Financial Data and Key Metrics Changes - Non-GAAP EPS increased nearly 20% year over year, reaching $0.44 per share [5][8] - Revenue growth returned in both segments, with Workplace Furnishings revenue slightly increasing and Residential Building Products revenue growing 7% year over year [8][10] - Consolidated non-GAAP gross and operating margins expanded year over year, with non-GAAP operating margin at the highest first quarter level since 2007 [8][9] Business Line Data and Key Metrics Changes - Workplace Furnishings segment saw a slight revenue increase, but non-GAAP EBIT margin compressed by 20 basis points year over year due to a different mix of business [9][10] - Residential Building Products revenue increased 7% year over year, with remodel retrofit business growing 13% and operating profit growing 16% [11][12] Market Data and Key Metrics Changes - Contract customer revenue increased 4% year over year, while shipments to small and medium-sized businesses (SMB) declined approximately 5% [9][10] - Orders in the Residential Building Products segment increased 8% year over year, with remodel retrofit orders up double digits [15][16] Company Strategy and Development Direction - The company remains focused on investing to drive revenue growth and expanding margins, with a cautious yet confident outlook for 2025 [6][32] - Continued investment in new product development and strengthening relationships with builders is emphasized to enhance market position [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges heightened macroeconomic uncertainty but expresses confidence in strategies and customer commitment to long-term investments [13][38] - The company expects continued earnings improvement driven by margin expansion and revenue growth, despite potential demand volatility [12][23] Other Important Information - The company maintains a strong balance sheet and cash flow generation, with a gross debt leverage ratio of 1.3 times [30][31] - Ongoing initiatives in Mexico and KII synergies are expected to contribute an additional $0.70 to $0.80 of EPS through 2026 [23][24] Q&A Session Summary Question: What was the SMB order number this last quarter? - SMB orders were slightly down 5% for Q1 [36] Question: Are there any changes in order patterns or buying activity due to increased uncertainty? - There is a lot of uncertainty, but the backlog looks encouraging, and customers are committed to long-term investments [38] Question: Was the hospitality business affected by tough comparisons this quarter? - Yes, it was a tough comp, and there is some volatility in demand, particularly in custom business [40] Question: Did you see any improvement in the transactional part of the SMB business in April? - Orders started to pick back up over the last five weeks, indicating resilience [47] Question: What are the end market assumptions for the second half? - Limited market help is expected, but strategic initiatives are anticipated to drive low single-digit growth [55] Question: How do you expect earnings visibility to translate into free cash flow? - Expected free cash flow from transformational efforts is projected to be $45 million to $50 million, enhancing financial flexibility [64]