Core Insights - The company reported a 12% year-over-year decline in net sales to $3.4 billion, primarily due to lower core organic sales and commodity deflation, with a sharp sales deceleration in the fourth quarter [2][5] - Core organic sales fell due to a 15% decline in single-family, a 20% decline in multifamily, and a 7% decline in repair and remodel, attributed to ongoing consumer uncertainty [1][5] - The company is managing spending and maintaining flexibility by aligning capacity, managing headcount, and reducing capital expenditures, consolidating 25 facilities in 2025 [3][5] Financial Performance - Gross profit was $1.0 billion, down 19% year over year, with a gross margin of 29.8%, down 250 basis points [8] - Adjusted EBITDA was $275 million, down about 44%, with an adjusted EBITDA margin of 8.2%, down 470 basis points [8] - Adjusted EPS decreased by 52% to $1.12 [8] Cost Management and Productivity - The company is implementing $100 million in cost actions, including $75 million in year-over-year cost reductions and $25 million in cost avoidance, primarily related to SG&A [7] - Productivity savings of $48 million were generated in 2025, mainly through targeted supply chain initiatives [9] Acquisitions and Growth Strategy - The company completed several acquisitions in late 2025 and early 2026, contributing to over $2.3 billion in annual sales since the 2021 BMC merger [10] - The acquisition of Pleasant Valley Homes is aimed at expanding the company's prefabricated component strategy [11] Technology and Digital Strategy - The company’s digital platform processed nearly $7 billion of quotes in 2025, reflecting over 130% year-over-year growth [12] - Progress was made in SAP implementation, with plans for broader deployment in 2026 [13] Cash Flow and Guidance - Fourth-quarter operating cash flow was $195 million, with free cash flow of $109 million, and full-year free cash flow of $874 million, equating to an approximately 8% free cash flow yield [14] - For 2026, the company guided net sales of $14.8 billion to $15.8 billion and adjusted EBITDA of $1.3 billion to $1.7 billion, with expectations of a gross margin of 28.5% to 30% [15] Market Outlook - The company anticipates a challenging macro environment for the first quarter, with net sales guidance of $3.0 billion to $3.3 billion [16] - Management expects a heavier contribution in the second half of 2026, with signs of stabilization in multifamily starts [17]