Financial Data and Key Metrics Changes - The negative EBITDA impact in Q4 from Monterrey challenges was $8 million, which was higher than the previously estimated $5 million [5] - EBITDA margins for the Hardware Solutions segment would have been in the 16% range without the negative impact [5] - A $3 million hit is expected in the first quarter due to ongoing challenges [6] Business Line Data and Key Metrics Changes - The Hardware Solutions segment faced increased costs due to a shift to 24/7 operations and higher labor and freight costs [5] - The company anticipates a flat revenue outlook for the next year, with potential for improved EBITDA due to reduced costs from Mexico and additional synergies [9] Market Data and Key Metrics Changes - The company has not observed irrational pricing behavior in the market, indicating a stable demand environment [20] - Commodity prices are expected to stabilize, but there may be pricing pressure as they come down [21] Company Strategy and Development Direction - The company is focusing on operational improvements and sharing best practices across its divisions to enhance efficiency [25] - There is potential for insourcing demand in the Custom Solutions group to mitigate tariff risks [24] - The company is balancing cash flow generation, stock repurchases, and debt paydown, especially in the first quarter, which is typically a low cash flow period [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in their ability to manage costs and operational efficiency despite inflationary pressures [35] - The company is optimistic about the recovery in the repair and remodel market, which is expected to lead new construction recovery [54] Other Important Information - The company has been proactive in addressing operational issues in its facilities, ensuring that similar risks are mitigated [32] - SG&A expenses are expected to be around $73 million in Q1, reflecting higher costs due to inflation and benefits [34] Q&A Session Summary Question: Impact of Monterrey challenges on EBITDA - The negative EBITDA impact was confirmed to be $8 million, higher than expected, affecting margins in the Hardware Solutions segment [5] Question: Future outlook on market volume and procurement synergies - The informal outlook suggests flat volumes with flat pricing, but improved EBITDA due to reduced costs and synergies [9] Question: Concerns about stock repurchase limitations - The company focused on debt repayment over stock repurchases, but will be opportunistic in the future [11] Question: Competitive pricing behavior in the market - No irrational pricing has been observed, with supply chain risks being prioritized by customers [20] Question: Expected product performance in 2026 - The Custom Solutions group may see opportunities due to tariff impacts, while other segments are in a wait-and-see mode [24] Question: Benefits from resegmentation - Early operational improvements have been noted, with potential for mid- to long-term growth opportunities [26] Question: SG&A expense clarification - SG&A is expected to be higher due to inflation and benefit costs, but operational efficiency is a focus to offset these increases [35] Question: Pricing stability and cost outlook - Pricing is primarily driven by inflationary pressures, and the company expects to maintain pricing due to justified cost increases [50] Question: Demand outlook for new residential vs. repair and remodel - Both markets are currently impacted similarly, but repair and remodel is expected to lead the recovery [54] Question: Cash flow expectations for Q1 - Slightly negative free cash flow is possible in Q1, depending on volume and CapEx timing [55]

Financial Data and Key Metrics Changes - The negative EBITDA impact from Monterrey challenges in Q4 was $8 million, higher than the previously estimated $5 million, affecting EBITDA margins for the Hardware Solutions segment [5][9] - The company paid down debt aggressively during the fiscal year and repurchased approximately $3 million in stock in Q4, despite shares being perceived as undervalued [10][12] Business Line Data and Key Metrics Changes - The Hardware Solutions segment faced challenges due to increased labor and expedited freight costs, but a favorable cost roll impact helped mitigate some losses [5][9] - The company expects a $3 million drag in Q1 from Monterrey issues but anticipates this will go to zero beyond the first quarter [6][9] Market Data and Key Metrics Changes - The company has not observed irrational pricing behavior in the market, indicating a focus on supply chain risk management among customers [19][20] - The Custom Solutions group may face impacts from tariffs, but there is potential for insourcing demand back into the U.S. to mitigate risks [21][23] Company Strategy and Development Direction - The company is focused on operational improvements and sharing best practices across segments, particularly in the extruded solutions group [24][25] - The resegmentation is expected to yield mid- to long-term growth opportunities, with a focus on innovation and process improvements [25] Management Comments on Operating Environment and Future Outlook - Management noted that both residential repair and remodel (R&R) and new construction markets are currently experiencing similar impacts, with R&R expected to lead any recovery [51][53] - The company anticipates stable material costs but expects continued inflationary pressure in specific areas, particularly oil-based products [35][36] Other Important Information - The company is balancing cash flow generation, stock repurchases, and debt paydown, with Q1 typically being a low cash flow period [12][56] - Incentive payouts for the executive team were lower than usual, which may positively impact cash flow in Q1 [57] Q&A Session Summary Question: Impact of Monterrey challenges on EBITDA - The negative EBITDA impact was confirmed to be $8 million, affecting margins in the Hardware Solutions segment [5] Question: Competitive response in the market - Management indicated no irrational pricing behavior has been observed, with supply chain risks being prioritized [19] Question: Expectations for product performance in 2026 - The Custom Solutions group may see impacts from tariffs, but there is potential for insourcing demand [21][23] Question: SG&A changes and outlook - SG&A is expected to be around $73 million, reflecting higher benefit costs and inflationary measures [33][34] Question: Pricing and cost outlook for 2026 - Pricing increases are primarily driven by inflationary pressures, with a strong ability to maintain prices due to cost support [48][50] Question: Cash flow expectations for Q1 - Slightly negative free cash flow is possible in Q1, depending on December and January performance [54][56]