Release Date: March 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss the expected progression of margins for the rest of the year, particularly on the gross line? A: George Wilson, Chairman, President, and CEO, explained that the expected increase in gross margins is due to the PPA step-up related to the acquisition, which impacted Q4 and Q1. The rest of the year should see a meaningful jump in gross margins, improving each quarter.
Q: What factors contributed to the divergence in growth rates between the cabinets and fenestration businesses in North America? A: Scott Zuehlke, CFO, noted that harsh winter weather significantly impacted the window and door market, affecting demand in Q1. The cabinet segment, which tends to lead in both declines and improvements, performed better due to its earlier hit and recovery cycle.
Q: How confident are you in your full-year outlook, and what market improvements are necessary to achieve it? A: Scott Zuehlke expressed confidence in the full-year guidance, attributing it to realistic and conservative projections made in December. The expected improvement in the second half is based on normal seasonality, and the company feels comfortable with both revenue and earnings guidance.
Q: Regarding the second half improvement needed for full-year guidance, which segments are expected to drive this growth? A: George Wilson stated that typical seasonality is expected to drive the second-half improvement, with more seasonality seen in the window and door segments compared to cabinets. The company anticipates an uptick in the second half due to this seasonality.
Q: How are you prioritizing capital allocation between debt repayment and share repurchases? A: Scott Zuehlke mentioned that given the current trading levels, the company prioritizes share repurchases over debt repayment. The decision is evaluated weekly, and the focus is on repurchasing stock opportunistically.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.