Beacon Roofing Supply (BECN) 31 Oct 242024 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Beacon Third Quarter 2024 Earnings Call. My name is [ Ezra], and I'll be your coordinator for today. [Operator Instructions].

We will be conducting a question-and-answer session towards the end of this call. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. to call like to now would turn over the Mr. I and Vice President, Sanghvi, Treasurer. Capital Binit Markets Please proceed, Mr. Sanghvi.

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

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

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

a historical estimate, facts as may or words such including, can set materially statements XXXX Actual forward-looking from believe, various similar as the expect, use of the to, current Form do those statements Forward-looking of indicated limited company's identified XX-K. factors, to by those forth because and anticipate, be Factors other results they section meaning. not words and result important differ of Risk strictly in not such relate but

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

opening with remarks begin let's from Julian. Now

Thanks, good everyone. morning, Binit, and

our results quarter the Let's team's on of execution and to third demonstrate on Slide X. XXXX resilience Ambition plan. our Beacon's industry continue this begin

the numbers to company. and line We and margin top record have multiple growth deliver expansion for continue pads to

than end the exterior The repair core primarily areas the residential in of Nevertheless, by replacement the and of is third commercial our are Our of the by remains demand buildings. focus nondiscretionary. level while markets overall quarter, control. In majority acquisitions. on delivered plan to demand continuing on cycle products lower and team weatherproof in came activity strategic Beacon has this underpinned we our our third good, by X% housing within sales nearly daily we quarter. driven year-over-year anticipated and the by grew And

disciplined were margin focused X came business. Our improvement. at team's price our Notably, management. above continuous our positive in gross across cost we and cost guidance management We margin XX.X% all on through stayed prior of lines

market we quarter, the operating to align cost conditions. lower During expenses and took action with

a a EBITDA. for we result, adjusted line achieved and including quarterly performance, As record line strong record bottom top

We continue sheet to cash to in to reinvest M&A use organic capacity balance flow growth, return conduct capital shareholders. and our and

commercial solutions acquired New X companies Headquartered X I'd strength Pacific Jersey and to of like New Win footprint Jersey, highlight the have in supplies]. with addition [ ] second York. our We the [ in building end of to Persec Matalan Clifton, since adds the New branches quarter.

the support. roofing For and providing our for the professional businesses Goodman reputation state. in built region, more XXX strengthens contractors and the service in commercial has than position the family commercial a technical most acquisition years, related This in significantly

] well confidently can Beacon. about are potential the Our we to say achieving that I plan goal. of is [ Ambition our today way on XXXX on entirely

X. Page Now please to turn

achieving and build returns. is laid targets consistent we a we operate to you of superior central customers in to Day that most those great shareholder on relentless and how EBITDA As our out know, generate goals. organization focus adjusted double-digit drive deliver above-market A Investor margins, our growth

great a experience. deliver Our customer team day every to works

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

commitment build and ] their top approach. their training collaboration advanced has ] [ Further, partnered at skills team September, our unwavering people courses Clemson opportunities our employers, to clear ensuring to Roofing after in empowering military or in the a by pillars exciting to top connects [ sensors your skills employees our X-week and with career success ] in officially is announced footprint. The that our already industry U.S. online new that have goals to professionals [ supporting achieve considering delayed are program in funds a highlights with nationwide expertise One The our goals. PACE number [ Partnership that a for support path veterans few the of by University]. career In say community own Center of rewarding to course. completing quarters, Beacon have careers the tracking across pleased industry. I'm This their available civilian the soldiers and to providing [ anyone have they PAs the roofing we service. Army's them ] past with

and from X provides leadership the listened team [indiscernible] ease learning is an employees to we support to storms. relief Beacon grants thankful partner, program cares disasters crisis allows opportunities. And for their our recall past members $XXX,XXX a career that of of about coping totaling showcase that the addition to work years guarantee, fund you their team with them Beacon we in the and ago. or of hardship. of calls Beacon to employees that in established may those personal some the I'm in fund. Hundreds in employee Cares to have past, donations during interview that our pays all and the recent who natural unexpected Beacon the live financial quarter, skills, to Cares situations. soldiers of a can As you we that And other discipline powerships and resulting our

is set growth above-market Our initiatives. driving pillar through enhancing a and targeted second margins of

enhances a year-to-date. locations, opportunity opened we customers. new reduced new the we share. our branches and it to pipeline on This average distance location, market us our proposition, takes resources overall of had have sales open team us continues value and to the giving XX greenfield and reach earn time Our we time to execute our Each

opened We of beginning of have now goal total. ahead XXXX since XXXX, of well XX original our new XX the branches Ambition

recent We purchase [ acquisitions. discussed earlier. to Turning ] Persec our of

We commercial and Metallic our other these metals Building including the also better-than-expected the customer XXXX Ambition Canada, enhance branches, report highlighted acquired approximately billion quarter, We portfolio we end once have acquisition call delivering the Products as again achieved sales acquisition companies of quarter, X and grew Rufesmart], digital since well of solutions. I'm Since [ in generating Digital and ever our our our that adoption results. Metal highest residential in completed Massachusetts. the to annual in second footprint to our acquisitions to Ryan highlighted revenue. In on quarterly customers XX SSR Chicago Supply were pleased and add Extreme which Collectively, integrity performing XX%. are at August. our more announcing XX% year-over-year. in we third $X is together our around plan XX adding sales than acquisitions

off-line September, roughly online increased in the in our basket and continues and for margin larger with XXX Beacon competitive by points basis loyalty, platform customer we compared advantage Our a Canada. of clear launch announced channels. And sites when to generate digital Beacon sales enhanced through capability be Pro+

for to used branded a results pleased TRI-BUILT at a under thousands competitive by our second line up X,XXX you their start tool TRI-BUILT that sales alternatives. I'm and versus brand can of delivers there private basis to ISO, to and margin line higher label the expanding contractors report business customers helped is no-cost that process price our Many great drive our and addition of time. professional between know our newest private our of digital label quarter robust label manage products year-on-year. roofing of customers yields by enjoy additional that any [indiscernible] to Now and XX% anywhere private in the at is XXX launched points sold

As will through growing customers to exclusively available on extensive support offerings. to continue of products our come product Beacon, them have we catalog rely and and through TRI-BUILT

safety enhancing have improvement our initiatives. productivity, we capacity as and excellence and quarters, several operational we discussed continuous in are through Third, and

Our diagnosing focus our employees sprains. paused resulted improvements. who from first years. I'm disciplined different. of this our And report bottom to approximately standard the are third EBITDA, that have to call, $X the core in recall been strains making in meaningful tangible branches recommitted in on company-wide focus to is year, injuries I'm through everyday process report that has million and may for employees greater held spotlights in and issues annual you already pleased risk EBITDA our improvement A generated safer. This to all our last which X as the of to and on safety addressing no operational contributions quintile has and contributed our process newer year-over-year and branches quarter pleased of we And year the quarter.

way on goal We by our our are sprains to creating strains the year. Fourth, shareholder are review XX% let's well value. we this and of achieving reducing

previously margin XXXX our The confidence program into buyback the and Ambition repurchase shareholders in $XXX the plan. Since quarter, additional [ share during start model As share amount announced, to than value multiple both XX%. deployed of second delivering we count accelerated XXXX, demonstrates to our we enable the the in an the entered and and built million]. of the value have commitment program to buybacks, growth, cycle. billion In paths to approximately the more reducing summary, have expansion tools X.X through share service by differentiated Ambition as-converted to we share a creation have

of XXXX operating [indiscernible] an amplify Ambition the resiliency potential. model business Our our into together seamlessly unlock model and all plan is to our

to on call Now a quarter results. over our third deeper the I'll Prith pass provide to focus

Julian, everyone. morning, good Thanks, and

price the X.X% to Higher of those X% contributed months low net prior We to as digits primarily single offset annual day third in also higher billion comparable in X. to total percent the acquisitions. well single greenfields, day were sales quarter, decreased the August the overall less Adjusting more than contributed completed diligent $X.X X% X%. last prices the quarter execution X more additional high price sales. Organic while X% performing total resulting a in including day in average up in than and sales the higher by versus volumes, little the within for by Acquisitions almost growth net contributed per Slide to year-over-year. than X%, the lower Turning third a volumes year-over-year. Residential year XX selling organic nearly X%. in Acquisitions roofing sales are increase X% our of period. year, from per sales prices approximately driven this contributed of also from impact by achieved increased

our by the increased day activity Bidding by market. Nonresidential per Prices our in stable nearly volumes with sequential remain line a and year-over-year. healthy our sales and solid based in market and While we execution overall basis the strong volumes at down levels. declined were that X% digits were low team. R&R estimate residential quarter, in on remained a on the single quoting

to continued reroofing driven increased a and also construction by in to repair day by acquisitions. the shift sales from new per see third We than XX% quarter. Complementary more activity

expanding last now has and approximately mind We the in XX flat waterproofing new in X keep were nonresidential prices Please branches that quarters, our division. XX% have complementary residential complementary acquired XX% in Selling exposure. waterproofing significantly specialty category products year-over-year. our product

of margin our to margin We'll the is noting worth consecutive higher and operating Gross the basis than fourth gross third and is third Slide points was higher. this XX year-over-year It quarter, XX% Turning up margin XX.X% X. that in quarter review gross or forecast. expense.

was X by cost was were this selling XX business. costs offset by total, as product inflation. points highlighted, basis price In Julian year-over-year prices approximately partially higher As average of up all driven across lines higher price

with and were quarter. about gross of of percentage acquired also points to M&A In was and operating or the operating conducted addition, benefits has OpEx. in in increased prior and of XX% the higher contributed through XX%, products to Adjusted the that adjusted favorable greenfield as as approximately basis the costs expense continue million, accretive partially branches Beacon's impact channel Expenses offset higher up label in expense past $XX These and million a nonresidential the of XX increase contributed to associated be private of approximately dilutive sales increase year-over-year. digital contributions growth $XXX yet to year adjusted by OpEx. Inflationary our be an $XX well synergized. Adjusted as to wages sales our fully sales to we've compared margin. operating increase million warehouse

taking we action in we the call, level with approximately third and would [indiscernible] quarter estimate second realized our charges by in quarter, that from will balance and $XX in conditions recall may the at you efficiency We the we As markets. Restructuring costs operating of adjust beyond. we our seeing full approximately to were be are activity market OpEx did the exactly of that employee the expenses. cost high million half savings benefit of the QX operating the of in impact and quarter, be service said $XX consisting million that align second And onetime impact year. of to levels the the to actions reduced these and annualized only and in actions associated our

investments organization, Vision above-market drive will to conditions. of private and part and forward, on track to pricing technologies At branch are continue growth ready we e-commerce agility focused optimization. XXXX. initiatives the respond These label margin tools, support as sales to our changing Going enhancement include time, related and investing on we and record to build our stand the market of same to

in have now by Inflation inventory the the sequential result for also country. On year-over-year a Turning by in $XXX $XXX inventory. conversion our to largely attributable higher at we solid acquired branches as product we load-ins. quarter net nearly availability of activity, Operating the flow $XXX basis, reduction Slide product hurricane recent million driven the costs ensuring That from inventory a will inventory with million, the and regions was of cash to storm-impacted contributed mostly the increase. to balancing was of adequate million, greenfield and be our said, in customers X.

range. X.Xx leverage end our was the our As Xx X quarter, at targeted of to of net the above slightly third approximately debt

balanced expect down in the pay to within quarter deploying executing be our our capital net form pipeline generation the returns bring our our to repurchases. share providing solid range. fourth be existing value-creating the active More debt to seasonal in of business, will borrowings cash used of in our which majority continue to and allocation generally, targeted continue shareholders between and cash will the acquisition We on leverage

approximately to growth and employees. to invest fleet For $XXX million upgrade expenditures and XXXX, in our of capital our support and in we expect to drive organic facilities customers

the into retirement plan repurchase covered quarter, million helpful. In that million previously share that approximately let or some be we details million. $XXX Julian X.X you additional the a program, share the resulted While shares $XXX second of repurchase accelerated me of remind may entered in

shares million expected quarter $XX common the quarter. retirement at March net of to for the of his As Julian issuances of back outstanding turn repurchase XXXX closing and XX to our a call based to on $XX.X is result, contract result we September our as share I'll in the shares With estimated on price for and of settle forward the versus compensation, equity of stock-based approximately million fourth XX.X in remarks. remaining end that, million reduced XXX,XXX additional the stock XX. The

XX Page Thanks, materials. Chris, the reference slide and please of

head for we Q&A, to outlook update before So to like year. you on the remainder I'd our of the

we forward, fourth look we that the As will conditions expect continue quarter. current in

subdued. With and construction we in to sentiment that remain are are to this starts first hurricane new respect me to expected remains continue Commercial let and to demand, recover. repair in and continue reroof say expect they thoughts communities communities local will sales as our outpace the impacted and support area. home New we housing to existing favorable

X will daily volumes set record spread industry shipments. mind quarters. In of than a up of or over and monthly will sales October, Keep the approximately volumes estimates year-over-year terms around of we on will for X repair a reconstruct billion, be X% annual next show square business In $X that required be the we impact, more X% basis. believe these initial million to in

remember which volumes year-over-year. we day up be total all a mid-single expect lapping be lines the to percentage significant growth quarter we will business. saw Please sales fourth of digits record we fourth quarter, in that per For X across

range. We expect to margin gross be mid-XX% the in

full expect the flow. Prith importantly, seasonal slowdown, mentioned, previously the EBITDA we now lower of adjusted we the as For with cash assuming half a And year, year our finish expect significant in guidance. communicated to normal

and on Our control our the areas experience, safety, customer focus remains pricing operational in within execution. excellence

will accelerated deploy to continue in around acquisitions we including that in initiatives and branches our which will executing We greenfield be growth, expect expect XXXX. capital on delivering we locations, result on to on XX

plan categories. investments model, our our private digital service continue we offering TRI-BUILT our forward, Looking to and and our organization in sales making brand

with I'm As the progress pleased made. year, we team the end this has

X Over the operations, last into results the years, we delivered improved have and our invest future.

built capabilities have We performance. in accelerated resulting

any customers build is model [ strong Ezra], looking it to We open can and deliver that and forward our with results helping have questions. resilient We're our a that, we'll the more. up finish in demonstrated for strong business to And market. year we

[Operator Instructions].

Our from Philip first with Jefferies. Ng question comes

solid and just guess a Congrats market has how hurricanes. environment. standpoint. from uncomfortable you the guys, broader pretty first up curious, a little allocation for question, standpoint industry, about is been standpoint kind I of more quarter tight And to broadly, Florida generally in inventory weaker demand. an I'm a industry on from setup storm you ask lack just obviously that choppy a and you But of demand? set meet to from an for

So this through up. just an help you kind of from of us standpoint could this for uplift and ramps mean how kind what think

a the going Are in guiding to of mid-single-digit quarter. that up see growth kind pick You're the fourth as you in well fourth number quarter?

comments. few a question, the for thanks So

year, even So pretty whole step touch I'll saw. up of we take much and Florida commented ago. years to the for it we've let seen this what me off mean hurricane we've and all couple I a set was coming on a on Obviously, back then it and weak year.

entire a QX, expecting we So was we've more pickup were from into QX, mean that QX. that it. I demand was of be to thought in so delayed into weather in the going across the -- we country sort seen coming

impact the through make QX with and adjustments that. With impact pickup additional in also that's through to storms well. But question U.S. in rolled softening getting structure cost devastating. shuts a the that X in Helene QX. in, as to Milton the back we well. And we and your fourth markets, bigger we'll the obviously I including Francine obviously, Helene ultimately And rolled see. Debby, and hurricanes of pretty some Obviously, And we think our impacted we quarter. So at actually so as than during coincidentally, to we expected then came was why Florida. had saw decided -- saw original the that down as quarter things of around kind start the

just weeks like So us, year. really that have frankly, look, a There's has Helene obviously, There's infrastructure of to to difficult. rebuilding Western much the October, -- the all get North our on because was few a lot pretty quite We couldn't expect get road of quarter work the impact done impacted so the and We to of get done significant -- it of lot demand that that, needs to did infrastructure dramatically. before don't Helene. in that of there with it because first this Carolina flooding, was on stuff trucks it was damage. in results. And impacts the a

necessary pick really up. stuff sort a sort We what But couple to doesn't of impact immediate that's to X that in seeing terms it reconstruction slow that remediate people repair, -- is to disruption a of probably rolled to to we're on a what impact tops immediate the was lot Ian of demand took X months start majority somebody an obviously, for have the do So of Milton, really that but to months. with Florida. Again, sort be start and the into experienced and very problems. we of there see going of for of

really a sort we pick December, we come would X impact of expect be in to until something So And demand full indicated see we'll sort would to but why through. don't in we see that up the lot believe quarters region X next year. the of before see that's we it of

fourth managing Southeast we're So availability. from the product had We're and country, the getting make markets that the been Obviously, to quarter sure into manufacturers We've carefully. that been in parts through both need in into the also we very of need getting from back it. sort things. Obviously, other now, regions. storm-impacted side we year. of The manufacturers all that to of other parts the product have the redirecting the some want weak has what we that that products

the -- we impacting and country will it tight, already was will this believe a it's do it an certainly be of but So impact, have will slow. that part

that relatively okay. color. in will term, going things to that continue we XXXX, you gives tight. some be into Hopefully, short will So But think the be availability obviously,

waterproofing super largely things? some your Julian, That's from one of or more benefit side Would to up. recovery work I'm business residential sneak of sorry single the in. on

on -- talk when is Look, you you our blown done what work. this shingles. work get not recouped business. total infrastructure construction, needs the out, get needing lot businesses sort about commercial to just mean, damage it's for Obviously, of see. some with Obviously, getting to I that of the about things Windows of the a work hosing But

in we see had this Coastal waterproofing years expect So tremendous ago, Florida. And commercial in and a our obviously, a they acquisition see of a with strength impact. from it yes, couple We in the of pickup expect division. to to would would

benefit So we some see that. from expect would to

next Group. is from Our Thompson question Kathryn Research with Thompson

Brian actually on Biros for is This Catherine.

maybe how care Or or XXXX. demand in just commercial market you or verticals? guess only the think nonres [ prepared [ that that of how heading on characterize nonerosmarket], certain remarks, it's pent-up maybe storms ] can you R&R? maybe would in kind you're new touch the you specific you are gifts and verticals mentioned On from performing I is demand? accelerating? into seeing mentioned that the Or I just to is

more so We've new construction had of in that a money give into [indiscernible] getting little I Thanks rewind you, supply and on chain you disruptions finished the was but little challenging prioritized this and there's obviously, really much completion. question. you absolutely. tied repair was the a before, the color some mean, for hopefully, replace bit bit hit availability touched the Yes, all because product up I'll over need.

things sort new With prioritized. the product the there side construction and of in chain supply got of disruptions the availability, the

So that was done.

that supply -- little of a all of chain we we the of saw. The started fade repair construction came that destocking actually that's that replace has started strong. eased the to bit, the on as in the side but pick of movement really and So stocking, sort delayed all up. to and out and the particularly new And been commercial

remember was to -- You'll sort But the that centers. These it's large tend bit. in of that's 'XX a these very be still I of it demand developed, buildings, period. time overall portion a low during construction, warehouse a lot think roofing. flat little warehouse eased There was data an and explosion of a is which being industry

little And little of replace shift we that a for bit had we've hold anticipated. insulation a relative us, bit so a to and shift product is a up seen better repair probably the than towards construction. little less sort be But of mix new overall,

But call, If remember up that on a quarter so has executing actually, that about concerned well the fact, good. And the very QX Repair the call, was it's the I think company, segment. been you and commercial most the I well. held was we're very first as in release very, space. comments area in

phrase to commercial again, cautiously a remain actually I well-worn optimistic outlook. sort the So use about of

been I think quite it's constructive. actually

just rebuild other remain high lot somewhat so had we've of and infrastructure the with hospitals strength muted. in couple school expect areas good the small construction interest is A thing and retrofit segments, the of And vertical and Julian environment, forth. Yes. we said, is then these a what the that new rate to asks, side other

expectations. as change rates next second could of interest the down half for that So year towards come

ask. So would I mean that's all I

Ryan is Our Blair. from Merkel with William next question

I than for seasonality. wanted that little gross normal to it it's quarter a seasonality? margin looks guidance normal like is ask about more Because fourth mid-XX. Is

some So please? about there, drivers of talk the

the we've Prith and in regions is high-margin about some talked extend north. the it in part before as Yes. of countries, the mean, of touch I'll normal more on it I are detail. then the seasonality this

to cities in higher margins need country much You that we the tend rents part in of North need gross in larger the so be to them. the higher, because cover

So deteriorate, the down months, in margin gross the you to winter to as it to mean margin but slow doesn't start But a it bit. growth deteriorate. to see those little EBITDA does deteriorate mean start

a and terms of shift there's So both geography, the in in of shipments. the a on little product bit P&L

So sort normal product is of it just some flows. of

The it increases finally we've through fully. the that other cost part, product But a and the flowing of price part primarily be as it's for out through of that's would there. flush geography. sure got most piece the system still that making There's

margin. happens it the bottom a bit other is towards believe bit margin. of shingle does the as back gross The sales side bit margin gross Again, thing it that a the mix. impacts of little side, don't little sort product in more commercial line complementary higher a mix we way same tested the product and and than little residential which has

Yes.

a again, couple construction. of the Just color south, just of new in other there is more points

And the environment inflationary implied QX of then margin, little of and to high -- what's post-COVID consistent the be our a at that the the with if exception really with margins margins. tends bit you So look also XXXX guidance in lower it's and XXXX. the gross

question next from is Our Mamtora Ketan BMO. with

Perhaps, that to bit the kind average? trends in in are sort in impact the waterproofing relative Julian, business growth that business QX. that? just in I'm Beacon growth And the your is talk sort of how hurricane kind of of can underlying about how excluding margins you of expectations business a performing, the little curious

about really I question the Yes. [indiscernible]. appreciate

Florida specialty [ seen remember, fundamentally to that the you'll felt at local municipalities was that lack roofing the that it's in really of importance needed category blend remediation on So to of ensure building. segment integrity than up -- as ] construction. like a you order in we of know, we new spent to this that of acquired collapse, the wasn't. We've to Coastal, post things on the which side terms end as West that tragic a county, backing Coast waterproofing condominium of XXXX. presence That the this tragedy We to the is on in reserves our business. they believe needed in distribution, the Champlain acquisitions be but emphasized this really can space the maintain first well of had higher the and get requirements growth if fundamentally segment. We And as towers, we buildings has core impose done grow waterproofing waterproofing

that. And that, that operate related in climate, along the of we recognition the So weather to something just going to of coast sort that poorly is is not drive and is think all to We goes of taking understood we're it's $XXX continue the XXXX that, this significant now. from with changes bit plus. a sort the mid-$XXX conditions little million about And give Gone sales everywhere a This million been of -- where the excited that's end rate to [indiscernible]. run of pretty or it's towards much roughly of across take, country. us.

So really build that waterproofing acquired we've exciting. grown out to the specialty platform. that's multiple only businesses really We've been business. And nationwide distribution

margin residential And In with pleased it that. than profile, terms commercial. more is very of the we're like it's

get it in it's -- our the margins for market, work acquisitions of I that our they a some that enhanced over the faster-growing year, team we're We sure commercial margins fundamentally there. plan we in to time. very this some I want and run. We've leadership like excited above well. platform. operating said, work segment there they And the think ties average expect gross are to do construction got particularly, long the but we a as see with The that to company and be we EBITDA roofing business about it's make there, in get need to mean, has nicely brought to that got

it, and about the thank you excited very question. So for

Our Rehaut question Michael is with from next JPMorgan.

may. a of X-parter, if kind I Maybe

if understanding And A year. into drivers expected headwind first at M&A prior saw better guidance achieve the get for the to from in a challenges beginning you I -- I I'm a XXXX, and wanted Just as down initial having a off, this with the when to range. this you to and one a early branches I you hit earlier being XXXX. But of maybe bit. lot of secondly, temporarily on half lower the full little those perhaps year guidance look it's new margins apologize into gave the little year now come of margins EBITDA know going 'XX you little the dilutive the on and of sorry, expecting the cited of actually that to

core drag of we wondering margin if So was a focus on 'XX your the with initiatives, type continued your to of expect going resume? should my profit continued into or we similar given various of high improvement expansion expect question I is, level acquisitions, should a

Mike. Thanks,

the particularly little shift was with we bit year, the the the year. which the from a bit greenfields yes, They Prith that years in was with really let let some I'll And on of focuses. that's big expansion. this of our guidance sort of early margin little QX a that, just og me early touch mean year, but one picture key talk a where it So a about launched about drag. were I thing prior so of in

conditions market EBITDA acquisitions had of we low were margin. this to and that year completed single-digit mid softer the We some

a there. you there was with So -- drag up end

synergized We fully those. haven't obviously

Prith see They're our we're acquisitions results demonstrable line seeing in in think very pleased of are done seeing plans, we've and of think And and performance a bottom line both our the ahead in from forward. which expect we we terms initiatives, through. I of them year, top are that growth drag with we mentioned with this our that the improvement. his such comments also acquisitions. to improvement I going come not would mentioned we and quite

good. So that's been

year when on and still to improve done came work be market The coming them. to first in. bringing into pressure the the of some get dynamics what saw to overall year, getting on platform them the because and needs them We done then we some there. in our There's you're to working expect of see half margin

margin was I full flat original think our about for guide the year-over-year on year.

to overall, hand before few feel we're about fourth of think that. Prith our I to but broadly guidance than actually certainly our a I it And would the over think little I in It's market better, full the on like for one Look, we that we quarter. anticipated. then good touch the pretty guide got guide we've We to full that. for the for think the companies maintained certainly year. bit have maintained year. We been coming lower

Thanks, Julian. Yes.

for the question. So Mike, thanks

about guidance. your think look, So full year the question if was you I

back the And we on a we said Well, said basis. what so single-digit about to we actually at that kind the if call, quarter X%. was you go on day what high earnings of we expected QX for year-over-year sales QX, growth finished per in

drivers will to changed year-over-year year on single expect in big digits day previously thought we a per therefore, a finish really anything. the margin we where one the to gross now the of growth the digits. On that in be full high single And would basis, sales that's haven't high we the basis so mid- year

full to we our about rate sales adjusted gross the OpEx the then range. on an business range, our expect OpEx expect annual at margin And actions to the mid-XX% finish year in targeted the OpEx in to which full to to year the rate mid-XX% manage QX, XX%. to we above continue low side, in We is the try adjusted slightly rate. We took

be we'll the to bring positioned so target of the end of down XXXX. And at year within the well it

adjusted communicated put you half of up lower within of together, million the when $XXX of million our this all guidance to end previously should of $XXX EBITDA. you So

Our RBC. with is Dahl next question Mike from

area count characterizing a head kind Thanks. point Julian, focus OpEx last up on actions. you're taking, quarters, you. actions couple The pain to the you're I the want kind as of pick a of that's Obviously, comments. in been of for

kind could maybe as of bring Prith's at comment, about what I else and back programmatic you're prior doing? of And year, that question what comes us or look you're there about target? you thinking structurally, Mike's -- back. But So be towards as more back this terms that in are you you actions can are volume somewhat construed if next tell or kind structural and you lower that of to bring of down? as those about parts thinking mean temporary what on how back managing

from Thanks, sales work productivity things Mike. we previous the sales highlighted and for that earnings we've recall our [indiscernible] progress made. like calls and

we're the this Part sort very we and all never it. weak. from in order Florida west. the we QX, more into were about expecting head We've QX broadly did. In question ratio certainly, came good this was aware almost think mark Florida, in particularly been of of actions expecting it some from that year start of Florida performance, of it it's was to in been come weak, I in more our our And of see that particularly demand the around maintain taking but which standpoint. a from carryover and the thought Southeast being in is the year to a as storms we year, and weak, would talked year OpEx we count

levels anticipated. this below So had product. end, got part as the regular thought sure you've people in And realized of we sort quarter, into were went demand particularly year as what day, deliver on third went make to what that the is you the we need through of the we a the the to we and was we even

to we we what -- third took fourth the needed we the So that down action quarter adjust adjust in quarter sorry, to.

grew. we little making see a Florida, this of want volumes emphasize, of it. reset, just bit was a sure our outside to I we -- So

year. strip Florida about country. volumes feel we were of were guess seeing Florida elsewhere. we really, really I numbers, out a our growing grew And what was rest really our tough of good the If elsewhere. just mean you I the in But volumes market this

set. distribution But on that about we a We're we XX% miss are quarter-to-quarter grow, order deliver third Prith to in will more we business we around bring driving add people. more to service customers. I And have driving we're It productivity we're we was there's a high maintaining during the we ultimately, the action in. at volume, people business to to and But going have sure the quarter, make target we We on and that we're of to our there's and sort to we're manage going as decided a some we've difficult a just expect mentioned, reset. to to that trying to. more be productivity think as mean down just in in looking we got needed then that in as sales sort take people business it. of that's like need ours, you'd get Florida the in when to the more slowed and of do So service that greenfields, making where times fundamental basis to as sure we needed we level we there. branches. acquisitions, business add our Obviously, as probably

again of points a Yes. And couple just color.

year lot we've a is of acquisitions. one of We've So lot done thing XXXX, this greenfields. done a

that enter into you help the margin the as do overall mature, to XXXX, branches get expect as realization. continue Just And we synergy rate. structurally, to will

keep So some that's from in then one to thing we've secondly, had learnings mind. And just this year.

resources through will anticipate we how busy costs in anticipation more bringing demand on circumspect on so will, what operating come. so season, more we process the of we towards And around the in versus be add the biased forth, budgeting and line probably with the

put as well, actions. in wasn't actions processes of the were took going field by corporate Mike, kind of then forward. our those the into functions drive count to resources leverage that's it head We principles that forward. the going just we'll some expect So we from the And and that

Baird. Our next question is from with David Manthey

they're X, all just I had just factual. but

group and is revenue the to carryover would the incremental So I'll you've grew what $XXX year-on-year. guidance If is touch million? today. said $XXX that's this $XXX you expect And my last just quarter, over lift 'XX? like Based in deals then to TRI-BUILT, if like you interest date, what to Second that. XX% them. into could from on XX% you done expense is million on the math million quarter Just wondering right,

I those facts. X Just check could

this in should transactions could next start with terms in to -- question of On part was? it from -- of the be of year. question the total revenue X% about carryover into the Okay. your going Mike, year, of first the sorry, first revenue question you X% your me let the ballpark

$XXX third was that The TRI-BUILT. Is million? like running

you're right. I'll yes, try to

the terms in sales ballpark Your of in total math quarter. is the the in

interest expense, were Yes. asking the the on then what total And well. as you or? whether dollars correct that's So

for So $XXX it's what expect so full -- now -- million that's of kind the yes, and year. we

I can $XXX why? believe. it tell quarter, mean me last And was I you million

Yes.

through of higher XX things, you've X we've the the year taken debt months. the other with some buyback the balance course and over share So carrying been of the a actions

So then gone have right? that's it some ] hedged, up, gone rate It's up. REITs floating [ ] have but is REITs And of [ that one reason. the overall a

so And X reasons. are the those

Our Shmois next Garik from with Capital. Loop question is

the in expand August more the broadly, XX cost cost inventory increase? can was about that forward? points from price moving think you price on And basis mainly maybe price should we how Is the about hoping you I quarter. profits talked of positive

it of multiple Florida, pressure well. a single Prith advantage weak in Garik. into to leaning residential but I'll some increase. give obviously, really markets markets the challenging market saw because you've We very got some August some Again, we things Thanks, -- let little you of Again, we are particularly under the had price really price where where some taking strong. markets, detail, bit we was executed that a was on but very we And factors. hard worked this think other

to it's a very August coming about cost on not So markets tilt managing the new, managing the increase softer demand realized price concern in that the in price an and price we execution did as relative about but into of terms what but felt It's very I'm around was, well sure on very more year, a from well. there, the a executed And was where our overall terms We again, this commercial in environment constructive, was work had we about good what amount. pricing. We our of increase there's execution. area profits April huge commercial I inventory bit thought little diligently we the good. of in

the multiple And during came pleased So like said, were from we execution it areas. with overall very quarter. really the I

similar to August the the residential, in increase. on thing Garik, The saw add, only price we what realization Yes. price was to

And our so first side, price/cost environment. declining the we've seen then it's that's look, a in where a in even And a time on price big driver while there. favorable commercial

and managing the So it's team of really in kudos mix terms to the the operations there.

are a space. little months. And the a going more to see bit weaker into I'd than to be have different that XXXX in we're some in storms you when forward. going we've Southeast like into -- And I to because part are pressure think construction We progress forward the that market, meaningful would the dynamic question product you've firm in storm looking there's going forward. year. The some areas next of the there had seen of the country got part now go the about that's a up going have storms an to impact we're over that Western but second the impact new are Yes. then country, pricing the that of availability -- to expect in been down. coming there's dynamics XX, and going -- been last on XX of been the then certainly Obviously, terms have going

see So we're think the we we it in difficult I this -- do. what as going a And also to environment. be again, managing but

the I really into all parts. the this that saw. that different environment given think with year of that executed in a coming given We've dynamics area, a was choppy moving not a we seen year and we've in well lot

very actually forward. we'll I'm key this very, how So we've pleased emphasize dynamic a going price/cost And that element year. with of as continue managed to the our strategy

David question next Research. comes Our Longbow MacGregor with

how versus us label with help thorny of that obviously, contractor of of way kind that. nonresidential very any vendors navigating I'd I'm market maybe you're to residential kind XX% were extent, unpack how versus to versus as business there's to label like product And adding private growth for issue on competing there's private I if could the you understand wondering impressive. some breakdown a managing is about If kind complementary of understand or ask can to go the your with of and that. wanted you much I evolving that Yes. guess, a preferences. sales us. just associated you SKUs with growth,

Thanks, Dave.

the not to us. towards about growth. driver did large that this been have sales are ever in category. drive commercial help not a insulation to -- we there, of expanding products, XX% It's category talked First but it. And that a year. that product and get be make that's is We biased all, we We're going but It's we -- large been the residential us of to enormous the all introduction for we be a going in going category. penetration significant it's in category of

something we've I in the far, we they're So into foray that's adopted can of offer, our customers and to their really is been organization, that these also they've customers commercial job I'd the like mean, pleased ability very the see our is pleased way what the growth very sales our Look, results. with different offer offer with offer [indiscernible] our spec, label part arena. We competitors customers. the it. We're first, they're say, sites [indiscernible] tribal. something our various they of on to and something which private competing if so

adding balanced is going very in. going so forward? existing But the focus we it It's product asked lines actually and we're much to differentiated products in far. already Look, So markets, work categories you that been it's is been going be growing on think I the new successful. an important high-quality to forward. very We're and that for very addition growing new categories going be element in both. about these It's

not ability multiple relationships manage we a it's like the I mean the this vendor outlets. well-known As to is the have in those look, relationships. to strategy management of retail don't

from well-known very think very we're why volume to well. They manage out able are companies that anyway. source looking they've We got going that some I competitive we through to their we product Obviously, That's that this. networks. there's sure it well. make do products know do there

going them conversation them. coexist it's But think they we've strategy in don't we've forward. Obviously, understand space, quite and a that great we with think relationships have clear got And a problem we with I our also with partners. been I and that's our vendor So this that well.

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

Just eclipsed XX how may year. Any on XXXX already the look greenfield, this doing next on have meaningfully that target pretty Ambition you year? guys initial about thoughts your

we've a been for has pretty is this What found do. we and us. significant that opportunity Yes,

our markets, were would to catching in look that around opportunities actions see wait team, having enhances the I service we up second-tier believe around people XXXX" So portfolio were and add not taking is think, from country intent sit on think we had component. critical tractors first of is few we of that we this. sites to in as going. We rate keep we the and but the this the we really also not that under the of I markets, But years. prior tier Labor Fundamentally, locations as is the bit adding is to proposition see a be "Ambition markets deliveries for leveraged. that need. do, little scarce what think the the just by offering. Labor sort We a job the resource really

to whether they whether make So what we or of need critical something fundamental high-service that a because from efficient our that value to and the And adding them believe service high-touch we they is locations of -- actually pick and us more to up going deliveries some period to this our labor a ability additional is is strategy earn we providing forward capture contractors believe share over short-cycle to capture allow market absolutely need is the they really or is going time. business. And do.

XX-plus believe markets, in can branches us branches with we So and I'll we market is that acquire can forward. year, we do toggle our us The number that at in the look to fill are that add if that don't market that next to M&A. that saturated going and the we continue offer certainly there's from to to look expect caveat our adding that at continue be one When to you then we should that that our will to service, to But footprint is add Beacon a greenfield. proposition. the available of impacts how allow we believe service decisions branches we

anticipate either given hurricanes additional it. in pricing, maybe price on Got increases residential demand year the manufacturing? next and year over you or then this Okay. later expected from year next would the the early just of And the plus, the topic

going to are -- would this be comment I obviously, going manufacturer's so not on strategies what the to space. in I'm

We not seen from manufacturers. any have announced the increases

from of increases on but things. side sizing not seen have We the single manufacturers,

to we and see So dynamic. look, supply would a there's expect some. But demand

we're and there's this to this point wouldn't a not anything manufacturers I year. at least XX- going to Normally, to think. between XX-day so there's announcement expect getting be I increase And see anything or an don't from to the a lag year, where

supply/demand I think there year, into dynamics I be determine manufacturers next increase. the the are think think another to going price should whether going

concludes That the Thank questions. you everyone. very much,

Now I turn Francis the to for back call to comments. Mr. over like his would closing

of updating plans. And that of to first most an I'm are Ambition goals. thanks Ezra, to half have Investor Thanks, future Day XXXX expressed mid-range is say and down the an been for really planning goals many thinking everyone about longer-term you things of today. in range one plans update know in I of the locked we've to is to the XXXX about interest more we us our that hearing and happy we've joining our

tuned details. for stay so additional And that for

those gratitude by joining happy and But storms. for and and again my want to thanks associates than the to our that, very best of most recently ultimately, all a members, year you the Halloween us happy remainder other I team X,XXX the So today. impacted do holidays. wish the particularly for express I

Thank you much, today's concludes That everyone. call. very

disconnect now your lines. may You