Financial Data and Key Metrics Changes - Total net sales grew 34% to $1.3 billion, including $345 million from acquired AZEK sales, while organic sales declined 1% [22] - Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin [22] - Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26 [22] Business Line Data and Key Metrics Changes - Siding and trim segment net sales increased 10%, including $89 million from AZEK, while organic net sales declined 3% due to lower volumes [23][24] - Deck rail and accessories net sales increased 6% on a pro forma basis, with adjusted EBITDA of $79 million and a 30.7% adjusted EBITDA margin [25] - Australia and New Zealand net sales declined 10% due to a 20% decline in volumes, partially offset by a 14% rise in average selling price [26] - Europe net sales increased 18%, driven by strong fiber gypsum volume and consistent average net sales price [27] Market Data and Key Metrics Changes - North America accounts for 80% of net sales, with siding and trim and deck rail and accessories being the largest segments [9] - New construction represents approximately 40% of North America revenue, with repair and remodel at about 60% [10] - Demand trends in the new home market have improved relative to expectations, with mid-single-digit organic net sales declines anticipated for the full year [10] Company Strategy and Development Direction - The company focuses on profitable growth, disciplined execution, and material conversion from wood and inferior materials to composite alternatives and fiber cement [7] - The integration with AZEK is on track, with a focus on cost synergies and enhancing marketing capabilities [18][19] - The company aims to drive material conversion and sharpen execution across the business while delivering on synergy and deleveraging commitments [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, leading to a modest increase in full-year guidance despite ongoing challenges [8] - The company expects continued challenges in siding and trim markets, with mid-single-digit organic sales declines anticipated in the second half [28] - Management remains optimistic about long-term cash generation and expects to generate at least $200 million in free cash flow for the year [30] Other Important Information - The appointment of Nigel Steen as Chair of the Board and Ryan Lotta as the new Chief Financial Officer was announced [4][6] - The company has surpassed its first-year cost synergy goal and is pushing towards a total cost synergy target of $125 million [19] Q&A Session Summary Question: Trends in siding and trim, particularly with builder customers in the South - Management noted that the deterioration in market conditions has been less severe than previously anticipated, with some regions showing more stable activity [36][39] Question: Competitive environment in decking and railing - Management indicated that they have not seen a need to change their strategy and continue to focus on customer value and downstream marketing [42][46] Question: Price expectations in decking - Management confirmed that they will remain consistent in their pricing actions and continue to take inflationary pricing in the marketplace [52] Question: Cost synergies and timing - Management highlighted that they have achieved 85% of their G&A cost synergy target and are focused on ensuring no disruption to the base business [78] Question: Trim attachment rates in new housing and R&R - Management reported progress in trim attachment rates, particularly with large home builders, and sees significant opportunities for growth [68]

Financial Data and Key Metrics Changes - Total net sales grew 34% to $1.3 billion, including $345 million from acquired AZEK sales, while organic sales declined 1% [22] - Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin [22] - Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26 [23] Business Line Data and Key Metrics Changes - In the Siding and Trim segment, net sales increased 10%, including $89 million from AZEK, while organic net sales declined 3% due to lower volumes [23][24] - Deck Rail and Accessories saw net sales increase by 6% on a pro forma basis, with adjusted EBITDA of $79 million and a 30.7% adjusted EBITDA margin [25] - Australia and New Zealand net sales declined 10% due to a 20% decline in volumes, partially offset by a 14% rise in average selling price [26] - Europe experienced an 18% increase in net sales, driven by strong Fiber Gypsum volume and average net sales price [27] Market Data and Key Metrics Changes - North America accounted for 80% of net sales, with new construction representing approximately 40% of revenue and Repair and Remodel at 60% [9][10] - The company expects mid-single-digit organic net sales declines for the full year, with challenges in the Siding and Trim segment [10][28] Company Strategy and Development Direction - The company is focused on profitable growth, disciplined execution, and material conversion from wood and inferior materials to composite alternatives and Fiber Cement [7] - The integration with AZEK is on track, with a focus on cost synergies and expanding market reach [18][19] - The company aims to drive material conversion and sharpen execution across the business [30] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, leading to a modest increase in full-year guidance despite ongoing challenges [8] - The company is optimistic about long-term cash generation and expects to generate at least $200 million in free cash flow for the year [30] - Management emphasized the importance of contractor conversion and the potential for growth in the Repair and Remodel market [12][66] Other Important Information - The company appointed Nigel Steen as Chair of the Board and Ryan Lada as the new Chief Financial Officer [4][6] - The company has surpassed its first-year cost synergy goal and is targeting $125 million in total cost synergies [19] Q&A Session Summary Question: Trends in Siding and Trim, particularly with builder customers in the South - Management noted that the deterioration in market conditions has been less severe than previously expected, with some regions showing more stability [36][39] Question: Competitive environment in decking and railing - Management indicated that they have not seen a need to change their strategy and continue to focus on customer value [42][46] Question: Pricing expectations in decking - Management confirmed that they will continue to take inflationary pricing in the marketplace and do not foresee changes [52] Question: Future plans for railing product introductions - Management highlighted the recent launch of Advantage Rail and the strategy to provide a complete portfolio to dealer partners [55][58] Question: Organic strategy and challenges in the Northeast - Management identified the need to decrease the price differential versus inferior substrates as a key opportunity for growth [63][66] Question: Cost synergies and timing - Management reported that they have achieved significant G&A cost synergies and are focused on ensuring no disruption to the base business [77][78]

Financial Data and Key Metrics Changes - Total net sales grew 34% to $1.3 billion, including $345 million from acquired AZEK sales, while organic sales declined 1% [21] - Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin [21] - Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26 [23] Business Line Data and Key Metrics Changes - Siding and trim segment net sales increased 10%, including $89 million from AZEK, while organic net sales declined 3% due to lower volumes [23][24] - Deck rail and accessories net sales increased 6% on a pro forma basis, with adjusted EBITDA of $79 million and a 30.7% adjusted EBITDA margin [25] - Australia and New Zealand segment net sales declined 10% due to a 20% decline in volumes, partially offset by a 14% rise in average selling price [26] Market Data and Key Metrics Changes - North America accounts for 80% of net sales, with siding and trim and deck rail and accessories being the largest segments [9] - In North America, new construction represents approximately 40% of revenue, while repair and remodel accounts for about 60% [10] - Europe saw an 18% increase in net sales, driven by strong fiber gypsum volume [27] Company Strategy and Development Direction - The company focuses on profitable growth, disciplined execution, and material conversion from wood to composite alternatives and fiber cement [6] - The integration with AZEK is on track, with a goal of achieving $125 million in total cost synergies [19] - The company aims to drive material conversion and sharpen execution across the business [29] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, leading to a modest increase in full-year guidance despite ongoing challenges [8] - The company expects mid-single-digit organic net sales declines for the full year, with a focus on returning the siding and trim segment to growth [10][28] - Management expressed confidence in long-term cash generation and plans to reduce net debt leverage to under two turns within two years post-acquisition [29] Other Important Information - The company appointed Nigel Steen as Chair of the Board and Ryan Lotta as the new Chief Financial Officer [4][5] - The company is investing in contractor conversion and has seen strong performance in its Color Plus product line [12][46] Q&A Session Summary Question: Trends in siding and trim, particularly with builder customers in the South - Management noted that the deterioration in market conditions has been less severe than previously expected, with some regions showing more stability [31][32] Question: Competitive environment in decking and railing - Management indicated that their strategy remains consistent and they have not seen a need to change their approach despite increased competition [35][36] Question: Pricing expectations in decking - Management confirmed that they continue to take price and expect to maintain their pricing strategy moving forward [39] Question: Organic strategy and challenges in the Northeast - Management highlighted the importance of reducing the price differential versus inferior substrates and noted positive results from pilot programs [44][46] Question: Cost synergies and timing - Management reported that they have achieved 85% of their G&A cost synergy target and are focused on ensuring no disruption to the base business [54] Question: Margin improvement expectations - Management expects more pronounced benefits from HOS initiatives and cost synergies in the second half of the fiscal year [49][50]

Core Insights - The company reported a decline in net sales and adjusted EBITDA for Q4 FY2025, reflecting soft end-market demand and ongoing market challenges [4][5][12] - Management anticipates a mid-single-digit decline in North American market volumes for FY2026, marking a fourth consecutive year of declines in large-ticket repair and remodel activity [9][13][25] - The pending merger with Azek is expected to drive significant revenue and cost synergies, enhancing growth and margin expansion opportunities [11][45][82] Financial Performance - Global net sales for Q4 FY2025 were $972 million, down 3% year-over-year, with adjusted EBITDA of $269 million, a 4% decline [4][5][62] - North America net sales reached $2.9 billion for FY2025, with a 2% revenue decline and a 3% volume decline [5][6][65] - Adjusted net income for Q4 FY2025 was $156 million, with adjusted diluted EPS of $0.36 [5][63] Regional Performance - Asia Pacific net sales declined 17% in US dollars and 13% in Australian dollars during Q4 FY2025, with a 31% decline in volumes attributed to the closure of the Philippines [3][7][69] - Europe achieved record net sales of $135 million in Q4 FY2025, up 5% in USD, driven by strong performance in high-value products [8][71] Cost and Margin Analysis - North America EBIT margin fell to 28.2% in Q4 FY2025, down 350 basis points year-over-year, primarily due to increased depreciation and amortization [6][66] - North America EBITDA margin was 34.4% in Q4 FY2025, down 190 basis points, with full-year EBITDA reaching $1 billion [6][67] - The company faced low double-digit inflation in raw materials, impacting margins, but managed to maintain strong cost control measures [9][63] Strategic Outlook - The company expects low single-digit net sales growth in North America for FY2026, with a focus on maintaining EBITDA margins near 35% [9][74] - Capital expenditures for FY2026 are projected to decline by nearly $100 million to approximately $325 million, supporting free cash flow growth [10][79] - The merger with Azek is anticipated to create a leading growth platform in building products, with expected baseline revenue synergies of $500 million [11][47][82]

Financial Data and Key Metrics Changes - In Q2 of fiscal 2025, consolidated net sales reached $452 million, an increase of 8% year over year [25] - Adjusted EBITDA for Q2 increased by $11 million or 10% year over year to $124 million, with an adjusted EBITDA margin of 27.5%, a 40 basis point improvement year over year [27][22] - Net income for Q2 increased by $5 million year over year to $54 million, or $0.37 per share [27] Business Line Data and Key Metrics Changes - Residential segment net sales for Q2 were $437 million, up 9% year over year, driven by sell-through growth and channel expansion [28] - Commercial segment net sales for the quarter were $15 million, down 4% year over year, primarily due to weaker demand in the spring products business [28] - Residential segment adjusted EBITDA for Q2 was $122 million, up 11% year over year, with an adjusted EBITDA margin of 28% [28] Market Data and Key Metrics Changes - The residential segment achieved 9% year-over-year growth in Q2, with high single-digit sell-through growth contributing to this performance [6] - The overall market for repair and remodel has been challenging, but the company has consistently outperformed this market [6][20] - Contractor backlogs remain stable at approximately seven weeks, indicating steady demand [18][101] Company Strategy and Development Direction - The company is focused on material conversion, product innovation, and channel expansion, targeting double-digit long-term growth and sustained margin expansion [10][11] - The proposed merger with James Hardie is expected to enhance growth opportunities and create significant synergies, with an estimated $125 million in cost synergies and $500 million in incremental sales synergies [11][13] - Investments in new product launches and a vertically integrated recycling network are key components of the company's growth strategy [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in the broader economy but remains confident in the company's ability to outperform the market [19][20] - The company expects residential sell-through growth scenarios in the low single-digit to mid-single-digit range for the second half of the fiscal year [31] - Despite macroeconomic challenges, the company believes it can sustain margins while investing in growth initiatives [19][21] Other Important Information - The company has been recognized for its sustainability efforts, being named to Barron's list of the 100 Most Sustainable U.S. Companies for the first time [17] - The acquisition of Northwest Polymers enhances the company's recycling capabilities and supports long-term growth objectives [16] Q&A Session Summary Question: Guidance for the second half regarding decking and railing versus exteriors - Management did not provide specific guidance but noted that deck, rail, and accessories have been outgrowing exteriors [39] Question: Near-term cost structure and PVC pricing - Management indicated that costs have been steady, with some modest inflation offset through pricing actions [40][42] Question: Sales synergies from the merger with James Hardie - Management expressed confidence in significant sales synergies but noted it is early to discuss specifics [46][48] Question: Focus on acquiring additional recycling assets - Management highlighted ongoing investments in recycling to achieve cost savings, with a focus on regional supply [49] Question: Demand across retail and pro channels - Growth is seen in both channels, with slightly higher growth in the pro channel, and some regional weakness noted in the Northeast due to weather [53][55] Question: Impact of tariffs on pricing - The annualized tariff exposure is estimated between $12 million and $15 million, with pricing actions taken to offset these costs [56] Question: Customer reactions to the merger - Positive feedback has been received from contractors and channel partners regarding the merger, indicating excitement about the strategic benefits [61][65] Question: Sell-through assumptions for the back half of the year - Management clarified that the guidance reflects a conservative approach, not indicating a decline in sell-through [66][84] Question: Inventory positioning in the channel - The company is maintaining conservative inventory levels, ensuring they are below historical averages [71][76] Question: Mix pressures and contractor backlogs - No significant shifts in product mix were noted, and contractor backlogs remain steady at seven weeks [100][101]

Financial Performance - Q2 2025 net sales increased by 8.1% year-over-year[46] - Adjusted EBITDA Margin increased by 40 bps year-over-year to 27.5%[44, 46] - The company reaffirms FY 2025 net sales outlook between $1.52 billion and $1.55 billion, representing 5% to 8% year-over-year growth[44] - The company reaffirms Adjusted EBITDA outlook between $403 million and $418 million, representing 6% to 10% year-over-year growth[44] - Residential segment growth was at 9% year-over-year[44] Strategic Initiatives and Market Position - The company is the industry leader in outdoor living[17, 36] - The company is benefiting from long-term material conversion trends[16] - The company is targeting double-digit annual net sales growth[17] - The company is expanding Adj EBITDA margin to a target of approximately 27.5%[17] - The company estimates that wood alternative decking could reach approximately 50% of decking opportunities share over the next 10-15 years and up to 75% over time[33]