Thanks. Hey, good morning, George and Scott.

Morning.

Scott, did I hear you correctly that the negative EBITDA impact in the fourth quarter from the Monterrey challenges was $8 million, and if so, your EBITDA margins for the Hardware Solutions segment would have been in the 16% range in the quarter?

If you recall in the last quarterly call, we talked about Monterrey being about a $5 million negative impact in Q3. We estimated at the time that 4Q impact would be about the same at $5 million, but the reality was, since we went to a 24/7 operation and higher labor costs, higher expedited freight costs, that ended up being around $8 million, and then we alluded to about a $3 million hit we expect in the first quarter.

To your point, yes, it would have been better, but we also had a favorable cost roll impact in the fourth quarter that helped the Hardware Solutions segment.

Understood. That the $3 million drag expected in the first quarter, does your current, kind of informal outlook assume that goes to zero beyond the first quarter?

That's our expectation.

Our decision to add the 24/7 and do some different things in the plant to speed up that recovery plan, that was really the intent, to drive the backorder levels down faster than we anticipated. We're having some very good success at making progress towards that goal.

Sounds prudent that you're able to get your arms around it for sure. Maybe thinking about the informal outlook, what does that assume from a market volume perspective in terms of the volume you'll get in the first half and the amount of procurement synergies you'll be able to realize as a result?

Obviously, somewhat premature until we come out with official guidance, but the way we're looking at it right now for next year from a revenue standpoint, if we say flattish, maybe flat to down volumes with flat to up pricing is how I would look at that. Then on the EBITDA side, the positives would be obviously less Mexico costs next year plus some additional synergies offset by higher SG&A due to inflation, higher benefits, and then bonus accrued at target.

That's kind of how I would look at it.

Understood. Last one for me is you were able to pay down debt pretty aggressively here in the fiscal year.

You also repurchased roughly $3 million of stock here in the fourth quarter. The shares have been pretty depressed here.

Can you just talk about if you were limited by the open repurchase window timing at all during the fourth quarter? Then also if you could comment on whether you've been active on the buyback, kind of post-quarter end.

Yeah. We were active somewhat in 4Q.

I think we made a conscious decision in the second half of last year to really focus more on paying down debt because out of pretty much every investor call we had since the last two quarters, there was a real focus on net leverage. Even though our balance sheet's in good shape, we think it's very healthy, there's this sentiment out there amongst investors that anything above two times net leverage is a concern, with that in mind, we chose to pay down debt, even though our shares we still feel are very cheap.

Looking ahead, going forward, clearly we will be opportunistic. We don't have big windows in between quarters in which we can be in the market, keep that in mind as well.

The other thing to think about is the first quarter and really the second quarter are low watermarks for the year, we're trying to balance cash flow generation, stock repurchases also with debt paydown. We've typically been a net borrower in the first quarter in the past, we just try to balance all of that.

Hope that helps.

Thanks for the color, guys. I appreciate it.

Yep.

Thank you.

Hi. Good morning.

Wanted to think about for 2026, with the persistently challenging demand backdrop, more recently and looking forward, are you seeing any irrational competitive response in certain geographies or certain product categories?

Steven, we really haven't seen a lot of what I would call irrational pricing where people are going to the market to try to fill up volume. We just haven't seen that.

I think there's still a mentality in the marketplace that supply chain risk for all people is of great priority and importance. I think our customers evaluate those type of pricing decisions and have to balance, is it the right move to just move to another supplier based on price?

There's much more involved in those types of decisions right now. I would say that that's the truth globally.

Things like being able to supply facilities from multiple ship-to points in a lot of cases offset price. Now with that being said, I think as commodity prices stabilize or come down, I think we will see pricing pressure, but we're really not seeing anything that I would call irrational at this point.

Okay. That's great to hear.

Then also looking at 2026 and the various product components within each segment, are there any certain products that you expect to be better than the flattish level for the year?

I think the one area that is being potentially impacted by tariffs and everything that's going on in the macro drop would be the wood components part of our business that falls under the

Custom Solutions

Group. As those tariffs continue to hang out there and be uncertain, I think that there's an unknown.

If the tariffs stick at a higher level, there could be some opportunity to insource that demand back into the US to mitigate tariff risk around the globe. That could be an area of upside.

Everything else, I think, right now it's a wait-and-see, but that's the one area where there could be some potential opportunity.

Okay. Then on the benefits of the re-segmentation, this was a talking point from the Investor Day.

You mentioned it again. Are there any early positive takeaways and results with the re-segmentation so far?

Is there any benefits embedded in the 2026 EBITDA outlook, and maybe any of the nuances by segment on the sales or margin side with this re-segmentation?

Yeah. It's still a little early.

We're only now two quarters into this. What I would tell you, I think we're already seeing operational improvements by the sharing of best practices, for example, in the Extruded Solutions Group, where you had silicone extrusion, butyl extrusion, and then you layer in the Schlegel piece of the business that we acquired from Tyman that has a completely different type of material that they extrude, but it's an extrusion process, and so the sharing of best practices in that division is already paying some operational dividends.

I think we're starting to see and put together a plan on what our global footprint will look like. That's long-term in nature, but I think we've got a really good feel and good opportunities for what I would say are mid- and longer-term opportunities to continue to grow, to better serve our customers, provide new products and new services.

My biggest excitement right now relies around the process improvements as well as some of the innovation that's being driven through that. We probably exceeded my expectations from those points already.

That's good to hear. Thank you.

Thank you. Good morning, everybody.

Morning.

The Mexico issue seemed to be on track, kind of cleared up faster than you expected, which is great to hear. George, just curious, it's been a few months since that came about.

Can you go into a little detail about the efforts you guys have made internally to make sure that there weren't risk of similar or other issues at different facilities from Tyman?

Yeah. Obviously, being a manufacturing company, things happen in plants, and we identified the issue fairly quick, and when we did, we put a plan in to remediate, and as you mentioned, I'm very happy and pleased with the efforts to get to there.

I think we did a great job of mitigating the issue in a relatively quick period of time. Obviously, as a part of that, and I wouldn't just frame it around the Tyman acquisition, but we looked at every one of our facilities and said, 'Do these types of scenarios exist anywhere?'

We did a deep dive on that. That's part of what we deem our 8D 8D problem-solving philosophy, where we go in and we try to identify any like situations, and we have not found that anywhere, and we spent enormous amount of time and effort making sure that the issues that we identified were not going to be replicated or have the risk of being replicated at any other facility.

I feel pretty good about the controls we have to place that we won't see it anywhere else, and I feel really good about the issues to fix the situation in a relatively short period of time to eliminate this on a go-forward basis in Monterrey.

Great. Then a clarification on the comments for Q1.

Scott, did you say SG&A of $73 million, and if so, maybe I've got it wrong in my model, but that's a big change from where it was a year ago, I think $20 million almost higher on a similar revenue number, and also higher than what you just did in the third and fourth quarter. Can you just talk about what's going on there?

Is there anything one-time? Is that a good run rate for the full year on a quarterly basis?

I think that's a pretty decent run rate on our full year. When you compare it to the later part of last year, one of the main things that sticks out is accruing at target now this year versus last year when we knew halfway through the year we weren't going to hit those targets, SG&A came down.

There was a couple one-time benefits last year first quarter, just related to some issues from the legacy Tyman business. Then, clearly, when you go into a new year, you budget for higher benefit costs, higher inflationary measures, merit increases, things of that nature that just increase SG&A.

Now, clearly, with that in mind, our job, though, as managers is, to the extent we can, operationally become more efficient to offset increased costs as we move through the year.

Great. Now I'm going to sneak one more in.

You talked about potentially a little bit of price. I assume some of that is carryover from actions throughout this year, maybe related to tariffs and that sort of thing.

What are you seeing on the cost side in terms of cost of goods? Is that pretty stable?

I guess, ultimately, what does price/cost look like in your outlook for '26?

I'll take this one, Reuben. Really from a cost basis, things have I would say generally stabilized.

There's a couple areas across the different product lines, especially around oil-type based products, anything that's going through a cracked chemical-type process, I think we anticipate we'll see continued inflationary pressure there, but overall, I think materials have stabilized and the supply of those materials have stabilized. To be determined.

Tariffs do have a big impact right now, but that seems to have softened a little bit, or at least not changing on a daily basis.

Great. Thank you, guys.

Happy holidays, Merry Christmas, and Happy New Year

if I

don't talk to you.

You as well. Thank you.

Appreciate it.

Good morning, George and Scott. Congrats on the quarter.

Morning.

Thanks.

Thanks.

Maybe we could talk about the synergies to start first and how you guys are thinking how quickly you might be able to achieve the $15 million to get to the ultimate $45 million. Then maybe if you could break down how you're approaching those synergies from a cost, procurement, footprint perspective?

Sounds good. Then as you guys think about the pricing gains that you've got in 2025, how much of that was really inflation-linked versus kind of structurally?

Do you think you have any concerns around givebacks in '26?

As I look at pricing, I think we've been very focused on how to best serve our customers, and I think that's always been our sales philosophy. Our price increases that we pass on in the market really do revolve around inflationary pressures.

Our job and our philosophy with our customers is any sort of margin improvement on our part shouldn't come at the detriment of our customers. Our job is to pass along cost as true cost, and then for us to improve our margins, that's all driven by operational performance.

I think that that's our philosophy in how to be a good supplier, and we are not predatory in any way, shape, or form in terms of how we price to our customers. In that respect, I think our ability to hold on to price should be pretty strong because I don't think we're out there and we have all the data in the world to support the inflationary costs that we're passing along.

I think we're proud of the fact that that is the approach we take to pricing because I think long-term, that's what builds relationships with our customers, and we'll continue to do that on a go-forward basis. Again, long answer to your question, but I think the ability to hold on to price should be pretty strong because it's supported by what we've eaten in terms of cost increases.

Might be a long answer, but I think it was a great answer. Maybe if you guys could talk about demand as well from kind of parsed between new residential versus repair and remodel, and whether one feels stronger than the other and how you're thinking about it for '26?

I think for us, our products are fairly agnostic to either the market, so that we determine that really by our customer mix. I think right now we're seeing really similar-type of impacts on both R&R and new construction.

I do believe that the R&R piece will be we see that leads, at least for us, because we're weighted more to R&R. I think as we see new construction start to improve, the interesting metric that we'll keep our eye on is the size of homes and multifamily versus single-family and what does that mix look like, the number of window openings in a house impacts the volume impact of new construction for us.

I think R&R will be the leader on any sort of recovery, and that the new construction will be, again, more driven by interest rates and the movements of the Fed as well as availability and affordability of the new housing market, so. They're both impacted pretty equal, though, right now, from what we see.

Appreciate the color. Then, one final one just on cash flow.

You guys typically burn cash in the January quarter. Is there anywhere reason to expect you wouldn't have slightly negative free cash flow in Q1?

It's possible. I think it just depends on how December and January play out.

As we sit here today, November came in pretty much as expected, no surprises yet.

The one thing on cash flow that, again, a lot of it'll depend on volume-- --And

the timing of CapEx.

CapEx. The other thing that happened this year, it wasn't a banner 2025, so as we've stated, the incentive payouts to the executive team and the organization wasn't as high as it typically would be, it was pretty much under target.

The cash flow outlay to any sort of incentive payment is going to be lower in Q1 than we've typically seen. This is one of the lower incentive payouts that we've seen in the past future, so that should help cash flow in Q1.

Sounds good, guys. I appreciate it.

Thanks.

I'd like to thank everyone for joining. I want to take a moment to wish everyone a very safe and happy holiday, and we look forward to providing the next update to everyone in March.

Thank you.