JELD-WEN Holding, Inc. Q1 FY2025 earnings call

• Expressed appreciation to employees and customers for their dedication and collaboration.
• Highlighted the challenging first quarter with revenue down 19% year-over-year, adjusted EBITDA at $22 million, a $47 million decrease from the prior year.
• Discussed tariff exposure with an annualized impact of approximately $55 million, expecting to offset most costs by passing them to customers.
• Outlined efforts to enhance production capabilities, adapt to new homebuilder needs, and reduce headcount to address productivity challenges.

For North America segment: Revenue was $531 million in the first quarter, a 22% year-over-year decline. Core revenues decreased by 17% primarily due to lower volumes. Adjusted EBITDA declined to $16 million compared to $61 million in the same quarter last year. For Europe segment: Revenue was $245 million, down 12% year-over-year driven almost entirely by lower volume. Adjusted EBITDA was $11 million, a decline of $4 million from the prior year, resulting in an adjusted EBITDA margin of 4.3%.

• Withdraws full year guidance due to market volatility.
• Anticipates second quarter adjusted EBITDA will be slightly above first quarter levels.
• Transformation initiatives expected to achieve approximately $100 million in ongoing transformation benefits and $50 million of additional benefits from short-term actions, with about 40% realized in the first half and 60% in the second half.
• Plans to invest approximately $150 million in capital expenditures this year.

• Market uncertainty with a wide range of potential outcomes for the business.
• Tariffs introducing planning uncertainty and potential demand implications.
• Ongoing productivity headwinds due to lower demand levels not fully offset by cost reductions.
• Increased net debt leverage ratio exceeding targeted range, posing cash flow and leverage risks.

Q: How confident are you in your ability to pass along the $30 million in 2025 tariff impact to your customers?

A: We are in constant negotiation with key customers. Our team is working to define opportunities and challenges. We are agile in considering long-term sourcing implications and working with suppliers on reshoring. We see opportunities to pass through surcharges while optimizing our cost structure.

Q: How should we think about the phrasing of your outlook that 2Q EBITDA will be slightly better seasonally compared to the first quarter in the context of historical numbers?

A: Typically, we experience a seasonal uptick in 2Q versus 1Q, but it was very muted last year and is muted this year due to uncertainty. We would expect a seasonal uptick off of a low base, with muted rebound due to uncertainty.

Q: How should we think about the flow through of the $150 million in mitigation actions from transformation and cost out in the back half?

A: Roughly 40-60 split, with some cost measures actioned at the end of 1Q starting to drop into 2Q and rolling forward. Volume development is a variable, with some sites still underutilized and potential negative underlying productivity.

Q: Are you seeing or thinking about the potential that being a largely U.S.-based producer could help you regain some share in the market?

A: Yes, there are opportunities, especially in areas like fiberglass doors where Asian imports are prohibitive due to tariffs. We are investing in component manufacturing and have discussions with key customers, but it will take time for certainty and repricing to settle.

Q: Can you provide an update on the Towanda divestiture in terms of which end of the EBITDA range you're guiding towards?

A: We are seeing slightly more towards the higher end of the range, with muted seasonal uptake from Q1 and other factors playing out.