JELD-WEN Holding, Inc. Price & Performance (JELD)

Before I turn it over to Bill, I would like to remind everyone that during this call, we will make certain statements that constitute forward looking statements within the meaning of Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and provided in our Forms 10 ks and 10 Q filed with the SEC. JELD WON Jeld-Wen not undertake any duty to update forward looking statements including the guidance we are providing with respect to certain expectations for future results. Additionally, during today's call, we will discuss non GAAP measures which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a sub A reconciliation of these non GAAP measures to their directly comparable financial measures calculated under GAAP can be found in our earnings release and in the appendix of our earnings presentation. With that, I would like to now turn the call over to Bill. Thank you, James, and good morning, everyone. I'd like to start by recognizing the hard work and commitment of our team throughout what was a very challenging year.

We have continued making meaningful progress in our transformation. Strengthening our ability to navigate current conditions while positioning ourselves for long term success. I also want to extend my appreciation to our customers listening today we value your partnership and remain committed to being a stronger, more reliable partner in the years ahead. Today, I'll begin by providing an overview of after which Samantha will walk through our quarterly and full year financial performance. I'll then return to discuss our outlook for both the market and our business. Looking at our fourth quarter highlights on Slide four, the softer demand environment we anticipated last quarter materialized largely as expected. And our adjusted EBITDA results came in within our guidance range. As promised, we delivered approximately $115,000,000 of transformation benefits in 2024 and we continue to take the necessary actions to align our costs with current market conditions while ensuring we are all well positioned for future growth. In the fourth quarter, we faced continued pressure from weaker volume and mix across both North America and Europe. While our transformation initiatives provided some offset, they were not enough to fully counteract these headwinds. That said, we remain encouraged by the progress of our various initiatives which are in our control.

These initiatives are helping us navigate the environment strengthening our company for future performance. Although we're pleased with the progress of our transformation, market conditions remain challenging. We continue to see consumers trading down and delaying larger scale remodeling projects. Which has impacted both our volume and mix. Additionally, while housing starts have remained stable, the sharp decline in multifamily and higher end home construction has significantly affected our VPI and La Quintina businesses. On a positive note, while the overall market is soft, our interior door business has remained relatively stable as we picked up share. In response to the continued soft mark conditions, we are implementing cost reduction initiatives further improve efficiency, and adapt to our ongoing market dynamics. For example, in January, we announced the idling of our windows plant in Grinnell, Iowa following the loss of a major Midwest customer stocking business. With that, I'll turn it over to Samantha to walk through our financial results in more detail. Thanks, Bill. Turning to Slide six, fourth quarter revenue was $896,000,000 down 12% year over year. This decline was driven by lower core revenues reflecting the expected market driven volume declines across North America and Europe as well as a continued mix shift in North America from higher priced to more affordable options as customers prioritize cost savings.

Adjusted EBITDA for the quarter was $40,000,000 a $47,000,000 decline from the prior year driven primarily by lower volume mix resulting in an adjusted EBITDA margin of 4.5%. Free cash flow in the fourth quarter was a use of $28,000,000 including $56,000,000 in capital investments. Given the impact of lower EBITDA, and our continued investment in transformation initiatives, our net debt leverage ratio increased to 3.8 times above our target range of two to 2.5 As we look ahead to 25 and beyond, one of my top priorities will be to return to our targeted leverage range through EBITDA improvements and appropriate capital allocation. As shown on Slide seven, our fourth quarter revenue decline was primarily driven by a 12% decrease in volume and mix. With approximately half of the decline attributed to a shift from higher average selling price products to more affordable options. I'll provide additional insights into North America, and Europe market trends shortly. As shown on Slide eight, adjusted EBITDA declined by $47,000,000 year over year. Largely due to the sharp drop volume and mix. As expected, cost pressures remained a headwind in the quarter, driven primarily by labor and material inflation in glass and other commodities.

Key factors contributing to negative price cost dynamics. Additionally, lower volumes led to operational inefficiencies. Limiting our ability to generate meaningful productivity gains Moving to our segment results on Slide nine, Our North America segment generated $640,000,000 in revenue for the fourth quarter, a 14% decline year over year. This was driven by a 14% reduction in core revenues primarily due to lower volume and mix. The decline was more heavily weighted towards mix as consumers continue to shift toward more affordable products. Additionally, earlier in the year, we exited certain higher priced products with dilutive margins. North America's adjusted EBITDA declined to $42,000,000 from $94,000,000 in the prior year. Reflecting the impact of lower volume and mix as well as negative price cost dynamics and productivity headwinds stemming from significantly lower volumes. In Europe, revenue for the fourth quarter $256,000,000 with adjusted EBITDA of $17,000,000 Core revenues declined 6% year over year. Driven by a 7% decrease in volume and mix almost entirely attributable to volume. However, adjusted EBITDA improved by $1,000,000 resulting in a margin of 6.5%. The impact of lower volumes and slightly negative price cost was more than offset by strong productivity improvements. Turning to Slide 10, full year revenue declined 12% year over year.

Reflecting the ongoing impact of lower volumes and mix throughout the year. In addition, late in the year, our sales were affected by the loss of a major Midwest retail customers window stock business. As well as the strategic pruning of unprofitable business Adjusted EBITDA and margins were pressured by lower sales. With these impacts only partially offset by productivity gains, from our transformation initiatives. For the year, we faced approximately $160,000,000 in headwinds from lower volume and mix, along with an additional $40,000,000 decline from negative price cost and productivity challenges stemming from sharp volume declines. However, our transformation efforts delivered meaningful results allowing us to offset nearly half of these pressures in 2024. As a result, adjusted EBITDA declined 28% year over year with margins contracting by 150 basis points. I'll now hand it over to Bill to talk about the outlook into 2025.

Thanks. With the financial results covered, I would now like to shift focus to the broad market environment and our expectations for 2025. Turning to Slide 12. When we provided our initial market outlook last year, we were outside the consensus in anticipating a market decline. While we were directionally correct the downturn was steeper than we had expected. This year, we see the potential for continued volatility in North America with significant uncertainty around how conditions will unfold. Potential tariffs, persistently high interest rates, and the possibility of renewed inflation all contribute to this uncertainty. Additionally, affordability remains an issue as both unit cost and interest rates remain elevated. Finally, reports indicate that new home inventory is at a decade high level and discretionary spending on home improvements remained subdued. Especially on big ticket discretionary items. Therefore, we believe there is a meaningful risk of further market declines in North America. Specifically, we expect both new construction and repair and remodel demand for windows and doors, to decline by low to mid single digits. We also anticipate continued double digit declines in both multifamily and Canadian markets consistent with last year's trends. In Europe, we believe the market will continue to decline this year.

Albeit at a lower rate than North America. Given this backdrop, we expect European residential construction activity to decline moderately while commercial projects are likely to be slightly down. Given the challenging market outlook and as part of our ongoing transformation, we are taking further actions to strengthen our network. As shown on Slide 13, we are launching a comprehensive program to optimize our North America network ensuring it is aligned to both support and deliver Specifically, we will be realigning our footprint to support future growth at both the regional and product levels ensuring we have the capability to manufacture the right product with the right capacity in the right locations. At the same time, we are accelerating automation investments to drive further efficiency and enable additional facility consolidation. Finally, to improve customer service levels, we are enhancing the planning and execution of all projects in this area to minimize service disruptions and maintain strong customer support levels. While much of this optimization work is already underway, we do not expect a significant financial impact from However, as the consolidation progresses, we anticipate could generate an additional $60,000,000 or more in benefits on top of our ongoing transformation efforts once fully implemented.

In addition to the midterm optimization of our network, we are also implementing shorter term actions to reduce costs and align with current market conditions. As shown on Slide 14, we have identified several near term initiatives. First, we are rightsizing our factories, that includes adjusting our salaried workforce. In several regions, demand has further declined while we continue to run multiple shifts. As we progress with our long term network optimization, we are making near term adjustments by reducing shifts and scaling back support staff to better align short term costs with current and expected market realities. Additionally, with the evolving tariff landscape, we are proactively preparing for a higher tariff environment particularly in North America. We are modeling options to optimize our supply chain to reduce costs prioritize regional sourcing and in market production wherever possible. These short term initiatives are expected to have a meaningful impact on 2025 earnings. When combined with our broader productivity efforts, they are projected to generate approximately $50,000,000 in annual savings. These near term adjustments will help stabilize our cost structure as we recognize that 2025 will likely bring additional volume challenges. Let's now turn to our guidance for the year. Turning to our guidance on Slide 16, we anticipate continued softness in North America compounded by the impact of share loss and the strategic business pruning last year.

As a result, we expect net revenues to range between 3,200,000,000.0 and $3,400,000,000 reflecting a projected 4% to 9% decline in core revenues up to 4% to 9% reduction in core revenues which excludes the impact of Towanda about half is a result of the Roll Forward of changes that happened last year including the loss of the large Midwest retail business, while the other half is related to the anticipated additional market weakness. Lower volumes are expected to flow through to EBITDA at an approximate 30% decremental rate partially offset by ongoing transformation initiatives. We now forecast an adjusted EBITDA range of $215,000,000 dollars to $265,000,000 Given our EBITDA expectations, we anticipate operating cash flow of approximately $15,000,000 in 2025. In response to the low levels of operating cash flow, we are adjusting our capital expenditures to considering our expected elevated leverage levels by year end. This results in a projected use of free cash flow of approximately $135,000,000 While this CapEx guidance is lower than previously outlined, it remains well above historical levels representing approximately 4.5% of sales. We remain committed to funding our transformation to position the business for long term success. The cash impact will not be as severe as our free cash flow guidance might suggest.

This year, we received approximately $110,000,000 in cash from the required divestiture of Tawanda which we will use to support our transformation efforts. However, with lower EBITDA, we still expect to end the year with leverage above four times exceeding our target range and we will be taking steps to address this. As you know, we typically do not provide quarterly guidance and do not expect to do so moving forward. However, the first quarter of this year is shaping up to be particularly challenging as the market remains weak and we begin to experience the full impact of last year's share loss, and required divestiture. To maintain transparency, and support your modeling, we currently expect the Q1 sales range with adjusted EBITDA of approximately $20,000,000 That said, we anticipate an improvement in Q2 and throughout the remainder of the year driven by normal seasonality and the ongoing benefits of our transformation and cost management efforts. As a result, we do not expect these exceptionally low levels On Slide 17, we provide a detailed breakdown of the key factors driving our EBITDA guidance midpoint to support your modeling. As shown, the impact of the Tijuana divestiture combined with volume declines and the reversal of one time benefits, is only partially offset by the significant improvements and our broader transformation initiatives.

As we enter the third year of our transformation, we remain focused on driving meaningful progress based on the things we can control. As shown on Slide 18, we expect to deliver another $100,000,000 in annualized adjusted EBITDA improvements this While there is still significant work and opportunity ahead to strengthen the foundation of our business, the results so far demonstrate that our efforts are making a tangible impact in a challenging market environment. Turning to Slide 19, we expect the majority of the year over year variance to come from our North American segment. While we anticipate some early signs of stabilization in Europe. In North America, lower volumes are expected to have the greatest impact driven by a weaker market the required Tawanda divestiture strategic business pruning, and share losses from 2024. While we anticipate strong productivity gains in the region, they are unlikely to fully offset the impact of declining volumes. Price cost is expected to be flat in the year. Conversely, while European sales volumes may present a headwind, we expect these pressures to be more than offset by the productivity improvements generated through our transformation initiatives. Although we do not anticipate a significant year over year increase in EBITDA we do expect both absolute EBITDA levels and margins to improve modestly in 2025 compared to 2024.

As in North America, we anticipate price cost will be roughly neutral in 2025. Finally, corporate expenses are expected to be higher this year as certain one time benefits do not repeat and we reinstate variable incentives across the company. While the exact impact remains difficult to predict, we currently expect corporate expenses to land between 2023 and 2024 levels. As we look to the next phase of our strategy, one that positions Sheldwin for long term success, despite continued near term headwinds. 2025 will be a pivotal year for JELD WEN. Over the past two years, we have successfully reduced annual run rate costs by more than $200,000,000 yet persistent market weakness has offset these improvements. As a result, we are now shifting to the next phase of our transformation. Turning to Slide 20, our focus in 2025 centers on three key priorities. First, reestablishing strong partnerships with our customers, our service levels have not consistently met our customers' expectations and we are taking steps to improve both service and quality across the company. By focusing our organization on safety, quality and delivery metrics, and linking variable compensation to these metrics, we aim to deliver what customers expect the right product, at the right quality on time and in full.

As we continue to execute on these improvements, we fully expect to regain market share Second, optimizing our network As we discussed earlier, we still have too many facilities operating below optimal levels. We are taking a disciplined approach to realign our long term footprint ensuring we maintain the right capacity while minimizing customer disruptions Finally, continuing to invest in cost and efficiency gains. Under investment over the past decade, has left us with a fragmented network and many manual processes. We will accelerate automation in select manufacturing operations, as we still have significant opportunities to improve efficiency and reduce costs across our network. We expect 2025 to remain challenging. With continued market related headwinds. However, we are taking the necessary actions on items that we control to navigate near term pressures while positioning JELD WEN for long term success. I am incredibly proud of our team's hard work to deliver long term value. We continue to invest in the right systems, processes and people to deliver the long term value. Thank you for your continued interest. And with that, I'll now turn it over to James for the Q and A. Thanks, Bill. Operator, we're now ready to begin the Q and A. Your first question comes from Philip Ng of Jefferies.

Your line is open.

Hey, guys. Appreciate all the great color in terms of how you're tackling some of these dynamics. But I guess, my first question was really around the step up in your earnings progression even from 1Q to 2Q implicitly goes from $20,000,000 to $64,000,000 And certainly, first half versus back half pretty noticeable pick up there. So I think number one, it would be helpful to just kind of give us a little more color on how that progresses, whether it's the 100 transformation or the 50,000,000 headwind mitigation? How does that get layered in And then I guess in a more normal demand environment do some of these savings in the short term kind of reverse as well? Help us think through the progression? Thanks, Phil. This is Samantha.

So think about the progression As we talked about, we're going to be taking both some near term actions about $15,000,000 this year as well as the transformation. Many of those actions will begin to take effect in Q2. So we have to adapt to the ongoing market dynamics by optimizing our factories, our support staff and our SG and A, most of that takes effect beginning the beginning of Q2.

Are you assuming any ramp up in demand ramp in terms of first half versus the back half or pretty steady state throughout the year?

So there's going to be the normal seasonality that we expect beginning in Q2. So combined with the actions we're taking, that's kind of the lift up that you see. We do expect more of a normal seasonality beginning in Q2 and Q3.

Okay. And then from a price cost standpoint, calling for a pretty neutral price cost this year. So I guess first on the price part, have you taken any pricing actions and how your competitors reacting? And then certainly the unknown out there is around tariffs. The China tariffs feel pretty firm. There's metal and aluminum tariffs. And then there's talks of potentially China and Canada. I'm particularly interested on the Canadian front, just given the amount of lumber this country imports, how are you thinking about all those things and what's baked into your full year guide as well?

Hey, it's Bill. Good morning, Phil. So yes, it is a complicated picture currently if you're trying to run a global supply chain. Let me try and work through these one at a time based on the questions you asked. So yes, we are taking price. We expect currently given our visibility to the supply chain around $50,000,000 in headwind, on the cost side. Secondly, if we look at metals coming in from China, very little exposure. Yes, there is some lumber. I would say global exposure to lumber And right now, we're running through different scenarios and modeling implications We feel fairly well set up given our current production network, which is fully domestic. Both Canada and U. S. But we're waiting to see if there's some cross border tariffs and it would be Canada U. S. That could potentially have an impact running scenarios haven't baked anything in addition into the guidance that you currently have in front of you.

Okay. So the 50,000,000 Does not account for any the $50,000,000 cost head when you called out Bill, does that account for any tariffs whether it's China or Canada at this point? Correct? No. No. That would be over and above, but there are obviously factor cost headwinds and that's why we have selectively taken price in the market.

Okay. Thank you. Appreciate the call.

Yes. You're welcome. The next question comes from John Lovallo of UBS.

Your line is open. Good morning guys. This is actually Spencer Coffman on for John for the question. Hi, Spencer. Good morning. Maybe just the first one.

Can you just talk a little bit about your line of sight into really just how confident you are in achieving the $50,000,000 of the mitigation savings and the 100,000,000 transformation savings in this year? Just [indiscernible] market view here, And I guess on top of that, is the right way to think about it that the transformation you'll be doing anyways and the $50,000,000 is just like how you would approach a more challenging market environment?

Yes.

So I think your last statement is fairly clear and spot on. On our transformation, this is our ongoing business to really improve the foundation and strengthen the future for JELD WEN. So we have I'd say, we have active projects that are already in flight, 85% of the 100,000,000 already running. So we have pretty good conviction on being able to deliver that And I think our historical track record would suggest we're able to do what we say in this regard. The additional $50,000,000 that is reacting to what we think will be another demand challenged environment And so we have to adapt our cost structure accordingly and make sure we're ready Yes, we'd love the market to be turning up, but right now we don't see any signals from any of our competitors. Customers, or market research that would suggest a turn. So we're getting ready for a challenging year and making sure we're doing what we can't control doing that effectively.

Okay, that makes sense. In your slides, you mentioned that mix is expected to remain at the entry level price point how should we think about that in the context of your 2025 revenue build? Does NICS expected to continue to be a year over year headwind or are we sort of lapping all that now? Should be somewhat neutralized.

Yes, I think it's probably baked in and it's kind of a run rate rolling forward. If you just think about that dynamic of the market, we still expect soft market, as we've said, down low to mid single digits, both on new and retail R and R. With that situation, the large builders obviously are going to continue to sell out. Inventory are building there, but it's lower end volume and product, which is has a detrimental mix to our business, but we feel that fairly baked in now and probably continue for the Okay. Thanks guys. [indiscernible] The next question comes from Susan Maklari with Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Hey, Susan. Good morning, Susan. My first good morning. My first question is can you talk a bit about organic efforts to regain share, especially given the environment that we're in? Any progress that you're seeing there or project that we should be looking for as we move through this year?

Yes.

So there's a couple of things that we're doing on the growth side, Susan. Clearly, this is a challenging demand environment, but there are always growth opportunities for us, both on doors and in windows. There's two buckets that we're focused on. Number one is being more effective on the sales side. So we set up pretty strenuous pipeline review processes in both our doors and windows organizations. Have weekly stand ups. We're building project pipeline and we're creating conversion models that will allow us to better predict where we think we're going to end the year We're not ready to disclose detail around that, but I'm very pleased with the pipeline progression So that would be the organic piece. Second would be really driving service improvements Clearly, there are certain areas where we have to improve from a service level. I'm talking about quality and delivery. Because there are some pockets in this market that are still going and demand is strong. Such as interior doors in the Southeast market. Unfortunately, there was many hurricanes last year and that's really pushed a demand. From some of our key partners in the region. So we need to make sure we can fulfill that effectively.

So quality, delivery and organic pipeline growth in the sales organization are the three levers that we're working on. And feel pretty confident that we're going to be able to gain back some of this share that we elected to step away from last year just based on profit pool weakness or the Midwest retailer that elected to go offshore.

Okay. That's helpful color. And then maybe just turning back to the full year guidance, thinking about the first half versus the second half, be thinking about the exit rate on that EBITDA margin for this year as some of these initiatives do start to come through and gain momentum? [indiscernible] Towards the end of the year, they're gaining momentum. You are going to have kind of the tail end in Q4 when you think about the drop off from a seasonality impact. But I would say it's a good it's a good practice to think about our margin rate exit around 98% to 9% at the end of the year.

Okay.

That's very helpful color. Thank you both. Good luck with everything. You're welcome.

Your next question comes from the line of Matthew Bouley with Barclays. Your line is open. Good morning. You have Anika Dilakia on for Matt today. Thanks for taking my questions. First off, Hi, good morning. Within your $150,000,000 CapEx guide for the full year, I'm wondering if you can give more detail on what this is being allocated to Is it more on the productivity side or it's the growth or is it maintenance? Any details on that would be helpful. Thanks. Sure. So it's I would say it's balanced right now between network optimization and improving automation in our facilities and with some portion also being towards our growth. So you think about our special order project that we announced on a previous earnings call, there's a lot of work going into that around the updating of displays, making sure that we have the right systems in place to facilitate better special order process in our retail partners' When you think about the overall 150 got to think a little less than 100. Is tied to maintaining the asset base for our overall network. So the $50,000,000 of, let's call it, incremental to that is really the transformational CapEx around network optimization.

Automation and then some growth initiatives. Awesome.

That's super helpful.

And then I guess secondly on Europe, the volume and mix remains under pressure. Have you guys seen any pockets of strength in this region? Specifically in commercial? I know it's guided unsightly. And then can we assume any recovery as we move through 2025? Or how do you expect the volume cadence to trend there? [indiscernible] Europe is definitely looking better, but still challenged. So there's definitely pockets in different countries of recovery. Again, just to remind you, the build cycle for a European unit is probably nine to twelve months before our product goes in versus six to nine in The U. S. So as the starts pick up, we won't expect the major take. Until nine to twelve months later. So our expectation now and we've communicated this before is we expect recovery in 2026, not before. Interest rates are coming down. Which will definitely help. And we're also seeing some competitors in specific markets that are in financial distress So we're able to pick up some additional volumes. And this has been a story that's been going on probably for a couple of years now. And then on the commercial side, to answer your question on projects, we do see project pipeline.

So starting to pick back up, but obviously that also has a pretty long gestation period. Based on the size and the scope of the project. So that's like twelve months out So it's a 26 story. And we are controlling what we can't control in 25.

Awesome. Thank you and good luck.

Thank you very much.

Thank you. Your next question comes from Mike Dahl of RBC Capital Markets.

Your line is open.

Hi, thanks for taking my questions. First one just to go back to Phil's questions on [indiscernible] $50,000,000 is not insignificant amount if that's not inclusive of of Canada. So can you just help us Understand if that's the incremental cost. What's specifically is it related to in terms of the spend that you're bringing in Yes.

So the $50,000,000 hey, Mike, good morning. So the $50,000,000 is that's not tariff related. That's just inflation costs on our sourcing stack.

So there's I mean, there's freight, there's labor inflation, there's material inflation, Those are the big buckets that fill the 50.

So it's separate and distinct to potential tariff headwinds, which are currently not baked into that number. And our expectation is that we're going to be price cost neutral on that in the market for 2025.

Okay.

That's very helpful. [indiscernible] kind of related. I mean, if we look at kind of the bridges and it's always helpful how you draw the waterfalls.

In 2024, you had, call it, dollars 200,000,000 of EBITDA headwinds you offset $95,000,000 of that, give or take $90,000,000 to 95 In this bridge, you kind of inclusive of Tawanda, you have another $200,000,000 I guess exclusive of [indiscernible] effectively assuming all of that is offset and then you still have kind of these price cost issues, which I appreciate You're assuming neutral, but that's still stuff that you need to do to get it [indiscernible] I guess the question is going back to level conviction. It seems like a lot to offset to get to kind of a flattish EBITDA number help us with that walk a little and and maybe as part of that also the corporate side that's a very wide range on corporate costs. So maybe a little more detail on what's happening there?

Okay.

Let me try and hit it at a high level and then maybe Sam can give some additional color if some buckets are unclear. So I think you've you've kind of framed it correctly. The Towanda divestment, again, just so it's clear, that was court ordered. And we did divest based on an order from the court and that has cost us expected $175,000,000 of revenue and $35,000,000 in EBITDA. So that is one bucket clearly of headwind. The second bucket of headwind as we've shown on the waterfall is market and the market is bucketed into a couple areas. Number one, volume mix headwind and number two, pruning and share loss, things that are kind of rolling forward the Midwest retail loss, some of the pruning that we've done in our portfolio, what we didn't like from a a profit pool standpoint last year. And that a pretty big number. So based on our expectation, we see the headwinds this year, we feel that the $100,000,000 in transformation that we're driving to and we've committed to is not going to be enough to counteract this. So we need to do more. So we're going to take some tough actions on the structural cost to make sure we're ready for the rebound and we still feel that this is a great story.

When the volume comes back and we've cleaned up our cost structure and our manufacturing [indiscernible] Maybe there's some additional details that Samantha can give to help you better understand the buckets and how we're looking at balancing this.

So from a corporate cost to market conditions that will continue into 2025. There is going to be about $15,000,000 to $20,000,000 of headwind simply because of a variable comp issue year over year. Will be reinstated in 2025. When you factor it all in, think about modeling this year being $15,000,000 to $20,000,000 higher than 2024, net of all the puts and takes.

Got it.

Okay. Thank you.

You're welcome.

The next question comes from Keith Hughes of Truist.

Your line is open.

Thank you. You're talking about price cost flat with $50,000,000 of traditional inflation headwind. There's so much mix pressure in your industry What areas do you think you can get priced? It just seems like this would just get [indiscernible] [indiscernible] where are you going to get that?

Yes. Well, good morning. Keith. I do believe that as we said before, the mix down that was occurring last year, we feel we're kind of at a run rate that's predictable on the mix. So we don't think there's is going to be a significant amount of changes On the mix, when we look at kind of our stack, for expectations on volume around the builder side, on the new construction and then on the retail and R and R side. So this is just us working [indiscernible] that we're doing what we can to control our costs, but if there is inflation and there still is inflation in the system, then we need to pass it through.

And Keith, the other thing to think about is some of this has already like the price has already been in the market. This is in there from last year. So some of this is carryover. Impact that you're feeling in 2025, but this is [indiscernible] already in the market.

Okay. And the big customer loss in that last when will you anniversary that? And give us an idea what kind of revenue loss over twelve months that is?

Yes. So it's going to be kind of Q3 ish. September, around September. End of Q3.

And one final question, the previous comment on the corporate cost $15,000,000 to $20,000,000 headwind, is this just normal compensation expense coming back? Or was there something unusual about it?

Yes. It's essentially normal, essentially variable compensation coming back in 2025. It's nothing out of the ordinary other than that.

Okay. Thank you. [indiscernible] This concludes the question and answer session. I'll turn the call to James Armstrong for closing remarks.

Thank you for joining our call today. If you have any follow-up questions, please reach out. I'll happy to answer them. This ends our call and please have a great day.