Builders FirstSource (BLDR) 10 May 222022 Q1 Earnings call transcript

Good day and welcome to the Builders FirstSource First Quarter 2022 Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by management and the question-and-answer session. [Operator Instructions]. I'd now like to turn the call over to Mr. Michael Neese, Senior Vice President, Investor Relations for Builders FirstSource. sir. ahead, go Please

Today, Good call. welcome call With CEO; XXXX. our Flitman, Priscilla. first our quarter results quarter are our XXXX our for CFO. Jackson, Peter earnings me and will morning you, review to record and first Dave we Thank on the

As of a EPS amortization our excludes adjusted reminder, calculation intangibles.

for quarter call results our adjusted on investors.bldr.com. isolation The items. are discussed comparable non-GAAP directly press include certain website purposes, and and GAAP should most not investor our these for release first be provide available The presentation considered today's GAAP today non-GAAP in for We informational the measures. they at from results results and

a find non-GAAP SEC believe of these we a to corresponding they measures can can be GAAP our in and reconciliation release, of applicable press discussion our earnings useful why the You and presentation. investors filings to measures where

press this and Securities the Our and review press release, the presentation the on Act forward-looking I'll today's over Reform Litigation Dave. of forward-looking call various from our statements SEC differ filings With results in that call future could meaning projections section statements and and remarks results. cause in contain factors of actual projections. Please and forward-looking within statements turn the in cautionary to release the that, our for to Private

Along attributable XX%, quarter to quarter of entered and first We year, gross start core for of hard XXXX margin XX,XXX momentum sales a strong we've was quarter supply operations of to with to our our marking day growth deliver directly work The invest above the achieved dedicated throughout constraints to for XXXX members in maintain strong that face call. topics success I'll team us. significant company. that go chain fifth and of sales, and and joining continue as today's who of beyond Mike. adjusted industry record our our the Good position morning, in industry. key our EBITDA. We is customers and leader. our thanks outstanding straight the another we us everyone, our on four all Thanks, every produced net phenomenal service and double-digit persist help growth. organic to prudently year the hard-working building delivered our strong to of cover on

First, our on I'll base and quick quarter provide update record results. our business first a

our market our acquisition Second, our on continues premier including success to I'll position, provide deals. tuck-in recent an strengthen update that most

finally, update for it share digital point discuss and housing an our And provide highlighted I've the would like state quarters current several view our Slide on I'll strategy. again. market. important of I'll this the Next, On X, to of

results to As of to by our is our methodology we discussed appreciate commodity during Day it assess prices. believe a last the business company important normalizing growth underlying better base we our December, Investor using and profitability for

at reminder, base a feet. commodity assumes thousand board static definition As $XXX prices business per our

Slide X. to Turning

adjusted XX% CAGR expected of X base a ahead in year performance next deliver of improvement is year point these basis per CAGR, margin business EBITDA XXXX. top to Over XXX we the points And by base importantly, total the years, a business basis a of XXXX our EBITDA XX% on XX for and our a expect adjusted line, improvement full targets.

of share That M&A to in XXXX. growth, innovation and deploy expect have we capital $XX through includes billion capital performance, with this of result billion and along this repurchases. investments year's planned to $X organic to a As

added XX% on first price X%. our quarter to Turning Commodity X. We of added and strong delivered Slide core results XX%. growth organic acquisitions inflation

X growth nearly was of was X%. our family growth, exceeding And across divisions. our single-family was about which core organic once organic single all the family again growth operating single core Our XX%, double starts digits

that value-added strategy Our exceptional each of the the housing, XX.X%. prior in margin grew environment. the by quarter. another period, approximately point supply-constrained multifamily organic XX% in our internal and record in of and an key were and products is Core XX%. growth nearly for demand XX% is ongoing in growth for by segments, adjusted nearly value-added results year a pricing discipline $X first $X volatile, compared confirms to billion our delivered adjusted and were R&R quarter across working. customer the EBITDA organic products We generated all strong This with accounting of billion robust driven segments of sales grew productivity data sales EBITDA driver These

a We tuck-in on M&A. to turn remain high executing focused delivers Let's return. M&A that

and to seeing to $XX Truss Panel Valley and homebuilders you to Truss, less we off offerings welcome we than The Valley meet meet X, team family, for sales we're Truss to demand, fragmented X, consolidating a revenue last Slide multi-location last is capacity in I potential of for our forward X,XXX highlighting a Panel markets. Truss high-growth April components expands acquired see with we X year. to key rushing $XXX Panel approximately to markets in Slide updates Valley industry. local from On growth. Truss future of are on to there $XXX excited Boise's markets component BFS rise market were and Idaho. completed Georgia Builders Texas, national several additional will the acquired year, value-added XXXX. housing building expect components a than Also On the way April I our providing in building South with and opportunities Truss, to to and how of lead start. look and X, their acquisitions our Carolina. goals. accretive great opportunity we continue can This in members throughout As M&A, the ambitious single million in had with a multifamily approximately $X.X million to multifamily want clearly provider locations year, on provider sales solutions $XXX in FirstSource we're an Boise, single invest future million X billion. influx and approximately million single-location in more builders active to X, on in partner

Next, as a I'll we X digital our of accelerate pace strategy our continue to on update on brief transformation. provide digital Slide

and I quotes. on the continue operations quarter our Paradigm which roll faster deployment adoption earnings of to across have and our we During we customer provide accelerate. highlighted X call, across customer to Estimate, fourth X,XXX will continue completed more to accurate out plans states, that estimates Year-to-date,

for for homebuilders. process foundation In construction addition, efficiency our design this and configurable technology provides improved a and visualization

Hayden the Pacific Northwest an builder announce the in pleased Regarding Omni Homes, a I'm use our have technology, visualization with to signed our for Homebuilder that of we agreement platform.

digital incremental of With is their making solutions. investments an X,XXX Hayden will digital to currently growth approximately to track XXXX. We our industry revolutionize plans builder believe strategy on the capture Homes largest and are by our we opportunity starts, $X necessary using the that our billion become

to Turning productivity.

We X-TEAM to expect to System, deliver our by savings highlighted Operating which over a XXXX to $XXX December. at our productivity million BFS in strong Investor we've continuing leverage off We're start. in in Day

last by existing the produced that and efficiency the component per quarter year teams to example, our maximize of versus meet as has throughput to our feet board shows aggressively XX% our our work an of manufacturing facilities hour first improved metrics As demand.

I affirm work us delivers and outperform healthier X% housing peers shareholders. as for chain underbuilt our I challenges our and become and Despite a expressed homesites our targeting believe a can are industry term, our interest last platform supply across industry and X% rising the Over grow that industry productive and many and will year From to the remains headlines continue significant seen serve, in downturn. and productivity customers more allowing concern. serving of technology, together we resilient. the improvement to saw in than annual teams best and downturn we this we long not time customers customers. are leverage are that practices more we we persistent the industry rates, as homebuilding prepared efficient strong, Lately, that will expecting significant because of uncertainty have and to our to far what our we we thousands this

homes X last first, and the underbuilding demand; underlying of the the beliefs demand. in improvement quality key are demographic over of finally, occurred has credit next, supported by years; that Our facts: that XX-plus significant the

acknowledge continue I the prior rates to to near-term headwind And units. we XX.X% We that single-family continue likely momentum believe quarter, construction first increased a XXX,XXX represent industry. underbuilt. year higher the the In U.S. while mortgage market to tremendous is for homes and housing that the satisfying significantly demand, versus long-term growth under see will to

summer X% year, in time of demand construction last March. indicating ongoing have a result supply chain remained this during challenges, was in Also, the occurred at essentially of the X.X demand first approximately durable. underlying cancellation total hit from the unchanged remains and last quarter, low The million rates this XXXX. customer units under As

has year-over-year occurred homes from are month, home and this increases years demographic evidenced clear household to And to measures and their in cohorts into see XXXX. to the since rate. formations seeing last relief we demographic start This consumer creditworthiness trillions populous XXs, age the resulting growth. people swell buyers many more far mature reflect balance time of are in strong financial olds. the the shift. the the Turning resilient the data to all this of or homeownership, life We XX- low most old buy in is vacancy the XX-year according than by in their healthier overall X.X% that moving Census, the revealed from trend cohort strength as XX time unemployment dollars COVID young last U.S. favorable move when of today's of of to first younger and apartments and homes, early age adults a indicates cycle first single-family This posted a survey than sheets

favorable well homebuilding strong the given the demographics with historic with and So finances. significant industry consumers underbuilding, tailwinds remains positioned

track BMC entire operational across We productivity long As synergy commitments driving a the of efficiencies a share significantly customers. up our and have our overachieved for company, and innovation organization. are execution, successful record through we gaining and excellence ramping

transforming continue on accelerating further focus to and in goal investing products industry. digital of will our our higher-margin in efforts homebuilding the growth platform our advance We solutions our to value-added

them Month to served and their where people our in doesn't boxes who careers day a spirit deploying blessing necessities. our served of safety-first does honors his its and have Hatch, spend Rodney top we like at, walls and cash out. recordable and on His base we local into we this gives of responsibility helped keeping Rodney increased with expect We maintaining XXXX. to this and marine military-friendly BFS, in employer importance journey system strong a those coworkers. to our FirstSource. veteran minutes I'd himself. Rodney people capital Builders back reductions growth for and safe, need are be X. team hit X we role And those multiple like internal is bolt-on a into community see He remain People Alabama area to X investments, honored by geographies. generation. Military business locations XXXX, at is those committed can have jumped his stop continue of delivering significant pantry At last to of and part he proud and country. His locations M&A excels as with BFS. safety are greatly Ida and honor food as all high-return drive couple share neighborhoods our free Rodney of mindset For our recordable across highlighting who our One to of growing country to now donations reason have repurchases. of food by our have be accretive now year, a of to flow Appreciation the coordinator the to our from teachings who when never-ending double-digit collecting and his outlook are action, a locations so incidents part take the in fellow for vital year-over-year veteran Rodney particularly Hurricane members celebrates creating Mississippi and served in Louisiana achieve far showcasing who and day injuries and are

on first our and our through putting on grateful results And is we people our and our that, provide all update and thank Peter of BFS most Rodney showing partner each fortunate his team for are our the values, I'm members call our look veterans customers communities for QX have to XX,XXX-plus an improved embody our our country the the who guidance. I me With let in him service and why a to industry. detailed over turn XXXX of serve. and to team, our We at valuable core to go financial

our everyone. I who and Thank members and you, each also moment delivered thank incredible a good like of to Dave, XXXX. first morning, would of quarter team one take an

pleased deployment we through morning. We leverage very remarkable to BFS remain all accretive operations X first executing to with to businesses I share XXXX cash capital approach quarter family, are committed our the to our and beyond cover a while We authorizations. with this strong as our results. balanced great in topics repurchase flow you investments against our add and will make

First, review our QX I'll results.

the you update finally, And capital guidance our I'll on with updated year I'll efforts. Second, our you for deployment provide full XXXX.

period. increased year approximately estimated our continued XX. Core the had to sales our constraints. Slide compared strong work net supply begin $X.X grew our channels by and in for the the which value-added the the billion organic to of meet across sales performance Let's prior quarter, products XX% demand underlining an XX.X%, chain QX We value-added with on

$XXX.X value-added on compensation and quarter. well our SG&A continues primarily XX% $XXX to focus and customers year and in margin increase organic prior million increased year increase to growth gross looking XX.X%, points to Gross million, disciplined billion, the The acquisitions improved Our a core effective compared due on percentage compensation. products timely the of site. $X.X XXX improve profitability. was basis compared job to or as as was sourced. primarily pricing marketplace a driven variable by to appeal profit efficiency to the by driven period, volatile, to supply-constrained incentive and Variable increased prior XX.X% an strengthen

IT, We and strategic made also investments productivity in initiatives. digital

recent nearly due Lastly, fuel-related expenses increased global or million by XX% to $XX events.

income billion XX.X%, of the percentage markets, prior prices income in compared nearly quarter points as margins. or across of the was Adjusted net or Adjusted $XXX.X to compared end EBITDA basis points spending decreased share a $XXX.X net by per offset year million $X SG&A or period taxes the increase the fast-growing adjusted million driven income adjusted strong million period XXX demand and Adjusted manage to our net driven gross customer SG&A a EPS in in EBITDA same was year EPS to Net to XXX% $XXX.X to ago. XXX.X% environment. increasing net compared higher adjusted in and the to per XX%. we of to primarily by of the period. margin improved As margin, sales sales, income increase continue increased year The $XXX.X net in gross income share was by and a net total prior of in $X.XX million improved or partially income $X.XX key XXX $X.XX commodity by expenses. basis higher $X.XX

Now let's flow. turn to cash

the fact I'll quarter was $XXX.X $XXX.X investing we cash that first we half flow borrower highlight cash Our operating first Historically, of increases cash provided We we generated capital. make the free was of the activities the working are in flow-positive cash first as million. used net a are in activities in $XX.X by in year, QX million, time. seasonal and million. for

quarter's positive really of platform. This strength the flow our highlights cash market-leading

$XXX quarter, for million stock Let's capital In on first which spent year, This turn average April. closed price shares at the transactions X.X we roughly to M&A of approximately deployment. million million repurchased approximately have we $XX.XX. an $XXX our in

capital The new approximately X.X the price $XXX.X million M&A of XX.X repurchased stock shares repurchased average our an X number of stock we was of million XXXX, we August an of of our to Directors in Board billion. to $XX.XX our approximately Year-to-date, lower addition, $X.X April for year. we program continuing repurchased In repurchases. debt-to-EBITDA than due total already $XXX.X to our primarily was our repurchased, shares at XXXX working of repurchased less forma create $X.X the $X EBITDA. $XX.XX. to past and XX% committed shareholders. announce repurchase in billion. X.Xx added Slide have pro of price outstanding and million authorized the of total the happy value billion a a yesterday, XX, billion at average When needs. ratio than authorization million to net provides repurchasing for that actual We on Also I'm represents for $X.X opportunistically shares shares have our share Since This quarters of stock seasonal remain timing share almost for approximately of stock.

until have debt we long-term XXXX. no maturities ABL, our Excluding

was Our availability billion, credit total $XXX hand. and revolving approximately million in net $X.X cash under consisting $XXX of facility of liquidity on the million borrowing

The to off our delivering this products, to and remains great sheet a efficiency year. are customers, is and our rock higher-margin start balance team value We driving solid.

full gears outlook updated Let's on discuss and shift Slide year 'XX XX.

We continue in underlying see demand construction. to new housing strong

across our the single-family growth R&R mid-single estimate the and We geographies mid-single maintaining in starts are in our of growth digits. low digits and to multifamily

last providing this as sales commodity $XXX board per we of we performance As better foot. is net and you on business our discussed guide believe quarter, assumes at a with our we EBITDA base thousand costs are constant measurement and

continue to to your you our models. to will presentation a estimates your sensitivity in own allow We investor provide chart with into price you incorporate commodity commodity

or a X% sales business $XX.X to at our growth XXXX from QX midpoint. are billion result base to we our the guidance XX% As performance, increasing XX% to of XX%

We to guidance or growth from billion XX% increasing XX% are also midpoint. EBITDA the our XX% to XX% $X.X adjusted to at

We delays focused delivered million recognizing XXXX. P&L the products. of and cost value-added to to CapEx capacities the first $XX commitments approximately came facilities the capacity to forecast merger. will BMC synergy existing in support create fully establishing to that be the million supply year's growth CapEx is be chain synergies higher-margin quarter, and will new for in down due adding initiatives in expected Our on This $XX to million $XXX

as expect deliver addition, In across this continue savings drive in we over $XXX million to improvements our operations. we productivity year to

flow $X and This last free generate flow reflecting billion higher commodity is ability on expect $X.X of guide. disciplined working product prices, million our cash capitalize to We of cash quarter's an free portfolio. to our management to capital $XXX from in XXXX, billion industry-leading increase

average provide we Our year. to On down in the lower of anticipate $X,XXX prices of still back projected working the coming capital an various the XXXX. We EBITDA about the prices due to XXXX the range Slide We assumes way commodity commodity be sales of to flow our XX, adjusted sensitivity for and full for free commodity total half cash chart year another think I in $XXX total mentioned, year XXXX strong providing full points. illustrative will price static at believe growth.

We to delivering call focus With our turn across to let technology and operational that, value-added products, growing continue the closing back on for excellence me innovative Dave to driving company the customers. remarks. his

we Thanks, grow it industry believe resilient homebuilding Peter. in the and continue In summary, beyond. XXXX and will underbuilt, and remains to

strong. Our momentum is

in this exceptional is and quarter, expect Our beyond. industry-leading year we the second platform which remainder generating results, to of the continue

strategy continuing shareholders. to for and investments, growth please and application delivering Priscilla, our execute to questions. to the tuck-in long capital remain M&A balanced industry, our We're to to company's optimistic now organic ability value in the Our I'm committed is over market let's returns. generate for outperform accretive the on call the prospects open significant confident highly our share repurchases I term.

with first Instructions]. Mike from [Operator Capital question our RBC today take will Markets. we Dahl And

Nice set of results here.

the some and kind have of margin trends. of a of the questions on couple core I So

EBITDA of So core or margin. mid-XXs the incremental or in low maybe to organic converted a organic kind mid-XXs core it looks like still mid-teens you and the

to year for You're about core terms XX.X% the margin. the in guiding of

of the pretty or talk and that are and is margin year of takes what through full to that puts down is XX% understanding some the exceptional, number. mid-teens the you balance bring So year exceptional us

strong. head certainly yes, downs a chain would we've strong markets, What we I'm a it's in Probably in commodity the way. back strong normalization, We this exceptionally been the terms the a and we'll is lot our year-end, is anticipating knew be of not the commodity trend it in long-term that year, would be of this first estimate directional know, dynamics. Mike, supply ups in that issues, prices year. towards that base around volatility back been by we're good the of half see the sure get as half pricing. won't but business, some knew on it an $XXX. going question. looking we'll What at it There's there the year, this see you the will

increasing year relief over the of to -- seeing seen build we the of around will think for and that components things space. underlying year. we or And the more is chain in due the start in to illness the need market pretty remain also bit as the interruptions We modestly, it manufacturing half steadily supply a progresses. on supply improving chain will still historically some will the we back either well. the facilities the basically, the full the normal capacity normalize as a to homes, course drift we've the stabilizes, been think that's but board But margins pretty anticipate as little comes The level more strong, back year, towards strong,

That ranges sensitivities. sales sensitivities and to went price up Okay. question, I assumptions, your commodity both it's adjusted amount your prior at related. compared bridge If I somewhat EBITDA your around a on And second different my guess look decent helps.

think the exceptional that be still base being of in like transitory? of as -- some sustainable how being of about things So so you're the that kind first versus of much may half should some improvement just and talking true we more these

right? business, Yes. but focused EBITDA pretty of our we page -- a over handily. up base both good point call layer that's really to is base trying around the and on impact sales the the No top So -- did of that's core again, commodities -- beat that

what X% based by beat That really for was I think full guiding the year. in about we're of terms on QX we performance.

Slide a factor terms on as run this sensitivities. think only it's XX just I'll price The But kind far. of So that bit a thing it's what this commodity really, line. that's we've instrument. underlying really biggest on We a highlight -- is static slide, helpful. a blunt in with of a just so a We of the handy. That's is it's rate the nice the reminder, snap think please remember seen

in these prices commodity So will volatility around. numbers move

Wedbush. And with we'll go next to Jay McCanless

give of about again Dave, under the you you where stat amount homes talked that could construction?

We million. said Yes. total X.X

Yes. Really remarkable history. a number, through looking back

It's been at been since time a long this we've level.

Absolutely. have And you the why think guess, the Yes. builders, me Mike do from low envision follow-up back and/or that asking you you It construction I I slows cancellation why the pretty what guess, the now. what was we're if scenario little of that homes under at kind many to I permit is take with Dahl backlog staying a along heavy with -- demand activity maybe for a step rates really where volumes unit think a down a seeing it's hard bit? builders seems to what

Yes.

this I you're significantly to decline expecting year. it not thinking Jay. right, about volumes actually We're think

in only that's rest out your given get but we're is the year. there's As the confident half environment supply not with remain there in comparison the what relief for the some bit the the and robust chain for customers, a here -- quarter. conversations We But our issues progresses, we're of may in year Peter early of of we're mentioned, going to very hoping back year. second the backlog as point, to seeing the little

builder? they're is You And to platform. on in revenue -- on you at Homes, for how big year tested what talked the your does thinking full billion Day, should encouraging Pretty a at move Hayden of that Investor growth there? pretty of about kind that how a we mean, full I that's maybe the a progress? then that? see that I $X announcement. in about then guess, And taking Hayden and trajectory getting terms maybe to Or the omnichannel bigger think what to Great. that

that little XX the our working of months Paradigm to a of And of really out ago, lost for until just year wherewithal kind they recognition last with this We're platform that Yes. with got the bit about to Hayden, traction this them that the platform, build legacy great to really is also sign committed traction by investment digital far we're the this customer work that that Idaho. in on market. we've we that And making far and advancing and the largest but with getting have on and to table with and our the were of digital them. already brought we the the have a cool the story we actually. about them Thanks it's -- with in homebuilders, the back is what one. customer is They allowed had acquisition work the sixth going a certainly that point. excited been excited a agreement for we're and BFS so financial Hayden really summer. are Paradigm us asking Legacy this to digital. They largest in were ability Hayden and for realized we've customer worked Omni and at

with them. got we've longstanding a relationship So

into agreement the was for it so signing good materialize And to see Omni. of that that

do To in things where you quarters and But expect So Day, digital our we the ramp up. in said Investor as couple heavily is and platform. question, for to all of we've our to about we're we're it. part this second this and of that digital, recall, last year your a certainly excited build pieces of your out other the investing in Omni capabilities platform the

the of through the of we year time customer But we that from that the revenue we continued of year. loaded, beginning, billion as digital ramp-up we will and in see into this next course and the X $X said adoption that that years. of see of would only so expect, is the or X half And next of back this period coming because really back-end over

and the They're on job, great So a by we're doing heavy excited. lot going lifting team. of a

We take Matthew our will with question Bouley Barclays. from next

Wanted to sales guidance the the XX% business of ask base XX% sort the that. of of guide, a first to of components some for one Seeing base on business revenue year.

minimal thinking sort from doing how to about math, X% gains. of want to obviously, to implies noncommodity there. you've the And inflation sort the correctly end you of in and I acquisitions other market and said smaller you think that make the mid-single-digit the got share markets. pieces sure are that growth X% just the thinking low and then, I'm about all guys I

success Yes. the you components Thanks, have M&A good growth numbers certainly described. include top of work. organic We Matt. The do our on had in

As in some certainly inflationary factors described, market. you are there the

a in mentioned, out. year as start forecast influence that I a inflationary chain, for see incorporate in year. Timing tried dissipate. to if of forecast really the that down the tends half them to supply what balanced But the analytics, trying and of account for of question, account to but for some back this is from trend will way sort we've in we that's for as that relief we're and this great the is remainder Our to guide our do reasonable -- way kind a of

Understood.

in to seeing Okay. adoption maybe and just you don't continuing a you of Got both, there. can that are I increased usage windows, to an itself, are question question, a that don't be you of see products are unfair millwork, extent see, secondly, builders? this better extent Are so kind driven by can you I it's strength. by maybe doors, of but finding product higher-level signs manufactured kind is but curious the -- that. you know, to And through builders seeing board? with across then it's be and the that, combination Or know, this. is the supply the simplify just their signs I'd they're manufactured your going all of chain? of challenges products supporting to And the thoughts and actually attempting given

also supply the fact, But combination little agnostic to a Window see components year, seeing doors, it's bit quarter we've things are great particularly would they really in of a the the that now, particular, more did to doors. what have have totally adoption. anyway, on times in seen backlog. nail And the the a year also of windows, incrementally this year. about And this were we'll but a on talked It's better these ago think Matt. we're both here last legacy for head taken. I question, tough companies inhibited products long talked It's say both. really hit I combination in Yes. of builders And our you there's value-add quite in last millwork. really lead answer that have millwork still you're of come a as actually become unfair and interior it a the constraints, chain relative we've there. timely the we've and time, supply. And relative stepping on the on gas closing products given down the over course a And bit, talking about as but some homes, we

very I be our I of a listen, we the company, sticky. these around we think it there's excited members of more it's up because are we us. time. course long products about embraced the labor are both tight, that availability way think And inside the are strategy and the of ahead through remain adoption our money. still We've those. of runway have a our way think seen But have combination couldn't will momentum customers So ramping and time, of we saving the that also them team And

with next Truist Securities. We Keith to move Hughes will

the question. on building of Kind last

Your it's growth been is products in -- absolutely manufactured outstanding.

acquisitions are need of above others is they -- kind growth industry are that Builders to the same this for in the levels FirstSource? talk seeing you and you're the Or market coming As look and seeing? something that you in,

there, are can't is we're you the Well, way investing. strategy that relative how speak it we're tell certainly from and what is hitting unique us. can unique to but competitors our from not I It adoption seeing we're hard Keith, doing that to I really to phenomenon the our

that can have are we our competitors leg growth on doing. through a we spending and that on the our capital disproportionate amount assets to here, we with added. do preferentially of think we course you've And up of for over course acquisitions value the these are as capital time. we will deploy, certainly seen the as doing that I the to time of both a continue that organic we're And

with meeting get stress builders the it's them, supply under amount right, disruption. The on homes a really there. need hard We're Yes. chain all of completed, of are to

efficient, can we can they that effective. by make more an is lives their what do area, be this can So they easier, best, be they more leveraging

was powerful. positioning been certainly it's saying, So and Dave really good think is as strategically, we our momentum,

Okay. And one just follow-up.

acquisitions, two last Your acquisitions. Truss the

the look the acquisition that's doing the the going dollar again manufactured dollars of think to is Are a grow base? you -- would to is lot future you product you As lot at areas other send there's there? out acquisitions in a where just because get those of there available

Yes.

a value-added I us, the through invest out There in add. through take the potential Love value differentially continue to our there. think strengthen but business what country, we're M&A across the we of targets side see you'll heavily opportunities number course of love time. the of are still footprint, doing will to again,

we Reuben Garner with And now go to Benchmark. will The

quarter outlook. on Congrats strong the and

components gross you your Can there walk yet versus above, now of will think think, just guys things of through and Peter. So heard think, if it I year about loosens elevated gross historically, when, But the supply I the a where maybe posted guess, we of so margin, over outlook help like you I would still you up? is think to long-term the -- which periods think in rising could any the don't I margin, as part and maybe had gross kind would range. well I've way there, normalize to kind updates margin detractor commodity the chain line, why it's normalized XX% first you I the

it demand post-COVID, industry interest the put of down an that the with of from question. of has homebuilders years to supply kind scripted really push, years combined does drive meet go-go Yes. demand commentary. that by down and that or that early it's post chain our we're shrunken pressure to the on directly XXXXs. the amount to And resulting COVID capacity just its some really The homebuyers over has the No, of that's boil to in referring the interruptions, a dynamics, good attributable whether

of capacity curve. think. the to do know limit folks the can. manage as bell We're product customers But managing to that that I along the certainly created just becomes available we us we way that to of So think It we getting supply the to the ways, it over up vendors profits is, there I very will very, that keep to though, right? we it think and in I with is we to difficulty Staying can partner market, has chain, opportunities that pushed is. way time, we lot and through responding it start to product alleviate. a think, what the in a push best little bit, way do and more the the more supply available chain disciplined, And with a be in It'll that moving broadly that normalization. release purchase, disciplined will get. well,

normal right, our It's So the still downs estimation. still in you're we there'll or the higher think We for track long XX% some not on ups we're but have our way goals, LRP margin guide. gross in updated our term. along and be

to at. I inability the color would start, the wrong from it Or the Any color an than you projects Got done? there, it. CapEx environment? came get be And in like lower could saw were just I there the of because but is spend looking Any think then reducing correct previously me-- helpful. be this guide

get it's just just rolling just Unfortunately, And article and on hard we these to units keep it's do. harder new really got to and have. industry is chip in trying up I we versus about The chain just the things how on have chain. buildings the us. we're really We've supply would Journal spending slower trucks. trying out hoped. We're have Lead ones long, times it think, rather supply yesterday, to was we made orders and heavy-duty for shortages that No. the would getting than all have There stock it moving equipment Yes. in are an and R&M, and more unfortunately, with

All right. Great. Congrats again, guys.

Thanks, Reuben.

from next our question Manthey with take David We'll Baird.

low could outlook number? me assumption what and Your billion flow $XX was baked single-family it between free cash that? to for XXXX, Was $X of now a kind remind single-digit into billion of housing you start

It was. Yes.

Yes.

or it's we matter does it then growth it if volatile? frame if does rate how the U-shape over Does And a S-shape is it's something? get Okay. an same, matter If versus consistent that time it consistent the more matter a there? or average or

endpoint doesn't. target It No. really It's in an XXXX.

right? So we for don't have the at get far, and move point, path go us the as along way, to commodities markets to so least through way informative this process it's base But guide, along through been all in you're important. changes ultimate there's your is plenty So these that incremental. that right, think there you opportunity to of It a to is cash I the certainly flows unusual see business target.

Yes.

year? then meaning much And I'm you could how that's potentially to SG&A of Okay. compensation, versus the trying kind parse bridge of transportation, thing. us core, sort versus just for is last acquisition out occupancy,

we talk an do my sure We pieces or top give if bigger the and can when I of e-mail, certainly I'm sort off in the to that's it of we not head. can you helpful. get We you it cover back can. can

good. sounds That Yes.

Ryan Gilbert BTIG. go will And next with to we

growth you far end-market organic so core Could offer around XQ? commentary quarter-to-date trends any just in

Yes.

mean, I -- I'll this say way. there's the So right

certainly the I that the strengths to of across are end central have notice. all strongest, part are of country up see regional the continued would strength There and say markets certainly the but geographically. south We the certainly markets. doing we

total, demand. in that for sometimes and everything momentum. of prices, total, green on the can has Some the some average, positive think a mix think in momentum Whenever But which ebbs seeing mix flows. good you Good far. of is we and pieces put products, one the -- everything -- commodity year-to-date in I we've the example, what some between we're core, total R&R, versus and seen headwind kept see in each think between really which I sort on so single-family increases we significant

I the X Central double-digit core said, had of all West, and as organic growth East, And quarter. Ryan, in divisions, operating our

So to very point, consistent. Peter's

strong overall. ebbs Some geographies, flows certain but in and very

more in Great. Okay. I considering solutions? guess, changes seeing And increased integrated builder manufactured in are in at products, the looking value-added any interest adoption vertically off-site you levels

existing to enough. fast -- think, just build than for on more to what be builders it the But that of they shorten and is The today take is eyes, the it ever we think their available times. want challenge I builders here fabricated and opened advantages art is highlight offsite the at can to what homebuilding. to the would could it's capacity good and them it's certainly who components important I lead getting the I ground professionalize do if to really really really think of craft to Well,

from Zelman. And to Adam we move will Baumgarten now

guess much start, of price how core in us I just sales give XX% Nice quarter. a the to quarter? to growth for inflation contributed the could organic you sense

part important question. it. No an of It's

in We We future, haven't but it at point meaningful. the might PBM. the some was out broken

cash And at believe Got there to just reason in it. Okay. levels? 'XX won't outlook 'XX then billion given the flow authorization, be incremental share that free or any the is and above $X repurchases

that to going going Well, right. tuck-in the to thing But highlighted the is in as a script of for we give organic guidance say We've we're we We're off making certainly continuing in won't do that is to that, as consistent. sure going strategy cash. that position, investing. think our accretive think we do acquisitions. to smart growth is we've our generating company, that, making our I specific you've our seen. investing And a undervalued, internal lot sure to on smart, investment a will not right is a continue like to debt and this. We're committed but do We're in pathway is prioritize stock

will next with we Grooms go And to Stephens. Trey

Noah strong results. Trey. for Congrats is on on Merkousko This the

Thanks, Noah.

to at you're get be exit we the like of back gross think closer or half that even the it supply you'll you first the chain margins So as see year? here sounded some Do normalization question, maybe start in year. XX%, anticipating

remain products for normalization. some be certain don't the I think will going get time. some do elevated are to I think way There all that there'll back. we're

direction barring we but we don't would coming, this significant reasonable other But down that in is that Just say XX% the no, I think really point, would that year-end that by indicate right, a a at it see trend is that would bring somewhat. change expect. don't products to

kind that sense. of if the capacity All makes kind my And we continue get this was year? I value of frame follow-up, magnitude of online right. before hoping you as you're you you'll And on doing can the we then new that this do growth, see think capacity could any of to add. balance expansion for in capacity That you constraints out look into the run

we capacity now. Well, have constraints certainly

Our to metric, like about of We -- customers longer talked out where board our ways to lead production are more feet look times we're adding country. to trying about deliver per man-hour the in improve than at ability our productivity same. we over would talked to to We've them be. all the past the They the get shifts.

to continue We do that.

We continue to to add lines, continue we plans. add and

But we're of that, is challenges that given focus on with meeting components double-digit do that terms demand it's do in own it's we equivalent people right that it's obviously and any doing. certainly a because we put then in of that very something year terms So But its now, that. comes available everything plans in into -- need impressive the to we're to well.

spending in capital of we're it products. total for the And into those a the company is amount value-added disproportionate

today next Yinger We'll with our question take from Kurt D.A. Davidson.

sell you you more, just and we that there's in a for what of growth share could availability the supply. getting Here hoping the it, you more comments platform. distribution But about on BFS perhaps as highlights case been the says that of -- well. I clearly your have and grumbling the vendor around around what think QX, talk material lot lines driving side we the that's pretty And about along and was of than kind is it you're think just of fair I that could

past. Yes. on the Very in we've question. And commented this good

symbiotic important getting are merger our us, as a and To And I amount incrementally, think ago, your These slightly the to relationships. I of commented think is think, were wood share constrained they're say, I supplied readily Exterior to I a the around equally there, they better doors, point, still and a what than for point long more lumber were would things from got trim we've to relationships. momentum we would But supply, are to those difficult. products earlier, you is our they which in your importantly, strength of we're are highlighted We're windows come. Siding time our in year long-standing doors is platform are available. engineered expect interior disproportionate since suppliers. enabling like relationships. exactly I to suppliers be believe I really good as tight.

of some -- that products those even are on still of allocation. Some

we're is that. than really better we I were when mixed ago, And year we exactly a mean So it bag. incrementally a say

time that better. are to Some we are supply better, to And going be think, no better, some are there's some no in some come. for tight unfortunately, quite are

Great.

then a the it margin of on normalized And out pretty Or quarters. just Okay. couple really you've where been that last running the and follow-up been Are categories gross broad-based? significantly over product in there Peter, any outperforming? has of stick terms

channel. to timing It's been in I the X.X it's have pretty a different pretty wide years the last say through products they broad moved fair say it's that would the broad-based. pricing pretty throughout range, that of increase brush seen varied. I think we've come how and But

go We'll to Jefferies. Verron Instructions]. next with [Operator Collin

Great quarter. wanted I productivity just to turn the to improvements.

have? the examples some to throughput. synergy you've improvement just translates know about the for you you're X% your target, then margin the into EBITDA on productivity. larger of as Can you an dollars long-term You hit how more BMC talked your to And I to annual and increased guide base any mentioned you does about annual pivoting what talk that business? incremental color and what to X% basis that productivity of

Collin. Thanks, Yes.

productivity the the part exciting So business. of is an

time. going lot different of It's our BMC. a driving technology regularly, time. organizations. year drive businesses certain things think of over the seen think a the of It are we it ability variety those our next share to the business year of we've to practices a to we range optimize that it continue it history right? it. real to improving a think we think do that out. architecture And to at Good the changing It's tax our things. areas, to a process the on, over -- and with all hits catalyst It's have reporting, is momentum at be things It's rate. opportunity long in, redesigning synergy normal at It's the and And improvement. to It's What finding leverage more big certain work dependent from that. do savings but that we do drive acquisitions lot cadence less we looking scale for of on of process. that certainly our in this and we ways stage really have make our a I there's is people, company part to we're capability they're best

build number did a into plan. our we long-range So

aggressive we're with what X% I for the more for push we to So that, to improvement And ourselves. set to can plan number for. tell X% going lower our equal nonetheless. numbers. we not accounted success, certainly that commit candid have than going be a it's having long-range in you be SG&A and but to the to We're to target we're going

to being improvements in So it, types we feel record and good track we good about able those feel and about of our of a to drive certainly continue variety areas.

around guess I start out then concerns housing if And and to I to what margins environment a resi color. the lot of new helpful turning BLDR's there's happens decline. know debate That's quickly. to just there macro volumes about

bit start So pull kind margin. declining that about color think as leverage your your declines. I help of what little us resilient margins can a be to how we protect hoping of to just volume And to you you give to was do any just can adjust EBITDA volume see to if would environment us

mean that's a good I Yes. question.

where is what all times at business is think to this mortgage cyclical rates up. are with the going will not concerned idea the go, blind it and we're we market While also not doing or at we're that a

so So to we're on and to have. back we're the playbook the that going lucky fall leadership

our a And before. certainly be a of very, We these pleased at more situations leaders starting are organization. scale, when To we very have experienced through with look lot clearly leaner specific, better our have we're of perform, efficient point. to we that more ability and been types a

of every to things We a history. ability $XXX point face business our of day. when really million lot our mergers business a a perform we have headwind what to taken the obvious will More -- business us. we're result are volumes over what We focused our sure better really at performance look important how of any on sized the making in Those better actions, as as in out in expenses going over at monitor XX analytics our perform have manage than of right? the you we combined consider some and We've to X our specifically, last the to is will have environment. And accordingly. shift, years. pathways costs to a our stay At variable available we're scale, very

at sort in keep can certainly is market investors headwind market characteristics on about are list important our today. downside job in in just confident cash in seen and we excellence in the off I much that really when other also grow in the in know we as year productivity. we comes this given we we're environment. the any that sees to sort we for talked We've of any sort time, think done the mind, any prepared business company, more back any We of momentum any At that We've in it are when good will fund environment. think downturn. into that of biggest very our that And a to are to business is this the years. Those of and is environment. we for strong downturn. capital. past good us we working about things it, There and working spin same is make it capital the that very, those investing we factor operational about something certainly we're but leverage important do, do And can investment we how That's moments is

our And we will today take from Rygiel Alex Riley. B. question final with

business? to platforms? expand you BFS get Omni profitability should the for in upon then of the BFS how about paid to and Can And comparison think quarter. digital Nice this going legacy is we how business

Yes.

did pull-through what $X sells. about confirming of we subsequent primarily driven announcement, our financial nature the and estimates. X that, feel of performance our and is BFS in So to improvement of performance increased when sales increased by the good committed we year Paradigm That by billion

capabilities developed. to offering structural tool, link efficient, make just we're more what allows and unique those capability has leveraging us right? Paradigm with quotes when It offer it in and is homebuilders do the options. order, allows for powerful about marketplace, think offer to a more when better it's plans. us of to that add. allows easier process our you're for into us ability to it's that more what you the It homebuyers if It's design. especially to it efficient value configurable in to to you easier give for So our us build and to visualizations us is terms place It an customers. improved it's partners technologies taking makes And work more good Having customers. be our And powerful

So in that's think We certainly terms biggest committed But to we're impact in platform. what believe do. business initially, we revenue more. the It's incremental that's money. core make in the where we've add. through be there are sales going licensing Paradigm those our We'll markets value There'll to of revenue. see other streams

this Neese I'll or conclude call back does today. any Q&A remarks. our the for to closing for additional Michael And turn

thank Have great a and for time in you FirstSource. your your today Priscilla, interest and for day. Builders Thanks,

you see we York tomorrow to City in Thank be you. New BTIG conference, the will and hope for We there.

Thank This for does conclude your program. today's participation. you

any at disconnect time. may You