BMC Stock (BMCH) 12 May 182018 Q1 Earnings call transcript

Good morning, and thank you for standing by.

You are joining BMC's First Quarter 2018 Earnings Conference Call. This call is being recorded today, Tuesday, May 8, 2018. Carey Phelps, Director of Investor Relations for BMC, will now provide the company's opening remarks.

Thanks, Bill. welcome. and morning, Good key statements, Mike our Officer; McGaugh, Chief of discuss Major, opening for operating Chief first the and President Executive our quarter our will Officer, Officer; our Financial and Dave my our Interim results Keltner, XXXX. and Jim priorities After Chief Operating

would with forward-looking our may press XXXX. within today a to this In This the you where is remarks, and as comments is to the release, of are was the filings on Private earlier statements Litigation slide like today's include the SEC. issued of statements Act which to in I the that uncertainties addition and prepared our you available annual described morning. Reform meaning also can deck risks subject our some website Securities ir.buildwithbmc.com. remind company's These find at of quarterly

call. during results actual those from Our described differ way may material a the in

Financial adjusted earlier the In by addition, in certain not or issued net measures, this statements income as measures. GAAP refer adjusted most per slide slide isolation Measures and These financial appendix release the from obligation of are morning to expectations measures point, undertake directly the data new well a financial most made all Non-GAAP we will net today, to call, and the considered adjusted the greater discussion Dave. related EBITDA, these provided and additional comparable GAAP forward-looking for On comparable deck on most informational non-GAAP adjusted to the in which update Adjusted and the of the be required call financial locations, recent measure forward-looking unless information income as information on statements the not Non-GAAP we as company revised press are Measures section this any over our in is reconciliation circumstances for based for will measures -- believe press Please relate GAAP adjusted does directly to diluted find it will law. these our to any At discuss detail reconciliations turn and of data. useful in to adjusted We release and the I to of posted purposes this In in why this deck website. EBITDA slide only you provide margin, investors. share. should

Carey. Good far have us. Thanks, our everyone, pleased teams I'm so morning, with joining executed for year. thank how and you very this

start and continued going are We remainder a improvement today's of at discussion the our for with to are look macro backdrop will relate highlights call, the Mike we start BMC's will to strategic and our are well strong our positioned brief operational a then over of progress XXXX off beyond. and forward. some our On first they discuss successes quarter financial and as making, pillars. and strategy I

quarter over Next, will turning closing take our into back before dive for the call remarks. a our financial first to Jim results me deeper

as well in and positive job market. ongoing consumer including First and as levels growth continue high strength support to off, demographics fundamentals, housing of wage confidence the

While and media on seem hot the homebuyers interest the rising have investors, other undeterred. of rates a topic among in hand been

the continues sales, formations they centers and housing customers population say home undersupplied household new average Our as strong be in to homebuilder XX-year remain confident growth. sales and to traffic their is for the relative

represented Ready-Frame growth. in $XX Top line million backdrop, very first growth XX% quarter to as our So of was let highlights year-over-year components part with that some product our category which sales, in structural higher-margin XX.X%, by results. me in helped a move our strong encouraging

value-added labor products categories with to increasingly with XX.X%, sales request respectively. persistent to in strategic strong as of The solutions and customers services and demonstrates these XX.X% Our was deal and growth our our enhanced constraints. growth demand professional remodelers and enjoy the single-family continue homebuilders strong importance

increases We as dollars the our million million, selling Net quadrupled in profit flow cost and cash grew that we a margins. share, in job results than gross leverage of increase doubled EBITDA improved benefiting use adjusted million, diluted than tremendous XX.X%, working per earnings by XX%. we share Our of than achieved season. quarter. to of results, often the heart done faster as Adjusted a our from income these per enter our to more the overall spring during a $XX.X the team to an to solid gross of commodity nearly delivered more capital quarter foundation operating seasonally. in Evidenced cash sales, $XX.X $X.XX has improved $XX.X build improvement

pursuing offerings progress In and in operational the the some presence value-added we products again, excellence; and progress presence our and strategic details which each provide services performance and a build to these service Remodeling of also space; focused to in in three, made our efforts, and these will in now Professional organically enhancing space. a four Remodeling bolster of is acquisitions, strategic two, pillars. four, the McGaugh, apparent progress February, tuck-in our of our addition to of results, the execution financial discussed are high who number Mike one, key around continuing culture; our spearheading pillars, as from value-added including product growing priorities, Professional customer we our around

housing job moving to to on great to so better a reduce products ease for want labor-related internal new is front. this the Thanks, forward costs, The processes enhancing provider provider of times and in a success, are to and in better our Pioneering time year space are BMC and this to solutions Dave. demand this efficiencies thank ways customers. our to far There's of be market. all today's the key I we been and for real homebuilders. the becoming choice and and primary leading the markets cycle time, same deliver are of aims shorten builders never labor associates operators. At to our our face doing own us in innovative challenges be a constraint

mentioned, each Dave important of made with we've strategic pillars. strides our As

focusing millwork, capacity such more to First, bulk expand investments that in components could in margin manufacturing equipment value-added and in year excited Included our the through facilities. of efforts. I key CapEx investments our door automation processes offerings. efforts equipment value-added to as facilities for our are not and business automation. pieces higher we our and key of upgrading and be We're our these manufacturing capabilities lines, about support growth efficiency our our the bolstering the expectations and around in drive are enhancing

should I traditional call, here on recently automated achieve indicate we first in least a last XX% of on while line. a operating market. its kind average For mentioned output, Atlanta opened truss our that results highly labor the example, Early as truss than more at with facility one-third we less

create only costs been and work also new save not we but So capacity can this issues help experiencing. labor will we've safer equipment environments, some and alleviate

to into rate This Before remiss contribution. $XX mention second our not I'd growth be quarter remarkable to sales a a strategic I Ready-Frame XX% million result. this at pillar, is move on in and its take is house efforts part providing whole work and substantial our and our to important job manufacturing solution apart site customers. an sets off facilities, value to our framing of the us of

improvement Operating our and drive to strategic to second the customer enhance System. using efforts service relates continuous launched our Our newly BMC pillar

embraced reduce we're markets deliver management just the efficiency Kaizen own to Belt have eliminate identified opportunities several to least projects to Our as cost markets significantly we identify through run and waste, to in Events processes. this expect at cost, XX markets. begun savings select for of quickly of and our have implement which identified, utilize our training of training associates this how that improve projects the their these savings started. and each getting training, manufacturing, they from Events reduce and In number of Green receiving After some around the waste and so elements operating in in home that, lean associates of reduce annual enhance their than project been will their lean key this and can management has $XXX,XXX for country. efficiency and higher skills XS visual potential learn such a costs, Each far gains initiatives. be Kaizen year,

customers. BMC capabilities, and Operating the translates All service excited very than better operators year System. from get of from we're this of service here. our about better ago, we to I'm We're today our a the into customer we'll plus launch better early the results were enhancing

high-performing making strategic our third people. pipeline our development build and into pillar, as to We're to of culture. we fortify our into investments associates training our continue Moving talent a the

focus, and completed program our market-first relaunch and throughout first development and leadership before, our of we're lean financial our leadership beyond. In and our with communication culture, refocusing attention XX our the sales XXXX customer leaders leadership launched teams remainder teaching evidence our addition of the a operational on lean operate for is we've of More follow-on In management I year of our in new that to programs mentioned operational leaders priority, we've the we top and March, program. people We're leadership. the the for trainee sales program. areas to training a and feedback, specifically

we new among find For our future plan to XX we approximately identify to of some XXXX, leaders. and of whom expect hire associates generation

we expansion We're to up pursue customer targets move and of as stepping opportunities. intend we're very either tuck-in three to the mix. our that with to the attractive past and/or product pillar, fourth we performance completed capabilities within our our value-added the additional for mix, Finally, our enhanced year efforts forward. find pleased our date acquisitions Each strategic

we're and calls targeted receive Our continue pipeline calls to potential inbound and is from sellers. to improving, making companies outbound

our we M&A not appetite overpay. strong, will for is While

acquire our quality at rigor maintain fair We discipline will to a and price. companies

As day our also and in equipment. material, at investments We're it's traditional new a providing see, not making only BMC. but building you people crucial can we're

service better We and industry. financial in the operational over to for can to that, own of provider processes Through leadership, serve industry-leading our and our our to excellence Jim the our are turn customer of customers. believe deploying achieve goal drive call I'll we and financial performance his that review. choice become With automation I efficiencies in

category lumber our and It's Led results. in clear sales first the momentum right we focused value first feel the lumber the increases goods, growth our is components product priorities the and evident stakeholders. positive our quarter that and total that sheet price for And increased improved we're XX.X% on deliver Mike. XX.X% for net Thanks, to company in structural in quarter. by inside profitability

other growth As Dave to by and sales in to grew mid-teens, a the single-family total multifamily, constrained in and commercial but was XX.X% sales decline homebuilders contractors. mentioned, sales remodelers professional

were three further of and in a into of resulting last During XX%, Southeast approximately QX by backlog by starts market XXXX delays impacted XXXX, that lower sales to declined Mid-Atlantic. heading quarters the and year-over-year weather end multifamily the in projects

recent the multifamily similar closed goods year-over-year quarter, a the to of a of different and of profit and enjoyed segment for on the Selling, we $X.X million XX.X% increased driven X.X% and drop growth, recent higher million increased quarter to but to Late in compared inventories the benefits from in was back and on selling related the in believe we of by Gross to Shone for margin market our goods lumber basis lumber opportunity, temporary improved including Code gross year. we percentage $X.X XXXX during commodity the X.X% to XXX and of million volume this basis X, approximately growth the million growth XXXX, primarily held to net improvement and sales which our the $XXX.X improvement points general average. experienced and point of category. in from sheet and to gross basis at increased to improved our administrative points $X.X below first -- acquisitions, XX.X% benefited While costs. Lumber, acquisitions, our significant, SG&A and lumber longer-term we quarter compensation recent lumber acquire the Plus lumber net of it's achieve sales that increased related diesel short-term will XXXX. and a allowed product nature lumber margin doors. as the sales windows the March quarter from purchases expenses approximately in goods structural $XXX.X sheet and Due TexPly addition to unlikely a sheet Gross prior expenses to and XX.X% within prices XX million as millwork increase additional the and sheet components lumber quarters. an cost higher pricing margins other this employee-related the us future related employee level million $XX.X for a XX costs goods

with we expense In of costs. million search and firm associated $X.X incurred executive severance addition,

$X.X opportunities million continue we're million or benefits per the $X.XX $XX.X compared expenses as to $X.XX quarter focused per million, sales. discussed, on Adjusted expense million a per our quarter. form And significantly customer net and very to service year. last EBITDA Mike share $X.XX share productivity ago. share to first year to $XX.X or to lower will the prior net year $XX.X that SG&A As yield percent diluted the to diluted million of per improve of focus improved $XX.X $X.XX Net up to or as compared for believe and improved income compared a increased share income to adjusted in

lumber related growth sheet improvement improvements from year $X.X contributed and on our selling While the and and operational margins to million incremental and in $X first adjusted adjusted higher benefits results majority EBITDA gross million EBITDA. volume acquisitions added lumber prices goods, of our in

year Our QX, outlook. indicators and from presentation, our increased confidence have have strong of refined the X our expectations only single-family results full our on Slide in On XXXX we earnings our positive we homebuilder remodeling highs last and investor our call. near prices remained in that provided all-time lumber customers

to year achieve against was XXXX, we we XXXX a volume growth organic we Due growth to relatively the Lumber will quarters will we in from lead prices, price X% range year sales the growth inflation. likely prior sales but our we've will the and prices in for realized are in tougher growth completed net inherent year-over-year wide, and but remaining additional X% X% of X% come up acquisitions. deceleration significant full second comparables subdued, realize believe uncertainty While year which the from full commodity to high, of an healthy QX and growth remain to maintaining to volume for lumber XX%. continue around

to leverage operating sales growth significant are operating and X% for realize to expectations increasing XX%. year incremental expect We full our from to this XXXX margins

XX%. momentum we believe XX% continue As described, we the System, will longer-term gain by incremental operating to BMC benefits increase by more Operating to which margins from Mike delivering the

a XXXX, and our of Turning Much replace entrants in we in has capital we to to million component now footprint investment plans made new make in our that $XX construction, in as been as componentized to million XX% we $XXX about continue written investments between good to of audience the the In XX residential been of by earlier, that equipment expect XXXX, and recently sales time area over our as enjoy noted and much on will still and over million a expenditures capacity. so it produced has grew first may needed, we'll $XX pillars. spend -- over support already be quarter. we remind in operations strategic

to XX enhance and from drive our approximately capabilities. at revolver. under asset-backed and value-added businesses liquidity and will March business our Mike remain and invest As availability million $XXX.X efficiency strong at derived this highlighted, Total Dave is our primarily in continue we all borrowing to further

at Our trailing March price even with end debt leverage the Shone the million. of of after $XX X.Xx its year-end XX-month over adjusted our ratio purchase at EBITDA Lumber level just of transaction a closed held

fundamentals of continue market at and of and out with to as work are provides hard are housing the now. thank opportunities our going industry, opportunities reported our We result dedication. better our growth. balance take with that a to Operating experienced we with profitable forward. on positioned their innovation our below capitalize System, show -- I'm to leadership the April, currently today. preliminary are BMC we we balance the and for flexibility first X.Xx. sales what very advantage rate uniquely and the and also which believe our increasing across positive Through in pleased having for acquisition and to becoming sheet, are team remain positioned to our strong one to quarter sheet target closest those to some We operators our Xx grow a stand range drive well amongst similar of associates want We right competitors significant I influencing

turn call closing remarks. So with over for the me some to let back that, Dave

Jim. Thanks,

brief have and time capabilities people operation my our of position, struck been their by service. this in outstanding to During remarkable I our enhance deliver to the eagerness and customer

growth to value-added the and builders for time provider tremendous front, innovator balance to exciting be very labor a time are come. face a sheet to experience well is positioned As challenges with of and profitable solid on We solutions them. believe right for product we leading offerings the some this

to and we our other the organization, bolt-on services and intend customer continuous products, are excel, pursue to acquisitions to and with provide improvement team to the excellence our We operational necessary enhance mix, our initiatives. driving strategic achieve training across support growth

Q&A. customers call, a point, our to believe us a summer. to the out for company's been value feel joining With close in have search place in search. candidates potential work this place thank to someone operator that, that ask better better our Board I continue lead strategy, and us to are to Since we employees, executive deliver the over a positioned no enhanced strategy our please to later into will our for I'll At on our say become shareholders. the cultivate than the good about of engaged to a broad role we the we partner that the firm like and find CEO took for We a strong I'd today. the January, to very best quick well we The this end me Before of just update narrowed and hope time you launched and drive forward. let culture provide to the and leading has list who candidate, effort growth

first from [Operator Bouley Instructions] comes Matthew The question Barclays. with

a maybe Mentz margin expectations is margin year, what on the result decline This is called Obviously, Internally in lumber you what lumber on Matt. the plan? boost quarter? outperformance incremental to you've the the that in year sheet, all for in progressing recognizing effectively boost full actually that your the and incremental the how else margin Marshall your to are with And out with versus great in for quarter, temporary expectations? goods your sheet drove

LSP, a bridge this Yes, out was within materials and year-over-year to as the in $X our excluding a our gross into Marshall, kind put even incremental near-term such, from and the as short-term about we resulted margins accordingly of improvement think teens lumber our improvement million related and we we benefit that certainly that have year of in guidance raised morning, here full temporary would drop goods, investor but lumber the benefit do have and or view I that been the impact, margins sheet so. in

Operating And point is results items it's could to, there getting any maybe you or... specific there whether System, the BMC

Yes, certainly.

lifting your the for expectations [Indiscernible] year? have you

System, $X.X a have were small we organic BMC in Mike basically million I volume pleased Operating what to the good off growth. was benefits mean, fairly is a Certainly, start. as improvements from operating described, to of QX against change

of to that this little benefits do more commodity to a volume ups volume some up X% up continues downs bit As that transitory expect across system that volume our QX to we margin the entirety hopefully improvements get would from are less we X% quarter. of growth the pick consistent and the benefit bit. of more a range and generally, of things and business, to growth maybe normal operating and pick weather lead from out We little got to of and

of truss facilities, look that facility maybe new this -- to When truss the of once then facility. open? the the And period if some network? new what other facility the a how on rest compare ultimately then of automation you exists And like that? automated, fully throughout like ramp-up for did that what is And level could the recognizing

days We ago. approximately XX started up the facility

be to at sometime it expect We June. in rate operating sustained

of XX% our pleased grid mentioned labor, standpoint. with. I us As seeing The with a we of across CapEx investment of we're very for key are it's already one-third call, automation varies improvements rate less from on area the which a and

due facility results labor. due the to We markets either to that pleased are very of We that this larger of are actually to replicate some need Atlanta. capacity in in in our with plan or

[Operator Baird. Instructions] from with question next Manthey David The comes

First companies your more of normal of out impact quarter. calling the -- off, January, maybe February, the the quarter rates, itself, then complexion are can on secondly, a And relative growth impact normal talk of lot the the about more March? winter weather you of winter first

story weather out our out, QX last terms customer our so would in been versus I was better, some divergence Sure. say, It types, is our more we have some said and our I in guess, single-family little Remodeling. it less weather slightly in good year. might territories. a Having in QX, from as probably probably that, perspective, -- wet really called in territories. weather of Western mean, wasn't Professional it of year-over-year Eastern strong West I growth modest Net-net, of tale positive with a worse

recent the bit we've smaller-sized well contraction multifamily a underlying in bit seen and of single-family business to multifamily, the where largely just noted, homes. in As come quarters, challenged partly as that entry which I weather more was the was in growth level a as we a then single-family from little story. continues And our is the places as starts of fact think more in

April said, the trends our huge into through saw to case, very be rates we as things certainly, when a all April, in start across and more a disparity certainly, And to is usually well. the that growth we're the customers is as terms from the in QX continue outlook past there sure you stable get we weather like. not I'm we as hearing growth little but the and So positive board looks of move QX, is that and went you as

first there even was a in pretty quarter? So what trajectory it the is through I'm -- the anywhere quarter, you no spike hearing the was that from

think a fair do I statement. No, that's

goods then gross and sheet And benefit lumber lumber the here. margin to turning

overall, is in the up at that, first benefit quarter gross second margin unwinds, you the pretty basis Even Assuming your normally saw nicely. should margin if first from quarter? at higher still we that gross points, second into when unwinds look quarter looking it than be XX, quarter XX that in we

hesitant We're right that maybe been there here say in recently. to further now because a little inflation has some lumber

where ahead still in period is pause market always out in of gives out and skis. to we're So there volatility our getting this there us the that

I is last XX.X% you if battling think that look range. XX.X%. five been was period end we've volatility, at ranged the our Obviously, quarters, gross the when this margins high over we've the of and of which kind between at QX

range continue will prices at that to least out a we things which of recent kind bit. lumber to in lot be higher until here battling prices in of a of we're now, stabilize of pull driven -- issues still to think back kind transportation right of lumber and/or Canada weeks. have seem And and I operate nature, that seem

gross been operating raised may we improve. expect as guidance margin be therefore, be So that about our is SG&A we operating the and has to improving while may certainly the range. full that year incremental to And margin XX% X% range leverage -- margin to talked that continue to in

Seaport And from our Matt last Securities. question with Global McCall comes

here. the understand back the the the I question but was incremental a last over the look bit then lumber the forward? need maybe to with up the in so be that incremental specifically you we secondly, provided the be memory first have QX start going but higher in then, was you're of the more Jim, And cognizant And maybe, as getting off that to I we on what that moved what don't it I'm in happened trying maybe higher we half one follow last here, maybe not of upside. I -- what accelerate rely my on expectation QX. But, much the maybe -- to So and half, are, subdued your answered little conservative, being skis, the prices that I base still this why guess, just of parts understand thought higher drove quite and so two one, maybe just with in

somewhat and from you all-time I at and in of nature. recovered temporary all-time improvement benefit back is in goods again, most gross if Yes, We categories. driven is we the now over of feel that lower we mean, But a significant LSP was through lumber course a the benefit late sheet therefore, our or QX. then very passed had at near of in cost buy QX, form wasn't have low selling like the sort be temporary that in additional probably be look to costs which margins, highs decline were the and, that able decline in necessarily the has as or in the prices and from at highs estimated point plywood those as proved commodity and average to QX position. in in of about market lower We inventories -- XXXX. that go market $X And that in to cost million

still that, our margins call in as XX% we've earlier. such, the back and were full X% if having our So as raised you said mid-teens described year to incremental that to out, we to low on even the guidance

So that the lumber strip low no to further that to if I there's mid-teens, so -- impact. adjustment out

QX, those look solid year poised itself, improvements, to acquisitions completed all certainly inflation things improvement the last the just out in you carry from we've still price other into operational benefits had you over Yes, margin and future even quarters. from forward if that the from pull

is you do, $XX then I total But you a -- that that's talked this required the What's of investment to did plan some apologize. investment returns if you the expect Mike, to about caught -- difficulties. So and you included technical about and the the there. this, talk new few I in many how truss million don't that I think you -- many you that how CapEx gave I how facility. required, had the $XX and many million year?

vicinity of number a are for payback number call, sort $X There on that of disclose is seeing but is year, take. all-in of of key this the a give We're in facility. cost key to want markets a million, payback for The compelling. is right the don't which are a the that building or I the facility markets

continue -- the a on and those That's X, managing And so or question the Building managing build company, point, conservatively, up probably out X, at on to of, I about we're a your we'll rate the right probably business year. former clip. X say, Jim's margins. and

and System and One customer company highly of excellence on for we work. then is and and the pricing our actually Operating key on BMC the things delivering charging service pricing we've so are around driven focused exceptional that, the

So goes in hand glove. that it

So able excellent service, we're monetize the driving standpoint. us then deliver system that a price in is to terms operating from but to

you'll see from a think that continue I products. in particularly our margin non-commodity standpoint, to

I to So that wanted just touch on well. as

$X CapEx. thing the primarily one on Clarify equipment. is million The

One the bricks-and-mortar. think things are Atlanta existing of put nice most I of that the equipment are facility, the and can the we about this pipeline, ones in into

component facilities real to not better to So having operating, add estate facility operations. throughput getting existing costs. or better existing truss and output and add and necessarily just existing we're We're through

out of result alleviate some technologies we constraints So quicker business. to roll a Mike's as helps and it's the payback the better capacity much point, these a as to across

what there not comment anything or might assume? I expect, this should what guess pipeline, M&A or the to last assume one, can is Dave, you give like and you'd on expect The us we for us you you. any be

right and well with flow yes, the investments do to both continuing as just still maintain the we're very sheet can very balance Matt, was we that where And to Jim we're there, is to which M&A truss with as still on like Xx the to generating, we X.Xx automated level, inorganically we that is and optimistic our pleased -- seeing grow think front opportunities out have we're think prudent. EBITDA feel both I cash good plant things say now adjusted the going mentioned, I as organically. very that trailing and

seeing also deal to a in reaching we to on those that well. of uptick going. We've number We're more as out do an So of conversations a aggressive we would do targeted calls number have like inbound the companies gotten with.

Humphrey. comes from Hughes Keith The with next Robinson SunTrust question

I rapid industry a any little lumber with the talk helped in pricing or felt? on to pricing what get quarter. help hurt or changing basis? you lumber dealing has potentially been so. on real-time So the through the quarters, of to It's last the in know more packages there inflation that's year close this past it framing is for Is but inflation a something been just push to

generally, the tooth -- think changes. strong the Yes, the other participants market. certainly, the to market advocates and tend I the I of of would different those nail I mean, whatnot market think around -- we fight percentage commodity and market share types But be for points,

of this salvation, will, what more the our is which at our of in if end from commodity the business. of noise business the to components. commodity maybe converting focused to day, you and our on, sales higher what's drive inherent think longer-term I margins drive structural I issue And is of that's we're portion the past going think, us some this that's to

we we'll So better going making improvements in continue the the to all and growth that yield forward. think are towards end, we're investments

is customer And monetizing about then Keith, and about again, I excellent we that We mean, that implementation talked service this plan strategy. it's as talked a four delivering is hinged have clear. And and I excellence. pricing again, with before, actually have pillar very Mike. simple our on

that. pricing so to have from terms very continue excellence, in results And analytics we robust going approach to of we're and a pricing and see

you seen in actually flatten to ever if going second, prices we the margin these inflation the look to about get gross and And talked like out from can with we've is they from of year where half the now, will the continue that will today? or are, they wherever for into the second dissipate we does third where the impacts are inflationary sit what you

I of of it issues remind QX, pull predict even numbers. mean, to the only everybody, depend was important May, lot bit on it's prices if percentage much or still of third it's is whether transportation little some think I in as obviously, across that even kind compressed margin maybe so back little point, robust a get it's this not at quite a it's higher into as But bit. the and will quarter. a hard A early to the rectified sales

you a margin prior put the or now dollars continue. will of the expect are to us now profit QX percentage that running certainly quarters So bit the the little producing and year. commodities help in that recent for on gross circumstances, in remainder category costs, that dollar would run-up pinch a three and as pull from tends us have when higher back. and helping two over quarters, been of But inverse prices we've and when to to happens in we've gross right continue more both terms, But proven in a

The Michael Markets. with Eisen Capital from next question comes RBC

are labor to building. of a new adoption have additional in you've the the have where gotten markets Ready-Frame component contribution. just last quick this becoming Just seeing of -- you about of commentary any uptick more each uptake saw that -- of lot homebuilders ways them another any adoption from And from question more lumber couple of components the quarter, reduce heard Can this the and nice you segment like you're important the and we seen, initiatives over growth to and on the panelization national for initiatives kind is an quarters, lumber a talk product? guys builders you if

and look for significantly Michael, segment is of the Yes, XXXX national national of XX the footprint grid are Mike. with this course XXXX. it. with have ready-frame builders, -- currently We our and expanded over using we trials Sure, stalls or product XX builders the this our

in. XX months dialed learning is XX product the is technology curve launch. you'd We post expect to the The have where with construction

helps environment in the uptake, adoption also And and manufactured it we are result, controlled because quality significant brings a labor seeing it a issue. solve significant in As issue.

panelizers oriented. Ready-Frame about rates So And generating the saves that saves saves are revenue are of the positioned adoption units and labor of out million are some as is have we tech waste, our these we there $XXX more company. in that called hear the cost, of And XX vehicle and out that Jim as showing it.

to We continue. expect those adoption rates

those kind you in is thinking then of conversation? the of with strategy CEO the the initiative kind that And laid How of picture search. as pillar guys any aspects other should two a is And the new of there leadership there are about permanent how hold on place? conjunction Are unfolds? bigger have until in that year four team ongoing that much out of intertwining each that, with we in think

that. let Yes, address me just

a I very got think team strong management we've here.

hold this So is on point. nothing at

to to we we that right think those We And think continue the are and I we opportunities CEO investments continue are will the will do search and things we operating company normally we do. that the as replacement. as would, pursue to for

feel very I our company initiatives. So good doing on the we're about what within

in, just that can a And about coming following thinking the if on more or sneak one lumber comments. those candidates broader within for and you someone applications? the so sense, more looking in more up different leadership I are When business potential candidate in the type are industrials distribution

industrial We've this taken terms primarily. CEO thorough more taken operations, and I and experience we've with process be building that We're will the distributed we're that ideally, looking view. a distribution candidate have of view as in the a in space, down in narrowing a important but I space, broader a candidates mean, the interview starting think, little space, we're we're experience in view. looking plus, broad well, which potentially currently And clearly will cycle. very material is looking and

back session. for to turn closing question-and-answer remarks. conference our to concludes I like over any Dave this Keltner would Okay, the

today just like we're happy thank look for I'd our you, with. to very we which us you share talking us QX and to forward with results letting And everybody to joining QX. after Thanks.

So thank you.

you Thank concluded. attending now today's has presentation. conference for The

You may disconnect. now