Builders FirstSource (BLDR) 7 May 242024 Q1 Earnings call transcript

Good day, everyone, and welcome to the Builders FirstSource First Quarter 2024 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 would now like to turn the call over to Heather Kos, Senior Vice President, Investor Relations for Builders FirstSource. Please go ahead.

Good morning, and welcome to our first quarter 2024 earnings call. call CFO. Rush, the Peter CEO; on our Jackson, me are our Dave and With press and earnings investors.bldr.com. The release website on at our presentation are available

will purposes, for from comparable certain call. We provide in during include We isolation results the and should items. the GAAP for not non-GAAP discussed considered informational GAAP adjusted directly results they measures. today our results non-GAAP these to refer and most . The presentation be

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

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

Thank our call. Good for you joining you, morning, Heather. everyone. Thank

product Our results quarter reflect our and resilient scale. differentiated first portfolio

our executing efficiency priorities Our consistent focus team members on and operational our strategic initiatives.

a products our challenges . platform. we multifamily built through our our As were we on year. growth expected, mortgage these in affordability higher value-added challenges, micro weakening and industry-leading headwinds market the rates, driving and Despite to start portfolio successes digital drove

delivering We customers. preferred service to as are customer a exceptional and and partner innovation advancing trusted our committed to

on executing as on our pillars, focused shown We Slide X. strategic are clear

growth, greater the and of empowering next are services driving install Our investments efficiency products, in and delivering homebuilding. generation organic digital value-added solutions

and BFS panels who story, those and value-added Ready-Frame well components manufactured products to such millwork. as as as trusses, doors the include Windows, wall new For are

construction construction services addressing we digital quality. our constraints increase way and and homes products efficiency. to customer our continuously improve stickiness, cost-effective to are home will times, our their providing with things cycle of win manage help improving labor that committed do efficient to such remain tools, better. customers as customer we more and and innovation Through We reducing our meet the With value-added seeking new install a business operational needs, and existing our

We productivity robust scale have our and while focused and delivering customers. leveraging a operational the our fixed cost set products quality of and initiatives highest services on to and are

Working back disciplined value a with shareholder We competitive at are prices. am strategy best to continue deploying team confident in industry, M&A the shares in proven capital alongside a of record strategic our long-term manner priorities. we a compound the buying and track achieve will that and I

quarter our end-segment QX, margins focused product highlights and Let's our first and differentiated portfolio deliver We execution continued reflecting on to in strong Slide turn to X. scale. diversification,

Our a products, of and mix gross trust efficiently. of margins more our value-added higher to including than more ability XX% manufacture reflect multifamily

this continue multifamily the and some normalization core margins. to course normalize expect in see progressively year, of the in We to we over segment

to off our a strong We're strategic Moving start to Slide X. on initiatives.

Show customers. gain everything about to It's business incremental launch. going things: X new excited so the our the it tools digital points; easier two, after how one, and digital solve full level, pain high in International make product a help launch partner a us an our and Builders at At milestone. we're us win-win, with do is was three, and Our suppliers; customer exciting far from February even existing and

is we're and business. wallet using One share excellence to where services focused innovation safety, on We're proven our operational customers. area installed and using increase with our playbooks playbooks practices and of best with efficiency

help to year-over-year sales by constraints. increased as customers we leverage capabilities install our address XX% Our labor

productivity in includes maximum balancing in million We operational our reductions savings optimizing procurement flexibility. This cost believe leads footprint Additionally, management primarily future we to SG&A against through QX, prudent $XX initiatives. demands. and expense and drove capacity

We matter cooled environment. operating of has momentum persistent short-term will single-family as inflation in interest has discretionary reductions. remain the slowed just Early spending expectations disciplined rate no managers for

However, low environment, existing the challenges continued Builders home affordability development demand has infrastructure. having land the to where environment inventories growth an build. issues and and pent-up across navigate are board and with provide to regulatory

sizing, It's home rate national to benefit to with done options. cuts. a affordable providing of interest from reducing specs, good builders evident have large buydowns sizes assist builders more the rate that buyers job utilizing likely and Smaller were home

staying of current the are to maximize contact customers our in with our environment. in sizes all We close business

As levels and calls, activity QX year. versus in declined detailed our prior became on multifamily record headwind as prior we have have the backlogs a

is that It margins multifamily remains strong gross to at however, a current note, contributor important even EBITDA and levels. to

Slide Turning to X. M&A on

aggregate target in sales XXXX while opportunities February, Idaho. disciplined. early of windows In $XX to X distributor continue Southern Quality and and doors completed We we door the we roughly attractive of millwork, remaining leading first financially In acquired millwork with a million. deals quarter,

South Trust, further California last acquired Shutdeman's building area. we And value-added manufactures In week, materials and Building distributes trusses Materials. acquired our Hanson Nevada. March, strengthens and in the which we Dakota [indiscernible] Northern position Sufal, in

members X,XXX talented the a by organic XXX by mix products of the if are go investments new and family. points We back X these percent basis and XXXX. past as to overall to points BFS our excited you years value-added have welcome basis increased to M&A team over

targets runway market, and a the improvements this a with pipeline. our of cycle. pleased component in margin the has M&A success there is Our are with strategy recent fragmented we core believe our through profile of been in improved long We

extending and increasing our M&A market position in value-added specialty includes lead retention. geographies, approach desirable disciplined our Our customer to solutions in and enhancing

allocation. we X, on an Slide On provide capital update

sheet. additional quarter, During to flexibility strong completed grow us first a and while brought offering note billion acquisitive which a the remain we maintaining organically $X financial balance

billion continue shares while outlined acquisitions, last $XX to we to high-return by of track capital track deploy repurchased $X.X tuck-in We opportunities. December. million Day strategically to XXXX to of capital the record, back proven as XXXX to from at to as In X remain on $X.X Investor buy shares allocating addition we'll billion our

let's and digital update Now for to our X on an strategy. turn Slides X

As we provider substantial the organic of our digital will space, the believe only BFS driver a in end-to-end be platform digital and tools an of transformative for industry growth.

improved full efficiencies by Our portal in our our create seamlessly engagement easy-to-use offering will for building members delivers estimating designed customers homebuilding increased service bldr.com to and customers both our Combined time tools, personalized. transparency customers. It and have over process. our more money our process. for capabilities is digital customers and save for clients and team while and homebuilding more process the with This proprietary making will control their our configuration the our to entire the

We highlight to digital were the product full capabilities proud IBS at February. in

them an confident in XXXX, X new over this win $XXX to we In targets need, address and go had the share of were from digital of over million. use orders $XX Since Our incremental our year customers launch by the incremental remain as end sales revenue they customers. of new told million. and billion and meet their of late our to February, nearly ability to platform by million $X unmet in grow us the excited in digital we $XX wallet businesses. tools QX, have seen on we We

to construction before tools, architects, and and design mechanical digital XD breaking our of build are Optimized uses ground. advanced identify classes builders resolve the modeling trades and building plan. It One to conflicts ensures coordinated same

interest from we've seen point advantages using this of proof X of the tool, builders. transformative a As large

plants. One average, customers and to X XXX On used XX markets conflicts we in across before have identified of per resolving these conflicts plant, construction XX leads cost has communities those site time savings. it job and

because BFS favorite helper to beyond. Atlanta, when [indiscernible] with XXXX a customer. this willing go no facility Ara the the members add for there team of to is our himself that customer whatever to urgent day, to and of arrive drivers respect rose to in oversees was in and Millwork for in quality. take box new the acknowledging [indiscernible] Ara operations truck my it available and he's of that who members customers. through above his as has the our initiatives had Atlanta driver value BFS Decola. at Recently, solve Georgia manager delivery care takes now problems team began personifies an ranks One do and drove

to drive Ara turn the results greater for quality financial we in leaders Peter by in grateful example, our consistently find detail. I'll BFS. lead to to discuss I'm a call now across over

everyone. morning, good and Dave, you, Thank

strategy results quarter of the demonstrated first our operating and effectiveness Our model.

to are and acquisitions quarter. sheet our the maintaining prudently highest share opportunities. during the fortress We repurchases deploying included balance We've and capital return

and growth financial We to for our our customers competitive and future are shareholders. leveraging strong and position sustainable value creation advantages drive

you this with topics I will X cover morning.

recap First, I'll first quarter results. our

finally, XXXX provide assumptions. I'll deployment. guidance and our Second, on our capital update And discuss related an I'll

Let's was our and first sales, driven line X.X% We organic in deflation delivered with [indiscernible] begin acquisitions by X.X%. offset was driven sales by of from geographic reviewing billion sales XX. From were flat West of XX performance a commodity Central Slides a by quarter $X.X the of in on Core up growth homebuilding increase net X% were down by year of digits, and single-family early-stage than prior the higher more mid-single mid-teens. amid sales perspective, products. E

X% Northeast and As and due we comps. by the from inclement weather. weakness declined prior expected, in than year's the other as more XX% lapped R&R declined multifamily we almost strong predominantly to signaled also

As X% for our products these our and we customer net mentioned during roughly last negatively Value-added of of XX% reflecting higher-margin quarter, quarter, first overall products. to our impacted in operations by weather approximately the inclement stickiness our sales. X% QX strength represented sales

the period. were a as the $X.X lower-margin, homebuilding profit margin as due basis During compared mix towards year shift mainly Gross product was in normalization, X% multifamily. to particularly points, increased in XXX early-stage products, to decreasing first XX.X%, margins well gross timing approximately billion, quarter, prior

primarily acquired million million, $XX attributable to increased operations. $XXX SG&A to

basis profit the and to EBITDA points lower XX.X%, lower down net year higher team profit growing approximately prior Adjusted prior into As $XXX Adjusted total managing expenses. million job was primarily fixed basis due SG&A was million to acquisitions. EBITDA The year. sales, XX.X%. Adjusted costs and the leverage down margin ready to of excellent income has higher by $XX to due stand was down primarily gross net a from from an we expenses, our SG&A, and driven XXX gross increased operating the operating XX $XXX market. XX%, done points percentage million, of

basis, was decrease year. compared XX% quarter. Adjusted year-over-year of for roughly On a prior first to $X.XX earnings per the share diluted the a share share repurchases added $X.XX, per

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

prior an and increase compared income lower operating in approximately down year QX net working period, was mainly to the million million, $XXX net cash Our [indiscernible] attributable to capital. flow

million. $XX Capital the were million, flow cash for was $XXX quarter free expenditures and approximately

free our approximately X%, invested flow return XX, capital March ended on months XX cash yield XX%. last cash flow the For was while operating was

to Our we base net maximum unsecured In senior X.Xx, debt grow adjusted completed was remain financial of enables offer $X business leverage and private approximately a February, EBITDA [indiscernible] while a organically to due billion which XXXX, acquisitive. flexibility notes X.Xx. ratio was

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

to Moving deployment. capital

per buyback per total the price XX.X% August roughly XXX,XXX of we at million of 'XX, repurchased of for of average $XX.XX for our inception $XXX.XX average in During Since shares quarter, an $XX stock the of outstanding share. we $X.X repurchased first billion. at shares have share price an program

disciplined million of and value $XXX on have for have returns. to paths We remain maximize share stewards our We repurchase authorization. multiple capital remaining creation

which Slide reaffirming to Now are on let's we XX. turn outlook, our

net to For full year we to $XX.X company billion billion. $XX.X total sales be XXXX, expect

to is to to We XX% Adjusted XX% be expectation. line of are with to our which $X.X EBITDA expect and be a EBITDA we adjusted gross is to guiding margins normalized in XX%, forecasted XX%, margin long-term to billion range $X.X billion.

to performance the Our above operating recent reflect of offset value-added with costs. pricing disciplined multifamily margins along required top of mix on increased normal products our greater

The billion. of year $XXX full of per flow assumes the $X.X range thousand billion expect to free forecast We cash in $X average flow free $XXX commodity [indiscernible]. prices cash XXXX to

refer key Our on of based for to release a Please growth. Slide in XXXX list several XX of expectation an outlook investor and our these assumptions presentation includes for assumptions. the earnings is improving single-family

in teens is continued single down adjusted sales EBITDA multifamily uncertainty as all to we year-over-year provide to know, single-family situation. color a and expected be primarily given expected high do headwinds. but Year-over-year offset directional multifamily down we for rate geopolitical guidance, ongoing low impact quarterly not growth give digits the of you typically QX, As wanted interest flat be QX QX basis, to to we net normalization. expect the is by given On the

and to XX. Slides XX Turning

As volatility. profitability normalizing assess approach and focused to business our core margins by a and underlying This to have our strength reminder, showcases attention outperformance. sales business clearly helps the aspects company of our base of the the where for commodity drive sustainable we

guide business on XXXX sales billion. approximately base Our $XX.X for is net

margin at base Our business is guide approximately of EBITDA a $X.X adjusted billion XX.X%.

As final we for are our value With me turn reiterate some back want to create outlook, call goals execute exceptional let Dave confident our the that the I to I to positioning that, and wrap strategic up, to environment. shareholder ability in our in any thoughts. near-term over

Peter. Thanks,

pain are customers' the drive points by Let our long-term install leader me profitable value-added our growth products focus pillars. addressing we customer We on strategic through in up close and set by our services. believe unquestioned service, executing summarizing how to we're

innovations Our way. win grow will efficiency to customers are bringing the us share greater along and industry-leading and homebuilding new digital wallet

Our flow is that funding robust disciplined capital free generation deployment will returns value. compound shareholder cash long-term and maximize

playbook joining now us be best the We and during have deliver Operator, you please call for environments, for complex and a day. we'll every today. working operating Thank open keep again proven to excellence the for questions. growth

Instructions] does Barclays. with And our we first Bouley question appear from [Operator have Matthew it

come me on that wrong. quarter, so or there entirely XX% in second that if moving of not kind can we XX% earn inside the is about it off second know I'll would but year I'm start the over gross full that sort entirely both that within -- out say rolled I'm be quarter? margin. second quarter multifamily yet both multifamily wondering talking to gross to second the core, of in the correct and we're quarter normalization the the quarter. margin, so I of what's into range in the second you're rolled more in core off beyond seems and

Matt, thanks question. for the

think, margins that multifamily it, restate with in the to but The to everybody continue really we'll expecting. we're it normalize. couple just line a outlined seeing I we specifically, are So were times, what of for business

We towards to return Sales go year progresses. margins down as back of will to over to year. the we'll the course a and continue back percentage see as the continue normal normal, will continue decline to

much very not were with over, So line what it's we but in expecting.

of normalization XX. We talked a margin and being an there's that's between Margins couple We've -- forecast. XX things going accurate think on. about

It's which Just that about still for would where that for We've to margin But surprise this and guide going keep expected. to the think in good quite where we're able mind But us be that's we like that the to to yet. on year levels rates we sustain -- our it's is normalization performing get of the terms in seen on things some not range. are. not margins. in to a the instance, longer, our guide assume normal said, year starts. -- back hold within

Okay.

products. QX. the multifamily have revenue tough see down the concentrated XX% I like you more, it's second It was in looks clearly, manufacturing multifamily Secondly, here in think, quite the in I quarter. comparison year-over-year impact, in multifamily one

So I of that half? sort second second Or the should the multifamily sort declines Would multifamily low that of guess first in point year? for is the of for consistent we the through in it for that than guide, quarter. with balance year-over-year declines a lesser of within is is assume should imply was assumption look multifamily quarter kind headwind we the the that more QX the down

it's latter. the Yes,

is in lead as what we're learn a course, to We'll, in throughout good expecting But we're We've visibility multifamily to a year. year-over-year from month time big multifamily a QX I a and we expect given year. certainly the one of period. see. to should think the you sort slippage seeing got category. bit of product more. any what in end You decline the decline of from of a to expecting the update the another and consistent There's long decline not pretty throughout It's consistent next

Markets. Dahl next our RBC Mike question And from we with have Capital

EBITDA your in about now comments those, of margin. of I in at XX% multifamily kind want results double-digit growth the gross about the half, be the margins end requires margin, XQ, the did midpoint, and decline, in implied guess, to and there. seems if normalization the kind a ask, second further difficult. growth we line high color [indiscernible] top top effectively XQ directional would When follow-up what's look given at EBITDA like for of kind of the is I think mid-teens it It line just just both we

So maybe point you of leaning higher. a directly. the the how roundabout you're like asking guess this full lower you can towards us evolved. more at you there way more or midpoint is look a or just range I When guide, Maybe understand there. help that think at us that's it's help point, year in midpoint or

it's Mike, really thanks the reaffirming. you're growth In confident forecast, in about guide that good the you already question. laid feel way That that and short, there we're happening. out something The about is talking put out. for is the

I some So in our through of came it materials. think

of the doing that's seeing is momentum we're what our there's really expectation here, start, maybe we're the right? the after moves stuff great. The seeing whole [indiscernible], that early the quarter. hits And in site job the not think I building. business the in same that trust, same building the way early this the growing. process, parts You're the

not have yet a we sure bit later is we're course, process the us. about about doors, category. we the about uplift I'm confidence questions that started in very be of headwinds interest the the single We've business rates. overall to some tailwind good mill of dealing the questions that right, see of the the is certainly are from good a tailwind, coming, lot But are to for that. But that's building family what to do, more. going some they continue to There of going products, also There work, performing talk the mean us. I we'll that's little with. that talked every lot well a a are, in market for

participating. lot lot not lot let's are units homebuilders. out confident there's There a are of on, forget, and of going good There a there. production again, a good we're momentum and But demand of

everything we're So on digest delivering have concerned we multifamily. based not to about do but seeing we're today,

very we expected, It's been transparent and that. playing working we've are things about like think out. I

the yes, the be products. year to growing. that to continue in in and momentum we into, we're categories pass of install, So back think active will good needs growth seeing We're half seeing But the through leaned be on that we've again, M&A. good we value-add, early-stage

certainly, and the not a We're lot seeing in. what with shy be to of about rest So the happy business year. we're the for confident

add is I'd Yes. echo The the continues demand overarching to only thing be strong. profile

is expectation execute that's actually I the the they more think of buy. will that they when [indiscernible]. volatile little timing kind is than execute buy And the a the of what

was first the for how time year? can envision What in we through maybe specific from about anything quarter capital you while. a [indiscernible] that? this more just deploying really nominal the And away take

going of what all excited far, the on little of but that in present about we've how ABL, about you're a lots we're but feeling like. good. That's have take read mean to we're We'll $XXX of in of powder advantage the plus opportunities right? to so we're Yes. we're year, out. of ready themselves. opportunities the you of start We're capacity cool kind A a done dry small cash popping to bit sitting -- moment play how at right, that. to a and in couple look are time, bunch deals sitting M&A should this on they see of the the slow But million I

have our next Trey we question from with And Grooms Stephens.

touch on it or believe not. want also to I the guidance,

could there full first most XQ have been than through of is than kind as about it's in multifamily to the moved year, is have. thought? better mentioned overall, guys about full expecting, or you pullback with your that mentioned impact any it reiterating think You say Or areas tracking kind I or expected clearly, the multifamily guys XQ you you the of as going would But even but expectations the clearly, fair and have you maybe reiterated very . Any in guide, guide that the the year? you kind well, is the of you year -- lower And expected. we've where it vocal kind as worse is what would off, and surprises far coming of have modeling you there? were so

Thanks, is you is Yes. Trey. of getting I specific, some What backlog would that in tell extended. multifamily

in a may quicker. of now. So those us They're the one smooth of in thought spread would It one time point where have transition good at that finish year, It's thing. for way. I in jobs more kind actually

multifamily, tell I'd going after thing you has our other The job multifamily. team pseudo great about done a

in continual build expected build important need been of And to. we it as would and it's that would the at it's a It's it's like course, and [indiscernible] build the a level. there, slower see. it we not, that's an of robust and it's a -- market build, way retract as steep ever, even It love is to than day, a conditions. but it's to as like, but we're factor. as end a as to, it's doesn't below never not adjusting -- There's steady of we as build those we the we'd a retracted

were, I the a bigger than The anticipated. we only couple in what's all is there I headwinds happened thing variables, in we've for accounted I would that are think is surprise there's of of us -- say, variables might to nothing variables a add terms the that

been navigate, weather tricky has to ball. certainly but particularly to a that one It that's thrown regionally. back, bounce think [indiscernible] us thing I will

been that affordably, of some what whether as builders I challenged with. we've done be the to or homes complexity that home think more the size build on home variability have well it there's of

what we going and were in those But said variables. again, doing line to despite we're do we're think we I

good trust would add, I me is for And always Yes. a indicator backlog. our

It's is That's a build. healthy but word, of be in at what's where situation. come. trust give it's slack was levels. that a to be that I continuing to for to more needs if And Our off, for to it us starting might backlog to little healthy us an indicator

it. I All being right. that And guide Well, encouraging. and in is it. to very appreciate Got hearing confident you're reiterate it able the

So quarter. -- we Good of appreciate the thanks. and for . luck it, rest the

Trey. Thanks,

comes And Bank our next America. from Jadrosich of Rafe with question

I wanted to ask on up, lumber -- sequentially. were the commodity pricing in when seemed the of first OSB quarter, look you prices prices it think kind was deflationary, at but flattish I

like just the do So about it you're Or mix expect either competitive forward? a is can what talk And there how going that go to you you seeing environment evolve? is standpoint? from how

Yes.

upfront commodities where fight the you've where the got is is. So the are right tell where happening. I It's you aggressive that would Historically, players. war That's most

You've volatility got pricing, the of it. most the dynamic

timing. sort around the much in come us I be little bit OSB terms prices it. points news expect just at will That we the of really would numbers in feeling during shift to we different But one the I of of of is you're year. commodities. pretty when the the around bad done seeing through with think A saw versus what when were

to is walk OSB that's What and well. as I saw run we will that's in a number, much the say, while smaller starting back. walking saw though, we back

recognizing up, But price the our to that category. continuing the not changed and commodities bet. on product that appropriately, prices. on of trying for market to our strategy for it time, just So that's in down hasn't We're again, at move to longer what get We all commodity seeing commodity means quickly, that in game. you're don't hire that mood triangulate we play I paid what do, think

of Very second that the the last us it. How especially think And year, And half terms of of from quarter. just on do some then first sales remind comp year? you then [indiscernible]. in base diversion was forward going just should helpful. if the the Got there turn here, about we have incentive SG&A, in in

leverage always [indiscernible] keep the Summer see us that through. our QX, are you'd months, expect. QX, in ranges best come you'll so right, that months

much base In business, an I of side. isn't on the bonus adjustment, the there terms say of I maybe would minor guess

I you've ourselves year-over-year storyline think year. a we for bonuses challenging seen this the that around and as plan is target really the gave more

versus Our vastly performance line is more outperforming target. that in

total that shareholders, see of by I an of amount which on that one. nature you'd performance, bonus alignment So just management dollars you the that the will think and Board in a expect all pullback is

So of that bit a amount prior a just the year will be perspective. from tailwind versus dollar a

in are as The the as been line which and and in only our an right our is with cost obviously managing we cost is parameters key company. a activity thing percent good within sales have labor and variable is our our of highest team add our I'd they've ever keeping XX with And tools for field as operating job the what of that years labor. in profit, set the for ourselves the my metric done exceptional is this level of gross

and in the the they've well us year. since managing done that down beginning at we level, So the key factor is for field manage the at labor exceptional our of SG&A how

our we Hughes next And have with Keith question Truist. from

Windows Doors the and on X%. segment. question was It The down

of product declining. any You inputs of prices talked details that you that about some more, . costs or growth. bit a is the and about kind declining Can product which talk selling little

the pipeline chain, out higher was Keith, the pig first a quarter and coming in in the the first That quarter time this I door of getting in those last of first year, Well, for were the we this delivered catch quarter recall, to norm. the on quarter national were good that timely normalization again, year level the normal. just in if supply and morning, year last completions than when indoors first you when Keith, of just was in work tell or focus you at was up. higher us would kind mill sales last builders

normal with numbers more to it we towards respect had roll completions this more to year tilted was a from where last completions. where over was So bit those year

specifically, been it the in that's has think modestly. millwork millwork the with and deflation on affected category, side. And There some I

volumes I it was completions lines some saw that our that close with last quarter, explained degree over really think we along do we volumes expected pretty higher the more what our of rolling did to exactly and difference. of first deflationary the the impact along of

And from question Baumgarten next & Adam we with Zelman have Associates. our

about from perspective? side? talk on specifically what non-commodity manufactured pricing a product And Can you you're maybe the seeing

customer So you're talking vendor about pricing pricing. or

customers. to pricing Your

why the we -- as you play those in delivery That sensitive the locked get becomes factor. schedules you less whatnot. to and get who's more going So manufacturing price on somebody would and side because in important expect it's meet is you and locked in with once with designer that categories,

Now been have and affects that of they a price slightly. commodities up are component fact go down, as or the and that going for manufacturing they've as the fluctuated commodities lumber down

[indiscernible] able commodities, to strategy. been foot we've those per improvement we've with investments throughout is offset actual better what has is know our Add nice in hour you a that able in of efficiencies and of to our line board Value automation labor as But which, in But challenges. hold a produced been do our continual to with some offset that been with of the gain merger since some there course, continues to whole, our

X% XQ? a weather Or mostly Got few it you we That's that quarters? be expect the over And to saw to span from helpful. recouped? how should it it. Okay. is on in in going XQ, just impact then Is X% to

a Generally, back Houston QX was takes other to unfortunately varied it, I and direction, a flooded but until out. think probably up. months. . to doesn't that's say about reasonable a just happy about X catch got whipsaw to to back half way up quarter to It X quarter it Well, the or

from question Stifel. comes And next with our Stanley Elliott

[indiscernible] attach things the through rate some you're or the on pull of side? other doing manufacturing on

materials Yes. say a install labor did would strong I of and billion the had in We business. above. all installed We XXXX. in $X.X

that in it's And would So markets. we familiar every we on from. our had we're market are that most good was to that initial you other products And at work we base products nice and platform day. expect, to that with a already the distribute one leveraging products and the as the focus,

that a are doing to because that So ones those A from. the lot existing from are is start. install had work off base that markets we've the got of great increase to already

has we've playbooks, good interest. developed been interest, really and But we which nice pull really had

[Audio plans, I reaching role, got get as the this to really into I what you So into seat, do in we've next for need way my want it we the how that out, sure people, mistakes. and a think That's you right want points make solving it. and see. our that's business, key which a in do is we in to and my good don't me, that to right this And as get in people for versus it us "Hey, customer good it's to evolution just us can do they Gap] doing company and saying, really wherever business. it way make pain methodically way the apply

or install national seem really are to millwork to both like little windows they're not a builders. but custom the probably so specific the like guys framing, more more it's to installed but The best, They segments. specific that right? play there for for good little So a applications much a it,

of a players we of higher value-added to the just level And point, generally. to products do our see Dave's larger adoption

Yes. value the get natural a natural but that's the delivered And part do add, install evolution It's that to you components next site, just you are site, only customers. not for a delivered of doing more the the job add. to job is value to components actually evolution install the of our the

next question And Jefferies. Collin our Verron we from with have

to side of the margin I gross on things. just start want

a from starts, it thinking maybe conversations about that that And multifamily talked the And what following being year-over-year? or mix the Can you're year, quantify shift the headwind seeing and in seeing just you're up with normalization? on mix margin through either headwind. customers? given rest that, homebuilding of in just how you backlogs sequentially your gross towards You how compares headwind products timing the about early-stage to you're

Yes.

So year, margins, gross normalization. this the this from Much margins this is not down have play normalization. the been on we've chunk hold in the of our gross those the commodities. good also had across stuff, the don't I on stretch, going see single-family, that's a it year's quarter, an So to margin you breakdown the growth necessarily We've of business. multifamily, a don't that's too. not of . We've is We've commodities we've seen gross -- that the going you're out. step where a that can talked back I right? it last they but think to categories, it's board that the It's most over our was pure I and the I you normalization tell you right mix. lot. as bulk that you what were towards and just because we we're were mix, What think detail I biases I'm the between a right? play the is of expectation exactly we for what normalization. a what A adamant Thank was it seeing margin it aggressive the fact, about looking of why peel year where seen trend that being across I it -- more and is side, to on single-family now the matter relationship -- mix messaging can just just like out the of it's give trust seeing the sure we're And commodities weren't when was so X you And needed before, we question. back numbers normal were. multifamily last for. mid-XXs can give much saying That are seen is

will the But have, gain as but from lapping be certainly later-stage the we prior we tailwind the year. a building that again, mix products,

that that XX play why because the will to is X you possible XX our insight think So to that's variables we we'll give want other, best end guide where in those range and up. try we to against and each

It of look to Any targets M&A it's I product potential to the color pretty want robust. from color. what guess like market size in pipeline. the like the sounds helpful perspective. That's Okay. [indiscernible] I offering and towards potential a deals those there out

has always we We that look are discussion. most we in won't or our way a but can we're that I precise, add may not about the value the what where market, where the right? all think rumors get think million at variables are there there's But trade. -- The changed, I successful, strategy may not

stay just of imperative we and that fit out across . can we to there now think I lot exciting is, a it's line. for finish What's screen, focused. us, if get we disciplined see it see stands that that as got we assets today, we and stay them

And our next Oppenheimer. question comes with from Tyler Batory

there that players A get your the environment. and on to impact question your take aggressive having Are maybe you on the out competitive to shares. Is trying performance of seeing on business? market some smaller an more

the choose What compete lumber. the of is Tyler, regard. not any recognized price and than at is well in [Audio But in a war at that Again, into I we see side do Gap] to there we we'll sure we where to We maintain it want the recognition wants we high and We're that to where and we that more making pretty good lumber. a that doing you, lumber get on to share tell for getting We're schedules where good meeting and would when competition play. customer continue we way so compete use that just commodity percentage do always get regard. usual. -- where versus a as

lot and in long side side on on way. competition the our commodity the a the a value-added carries us than space But reputation short, noncommodity more

only thing your share. in is add, think be it I'll I question The might embedded

we we tricky I compare that's think right sales now those that. or units work share against all a think the or what's real number. general, or measure. because for really either we is Gap], [indiscernible] those one starts meaningful of struggle Generally, the the [Audio would between sort differences with our we've proxy any that represent single-family a are as then of other deltas would variables the In there but use gaps market of mill ones thing I some about, also X talked of and

selling analysis bit on place in challenging. to whether little whole struggled back end and layer stuff, weather and think competitors the are how and or or And discussion maybe or more it timing what be are that then we're the of the certainly you a think But down whatever, smaller get point, battled low the dirty. that complete these made only where we've to we has homes that really it commodity, I is Dave's related willing

think a seeing helpful. the of impacting weather down you follow-up are [Audio Okay. R&R X% here that. things on the I quick quarter, Gap]. then And probably Very side in What

builder some of to kind general, weather cost felt we I expect. [indiscernible] as custom the money line of will R&R smaller I going of same had same be right? serious what facing, in That's In of regular projects, where along it. be it's that are pressures the the the sword, -- would you X-edged The the small quarter. but are is kind think, bigger think projects facing

question next our And from we Manthey have David with [Audio Gap].

Gap]. [Audio

IDS. as able head. our customers the don't took of of know you, a seeing them that don't It's We've I do don't are have be for around get but our that that. going or user and were, numbers. I gosh, top We're the I off of leads to might adoption them board. we XXX unfortunately up. They I lot rollout my country out XXX coming got we on have

you're of their to with builders, better technology efficient and While smaller-sized make are able those customers. are are I to them be profile, more professional more and most to into that mid digital talking think, that themselves about leaning the and

leveraging easily, It's you've got the visually. tools out go -- connect generational. of with bit buyer mentality the sometimes think not. waste the little more make to around quicker, Candidly, more the job, sometimes I job just a take it's it's home

it's compelling tool efficiency, That help a such trades much get that we're got it -- opinion, play, builder, it's home a little game bit so and a to day. just it's buyer. all every But to or creating such to better the trying can to in the our the making more transparent build the

becoming that, it's do doing very so technology just the to the -- but way really easy. is of seeing that take business I digital of that it's our smooth. new in advantage think has early we're those of -- tool become very that the ones general, increasingly So are modern, because It's -- customers, types

We're about early far days. and been progressing so so And how far excited good. ramp-up the so trend it's

of booth the you, IBS. tell I'm we [indiscernible] it and what capabilities the would XX kind IBS at me I our the went our of of primarily platform traffic to booth showing years traffic excitement through digital that going that and and at most in kind my going because had to present. was with seen was What the our never

the say you invest if thing I get that about a The the to year, XXX of think to to we're have would this XX you're don't developing. smaller homes builder, a technology ability level is, it, other to other in for yourself platform -- the

make and our to investment for that leveraging can those is efficient that they our in upfront customers without a ability themselves. space doing be having we're huge so develop platform size to What investments of that make play that

hit IBS head. the So the if right base behind for on why any think it customer and indication, appealing and it that's rationale it we be we will is our why developed we

of the interest pass Thank [Audio Gap]. on. In Okay. it you. I'll just time,

strong, I unusual for of the would market? Tough No. strong it's from that a Gap] others a a us to a think see stable behavior but it's market. and [Audio in generally -- perspective,

to made . people how know with stuff was don't moving. bets where I So regard

Markets. And from Ketan Capital our with next question Mamtora BMO have we

Peter, just one question.

quite normalization talked and multifamily. You've margin a bit about

piece, On think of today. characterize the given that in that the the are where at this on all, is single-family the given EWP competitive of point, sort business would prices core side sort end pressure you you of changing do lumber dynamics And How organic, midway normalization, through? are towards that? at we the of

your get to curious thoughts. Just

terms We're volume. Ketan, below to still yes, the closer would in tell how expect we're of normalize. we normal end margins of I terms that to you in

pressure-filled It a environment. very has always that's So been. competitive. It's always

something it right? the And and years we be rise But cry to for to, feel will that good that expect be a we've on We battle it's side. commodity we done about. needs always now that

think certainly moves. have be some play player well. it's that will There's will that the to in think a by expectation certain been little always an -- most from cases, in to past and vendors, out. But aggressiveness we I more performed margins but there's large, continue There's competitive, response and

mean sense? more of a back a in a if rather to So you more oh, trouble, -- Does a, will, that we're do make rebound normalization, we need dramatic. than reversion, of something

much. does. you It Thank very

participation. And the it today's we program. allotted have our your reached appears That Thank time conclude for will today. you session for question-and-answer

now may disconnect. You