Q2 Sales and Margin Outlook
Q: What is the expected sales, gross margin, and EBITDA for Q2?
A: Management expects Q2 gross margins to be in line with Q4 of last year, driven by operating leverage from sequential revenue increases . Residential orders have reached record levels in the last two months . SG&A expenses are expected to remain flat . Sequential sales are projected to increase to approximately $210 million to $225 million, likely toward the higher end of that range .

Full Year Guidance and Growth Drivers
Q: What is the updated full-year guidance and its key drivers?
A: The company is forecasting $875 million in revenue at the midpoint, with a split of 57% commercial and 43% residential . This includes approximately $20 million in vinyl sales in the second half . Changes in interest rate outlook have affected expectations since February . Despite this, record orders in March and April may signal a trend reversal, potentially leading to double-digit growth in the upside case .

Vinyl Product Line Ramp-Up
Q: Can you provide details on vinyl windows and their progress?
A: The initial launch of the vinyl line faced challenges due to an incomplete product offering and supplier hurdles . Dealers require a full product line to fully commit, and the company expects to have this ready by the end of June ** **. Orders are improving rapidly; in May, vinyl invoicing will exceed that of February, March, and April combined, with June projected to surpass May . Management anticipates that vinyl sales will increase tenfold by next year .

Backlog and Pipeline Growth
Q: Do you expect the backlog to continue growing in the near term?
A: Yes, the backlog is growing daily as they are invoicing less than the jobs being closed . Last month, they closed more jobs than they invoiced . The trend is booming across multiple regions in Florida, including Miami, Boca Raton, Pompano Beach, West Beach, Jacksonville, and Tampa . All jobs are fully funded, and the backlog currently excludes retail residential orders, which are expected to ramp up . Management anticipates strong performance in the second half once new products are aligned from July onward .

Currency Exposure and Hedging
Q: What are your plans regarding hedging Colombian peso exposure?
A: Management views recent FX volatility as an outlier and does not expect it to continue . Past hedging efforts have often resulted in losses, missing upside or downside moves . They feel comfortable with current exchange rates and project stability for the rest of the year based on macroeconomic forecasts . They prefer not to hedge at this time to avoid potential losses and will continue to monitor the situation .

Capital Allocation and Share Repurchases
Q: What are your near-term capital allocation priorities, especially regarding share repurchases?
A: The Board regularly discusses share repurchases and plans to act opportunistically . There is significant opportunity to return value to shareholders through both repurchases and dividends . The balance sheet is highly flexible, and more than half of the share repurchase program remains available . Management will assess and execute actions that create shareholder value .

Residential Segment Expectations
Q: Can you confirm the residential sales projections and discuss the mix?
A: The residential segment is projected to represent 43% of total revenue, equating to approximately $375 million in sales ** **. This includes about $20 million from vinyl in the base case scenario ** **. Sequential residential orders are up over 20% . Currently, the residential mix is roughly 2/3 repair and remodeling and 1/3 new home construction . New construction is slowing due to interest rates, but they expect the mix to return to 50-50 as rates decrease .

Gross Margin Guidance Confidence
Q: What drives your confidence in maintaining gross margin guidance?
A: Management is projecting low to mid-40% gross margins in the base case and mid-40% in the upside scenario . Confidence stems from operating leverage as revenues increase and the mix improves with higher residential orders . Increased manufacturing revenue enhances the mix, supporting stronger margins . They anticipate a step-up in revenues compared to Q1, reinforcing their margin outlook .

EBITDA Impact from Mix and Price
Q: How much of the EBITDA decline is due to mix versus price?
A: The primary impact on EBITDA is from FX, with an 8% revaluation due to the projected average exchange rate of 4,000 compared to 4,350 last year . Other factors include mix and operating leverage . In the upside case, operating leverage offsets the mix effect, making FX the main variance . In the base case, they expect 10-15% more mix and standalone product sales . Pricing is not a factor going forward, as prior impacts were from Q4 promotions for Q1 sales, which have ended .

Distributor Feedback and Ramp-Up
Q: What is the feedback from new distributors, and how will the ramp-up unfold?
A: New distributors are eager to order but are waiting for the complete product line to be available . They require all products to offer a comprehensive package to their customers . The company expects to have the full line ready by end of June . Once available, they anticipate strong growth in the next two quarters and significant expansion by the end of 2025 with the vinyl line . Customers appreciate the superior look and quality compared to competitors .