Financial Data and Key Metrics Changes - In 2025, the company reported net sales of $3 billion, with adjusted EBITDA of $83 million, resulting in a 2.8% adjusted EBITDA margin, which was lower compared to 2024 due to challenging market conditions [14][29] - The fourth quarter of 2025 saw net sales of $716 million, a slight year-over-year increase, with total gross profit at $113 million and a gross margin of 15.7%, down from 15.9% in the prior year [21][22] - The company experienced a net loss of $8.6 million for the fourth quarter, primarily due to higher net interest expenses and M&A-related costs [22] Business Line Data and Key Metrics Changes - Specialty products net sales for Q4 2025 were $505 million, up over 4% year-over-year, driven by higher volumes and modest price increases, while structural products net sales were $211 million, down 7% year-over-year due to lower pricing [24][25] - Specialty gross margin was 18.1%, slightly down from 18.4% the previous year, while structural gross margin was 10%, down from 10.8% [24][25] - For the full year, specialty sales were up slightly due to higher volumes and the acquisition of Disdero, while structural product sales were down slightly due to price deflation [27] Market Data and Key Metrics Changes - The multifamily channel grew volumes by 19% in 2025, indicating strong long-term growth potential in this market segment [9][15] - The overall housing market remains soft, with affordability challenges and low housing turnover impacting both housing and repair and remodel activities [17][18] - The company anticipates that the multifamily end market will continue to deliver strong long-term growth due to its affordability compared to single-family housing [9][18] Company Strategy and Development Direction - The company is focused on a profitable sales growth strategy, targeting both single and multi-family end markets with product and service expansion initiatives [4][6] - The acquisition of Disdero Lumber Co. is expected to enhance specialty product sales and strengthen the company's presence in the Western U.S. [5][12] - The company is investing in digital transformation and AI initiatives to improve operational efficiency and enhance customer experience [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term fundamentals for new construction and repair and remodel work, despite current market pressures [17][18] - The company believes that its strategic investments will position it well for growth when the housing market recovers [19] - Management is monitoring government proposals aimed at boosting the housing market, which could potentially kickstart recovery [19] Other Important Information - The company generated operating cash flow of $62 million in Q4 2025 and free cash flow of $56 million, reflecting effective working capital management [32] - The liquidity position remains strong, with $726 million available at the end of the year, including $386 million in cash [13][30] - The company repurchased $38 million in shares during 2025, demonstrating a commitment to returning capital to shareholders [34] Q&A Session Summary Question: What were the primary drivers of the sequential improvement in specialty products gross margin? - Management indicated that part of the improvement was due to one-time rebate-related true-ups with a vendor, and the rest was attributed to maintaining pricing discipline in a challenging market [36] Question: Is EWP pricing stabilizing, and what is the pricing outlook for the first half of 2026? - Management agreed that EWP pricing has stabilized and expressed confidence in maintaining solid margins despite competitive pricing pressures [41] Question: What is the timeline for rolling out AI initiatives compared to traditional e-commerce platforms? - Management stated that while the timeline is uncertain, the incremental costs associated with AI are expected to be immaterial compared to traditional e-commerce investments [74][78] Question: How has the market landscape shifted in customer conversations? - Management noted that despite a weak housing market, the company has grown market share by demonstrating the value of its services to customers and suppliers [51][54] Question: What is the expected timeline for increased activity in the multifamily sector? - Management believes that multifamily housing will continue to improve over time due to the ongoing affordability crisis and favorable financing conditions [62][65]

Financial Data and Key Metrics Changes - Net sales decreased by 6% to $3.7 billion, driven by lower organic sales, one fewer selling day, and commodity deflation, partially offset by growth from acquisitions [19] - Gross profit was $1.1 billion, a decrease of 14% compared to the prior year, with gross margins at 30.5%, down 290 basis points [20][21] - Adjusted EBITDA was $369 million, down 32%, with an adjusted EBITDA margin of 10.1%, down 380 basis points from the prior year [22] - Adjusted EPS was $1.51, a decrease of 43% compared to the prior year [23] Business Line Data and Key Metrics Changes - Multifamily sales decreased by 33%, while single-family sales declined by 6% due to lower starts activity and weather impacts [19] - Repair and remodel increased by 4%, driven by strength in the Mid Atlantic and Southeast regions [19] - Productivity savings of $17 million were achieved in Q1, primarily through targeted supply chain initiatives and more efficient manufacturing [8] Market Data and Key Metrics Changes - Single-family starts remain soft as builders manage construction pace amid affordability challenges and inventory buildup [8] - The multifamily segment continues to face headwinds compared to 2024, with actions taken to align capacity and manage expenses [9] - The company anticipates a down mid-single-digit single-family market and continued weakness in multifamily for the full year 2025 [26] Company Strategy and Development Direction - The company remains focused on organic growth, operational excellence, and disciplined capital allocation [5] - Significant investments in value-added products, digital tools, and internal systems are aimed at solidifying the company's industry position [6] - The company completed two acquisitions in Q1, with a focus on expanding value-added product offerings and leadership in desirable geographies [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges due to a resilient business model and a focus on execution [4] - The company expects to outperform as the market recovers, despite current macro and industry dynamics being unsettled [5] - For 2025, the company forecasts net sales between $16.05 billion and $17.05 billion, with adjusted EBITDA expected to be between $1.7 billion and $2.1 billion [26] Other Important Information - The company invested $23 million in value-added facilities in Q1 to prepare for future demand [7] - The company has a disciplined capital allocation strategy, deploying over $900 million towards investments, acquisitions, and share repurchases [12][25] - The company expects free cash flow of $800 million to $1.2 billion for 2025, with a focus on maintaining a leverage ratio of approximately 1x to 2x [27][25] Q&A Session Summary Question: Market share and growth in a declining market - Management stated that they are always striving to increase market share, adapting to competitive dynamics and affordability challenges [34][36] Question: Gross margin strategy - Management indicated that while margins are expected to drift lower, they will balance share versus margin based on competitive pressures [39][41] Question: Capital allocation and buybacks - Management confirmed that capital allocation priorities remain focused on protecting the balance sheet while evaluating M&A and stock buybacks [52][53] Question: Commodity prices and inflation expectations - Management discussed the impact of higher lumber prices and the expectation to pass through tariff costs to customers [58][110] Question: Digital initiatives and sales targets - Management expressed confidence in reaching the $200 million target for digital sales in 2025, citing positive customer feedback and adoption rates [66] Question: Competition and sustainability - Management noted that some competitors are struggling with sustainability, emphasizing the importance of providing stable partnerships and quality products [70][75] Question: Productivity savings and future actions - Management highlighted that productivity improvements are a continuous effort, with expectations for savings to roll in throughout the year [78][82]

Financial Data and Key Metrics Changes - Net sales decreased by 6% to $3.7 billion, driven by lower organic sales, one fewer selling day, and commodity deflation, partially offset by growth from acquisitions [19] - Gross profit was $1.1 billion, a decrease of 14% compared to the prior year, with gross margins at 30.5%, down 290 basis points [20][21] - Adjusted EBITDA was $369 million, down 32%, with an adjusted EBITDA margin of 10.1%, down 380 basis points from the prior year [22] - Adjusted EPS was $1.51, a decrease of 43% compared to the prior year [23] - Operating cash flow was $132 million, a decrease of $185 million mainly due to lower net income [24] Business Line Data and Key Metrics Changes - Multifamily sales decreased by 33%, while single-family sales declined by 6% due to lower starts activity and weather impacts [19] - Repair and remodel increased by 4%, driven by strength in the Mid Atlantic and Southeast regions [19] - Productivity savings of $17 million were achieved in Q1, with a target of $70 million to $90 million for the full year [9][78] Market Data and Key Metrics Changes - Single-family starts remain soft as builders manage construction pace amid affordability challenges and inventory buildup [9] - The multifamily segment continues to be a headwind compared to 2024, with actions taken to align capacity and manage expenses [10] Company Strategy and Development Direction - The company remains focused on organic growth, operational excellence, and disciplined capital allocation [6][11] - Significant investments in value-added products, digital tools, and internal systems are aimed at solidifying the company's industry position [7][14] - The company completed two acquisitions in Q1 with prior year sales of approximately $565 million, indicating a focus on M&A for growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges and emphasized the importance of being a trusted partner to customers [5][6] - The company anticipates a down mid-single-digit single-family market and continued weakness in multifamily for 2025, guiding net sales between $16.05 billion and $17.05 billion [27] - Management highlighted the importance of maintaining financial flexibility while investing strategically for future growth [32] Other Important Information - The company expects free cash flow of $800 million to $1.2 billion for 2025, with a projected tariff cost impact of $175 million to $250 million annually [28][29] - Capital expenditures were $87 million in Q1, with over $900 million deployed towards investments, acquisitions, and share repurchases [26] Q&A Session Summary Question: Market share and growth in a declining market - Management stated that they are always striving to increase market share, adapting to competitive dynamics and affordability challenges [36][38] Question: Gross margin strategy - Management indicated that while margins are expected to drift lower, they are pleased with current performance and will balance share versus margin [40][41][43] Question: Capital allocation and buybacks - Management confirmed that capital allocation priorities remain focused on protecting the balance sheet while evaluating M&A and stock buybacks [54][56] Question: Commodity prices and inflation impact - Management discussed the impact of higher lumber prices and the expectation to pass through tariff costs to customers [60][108] Question: Digital initiatives and sales targets - Management expressed confidence in reaching the $200 million target for digital sales in 2025, citing positive customer feedback and adoption rates [64][66] Question: Competition and sustainability - Management noted that some competitors are struggling with sustainability due to low margins and emphasized the importance of providing value to customers [71][75] Question: Productivity savings and future actions - Management highlighted that productivity is a core focus and savings will continue to be realized throughout the year, despite some impact from ERP rollout [78][81]