Financial Data and Key Metrics Changes - Third quarter revenue decreased by 5% to $614 million, while adjusted EBITDA before unallocated amounts increased by 5% to $148 million, resulting in an EBITDA margin of 24.1%, an increase of 240 basis points [10][12] - Gross profit on a GAAP basis for the quarter was $265 million, compared to $249 million in the prior year quarter, with normalized gross margin increasing by 230 basis points to 43.2% [10][11] - The company recorded a pretax charge of $244 million for impairment on goodwill and investment lives related to the acquisition of Hunter Fan due to weak consumer demand and increased tariffs [11] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased by 2% to $400 million, with an adjusted EBITDA of $129 million, up 9% year-over-year, driven by favorable price and mix [13] - Consumer and Professional Products (CPP) revenue decreased by 16% to $213 million, primarily due to a 19% decrease in volume from weak consumer demand, although EBITDA decreased by 14% to $19 million [13][14] Market Data and Key Metrics Changes - The company reaffirmed full-year EBITDA guidance of $575 million to $600 million while reducing revenue expectations by $100 million to $2.5 billion due to ongoing consumer weakness in the CPP segment [6][15] - The company noted a 1% unfavorable impact from foreign currency [14] Company Strategy and Development Direction - The company is committed to a capital allocation strategy that includes investing in businesses, opportunistically repurchasing shares, and reducing debt, having returned $145 million to shareholders through dividends and stock buybacks [18] - The company aims for long-term margin targets of 15% in the CPP segment and over 30% in the HBP segment, with current expectations for HBP margins exceeding 31% [16][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the CPP segment, indicating that consumer confidence may return once tariffs stabilize [33][35] - The company expects to generate over $1 billion in free cash flow during the fiscal year and the next two years, despite current challenges [18] Other Important Information - The company repurchased $40 million of stock during the third quarter, reducing outstanding shares by 18.4% since April 2023 [6][7] - A quarterly dividend of $0.18 per share was authorized, marking the 56th consecutive quarterly dividend [8] Q&A Session Summary Question: Can you discuss the pricing strategy in the CPP segment and retailer reactions to tariffs? - Management indicated that they have implemented price increases in certain instances but could not provide detailed insights due to sensitive customer discussions [23] Question: What are the sell-through trends at retail? - Management noted reduced point-of-sale activity, particularly in the Northeast, influenced by weak consumer demand and concerns about tariffs and inflation [24] Question: How is pricing realization tracking in the HBP segment? - Pricing realization is generally tracking in line with expectations, and price increases are being accepted by the market [29] Question: What is the outlook for demand recovery in the CPP segment? - Management stated it is difficult to project when consumer demand will rebound, but they expect recovery once tariffs stabilize [33] Question: What are the long-term margin targets for the CPP segment? - The long-term target for CPP margins is 15%, but achieving this will require a return of consumer demand [44] Question: How is the global sourcing initiative progressing? - Management confirmed that all actions related to global sourcing are complete, and they have flexibility in sourcing locations [36]