Greetings. Welcome to Masonite's third quarter 2022 earnings conference call. During the presentation, all participants will be in a listen-only mode. After management's prepared remarks, investors are invited to participate in a question-and-answer session. Please note that this conference call is being recorded. I would now like to turn the call over to Richard Leland, Vice President of Finance and Treasurer. Thank you. Please go ahead. Thank you. Good morning, everyone. We appreciate you joining us for today's call. With me here this morning are Howard Heckes, President and Chief Executive Officer, and Russ Tiejema, Executive Vice President and Chief Financial Officer. Also joining us today for Q&A is Chris Ball, our President of Global Residential. We issued a press release and earnings presentation yesterday reporting our third quarter 2022 financial results. These documents are available on our website at masonite.com. Before I begin, let me remind you that this call will include forward-looking statements. Each forward-looking statement contained in this call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears in the section entitled Forward-Looking Statements in the press release we issued yesterday. More information about risks can be found under the heading Risk Factors in Masonite's most recently filed annual report on Form 10-K and our subsequent Form 10-Qs, which are available at sec.gov and at masonite.com. The forward-looking statements in this call speak only as of today. We undertake no obligation to update or revise any of these statements. Our earnings release and today's presentation discussion include certain non-GAAP financial measures. Please refer to the reconciliations which are in the press release and the appendix of the earnings presentation. Our agenda for today's call includes a business overview from Howard, followed by a review of the third quarter results from Russ. Then Howard will provide some closing remarks and will begin a question-and-answer session. With that, let me turn the call over to Howard. Thanks, Rich. Good morning. Welcome, everyone. Starting on page four, I'm pleased to report that Masonite continued to deliver strong year-over-year growth in the third quarter with net sales up 12% and adjusted EBITDA up 7%. Adjusted earnings per share increased 27% due to our higher earnings and a lower share count. Results in our North American Residential segment for the quarter were outstanding. Net sales for the segment grew 19% year-over-year, and adjusted EBITDA grew 26% due to a disciplined focus on price and cost management and strong execution of our Doors That Do More strategy. The segment also benefited from the diversity in our residential end markets as demand remained more resilient in the residential repair and remodel market during the quarter and helped mitigate the impact of softening demand in new construction. In Europe, we experienced substantially greater headwinds than expected in the quarter from ongoing macroeconomic challenges, including consumer confidence, energy costs, and exchange rates. The leadership team has been systematically taking a number of actions to support margins, but the rapid deterioration of the economic climate did result in uncharacteristically weak performance for this segment. The combined effect of the European results and slower than anticipated recovery in the architectural segment were a significant headwind to the overall results for the quarter, but we are pleased that strength in the core North American Residential segment kept us largely on track in the quarter. Beyond these quarterly highlights, I am happy to also comment on the exciting M&A news occurring subsequent to quarter end during our normal quiet period. On November 3rd, we announced our intention to acquire Endura Products, a leading innovator and manufacturer of high-performance residential door frames and door system components. We are extremely excited about the strategic fit of this acquisition and its potential to help accelerate growth for Masonite. Let's turn to slide five. Endura was founded in 1954 and has been a family-owned business for three generations. Over nearly 70 years, it has developed into a highly respected supplier of exterior door system components. The company has delivered net sales of approximately $270 million over the last 12 months, and their revenues have grown at a compound annual growth rate of 17% over the past three years. Their products are sold to distributors located throughout the U.S. and Canada, as well as direct to OEMs and online. Endura's product portfolio broadly consists of door frames, door sills, and other components, as well as engineered stiles and rails, all designed to improve the performance of exterior door systems. The team is in constant pursuit of insights that help drive innovation and make a door system perform better. Their research and development efforts have produced an intellectual property portfolio of over 100 active patents and dozens more that are currently pending. The company has four production facilities located in North Carolina, Texas, and Oregon, and employs over 800 people. Endura has been a Masonite supplier for over 25 years, and the partnership has grown stronger recently as we have collaborated closely on several of our new exterior door systems. We have a great respect for the way they prioritize and demonstrate not only innovation, but quality, service, and integrity as well. We believe there is a great cultural fit between our companies and are delighted that Bruce Proctor, Endura's current president, and his leadership team will be joining Masonite following the close of the transaction. Bruce has invested 30 years of his career into growing his family's business and is excited about the combination of Masonite and Endura, given our strong partnership to date. This was not an auction. This acquisition was the logical next step in the evolution of our partnership. Both the Masonite and Endura management teams see tremendous potential to accelerate future growth as part of a combined organization. We have put a cross-functional integration team in place to ensure a smooth transition and deliver on the synergies already identified during due diligence. We expect to close the transaction near year-end, pending receipt of regulatory approval and satisfaction of customary closing conditions. Turning to slide six. Our Doors That Do More strategy drives how we run our existing business, as well as our inorganic growth roadmap. Since developing this strategy, we have taken a more targeted approach to M&A that includes a clear framework of strategic growth opportunities and a list of potential targets. Endura has long been at the top of that list. Beyond the attractive product portfolio, intellectual property, valuable brand, excellent manufacturing capabilities, great customer relationships, and an outstanding team that Endura brings, the long-term strategic value of this transaction comes from the ability to accelerate innovation across the complete door system and unlock the value of fully integrated products. This product integration opportunity came to light shortly after I joined the company. Our consumer-centric research uncovered unmet needs around the home for comfort, privacy, security, style, and convenience. As a result of the pandemic, the homeowner's needs have only become more acute. To make a door operate seamlessly and to solve life and living problems, to make it more soundproof or weatherproof or secure, you need more than just the door slab. You also need the frame and all the other components to be tightly integrated and work in concert. This is what makes it a door system and gives it maximum value. It is also why Masonite and Endura being together makes so much sense. Many of our down-channel customers already buy both Masonite doors and Endura products to use them together in creating entry door systems. A great example is the Masonite Performance Door System, which we launched earlier this year. As you may recall, this product combines high-quality Masonite exterior fiberglass doors with high-performance Endura frames, self-adjusting sills, weather sealing, and more to form a highly engineered complete door system that is 64% better at keeping air and water out than the leading competitor. We also partnered with Endura to design and supply components for our M-Pwr smart door solution. These are just a few examples of the types of performance benefits that come from design and engineering across the entire door system, and we are eager to further these efforts. By fully integrating and aligning our resources, we can move even faster to deliver Doors That Do More. In addition to the incremental growth potential from product integration, we anticipate other tangible benefits from this transaction. Upon closing, Endura will provide incremental access to new markets, new product categories, and new distribution channels. Together, we will be expanding our total addressable markets and further building on the value of both of our brands. For all these reasons, I'm thrilled to welcome the Endura team into the Masonite family as we continue to unlock the value of our Doors That Do More strategy by delivering door solutions that solve life and living problems for homeowners and delivering greater value to our partners and shareholders. With that, I'll turn the call over to Russ to provide more details on our financials for the quarter. Russ? Thanks, Howard. Good morning, everyone. Turning to slide eight, I will start with an overview of our third quarter financial results. We reported net sales of $728 million, up 12% as compared to the third quarter of 2021. The growth was driven by a 21% increase in AUP, which was up year-over-year on price implemented to offset inflation, as well as positive product mix. This increase was partially offset by a 6% decline in volume, a 2% decrease due to foreign exchange, and a 1% decline in component sales. Gross profit increased 8.5% in the quarter to $167 million, while gross margin decreased 60 basis points year-over-year to 23%, due primarily to the effects of inflation and the volume deleveraging impact on factory costs in the Europe and Architectural segments. Selling, General, and Administration Expenses were $83 million, up 8% compared to the same period last year, while SG&A as a percentage of sales improved 30 basis points to 11.4%. Net income was $57 million in the quarter, an increase of $19 million from the prior year, driven primarily by higher gross profit, as well as the absence of debt extinguishment and restructuring costs incurred in the third quarter of 2021, partially offset by the increase in SG&A and higher income tax expense. Diluted earnings per share were $2.54, up 65% versus the $1.54 realized in the third quarter of last year. Adjusted earnings per share were $2.53, up 27% compared to the $1.99 realized in the third quarter of 2021, which excluded $14 million in charges related to the extinguishment of debt, $1 million in restructuring costs, and $4 million of positive impact from income tax adjustments related to the exclusions. Adjusted EBITDA in the quarter increased 7% to $112 million, driven by strong gains in our North American Residential segment. Adjusted EBITDA margin declined 70 basis points year-over-year to 15.4% as a result of lower results in our Europe and Architectural segments. Drivers of our adjusted EBITDA performance are shown on the right-hand side of the slide. As we have seen consistently this year, the top line benefited from strong AUP, driven by pricing and positive product mix, while inflation continued to weigh heavily. The combined impact of inflation on materials and inbound freight exceeded 20% on a consolidated basis in the third quarter. We have started to see some cost moderating on purchases made more recently. However, we are still working through higher priced materials currently in inventory. Factory and distribution costs were up approximately $33 million, due primarily to the impact of volume deleveraging and inflation on labor, overhead costs, including utilities, and distribution packaging materials. SG&A was up $8 million in the quarter, driven by investments in growth initiatives, higher personnel costs, including variable compensation accruals and stock compensation, and higher travel expenses. Let's turn to slide nine for our North American Residential segment results. Net sales increased 19% to $579 million on strong price and mix. Total AUP growth was 23%, inclusive of three points of positive mix. We saw a volume decline as anticipated, down 3% for the segment overall, as our wholesale customers adjusted their inventories in response to declining housing starts. Triple R volumes, however, proved generally resilient. Adjusted EBITDA in the North American Residential segment was $115 million in the third quarter, up 26% from the same period last year, with an adjusted EBITDA margin of 19.9%, up 120 basis points on strong execution and price-cost discipline. The carryover benefits of pricing actions taken prior to the third quarter continue to cover both inflation and margin in North American Residential. Our M-Vantage operating model delivered cost benefits in the quarter, including a reduction in overtime and rebalancing production between plants to allow for the elimination of higher-cost shifts. At the same time, we are moving forward with targeted investments in the development and commercialization of new products. We are encouraged by signs that our recent launches are gaining traction in the market and earning accolades. Recently, we announced five new builder partners that have begun including the M-Pwr smart door in select communities across the United States. M-Pwr was also recognized with four new awards, including the TecHome Brilliance Awards for best overall product and the rAVe's Best of CEDIA Expo Awards for best new security solution. The new Masonite Performance Door System has also been well-received by our channel partners, with interest accelerating quickly. All in all, we believe the North American Residential business is executing extremely well. We look forward to building on their success with the acquisition of Endura. Turning to slide 10 and our Europe segment. Net sales of $66 million were down 22% year-over-year, or down 9% excluding the impact of unfavorable foreign exchange. AUP growth of 13% was offset by 21% lower volume. Demand among home builders remained steady in the quarter, but declined significantly in the merchant and contractor channels due to the severe impacts that inflation and economic uncertainty have had on consumer confidence and spending. Adjusted EBITDA dropped to $4 million in the third quarter, and adjusted EBITDA margin contracted to 5.9%, with approximately 2/3 of the decrease due to deleveraging and 1/3 caused by energy inflation. Year-over-year price realization was enough to cover material inflation but not enough to cover either margin or the impact of higher utilities costs, which remained extremely volatile and increased significantly in the third quarter. Our Europe team is focused on aligning production headcount with the lower demand, which, as we've noted previously, takes longer in the U.K. due to notice requirements. Reductions in headcount resulted in almost $1 million of severance expense in the third quarter. We expect to see a positive impact in Q4 from these cost reduction initiatives already executed. Additional cost actions underway now will further benefit the segment heading into next year. Moving to slide 11 in the Architectural segment. The segment returned to growth this quarter with net sales of $78 million, up 3% year-over-year. Higher AUP contributed 13%, partially offset by an 8% decline in volume as well as lower component sales. Adjusted EBITDA in the quarter was essentially breakeven. Efforts by our sourcing and R&D teams to qualify new suppliers for the crossband material, which has been in critically short supply this year, have been successful, and the operations team is now working with the new inventory in production. Internal operational challenges rooted in the complexity of this business continued to limit our success more than factors related to end market demand. The segment has demonstrated solid earnings performance historically, but recovery from the pandemic and subsequent supply chain challenges has progressed too slowly. As the architectural team continues to execute their plans to reduce complexity and improve throughput, we will also assess opportunities to unlock the intrinsic value we believe resides in this segment. Turning to slide 12, we will cover liquidity and cash flow performance. At quarter end, our total available liquidity was $504 million, inclusive of unrestricted cash, our undrawn ABL facility, and an accounts receivable sales program. Net debt was $616 million, resulting in a trailing 12-month net debt to adjusted EBITDA leverage ratio of approximately 1.4 times. Cash flow from operations was $83 million to the end of the third quarter as compared to $100 million through the third quarter of 2021. The year-over-year decline is largely attributable to increased working capital, resulting from both inflation driving up inventory values and the investments we made to increase safety stocks in the face of a fragile supply chain. As supply chains continue to stabilize, our sourcing and operations teams are actively working to reduce inventory to more normal levels. Capital expenditures were approximately $66 million in the first nine months of 2022, up from $47 million in the prior year, driven by incremental investments in our new plants. Due to trading blackout restrictions in place pending announcement of the Endura acquisition, no share repurchase activity was conducted in the third quarter. Year to date, we have repurchased approximately 1.6 million shares for $140 million. Turning to slide 13. On our second quarter call, we updated our full year outlook as follows. We maintained our outlook for net sales growth of 6%-10% despite stronger FX headwinds. We reaffirmed our outlook for adjusted EBITDA of between $445 million and $475 million, and we increased our outlook for adjusted EPS to between $9.60 and $10.60. Net sales year to date are up 13%, while we are expecting increased softness in U.S. new construction, further channel destocking, and a persistently challenging macro environment in Europe, we still believe that full year net sales are likely to end the year near the top of our guidance range. Adjusted EBITDA is up 12% year to date, despite significant inflation, with strength in our core North American Residential business partially offset by slower than expected recovery in the architectural segment and volume and energy cost headwinds in Europe. We are taking proactive actions to leverage our M-Vantage operating model and cost management playbooks. However, the majority of these benefits will be realized in 2023. As a result, we now expect adjusted EBITDA and EPS for the full year to be nearer the bottom of our guidance range. While our leadership team is staying nimble and adapting to day-to-day and month-to-month volatility, they're also working to deliver consistent, reliable supply, drive specified demand, and win at the point of sale to position ourselves for long-term growth. Turning to slide 14. Before I hand the call back to Howard Heckes, I'd like to take you through some of the key financial aspects related to our acquisition of Endura Products. As we've said previously, we evaluate all potential M&A through both a strategic lens and a financial lens. Howard Heckes took you through the compelling strategic logic behind this transaction. Now I'll cover the financial side. The acquisition price for Endura is $375 million, which represents approximately nine times anticipated adjusted EBITDA post-cost synergies. We are targeting approximately $8 million of cost synergies related to sourcing and operational efficiencies identified during due diligence. We expect to realize these synergies within the first two years, with the majority achieved in year one. We are also highly optimistic about the potential for incremental growth synergies, as Howard Heckes noted. We have not factored any of those benefits in the transaction multiple. Funding for this transaction will come from a combination of cash on hand, borrowings from our recently upsized ABL credit facility, and from an expected new term loan. As I mentioned earlier, exiting the third quarter, Masonite had a 1.4 times net debt to trailing 12-month adjusted EBITDA ratio. Pro forma for the acquisition and expected cost synergies, this ratio would remain at a conservative two times. The cross-functional integration team we have established is already developing a comprehensive plan to facilitate a seamless transition upon closing and ensure a robust roadmap is in place to deliver the synergies we expect to achieve. Now, with that, I'll hand the call back to Howard Heckes. Thanks, Russ Tiejema. In summary, we look forward to closing the acquisition of Endura, which is a natural fit with our Doors That Do More strategy, and we are eager to work together on the next generation of door solutions that improve life and living. As for third quarter results, I'd congratulate the North American Residential team again on their excellent performance, and in particular, on their margin growth in the quarter. In Europe, the team is facing a difficult environment, but is committed to progressively resetting our cost base while using M-Vantage tools to maintain service levels and drive productivity. Regarding the architectural segment, the prolonged impact this business has had on our consolidated margins is certainly not in line with the expectations we had when putting together our outlook for 2022. I'm appreciative of our team for working through some of the most critical supply chain issues that have been affecting the business this year, but we need to consider alternative approaches for getting the value from this business faster, and we are doing that now. Each of our segments are facing headwinds going into the final quarter of this year, yet we are confident in our ability to deliver another year of consolidated net sales and adjusted EBITDA growth. We look forward to providing our outlook for 2023 in our next earnings call. Rest assured, our 2025 centennial plan goals continue to define the long-term priorities we have for our business. Moreover, we are confident in our ability to achieve these goals by consistently executing against our plan, adapting quickly to the environment, and taking full advantage of valuable strategic opportunities, such as the Endura acquisition. Now I'd like to open the call to your questions. Operator? Thank you, Mr. Heckes. If you would like to register a question, please press star one on your telephone keypad. If you are using a speakerphone, please lift your handset before entering your request. We ask that you limit yourself to one question and one follow-up. Again, that is star one if you would like to register a question at this time. The first question today is coming from Joe Ahlersmeyer of Deutsche Bank. Please go ahead. Yeah. Thanks very much, guys, for taking the question, nice results. Thanks, Joe. Thanks, Joe. Sure. The comment around the bottom of the range, maybe just a quick one if you'd comment. If you think about the range within that range for North America, how did that change from the summertime, August when you updated us, to now? Yeah, Joe, it's Russ. I'll take that one. It's interesting. There's actually a pretty clear distinction between the performance we've seen in our core North American Residential business and elsewhere. Specific to your question about North American Residential, there are a couple of factors going on. One, we're seeing the inflation flow through the P&L a little bit slower than we would have anticipated. That's driven primarily by the fact that volumes are coming down, and we've got higher cost material that we're continuing to consume as we produce for those lower volumes. The other aspect is we are seeing some volume de-leveraging. That's not significant in the North American Residential business. It is at the margin and impact. The team, we think, is doing a really nice job staying sharply focused on cost actions that will allow us to respond to that. If I step back and I look at how the quarters will progress from Q3 to Q4, in the case of North American Residential, we often see margins come down sequentially from the third quarter to the fourth. That likely will happen again this year, but in the case of NA Res, pretty modestly. They'll probably still generate pretty strong margins improvements, that is, year-on-year in the fourth quarter. All right? That's a very positive distinction. On the European side, the team there, as we commented, has done a really nice job implementing cost actions. It does take us longer there because of notice periods that are required when any workforce reductions are made. That said, we believe that business is on track to recover to a double-digit margin in the fourth quarter. They're still likely going to be short of prior year. With the architectural business, probably just modest improvement quarter to quarter. All of those factors taken into account form our viewpoint on how we come through the balance of the year, and why we think it's prudent to call EBITDA closer to the bottom end of the range. All right. Thanks for that color, Russ. I appreciate that. On North America, I imagine that margin assumption includes some pretty healthy continued AUP just based on the realization in the third quarter. Is there also an assumption for a mixed benefit in the fourth quarter? Just given how that plays into your longer-term growth algorithm, how should we think about mix within North America into 2023 and beyond? Yeah. Well, first of all, taking that AUP question head on, we would expect AUP at both a consolidated level and for North American Residential to drift lower in Q4 as compared to what you've seen the last couple of quarters. Frankly, that's a function largely of lapping price increases that we took in August of last year. With respect to mix, we anticipate that's going to continue to be a tailwind for us. We've made proactive investments in product and in marketing to make sure that we're driving more mix from hollow core to solid core, from steel to fiberglass, et cetera. You've seen the last couple of quarters the benefit of that within our AUP. In North American Res this quarter alone, three points of a tailwind within the overall AUP. We anticipate that trend will continue. That is a core part of our Doors That Do More strategy. All right. Thanks a lot, guys, and good luck. Thanks. Thanks, Joe. Thank you. The next question is coming from Michael Rehaut of J.P. Morgan. Please go ahead. Thanks. Good morning, everyone, and congrats on the quarter. Thank you. First question. Just wanted to delve a little bit into Endura, and congrats on the announcement. Just wanted to understand when you think about the sales, I'm curious about the amount of sales, if you can give it on a rough basis that Endura has to yourselves, as well as to other competitor OEMs, if there's any potential channel conflicts or the customers perceiving it perhaps as a conflict, how that might be managed. On the sales going into your own company, if that's a portion of the $8 million of cost synergies, because obviously there would be some element of savings from a profit standpoint at least, if that's baked into the $8 million. Curious about those two factors. Thanks, Mike. This is Howard. We're very excited about Endura and what it can do for Masonite going forward. Relative to the channel conflict, their customer list looks a lot like our customer list. Their biggest customers are really wholesale distributors, both one and two-step. While they do sell to OEMs like Masonite, that is not the biggest percentage of their business by a long shot. We don't expect there to be really any significant channel conflict there. The benefits of the product that we do buy from Endura is not included in those synergies that we talked about. Those synergies are more direct purchasing, raw material purchasing synergies, and some productivity and factory efficiencies, but not the benefit of the purchases. Okay. No, that's helpful. Also, the European actions and maybe some of the broader advantage or cost actions that you're taking in the face of softness overseas and maybe here as well, a little bit in some channels. Sounds like you're expecting a pretty quick snap back on your European margins. Was hoping to get a sense of when you talk about headcount savings, and again, other actions more broadly, what that might mean on a dollar basis annualized and if it looks like some of it might be already beginning to be realized in the fourth quarter, what might be incremental that we should think about when looking at 2023? Yeah, Mike, it's Russ. Let me take that one. I guess first I'd like to set the stage with the Q3 performance of the segment. We printed a 5.9% EBITDA margin. As we acknowledged during the remarks, there was approximately $1 million worth of severance costs that that business incurred as a result of these headcount actions that the management team there is taking. We also had circa $1 million higher cost in electricity and utilities, which is in line with the broader energy inflation that the European market is seeing, and certainly we're experiencing in the U.K. and Ireland, which is really where our business there is focused. If you were to adjust for those two items, the business was in a high single-digit margin call on a pro forma basis. Between the stabilizing of the headcount there, reducing the workforce, the actions that that team has put in place, and the fact that there are some price caps being put in place on energy in the U.K. that we think stabilize and likely reduce our utilities cost in the fourth quarter as opposed to the third quarter. That's what informed my comment a moment ago about returning that business to double-digit EBITDA margins, we believe by the fourth quarter. The headcount piece of that, essentially what the team there is doing is the same playbook that we execute here in North America. There's an order of operations whereby first you're going to eliminate any overtime that you can. You're then going to remove any temporary headcount. You are then going to move into more permanent headcount reductions, whether that's riding the attrition curve or eliminating shifts, and only thereafter would you consider more permanent or durable capacity reductions. The team is executing against that plan. The only additional factor I would offer that they're looking at is are there ways that we can manage shift patterns or operations in the U.K. to actually reduce our consumption of electricity in the production facilities? It's all of those factors taken together that are taking cost down, including reducing headcount wherever possible in line with the volume decline. Great. One last quick one if I could sneak in. Just the de-stocking in North America, do you have a sense of what that impact was on sales and if that should continue into the fourth quarter? A lot of companies are thinking perhaps de-stocking might be finished by the channel by the end of the year. I'd be curious if you have a similar view. Mike, this is Chris here. Let me take that one. Just to step back for a minute and to give perspective on the North America business, we've got a good balance between new construction and Triple R. As we mentioned in the comments earlier, the Triple R side of the business has been resilient, so the de-stocking that we saw in the third quarter and expect to continue here into the fourth is really related to our wholesale business, which is focused more on the new construction side of our portfolio. It's really driven by this backdrop of the softer new construction, new housing starts and the overall demand on that side. As we look at the business for Q4, that's what we have put into the outlook that Russ shared earlier. From an action standpoint, we've got a lot of focus on making sure we're disciplined on price cost to make sure we're driving the margin side of the equation, but also looking at those mix opportunities to offset some of that volume loss with the solid core doors, with fiberglass and other areas for us to drive AUP growth. Great. Thank you. Thank you. The next question is coming from Mike Dahl of RBC Capital Markets. Please go ahead. It's actually Chris Klaus from Mike Dahl. Thanks for taking our questions. Sure. Just on the price-cost dynamics in North American Residential. Clearly, with residential slowing as meaningfully as it is and builders likely to come, if not already, to push back on supplier price increases, how are you guys thinking about the sustainability of your pricing gains? I know you said you're expecting some moderation on year-over-year growth that's largely a comp issue, if I understand it. Just in terms of the ability to sustain the pricing increases you've had to date and kind of outlook for next year, how is that all shaping up? Yeah. Thanks, Chris. I may start that, maybe Russ Tiejema has something to add. It's been important to us and our success has been based on disciplined price cost management with the goal to always maintain favorability of price cost. This year, obviously, we've had very significant inflation, again, over 20% this quarter, we've had to be certainly more aggressive on the price side. Our intent, even going forward, is to stay favorable in that price cost relationship. We've done consumer research now three different times, most recently just in the last month or so, that, again, continues to suggest that consumers expect to pay a lot more for doors than they currently pay. There's value in the products that we provide. Keep in mind that our strategy and this evolution of doors and door systems is about driving mix and driving specified demand to higher value doors that will continue to drive mix. Our goal is going to be to stay price cost favorable. We believe we can do that. We believe the market will support that. The consumers expect to pay more for doors, we're going to continue to drive higher mix. Yeah. You know what, Chris, the only thing I would add to that is that I'd like to rewind the tape three years to late 2019 and just remind everyone about the actions that we took, pretty bold actions at that time, around pricing, and the fact that they were grounded in consumer research. Right? That indicated there was a lot of value being left on the table up and down the value chain in our category. That's what gave us the confidence to move forward with some pretty bold price increases effective early in 2020, with a commitment that we would reinvest back into the business around reliable supply, product innovation, down channel marketing. We've done those things. Particularly in consistent, reliable supply. That's been a real focus for us over the last year and a half, as supply chains have been so fragile. We believe that's kept us leading the pack with respect to service levels to our customers, and it's clearly indicative of our commitment to maintain that. Between all of that, the value that we're offering, not only to the distribution channel but to the consumer, as Howard Heckes mentioned, and the fact that we continue to refresh that analysis, it continues to suggest that consumers' expectations for door pricing continues to go up in the broader inflationary market. Just to underscore this theme of wanting to be paid fair value for the product and continue to execute a pretty disciplined approach to price cost management to ensure that happens. Understood. Appreciate that. Then just maybe turning to the cost side of that price cost equation. Could you guys just flesh out how much inflation you guys saw 3Q on a year-over-year basis, what you're expecting in 4Q? You did mention you're starting to see some green shoots of alleviation in inflation, hoping that we could maybe get some more color on what that is and potentially any comments on implications for next year. Yeah. I'll pay that one off, too, with respect to cost. We did see material inflation, I think as I commented during prepared remarks, over 20% in the third quarter. We do expect that that is going to drift somewhat lower in the fourth quarter. It's likely still to be in the mid to high teens on a year-on-year basis, however. Part of that is due to the fact that, as I mentioned earlier, we're continuing to consume these higher cost materials that we purchased earlier, and in some cases, built higher levels of safety stock as a means to ensuring that we could deliver that consistent, reliable supply I just spoke about. We're consuming that higher cost material. That's going to continue to run through the balance of this year and perhaps even into early Q1, depending on what end market demand and production volumes do. We do expect that we'll see some moderation from those levels in 2023. We're still formulating our viewpoint on what material inflation looks like by each category, and we'll be in a position to comment more specifically on that on our fourth quarter call. Understood. Appreciate all the color. You bet. Thanks, Chris. Thank you. The next question is coming from Noah Merkousko of Stephens. Please go ahead. Good morning, thanks for taking my questions. Hi, Noah. Hi, Noah. First, I just wanted to get y'all's high level view on 2023 as we look out today. Clearly there's some demand uncertainty, likely see continued softening in new res, it sounds like. On the other hand, sounds like the Triple R market's holding in well. Maybe if you could just talk to how you're seeing demand potentially shape up across your businesses for next year. Sure, Noah. It's Russ. Let me take a shot at that. I mentioned just a moment ago that we'll provide more color on a number of areas on the fourth quarter call. We'll comment more specifically about 2023 broadly then and what our financial outlook is for the year. I can still share some factors about what we're planning for as we finalize our outlook for next year and the plans for each of our businesses. First, with respect to end market demand U.S. housing market, our current view is that the weakening conditions that we're seeing currently are going to continue the balance of the year, if not potentially worsen a little bit, and continue into 2023. As a result, at this stage, we're planning for a double-digit decline in new housing starts next year. On the flip side of that, on the residential repair and remodel market here in North America, by the way, just to emphasize, that we estimated is just over half of our business. That business has remained relatively resilient, and we expect that that's likely to continue. Particularly as a lot of people perhaps elect to renovate in place as opposed to move homes because they've got favorable mortgage terms to preserve vis-a-vis what current mortgage rates look like. We believe that could likely serve as a little bit of a buffer to just the broader economic weakness that we're seeing. As a result, Triple R, we would plan to be down just modestly year-on-year. If you think about our end markets in Europe then, again, we're primarily exposed to the U.K. there. That market has been hit pretty significantly by inflation. Consumer confidence has sagged. Consumer and household inflation has spiked dramatically given energy. We have a pretty significant position in the exterior door renovation market there. Very high AUP, very high margin. That business has been blunted. We expect that that's going to continue. The housing market has remained relatively resilient so far, but there's probably a risk of volume weakening a little bit there as we get into 2023. Then I commented a moment ago on material costs, I won't rehash that. If you step back and you look at all of that, it suggests that the efforts that we're making around price cost management, M-Vantage to optimize the operational footprint, leveraging that highly variable cost structure to reset labor levels in line with volume. Those are all going to be really important as we move into 2023. It's also, by the way, what leaves us confident in our ability to demonstrate solid earnings power next year, despite what we believe is going to be a weaker demand backdrop. Again, we'll comment more specifically on the fourth quarter call, at least qualitatively, that's how we're thinking about market drivers moving into next year. Noah, this is Howard. If I could just add, I joined the company shortly before COVID, one thing I've learned is I'm very confident in our team's ability to navigate end market uncertainty. As we head into 2023, there's certainly some uncertainty, as Russ pointed out, I think our product mix strategy is working. Our variable cost structure is favorable, and we have very disciplined price cost management in our business that's going to allow us to adapt and continue to relatively outperform the market. Thanks. That's really helpful and quite encouraging. For my follow-up, over the last couple of years, you all have created some innovative products in-house, and now you'll have the Endura product. With this portfolio, do you feel that you have the right products and resources to execute on your long-term goals, or will there be further M&A needed? That's a great question. First of all, as I said on the script, Endura, we believe is absolutely a natural fit to our Doors That Do More strategy. First, it's a great company with great people and great intellectual property products, et cetera. This ability to integrate door systems and solve life and living problems is a real key unlock for our strategy. The products they currently have in their portfolio and continue to develop, and the IP that they have with articulating sills and certain frame products and locking mechanisms, et cetera, are certainly one big step to helping us develop and solve some of these life and living problems. Now, are there other things that we need? Maybe not. Are there other things that might be helpful? Absolutely. We've talked about our M&A strategy pretty consistently over the last several years, that we want to acquire companies that help deliver our strategy. Along the lines of the driving specified demand, you can begin to think there could be other things that contribute to that help us move more quickly. We're also interested from an M&A perspective in things that help us deliver consistent, reliable supply or win the sale. You can think about how that might tie into our M&A roadmap that we talked about on the call. Got it. That makes sense. I appreciate the time. Good luck with the next quarter. Thanks, Noah. Thank you. The next question is coming from Steven Ramsey of Thompson Research Group. Please go ahead. Hi, good morning. Wanted to think about Endura's trailing 12-month margin of 12%. You've seen great sales growth as well there in the past few years. Can you compare the recent margin performance of that company to prior years? Does this reflect inflationary pressures on results? If prior years had better margins than this. Certainly, Steven, the same inflationary pressures, similar inflationary pressures to all of us buying those types of raw materials. Price cost becomes an important driver of margins in climates like this. That's been an interesting dynamic in the business recently. We think, through our due diligence, one, the integrated product opportunity that we have, and two, some of the cost synergies that we have can certainly improve the margin structure of that business. Okay. Helpful. Thinking about the architectural segment. Looking at unlocking intrinsic value there, can you share more about what this means? Is this operational-oriented or strategic alternatives-oriented? Is there any coincidence there with the timing of this commentary along with the Endura deal being done? No to the latter. There's nothing about the timing, Steven. Just as a reminder, this has been a relatively good business for us historically. The pandemic hit, volumes fell off a cliff, and then we had a super fragile supply chain on a number of issues. It's become a break-even business that's been too significantly dilutive to our consolidated margins. The team has developed, and it's been executing a pretty thoughtful plan to get that business back to its pre-pandemic profitability. Unfortunately, the progress has been slower than we expected for a variety of reasons, some of which are outside of our control, some of which are within our control. We're certainly grateful for investors' patience here, but we recognize that the clock's ticking, and we are impatient ourselves. We believe the pace of recovery can and should be faster. As a result, we're reviewing all options to unlock the value of that segment. There's really nothing more to share today, but certainly we'll keep you informed as those plans develop and as we execute better in that segment. Excellent. Thank you. Thanks, Steven. Thank you. The next question is a follow-up coming from Michael Rehaut of J.P. Morgan. Please go ahead. Great. Thank you. I guess one of my questions was just asked around architectural and the intrinsic value, but maybe just a technical one on the term loan and borrowings, ABL borrowings. If you could give us a sense for the transaction of Endura, if you could just give us a sense of how we should think about each of those as part of the $375 million, how it kind of breaks down, and anything around interest rates on the term loan and the ABL, on a rough basis, how we should think about that. Yeah. Sure, Mike. It's Russ. Let me take that. First of all, with respect to funding the acquisition, technically, given the strength of our liquidity right now, we're in a position to close that without incremental debt financing between cash on hand and the upsized ABL, to your point. We just feel that it's important as a broader liquidity preservation measure to make sure that we optimize the capital structure. Where it's appropriate, go ahead and issue some additional debt in the form of a term loan. That's not finalized yet, so I don't want to comment anything about the specifics of that or projected rate. What I would comment on, though, is that with respect to the ABL, we did upsize it by $100 million. As part of that process, we changed the reference rate on that instrument from LIBOR to SOFR. That ABL serves as our lowest cost form of funds. The margin on drawings really is anywhere between 130 to 155 basis points over SOFR, depending on the degree of usage. If you just compare that to what the current one-month SOFR rate is, it would indicate a borrowing rate of approximately 5% on that. That's clearly an attractively priced, certainly for the current market, form of liquidity for us between that and pretty substantial cash on hand, and then supplemented by this term loan when finalized. We'll balance across those three how we fund the acquisition. Okay. No, I appreciate that, Russ. I guess just secondly, you put out somewhat of a framework in terms of how you might think your end markets play out in North America next year. Obviously, at the same time, you're enacting different actions around from a cost standpoint. How should we think about decremental margins next year in a down revenue scenario, taking into account some of those actions around M-Vantage and operating efficiency, et cetera? Specifically, I'm thinking around North America. If you drive down to the segment level, but company-wide is helpful too. Yeah. Let me provide a little bit of color on that, Mike. It's Russ again. Broadly speaking, at a consolidated level, we'd reasonably assume decrementals to be somewhere in the range of 30%-40%. That is impacted based on mix, based on speed of the volume coming out, based on which product categories, which geographies, et cetera. Case in point, in the U.K., we have seen a lot of our volume weakness over this past several quarters in the exterior product line portion of that business, which is a much higher AUP and margin business. Our decrementals have been in excess of that in the U.K. as a result of the mix impact of losing more volume on the exterior side than the interior side. Broadly speaking, think about 30%-40%. That rule of thumb would apply across certainly North American Residential also. The benefit in North American Residential, in contrast to the U.K., as I commented earlier, where you've got notice periods that impact how quickly you can reduce your workforce, we don't necessarily have that in North America. The team can be a little bit more nimble in making headcount adjustments in line with volume. Now, there's a downside to that also, right? You don't want to move too quickly until you're pretty confident that the downturn in volume is durable, because that leaves you inefficiently rehiring and training people and bringing them back up to speed. That all said, as I commented earlier, at this point, we're planning for, on the new housing side, a double-digit decline in North America. Much more modest than that on the Triple R side. Overall, not immaterial volume declines next year. The team is going to execute that multi-layer strategy we've talked about at length and many times, right? Making sure all the overtime is pulled out of the plants wherever possible, eliminating temporary employment, revising our shift structure. We've already begun work along those lines. Ultimately, where warranted, more permanent changes in factory footprint and capacity reductions. Planning for each and every one of those actions is in place right now. There's a playbook that will be executed as we move into 2023. More to come on that, and we'll obviously be able to comment more as we get to the end of the year and provide our financial outlook for 2023. Okay. Just to be sure, Russ, I just want to be clear. The 30% to 40% is on EBITDA margins. Also, any sense of what those offsetting actions? It sounds like the decrementals are before any, again, cost actions or offsetting actions. Any sense of what that could be inclusive of those actions? The 30% to 40% decremental, Mike, to be clear, that's the amount of drop-through to the bottom line in EBITDA dollars that you would incur from a reduction in sales volume. That is before any of the offsetting cost actions to address them. Clearly, our objective is to continue increasing our margins over time, that means ensuring that we're resetting the cost base of the business and continuing to pursue this disciplined approach to price-cost management that will allow us to absorb those volume declines and continue to maintain or grow margins. Great. Thank you. Thank you. Thank you. At this time, I would like to turn the floor back over to Mr. Heckes for closing comments. Thank you, Donna. Thank you for joining us today. We appreciate your interest and continued support. This concludes our call. Operator, could you please provide the replay instructions? Certainly. Thank you for joining Masonite's Third Quarter 2022 Earnings Conference. This conference call has been recorded. The replay may be accessed until November 22nd. To access the replay, please dial 877-660-6853 in the United States