JELD-WEN Holding, Inc. (JELD)

Item 2 - 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. Amounts discussed in MD&A are presented in millions 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 of the significant line items on our unaudited condensed consolidated statements of operations, as well as key events or changes since the prior reporting period that may affect our financial condition, results of operations, or future outlook.

•Segment Results and Non-GAAP Reconciliations. This section provides 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 complex estimates.

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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Comparison of the Three Months Ended June 27, 2026 to the Three Months Ended June 28, 2025

Consolidated Results

Net Revenues – Net revenues decreased $5.9 million, or 0.7%, to $817.8 million in the three months ended June 27, 2026, from $823.7 million in the three months ended June 28, 2025. The decrease in net revenues was primarily driven by a decrease in Core Revenues of 2%. This was partially offset by a favorable foreign exchange impact of 1%. The decline in Core Revenues was driven by a 3% decrease in volume/mix, partially offset by a 1% benefit from price realization.

Gross Margin – Gross margin decreased $6.1 million, or 4.3%, to $137.3 million in the three months ended June 27, 2026, from $143.4 million in the three months ended June 28, 2025. Gross margin as a percentage of net revenues was 16.8% in the three months ended June 27, 2026, compared to 17.4% in the three months ended June 28, 2025. The decrease in gross margin percentage was primarily due to negative price/cost and volume/mix, partially offset by favorable productivity.

SG&A – SG&A decreased $10.2 million, or 6.8%, to $138.3 million in the three months ended June 27, 2026, from $148.5 million in the three months ended June 28, 2025. SG&A as a percentage of net revenues decreased to 16.9% in the three months ended June 27, 2026, from 18.0% in the three months ended June 28, 2025. The decrease in SG&A was primarily due to lower salaries and benefits driven by a reduction in headcount, decreased professional fees, including non-recurring transformation journey expenses and lower legal costs, partially offset by intangible asset impairment charges during the period. Refer to Note 7 - Intangible Assets, Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information regarding these impairment charges.

Restructuring and Asset-Related Charges, Net – Restructuring and asset-related charges, net decreased $4.8 million, or 53.9% to $4.1 million in the three months ended June 27, 2026, from $8.8 million in the three months ended June 28, 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 $1.9 million, or 11.4%, to $18.4 million in the three months ended June 27, 2026, from $16.5 million in the three months ended June 28, 2025. The increase in interest expense, net was primarily due to lower interest income resulting from lower invested cash balances and borrowings on the ABL revolving facility.

Other Expense (Income), Net – Other expense was $3.4 million in the three months ended June 27, 2026, compared to other income of $4.6 million in the three months ended June 28, 2025. Refer to Note 17 - Other Expense (Income), Net to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.

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Income Tax Expense (Benefit) – Income tax expense was $4.6 million in the three months ended June 27, 2026, compared to income tax benefit of $3.5 million in the three months ended June 28, 2025. The effective tax rate in the three months ended June 27, 2026, was (17.2)% and was driven by foreign earnings taxed at higher rates, losses for jurisdictions for which there is a full valuation allowance in the quarter and discrete tax expense of $0.5 million due to changes in UTPs from ongoing audits and return-to-provision adjustments. The effective tax rate for the three months ended June 28, 2025, was 13.6% and was driven primarily by losses for jurisdictions for which there is a full valuation allowance in the quarter and $0.6 million of discrete tax expense attributable to share-based compensation. Refer to Note 11 - Income Taxes to our unaudited condensed consolidated financial statements included in this Form 10-Q for more information.

Gain on Sale of Discontinued Operations, Net of Tax – The $0.8 million gain on sale of discontinued operations, net of tax in the three months ended June 28, 2025, is related to the July 2, 2023, sale of JW Australia resulting from the release of the reserve associated with purchases under a supply agreement.

Comparison of the Six Months Ended June 27, 2026 to the Six Months Ended June 28, 2025

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Item 7 - 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” in Item 1 - Business and Item 1A - Risk Factors in this Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. This discussion should be read in conjunction with our historical financial statements and related notes thereto and the other disclosures contained elsewhere in this 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 included in this Form 10-K.

This MD&A is a supplement to our financial statements and notes thereto included elsewhere in this Form 10-K and is provided to enhance your understanding of our results of operations and financial condition. Our discussion of results of operations is presented in millions throughout the 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, business and industry trends, our key business strategies, and background information on other matters discussed in this MD&A.

•Results of Operations. This section provides our analysis and outlook for the significant line items on our 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.

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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 14 - Segment Information included in this Form 10-K for more information about our segments.

Divestitures

During 2021, the Company ceased the appeal process for its litigation with Steves. As a result, we were required to divest our Towanda facility and related assets, which occurred on January 17, 2025. We have reported Towanda within our North America operations through the date of sale. Refer to Note 2 - Discontinued Operations and Divestiture included in this Form 10-K for more information.

On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum Equity Advisors, LLC, to sell our Australasia business. On July 2, 2023, we completed the sale. The net assets and operations of the disposal group met the criteria to be classified as “discontinued operations” and are reported as such in all periods presented unless otherwise noted. The consolidated statements of cash flows include cash flows from discontinued operations through the divestiture date of July 2, 2023. Refer to Note 2 - Discontinued Operations and Divestiture included in this Form 10-K for more information.

Factors and Trends Affecting Our Business

Components of Net Revenues

The key components of our net revenues include Core Revenues (which we define to include the impact of pricing and volume/mix, as discussed further under the heading, “Product Pricing and Volume/Mix” below), contribution from acquisitions and divestitures made within the prior twelve months, and the impact of foreign exchange. Net revenues reported in our financial statements are impacted by the fluctuating currency values in the geographies in which we operate, which we refer to as the impact from foreign exchange. Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, percentage changes in pricing are based on management schedules and are not derived directly from our accounting records.

Product Demand

General business, financial market, and economic conditions globally and in the regions where we operate influence overall demand in our end markets and for our products. In particular, the following factors may have a direct impact on demand for our products in the countries and regions where our products are marketed and sold:

•the strength of the economy;

•employment rates, consumer confidence, and spending rates;

•the availability and cost of credit;

•interest rate fluctuations (including mortgage and credit card interest rates), sustained periods of elevated interest rates, and the availability of financing for our customers and consumers;

•the amount and type of residential and non-residential construction;

•housing sales and home values;

•the age of existing home stock, home vacancy rates, and foreclosures;

•volatility in both debt and equity capital markets;

•increases in the cost of raw materials or any shortage in supplies or labor, including as a result of tariffs or other trade restrictions;

•disruptions or delays to the global supply chain;

•the effects of governmental regulation and initiatives to manage economic conditions;

•armed conflicts, acts of terrorism or civil unrest;

•geographical shifts in population and other changes in demographics; and

•changes in weather patterns and extreme weather events.

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In addition, we seek to drive demand for our products through the implementation of various strategies and initiatives. We believe we can enhance demand for our new and existing products by:

•innovating and developing new products and technologies;

•investing in branding and marketing strategies, including marketing campaigns in both print and social media, as well as our investments in training curriculum, in-field training and technologies to facilitate remote learning; and

•implementing channel initiatives to enhance our relationships with key channel partners and customers, including optimizing growth through rebate programs in North America.

Product Pricing and Volume/Mix

The price and mix of products that we sell are important drivers of our net revenues and net income. Under the heading “Results of Operations,” references to (i) “pricing” refer to the impact of price increases or decreases, as applicable, for particular products between periods and (ii) “volume/mix” refer to the combined impact of both the number of products we sell in a particular period and the types of products sold, in each case, on net revenues. While we operate in competitive markets, the demand for our innovative products allows us to exercise pricing discipline, which is an important element of our strategy to achieve profitable growth through improved margins. Our strategy also includes incentivizing our channel partners to sell our higher margin products, and we believe a renewed focus on innovation and the development of new technologies will increase our sales volumes and the overall profitability of our product mix.

Cost Reduction and Productivity Initiatives

Our senior management team has a proven history of implementing operational excellence programs at various large, global manufacturing businesses, and we believe the same successes can be realized at JELD-WEN. Key areas of focus of our operational excellence, productivity, and footprint rationalization programs include:

•reducing labor, overtime, and waste costs by optimizing manufacturing capacity and improving planning and manufacturing processes;

•increasing rigor and alignment around capital expenditures with a clear linkage to our strategy and optimizing returns;

•reducing or minimizing increases in material usage and costs through value-added engineering;

•investing in logistics optimization programs to reduce freight costs and increase throughput;

•redesigning our supply chain network to reduce lead times and optimize inventory levels to increase cash flow; and

•reducing warranty costs and scrap by improving quality.

We continue to implement our strategic cost-reduction and productivity initiatives to develop the culture and processes of operational excellence and continuous improvement. These cost reduction initiatives, which may include plant closures and consolidations, headcount reductions, and other various initiatives aimed at lowering production and overhead costs, may not produce the intended results within the intended timeframe.

Raw Material Costs

Commodities such as wood, steel, glass, fiberglass, aluminum, and vinyl are major components in the production of our products. Changes in the underlying prices of these commodities have a direct impact on the cost of goods sold. While we attempt to pass on a substantial portion of such cost increases to our customers, we may not be successful in doing so. In addition, our results of operations for individual quarters may be negatively impacted by a delay between the time of raw material cost increases and a corresponding price increase. Conversely, our results of operations for individual quarters may be positively impacted by a delay between the time of a raw material price decrease and a corresponding competitive pricing decrease.

Freight Costs

We incur freight and duty costs from third party logistics providers and port authorities to transport raw materials and work-in-process inventory to our manufacturing facilities and to deliver finished goods to our customers. Changes in freight and duty rates as well as the availability of freight services can have a significant impact on our cost of goods sold. Freight and duty costs are variable due to several factors that have affected the supply and demand of trucking and port services, including increased regulation, such as logging of miles, increases in general economic activity, labor shortages, and an aging workforce. We continue to monitor these key market drivers and proactively mitigate these costs through various internal initiatives and carrier contracts.

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Working Capital and Seasonality

Working capital fluctuates throughout the year and is affected by the seasonality of sales of our products and of customer payment patterns. The peak season for home construction and remodeling in our North America and Europe segments generally corresponds with the second and third calendar qu

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