Financial Data and Key Metrics Changes - For Q4 2025, net sales decreased by 12% to $3.4 billion, driven by lower core organic sales and commodity deflation, partially offset by growth from acquisitions [18] - Gross profit was $1 billion, a decrease of 19% year-over-year, with a gross margin of 29.8%, down 250 basis points [20] - Adjusted EBITDA was $275 million, down approximately 44%, with an adjusted EBITDA margin of 8.2%, down 470 basis points from the prior year [21] - Adjusted EPS was $1.12, a decrease of 52% compared to the prior year [21] - 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 [22] 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% [19] - The company consolidated 25 facilities in 2025, bringing the total to 55 over the past two years, while maintaining a delivery rate of 92% [9] Market Data and Key Metrics Changes - The housing market remains weak, characterized by affordability challenges, muted consumer confidence, and depressed commodity prices [5][6] - Commodity prices for OSB were below $350 per thousand board feet as of the end of 2025 [6] - Economists have mixed outlooks for 2026, with some predicting further declines in single-family starts and others expecting modest growth [6] 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][26] - The company plans to continue pursuing acquisitions to expand value-added product offerings and enhance market presence [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing housing affordability challenges and a weak market environment but expressed confidence in the company's ability to navigate these issues [4][5] - The company expects net sales for 2026 to be in the range of $14.8 billion to $15.8 billion, with adjusted EBITDA of $1.3 billion to $1.7 billion [24] - Guidance for 2026 includes expectations for flat single-family and multifamily starts, with a slight increase in repair and remodel [24] Other Important Information - The company invested over $110 million in new or upgraded value-added operations in 2025 [10] - The digital platform processed nearly $7 billion in quotes through 2025, representing a year-over-year increase of over 130% [14] Q&A Session Summary Question: Can you discuss the cadence of the year and expectations for single-family versus R&R? - Management indicated a slow exit from 2025 but expects a ramp-up in activity as builders prepare for a stronger summer in 2026 [30] 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 [33] Question: What is the outlook for gross margins given the current environment? - Management expects gross margins to remain stable but acknowledges potential variability due to market conditions [36][39] Question: How is the install business performing and what are the expectations for growth? - The install business is performing well, outpacing the overall market decline, and is seen as a growth lever for the company [80] Question: What are the expectations for working capital investments in 2026? - The company anticipates higher working capital investments in 2026 due to expected sales growth and commodity price normalization [87]