Core Viewpoint - The previous investment stance on JELD-WEN Holding (NYSE: JELD) was a hold rating due to the absence of near-term recovery catalysts [1] Group 1: Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - The analysis is based on a bottom-up approach, examining the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $824 million, a 16% decline year over year, primarily due to lower core revenues and the divestiture of Towanda operations [12][15] - Adjusted EBITDA decreased to $39 million, down $46 million from the previous year, resulting in an adjusted EBITDA margin of 4.7% [13][16] - Free cash flow was negligible compared to $12 million in Q2 2024, driven by lower EBITDA [13][14] - Net debt leverage ratio increased to 5.7 times, exceeding the targeted range, with a focus on reducing leverage [14][15] Business Line Data and Key Metrics Changes - North America segment reported revenue of $556 million, a 22% decline year over year, with adjusted EBITDA dropping to $35 million from $76 million [17] - Europe segment revenue was $268 million, down 2.7% year over year, with adjusted EBITDA at $17 million, a decline of $3 million [18][19] Market Data and Key Metrics Changes - Demand remained soft across all product categories and end markets, with a 14% decrease in volume and mix [15][16] - The court-ordered divestiture of Towanda operations negatively impacted year-over-year comparisons [12][15] Company Strategy and Development Direction - The company is focused on improving service levels, optimizing manufacturing and distribution networks, and investing in automation to enhance long-term efficiency [32][34] - Full year revenue guidance is set between $3.2 billion to $3.4 billion, with core revenue expected to decline between 4% to 9% [22][23] - The company is evaluating strategic options to address high leverage, including potential divestitures of non-core assets [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the macro environment but expressed confidence in long-term housing demand and the company's positioning for recovery [8][35] - The company reinstated full year guidance due to improved visibility, despite the uncertain macroeconomic conditions [8][22] Other Important Information - The company expects approximately $100 million in transformation benefits for the year, with half of that being carryover from previous actions [25][30] - Tariffs are estimated to have an annualized impact of approximately $40 million, with pricing actions in place to recover costs [20][21] Q&A Session Summary Question: Optimization of the network and implications for near-term margins - Management indicated they are over the halfway mark in optimizing the network but are slowing consolidation efforts to preserve capital and limit service disruptions [38][39] Question: Pricing pressures and inflation offset - Management noted a slight negative price-cost relationship due to inflation exceeding price increases, with competitive pricing pressures in select regions [43][44] Question: Actions to address leverage and urgency - Management confirmed that while the leverage ratio is above target, there is no immediate pressure due to ample liquidity and no restrictive covenants [50][52] Question: Volume performance in North America and Europe - Management reported mid single-digit volume declines in North America, with a similar trend in Europe, but noted that the rate of decline is slowing [63][66] Question: EBITDA margin improvement in the second half - Management explained that incremental EBITDA margins are expected to improve due to volume increases and cost mitigation actions already in place [54][56] Question: Performance of windows versus doors - Management stated that there has been no significant change in performance between windows and doors, with minimal mix down observed in 2025 [92][95]

Financial Performance - Sales decreased to $824 million in Q2 2025, a 16% decrease compared to $986 million in Q2 2024[17] - Adjusted EBITDA decreased by 54% to $39 million in Q2 2025, compared to $85 million in Q2 2024[19] - Adjusted EBITDA margin decreased by 390 bps to 4.7% in Q2 2025, compared to 8.6% in Q2 2024[19] - Core revenue decreased by 13% due to lower volume/mix[20, 22] - Free Cash Flow is ~($150M)[35] Segment Results - North America net revenue decreased to $556 million in Q2 2025 from $711 million in Q2 2024, with an Adjusted EBITDA of $35 million and a margin of 6.3%[28] - Europe net revenue decreased to $268 million in Q2 2025 from $275 million in Q2 2024, with an Adjusted EBITDA of $17 million and a margin of 6.4%[28] - North America volume/mix down (16%)[29] - Europe volume/mix down (10%)[29] Outlook and Guidance - Net revenue is projected to be between $3.2 billion and $3.4 billion[34] - Core revenue is expected to be down 4% to 9%[34] - Adjusted EBITDA is projected to be between $170 million and $200 million[34] Balance Sheet - Total debt is $1,179 million as of June 28, 2025[47] - Cash is $134 million as of June 28, 2025[47] - Net debt leverage is 5.7x[47]

Core Insights - Jeld-wen reported a year-over-year decline in GAAP revenue, operating margin, and net profit for Q2 2025, despite exceeding modest analyst estimates in non-GAAP EPS and GAAP revenue [1][12] - GAAP revenue was $823.7 million, surpassing the average analyst estimate of $810.1 million, while non-GAAP EPS showed a loss of $0.04, narrower than the projected loss of $0.08 [1][2] - The company reinstated its fiscal 2025 guidance, indicating ongoing sales and margin pressure, with limited financial progress observed [1][12] Financial Performance - GAAP revenue fell 16.5% year-over-year, primarily due to weak demand in North America and a court-mandated divestiture [5] - North America segment revenue dropped 21.8%, with a 16% decrease in volume and mix, and a 7% revenue loss from the divestiture of the Towanda manufacturing facility [5] - Adjusted EBITDA from continuing operations was $39.0 million, down 54.0% from $84.8 million in Q2 2024 [2][6] Operational Overview - Jeld-wen operates 79 manufacturing and distribution facilities across 14 countries, focusing on both residential and commercial building markets [3] - The company is modernizing and consolidating its manufacturing network, driving cost reductions, and leveraging proprietary technologies [4] - Environmental and regulatory compliance, particularly around sustainability and energy efficiency, is now central to the company's operations [4] Segment Analysis - The Europe segment showed more stability, with revenue down only 2.7%, partly offset by a 2% gain from price increases and a 5% boost from currency movements [6] - Adjusted EBITDA for the Europe segment decreased by 16.6%, indicating less margin erosion compared to North America [6] Challenges and Strategic Actions - Lower volumes and underutilization of production facilities have been significant challenges, although cost savings and transformation measures have helped mitigate some losses [7] - Additional charges, including $8.6 million in professional and legal expenses and $30 million in tariff costs, impacted results [8][9] - The company is investing in automation and reducing product complexity to optimize manufacturing and address excess capacity [10][11] Future Guidance - Management reinstated full-year guidance for FY2025, forecasting revenue between $3.2 billion and $3.4 billion, reflecting a 4% to 9% decline in core revenues year-over-year [12] - Adjusted EBITDA for FY2025 is expected to range from $170 million to $200 million, significantly below the prior year [12] - Operating cash flow for FY2025 is projected to be a use of approximately $10 million, indicating continued pressure on profit margins and weak demand [12]

[JELD-WEN Second Quarter 2025 Earnings Release](index=1&type=section&id=JELD-WEN%20Second%20Quarter%202025%20Earnings%20Release) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) The company reported a significant Q2 revenue decline of 16.5% and a 54.0% drop in Adjusted EBITDA amid challenging market conditions Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Revenues | $823.7M | $986.0M | (16.5)% | | Net Loss from Continuing Operations | ($22.3)M | ($18.5)M | 20.6% | | Diluted EPS from Continuing Operations | ($0.26) | ($0.22) | (18.2)% | | Adjusted EBITDA from Continuing Operations | $39.0M | $84.8M | (54.0)% | | Adjusted EBITDA Margin | 4.7% | 8.6% | (390) bps | | Adjusted EPS from Continuing Operations | ($0.04) | $0.34 | (111.8)% | - The decrease in net revenues was primarily driven by a **(13%) decline in Core Revenues** and a **(5%) impact from the court-ordered divestiture of the Towanda facility**[4](index=4&type=chunk)[9](index=9&type=chunk) - The decline in Core Revenues was attributed to a **(14%) decrease in volume/mix**, which was slightly offset by a 1% benefit from price realization[4](index=4&type=chunk)[9](index=9&type=chunk) - CEO William J. Christensen highlighted that the company effectively managed uncertainty by delivering cost reductions and is making steady progress in improving quality and service[3](index=3&type=chunk) [Segment Performance (Q2 2025)](index=2&type=section&id=Segment%20Performance%20(Q2%202025)) Both North America and Europe segments saw revenue and Adjusted EBITDA declines, with North America more severely impacted by market weakness Q2 2025 Segment Performance (vs. Q2 2024) | Segment | Net Revenue | % Change | Adjusted EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | | North America | $555.7M | (21.8)% | $34.7M | (54.1)% | | Europe | $268.1M | (2.7)% | $17.0M | (16.6)% | - North America's revenue decline was driven by a **(15%) decrease in Core Revenues** (due to a 16% volume/mix decline) and a **(7%) impact from the Towanda divestiture**[17](index=17&type=chunk) - Europe's revenue performance was impacted by an **(8%) decrease in Core Revenues** (due to a 10% volume/mix decline), which was partially offset by a 5% favorable foreign exchange impact[17](index=17&type=chunk) [Financial Position and Cash Flow (Six Months Ended June 28, 2025)](index=2&type=section&id=Financial%20Position%20and%20Cash%20Flow%20(Six%20Months%20Ended%20June%2028%2C%202025)) The company's cash flow deteriorated significantly in H1 2025, leading to a substantial increase in Net Debt Leverage to 5.7x Six Months 2025 Cash Flow Summary (vs. Six Months 2024) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($48.9)M | $40.4M | | Capital Expenditures | $76.1M | $74.1M | | Free Cash Flow | ($125.1)M | ($33.8)M | - The increase in cash used in operations was primarily due to a **($165.4) million decrease in earnings** and a $39.5 million increase in cash used in working capital[10](index=10&type=chunk) - **Net Debt Leverage rose to 5.7x** as of June 28, 2025, compared to 3.8x at December 31, 2024, reflecting lower trailing twelve months Adjusted EBITDA[50](index=50&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) The company reinstated its full-year 2025 guidance, projecting revenue of $3.2-$3.4 billion and Adjusted EBITDA of $170-$200 million Full Year 2025 Guidance | Metric | 2025 Guidance | | :--- | :--- | | Revenue | $3.2 to $3.4 billion | | Adjusted EBITDA | $170 to $200 million | | Core Revenue Decline | (4%) to (9%) YoY | - The company reinstated its guidance despite remaining uncertainty around tariffs from the federal government[12](index=12&type=chunk) - The company now expects operating cash flow to be an approximate **$10 million use of cash** for the full year[14](index=14&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=3&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) This section provides detailed unaudited financial statements and reconciliations of GAAP to non-GAAP measures like Adjusted EBITDA [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a Q2 net loss of $21.5 million and an H1 net loss of $211.7 million, driven by lower revenues and a goodwill impairment Q2 2025 Income Statement Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Revenues | $823.7M | $986.0M | | Gross Margin | $143.4M | $190.0M | | Operating (Loss) Income | ($13.9)M | $5.1M | | Net Loss | ($21.5)M | ($18.5)M | H1 2025 Income Statement Highlights (vs. H1 2024) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Revenues | $1,599.7M | $1,945.1M | | Goodwill Impairment | $137.7M | $0.0M | | Operating Loss | ($198.9)M | ($23.1)M | | Net Loss | ($211.7)M | ($46.2)M | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $2.54 billion and shareholders' equity fell to $477.1 million, reflecting the period's net loss Balance Sheet Summary | Metric | June 28, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $134.1M | $150.3M | | Goodwill | $196.6M | $315.2M | | Total Assets | $2,542.9M | $2,620.2M | | Total Liabilities | $2,065.8M | $2,000.1M | | Total Shareholders' Equity | $477.1M | $620.1M | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company used $48.9 million in cash from operations in H1 2025, a significant reversal from the prior year's cash generation Six Months 2025 Cash Flow Activities (vs. Six Months 2024) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($48.9)M | $40.4M | | Net Cash Provided by (Used in) Investing Activities | $36.8M | ($69.6)M | | Net Cash Used in Financing Activities | ($12.8)M | ($39.8)M | | **Net Decrease in Cash** | **($16.2)M** | **($75.5)M** | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section details reconciliations from GAAP net loss to non-GAAP metrics, with a goodwill impairment being the largest adjustment - For the six months ended June 28, 2025, **Loss from continuing operations of ($212.4) million** was reconciled to **Adjusted EBITDA of $60.9 million**[40](index=40&type=chunk) - Key adjustments to calculate Adjusted EBITDA for H1 2025 included a **$137.7 million goodwill impairment**, $54.7 million in depreciation & amortization, $31.4 million in net interest expense, $23.4 million in restructuring charges, and $20.5 million in net legal/professional expenses[40](index=40&type=chunk) - Transformation journey expenses, included in 'Net legal and professional expenses', amounted to **$8.1 million for Q2** and **$19.3 million for the first six months of 2025**[40](index=40&type=chunk)

Core Insights - JELD-WEN reported a net revenue of $823.7 million for Q2 2025, a decrease of 16.5% compared to $986.0 million in Q2 2024, primarily due to a 13% decline in Core Revenues and a 5% decrease from the divestiture of Towanda [4][11] - The company experienced a net loss from continuing operations of $22.3 million, or $0.26 per share, compared to a net loss of $18.5 million, or $0.22 per share, in the same quarter last year [5][6][11] - Adjusted EBITDA from continuing operations was $39.0 million, down 54.0% from $84.8 million in Q2 2024, with an Adjusted EBITDA Margin of 4.7%, a decrease of 390 basis points [7][11] Financial Performance - For the six months ended June 28, 2025, net revenues totaled $1.6 billion, a decline of 17.8% from $1.9 billion in the same period last year [35] - The company reported a net loss of $211.7 million for the six months ended June 28, 2025, compared to a net loss of $46.2 million in the same period last year [38] - Free Cash Flow used in the six months ended June 28, 2025, was ($125.1) million, compared to ($33.8) million in the same period last year [9] Segment Performance - In North America, net revenue was $555.7 million, a decline of 21.8%, driven by a 15% decrease in Core Revenues and a 7% decrease from the divestiture of Towanda [12] - In Europe, net revenue was $268.1 million, a decline of 2.7%, with Core Revenues decreasing by 8% but partially offset by a 5% favorable foreign exchange impact [12] Guidance and Outlook - The company reinstated its full-year 2025 revenue guidance of $3.2 to $3.4 billion, reflecting a year-over-year decline in Core Revenues of approximately 4% to 9% compared to 2024 [14][15] - Adjusted EBITDA is expected to be in the range of $170 to $200 million, indicating continued pressure from competitive pricing and volume environment [14][15]

Core Viewpoint - JELD-WEN Holding, Inc. has made significant progress in its sustainability efforts, emphasizing that sustainability is a key business driver and integral to its operations and product design [3][4]. Summary by Categories Products - JELD-WEN is committed to ensuring that all wood used in production is responsibly sourced by 2030 [3]. Environmental Stewardship - The company has achieved a 10% reduction in Scope 1 and Scope 2 greenhouse gas emissions since 2021 [8]. - There has been a 12% reduction in metric tons of waste sent to landfills year-over-year [8]. - Energy consumption has decreased by 7% year-over-year [8]. Social Responsibility - JELD-WEN aims to achieve a Total Recordable Incident Rate (TRIR) of less than 1.0 by 2030 [3]. - The company has reported a 5% reduction in lost time injury rate year-over-year [8]. Governance - JELD-WEN's Global Sourcing Policy compliance stands at 63% among wood suppliers [8].

Core Points - JELD-WEN Holding, Inc. will release its second quarter 2025 results on August 5, 2025, after market close [1] - A conference call to discuss the results is scheduled for August 6, 2025, at 8 a.m. EST [1] Company Overview - JELD-WEN Holding, Inc. is a global designer, manufacturer, and distributor of high-performance building products, including doors and windows [3] - The company operates in 14 countries across North America and Europe, employing approximately 16,000 associates [3] - JELD-WEN's brand portfolio includes JELD-WEN®, LaCantina®, VPI™, Swedoor®, and DANA® [3]

Core Insights - JELD-WEN UK has achieved its second Cradle to Cradle Certified® product certification in 2025, enhancing its portfolio of sustainable doors and reinforcing its commitment to responsible innovation across Europe [1][3][5] Sustainability Commitment - Cradle to Cradle Certified® is recognized as one of the most advanced product sustainability standards, assessing products based on material health, circularity, climate protection, water stewardship, and social fairness [2] - The newly certified Bronze-level products include various door types from Latvia, Estonia, Denmark, Sweden, and the United Kingdom, showcasing the company's alignment of sustainability with manufacturing excellence [3] Strategic Positioning - The certification highlights how sustainability is integral to JELD-WEN's innovation and operational performance, positioning the company favorably ahead of regulatory changes like the EU Deforestation Regulation (EUDR) [4] - By adhering to Cradle to Cradle Certified® standards, JELD-WEN ensures responsible sourcing and sustainability throughout the product lifecycle, enhancing transparency and long-term value for stakeholders [4] Global ESG Goals - The expansion of Cradle to Cradle certification marks a significant milestone in JELD-WEN's sustainability journey, reflecting the company's commitment to designing safe, circular, and responsibly made products [5] - JELD-WEN aims to provide sustainable solutions that benefit customers, communities, and the planet, aligning with its global ESG objectives [5] Company Overview - JELD-WEN Holding, Inc. is a leading global designer, manufacturer, and distributor of high-performance building products, operating in 14 countries and employing approximately 16,000 associates [6]

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