JELD-WEN(US:JELD)2025-11-04 14:00Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $809 million, with core revenue down 10% year-over-year, primarily due to lower volumes in North America and Europe [10][11] - Adjusted EBITDA was $44 million, or 5.5% of sales, reflecting a decline of about $38 million from the prior year, driven by price-cost pressures and unfavorable volume [12][13] - Negative free cash flow was reported for the quarter, with net debt leverage increasing to 7.4 times due to lower year-over-year EBITDA [11][12] Business Line Data and Key Metrics Changes - North America revenue declined 19% year-over-year, with adjusted EBITDA dropping to $38 million from $75 million in the same quarter last year, primarily due to lower volumes and operational inefficiencies [14][15] - Europe saw a 2% increase in revenue year-over-year, with adjusted EBITDA remaining roughly flat at $16 million, as productivity improvements offset lower volumes [15] Market Data and Key Metrics Changes - The market environment has deteriorated, with new construction and repair and remodel activity weakening further, particularly in Canada where housing starts are down more than 40% year-over-year [18] - Full-year demand for windows and doors in North America is now expected to decline in the high single digits, while demand for doors in Europe is anticipated to decrease in mid-single digits [19] Company Strategy and Development Direction - The company is undergoing a strategic review of its European business to strengthen its balance sheet and sharpen its strategic focus [6][8] - A headcount reduction of approximately 11% in North America is planned to align the cost structure with current market demand [6][27] - The company is simplifying its product portfolio by reducing approximately 30% of its SKUs to improve service levels and operational efficiency [36][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing price-cost headwinds and inflation in labor and materials, which have created short-term margin pressure [5][10] - The outlook for Q4 2025 has been adjusted to reflect a more typical seasonal pattern, with expectations of continued negative price-cost dynamics and soft market conditions [20][21] - Management remains focused on improving execution and strengthening operations to capture growth as market conditions improve [8][28] Other Important Information - The company maintains a strong liquidity position with approximately $100 million in cash and $400 million of revolver availability, with no debt maturities until December 2027 [8] - The annualized impact of tariffs on the business is estimated to be around $45 million, with some pushback on tariff-related pricing actions from larger customers [16][17] Q&A Session Summary Question: Share losses and recovery path - Management noted significant share loss last year with a Midwest retailer, which impacted Q3 results, and highlighted ongoing pricing challenges in North America [35] Question: Update on productivity and cost-saving efforts - Management expects about $150 million in savings from transformation initiatives, with roughly half rolling forward into 2026 [39][40] Question: Drivers of EBITDA expectations drop - The decline in EBITDA expectations is attributed to softer market conditions, operational challenges, and a failure to capture expected market share gains [51][52] Question: Contribution of Europe to full-year EBITDA guide - Approximately half of the consolidated EBITDA is expected to come from Europe, with improvements noted despite challenges in North America [55] Question: Liquidity and potential actions - Management confirmed no plans to draw on the revolver in Q4 and is exploring selective sale leaseback actions to enhance liquidity [64][65] Question: Sales trends and market dynamics - Management indicated that recent interest rate relief has not significantly impacted sales, with cautious consumer behavior continuing to affect demand [81]