The AZEK Company Inc. (AZEK) 19 Nov 242024 Q4 Earnings call transcript

Welcome to the AZEK Company's Fourth Quarter Fiscal 2024 Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Eric Robinson. Please go ahead, Eric.

afternoon, good and you, everyone. Thank earnings We earnings our and supplemental release this issued website afternoon investors.azekco.com. of our presentation portion to a Relations press the at Investor the was via press also earnings release X-K The on SEC's website. furnished of statements joined within during Officer; Peter federal Executive future may this the and Financial call, Clifford, our to the like certain Officer and Officer. I Operations we by would forecasts, including Singh, that Chief remind laws, I'm statements remarks today beliefs, Chief expectations, Chief meaning plans constitute Jesse forward-looking our prospects. everyone and securities make that about estimates, actual statements described to a in Such the differ variety as reports periodic and cause filed with uncertainties Commission to results subject our Exchange Securities materially. of are and risks could that undertake duty such forward-looking not do update any statements. to We

as discuss not found today's website. be can non-GAAP in are we during we in Additionally, considered earnings GAAP. can prepared call, press and presentation, Reconciliations be our financial such in our supplemental substitute measures measures, posted which non-GAAP performance. which be release of believe non-GAAP or measures on in accordance evaluating a These should for with our earnings results useful will isolation

to over CEO, Now turn the let me call Jesse Singh. AZEK's

was grown X% our XXXX. and and mission top growing XXXX, thank our in Good in expansion. Residential sell-through of record XX% net another The year-over-year strong growth. growth revolutionizing on financial Residential growth The XXXX Since living for year, business margin you and of afternoon, to our AZEK strategic outdoor and high delivering achieving growth team's year-over-year successful to our business sales results us. XX% in joining has team single-digit growth Residential sustained initiatives dedication XX% XX%. This delivered the XXXX execution fiscal that of and reflect led achieved

Residential broader consecutive years and remodel have X in the outperformed of market. repair we once segment again And We growth. delivered XXXX,

business growth Accessories and industry delivered continues to lead & XX% Deck, sales XXXX. fiscal for Our Rail the

sourcing XX.X%. We focus record and expansion continued Our to a initiatives, to expanded us expanding SG&A, $XXX shareholders returned We enabled XXX of new our investments reduction to strong net while and expansion XX.X% margin points and to and invested manufacturing margin leverage deliver operating repurchase making year-over-year points basis capacity, incremental basis cash year-over-year margins our our in and XXX through cost on manufacturing adjusted EBITDA program. of productivity, products. production flow, profit share in future generated recycling million launching

to low continue give ability across our XXXX us and Our in ability fiscal backdrops through margin I team our and share to engineered sustainable members AZEK-specific towards in vision thank business multiyear our partners maintenance demonstrated record conversion types various would market like beyond. Once initiatives of to track confidence outperform to and materials. and driving growth expansion who our material drive again, dedicated

is partners the of experience performance members dedication of the our and result passion team a and products to Our deliver to best customers. AZEK's and

over XX%. Deck, saw For each including growing the sell-through the back digits Residential softness for business, the grew digits of Overall, & double some sell-through year in half the fiscal year-over-year discussed, product with as single XXXX, the year. full Exteriors segment of which, high Rail grew lines the Accessories year,

and a our sales is brand channel investments. growth expansion downstream products, engagement Our direct initiatives, result of new

grew quarter. Accessories sell-through previous the digits grew During improving and modestly the single single quarter, fourth fiscal low Exteriors high year-over-year, Deck, digits & Rail from

fourth we As improvement growth. we saw sell-through progress through the quarter, in

and retail channel pro We sell-through. strength have across seen

customers. levels sales together partners, have channel done great of while job a team service to very operations delivering Our and inventory and managing worked our high

confidence including as on living materials aging years to a an shift the the markets internal and more metrics and remodel environment sustainable should come. construction housing realized underlying for that in outdoor increased demand our stock, believe millennials broader strong there and to digital improve. Market as and of trends, see homeowners, and to is growth focus consumer provide continue an new and engagement expansion We will market repair that a growth be in

these part of investing XXXX for XXXX that future We recent brand, market new research our continuing contribute XXXX. will impact core As and new to billion new are in XXXX, access relationships our even innovation, XXXX us announced our opportunity. our allow more across strategy, manufacturing will growth customer our incremental growth X development, operations. that from and incremental $X products In launches will an launches product than and products to we these have and recently platforms addressable on of opportunity. strengths revenue product and saw believe world-class greater expect Collectively, we of

aged As PVC our offers with decking we which sustaining part launched that the portfolio of advanced decking, TimberTech leadership, natural of cool benefits visual. beautifully collection the recently homeowners touch and functionality Harvest+ a fire-resistant combines

year's be in we last of lap our new In alternative siding expand Aliquippa, a in which This siding. Pennsylvania. manufactured capacity launch Xceed line business, Exteriors product Versatex exteriors to will our vinyl product, continue premium provides the to expansion

new Reliance our replacement to in the also platforms part launching much value-oriented of which excited material. broader and business, is a we recycled call, sustainable in an building in access of PVC a and OEM we create the market. this to product the rail in railing X We aggressively create billion The technology wood PVC the ability features. line offer will breakthrough wood railing $X extensions with access in vinyl new launch our we Rail, about alternative our This capability aesthetic new TrimLogic, market proprietary rail target be a platform, ongoing and vinyl to we year, Fulton a able the steel launched discussed leverages part Earlier rail position vinyl new still the and X wood. We price competitive multiple the a the products. our puts of trim but of With rail approximately and acquired over across a still is a exterior approximately billion percentage recycling premium rail recycled position to go to at XX% TimberTech investments up PVC $XXX the last we of our greater believe major new PVC and made access that that aesthetic, product. balanced trim technology differentiated portfolio, and made is proprietary exciting market terrific the paintable new market. market. and our are the to categories exterior to portfolio after Trim addition is are the of is This convert segment we vinyl product million in highlight product. and even to products rail launch, and more market a decking, targeting market other goods are points wood. In this more materials the railing leverages an larger us In our railing these entirely wood over to value-oriented this XX% This to

innovation to up to in gross our associated our New on fundamental with products expense SG&A, exciting of launches ramp and see ongoing are part as product margins we do and The investments a core value. expect new we we is modest these our are some new what impact do, products.

customer experience Officer. our Mohan technology in quarter, as our AI our Rakesh our scenes, brings solutions and team will we that Technology to Digital making During and years technology-enabled of investments Lennox the been expand from and Rakesh us team months Chief to and investments solutions and International. Behind the welcomed coming we believe the have years. joins in these

are driving the also Magazine's sales and XXXX Brand AZEK X categories. and awareness recently and in momentum brand in innovative brand most in Use Renovation among as Home #X PVC Our our our Decking technology. significant our for by the Housekeeping's used TimberTech were both advanced recognized Vintage recognized or brand Awards Railing and Studies leveraging and was by awareness Remodeler investments professional both TimberTech Collection, years fire-resistant contractors. TimberTech marketing homeowners Builder last #X in and Trim Good

a We changes mentioned we designation will the growth we as and phase not Class made company of conversion. our in material also of distribution being last better in recently call, A positioned that for are ignition uniquely As believe flame next state but our only on align California. the certain with resistant designated

terrific the expansion have and underserved our that our believe of and partners changes We recent portfolio. markets penetration of will the product increase

solution Our to provide put our our contractors new complete have with to value us product platforms in great work a customers. our channel and more and higher a position partners to

growth, to optimize our penetration for ourselves channels will and conversion. future brand building, continue business position to better material We market and

to us outperform our XXXX, we company-specific initiatives to into an fiscal As once with expect market. the opportunity move again provide we

and investments benefit our conversion. on the our of seeing and are brand broad multiyear journey consumer material focus We

underlying fiscal Residential year inventories to the positive, be demand averages. believe and be there realized channel the were historical as market below sell-through improves. is that R&R We will broader continues growth exiting that

fiscal remodel Our assume we initiatives. track AZEK-specific expect would to an again, with approximately and driven flat planning the and XXXX outperform record, market; repair by assumptions year our historical consistent market,

start expect during While a currently if of we see we not to assumption, the in see our to R&R the benefit would year. market, broader a recovery

XXXX. we assumption in We growth similar sell-through growth with of year-over-year have planning started ended the mid-single-digit and how XXXX, year a fiscal to year sell-through October double-digit in

leverage. drive our to continue improvement, on margins We we our see positive continuous and as initiatives recycling momentum

us a good position while put making and expand channel drive awareness. brand sustain in margins growth new initiatives to margin investments growth, product Our and to

EBITDA in some to consolidated our on to X% adjusted basis, now assumption planning segment net Residential outlook. current Residential context over adjusted our EBITDA on results turn Peter to segment to will we X% Our X% to and and Overall, to to financial call is year-over-year. to year-over-year X% the X% provide XX% X% by expect a X% our sales grow our range. I grow additional and by the

and good Thanks, Jesse, afternoon, everyone.

at highlighted we supplemental earnings website. our presentation Investor call, have Eric the of a the on portion of uploaded the Relations As beginning

the executing growth via flattish environment. a playbook Before a outperform the market by execute to the team was in we a all make time, we the the that perspective, R&R to to our X% past journey at we perspective, year. When single-digit reflect portfolio within and our EBITDA expansion growth of on a experiencing wanted market opportunities. during we proceeds $XXX in portfolio From pure to into we margins we the expanded disciplined a were cash landfill-bound stewards our our enabled good be to a growth capital the of to quarter a high capital against market. of cash level perspective, utilize expectations we macro valuation. From From margin cash we and full able to and At From as generation, perspective, exteriors sustainability business From still XXXX. wanted From modestly our to basis the clear deployment from generation investing operations play we flow to perspective, flow free the generated to make initiatives free margin wanted million residential Vycom progress a XXX we November cash recycled at of assumptions coupled sale were perspective, we've stock year. XXXX, a we while the in generate approximately perspective, margin conversion of capital. growth cash AZEK million From by points get and negative growth we strength a following. during a these uncertainty closer while in to all year. the business from drive continue wanted our the to our found want cash our from focus. From deployment I portfolio X% adjusted our outperform we take with perspective, high attractive our perspective, $XXX wanted said cash products. On million business, a better owner moment via sell-through a back a ambitions as the growth, flow 'XX the lastly, fiscal significant of year wanted manage reasonable to playbook. residential we strong wanted results, facing planning progress of From SG&A. a in with From a CapEx. repurchased offered materials the on fourth against decking free points, well Vycom perspective, perspective, more $XXX effectively the And to

to term to in 'XX single-digit accessories increased expanded year a we business As high $XXX our with at We deck, bring In XQ, loan our single full below levels experienced our low days we company days on well, flow broad our close environment better prior new total channel of lastly, partners by content inventory stays hand rail in pride XX% pergola September inventory a growth portfolio, as positive We and lead versus new refinanced retired channel and that digits. including our 'XX. In on its XX% million channel a XQ contractors well in repurchase from to on residential year. Consistent base XX% similar approved approximately perspective, the approximately we our our as our with from ground. keep times. in million quarters, $XXX dealers recycled products we extruded and customers. the a our of levels our to share capacity historical and $XXX we past with million to approximately the single-digit year ourselves exteriors work sell-through program, 'XX, a the both understand manufacturing continued high revolver. sustainability with being full to surveyed sell-through debt hand compressed portfolio B, approximately And given sell-through cash low ended on the

reported a through constructive levels. a From Our sentiment backlogs perspective, their environment in term. continue and stability above see weeks, X-plus continued and contractors growth just remaining dealers the with to pre-pandemic at our quarter the near contractors

On samples both we digital and leads. side, strength contractor in the saw

recycling see advances to sourcing perspective, costs and make operating prior were continue we drive noninflationary, stable and initiatives productivity, stability savings margin to continue Production remained and gross year. Material our manufacturing expansion an we environment. our consistent From the year-over-year. incremental with to in in levels input

consolidated fourth quarter we both delivered above the of range. XXXX, which as For was well as sales fiscal the top $XXX net of our million, consensus of guidance

impacted were partner divestiture net the timing in sales the net levels our million prior $XX and business to quarter segment. the achieve Vycom higher of by channel discussed from XX of XQ in previously impact Our Commercial our the service purchases

year-over-year 'XX to $XX the points Adjusted by $XX the driven expenses 'XX adjusted Adjusted decreased adjusted gross well million. decreased is gross was EPS decreased by million XQ by 'XX The for decline to in year-over-year $X margin adjusted million. as normalization previously and profit The year-over-year at XQ margin million $XXX expenses SG&A administrative by driven to marketing $XX XQ decreased EBITDA share. million was in gross rate million a by 'XX and XQ sales million $XX came year-over-year primarily million $X.XX share. percent million to adjusted $XXX came million. income in year-over-year $X.XX or million lower volume. million adjusted XQ modest decrease profit XX.X%. profit as at $XX costs. to year-over-year by $XX of mentioned quarter primarily EBITDA $X to The per of gross per or for XX% $X for diluted Adjusted XX.X%. GAAP SG&A reductions or profit income decreased $XX by gross basis for was net increased XX.X%. Net XX expense

to and due Xx XQ 'XX the by Now ended year-over-year. of the $XXX fourth million, the again, Vycom year. balance million $XX gross previously at approximately our up million year-over-year, facility. the equivalents $XXX sales segment fiscal net the to of for approximately disposition a segment during we adjusted minus XQ were X% service Vycom finance adjusted at margins million, cash driven and decrease accounts of debt the segment purchases our $XX cash for million with were under leverage adjusted in $XXX million, of primarily segment XQ quarter. million the quarter inventory the operations million available $X.X quarter down a the at $XXX $X.X with as cash our XX% leases. Net primarily perspective, results. the quarter approximately $XX of for million, million and earlier million, and million. which business ended cash We came channel was $XXX sheet Residential flow revolving the discussed included EBITDA of payable, of borrowings capital, was 'XX X% driven EBITDA down quarter $XX receivable Capital in XX.X%. Commercial of defined year-over-year, were year-over-year. business. From million, in quarter levels sales sale Working Commercial expenditures year-over-year. of million plus for were higher for by the timing came EBITDA segment accounts the prior credit quarter, turning partner end the year-over-year, Residential stood debt down from ratio to million, at $XXX $XX in net segment $XX for the net $XX Net 'XX. and was Residential decrease achieve future

quarter, $XX was flow $XX million fourth year-over-year. cash of the decrease free million, For a

in As million share company the million Under final company $XX The XXX,XXX expected our approximately authorization $XX under quarter a $XXX repurchased in XXXX. with purchase previously of of initial repurchase share shares million. additional remaining received also announced, first approximately in we open the terms is accelerated repurchase initiated an The transactions agreement, aggregate of the X for an August. price settlement an market the shares program million.

allocation the as capital previously Our priorities communicated. remain we same

to will have organically to invest And opportunistically. both repurchase inorganically. our shares we in excess we look cash the will extent to continue business and flow, We

assumptions to and As provide let we on key color XXXX. upcoming me some the for fiscal turn planning outlook, context the our

We be us specific our that confident wins and with XXXX above-market the growth drive market, will for Even are growth. assuming playbook incredibly year are to the R&R enable that flattish. carryover to continue approximately AZEK flat full market we AZEK will

planning the year. pro impact activity retail channel have incorporated potential and of Our the assumptions for

the approximately assumptions. by X% year-over-year of sales grow We our XXXX net in at planning expect our to midpoint Residential fiscal

$X.XX assumptions $X.XX growth billion high-level to drives $XXX and our assumptions planning million $XXX billion million to in fiscal EBITDA. XXXX these to of revenue adjusted in impacts for Some and carryover

and EBITDA. sales in net guidance adjusted year-over-year to Our year-over-year imply would range X% to X% growth X% growth our X%

planning year million sales for to in net is sales XX% growth include representing segment year-over-year following. the and million EBITDA $XXX share X% billion for X% adjusted EBITDA, growth. A adjusted other Our segment fiscal assumption X% net assumptions $X.XXX in $XXX Residential the XXXX few to $X.XXX billion to to segment to and

$XX We to a publicly of target million expenditure consistent of are approximately range of our stated expecting X% of CapEx to with revenue. $XX capital million, X%

million $XX approximately of depreciation expecting are to $XX million. We

expense interest expecting million. to are We $XX of approximately million $XX

We And finally, of a tax approximately earlier, detailed GAAP are XX%. as percent are the sales capital for working approximately flat year at rate XX%. as targeting we expecting of full

additional on planning posted supplemental with For to presentation modeling assist assumptions please the our website. year earnings fiscal refer Investor Relations XXXX, have we to

Before the guide turn for fiscal we to expect wanted for context provide I 'XX. XQ our environment quarter, in operating to we first the

For expect sell-through expecting From are of the single-digit line we the an conservative the growth channel with in in we quarter, first quarter with or our to years' staging inventory to mid- below last hand, Residential on range. days perspective, inventory historical channel and exit couple remain behavior. the high at

period where second goods assuming our volume of the will this favorable year-end, which Buy, As of upcoming as ships could known our positioned ship of between the we not half levels manufacturing own to this at conservatively otherwise historically and levels Western the at high the inventory and modestly of stability are negotiates Channel timing continued an building channel the and the include expect industry shelf fiscal impact 'XX be are replenishment, fiscal operating in our environment. distribution we of that were our in alignment, we to XQ XQ inventory managing Early fiscal and which to XQ note perspective, this the in inventories our time. From in does the want 'XX. of not are we effectively in first fiscal that of all XXXX, stages a service. year finished ahead is reminder, channel I guidance maintain inventory fiscal positions certain proactively space season. AZEK quarter,

our guidance material $XXX in noninflationary and million continued for and adjusted flat input production in these stable million the million year EBITDA. costs, to expect progress to is $XXX factors relatively million against the into productivity revenue our prior initiatives. Taking $XX quarter consideration, compared and levels to We $XX

X% range guidance year-over-year year-over-year growth imply growth sales EBITDA. adjusted net X% would to XX% X% Our in to and

year adjusted our of $X of prior results the our prior for reminder, to and month million divestiture. X XQ the negligible approximately which net quarter's a As Vycom 'XX included ownership, EBITDA results sales contributed

net in sales Our guidance million million for to Residential to and in the is $XX million EBITDA. quarter $XXX segment adjusted $XXX $XX million

Our segment guidance and adjusted range in XX% EBITDA. growth imply growth would year-over-year year-over-year net XX% to XX% X% to sales

tax We are of XX% the approximately expecting rate an quarter. effective for

in some Our With call to for is prepared front tackle the and team turn remarks. us in Jesse fiscal environment of XXXX. I'll well the closing excited, now back engaged that, to

share to year Thanks, Pete. We vision as partners, and dedicated team delivered another homeowners financial members, same company. of channel thanks and performance, strong the contractors our AZEK that supplier the

strategy. With positioned XXXX in margin to open that, our and growth are the We by fiscal please the well drive questions. long execute for term double-digit operator, expansion year line and to over continuing growth

[Operator Instructions].

Your of Matthew from the comes first Barclays. line with Bouley question

today. Dholakia have You on for Anika Matt

this So I you or there's how 'XX versus should if year XXXX. partners bit. inventories we wanted sell-through about assumption if to thinking On just exterior. about just And parse your in deck sell-through on any a channel wondering mid-single-digit terms from fiscal are how your their read-throughs in out for outlook of wondering think for I'm can little hone overall

that. with, top And this is with highlighted, It's assuming X we start last then to Yes. time. we just the intent started growth Thanks on market. as of we question. similar the for I'll to have at drive growth very that, an number X% a above year

to out the you X parsing not how necessarily businesses. that's between get the so X%. We're And

been you similar. our over the businesses track relatively long I have the X record think look at if horizon,

out, being recent think us would see in I than we our you Exteriors higher, bit at have most business. called decking you look our if quarters, a as

sentiment, we're decking not once positive. then to that of again, channel it's relative at specificity. And might safe it's assume to modestly level be higher, but that So

to We've setting think for season we're they unfold. for think their approaching they good had view opportunity to And a quarter in with very relatively are think the in normalized up setting buying the fashion. year last good ended and are year. patterns people they're I this in. to the I they're have similar us, I And We up normal quarter waiting that demand how demand. a

So we you should expect pretty progression XXXX. and normal as a we go through expect

with next question Susan Maklari Our comes Sachs. from Goldman

you. first bit is Good support My Thank some wins. afternoon, SG&A new thinking just distribution of the a the given we as question to about product everyone. the move through efforts year the and these launches

thought sales the through Just and will quarters? marketing, effort any that on of the next the couple how over flow

Yes.

this of I of well we things think execution growth the to margins. back flexibility to would opportunities that see year we gave continue side. right very we that's the Any gross invest us invest And withhold margins, that marketplace. and a XXXX. And philosophy carry down into strong what strength think to growth we want on that was the the on was double the in continue might some within gross one SG&A did that extra to forward to on I

say I'd suit. So the of more same

prepared And think called remarks. out in it -- Yes. I and I our

say, is That, SG&A. been over It's we to have of how would new market and bringing in I the the few launching We last our years. pretty products embedded new part solutions consistently operate.

unusual we expansion. us year new in the that we launches this with this terrific of not invest constantly a in little product is so And level for albeit higher have, activity,

of that some R&R some what Okay. what guide bit a stronger R&R? imply That's the in -- so you helpful. I implies that that R&R., does expect. could there that thinking there's end how year? see than potential about own are overall a potential there outperform flat then recovery upside for do could And that growth And your setup you drive and you that being this up guess just for mentioned think could on your you the you that its in the of could decking broader

Yes.

record general, you you and in our back XX% and I growth think XX-year a at we've now if thesis step CAGR. once look track of got again, --

thesis, that, then, bit conversion, of you you initiatives. If historically which get top an our of growth has on course, On a which outgrown typically that. R&R. more on you've in benefits that both then products. benefit material emphasis at of company-specific And look get a of it's got you outdoor And living, us

to all historically that stacked percent up of algorithm. is XX-plus our growth we've So what

So I at market increased there's R&R of that look certainly fair the about moving think as are talking we third a forward, amount parties growth.

space, as to out, starting planning we appropriate similar year, assumption up. did flattish we a into almost unusual to straight unprecedented. last us, But it's think flat. the negative flat we assume the prudent be market assume have of ends see would a I for what year, it's think just we R&R to think years to It and then where market X the as either come or in

the Our line with from JPMorgan. Michael comes question of Rehaut next

trending on best good, Appreciate sense framework. I get my Rehaut. Andrew Azzi you by This want questions. is of to a Michael better would how your maybe category are love -- point taking within for price better, to just I sales

Peter. is This Yes.

terms been That's is, from premium premium pretty we're meaningful anything all look, entry, down category growth consistent would perspective. I seeing say not mix of in what rates year. Just The are versus robust. a

as And kind didn't for really of we faster, dividends. Prime that that with capacity. couple relaunched largely we've the is good pickup. share we out entry of pandemic and point out of modestly of when and view been that we've the that's paying and Our coming price have supported a last Prime+ called growing quarters, category, out We've capacity, and

and impact from distribution can kind Would get partnership if to of to from about love from with your your of kind that. Capital a get sense rough way think West. then -- Appreciate that. sales of sales I in the very And within some Lumber even impact recently the the with expansion Canada

Yes. At haven't that level, a called necessarily we high out.

And I it now and of what we where Canada single that gives the access think at last gives access Western in us the if you Doman, to look about Canada. with part we distribution. have had we us distribution, double on talked call

with it focus think the drive downstream capital really more up I continue front, to sets us to on their conversion.

Pete prepared his out so of expect our think expansion, we it's QX would we is upside million potentially And I and the benefit that's some what And half in be incremental potential frame guide. bit, $XX QX. upside some to we first volume see called just Western and will do remarks in distribution approximately year as the that progress and within million, to QX. that in of our a $X about from

of Baird. from comes with question line Wojs Tim the Next

I guess just drive reacceleration? if reaccelerating here you've the that data channel kind sell-through kind at maybe of QX, QX to or back Nice into to that anything, QX of just Jesse, looked I the and kind and numbers kind partners, of would as guess, of first at talked kind of kind your you of look job. reasons question, you step behind

Yes.

good pattern going weather we've out, pick think is working the the historically, on of as the set demand it's it seasonal of be of demand. Long back Cape, in August, we vacationing. think DIY question. the in little First, in have particular, slowdown the of Island in to side would a bit we more And if came are and a channel would similar this of side. with a areas and be October when in into a as November. And think then seasonally, contractor chatted and kind be There'd And the that bit seems pause, activity people then house back-to-school play on there back And in August, of partners. a almost a up to September, good, number fall, I July a a into and seen pattern, late last a where of

So this in slowdown of to a of coming the throughout I little pattern this whole unusual. and a seen thing we not bit in normal. of a we've bit more year. reacceleration positives fall think And And August is a as view back the

hear I can to prior back election. that the that a You don't might know saw there have see pattern to pause election. coming might and things we of that. see the related that been We

Okay.

Pete, kind equation, at fiscal you of any kind you kind of there? look kind helpful. would Okay. puts takes That's and guess, then just, I outlined in price/cost of as And 'XX, the of

assumption to XXX similar 'XX, we'll quite side say a but back decking saw exterior as 'XX to for say program of management, XXX on just of kind bit primarily is kind to I'd normal closer of I'd continue have it. the we basis to on that pricing in the to pricing little backside 'XX, side Yes. points. in the on not And

kind environment of a but just and to a felt point. And right So right best it anything. ultimately X positive than a now stable probably commodity might guess, in of let's deflationary the like in inflation that that days, months now, net there some be it's boring the feels like of if more call perspective, couple creeping I news, less it it's from negligible, XX last XX pricing

question comes from Phil Ng with Our next Jefferies. the line of

XX margin solid to Congrats on guess I a that. But a year. have I guys for self-help the could mean, calling XX initiatives, all margins expansion, thought it, quarter you about I nitpick, than drive strong call the would more and decent with points. are perhaps basis certainly, you to finish

that as maybe of look in? a might investments. kind much did perhaps or Just with you recycling margin stuff? remind the some that Can are like call of out are you're have of out, we longer far where you term, from not allude and the your be us to load how And You target. some the What reconfiguration that some drag at longer-term of levers product you disposal?

a makes fourth of that sort things of quarter little couple a the unique. Well, bit

on year, their on transition $X.X things didn't million are out look kind XXXX we Investor year-over-year that a set the of So earnings. about assistance think I quality of on quarter reoccur. couple that inventory are the of pricing we of sort called year, of we some had a impacting obviously, benefit the is of laid still as Those the bills the the of opportunity of We to both had last fourth that stocks. Lowe's utility next out on kind onetime But Day. of kind we same out kind

in or about X -- opportunity said general, kind we've of ago, probably think half a set. I we'd against of quarter that executed about

think making be recycling sort deck, all plenty And mentioned We're margin our of out incremental whether magnitude So across X business density. there well to of to of in production. as headroom there's opportunities, the low put still significant, Jesse of better move were PVC upside, of Exteriors our pounds as than the product responded have that which every to what us tremendous demonstrated a sales on kind R&R configuration. think we we leverage rate incremental pounds that really as mid-XXs. And plants. those of is good again, the opportunity of this earlier, I certainly, if traction pegged, gives pound our well it incremental an incremental production, year gives certainly, we'd upon I very if we that feel it well us traditionally, positive of of plants depending And

And obviously, XXXX. to question our the target, on your we're that way on well just by achieving

it But our I now look products, how on at controlled should the earlier. it's launch that as we're and again, think you achieve track of is once at should investment, way we right within that. -- you to look all it

cash strong flow. a from And Super. flow Okay. standpoint, cash

You guys you there the you Have back seen do amount to how decent about some opportunities about think get Are Jesse, buybacks, to out XXXX, you look versus of are be in your how stock. going you compelling bought out market? M&A back you that it? a When could or thinking priorities?

there. in vinyl that continue tuck-ins small opportunities in near value is sorts continue we At was I bit the investment That where and terrific to it be manufacturer. Yes. is uses the we are relatively call acquired a adjacent, see to put invest if or It add capital. in those return high level, those get or whether a products, business. the of, expense rail it, we adjacent best same, highlighted core the modest priorities little whether in we be we recycle just it can can which -- to a be a then or our more of

continue money against invest of capital to We projects. X% to our X%

generation as efficient And are more gives lower actually cash be point we us really beneficial. you relative those then out, of opportunity All to -- interest. that to by with even some debt, retiring

actively left acquisitions. our been page. is think business we evaluating of we And model. love a leaves think And consider I it's do We have current money number that I it, fits we anything important Day same additive Investor That as and our over.

high find pretty see more continue bar. But if once we'll again, the found would in fit. a opportunities, significant that's something one so great to expect opportunities. we that smaller we've And that May, there's we'll and we And

we're So looking.

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say time. one wouldn't I it's

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Yes.

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Yes.

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Yes.

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it to pass Jesse back closing All right. remarks. I for will Singh

much joining ongoing to We a evening. us forward Thank Thank discussions. Have you you. so look for night. great this