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Greetings, and welcome to the Simpson Manufacturing Co. Third Quarter 2025 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Kim Orlando of Investor Relations. Thank you. You may begin.

Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Co.'s Third Quarter 2025 Earnings Conference Call. Any statements made on this call that are not statements of historical fact are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in the company's public filings and reports, which are available on the SEC's or the company's corporate website. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we make here today, whether as a result of new information, future events or otherwise. On this call, we will also refer to non-GAAP measures such as adjusted EBITDA, which is reconciled to the most comparable GAAP measure of net income in the company's earnings press release. Please note that the earnings press release was issued today at approximately 4:15 p.m. Eastern Time. The earnings press release is available on the Investor Relations page of the company's website at ir.simpsonmfg.com. Today's call is being webcast, and a replay will also be available on the Investor Relations page of the company's website. Now I would like to turn the conference over to Mike Olosky, Simpson's President and Chief Executive Officer.

Thanks, Kim. Good afternoon, everyone, and thank you for joining today's call. I'm joined by Matt Dunn, our Chief Financial Officer. Today, I'll share highlights from our third quarter performance, key developments across our end markets and progress on our strategic initiatives. Matt will then walk through the financials and our updated fiscal 2025 outlook. We are pleased to report net sales of $623.5 million, a 6.2% increase year-over-year, primarily driven by our June 2nd price increase and a positive impact from foreign exchange. This growth reflects the ability of our business model to navigate a challenging macroeconomic environment even as residential housing markets in the U.S. and Europe remains soft. In North America, net sales rose to $483.6 million, up 4.8% from the prior year. This includes an estimated $30 million contribution from our June price increase. North American volumes were modestly lower. This reflects broader market conditions, including significantly lower housing starts, both in the southern and western regions of the United States, where we have more content per unit as a result of stronger building codes. As a reminder, our volume calculations exclude contributions from software, services and equipment. While comparative data versus U.S. housing starts was unavailable for Q3 and due to the government shutdown, we remain confident in our ability to outperform the market over the long term. Our focus on innovation, customer service and operational excellence continues to drive solid results. Highlighting some developments from our key end markets, our volume performance was mixed, though we're seeing positive momentum across several key areas. The OEM business delivered high single-digit volume growth led by mass timber solutions and new product introductions. Direct sales to manufacturers of material handling and data center equipment also posted solid gains. In the component manufacturer business, we achieved low single-digit volume growth supported by our new customer wins and expanded product offerings. We recently launched CS Producer. It's our first cloud-based truss production management software. CS producer gives floor and roof truss manufacturers powerful ways to schedule and manage daily operations. It's also a major milestone in our software road map and received enthusiastic feedback at the Building Component Manufacturers Conference. In our national retail business, volume was slightly down, while point-of-sale performance improved mid-single digits. We saw continued strength in Outdoor Accents, fastener solutions, e-commerce and Pro initiatives with our two largest retail partners. Expanded shelf space and new products introduced last year are contributing positively. In the residential business, volumes declined slightly. However, we secured new business through dealer conversions and growth in outdoor living solutions. Multifamily demand remains a bright spot, especially in the northwest, northeast and Canada. In the commercial business, volumes declined mid-single digits, reflecting an overall weak commercial market, but we saw growth in cold-formed steel connectors and adhesive anchor lines driven by strong field engagement and specification efforts. I'm also proud to highlight that our commitment to customer service was recognized with two supplier awards from Do it Best and SouthernCarlson during the third quarter. In Europe, net sales reached $134.4 million, up 10.9% year-over-year or a solid 4.3% on a local currency basis. Growth was driven by increased volumes, resulting in performance that outpaced the market. As we look ahead, we are undertaking proactive strategic cost savings initiatives to align our operations with evolving market demand and position the company for long-term success. This is in response to a downturn in the housing market that started in 2022. While these decisions are not easy, we are committed to supporting our team and ensuring we do not compromise on what we're known for, which is delivering best-in-class service to our customers. These actions are designed to drive efficiencies, preserve profitability and unlock future growth opportunities in what's expected to be a continued soft market. As a result of these actions, we expect to generate annualized cost savings of at least $30 million with onetime charges of approximately $9 million to $12 million that will be realized in fiscal 2025. We remain committed to supporting our team in delivering exceptional customer service. Matt will provide further detail on the financial impact shortly. Turning to consolidated gross margin, which was 46.4% and slightly below last year. This reflects higher input costs, including tariffs and labor costs. Our June price increase helped partially offset rising costs, and we've taken further pricing actions, effective October 15, to address additional tariffs announced subsequent to our prior price increase. These increases are expected to contribute approximately $100 million in annualized sales. We expect continued deceleration in our gross margins as the impact of tariffs flow through our inventory. Third quarter operating margin was 22.6%, up 130 basis points year-over-year including a $12.9 million gain from the sale of our Gallatin, Tennessee facility and approximately $3 million in restructuring costs. Adjusted EBITDA totaled $155.3 million, a 4.5% increase year-over-year. Next, I'd like to highlight progress on our financial ambitions. First, continuing above-market volume growth relative to U.S. housing starts. We're updating our 2025 outlook for U.S. housing starts. We now expect them to decline mid-single digits compared to 2024. In Europe, housing starts in 2025 are expected to remain relatively consistent with 2024. We remain focused on growing above the market. Second, maintaining an operating income margin at or above 20%. Considering the cost savings initiatives we are taking in a growing market, we remain confident in our ability to deliver 20-plus percent operating margins. And third, as a growth-focused company with industry-leading margins, we believe we can consistently drive EPS growth ahead of net sales growth. Year-to-date EPS has increased approximately 510 basis points above revenue growth, demonstrating our ability to deliver shareholder value. In summary, we delivered solid results in a challenging housing environment. Our pricing actions, cost savings initiatives and market share gains are positioning us for continued success. We're optimistic about the future and believe in our ability to drive growth, improve profitability and capitalize on a market recovery. Thank you to our incredible team for their dedication, resilience and relentless customer focus. With that, I'd like to turn the call over to Matt, who will discuss our financial results and outlook in greater detail.

Good afternoon, everyone. Thank you for joining us on our earnings call today. Before I begin, I'd like to mention that unless otherwise stated, all financial measures discussed in my prepared remarks refer to the third quarter of 2025, and all comparisons will be year-over-year comparisons versus the third quarter of 2024. Now turning to our results, our consolidated net sales increased 6.2% year-over-year to $623.5 million. Within the North America segment, net sales increased 4.8% to $483.6 million. In Europe, net sales increased 10.9% to $134.4 million due to increased sales volumes as well as the positive effect of approximately $8.1 million in foreign currency translation. Globally, Wood Construction products sales were up 5% and Concrete Construction product sales were up 12.8%. Consolidated gross profit increased 5.2% to $289.3 million resulting in a gross margin of 46.4%, down 40 basis points from the third quarter of 2024. On a segment basis, our gross margin in North America was 49%, slightly lower than the 49.5% reported in the prior year due to factory and overhead as well as higher warehouse costs as a percentage of net sales. Our gross margin in Europe increased to 37.9% from 36.6%, primarily due to lower material costs as a percentage of net sales. From a product perspective, our third quarter gross margin was 46.2% for wood products compared to 46.3% in the prior-year period. For concrete products, gross margin was 48% compared to 49.7% a year ago, with the reduction partly due to increased tariffs on imports. Now turning to expenses, while SG&A head count is down over 4% year-over-year, total Q3 operating expenses increased 9% to $162.3 million, primarily driven by higher variable compensation on improved profitability, severance costs related to our strategic cost savings initiatives, foreign exchange and employee health care costs. As a percentage of net sales, Q3 operating expenses were 26% compared to 25.4% last year. Our third quarter operating expenses included approximately $3 million in severance-related costs associated with our strategic cost savings initiatives, which we anticipate will deliver annualized cost savings of at least $30 million. To further detail our third quarter SG&A, our research and development and engineering expenses increased by 1.2% to $20.8 million. Selling expenses increased by 5.9% to $56.1 million, primarily due to higher variable compensation and commissions, personnel and severance costs related to our strategic cost savings initiatives, partially offset by a decrease in travel-related costs. On a segment basis, selling expenses in North America were up 6.8%, and in Europe, they were up 2.8%. General and administrative expenses increased by 13.3% to $85.4 million due to increases in variable compensation, software costs, including development for our component manufacturing business as well as negative foreign exchange effect. As a result, our third quarter consolidated income from operations totaled $140.7 million, an increase of 12.7% from $124.9 million. Our consolidated operating income margin was 22.6%, up from 21.3% last year. Income from operations included a $12.9 million gain on the sale of the existing Gallatin, Tennessee facility. In North America, income from operations increased 1.6% to $125.2 million, driven by an increase in gross profit, partly offset by higher variable incentive compensation, personnel costs, severance costs related to our strategic cost savings initiatives and software-related costs. Our third quarter operating income margin in North America was 25.9% compared to 26.7% last year. In Europe, income from operations increased 27.6% to $16.1 million due to an increase in gross profit, partly offset by increases in operating expenses due to the negative effect of approximately $2.1 million in foreign currency translation. Our third quarter operating income margin in Europe was 12% compared to 10.4% last year. Our third quarter effective tax rate was 25.3%, approximately 80 basis points below the prior-year period. Accordingly, net income totaled $107.4 million or $2.58 per fully diluted share, compared to $93.5 million or $2.21 per fully diluted share. Adjusted EBITDA for the third quarter was $155.3 million, an increase of 4.5%, resulting in a margin of 24.9%. Now turning to our balance sheet and cash flow. Our balance sheet remained healthy with cash and cash equivalents totaling $297.3 million at September 30, 2025, up $106.9 million from June 30, 2025. Our debt balance was approximately $369.2 million, net of capitalized finance cost, and our net debt position was $71.9 million. We have $450 million remaining available for borrowing on our primary line of credit. Our inventory position as of September 30, 2025, was $591.9 million which was up $5.3 million compared to June 30, 2025, with lower pounds of inventory on hand. Our disciplined approach to capital allocation keeps our investments aligned with evolving market conditions and focused on driving sustainable value. We generated strong cash flow from operations of $169.5 million for the third quarter. This enabled us to invest $35.9 million for capital expenditures, pay $12.1 million in dividends to our stockholders and pay down $5.6 million of our term loan. In addition, we repurchased 158,865 shares common stock at an average price of $188.84 per share for a total of $30 million. On October 23, our Board amended our share repurchase program, authorizing an additional $20 million of our common stock for repurchases through year-end, resulting in $30 million remaining under our authorization. In addition, the Board authorized a new share repurchase program for 2026 to repurchase up to $150 million worth of our shares through year-end 2026. This reflects our confidence in the long-term prospects of the business and our commitment to returning capital to shareholders. In regard to our investments, our new Gallatin, Tennessee facility opened during the third quarter. As a reminder, this facility will play a critical role in helping to support growth and enhance operational efficiency across our fastener product lines. Next, I'll turn to our 2025 financial outlook. Based on business trends and conditions as of today, October 27, we are updating our guidance for the full year ending December 31, 2025, as follows: we expect our operating margin to now be in the range of 19% to 20%. Additional key assumptions include: our expectation for U.S. housing starts to be down in the mid-single-digit range from 2024 levels, a slightly lower overall gross margin based on the addition of new facilities as well as the recently imposed tariffs, which we anticipate will be partly offset by the price increases that went into effect on June 2 and October 15. Our outlook also assumes nonrecurring severance costs from our strategic cost savings initiatives in North America and Europe of approximately $9 million to $12 million. And finally, our margin guidance includes the benefit of $12.9 million from the gain on the sale of our existing Gallatin, Tennessee property. Next, interest expense on our term loan, which had borrowings of $369.2 million as of September 30, 2025, is expected to be approximately $5 million. The benefits from interest rate and cross-currency swaps and interest income on our cash and money markets are expected to substantially offset the expense. Our effective tax rate is estimated to be in the range of 25.5% to 26.5%, including both federal and state income tax rates based on current loss. And finally, our capital expenditures outlook is expected to be in the range of $150 million to $160 million, which includes approximately $75 million to $80 million for the completion of both the Columbus facility expansion and the recently opened Gallatin fastener facility. In summary, despite a challenging market backdrop, we delivered solid third quarter results and continue to execute with discipline. Our pricing actions helped offset rising costs from tariffs, helping our margins remain resilient even as we navigate cost headwinds. While SG&A was elevated this quarter, the strategic cost savings initiatives we implemented in late September and early October will drive meaningful efficiencies and support future earnings growth. Gains on asset sales also contributed positively to operating income and EPS. Looking ahead, we remain focused on disciplined capital deployment and returning value to stockholders through our expanded share repurchase authorization and our commitment to return at least 35% of our free cash flow. With that, I will now turn the call over to the operator to begin the Q&A session.

[Operator Instructions] Our first question comes from the line of Dan Moore with CJS Securities.

To start with, 6% revenue growth in Q3, certainly very solid in light of the current housing environment. Obviously, it was mostly pricing strategic actions. Just give us a flavor for kind of the organic volume declines in North America and what did volume growth look like in Europe?

Sure. Dan, this is Matt. Let's break it down on a global basis first. So the 6.2% sales growth for the quarter, a little more than 5 points of that was from pricing, a little more than 1 point from foreign exchange, less than 0.5 point of help from acquisitions that were acquired in 2024 that had not anniversaried yet. And then volume was down 1 point. So that's on a global basis. If you look at volume on a North America basis in the quarter. Yes. I think...

Dan, Year-to-date volume growth is down 1.4% versus prior year.

Yes. North America.

North America.

Got it. That's really helpful. Obviously, just sticking with kind of the macro housing demand proving to be more tepid this year than perhaps we had hoped or expected when we started the year. The rental rates coming down, affordability remaining challenged, you're taking some meaningful cost actions, and that will be my follow-up question. But do you see any catalysts that could kind of stem the tide and give a trajectory next year? Do you foresee continued declines in the housing market, and that's why you're taking the actions? I know it's early to be crystal balling '26, but just kind of beyond the next -- where do you see things going?

Dan, when we look at this year, again, probably down mid-single digits. And I think that's a bit of a surprise for a lot of people. When we were coming into the year, we were thinking it was going to be up low single digits. And it does look like it's certainly decelerating in the second half of the year. When we look at all of the various market forecasts and not getting specific to market, most of them are coming in on the flat range. And when I talk with our customers, affordability is certainly an issue, but a lot of the bigger builders are already subsidizing mortgage rates. So a lot of people that are going to these big production builders are already getting a 4% loan. So certainly, lower interest rates will help the small- to medium-sized builders that really can't subsidize things, the way the bigger builders are. But I guess we're focusing on the things within our scope of control. We're absolutely committed to being in that 20% operating income level, and that's why we had to make the really difficult decision to make the strategic cost savings initiatives and get our cost structure in line with what we think is going to be a little bit more of an extended slow market.

Yes, Dan, I would just add, as Mike said, tough decisions looking ahead toward what looks like is going to be a flattish market next year. We took these actions to stay on track against our financial ambitions. We believe that they'll deliver at least $30 million of annualized cost savings in 2026, really through a combination of workforce reduction and portfolio management. And then as we mentioned on the call, we expect $9 million to $12 million of onetime costs during 2025, of which $3 million are already in the Q3 results, but the full $9 million to $12 million is included in our updated outlook for the year.

Really helpful. And then I was -- I think you just touched on it, but I was going to dig a little deeper into the targeted cost savings. Any kind of general breakdown between North America and Europe? And then it sounds like you've already incurred $3 million, the $9 million to $12 million is not incremental to that. But I assume the balance is likely going to be in Q4. Is that the right way to think about it from a modeling perspective?

Let's take the second part first. Yes, from a modeling perspective, you could assume that the $6 million to $9 million is going to come in Q4 and then the $3 million we already had in Q3 would get you to that $9 million to $12 million. In terms of the breakdown, regionally, I'm not going to provide all that, as you can assume. Not all of it's done yet, certainly given some of it still to come in Q4.

Got it. Last one, and I'll jump back in queue. But that entire $30 million cost savings earmarked for bottom line improvement or at least is sort of bottom line maintenance and getting back to that 20% operating margin target? Is it the right way to think about it versus reinvesting back into the business?

Yes. We're not guiding yet, Dan, obviously, for 2026. But our assumption in the market is going to be flattish from everything we've heard and we are committed to making sure we get back to that 20% operating income level.

Our next question comes from the line of Tim Wojs with Baird.

Maybe just on that last point, Mike, is basically what's changing on the cost side, the expectation that the market is just going to stay slower? I mean if we look back a year ago when you guys had that question or 2 years ago when you had that question, it was kind of like, hey, the market is going to get better and we'll lever those costs. Is it basically that, or is there something kind of worse happening in the market? I just kind of want to make sure I understand the drivers of the cost reductions.

Yes. Good question, Tim. It's pretty much in line with what you're hearing about the market. So the census data came through August, which is the last report we had basically said that housing starts were up 1%, which was a little inconsistent with some of the results we've seen in the industry. We've definitely seen things slow down in the second half. We've certainly heard that from our customers. I believe they're all feeling the same thing. You're probably hearing that from other clients as well. And then we think that, that's just going to carry over into a flat year next year.

Yes. I think, Tim, we just wanted to make sure that we could see our way to delivering our financial ambition on the operating margin side of 20%, even if the market is flattish or a little bit down next year. Again, I'm not giving the formal guide yet, but just need to take some cost choices to make sure we can get there next year.

Okay. Okay. No, that's helpful. I guess on gross margins, when do you -- I guess, two questions on the trajectory. So when do you fully kind of expect the tariffs to kind of flow through the gross margin line? And then is there a noticeable impact in gross margins from turning on the Gallatin facility? Or are there other cost offsets?

Yes, I'll take the second part first, not a noticeable impact on turning on the Gallatin facility on gross margin, certainly in the short term or even the next year or so. I think some of that will depend on what happens with tariffs and what we do with sourcing and are we in-sourcing more maybe than we thought from the start. A lot of that depends on where we net out on tariffs. In terms of gross margin impact of tariffs, if you look at our product segment breakdown on gross margin that we talked about, you can see the gross margin on concrete construction products is down quite a bit more than wood construction products. That's largely where the anchor business falls, which is subject to the most tariffs and some of our fastener business falls there as well. I would say that from a gross margin standpoint, we continue to see erosion over the next quarter or so, a couple of quarters as the tariffs are fully rolled in, but you're seeing an impact in Q3 certainly. And so incrementally, a little bit more in Q4 and then maybe a little bit in Q1, but from that standpoint, then they should essentially be rolled in everywhere. But I would say -- if I had to pick a percentage on it now, I would say 80% rolled in already in what you see in the Q3 results.

Tim, remember, we're talking about Gallatin, we're also in-sourcing coding and heat treating processes. So it's not just moving production and adding additional cold-forming equipment. It's ramping up kind of a full end-to-end process. So that's why it's going to take us a little bit of time to get that fully going.

Okay. Okay. No, that's helpful. And then I guess just to kind of put a finer point on the volume trajectory. So I think we were down a little bit in North America in Q2. I think we're down a little bit again in Q3. Is -- are you seeing things even out? Or would you expect your volume performance to get weaker in the first quarter and into early next year?

So if you just look at Q3, Tim, volume was down 2.7% versus prior quarter. And if you look year-to-date, as I mentioned, down 1.4% for the full year. So definitely trajectory-wise getting a little bit worse. Again, a lot of things can happen over the next couple of months. So let's see how the rest of the year plays out before we talk about 2026 too much.

Okay. And you should still outperform the mid-single digits. That would be the expectation, right?

I mean our ambition is to drive above-market growth. As you know, historically, we've been about 300 basis points above that. Now, it's not always been a straight line over the last 9, 10 years. We've had a couple of years of volume growth was below the market, but we certainly want to grow above the market and ideally above that long-term average.

Our next question comes from the line of Kurt Yinger with D.A. Davidson.

Great. Just wanted to follow up on the cost savings target. I apologize if I missed this, but is that $30 million expected to be kind of achieved on a run rate basis, I guess, in early 2026 there? And I guess as we think about the sources of savings, how would you kind of have us split that between the cost of goods and kind of the operating expense segments?

Yes, Kurt, the $30 million would be a realized number in 2026 kind of throughout the course of the year. We are going to see a little bit of savings in 2025, but it's more than offset by the severance costs. So from an incremental savings standpoint, net-net, the full $30 million should show up in 2026. So in terms of how that splits versus SG&A and COGS, I would say 90-plus percent of it is in SG&A. There's a little bit in the COGS side, but the bulk of it is SG&A.

Okay. Okay. That makes sense. And then I believe, Mike, you had mentioned kind of the residential market was down low single digit for you guys this quarter, which, in light of some of the pressures in Florida and California and other parts of your business that are maybe more exposed or higher content per start seems pretty good still. I guess, has that performance surprised you at all? Do you feel like you're actually potentially gaining some share there relative to the impacts of certain regions? How would you just kind of frame that for us?

So Kurt, just to be clear, the volume for the total North American business was down 2.7% for the year. Our residential...

For the quarter.

For the quarter. For the residential business, it is down mid-single digits for the quarter. We do believe that -- and we see this with our customers, and we continue to pick up share at some of our lumber yards and pro dealers. We tend to -- we're still getting more shelf space that we think eventually leads to more positive sell-out. So we continue to feel good about our ability to grow above market. If you look at the digital mix, so the regional mix is a big deal for us. So the south and the west, when you look at the census data through August, they're down mid-single digits. If you look at the Midwest and Northeast, again look at the housing data -- census housing data, they're up double digits. And remember, a house built in a seismic or a hurricane area can have 10x the content of a house built in the middle of the U.S. with a pretty standard building code. So that definitely has a mix. We don't have great visibility all the way to the end builder, as you know, because we're going through a bunch of lumber yards and pro dealers and contractor distributors. So it's hard to say exactly how that's impacting us, but that's definitely a headwind.

Okay. Okay. Perfect. And then just thinking about the guide at a higher level, your starts assumption for the year ticked down a little bit. The outlook kind of now contemplates the onetime cost to achieve the targeted reductions. Is there anything beyond the October price increase that's been better than expected? Or is it maybe kind of incremental on the positive side, just thinking about the operating margin guide moving up to the higher end?

Yes. I think we narrowed up the guide to a 100 basis point range from a 200 basis point range. We've included the onetime costs. I think the -- our volume development has been maybe better than what you hear if you listen to some of the market forecast, whether it's a

Our next question comes from the line of Dan Moore with CJS Securities.

Yes. Just a quick follow-up, and I appreciate the color on the gains you're making in some of those targeted end markets that are a key focus for growth and continuing to outpace. When you look to '26 and beyond, if not rank ordering, just kind of maybe would you call out two or three that you see a little bit more opportunity here in the near term that could help you to continue to outpace those end markets if we do remain a little bit softer?

Yes, Dan, so we -- let me start with Europe because we're very pleased with the development that Europe has made over the last 2 quarters, profitability improving, we believe above market growth. So -- and we expect the growth there to continue. And Dan, we think, literally, we have plenty of opportunities in all five of our market segments. We've got very specific plans in each segment to try to gain share. When you kind of add all that up, there are a lot of singles and doubles, meaning a lot of small applications, digital self space, shelf space, new products that we're launching and small games with customers that we do think will add all up and help us continue to drive above-market growth. If you talk about the bigger ones, we continue to think all things component manufacturing is a good opportunity for us. That has been one of our strongest growth drivers in the last couple of years. And then we think ramping up the new product innovation activities, we are making good progress there, and we expect to continue to make good progress on that going forward.

Very helpful. And then lastly, obviously, you've been aggressively returning cash to shareholders and very consistently. Just the language around 2026 share repurchases up to $150 million, absent meaningful M&A opportunities? Is it how we should sort of think of that as kind of a target, just balancing, especially given CapEx probably starts to wind down a little bit after some of these projects?

Yes. I think as we've talked before, we've been in a pretty heavy CapEx cycle with the two facility expansions in Gallatin and Columbus, and that's going to normalize quite a bit next year, and we'll issue that formal guidance in January, but definitely going to free up some capital and certainly want to be continuing to return cash to shareholders. So I would plan on, barring unforeseen events or significant M&A or something like that, that's a good target number for 2026 on share repurchase.

Perfect. I look forward to seeing you down in McKinney in a couple of weeks.

Yes, looking forward to it.

Our next question comes from Tim Wojs with Baird.

I just had a couple of follow-ups. On pricing, can you -- how much of carryover pricing would you have next year? I think you mentioned $30 million you saw this quarter. I guess what would you expect in the fourth quarter? And how much carries into '26?

Yes. So big picture, Tim, tariff story, roughly $100 million. Price increases specific to tariffs, a little bit over $50 million. Both of those are on an annualized level. We also implemented our first price increase in roughly 4 years on our U.S.-made products, roughly $52 million impact on an annualized level.

Yes. And then just if you recall from Q2's release, Tim, we had a little bit of pricing in Q2 from the June price increase, about $30 million in Q3, as we've said, based on volume, probably another $25 million or so in Q4. And then so that leaves you with probably about, doing the math in my head, $30 million, $35 million of carryover pricing in 2026.

Okay. Okay. Great. And then just on the fourth quarter, like the 100 basis points is still pretty wide for the year for the EBIT margin guide, and it is a seasonally weaker quarter. So just any -- would you put any finer point on that? Or just kind of how we're thinking about the fourth quarter because that could be up a couple of hundred, down a couple of hundred basis points in that specific quarter. So just anything that could help us there?

Yes, I mean I think the biggest variable is volume, right? I think if you look at market forecasters on what fourth quarter is going to look like from a housing start standpoint, there's some pretty dire forecasts out there to get to the numbers that they're saying on an annual basis based on where we are year-to-date. So that's probably the single biggest variable. And then from the cost savings initiative, just in terms of exactly how much we're able to execute on which timing in Q4, we have a little bit of a read there. But I think it really comes down just to volume. I think the rest of it is largely locked in, but volume is a big enough variable in this case, given what's happening and what is already a pretty low volume seasonal quarter for us, which is Q4, typically.

Okay. And then just a last clarification. The $30 million of annualized savings, is that in addition to the severance costs? So it's not $10 million of severance and $20 million of savings, it's $30 million of actual savings.

Yes.

Yes.

At least $30 million.