James Hardie (JHX) Q4 2026 Earnings Transcript

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DATE

Tuesday, May 19, 2026 at 6 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Aaron Erter
• Chief Financial Officer — Ryan Lada
• President and General Manager, North Building Products — Jonathan Skelly
• Vice President, Investor Relations — Bill Seymour
• [Moderator/Host] — Christopher Russell

TAKEAWAYS

• Revenue -- $1.4 billion for the quarter, a 45% increase driven by the AZEK acquisition, with organic net sales declining 1%.
• Full-Year Net Sales -- $4.8 billion, up 25%, with organic net sales down 2% as legacy fiber cement sales declined in a challenging market.
• Quarterly Adjusted EBITDA -- $381 million, with an adjusted EBITDA margin of 27.1%.
• Full-Year Adjusted EBITDA -- $1.27 billion, margin of 26.2%, reflecting actions taken across procurement, plant productivity, and cost management.
• Free Cash Flow -- $314 million for the year, including proceeds from an Australia land sale in Q3 and integration-related costs that are expected to drop significantly in the next period.
• Acquisition Impact -- $445 million of Q4 revenue attributable to the acquired AZEK business; commercial revenue synergies run rate tracking toward $125 million exiting fiscal 2027.
• North America Siding and Trim -- Q4 net sales of $767 million (up 7%) and adjusted EBITDA of $253 million at a 33% margin; full-year net sales of $2.96 billion (up 3%) and EBITDA of $951 million at a 32.1% margin; $20 million negative impact from weather-related project delays in Q4.
• Deck, Rail, and Accessories -- Q4 net sales of $345 million (up 5%), adjusted EBITDA of $97.5 million, and a 28.2% margin; full-year net sales of $795.2 million, adjusted EBITDA of $224.8 million, and a 28.3% margin; channel inventory normalization is set to impact Q1 sales and margins.
• Asia Pacific Fiber Cement -- Q4 net sales of $140 million (up 18% mainly from FX), adjusted EBITDA of $50 million at a 35.8% margin; full-year net sales of $521 million (flat) and $178 million EBITDA at a 34.1% margin.
• Europe Building Products -- Q4 net sales of $152 million (up 13% mainly from FX), adjusted EBITDA of $23 million at a 14.9% margin; full-year net sales of $557 million (up 13%), with $82 million EBITDA and a 14.8% margin.
• Cost Synergies -- Annualized cost synergy run rate at approximately $80 million exiting the year versus an original $42 million target; management expects $35 million to $40 million additional cost synergies in fiscal 2027, separate from previously disclosed plant closure savings.
• Pricing -- In Siding and Trim, Q4 price realization was 4.8%, above normal, with anticipated normalization to 3%-3.5% for fiscal 2027; Deck, Rail, and Accessories expected to deliver 2%-3% pricing for the year.
• Outlook—Fiscal 2027 Guidance -- Net sales projected at $5.25 billion to $5.41 billion (0%-3% pro forma growth, 1%-4% organic); adjusted EBITDA expected at $1.45 billion to $1.5 billion (4.1%-7.7% pro forma growth); free cash flow forecast to surpass $500 million, capital expenditures expected at 6%-7% of net sales.
• Q1 Fiscal 2027 Guidance -- Net sales forecast at $1.32 billion to $1.35 billion (flat to 3% pro forma growth, 4.3%-7.5% organic); adjusted EBITDA projected at $354 million to $375 million (0.5%-6.5% pro forma growth).
• Tax and Interest -- Adjusted effective tax rate was 23.4% in Q4 (20.2% full year); adjusted net interest expense was $65 million; both are expected to be consistent in the next fiscal year.
• Run-Rate Commercial Revenue Synergies -- Expected to reach $125 million by year-end, with integration progressing ahead of schedule and early wins in partner channels like Lansing and CBUSA.

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RISKS

• Management cited “year mortgage rates,” “softened” builder confidence, and “economic uncertainty” as ongoing challenges affecting new construction and repair-and-remodel activity, with base case guidance assuming the addressable market declines approximately 3%.
• Cost inflation from the Middle East conflict is projected at $80 million to $100 million for fiscal 2027, “roughly 2 thirds in North America,” creating significant input cost headwinds for the business.
• Q1 fiscal 2027 sales and margins in Deck, Rail, and Accessories are expected to be “softer” due to channel inventory normalization, delaying growth realization to the second half of the year.
• Guidance assumes no improvement in market conditions or recovery in raw material and freight costs, leading to ongoing margin pressure if negative trends persist.

SUMMARY

James Hardie (NYSE:JHX) highlighted significant revenue growth in Q4 2026 due primarily to the AZEK acquisition, despite a 1% organic sales decline, and outlined a multi-segment strategy focused on operational synergies and cost management. Management confirmed a full-year adjusted EBITDA margin of 26.2% and guided for further margin expansion, expecting free cash flow to improve substantially in fiscal 2027 as integration costs decline and pricing offsets anticipated cost pressures. Commercial and cost synergies are tracking ahead of schedule, with integration into key partner channels supporting the outlook for incremental $125 million run-rate revenue synergies by year-end. The fiscal 2027 guidance reflects cautious assumptions under market headwinds but targets organic sales growth and improved profitability through disciplined execution across product lines and regions.

• Management stated, “we expect fiber cement to return to growth.” in fiscal 2027, with a focused strategy on underpenetrated regions like the Northeast and Midwest supported by dealer and contractor engagement initiatives.
• Cost optimization efforts, including the application of the Hardie Operating System and recent plant closures, are projected to yield $25 million in annualized savings, supplementing synergy realization.
• “Pricing actions announced in late April directly offset this pressure,” indicating the company’s approach to maintaining margins through targeted price increases even as competitive pricing remains mixed in the industry.
• Q4 weather-related disruptions caused a $20 million headwind in Siding and Trim, with production and sell-through expected to normalize moving forward.
• The sales organization’s integration, effective April 1, is cited as a key driver of commercial synergy momentum, with a “1 Salesforce 1 company,” approach expected to reinforce downstream execution.
• Management indicated that underlying demand remains intact, and they are planning for “positive sell through, in both Q1 and for the full year,” signaling confidence in channel activity normalization by the second half.

INDUSTRY GLOSSARY

• Run Rate Commercial Revenue Synergies: Projected realized annual revenue benefits from cross-selling and channel integration following an acquisition, measured at the end of the reporting period.
• Hardie Operating System (HOS): James Hardie’s proprietary operational framework designed to improve procurement, plant productivity, and ongoing cost management.
• Repair and Remodel (R&R): Segment of the residential construction market focused on home improvement projects rather than new builds.
• Deck, Rail, and Accessories (DR&A): Product segment including composite decking, railing, and related exterior accessories.
• Pro Forma Growth: Financial growth rate assuming recent acquisitions or divestitures took effect at the beginning of the period for comparative purposes.

Full Conference Call Transcript

Christopher Russell: Thank you, operator. Thank you to everyone for joining today's call. I am joined today by Aaron Erter, Chief Executive Officer of James Hardie Ryan Lada, Chief Financial Officer of James Hardie; and Jonathan Skelly, President and General Manager of James Hardie North Building Products. Before we begin the call, please note that during prepared remarks and Q&A, we may refer to non GAAP financial measures and make forward looking statements. You can refer to several related cautionary and other notes on Slide 2 of our earnings presentation for more information. Forward looking statements made during today's conference call and in the earnings materials speak only as of the date of this presentation.

Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Accordingly, investors are cautioned not to place undue reliance on forward looking statements. In addition, non GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of non GAAP measures discussed today can be found in our earnings presentation, which is posted on our website. Also, unless otherwise indicated, our materials and comments refer to figures in US dollars and any comparisons made are to the corresponding period in the prior fiscal year.

Organic net sales comparisons exclude the impact of the AZEK acquisition as well as the impact of exiting our Philip business in Q2 fiscal year 25. With that opening, I am pleased to hand the call to Aaron.

Aaron Erter: Thanks, Christopher. I would like to take a moment to thank Christopher for his contributions during this transition period investor relations and to welcome Bill Seymour, our new vice president of investor relations. Bill brings extensive IR experience to the role, and a strong track record in the field. In my remarks today, I will briefly review the highlights for Q4 and fiscal 26. Discuss our strategy, and end with our outlook. We delivered a solid fiscal fourth quarter and full year. Despite a challenging construction market The result of staying focused on what we can control execution, cost, and serving our customers.

For the fourth quarter, we delivered net sales of $1.4 billion and adjusted EBITDA of $381 million ahead of expectations. With adjusted EBITDA margin of 27.1%. Demand held up across our core categories, despite weather related softness early in the quarter in the United States. And our teams executed well. Protecting price, managing costs, and supporting demand as conditions improved. For the full fiscal year, we delivered net sales of $4.8 billion and adjusted EBITDA $1.3 billion with adjusted EBITDA margin of 26.2%. Reflecting the resilience of our portfolio and the actions we took across the business.

Free cash flow for the year was $314 million reflecting tightly managed operations in the year, And despite significant onetime integration and acquisition related costs. While organic net sales declined in our fiber cement business during the year, we are confident in the underlying demand drivers expect this business to grow in fiscal 27. This confidence is reinforced by our great products, leading brands, and best in class sales force. Which together position us to outperform the market and capture long term growth opportunities. As I look back on fiscal 26, we delivered against a number of objectives. A key differentiator for us is the Hardie operating system.

Through HOS, we have taken out and offset significant inflationary costs by improving procurement, driving productivity in our plants, and applying operational discipline. Even with lower volumes, we were able to maintain best in class margins and keep the business performing at a high level. As we continue to bring the companies together, we are applying the Hardie operating system to the AZAC manufacturing network. We are encouraged by the early progress in the AZAC plants. And believe that HOS will drive productivity and savings over the long term. We utilized a HAAS framework to make the difficult decision to close 2 of our legacy fiber cement plants in January 2026.

As we move forward, we will continue to leverage Haas as a critical tool to drive productivity manage costs, and support both margin expansion and reinvestment and growth. Another milestone in the integration we recently completed was combining our sales forces. We believe we have the largest, most downstream focused sales team in our space. 1 Salesforce 1 company, and a portfolio of leading pro brands. James Hardie, TimberTech, AZAC, and more. We are seeing commercial synergy momentum build as a result of the combination with early wins validating the strength of our integrated go to market approach. These wins are both numerous and broad-based. You can see 2 examples in our earnings presentation.

1 example is our expanded relationship with Lansing Building Products. Lansing has been a long time and valued partner of James Hardie. And through this expansion, we are consolidating multiple PVC trim brands to AZAC across their footprint. This simplifies the offering for the channel increases attachment of AZAC trim on our fiber cement siding jobs, and strengthens our ability to deliver a more complete exterior solution. Another example is our recently announced expansion with CDUSA, This exclusive agreement adds TimberTech to an existing relationship between James Hardie and CBUSA. Expanding our share of wallet, while positioning us as a single source provider of exterior products for custom builders. These are just 2 examples.

The breadth of opportunities and early traction reinforces our confidence in hitting $125 million in run rate commercial revenue synergies. exiting fiscal 27. On cost synergies, we are ahead of schedule. Without sacrificing service or execution. Integration continues, and our conviction in this combination grows. Next, I would like to discuss our go to market strategy in our largest market, North America. Starting with the size of the prize. Our $23 billion exterior total addressable market remains heavily underpenetrated by more resilient materials. Wood and vinyl still dominate siding, decking, railing, and outdoor structures despite real limits on durability and maintenance. A $17 billion-plus conversion opportunity. The James Hardie, AZAC combination positions us to capture it.

Build the leading exterior platform, with the best brands and win in both R&R and new construction. To capture it, we are executing against 5 pillars, that drive our growth and margin expansion. First, material conversion. We are replacing wood and vinyl with materials that are more resilient, need less maintenance, and resist fire. We are seeing this play out in real time. Contractors who trust our brands are switching competitive decking to TimberTech, and longtime Hardie siding contractors are adding composite decking to their service offerings. There are approximately 60 million decks in the United States, and the vast majority are wood. Representing a long runway as the installed base weathers in the elements.

These 2-way wins are exactly what we expected from the combination. With our brands, products, and contractor relationships, we are positioned to continue to deliver above market growth. Second, channel expansion. In scaling what each business does best, across the combined footprint. In the South, approximately 2.5 thousand locations stock Hardie but not TimberTech, yet. A clear runway for our outdoor portfolio into accounts where we have an established relationship. In the North, the inverse, approximately 700 strong TimberTech and AZEK locations where Hardie is not yet stocked. Disciplined approach, real growth opportunities. The third pillar is innovation. The product and R&D teams from both companies are now combined.

Focused on solutions that accelerate exterior conversion, Innovation has been a key element of AZAC's 500 to 700 basis points above market growth per year. We are applying that same playbook to fiber cement, to expand our market and drive new product growth, over time. Fourth, brand preference. James Hardie, AZAC, and TimberTech are among the most recognized brands in our categories. And we are extending that lead through targeted marketing contractor education, and innovation. Most of it in house. The impact is clear.

In our DR&A business brand search volume has increased at a 40% CAGR over the past 3 years, while customer sample orders a leading indicator of future demand, have grown at nearly 15% annually over the same period. This marketing strength also carries through to our loyal TimberTech pros, where our data suggests that the consumer demand we are generating has established TimberTech as the leader in brand awareness among contractors. This positions us for sustained share gains over time. As we move forward, we have combined the marketing teams and are applying the AZAC in house marketing approach to the fiber cement side of the business.

As we scale this competency, we expect to drive increased awareness, consideration, and brand preference. Fifth, simplifying the consumer journey. we are making it easier for homeowners to choose and purchase our products. A key part of this has been a full replatforming of our website, designed to improve how homeowners research, compare, and ultimately, select products for their homes. Just as important, it better connects homeowners to our contractor network helping turn interest into action. Underpinning it all, is the Hardie Operating System. Continuous improvement in safety, quality, service, and cost. Together, this is a clear path to sustainable growth, margin resilience, and long term value. Now let me talk a little bit about our fiber cement growth plan.

Beyond these 5 pillars, our fiber cement growth plan is central to the strategy. We have clear plans to reaccelerate siding and trim. And as noted, we expect fiber cement to return to organic volume growth in fiscal 27. Step 1, a deliberate focus on the Northeast and Midwest. Where we are underpenetrated and where R&R wood and wood-look siding alone is an approximately $1 billion conversion opportunity. Azac gives us immediate relevance. Established channels, strong relationships, and complementary products. In these markets, we are actively pursuing the opportunity on multiple fronts, including expanded dealer engagement, targeted training programs, scaled contractor conversion initiatives. Central to this effort is the continued rollout of expanded statement and statement essentials.

Which ensure James Hardie has the right offering for each contractor in our value chain. We launched this program with a Midwest pilot in April 2025. And the results to date provide clear evidence that the strategy is working. We are seeing consistent acceleration in ship to revenue across each quarter. With growth culminating in double digit percentage gains. This reflects improved execution in the market, and early success in converting demand into realized revenue, and we are scaling this approach to other regions throughout our footprint. We are hitting these markets on multiple fronts. Hardie ProLab, a series of mobile training units, supports contractor adoption with hands on training on ease, speed, and economics of fiber cement install.

Based on the Midwest pilot success, we have expanded the program across approximately 50 dealer locations in the broader Midwest and Northeast with strong early traction. Our approach focuses on 3 opportunities. 1, converting vinyl siding. 2, winning against all wood siding types. And 3, expanding our presence in premium products. First, vinyl. We are accelerating penetration in the Northeast, Midwest, Carolinas, and Canada. Backed by new products, expanded ColorPlus rollout, and more contractor engagement and training. Second, winning against wood. We are rolling out easier and faster to install products. Targeted downstream sales and marketing, and expanded channel access, including the legacy AZAC dealer network. Fire resilience is becoming an increasingly critical factor in this dynamic.

As building codes evolve, insurance requirements tighten, and homeowners place greater emphasis on durability and risk mitigation Fiber cements noncombustible properties, are emerging as a more meaningful differentiator versus wood, and other combustible materials. While this is most pronounced in higher risk regions, we are also seeing broader awareness and adoption across markets. Reinforcing the structural advantage of our portfolio supporting continued material conversion. Third, premium products. Timber hue and enhancements to artisan and other premium lines target custom builders and high end remodelers. Leveraging our independent channel strength where design and durability drive the decision. Together, these priorities position us to accelerate conversion take share, and drive durable volume growth and fiber cement siding.

Lee me talk to you a little bit about our external environment and outlook. Ryan will cover our outlook in more detail, but let me quickly frame how we see the external environment and touch on our approach to fiscal 27. The market has shifted substantially in the last few months. At the start of the year, we plan for broadly flat market demand in fiscal 27. Since then, key variables have changed. 30 year mortgage rates below 6% late February moved meaningfully higher after the Middle East escalation. Builder confidence and consumer sentiment have softened. Across our dealers and contractors, nearly half cite economic uncertainty as their biggest challenge.

While the broader market remains somewhat challenging, I want to be clear. We are optimistic about our path forward. We are seeing solid momentum in the business, and are intensely focused on execution. We expect to deliver market outperformance, a return to growth in fiber cement, adjusted EBITDA expansion and we expect to significantly grow our free cash flow. Which will drive meaningful deleveraging. Now over to Ryan who will take us through the financials.

Ryan Lada: Thanks, Aaron. I will walk through our results and then get into our planning assumptions. Q4 total net sales grew 45% to $1.4 billion including $445 million of acquired AZEK revenue. Organic net sales declined 1% in the quarter, For the full year, total net sales grew 25% to $4.8 billion, with organic net sales down 2%. The organic decline in fiber cement reflects the market environment Aaron described. Q4 adjusted EBITDA was $381 million Margin, 27.1%. For the full year, adjusted EBITDA was $1.27 billion, margin was 26.2%. A few items to highlight.

For modeling purposes, Adjusted corporate and unallocated R&D was $45.5 million in Q4. keep in mind, approximately 40% of our full year 2026 cost synergy benefits are in that line. Our adjusted effective tax rate was 23.4% for the quarter, and 20.2% for the full year. Slightly above our prior 20% guide. Adjusted net interest was $65 million, Weighted average diluted shares were approximately 585 million. We expect both to remain consistent in fiscal 27. Q4 adjusted net income was $173 million and adjusted diluted EPS was $0.30. Free cash flow for fiscal 26 was 314 million Including the benefit of a completed Australia land sale in Q3. Integration costs continue to weigh on cash.

But those stepped down meaningfully in fiscal 27. Combined with higher EBITDA from synergy realization, and disciplined CapEx, free cash flow will improve significantly. And deleveraging remains a clear priority. In siding and trim, delivered against our objectives despite unfavorable weather. In Q4, net sales were $767 million up 7% with adjusted EBITDA of $253 million at a 33% margin. Cold, storms, and above average precipitation most pronounced in February and early March, limited job site activity, and delayed project starts in both new construction and R&R. We estimate the weather impact to our fiber cement sales was approximately $20 million in the Activity rebounded later in the quarter as conditions improved.

Our manufacturing footprint optimization and expense management has already delivering. with initial P&L benefits in Q4, an example of actively managing the business for stronger profitability, For the full year, Siding and Trim delivered net sales of $2.96 billion, up 3%, and adjusted EBITDA of $951 million at a 32.1% margin. In deck, rail and accessories, Q4 net sales were $345 million. up 5%. Adjusted EBITDA was $97.5 million Margin was 28.2%. Sell through grew low single digits. January was solid. February and early March were disrupted by weather. Then activity recovered through the end of the month. We grew DR&A again this quarter, lapping strong q '4 growth in the prior year, delivering against the down market.

Over the past few years, we have meaningfully expanded our shelf position, with continued gains this year across both pro and retail channels. During Q4, we shipped to support those new shelf wins. And saw pockets of sell through delayed by weather. Working with our channel partners, We are taking a slightly more conservative inventory position in Q1. To set up a strong back half of the year. Q1 sales and margins will be softer as a result. Underlying demand is intact. We expect positive sell through, in both Q1 and for the full year. Full year on 3 quarters of contribution net sales were $795.2 million. Adjusted EBITDA was $224.8 million. Margin, 28.3%.

We outperformed a market that declined low to mid single digits by more than 700 basis points. In Australia and New Zealand, our fiber cement business remains highly profitable across new construction and R&R. Q4 net sales were $140 million up 18%, mainly driven by FX, with adjusted EBITDA of $50 million, at a 35.8% margin. Softer volumes in certain markets partially offset by pricing realization disciplined cost management. With long term tailwinds from durability requirements and consumer preference for low maintenance materials. For the full year, ANZ delivered net sales of $521 million, which is flat and adjusted EBITDA of $178 million, at a 34.1% margin.

We remain focused on innovation, mix, and contractor engagement, to extend our leadership in the region. In Europe, Q4 net sales were $152 million, up 13% mainly driven by FX. Adjusted EBITDA was $23 million, Margin was 14.9%. Fiber gypsum demand was strong, we improved profitability through expense management, and increased manufacturing efficiency. For the full year, Europe delivered net sales of $557 million, up 13%. Adjusted EBITDA was $82 million at a margin of 14.8%. Turning to our fiscal 27 outlook. The environment is more challenging than we expected entering the year, Mortgage rates are higher, Builder confidence and consumer sentiment have softened. And economic uncertainty remains a top concern across our dealer and contractor base.

New construction will remain under pressure. R and r activity is compressed. Our base case assumes the addressable market declines approximately 3% in fiscal 27. With that said, our guidance contemplates a range of outcomes, on both the macro and the cost side. We are not assuming conditions improve. We are planning on what we can execute. On cost, the Middle East conflict has driven real inflation across raw materials, freight, and energy. We expect approximately $80 million to $100 million of cost pressure in fiscal 27, roughly 2 thirds in North America. Pricing actions announced in late April directly offset this pressure.

Separately, $25 million in annualized savings from Fontana and Summerville cost discipline across sourcing, productivity, formulation, and deal cost synergies, where we are ahead of schedule reflect structural improvement work already underway, independent of the macro environment. 1 technical note on commercial synergies. As we convert customers, some wins involve buyback of their inventory in the channel. This is mechanical, transitory, and not fully modeled into our guidance. We will quantify it where material. Our objectives are clear. Organic volume growth in siding and trim and deck, grill, and accessories, margin expansion, and a significant step up in free cash flow as integration costs step down. Capital expenditures are expected to be approximately 6% to 7% of net sales.

These primarily include maintenance, safety, and targeted growth investments. On page 17 of the presentation, we have outlined our planning assumptions for fiscal 27. At a high level, our fiscal 27 planning assumptions are for net sales of $5.25 billion to $5.41 billion which equates to 0% to 3% growth on a pro forma basis. On an organic basis, it is a sales growth of 1% to 4%. For adjusted EBITDA, we are planning for a range of $1.45 billion to $1.5 billion or 4.1% to 7.7% growth on a pro forma basis. On free cash flow, this is where the combination of the business shows up. We expect to exceed $500 million in fiscal 27.

Up from $314 million in fiscal year 26. Higher profitability, integration and acquisition costs rolling off, and disciplined capital spending. All driving in the same direction. Turning to Q1, For the first quarter of fiscal 27, we expect net sales of $1.32 billion to $1.35 billion or growth of flat to 3% on a pro forma basis. On an organic basis, this translates to sales growth of 4.3% to 7.5%. Adjusted EBITDA is expected to be between $354 million and $375 million or 0.5% to 6.5% growth on a pro forma basis. In siding and trim, we expect net sales of $758 million to $781 million Channel inventory is normalized.

We expect continued execution in new construction, and early traction in the Midwest and Northeast fiber cement expansion. In deck rail and accessories, we expect net sales of $291 million to $300 million. As flagged in results, Q1 reflects the channel inventory normalization dynamic. Across both siding and trim, Entegra and accessories, pricing actions, plant cost savings, and cost synergies are all driving in the same direction on margins. And with that, I will turn the call back to Aaron.

Aaron Erter: Thanks, Ryan. Before we open it up to questions, let me leave you with a few thoughts. Fiscal 26 was a solid performance in a challenging market. A testament to the discipline and focus of our team. And our commitment to control what we can control. And it sets us up well for what is ahead. Looking ahead to fiscal 27, we expect fiber cement to return to growth. We expect to outperform the market across our portfolio. The early returns and execution from the AZAC acquisition are encouraging. Resulting in $125 million and run rate of commercial revenue synergies exiting this fiscal year and ahead of schedule progress on cost synergies. We expect adjusted EBITDA to expand.

And finally, we expect significant free cash flow improvement in fiscal 27. Which will drive deleveraging and give us continued flexibility to invest behind our brands, innovation, and go to market capabilities. We look forward to telling you more about all of this at our Investor Day which we will host in New York City this September. Members of our leadership team will provide an in-depth update on our strategy, growth priorities, and long term financial outlook. And a formal invitation to register for the in person or virtual attendance will follow in the coming weeks. Before we go to questions, I wanna thank our team. None of this happens without them. They have done an excellent job navigating change.

While servicing our customers at a high level and delivering solid results. With that, operator, please open the line for questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking to allow for optimum sound quality. And if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Philip Ng with Jefferies. Your line is open. Please go ahead.

Analyst (Philip Ng): Hey, guys. Thanks for all the great color. I guess question for you, Aaron. Still pretty challenging backdrop. Help us kinda think through the key drivers that you have that gives you confidence you could deliver, you know, positive organic growth in your siding and trim business. It would be helpful to kinda tease out the big buckets, whether it is pricing, some of these commercial synergies, how that kinda ramps up, and any other self-help Hardie-specific initiatives.

Aaron Erter: Yeah. Thanks for the question, Philip. Look. Quite simply, when we think about the priorities in our business, the our number 1 priority is as a company is getting our fiber cement business. Back to growth. Look. We have had a strong history of growth in this category. Over the last decade. We have not been happy with our growth in the last couple years. We can talk about the markets being tough, but quite simply, those are excuses, and we will not have any excuses anymore. there is enough available share for us to go out and get when we think about the value proposition we have, the team we have.

So we are going to go out and get it. Let me tell you a little bit of how I think we are going to be able to do this. We talked a little bit about it on the call, Philip, but look, we have a tremendous opportunity in our R&R business. We think that we can really take advantage of, call it, over $1 billion type of opportunity in the Northeast and the Midwest. That have been really underpenetrated for us. We are gonna be able to do this by making the product easier to install with our trim over method.

We are going to be able to reduce costs to our contractors or to our homeowners who take on these jobs with contractors by the labor savings that we are going to be able to provide. And that is gonna help contractors go out there and do more jobs. We are going to make the product more accessible. We are having more and more of our dealer partners bring in our statement essentials product. And I guess the question is, alright. what is the proof point? How do we know this is working? We piloted this at the Midwest for about a year now. And we are seeing really strong growth.

In fact, over the last year, we saw low double digit growth in the Midwest. So we are extremely excited about this. We are going to roll this out to other areas right now. We are rolling it out to the North, to the Mid Atlantic, to the Carolinas, to the South. So this is the number 1 priority for our team. And as you know, we have a combined Salesforce As we think about their objectives, this is number 1 for them. To be able to grow this fiber cement business. The other opportunity we believe we have is untapped for us and not fully focused on is really getting after these regional home builders.

We believe this is about a $750 million opportunity out there. We have the product to be able to do it. it. We have the team We have the value proposition. And I think a proof point of this when we think about synergies out there is the agreement we just signed with CBUSA. To help us really get after a lot of those regional homebuilders not just with fiber cement, but with our whole selection of products out there. Then if we think about this, Phil, just with the from the fiber cement standpoint, we do believe there is competitive share to go out there and get. We have a competitor that is vacating the space.

Add to that the synergies that we believe we are going to be able to get with the combined sales team And then we look at our inventory levels which are in a good space right now. And we look at our Q1, we have pretty favorable comps. You add all that together, Phil, and it gives us a lot of confidence for us to be able to get this business back to growth. And this year in FY 2027.

Analyst (Philip Ng): Well, that sounds exciting, Aaron. If anything, it almost feels a little conservative in terms of how you framed the guidance for this year. So looking forward to that unfolding this year. I guess a question for Ryan, your full year guidance for EBITDA margin calling for, I think, roughly 140 basis points of, expansion. And you are calling out, call it, $80 million to $100 million inflation. So tough environment from that standpoint. Just give us know, the levers you have at your disposal to offset some of this.

You talked about costs and perhaps some pricing, but just kind of help us think through how that kinda ramps up, and the ability to drive that margin expansion this year.

Ryan Lada: Yes. So if you think about this last year, right, I mean, we had a lot of cost synergies that we took action on that materialized here in fiscal year 2027. Additionally, we took $25 million of plant actions at the end of the year in that would really start impacting us. So those are nice regardless of what the market has. And then second, we do are seeing about $80 million to $100 million of comp inflation due to the current conflict.

You know, we are working through on savings as well as other procurement initiatives to go after that, as well as we have opportunity to price to get that selected with our, you know, partnering with our customers. So I think the stack of that as well as a little bit of growth and getting utilization in our factories those should set us up really nice for 2027 from an EBITDA perspective.

Analyst (Philip Ng): Okay. Really helpful. Really helpful, Ryan. Thank you.

Operator: Your next question comes from Lee Power with JPMorgan. Your line is open. Please go ahead.

Analyst (Lee Power): The decking and railing piece, so you obviously talked to an inventory impact in the first quarter. Other inventory, as we look to this FY 2027 number, how important are the price increases that you have announced? To hitting that guidance? And kind of what it what is the feedback that you are getting from your customers given there is obviously a couple of your peers that are probably not going as hard on price at the moment.

Aaron Erter: Yeah. Hey, Lee. Good to hear from you. I will start out here, and then I will turn it over to Ryan, and then Jonathan can add any color. I think the first thing, you know, to note is our DR&A business is healthy, and we expect we are gonna continue the trajectory traditionally that AZAC has had in 2027. We are going to grow the business, and we are going to improve the pricing and the mix of the business. Look. The last couple of years, we really meaningfully expanded our shelf position with gains. This year in the pro channel and also the retail channels.

So as we think about, you know, our stack and our growth algorithm, the biggest part of this is for us to have a contractor and customer conversion, which will continue to do that. And, look, from a pricing standpoint, we are taking price to offset inflation and also to hold our margins here. But, guys, you wanna chime in here? Ryan?

Ryan Lada: Yeah. I think those are the major drivers there. Right? So our historicals, you know, we have been targeting to hunker pace the market by 5 to 7 points. We have consistently done that. Say there is not a lot of change to the algorithm for this year. You know, as we exit the full year, we had a modest inventory build due to the weather. After a successful early buy. That normalizes past Q1, and then we are back to kind of growth from that perspective.

Jonathan Skelly: Think those are the key things. I do not know, Jonathan, anything else you would add? I think that is well said. I would just add that, you know, we have history of taking selected price action. business and still driving that 500 to 700 basis points above market growth.

Analyst (Lee Power): Good. Okay. Excellent. And then just a follow-up if I can. Just going on from Philip's question around kind of bridging that top line. So market volumes, it sounds like they are gonna be down 3. You have got a couple of points of growth at the top line. So there is a decent a decent gap there. You have you have you have obviously kind of outlined a bunch of initiatives that sound really exciting on getting back to that 500 to 700 points of growth.

When we think about 2027, is it real is it is it gonna be that growth above market that does the most of that heavy lifting, or is it is it a pricing perspective? Just trying to think about how we go from, you know, down 3 to the low single digit growth.

Aaron Erter: Hey, Lee. I think that, you know, the short answer is we are guiding to a number we believe that is appropriate. Given the uncertainty that we see out in the marketplace. Right? Right now, and also 1 that we believe that can handle, you know, continued potential challenges. Yep.

Analyst (Lee Power): Thank you. I will leave someone else to go into the conservativeness of it. So I really appreciate the color. Thank you very much. Thanks, Lee.

Operator: Your next question comes from Ryan Merkel with William Blair. Your line is Hey, Thanks for the question.

Analyst (Ryan Merkel): Good afternoon. Wanted to ask on Slide 8, its new disclosure. I think it is a case study of the Midwest. And I guess my question is, expect to see this kind of growth when you roll it out to the other regions? Then what could it mean for fiber cement growth if it has the success that you think it might?

Aaron Erter: Yeah. Ryan, really good question. I will start out, and I will hand it over to John to talk about it a little more. Look. As we think about our fiber cement growth, as I mentioned before, we have not been pleased with it. This has been an on purpose effort that we have had in the works over the last couple years. How do we get after repair and remodel? How do we close that gap? Right, versus inferior materials like vinyl from a pricing standpoint? And we get after what we think is the largest opportunity in the marketplace. We talk always about these 40 million home or these homes that are, you know, 40 years or older.

40 million homes. So we believe that we have the right formula now It is the early days, right, when we are citing this case study here. We have been doing this for about a year. The results are very promising. So we are taking the template of that and we are rolling it out region by region where there is this opportunity. So talked about the Midwest. The Mid Atlantic. We think we can do this in other areas of the country.

So, Ryan, as we get into our Investor Day in September, we can talk about from a longer term perspective what that means Our focus right now, as I mentioned in the beginning, is getting this business back to growth and getting it back to volume growth. And that is our target we believe this is gonna help us be able to do that. Even in what is a challenging market.

Jonathan Skelly: Jonathan, do you have anything else you wanna throw in there? Yeah. Sure. I mean, I think the only thing I would add is you know, it is really it is it is good execution, and it is providing additional education awareness in the marketplace. Right? So there is a strong value proposition for the product. But in certain markets, you there was not the right value proposition in terms of installation and pricing. So we solve that problem. Right? So that gives the opportunity, Ryan, to get after $1 billion R&R opportunity that Aaron highlighted.

By making sure we have narrowed the gap between, you know, competitive and pure materials, and we allow both the homeowner and the contractor benefit from a better value proposition from a pricing perspective.

Analyst (Ryan Merkel): Alright. that is great. Great to see. And then my next question is just on the first quarter, DRNA. The EBITDA is a little light. Can you just talk about what is the impact of the production cut in 1Q to EBITDA? And then when do you think the channel will be destocked? For decking?

Aaron Erter: Yeah. Yeah. I will I will turn it over to Ryan here. Look. When we talk about elevated inventory levels, this is less than $20 million. So just full disclosure here. But Randy can talk a little bit about the, you know, the impact from reducing the production.

Ryan Lada: Yeah. And I Brian, I would say it is, you know, basically, half decline year over year is probably limited to the production there. So we did pull a little bit of volume out. Some of it was related to that inventory destock that we were mentioning. Then some of it was, you know, we have been producing a little bit ahead for some of the synergies, and now we are kinda normalizing that production. The rest is really just the volume, $20 million that we would repeat in.

So if you if you go to those So our goal was to get that all behind us as we exited Q4 into Q1. that really normalizes even a year over year. Yep.

Analyst (Ryan Merkel): Alright. Got it. Best of luck.

Operator: Your next question comes from Samuel Seow with Citi. Your line is open. Please go ahead.

Analyst (Samuel Seow): Thanks. Evening, Aaron, Ryan? Just a quick question on the guide. And really how you are modeling costs. Over the full year, when we think about the margin assumption you have got there, are you using kind of like spot for things like freight, etcetera? Or how are you thinking about the assumptions you are building into the margin? Thanks.

Aaron Erter: Yeah. Hey, Sam. Good to hear from you, and I will start out. Look. We are we are thinking about when we look at, you know, the inflation in FY 2027, we are thinking about a $80 million to $100 million type of cost. Headwind. You know? And, certainly, the Middle conflict has driven real input cost and inflation across certain raw materials. In particular, you know, freight and production inputs. So know, the majority of this, you know, call it about 70% is in North America. But that is how we are looking at it. You know, as far as how we offset it, certainly, we are looking at this from a party operating system standpoint.

Know, the team has done a really fabulous job even with slowed volumes. Of operating very efficiently. We have certainly taken out taken out cost last year that is gonna help us this year. And then we are working with our customer partners. You know, where we need to. You know, from a pricing standpoint. But that is that is kinda how we are looking at this. But Ryan, do you wanna add into this?

Ryan Lada: Yeah. I mean, I think the other way to look at it too from a phasing perspective, right, it is pretty equal. Right now. We are not assuming recovery. So what we are seeing for oil prices now in terms of freight and input, we are modeling that through the year. That could get worse. That could get better. You know, we are monitoring it daily, and we would continue to work to offset that.

Analyst (Samuel Seow): Got it. that is really helpful. And then a quick question on cash. You obviously did 300-odd this year. If we add an additional asset quarter, know, reversal of the integration costs. We kinda get, you know, above 600 or well above your guide, you know, before even kinda considering you know, organic growth or declining CapEx, can we just kind of talk about if there is another moving piece there? Or if the guidance is just conservative on cash as well?

Ryan Lada: Yeah. So we were talking about the building blocks that we knew Right? So, obviously, the big 1 being integration and deal cost stepping down materially year over year. The second part is you are picking up the highest quarter of ASIC. And then you know, we were really working on assumption of you know, we did not need the market to help stabilize that. Did have a land sale that will not repeat year over year, so that is part of the step down. So you know, although CapEx is coming down, we will not get the benefit from the Australian land sale. that is kinda offsetting some of that.

But, yeah, generally, you know, that we were setting $500 million as before. We could just do that.

Analyst (Samuel Seow): Okay. Thanks, guys. Appreciate it. Thank you.

Operator: Your next question comes from Keith Hughes with Truist. Your line is open. Please go ahead.

Analyst (Keith Hughes): Thank you. Questions on Siding and Trim. In the guidance and organic numbers you talked, can you give us a feel at least directionally how much price and volume are going play a role in that number?

Analyst: For the guide.

Ryan Lada: Hey, Keith. it is Ryan. Yeah. So when you think about combined market down 3%, right? I mean we think new home construction is going be down a little bit more than that. When you think about that growth there, I would say about half of it is price then the half is initiatives at this point. We could do a little bit better on pricing. But the reality of it is it is about 50 in our current guide.

Analyst (Keith Hughes): Do you think volume will be up for that segment in the year, if you hit the guide?

Ryan Lada: Yes. So I would look at it as the price is kind of offsetting the market decline of 3% and then that other 0% to 3% would be the volume in that we are driving.

Analyst (Keith Hughes): Okay. So okay. 1 other question then. It does look as you work through the numbers. Like a pretty big margin ramp coming in deck railing and accessories. I know your first quarter is going to be hit. With the production slowdowns. Can you just talk about production rates and what do you anticipate to see for the rest of the year in that segment?

Ryan Lada: Yeah. I think, you know, we are pretty consistent where we were the last couple of years, just under 70% utilization across the decking network. I would say that probably stays pretty consistent throughout the year. It is a little bit lower in Q1. So if you normalize for the Q1 flip, it is back to more I would say, kinda run rate, what we have seen for vRNA. So I think absent of Q1, the rate kind of holds up with the track record and kind of trend that we are on.

Analyst (Keith Hughes): Okay. Thank you. Thanks, Keith.

Operator: Your next question comes from Peter Steyn with Macquarie. Your line is open. Please go ahead.

Analyst (Peter Steyn): Good evening, Aaron and Ryan. Christopher and John, thanks for your time. May I just ask you after the sales organization integration in mid March, if you could just sort of dig in a little deeper for us, Aaron, and give us a sense of where the team is at, you know, what the balance is like between the 2 businesses, and how comfortable you are that the team is set up to be able to switch and the and shift between the businesses and drive the outcomes that you are, you are needing both on-site and the d r n a.

Aaron Erter: Yeah. Peter, that is a really good question. And as you know, we think about keys to our success, that certainly is Just to note, as we sit here in Chicago, we are having our sales organization have their sales meeting. Right now. So if we think about this, you know, as we sign the deal, you know, it is it is we are getting to almost a year of finalizing it, you know, and we have integrated the 2 teams starting on April 1. We are still in our infancy here. With that said, we are seeing a lot of success.

When we talk about, you know, synergies, which certainly is a proof point for us, from a commercial standpoint, we are seeing very good progress, and we are confident in our run rate exiting, you know, FY 2027 to a $125 million run rate. But, look, I think best we got John sit sitting right here who runs this group, and he can get some more color.

Jonathan Skelly: To get Yeah. I have to do that, Aaron. So, again, I think, ultimately, the number 1 this test is the customer, and that is where we have seen a really positive response, So the synergy opportunities are headed in the direction, you know, that we expected. And, you know, to clarify, in terms of roles and responsibilities, you know, largely, if somebody was a tenured fiber cement seller or someone was a tenured deck, rail, and accessory seller, that maintains itself. So we have not built a general Salesforce.

What we have done is leverage, you know, the strength the team, and we still have that specialist model out on the street, but that is being coordinated as a team, and then we have a channel manager of that considered that person the quarterback at the customer level. So the customer has 1 point of contact and then is able to leverage, you know, the best in class you know, knowledge required, whether it is a fiber cement conversion opportunity or deck realm accessory. Opportunity. So the customers' feedback has been really positive. The data and the sales growth coming from that has been has been exceeded by expectations.

And then, you know, Ryan just quoted that is a big driver of the initiative growth we expect next year is driven by that combined sales team.

Analyst (Peter Steyn): Awesome. Could I just indulge 1 quick follow-up, shared a number of years ago a number of years ago, you entered a range of exclusives, deeper relationships particularly with the large builders, and some of those have probably played out in some of the sales performance over the last 2 years. Just from a mix and location point of view. But what I am curious about is as, you know, a lot of those contracts probably are starting to extend now towards some form of renewal. How are you thinking about those, our How we are positioned? Or do you feel for extension of those relationships?

Aaron Erter: Yeah. Peter, I bet you were a little choppy. I think I the gist of it. it is just our, you know, the contract renewals for some of the large home builders. Look. That remind that remains a key focus and a very important part of our business. And we will defend that know, rigorously, and we have. And we believe you know, not only is there opportunity to continue to defend that business, but to deepen those relationships and expand those relationships. With offering a full suite of products that now we have at our disposal. Whether that be Azac trim or TimberTech type of decking, So our focus is to defend that business, but also to expand it.

As we think about opportunities from a revenue synergy standpoint, certainly, this is a key 1 for us.

Analyst (Peter Steyn): Thanks, Aaron. that is useful. Appreciate it.

Operator: Your next question comes from Timothy Wojs with Baird. Your line is open. Please go ahead.

Analyst (Timothy Wojs): Hey, everybody. Good afternoon. Maybe just starting with price mix. In the siding and trim business. I think it was the second consecutive quarter where that is been up mid single digits. And so I am just curious if you if there is any anything in there that we should think about in terms of pure price versus mix Because, Ryan, it did sound like maybe that number could step down a little bit as you think about fiscal 27. So could you just kind of talk about where price mix kind of landed in the fourth quarter? And of the sustainability of that in 2027, especially against tire inflation?

Ryan Lada: Yeah. I think as we talked about before, you know, on the fiber you side, we would expect it to be a little more than 3% in terms of price realization. And then DRA would be closer to that 2%. We did end Q4 in a little bit better position. So I think price was at about 4.8%. You know, we did see a little bit higher realization on price, and then that was offset by some negative mix. Based on the regional demand scale. We would expect that to normalize closer to that 3, 3.5% as we enter full year 2027 here.

And then DR&A consistent, we would expect that 2% to 3%, depending on the annual price increase as well as you know, where we are working to offset inflation.

Analyst (Timothy Wojs): Okay. Okay. Great. that is helpful. And then just is there a way just to kind of give us a little bit more precision on what the realized cost synergies that are kind of embedded in the guidance are?

Ryan Lada: Yes. So I think as we exited full year 6, we are approximately at an $80 million run rate versus our original target of about $42 million in exiting the year. So I would say you expect like a $35 million to $40 million incremental of cost synergies to be realized during full year 2027. You know, driven you know, by manufacturing optimization, you know, procurement, organization efficiency, just continuing to integrate on the exact platform. You know, cost savings and things outside of that $25 million we quoted for the plant closures would be outside of that. But that is that is generally where the cost synergies would be.

Analyst (Timothy Wojs): Okay. Super helpful. Thank you so much. Thanks.

Operator: Your next question comes from Keith Chau with MST Your line is open. Please go ahead.

Analyst (Keith Chau): Hi, Aaron and Ryan for taking my question. The first 1, maybe just put it simply So know, we are all trying to get a gauge of what is in the FY 2027 guide, and I just wanna focus on market share. So, you know, important to give a bit of context for signing in trim last year. I think there was a $75 million destocking impact at the revenue level for siding and trim. So if you take that into consideration, it is I am just trying to back out what your market share assumption is for FY 2027. So maybe if you can just give us that 1 number, that would be useful. Thank you.

Aaron Erter: Yeah. Keith, if you are talking about PDG, I mean, look. What we are looking at is how do we have high as we go, you know, into FY 2027. Certainly, a lot of challenges in FY 2027. Our focus is to outperform the market and we believe, you know, with the commercial synergies you know, the R&R expansion we talked about, you know, you mentioned it, you know, some of the comps that we have, that we are going to be able to do that. And bring this business back to, you know, volume growth.

So if you are looking for a PDG number, our focus is to be able to have positive PDG as we contemplate you know, our guide and we look to the year. 1 thing, you know, I think everyone knows this, but as we look at our guide, we are not only guiding through this year, We are lapping the calendar, and we have to guide through March 31. So, you know, that the visibility is limited but, you know, we are confident in our ability to be able to grow and be able to have positive market share gains.

Analyst (Keith Chau): Thanks, Aaron. Can I just ask a follow-up for Ryan? So, Ryan, I think you mentioned before that you know, this history of AZEK raising prices being able to recover and also taking market share at the same time. Presumably, you are talking about that post COVID period when price increases were fairly rampant guess the difference this time around is your company was, and they can have not announced the price increase. Whereas, you know, back in that period, everyone was raising prices into some competing products, it was multiple price increases. So just came to understand how you are proposing to manage the competitive dynamic given AZEK are raising prices and Trex is an at this juncture. Thanks.

Jonathan Skelly: Yeah, Jonathan. Go ahead. Yeah. I mean, I would say you know, we have history, you know, regardless of market conditions, to be able to take strategic price. And so, you know, there is a long, long track record with our ability to do so. So, again, I think I think we have a proven history of strategic pricing plus share gains Nothing's changed. What we have seen historically is typically the competition has followed. If they choose not to, again, we still believe we have the best value proposition in terms of a product and downstream sales and marketing engine.

And so we have a proven capability to take share, you know, regardless of what the competition does from a pricing standpoint.

Analyst (Keith Chau): Thanks, Jonathan. Thanks. Thanks, Ryan. Thank you.

Operator: Your next question comes from Trevor Allinson with Wolfe Research. Your line is open. Please go ahead.

Analyst (Trevor Allinson): Another question on the synergies. You reiterated your run rate target of about $125 million by year end on the commercial synergies. How should we think about the contribution of these in 2027? And then on the cost side, do you see upside to your eventual cost synergies number given you made such good progress? Or are you just seeing those come through earlier and you think you will kind of land in the same spot as you would originally targeted on the cost side?

Aaron Erter: Yeah. Trevor, I will take the revenue synergy piece. Look. We have not, you know, explicitly mentioned what these are and how they are gonna be phased in. What I would say is we have clear line of sight to be able to exit the year at a 125 million in revenue synergies. You know, we gave a couple of the headlines out there are many headlines that we could give on some of these. The real magic is gonna come, and, you know, Jonathan talked a little bit about the sales teams being together. Is when we really get after it, which we are, our contractors are thousands of contractors that we can cross sell to.

So that is a big opportunity for us as we move forward Yes. We are giving headlines, but, you know, we feel confident. We do have line of sight to that 125 million in revenue synergies. Do you want to take the cost?

Ryan Lada: Yes. And Trevor, on the cost side, right, the primary goal was to get to the $1.25 faster. We are not necessarily raising that target. The goal is just to achieve that quicker, and we are we are actually we are on a really good run rate to be able to do that.

Analyst (Trevor Allinson): Okay. That makes sense. Thank you for all the color. And then maybe more of a clarifying question here on some of pricing commentary in 2027. I think I heard you say you are expecting about 3% pricing in Siding, which for you guys is a pretty normalized price increase. But you also have these inflationary pressures that you are speaking to that seem maybe to require some additional pricing. So can you confirm Siding and Trim, is the 3% expectation for realization in 2027, correct? And then if so, if you can help reconcile why some of these inflationary pressures, that might not be a little bit higher in 2020 Thanks.

Aaron Erter: Yeah. Trevor, if you think about this, I mean, we go out usually with a mid single digit type of price increase, and it usually nets to, like, 3 to 3.5. Here's what I would say. If we have to go out and take pricing, because of inflation, certainly, we are going to be able to we will do that. And on the siding and trim side of the business, we have been very selective in working with our customer base on certain products in certain areas where we can go take price, and that is what we have done. Certainly, there is other areas that we try to make up that inflation and hold our margins.

We talked a lot about the Hardee operating system. So we have a number of levers at our disposal. Which we will utilize if we need them. Thanks, Trevor. Thanks for the color, Aaron, and good luck moving forward.

Analyst (Trevor Allinson): Thanks. Thank you.

Operator: Your final question comes from Daniel Kang with CLSA. Your line is open. Please go ahead.

Analyst: Hi, guys. Thanks for taking my question. I just have 2. The first 1 was just on the exteriors business within siding and trim on it looks like revenue dropped kind of I am getting is in double digits year on year. That was more than actually the organic fiber cement business. Just in the context with earlier questions around the go to market combined Salesforce, just wondered if you could help us flesh out, I guess, the differential in performance between those 2 businesses, whether there is any kind of volume and pricing mix you can give us on that 7% drop on the exteriors business?

Ryan Lada: Yeah. What do you want to talk to that? I will talk to it moving forward here. Yeah. Yeah. I think, you know, just given kinda where we ended Q4, are you are talking about the results or the guided result, and then that would move forward? Yeah. Yeah. I think you know, we have a lot of the commercial synergies that early on are related to the exterior product. A lot of those materialize as we get into the season here. So I think that is really what you saw in Q4. Nothing really from a fundamental demand perspective. Just given timing of where the market is.

Aaron Erter: Yeah. As we move forward and you heard from some of the headlines, we believe and we talked about this when we signed the deal. You know, we see some low lying fruit within, you know, being able to bring PVC, to many of our traditional fiber cement. Customers. What you are seeing with Lansing. Is us doing that, and we will do that with a number of other customers. So the business is healthy. The business is gonna grow for us. So nothing else really, you know, I guess we have no worries about this business. We are confident of our path forward. Okay. Great. And then just another clarifying question.

Just on the timing impacts of starts, I think historically, you kind of talked to a 1-quarter lag between, you know, sales volume and what we see on the start side. Note in the pre remarks kind of talking to I think it was a $20 million headwind from weather in February and March. So it seems like the timing has contracted. I was just wondering if you could help me understand a little bit more whether there is any kind of procedural changes, whether that shorten that time frame and if we should expect that going forward. Yeah. I do not think there is anything different.

When we talk about the mentioned $20 million from weather impact That was because we had customers that were shut down. There were job sites where people could not work. that is there is really nothing else to read into that. So, as far as the -- would there be any difference from the lag between starts and realized volume, we should get back on a normalized level.

Analyst: Okay. Good. Great.

Operator: We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.

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