Greetings. Welcome to the Simpson Manufacturing Co., Inc. Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Kim Orlando with Investor Relations. Thank you. You may begin. Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Co., Inc.'s second quarter 2026 earnings conference call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events, or otherwise. On this call, we will also refer to non-GAAP measures such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4:15 P.M. Eastern Time. The earnings press release is available on the investor relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the investor relations page of the company's website. Now, I would like to turn the conference over to Michael Olosky, Simpson's President and Chief Executive Officer. Thanks, Kim. Good afternoon, everyone, and welcome to today's call. With me is Matt Dunn, our Chief Financial Officer. Before turning to the quarter, I'd like to briefly discuss our results in the context of the strategic priorities that continue to guide our decisions and shape the way we manage the business. Across the organization, we remain focused on deepening our position as a partner of choice for our customers, driving innovations in the markets we serve, and strengthening our values-based culture, all while continuing to deliver solid financial results. Despite ongoing market challenges, we are making solid progress advancing our strategic priorities. One of the defining strengths of our culture is the experience and long-term commitment of our people. As we mark our 70th anniversary, that continuity is especially meaningful. It speaks to a company that has evolved and performed through multiple cycles while staying grounded in a consistent set of values. Throughout the year, we'll continue recognizing employees whose careers reflect that legacy. I'd like to take a moment to highlight a few of them. First is [Dane Pickerel], a Project Manager for our Southeast operations, celebrating 40 years with Simpson. Dane began his career as a fabrication operator at our McKinney, Texas, manufacturing facility and has held a variety of roles across manufacturing and operations. Today, he is a trusted Subject Matter Expert, supporting product launches, training programs, and key operational initiatives. His deep experience and institutional knowledge continue to play an important role in ensuring consistency, quality, and execution across our business. Next, I'd like to recognize Gwen Silva, an Inside Sales Representative for our Northwest operations, celebrating 47 years of service. Gwen began her career in 1979 mailing catalogs and has spent nearly five decades serving our customers across inside sales and customer support. Her tenure reflects not only a deep understanding of our business and customers, but also the resilience, commitment, and adaptability that have remained essential as our company has evolved over time. Finally, I'd like to recognize Bill Megahan, our Regional Sales Manager for our National Retail Market Segment in the Northeast, celebrating 42 years with the company. Bill was the first employee hired when our Columbus facility opened and has served in a variety of sales and sales leadership roles throughout his career. He is known not only for his passion for our customers and our people, but also for the countless employees he has encouraged, mentored, and championed along the way. As he prepares for his retirement in October, we recognize the lasting impact he has had on our growth and his steadfast commitment to the values that continue to guide our company today. These are just a few examples of the many employees whose experience, leadership, and commitment continue to shape our performance, and we appreciate the contributions they make every day. Now turning to our financial results. We delivered net sales of $671.1 million, up 6.3% from the prior year quarter. As outlined in our investor presentation, net sales growth was primarily driven by our 2025 pricing actions, which contributed approximately 5% of the increase. Sales mix and foreign exchange each provided an additional 1%. These gains were partially offset by an approximate 1% decline in volume resulting from a softer market. Over the last 12 months, our global volumes declined by 1.6%, 100 basis points below the 0.6% decline in U.S. housing starts. Of note, we exited some business in 2025 which negatively impacted our global year-over-year volume comparisons by 30 basis points on a trailing 12-month basis and 70 basis points in Q2 2026. In North America, net sales were $522.3 million, up 6% from the prior year quarter, including an approximate $30 million benefit from pricing actions. Results across North America varied by market segment and region, consistent with the broader construction trends. We saw encouraging results in key strategic growth areas, underscoring the strength of our business model, innovative solutions, and trusted customer partnerships. The component manufacturer business delivered a solid quarter with volumes mid-single digits year-over-year. Growth was primarily driven by continued new customer wins and capturing a greater share of the total connector spend from existing customers. We secured meaningful conversions during the quarter with encouraging interest in new equipment. Customers continue to prioritize labor efficiency, throughput, and operational visibility, underscoring the value of our integrated platform of software, plates, equipment, and design services. While activity remains uneven in certain markets and customers tied more closely to single-family starts remain cautious, adoption of our solutions continue to advance, further strengthening our position as a strategic partner to component manufacturers. The OEM business delivered another strong quarter with volumes up high- single digits year-over-year. Growth was supported by continued momentum in material handling, anchoring solutions, engineered applications, and expanding customer relationships. We also continued to strengthen our mass timber opportunity pipeline through project specifications, project wins, and target investments and resources that support our long-term growth objectives. While mass timber project timing can vary, customer engagement remains high. Our ability to combine innovative products with deep engineering expertise, testing capabilities, and field support remains a key differentiator as customers pursue increasingly complex, performance-driven projects. Our residential business volumes were down modestly year-over-year, reflecting continued softness in housing activity as a result of persistent affordability pressures. Despite these conditions, we saw areas of relative strength in multi-family, fire rebuild activity, selected regional markets, and new product adoption. Our teams continue to engage customers through builder and distributor training, job site events, product campaigns, and customer conversions while increasing cross-selling across our portfolio of connectors, fasteners, anchoring solutions, and value-added services. Builders remain focused on cost control, cycle time reduction, and inventory management, and we are supporting them with high service levels in the industry's deepest portfolio of engineered solutions. Our national retail business delivered a slight increase in volume year-over-year. The retail environment remains competitive and continues to reflect selective consumer spending, inventory discipline, and mixed point-of-sale trends across the home center channel. Our teams remain focused on in-store execution, merchandising excellence, training, and close collaboration with our retail partners. During the quarter, we advanced several important initiatives, including bay optimization with creative display solutions, continued Outdoor Accents expansion, and a successful fastener merchandising pilot that is expected to expand later this year. While uneven demand remains a near-term headwind, our focus on service, reliability, and retail execution continues to strengthen our customer relationships and support future growth. In our commercial business, second quarter volumes were down modestly year-over-year, reflecting mixed construction activity across segments and geographies. We remain optimistic on our ability to capitalize on opportunities in data centers, education, retrofit work, cold-formed steel, QuickFrames, and anchoring applications. Through specification activity, takeoff services, project coordination, and cross-selling efforts, our teams continue to help customers manage complexity, improve productivity, and execute large projects more effectively. While the broader environment remains uneven and customers remain cautious amid inflation and project timing uncertainty, our technical expertise, code compliance solutions, and field support provide a strong foundation for future growth. In Europe, second quarter net sales totaled $143.5 million, up 7.6% year-over-year, driven by an approximate 3% year-over-year increase in volumes, price increases, and foreign currency translation. On a local currency basis, net sales were up 4.9%. Customer engagement remains healthy, we secured several meaningful wins during the quarter, including multiple mass timber projects. Our consolidated gross margin improved 100 basis points year-over-year to 47.4%, driven by our 2025 price increases, which contributed approximately $34 million in net sales in the quarter. This was partially offset by higher factory and overhead costs as a percentage of net sales, including approximately $1.5 million or 20 basis points of Q2 startup costs from the ongoing ramp-up of our Gallatin facility, which we opened late last year. While startup costs associated with the Gallatin ramp-up continued to impact gross margin in the second quarter, we saw improvement versus the impact in the first quarter. Our operating margin was 25.2%, up 300 basis points year-over-year, which included 100 basis point benefit from a $5.5 million eminent domain settlement. Partially offset by one-time cost in Q2 2026 of a $500,000 related to our strategic cost savings initiatives. Adjusted EBITDA totaled $196.1 million, a 22.6% increase year-over-year. In summary, our second quarter results demonstrated disciplined pricing and effective cost management underpinned by solid execution and a clear commitment to supporting our customers. Our financial ambitions remain, one, driving above-market volume growth relative to U.S. housing starts, two, maintaining an operating income margin at or above 20%, and three, consistently driving EPS growth ahead of net sales growth. As for our outlook on the markets, we continue to expect 2026 U.S. housing starts to be down low single digits compared to 2025. In Europe, we expect flat to modest market growth in 2026. As we look ahead, we remain confident in the long-term potential of our core growth drivers and customer engagement with our value-added offerings remain strong. At the same time, mix headwinds and rising steel costs are creating a more challenging backdrop, particularly as we move through the back half of 2026. As such, we do not expect to maintain the same rate of revenue growth and profitability in the second half of the year, as we will have fully lapped the majority of the pricing actions we implemented last year. We continue to approach pricing with discipline and a long-term perspective. Given ongoing housing affordability concerns, customer response and competitive dynamics have varied across markets and channels. The market for steel remains volatile, with rising steel prices and increasing availability constraints. Maintaining dependable product supply and providing reliable service remain top priorities for Simpson. Our approach remains grounded in value-based pricing, supported by detailed product and market level evaluations that consider input costs, value, mix, margins, and long-term customer relationships. With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail. Good afternoon, everyone. Thank you for joining us on our earnings call today. Mike spoke earlier about our 70th anniversary and some of the employees who have been part of that journey. I'd like to add my thanks to them and to all of our employees for their dedication and commitment. I'd also like to mention that unless otherwise stated, all financial measures discussed in my prepared remarks refer to the second quarter of 2026, and all comparisons will be year-over-year comparisons versus the second quarter of 2025. Turning to our results. Consolidated net sales grew 6.3% to $671.1 million. In the North America segment, net sales rose 6% to $522.3 million, driven by pricing and favorable mix, which were partially offset by lower sales volumes. Europe delivered a 7.6% increase in net sales to $143.5 million, driven by both higher volumes and price increases, as well as the positive effect of approximately $3.7 million in favorable foreign currency translation. Globally, wood construction product sales were up 6.1%, and concrete construction product sales were up 7.4%. Consolidated gross profit increased 8.6% to $318.2 million, resulting in a gross margin of 47.4%, up 100 basis points from last year. In North America, gross margin was 50.2%, up from 49.5% reported in the prior year, reflecting the impact from our 2025 price increases and our prior year strategic cost savings effort. As a reminder, we continue to have start-up costs in our Gallatin facility, which improved, but still represented an approximate 20 basis point headwind to our second quarter gross margin. We expect this will continue to moderate as we progress through the year. In Europe, gross margin increased to 38.2% from 36.2%, primarily driven by better absorption of overhead costs through volume gains, pricing, and our prior footprint optimization work as a percentage of net sales. From a product perspective, our gross margin for wood products was 47.3% compared to 47.1% a year ago. For concrete products, gross margin was 48.3% compared to 45% a year ago, reflecting lower material costs as a percentage of net sales as well as price increases. Turning to expenses. As a percentage of net sales, second quarter operating expenses were 23%, an improvement from 24.2% last year. SG&A headcount was down approximately 8% year-over-year, which reduced personnel-related costs. In total, operating expenses increased 1% to $154.4 million, impacted by an increase of approximately $3 million from our non-qualified deferred compensation program, driven by the quarter-ending stock price. Incentive-based compensation also drove an approximate $2 million increase in operating expenses in the quarter. To further detail our SG&A, our research and development and engineering expenses decreased by 13.3%, or $2.8 million- $18 million. Approximately $700,000 of patent filing related costs were reclassified to G&A. The decrease was also driven by lower headcount, reduced professional fees, as well as cost reductions from optimizing our footprint initiatives. Selling expenses were down 6.4% to $52.8 million as a result of reduced travel and entertainment expenses and lower advertising expenses. On a segment basis, selling expenses in North America were down 10%, and in Europe they were up 4.2%. General and administrative expenses increased by 10.5% to $83.6 million, primarily driven by a $3 million increase in our non-qualified deferred compensation program, reflecting the impact of quarter and stock price, as well as a $2 million increase in incentive-based compensation and higher professional fees. As a result, our consolidated income from operations totaled $169.1 million, an increase of 20.6% from $140.2 million. Our consolidated operating income margin was 25.2%, up from 22.2% last year. The increase was partially driven by the previously mentioned $5.5 million gain from an eminent domain settlement and leverage from roughly flat operating expenses versus the prior year. In North America, income from operations increased 15.8% to $158 million due to higher net sales on reduced operating expenses, including lower personnel costs and software licensing fees, as well as a reduction in travel and entertainment spend. Our operating income margin in North America was 30.2% compared to 27.7% last year. In Europe, income from operations increased 25.7% to $19.7 million, primarily due to higher gross profit and continued strong cost control. Our operating income margin in Europe was a record 13.7%, compared to 11.7% last year, another step forward in our progress toward our 15% operating income margin goal while continuing to optimize our European footprint. Our effective tax rate was 25.7%, approximately 10 basis points below the prior year period. Accordingly, net income totaled $127 million, or $3.09 per fully diluted share, compared to $103.5 million, or $2.47 per fully diluted share. Adjusted EBITDA was $196.1 million, an increase of 22.6%, resulting in a margin of 29.2%. Now turning to our balance sheet and liquidity. As of June 30th, 2026, our debt balance was $336.7 million, down $33.8 million from March 31st, 2026, with $555.8 million remaining available on our revolver. Cash and cash equivalents totaled $450.5 million, resulting in a net cash position of $113.8 million. Our inventory position as of June 30th, 2026, was $513.5 million, which was down $80.7 million compared to December 31st, 2025, driven by approximately $46 million in lower raw material inventory levels on hand and a $35 million reduction in finished goods, including $20 million from ongoing inventory optimization initiatives. North America inventory pounds on hand are down 27.4% since December 31st, 2025. We generated strong cash flows from operations of $250.6 million in 2026. Our capital allocation strategy remains focused on supporting growth while delivering meaningful returns to our stockholders. Year- to- date, we invested $33.7 million in capital expenditures, returned $23.9 million in dividends to our stockholders. We purchased $98.7 million of our common stock and repaid $30 million towards the revolver. Subsequent to quarter end, we repurchased 127,132 shares of common stock through July 22nd for a total of $24.5 million. Additionally, on July 23rd, our Board of Directors increased our 2026 share repurchase authorization by $50 million- $200 million, leaving $76.8 million available for repurchases through year-end as of July 23rd. This action reflects our confidence in the long-term prospects of the business and our continued commitment to returning capital to stockholders. Next, I'll turn to our 2026 financial outlook. Based on business trends and conditions as of today, July 27th, 2026, our guidance for the full year ending December 31st, 2026, is as follows. We are narrowing our expected range for consolidated operating margin to 19.7%-20.5%. Additional key assumptions include our outlook for U.S. housing starts to be down in the low- single-digit range, a lower overall gross margin based on rising raw material costs, imposed tariffs, and increased depreciation costs, an expected $2 million-$4 million of footprint optimization costs in Europe, and an expected $10 million-$12 million gain on the sale of vacant land in the back half of 2026. Our effective tax rate is estimated to be in the range of 25%-26%, including both federal and state income tax rates based on current tax laws. Finally, our capital expenditures outlook is now expected to be in the range of $80 million-$90 million, which includes efforts to optimize our footprint to improve operational efficiency. In summary, we are highly focused on the elements we can control, and we executed well, which allowed us to deliver a strong quarter despite ongoing pressures in the broader market. Pricing actions continued to contribute as expected, though we do not anticipate maintaining the same rate of revenue growth through the back half of 2026 as we fully lap last year's increases and navigate mix and steel cost headwinds. Despite these dynamics, we remain focused on disciplined capital deployment and our commitment to returning at least 35% of free cash flow to shareholders. With that, I will now turn the call over to the operator to begin the Q&A session. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions. Our first question is from Trey Grooms with Stephens. Please proceed with your question. Yeah. Hey, Mike and Matt, this is Ethan on for Trey. Thanks for taking the question. I wanted to dive a little bit more into the margin performance in the quarter. Both gross margin and operating expenses outperformed. I know there was a settlement benefit helping some, in addition to lower material costs and expenses, and that was despite some startup costs from the Gallatin facility and higher incentive comp. Just any more detail on what drove the better margin performance in the quarter relative to perhaps your initial expectations would be great? Hey, Ethan, this is Matt. The quarterly operating margin was up 300 basis points. I'd basically categorize that into three buckets. Roughly 100 basis points from the gain on the eminent domain settlement in Texas. Roughly 100 basis points from the gross margin, call it absorption and efficiency and having the better volumes, a little bit better volume, than maybe what we had last quarter and being roughly flat on volume. The last 100 is really leverage on keeping OpEx essentially flat in the quarter and then getting the revenue growth primarily behind the pricing. Those three really drove the 300 basis points. The gross margin, we had some of the strategic cost savings we did last fall were targeted at items that hit COGS, so that helped improve the gross margin a little bit. Just a little bit of a mix help in the quarter as well. No, that's all very helpful. If we could extrapolate that to the second half margins, I think guidance at this point implies maybe a year-over-year decline in the second half. In the prepared remarks, it was clear that there was some mix headwinds in the rising steel costs having an impact and also some D&A. Just any more color here on the second half margins would be great. Thank you. Sure. Yeah. If you look at gross margin year to date, Ethan, we're down about 10 basis points versus last year through the front half, so year- to- date. We said we expect the gross margin to be down slightly for the full year. Fairly consistent with where we were, although Q2 was a little bit better as we talked on gross margin. From an overall standpoint, we are seeing the cost pressures start to go up on steel. The pricing that we took largely was in late Q2 of last year, so we've essentially anniversaried the majority of that. There is still some that was in October last year, and we've taken a little bit more in pricing. Typically Q4 for us is a tougher comparison from a market standpoint, meaning it's lower volume, and so our margins are typically lower in the fourth quarter. Yeah, there definitely is expected to be some lower margins in the back half, and that's really driven by the revenue profile. If you look at where we've been on volume year- to- date, roughly flat, and we get the benefit from pricing and exchange rate, which has provided some leverage. That pricing benefit goes significantly down as you look in the back half from something like five or six points to one point, something like that, which creates more difficulty in growing revenue when it's really based on volume. I think our volume trajectory is going to look similar to what we've seen year to date, but we're going to not have as much revenue growth because the pricing was in the base. Got it. That's all very clear and very helpful. Thanks so much, and I'll pass it on. Thank you. Thank you. Our next question is from Tim Wojs with Baird. Please proceed with your question. Hey, guys. Good afternoon. Nice job. Hello, Tim. Hey, maybe just to follow up on the last question. Has your gross margin guidance changed at all? I think you did kind of expect it to be down slightly. I guess, has anything changed there? Steel's kind of been up all year, so I'm just kind of curious if you had baked that into the prior guidance or if there's kind of an incremental headwind? Yeah. No change in our expectation that gross margin, when you look at the whole year, is going to be down in 2026 versus 2025. Q1 was down a little bit more. Q2 is actually up a little bit, and then we see that pressure in the back half, but that was all baked in before, nothing new there. Tim, if I could just comment real quick on gross margin in general. We're committed to maintaining a good gross margin level that does include pricing, productivity, footprint optimization to try to make sure that we're maintaining our costs and watching the pricing level. That good gross margin enables us to really reinvest back into the business to continue to provide that service and support that our customers are used to from us. Okay. That's helpful. Then, I guess, how would you guys characterize just the kind of volume environment if you think about today versus your back half of last year, early this year? I think it's still pretty tough out there. Has anything gotten worse in the starts environment? Anything gotten better? Or is it bumping along at the same pace? Roughly kind of bumping along the same pace, Tim, is the short answer. When we were coming into 2026, late 2025, based off all the feedback we were getting from the market forecasters that we work with, expecting a flattish to up slightly market in 2026. We did anticipate continued mix headwinds. After the first quarter, we said we expected to be down low- single digits. We continue to think that it's going to be down low- single digits. When you look at the housing starts data, Tim, there is a lot of volatility there, especially on the multifamily part. Single-family starts are forecasted to be down pretty significantly for the year. Multifamily forecasted to be up. Then we also have some mixed headwind that we've talked about in the past. We think Western United States, if you look at it from a trailing 12 months perspective, continues to be down low- to mid- single digits. The South and both of those two regions, we have a good amount of content, flattish. Those are some of the things we're working at. If you look at the translation to our volume, last year volume was down roughly 1%, and year- to- date, our volume's down roughly 1%. Okay. I just want to sneak one more in. Just on Europe, I guess if you round up, you'd technically be at mid-teen, kind of even margins. I guess maybe you could just talk about some of the improvements you've maybe made in the underlying business, and as you think about getting to that kind of margin on a full year basis, any kind of visibility to when you might get there? Yeah. We're very happy with the work that our European team has done, Tim. Over the last couple of years, they've worked hard to make sure they're controlling costs. They've done a lot of work from a footprint optimization perspective. While trying to maintain good cost control, they have been trying to keep some volume growth relative to the market, and the fact that they had 3% volume growth in the second quarter with a record operating margin, we're pretty pleased. The target for those guys is still 15% operating margin. We still think that's a midterm goal, and having a little bit of volume growth will help us get there sooner rather than later. They've still got some work to do, but they've made a lot of progress over the last three years. Okay. Sounds good. Thanks for the time, guys. Good luck. Yeah. Thanks. Thank you. Our next question is from Kurt Yinger with D.A. Davidson. Please proceed with your question. Great. Thanks, and good afternoon, guys. Thanks, Kurt. First off, on North America, I know you had mentioned $30 million pricing benefit. By my math, that would have volumes down less than 1% in the quarter. Did mix play a role as well? Any way we could maybe put kind of a finer point just on the volume figure? For North America volume specifically? Yes, Matt. Yeah. Total company volume in the quarter was down a little less than 1%. I think in our investor deck, we've got down 0.6% for the quarter. European volume was up a little bit, as Mike said, I think 3%, and that's kind of a small, about a quarter of our business. Kind of somewhere around that down 1%. We did divest a couple business or exit a couple businesses last year as part of that strategic cost savings. That cost us about 70 basis points on the whole company on the quarter in terms of year-over-year volume. Much closer to flat, which would be just barely down in North America and then slightly up in Europe. Kurt, if you go by market segment, for our residential business year-to-date, volume growth is down slightly. If you look at our commercial business year-to-date, down low- single digits. Our OEM business continues to have really strong volume growth up low- double digits. Component manufacturing year-to-date, again, really strong growth there, up high- single digits. National retail was positive last quarter, for the year down slightly. We're pleased with the improvement that the national retail team has made over the last quarter. Got it. Okay. That's super helpful. Maybe sticking with component manufacturer volume and the momentum there. You had alluded to demand for equipment, greater wallet share of connectors. How should we think about the overall performance there, relative to maybe the true truss plate business, right? The conversions on the software side. How impactful have those two or three buckets been kind of in that performance? Yes, Kurt, if you look at that component manufacturing business, you're exactly right. It includes equipment. It includes our connectors that sometimes just ride on the truck with the trusses to the job site. It includes truss plate. Truss plates as a whole, that market segment has been one of our fastest-growing market segments over the last three years. We're very pleased with the development of it. If you look at the truss plate in that segment, we haven't released exactly what those numbers are, but that is definitely the fastest-growing component of that business. We continue to make real strong progress from a software perspective. We plan on launching our complete solution, the Cornerstone program, at the BCMC show in the fall. We believe we're on track with that, we continue to get good feedback when we show our customers what we're working on. In between, we continue to pick up new customers along the way. That's good to hear. Going back to the gross margin side, it seemed like it might have exceeded your expectations here in Q2. I understand the full year outlook hasn't changed, thinking about it half vs half, given some of the inflation you talked about, is it fair to say that maybe the back half gross margin expectations have come in a little bit just with the outperformance in the first half? Is it still largely what you thought at the outset of the year? Yeah, Kurt, I still think we're pretty close to what we started at the outset of the year. There's definitely different gross margins by quarter based on seasonality and overall volume. Maybe a little bit better in Q2, as you start to see steel prices ramp up, may have a little bit of impact in the back half of the year. I think still all in all, net net, basically where we expected to be for the year, which is down slightly versus where we ended last year. If you look at year-to-date, we're down 10 basis points, so in that range. Right. Okay. That makes sense. Lastly on the pricing front. It's kind of an evolving discussion given all the variables out there, what would you need to see to maybe look at taking additional pricing actions going into next year? What's most important in that conversation in your mind? Kurt, when we think about pricing, we're taking a very disciplined long-term perspective. We're making sure that we get input and tracking a lot of different factors associated with that, because we recognize that pricing in a slow-growth market with affordability challenges is not something that's easy to do, and it's something that we don't take lightly. At the end of the day, objective for us is to maintain good gross margin. Pricing is a component of that, trying to drive productivity, trying to optimize our footprint and other things that help us maintain that good gross margin, we're also working on. Really the objective of that good gross margin is to enable us to invest back in the business, as I mentioned earlier, to provide that great service and support to our customers. Got it. Okay. Appreciate the color. Thank you. Thank you. Our next question comes from Daniel Moore with CJS Securities. Please proceed with your question. Thanks very much, Mike, Matt. Appreciate all the color. Covered a lot. Certainly on your targeted growth initiatives, including component manufacturing truss, just given some of that momentum, would you expect to get back to sort of outpacing the overall housing market as we get back, look to the balance of this year and certainly into 2027? Dan, as you know, we've had a long history of driving above-market growth, and that is definitely our ambition going forward, and we also remain very confident in our growth initiatives that we think the portfolio of innovation projects we have we're quite pleased with. Then if you go back to those market playbooks that we talked about, we continue to feel really good about the component manufacturing and the OEM business. Those have been two of our growth drivers. We also think getting National Retail business back onto the growth path is important, and we have a lot of programs and new product ideas and packaging and merchandising initiatives that we think can help us do that. Our commercial business has had a little bit of a tough part, but that market segment, when you look at it indexed for the segments that we play in, has also had a pretty tough run at it. We have plans to get that back on place, and we continue to think we can drive good volume growth in our residential business as well. To wrap all that up, Dan, we do believe we can continue to drive above-market growth. I think the benchmark that we're looking at, there's a ton of volatility in it. Just looking at the multifamily story alone, a ton of volatility in how those numbers are coming out. That's certainly playing an impact when we look at how do we benchmark our numbers. The regional mixing continues to be a challenge with the markets that have the most content being some of the slower markets in the U.S. Makes sense and great color. Really strong cash generation quarter. Can you continue to work down inventories? If we hit sort of a base here at or near current levels, particularly given the rising steel and input costs? Yeah, Dan, this is Matt. We're down quite a bit if you look at pounds or pallet locations or however you want to look at it in the warehouse. Obviously, the cost has gone up, which has offset some of that when you look at the dollars. Even on dollars, I think year- to- date, we're down about $85 million in inventory, and I would put that in a couple buckets. The first would be raw material inventory I think that just ebbs and flows based on when we're active in the market purchasing steel, what the market prices look like, how much we want to load up, and what our outlook for prices are. I think that's going to bounce around. I think we've been working through the steel that's in the inventory and kind of looking for the right opportunities to get back into the raw material steel market. That's probably going to bounce back up a little bit when we do buy. The other $35 million or $40 million of inventory that's down, about half of that is structural things we've been doing in terms of productivity and stock level management and safety stocks and tweaking the dials a little bit. I expect us to continue to do that type of work. It's slow and steady. You make changes, you see how it works, and then you make more changes. There have been a couple areas, transparently, where we've been a little bit light on inventory from a customer service and supply standpoint. We got to build those back up a little bit. I think, net, to answer your question, I think the raw materials are going to force it to bounce back up. The places where we're a little light on stock may come back up just a little bit. We're going to continue to work on the structural stuff to take dollars out there. It's hard to predict what's a bottom number, but we're really focused on tweaking the dials where we can on the things we control, and then the raw materials kind of bounce around a bit. Really helpful. Last for me. The tweak in the CapEx guide, is it mainly timing and inflation, or are you seeing more opportunity to put capital to work and, going forward, you've been comfortably above your 50%, or your 35% goal of returning cash to shareholders. Are you seeing either M&A opportunities, or do we expect that to, barring those, comfortably exceed that target? Thanks again for all the color. First, on your CapEx question, we did bump the expected CapEx spend up $5 million on the low and the high end to $80 million-$90 million. That's all included in that guide. The timing of a couple of those projects has shifted a little bit, that's the reason why we bumped that up. In terms of overall capital allocation, we did get approved for an increased share repurchase authorization by the Board, so up to $200 million. In terms of meaningful M&A, there's really not a lot on the near-term horizon, really nothing on the near-term horizon of any size. I think we continue to generate strong cash flow and we're working down inventory, as you said. Paying down debt, we paid down $30 million on the revolver in the second quarter, that certainly leaves us the ability to increase that share repurchase like we did from 150- 200. I think we definitely want to continue to exceed that 35% threshold that's out there, I think our track record kind of shows that we have been. That's perfect. Thanks again. Thank you. Our next question is from Andrew Carter with Stifel. Please proceed with your question. Hey, thank you. Good evening. I wanted to ask, you haven't changed your housing outlook for the year, of course, what happened last year was there was that abrupt kind of cut to production by some of the big home builders on kind of inventory levels. I think as you look at the second half of the year, you have visibility and you're kind of the first one to report. Do you see risk of that this year that could be kind of a meaningful kind of correction in single-family starts for this year? Thanks. Yeah. Andrew, we are obviously tracking that really closely. Again, we basically use Zonda as our main forecasting tool because we can get a regional split, which is important for the way we run the business and how the content is based on there. If you look at their forecast for the year, it's down 4%. If you look at the six or seven other people that we track, you average them all together, the combined forecast is down 2% for the year. If you add that to the fact that the Census Bureau data is up slightly, it definitely says a softer back half to the year, and I think we've already seen that with some of the builders and some of the forecasts they are talking about. At the end of the day, Andrew, we're focused on the things we can control. We still think there's a lot of opportunities to launch new products. We still think there's a lot of opportunity to get more content in a home and continue to work on our merchandising efforts with our national retail customers. We're certainly watching the market, we're trying to figure out how we can drive volume growth following our market and product playbooks. The second question I wanted to ask is, I heard more than once, a competitive market out there, just to kind of square the loop and make sure that you're not indicating any kind of extraordinary competitive activity out there that would cause you to deviate from not getting kind of the full value of your services. Just want to make sure on that call-out? Thanks. That is correct. What we have seen is in the fastener space, we've got a couple of competitors in that area where they don't have differentiated products. They don't have patented products. They aren't investing the time and effort to get all the load rating and the testing. They are leveraging price to some extent in the markets that they play in, they've used that to stop us from getting some new business. It's more of a, we haven't hit on some opportunities that we thought we were going to hit on because the pricing was just a little bit more challenging than we anticipated. We do believe that we got a good playbook in that area. We're going to continue to differentiate the product line. We're going to continue to drive cost out from a manufacturing perspective because we do believe fasteners is a big growth opportunity for us, and we'll work through this current situation with pricing. Final question from me on the component manufacturer side. I know you don't break out the truss plates exactly, has that volume growth kind of been accelerating every quarter as you picked up new business wins and new customers? What kind of step change could you see with the additional software roll-ups in the second half of the year? Thanks. Yeah, Andrew, this is Matt. You're right. It's kind of been accelerating as we have onboarded new customers pretty sequentially each quarter over the last probably eight quarters or so. You see that in the results. As Mike talked about, the truss plate area of that market segment is definitely the fastest-growing. As you look toward later in the year when we're going to be up and running on our next generation cloud-based truss software across all three vectors of the production software, the actual design software, as well as the project management software, I think that's an unlock to be able to onboard more customers. I don't think it's going to be like an immediate, hey, step change, and then Q1 2027, you see a huge change. It's going to be more of the same access to more customers that are willing to commit to Simpson because our software has been upgraded, and they already know the service and the value proposition that we provide. I think it's going to potentially accelerate that and give us access to some larger customers. I don't know that it's an immediate step change. I think if you look at it across multi-year time horizons, definitely pretty significant acceleration. If you're looking for a huge bump in one quarter, probably not going to show up that way. Thanks. Pass it on. Right. This now concludes our question and answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.