Ferguson (FERG) 5 Dec 232024 Q1 Earnings call transcript

Hello, everyone, and welcome to Ferguson's First Quarter Results Conference Call. My name is Bruno, and I'll be coordinating your call today. [Operator Instructions]

I would now like to turn the call over to Brian Lantz, Vice President of Investor Relations and Communications. The floor is yours. ahead. go Please

forward-looking announcement differ statements and SEC and want today. I call everyone, remind to that today to Ferguson's quarter discussed risks of may Risk section website will our uncertainties the morning. first actual the section be those in subject call made the could Good available our later this web of entitled webcast. welcome page. uncertainties including Factors Hopefully, conference and corporate are The this some issued and everyone announcement risks certain on chance available materially to cause of you've our and in earnings projected, in earnings Investors XX-K. the various our morning, and we that to is filings results had be from review to recording a Form A

company's we obligation as statements forward-looking only of expectations any update and today to represent Also, any disclaim these the specifically statements.

today's on also reconciliations comparable earnings financial Please on call, will addition, the information including measures. those directly financial In to non-GAAP non-GAAP our our most and announcement regarding measures, refer presentation for GAAP discuss measures. additional to certain website we

CEO; the are on to over call now With me turn call Brundage, Kevin and Murphy, today our our Bill the will CFO. I Kevin.

call. Thank you, Brian, and results Ferguson's first welcome, conference everyone, to quarter

some then cover before at and more call the today, end from first and Bill your come I'll by our I'll I the before call highlights of comments by give group the take turning Bill view over questions. detailed and a On our back for to end also customer the provide financials. closing quarter performance to performance I'll market

quarter. Focusing on the first

in delivered line associates with we as our that lapped strong comparables. were expectations results Our solid

helping execution, successful remained on projects make serve beyond and to to have our associates simple, and dedicated Our sustainable. above to go customers, their continuing focused more

adjusted in quarter XX% but in in diluted solid operating of earnings We adjusted revenue delivering $X.XX. share down a a we're profit of delivered decline saw of delivering the we operating of gross modest expected, million, margins costs, margin and challenging $XXX As diligent X.X% adjusted and market. per an managing XX.X%

this XX%, profit X XX% per growth years share since adjusted adjusted sales of the represents operating diluted of and growth first fiscal Over XXXX, growth of XX% for quarter. the earnings

unchanged, as views go are model and you of forward. Bill strength detail walk business this We're Our in through fiscal XXXX confident we in on will shortly. more the guidance our

the as remain net the comparables the And down turning trends impacted X.X% with U.S., lapped broadly have quarter, market consistent were with the markets the to we and strong slowdown prior by performance in sales in by markets end trade with resilience, challenged. Residential serving remained but expected. and high-end new core construction Repair, remodel, seen first as consumer. in residential our area project-minded quarter has particularly down and greater markets improvement the were and maintenance the an professionals in

and manufacturing by such X% other Our outperformed centers non-residential up which residential better and the and Areas U.S. have declined quarter. comprised markets retail. in just as held to quarter. in Non-residential industrial revenue sales such as than activity. commercial half of office residential Overall, areas during over X% net grew due revenues, the data much

over expect balanced time, exposure rates us we positions market growth well. fluctuate While will our intentional end

trade permits new construction starts Residential as indicators year Residential residential new HVAC residential the our growth as XX% against against digital growth such XX% growth across demand to comparable of declined year now of XX% building customer rate prior below weighed has in our on X% a weaker plumbing XX% by X-year a declined prior execution revenue with year. stabilized XX% prior HVAC by revenues but and persisted. a consumer and remained by by grew Residential comparable. X% have as growth groups performance. Shifting strategy. remodel the commerce stack declined U.S. activity driven Leading subdued

Waterworks the activity businesses broadly revenues by combined municipal, stabilization business a of the manufacturing, a commercial, growth fire broader plant quarter and against growth our healthy were driven down benefit against continuation and in treatment general X% as grew work industrial, bidding infrastructure. activity. remains and group green fabrication customer plant, meters trends Demand and non-residential such the residential, a diversified technology, from we mix sales and industrial comparable delivered performance including X%, and flat XX%. prior facilities urban by public XX% wastewater onshoring water turnaround comparable and year of supply of works, and metering soil and Commercial/mechanical

Our to while also value bring balanced maintaining market total to breadth project customer exposure. and of broad the groups a allows end us

Now to let more Bill to the in results me cover you financial over detail. pass

Thank morning, you, Kevin, good and everyone.

by Organic First year. declined rates impact, offset last net quarter were below sales acquisition having X.X%. of foreign adverse revenue revenue X.X% partially X.X% a X.X% with exchange

we X% comparables. further stepped to strong X% the prior over by points of deflation driven basis As was certain down margin QX. certain in XX expected, from categories was in down categories. Gross commodity impacted inflation pricing as lapped in weakness QX principally This approximately commodity year, by also XX.X%

share EBITDA. and the at debt Xx costs to last diluted deliver XX.X% lower points to with total operating repurchase the to Cost net adjusted margin, than prior by lower profit down of year. to year, over operating base $XXX Adjusted XX.X% per balance million was was well earnings prior enabling profit, XX% year. program, has strong compared the of been partially operating compared year, our a contained lower million down remains offset Adjusted or to the adjusted reduction flat us sheet due prior adjusted $XX share impact basis our XX with the

partially to was offset $XXX This XX.X% U.S. operating XX% against delivered X.X% X% strong by top declined Moving delivering on Organic million, profit quarterly operating X.X%. a our from by revenue generated of prior The a margin. performance We growth Net of adjusted segment business another adjusted comparables. results. contribution comparable sales solid declined year a rate. acquisitions.

declined Net our a declined X%, segment, sales X.X%. markets foreign organic Canadian foreign exchange further by on to weighed rates rates soft X.X%, revenue revenue results. exchange Turning and reduced and were also

X.X% have market in markets were the We in than U.S. Canada more non-residential Adjusted QX. of X.X% to improved in year $XX last Adjusted operating from but resilient the trends end profit was operating X.X% million residential. seen proving year. prior margins sequentially those with of below similar down in from million $XX

flow. to continues business generate strong The cash

in As seasonal tax trends. in $XX Working $XXX levels quarter continue quarter, of during similar invest outflows to as capital we expected, with Interest fiscal were had levels last eased. and last investing million chain million inventory line were constraints historical our growth and to through CapEx, exited investments the year, first the were year. supply normalized as organic more we during

million prior As a year. over a result, the $XXX was free $XX increase million, cash flow

allocate of the with through operate net sheet we balance end as strong of capacity to a Xx, the towards ensure maintain the priorities. of range We opportunities sheet. advantage is to balance clear cycle position resilient to EBITDA that to debt Xx. net of intend a and across growth Our X target adjusted capital low We to have to well as range leverage we Xx take

quarter, centers, to in during distribution principally $XX and technology First, above-market million the focused capital the on Previously business growth. we're working invested and we into mentioned, our branch organic $XXX CapEx in market programs. drive investing network million

to Second, we dividend. grow continue sustainably ordinary our

Board dividend, and declared in confidence quarterly $X.XX cash year, business generation. a the Our share prior increase over per the X% a our reflecting

geographic and bolt-on through markets fragmented our capability consolidating we're Third, acquisitions.

distributor We are pleased from have America solutions a a Texas. metering welcomed leading of SecureVision the to in of quarter, associates waterworks during

count ended period the our Our healthy, end we by million via We capital strategy. below range. to XXX,XXX we current allowing repurchases are under shareholders when our repurchase using And continue are target outstanding of during with the share us deal the to leverage we returned $XXX returning shareholders committed consolidation pipeline to quarter, to approximately low our million program. the remains execute $XXX and surplus share to share finally,

will guidance, the Turning last of fiscal particularly year the comparables. be our XXXX year, of to prior We half market, first a for strong our flat reflecting broadly in believe year fiscal which challenging unchanged. revenue is view against

outperformed end decline XXX For points. markets the year, markets range. we by to basis these XXX in approximately We mid-single-digit the assume

acquisitions, of are for one have benefit we and expect tail the additional year. landing generate which a full broadly the to modest pricing from completed we third environment expected just neutral the sales we in in in revenue saw We day assuming a QX, while million over $XXX quarter. Overall, deflation

We continue half the strong with midpoint between for comparables. provide by modest largely to adjusted X.X% margin normalization, first to operating driven reflecting X.X%, continued a range

we and to effective in We approximately stay expect to expect $XXX $XXX levels million 'XX. between broadly consistent invest tax similar million, interest adjusted $XXX expense should to at XX% approximately of our fiscal to million CapEx, rate million $XXX

line and execution believe performance, summarize, So back sheet, we model focused market flexible to in unchanged. fiscal the positions on and with on quarter balanced I'll now had business our you, us and solid Kevin. a of our end remain combination expectations, exposure guidance strong and balance We to XXXX are our pass views first well. Thank

Bill. you, Thank

for quarter. customers. associates serving pleased to with and The our with again in the me Let our unwavering has in dedication first expectations, line their execution our year thank we're started

guidance set fiscal our Bill As XXXX out, is unchanged.

the the and domiciliation release the team. It's States. headquarters ultimate the of have alignment a United next to is of and our will company this in with operations Ferguson's step Board seen enable governance parent company's you the in of As full geography the leadership evaluating logical morning,

positioned despite repair, new improvement. and forward, look we and business with construction mix As current balanced challenging residential well environment, macroeconomic maintenance a we're the between and non-residential,

and to an changing adapt a us have We business to allows base model cost market flexible that conditions. agile

a a continue these operating target to and organic sheet, do fragmented end and range. We've through capital. consistently years, long-term priorities this to We deployment executed for us invest return on acquisitions this leverage for shareholders. at consolidate supported allows our many balance markets while and record the disciplined strong of capital model cash-generative of outperformance maintaining has of Our low intend to growth, to track our

revenue years fiscal been our the XXXX, XX also X.X%, profit while with billion rate to Over the of of CAGR XX% growth a and returning dividends to form has annual buybacks. operating compounded shareholders adjusted end in $XX

in the we've our while of consolidate organic approximately market past to alone. X XX in XXX markets, acquisitions we basis delivered XXX years points As bringing outperformance reliably

Our these and expect scale end in multiyear confident across over tailwinds allows back call our opportunities. benefit groups to your our term you and of medium your markets, strength and emerging capitalize competitive questions. our us time over our in to to to the order customer the happy hand from I are you. today. Thank the longer Bill take growth now on I'll and for Operator, to in breadth position remain leverage markets

do from Instructions] comes our Jefferies. [Operator have first Ng We question, from Phil

solid on you commodity XQ? toughest guidance finished on year, prices choppy any in announce side? And Appreciating curious your Congrats XXXX. flat a is environment. And how have did price XQ pricing the And seen sequentially for on stabilize, for another especially year is that have price quarter suppliers full predicated your but goods increases quarter, comp in increases calendar categories? on your your pricing track the

sure Phil, I'm will it's and Yes. Bill. to that, add it. I'll with start Kevin

terms it stable the was In pricing of throughout quarter, sequentially. relatively

to from prices. QX QX, pretty So stable

not second of last of movement. the were relatively very stepping a movement. as QX not quarter consistent, lot as the a here, comparables lot down And through In months, stepped of through then the terms stepped again, of commodities but additional touch we into a year, difficult

about products direction, moving at the And through that different they, the time. Phil, in we as for same same think When the you velocity, sell aren't the you question. expected, thank the same at commodity-based

in that we've differences so deflationary what looks And seen like. pressure

signs have We of stabilization seen though.

of in like products at look some increase. degree have You stabilization seen fact, some steel that and,

under that into calendar price time As get normalized finished been as They those look more what cadence. goods that low that or see finished that that in terms normalized of that back provides but finished 'XX. look place of is is and price through of have degree goods at annual And into whether a defensive it some modest as in that increases, now would typically you year we goods, do side those terms approach increase we we to do annual single-digit the gets forecast that the floor cadence, offensive you a play not them. business that believe like, increases expect annual seeing we of

That's Okay. helpful.

you just On trying the pretty trends course to in Appreciating the I'm of do up continues accelerating office of you up business? And you out line non-res impact mega well, do side, very seen quarters? diversified shaping the the the year? anticipating to full hold you from again, activity of resiliency. rippling kind in and the the once that top bidding show how business kind are So good through of retail? like here. you're see your projects, in picking gauge, called effectively, you up slowdown really How see coming and potentially have

wastewater, like. commercial/mechanical, activity, the strong for as retail, in pressure and in, the happening been commercial space. really very a through across we've the and seen AI we in you've customer drop as with what's is, a and typical pickup water, it's expected, though, suppression data these continuation good So What off us warehouse in seen from drop have center fairly knock-on seen, you've office and environment also activity, activity are a center non-res like created that fire or space. that's off multiple projects and underground And say, groups, of especially distribution seen

As you that we're as longer actually these was project to activity as think seeing going mega continue and projects. up They're inside expected. just landscape, be we're pick open deal to great the are revenue continues and really of taking The those seeing to the projects. longer about mega bidding discussed, that order experiencing quite volumes growth a and we've strong, be

space. a that how project, to we being us, it's good much for well groups multiple whole inside as on of operate mechanism catalyst as the across For a customer as the non-residential support want

Blair. Our from next William Ryan Merkel question comes from

trends? quarter-to-date First broader off, that on is has bit. the comment little reason a the ask I slowed guys seems And it you can macro

So I'm have seen if anything. just guys curious you

down and stepped how comparables Ryan. so quarter, QX. growth to stepped has about expected we've through the we've second in We're the Yes, into as the a up We've seen rates bit the as through actually low ease -- that's play start single-digit And organic we to quarter second to expected, decline our down range. move get bit. year into as improve X% That a the half. second we start those as really in

we've So actually. a those in of bit improvement trends little seen growth

What next It's is performer. given to HVAC have regulations? for then segment, What you it. on standout second great is And the pricing, the from just years outlook the hear. my question X just your Got over suppliers? heard

went that going mix was we what's going and to to be changes our of equipment business, really be at look it at us what regulatory pricing through and plays ductless out. as We'll to that versus that to how going And then unitary. knew what terms supportive you of that's piece. if like see that you the we But going single-digit looks is So in high in whether look for in supply. parts, mix terms be be

a look we more perspective. volume But lot a to of inside and clearly, from changes So is of there regulatory going price environment that. of we supportive are be as variables is a bit challenging at through go a what

from Our next question comes UBS. from John Lovallo

Matt is for on This John. Johnson actually

pros or expense? of cons can it's about with here, And off, potential first you some whether tax talk can implications and any your about the you just redomiciling? talk corporate for financial costs So

Matt. Thanks,

indexation. York shift in what's listing in happened the standing In terms way in of step of coverage, secondary approached about movement the and and process, I we're the to cons, a methodical pros years, our last the what's of the back of that the with terms up take entire several the we've primary that really out happened terms New of a been listing the of if sell-side pleased New on journey we've for think York, of in London, shift

of U.S., our step is line in North what a terms headquarters viewed And really the for in of moving where our as this the This our location principally American governance, company, our with a geographic natural us, moving next sits. leadership is markets. and is in

looks what like. us, just that and And natural terms we're of journey days of next more so for it's a in step, early

impact, that. corporate sitting more the U.S. the a fully relatively evaluating we we Yes. And But to that we're our in move But of the here develop process to the headquarters. expect today, overall a come as terms on with and impact to immaterial financial of financial in process be approach.

are I over And have interest more. you can meaningfully where come just then your one guys' appreciate guys month. I but rates obviously guess, market any is -- from unchanged, the just, guess rates I just provide that. end in outlook on past they stay recovery if here? thoughts say, did

very impact they expected. saw, you construction our on of obviously, half playing -- just new residential the residential the business markets, are And half environment, is was as portion like. million of lightest of world the the much really out inside think we're as start some we not But side, being a biggest with of the on of end stabilization And year about what over as our degree that our country, a rate that the just For X.X north seeing it's res. starts we seeing permit of We that play through. saw and that we that of new need there. are looks side stabilization activity although

much center rate in activity, on environment to see as we you some environment be what but we in some As that side. side, mega on pauses expected think fits going even interest speaking, yes, about the But continuing we're today. pressure on doing and pressured, non-res generally the that play commercial of press continuing to project projects have mega and to the being with some light maybe very out starts, knock-on there's -- is the rate data

Our RBC next Capital Dahl from from question Markets. Mike comes

actually is for on Mike. Kalata Chris This

on the is versus unchanged, thoughts your this dynamics Just first half, realizing trajectory just shifting half get over on hoping views but second there? to to guidance was latest for margins. year, latest the your margins I

that. no Really change Yes. in

Chris, to full that to X.X% at year, range. the X.X% we that As operating expecting land look margin in

we're we in continued that some As of as fourth normalization set modest quarter out, first coming talked midpoint and call, on we guidance our the expect this about that of year. that expecting most half

was much operating the down just as you last that from very As margin saw, year. And XX% expected.

flat get just half growth second We of the we that the returned then to into Kevin's have step to really improvement point bit second had back we he we as expect broadly and the year a growth as last as through and the strong back given go some quarter for through, as pressure, year. we and quarter stabilizes, continued to to walked second revenue

Got color. capital it. just capital Got how kind it. the stepping this allocation looking I appreciate over to of then sequentially get that on today? repurchases priorities and allocation I landscape your wanted thoughts latest And M&A with shifting just down to share quarter, is

Yes. how of Really that. in terms change no executing we're

now. intention towards of Xx. to of Xx range, end We're operate low bottom our Our the range is at end right right that leverage the to sitting

you as deal perspective, from the acquisition an in pretty but healthy. small pipeline so acquisition quarter, saw And X is the completed

there should capital priorities that towards to end So us consolidate continue execute expect we're But of that maintaining some operate continue capacity priority the across and to our you our to order. to markets. range low X-step

Will Our next comes question from from Redburn Atlantic. Jones

couple a please. for me, Just

about be working to margins gross projects, projects still quarter to through draw the accretive to regard gross Would just relative margin margin, bidding into out commodity deliver that not the more effects? And just might projects? we on with the XX.X%. non-res And process favor help whether were what commodity understand gross or the just impacts to Any first good insights half despite mega first you margin when go think in normal us as mega the gross better could those secondly, gross think there. I that then willing that? was your against be you what you margin, perhaps

gross we with above down were we team's margins staying of on out quarter, in little had bit the the expected And XX%, Well, delivering a that step Yes. QX. execution pleased first a of coming XX.X%.

onetime but talked as inventory. we gains were in inventory You about some we XX.X%, sold some QX, may recall through we older at

to and executing there's yes, pricing with but sales. really from tricky you a well field XX.X%, from accretive. own about as that of XX% a brand gross is really time a know, our then perspective. pressure bit the commodity be commodity team And that's, about think little I what the of through As continues revenue is margin That discipline a in managing as good we're perspective,

execution. good really So

job gross Yes. was so did pressure from Building execution gross profit margin Will, impact and on that, the perspective than team of an an great less dollar a was.

on you business to doing about evident it's and that mega selling gross think margin as the approach very I a growth on commodity margin, our our is that the relatively our more the good markets, the When are if value-added about dollar mega in we consistent. a look numbers, of non-residential deflation mean, As the group project consistent today, that sure product approach, job yet in in relatively commodity-based lower you and fact, project landscape. And the business impacts a strategy gross landscape think profit make is side the you services, selling non-residential product what's there in territory. at clearly gross is

And volume the sat we're of inside is non-residential space growth proud pretty today. we're something here of as so

Our from Patrick from next question JPMorgan. Baumann comes

in groups RMI growth to terms First particular out commercial/mechanical I'll diving that the there. improved then of that, one there, drove into Anything next that call was The more bit. thought, and one, fourth go or a -- focused it Is verticals to it drivers? -- that? the any within one. versus I'll particular the I maybe nicely, little leave in quarter customer And

non-residential to in thanks with bit what portion challenged. were is from perspective, activity go back a Patrick, previous you're looks that it really in market we line the question, a Yes. growth with the of If the question. like. And right, for that discussion, commercial/mechanical is pleased I

has and a repair, maintenance split mix business good between improvement and construction. got Our new

activity, production, build-outs industrial places like space sustainability and as business the and center like. good commercial/mechanical onshoring mega well data of for electric how work that project levels that seen have the as activity vehicle We with in well our manufacturing in feeds landscape quite

was through for in that And really us. that space as be say, strong to balanced good territory we feel move is. and a about to it deflationary to relatively that then gross margins we I exposure like growth a hold able commodity-based non-residential on products, be was pretty where so volume consistent And

So growth nonresidential into serves these us of again, is of different pleasing ability nature balanced areas the very for well through and business the sell our to us.

helpful. pricing a kind being cetera? range on from I'm at And question. Yes, stage then, forward at now maybe can deflation, follow-up margin guess, look start low that hold number there? you as that to Do et for, you that the XXs of now going I normalized and gross this just grow wondering if in

Yes, Pat, that that our normalize over last XX% gross quarters belief would been the margins mark. has around several

with to any pressure the And pleased on not significant expecting very pressure so particular could But quarter. much we're, -- additional some gross we further that put again, share we we're feel to deflation date. get in that a margin our Certainly, into growth executing like market which future strategy. to that some XX% from good can range and as on back the then take build is we and point normalized execution continuing

as on time implementing that our us our intend the not environment, in value that those reflected that margin services gross and driving out but see in a continuing allow steadily to operate value-added by build important of and gross to that we our business. environment company, strategy things deflationary are normalized we from to then And and durably over product more stabilizes to margin only that commodity build also

time for like us. to we over have So historically. there a just We'll build from continue not that's floor

Thompson Our question Kathryn next from from Research. comes Thompson

touch and kind versus know closer project This in process, engineer how involved to any more environment Ferguson color getting the products in or guess differentiate little or Brian your get kind the would to kind ] the is be about right to of today's I the of on on peers? owner more Kathryn. there, just in but the you've Biros environment, [ you actually the beating talked for helpful. current a GC be you of the past, in start, bit here mega wins can how I on to the

knew Yes. we and bidding The actually playing into and like open how slower is of mega terms to orders very that looks project bidding how what this out open We going orders as flow much landscape in a be into revenue was construction. and actual landscape flows activity activity expected.

So it really We're structural the what with won't the that get is into ramp-up until We this coming expected. of we pleased years. playing tailwind see full like. out as looks impact

That discussed said, as past quarters. we've in

this this catalyst is to These of projects bear where projects future. we large is are capabilities chain a the bringing is construction operate us, how For our to for our and scale want and supply helpful. mega beneficial market the in scale inside

the or bringing those waterworks we complexity commercial/mechanical on such the value that's contractor, And We also that's and true sure are groups. make multiple when getting that these general individual the across especially the doing to lastly, then the contractor, community, some together on closer problems to them groups the level the contractor, of the although industrial customer customer trade there's we protection contracting engineering the contractor do fire work, solving add by scale and ownership whether we're for stay very to the site projects.

so and and we capabilities look And had we hoped, continue like. in invest playing out to work as those that's what

that And follow-up strategy waterworks -- basis basis? metering a larger waterworks Got on just you how it. announced. color the fits of kind of for Texas, the the acquisition the geography product distributor acquisition, a you in a got any on into or they Can just on more either kind M&A

that States, products the on core United and inside whole we business. a valve at it's fitting and look for core the pipe and across position municipal and you waterworks if business So maintain residential, strong been very applications, commercial our of well out built

and been treatment We have in capabilities, to metering build metering capabilities. plant and the years, technology wastewater past water working out many

State seen so our across you've what in with of service that acquisition municipal get the Texas, that also but meters business. only of metering market, that us cannot the is relationship to so closer well technology And whole we this serves because and that capabilities customer

infrastructure green already strong whole we to and key meters across our us see the work continue the of complement stabilization. as strategy you'll And States. and what's United soil been build acquisition business It's out urban a technology, part a to metering of

next Our from James. Raymond comes from Sam question Darkatsh

of these Two a range the to kind of low both leverage questions, expect the end debt the the follow-ups certain and foreseeable for to at you mentioned remain are degree. future. But that the control you Bill, just perhaps now, obviously things really always right and market. making core to attractive from was larger as come scale organization's appetite the to when I is what bandwidth away in can't business? you curious M&A

this energy fact ask only strategic the comfortably a PVF of to obviously there's seemingly a player ingest a the light the that that's and you're players with such in into sale, ostensibly of sheet one I balance looking And transaction. major

curious with So interest, M&A particular to not I'm as situation the with in just particular, larger right for that now scale in general, organization. maybe but the

Xx. bit operating talk on your an To groups in capacity from of M&A. and Yes, a start, Sam, weigh and at I'll we're customer large-scale little acquisition I standpoint. point, leverage how the turn billion will we us probably were a EBITDA of to about And side about of thinking think think we X Kevin the us our all you view leverage how way strategy if range business, low $X end roughly the to $X gives to billion up flexibility, of gives capacity scale X a bit range quite about roughly

and up. itself small out capacity you've operate competitors. to what low medium-sized to the to industry us intend towards end give of what scale our general, XX,XXX-plus ourselves to to In We are seen the lends

in point small day, to last we've earlier so to XX acquisitions in X Kevin's done in the years, range. the mostly medium-sized And that over

bit lumpy Sometimes, come and together. those a are they

one only saw quarter. this You

Sometimes quarter. in we'll X, do X X, X, a

want maintain that to capacity. we So

our strategy, acquisition point, quite bring built the Bill's at as capabilities that will, how the us geographic, relevance fit well much maybe serve industry about as that that the importantly, more is serve or we out look both customer larger When group or customer expansion. that does to whole that importantly at look to on has think we served We into capabilities look as bolt-on the is need And that well, frankly, we a fact, as what and platform very then, And we and scale to way. project at project. that acquisition the to customer. in as acquisition, and need you

and what And would look transition at. energy for maybe sustainability you've as catalyst even a we highlighted

at And in are customers to so how especially multi-trade both non-residentially we and it's a them. our say we residentially how best fair individual environment and today, continue operating to look that do serve

And well strategy so customer next group that bolt-on how mind business can that to that we're and it's always like. in an focused might our complement But from perspective. look organic today, on our fairly what as

Sam. So thank for question, the you very much

I'm if the follow-up, chains this And the supply normalization increase in a enough. pressure not least seeing business? mentioned that as in Fair within your a availability inventory in you relative would? at might Kevin, Are now from is allowed if the inventory independents -- where Yes. any and you And the competitors regional business and verticals at as point. occur, it point lever much that

X exceptions. We've small with of for X seen normalization the supply maybe or -- chains

across and and scale We and our were expected supply have the That's traditional XXX we chain the fortunate supply what groups. relationships outgain have of points we strengths very a to that to business the period chain have from our that to normalized chaos share customer we to and normalize. during use across that We size basis and were. perspective, normalized vendor a XXX our

both now a No, from as from perspective see a supply that perspective further as pressure any well market we don't. Do normalized? pricing have chains we

from to of as we In the discussed, the overall came what's deflationary activity, in talked commodity-based market. fact, really opposed as as the we earlier, majority input about happening

wouldn't we So pressure we any abnormal don't markets. see these that inside of normally see

no We have further currently questions.

go to the like to remarks. Murphy back hand ahead. for Please I'd call Kevin closing So

out your in our to and really playing with are expected, making taking things extremely of really and and We is the execution successful call. teams today and pleased And simple, for care the projects customers all time. more and that and part take we're you Thank operator, our you, we of sustainable. close time Yes. as their began, close, as appreciate I that we thank as really

and continue We're tailwinds we're the some develop. our confident model business we've of these strength markets, of medium both confidence great the residentially on, in got structural will term non-residentially and and in long it. of that The and seeing

care, Please talk soon. much. very Thank and we'll you you. thank So take

joining. and this call. Ladies gentlemen, you today's Thank for concludes

your disconnect lines. now Thank may You you.