Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the JELD-WEN Holding, Inc. Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Chris Teachout, Director of Investor Relations. Please go ahead. Thank you. Good morning, everyone. We issued our earnings press release this morning and posted a slide presentation to the investor relations portion of our website, which we will be referencing during this call. I'm joined today by Gary Michel, Chair and CEO, and David Guernsey, Executive Vice President. Before we begin, I would like to remind everyone that during this call, we will make certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties, including those set forth in our earnings release and provided in our Form 10-K and Form 10-Q filed with the SEC. JELD-WEN does not undertake any duty to update forward-looking statements, including the guidance we are providing with respect to certain expectations for future results. Additionally, during today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to their most directly comparable financial measure calculated under GAAP can be found in our earnings release and in the appendix to this presentation. I would now like to turn the call over to Gary. Thanks, Chris. Good morning, everyone, and thank you for joining us. At JELD-WEN, we're in the midst of a multi-year journey, transforming the business to deliver consistent, profitable growth, expand margins, and further enhance shareholder value through effective capital deployment. This year has been particularly challenging to deliver on our financial targets given the macroeconomic environment. To succeed, companies must adapt how they do business to overcome ever-changing headwinds. Our execution did not meet those requirements, nor was it indicative of the performance-driven culture and expectations we have at JELD-WEN. As the earnings release stated this morning, results came in below expectations for the quarter, and we've adjusted the full year outlook to reflect first half performance and a continued challenging operating environment for the remainder of 2022. We know we have the right strategy. Long-term macroeconomic fundamentals remain strong, and our productivity initiatives are yielding benefits. We must execute better and consistently deliver on our promises. As I'll describe in a few minutes, we have already taken significant actions to reduce costs and to help mitigate the earnings headwinds of the current operating environment, and we're reviewing additional actions that will have a positive impact on our top and bottom lines. Before I provide that color, let me provide some context on this quarter's performance. Continued significant cost inflation and softening demand in certain geographies and channels impacted second quarter results more significantly than we anticipated. Cost inflation, which totaled more than $30 million net of price actions, continued to be the primary driver of Adjusted EBITDA and margin weakness relative to prior year and our expectations. Demand in this quarter was mixed, with total volume mix down slightly from last year. We experienced particular softness within the North America and Europe retail channels and from lower volume mix in Australasia, primarily due to builder labor challenges and higher absenteeism from COVID-19 and influenza. However, we have many products and channels that are performing well, where lead times are an advantage, orders are solid, and backlogs are growing. In North America, we continue to experience strong order rates and revenue growth in the traditional channel, which primarily serves the residential new construction market despite some customers adjusting inventories to account for more normal manufacturing lead times. Pockets of strength included both interior and exterior doors and wood windows. Additionally, we have the highest ever backlog in our VPI multifamily window business due to continued strength in multifamily and the continued ramp of our new manufacturing site in Statesville, North Carolina. Canada and company-owned distribution performed exceptionally well, both posting strong growth above expectations. We continue to experience strength in certain European markets, including France and Central Europe, that are delivering sequential and year-over-year improvement for the segment, as well as in Australasia, where demand remains strong within both residential new construction and repair and remodel markets. Please turn to page four as I share a few highlights from the second quarter. Second quarter revenue increased nearly 7% to $1.3 billion, including an 11% increase in core revenue, partially offset by foreign exchange. Core revenue growth remained positive for the eighth consecutive quarter and within each of our segments. Adjusted EBITDA of $126 million represents a 15% decrease versus last year, resulting in adjusted EBITDA margin of 9.5%. This decline is a result of significant cost inflation and a strong margin performance last year. While the long-term fundamentals of our business remain strong, the factors that impacted second quarter results, including elevated input costs and softening demand, are unlikely to abate before year-end and are reflected in our revised full year outlook. Please turn to page five. For the full year, we now expect revenue growth to be in the range of 4% to 6% and adjusted EBITDA to be between $430 million and $450 million. Our updated revenue outlook assumes continued core revenue growth of approximately 10%, but with a greater contribution from increased pricing and lower volume mix. The lower sales guidance reflects the negative impact of foreign exchange of 4% to 6% due to the stronger US dollar. The revised EBITDA guidance is mostly driven by lower volume mix, which we now expect to be flat to slightly down year-over-year. In addition, we assume an improved price-cost relationship in the second half of this year, but we continue to expect some negative impact from inflation and productivity pressures in our global operations. Please turn to page six. This updated outlook includes the cost actions we have already taken, and we have additional initiatives in process. These actions include optimizing our operations network to reduce fixed costs, align demand to labor productivity, and consolidate our footprint. Improving customer and product mix to focus on higher margin growth, categories and channels, and investing in innovative products and services to deliver more profitable growth in 2022 and beyond. I'd like to focus on a few specific actions we took in the second quarter. For the past several years, we have been focused on the deployment of our business operating system, the JELD-WEN Excellence Model, or JEM, which has enabled us to increase capacity, improve throughput, and accelerate productivity across our manufacturing facilities, which allows us to further optimize the operations network. In North America, we flex manufacturing to current demand and are directing production volumes to the lowest cost facilities. We announced two plant closures in North America and recently shared that we will exit the non-core UK stairs and windows operations and close our manufacturing facilities in Melton, UK. These actions reduce our footprint and fixed costs without impacting throughput, which will yield immediate cost savings and a sustainable improvement to margins going forward. We've also insourced certain functions, including portions of our logistics network, that will yield additional savings during the second half of this year and into 2023. Though the cost actions we've undertaken only modestly affected our second quarter results, we expect to be at full run rate starting in the third quarter. We are also focused on improving customer and product mix while investing in innovative products and services to drive growth and margin improvement in 2022 and beyond. This includes the VPI multifamily windows business, which has been growing as we have nationalized the business and secured new partnerships with multifamily and commercial customers. Not only are we growing the VPI Quality Windows line, cross-selling opportunities are expanding growth of other JELD-WEN offerings into this space. Our new Statesville, North Carolina facility continues to grow our reach on the East Coast. We're adding additional resources to accelerate the conversion of backlog to revenue and adding new production equipment that is expected to come online in 2023 to meet growing customer demand. The exterior fiberglass door business in North America brought additional capacity online during the quarter, which helped drive industry-leading lead times and mid-teens revenue growth. We expect further improvement in throughput as this capacity ramps to full production. In Australasia, we are accelerating new product introductions in energy-efficient windows and doors to capture growth opportunities within the luxury residential and commercial segments. Additionally, investment in new showrooms and other initiatives geared toward increasing penetration within the Australian R&R market helped drive low double-digit growth in R&R activity through the quarter. We also began shipping our new AuraLine composite window and door products this quarter to customers in North America. AuraLine is one of the most significant product lines the company has introduced in recent years, addressing the rapidly growing demand for products that are design-focused, energy-efficient, and sustainably sourced with a high degree of recycled content. We have been pleased with market adoption, and we saw a meaningful acceleration in orders in July. As planned, we will introduce additional AuraLine products in the second half that will further expand the addressable market. Please turn to page seven. We are making progress on environmental, social, and governance efforts. Next week, we will publish our second ESG report, which will outline JELD-WEN's long-term sustainability goals. We are deeply committed to significantly reducing our environmental impact through our operations and to increasing our energy-efficient product portfolio to help customers reduce their own footprint. This past quarter, our Canadian team was awarded the 2022 Energy Star Manufacturer of the Year for the ninth time, and Newsweek recently named JELD-WEN to its inaugural list of America's Most Trustworthy Companies. As the only building products company on the list, it is a true testament to the values-driven culture at JELD-WEN and the importance we place on building trust with all stakeholders. Please turn to page eight. I am pleased to welcome our new Executive Vice President and CFO, Julie Albrecht, whose appointment we announced in June. Julie is a seasoned finance executive who most recently served as CFO of Sonoco, one of the largest global sustainable packaging companies. Julie's broad financial acumen, proven leadership, and expertise in driving improvement in financial results and processes make her an ideal fit for our organization. Julie has been actively engaged with our team and the board of directors in preparation for our earnings release but is not on today's call due to a personal obligation this week. I'm excited for you to get to know Julie over the coming weeks and months. I'll now hand it over to David for a discussion of second quarter financial performance. Thank you, Gary, and good morning, everyone. I'll begin with a review of our consolidated results for the second quarter. Please turn to page 10. In the second quarter, we generated net revenue of $1.3 billion, an increase of 6.8%, primarily driven by 11% core revenue growth. The increase in core revenue was due to a 12% positive price realization and 1% volume mix headwind. Second quarter adjusted EBITDA decreased 15.1% to $125.8 million. Adjusted EBITDA margin decreased 240- basis points with cost inflation from raw material, freight, labor, and energy negatively impacting margins by approximately 380- basis points, partially offset by positive productivity. Earnings per share and adjusted EPS were $0.52 and $0.57, respectively, compared to EPS and adjusted EPS of $0.60 and $0.59 a year ago. On slide 11, you'll see a detailed breakdown of key drivers of revenue growth in the second quarter. Once again, price realization was strongest in North America at 14%, followed by Europe at 11%, while Australasia increased 8%, an acceleration compared to the first quarter. As Gary mentioned previously, we took additional price measures in each of our segments that will be fully realized during the third quarter. Volume mix decreased 1%. North America volume mix was flat in second quarter, while Europe and Australasia decreased 2% and 4%, respectively. Please turn to page 12, which shows the substantial raw material and freight inflation we faced over the past four quarters and the price increases we've implemented to help offset the impacts. Material and freight inflation was again greater than expected, driven primarily by metals, millwork, and logs and lumber. Delayed price implementation within the retail channel impacted our ability to cover all these costs in the second quarter. However, price increases are now fully implemented and will be reflected in third quarter results. As a result, we expect price cost to become a tailwind as we move throughout the year. Moving to page 13, you'll see our segment highlights for the second quarter. Net revenue in North America increased 13.4%, driven by strong price realization, while volume mix was flat compared to prior year. Order rates and backlog built throughout the quarter, with backlogs at quarter end reaching their highest level of the year and approximately 50% higher than the same period last year. Adjusted EBITDA margin in North America decreased 450- basis points to 11.1% due to higher costs for raw materials, freight, and labor, which accounted for the entire margin decrease year-over-year. Continued growth initiatives were funded by positive productivity and other austerity measures. Europe core revenue increased 9%, but declined 2.8% on a reported basis due to the stronger US dollar. Favorable pricing, aided by additional price actions taken in the quarter, drove core revenue growth, which was partially offset by negative contribution from volume mix. We experienced a further softening within residential new construction and R&R activity, particularly in Northern Europe, driven primarily by the impact of significant inflation on consumer demand and from general economic uncertainty, largely due to the conflict in Ukraine. Europe Adjusted EBITDA margin decreased 550- basis points to 5.9%. Price improvement year-over-year was insufficient to cover cost inflation, including raw materials, freight, labor, and energy, while profitability was also impacted by the deleveraging impact of lower volume mix, partially offset by productivity savings. Australasia core revenue increased 4% but declined 2.6% on a reported basis due to foreign exchange. Price contribution increased meaningfully both year-over-year and sequentially as we implemented additional actions to mitigate the impact of inflation. Orders in backlog remain healthy, reflecting solid demand for new housing, our strong market position and strategic focus on expanding our channel presence within the R&R market. However, builder labor shortages Gary alluded to earlier have impacted volume and mix. Australasia Adjusted EBITDA margin decreased 100- basis points in the second quarter to 10.5%, primarily due to the deleverage impact of lower volumes mix, partially offset by strong price realization and positive productivity. Please turn to page 14. Operating cash flow used during the first half was $165.7 million, compared to operating cash flow from operations of $40.7 million during the same period a year ago. We generated positive operating cash flow during the second quarter, but less than seasonality typically indicates. We remain in a net cash use position due to significantly higher working capital balances, primarily from the impact of inflation on the balance sheet and lower earnings. We expect improved cash flow conversion during the second half of the year as price cost improves and inventory investments convert to revenue and ultimately to cash. Our balance sheet and liquidity remain in a solid position. We ended the quarter with total cash and liquidity of $272.5 million and $550.8 million respectively. Net debt leverage increased to 3.8x from 3.5x last quarter and 2.8x at year-end. This was primarily due to the temporary impact of inflation on our cash flow and from repurchasing $64.3 million of our shares, or about 4% of the total shares outstanding during the second quarter, and $105.6 million or 6% of our shares outstanding during the first half. In July, we ceased repurchasing shares under the $400 million plan approved by the board of directors in July of last year. This morning announced our board approved a new $200 million open-ended share repurchase plan that gives us continued flexibility with our capital allocation actions. We will take a disciplined approach to repurchasing shares, keeping in mind market conditions, liquidity and future free cash flow generation, financial leverage and returns on alternative uses of cash. Ultimately, we remain focused on investing in our business and reducing net financial leverage towards our stated goal of 2x to 2.5x Adjusted EBITDA. We expect to make progress on our financial leverage targets as we drive improved growth, margin expansion and cash conversion. We will continue deploying our cash in a disciplined, returns-focused manner and compounding the returns on that cash over time. With that, I'd like to turn it back to Gary for his closing remarks. Thank you, David. Before I cover the market outlook, I would like to provide an update on the divestiture process for our wood fiber building products business in Towanda, Pennsylvania. Last year, we decided that pursuing a divestiture was in the best interest of JELD-WEN and our shareholders. We have and will continue to cooperate with the court and the special master and his advisors to carry out an orderly sale of Towanda. Unlike a typical divestiture, we are in a legal process that has not concluded and is dictated by the court. In the meantime, Towanda is operating business as usual. I'm very proud of our fiber products team for putting customers first and operating the business. As we shared previously, we are fully prepared to meet our own door skin needs from other facilities when the divestiture is complete. Please turn to page 16. In North America, heightened mortgage rates and increased economic uncertainty are likely to cause a continued slowdown in both residential new construction and repair and remodel activity in the near term. However, we expect the R&R market to remain more resilient over the longer term given the level of homeowner equity accumulation, age of the existing housing stock, and homeowners increased focus on their homes. We anticipate continued solid demand within multifamily to provide some offset over the near term. In Europe, high inflation and economic uncertainty stemming largely from the war in Ukraine is impacting residential new construction and R&R activity while commercial project work remains steady. Over the near term, the high degree of uncertainty is likely to cause a further slowing of activity. Like North America, we expect an underbuilt market and aging housing stock to drive increasing activity over the intermediate and longer term. In Australasia, demand for new residential homes and R&R activity is expected to remain strong into 2023 moderated somewhat by builder labor challenges and extended build cycles that continue to impact that market. Please turn to page 17. While we see a temporary slowing of the market, we do continue to be encouraged by consumers' desire for homeownership and their willingness to invest in their homes. We recently commissioned an independent study of US homeowners and found that roughly 40% of them intend to spend a significant portion of discretionary dollars on home improvements and renovations. This is even higher among younger US consumers who cited home improvement as a top priority for their disposable income. Of those who plan to undertake a home improvement project, about half said they plan to install new windows or exterior doors in the next six months. These dynamics are precisely why we focus our products on two distinct applications, the traditional home building channel and the R&R business. We've always said that we are positioning JELD-WEN to be successful in any environment, and we feel confident that the breadth of our offerings, along with significant execution improvements, will allow us to capitalize on market opportunities. As I said earlier, we know we have the right strategy. Long-term macroeconomic fundamentals remain strong, and our productivity initiatives are yielding benefits. We must execute better and consistently deliver on our promises. The significant actions we have already taken to reduce costs, plus those we are working on now to further impact both the top and bottom lines, will help mitigate the earnings headwinds of the current operating environment. With that, we will now take your questions. At this time, I would like to remind everyone, in order to ask a question, simply press star then the number one on your telephone keypad. Your first question is from the line of John Lovallo with UBS. Please go ahead. Good morning, guys, and thank you for taking my questions. The first one is, you know, JEM has been in the process now for several years. Is there anything different in the strategy that you implemented, excuse me, in second quarter that could help execution become more consistent, or is it sort of just more of the same blocking and tackling? Good morning, John. Thanks for the question. Yeah, we've been deploying JEM now for several years. We've got a number of model value streams that are definitely showing outsized performance compared to places where we're not quite as far along. One of the things with JEM is continuing to accelerate our deployment across the entire enterprise. Using the tools definitely makes a difference in how we perform. Because of JEM, we've been able to increase capacity and throughput at certain sites, those model sites, which has allowed us to accelerate our rationalization and modernization programs, taking older legacy plants offline and reducing costs, you know, reducing our core costs by taking those factories offline and shutting down that capacity in exchange for lower costs, more productive capacity elsewhere. Without JEM, I don't think we would be able to do that as quickly. Through the second quarter and into the second half, we're actually accelerating some of that work. We previously announced a couple of closures, that JEM really allowed us to do that. The net result is better throughput, better cost structure in fewer facilities, which JEM is really providing us that opportunity to do. Okay, that's helpful. You know, are you concerned at all that industry pricing discipline, maybe especially on the interior doors, could fade here as volume moderates? It's been a number of years to get price to match value in that marketplace. We clearly are watching that. A lot of what we're seeing is, you know, certainly we saw softness in the retail side. You know, pricing still continues to hold both there and in the builder channel. Our backlogs are really strong in the traditional and builder channel, and a lot of that price is already built into that backlog. We would expect to see that for the remainder of the year. Your next question is from the line of Matthew Bouley with Barclays. Please go ahead. Hey. Good morning, everyone. Thank you for taking the questions. I just wanted to ask about the assumptions around the revenue guide, that you said you expect volume mix to be flat to slightly down for the year, which, you know, I think that assumes trends are relatively consistent with the first half of the year. You know, I know the comps, you know, may be eased somewhat, but at the same time, you know, as you mentioned, you've clearly got changes in the market. I'm wondering if you could provide a little more color around that outlook in the second half, sort of your confidence in continuing it at sort of these relatively consistent trends. You know, maybe any detail around June or July would be helpful there and sort of views on customer inventory. I know there's a lot in there, but any color on the volume outlook. Thank you. Well, certainly, customer inventory, particularly in the traditional channel, has been adjusting a bit. But the good news for us is that we've got, you know, pretty significant backlogs, which helps us gauge in a pretty accurate way where we think volumes are gonna land in the next 90 days or so. We're looking at that and feel pretty comfortable about that, along with, you know, some of the consistency that we're seeing from the builder channels. With all of that in place, you know, I think we're in a reasonably good spot, particularly as we lap the third quarter from last year, which was a fairly weak quarter for us. Got it. Okay. Understood. That's helpful. Secondly on the cost savings, you know, presumably some of these savings, you know, might be permanent, I guess, given the closures and exit. I don't wanna put words into your mouth. I guess I'm curious if you could, you know, number one, maybe quantify the savings, and number two, kind of speak about, you know, what might be permanent, what could be temporary, and if there's opportunity to even, you know, push harder, be more aggressive on some of these cost savings if the market ends up weakening further here. Thank you. Yeah, sure, Matt. We've taken some permanent actions in plant closures that we previously announced in really in all three segments in the second quarter. We're continuing, as I said earlier, to look at accelerating those rationalization actions with additional permanent cost out where we can. A lot of that based on the fact that we've been able to increase our throughput and our capacity in other plants where we've deployed JEM and are seeing great results and expect that to continue. In addition to that, we've taken swift action on other costs. David referred to them as austerity programs. You know, all the normal types of costs that we would take out, including you know. You know, through and including some personnel, but also, you know, other costs that for the short term are discretionary. We have more in line that we are deploying in the third quarter and second half, and we will continue to do that, as we're capable of doing that. It's a matter of just time and resource to get that done. A lot of the initiatives that we've put into place from a cost standpoint, we put into place coming out of the first quarter and began to gain some momentum through the second quarter. Particularly the permanent initiatives will start to gain a bit of steam as we head through the third and the fourth quarter. Your next question is from the line of Michael Rehaut with JP Morgan. Please go ahead. Thanks. Good morning, everyone. Thanks for taking my questions. First, I just wanted to get a sense, and apologies if I missed it before. You know, you detailed several actions earlier, driven by JEM, around some, you know, a couple of plant closures and, you know, actions in the UK that I believe you said occurred in the second quarter, and you'll see the full run rate of those savings in the third quarter. I was hoping just to get a rough sense of what those dollar savings were, should we expect, and, on an annualized basis, and if you expect to achieve the full run rate of that, for the entirety of third quarter or by third quarter end. I think what we'll see with regard to that is, some of the plant closures, for instance, Melton, we'll start to see towards the end of third quarter when we have final closure. Some of the other plant adjustments that we've made, we'll see at the beginning or already seeing the benefits at the beginning of second quarter. For sure, by the time we get into fourth quarter, we'll see full run rate against all of those initiatives. Could you give us a sense of what the dollar savings would be from those actions? The EBITDA. I would say in total, the kind of sum total of the initiatives that we have put into place is in the neighborhood of $75 million on an annualized basis. We're actually in second quarter. Yeah, sorry about that. On an annualized basis, we'll start to see full run rate against that again halfway through the third quarter and into the fourth quarter. Great. Thank you. You know, on price cost, also just wanted to get a sense. The slide that you posted was very helpful, kind of detailing price against cost, earlier in the presentation. It does show, you know, kind of a rough offset on a dollar basis, but it would appear not on a margin basis. So, when you think about, you'd mentioned that price cost becoming a tailwind in third quarter and fourth quarter. Just wanted to clarify that you expect that tailwind to be on a margin basis, and if so, you know, just confirming for both quarters as well as if you have any sense of the degree of magnitude, that would be helpful as well. With regard to the margin impact, kind of that price cost, and you've got it, tyranny of the math there. You get, you know, all of the revenue in and offset 100% by inflation, and that's had about a 100-ish- basis point impact on margins for us overall. We'll see that reasonably consistent as we get into the third quarter and the fourth quarter, except that that price cost dynamic is much closer in the third quarter and the fourth quarter and will help us kind of with a, you know, 100-ish- basis point improvement in sequential performance from the second half versus the first half. A little bit of both. We'll still see the depression from the significant impact of that pricing substantially offset by the inflation, although the relationship in that pricing and inflation will drive some benefit in the second half versus the first half. Your next question is from the line of Stanley Elliott with Stifel. Please go ahead. Hey, good morning, everyone. Thank you all for taking the question. Could you all talk a little bit about how you're thinking about the European exposed manufacturing, you know, with concerns over energy, utilities over there? What sort of impact do you see? Also, you know, have you all thought or have they told you all if you will be, you know, quote, "essential manufacturing"? And just trying to get a sense for any sort of disruptions that we potentially could see. As we went through COVID, we were considered essential manufacturing. I wouldn't see any reason why, under an energy supply challenge, we wouldn't be considered essential manufacturing. From that standpoint, I feel reasonably comfortable. Our European leadership tells us that he's reasonably comfortable with kind of what's happening from an energy reserve standpoint within Europe. To that end, I think we'll be in reasonably good position to kind of buffer for the cost of that energy over the foreseeable future. We've been able to take price in certain markets. We also have some strength in certain markets as well, where we continue to see growth, we continue to see strong markets. France, Central Europe, for example, continue to be strong in contributing in the region. Obviously, we have to offset those utility costs and then inflation, and we'll continue to monitor that. Just like we mentioned earlier, you know, our discussion of rationalization and modernization, the deployment of JEM, et cetera, hits Europe just like it would anywhere else in the network. Secondly, you know, you pushed out some capital projects. I mean, I understand the markets are slowing, but, you know, any sense or kind of flavor on what's getting pushed out, maybe even regionally? Just trying to look at that versus, you know, all the implementation that you're still working on with some of the JEM initiatives. Yeah. I think it's not that so much that things are getting pushed out. I think it's really just what our, you know, our ability and capability has been on an ongoing basis. You know, a lot of the JEM projects, particularly in more mature JEM-deployed facilities, don't cost us a lot. It's kind of a, you know, one of the benefits of doing JEM is, at some point, you get this virtuous cycle of continuous improvement without, you know, without as much investment in capital. Obviously, we're not skimping on anything that we've talked about in terms of growth. We continue to invest in our new products and new category growth that we've been talking about. We've talked about that, a lot of that being beneficial here in the second half as well, and that continues to be true. Really it's more just about where we are on a year-to-date run rate on projects and the projects that are before us and the ability to pull those off in the remainder of the year. I really wouldn't point to anything in particular that you know, that's a slowdown or a push out of any of our growth strategies that we've already talked about. Your next question is from the line of Deepa Raghavan with Wells Fargo Securities. Please go ahead. Hi, good morning. Thanks for taking my questions. Can you talk about your backlogs? I'm looking specifically at any potential risk of cancellation given that price increases are ongoing. I'm assuming you'd have some escalation clauses there, but also the demand environment is softening at the same time. Relatedly, did I hear you say backlogs are up 50% year-over-year? We have backlogs up 50% in the traditional channels in North America. Deepa, what we saw is that we've seen some slowdown in the retail channels. You know, sometimes that's a little bit of an overreaction in the beginning and then comes back later. As you know, R&R markets, which tend to be served through retail, tend to be more resilient, even in slowdowns. We'll be watching that one. As far as the traditional and builder channel, we actually saw, you know, pretty steady order flows through the quarter. That's really where our backlog exists. We see that, you know, pretty well. That's what's gonna carry us, you know, into the second half. We've got those backlogs there. We've really seen no order cancellations, you know, due to pricing. As our lead times have really come down to back to normal, quite frankly, you know, we're seeing those shipments happen. Okay, thanks. You mentioned investing in European projects, products even now, with a focus on increasing profitability. Can you talk about if your strategy has changed to focus on the lower end of the chain, given that we may be going into a slowdown and some of the consumers are probably trading down at this point in time? How are you thinking about your investments, your R&D, your new product innovation, et cetera, at this time? Well, we continue to. You know, first of all, we've talked about, you know, the second half being the beginning of the payout of some of the innovation and new products that we've put out there. You know, first of all, on capacity expansion in our VPI multifamily business, that continues to go very, very well. We've opened our Statesville, North Carolina plant to serve the East Coast customers, nationalizing that product line. We've had great reception to that, and we're continuing to add capacity in Statesville to meet what is a strong backlog and continuing order demand. We expect multifamily to continue to be strong for a while. Likewise, we started commercially shipping our AuraLine composite window product in the second quarter. July orders very strong for that product and ramping. We will continue. You know, it's a brand new product category for us and one that's really a step-up product. So, we think that that's gonna continue to be strong, and we're seeing that in the order take-up that we're seeing and very excited about that. Likewise, our exterior fiberglass product, while maybe a little bit more geared towards R&R, we're seeing that capacity expansion being utilized as well, with continued growth that we've been talking about for the last several quarters. All of those are margin accretive to our lineup and in growth areas that we think will continue even through a slowdown. They're not necessarily a big box retail focused in their positioning. That being said, we've got a full breadth of products across the range, and we'll continue to monitor where the order flows are. Right now, our traditional builder channels are pretty strong. Your next question is from the line of Susan Maklari with Goldman Sachs. Please go ahead. Thank you. Good morning, everyone. Morning... [crosstalk] Susan. How are you? Good. Thanks, Gary. My first question is building on the commentary that you just gave in terms of mix. You've been seeing an improvement in the mix over the last couple of quarters. Is it reasonable to assume that the mix is continuing to improve and will continue to come through in the back half? Yeah, there is a continued improvement in mix kind of built into our outlook in the back half, and driven by, you know, we've talked about softness in retail offset by some strength in the traditional channels, and that would naturally mix up. Okay. All right. My second question is, you know, as we do think about the shift that's happening in the underlying macro and obviously your efforts to continue to put pricing through to offset the inflation, are you seeing any changes in the elasticity of of demand across either retail or the wholesale traditional channels and maybe anything geographically too, as you think about North America, the US versus Europe? In the U S, as I mentioned earlier, we saw some retail slowing. You know, again, that's maybe as much around adjusting inventories and order flows in as it is, you know, what's actually happening on the R&R side, on the outsell side. On the builder side, the traditional channel side, we saw pretty steady order demand through the quarter, and we expect that to continue here in North America. In Europe, again, we talked about, you know, some strong markets as well as some markets that have some uncertainty. You know, again, France, Central Europe, very strong, continue strong. The retail markets there are slowing as well, but we, you know, have seen some of our commercial business there fairly steady. In Australasia, really have been on an upswing in terms of order demand. It's as much about, you know, a little bit of different cycle where it's much about builders being able to have enough labor to build the orders that they have. Our backlogs are strong and our order loads are fairly strong there. We expect as they, you know, stabilize out of their COVID absenteeism. They had some flu issues in the quarter as well. We expect that to continue to be a bright spot for us in the next several quarters. Your next question is from the line of Mike Dahl with RBC Capital Markets. Please go ahead. Morning. Thanks for taking my questions. Gary, I wanted to ask one question related to Towanda. I know you're still limited in what you can say, but your comment around, you know, continuing to have sufficient door skin capacity from your other plants. I wanted to get a little more clarity on that 'cause obviously Towanda has been your biggest facility. I think at one point it may have been a third of your facings. So, I know you've had some productivity initiatives at other plants. Maybe how much of the ability to service the lost skin capacity from Towanda is coming from true increases at your other plants versus as you've gotten farther along in this process, having a more solidified plan for potentially a long-term supply agreement with the future owner of Towanda? Well, there's always the possibility of a future supply agreement with a future owner. We don't know who that is or will be at this point, or what the terms of that might be, but that's always a possibility. I will tell you that we've had a lot of time to prepare for this, and we've been preparing ourselves with our other internal plants to be in a position to serve ourselves, our needs, both currently and for any growth that we might see. You know, we feel like we're in pretty good shape to do that. Got it. Okay, thanks. One other, my second one is more of a housekeeping item. There was a $21 million other income line item in the quarter. It looks like that was not backed out of Adjusted EBITDA or income. Can you just give us a little more detail on what that was and whether that's something that we should think about some continued impacts in the second half from? There was a combination of items. We had a real estate sale for some real estate that we had in Mexico, which obviously is non-recurring, but there was actually some favorability on our FX hedging that would reasonably be expected to occur, considering the strength of the dollar and the situation that we're in. Coupled with a few one-time cost adjustments that, you know, we continue to look for opportunities, particularly in the environment that we're in, to execute something similar as we would get into the back half of the year. Your next question is from the line of Josh Chan with Baird. Please go ahead. Hi. Good morning, Gary, David, Chris. Thanks for taking my question. I guess if you look at your new guidance range versus the old guidance range, could you just sort of bucket the various items that change kind of by order of importance? I would expect, you know, you probably have pretty good visibility into pricing, but so was inflation worse, you know, the demand environment and then internal efficiency? Could you just kind of help us, you know, see which... [crosstalk] Yeah. I think the way to look at it is, the majority of the change is really volume related. You know, the rest is a little bit of continued inflation and then some of the costs associated, you know, really the timing of the costs associated with that volume coming out. If you look at, you know, kind of first half, second half, you know, clearly our margin better in the second half than the first half, markedly. You know, that's a benefit of the pricing deployed and the actions that we've taken, you know, already on the cost side. Again, mostly volume, some inflation and some of the costs and inefficiencies that are, you know, related to that volume takedown. All right. Yep. Thanks, Gary. On sort of your macro thoughts in North America with R&R being more resilient and new construction maybe being softer, which makes sense, that's kind of the opposite of what you're seeing in terms of the channels, I guess, with the traditional being stronger. Just could you just kind of reconcile that and how you see the channels kind of playing out as we go forward? I think in the short term, we've seen retail, you know, retail softness earlier this year certainly slow in the second half. You know, we tend to see, you know, a more quicker reaction in the retail. And then it kind of climbs back as, you know, as the inventories and the lead times kind of settle out. We'll probably see that kind of over the midterm and long term where R&R will settle out as being more resilient in a downturn. Right now, you know, we continue to have strong orders and backlogs from our builder channel partners, which tends to be in our traditional channel. Again, some changes there in inventory positions, but most of that is to order. Those backlogs, you know, will continue to carry us, certainly, you know, in the third quarter and through to the end of the year. We'll obviously be monitoring when we see that slowdown of order rates in the builder channel. We certainly have not experienced that yet. Your next question is from the line of Bill Inge with Jefferies. Please go ahead. Hey, guys. This is still Inge. Gary, it sounds like orders have remained pretty steady, which is a little surprising, especially in Europe. Just curious, how much line of sight do you have. You talked about backlogs being pretty extended on the builder side. How extended is that? Just give us some comfort around that, just because I've always thought your business is a little more shorter cycle in nature. Yeah. I think just to clear up a little bit, we've seen. You know, we saw some softness in orders in general in Europe, but you know, we have pockets of strength still in France and in Central Europe. Our commercial orders tend to be pretty steady as well. That's our project business. Where we've seen the weakness has been in retail in Europe and in some of the Northern Europe markets where there's some uncertainty related primarily to Ukraine. In North America, again, we saw pretty steady order loads in our traditional channel, but softness in retail. Orders in Australasia, fairly strong for the builder market and for R&R with, you know, a little bit of choppiness there still as they're coming out of some of the COVID absenteeism and availability of labor primarily for builders to build, the orders that they have. Gotcha. That's helpful, Gary. I mean, certainly inflation is slowing, growth is out of control, but I think, in your prepared remarks you mentioned that some operational challenges not meeting, you know, your intended targets internally. Can you expand on those issues? How much of that is behind you? If we do have, you know, a weaker backdrop, call it in 2023 Are there any obvious, higher cost footprint, you have where you could take out and, you know, see a bigger cost saving coming through, perhaps next year if you needed to? Yeah. I think the real thing there is not operational issues or hiccups in our own operations. We were able to meet demand and, you know, pretty well. Really the difference was inflationary costs that were higher than we expected. You know, that we probably could have performed against better. We've got some pretty active supply chain actions underway, which will help us both on the cost and on the availability side, quite frankly. We're exercising those. As far as rationalization goes of our footprint, we've been working on that for a number of years. In the second quarter, we took some action to take some legacy plants offline. That's permanent cost out really in all three regions. We've got more of that to come. Again, it's really a benefit of the work that we've done by deploying JEM, improving capacity and cost structure in our model plants and being able to take additional plants offline. That's really where we're gonna get the best cost savings, best structural change. I've said all along, I've said this for the last few years, in a downturn, these are the types of activities you would do anyway, and we have the benefit of actually having them teed up and being able to accelerate that program rather than come up with it from scratch. Your next question is from the line of Truman Patterson with Wolfe Research. Please go ahead. Hey, good morning, guys. Thanks for fitting me in here. Just wanted to follow up on one of John's questions. In North America, I think you all had some pretty robust pricing effective in June. I'm just trying to understand if the expected realization of that price hike, given some of the retail softness you all mentioned, you know, are you still expecting it to be as effective as maybe last year's announcements? Or are we starting to see pricing power wane a little bit? I think we'll see. Well, the pricing that's out and deployed is what we'll be seeing in the second, you know, benefit of in the second half. That's already in, you know, there's no additional pricing that we're expecting in the second half guide at this point. It's all been deployed, and that's what we expect. You know, obviously there's, you know, it's a matter of what the volume is and the amount of the price, but that's built into that guide. Okay. [crosstalk] We... [crosstalk] Thanks for that then. We've accounted for a kind of a reasonable level of competitiveness in terms of the impact on our pricing in the second half. To Gary's point is the outlook and the guide that we've given to all of you at this particular point in time assumes the increases that we have in place, right, see their way through the back half of the year. Okay. Free cash flow in the first half, I think was about -$200 million. I'm just hoping you all, given the new updated guidance, if you all can give an update of where that might, you know, end for the full year. I'm really thinking, is there any chance to, you know, maybe work down the inventory or net working capital levels? If I heard you correctly in the prepared remarks, it sounds like, you know, perhaps near to intermediate term, share repurchase might be put on hold, and you all will be focused on leverage going forward. Thank you for asking and answering my question. Yes, the working capital is a significant focus. There is opportunity, the way I see it, in our working capital for about half a turn, about $200 million. Indeed, we'll continue to be opportunistic from a share repurchase standpoint. At the current time, we have a really significant focus on improving the overall leverage. That's a big focus for us to get back down to kind of that targeted leverage through the back half of the year and into 2023. Today's final question's from the line of Steven Ramsey with Thompson Research Group. Please go ahead. Hi, good morning. Wanted to think about Australia RNR market push. Can you maybe share where you are on this journey, where you are now versus one to two years ago? As you scale up the RNR business, how does this impact margins for the segment now and in the future? Thanks for the question. You know, for those that are not familiar, our Australasian business had been primarily focused towards new construction, home new construction in Australia. One of our strategies was to improve our penetration into the repair and remodel, which is a natural extension. If we're in the new build, we should be able to do that. We've made some investments over the last several years in showrooms and capabilities within the RNR channel, and we've seen significant improvement in our mix towards RNR. Just like in our other markets, you know, it's margin accretive. We expect as this cycle continues in Australia to grow, that our growth in RNR will expand. We've definitely made some improvements there, and we'll continue to report out on the mix change, as we go forward as the cycle improves. This does conclude the Q&A session of today's call. I will now turn the call to Gary Michel for closing remarks. Again, thank you for joining us this morning and for all your questions. We look forward to sharing our progress on the third quarter and the second half as our costs and commercial actions yield results. Our strategy, long-term macro fundamentals, and our rationalization initiatives are yielding benefits. Our execution against this backdrop will deliver a stronger second half. Thank you again for your interest in JELD-WEN. Look forward to talking to you all soon. Ladies and gentlemen, this does conclude the JELD-WEN Holding, Inc.'s Second Quarter 2022 Earnings Conference Call. Thank you for participating. You may now disconnect.