• Fourth Quarter Revenue: $896 million, down 12% year over year.
• Adjusted EBITDA: $40 million, a $47 million decline from the prior year, with a margin of 4.5%.
• Free Cash Flow: Use of $28 million, including $56 million in capital investments.
• Net Debt Leverage Ratio: Increased to 3.8 times, above the target range of 2 to 2.5 times.
• North America Revenue: $640 million, a 14% decline year over year.
• North America Adjusted EBITDA: $42 million, down from $94 million in the prior year.
• Europe Revenue: $256 million, with a 6% decline in core revenues year over year.
• Europe Adjusted EBITDA: $17 million, with a margin of 6.5%.
• Full-Year Revenue Decline: 12% year over year.
• Full-Year Adjusted EBITDA Decline: 28% year over year, with margins contracting by 150 basis points.
• 2025 Revenue Guidance: $3.2 billion to $3.4 billion, reflecting a projected 4% to 9% decline in core revenues.
• 2025 Adjusted EBITDA Guidance: $215 million to $265 million.
• 2025 Operating Cash Flow Guidance: Approximately $15 million.
• 2025 Capital Expenditures: Approximately $150 million.
• Q1 2025 Sales Guidance: $750 million to $775 million.
• Q1 2025 Adjusted EBITDA Guidance: Approximately $20 million.

• Warning! GuruFocus has detected 5 Warning Signs with JELD.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• JELD-WEN Holding Inc (NYSE:JELD) delivered approximately $115 million of transformation benefits in 2024, demonstrating progress in their strategic initiatives.
• The company's interior door business remained relatively stable, with JELD-WEN picking up market share despite overall market softness.
• JELD-WEN is implementing cost reduction initiatives to improve efficiency and adapt to ongoing market dynamics, including the idling of a Windows plant in Grinnell, Iowa.
• The company has identified near-term initiatives expected to generate approximately $50 million in annual savings, helping stabilize the cost structure.
• JELD-WEN's transformation efforts have delivered meaningful results, offsetting nearly half of the pressures faced in 2024, and they expect to deliver another $100 million in annualized adjusted EBITDA improvements in 2025.

Negative Points

• Fourth quarter revenue was down 12% year over year, driven by lower core revenues and a shift from higher-priced to more affordable options.
• Adjusted EBITDA for the quarter declined by $47 million year over year, primarily due to lower volume and mix, resulting in an adjusted EBITDA margin of 4.5%.
• The company's net debt leverage ratio increased to 3.8 times, above their target range of 2 to 2.5 times, due to lower EBITDA and continued investment in transformation initiatives.
• JELD-WEN anticipates continued softness in North America, with projected net revenues reflecting a 4% to 9% decline in core revenues for 2025.
• The company expects both new construction and repair and remodel demand for windows and doors to decline by low-to-mid single digits, with continued double-digit declines in multi-family and Canadian markets.

Q & A Highlights

Q: Can you provide more color on the earnings progression from Q1 to Q2, and how the $100 million transformation and $50 million headwind mitigation will be layered in? A: Samantha Stoddard, CFO, explained that the progression is due to near-term actions and transformation initiatives, which will take effect in Q2. The company expects normal seasonality to begin in Q2, contributing to the earnings lift.

Q: How are you approaching pricing actions given the potential tariffs and cost headwinds? A: William Christensen, CEO, stated that they are taking pricing actions to offset expected $50 million in cost headwinds. They are monitoring potential tariffs, particularly between Canada and the US, but have not included these in their guidance.

Q: How confident are you in achieving the $50 million mitigation savings and $100 million transformation savings this year? A: William Christensen, CEO, expressed confidence in achieving these savings, noting that 80-85% of the transformation projects are already in progress. The additional $50 million is to adapt to a challenging market environment.

Q: Can you discuss your organic efforts to regain market share? A: William Christensen, CEO, highlighted efforts to improve sales effectiveness and service levels. They are focusing on quality and delivery improvements, particularly in areas with strong demand like interior doors in the southeast market.

Q: What is the allocation of the $150 million CapEx for the year? A: Samantha Stoddard, CFO, explained that the CapEx is balanced between network optimization, automation improvements, and growth initiatives. Approximately $100 million is for maintaining the asset base, with the remainder for transformational projects.

Q: How do you view the volume and mix trends in Europe, and is there any expected recovery in 2025? A: William Christensen, CEO, noted that while Europe remains challenged, there are pockets of recovery. They expect a more significant recovery in 2026, with some improvement in commercial project pipelines.

Q: Can you clarify the $50 million cost headwind and its components? A: William Christensen, CEO, clarified that the $50 million is due to inflation in freight, labor, and materials, separate from potential tariff impacts. They aim to be price/cost neutral in the market for 2025.

Q: What is the impact of the Midwest customer loss, and when will you anniversary this loss? A: William Christensen, CEO, stated that the loss will be anniversaried around Q3. The revenue impact over 12 months is significant, but specific figures were not disclosed.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.