Builders FirstSource (BLDR) 3 May 232023 Q1 Earnings call transcript

Good day, and welcome to the Builders FirstSource First Quarter 2023 Earnings Conference Call. Today's call is scheduled to last about one 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

we Good release, With welcome are me and our XXXX. investors.bldr.com. CFO. our Shelly. the at results quarter quarter website presentation first Dave our are earnings CEO; of Today our Jackson, call. on earnings Peter review morning you, our to for press and The first Rush, will investor Thank the on call available

the from We will presentation our call. several refer investor during slides to

for include they The directly We and in GAAP certain results adjusted for and items. measures. these results purposes, isolation today should results non-GAAP discussed comparable GAAP most provide non-GAAP considered from informational the be

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

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

turn that, to the like With I'd Dave. to over call

Thank you, for thanks Mike. call. Good morning joining our everyone and

solutions transforming XXXX tangible exceeded driving into the to FirstSource Builders work building is put our has have into product start supplier that Our expectations, as results. we the premier of

dynamic XXXX. the positioning become evident as increasingly We through we market are resilience will year customers confident with to our business in that our a exceptional the of the and progress

to and product execution macro efforts our the backdrop, on we our members. due the of strength our priorities challenging portfolio, team Despite tireless of strategic performed above a forecast

make being driving market through managing by to easiest our while and this improvements customer do and business will committed the footprint building enhancing our distribution efficient. end more We are home affordable remain with, to complex relationships that the leveraging exposure. in by We best-in-class industry environment

our Our us on positions execute goals. operational to continue unrelenting emphasis excellence well to

share growth to are accretive continuing We mix acquisition. and while improvement, through driving grow

Our recent and our transactions diverse reach attractive allow us further added customer value offerings base markets. a expand in more to

continue activity closely staying the we close are macroeconomic to by headlines, factors and market on maintaining our local our monitoring dominate to customers While strategy. focus

region, and are can We challenges seen April and are controlling when emerge affordability rates mortgage encouraging from business that our resilient signs long-term dip. offer Though vary has demand mortgage headwinds. feedback what that to suggested Elevated The we we sales value green continued the control slightly across creation. been for have running homebuilders the are shoes has homebuilding. underlying by results to starting some rates

what achieved points increased margin Slide strength XX.X% by in basis On the our category. X, driven we show XXX quarter. the highlights, value percentage gross the our of multi-family Among we product first to added

which our exposure footprint diversified strong our the contributor us quarter. a Our acquisitions multi-family sector recent have been to have first for this and enhanced

we quarter remained drove across business. well and productivity in margin EBITDA Our improved first as the healthy the executed

quarter by digit the more single-family belief our This serving XX.X%, EBITDA only we during points this was with margin starts XXX sustain that that our XX%. note to no a can off quarter. as margin reinforces declined sales the important to is It of year compared double than year throughout down prior basis adjusted EBITDA by

XXXX. tailwind Multi-family was year, organic remainder would to we a for declined sales single-family X, I prior multi-family and strength and demand R&R/Other quarter as both relative Slide expect while the continue slowed, grew. out core this this that On point housing of to

first sales last year. time to of versus our doubled this multi-family acquisitions, the in margin net recent quarter Following XX% than X% more

as quarter our deliver $XX improving System. to continue to BFS on Team and One we productivity We for in the are leverage pleased we focus savings Operating million

We by on full are is XX% manufacturing focused delivery and delivery efficiencies in improvements. operational evidenced This hard working our to through metric. excellence improve

site, We helping trips lower We are customer controlling dedicated job fewer to relationships our reducing focused on optimization against capacity efficient and our customer the other our cost. variable ongoing importance strengthening to cycle and deliveries their cost full expenses. total needs. times, and of remain the of the SG&A need to for with utilization, capacity includes This footprint, balancing future reductions and

we XXXX, May social responsibility our released first report. In corporate

look report stakeholders. CSR later our to sustainability expect release progress to We and our sharing forward this our with XXXX month on

emissions. We are gas to committed climate reduce addressing to the our actions risk change, greenhouse taking including of

XXXX undertook month. use energy Scope an work, to consolidate and our XXXX later we X X Scope facilities greenhouse and early and gas In across emissions completed emissions and XXXX, to monitor data. Through this our project our this gas fleet extensive expect and our greenhouse report and we report now

this XXXX leveraging goals. carbon emissions appropriate are We set emissions baseline to reduction

we our that XX% priority. first reduction a year When to our far this last am we reduced another have recordable our rate is by high-performing say it safety in year. proud I BFS talk incident achieved and total so XX% about culture,

by We make to place striving work. continue invest the best to in to BFS our people

members improved have benefits and inclusion over today on of trained retained We high-performing XX% a and our to talent and initiatives. diversity, track better have team equity

of our disciplined of these industry, on pipeline to M&A average attractive prior years, still smaller we remains goal Slide deals, highly target M&A invest to far our a the been Thus continue have believe X, fragmented per a an year with opportunities M&A in to slower approach. next current we the for million while Turning than XXXX nature in years. in $XXX but given several

we past contributes serving acquired area. distributor JB this we five-location Texas. Noltex on single in Chattanooga capacity Millwork As the acquired manufacturer Builders and acquired providing components added in the two more important during billing throughout call have acquired a to then Millwork, Last the Supply, companies. a Trust trust Anchorage, month Monday February, millwork multi-family our we which first and value markets mentioned we quarter, we Since

businesses family. team the are new to BFS these members to and We welcome excited

Moving tuck-in cumulatively repurchases, investments, M&A, towards to capital billion million quarter deployed and $XX we goal. share our $X.X the have approximately Slide first of $XXX XXXX, against billion organic we and allocation. to growth In X deployed billion $X capital and

I Day another initiatives, Atlanta, latest the am our offerings. in December announce happy forward, digital update host Looking including strategic to we Investor progress in plan our to would where we our on on

We will also provide trust robotic facility. a tour our nearby of

in more We are the details planning to months. coming release

an let's Now, our provide update strategy. digital X Slide to on turn and

in the homebuilding and enhancements working to of We pioneering a in to and throughout XXXX. continue XXXX, drive digital play are the role capabilities growing our transformation industry, adoption

development will and through customers our tools the of We lead enhance long-term partner as choice plan introducing myBLDR.com extend digital firmly platform. investing home executing efficiency in our the and benefits to a to market. greater their across BFS's innovations are product commitment deliver and technologies and building, We our digital product service and in the our offerings, believe

our to we of design homes. provide digital build During ultimately our easy-to-use with tools our which customers launch to call announced last virtually portal, access the homebuilder myBLDR.com customer will and their

which develop of we that throughout of a be One capabilities is applications pilot Configure, to and XXXX. those significant is number already deployed will in new continue customers, while with use Home

at home of more three-dimensional a continue a as virtual while suite the is types of experience. a allows whole These configure providing we collaborative user scale industry Configure forefront application a to to putting a the of Home are our that rapidly capabilities. us advancements

and momentum we Home had us QX QX an we strategy over schedule, early and gives Configure will in completed we started the window This on In X,XXX over takeoffs, to XX% XX,XXX visitors tool. XXXX, lumber to our who automated increase continue that drive and digital enhance adoption. sessions platform confidence our nearly XX,XXX remains

Our help building digital share in products ultimately of as sell-through we us more customers integrate our incremental and core tools of with wallet. will result our closely gain

are billion an track gain We XXXX. by incremental sales on to in $X

building people blocks a day me me story of say of They evolution our our share represents Today continue have to culture. of our inspire Mitchell our from I'm to that You the team, every Ingram delighted that growth Georgia. success Blairsville, organization. best heard and the sales the people-first are

service. ago XX very CDL he as driver, with from us customer began and out journey stood Mitchell's exceptional a beginning for delivering years the

wanted, to both their and continued led ability Mitchell materials sales, and became trust was where For to every service and five customer customer to be team then flawlessly he exceptional years to he Mitchell natural for the quickly job earning delivered sites, as for our That inside loyalty. salesperson their that excel go-to customers. our driver promoted the internal

achievements. and has outside I Today, him congratulations of key become the and of a member extend of for as salesperson outstanding award, team his Mitchell to of members. warmest recognizing top market's On recently Mitchell Leader sales our top behalf Pack as team, the sales contributions one won BFS, my a our

so At that remarkable success, and us to our are BFS, team to and the we have team's have fortunate many further our successful. Their exemplifying stories, are them. commitment similar members we dedication commitment invaluable to make

conclude to I'm well winning the excited on will this management win that and our in to positioned clear us value-added differentiated saying lead very I focus team, delivering experienced and customers platform, our by team. have market outperform. solutions to

results I'll now detail. turn the in discuss to first Peter greater quarter our to financial call over

outperformance. morning The evident good to products gross quarter, services margins despite are Dave advantages we exceptional challenging I'm value-added macro you, the delivered of report key Thank in backdrop. everyone. to pleased a our first and and that and

operating cash platform effective We extended strong flow generated we and and our cost best-in-class track capital leveraged containment of our working free management. record as

excellent industry-leading Our come. for navigate reputation macro us solutions, to position years growth robust volatility providing financial the customer to and and in and for us successfully allow above market products position, service

cover will three I morning. this you topics with

First, first quarter I'll results. recap our

I'll Second, quarter on provide our capital second full an I'll and provide illustrative And year on update finally, update scenarios. our deployment. guidance an discuss

growth spot in that our performance sales increased rental of than to to by delivered X%, to XX%. grew in XXXX. bright quarter and reviewing Multi-family a more a in acquisitions by sales. compared category, and billion by organic sales was prior reflects a driven demand strong decreased strong $X.X Slide begin this due the nearly on by XX% Let's a quarter of single-family expansion versus attributable The Core XX. focus year. was decline to R&R by and first net Other and XX%, multiple benefit strategy mainly growing capacity slowing market. first We attributable our

growth selling past to percentage one sales of The five cumulative had net and effect year of impact additional X%. approximately the day a our points favorable of contributed over acquisitions

XX% to slowing core overall resilience the added result is points this XX value and and by added value portfolio. product core sales decreased starts, family the the almost better than While of due organic underscores products single nearly organic

products margin high products. to valuable reflecting our as supplier the in these represented added sales choice value position net XX% the our quarter, of Importantly, of

margin increased profit XX.X% first basis XX.X%, compared services. of multifamily change the the the During of basis year value points gross added Gross to decrease XXX half quarter, than products a XXX our billion, was period. more and to from prior with points coming $X.X

SG&A offset million, decreased year. in to $XX.X mainly $XXX.X Acquisitions expenses the additional to $XX last by from in variable compensation, by due quarter. the partially operations lower SG&A acquired million increased million

by total points primarily net net leverage percentage sales, attributable of SG&A a As XX.X%, increased decreased to XXX to basis sales. to

We remain market-by-market disciplined a on are cost actions response taking and focused in management appropriate dynamics basis. on volume to

As the we approximately expense volumes. past, is stated variable of XX% in SG&A with have

striking protecting the based operations in future between right growth. calibrating for volume are capacity on We balance changes and

market of by housing products and sales, decline EBITDA a in Adjusted margin million, deflation. net organic a including XX%, Adjusted approximately attributable $XXX robust core decline lower was commodity primarily a to driven a slowing XX.X%. was EBITDA

adjusted period. was quarter. in adjusted our income was year than Adjusted EPS in million, during compared The share per the or of share income quarter. the earnings of by $XXX to an million prior shares was offset year down $X.XX, more favorably $X.XX in diluted net $X.XX per decrease the prior X.X from million net $XXX repurchase Adjusted

guidance we margin forecast. supported Our came value-added provided in gross by productivity as and faster the February, first products quarter in results strength, than beat over-delivered

versus now percentage XX% a expectation result, XX% we our plus of As is are gross margin normalized our at increasingly plus. previous long-term that confident

liquidity and on to let's XX. flow, our turn Slide cash sheet Now, balance

XX. cash the year, attributable and prior was improved and $XXX million, product first expenditures disciplined effective in Capital as to pricing flow from management management. mix, million cost Our approximately well operating quarter up $XXX $XXX yield working mainly XX.X%, as capital in, months return robust invested cash on of Free operating were $XXX March the flow while approximately million. XX.X% for flow trailing was free All capital we flow delivered cash is XX ended cash million.

X.Xx. Our debt-to-adjusted net approximately was EBITDA ratio

facility borrowing, and end $X.X availability our ABL, the credit liquidity under $X.X At no net we maturities long-term until revolving $XXX Excluding have debt XXXX. billion, our quarter in total cash-on-hand. billion consisting million was of of

to a for an quarter shares stock share. capital first at price deployment, $XX.XX the average $XXX approximately million Moving of repurchased million during we X.X

average X.X million of of have In of price for addition, outstanding million so quarter August $XX.XX. $XXX total, second repurchased far repurchased in we XX% we approximately shares shares since an have stock XXXX. our at the In

the As new a continue we repurchase share stewards have repurchase We fortress remain inorganic Board repurchase sheet. billion while value attractive and look authorization. and $X an completed growth to organic of for our share will Directors at authorization, shares to our approve prior balance capital decided opportunities of and disciplined maintaining to

guide Now, I discuss would on Slide our XX. like to

challenging the continuing are housing the in Given guidance. conditions to we ongoing quarterly market, provide

actual business full guidance We and year progresses. year our for will the reassess base as

of and range adjusted in sales $XXX net to to of be to XX.X% in expect adjusted of $XXX EBITDA billion the in with billion million to million be $X range XX.X%. to we the $X.X an EBITDA range margin the quarter second the For

guide EBITDA adjusted gross the assumes margins XX% for range. in quarter XX% Our to second the

Our the which full second year quarter assumptions, Slide also on the guidance release outlined are XX. and following earnings includes in

capital includes investments continued expenditures in range scaling the total million. to million expect products. value-added $XXX of in This $XXX our We

million expense between million, days savings. $XXX to of to we annual amortization in We no versus XX%, an the And of effective million, $XXX million million in finally, the deliver and productivity the $XXX in in change XX% to tax million range rate expect $XXX year. selling $XXX interest number expenses range depreciation prior of expect $XX the and between and

that important is We full about to think for potential the year. outcomes it recognize

market our So to scenario how are commodity conditions. updated to housing on have and performance XX, positioned analysis Slide we resilient across a financial we of demonstrate generate range potential

$XXX performance can QX we for strong down performance year, scenario expectations roughly expected. see, year each generate could into are starts previously XX% you from the gross increased savings million scenarios. adjusted the As fourth full reflects now expectation EBITDA, in of QX Single-family our improved we and billion $X.X quarter visibility is we This stronger which productivity our and meaningfully for our EBITDA up margins analysis. believe than have

our that wrap drive year, is transformed margin want that benefits the sustain well to XX% positioned or I As are of now to up, strategic reiterate exceptionally believe our see long-term adjusted forward. margin can this and we I I our believe business. a we goals percentage continue EBITDA higher. at to gross double-digit We we that normalized

on I'm up healthy cash best-in-class set confident will in operating platform, provides our to which balance financial continue flow, us free our of flexibility to generate sheet. further top substantial

will to shareholder maximize manage, We and value. continue to also long-term diligently to capital work deploy

that, remarks. over for let closing With back his call the turn Dave to me

Thanks Peter.

in good close really execution by me we and Let about our feel far so saying strategy our XXXX. that

initiatives, with to term. and Our the all investments partnership productivity products, our in digital goal in value-added on long driving experience are over growth our BFS, solutions delivering customers while improve

for our year we on create towards industry, shareholders our focus our can of through strategy, be deployment for services, disciplined value products executing to challenging I'm While and and capital opportunities. appears a growth our XXXX our that value-added still confident

please joining Operator, Thank today. you now for again the open us for questions. call let's

And [Operator our first take Barclays. Bouley from Instructions]. with Matthew question we'll

morning on the Good results. everyone. questions. you Congrats for Thank the taking

to to the raised XX% right plus. normalized guide you the guide the jumping long-term gross to – question, So margin

as is, adds that shorter value kind I say heard of talk talking business. think market are etc. some benefits Thank is or share, little bigger you're a My time the that and the now coming I what you just confidence of more productivity that to is you to some that you this to I little about? term say to the faster. target. view pieces, you. the a a in of trends a question result these You mean, underlying give a of raise gross trough transformed better visibility got about margin

date. a gross for margins normal Thanks, it's sense a a trying talking, get was long-term chain all that while on better type noise about based no, since something taking really of Matt. That the at and on felt to good of ever thing. of We question. We've basis, the is. felt XX% now, merger quite we where been good Yeah, and the great or out was supply about a business normalized merger sort that where around

it, were We've continuing meantime, the at But working. the to managing in been look right? we at looking it, business, we've but been

value right. it's improving faster, business, we've So, we've acquisitions made, worked to mix, resilient. our as overall of percentage the a grown it’s and been more improve add The

and time. on meaningful average So just of our over increased gross component to ongoing that's being think an mix the biggest important value we basis, add the margins

In job add of the giving us down that lot productivity, we managing value of market have even made investments internally overall, we've automation really addition, in good in yielded volume and were we've a productivity done a the a certainly confidence benefits expecting.

I most it this factors the think performed two compare, and admit, And I still and that what does very XX% those that market that as we are margin proof very, was down QX, to was of last because So can gives the think year-over-year the being in as we've a powerful. as value confidence positive us. seen of see that challenging customers is, product one we for a really and normalized the us needed start up that for well our we moving as plus, all we to

cycle addressing times. Matt, for and some concerns them, those times as solving through of problems see reducing are sensitive costs those of Yeah, labor reduction them, that cycle they price less products and are up they I'd those them, for add just for the make they customers can because are they

it, with and easiest So our perspective do value we driving for why customers. business that's being from to focus on

you. Got

jumping I one, near underlying know detail assumptions Thank then historically. unusual be is you. seasonality you around you're obviously and that guide, other dollars kind what gross which call of looks the lower the of unusual guess such And there. QX, But I margin that of The are on on you to QX of there? mean term. great of in margin into this to Thank be path that. that. for and have you're a guiding kind to any part Okay, EBITDA second I normalizing and And QX, why would than some

would assumes I consistent competitive environment market. continue been normalization Yeah, This to is a an to to I'll sales. is going we're and that talk flow what still the to and Sure. see volume that communicating. Dave we let this margins What overall have and say challenging through in environment, with continues in increased QX,

business, So that don't what aren't at think some the absolutely seeing two least while and coming, we're I there quarter that's really numbers. want you're in comps in anybody or for there the confident to still difficult next the

So, what the word stability. we're hearing customers from is

You're hearing not robust. really

and that's for stay stable resilient supports hearing valuations a and optimism You're it's kind the rates things as consistent. a underlying a we're when well. that and But as when we're rates of forecast demand demand our what still mortgage consistent, the with stay more backdrop are fairly mortgage our as of overall increased environment, using There's backdrop. working volatile

feeling And all so on but a it's pretty relative basis. good, we're

guys. you Good All Dave, thanks right, well luck thank Peter.

Matt. Thanks

RBC we'll And Dahl our with question Capital Mike Markets. take next from

Good questions. morning. taking for Thanks my

enough the margins gross Just Matt I description you had. of kind think those of of your normal. pick about a or terms in of think that margins up points we specifically, to When and questions clear on couple know

XX% You half year which recurring to were for you're know and the at that middle level. XXs even to mix, also still guiding full to of seems basically reach if seems if gross low imply adjust margins, a a a I margin to gross first mid-XXs low It like you'd looks EBITDA like XX% mid-XXs, the to like than scenario maybe you're in margin. non-recurring, more this the year,

this progresses.’ be million ‘hey, kind then that been still articulate what now know would that should the be, base I if that for the good potential a business I are embedded? we'll I few that first know your gross if (b) delta in expect I in just think bit have temporary – timing like said, as guides in the favor. And sorry the you is in but full hundred you tell more terms Could right margin impact for – of XX, between So year that and question, a expectation you take you some those of (c) what still But little there's guess could we dollars it's (a) that year year opinion? things about some assume I multi-part half. your could Maybe of you

parts. So I XX if can there's one points. hit me question the I'll do you in best my and all tell

difference our XXs, to The disconnect and first plus there. talked on right, know what I margins. in is example between we've normalized which to QX a the around mean XX, one low guide guide, the basis is about for mid you you're low is our mid a for XX% there yes in XXs,

I react, market guidance some how it. we is We much in provide explicit we embedded, didn't the send digested numbers sense we're to We're the better think going pretty significant scenarios and volumes I full is those seeing while environment fully very a volatile downs but have we're a to obviously in still. haven't around step trying of year. mean message have

on That'll course our ongoing to exceptionally up better So learn what take continue basis. our gross we numbers an confidence, and what best is above full we that understanding. in year normalized we're But margins saying we'll be with we this that strong. number normalized average in for as would margins our to as started year consider of more update we get

the know things surprised resiliency recent happened margins. near I think we've the been gross strength by You of gross terms of that the has periods of of in has in margins, pleasantly in been the term, what one

primarily our made. that it's to While that out a think driven quarter investment by point that performance margin I was mix, multi-family really that we've piece of is big important gross this

on longer there's thing. to That means to favorable exposure environment and in that's a which their a business bit you lead times delivery, quote has this commodities more as know

So and Mike? Did there's these really to are part pleased I gross normalized in of business. things We're transitory performance points some the accounting business's But happy for margin when benefit that overall we're as it certainly the with hit giving all there. we're types of have those numbers. your

pretty yeah, much. Yeah,

just wane that, where also competitive, yeah stickier. know multi-family add we're increasingly the I into tailwind will we because little stuff you we're as will Mike can value-added good the for have And the waned good the anyone anticipate the chain farther would supply at stuff products it's we year is issues go provide be sure. that a as well. But at,

So it's a of those. all combination of

Okay, I both. been starts half, yeah, in allocation. first look, temporary of on if cash have some in great. the is of follow-up, that's And a the EBITDA very scenario underlying helpful. conversions just The this capital even terms strong. a your is it coming consistent with Thank then flow free number, through incredibly mean you little middle

in the buying back effectively obviously aggressive been billion just know stock, pretty four the months. you last You've a dollars

The new like seems authorization off considerably It is for more cash throw you'll this year. free $X billion.

any you'd the of not puts not explicit what of and just cash could out a why there, on bigger bigger, thoughts just for more on expect provide takes you have to maybe conversion year? So some kind authorization direction full it why a free type and

past, said north in in of seeing. $X.X point now, billion because of I thinking is call-off our billion probably Yeah, we that the conversion $X and so of that's is of the free around that, north cash we're terms what probably think a increase significant first that flow

really working As performing off some you sheet. of reality some we spinning continue well will know quite outlined the that in of that the deploy the on The past. are strategy to the attributable capital the in of in to is, the value is we've Mike, business we our slowdown capital and and balance

strategy, The seems we on to us with we whenever revisit it us there hand-in-glove put billion very authorization, work, and absolutely $X because this need fine if have think has makes for we'll to been it for now, cash board supportive, sense. they'll they're so be but we

I'll the right, benefit we're those sort thing we've of the share commodities volumes only very of past past seen windfall very, of that of some because commodities, of with high the mean is, I are out the couple point of the so over that. years done buyback

Okay, it. thank you. I appreciate

take we'll Grooms from our next question And Trey Stephens. with

everyone quarter. morning, on Good congrats and Hey! yeah, the

Trey, thank you.

said you or an competitive I better the the to up see competitive markets and behavior is Sure in you versus the thing. tougher and expect some are more you these Peter, increased competitive behavior see that starting slowdowns? markets creep of kind increased difficult in some How or than environment. competitive it more of of maybe prior markets behavior, you've competitiveness in think does look to more demand less maybe what your seen

Hey Trey, is this Dave.

said I market-by-market previously. again, think it's we've what a evaluation Trey. mean, I it's still to similar

than and a west that seeing to the in If tougher, it's east, it products competition, more anyone definitely where demand is little do. a is out the around you little go east, from tougher we're west can again,

stickiness more those and generally where areas to east around they to it's are where because willing the product the the it's competition to pay solves them, well those, see chain that now the because as west around problems value started is for with value-added value. as right the more still we're to the has really more get being for valuable Where can something anybody efficiencies Again, is customer. products going normalize. far and those with doing to those for supply and customers able they're in them, creates provide products scenarios, they But

these about sustainability margins it's Okay, what and gains and these and but in these in markets cost the it's initiatives for got then longer maybe the drive it. call near I that, you better Longer an the term, of efficiency management term, actions do of environment, that Thank how guess operational and are and kind of you driving as kind see of excellence helping for I think a some end obvious out follow-up, downside you term to productivity. things a doing as improve?

where we is, and that technology is have efficiencies efficiencies where Well, the already me we're create that pretty the Trey I exciting process. and manufacturing labor driving in that's manufacturing the think the most opportunity thing good, in for

us there's that there. hour. foot heard continuing invest labor the of XX% in You've we segment continue increased of we that long still per pretty to runway to board use That's and have as a business, improve,

As our to it to that well, still also of can illustrate of best value be distribution bring XXX that we supports meaningful we're we then is the exciting the as to there is, just that across as with, customers, there's we far and that easiest as the the party thing leverage also it continue delivering those number, our locations, to product. and business a business, and we along to generally pledge and is we something practices side the opportunity develop all where do lines going beyond think

we you operating it's of would over that terms that in these changes something credit repeat. analyze productivity numbers, change. better in of that feel to for sticky. the to The think going changed not we add I we're other to These on for comes are the contractual thing year about the not take productivity is, These be the the and freebie are are business and we've These numbers sort to changes having changes. that are business. able and do time cumulative about good when as this work around know that goes permanent to trying done we the talk We're a is

Perfect. that I'll on. Thanks it guys. for pass

Thank you.

Collin take And with Jefferies. Verron question from we'll next our

underlying Was just specific prices late so that here And guide XQ came us first a able it you Was on in expecting? is hold quarter. you what product in how earlier the came the of you you better? the than of since Were you the talk can in Great exited quarter Can which it were of morning. that gave February. to gave to category? versus the you guide at declines just commodity end just, just in sales a Good demand? My quarter? better question quarter, you sense about ahead year-over-year give

about. up longer-term as coming were of doing was a Yeah, obviously commodity That value-add, didn’t dynamic through well We was that know you in forecast. of what of we've some no. bit just a was talked worse and anticipated. we experienced. internally as The black way of that we eye the some the we momentum organization we floated ramp dynamics even but multifamily felt than we not that we what actually for But a on expected. we thought certainly quick like the was that of accuracy That's numbers was of terms and was – the the than knew it better good, our the Sure. competitive did lot contracts

was. has been were ensure that that all for certainly through fantastic what surprised job strong market how a we've product we a that dynamics good seeing, getting operating through done all the to but local managing they of So moving at compensation team are and certainly

You was terms interesting saw of know in it an numbers. quarter what in the we

– push on that won't West in You hear piece. take. weather whine continuing That's weather been while so good us but give we through, about and to take periods. feel certainly was in a about weather, a certain definitely that's the a work a Coast, it and That's the Texas disruptive

right, Dave those good the our saying. reacting certainly what as market, rate saw down also they’d builders was whether interest on changes, be we were customers to I up what feel were but reacting in impacts overall our of were or to, think the We surprises influential pretty

going anybody great ‘we're we're you hoping say a just fantastic it and the year and in and was early guys best. of preparing would add, know the know I taught, we out worst with to for the the ground you of a did Our But for the in okay.’ was job that stake put be tough that pretty much expectation volatility with to

scenario the prepared our management, that got and we cost downside to as or we we with then quarter was baseline. play how clearer of against out, sights the market managed for So the going

was And better they as customers, are they than just even you're did at they the builder point it our them And expected. now, sentiment also from reflected that time. we you saying heard, same as in hearing

of combination So it's kind that. all a of of

in that business about on That's the about size just very the guys guardrails helpful the here? remaining have you year just that the rest then you how obviously quarter. on Can business to talk in any of color. business through and the And strong think here, the the backlog multifamily of

because market in business maintained bit of is that is substantial, its a about and strong part surprising to has Right nice a backlog. we certainly now have fashion it's part the it has Well, that the do visibility been more somewhat strength.

I think there's that absolutely right a story in world great profitability now.

allowed But that's of prices what market, part the both, the XXXX. as market over absolutely yeah, as the this us that of and through what time we're Dave prices all to results M&A far of of the in and But enjoying mentioned, do that year commodities terms the will in but so normalize continue sector coal tighten. to of

that cost that declining. that I'd is through The capital the is substantial figure a faster facing got In of up, than And But a like. completing the really try pipeline look sector kind single-family or pace in general because issues we've pause is that facing. we're back to XXXX proposition what only words, is filling group sector out to thing value at and the backlog other there's backlog same we're that gets to needs a in going a jobs add us just the forward beyond. hesitancy

seeing bit beyond. again pipeline there's months wins, in that XX a a of including believe, capital of we than recalibration into the still greater being demand But as jobs We finished are multifamily. a cost, housing and rate jobs little at out long-term, entered

Great, luck quarter. second and the in good

you. Thank

Stanley question next from Elliott our take we'll with Stifel. And

is you of switch do piggybacking start down of quickly and it single-family, commentary everybody. value individual multi-family Dave, in we rather, business, decline it does the you the markets nice the difficult then how the ‘XX think added on on pretty kind morning, for it your when buckets? about between And question Good the multi-family and beyond? all we how the a of multi-family part if for break focus consistently is the year. to a to Hey or side, kind in between see Thank

You Stanley, question? broke first up. repeat you can the

that. Yeah, sorry about

consistent I of is between or there direction single-family, going delineate add now versus products your of multifamily terms kind little terms then way a to also whole, there. manufactured a how upon more Maybe the your side, happen on was to in the single-family? or of differentiate And but in portfolio, for pivot the with So multi-family what's of going much multi-family the markets. looking the value maybe value-add to necessarily end overall some depending just is into it's ability piece of between with or as a those

that for thanks question. Yeah,

non-value value-add. lot do add is Truss our the don't multi-family segment primarily and multi-family of the for with customers We a us, majority Within value-add. of it's the overwhelming

always of sales it So multi-family value-add. will have being percent a as higher

– our Now a fairly in XX% the total it's context it's of business. of the business, still overall

single-family. much So even that the the move way context, it in either very needle doesn't versus

value our platform to have, those to of build that's Now, can you, having manage those where what in plants way of efficient and of where the that And have the we by a our effectiveness the availability the plants. ability business Trusses tell single-family job is we I to most plants done single-family great are under will have moving multi-family at guys the capacity. capacity

that within that significant coordination to on effort be So the to of efficient the the build cost goes of But radius there's happen. and we're a there that those a to effort get make we is trying where coordinated supply. and integration a can it lot job most to has there Trusses

flow terms guys you somewhat managing still but half to now, outlook, about in uncertain a good. of the what of the are we I that you to how is Even capital free mean, level going in repurchases, terms that's turn leverage. leverage right the M&A, structure? I your comfort so given be guys Peter, you continues mean, thinking mentioned are of kind are below market? Actually, Thank Perfect. of of a kind you color. great and be with cash quite then in

as think general business of like It's based risk, still we'd trailing an metric little guideline that one a under a just if actuals, our about base but we the to a think of we're rather still amount a how that helpful is you we but two leveraged looks appropriate at thinking business on terms it times I about bit XX in guideline as we're last minimize Yeah, say it. in certainly you that to if have in the than look regard. our in like room, range, take year,

feel around our good base as pretty the continue business update full get the better thought go about normalizes, into tenure give process you watch a that we'll at So and this as business, we XXXX and But leverage visibility ratio. borrowing, we it. ahead we'll to and cost the year, updated this an both point,

Best question. Great, of the guys. Thanks luck! for

Thanks Stanley.

Wedbush. question take with our we'll next And McCanless Jay from

everyone. my morning, Good taking questions. Hey! Thanks for

this feeling the we're relevant know are is cost just, especially over in subdued but business, maybe you for that I market curtailments lumber So to two what the that actual are the there, months? about. of suppliers and the to less I next direction your year, you commodity becoming it's surprising light have of lumber, lumber been starting guess, the three and the how hear lumber your about prices prices of how from been some hearing

answer. a tough that's question to Yeah,

ensuring taking capacity been us. have a for There and of other a OSB under capacity. back we indications on we flow-through margins it floor some I adding that little to side hear that put manage right forth, think some on been I it. It's particularly get helpful murmuring, you. basis, about be continue might the a There's to the out bit been

such it's but it’s don't range-bound of we're but predicting, over think last commodity feel say. to comfortable kind now, years. I been right I a It's the ready. surprising few tough certainly

able from I most or etc. that are already and but with been that? tightening more banks price or wondering the the on is pressures credit, think side Dave seen Okay. have builders addressed in this, you of supposedly question, Have March other some just you lift competition and to the distribution coming getting this sentiment on your April that some the of may of And from in aggressive financial diffuse

on at at demand, partners worked supply you had and but think environment. is a capacity kept this the I is as partners? in demand, with where chain bank and that chain general, additional is the normalized point I time first excess supply are asking saying versus that what about our they in quarter or doing result, of a through things little capacity in you're have our would what there products there tell is implications a

aggressive, still pressures well, reluctant on-hand are in to their to business been in experiencing balance inflationary get out as quarter. worked they a little the versus too the and it pretty much So was capacity itself labor, unless first which around they've specifically situation,

that. in So I we're think

the day of word You the know stabilization. industry for the is

and on to kind market the we're able think in the I of nimble to think are today. as stable where be I upside and downside or that's of necessary, either a we be trying kind respond all and

sounds Thanks my for great. That questions. taking Okay.

Jay. Thanks

Research our question Steven take And we'll from Ramsey Group. with Thompson next

better the in that morning. Good Maybe drive Hi! segments connected maybe just start. quarter, year, And dovetail is in that into maybe to that one clarify elaborate another? how first over the all saw expected you can was green to on than or did segment the you shoots better that to the start April,

saw overall resiliency Well, would fair say we I the in question. forecasted. had more we than market

overall, would that's product-wise think fair in value-add. geographically to been the think their the we'd what and market market the results timing anything on the there's don't in is And most digesting think a terms in the horizon reacting of resiliency East, more resetting orders. to We like, sales orderly board. originally in that, in strong I be caused there I more terms say indicating each disciplined placing in to of down I and demand is than forecast. is I the the that across different, saw But time meaning looks each it's say step

the the are showing market optimistic. we're that green buyers be rates enter and where again. a what As think resilient comment, level areas customers for demand they when at where from seeing the be there will is into Again, are things far mortgage stable, to I are things ability are as cautiously our shoots

actual that's country the of are versus receded. was during kind boom of we've of somewhat Areas seen strength where that's there's that job growth of a little where better what pockets real COVID now with a

starting show So is see to west of west moving we mainly coming, And is leveling it signs where east to again, least out. improving. at of

you products added And single-family, You then that's how term, the up helpful. and thinking multi-family penetration products. value said long multi-family is of Okay, see mostly added term? that in secular do the over longer shaping value

products there less of more or opportunity a that those is added portfolio penetration adding for value into customers? So, there

opportunity the a get we're in it's have yet. Yeah, full we max terms portfolio we're is the the not value-add what more to about expect that there you world, done. digital moved geographically. more the of to our ability but offering where long [inaudible]. our where look in the quite There quarter, markets to There's value-added that of in products overall excited And at not of ultimately I if have this we I needle to and do think mean more term. bit a means very certainly are value-add in We've being more XX% opportunities

total our go grow serve make to ways for looking to our more We're build down. cost ability their help efficient, of them customers,

We excited So it. of opportunity there's lot we're think a there about certainly still.

come. little not to to it's lot great but know, much believers terms in certainly a about there's more that numbers of it we're there's so You way, talk harder a that of share,

be doing when it to sure is to we're share really hot, we're the thing when when to and multi-family single-family's our have the hit specifically around that, the figuring to that accomplishes to able multifamily the from multi-family's we're there. adding was premise you around work. and the that integrating able only make add Truss out I'd And able other coordination And and hit between And plants only there, single-family. Truss diversification objective works hot is market plants what in single-family well

you the Excellent! Thank for color.

from And Bank. we'll with Deutsche Ahlersmeyer question take our Joe next

congrats thanks questions taking Yeah, results. my for impressive the and on

Thanks, Joe.

Are maybe are unpack doors respect a seeing manifestation multi-family that? at pricing with seeing essentially the Looking and little your doors? also family the we what the more positive on perhaps basis that in Is performance still you single here? year-over-year, or to could stronger millwork mainly completions in this quarter, perhaps flat we of performance windows, just a drove a quarterly

certainly back completion windows, process example. and building good it's bit a the of those a The of a doors products, of remains things. Yeah, think those on couple I little strong millwork,

of was as the to there needed. in the of think quite a on ability disruption ground I that product bit part slowed market put which well, when the

we've component, So but that's also another invested. big

increased there's serve well. to ability So as

assume XQ. sitting year-over-year And likely de your here basis? expectation headwind time is this significant deflation coming Great. on second bridge bucket the for a quarter the bucket see we're XX, increase in at minimis And the if commodity here, in looking relatedly, up that, that is next fairly year, that same this I on page we it a versus now

next and So shapes that context Thanks. around how year? maybe some up just time next quarter this

next you're year. of all of of pricing be should comp the no, year. QX bulk We digested the Yeah, would the last noise, commodity peak in QX have commodity terms right. biggest volatility hit by in this

is on So QX biggest it may bit that's the drain a little a QX, into impact but year-over-year basis, right.

as to of or Could $X.X headwind much billion it is billion on be as too sales that $X a aggressive?

top that you We I have one. of off to of guide narrow can don't actually back that the get my head. on a

Okay, no a Thanks guys. lot worries.

Thank you.

our David question Baird. Instructions]. next from Manthey We'll take with [Operator

there productivity just that is that two? is million thank your mostly overlap SG&A? quarter, gross you. about everyone. separate Good some outlook you in When margin this in savings is from wondering, the morning definitionally $XX example, entirely or for Yeah, or between I'm And here, higher productivity talk the

where where efficiencies. savings our and manufacturing When both. we've the get SG&A we positive Yeah. categories efficiencies. component is of the also contributor COGS margin relates to productivity gained as through manufacturing well, It actually it it's The in so to a is a margin actually categories manufacturing, it

rule varies that there's we be should to thinking so assume base I no about? And quarter, from quarter

correct. That is

Okay. Thanks for the taking question.

Thanks David.

our Adam we'll from Zelman. question Baumgarten with And next take

you morning, for on of walk Good the part seeing pricing Hey! Can business? you're what non-commodity us guys. through the

that itself I the over years so. but think process discipline and that commodity done five mean, the we've non-commodity last there's pricing lot work an talked the or certainly the headline to It's we've of a that the about, all been in has pricing think implemented I side. I Yeah. on been really lends area the

the side. of it chunk from a absolutely the of of pricing volume it, So not attributable to profitability pricing to mix offset nice the certainly but A multi-family and change headwinds business. space. that strong all that is certainly, the Obviously healthy in

you. Thank Got it.

Thank you.

our with BMO take next we'll Mamtora And Capital from question Markets. Ketan

for I Peter, in for flow think Thanks $X.X I my how heard about XXXX? you can cash billion question. you free taking earlier just comments. thought the clarify

Yeah.

for cash continues a a and to You be substantial know, know bright bit unusual in us. spot flow We free actually generated for that's us. you QX, a amount

with resizing the well, we're quite of do profitable. that still basis. still comparison But on of a Some performing year-over-year business has to the

comfortable scenario north we're that path expect $X.X on most kind range for middle that So likely the flows we sort of or of be cash we the to of over billion that saying provided. based XXXX,

You Peter, clarify? said of just billion to north $X.X

That's correct.

Perfect. Thank you so much.

participation. questions have no teleconference. it That at appears concludes your And today's time. you that we Thank this further for

disconnect. now may You