Good day. And thank you for standing by. Welcome to the JELD-WEN Holding, Incorporated Second Quarter 2021 Earnings Call. At t this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Chris Teachout, Director of Investor Relations. Thank you, and 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'll be referencing during this call. I'm joined today by Gary Michel, our CEO; and John Linker, our CFO. 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 Forms 10-K and 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 or statements regarding the expected outcome of pending litigation. 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 this morning. At JELD-WEN, we talk about our aspiration to be a great company. We define a great company as one that people want to buy from, people want to work for, investors want to invest in and that does the right thing for people, our communities and the world. We've been sharing with you our multifaceted growth strategy and how we're executing this disciplined plan to accelerate growth, expand margin and deliver cash, while allocating capital to optimize shareholder returns. What is really special about our progress and what is frankly unique to JELD-WEN is our engaged team of associates and the values based premier performance culture we're creating. The foundation of our strategy deployment is our business operating system, the JELD-WEN Excellence Model, or JEM. JEM is the systematic way that our people work within the company to deliver our strategy globally. This holistic approach is anchored in the very essence of a lean problem-solving culture, the practice of continuous improvement, development and respect for people and the identification and elimination of waste to deliver growth. Please turn to page five. The second quarter exemplifies our accelerating progress, as we yet again delivered strong broad-based financial performance. Consolidated revenue grew 25.5% and core revenue grew 19% in the quarter. Core revenue growth accelerated in each segment, driven by volume from share gains in key products and channels, continued price discipline and favorable mix. Gross profit increased 33.5%, and we delivered 140 basis points of gross margin expansion from strong volume leverage, price that more than offset inflation and productivity. Our global sourcing capabilities and self-sufficiency in key manufacturing processes are competitive advantages that ensure consistent material availability and reliable delivery to our customers. This quarter is…

Thanks, Gary. And good morning, everyone. I will start on page 10. Our second quarter financial results demonstrate the benefits of our multifaceted growth platform and extend our consistent track record of execution with improvements in revenue, earnings and cash flow. This strong performance is a direct result of investing in our strategic growth drivers over multiple quarters and the ongoing momentum of JEM. Second quarter net revenue increased 25.5% to $1.25 billion. The increase was driven primarily by a 19% increase in core revenue, as well as a favorable impact from foreign exchange. Notably, all three segments delivered core revenue growth with broad-based acceleration and volume mix and pricing showing improvements both year-over-year, as well as sequentially. Gross profit margin expanded 140 basis points, benefiting from price realization that more than exceeded material and freight inflation, operating leverage on increased volume, structural cost reduction programs and productivity savings from JEM initiatives. Our commercial teams in each region have done a fantastic job enabling this margin improvement by implementing multiple pricing actions to stay ahead of rapidly accelerating inflation in all of our global markets. Reflecting the strong operational performance, adjusted EBITDA increased 17.9% year-over-year, while adjusted EBITDA margin declined 80 basis points, as the gross margin improvement was offset by higher SG&A from the non-recurrence of our second quarter 2020 COVID-19-related cost savings measures, as well as the margin-dilutive impact of foreign exchange. Core adjusted EBITDA margin, which excludes the impact of recent acquisitions and the impact of foreign exchange, declined only 40 basis points. Page 11 provides detail of our revenue drivers for the second quarter. I'll highlight strong volume mix growth of 13%, driven by North America and Europe, as well as pricing realization of 6%. Both volume mix and pricing improved sequentially from the first quarter.…

Thanks, John. With strong momentum in the first half of the year and favorable market conditions driving demand in every segment, we're increasing our guidance for full year revenue growth. We now expect to deliver full year revenue growth in the range of 12% to 14%, increased from the previous outlook of 8% to 11% due to foreign exchange, recently completed pricing actions and strong volume momentum. We expect that continued operational excellence, pricing discipline and productivity will deliver EBITDA in the range of $510 million to $535 million, an increase from the prior range of $505 million to $535 million. This updated outlook implies a slight reduction in our EBITDA margin rate for the full year due to the impact of updated assumptions for FX, as well as higher revenue from additional pricing, which continues to offset inflation. As you can see, favorable market conditions in each of our segments, in many cases, the best demand conditions we have seen in quite some time, coupled with our consistent execution are demonstrating differentiated financial performance. I am so proud of our associates around the world who are committed to delivering for our customers, our shareholders and each other every single day. This premier performance culture centered on our core values is what separates JELD-WEN and ensures our success. Thank you for joining us today. John and I will now be pleased to take your questions.

Thank you. [Operator Instructions] We have our first question comes from the line of Truman Patterson from Wolfe Research. Your ling is open. Please go ahead.

Hey. Good morning, guys. Thanks for taking my questions. First, just wanted to visit your guidance, on the revenue, you bumped it up, I believe, three to four points, but the top end of your EBITDA guidance was left unchanged. So I was just hoping you can walk us through what the reduced outlook for EBITDA margins are. Is it just simply you know, greater raw material inflation and pressures, you know, versus your prior expectation? Is there anything baked in from the Towanda divestiture? Just really hoping you can help us bridge the gap there because we've heard of some very robust pricing announcements and realization in the US?

Yeah, that's correct. I mean, we'll still see a favorable price, cost in the second half of the year, but we are - we're offsetting inflation that we'll see, material inflation that we'll see in the second half. So we're kind of guiding to that. So you'll see kind of a big bigger portion of that hitting with the pricing actions that we've already taken, price, costs will continue the trend that we've seen as being favorable for us going forward. So that's really the primary difference that you're going to see in the second half.

Okay. Just a quick follow-up on that, I believe you all last quarter said about 2.5 points net of inflationary pressures after some of your productivity initiatives. Could you just update that number?

Yeah, Truman. Material inflation in the second quarter was around 4.5% of revenue. And we're expecting that sort of similar magnitude now for the full year. So that would imply that we're seeing more than 4.5% in the back half of the year on the inflation front.

Okay. Okay, thanks for that. And then a final one for me. Just hoping for some more detail on the Towanda decision. Why did you all decide not to continue with the appeals process? Any time line for a divestiture, you know, EBITDA multiple potential of similar companies. And finally, just want to understand what you all will do with the sales proceeds, primarily share buyback, et cetera?

So I can't give a whole lot of detail on the process at this point. We're working with a Special Master on timing and the actual process. We believe after our review that the time is right in the best interest of our associates, our customers and our stakeholders to get on with divestiture, great commercial markets. As you know, the R&R and new construction markets are very strong. M&A markets are very strong. So we think it's a good setup for us. We're very prepared preserving our customers and preserving shareholder value after any divestitures. So we just seems - it just seems like the right time to move on with us. As far as timing goes, again, we're at the - we'll be working together with the Special Master, and as the process moves forward, we'll update on that. As far as use of cash, we did announce the upside of our share repurchase plan. We do believe that our shares right now are really good investments for us and a good use of our cash. We continue to have great projects, high-returning projects internally that we've been talking about as we deploy JEM and as we improve our capacity. They're starting to show the payoff as we're outperforming on the top line and the bottom line and gaining share. We do have a pipeline of other uses of cash as we look at the M&A markets, and we will certainly be reporting on that going forward.

All right. Thank you, guys for your time.

Thank you, Truman.

Our next question comes from the line of Matthew Bouley from Barclays. Your line is open. Please go ahead.

Good morning. Thanks everyone for taking the questions. Just sticking on the same topic on Towanda. I'm curious if you can comment at all on, I guess, what you've done to position sort of the balance of your capacity, particularly your door skin capacity, just thinking about your vertical integration. And Gary, just mentioned kind of maintaining customer service levels. Just any commentary around how you've positioned the rest of your door skin manufacturing capacity for this divestiture? Thank you.

Yeah. All I would say is we've had time to consider the alternative, and we are in a really good position to take care of our current and our future needs for door skins. And we've talked about in the past, all different types of alternatives. But with JEM activities, we have focused on our door skin plans, as well as on our - all of our plants across the enterprise. So we're in pretty good position there. I don't want to get into too much detail as the process will unfold. There will be - there'll be - I don't know if I call them idiosyncrasies or particulars to any deal, I'm sure, and we'll need to make sure that we adhere to those. But we're in great position. We've been planning for this eventuality and we know that we can take care of not only our current needs, but our growth needs as well.

Understood. Helpful color there. Second one just back on the price cost side. Obviously, the strong pricing environment, and you've got this fairly sizable offset from cost inflation in the near term. My question is kind of what happens on the other side of this, if we eventually see sort of abatement or even deflation in key materials. I'm curious if you could outline which categories you might be able to more so hold on to price versus which categories or channels do you tend to give pricing back in a deflationary environment? Thank you.

Well, we have been obviously very focused on price, cost for a long period of time even pre some of this inflationary market, getting fair value for our products. And by being a good operator and being able to serve our customer needs. As we talked about at Investor Day, providing a differentiated and superior customer experience certainly is valuable within the building products space and it's something that we do get paid for and expect to get paid for as we grow share. So some of the pricing certainly will continue as that value continues to improve. As we look at materials, clearly, we've moved up and been able to stay ahead of that. You know, probably an area of where the fluctuation would be, would be on freight. Freight tends to be more variable and tends to be something that rides with more closely to Ashville costs.

Got it. Well, thanks and congrats on the results.

Thank you.

Our next question comes from the line of Deepa Raghavan from Wells Fargo Securities. Your line is open. Please go ahead.

Hi. Good morning, all. Thanks for taking my question. So some of the builders continue to talk about back audit situations in windows and doors. Can you talk to how the situation has evolved? Has it gotten better or worse? And how are you handling and benefiting from the situation?

Well, thanks for the question. We've - it depends by product, of course, but we've been in pretty good shape with adding capacity and throughput, as we talked about earlier, through our JEM initiatives. We've been very focused on our operations, being able to meet demand. There have been certain constraints here and there along the way. We're not immune to all of those. But in general, we have been offering lead times that are industry-leading. Well, we're probably slightly better on the door side. We're extremely better on the window side. What we've been seeing with all the improvements that we've put in, in windows, in particular, we've actually been seeing industry-leading lead times out of JELD-WEN, and that's been turning into the share gains and builders actually moving their business towards us. So that's been very favorable. On the door side, we've certainly been able to keep up. And I kind of think the bigger constraints in the industry have been other materials and builders availability of labor to complete those starts, and certainly, that will affect us some. But right now, we're seeing share gain in our products pretty much across the board. And like I said, the lead times due to the JEM initiatives that we've been at for several years are paying off.

Great. That's good to hear. A quick clarification question for me on Towanda facility. I don't want to make any assumptions here. So just asking you, you know, as you work through this divestiture, should we plan for any impacts to sales and operations?

I'm not sure if I understand your question 100%, but you asked that we should expect any sales or operations impact from the divestiture of Towanda?

Yeah, as in - yeah, should we plan between now and the time it's actually going to be - yeah, divested should...

No at all. Not at all. We continue to operate the business. It's operating very, very well, and everybody's best interest to remain that way. There's a robust market for exterior trim and trim board, which is the primary business of Towanda, which is our MiraTEC and Extira lines [ph] That continues to be very, very strong. And as we know, the door businesses are very strong as well. So we expect to continue to have a great performance out of Towanda, as we do with the rest of the business.

Great. Thanks. I'll pass it on.

Thank you.

Our next question comes from the line of Philip Ng from Jefferies. Your line is open. Please go ahead.

Hey. Good morning, guys 2Q comps are a little noisy, obviously, from the pandemic. But when we look out to the back half of the year, should we expect normal seasonality in the business? And are you having any meaningful limitations from a supply chain labor standpoint, particularly as you get size of the impact you called out in Australasia would be really helpful?

Yeah. So we're - for the most part, let's start with that. Our plants, for the most part, are operating across - or really all around the world. Australasia is the one area where we've had some recent COVID shutdown. In Australia, itself, there have been occasional outages there, which is an affecting market a little bit. But they're still in the upper tick, coming back off of the, the housing slowdown over the last couple of years. So we've seen some nice growth there. Our Malaysia operations and Indonesia, to a certain extent, have been affected by COVID. Malaysia has actually had some shutdowns. We expect those to start returning back to production here in the next couple of days or weeks. In Indonesia, we've been operating at less than full capacity, but we expect that as well to be returning here probably within the next week or so as we see vaccinations and the light there. All in all, though, occasional issues on material due to weather, COVID, demand-related, some temporary issues of availability or supply - in our supply chain, but nothing that's been affecting customer deliveries, except for maybe window screens. But we've been very active in resourcing and in using our own self-sufficiency, our manufacturing operations to ensure that we don't miss any customer demands or customer needs and we continue to monitor that.

Yeah, that's super helpful, Gary. And when we think about mix, if I heard John on your prepared remarks, it sounds like mix is improving a little bit on the retail side. Can you kind of expand on that? Then when we think about commercial, remind us, is that mix positive, neutral, negative? Any color would be great.

Sure. So in North America, specifically, where I think you first started asking the question about mix, where we did see in the past, a shift towards more stock demand and less special order demand in the retail channel, we're now seeing that balance improving. We're still working with our retail partners to get stock levels up to target levels. So we're certainly not there yet. So demand still remains strong for stock units. But I think what is now inflected is we are seeing a pickup in special order unit. And so in Q2, in North America, mix was a tailwind to both revenue and earnings as that flowed through, as we start to see that pick up. I'd say on the flip side, you mentioned sort of commercial. The only place that that's a bit of a mix shift would be in Europe where seeing a slowdown in some of that major project business that we do which is tied more to hospitality, institutional demand. If we see a ramp in DIY R&R business versus some of that project business, that can be slightly margin dilutive. So we saw a little bit of that in Q2, but nothing material to call out. But I'd say in general, we now feel pretty positive about mix being a tailwind for the full year exiting 2021 and then hopefully seeing that - continuing into 2022.

Got it. That's really helpful. When we think about the divestiture or Towanda, will securing a longer term supply agreement from your potential buyer be something you're looking to accomplish? And then do you have any flexibility in terms of bringing back any mothball capacity on the door skin side? And any color on the timing of that and the process and any capital required? Thanks.

Again, as I said before, we're well positioned to take care of our - of all of our needs currently and for growth in terms of door skins to supplier door businesses. What that looks like going forward, obviously, will depend on the process and who the ultimate buyer is. But we're in a position to do various things, including takeoff from the new buyer utilizing capacity within our business today. And we've talked about the ability to bring on additional capacity in plants that we currently have. Again, we've been improving our cycle time, improving our throughput, using our JEM capabilities in all of our plants, including our door skin plant. So we feel like we're well positioned to take care of those needs for today and into the future. As far as the timing goes, that will be dependent on the Special Master of the process, and we'll report on that as we go forward.

Super helpful, guys. Thanks a lot. And good luck in the quarter. Operator Our next question comes from the line of Sue Maklari from Goldman Sachs. Your line is open. Please go ahead.

Thank you. Good morning, everyone. My first question is around the volumes in North America for the back half. Can you talk about how we should expect those to kind of come together, especially when you think about you obviously had a pretty considerable lift in the second quarter, partially given that comp. But how are you thinking about that part of the results coming together?

I'd say we feel quite positive about our North America core revenue potential in the back half of the year. As you called out, Q2 is a bit of an unusual quarter just given some of the comparability to the prior year. But as we think about core revenue growth in aggregate in the back half, I'd say low teens is a fair assumption in terms of what we think we can deliver on core revenue in North America, which implies both positive volume and positive pricing.

Okay. So should we expect a relative improvement on a sequential basis from where you were in the second quarter?

It's tough to call out, I guess, a sequential improvement because of the comparability of the prior year. But I would just say that we're - we expect good trajectory in volume in North America. Backlogs are healthy. Our book-to-bill is solid. And we've got good visibility to delivering the revenue guidance that we delivered here this morning for the back half of the year based off of the demand we're seeing.

Okay. Okay. That's helpful. My second question is around, you know, you mentioned that you're obviously continuing to move through your JEM process. You've outlined a few more locations where you'll be taking projects on. Can you give us a little bit more detail on that? And how we should be thinking about the timing in some of those coming through?

Yeah. So we're - we've been at - we've been deploying JEM for the last several years across the enterprise. I would tell you that there's probably no place that we have in at least hit with the start up kit, if you will, for JEM deployment, utilizing visual management, your focus on cycle time reduction and on delivering productivity. We have identified a number of sites that we would call model value streams, and we talked about those within our Investor Day. And we have deployed at nine of those sites already and have gone through what we call our value stream analysis process, which starts to set up what the next level of improvements that we can focus on. It's very coordinated in terms of process, the deployment and the dedication of people resources. And we're looking for significant improvements in cycle time, in customer satisfaction, employee engagement, as well as productivity. So these are sites that are kind of in the advanced plan now, and will be leading the enterprise. And then ultimately, we'll take those learnings to additional facilities around the globe. So very excited with kind of this move. It's a bit of a maturity or realization of maturity in our JEM deployment, and we'll deliver some real results going forward. I mean, I think one of the things that you're seeing is the trend on price - on our price, cost is cost part of that, the productivity is being delivered. The ability to increase our cycle time through our facilities is leading to share gains in the marketplace. I think these are all great signs of how JEM is being deployed and what we still have so much more that we can do.

Okay. That's very helpful color. Thank you. And good luck.

Thank you.

Our next question comes from the line of Steven Ramsey. Your line is open. Please go ahead.

Good morning. To circle back on pricing and margins to make sure I understand, do you expect for the company to be price, cost neutral or positive in Q3 and Q4? Or will there be some kind of short term lag in there before you catch up?

No, you have it right. It will be positive in the second half, both quarters.

Okay. Okay. Excellent. And then on Australasia, the COVID headwind there, is volume and mix still a positive driver despite that?

It is such a challenging time to kind of call what the future lockdowns are going to look like. We've got the demand in that market. So as long as our facilities are open, we will drive positive volume and positive pricing in the back half of the year in Australia. We just can't really call out exactly when things are going to reopen and in what cadence given the uncertainty around the pandemic. But we're ready to go and we got the demand as soon as the government let us operate.

Excellent. Okay. And then last one for me on the Towanda exit. Is this overall a positive margin move once this is done? And I guess within that, is there any difference in the external sales and internal impact on margins?

Yeah. We'll probably - we're not going to get too deep into the financials of that. Once the process begins under NDA, potential buyers would be able to see the detailed information. But we believe that the value that we'll get for the - for Towanda at this point will be great for shareholders, it'd be great for the company and we're well prepared.

Great. Thank you.

Our next question comes from the line of Mike Dahl from RBC Capital Markets. Your line is open. Please go ahead.

Hi. It's actually Chris calling on for Mike. Thanks for taking my questions. A couple more on the Towanda plant. I realize you guys don't want to give too much granularity, but I guess just kind of help us understand the potential financial impacts. I mean, is the - I'm assuming the margin profile is kind of above what the - what your current North America margins are, is that true? And is there any way you could help us understand potential implications from the loss of vertical integration of that plant, whether it be higher skin prices or your loss of transfer pricing? Any - I realize you're kind of limited in what you provide but anything would be helpful.

Yeah, I don't think you should be considering that at all in terms of transfer pricing or any of that. I think we've been running the business in a way that, that will be a non-event and not, so well prepared to take care of our needs. We're well prepared to support our growth going forward. So I think you should assume that we're in a good position there. There are - the business that we're selling at Towanda includes - it is primarily the MiraTEC and Extira businesses, which are exterior trim and trim board, which are great businesses. There will be a lot of interest in that business. From a door skin standpoint, we have three other plants operating today and - plus Towanda that supply both internal and external skins. The real thing to consider here is we've laid out our multifaceted growth platform for the company. At our Investor Day, we put out targets for our growth. This does not affect any of that. We are well positioned to meet those targets that we put out there. This was - as the time has come for us to move on the litigation and to move along with the divestiture of Towanda to take any distraction from that news away from really all the good things that we're doing to execute consistently over several years now. And I don't think you need to read any more into it. It's a part of our business, and the door skin part of it is even a smaller part of that.

Understood. That's very helpful. I appreciate that. And just for my follow-up, any initial views on kind of what kind of the entrance of a potential third player in the US door skins market, what that could do to longer term competitive dynamics? How do you plan on that evolving in terms of timing and kind of your position within that?

Listen, I'm not going to pontificate on - because I don't know who will ultimately buy this business. But my guess would be that it's a valuable business. Somebody is going to pay for the value of that business. Door skins today is a relatively constrained capacity. It's something that we're trying to increase capacity on every single day. So my guess is that it will remain that way for some time to come. And if somebody pays for a business, you would expect them to operate it in a disciplined fashion and get a return on their investment. So I'm not really concerned about the effect on the market.

Understood. Appreciate the color.

Our next question comes from the line of Josh Chan from Baird. Your line is open. Please go ahead.

Hi. Good morning, Gary, John. Chris, thanks for taking my questions. Circling back on the price, cost equation, recognizing that you guys expect positive price, cost in both Q3 and Q4. Is there anything to call out in terms of whether one quarter will have a much more narrower gap than another? And then kind of relatedly, anything to call in terms of margin dynamics between Q3 and Q4 in terms of - do you have a tougher expense comp in one quarter and another? Just to see if you have any color on those two quarters there.

Yeah. I'd say the price, cost for the full year, we're in great shape to more than exceed inflation with the pricing we put into place. And we've got - we've done that in the first two quarters of the year, and we expect to do that in the back half of the year. The inflation is definitely weighted towards the back half of the year and even into Q4, there's more inflation. And so I think we got - that will have an impact on any incremental benefit to margin because we need the pricing that we're putting through to offset that incremental inflation. So that's why you're seeing a margin - slight headwind there because the additional revenue is going through without much incremental significant corresponding profitability. So certainly, back half of the year, more inflation, but we're in great shape to deliver pricing to offset that. We've taken multiple rounds of price in really all of our markets that we operate in and trying to stay ahead of this curve as much as we can. I'd say that Q3, and from a margin profile dynamic, Q3 will probably look a little similar to Q2, and the fact that we would expect gross margin expansion, but still lapping some of the SG&A benefits that we had last year. So I think the EBITDA margin in the third quarter would probably be less favorable than in the fourth quarter, just given that dynamic, but we expect gross margin improvement in both Q3 and Q4.

Okay. That's really helpful color, John. Thank you for that. And then I think, Gary, you mentioned that homebuilders might be slowing this pace of starts a bit. I mean, are you seeing that in your order book necessarily? I'm kind of surprised with the extended lead times in the industry, I wouldn't think that even if the starts were to moderate, you would see order book for some time.

No, I actually made that comment exactly, Josh. I said that we're not seeing that. So the - any of the news that we've seen in push-outs of completion, as we believe that's transient in the short term. I mean, we are not seeing that in our demand. We're having some of the - we have some of the best demand we've seen in recent history, and we expect that to continue. I think that's back of the comment I made.

Okay. Okay. That's great. That's great to hear. And then lastly, you mentioned the returns focused capital allocation more than you have in the past, I think. So can we expect share repurchases, for example to become part of capital allocation than it has been in recent years going forward?

I would say that we're certainly focused on that. We recently upsized the - last week, we upsized, the Board upsized our allocation. We've made some bigger purchases this year. We believe that our share price where it currently is, it's a great investment for us. We've delivered a great message around our multifaceted growth platform. We have a successful track record. We've been executing and outperforming. We're gaining share in our markets. And we continue to deploy our internal programs around JEM that will continue to allow us to increase our cycle time, increased productivity and deliver for our customers. We delivered our updated long-term revenue growth and margin targets at our Investor Day, which we believe in fully. And with the strong backdrop of great market conditions and our strong operations, we believe this will continue for some time. So we believe in ourselves, and we'll continue to invest there.

That’s great. Thanks for your time. And congrats on a quarter.

Thank you.

Thanks, Josh.

We have our next question comes from the line of Michael Rehaut from JPMorgan. Your line is open. Please go ahead.

Hi, thanks. Thanks. Good morning, everyone. Thanks for taking my question. First, I just wanted to get a sense from a perhaps a modeling perspective a little bit on the magnitude of incremental pricing in the back half of the year. If you could just remind us, and if there's any sense even on a per region basis, because I believe you've said that you expect incremental pricing to come through across each of the three regions. When the incremental pricing actions are effective and any type of degree of magnitude of those pricing actions on a percentage basis, just to get a sense of how to think about the impact in the back half. Obviously, in the second quarter, you had 8% in North America, 3%, Europe, 1%, Australasia. Just trying to get a sense of directionally where that could go in the back half.

Yeah, Mike, I guess, starting with the revenue guide for the full year. Previously, our revenue guide was 8% to 11% for the full year, and now we've updated that to 12% to 14%. I'd say that our Q2 volumes came through pretty strong relative to the guidance that we gave back in April. And so part of that uplift was some strong revenue performance in Q2. But the vast majority of that increase in the revenue guide is pricing that is needed to offset the inflation that we're feeling. Those are pricing actions that we've already taken that we've communicated to the market. These are not prospective pricing actions that we have yet to take. So this is really just a matter of the timing of what we've announced and letting that flow through. The timing - by product and by region, the timing of implementation does vary. I'd say that Q3, this latest round of pricing is going in during Q3. So by the time you get to Q4, you'd have sort of a full run rate impact of all the compounding effect of the pricing actions that we've taken this year. But that's the biggest driver in the updated revenue guide.

Okay. I appreciate it. It's helpful. And second question, and I apology - my apologies to beat a dead horse, I almost feel like not asking a question about Towanda would break a chain here. But just want to be clear on a couple of items. Number one, Gary, you've kind of said over and over again during the call that you're well positioned to take care of your needs, at least, internally. So I just want to understand, do we take from that, that the roughly $55 million from 2020 of the internal sales that, that will be completely offset by internal productivity improvements? That's number one. And number two, if there's any sense for you to give us on the $150 million of sales to external, any type of sense of what that means from an EBITDA perspective?

I'm actually not going to get into a discussion of the details of the financials for Towanda, but I would tell you that the business itself is primarily the Extira [ph] trim and trim board products from MiraTEC and Extira. So consider those external sales as well. And the - and once we're in the process and talking with potential buyers, they'll understand the magnitude of what's in that business. But yeah, I will reiterate that depending on who the buyer is, of course, and what any relationships might be with us going forward, we are well positioned for the eventualities of serving ourselves and our growth plans within our own internal capabilities.

Thank you.

We have our next question comes from the line of Stanley Elliott from Stifel. Your line is open. Please go ahead.

Good morning, everyone. Thank you all for feeding me in. Can you talk a little bit about some of the new products that you have coming in the market right now? It sounds like that they're getting some pretty good traction with some of the customers. And then secondly, with the supply chain challenges that's impacting everyone, is this changing your thought process on some of the 2022 new products that you have coming to market? Thanks.

Yeah. So we talked a little bit about innovation and product development earlier this year through Investor Day, and we'll continue to talk about new products as we go forward. We've got really quite a lot of exciting things going on. A lot of what we've been doing kind of the last several years, obviously keeping up with styles and looking at trends, but also working on our operations and making sure that we could meet customer demand. We look around the world, we've had a really nice focus on sustainable products, products that meet customer needs on more than one front not only design, but also on kind of the engineered components around security, around noise, on the windows side, around energy efficiency. And we will be addressing and announcing some more interesting products in the window space around composites later this year. So a lot going on, on the innovation front and really in all three of our segments. So pretty exciting times for us. And with where we are operationally and where we are on the commercial side of the business, it's a real good time for us to introduce some new products that will have not only are paying dividends now, but the ones that we will be launching, which will be paying dividends into 2022 and beyond.

Great. Thank you.

And there are no further questions. Gary, you may continue.

Well, thanks, everyone, for joining us today and for your interest in JELD-WEN. We had yet again, another exciting quarter. Great performance by our people. JEM is clearly paying off for us. We keep talking about our multifaceted growth platform and our successful track record of earnings growth and our compounding cash flow. We are very excited about the strategy that we've defined in our business operating system deployment. It's driving transformation within the company and delivering profitable organic growth. Please take a look at our long-term revenue growth margin and cash conversion targets that we set out at Investor Day with the backdrop of great markets and strong operating execution by the company, we're very, very excited about where we are with JELD-WEN, and we look forward to talking to you more about our successes in the coming months. Thank you so much.

This concludes today's conference call. Thank you all for participating. You may now disconnect. Have a great day.