- Sales Growth: Net sales surged 43.8% to $1.84 billion in 2025, driven by strategic resegmentation and volume growth in Hardware Solutions.
- Adjusted EBITDA Impact: Pressured by Extruded Solutions volume declines and Mexico operational costs, yet progress toward normalizing operations by 2026.
- Debt Reduction & Buybacks: Generated consistent free cash flow to reduce debt and repurchase $3 million in shares during Q4 2025.
- 2026 Guidance: Anticipates flat revenue and EBITDA for 2026, with Q1 revenue declining 16-18% and EBITDA margins down 800-825 bps due to higher SG&A costs.
- Synergy Realization: Achieved over $30 million in synergies, with $5-10 million additional expected in 2026, offsetting inflationary and SG&A pressures.
Segment Performance
Volumes in the Hardware Solutions segment were up approximately 1%, while volumes in the Custom Solutions segment were essentially flat. However, volumes were pressured in the Extruded Solutions segment, mainly driven by weaker demand across European and international markets. The company is taking steps to address these challenges and is seeing operational improvements from the resegmentation, particularly in the Extruded Solutions Group.
Balance Sheet and Cash Flow
The company's balance sheet and cash flows have shown significant progress. The company is generating consistent free cash flow, which has enabled it to reduce debt and repurchase shares in the open market. Debt paydown was a focus in the second half of 2025, driven by investor focus on net leverage. The company paid down debt aggressively in the fiscal year and repurchased $3 million of stock in the fourth quarter.
Outlook and Valuation
The company's current view for fiscal 2026 is that revenue and adjusted EBITDA could be flat compared to fiscal 2025. The first half of 2026 is expected to be more challenged than the first half of 2025, with revenue expected to be down 16% to 18% in the first quarter. Analysts estimate revenue growth of 1.2% next year. The stock trades at a P/E Ratio of -3.19, P/B Ratio of 0.97, and EV/EBITDA of -13.48, indicating that the market is pricing in significant challenges. The company's focus on debt repayment, operational improvements, and strategic capital allocation may help drive future growth.
Operational Challenges and Opportunities
The company faced operational challenges, including issues at a facility in Monterrey, Mexico, which have been addressed. The company is also navigating inflationary cost pressures, housing inventory shortages, and a wait-and-see approach ahead of anticipated Federal Reserve rate cuts. However, the company is seeing mid- and longer-term opportunities for growth and innovation, particularly in the Extruded Solutions Group. As George Wilson stated, "We're starting to see mid- and longer-term opportunities for growth and innovation."