GMS (GMS) 7 Dec 232024 Q2 Earnings call transcript

Greetings. Welcome to GMS Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a note, this call is being recorded. At this time, I'll turn the conference over to Carey Phelp, Vice President of Investor Relations. Carey, you may begin.

Rob. you, Thank thank earnings and fiscal joining for us Good call you for GMS conference of the the morning, for second XXXX. quarter Executive Senior today President Financial joined John Officer; Chief and I'm Officer. Scott President Vice by Deakin, and Chief and Turner,

to our this we forward-looking In remarks today's management's website PowerPoint at the have the in and release in this the Reform Litigation XXXX. defined your as prepared contain accompany www.gms.com. On statements to call press questions answers Investors posted issued addition Securities morning, slides section may of to of call, Private Act

Forward-looking statements results address control uncertainties, subject today. differ matters beyond may which and discussed to to risks many our that are and from are actual cause those of

to note press of and non-GAAP measures Instructions] With I'll relate on Slide to the measures. October Turner, XXXX. of presentation estimates obligation future. J.T.? ended reconciliations more discussion XX, assumes these John the The As the in a the a over certain X. the provided whose turn with this [Operator forward-looking in and presentation review company's encouraged to reports. Today's that, slides. reminder, expectations. Factors these of the to The non-GAAP are call section SEC, in includes contained the any statements and on fiscal forward-looking no periodic XXXX forward-looking definitions and that will Listeners statement other the are Please discussions be related XX-K the to in to current company quarter references release second detailed statements Risk the filings starting discussion update management's call also company's quarter including represent

and joining all for us Carey, today. you, you thank Thank

to which sales, stated another report for adjusted and exceeded We net our EBITDA. quarter, pleased are net income, expectations solid

drove residential Despite was relative helped pricing. pricing market, in of offset by the in construction single-family Wallboard experienced more resilient increases Continued steel offset complementary slight and all demand. overall to softness multifamily steel continued environment which volume ceilings, and decline, which products, only a framing, commercial a and demand in challenging single-family volume

billion, recorded million, For flow from adjusted free million operations we million, respectively, $X.X totaled were the quarter, cash EBITDA $XXX net cash quarter. income million. flow sales $XXX this from $XXX XX% and as Cash of and up was and the of improved quarter, net prior again $XX X%,

X.Xx improved debt Net from a to ago. leverage year X.Xx

levels in change. In portfolio ability with scale, of company's well-balanced us is combined the our and provide continues quarters. seen our expertise backlog improved to continue Our products at pace into to term, activity markets, or and sequentially through is are the continue the near end optimistic near multifamily the to markets current we with our in to end expected as dynamics about levels activity flex team's next over the at few demand. single-family its Commercial operations worked the And expected as current is spring. we've also of

look we the promising as seemed recent of into sale this limited setting mortgage up existing demographics XXXX. for easing favorable and fiscal for market, out end supply homes to conditions As rates, of be particularly

this highlighted are job pillars, strategic on Our Slide have on focus fiscal so done a to challenging our far remarkable continue to which under teams X. circumstances year

checks. least core we disclosures nation's serving the the Framing by a manufacturing versus according products a Industry positive Wallboard in year, strength the to share shipments Ceilings We've part, Steel share and have and to continued to outlook. evidenced as share increased as in channel in prior homebuilders, and gain they in report too we've Association they Steel data, grow partner more continued our Framing in percentage gain also as as Gypsum-associated largest First, at of with sales our higher reflecting

up made on focus great category, year-over-year and which put sales the delivered to its for continues team of consecutive our our growth. XXth our products quarter XX% Second, of growing quarter complementary

Stucco, quarter. collectively EIFS particular Tools Fasteners, & Insulation, and category on which the during are continued emphasis than to We placing and the grow overall faster

M&A our greenfield one key openings through be growth. continues of of Third, to levers and expansion

quarter, $XXX representing respected AMW at XX acquired and distribution Construction estimated During the a revenues market. Supply, have the acquired we time opened in complementary and distributor the other centers fasteners of tools greenfield XX Phoenix, locations. Post-COVID, we've of highly companies, of we opened annual closings XX also a stores greenfield Arizona total we also nearly with And products new XX million, AMES and deal and locations. of X

appetite pipeline promising a product have where markets while and our an territories under-penetrated, offerings in service are our to footprint markets. of and broaden expand we opportunities continue to existing We we in key also

are evident during and are experience. business, Finally, these The improved with of levels the detail of quarter, better data complexity customer benefits remarks. and and overall will we reducing SG&A effective becoming productivity to costs efforts efficient we profitability in driving more enhanced and an Scott facilitate his offerings recorded that successfully throughout provide enhanced operators the this tools and which decision-making

over, want our commitment performance of the our delivering the during and call thank level turning to to I customer quarter. outstanding high Before maintaining team service for

call markets quarters. With and our and to we in progress turn well-positioned that, dynamics that all coming I as the demonstrated the have will Scott. our expertise We over believe in flexibility demand of supporting are end

a commercial sales Starting on with headwind Thanks, quarter activity decreased year-over-year perspective Good offset. slightly second increases mix $X.X in Slide multifamily with softness markets price to as Net billion results. everyone. volume XX% were products drove just favorable robust a our X, morning, end and than I'll and more both now provide Steel and an complementary $XX for Framing, Ceilings, further net demand deflation the our of steel million reduction quarter J.T. while in levels also in sales. Single-family was some

EMJ, Our and our Home sales Tanner, also X.X%. including positively AMW to Organically, quarter's recent Lumber, down contributed acquisitions, Blair, results. were

were sales resulting year-over-year dollars single-family sales X.X% in dollar the of offset XX.X%, dollars hand, flat dollars multifamily volumes U.S., on decline roughly sales noted were sales by grew X.X%. sales Commercial residential U.S. price end the while deflation. steel declined a the as other From total a market perspective, increased in

last quarter, many are underway nearly the projects experience highlighted scheduled across sectors. active continuing commercial start to coming markets or with quarters demand we all in of regional to our As favorable

For and education space. expect manufacturing build-out number to residential Airport a in casino, example, hospitals student projects new several and participate a we the in some and facilities, Tampa higher the medical new mixed-use tenant facilities, other of projects even expansion, other office multiple housing facilities,

While commercial that attractive we on the seeing are financing could market, capitalizing the been a for headwind currently. is of end demand tight and we've become level

mix. results facing volumes segments. X.X% product dollars roughly wallboard of multifamily remained flat lack with year sales that resilient steady are comprised period, respectively. Single-family quarter second increase and up volume also of to sales capacity, $XXX.X reflecting and at in the high excess X.X%, quarter which in synthetic roughly again for XX.X%. year pressured year X% with ago, a were gypsum. Organically, wallboard and production wallboard commercial each access prices wallboard second approximately costs, flat the realities looking with a a of Now, volumes our declined and XX% with manufacturers, a were while a of increasingly and price input decline prior our and wallboard flat volumes were ago, Wallboard were million Overall,

per ago both second square thousand For quarter, was quarter. price the year first a slightly sequentially fiscal from wallboard realized the $XXX up feet, from and average our

Given resilience this the wallboard sequential pricing, we expect year. through now continued fiscal and flat end in our mix roughly price of

Organic of mix. year-over-year, of X.X% Ceiling in X.X% and comprised mix. million, X.X% an sales quarter X.X% benefit X.X% increase volumes and in grew $XXX.X a increased Second with in volumes X.X% sales and price Ceilings from and a from price benefit a increase

Steel Framing increase volumes XX.X% prior versus of deflationary offset volume. XX.X% This drove price a and down with were $XXX.X mix Second price a XX.X% decline million XX.X%. the XX.X% and year and increased a Framing mix, sales while sales down quarter in XX.X% quarter. were partially by in decline in pricing Organically, Steel

raw a cold galvanized rolled ton XX% last has with low indices Framing nearly over and the Steel commodity up for since While pricing the fall. this has headwind increased underlying been point year, the material per

have inconsistent price partners. Accordingly, upcoming to continue Additionally, we of notices lead multiple extend from manufacturing times with our received increases availability regionally.

traditionally from complementary soft contributions volume the grew sequentially basis benefited in out post-commodity positive to for we X.X%, of products pressures be residential change, our index reflecting expect quarter sales to year-over-year steel Given lumber lumber the before currently and fourth quarter product million pricing lines acquisitions. from $XXX.X and of roofing given Canadian declines Organically, as X.X% during X- what in in sales continue prices we then currently lag flattening demand. a quarter declined a third the XXXX. Complementary to turning sequential X-month product pressured is on and in the positive fiscal

are on Fasteners, As and product practices we've areas. operations share significant especially and EIFS and we across discussed these where best quarters, & are in in focused we opportunities our Tools leveraging Stucco to growth previous drive Insulation our lines,

second For quarter, in fiscal the these grew aggregate. lines our XX.X%

the Slide steel of compared driven the profit of for Now, turning deflation margin the ago, entirely ahead just XX.X% profitability decreased pricing. market which a by of quarter. was This Gross to highlights year quarter. quarter. million to Gross our for year and expectations our X.X% to $XXX.X X, prior decline compared XX.X% nearly slightly

the the locations. recent principal and comparisons. of increased administrative tiers to related both pricing opened Volatility million acquisitions newly were during our million, million realization expenses general, increase an quarter in to including $XXX.X of steel in $XX.X and purchasing incentive factors Selling, in $XX.X greenfield

volumes our that serve volume high lagged in led the Excluding pleased we sales markets quarter. these were the cost expenses in for expansions, SG&A our as in way the increase even very to growth our increase end consolidated remaining

driving I our in costs out for would controlling the and their discipline to business. teams of like thank inefficiencies

the $X.XX also recent higher million quarter, year levels in, and as from a a labor commercial as of multifamily an productivity sales due level for from expense winter, XXX expense, quarter of $XXX.X to costs, XX.X% due points income the acquisitions percentage mostly we gained or income to $XX these to prior points activity with decreased favorable steel diluted million ago, year us basis XXX net difference was for quarter. and of a primarily XXX percentage points XX.X% share basis of higher net Our of share of from increased experienced associated was ongoing coupled XX business basis to SG&A greenfields. Adjusted basis to increase SG&A XX during the interest a enabled quarter, due compared the sales deflation, or net the $X.XX the points with last remaining per XX.X% a points XX.X% initiatives, of efficiencies price year diluted basis with a ago. to results. SG&A of with achieve rightsizing per up and the XX.X% and All net

$XXX.X compared year's EBITDA EBITDA to as decreased and XX.X% ago. pressure, steel operating single-family to compared decreased increases last cost On Adjusted margin million second $XX price a of quarter, demand activity-based million framing level in year XX.X%. quarter of declines, with adjusted the the

is $XX.X million quarter of Now, had which shifting credit balance Slide revolving and to under available XXX.X highlighted X. our cash liquidity end, our we sheet, hand facility. of At on on million

the have X.Xx EBITDA was quarter We X.Xx operating cash at Year-to-date, the debt net year no ago. Cash the year a prior year from leverage adjusted year our the XX% $XXX.X debt by maturities, $XXX.X free was cash quarter. free improved Cash was ago. a flow improved near-term compared period, again and flow to provided $XXX.X compared we've this to generation more end a activities ago. of million, for generated million million in than while $XX.X million quarter

full to XXXX, And $XX.X flow we ago. a the EBITDA. cash million Capital free of We of to compared the $XX in million. XX% for million year, flows expenditures be fiscal generation year strength for be expect the capital that $XX will the adjusted full for half, cash expenditures approximately with of XX% to expect now relative between quarter second year

program, outstanding $XXX In October, its common program authorized to share This an repurchase which million previous of repurchase under approved replaces stock. Directors our our the expanded to up Board authorization. expanded of is repurchase company

$XXX.X leaving as shares, end XXX,XXX quarter. of of approximately authorization remaining repurchased the of we million quarter, the During the

solid with near-term no are sheet a balance structure. well-positioned on We maturities our with capital

on We're We market paying to opportunities. to my remarks and again, for, M&A today team solid the conditions. I'll investing debt review amidst J.T. in to our a favorable continue market our balance Slide now our turn to repurchases. I'll delivering opportunistically leveraging close initiatives, of over expect strategic for thanks for starting call outlook X. down share successfully with conditions ever-changing including additional results

Thank you, Scott.

third at over is a dynamic. remains Commercial, and least declining to expected yet figures me to market most setting have And with the growth years government-backed for we've move rates a the in and shortage population full and declining remain the levels demand mortgage activity of of the while near the markets new on to with the year recently in recent end programs to in in even the and returned providing of expectations Permits quarter. the a coming housing improved Our prospect growth. With of for as stimulus experiencing, deliver news poised fundamental immigration to as multifamily our nicely solid volumes quarters year-over-year levels. supply of growth levels ago, we've has starts existing residential for pre-COVID least that still is at appears starts continuation and term. Meanwhile, for are let Canadian not through place homes sale. And our U.S. for end albeit a our the fiscal declined, improving business, seen several housing, structures rebound solid support backlog promote a that but the the put backdrop, year. up more encouraging this at given been the single-family U.S. rates

call, I Wallboard, growth. quarter said of to provide strong relatively is start expected to still in at as multifamily year-over-year positive looking backlog be the the continue the First, for at should and the

component year-over-year up expected low mix. in We expect digits Wallboard up up volume Commercial with to volumes too we flat year expected be down down compared be single well digits. Single-family improvement price expect mid-single just market to that volume total, year residential ago. end a more a multifamily reverts should to mid-single as slightly Wallboard In volumes normal be mid-teens in Wallboard mix marked from is of to be single-family Wallboard comparisons. to digits, as with our to do with ago a a

remained capacity As pricing steady for has Wallboard environment. balanced in we relatively reported, a

of continued manufacturing required to gypsum. synthetic is investment our availability Additionally, by adjust to partners the declining

recovers. in stability As the expect of as we market remainder for continued potential such, our increases with for fiscal year, relative Wallboard single-family pricing the the

quarter, backlog expect in our low solid mix prospects single as including and high-single-digit for by end mid- market, year-over-year In in for in Ceiling our price to continued Ceilings, given remodel fiscal volumes, third we channel our increase encouraging digits. projects up expectation our indicated commercial a demand of with increases and checks,

with low as ago. to be demand digits move year to should Pricing the for double fiscal with will Framing, of For volumes with solid, Steel third remain our we challenging continue expected be up year-end. compared expectations as a quarter, improvement sequential into

quarter for third quarter. net the fiscal impact financial XXXX, again other with leverage, and be and sales, is SG&A compared metrics price down nearly will XX%, which As Framing of Steel mix to our the for expected

to see sales offerings. solid focus as our our to expect growth We expanding Products, on in we with continue Complementary these

For to sales single our be fiscal Complementary quarter. third digits for the year-over-year digits quarter, up high Products low our growth should double

quarter for to last likely our total compared a range year these consistent fiscal the million performance the in reasons end another be third approach $XXX for have quarter. of optimistic. quarter. Overall, expect we to And and ago. adjusted will expected quarter. third with be expectations, is be Gross EBITDA for million to be calendar ahead, single digits net as as anticipate level XXXX margin with solid look up of all sales we And to Given low the we $XXX we of the

the our beyond. Commercial in well through in expect the backlog and too time sequential fundamentals year and First, continue is slow the interest outlook, housing worked demand, coupled U.S. improving for do although improving multifamily to balance rate an single fiscal likely being. supporting expected down is underlying given the family will the to with trends of once through, we

all an may our built in levels credit into operations some drive are we are activity that change demand tighter the we standards lending believe air markets, thanking and all, point shareholders next suppliers, continue all value to growth profitability as to While our our you our your we now, will our confident by for our calendar pocket call in like year, and today end pivot to stakeholders. I'd long-term for are us we which at flexibility to with for and of demand customers, as continued joyous cause And wish support. our close deliver positioned markets help a levels improvements. All we holiday drive in expansionary to solid I'd will out believe like well teammates, season. efforts within easing

Operator, please line for open the questions.

from comes with Our Grooms Trey Instructions] Stephens. line the first [Operator question of

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

Thank you. Good morning.

So for there. maybe on for side, volume But it at bit still in outlook. starting as here third little we the some the potential a look on from constructive sequential demand the pretty commentary all we pressure the first, off of terms expecting deeper here sounded improvement but if your detailed dig thank single-family you quarter,

growth to the XQ more or where So I a reasonable is event? it fiscal potentially guess is later the is as at some in of just that building expect Wallboard maybe process, installed 'XX typically given we look

the of and year. We'll probably points next second lap the course quarter, first of lowest over quarter, quarter fourth

So indicate Very yes. some seen sequential What slight, early we yes. starts have should based growth quarter, as continuing our starts. on but as expect see fourth we getting what be growth from we some should already from to

'XX, sounds there like is then, the you margin know again, to it Got you've But But for a difference now. diverging, impacts gross SG&A. when we to different a in has mix side, down much you holding relates got makes of remind I of maybe there? longer into get growth as end is really on price? EBITDA, single-family That the and just can us it markets sense. potentially in impact as X on And those commercial where the fiscal it. think, scenario seeing term it

not. No. There's

difference, little profitability of at margin up little ends difference so costs. being they very to of bit little it But bit single-family in end end little the SG&A higher multi-family. gross summarized both better on both the commercial -- the bit commercial and multi-family, -- similar margins, up, perfectly, You margins of a new bit a gross day, the and a

of question next Our line is with Manthey David from the Baird.

results good encouraging outlook. and here Really

pricing your with can with sheet than the the sheet of your a raise steel your given might you higher typically working and opportunity, be you slightly faster prices on now? balance off, there, into pace the inventory you and that that visibility margin first there slight especially into strength, balance visibility have So through the cost P&L have that along

there's I what is there. would say Dave, X dynamics

You've I is to the pricing to be is got then, is which expect which a work, which and think, yes, your is deal is your we're bit there then would kind In the of a piece, large quoted work, we locked-in quoted the percentage if little of commercial front availability as stocks piece, up of opportunity there's your in deal the a stocks work. receiving. that tighten it,

the quoted in see a squeezing. little other the little hand, a up, probably is On of one of term negotiation bit the bit could that go prices when piece the near around we

be least term, would because significantly, just certainly all increased in it at of say, we're cycle, increase to we're don't them increased that able think get a if going going I be to, new able those probably to So during appears offsets. in keep all, the this like I flat we'll margins near into we'll cycle, but period. through X to and

steel we too, past inventory pretty discussions, fast, From turned about I'd just Xx. reiterate too.

those So impact work there through changes. as inventory typically much we isn't pricing

Yes.

have just if more can then of I'm at your just folks And I you current how lot in this point, things rate of shared there wondering brain, And through than the not tap interest that there's would cycle. wisdom helpful? terms clearly GMS X of out, of a assume theirs sort play they've relative we tap that to things thought lived situation might we may have that be and any it Okay. at

according rate to commercial I the there There cycle bottom think because of likely, lag, much The much reports. and of of the interest of interest shouldn't apparently, Speaking of in And off have in to coming a if homes. the homebuilders' primarily we the from building to a we're of this seems most activity new environment, there down residential be most a residential, about come lag bottomed. right? isn't isn't rates

one, the period commercial longer The on a it's of hand, other time.

projects course, been remodel has I that So basically see and things experiencing were pocket financed air easier ground less remodel out a year were ago in we'll volatile that, broke a remodel of new we're little component, and there. still we of the commercial, strength projects have when bit strong in real than think an historically commercial. but a do

again, we And also, that not Dave, think us. And so I back the volumes. We're at still were will looking help back.

-- in back Our guarantee pre-COVID to our would of and neighborhood Wallboard volumes in industry not levels are Steel ourselves XX%. and in I the industry, that, still

forward, a happens brakes off whatever going the being single-family So in event. ago. I being saw I don't draconian just just don't hit so commercial see hard XX%, year we like a it see it

of down it the don't declines that. in the over course double-digit commercial And just Will now, in couple I we're volume. will. of doing having quarters soften? significant last Certainly see there

into to think out of change. also financing our there's real lot think And it post it's -- think be be going a ABI that think you don't half also I it it's that back because there. single-family I fiscal with fully offset I a will as soften to the being I pent-up XXXX. I the by going has been, as XXXX, tight and dramatic can't think period, the demand activity of

that driven it's or a about in hasn't being done been whether because single time. long office the remodel it in just some are You're activity purely our in channel checks multi-family general, office, reading it of conversion to every indicating or space of increased to day,

we're in not or like that. something So slowdown feel do expecting be commercial, I to off it we'll some like XX% see but

remodel, correct? is Commercial about X/X Yes.

into right. remodel X/X. of a because Yes. But so that right our Historically, be historical that's right. XX-XX market, that would in in a That's It's the office, now closer range. softness it's than little less

question next Barclays. the Matthew from with coming line Bouley is of Our

for on Dholakia Anika is This Matt.

just off, quarter? if multi-family year fiscal strength first So further in more are and noted should this that moving carry XXXX. you know the could guys through forward, into on detail guys a you that growth give curious backlog And seeing us you little I you

So when pressure Is you earlier? more Or do I 'XX guess this weaker, see just coming? given a it could starts so be of much potentially are fiscal story? it

We 'XX. think mean, just on just the environment starts fiscal we completions, guys and did and that it's worked course, I it's the that. you math have I done math backlog same we experienced, single-family think and ourselves of everybody through the does. And

And math, I significant see experience so 'XX slowdown. before think between that the and to we it's fiscal start a

my headwind a then know maybe was second pressure in a I guys in have of question, Do And Understood. quarter, you and third the are that steel it of quarter. ahead further you deflation sense into the seeing this magnitude XQ? flattening pressure of for large see you XQ

I'd we it's $XX in flow quarter. QX, meaningful, million down the in based the but about million. of but saw And the similar the in that, in say fashion Still we still you third about We probably impactful, of saw projections less through then in on what impact probably can $XX P&L QX. QX. that sort talked to a than than our ballpark for less

the RBC from are Our Dahl with Mike Capital next Markets. of questions line

balance multi-family for meaningful rate the to it up and single-family seasons mean, is induced. be and more make it. decline cap the commercial It potentially I last I little cycles, multi-family. in could declines that with articulated credit I between it's and could commercial, stick single-family you can way does time helpful those by seem want a given think like longer the

how about I remind -- And are is impact from offsets this multi-family you of percentage business and are guess the what if in at beyond? your thinking how commercial, just multi-family. So you single-family 'XX us point

that right? as multi-family. range is probably Wallboard in It's XX% total than XX%. our a that to Wallboard component, revenue volume, about it's use as down a we Well, proxy, XX% less In

together. throw multi-family I commercial And almost so and

into to and put overall you XX% got plus together, markets those overall plus we market, so when is and a normalized revenue. of And X Wallboard single-family our XX% more get probably, of business, the

full come single-family see to it's, digits be we multi-family and then a best. And at see in probably low XX%, I multi-family double to whatever if my -- maybe commercial the bottom, mind, be not expectation teens, Again, to it's So XX% would at my offset is back the we off, imagine off the can commercial. in would or of meaningfully, in single be that and single is you'd doesn't coming hoping going would commercial have that will not get a the and year correction still whatever family. from a just deep commercial of on full perspective. bad feel the a next certainly volatile this It offset and bounce, like it's very multi-family we're side. to in I'm that it of into We multi-family.

more from road, every multi-family. the The you are conversion office the day of and more about to down hearing is multi-family other offset course, to

happen. a strong that's area. again, of in So that that's And remodel And more very activity. to going we're

I offset we So a as an degree of be expect would that to get there.

use not everything feel the the stimulus there reality by we're provide across the housing. And I all don't today I actually whatever read to when that. my haul to because it's is really through this the up you way America every for position doesn't air affordable pretty myself engaged mean, about only pocket housing, phone. driving from what aging I like in is the long when I'm construction multi-family going is get be paper out the or of strong and see have of going fundamental read, North way. then, But the up the really we pick to in you And the into to end for can't 'XX all fiscal going do housing you're matter the 'XX, a it you and read journal, government going paper day, decade. pick further -- road, I I down

And point the notable higher is is in particularly that where last multi-family market. single-family versus in that of Canada, relative mix

of term with I Yes. last helpful. the Certainly, of very longer That's terms it. multi-family fully Got and point, in importance serving affordability. agree all the

pricing puts price then half-hinge have out, these strengthening. potential so as if increases market and play you and shifting single-family the you the and that weakening potentially for to talked in about so you'd Wallboard takes, single-family With dynamic, strengthen,

How does seeing that your that still typically little be targeted more on bit Or increases maybe pricing? in of it increases but play a out expect we then terms Wallboard in How broad typically out? you terms with seeing are play would increases what half-hinge, not on of Would business? products? single-family across seeing happens

it's capacity. overall much strong, a the is market more It's single-family bigger When historically. lot part situation. capacity up a of It eats the

it's products, the if the I across really, run they So slower. you at it's commercial across actually the board, look mean, board.

so And product, you're in running a if single-family price in a five-eighths -- you're reason decline capacity-constrained to speaking, generally off no consider because five-eighths. there's

Our question Yinger D.A. line of with Kurt the Davidson. from is next

talked kind on relationships. On expanded vendor and talk maybe some couple you the dynamics saw you've the into side, factors opportunities those And played how the of kind competitive that Ceiling and market? past also thinking Can maybe any share of strength you're quarter? about last the about quarters, how touch about of just you greenfields additional this within

strengthening us work, in remodel out question things probably our absolutely channel more smaller bit that. about those mean work, the work, suburban to improvement efforts our remodel to would I work, a right strength organic telling the though sector increase office I little be no all dividends, now. seem medium-sized and checks the Sure. point tenant paying are in and that

expecting, And pretty bigger driver probably strong and a quarter again, forward. the we're would going really be why so that

it. Got

expand you makes second, talk That categories And this strength organically then Can you're have business maybe those the Complementary to prioritizing Products. sense. what footprint? more stage? the of And Okay. grow you internal in the across about any initiatives within just at to

-- product & both our Tanner. both Tools tools vendor out Phoenix. fact, in in bought relationships our It's of AMW there it's M&A course, just in bought right? Yes. -- and We We've Fasteners,

primarily leadership a Tools teams Southern all expertise grow that provide we'll area EIFS this Fasteners, growing as United us and our -- area then so acquisitions path teams help M&A Insulation. been both an effort, Stucco, in also States those our our this we and perspective well. for But divisions sales in & And organically. from of And continue and and in down across to we've

So we've been growing.

we to our have products and that's bigger, fairly When that. types most meaningful have selling core take with for products. the key you out are to a obviously, volumes were As our specialize we and there generalist not you're able these generalists our when able them force, to of do get of sales still can

success So there and with sales can forces Complementary the big you have and that. when and we're expertise this scale seeing afford out to you dedicated mix, Product have huge get dedicated to enough

question is Ramsey last the Research Group. from of Steven Thompson Our with line

for Steven. is Brian actually This on Biros

now, or right bad like downward so any of based geographies seeing are the doing on this not actually verticals I be see it an seeing it's like like in First, expecting cancellations pocket sounds guess, you're guess, air pressure kind meaningful there eventually. they yet, sounds which but would obviously really or office, I any non-res activity what next that outside today? not look pauses to you're of

too, been for of themselves it's right, place kind the entire activity The numbers West that's the so it's high period. the low geography, I of us. soft, more -- each the softest the construction-related mean Coast you put out across you But at geography, a fairly to goes. the the But throughout that, reflective board. as range double-digit softness look has the than fine categories is been soft it's all has And key indicating West other. far multi-family with are if single When any in right, that are -- of ask been in as there. verticals about none still softest really

I at I then expansion the the would -- just overall you the of strategy guys end platform mentioned. the I tools on kind year, kind last more follow-up and guess, And the, guess, here Okay. AMES of color of just be the more distributor, provide specifically stores guess acquired more

capitalize would some I on those think of roll you expertise can platform. kind and some stuff I it expertise. you be acquisitions you of added how to mentioned that hear that type across the guys earlier out just guess think interesting

to answer business the of to relates of example. helping buying do and to understand of is to really those job purchasing a teams that know those back that our -- it a the better the and just and our and Yes. products of supply approach question, back primarily nationalizing you using understand organically, It the better an relates give so lot products. I'll resources that the previous

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