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President & CEO Scott Culbreth stated the forecast assumes a similar pattern for both R&R and new construction: a challenged first half followed by a second-half recovery. Confidence is based on commentary from home center partners and expectations for an improved new construction market. He noted that while list pricing has held, the company is seeing negative mix shifts and lower cabinet counts per home from builders.

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Executive M. Culbreth did not provide a specific channel breakdown but confirmed all channels were down. He uniquely noted that while new construction unit growth was positive, it was offset by negative price/mix. Culbreth clarified that the guidance assumes a 'steady as it goes' environment, with no major macro improvements or rate changes factored in.

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Executive M. Culbreth stated that the company would not provide a quarterly forecast due to market uncertainty but remains confident in the full-year projection. Regarding costs, Culbreth confirmed that pricing actions are variable by channel and that an increase has already been announced in the dealer channel to mitigate inflationary pressures.

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CEO Bryan Fairbanks confirmed that the full-year sales guidance of 5% to 7% growth is based on that sell-through assumption. He emphasized that the most critical quarters for observing this sell-through are Q2 and Q3, which represent the peak season for the business.

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CEO Bryan Fairbanks deferred commenting on specific 2025 growth assumptions. He explained that the current market bifurcation is more pronounced than in the past because Trex now has a well-developed entry-level product line (Enhance) specifically targeting wood conversion, making that segment's reaction to economic pressures more distinct.

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CEO Jeffrey Edwards stated that while a severe downturn would cause price declines, the current environment is seen as more normalized. He and CFO Michael Miller noted that manufacturers are rational and can curtail production to maintain a healthy market. On consolidation, Mr. Miller confirmed they continuously evaluate their footprint and are currently looking to combine 3-4 locations as part of their normal course of business.

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CEO Jeffrey Edwards stated that spray foam constitutes about 10% of revenue and its pricing weakness impacted gross margin by less than 100 basis points, a headwind expected to continue. He confirmed the multifamily segment will be a headwind in Q4 and into 2025, as the lag from stabilizing starts to installation will take time to positively impact results, though their specialized team is helping outperform the market.

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CEO R. Banyard confirmed that Q2 EBITDA and sales will improve from Q1, but year-over-year decremental margins will not meet company standards. He cited two main headwinds: inefficiently running factories due to choppy demand before realignment benefits materialize, and absorbing tariff costs before price increases are fully realized. Regarding the guidance, Banyard stated the wide range is primarily dictated by uncertainty in market demand, particularly the unknown consumer reaction to the broader economic impact of tariffs.

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President and CEO R. Banyard explained that while late Q4 and January were slow, February's demand returned to a more normal pace, suggesting a typical seasonal pattern for 2025 with a stronger second half. He clarified that price increases are mostly delayed, not lost, due to volume pressure in the dealer channel and competition in opening price point products. He expects the price/cost dynamic to improve after Q1. Banyard also noted that the Supreme acquisition was more resilient during the slowdown, performing in line with expectations.

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CEO Dave Banyard responded that the company's plan anticipates the ASP to be 'somewhere around' flat in the fourth quarter. He characterized the promotional environment as 'pretty normal' and not accelerating, with the main variable being the volume generated from specific promotions. Banyard clarified that the new homebuilder wins were predominantly with top-25 national builders, noting that revenue recognition is tied to project completion schedules, which can be choppy.

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CFO Rob Kuhns confirmed that this moderation is factored into the company's guidance. He specified that pricing on the installation side, tied to last year's fiberglass increases, is expected to ease, while pricing on certain commercial and industrial products in the Specialty Distribution segment should hold up better throughout the year.

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CFO Rob Kuhns quantified the headwind from spray foam price decreases at approximately 130 basis points on price. He clarified that the guidance reduction was primarily driven by the residential market, specifically delays in the multifamily backlog, and also noted a combined ~$18 million impact from hurricanes in Q3 and Q4. The C&I outlook remained consistent with the previous quarter's view.

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President and COO Paul De Cock confirmed that selective price increases were implemented for premium ceramic and laminate products to offset inflation. Executive James Brunk noted that while lower natural gas prices should provide a benefit later in the year, a significant impact from raw materials like petrochemicals has not been seen yet and would also be a second-half event if it materializes.

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Chairman and CEO Jeff Lorberbaum acknowledged a belief that some customers took on extra inventory in anticipation of a strike but said it was hard to quantify. Regarding commercial verticals, he noted that hospitality, government, and education are outperforming, and the company is focusing its attention there. He also mentioned that commercial pricing is more resilient but that the channel has a longer tail in a downturn.

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CEO Peter Jackson said the core installation business is performing well and remains attractive to builders, though the overall segment faces headwinds from the multifamily downturn. Regarding the digital platform, he noted that while they are considering working with larger builders, the current focus is on perfecting the tool for smaller builders. He clarified that engaging larger builders is not necessary to achieve the previously stated $1 billion sales target.

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CFO Pete Beckmann stated that value-added products continue to command a 1,000-1,200 basis point margin premium over commodities. CEO Peter Jackson described a labor constraint scenario as both an opportunity to win share with their install services and a risk to the overall industry, as it would hurt housing affordability and starts.

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CFO Christopher Calzaretta affirmed the company is planning on its normal twice-a-year pricing cadence, with the size of the next increase dependent on the evolving tariff and cost environment. CEO Victor Grizzle addressed the education market, stating that they have not seen a material falloff in activity and that the vertical remains active. He noted they will be watching the key summer season closely.

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CEO Vic Grizzle expects AUV to accelerate in Q4, driven by a normalization of the mix component, which was flat in Q3. CFO Chris Calzaretta added that SG&A should see some moderation in Q4 and that the company aims to lower SG&A as a percentage of sales below 20% in 2025 by leveraging past investments.

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CFO Kevin Zdimal acknowledged that while the company is now tracking toward the lower end of its guidance ranges (mid-single-digit revenue growth, ~50 bps EBITDA margin expansion), they remain confident in the full-year outlook. He specified that CCM is expected to achieve its 50 bps margin improvement, contingent on second-half pricing, and that CWT's margins are anticipated to recover to the 22% range starting in Q2.

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CEO D. Koch expressed confidence in the price increases, citing supportive market surveys, competitor actions, and real cost pressures from tariffs. He expects traction in late Q2 as seasonal demand improves. Koch estimated a $10-15 million negative weather impact in Q4. VP of IR Mehul Patel explained that for the Henry business, the lack of rain on the West Coast suppressed demand that is unlikely to be recovered in Q1. CFO Kevin Zdimal added that Q1 2024 had a positive weather benefit, creating a difficult comparison for Q1 2025.

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CEO Chris Koch confirmed no change to the outlook for a flat price-cost dynamic for the full year in the CCM segment. He described the pricing environment as relatively stable, noting that competitors are also investing in their businesses and seeking returns. He reiterated that the full-year price decline would be close to the initial 2% forecast and that early feedback for 2025 suggests potential for some price upside.

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President and CEO Keith Allman responded that they have not observed any notable changes in the competitive dynamic. CFO Rick Westenberg confirmed that while mitigation actions are underway, the 2025 guidance range does factor in the net impact of tariffs, which the company is working to minimize.

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CFO David Barry attributed the sustainable gross margin gains to plant closures, supply chain efficiencies, and favorable product mix, and expects further expansion in 2025. Regarding buybacks, Barry stated the guide only includes shares to offset dilution, but the company intends to be aggressive in repurchasing shares during price dislocations, funded by strong projected free cash flow of $580M-$620M in 2025.

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CFO David Barry reiterated that while digital POS and the sales pipeline are exceeding expectations, actual revenue conversion is slightly behind, which the company is addressing with targeted investment. CEO Nicholas Fink clarified that trade-down is not an issue in Outdoors. In Water, the issue is not a typical trade-down but rather non-compliant mechanical products making false claims, similar to the situation in Security. He emphasized the issue is not with connected products.

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CEO Donald Allan stated that while promotions were a slight marginal headwind, the company was satisfied with the execution and growth it delivered, noting 2024 was the first full year of a return to a traditional promotional cadence. COO Chris Nelson added that while there was a modest price impact, the promotional space captured was for accretive products, making the company feel good about its overall promotional positioning.

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EVP and CFO Pat Hallinan advised against getting too precise on the Q4 to Q1 sequential move, noting that variability is driven by the mix of the outdoor business and the state of the auto market correction. He suggested that broadly, the first half of 2025 would see gross margins in the 31% range, plus or minus, but declined to give specific quarter-over-quarter flow.

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SVP & CFO Allen Mistysyn indicated that the 2025 gross margin expansion would be less than what was achieved in 2024 and would be stronger in the second half, driven by expected volume improvements. He noted that about 75% of the price increase is aimed at offsetting cost inflation, with the remainder of the margin gain coming from self-help initiatives.

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Executive Allen Mistysyn confirmed directly, stating, 'Yes. That's exactly what we're seeing.' Executive Heidi Petz elaborated that the 'slower for longer' recovery scenario is playing out in real-time and the company is prepared to manage through it.

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Chief Financial Officer Todd Fister explained that the divested business, with approximately $130 million in revenue, has low EBITDA margins and high capital intensity. He noted the sale aligns with the strategy to focus on higher-value product lines. The transaction is expected to be completed in the second quarter of the following year.

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