. Can you give us a bit more color on where those are coming from? How they came through over the last quarter? And then understanding that you've had a more challenging time regaining some of that share. But just how do you think about the path from here?

So thanks for the question, Susan. A couple of comments. As you remember, there was a significant share loss last year with the Midwest retailer on the Windows side of the business. So that laps in September. So we were still tackling that base effect in Q3.

Second point, as we did note in our prepared remarks, pricing remains challenging across the market in North America, particularly and there have been some aggressive pricing actions around the edges from some competitors, mainly on the door side of the business. So we have seen specific regional share loss, but on balance, not material. And I think the third point is, as we continue to our simplification of our portfolio, our target is to reduce approximately 30% of our SKUs by year-end were not by year-end, excuse me, we're in the process of reducing 30% of our SKUs. We're about 50% of the way there. So we have been trimming complexity which allows us then to optimize our service levels into our customers.

I think the last point is then just a weak overall market. And we've said we're really focused on rebalancing our shares with customers where we have strong door volume, we want to try and increase our window business and the other way around. We've actually made some progress on the Windows side. But in general, the soft market has created, I think, opportunities from aggressive pricing as we've talked about and our portfolio reduction, which is simplification driven has also led to a little bit of that. And as we look forward, we see that continuing into the fourth quarter from a market standpoint. Volumes remain soft. Nothing that we've seen in the month of October would suggest a different run rate so we're expecting that through the end of the year, and you can see that on the bridge.

And just to follow up on that, Susan, when you compare kind of our previous guidance to the bridge that we're sharing in this earnings release, the share loss hasn't changed. That is, as Bill described. Most of this has already occurred. It's more about the volume mix that we expected to gain that did not materialize. That's the big change on that.

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

Sure, Susan. As you've seen on our guidance bridge, Page 14, we expect about $150 million to offset the various headwinds that we've laid out as in prior years, we would expect from our transformation savings of about $100 million, roughly half of that to roll forward and in addition, as we've announced and talked about today in the prepared remarks, there are going to be some pretty significant headcount reductions taking place in the fourth quarter of this year, and we would expect benefits of roughly $50 million as we're thinking about a full year impact to 2026. So that's roughly $100 million currently.

And I think we wouldn't want to give any more specific guidance than that.

And on Susan on that, the headwind mitigation of $50 million, that was already done and executed in the beginning part of this year. So taking effect in the transformation initiatives that we have, the $100 million, those are already underway delivering results, things like plant closures, automation equipment that is now up and running in production. So back to Bill's point, these are already done in our P&L. Unfortunately, the other items like the more significantly negative price cost volume essentially not the incremental share that we expected is offsetting those.

Your next question comes from John Lovallo from UBS.

And maybe just a follow-up on Susan's question and just to put a finer point on it. The outlook implies $55 million of productivity, SG&A and other in the fourth quarter. I think there's only been about $37 million year-to-date. So what is driving that ramp? It sounds like if I understood the answer to Susan's question. PAUSE that a lot of this is already baked and is what you're going to come through? Is that the right way to think about it?

Yes. So thanks for the question, John. It's -- a lot of the savings are fully baked -- so the headwind mitigation, the transformation is fully baked. The action that Bill described in the recorded remarks, are not expected to have a material impact in Q4. We would expect that full run rate going into 2026. Where you see in just kind of isolating maybe Q4 and looking at that year-on-year, the biggest drivers, I would say, on the negative side are the volume mix, which is, let's call it, in line with what we expected in Q3 in previous quarters. Price cost, unfortunately, being more negative -- and part of that is some of the resistance on tariff surcharge pass-throughs. So that is more negative in Q4. And then the continued, let's call it, court ordered divestiture of Towanda impact into our P&L. The mitigation efforts, those are -- as I said, they're already done and dusted and they're in the P&L. And so that's going to be helping to offset some of those..

Okay. Maybe I'm missing it. So I'm still curious where that $55 million is coming from when there's been only $37 million year-to-date. What's driving that $55 million?

You're talking about the $55 million of negative base productivity.

No product savings. Yes.

Okay. So when you think about on the bridge, the base productivity, and I think this is what you're referring to, the negativity on that is coming from the fact that we staffed up our -- we stacked up our network in order to support incremental share gains that did not materialize. So in addition to essentially not having the volume flow-through, we then had costs we had to come out. So when you think about I think your question, John, is looking at there's transformation of around $100 million and then there's going to be base productivity offsetting that. And I think that's where you get to essentially the combination of what you're driving at. So right, of, let's call it, good guys from actions we've already taken, less that negative base productivity gets you to a net of, let's call it, $100 million.

Okay. All right. We'll follow up on that. Just I guess the 39% reduction in EBITDA expectations since August, I'm curious, I mean has the market gotten that much worse? Or were there things that just were not foreseen by you guys that maybe should have been? I mean what drove that 39% reduction?

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

And third, we've had some selective service issues across our network, and we've made a ton of progress and I would say we're very close to where we need to be, but we were still struggling in the third quarter and our ability to react on some specific areas was below our own expectations. So what are we doing? We're rightsizing our cost structure to market reality, we're further simplifying our portfolio. As I've noted, we were taking about 30% of the SKUs out, we're about midway through that. And we've been really driving the operating model rollout across our network of distribution windows and doors manufacturing sites in North America. And so we missed the market downturn, John, we thought we're going to be able to compensate some of it with our own initiatives. We did not materialize based on limited take rates, and we staffed up for that, and that hit us that hit us hard in the third quarter, and we're correcting now that as we go into the fourth quarter.

Your next question comes from the line of Philip Nong of Jefferies.

You have Fiona on Brookville today. Just wondering on your full year EBITDA guidance, can you help us understand how much of that is coming from Europe? We're assuming about roughly half of the consolidated total. Is that directionally correct?

Yes. That's directionally correct. So when you think about Europe and North America, how much is coming from each, it's about in line. We've seen, let's call it, an improvement of Europe. And unfortunately, because of some of the challenges in the North American market, a bit of a decline in North America year-on-year from an EBITDA standpoint. So that's the right way to look at it, Fiona. Thank you for the question.

And then 1 more. So if you were to sell your business and say you got probably 7.5 multiple like you did for Australia business. Our math it wouldn't really move to leverage that much so just wondering, can you provide more color on that, maybe both on deleveraging and liquidity?

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

Your next question comes from the line of Trevor Allison of Wolfe Research.

First 1 just on 4Q EBITDA guidance, the implied EBITDA guidance, the bottom end of that is roughly breakeven from an EBITDA perspective. That would be a pretty severe decline sequentially compared to what you guys are expecting from a revenue standpoint from 3Q to 4Q. Can you just talk about what's driving that big drop-off in EBITDA expectations sequentially? Anything more onetime in nature occurring in 4Q, then that wouldn't repeat going forward?

Yes. I can go through that. So a few things. When we initially guided out, we expected a nonseasonal Q4, so a much stronger Q4 in terms of both the volume as well as the productivity. And unfortunately, we are seeing, I would say, more of the seasonality that we've seen in previous years. So when you think about the range that we've guided to, you're correct on the low end of that range and that's tied to some of the uncertainty that we are seeing going into Q4. The last month of the year is generally for us, a very soft year with different holiday period, customer buying patterns. And so it's hard to predict on that. But I would say when you look at kind of the midpoint of our range and how we're guiding to the 2 biggest drivers, as I talked about earlier are the volume mix being.

I would say, as down year-on-year as Q3 with maybe a little bit more of softness and then the price/cost negativity being almost double what we experienced in Q3. We are seeing cost inflation, of court, more in line with our expectations, maybe slightly higher, but more in line with what we expected. Unfortunately, the pricing realization is lower than expected, as we talked about earlier.

So those 2 are, I would say, the biggest needle movers in driving. And then some of the base productivity is we need to rightsize our North America structure for the lower demand that did not materialize from the incremental gains we initially expected.

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

Sure. So in terms of liquidity, as we've talked about, we have not drawn the revolver to date. Our plans are to not draw on the revolver in Q4. We have not guided anything on 2026 nor are we providing guidance at this time. But from a liquidity standpoint, we are already working through some select sale leasebacks to provide additional liquidity as a buffer. And when you look at Q4, just in isolation outside of some of the cost measures or the cost actions that we are taking, which will have restructuring costs tied to it. We are driving to a free cash flow neutrality in Q4. So we are pulling back our CapEx -- we are managing working capital in a much more, I would say, rigorous and disciplined fashion, and that would continue. So from a liquidity standpoint, we are taking actions on, let's call it, more select smaller pieces of our real estate portfolio. And I would say nothing to guide into '26 at this time.

Your next question comes from the line of Steven Ramsey of Thompson Research Group.

On the share gain that you expected to capture would you say that opportunity is gone? Or is that something that you hope to get in '26 to greater fruition and then maybe if you could share any detail on the opportunity itself, if it was windows or doors or channel in color there?

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

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

Yes. So a number of different questions in that question, Stephen. Let me just start with 2025 because that's what we're talking through and what we have visibility to. So as you've seen from our bridge, we're expecting roughly a $50 million credit cost headwind for full year and $25 million and clearly, we can't continue at that rate. So we're taking a lot of actions addressing cost structure, driving efficiency and simplification to more effectively manage the headwinds going forward. It still remains a dynamic market with tariffs still, I would put it in the dynamic bucket with potential changes ahead. We know what we need to do in order to drive mitigation, and that's going to be our focus and already is our focus this year. And I don't want to guide or commit to anything that we'd be thinking through next year. But clearly, we know that we have a lot of homework to be done and it is a challenged environment.

We can see consumers are still being very discretionary on larger ticket items, especially what we see through our retail partners. There's hesitation based on affordability and uncertainty, and that's continuing putting additional pressure, obviously, on the price side of the equation.

Next question comes from the line of Matthew Booker.

Anika Dalkia on for Matt today. So I wanted to start off. I'm wondering how sales trended through the quarter and into October. As we saw some interest rate relief. And similarly, how has mix trended as you see relief on the rate side. I'm wondering if people are willing to mix up and more broadly, what you think is necessary to improve the mix dynamics I know mix is positive this quarter, but maybe it's more so a function of lapping easier year-over-year comps.

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

So don't expect a very close connect between rate reductions and volume increases on the new construction side of the business. I think in general, consumers still remain very cautious I said before to Stephen's question, big ticket items are still very slow in the retail side of the business and the expectations are that this continues. We haven't seen a significantly different trend in October than we did through the third quarter. And so I think, to answer your question specifically, the Fed funds reductions did not move the needle for us in the month of October.

Understood. That's helpful. And then second, I'm just wondering, you lowered the revenue guide for core. It's now down 10% to 13% from prior 4% to 9%. It seems to be largely driven by volume and mix as you look at the '25 guidance bridge. So just going back to that mix point, if you can separate how much is volume given you lowered the end market assumptions for both new construction and retail? And then how much is mix?

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

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

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

Thank you for attending today's call. You may now disconnect. Goodbye.