JELD-WEN Holding, Inc.

At this time, I would like to welcome everyone to the Jeldwyn Holding Inc. First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and one. I would now like to turn the call over to the Vice President of Investor Relations, James Armstrong.

Thank you and good morning. We issued our first quarter 2023 earnings release last night and posted a slide presentation to the investor relations portion of our website, which can be found at investor.jeldwin.com. We will be referencing this presentation during our call. Today, I'm joined by Bill Christensen, Chief Executive Officer, and Julie Albrecht, Chief Financial Officer. 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 the 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-K and 10-Q filed with the SEC. GELDWIN does 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. Presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to their most 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 thank you everyone for joining our call today. I'm happy to report that we are making solid progress on our short-term measures to simplify the business, improve our cost structure, and strengthen our balance sheet. Thanks to our employees around the world, our first quarter came in better than we expected. During the quarter, we reduced costs while improving service to our customers, all during a very uncertain macro environment. Turning to our first quarter highlights on slide four, we began the year with both sales and earnings coming in above our expectations. During the first quarter, Demand was down year over year, however, not as soft as expected, and we outperformed our plan for price-cost. We also took steps to right-size our inventories while still improving customer satisfaction metrics like on-time, in-full deliveries. Julie will talk more in depth about our financial performance in a few minutes. Turning to slide five, We continue to focus on a two-pronged approach, paying close attention to both the short as well as the long term with a transformation framework structured around people, performance, and strategy. We're making good progress in strengthening the foundation of our business with an emphasis on both culture and capabilities. This is augmented by the active deployment of value creation plans to deliver on margin expansion through operational and organizational efficiency initiatives. We are pushing down line of business accountability, rationalizing our global footprint, and establishing detailed improvement targets around our sourcing and commercial excellence activities. And finally, we are focused on delivering improved cash flow to fund the value creation projects that will support our margin improvement. We are planning to focus future investments in areas such as factory automation, demand management, and digital commerce. We're also developing a plan to deliver more consistent profitable growth. As I have said before, we need to simplify our long-term strategy, establishing clear deliverables designed to drive improved market performance and shareholder returns, while giving customers more of what they value. Although we are not insulated from the weakening macro conditions in housing across the globe, we are gaining momentum from actions we already have in progress. One of the most significant near-term actions we have taken relates to our Australasia business, and this is seen on slide number six. On April 17th, we announced the completion of our strategic review, resulting in a sale to Platinum Equity for approximately 688 million Australian dollars. This was an important step towards executing our near-term strategy of simplifying our business and strengthening our balance sheet. We plan to use the net proceeds of approximately 450 million US dollars to repay debt and expect our leverage to be below three times net debt to EBITDA on a pro forma basis by the end of this year. In addition, we expect minimal tax leakage and anticipate the deal closing in the third quarter. I personally want to thank our entire Australasia team for their continued hard work. We have an active separation management office, which is currently working with Platinum Equity on the transition plan and relevant closing details. Last quarter, we noted that we are focused on strengthening the foundation. And on slide seven, you see the three key areas for our work. We have a tremendous amount of activity underway that we expect will deliver notable profitability improvements in the near and medium term. Our teams are consolidating numerous ideas that range from just do it improvements to more complex projects that are run through a review process and then sequenced. Knowing that we are in the early days of improving our profitability, I wanted to provide some insights into a few of the projects that are helping drive approximately $100 million in lower costs in 2023. These activities are incremental to actions we've already taken in late 2022 and early this year to improve our cost base across our operations and in SG&A. First, we're improving our operating efficiency and driving costs out of the system. For example, we have recently started to implement a centralized logistics program in North America that will allow us to better optimize our transportation network and improve shipment visibility for us as well as our customers. This program, we expect to drive 15 million of annual costs out of our system. Further, we are scoping similar programs that leverage the enterprise to reduce costs through sourcing and centralized order and supply chain management. Second, we are focused on commercial excellence throughout the organization. In Europe, we are reviewing our go-to-market structure, including people, process, and systems, as well as end markets served. Expected results include sales and customer service efficiency targets, as well as country level details to better calibrate pricing actions. Finally, we continue to optimize our network footprint, which includes improving how we plan and execute our production. In North America's interior door business, we have reallocated production to sites to be closer to customers and to optimize production efficiencies. As we move forward, we anticipate expanding such opportunities across additional product categories. Additionally, in another step towards rationalizing our footprint in January of this year, we announced the ongoing closure of Atlanta doors facility, which we expect to deliver cost savings of about 11 million annually. As you can see from these examples and our results in the quarter, we are focused on delivering cost reduction and profit improvement initiatives. To reiterate, these are a few of the projects we are working on to drive improved performance, and I look forward to sharing more examples in the quarters and years to come. As we implement our plans laid out on slide eight, we have significant self-help opportunities that we expect to drive improved performance in the quarters and years to come. We are in the process of setting clear targets and will actively monitor them to ensure accountability. As we develop these plans, we are focusing on investment returns and a longer-term runway of innovation to drive future growth. On capital allocation, we remain committed to reducing our leverage below three times which we expect to achieve on a pro forma basis by the end of this year and includes the completion of our pending Australasia divestiture. We are also prioritizing investing in strong payback projects to further improve profitability. And finally, we continue to focus on transparency with investors to help you understand the drivers and underlying fundamentals of our business. We are underway with developing our long-term goals. We're also committed to sharing more information when appropriate and giving mile markers to these goals so you can evaluate our progress along the way. However, in the near term, our focus is on detailing our transformation plan that will reduce operating costs, rationalize our footprint, improve our commercial excellence, and deliver on the large actions that we have already laid out. I'll now hand it over to Julie to discuss our detailed financial results.