Aug 5, 2026 earnings call — Australasia joint venture closing and company transformation
Closed Australasia joint venture and received $181 million in cash.
Revenue $0.5B (est $0.5B) · EPS $1.51 (est $1.34) · Next-quarter revenue outlook $1.8B
Key quotes
"At closing, we received $181 million in cash, a $49 million note receivable and a 49% equity interest."
"We continue to expect revenue of $1.8 billion for fiscal 2026 on a continuing operations basis and adjusted EBITDA of $458 million, which excludes certain charges that affect comparability."
"During the third quarter, we repurchased $53 million of our stock or 626,000 shares at an average price of $85 per share."
Analyst Q&A 7
competitor supply issues and share
Q (Timothy Wojs · Baird): Is the competitor's manufacturing/shipping trouble showing up in the market? Is that creating a share opportunity for you?
A: Management said they can meet any extra demand and are performing well with their dealers and customers. They also said door volume fell slightly for the quarter driven by residential, but fan volume offset that so commercial volume was flat.
"So door volume for the quarter was down slightly, driven by residential, and this was more than offset by the fan volume, leaving our commercial volume flat." — Brian Harris (CFO)
residential growth and commercial replacement cycles
Q (Lee Jagoda · CJS): What growth actions can you take on the residential side while housing is weak? How does the commercial replacement cycle compare to residential and where are you in that cycle?
A: They said they keep launching new, well-received products and are ready if housing improves. On commercial replacement, they said the cycle is shorter — about 7 years depending on product and location — and lower new construction raises replacement and refurbishment activity.
"So we deem it as approximately 7 years depending on the product and location it's installed." — Brian Harris (CFO)
pricing versus product composition
Q (Collin Verron · Deutsche Bank): Please split the 6% price/mix between price and product mix and how to think about those going forward. Also, what is your view on COGS inflation into the September quarter and FY27 start?
A: They said price and product mix were about equal this quarter and a price increase was taken during the quarter that will flow through as backlog clears. On costs, they said the price increase offsets raw material, labor, energy, distribution and logistics inflation and that pricing should keep margins at 25% plus.
"So for the quarter, price and mix were approximately equal." — Brian Harris (CFO)
timing of price-cost catch-up and margins
Q (Trey Grooms · Stephens): Will the price/cost catch-up mostly occur in 4Q or spill into FY27? Over the longer term, what incremental margins and free cash flow should we expect as demand improves?
A: They said most catch-up should occur in 4Q and they feel the price increase is appropriate, with further guidance in November. They said the company has modest leverage today and significant operating leverage, so incremental volume should drive materially higher free cash flow.
"We have modest leverage on the company today, and we have significant operating leverage in the businesses." — Ronald Kramer (CEO·CHAIR)
seasonal trend and corporate overhead
Q (Sam Darkatsh · Raymond James): How did trends evolve from April to June and how is July tracking? Also, after AMES, what are plans for corporate overhead going forward?
A: They said seasonality improved from spring into summer as expected and they expect Q4 to be their high point, with Q1 generally similar to Q4; July trends continue. On overhead they said they regularly review costs and that their guidance, which assumes EBITDA margin of 25% plus, includes all costs.
"And we expect our fourth quarter to be our high point as it normally is, and Q1 generally is similar to Q4." — Brian Harris (CFO)
commercial product fit and project timing
Q (Julio Romero · Sidoti & Company): How do your doors fit into growth end markets like data centers, semiconductors and pharma? Do you get specified on projects and how far out is that visibility?
A: They said their doors serve those markets for entry, fire protection, partitions and security, including very high-end secure doors used in embassies, and they will keep launching products to meet those needs. They added they are building an architectural sales force, seeing many more inquiries that lead to bids, but the process has longer lead times.
"We have actually very high-end secure doors that can even be used in embassies and places like that, and we continue to innovate and we'll continue to have product launches that meet the needs of both commercial and residential needs." — Brian Harris (CFO)
margin drivers and use of proceeds
Q (Jeffrey Stevenson · Loop Capital): Was the sequential EBITDA margin step-up driven mainly by volume or price? And how will you use cash from recent transactions — buybacks versus debt paydown?
A: They said the margin improvement was driven more by volume and product mix, while price is treated as offsetting cost. For capital use, they said they take a balanced approach between returning capital to shareholders and debt reduction, and that the transaction proceeds were used to pay off their TLB.
"Yes, it was definitely more from volume and mix." — Brian Harris (CFO)