Financial Data and Key Metrics Changes - For the fourth quarter, net sales decreased by 12% to $3.4 billion, driven by lower core organic sales and commodity deflation, partially offset by growth from acquisitions [19] - Gross profit was $1 billion, a decrease of 19% compared to the prior year, with a gross margin of 29.8%, down 250 basis points [22] - Adjusted EBITDA was $275 million, down approximately 44%, with an adjusted EBITDA margin of 8.2%, down 470 basis points from the prior year [23] - Adjusted EPS was $1.12, a decrease of 52% compared to the prior year [23] - Operating cash flow was $195 million, down $179 million, with free cash flow of $109 million for the quarter and $874 million for the year [24] Business Line Data and Key Metrics Changes - Core organic sales decreased by 15% in single-family and 20% in multifamily, with repair and remodel down 7% [20] - The company maintained a gross margin above 30% and an EBITDA margin above 10% for the full year, reflecting operational excellence [5][6] - The install business remained around 16%-17% of overall business, outpacing the market decline [85] Market Data and Key Metrics Changes - The housing market remains weak, characterized by affordability challenges, muted consumer confidence, and depressed commodity prices [6][7] - Commodity prices for OSB were below $350 per thousand board feet as the year ended [7] - The outlook for 2026 includes expectations for flat single-family and multifamily starts, with repair and remodel expected to increase by 1% [25] Company Strategy and Development Direction - The company is focused on reducing barriers to affordable housing and driving a more efficient, integrated supply chain [4] - Investments in technology and operational excellence are prioritized to strengthen competitive positioning and drive long-term value creation [10][28] - The company plans to continue pursuing acquisitions that expand value-added product offerings and enhance leadership in desirable geographies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating near-term uncertainties while building long-term shareholder value [4] - The company anticipates a challenging macroeconomic environment in 2026, with a focus on managing costs and optimizing operations [19][27] - Management noted that the worst of the downturn is over, with expectations for gradual improvement in the multifamily market [34] Other Important Information - The company consolidated 25 facilities in 2025, maintaining a 92% on-time and in-full delivery rate [9] - The digital platform processed nearly $7 billion of quotes in 2025, representing a year-over-year increase of over 130% [15] - The company has made 40 acquisitions since the BMC merger in 2021, representing over $2.3 billion in annual sales [14] Q&A Session Summary Question: Can you discuss the cadence of the year regarding single-family and R&R? - Management indicated a modest growth expectation, with a slow exit from 2025 and a ramp-up expected in the first half of 2026 [33] Question: Can you provide more detail on the cost actions planned for this year? - Cost actions are primarily SG&A related and are already in place, with benefits expected to materialize throughout the year [36] Question: What is the outlook for gross margins given the current environment? - Management expects stable gross margins around just below 30%, with some variability due to seasonal factors [42] Question: How should we think about incremental margins as volume returns? - Management indicated that incremental margins are generally strong due to fixed overhead leverage, with expectations for higher than average margins during growth [51] Question: Can you discuss the recent acquisition of Pleasant Valley Homes? - The acquisition is seen as a strategic move into modular housing, with a focus on partnerships with home builder customers rather than traditional retail [63][65]