Beacon Roofing Supply (BECN) 2 May 242024 Q1 Earnings call transcript

Good evening, ladies and gentlemen, and welcome to the Beacon First Quarter 2024 Earnings Call. My name is Joe, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

I would now like to turn the call over to Mr. Binit Sanghvi, Vice President, Capital Markets and Treasurer. Mr. proceed, Please Sanghvi. briefly. hold Apologies, we'll One moment, please. and [Technical patience. you your thank Difficulty] Ladies for gentlemen, Again, XXXX First Beacon welcome today's to Quarter Earnings Call.

I call over to hand Sanghvi like Beacon. would with to now Binit the

proceed. may You

today's as Thank Carrubba, Chief always, the you, Beacon's to call. to Francis, Interim by call the our I'm join Officer. evening, Investor with Officer; remarks questions. will our Julian Financial Jill. Beacon's follow posted everybody. Chief and time we you that Executive we for the of Good slide section thank begin deck that, taking will the Carmelo Relations joined will Julian Today, After And and call prepared Carmelo website. open for

begin, please Slide we a reference couple for Before reminders. X of brief

contain objectives statements plans forward-looking company's will and performance. the and about this First, future call

statements and because be historical estimate, current do facts relate as always words use other identified of expect, or not anticipate, strictly words meaning. such to and believe can Forward-looking they similar

from by set company's forth important XX-K. Risk materially not Form those factors, to differ various may section of limited Factors those including, -- statements results such as in result important indicated XXXX Actual but of a the forward-looking the

our call. becn.com. The press references in forward-looking of at statements. are is the to And release finally, and measures. And these appendix Both this reconciliation statements non-GAAP on and call to information measures press this no available presentation based set to obligation contain as undertakes presentation are company release Second, non-GAAP forward-looking certain today's GAAP as required the revise or these the accompanying today, on of any contained XXXX. X, the the most in law, May website call except by to measures will update the this of forth comparable the

from with begin remarks let's opening Julian. Now

Binit, good and everyone. afternoon, Thanks,

with has the demonstrated growth to created record We our Ambition The sales. executed business year, plan we again, on increased XXXX that for grow. by X us start year-over-year. are Slide to X. than lines Once well team Sales all quarter XX% of multiple pads delivering beginning first more posting

This supportive market and greenfield Nondiscretionary for services growth contributed quarter. to acquired more was of continues underpin reroofing slightly is products indicative our repair in need than branch the the than and and higher a and expected environment. locations demand X% first

recorded grow to quarters strategy of environment Our any sales proven, XX growth. year-over-year have is we and in consecutive

This productivity is maximize proposition value to continue because we to service scarcest our add allowing of customers, the our them to their labor. enhancing resource and

below approximately at call. first of in quarter gross the on our year above of but points we basis came Our XX.X% margin quarter last XX fourth guidance XX.X%, that provided the

highlighted the both greenfield the recent we not February, In yet and are impact fully of margin matured. that and M&A additions to gross expected OpEx

over branches acquired last through reflects reminder, XX XX opened newly a this locations XX. March months As the XX and

I Our are than both value dedicated And Ambition announced greenfield later the comment call. since expected and our in XXXX teams portfolios have that acquired plan ago. which our say on our been executing we for will years pleased to performing at a I'm creating high shareholders, and better X level more

track built We with continue greenfields rapidly customer Denver, construction Colorado, Headquartered the in value-added to restoration have and locations acquisition our growing the and Since to and Mexico in providing in XX has to California, Year-to-date, Arizona, of a yesterday, markets. industry We future of technical contractors. team solutions Utah. both new our expand adding X acquisitions, waterproofing growth an significantly record know-how leader XXXX, throughout Nevada, waterproofing and invest enhancing footprint. we opened made service in and reach. nationwide step X platform an our important took

expect. digital We're the our investments for our private As members our model. the are leading results provide customers positioned improving service well including preparing operations, in pricing team high our season, the construction in investing to and they our future, platform, we also key initiatives a offerings, enter today label acceleration caliber part delivering of while of commercial

we would and year, that and residential be average. improve that the by time, into revert last nonstorm our the construction expected the assumption of market driven demand reroofing over also new roofs number older lower would to to as grow At same said storm Coming will reroofing residential XX-year repair activity grows, the year. we

in would a contraction Architectural roofing, grow the commercial first based there that that the our year's said Index, last of Regarding activity volume because the of destocking. half in we be on Billing will install year but

of team our as summary, have end fundamentals the demand performed has executed well. and market In we expected,

out Now organization, turn laid to Two years deliver returns. we above great consistent build adjusted to and shareholder our EBITDA ago, deck. a Page margins generate please X drive double-digit market target superior the growth, of

central customers goals, relentlessly achieving every Creating team is to these focused value that for our day. and on doing our is

update are with you initiatives, we an starting a culture. provide how with building winning our strategic me on Let

our core day to as values calls, risk recall at employees themselves. prior you are safer. of One of And make newer greater is injuring from every may

In branches and and which March, employees of on year everyday we and all held our X,XXX this with our paused focus sprains. annual making company-wide strains safety stand-down a safer recommitted in to

to as tools will stretching safely and injuries. as We techniques and continue innovative to reduce well lifting of importance using emphasize the

by strain reduce to our goal this XX% injuries amongst a employees newest occurring set year. have We

and cams to fleet conditions, prevent real have behavior. analyze our We have another technology and practices. begun fleet drivers continuously behaviors By use further in providing flagging to also drivers These accidents. and reduce cab types influence alerts tool managers driving and cameras to unsafe piloting these road helping in warnings, safe AI-enabled time dash of

our the to people to we Women's in leaders put first. And February, and from our values inaugural of bringing learn Another female develop industry. hire, best held organization Summit, our a culture more compete Roofing and forum together a the core and foster in is and to and in national retain diverse the network. event women This of us in sponsorship will inclusive talent help for across

is be in lever enhancing pillar greenfields market above and our Expanding including acquisitions. reach set growth a driving plans, of major in second initiatives. growth targeted a and margins through our continues investments our customer Our to

Our on new and continues we time it time dedicated us reach have X team a reduced we year-to-date. to to new customers. we opened add distance execute of sales Each resources locations, and our had branches branch, average greenfield pipeline the and takes our

us overall to enhances proposition, giving market earn opportunity This our value share. the

the of have on On February. goal of acquisition we acquisitions, call Sealants XX in earlier XXXX, our Metro of since beginning our highlighted exceeding our XX and discussed the of 'XX original new and total. now of purchase We of ambition opened branches Greenville Roofing Supply we

and We acquired in product adding the April, Siding building have Midwest General surrounding offering and the areas. also Supply complementary strengthening in including locations Omaha our

announcing Since companies $XXX towards million XX base in adding Ambition year acquisitions, approximately million. plan, capital branches have XXXX adding XX date. to of we deployed $XXX have more our these In than revenue we acquired total,

Our increases when online capability loyalty, continues channels. and and advantage basket customer generates to compared Beacon through be XXX sizes digital competitive a platform for to enhances larger sales our points basis off-line by clear margin

quarterly a to our target XX% grew of digital we quarter, our to our close XX%. adoption XXXX first highest ever as customers Digital sales year-over-year. highlight XX% nearly at we Ambition the residential were achieved and sales In

competitive this have to area invest advantage. build We digital leadership our our differentiate to by upon ourselves plans build continuing in and to

adopted the Commercial of throughout we systematically Ambition the are in acceleration these are We last plan. locations roofing our launched practices, organization. one and happy have report we practices from commercial growth. gathered growth is that our pilot them initiatives replicating our seeing key above-market to XXXX initiative we the markets. In of commercial best year, top-performing I'm where

the We line markets. the increased of At customers, we has roofing year, TRI-BUILT the to top and products private products come have a is growing roofing of job. building full system, sustainability of this our through program plans touching the for extend amount quality time, our to grow typical the commercial have insulation for their a on label XX on focus roofing commercial part Furthermore, branded our the a commercial codes to have insulation same customers rely business. the of required and

So meet of installation ISO owner professional-grade Not systems. TRI-BUILT contractor product newest it and I'm commercial energy that specifications announce a of does line. a pleased TRI-BUILT building diverse roofing range customers. to roof only is the efficiency, benefits but our is expanding offer commercial addition our designed the to to ISO also

It's eco-friendly to customers' come features for our choice on rely it a make customers our sustainable projects, have products. TRI-BUILT and

We through to continue of offerings. expanding them catalog will product our support

operational through driving improvement excellence continuous Our pillar initiatives. involves third

strategy, our new that by a is approach give it me importantly, our of just model. pricing is It governance a let tools update pricing product. and way processes. individual fundamental as This well much goals in more rollout as of not you and system, is a but And positioning Now shift new thinking just the technology. supported most an and on than involves an

improve I'm pleased elevate and point are to branches, competitive XX early achieving I'm structurally but confident initial expectations lift performance. a We're our basis in dynamics migrating the Beacon's pilot of market that delivering system on margin. in our help say our and Ambition that to results still new will XXXX us edge respond

reduction a from take in fleet to resulting speeding usage fuel this idling. will technology in enables in The software and also hard reduction minute telematics real-time to improvement how fleet bit efficiency. talk including breaking me new improve route emissions. monitoring little fleet a enables about Leveraging optimization, operations, Let a and our data

And fourth, creating shareholder let's value. review how we're

the have As XX companies mentioned since earlier, beginning adding XX branches XXXX. acquired we of

disciplined paying targets. acquisition off, M&A high performing I'm above a original exceeding is dedicated team our and at is level expectations. is our growth our report Our approach the happy to executing portfolio that and

exceeded and value-creating strong more for going are which employee continue to Through becoming sales acquirer of and choice, branches opportunities actual forward. retention XX%. provide talent and of a closing pipeline an by Our our development than performance will we acquired faster integration, the

took window of of from loan, credit reducing in due interest an rating The to opportunity Next, upgrade also to and we'd of was term factors, agencies. spreads. rate market part received economic we our X refinance our favorable advantage a

As additional B $XXX XX were per interest loan, the saving more by cash on over than free a X-year Term generating life reduce more share. flow result, points our in outstanding pricing we cash Loan million $XX than able to of million basis the remaining

and amounts year, to And are returns lastly, no in there remain quarter additional we evaluating this timing repurchases committed shareholder the of buybacks. were although and of the share first

Board February $XXX have As of last authorization we year. by remaining in a granted reminder, million approximately our in

year, to start we're summary, and a well as we In the at the off to developing is market good as anticipated. least

Carmelo pass let details more over the Now to on for it quarter. me

Thanks, everyone. evening, Julian, and good

prices selling net by driven from organic XX% primarily our Turning first were volume to up year-over-year. quarter, In billion year-over-year the as aggregate, acquisitions. achieved $X.X average than as in sales the total growth X. for contributions over We in Slide well products positive slightly more

approximately contributed Organic overall to including X%. while greenfield, volumes, X% increased X%, price less than

the net As portfolio than acquired more contributed our months to we year-over-year. is acquisition well sales performing branches last discussed, XX X% over daily and

roofing single-digit in in line the strong higher by driven remodel Residential the with more sales and market. X% higher demand, restocking, were channel were the combined prices in Resi than as underlying we with the and for repair volume estimate quarter by that were resilient grew low volumes adjusting range. we

destocking continue that to the activity homebuilders. customer period. solid in new prior year level residential single-family see in We increased experienced we demand in nearly at sales XX% and Nonresidential improvement from on particular, construction, R&R our

quoting year a and mid-single we And sequential pricing, a high we on the will progresses. repair in of be at digits a new healthy continued remains from while construction year-over-year levels, and which also expect stable shift supportive activity and from reroofing prices the see to they also comparable, basis. as Bidding declined remain

more in our X% that nonresidential were products Complementary has volume grow. Please by year-over-year, category residential exposure. complementary keep continues siding year-over-year. partially than our offset growth. sales platform stable now Selling product waterproofing increased of approximately the XX% to specialty XX% as Lower and prices mind

QX Slightly gross X, first offset points was expectations positive gross Slide the higher were quarter, and than to margin down review product prices in nonresidential selling Turning and basis than operating but approximately XX in more margin pre-COVID margin higher levels. above XX.X% the solidly we'll costs line of year-over-year, especially by expense. Gross average our business.

synergized basis of mentioned, as percentage. and declines. points M&A greenfield of conducted XX we've was the also past mix cost fully we year Higher in the margin to approximately down the offset yet percentage the to and decline gross has as line business contributed and new label dilutive locations private And in sales. sales digital year-over-year, partially and Price were be a

a the driven and percentage XX year-over-year. the branches, to million, quarter. was basis change OpEx adjusted with associated OpEx OpEx Adjusted compared in of million $XX increased million sales up an of XX.X% approximately of increase. Adjusted primarily by acquired $XX contributed which was or prior $XXX The increase expenses points as year greenfield to

contributed our Additional existing increase. in headcount branches to year-over-year also the

recall we are service February as high the seasonal given in customers will the wages call markets, that provide to and properly to increase to of in also adjusted contributed our our tight rents we activity benefits You meet Inflationary and ensure OpEx. made level ramp well an consciously that in expect. from labor as the the effort staffed

XXXX. contributed already class We with bottom bottom inflationary the the pressures, and has have focus diagnostics for to results initiatives line also and favorable we improvement years in is quintile of continue XXXX. for these our improvement completed many to showing on productivity and offsetting plans initiative on goal This of

enhancement to technologies initiatives branch our optimization. investments experience, pricing in to sales customer in Ambition priorities organization, XXXX and above-market quarter. the e-commerce tools, growth related These Investments margin continued drive include and

flow X. quarter. $XXX in Turning to Slide Operating negative was million cash the

cash the the pattern in our and Given the seasonal in half the generate year. second year in of the cash use capital half of first we of business, working typically needs

$XXX price to we of demand the support end compared increases. inventory the and year-over-year and the first XXXX manufacturing of of inventory to to adequate acquired advance for quarter Higher in is the product to M&A attributable million ensure is that ramp inventory through also greenfields. Net higher have

of to as EBITDA. our target of Net end March, Xx leverage stated X stood debt at of within range well X.Xx, the

access mentioned, and March, lower loan. which notch, Moody's we of forward. rating to our our took overall term refinance Julian advantage debt the of our At our upgraded credit the reprice opportunity same to As in going time, and cost long-term will capital X improve

portion The we used demand, approximately our million. of the in to revolving raise strong at additional of decided to incremental us and funds with pay credit upsize balance, $X.X were end. quarter $XXX billion the a Given provided line an down liquidity which

balance opportunities continue returns. capital as and growth We our shareholder to between allocation inorganic organic well as

to This invest acquisitions as the us balance in in the in not expect record and million the approximately ability and also beyond. will has well as by included also to the sheet amounts building year out investing full liquidity. of value-creating deploy in greenfields our Our already and We're tools expenditures discussed, capacity in ample business XXXX. $XXX is fleet technology only capital during and facilities upgrading investments benefit that but our XXXX underpinned

performance up, first To wrap we are very pleased the the in about quarter.

positioned disciplined We the well most part have the to we significant year. by we as and our our realize important momentum, of objectives execution priorities enter are continuing of strategic

Julian let Now his turn closing for call the to back me remarks.

XX Carmelo. of Page slide the Thanks, turn materials. to Please

the you we on I'd Before to Q&A, head update for XXXX. to expectations our remainder like of

of meet to year-over-year will track storm continue be our driven We residential to that this point, assumptions appears demand on demand believe to by XX-year the lower market which, nondiscretionary be lower, average. at

despite roofing the will in higher construction remains our contraction XX, Index sentiment higher In see business, activity. Architectural both demand replacement in interest nonstorm-related commercial and believe improving, rates. aged Billing the new indicating but We we be below

However, be contracted our us are we lap as volumes year-over-year effect that higher last destocking expected the year. to impacted

per X% second growth the year-over-year, quarter, the growth the X, the manufacturer's with high April a single April sales to be effective announced to line day. of expect sales range increase For in announcement. price total single-digit in corresponding we We

and executing by team market realization local Our will be is with determined conditions. discipline

expected increase to and XX% to higher a the of range, Operating quarter inventory and prior be to the sales attributable largely year higher first greenfields is our as profit. gross in from in include to margins year-over-year, a expenses result, headcount As percentage expenses related expect than the acquired and we branches.

than We as the last percentage of of operating higher year. quarter a expect to sales expenses adjusted second be modestly

Our net acquisitions for full in expectation year-to-date. growth mid-single-digit including sales year the is range, announced

initiatives, Important and be by neutral to resulting including structural label from price year. relative be improvements offset expect we full margin mid-XX% On that digital to to the mix range. percentage private somewhat in note to higher year sales nonresidential in expect cost gross we gross continue our to margin, higher a last

to need million our customers' acquired $XXX and We services meeting year full is our between when businesses, inclusive expectations and raising where be our of $XXX are recently our adjusted needs million, EBITDA they priority.

Near-term on cash flow requirements. continue will depend to working the capital seasonal

For the to free cash. of full though, adjusted year convert we expect to above EBITDA XX%

experience, areas our on on daily remain the enhancing focus execution customer control, and including safety, Our and will our service efficiency. pricing within

our a result acquisitions to greenfield branches initiatives on in to will employees. our our of on for We well expect pipeline as our on we growth, will of for locations continue and capital and customers executing robust accelerated as quality deploy XX and in XXXX, including that improve target their investing delivering

be And we investments environment, with In growth for we value and we our for returns any market to demand to continue generating balancing committed positioned creating share in outperform to summary, our shareholders, the all well are repurchases. will stakeholders. be

rest are key to we our the enter the part of We forward looking customers as XXXX more build and construction a season. of helping

And with questions. that, it for Joel, up we'll open

Research from Thompson [Operator Kathryn line first is question Instructions] the with The Thompson Group. of

general for on they're sales, This expected, a ask just probably the stronger overall guess opposite at Brian the to on I than is headlines actually bit little nonres moment. about Kathryn. from Biros the nonres want I

guys on the grow You there the are destocking contracting why currently well, things when overall. of allows and that kind out you performing demand comps to you the touched of was just industry

rest the comps there but maybe for year of growth I around be put you would else you to that can the guess continue growth mentioned size your the little of rest in is anything the in more here outlook consider framing nonres going the of And kind kind forward? helpful. for for know a there, color just number I double-digit year?

is I Brian. never -- year, market quarter seeing year. pleasantly total believe Thanks, install in had that market, tell we down. is I in anticipated We that the overall be growth. the the that But arena we the coming commercial Yes, sentiment we probably were the the last quarter. would would overall a that anticipated indicated for we the we saw activity first first year. full obviously, by the surprised the than market was you destocking indicator into better

But in I destocking we fact probably that I XX. a positive We index Index, the year. the would tell we market despite in the than little don't is better I perform sentiment that that you marketplace. the below because of would still tell think more see Billing the last Architectural sentiment track, that feels that that you ABI,

that we think first So was year. last of completed the largely destocking half in the

starting expect remain to bidding the would we growth. coming to indications But in some see are quoting half market were year. the our us substantial quarter So the that second overall the and think they're probably into we get I than now and optimistic of significantly more back year, customers giving outperform into the and they

you, coming, practices it's the but have I long well the our time best that's how that acceleration business the with going capabilities across work So an as line pleased also really have. with as markets told commercial we're I the making emphasize people impact well. and starting to we're think as both we doing the been very, mentioned the about a installation That's very commercial today. to investments we're initiative, the in company. sharing I I on of excited opportunity. want TRI-BUILT and that the

Trey the with The is from line next Stephens. of question Grooms

touch we cadence on year. if the hoping kind was maybe could of for I the

the XQ. some how give half full maybe comps us gave up any you XQ with tougher the -- kind you think of facing the in the back us frame can with half. clearly good and year, But we're about guys help to in the for You us cadence color on color expectations some could back

of pricing also improvement expectations Any comps of Given the and the color that backdrop thing? sort tough but would helpful. for be your

half big things the year, a the and detail. Obviously, give Carmelo come impact I'll to the started residential storms the But as Sure. into year and up. we little way are in. more got picture of the try it shaping a you second last for we'd bit turn to first quarter, the to over see

that impact had year. So a positive last

nothing storms. to but sort We've that were have this in anticipated believe that carryover outlook, see a of of hail carryover We impacted from partly to average lower of XX-year couple from in wouldn't we storms last So the due comps good year-over-year, we seen as reasonably that sort year continue to early partly there and a then have good there's demand storms have significant would that few been significant some to quarter locations the growth of second expect due well. Midwest year,

So watching. play grow we We're I little second the there's a ability optimistic the we probably average think seeing more that's half. more got we've in commercial. still of impact some share continue in couple that market we're the what of the can rest see out. be. a positive year, a although to bit of gains first expect things contraction we to the of storms be environment, there of little that our and Obviously, In still our half to the believe optimistic, probably terms into bit now

we start optimistic the a where a to the year And about becoming shaping we're a slight said, half in half. bit guidance that back it's year to more with that produce out. will as greenfields little the of our think I second towards overall I start nice overall the raise So how the have --

I including think year, very on what positive we pricing. on overall we remain see this

Maybe exactly. that add. I the Yes, that's would color

the on market. see I than positive the then were maybe were commercial like what we that at expecting this more months we we X ago, think point

Now commercial in environment in positive continue be segment in little our and we're in of pricing give doing the executing year. work a the of and will momentum see think we stabilization that And we even QX. to commercial acceleration, market more trend the bit also the QX this will supportive that confidence we rest see a us also

earlier to the benefit, of think our the we from in in as they also get we executed course, that systems. And we're acquisitions integrated year. going Also,

-- little a and synergize the course, Of more.

the I contribute. course, opened we -- benefit the the think that part in our year greenfields, some -- the see of of that of from we the also of first we'll our will and want greenfield maturation also to

all, that and positive then in will year from mentioning. the the all about you the very these progression in complete we half year other we're So of see some and second despite that were of the

is question Michael next Rehaut JPMorgan. with line of from The the

to you outlook? back to -- $XX I lags top wanted line Still, midpoint raised circle the full X% it at the the a midpoint. year at EBITDA kind about at looking EBITDA and we're by of that guidance the guidance million growth

be how as obviously, of with Ambition about that, still basis to margin should this year, that associated XXXX. and initiatives greenfields acquisitions dollar then other really by your tends and impact we And expanding perhaps part the expect the driven on the a you this of some think costs that your versus

expect EBITDA drag look growth growth. forward years impact you you bigger or we picture in years, next a would be to and the the onetime couple the as expect year line the or over over from next more more normal revenue cadence to or of even a in be more acquisitions greenfield this exceed And of would couple of the

a of couple that line expect think bottom going run answer growth on the things important. for line. question, The There's to Michael. in long EBITDA that we the are would our outpace Thank is I top you

margin. ones, margins process, been few particularly a of we've well process. of sort to We how larger BXB done, our certainly bottom the acquisitions the we've average looking quintile now like the of the know have We our buying. One, improve we're companies process at We branch the below got a revenue there. that EBITDA know a

recent to of margin. EBITDA more some have mid-single-digit had there So the acquisitions done we've low

So revenue look to significantly. that that's at nice think we we a when be -- that, can improve drag. Really proven we

would that add So it. to

the got to They're As been still kind X we start mature. remember, into we back into years greenfield. of get not back only since of it's sort

the they of of we've bit in, than So the a that the today coming in probably drag. future. still a little in terms of a And coming they that revenue portfolio represent from percentage represent total of greenfields bigger got overall will

So drag, see diminishing that That's a be double what you mean, diminishing well. if I over also will negative. drag time a as

that of element the third now like we're our initiatives couple of that's we model, are digital, product put years see the traction. they in label that really is, I place expanding, think The private starting ago, a like the pricing what like to to get is impact the starting line now

And working a in really on P&L to them, contributed been our haven't they way. while we've significant

certainly focused top not is EBITDA And we would this feel it look business. to that underlying a growth. at phenomenon, back exceed we're So X-year well, our start certainly not But it's something It's on. something line we a confident multiyear -- the that is will maybe growth phenomenon. get we to

certainly deliver grow back And believe actually margins. EBITDA margins basis. can an to something a point consistently Margin EBITDA ongoing expansion on more we we're to on getting focused double-digit where is continuing grow we importantly,

line The Mike next question is RBC. Dahl with of from the

number single resi the you inventory inventory. inventory? just be characterize your moving Can of about wanted much was Carmelo side. the on a specific articulated prebuy? more the I there. in how that pieces Obviously, ask would So to How about quantify you

cost you the benefit, including to year price then neutral. but the XX% also, And full margin, alluded

then you what's in margin cost -- second offsetting that and headwind gross effectively XQ price in do half just quantify we neutral? And the as XQ? then be and the So price gross would the cost effectively think that about the saw margin benefit

course, remarks, course, actually All year built right, of when off inventory year. in coming a of inventory Mike, in building thanks for our and And this inventory bringing the is, actually we, prepared question. as Yes, of QX said to we were last down. so this we period compared

time We this year year. into had outlook to a compared last coming had we this different at very what

wanted we price as serve wanted the increase. advantage to So market prepared we you prepared the well. be take course, to to to of of be And also, mentioned,

impact so -- from all, is, were inventory. that the we we probably that's, think, price in time wanted the QX. in on margin I And that were also these to we to think coming which I that I our elements digit, then with on the that mention in will growth make thing from performance I able All in wind our in will we performed I the inventory these see down of profit investments to on wanted support our inventory QX. think the greenfield course, and would low and The profit acquisitions sure also characterize these single

I add know what say. I some to Julian that. that's would color I much wants think don't pretty to

Yes, Mike. of year. in pretty about country, occurred last demand the the markets where storms a western the the coming are of into confident half particularly we Look, year, residential of carryover in the lot some

Denver Pacific, sort that of the So thing.

to sure the bringing unlike we particularly we last So in wanted were the year right that product in lines, make shingle.

operating low is I prior up year. so low think sort digits the manufacturing shipments. roughly, the So believe. the bulk of the in certainly the shipments, the is lines. million been things. very by, it carefully side inventory. in armor think, in a They're you We've to $XX investment commercial We industry residential And at over range, managing sort take, I to broad-based mean single give was of the obviously, been has industry. add of that was which the of product they -- we've we overall I the were think double or inventory look what But wanted capacity,

we we then really of and markets, that the took and towards it the a manufacturers strategy knowing we're with doubled markets the out everything increase. shift of tilted plan. come couple that a And inventory off put good There's April come in to with place. residential right But are down have on an we think watching into we make those. So sure our that, to would well X to manufacturers could we We year the sort that that the placed. we'd be opportunity wanted it everything were

Benchmark is The Garner The Company. next of the question Reuben from with line

Two-part on question the side. M&A

that guess, can what company acquisitions recently it do power some businesses Julian, the cited were Are pipeline the of so, clarification, simply guys if through product closer businesses. margin to or the then kind EBITDA And is, purchasing of the any your it processes? moves of kind the complementary in with maybe you those Just low a operating categories those outlook is you Is I the of more and the in else bring? and rate you siding rolling mid-single-digit look anything part question recent waterproofing get average time? second over change Or what's kind to of that there?

to Happy that. about Sure. talk

in referring acquisitions the our business, right to about So that. primarily complementary you're I'm were

that businesses the the So businesses, larger larger was. we've that that's we I the generally drag were where done. the had Like acquisitions scale said, they

with bring, I overall, line rest got terms mean, operates in we've sort In business of we of double-digit of sort of the EBITDA margins market. what a complementary that at the

know those Certainly, scale So we can operating to implement. we it. the things deliver think I operational TRI-BUILT, can matters how know But of now improvements we where Digital, us. it's we we side that all some of think of something that to bring the and capabilities. purchasing also

team that of these management areas. operations drive dedicated this of enhanced ability we improvements capabilities. in in in the we really inventory all And our to see has addition have The

So we businesses doing think being next at average built over of couple move around really company excited because a we're that. to mid-single-digit about those we least think businesses to years. we've that the sort But can capability able the in those bring of certainly we up

second changed. terms remains I In think that your question the part that robust. say -- on pipeline, we've interest have it of of don't I'd rates

a we've Obviously, sellers. years of down. potential multiple X acquisitions got not with talked that kind done this slowing the active last of over see we the do very we've in back the about We've since game. are We number year. acquisitions We conducted

scale proposition. looking any of And for tuck-ins. ones as at in X years. as well been last the I have with over we're know about excited We're the as Obviously, point many as we we're discussions don't

all, presented So no us. we're and the that being slowdown opportunities in excited about that to at are

of with The Mamtora next question is from Ketan BMO. the line

it year full versus what holds storms? how the to commercial the I'm EBITDA you bottom end just Is your Is it curious, gets think as guidance? guidance, top the end of the you side up. about

Look, bit Obviously, those now. we're raised Yes. little we've probably Like our I Ketan. more things, it's said, guidance of a optimistic. all

only weeks at for to some usually a been X execution. to WACC so elements our sort We've costs, there's clearly for we've current X We pricing of what the fully that think the little adjust momentum I got for -- there. see that accomplished. good now. form takes believe It days can to to for and XX we we've

I to We're mean, weaker in the are would numbers I out oddly, been Florida a markets it's you has move certainly challenge. some there signs. early pleased markets. there the with harder tell that

you the first they in lessons shipments, XX% at if the in Over quarter. were looked so the down Florida armor

market a is great expecting we're not realization. Florida So where

for the bullish sort country, But second also we're us. that's important full going of where to year. of be quarter It's rest both the taking the but about

XX-year there. positive Sentiment market fact I seems initiatives remain towards the to storms that place the remains look, around M&A we below commercial, above seeing is help the guidance to top share improving but We despite have with that we average we're drive average, good of going contribute. be momentum ABI would there. end earning in like that would said, us believe We're the range, Certainly, XX. So definitely that

we putting on But I last So is we've that multiple and we're multiple all and both The said, this it's we stops. top quicker greenfields we've on we're in the If place, working paths end I'd say ramp can with to the the private to get initiatives we manner growth label initiatives digital to also year. branches bit help efficient really of and improving do work margin to got, a do in are not and if expansion, with said, can paths to a got the Like continue of to range. as them. acquired working. That to drive solely to we that that little the piece those deploy would M&A.

very drive we line all improvement. around elements look, to built bottom these we've feel robust us help of model a So

the we So excited remain opportunities. about

Shmois Loop question of Capital. Garik from the is The with next line

year. to just geographic point curious from either outlook for up the follow wanted there's if I'm mix, rest on or been the any just I your QX either around negative, for the in or of the positive impact being weak.

You quarter sales, any mix about ahead geographic but wondering just product with being commercial the issues? with to mix spoke higher

first been gross of impacts Yes. towards all, the little This as West, the a shifted geographic has gross we've the recently margins -- that margin. the is about mix of impact talking something south on that bit on and sort

that margin all shift geographies go have and of geographic down the can I corporate a mean, way all the truism improve up. shapes gross margin that in product lines gross because and it's we in

southern the slightly the part of gross to So margins. U.S. be tends lower

there but that. right little now, of that So bit It's shift has drag. a that watching we're a huge is a not X

our when to Obviously, volume southern down margins in of storms relatively you part EBITDA the a there, EBITDA country. margin, on no are tends impact but has it lot across margins. that drag the drives stable which have gross our

the but affects not it is the So which level, EBITDA margin important EBITDA we focus have the it more an margin gross on margin level, think at is impact does why ultimately. that

and about you've in, dip say at X that. after shingles particular Florida. you any would is, you the was Ian, in around through. was last that particularly thing I it worked heavy shift seen all hurricane first don't The now, been When it of I if because look got obviously, think think we've year, quarter that's

category area. been there's just demand has lower more much in the nonresidential that shift The because towards in residential single

towards our question, Garik. bit of Thanks for margins negative. we're where a shift having a also that's the EBITDA really little the So really, But again, focused. mix

think important communicate. to for that's I us

Adam The with Zelman from next is Associates. & question Baumgarten

benefit One suppliers as weather being commercial talked of quarter. your a the first roofing have about in

days pricing X improved is they next there's the some X there, a go you out it. And months, will how the increases or also of roof extra you do on then the that benefit? your as think given think fare front way forward, price I couple cited increases nonresi the Did over feel you just on outlook?

Sure.

manufacturer that the in interesting since locations. a they're roof, of say they got -- out actually that don't I would days roofing So into not they're shipping us they in extra

exactly impacts So same in that sure way as us. I'm how impacts not them the

call, means first country, that propensity see We good. pretty roofing a what it tell that would you of days, I'd which about I has whether days gets on good that impact. demand of an kind doesn't was have Heavy but people's weather a really But need we a quite roof, had of X on that quarter the a the did weather few, much different on new rain what we sort a What rain in quite had up no of impact bad where actually much uniform bit is rains we was is to volatility. roof. see did light everywhere, across

January were it rough. bit early of month pretty then But of little was -- of March the February month but down, and in They not early the very The half good. strong. second were good. were was April actually a well weeks April

So kind the all over place. bounced it of

to We sort than days, pretty very And there. tell would. our of demand days, reflected the like convinced line into and on were is that decision was OpEx that winterize on would our demand we weather rather I coming that we the of good holds that see healthy. branches people normally the you year would in But sort in roofing the good

saw. we with we were so what And pleased very

-- pickup we're it but mid-single on said, in I stable commercial second to out weather in a get sort pricing. of May, get March, we As and mixed your certainly nice was year-over-year, We pattern demand on said digits sequentially. of going sort to really down also sort seeing side. April, I was of of -- residential commercial said nice so June, the like think see question going And that we it into we're

continue. the what I pattern think will we is that that, believe

as that digits. was which if Overall, said, not market can single is think think that healthy. to we low see anticipated, I think We the had very of of much be would terrific it's remain going as fairly the positive we sort in We as constructive. inflection to continue that down I market volumes, terms was

from is Stanley Instructions] The [Operator with the question of line next Stifel. Elliott

Everybody, thank level. the in. thanks fitting quick I for question, Julian, for me mean and you question.

announcement. the just big past into mean box I looking we're I understand with So the space, to of players get X

business Or Or to where X the envision take is this this think strategically? smaller that about that? disruption create it from how of you basically share players customer sort any something Does you would the down continue the change road? maybe biggest the such Does is dynamic players.

I Just are you early love see to but about very we'd process, that. we're understand thinking guys how the in

it so that believe we Obviously, out. putting of been SRS had I see. it and Yes. characterized to us Home it is far. on going how Depot's was certainly deciding we're something on based to caps This going was mean, has play what our thinking still purchase

in it's honestly a dynamic. I our of it's don't I are creates to market that any going mean out. that the same way tremendous plays -- roofing it's buying distribution of how No, professional there, wouldn't say customers we'll they're it a amount can't from Home not disruption believe expect different and closed. Depot company, I SRS. obviously, see but that a believe It's I

is be of the happening I undervalued. and than really higher relevant and strong terms valuations I seem between at to think We've very explained The multiples trading it believe here was transactions private market We've thing it's that the emphasized private believe -- we're multiple. is team markets certainly public that roofing the in we call of we're for said at. This a discrepancy to

that continue to We well any we in that think the marketplace. are we're the multiple by -- garner executing in and we're results delivering as we market strong out be company frustrated as anyone as the that public as today

think is long-term that this out. So going something will to I Like to a have play don't said, continue it's I effect.

characterization. money. the where resources characterized label on talent, think to the have in attract greenfields is deploy playing We to talent, really in that our all that, time and develop X best people that that's size share. against industry. and to likely our think taking the are important, field a think We I we're digital big this to still spending ability as you investments that's private in matters it believe We

believe continue I change how we'll So to that's going to strategy. It's not our think that, do.

made markets. between private I gap the just very and valuation think clear public it's

to our concludes the back turn closing comments. Julian That over I like for session. call to would Q&A Francis

I his Look, as today. interest everyone's appreciate Carmelo I CFO. and table before across thank Carrubba for Joel, interim contributions the and look close, and Thanks, I my friend, colleague to want

financial to And valuable in know other who's him Corning welcome who Chris industry his the particularly he this Press well weekend. from record building I a a our products will I want with in role starting Gandy, makes and leadership, assume us each here Owens track sitting and together. to today proven that time addition And also got team. our at

work we'll a know So have and know forward. great we we we partnership,

Chris? So

like Thanks, Julian, execution. and look strong team really demonstrate The to made good in coming join to I'd to thank evening, very of you it all forward leadership. his I step in easy everyone. the I'm It's for also team. with and and honored to Beacon's acknowledge continues Carmelo and to here. days. and me engaging meeting

. you. thank So

for for members today, thank is focus to their Chris, and appreciate you call your Beacon. on so the and our the relentless important We us. Thank field, for in you. interest team in the on which thank us Thanks, everyone execution joining

call. Thank all participation. today's your for concludes That you

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