Jeld-Wen Holding Inc.
05/05/2026 | Press release | Distributed by Public on 05/05/2026 11:58
Quarterly Report for Quarter Ending March 28, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
This MD&A contains forward-looking statements that involve risks and uncertainties. Refer to "Forward-Looking Statements" section above for a discussion of the uncertainties, risks and assumptions associated with these statements. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto and the other disclosures contained elsewhere in this Form 10-Q, and our audited financial statements and related notes and MD&A included in our Form 10-K. The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those listed under Item 1A - Risk Factors in our Form 10-K and Form 10-Q, and included elsewhere in this Form 10-Q.
This MD&A is a supplement to our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and is provided to enhance your understanding of our results of operations and financial condition. Our discussion of the results of operations is presented in millions throughout MD&A and due to rounding may not sum or calculate precisely to the totals and percentages provided in the tables. Our MD&A is organized as follows:
•Company Overview. This section provides a general description of our Company and reportable segments.
•Results of Operations. This section provides our analysis and outlook for the significant line items on our unaudited condensed consolidated statements of operations, as well as highlights key events or changes since the reporting period that may affect our financial condition, results, or future outlook.
•Segment Results and Non-GAAP Reconciliations. This section provides other information that we deem meaningful to an understanding of our results on both a consolidated basis and a reportable segment basis. It also includes non-GAAP financial measures used by management to assess performance and make decisions regarding the allocation of resources, along with reconciliations to the most directly comparable GAAP measures.
•Liquidity and Capital Resources. This section contains an overview of our financing arrangements and provides an analysis of trends and uncertainties affecting liquidity, cash requirements for our business, and sources and uses of our cash.
•Critical Accounting Policies and Estimates. This section discusses the accounting policies that we consider important to the evaluation and reporting of our financial condition and results of operations, and whose application requires significant judgments or a complex estimation process.
Company Overview
We are a leading global designer, manufacturer, and distributor of high-performance interior and exterior doors, windows, and related building products, serving the new construction and R&R sectors.
We operate manufacturing and distribution facilities in 14 countries, located primarily in North America and Europe. For many product lines, our manufacturing processes are vertically integrated, enhancing our range of capabilities, our ability to innovate, and our quality control as well as providing supply chain, transportation, and working capital savings.
Reportable Segments
Our business is organized in geographic regions to ensure integration across operations serving common end markets and customers. We have two reportable segments: North America and Europe. Refer to Note 12 - Segment Information to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information about our segments.
Results of Operations
The tables in this section summarize key components of our results of operations for the periods indicated, both in U.S. dollars and as a percentage of our net revenues. Certain percentages presented in this section have been rounded to the nearest whole number. Accordingly, totals may not equal the sum of the line items in the tables below.
We present several financial metrics in "Core" terms, such as Core Revenues, which excludes the impact of foreign exchange, acquisitions, and divestitures completed in the last twelve months. We believe Core Revenues assists management, investors, and analysts in understanding the organic performance of our operations.
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Recent Developments
Tariff Refunds
Following recent legal and administrative developments invalidating certain tariffs imposed under the International Emergency Economic Powers Act, U.S. Customs and Border Protection has communicated an implementation process for potential tariff refunds. The Company may be entitled to a refund for tariffs previously paid. However, the timing and ultimate amount of any refund remains subject to legal proceedings, administrative action and other uncertainties, including evolving interpretations and the implementation of new processes. Furthermore, any potential refunds or recoveries may be offset by refunds due to customers for payments made in connection with these tariffs. Accordingly, no amounts related to tariff refunds have been recognized in the accompanying unaudited condensed consolidated financial statements. If received, refunds are expected to be made over multiple payments and could affect the Company's results of operations and cash flows in future periods.
Comparison of the Three Months Ended March 28, 2026 to the Three Months Ended March 29, 2025
| Three Months Ended | |||||||||||||||||||||||
| March 28, 2026 | March 29, 2025 | ||||||||||||||||||||||
| (amounts in thousands) |
% of Net Revenues |
% of Net Revenues |
|||||||||||||||||||||
| Net revenues | $ | 722,125 | 100.0 | % | $ | 776,006 | 100.0 | % | |||||||||||||||
| Cost of sales | 629,411 | 87.2 | % | 663,923 | 85.6 | % | |||||||||||||||||
| Gross margin | 92,714 | 12.8 | % | 112,083 | 14.4 | % | |||||||||||||||||
| Selling, general and administrative | 145,957 | 20.2 | % | 144,767 | 18.7 | % | |||||||||||||||||
| Goodwill impairment | - | - | % | 137,721 | 17.7 | % | |||||||||||||||||
| Restructuring and asset-related charges, net | 1,979 | 0.3 | % | 14,546 | 1.9 | % | |||||||||||||||||
| Operating loss | (55,222) | (7.6) | % | (184,951) | (23.8) | % | |||||||||||||||||
| Interest expense, net | 17,203 | 2.4 | % | 14,918 | 1.9 | % | |||||||||||||||||
| Loss on extinguishment and refinancing of debt | - | - | % | 237 | - | % | |||||||||||||||||
| Other expense (income) | 1,043 | 0.1 | % | (10,586) | (1.4) | % | |||||||||||||||||
| Loss before taxes | (73,468) | (10.2) | % | (189,520) | (24.4) | % | |||||||||||||||||
| Income tax expense | 3,376 | 0.5 | % | 618 | 0.1 | % | |||||||||||||||||
| Net loss | $ | (76,844) | (10.6) | % | $ | (190,138) | (24.5) | % | |||||||||||||||
Consolidated Results
Net Revenues - Net revenues decreased $53.9 million, or 6.9%, to $722.1 million in the three months ended March 28, 2026, from $776.0 million in the three months ended March 29, 2025. The decrease in net revenues was primarily driven by a decrease in Core Revenues of 10% and a decrease in net revenues from the court-ordered divestiture of Towanda of 1%. These were partially offset by a favorable foreign exchange impact of 4%. The decline in Core Revenues was driven by a 10% decrease in volume/mix.
Gross Margin - Gross margin decreased $19.4 million, or 17.3%, to $92.7 million in the three months ended March 28, 2026, from $112.1 million in the three months ended March 29, 2025. Gross margin as a percentage of net revenues was 12.8% in the three months ended March 28, 2026, compared to 14.4% in the three months ended March 29, 2025. The decrease in gross margin percentage was primarily due to negative price/cost and the decremental impact of volume/mix, partially offset by favorable productivity.
SG&A - SG&A increased $1.2 million, or 0.8%, to $146.0 million in the three months ended March 28, 2026, from $144.8 million in the three months ended March 29, 2025. SG&A as a percentage of net revenues was 20.2% in the three months ended March 28, 2026, compared to 18.7% in three months ended March 29, 2025. The increase in SG&A was primarily due to a legal settlement, as discussed in Note 20 - Commitments and Contingencies, partially offset by lower salaries and benefits driven by a reduction in headcount.
Goodwill Impairment - Goodwill impairment charges of $137.7 million in the three months ended March 29, 2025, related to goodwill impairment charges in our North America reporting unit. Refer to Note 6 - Goodwill to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
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Restructuring and Asset-Related Charges, Net - Restructuring and asset-related charges, net decreased $12.6 million, or 86.4% to $2.0 million in the three months ended March 28, 2026, from $14.5 million in the three months ended March 29, 2025. The decrease in restructuring and asset-related charges, net was primarily due to a decrease in charges incurred to close certain manufacturing facilities in our North America and Europe segments and to transform the operating structure of our Europe segment. Refer to Note 16 - Restructuring and Asset-Related Charges, Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
Interest Expense, Net - Interest expense, net, increased $2.3 million, or 15.3% to $17.2 million in the three months ended March 28, 2026, from $14.9 million in the three months ended March 29, 2025. The increase was primarily due to lower interest income resulting from lower invested cash balances.
Loss on Extinguishment and Refinancing of Debt - Loss on extinguishment and refinancing of debt was $0.2 million in the three months ended March 29, 2025. Refer to Note 10 - Long-Term Debt to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
Other Expense (Income) - Other expense was $1.0 million in the three months ended March 28, 2026, compared to other income of $10.6 million in the three months ended March 29, 2025. Refer to Note 17 - Other Expense (Income) to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
Income Tax Expense - Income tax expense was $3.4 million for the three months ended March 28, 2026, compared to $0.6 million for the three months ended March 29, 2025. The effective tax rate for the three months ended March 28, 2026, was (4.6)%. The effective tax rate for the three months ended March 28, 2026, was driven primarily by foreign earnings being taxed at higher rates and discrete tax expense of $0.5 million due to changes in UTPs from ongoing audits. The effective tax rate for the three months ended March 29, 2025, was (0.3)%. The effective tax rate for the three months ended March 29, 2025, was driven primarily by discrete items consisting of a $14.2 million increase to valuation allowances on foreign and state NOL and credit carryforwards, $9.8 million of tax benefit attributable to goodwill impairment, and $8.5 million of tax expense attributable to the court-ordered divestiture of Towanda.
Segment Results and Non-GAAP Reconciliations
We report our segment information in the same way management internally organizes the business in assessing performance and making decisions regarding the allocation of resources in accordance with ASC 280-10 - Segment Reporting. We define Adjusted EBITDA as income (loss), net of tax, adjusted for the following items: income tax expense (benefit); depreciation and amortization; interest expense (income), net; and certain special items consisting of non-recurring net legal and professional expenses and settlements; goodwill impairment; restructuring and asset-related charges, net; M&A related costs, net; net gain on sale of business, property and equipment; loss on extinguishment and refinancing of debt; share-based compensation expense; and other special items. We use Adjusted EBITDA because we believe this measure assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. This non-GAAP financial measure should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP.
We have two reportable segments, organized and managed principally in geographic regions: North America and Europe. We report all other business activities in Corporate and unallocated costs.
Reconciliations of loss, net of tax to Adjusted EBITDA by segment are as follows:
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| Three Months Ended March 28, 2026 | |||||||||||||||||||||||
| (amounts in thousands) | North America | Europe | Corporate and Unallocated Costs | Total Consolidated | |||||||||||||||||||
| Loss, net of tax | $ | (34,986) | $ | (10,086) | $ | (31,772) | $ | (76,844) | |||||||||||||||
| Income tax expense (benefit) | 13,542 | 2,845 | (13,011) | 3,376 | |||||||||||||||||||
| Depreciation and amortization | 18,829 | 8,384 | 2,157 | 29,370 | |||||||||||||||||||
| Interest (income) expense, net | (496) | 760 | 16,939 | 17,203 | |||||||||||||||||||
|
Special items:(1)
|
|||||||||||||||||||||||
| Net legal and professional expenses and settlements | 165 | 1,986 | 10,616 | 12,767 | |||||||||||||||||||
| Restructuring and asset-related charges, net | 792 | 1,154 | 33 | 1,979 | |||||||||||||||||||
| M&A related costs, net | - | - | 7,599 | 7,599 | |||||||||||||||||||
| Share-based compensation expense | 641 | 518 | 2,523 | 3,682 | |||||||||||||||||||
|
Other special items(2)
|
5,132 | 1,515 | 362 | 7,009 | |||||||||||||||||||
| Adjusted EBITDA | $ | 3,619 | $ | 7,076 | $ | (4,554) | $ | 6,141 | |||||||||||||||
(1)Refer to the calculation of Adjusted EBITDA for a discussion of the Special items listed below.
(2)North America other special items include an impairment charge of $3.1 million as a result of reviews performed in connection with our North America equipment capacity optimization.
| Three Months Ended March 29, 2025 | |||||||||||||||||||||||
| (amounts in thousands) | North America | Europe | Corporate and Unallocated Costs | Total Consolidated | |||||||||||||||||||
| Loss, net of tax | $ | (161,242) | $ | (3,453) | $ | (25,443) | $ | (190,138) | |||||||||||||||
| Income tax expense (benefit) | 9,350 | 1,907 | (10,639) | 618 | |||||||||||||||||||
| Depreciation and amortization | 17,325 | 7,565 | 2,405 | 27,295 | |||||||||||||||||||
| Interest (income) expense, net | (641) | 34 | 15,525 | 14,918 | |||||||||||||||||||
|
Special items:(1)
|
|||||||||||||||||||||||
| Net legal and professional expenses and settlements | 711 | 1,015 | 10,156 | 11,882 | |||||||||||||||||||
| Goodwill impairment | 137,721 | - | - | 137,721 | |||||||||||||||||||
| Restructuring and asset-related charges, net | 10,663 | 3,147 | 736 | 14,546 | |||||||||||||||||||
| M&A related costs, net | - | - | (613) | (613) | |||||||||||||||||||
| Net gain on sale of business, property, and equipment | (653) | - | - | (653) | |||||||||||||||||||
| Loss on extinguishment and refinancing of debt | - | - | 237 | 237 | |||||||||||||||||||
| Share-based compensation expense | 531 | 442 | 2,255 | 3,228 | |||||||||||||||||||
| Other special items | 1,759 | - | 1,069 | 2,828 | |||||||||||||||||||
| Adjusted EBITDA | $ | 15,524 | $ | 10,657 | $ | (4,312) | $ | 21,869 | |||||||||||||||
(1)Refer to the calculation of Adjusted EBITDA for a discussion of the Special items listed below.
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Reconciliations of loss, net of tax to Adjusted EBITDA on a consolidated basis are as follows:
| Three Months Ended | |||||||||||
| (amounts in thousands) | March 28, 2026 | March 29, 2025 | |||||||||
| Loss, net of tax | $ | (76,844) | $ | (190,138) | |||||||
| Income tax expense | 3,376 | 618 | |||||||||
| Depreciation and amortization | 29,370 | 27,295 | |||||||||
| Interest expense, net | 17,203 | 14,918 | |||||||||
| Special items: | |||||||||||
|
Net legal and professional expenses and settlements(1)
|
12,767 | 11,882 | |||||||||
|
Goodwill impairment(2)
|
- | 137,721 | |||||||||
|
Restructuring and asset-related charges, net(3)(4)
|
1,979 | 14,546 | |||||||||
|
M&A related costs, net(5)
|
7,599 | (613) | |||||||||
|
Net gain on sale of business, property, and equipment(6)
|
- | (653) | |||||||||
|
Loss on extinguishment and refinancing of debt(7)
|
- | 237 | |||||||||
|
Share-based compensation expense(8)
|
3,682 | 3,228 | |||||||||
|
Other special items(9)
|
7,009 | 2,828 | |||||||||
| Adjusted EBITDA | $ | 6,141 | $ | 21,869 | |||||||
(1)Net legal and professional expenses and settlements include non-recurring transformation journey expenses of $2.6 million, and $11.2 million in the three months ended March 28, 2026 and March 29, 2025, respectively. These expenses primarily relate to project-based consulting fees that directly support the transformation journey that are not expected to recur in the foreseeable future. These projects include the centralization of human resources processes, North America supply chain network optimization strategy, and other projects related to our transformation journey. For the three months ended March 29, 2025, these expenses also include $2.1 million related to the engagement of a transformation consultant for a period spanning from the third quarter of 2023 through April 2025. Additionally, net legal and professional expenses and settlements include $9.4 million and $0.6 million in the three months ended March 28, 2026 and March 29, 2025, respectively, relating to litigation of historic legal matters.
(2)Goodwill impairment consists of prior year goodwill impairment charges associated with our North America reporting unit. Refer to Note 6 - Goodwill to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
(3)Restructuring and asset-related charges, net represents severance, accelerated depreciation and amortization, equipment relocation and other expenses directly incurred as a result of restructuring events. The restructuring charges primarily relate to charges incurred to change the operating structure, eliminate certain roles, and close certain manufacturing facilities in our North America and Europe segments. Refer to Note 16 - Restructuring and Asset-Related Charges, Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
(4)Product and inventory-related charges related to announced facility closures were detrimental to Adjusted EBITDA. Refer to Note 16 - Restructuring and Asset-Related Charges, Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
(5)M&A related costs, net consist of legal and professional expenses related to strategic initiatives and the court-ordered divestiture of Towanda.
(6)Net gain on sale of business, property, and equipment in the three months ended March 29, 2025, relates to the court-ordered divestiture of Towanda.
(7)Loss on extinguishment and refinancing of debt consists of $0.2 million in the three months ended March 29, 2025, associated with an amendment of our ABL Facility. Refer to Note 10 - Long-Term Debt to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
(8)Share-based compensation expense represents equity-based compensation expense related to the issuance of share-based awards. Refer to Note 15 - Share-Based Compensation to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
(9)Other special items not core to ongoing business activity include in the three months ended March 28, 2026, an impairment charge of $3.1 million in our North America reporting unit as a result of reviews performed in connection with our North America equipment capacity optimization. Refer to Note 5 - Property and Equipment, Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
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Comparison of the Three Months Ended March 28, 2026 to the Three Months Ended March 29, 2025
| Three Months Ended | |||||||||||||||||
| (amounts in thousands) | March 28, 2026 | March 29, 2025 | Variance | ||||||||||||||
| Net revenues from external customers | |||||||||||||||||
| North America | $ | 452,713 | $ | 530,561 | (14.7) | % | |||||||||||
| Europe | 269,412 | 245,445 | 9.8 | % | |||||||||||||
| Total Consolidated | $ | 722,125 | $ | 776,006 | (6.9) | % | |||||||||||
| Percentage of total consolidated net revenues | |||||||||||||||||
| North America | 62.7 | % | 68.4 | % | |||||||||||||
| Europe | 37.3 | % | 31.6 | % | |||||||||||||
| Total Consolidated | 100.0 | % | 100.0 | % | |||||||||||||
|
Adjusted EBITDA(1)
|
|||||||||||||||||
| North America | $ | 3,619 | $ | 15,524 | (76.7) | % | |||||||||||
| Europe | 7,076 | 10,657 | (33.6) | % | |||||||||||||
| Corporate and unallocated costs | (4,554) | (4,312) | 5.6 | % | |||||||||||||
| Total Consolidated | $ | 6,141 | $ | 21,869 | (71.9) | % | |||||||||||
| Adjusted EBITDA as a percentage of segment net revenues | |||||||||||||||||
| North America | 0.8 | % | 2.9 | % | |||||||||||||
| Europe | 2.6 | % | 4.3 | % | |||||||||||||
| Total Consolidated | 0.9 | % | 2.8 | % | |||||||||||||
(1)Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. Refer to the calculation of Adjusted EBITDA for a discussion of the Special items listed above.
North America
Net revenues in North America decreased $77.8 million, or 14.7%, to $452.7 million in the three months ended March 28, 2026, from $530.6 million in the three months ended March 29, 2025. The decrease was primarily due to a decrease in Core Revenues of 14% and a decrease in net revenues from the court-ordered divestiture of Towanda of 1%. The decrease in Core Revenues was driven by a 13% decline in volume/mix and by a 1% decline in pricing due to weaker market demand.
Adjusted EBITDA in North America decreased $11.9 million, or 76.7%, to $3.6 million in the three months ended March 28, 2026, from $15.5 million in the three months ended March 29, 2025. The decrease was primarily due to negative price/cost and unfavorable volume/mix, partially offset by higher productivity and lower SG&A. The decrease in SG&A was primarily driven by decreased salaries and benefits driven by a reduction in headcount, lower advertising and promotion expenses and reduction in R&D expenses.
Europe
Net revenues in Europe increased $24.0 million, or 9.8%, to $269.4 million in the three months ended March 28, 2026, from $245.4 million in the three months ended March 29, 2025. The increase was primarily due to a favorable foreign exchange impact of 12%, partially offset by a decrease in Core Revenues of 2%. The decrease in Core Revenues was primarily driven by unfavorable volume/mix of 4%, partially offset by a 2% benefit from price realization.
Adjusted EBITDA in Europe decreased $3.6 million, or 33.6%, to $7.1 million in the three months ended March 28, 2026, from $10.7 million in the three months ended March 29, 2025. The decrease was primarily due to unfavorable volume/mix, partially offset by favorable productivity.
Corporate and unallocated costs
Corporate and unallocated costs increased by $0.2 million, or 5.6%, to $4.6 million in the three months ended March 28, 2026, from $4.3 million in the three months ended March 29, 2025. The increase in costs was primarily due to a decrease in cash received on a real estate investment, partially offset by lower insurance expense due to favorable claims experience and lower salaries and benefits driven by a reduction in headcount.
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Liquidity and Capital Resources
Overview
We have historically funded our operations through a combination of cash from operations, draws on our revolving credit facilities, and the issuance of non-revolving debt such as our Term Loan Facility and our Senior Notes. We place strong emphasis on cash flow generation, which includes an operating discipline focused on working capital management. Working capital fluctuates throughout the year and is impacted by inflation, the seasonality of our sales, customer payment patterns, supply availability, and the translation of the balance sheets of our foreign operations into the U.S. dollar. Typically, working capital increases at the end of the first quarter and beginning of the second quarter in conjunction with, and in preparation for, the peak season for home construction and remodeling in our North America and Europe segments, and decreases starting in the fourth quarter as inventory levels and accounts receivable decline. Inventories fluctuate for raw materials that have long delivery lead times, as we work through prior shipments and take delivery of new orders.
As of March 28, 2026, we had total liquidity (a non-GAAP measure) of $309.9 million, consisting of $50.4 million in unrestricted cash and $259.5 million available for borrowing under the ABL Facility, compared to total liquidity of $484.7 million as of December 31, 2025. The decrease in total liquidity was primarily due to a lower cash balance, net borrowings of $40.0 million, and a seasonally lower ABL borrowing base availability at March 28, 2026, when compared to December 31, 2025.
As of March 28, 2026, our cash balances, including $2.0 million of restricted cash, consisted of $13.7 million in cash located in the U.S. and $38.7 million in cash located outside of the U.S. held by our non-U.S. subsidiaries.
Based on our current and forecasted level of operations and seasonality of our business, we believe that cash provided by operations and other sources of liquidity, including cash, cash equivalents, and availability under our revolving credit facilities, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, and debt service requirements for at least the next twelve months from this issuance of financial statements and maintain compliance with covenants under our debt agreements.
Our total indebtedness as of March 28, 2026, was $1.22 billion of which $19.5 million in short-term debt obligations is due and payable within the next 12 months. We have $400 million of Senior Notes due in December 2027 for which it is unlikely that our cash flows from operations will be sufficient to fully repay. To service our indebtedness, we may be required to undertake various actions including, but not limited to, refinancing all or a portion of our existing long-term debt, pursuing strategic reviews of our assets and businesses, entering into sale-leaseback transactions for selected properties, adjusting our planned level of capital and other expenditures, or other strategies. In addition, in accordance with our credit agreements, dispositions of assets or businesses may require us to use all or a portion of the proceeds of such sales to pay down certain portions of our debt.
We may, from time to time, refinance, reprice, extend, retire, or otherwise modify our outstanding debt to lower our interest payments, reduce our debt, or otherwise improve our financial position. These actions may include repricing amendments, extensions, and/or opportunistic refinancing of debt. The amount of debt that may be refinanced, repriced, extended, retired, or otherwise modified, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants, and other considerations.
We may, from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if there are any, will be on such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Based on hypothetical variable rate debt that would have resulted from drawing each revolving credit facility up to the full commitment amount, a 100-basis point decrease in interest rates would have reduced our interest expense by $2.2 million in the quarter ended March 28, 2026. A 100-basis point increase in interest rates would have increased our interest expense by $2.2 million in the same period. In certain instances, the impact of a hypothetical decrease would have been partially mitigated by interest rate floors that apply to certain of our debt agreements.
Borrowings and Refinancings
In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove certain provisions no longer relevant to the parties, and make certain other technical amendments and related conforming changes. Pursuant to the amendment, replacement term loans bear interest at SOFR plus a margin of 1.75% to 2.00% depending on JWI's corporate credit ratings, compared to a margin of 2.00% to 2.25% under the previous amendment. All other material terms and conditions of the Term Loan Agreement were unchanged.
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In August 2024, we issued $350.0 million of Senior Notes, bearing interest at 7.00%, the proceeds of which were utilized to repay $150.0 million of the outstanding balance of our Term Loan Facility and redeemed the remaining $200.0 million of our 4.63% Senior Notes in September 2024. The Company recognized a pre-tax loss of $0.5 million on the redemption resulting from accelerated amortization of debt issuance costs.
In March 2025, we amended the ABL Facility to extend the maturity date from July 2026 to March 2028, replace the CDOR as the applicable rate with respect to loans denominated in Canadian Dollars with the CORRA, and make certain other technical amendments and related conforming changes. All other material terms and conditions of the ABL Facility credit agreement were unchanged including the aggregate commitment, which remained at $500.0 million. As a result of this amendment, the Company recognized a pre-tax loss of $0.2 million in the first quarter of 2025, consisting of unamortized issuance costs. As of March 28, 2026, we had $40.0 million outstanding net borrowings under the ABL Facility.
If there are outstanding borrowings against the ABL Facility, which results in the Company's Global Excess Availability falling below the Level 1 Availability Trigger Amount, we would be required to comply with a minimum Fixed Charge Coverage Ratio as described in the ABL Facility credit agreement.
As of March 28, 2026, we were in compliance with the terms of all our Credit Facilities and the indentures governing the Senior Notes.
Our results have been and will continue to be impacted by substantial changes in our net interest expense throughout the periods presented and into the future. Refer to Note 10 - Long-Term Debt to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.
Cash Flows
The following table summarizes the changes to our cash flows for the periods presented:
| Three Months Ended | |||||||||||
| (amounts in thousands) | March 28, 2026 | March 29, 2025 | |||||||||
| Cash (used in) provided by: | |||||||||||
| Operating activities | $ | (91,215) | $ | (83,494) | |||||||
| Investing activities | (26,163) | 70,047 | |||||||||
| Financing activities | 32,106 | (6,602) | |||||||||
| Effect of changes in exchange rates on cash and cash equivalents | (629) | 2,174 | |||||||||
| Net change in cash and cash equivalents | $ | (85,901) | $ | (17,875) | |||||||
Cash Flows from Operations
Net cash used in operating activities was $91.2 million in the three months ended March 28, 2026, compared to $83.5 million in the three months ended March 29, 2025, an increase of $7.7 million. The change in cash flows from operating activities was primarily due to the increase in earnings of $113.3 million, inclusive of $137.7 million in non-cash goodwill impairment charges related to our North America reporting unit in the prior year and a $12.8 million increase in net cash used in our working capital accounts. The impact of accounts receivable, net, was unfavorable by $13.0 million for the three months ended March 28, 2026, compared to the same period in 2025, primarily driven by higher sales at the end of the current quarter. Accounts payable had a favorable impact of $26.2 million, mainly due to higher inventory purchases. Inventories had an unfavorable impact of $26.0 million, primarily reflecting increased material purchases.
Cash Flows from Investing Activities
Net cash used in investing activities was $26.2 million in the three months ended March 28, 2026, compared to cash provided by investing activities of $70.0 million in the three months ended March 29, 2025. The change in cash flows from investing activities was primarily driven by $112.1 million proceeds related to the court-ordered divestiture of Towanda during the three months ended March 29, 2025, and a decrease in capital expenditures of $15.9 million.
Cash Flows from Financing Activities
Net cash provided by financing activities was $32.1 million in the three months ended March 28, 2026, compared to cash used in financing activities of $6.6 million in the three months ended March 29, 2025. The change in cash flows from financing activities was primarily due to net borrowings under our Revolving Credit Facility of $40.0 million in the three months ended March 28, 2026.
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Critical Accounting Policies and Estimates
Our MD&A is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which may differ from these estimates.
Our significant accounting policies are described in Note 1 - Description of Company and Summary of Significant Accounting Policies to the consolidated financial statements presented in our Form 10-K. Our critical accounting policies and estimates are described in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K. Our significant and critical accounting policies have not changed significantly from those disclosed in our 2025 Form 10-K.
Jeld-Wen Holding Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 05, 2026 at 17:58 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]