GMS (GMS) 29 Feb 242024 Q3 Earnings call transcript

Greetings, and welcome to GMS Inc.

Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Carrie Phelps, Vice President and Investor Relations. Thank you. Ms. begin. may you Phelps,

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

section PowerPoint accompany this call In addition issued release to press website this morning, www.gms.com. the slides Investors of to the we our at have posted in

call, management's as detailed remarks Slide Private on on today's may XXXX. statements, As to answers forward-looking Securities of questions defined prepared your Act X, and the Litigation contain Reform in

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

management's the forward-looking future. estimates related detailed company's assumes the the forward-looking reminder, The company update represent SEC, in the review obligation the to Risk statements periodic XX-K company's forward-looking in contained a including Factors other to expectations. more statements no section encouraged and in and to the any statements reports. filings discussions with these are current Listeners As

Today's presentation measures. these whose definitions Instructions] With the third begin of non-GAAP will measures of [Operator also discussion of the note ended in I'll presentation that, fiscal J.T.? John discussion reconciliations XXXX. quarter press X. the XX, on turn a Turner, to over are provided and slides. XXXX quarter this relate the on January to call call certain Slide non-GAAP to release and Please The references includes that

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

a resilient, and this efforts to with organic contributions as growth categories, steel, outstanding remained compared against our recent of growth team realized quarter. pricing except service from our major the across we benefited our both like year and in to key of and total, once for, would acquisitions. from results And, thank again, product and also ago. in as our was all Volume solid executing delivering accretive initiatives I

versus temporarily sales during delaying the million, pleased near-term sales year the these our we challenges, significant Still, of divisions XX, were which forced expected, with price our Our late steel deflation, week part communicated fourth million the faced adverse of with last to weather we shut above into of previously but despite all of achieved was weather Typical one to headwind January. net of quarter increase net geographic locations January down deliver in and which $XXX our conditions even that early in total were expectations. EBITDA of adjusted third $XX.X we income quarter. along both

we continue of Complementary end trends and fourth these our from and gains quarter, close the both delivering Framing commercial for end anticipate acquisitions, in single-family an sales Wallboard, growth Products. improving growth market the Ceiling, year-over-year out expected to And strong quarter we XXXX During Steel backdrop helped along are at with and multi-family volume net fiscal drive and sequential as April. demand, in as

slowdown, forthcoming demand, Commercial with indicate current indicate half checks to expected also in and significant and experienced our is likely units levels this quarter. there While multi-family its we year, of in now, consistent of back construction. a channel our under of a calendar permits number starts pace third still continue do external those solid internal of for the remains as backlog,

a foundation builder for consecutive of rise are in and in in the pent-up housing we single-family, encouraged environment. the confidence home builder uptick reported expectations new continuing For environment for our need an and reflecting mortgage supply-constrained X-month levels, by improving by orders rig customers relatively the pronounced

low rising held year-over-year. Pricing believe down Steel manufacturing is has levels well, continued in gypsum. reinforcing and of Ceiling and what Framing declining industry, we while Complementary new of also Products with particularly planned prices costs, we recent expected, up the substantially with in given pricing structurally of with availability has synthetic addition, the performed as to resilience or In are continue Wallboard, changed capacity pleased a

X Although it price began steel appears peak. near-term reached have raw indices now escalating these months roughly ago, a that

for our As term likely quarter, the slightly such, prices prices our while those we near increase expect sequentially will thereafter. for to fiscal fourth least flatten at

results navigating and and on Slide X. successful our near-term strategic pricing, X their have focus to deliver the demand and end our market the execution have highlighted which dynamics While of teams continued on maintained pillars, are solid

the continued to Gypsum our breadth delivering data manufacturer in the that seeing measuring and each our share are markets our and disclosures, First, Association, that product Customers the provide. core across we value against categories. our scale, believe product to expand Steel Association outstanding Industry framing end service have expertise, from we commitment of

have residential well homebuilders, we successfully of those participation activity work government as in many of winning months, a education, projects, as nation's remain centers the data active, secured the largest country. most recent mega sectors, also while the across primarily In new medical, underway with in some which including and range manufacturing, commercial of expanding projects

is XX% to quarter, growth Products core which & product grew products. a segment grow EIFS Complementary total margin-accretive far this drive And grow category our of year. of as in overall our Stucco particular, Over collectively as our previous Complementary continues grew part sales. and category on rate this Tools X.X%. category as to Fasteners, twice of we Products we said to an percentage aim placing our mix. our this This Second, net for of and has to are in made the fiscal the XX.X% sales emphasis quarters, In while category accelerated important increasingly we've the up so our Insulation, expect continue time,

Equipping and our efficiency position. tools of continues seeing yard scale improve further with of operations. complexity realizing success operators to right of our technologies are to business, push with the many we out initiatives their the our Third, the benefits costs drive productivity our attractive while and the

advancements with which and together taking easy providing offer among quick customer are e-commerce payments, increasingly enhanced are Our experience information, for product, features, advantage order online avenue other an and, an of. pricing customers

we number leveraging and legacy customers. other operational organizational standardization drive are functionality, consolidating make for business. a with provider also and customer our along initiatives these positioning merging and operators, costs, the further back-of-house of while process GMS as reducing Collectively, help additional our data across product, in and thereby legal of Additionally, choice the entities complexity the business our of the us profitability better vendor,

expand opportunities. greenfield our strategic accretive platform to and acquisition our through Finally, pillar fourth is

our green to and opportunities market. opportunities a continue as highlighted December, drive core we on York to capitalized third Supply growth, on on Corporation, agreement in one businesses. of focus Kamco distributor purchase During late we In the to attractive Slide deals, X X, with quarter, New we of City M&A both building new our in and leading these complementary announced the opened and products

We days. excited very are expect transaction, about we close the the this of coming which to in prospects

in highly our GMS. York represents GMS products company's values and our a core and with pleased and unique to City market. regarded join advance leadership strategic to into family the welcome well Kamco as align attractive execution very they share New the in of our the employees geographic discipline Bringing brands Kamco's including own, and expanding opportunity expansion priorities, are we highly

sales, in opportunities other to transaction Additionally, this leadership will present operations our GMS continue area, expanding Wallboard. including drive Products cross-selling with position as Complementary the in we further

expansion. and customer of We excellent service excited to look one distributors a reputation for region, for Kamco's are this very key becoming in about inorganic base further as operational and leverage the top we'll organic and execution

one. we successfully demonstrated the call growth servicing our of we transaction service who once priorities. continue quarter. benefits performance that our high Before I execute flexibility profitability turning level team of in will further expertise want, and business we and and balance to again, market over am during will cover on drive the the maintaining on our again, confident and this and more results, as to Scott, We, strategic have for the our thank our I each to end exciting

to will With Scott. that, the over I turn call

Good morning, J.T. everyone. Thanks,

we additional late legacy in with acquire Supply of the an in fund. price pension a mentioned, agreement of exit into just and Corporation entered a consideration As purchase $XXX.X connection December, of inclusive affiliates for Kamco to million,

XXXX, yards the an add in including Kamco, million during XX ended XX, Long top the December market, locations months Kamco's we to Manhattan, revenue important legacy X in in meaningfully City believe and which has in recently generated Brooklyn, greenfield line Patterson. $XXX added location which will Bronx, York New they Island growth. Greater the Plus, new

roughly Before historically business. has any generated in line the synergies, expected EBITDA GMS Kamco broader margins with

opportunities, the distribution notably In and XX and this integration expect revenue SG&A networks our purchasing addition, wallboard programs, and cross-selling transaction through of complementary to XX we and the savings. over months, to products cost for generate next synergies

have All and will intangibles as above EBITDA tax Moreover, in, we an we a business. pay to tax attributes, substantial this just expect multiple benefits transaction, forma from X.Xx including pro for synergies asset these amortization.

to we our by current turn, all raise the We ratio which equal, net to X.X year. expect our returning would, being before next this on hand level over leverage expect borrowings transaction under ABL, with approximately our and from fund less briefly cash else debt than

close We are highly be very of pleased the this nearing to transaction. strategic

categories, billion, the have price million our third me product as to our steel prices. pricing at X. product an move quarter growth resilient let with that, fiscal helped all for of lines, assuming Starting $XX of for our sales to coupled X.X% quarter. of results current for been our deflation, Slide sold with With offset all major $X.X year prior nearly estimated across on volume Net increased to volumes

mentioned, harsh our to sales operational overtime demand projects territory also some delivery our as of estimated Also, project quarter. moving This forward. execution, our million service fourth slowed fiscal teams across and net added customers' $XX as hours weekend an forced temporary in pushing conditions J.T. of inefficiencies much our keep into delayed and weather mid-January,

single-family multi-family remained while during around and solid the activity quarter, sentiment demand levels the improving. is Commercial

our Our recent acquisitions, EMJ and quarter's to such also Tanner, results. contributed positively as

flat market with a X.X% single-family sales total essentially year-over-year, declined year ago. sales resulting period residential grew were From while perspective, sales multi-family X.X%. X.X%, dollar in end the compared decline same as dollars dollars a a sales consolidated of Organically, U.S.

Commercial year, sales were same positive X% X.X%, steel And U.S. XX.X% deflation. period volumes price by increased fourth Single-family significant with our comparison multifamily X.X% were $XXX.X up turn expect growth, year-over-year. down dollars given as to last quarter. we dollars based this of increasing the volumes volumes X.X% sales over fiscal the muted and in commercial sequential current million run on were sales rates, Wallboard and our of for only respectively. grew

the nearly a flat in with were comprised price of a X.X% wallboard mix volume Organically, prior increase year period, with third and quarter sales compared up component. X.X%

a year from with now realized and Overall, For in resilient, quarter, consecutive average pricing second to quarter. wallboard single-family wallboard wallboard per down fiscal $XXX third slightly X,XXX volumes, ago continues declines flat the was the quarters. for year-over-year price feet, be X despite our

and our With fiscal quarter. anticipated least price we wallboard improvement developing expect in the year-over-year, slightly, single-family and both for space, a increase pricing sequentially renewal negotiations, continued to at improve for fourth of

Ceiling in Ceiling a grew benefit sales from in the were mix. decrease up all and volumes, a by price any increased mix. in price as benefits X.X%, X.X%, of of from with were increase $XXX.X sales offset quarter by X.X% volumes slightly the offset X.X% million Organic

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

While XX.X% upcoming and multiple Steel basis, price of sequential a manufacturers for year-over-year X% down were prices framing Framing have products issued increases. notices on

expect the for fiscal declines we moderate quarter. result, As continue out fourth XXXX, we with sequential a to our improvement for pricing finish to some in year-over-year as expected

element grew $XXX.X particularly priorities. EIFS total Insulation quarter Fasteners, of of Stucco year-over-year of on X.X% for to representing in a of million be strategic Products and Complementary & this for through-the-cycle growth X.X% basis, and sales our an Complementary Tools Products, consecutive for continues key organic quarter the XXth and Expansion the category.

and organization advancement the these organic promote to desire We practices expand purchasing lines, product inorganic are sharing our across commercial both to the means. margin-accretive and this best category building of on for

and as realization to improved million, points volume turning quarter. targets, dynamics a in was for incentive highlights XX% by $XXX.X of incentives. margin steel compared deflationary incrementally basis volumes pricing. Gross steel purchasing XX of year deflation, partially which Despite the year-end attainment offset XX.X% of X, our mostly associated the to up Gross from benefited of Now profitability ago. a Slide including calendar profit the the

for cost million that prior million $XXX.X recent were of nearly increase expenses million quarter, administrative quarter, to newly related the an the opened $XX.X and over general was primarily Selling, mix end remaining locations. serve those acquisitions The demand. by and by increase $XX particularly and of elevated year volume expenses, organic labor and and greenfield multi-family of increase driven higher commercial to market the other high

was impact. a steel And sales the leverage for the as points XXX price from impacted points basis associated had quarter SG&A reduced estimated XXXX. percentage net Along points. XX.X%, deflation negatively just from delays an of operational of of noted SG&A items expenses, of revenue I weather-related by revenue the increase XX inefficiencies with basis additional unfavorable and fiscal an basis third XXX SG&A

points a XX.X% Adjusted sales in percentage from year the SG&A as expense net XXX increased XX.X% basis prior quarter. of of

Adjusted compared decreased $X.XX million to X.X% million decreased XX.X% or ago, diluted as income of million $XX.X year decreased adjusted net or Following, of for share compared XX.X%. income share with per net to quarter with a million to EBITDA and diluted compared to year's quarter EBITDA ago. expense, higher third level margin or of per a XX.X% XX.X% and the $XX.X interest $XXX year $XX.X $X.XX last

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

debt was debt maturities, year X.Xx improved EBITDA near-term the no our have ago. We of the net end from leverage and adjusted a at X.Xx, quarter

before leverage towards fourth Kamco current motoring our approximately so. to next XX the the over debt level closure, net Given the back expect with X.Xx approaching months or of transaction we end quarter

annual which the after terms, successfully prior interest million a end Term a XXX, our of quarter, represents opportunistically as annualized the our repriced Just income. third net to improvement, $X.X SOFR million to or savings expense at a B we plus $X.X Loan XX-basis-point achieving benefit compared

with XXXX, loan prior agreement Our consistent in May its will expire term.

to Free quarter, cash For year. million $XXX.X was same $XXX.X activities year compared million was operating a the by provided ago. million last flow to $XXX.X the for $XX.X compared million cash period

we year, full adjusted flow to of the approximately XX% cash expect For XX% free generation of EBITDA.

a of compared $XX.X million expenditures to quarter the for ago. $XX.X year Capital million

million $XX fiscal the year XXXX, We that stock of will to million purchase had and million. XXX,XXX expect the continue million at $XX.X January share We for $XX expenditures for to full $XXX.X authorization another shares approximately of capital repurchased during be quarter remaining XX.

structure, balance sheet, maturities the for only to and We Moody's the this grade. and was business an us an the have no earlier BAX, priorities. providing our GMS a capital effective our investment one execution strength Investors foundation solid below by health of near-term on balance attractive strategic with month now sheet, of our of Service putting notch Of upgraded note,

favorable additional to Looking allocation forward, leverage conditions market in our balanced expect opportunistically we repurchase capital approach to intend invest to we business, to as continue the seek maintain opportunities to shares. and M&A

operations as of while to for for commitment to to exceptional flex drive all service. our their team demand improved efforts maintaining over time their and want profitability, levels has thank remarkable I our shifted

Before to items. X of fourth our turning J.T. outlook provide the me quarter and over projections, to a review highlight let housekeeping call

transaction. please the provide that are potential fiscal benefits XX quarter the during second, days will First, And XXXX year J.T. fourth compared that note from period. prior with exclude the selling XX Kamco there projections in as any the of

part add month to of closes, likely net we EBITDA $XX during quarter. million fiscal transaction few full Kampo the of $X GMS in as once next with However, would approximately adjusted our for in days, expect approximately $X.X to the each sales, million fourth million

Slide He that, will on start to the over J.T. now X. turn With I'll call

you, Thank Scott.

GMS. lies likelihood spoke are for XXXX. ahead by in we call the our a commercial calendar On about December, we during we what pocket believe in of air sometime encouraged potential activity forward, Looking starting

to eventuality still While in road appears have be down severity. likely at the and it less expected some would both and than further we duration likely point, pronounced

is infrastructure more stimulus QX conditions of loosening commercial our economy, myriad interest that our as of quarter. previous indicate provide half risk loan contagion U.S. of assuming lending the near anticipated, previously the would a the broad levels and optimism back And in in similar expectation than of still in and in term, the the the commercial rates strength present large-scale The of backlog reduced very programs in defaults avoided. activity XXXX

the with high markets, remain to February part due volumes commercial third of albeit other Our our commercial, a not was quarter. work solid, particularly the across only products. that for end demand our be Also, steel proven end weather to in delayed at strong has month, for but

XXXX. the we calendar and improving, to of for show full year-over-year expected is demand year Single-family improvement

multi-family, backlog the and drive a we its next current for do to at reduction For so activity, expect despite in couple quarters. of construction it starts, to continues least

Given we backdrop to basis. to on fiscal be this anticipate high single mid- up commercial digits day quarter our volumes, wallboard starting and for with per fourth a

wallboard digits comparison. tougher Multi-family are low grow the will if wallboard low are period which, volumes wallboard represent digits, facing volume for as single-family compared to expected progressively with year X.X ago expected years. the And be we single are as volumes positive realized, single-family year first single much up comparison year-over-year in prior to

with up for volumes low of year. Wallboard with to total, last as currently quarter per to underway. the In Wallboard single Pricing fourth price expected day is compared increase digits remain expected resilient, negotiations are be

fourth be compared we and ago. the such, to a single expect in quarter, As year sequentially for our both wallboard as up slightly low fiscal prices digits, to

solid our mix. volume low to mid-single-digit demand and for day a increase per market, mid-single-digit for given end expect in increases expectation we and year-over-year continued Ceilings, price of In commercial our

per demand quarter. fourth in solid, earlier, the up mid-teens stated is day I with to For the volumes expected steel framing, for as remain

they decline prices year-over-year last a a basis. expected for stabilized lag year's appear per in teens level steel now, on in to have our with the framing day low still While

on factoring were mid-single to Finally, net as delays, expected basis ago. and XX, compared All compared year for that anticipate the steel fourth $XX per sales as grow to an QX in dollars complementary additional the deflation a are per pushed our in with net to in, single digits pricing shown ago. Slide we with year-over-year day for sales on products including year increase a into weather as high sales a day due expectation of approximately digits quarter million

will a deflation price steel as an XX the estimated that by points. expect also negatively of basis SG&A impact sales We percentage

saw QX associated XX.X% we incentives volume when margin for For year-end new the component gross we single-family to quarter. approximately fourth the mix, benefits be as in without as to our achieved and a our margin, of gross we expect tiers with increase begins

EBITDA adjusted $XXX in Altogether, for the to million million is $XXX expected quarter. of be fourth to range the

likely Looking ahead reach will backlog. completion our we what remains the of portion single-family, dynamics the of for end fiscal that substantial calendar on a building again QX XXXX, believe construction to with by we will shift while see strength of multi-family market

are that at similar of commercial currently quarters. are couple levels We reported we what activity for to to the next least with just expecting continue

of Given serve markets, our as a best to is needed flex shifts balanced end ability demonstrated that, team with our and mix our customers. these has ready for expected to

for ready us questions. Operator, you to for we the Thank joining today. are line open

from of David [Operator the question Instructions] The Baird. Manthey with first line comes

And be quarter. to to want year-over-year J.T., have XX the correct? just Is if quarter-over-quarter. quarter single that you wanted per and X in those thousand up wallboard, that the I said also have low I just to fourth digits check expected check that fourth think facts. it right. I last in I you I

just you price volume or Are price? talking and

talking just I'm There, price.

Yes.

it number improve. expect see be up we right. expect to that to So to I'm sequentially, year-over-year, slightly. was we it if quarter looking And

X is X a we the so ended higher to quarter February closer at at just And XX. XX. third X tracking XX, and roughly

customer Okay. in, those effect already was the that weeks -- increases Yes, fairly that an X right? here given the reaction seeing good, must February is question to just be you're

the are I the moment. slightly increases, prices of are never are to at price is customer where reality parts good better able to mean we reactions but Yes. market there the get

it. Got

[ margins, then mix a negative on to positive And second just ranks your for question, terms, operating And steel us does gross where although -- have lower you rank stack it's can product your your pricing revenues in other steel relative segments? segment Okay. margin? ] and effect remind

gross It's -- third, are it's but margins good. pretty

close very percent. then margin the is actually this the complementary ceilings in gross So at gross of to products, margin wallboard, wallboard steel, And lowest percentages. point

Okay.

gross effect margin with steel that the in think actually accretive being slightly So when you that? the mix, down might of about be

I all right? in that I with the it volume yes, -- growth mean But the mean, significant. categories. be other on dollars the growth, sales though, depends still will pretty slightly,

points kind basis maybe, XX lot. a deal, of it's right not the MAX So

the Merkousko from question Next Stephen, comes line with of Noah Inc.

Is of wanted of again, term to calendar single-digit about the encouraging strong here really as as price I should to I corresponding got fiscal single-family single-family. year terms the to finally But with here continue think XQ X in that to be some to see low throughout that we kind see of quarters? first, to price we ballpark in So you to improvement that next guess, look growth, longer good touch we seems on on think wallboard maybe volumes. I just 'XX, a holding the think kind

you're yes. And the dependent the it's in fully strength on say, I market. would right, single-family

some point, And see you single impact as that on see more -- mix just to mix you even that maybe as up a negative impact follow consider family.

That's right.

your around commercial last really All for me. And one one like commentary right. improved. Great. sounds It has then

indicator hoping as markets look a what The little leading still specific you're within detail of point not-so-rosy picture kind get kind Just end commercial, forward. that to is seeing there more on we bit a of strength?

slightly driving what's understand differentiated here. of your So maybe kind view help us

that you a ABI, the look on huge and think impact look you of just the the at purely drag. at it's if ABI multi-family I

in kind to is So seeing of decline, multifamily you're seeing already headline multifamily bigger much business, and we've what our decline, accounted for XX%. a expected you're XX% that

back half. for accounted the in So and expect that we've of kind that

would that, not seeing as you're categories huge strength Underneath in us for those earlier. I ABI that a of a about lot it's headline talked So indicate. drag

chip car plants all of of seeing supporting You're activity, and out and a infrastructure there. that around lot project all the mega plans of

seeing on. You're with particularly in in in no centers, medical, centers, seeing this down revolution, AI right, strength data data you're strength slowing going

today lot to And strength a commercial a having think of categories probably been hard being the So a drive have continue tomorrow. mega I lot strength the smaller really the the that that's the driving projects time offset funded. of

All said, with morning is that already. guys the probably at this I are me watching because that you PCE out being the the expectation that's don't phone probably have my but moment,

with do medium create I that and being down again, Fed So environment, commercial is of June that, the come situation tight loosening I think expectations would rate commercial back for a this that funding think interest most start facing. rates of the this small funds that the

already for do And And in moderate think to is the we and pipeline already think really that is large the hopefully, half importantly, see funded, But I'm those that activity. going more lending commercial it's important year that's of is to of rates conveying and improved to I continue. the environment happen, I back happen. that's see going into part interest what commercial we the this positivity

we'll come all and I be things fine. together, believe Those

the year, think to quarter. probably later probably be thought the as have would last will It'll of severe as I it like said, it at end decline. air the in we be possibly pocket, that, will be it's but going not and an I

D.A. Kurt Next Yinger question line the with from Davidson. comes of

decline look big mix I QX, If purchase factors XX expected Or of bit other any morning, you, single-family in that guess, there off within at, primarily that's maybe falling with we in of Thank and there good little margin kind is incentives are Wallboard? a that the expectation? dynamic basis Great. gross everyone. the point

It's had of We the We the see quarter. fourth surprise the don't goals expect a that pleasant in probably to of expectation. happened No. that again. these year some basically in last achievement

really and biggest of the one reversals that's from So year-over-year. quarter-to-quarter

Okay. And then of sense. a bigger bit a Kamco deal. Makes is

you I and of just guess And think from leverage hesitancy? bit? comfortable you if up quarters that net integrate the a deleveraging talked where going that opportunity stands? work for pretty as next X.Xx. you the right to does about M&A as wouldn't leverage appetite You impact about feel much be couple that the still down that, Or over there comes net up, very do with under

Yes.

to it's I X.X. wouldn't clarify, First say under just

is sort of to But our X.X appetite probably number. don't think it oversell what do be to I at able there. doesn't the better we'll I want lower all.

we we're we'll said, deployment to on things based it's pedaled cash combined As able the and the these years and our be of over flows all to initiatives strategic levels get back of on business doing, current still time down. that

we our So leverage. are really debt comfortable with

strength As we an Moody's just got the upgrade our noted, just sheet. balance from we based on of

doing and positioned think So strategically. to where it's we're we're what a content gives with it I us lot platform of do continue to

Securities. the Next Keith Hughes of Truist question line comes with from

Okay.

fiscal but not Kamco. does questions, quarter, for one. that correct? Is The guidance one assume of couple fourth I a quick include that Just

Yes, that's correct.

kind And you when close? update do you of expect have when it any to

days. Within coming the

Okay. Short term.

up run quarters. past the compressing term? your should the Is single here -- in then on that's Is commentary something in periods? back And something specific is on going Okay. that's mix that you on change going happened long to know some there's the me for that well, coming something going commentary there? in stuff the AUV. there It's this Or let

the I we mean more the If then more is office on right? just of related, the or individual the market quarter. get mix mix low we with up for more end, We down. more or end education medical it end then get that just depends increase. It's activity will

volume quarter mix when and having which we think gave this a up. coming pricing is more up guidance I the normalized talking we're about there,

mix let's the So we're not haul. of just a It's dependent. long really expecting continuation, project over to in say, decline see

me, final just in next growth just then -- question. you or on commercial view remodel you excuse well, a Are general. the the view of view so? in that an constructive sector -- could enough And seeing actual of Okay. for year generally The be that, short-term office commercial activity

whole big to this office pressure on. to cheaper whatever Is in it continued move feel stuff an Is going is -- that big construction? that for is and offset price all in new enough enough office that's it we

think lending in something of in some move as not some those -- but certainly those price properties lot resolution hands, 'XX, what in happens, say I'm some the in 'XX with not buildings. have I will would or these huge late those It's if considered in it's we're right, do when that rebound be not properties well owners maybe wouldn't calendar upside. year, in that there regardless empty and/or of some that of a some a the us. forecast around will chatter, activity we 'XX realizing there our with But of -- in that's yet, this in do itself and out positive good if larger situations even space XXXX markets considering is, those be office. the in that optimism. of the And as that new of change for that my I

Steven comes Research from Ramsey Next with Group. line Thompson question the of

just maybe if to elaborate products, margin curious or mix get on on look or that bit you a color to yours. the if little complementary hear it's enhancement is Wanted to the profile shifting little more growth there like it's margin way is to deal. with if more GMS there some volume to Kamco that? more opportunity I'm a Good similar their any want

of It's all the above.

those areas. there's that in say would opportunity I all So

of overlap purchasing the not today. We opportunity in of of little all don't there's don't here. any geography here. G&A, at unique have a G&A at businesses because synergy think much lot a I we overlap all. artifact, have our bit

But some have comes the Wallboard. in the out side. drive areas. that we also believe, to also insurance We like we on and from help So we in more savings be the smaller called respect, volume specifically. We enhance mix, to wallboard things able the but think ability, G&A that might

too, as overhead of add Just location We've in Bronx well. Stephen. the got margins those the

overhead business grow, city. get of exciting air the borough So that And for that's over serve we'll out opportunity a profitability well. the those as cover an that revenues the new overall of to revenues of will help costs as lot those

the an well. one call in up that short being that on very Well, time. that exceptional greenfield Kamco ever that's a listening I anybody period very, out call wouldn't I open Visits from we've Yes. had seen facility. is of there, as

acquisition, then CapEx. a on you the that? if And usage time? XX% bit usage out curious Or over XX% over X to think next to I'm you years XX% Slide repurchases, Great. to Okay. capital just mix over something morph the similar be that cash foresee X, Zooming could the to X-year that

and And the engine. we've mean a M&A it's got I'd would a also backlog. see I it's good M&A I going Well, It's accelerate down, a rates anything little And probably towards to expect market competency lean a moderating to it got guess -- with else. if coming going M&A for We've strong the think bit. more than change, core us. to

probably more So towards M&A.

It wouldn't directionally, shift, be significant maybe XX on. X spot of that's to a points but percentage,

comes from Mike of question the line Next RBC Markets. with Dahl Capital

minute. a just line ask also and out for about cut wanted I Kamco to my

of category market business, mix just even of if and their the but product terms us just what apologies asked end standpoint? help So in current understand from a you an is can current mix this,

And versus you then of on are recent slightly had revenues down provided. kind the numbers XX-month 'XX prior trends. trailing The the

more little upcoming in so trends a expect what for organic on would and organically And you color currently the quarters? the them

more we haven't closed. weighted are They again, towards --

out distributor. sitting all from an are more an in exceptionally of there me, front but weighted heavily have ceilings. best they the details perspective don't probably I right strong are -- They an excellent ceilings. towards for the in independent So market ceilings

lot a and you, weighted and more versus a in be underweighted couple would underweighted us in close the on information I it days they're facing, -- sales, and it's complementary balance the more a in tell to next us. steel guess little their we're we'll Wallboard versus conditions but The a get primarily. that of ceilings. And while believe So there same towards little

And numbers. That Okay. sense. makes at then the looking

legacy have it So And EBITDA envelope, kind $XX to expect of might get again, been around suggesting suggests like their but kind if is post-synergy your at up it this of of look million. multiple, you to back I mid-XXs that million. the you're around seems

have insignificant of when the of magnitude synergies you geographic not current terms overlap. That's in don't

of that you it included level. greenfield contribution us in articulated coming know be be give ramps Sales the to size greenfield a they're more is high relative synergies? as where we at I to color from as on little number, cost you a same and legacy if expect So location then branches? the the Can should about synergies? the And about their

the And beautiful the synergy credit we've great well very expectation answer large building, of them operational given is facility. Yes to our number. capability. a is to stocked, there growth facility It's in yes, an that and included the Actually, question. last outstanding it's

you A cetera. effort and Bronx, et years running investments, facility can get a up trying effort, to and in that through it the lot permitting takes of imagine the of

that So we opportunity. feel fortunate about really

significant is several but side selling synergy, on side, wallboard as opportunities. So another both other there cost well also the opportunity cost on as the product

contributive little majority you synergy to the as in the the the interest well things and And again, look got growth piece, more synergy, that and were purchasing like of if and that's bit which, So like leases large as the in we've things there G&A have we a advantages expenses Bronx, the at least that. in market. as of overall scale is benefits

a significant amortization years. too, mind, we in also because is tax transaction, which in from for XX an that us, it's the locked asset next benefit Keep essentially get

And almost more enhancement. price so an about think versus as -- that reduction EBITDA a in

one I in. one last if all Okay. And That makes just sneak could sense.

the one, how for best timing, ramp? we ongoing is the synergies, other of think of but savings In your terms obviously, tax to timing about point, an realization should that

the in growth the It's fairly over in right? quick, course we'll purchasing Well, that. of the plus, doing operation. term I very happen Growth next the a is They'll Bronx. the Bronx, in startup mean, near are be quarter synergies

XX of of kind the that's end talked to the tail about. So XX we months

So benefit have tax kind of immediate the basis. you a on

synergies longer period then is time. in one of the immediate ramp-up purchasing to G&A take an small the immediate an the on going basis, got and the that's Bronx basis more You've savings on

ramp-up as cross-selling The bit place of foothold Wallboard get well. and that little of Complementary in to a will time take

line of The from final Loop comes Pacheco Zach Capital. with question the

in wondering slowdown the show backlog any Wallborne in on are up multi-family last was how current demand? in multi-family before your I the to long expectations begins what

third calendar to expect start soften. see quarter, Like I'd to things

couple to I then And said ask in just seller provide M&A in maybe wanted of just Understood. a forward? if of days Okay. on know any or you you your here, pipeline, moving the improvement sentiment but expectations guys' closing more on kind color

our solid depending expectations cetera. is kind of our mean of on it strategic the location. is with the pipeline multiples. to us, normal of that and market sellers' Bronx nature of et one But because I This varies, range unique

energy building Really time and strong there, here in in but our strong the well. very as also up Canada, lot really leadership where we're U.S. a position, of spending

when it that. of shortage no So to opportunity comes

you. This concludes today's Thank teleconference.

disconnect this Thank may at lines your time. for You participation. you your

everybody. Thanks,