TopBuild (BLD) 4 May 232023 Q1 Earnings call transcript

Greetings, and welcome to the TopBuild's First Quarter 2023 earnings release. [Operator Instructions] As a reminder, this conference is being recorded.

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

morning. good and you, Thank

On the Executive President Chief Robert today and Rob are Officer; Officer. Buck, Kuhns, and call Chief Financial

company's posted as our including forth press to remarks known remarks those formal include forward-looking summarizes set our senior unknown in SEC. are PowerPoint as filings will at release have subject which website of that with on our morning's risks and Many in topbuild.com. and the this statements, presentation the well comments We a management's and uncertainties,

assumes no isolation are that be of will discussed company intended not as note subsequent obligation The be supplement to considered call measures for substitute a some forward-looking become events. on in to be update a statements results the that or of to prepared this or financial non-GAAP measures untrue in GAAP. accordance basis. because on non-GAAP Please with The

financial measures today's the and can We of to quarter presentation, website. found most have also in included measures table which be GAAP these on comparable press our a first our reconciliation a in provided release in

the turn now Buck. to over will I Robert call

Good you morning, us joining and for today. thank

that pleased good with Revenue to expanded adjusted Both XX.X%. solid and distribution off We to installation specialty start margin performance. our operating XXXX also increased our basis first a quarter adjusted and margins. to points are a X.X% and EBITDA report XXX is expanded business EBITDA segments,

integration suppliers our with our installation markets, efficiency advanced platform. our direct performance all both operational with command industrial, result commercial into and customers work approach a we the and and on and our end ERP model diversified strategic business, our excellence; quarter-after-quarter and support our their acquisitions focus residential, of our strong insight branch strong to is our facets Our the business consistently and specialty operations of of onto and advantaged teams, our distribution, hard have partnerships and uniquely

and of of in from conviction long-term that are multifamily supply homes of benefiting by supports customers improvements we steadfast This the fundamentals homes under interest. large builder is and new single the terms and are encouraged buyer backlog supported limited favorable and the construction, strong, of see existing both housing industry our business demographic installation that trends. our Our to continue

installation are before type an in either very also our is Our business residential project. increase and commercial to able benefiting installation branches most light and We've light from similar work. commercial that mentioned are of perform of

Microsoft City numerous also branches expansion, secure initiatives few. The the commercial and light and have a in work. new corporate encourage heavy opportunities just centers growth commercial and new to them projects, a Airport tools are additional and and Our Salt name long-running the large Dome both salespeople YouTube Lake better our involved help identify including support resources we commercial and branch providing heavy and to managers and been for this Intuit

bid these proprietary then lead our improving opportunities, showcased of and construction which commercial sales data our hub cloud-based and Investor leads pushed project aggregates is Day at force sales last rates. One This our are win to May. out identifies productivity app dramatically tool

of efficient construction productivity sales use industry, which labor enhancing best proprietary practices, results. through continued financial highly the tight of focused remain better management remains the but tools branch labor We process, Direct on drive a technology the TopBuild. for and a and within sharing strength is of all

differentiator to gives us is competitive and and advanced a ability our addition, time major a our among ERP in the monitor us branches. In advantage. gives real labor system share This productivity

our contractor and mix customers model down brought the our residential diversified in X.X% to Looking volume volume industrial construction channels. stream multifamily. was and at our business. under specialty our distribution a units from levels Offsetting sales sales of has Overall, commercial a increase and distribution declined as increased shifted distribution decline X.X%. in business of Residential inventory solid demonstrating smaller the

a industrial projects for semiconductor alternative teams including XX. Phoenix. major distribution center Gigafactory Marathon specialty Other supporting Our manufacturing manufacturing number facilities are include in of in and fuel and Austin long-running projects, the Phillips its Taiwan Tesla

Looking ahead, continue these and large to we expect commercial to projects. industrial support

North Our leading product customize that recognizes us our customer type we of engineer fabrication base of mechanical in facilities to solutions and customers the XX require. North and are insulation supplier any America enable across our America

$X.X share market, both of growth, see market we addition, opportunities and with In this organically through fragmented for great billion only XX% very acquisitions.

following the We either markets the or industry. have in the impact commercial industrial seen turmoil demand banking in not recent on an

installation we and early On projects side, and bidding already late robust, the commercial are XXXX. our into backlog XXXX remains

a for of business. opportunities we recurring diverse the this mechanical also in lot very on across been commercial projects stabilizing for the our We industrial giving markets. and specialty distribution, repair and serve distribution industries, end Maintenance major several work and the revenue commercial insulation. about planned being a stream see for scheduled, optimistic should For and specialty industrial as revenue both growth remain has many sites driver demand continued

there down as the fiberglass. industry traction. number to of batts during is remain to for have December was be expect both did Turning year. maintenance expected lines loosefill, and Most increase we Supply in for bought some production tight to of an cost which you know a

of continue Acquisitions $XX be We overall our business. #X will acquisition allocation momentum SRI of key priority first to in additions annual and our remain capital ahead, Looking to completed one expected revenue. contribute quarter, and is strategy our growth Holdings, component which our the approximately important million a of to

and a a in presence installation is Ohio strong with Michigan. great Florida, Georgia, SRI segment to our addition

and chain, our practices sales logistics and As and practices empower immediately all optimize office to the locally integration share team processes supply talent. procedures, technology to we our onto acquired labor leverage great best and acquisitions productivity, incorporate improve eliminate redundancies, works a with do best upon to close, streamline and company operational and fleet back newly

specialty our scale, enhance will are installers customer distributors expand companies, targets base that Our our our for returns generate growth strong high-quality installation both and and focused shareholders.

these $XX.X opportunities have meetings, market share. to have answer and the of of we The have terms target expand addressable and X acquisitions in this We some is space which In of our all have installation of we expand. commercial long in pipeline through end residential, a a a a in of to they presence we combined represent industrial. close both which deals of so you year. serve: of organically our Combined, total markets number plenty white over to no. if asked XX% billion, mix simply for and quite of the business term. see robust recent a prospects over expect We

has margin Before and our to important turning execution EBITDA remains most driving operational component of of of our point emphasize to and excellence one Rob, the over of XXX-basis call adjusted great first our focus is key XXXX. I quarter organization and expansion throughout areas want a since been that

as and by best with are Branch branches, at our build leveraging locally P&L efficiencies operational We efficiencies, processes supply XXX to leaders their procedures. our empower labor. At local responsibility. their include management, teams plus distinct corporate level, business entire installation achieved streamlining network our sharing across run back-office the operations and, to and practices, direct full chain branches leaders sales

culture we inherent in TopBuild. Rob? improve’ ‘drive Our to everything do at is

Thanks Robert, and good morning everyone.

of grew evident execute results. Installation The and a As high level, margins Distribution. EBITDA strategically at at generating Specialty both expanded we team as our strong to and Robert strength model noted, our advantaged was adjusted sales continues

saw we our addition, diversified all across In solid growth sales of end markets.

update quarter the with our overview results, I you on first of our an will Moving sheet, and review outlook. start financials, our balance to XXXX

a to $X.X strong prices. Robert X.X% to volume Distribution driven discussed installation to prices with net growth segment higher First and in decline billion, residential offset Distribution's earlier. from which million. Installation's X.X% sales $XXX.X our from Specialty and increased by quarter $XXX.X increasing selling higher million, volume sales driven sales XX.X% by were were selling Specialty sales sales increasing by

Our adjusted our for This cost and driven operational gross efficiencies, XX.X%, XXX-basis in first managing the fixed expansion. leverage, success by continued quarter was point a was margin inflation.

XXX-basis margin was improvement quarter to XX.X%, to a our adjusted quarter $XXX.X and million EBITDA XXXX. increased compared adjusted First XX.X% point EBITDA first

First basis. quarter incremental was branch margin same and EBITDA XX% a on XX%,

XX.X% quarter XXX-basis and of to expense $XX Distribution as points Specialty a XX.X% million margin million interest First $XX segment quarter in the our result from EBITDA higher Installation and respectively. Interest increased adjusted rates. an of for improvement was points, primarily XX-basis segment, our variable for first

average current maturities of cost X.XX% and approximately no with XX% fixed Our debt with rates is XX% until XXXX. approximately upcoming variable

and million were and Net quarter acquisition to costs. related adjustments First integration were Income $X.X to

First earnings per quarter prior from a year. XX% increase were share diluted $X.XX, adjusted

Net working Income year. was by our This cash Moving $XXX.X sheet to calls, XX.X% quarter driven sales a operating mentioned this quarter end as cash was the previous million increase are we million, by flows, first XX.X% in year. of in and, of an in the and I've prior XX% Capital flow compared Working improvements of to was $XX.X range and capital. targeting balance the on XX% to in

below X.X% the quarter quarter. We did in and long-term revenue, slightly CapEx any our in the repurchase $XX.X was shares guidance. million, not of

As million no debt one capital to was Total Robert with working trailing We mentioned, prospects. There priority significant of including debt EBITDA. billion. adjusted debt allocation quarter a acquisitions remain balances first of changes XX, and March revolver at our long-term and $XXX.X number ended remained structure pipeline million, leverage under million. short-term our our were $XXX.X and an outstanding and $XXX.X of accessible of just XXXX, robust X.XXx cash we net months $X.X the are XX on liquidity

guidance, on are XX. for to February outlook quarter Moving fourth provided we XXXX on call reaffirming annual our our

are billion to in EBITDA the of and As $XXX be expected a sales $X.X to be $X.X million. adjusted $XXX million reminder, to billion total range between and

to of and slower residential back sales year. in digits upper the to be the decline expect that will to continue half We mid single single-family activity our

any to public the acquisitions Our expectation recent does markets to are outlook the digits. and to builders. low commercial expand industry This we solid end for industrial share repurchases. of sales optimism long-term heard believe housing not include fundamentals pleased are We many by have by for our or potential is the expressed mid-single of and the

bullish also in and are on long-term commercial opportunities the industrial We end-markets. the

leadership ensure Our tools, TopBuild will that technology will environment. outperform cost Robert? team, structure flexible to and in any continue

avenues year our take of many the model opportunities advantage growth. demonstrate see unique to advantages the ahead operating multiple in We of our for and

of and areas at opportunities gives enables on plus system our control our continuous point Installation Both performance all XXX branches. Our and of are in the performing us advanced improvement of into cycle. Specialty every Distribution maximize to in us our and each insight great company the ERP day-to-day real-time focus well,

TopBuild the the evaluation, and national gold to Finally, standard in industry, our participated be company continuing Choice Work Great of the survey in of to Employer rankings. drive in our Places

recognized where positive organization is Places TopBuild report as and to direct strengthen proud our TopBuild and everyone to opportunity company fostering and organization. full from The every feedback commitment a Being that, we to employee is a diverse the of Work direct day. are their TopBuild Great feedback, recognized ratings to which entire realize excited on We potential. speaks based to a the Great our employees workforce as culture Places the a to inclusive Work strive has endorsement to

TopBuild for of all my thank I hard their dedication. teammates work and

working to focus and service on growth value, and to our key safely Your the customers to day quality success. every deliver our continued is continuing

[Operator comes Bank. Instructions] with question Ahlersmeyer Deutsche Joe first Our from

Joe good Ahlersmeyer on the the quarter. And in congrats is Deutsche This Bank. from results

Thanks, Joe.

you. Thank

you starts context quarter data revenue half raise could decision a family back And industry and the strong some not if or expectation commentary back your to about to given be whether single-family slower just you supportive start by the a for broader specific with expectation? the sort in talking of a offer the specifically, of single stabilization? and guidance here outlook that maybe or completions single-family could half, Maybe

is this Joe, Yes, Rob.

told tell about a of ago got out in half where weeks The together. lot we expected back QX we I'd from of you, the when there. came we uncertainty So XX what still right year, you

realistic too, single over So we from of cautiously a for there. didn't family the feel you out hearing guide given below lot the a it's have been need optimistic significantly last knowing we're builders, starts at where But that what quarters, the look if completions we're there. optimism But running. to really X we're adjust

its side. have that there. you forecast to work But system. to to remind uptick meaningful just starts we team, upside I'll So the from a management here we as be going any through conservative in will lean the out historically, the that's And way

So like about the I said, we're cautiously future. optimistic

Joe, And this is Robert.

on of the that. well, on Rob's seeing add what's specs coming like side. the in to from to ground to mean commercial out done and light well. And we're think as more nice has builders, opportunities as what I I hearing job really the seeing the the and other Just to business. team commercial happening field relative point, we're the a industrial

there. going there's think of guidance. to a our And we to point, So signs upside be out Rob's lot positive to that's only

Understood. All you the of just about had rest requiring encouraging. product the Very about think And right. could there multifamily talk been some any discussion maybe year? with considerations loosefill. the more I mix

discuss you for the or multifamily loosefill maybe supply/demand should pricing relative of? aware the to other maybe just So specifically could any considerations and we be batts

Yes.

think -- Robert I again. this is

multifamily to So we does perspective through definitely which XXXX great for XXXX given well. more construction, backlog, require into shape installation. relative that I required a carry product in as loosefill think the multifamily definitely to from loosefill, We're expect to what's

perspective. that from we're great So shape in

bidding have as field are teams backlog thing The doing. that of and the bidding teams the -- the the what rates is great the insight well into as in one we

we we've as half the think, good as, multifamily about we the back piece of gain in and bid work share some we the business. got captured that really good in So feel well what that

question Rehaut comes from next with Our JPMorgan. Mike

below terms is your referred, for an ago. quarter of reflects guess, starts second question about way in side. far, year residential hit, As the And Rob, which residential, think you as is starts the XXX, on I guidance first be will -- down more little for more side. the what single-family on year? a there I wanted a driving mechanical the so just you First, well my industrial around a on outlook to to But bit

upside? would for So expectation in is argument as be more of for the event quarter, starts there guys that say, And if starts, let's third some of year accelerate really of implicit type the for a you progresses? a fourth sake terms in or quarter second

starts multifamily. mean to We've we seen ready think great multifamily, the So Yes. a And The the right? it's at Mike, side. had down on single-family I look as there. this Rob. I strong we've it multifamily important for is and for We outbidding strong. really backlog comment very is single-family slowdown getting been the break data multifamily, between quarter remain

spec mean, were. here the are side increase today we're, right an it's of we backlog be have But I field's side, then start to happy of data, I really given and XX% that potentially like running hearing that cautiously more mentioned earlier, from And the on about the from of So us starts where with optimistic completions year. last work what on And this upside remainder our in we're now. said, below like things. to in we quarters, through are where expect what single-family homes the forecast builders, starts I couple the we the obvious starts, more would last

type So Any what color Or there? starts some before it forecast just question, year? the modest of clear to rest hit reflect of my reflect? Does be I remaining second current levels for does at the your improvement?

it I'd there. we today. flattish direction said, to movement upside out given I be we mean going it's from But have what or there. have modestly in I could meaningful the range out we or be is say like down to up Yes, either are downside where any

'XX. that translate -- of And would How projects referenced as bidding color in of side and any or expect the Great. be level growth? into involvement trends, you given you you versus good helpful the activity does commercial well. various Would then XXXX Okay. thinking commercial there Or any secondly, current 'XX. about expect would on in mechanical, terms

Hi, Mike. Robert.

into there just the future on say, pent-up There's looks. and industrial side. a can So translate out of would the what work mechanical how lot this you I

we -- 'XX, I was industrial, now come, space. recover. and you if the about think both talked projects in a little If those seeing slower about to that 'XX, as think And some beverage things onshoring, we're about food projects, new

that here the But a there benefit revenue, about also that this MRO business, what And lot We work capitalize then there love 'XX. and talked much side earlier. chemical going we're projects We we in any about situation out how some on which see is MRO of the coming other big such side, on scheduled. which we 'XX, that's given big there's refineries, our engineer a that allows into or player so we net is capabilities, on products really really MRO those us unique why there fabrication for why recurring revenue. to recurring

in very can a that outlook mechanical we from yes, tell a have of you industrial side positive reasons. for comments, -- the So those business my

Our Baumgarten next question Adam from with Zelman. comes

kind that's business. seeing there norm? what in from the any of outside you're Just Has pricing up of of a competition residential perspective been the sprouting kind curious

Adam, is Yes, this Robert.

So and to labor that. from of I continued the been things relative that given tightness tightness look, have steady pretty perspective, of think material

also a where realize think the that I chain from think I value in we given are there construction cycle, as the well. builders

of ordinary done field And at job balance say I'd if that price So to as results, perspective. working volume the again, great the out from our stuff I the get value bringing we're and have that think look a you nothing customer. teams well, our to of of walking that for the

also you balance to it. fiberglass on how of just additional side, on of the the That's guess hear. guys Got price the are about Okay. for thinking the I increases year? good prospect Yes. just that

Yes.

As this we moderate year. previously, expected said to we the inflation

inflation there. I think some there's still

public I the some they in from the about also quarter. first think manufacturers, of price saw fiberglass results previous the other you -- talked

it I demand all the it depend the the half starts like look expect to we So to on that back But stabilized. curve, will what be year. think of

from action future the that increase think drive cost any I could perspective.

Hughes Securities. comes question from Keith next Truist with Our

being year you're in about here. digits. And those is to talked differentiation any prepared talked You was industrial you between I mid-single Is talking being growth X% in about up rates? in the up commercial the the low same the there comments the as that business quarter? -- had about believe X first

Yes.

is So Keith, this Rob.

you're that correct quarter, company what's when was strong install talk that's baked business that distribution We a bit. yes, industrial the the digits, guidance. the obviously into front, about X.X% the commercial the on on exceeded specialty for low both being up mid-single So we up overall in first on to it and our little business. which

strength and we So where of really year I model is of to that about the diversified a end with growing. to we've can it really going what and think side markets, our be the a talking this testament show industrial been commercial the diversified business

optimistic a we're back still half, the for the mid-single-digit obviously to we're sticking had really quarter. for year, but So growth great first that with low but

As commercial outlook. the as meaningful quarter far segregating in say, X a wasn't I'd in or between the industrial, the between there our X and difference

roughly One how Okay. on are if And include question that. does The much? other that to, so, you numbers referring pricing?

it glass residential split price, more price there's we down side But Yes, the of on content through Definitely, on don't fiber but price includes break that side, commercial. and the between that. given we of flowing have higher don't residential things. the

from comes Ng Phil Jefferies. question with next Our

small, and stronger and concerns other? conditions. Congrats the seeing of of of highlighted would there. the bigger of on another earlier of problem was strong around some segment bidding of you a that what would have stuff. to out guys lot getting you're all some year. you to versus petchem, terms quarter. the some Robert, Certainly, really imagine there's projects you Sorry, to but beyond, I part help activity. capital, wouldn't curious color this one imagine around labor about smaller have that in tighter appreciate a good move looking impact XXXX much letting the up I bigger on But projects, ability these Can size your the customers stuff kind onshoring, kind little if unpack versus your wouldn't bigger maybe of much big some

Thanks, Phil.

if first, think So do the build I go that that the parts required that to and think piece. things A future, are of of of playing on recurring about see lot and let has we fluctuations spoke if MRO you MRO certain the things some the those beverage. the that side, and mean, I those future projects, projects to about in you're the is well refineries around you to, me actually our right large in you But think relative in move happen are funded some ability of of even about to food the if the well type country. if and

the So that's part positive of of MRO business. that

those run ground. funded into and about projects, the Those new because we if projects, large to out reason -- are 'XX to the work 'XX those those they'll projects. one are most our to use those well relative where you that to of already then comes long-running relative even those projects of that's and go projects, And term and of projects rate think

the So impact. seen we haven't

overall, industrial, oversaturated I and commercial the natural think, to you business have we're the avenues, and there space, we semiconductor mix think that if multiple liquid EV, there. really in And good. industrial onshoring the segments given X we're and could the feel the of beverage kind we across think not think think of gas, about I the really, within gamut area you where from we food even

and So coming. those that's of acquire really lot -- infrastructure a

our like else customers. it signs of signs everyone about also it. watch with but constantly, And obviously, So no in it here no feel talking is, We'll we good far. bigger thus

Can Robert. from great and to kind I benefits? whether going it's builders. year credits any XXXX? then there's That's do that, expect even some color, those of from IRA expand or Act you tax potentially standpoint, homeowner the average believe on an And you uplift the this And for

I think Yes. -- I think they're the about homeowners. mean

our doing specialty especially And that contractor on on may residential. our people about to -- reinsulate, that you customer get drive get that as business our energy of definitely efficiency or -- there. work that think work, some will, if the you primary efficiency that's after distribution look we'll some be the energy maybe of to distribution some So side. rebates, if specialty side, from potentially smaller rebate our an Definitely, doing the and

piece, side, If will example, Airport infrastructure on of Definitely, the infrastructure you some commercial Salt an mentioned other of us tailwind to industrial. types to some play, the into space. from as we'd expect across I some benefit that. given, that think Lake play again, quantify both of industrial But as see those and hard come definitely commercial those kind we about that again, the City projects, that entire nice bills

retooling And great in portfolio to these kind to growth some super. Okay, of to job the avenues. happen of

you, Thank Yes. Phil.

comes question Evercore next ISI. Kim with from Our Stephen

the Congrats all help on Appreciate the and guidance. the quarter.

You made an interesting comment near the beginning.

I environment talking expected. the that said came you overall residential And XQ think the residential, side of and and overall industry's in well your homebuilders said therefore, think you I the expectations. when or with sales you exceeded so were market greatly in for XQ about the line your XQ in the sales, what you roughly forth business, by pretty -- but planning is XQ clearly,

things well. want of we're difficult and spec building, a have lines the which more of bank time bit credit regional think small increasing to may have their shifting do given of just they you as privates see spec may able share open follow-on And a activity you see that of as because you kind market that builders hear balance and the I sheets that anticipating to that, the to is that to you little too, larger that, saw the might a bit So more confirm little mentioned you versus that one to that be I of stress. the the

lead you assume this guess if side is market margin see I shift reasonable business residential to or later the that a I'm slightly it year? to wondering, that of this -- install share lower incremental the might in So

Yes.

on off, I'm I'll on Stephen, this Robert hit comments Rob try it. well. as sure will add to is and So that start some

think stabilize spec mean, piece what So builder that us around sheet large think exactly the your and as seeing support having right here builders and piece the the gain saying out on They'll come ground. absolutely production right. of and I balance home I get you're allow about Yes, curve for are think to we're the ahead some I things of of seeing coming, the what that. that, it. obviously you're I share

our we're from with material too I production share that happens the not shift situation, those margin builders, labor builders. think if that perspective given happens production or situation, the concerned shift relationships with the a

no So add-ons. if and Rob over from that he's I'll any then hand concern QX to perspective. comment, Back got your to

we pretty I in was family. what flat. It saw to single think whenever line, happened we say

was the really, up field strong, what teams talked what really industrial distribution expected, we given is little Multifamily done about volumes, the side exactly commercial in down our residential what healthy have some given a distribution on bit expected, we in we would the the contractors those then by as were inventories of about as smaller thought and quarter, lowered the some in well in play as shift dynamics they we did. multi-family, and talked we came out the thought

The we about say residential a a down we're out work. from did side mentioned perspective. specialty in And made there, volume getting on installed remarks, I'd total, little the Stephen, getting better distribution Yes, a we team like I'd slightly. of expected. on lot a multifamily that prepared great side Yes. job the when talking we're volume we just in add, where I think right, I mean, comment, the

inventory in anticipating quarter. shift the multifamily little share as distribution especially taking some saw mix, slowdown smaller the We with people well less a the for out, contractors in bit of as residential that those had go products,

But overall, right X I things. expectations in So for with the those like quarter. our the said, are line

spec I within there distro. the If comments on sort your up side follow on could that, residential of

if all, a being too resi I'm for low and think, well, in small could XQ your we've then I maybe customers, wondering inventory. whatnot, business you then -- attributed it. think, here too other affects given to maybe me, you about first reducing are single-fam mix side we of how and that your the what those you if -- it from you, be could bit basically and now? about that Could the small talk that great. of multi-fam mix about installation seen industrial level small would impacted right particularly I your maybe would said due installers the high? multifamily sales? negatively? that down wrong, be it that's why you correct impacted commercial I What -- But homes, the to, multifamily inventories within smaller a the residential weaker the be guess was than versus is also that estimation is said was think in Or X%, spec sales And little rightsized the distribution

is Yes. Stephen, Robert. this

which, given all the way, special side I'll the in here. to try industry on the business if the of about execution distribution, you field talking the think -- the fabulous. to Relative So around get residential that by look single those was we low digits, answered stuff, yes,

did products, think team fabulous shift team some the handled areas, results from the in great we So other the on of the other that accessory that, side. multifamily so job a how products,

we side, they're type So smaller yes, get on repair/remodel residential which after custom probably the more the They're maybe distribution that less participating contractors, builder, smaller specialty in builder, multifamily that work. the work. and the regional

are going after. kind what that's of contractor that So we smaller specific

harder side. week's labor But picked around to equipment, fluctuations kind -- moving multifamily. a that, in there amount or the the we like the time you why the for about on side, to install about in of you needed, react when needed of talk it's and of as speak plays That to you the move that If multifamily and that's we're also up material, multifamily, if well share something got amount So able obviously labor about -- us right? material frame that. think I to on think where the we major

it lot multifamily and first there's but also -- light the seen, is has commercial today And that has this the then of then up, you've retail where multifamily above with a I'm a sure coming you for it. work could of as be work it lot got

with due And so the pick have we out will. commercial nice to how fact projects, like playing us if multifamily, across multiple some up it's to you allowed ability of that and we're projects

next question from comes Our BTIG. with Carl Reichardt

for the business $XX.X think the about you do percentage talked side? that being is you What Robert, billion. recurring the MRO of TAM revenue overall

Yes.

industrial about commercial $X.X stuff, we addressable you've billion space. I'd what side. total that our and We is at type call market. probably look about, say published as say, to that So $X opportunity, you the we MRO seen I'd around on XX% the call billion think if of business industrial it,

really capabilities done a work. job getting fabrication getting of and our so that we've -- And after probably good

I'd is total maybe it say XX% that than little TAM. less a So of the

in how tried -- and that think kind after I it and number. sure of just fabrication, capabilities space. is in and we exact probably we're given gain know to taking get how towards the to we've our oriented share that opportunity that, make I

look going I some then, talked you would as that Okay. target? be working number in a percentage then go? think your capital And down? drivers probably to XX% that the are recognize you XX%. of And sales down key number there's What to get do where as beyond target Rob, there? 'XX, the What about to seasonality ultimately you can

range. that Yes. I would still to our say is long-term target XX% XX% in

bit on little a the opportunity side. right the on inventory now lies AR also side, the but think I

things squeeze capital out that and down flow. definitely of potentially to some year, cash here in there's of half So working generate strong the the an back with opportunity free slowing

$XXX year, out be of should we we great the We flow. north stories cash and first of there, have of the cash free our quarter the million flow. was up XXX% flow, for for year the million $XXX of One free with free generated cash of our numbers full

high we and the long end probably year, of middle So we close we think of this that. to good that be but XX% feel XX% really the to towards as about will that, closer term, out

further Buck, Robert closing comments. are time. over to turn for would CEO, floor I at There this back and questions to like the President no

We us morning. for QX reporting Thank joining to look forward August. early results in this you

teleconference. today's concludes This

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