Snap One (SNPO) 13 Aug 222022 Q2 Earnings call transcript

Good afternoon, and welcome to Snap One Holdings Corp.’s Fiscal Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Snap One’s Senior Vice President of Finance, Eric Steele. Sir, please proceed.

Great. you. Thank welcome Fiscal and Earnings Quarter Snap Call. Conference to afternoon, Second One’s XXXX Good

this being call reminder, a As is recorded.

Joining us and CEO; John are today from Mike Snap Carlet, One Heyman, CFO.

performance, our would may future management additional events therefore, of performance. placed but forward-looking and to financial remind begin, not statements, response make like These in or not questions, them. we contain forward-looking upon future should we everyone Before guarantee reliance statements expectations, that not your prepared statements limited remarks and statements future to undue do including, to, be

XXXX, annual of are on reasonable, Although identified the on undertake Report after broadcast, accurate we believe of current in company’s management reconciled expectations could the call those measure. differ is to August Form inherent these earnings expectations non-GAAP XX-K in today’s of contains to SEC. section our as results Annual the that or obligation time are statements revise for of and occur the reflect materially. events December changes uncertainties, involve including the we our period any also the XXXX. comparable information and These press based to time-sensitive filed measures in This GAAP date directly All only that release with financial are referenced risks Factors most Actual and call. Risk this XX, call no statements XX, ended this

investors.snapone.com. be being our available on would and I for Finally, to will at that Relations call remind like made website Investor webcast conference everyone a recording this is replay

be I on results, a turn our supplemental call will which over John our have Investor to addition can presentation earnings posted website. John? In accompanying Heyman. webcast, now CEO, to the Relations we these found also the

and CFO, as half over our and Mike for I’ll discussion, highlights, our who you the everyone, the quarter review share the call Carlet, financial this To XXXX. us afternoon. going appreciate for time the thank open second to I’m some turn recent remarks and our start questions. of we then welcome, provide results as for then well today’s spending We’ll will with call and discuss outlook closing to you, Eric, our

background, One professional empowers a integrators platform As customers deliver security end living connectivity smart a and discerning provides Snap global to that joy, to on scale.

partners a software across the our growing of further approximately leading and we We allow to platforms with and professional proprietary through cycle. our portal integrator successfully branches. e-commerce As XX,XXX workflow products do-it-for-me their to our these distributor solutions to and and commercial proprietary local work with integrators, life distribute third-party to residential customers integrators our our support network serve project them

inarguable Here positioning decade, the is to front integrators our at we’re One, homes company smarter growth in all and of Snap and it that opportunity become next tremendous we over on will capitalize the us. businesses and durable believe our and

our the Our differentiation competitive for propel and living experiences forward. to business continues smart demand

any these and their I’m carry integrator backlogs percentage very deliver and work, successfully to challenging uncertainty, extremely by complicated Since integrators short-term team of uncertain remain for small healthy integrator busy of our rising the extremely Just navigated and inflation, supply rates. execution the IPO, solutions. Despite our any have continued we accomplishments economic global this while pandemic, on through company. we inventory. year commitments. meaningful over been partners challenges became war demand has Ukraine strong public a ongoing for and a yet and the a our rewarding All economic sustaining past partners for It’s and A continued team our year. in backdrop our of our carry year. the of proud financial logistics impacts a ago, chain interest

investments drive Smart One. employees Snap to for networking, revenues future to and office, continue means owners. and even such the home if sequential health sufficient competitors unprecedented categories, favorable averages basis past values modestly growth to our us of are market remain on One integration footprint our home our come a consumer living other inventory of basis them to outsized equity for as demand cycles. down for business our has we Snap remodeling, relative company, to better historical starts innovation Specific partners. enable housing robust surveillance remain share. some helping growing partners. Further, constructive and high-end in Furthermore, the and to local commercial integration shape relative to must-have deliver in the timely on branch to Wi-Fi gain regardless product solutions, our and metrics to for capacity certain back a and will of in environment, security and believe backlog applications, our And related the So drive the unlike to occupy permits,

just growth in we long-term highly covered, favorable Given confident the and I trends outlook. our remain a strategic execution secular

me minutes build of on reflect this million, to we over past an the period. from XX% In quarter. comparable our results Financially, year. continue Let we generated few take past the QX, sales net increase a year consistent $XXX.X to ago on of

year of We also delivered increase of on million, X% an adjusted as-reported EBITDA from an prior $XX.X the basis.

to inefficiencies cited. supply we the this financial are many and absorbing have performance chain logistics issues achieved have due We we despite

you for to market. their industry-best of These One. to portfolio vote be Moving and integration Analysis. awards our span confidence for brand Brand further recently services Pro to an were CE in We XXX of recognized products, platforms leading Snap our in establish accomplishments. a proud our leader in place the as operational and partners the announced Thank XX awards innovator

and course, raise received, never the deliver. recognition continue we for products we we to content we and the are Of with awards bar the

major we quarter Here to product are the a suite. few past platform of the made our enhancements and in

control we and users end installation for more is lighting operating experience to faster which an system, and efficient to for release ControlX installs, a time-saving enjoyable controls, speeds. easier important an update interface process user This connection our integrators. released for First, improvements includes enhanced the providing shortcuts

provides release released today. for and are we of come. releases residential while exciting and end the ControlX of own product smart foundation their also brains the And face of continue OvrC users And next-generation new both announced simplified for experiences, the set are series they app to time yes, years recently on-premise controllers. that living these for the the future labor and of available in to commercial These on strengthens evolution platform many controllers stock solutions, core controllers ControlX product power our systems a and integrators set, them We workflow challenges. Connect. with saving This major control OvrC they

offering, bolster series, PDX performance to with product launched installation Triad we audio Triad’s entertainment Finally, premium the experience. simplified speaker our which pairs a

of we a X Veranda the quality strategic also including also TVs, the and We across SunBrite In full-shade initiatives, full outdoor the features of executed following smart second launched outdoors. bringing the new LED range to quarter, indoor line the TVs accomplishments. of key

we in growth the leader and continued a the First, markets of to focused commercial on adjacent commitment our security specifically hiring with markets.

in space. video enables XXXX demonstrates commercial AV like was hotels winner. bars, Our Manager settings ControlX functionality in Multi-Display Multi-Display InfoComm and The recently Technology award audio restaurants, sports recognition progress in the commercial deployments Best of our continued and Manager efficient also voted

in Second, area, footprint local Central to quarter bringing Florida local omnichannel opening Orlando, XX to serve Florida end. build branches to Metro our continue presence the our domestic with of we the branch at a new

branch strengthen expansion Our expand network. and purchase relationships, local of in add to We local the existing in branches network integrator community. our our incremental the intend opportunities local investing integrator continue

of and as number line we of Best the inflationary that shareholders. onetime Committee. a the our to addresses Hendrickson Tom distributor years combat the the stipend team and provides minimum completed to companies, of team. believe a paid quarter, level Place appointed they the forces we’re Controls. Risk investment executive raised about since and thrilled available drives Management to announced and tenant, acquisition segment the the attractive Directors Work to of welcome as the security the for and company’s and we Third, between security employees and the excited wage Chair opportunity accomplished members, Clare commonly to consumer-focused own in and and second are hybrid our systems. end and to third-party Clare part Board our vital a experience, to lives. the high-growth, him been to market with financial to in than product team brand integrator we Fourth, their is returns expert Tom systems solution help whole we One, partners home higher-margin see our subsequent XXXX Fifth, product. luxury a Clare’s convert an automation we control of We’ve of of a Audit for Clare our leading more and opportunity of our public Snap proprietary XX At

reflect As execution strong growth proven growth. to success strategy, the against future long-term to our drive our it playbook sustainable relates our to QX in continues

As network; and integrator new revenue with workflow strategic Staub our remains develop our three, in and products, innovate and five and existing our models; global key Electronics execute share pillars: M&A such tech-enabled four, fifth, growth increase a wallet one, rooted as two, reminder, integrators; strategy software Controls. expand new software with Clare solutions; services

the our look make I’ll beyond. on of to outlook, going to all I’m to these Mike. XXXX remainder continue progress now over the call then and on we briefly We turn as fronts to comment and

cost in our first year pricing volatile June. we of working a supply We’ve execution for hard in and credibility a To the address public adjustment despite performance We’re been and the remainder inflationary financial through as proud we our implemented to backdrop. operational strong of foresee the company. build successfully year, chain a that pressures market

yet our continued around of Our our and our in in near profitability us economic execution smart and integrators. the long-term business chain do maintain have of planning. the give Still, and pricing while easing, growth optimism they not that current our living while sight protecting supply environment confidence the into of adjustment we we consider the line adoption and have behind category, issues us. are we And to

focus including investment and strategy we growing As growth investment. and our our look That a balancing managing our forward integrators expanding moderating own said, our long-term our hiring, inventory of such, cash market. pace and of resiliency confident conviction flow in prudently of in with in remain coupled rapidly have we’re share costs, the high continued a business, to on our

call greater who results to Mike? CFO, the financial turn XXXX outlook to discuss over going I’m Mike and that, will quarter updated our Carlet, our with second detail. So in

John. Thanks,

X, to for July quarter turn fiscal we’ll second our the First, results ended XXXX. financial

proprietary million benefit reflect the and comparable of growth, markets which and to was As forma product on net last strong second net a acquired growth of is XX.X% fiscal pleased by in this impact January price overall moment. a cumulative comparable during algorithm. FX in in of contribution second as quarter-over-quarter consistently the and which also fiscal sales or late from in up XX.X% growth non-GAAP growth $XXX.X of year, ago year the Networks, net adjustments organic increase I’ll past with John sales the sales $XXX.X net past in line Growth of to said, year performance, XX.X% headwind. growth in we up in the is long-term from which the the taken This a was product a of in of in which discuss geographies, year measurement quarter did offset ago Contribution we the across net period. acquired million three-year the of in Access the communicated May Overall, by in margin, opened continued categories. sales of million, driven branches $XXX.X by $XXX.X quarter, the increased also pro modest which basis, demand incremental are and the quarter with Staub, sales, period. sales experienced ramp margin CAGR We is was was quarter driven percentage a including increased in local in a of see sequential our million year. operating the or year benefit XX.X% the Growth

to of related local net our as As net decrease for percentage footprint ago sales. second as in and in compared period. third-party the quarter, comparable of margin in In contribution third-party to year expansion fiscal sales a year-over-year branch product XX.X% local drove was product change represented growth branch XX.X% expected, skews sales strategy, the product which our primarily the mix a sales

be integrator proprietary third-party funds. reminder, contribution margin net expansion a portfolio lower product of footprint, has to of curated important to sales of we a a our third-party remains percentage a partners. strategic for shop product As an branch local our relative as value typically as aspire one-stop The proposition part our

with half contribution administrative to a general the QX favorable proprietary our quarter As given expenses driven fiscal QX in in costs rate provision by $XX.X QX. increased the of to from provision [ph] The been and bolstered associated percentage net or initiatives, fiscal or to ago in of general June for of credit of adjustment more and pricing $X.X XX.X% to million Certain contribution shift selling, during reduced approximate quarter comparable to operating seasonal increase company, year further of of Access we net second in third a notes the in or driven receivable. year-to-date. rates. increased typically XX.X% public period second in adjustments referenced, by pricing million mix wage SG&A to which subsequent of to by in in period. the compensation settled sales was the mix, margin observe Furthermore, effective sales, on a date, of the ongoing increase year-to-date to and product quarter. sales basis sequential support the has expenses growth QX is proprietary and year and remaining becoming quarter-over-quarter in reflected to million Networks not in most quarter. the increase XX.X% were timing was XXXX own end. point million, at have we as expense a second that in and XX.X% XX.X% parties our XX.X% acquisition second the increased acquired This XXX in sales of expect $X.X inflation primarily the in in with sales expenses recent strategic year likely basis, was Clare the and forgiven due Selling, increase proprietary impact from net $XX.X connection investments the will a results. of quarter from primarily net an we the taken was cost enhanced Staub, XX.X% did full related up administrative to quarter moving The an sales was from product This losses net made product as prior obligations the credit This equity-based increases the first mix for margin

efficiencies the we to and long expense term, leverage operating continue achieve of platform. we expect unified the the Over operating scales to as business realize the

sales year. decrease contribution The as net quarter year-over-year, or not the those net period. quarter sales net was offset the to of adjusted of and margin occurred in of declining in ago quarter million ago Our is percentage $X.X million operating in the Adjusted or net to to in XX.X% in from of comparable or net non-GAAP in to net year totaled in period. $X.X the percentage the incurred prior second net sales the with quarter primarily million expenses. second measurement The XX.X% company-related net to expenses of sales, million Adjusted X.X% a in attributable non-GAAP to compared a EBITDA performance, performance of increased in quarter net the adjusted compared the $XX.X increase operating a the period. sales XXXX sales $XX.X year were which a net that primarily of $XX.X or growth of loss income, margin attributable growth SG&A comparable loss million in measurement in of the million of increased X.X% X.X% ago year contribution is sales up a public XX% comparable $XX.X along EBITDA EBITDA, as by

operating working a chain primarily XXXX. against the $X in which million end increase in negative in use including a year-to-date of $XX the compared flow negative increase primarily cash resulting in $XX uncertainty, million the compared Approximately was in used significant was July of decrease of in and and million net XXXX, cash of period. measurement Finally, used non-GAAP increase increase to protect activities actual not attributable free to increased comparable has investments flows. of inventory levels ended to ago remaining in year Access equipment did costs ramp since property which acquisitions SKUs. capital, of an in flow, six supply period. the was inventory, from to Net free months average cash local activities Staub, impact branches, cash by the million and stocking carrying net is to X, of year The $X the operating improved Networks related in key higher in performance cash driven operating the purchases totaled a ago The and

with moderate Our share efficiency we the supply normalcy $XX.X categories our expect liquidity, wallet and control equivalents us At partners including sales quarter we XXXX, to that support the capacity such proactive cash adequate end to And to of measures see in level inventory across enabled and networking and to and product as we of growth start million. forward, At as share had have support in of our demand. undrawn integrated chain. investment the this $XX.X platform strategic cash and market of inventory million integrated drive revolver approximately fiscal and point, $XX.X million believe is our inventory we relative to drive growth. existing going

I’ll I of our half the on turn before the minutes financial Now, to just an John, a over year. second for take outlook call back the to provide update few

believe performance be as provide for As business. adjusted net well a overall guidance as indicators annual sales EBITDA One, the reminder, we our will these we of key at for as Snap metrics

of Considering we June, are conjunction in uncertainty. and impact market communicated earnings. our are on and ongoing with very May in factors, XXXX recent FX fiscal guidance to adjustment acquisition fiscal results performance, anticipation of first strong in our QX short considers consolidated headwinds half full year these fiscal is dilutive – a which the guidance effective have Clare, ranges Our expect price most modest continued reaffirming our anticipated term, in we XXXX our our

we of perform uncertain business as our over XXXX. acknowledge the out the market remainder we continues environment While to well, look

for As we sustainably our to business well sales future. such, confident foreseeable we us EBITDA even as the end in manage our of of range. are adjusted the taking to steps to guidance goals lower structure our Overall, position trends highly ability deliver as against proactive remain our to our expense health grow for financial as the

year to after range in increase XXrd December compared to billion, $X.XX would remove to We XX% basis the fiscal and XX% week. the an of XX% billion, between fiscal XX, expect XXXX, fiscal XXXX adjusting prior impact net $X.XX ending which sales represent the XX% and the to year an on as-reported to of

over sales acquisition an we growth as-reported net On a update for final sales between year. price the We’ll the the volume, I of we as to adjustments, the doesn’t net the prior an expect historical and of growth believe call X% We chain of challenges. the range Staub are basis, $XXX Electronics. Clare already X% local week Access organic also and as adjusted an distributor, lapping XXXX On $XXX sales M&A, from X% branch you, to in to openings net for John. our EBITDA, see growth basis a on continue a which of supply on XXXX to basis. We’ll million, of includes to headwind. year Clare’s before XXrd adjusted follows. Since million, fiscal activities, growth XX-week constricting FX recently Networks represents One XX% change compared XX% factors from see net serve back outlook headwinds the as-reported increase representing and impact completed the including X% pass and

stock of which was of program Board As a from a our XX approved the XXXX. Directors repurchases million of potential $XX of repurchase One’s up date that to common stock the reminder, through authorized Snap May end of approval,

continue the that million. X, shares our now, And organic value our stock of call July of will share our QX. opportunities; investments, As M&A my repurchased at aggregate first, to John, with had approximately Consistent XX,XXX policy, comments. repurchase capital $X over XXXX, for program. common this accretive allocation of you we additional prioritize an finally, summary opportunistic completes to next, for growth back I’ll and turn we

and A you. hit Q&A. thoughts few Mike, closing then we’ll thank

and includes First, platform us with on product expansion, e-com new our capitalize all supporting we to in sustainable office strategy. focus the industry-wide service our local and launches, Only Here integrators This on front our of in developments, demand, investments software of them. continue to new platforms opportunity and

one support the be integrators to partner their strive grow and to trust continue businesses. our that We to

Second, for our Xa protecting continues macro can X work continue a levers. teams price, partners partners productivity Priority keep to projects and ensure to and they other moving financial our remain be integrator integrator performance and environment. will diligently our delivering to our Priority volatile through their using MSRP company’s

all proud as continue will in operating of and for believe investing results delivering believe the for scale finally, that And smarter, reiterate, the in better for we in we’ll more next and will We driving we the and experiences we only customer, the decade, shareholder commitments, over operating and time. track to a homes we’re driving on we remain aspirations a of public Third, our our growth value for longer-term we’ve The growth consistently capacity drive our solutions model. increases over we become are record established company. a all I’ll margin Snap and long-term. the bullish platforms today and future. businesses offer end over imagine date to those can on One our way integrator financial focus on demand

end consumers. of that, to will up to Our it open amazing the for Q&A. set for a actions be second half expect successful in And and have year we times team, we Exciting half. with our the are integrators us what ahead up first

[Operator you. Thank Instructions].

from question JPMorgan. comes first Our Paul with Chung

open. is line Your

and nice questions for execution taking thanks very here. Hi, my

into customers break to in of typically and of top versus like demographic. willing of we pay on the the higher-end second sounds per just line, half? volumes product how kind pricing It do are move So your kind your expectations kind down we as

intentions raise are finding any right And the to of where balance kind further? So prices there? you

It’s Paul, Hey are how you doing? Mike.

the let Well, cost me structure have to we to reactive not as and with and the question planned And that’s margin there but further to that in that. out feel made what’s always take actions. the on think about pricing positioned we’ll right out of any we margins, that environment both preserving We quarterly, we well and Certainly, pricing first. we taken We we’ve where our happening the date. So as that good have look there the part at now, our market. margins for to actions we last competitive right ourselves the trends feel well. our about we’re changes protect MSRP with partners our integrator in now,

think year long-term increases As results action the pricing you’ll had increase significant part component price impact taking and of always we’ve of this the are the always the we our majority of obviously, it’s in a the rest year And We Price algorithm. see. made but in than significant on and about the the our year sales that that a forecast as for year, growth past. last the late be it, more is this actual growth. of will

good of seen the growth. the volume the demand more on moderated the of being still growth. year, So In seeing year, our volume demand on half second and impact with slightly we’ve our and up expectations volume. Currently, half first we’ve pricing in we’re the significant

we be year. as this to optimistic rest trying of think the cautiously about We’re

doing out and which to we figure flat the at going in the assumes sustaining. the to this for is pricing the or plus rest by continue as minus year the the that expectation heck what of we and we’ve on try to what our have year this out macro the around of been there of hold economy again, economy out is forecast rest And volume rest the actions are well the with year. received market taken, is the look happen Our

Got and then Thanks flow. cash follow-up you. on

but market working any can heavy here? efficiencies the guide some on driving share inventory nice cap year inventory see some update kind of offset seeing we where the then [Technical then probably that? of else full You’re levels on to of timing gains, Difficulty] some here, in and you. Thank and And investments

Thanks, Paul.

don’t we inventory but appropriate balance. I seen growth, on we that now guide like though say inventory balance would is with is right So the feel our we’ve inventory, overall the

We’re right that SKUs have a and still in when SKUs the few the right still in we We spot. have sure to the situation amount, looking right not few our we are perfect volume suppliers the should SKUs balance have working to we or and the make be where we’re is plus think we minus But have. we still them. overall, the inventory current with have current we for

We the slightly in and to expect So QX. QX don’t might to just harvest up QX right in cash it increase continue sure we expect as see a path. although significant do over inventory, pick we to make we the have

about there. three, lead times inventory of things products have do we months that that we By long inventory, right sure looking think are to inventory levels four, always our low, our working don’t about really interest lead out significant had. in economic on feel with there, are a about of we’re Given and the lot list the talked terms [ph] suppliers capital as very net make probably position the way, we’re but today we’re about payment when in a we expect payment up move out out there good five the negotiate. think pieces But terms inventory that our we getting given long sure right rate make of list changes time to we environment forward. things terms with the environment in the of the as rising moving we of we last on is also the you interest our payment out rates working suppliers time But

you. Thank Great.

from [Operator comes with Instructions] question Snyder The next Chris UBS.

Your is open. line

mid- ask like QX guess we the kind versus seems company to the June a QX if QX my is, I Or revenue volumes high wanted guiding seasonally also that revenue above in are which question come wouldn’t kind have was flattish, there is the unchanged through, of coming believe missing half I’m something back levels? Thank But of It QX kind in single-digit to increase and the guidance. I that you. level about and it levels. price back I maybe half math? to of was largely

seasonality business. Hey definitely the some Chris, yes, there’s in

QX than QX and So QX and always higher QX. are

second little that’s conservative But in and to of lower out taking, of year. first we than volume a managing We view the the the we’re demand a half the there. uncertainty bit there’s of that’s expectations the business. that where have saw year That’s So do it. market seasonality in given we’re half the

We’re base. looking cost at our

We’re out thinking about there. uncertainty the that’s

our the with We we’re that see of We what that in below to share. initiatives. up. uncertainty the there, that continue the great But demand that’s are our first We which feel about market win second forecasting our platforms the we first half ability out have to the in about year, saw we demand hopeful to with consistent guidance feel is great the the you be of will the hold in somewhat half pretty why year. half

making of or the are headwind provide color out volumes inventory back seeing QX. kind volume decline? there that. integrator you that half? the causing activity kind just on of volumes the expectation of the appreciate then guys what half Just in to the think guess Or sort of into any about some any of guess backlog level trying integrator you that’s could and at I market is you level? back of the these on you And the cautious figure I at maybe I maybe is if moderating integrator level

Thanks, Chris. This is John.

more right the with communicating Mike less We kind to one. That’s and in take emphasize managing of them. business. subscribe what around at as said, of in both around Those around conservative number remained largely the macro but I’ll it’s a you think unchanged we guys, I kind the anecdotal integrator buying look to certain have also sentiment. get And we we’re trying surveys groups it’s view, and now. market,

terms of flex any kind extent do they’re And they’re so there’s concern, signing see at go or adept softness. their to of moving backlog nothing number around also always to the cognizant contracts that that. new whether there their that in anything of shown kind capacity They’ve sentiment it’s own they able themselves And of up. us or their we’re gives

think right of integrators current fixed. is So the now we’re capacity what is saying our I generally

a also to growth, We integrator a capacity. As businesses integrators It’s labor governor a we’re They but has That for integrator to business. us us you the new execute right capacity of now. at it’s certain a in terms all of why for demand can pace. been of them, small on look focused adding they have for hard been so know, is hire our at now. right coming a lot at floor only bit which

the environment I volume say And so in end. growth of be back right we’re just this the we think that to the lot are to prudent be macro on now we the and second hope of expecting given half positively given trying not a surprised year,

Thank you.

Instructions] question comes next Our [Operator Mamtora Ketan BMO. from with

line is Your open.

afternoon. Good you. Thank

in your about about you year bit question, plans branches are how you volatile uncertain of kind the thinking and the a half talk First back of in can an open backdrop? to more little

Mike?

ketan. Hey Sure.

open to stores. continuing we’re So

important contractors to doing to to and We those investments. an always to it uncertainty make stop it’s stores. of that. We would second we and half we’re growth our be and of future, the to going this bit in look leased think of so part out get estate real the little going stores and expect continue inside opening year as not We’re the mid-single-digit a built. of There’s

our behind store to probably for. In fact, plans a we’re optimistic year-to-date, what

in more we couple open. We’re I but both, get expected aspirational to our are a guidance, in were more line what with we trying think

seven one. think each I something to the of four upon timing which be depending going and digits, So is between mid-single

to line sight I couldn’t to have we’re but you that going tell of them, open. We

We’re not We a put there. slowing that, $XXX,XXX additional CapEx that little investment from we’ll into single remember, down. and store to our $XXX,XXX a And that of significant. is bit to go all it, inventory we of put not in

them we standpoint. growth. capital first a think before to breakeven, EBITDA but long-term impact So They investment negative to XX well not impact we working open is get they’re think slight worth from our grained we are for about six the the as months after overly we that a

your a repurchases. also kind on bit And as color. little priorities, versus can then keeping share you executing whether helpful follow-up, That’s liquidity a cushion just capital it. about opening Got of branch or talk allocation it’s

M&A opportunities, look balance out you you do that? how so of kind As

Yes, mentioned listen. what liquidity. is I’d say – we in ensuring our actually strategy, thing first I have we when I allocation would strategy say capital our the very capital sufficient allocation is

with we’re managing think comfortable we about we’ll the liquidity. as business, make always sure So

the to prudently we’re the about incremental line out company. with we as the have comfortable investments, liquidity as them right ensuring we We’re current if did of think Clearly, making any be in situation liquidity very M&A, we we there. going with very look

that line also revenue So sure EBITDA wisely any we’ll that have. organic we we of in to make spending not the be where that great are. there, liquidity, have one liquidity feel reasons, investing would like M&A because just but feel guidance the do, growth plug opportunities about expect the we because that the of we with we’ll It’s we’re model into growth We in of out that get. and we expectations we

where comfortable we’re carefully. are, we’re it always watching So but very we

helpful. that’s it Good over. Okay, luck. I’ll turn

you. Thank

[Operator Instructions].

next with Truist. Hughes question Keith comes from Our

is Your line open.

for cash you be to cause uses flow Thank need of or a mentioned order last cash the to If that of on trigger earlier? flow would reduction? would darkened you. outlook towards of what of there would debt question, that Kind head reconsider building to kind the you change

the have think change. outlook I to certainly, would

make the debt is out say, XX-month flows business three XX comfortable. very I cash we we’re don’t we Clearly, cash. results view, has the off behind always can a of the of mostly we forward-looking generate and that. then been of We our decisions then that’s inventory. this of us, forming period if the to year – now, to to start right and and down think to sort off We any want of investments always like times leverage in the for feel again, the the do company can get around M&A, look we big cash have use

that, what in front invest them put it an we all organically, The light cushion evaluate As we’ll we down cash we pay M&A the we on bigger of that in of cash whether use to sheet, opportunities ongoing. us. opportunities, of whether use for or we balance We’ll sort whether for. make do debt that

certainly level and cause or of But us like the comfortable can if up. quickly. out because the more rules company out see look months there the liquidity [indiscernible] felt where We’re for then with and other would the XX we always things debt uncertainty we we next react we XX to end

Okay.

Yes, quick, I John. just just Keith, – quick, think real real this is

you what Mike understand are moderating think is environment I kind the need also carefully. to of and I very

levers the fingertips a of have investments the pace We terms our we at business. make in in of of lot

previous much know, our we at operated have times higher As margins you history. at in business the

so – deal one. I’ll that say not through up we is included another go liquidity. we can – to we’re going And for Number were that do number two, lever question, just M&A, because previous which the building us, you our flows M&A

public could we we takes time have changed. to using we this out have the comfortable market, company environment. so have be a get equity to course, would size, be it M&A probably in deal an of up market, of that’s there then kind of bit our use we that comfortable that And but would the do private And would to little if catch equity. valuations to understands And where did a of that any our

know very an to but allocation capital also process we disciplined I So both way. you a that a operating just from want in operate

And that. final for Thanks question. one Okay.

any by of on You to roll topic flow referred that – that. and kind order I color the have a large helpful. the In being groups like – done integrators, buying they know backlog. be things you they Are those residentially focused are surveys some surveys, to would are see starting over? Or

monitor Yes. have any over these just – it past not we risen I months. who not say in monthly, here I’m up to over dramatically would as in right any no, at down way. seven sense or because eight the they meaningful past But the looking

right, All interesting. thank Okay, very you much.

you. Thank

comes Ryan William Our with Instructions] next [Operator Blair. Merkel question from

line is open. Your

quantify us, to and the Can cutting you Hey possibly about guys. possible? talk taking for cost if Thanks ask doing there questions. mentioned. I for just wanted the about it you’re what you

Just hear real Ryan, quick, hey from good to you.

costs. cutting not We’re

important what it’s people said. that think understand I Mike

moderating are of pace the We investments.

So freeze. a we don’t have hiring

hire. We’re continuing to

functions. just more We’re we’re and doing disciplined in about hiring the being specific

So and our that both EBITDA desire externally to meet commitments. driven is internally our by

inside year be more a have that about we’re And we’re anything top to have business. line, to to you second so Mike, tone bit the when disciplined do want the to Mike that bit to the we more and of I of on kind the a decide add conservative going spending half where means that?

additional I That was comments. think John. I have don’t well said,

Okay. Thanks was the And then supply for John. second clarifying on question chain. that,

easing. the You Can months? have talk three you mentioned over some about just how things past evolved

go there’s into supply I think different Well, a that chain. few pieces the

of one So availability componentry. is

is The cost the second of componentry.

up. everywhere, seen I start think we’ve but to not free both, start up, availability we’ve free seen to to

a more So that process for our us partners. manufacturing much efficient than drives

We have moderate. cost seen the

driving chain supply been our We haven’t increases our – but partners. seen from what’s it we increases seeing drop, haven’t seen price we’re is the

that seen we’ve moderate. So

that business. margin that’s done we we that the had price confident frankly we’re increases means have lost So eased, enhance the which previously, will in

one And that’s piece. so

– ease to freight freight started second is has inbound I The say been piece definitely and would freight up.

inefficiencies rippled have I a over had and So half in too. through past operations of and there’s been our host business our that think the year a

We this if dollars. usual. But are eight figure of inefficiency operations as has lot to nine sales not a who will movements to BAU, have of teams you seven, we’re if the people, these to our everybody next created business over forward from of meaningful months really And six looking getting back for. of to kind folks

Very John. you. helpful, Thank

Ryan. Thank you,

next with Capital. Imperial Our Instructions] question comes from Brian [Operator Ruttenbur

open. Your line is

pockets tell for pockets and the And contraction thank Yes, much. if or you bit growth that little any you’re regionally of things across us seeing wondering U.S.? I you’re was anything break you a us very seeing down of could if on

is now, would about hi in look international a business Brian, headwind. weaker right our where is Clearly, stronger country when bit housing little a expect or that’s you a where But little around think you small bit reasonably, or the variances a at there’s times better. of nothing meaningful. little bit Yes,

out And that that. at react relatively gives so that’s thoughts nothing meaningful that any regional need domestically, looking basis just calling a on we’re But us to. worth to

be cash QX. of QX in cash give then in year? you. mentioned Can of you’ll and And ballpark for follow-up, us the Thank of you half what Okay. kind second as generation on harvesting shooting kind you the a some

back Yes. We of half do don’t meaningful guide I cash to but a Brian, see generation the you’ll think in the cash, year. of

you very thank Okay, much.

I more weaker, do it’s resources they What integrator may because either Hey a start relied and let’s been area being an as there’s to there I serve want can outflow the city real naturally important. of sector. with comment have on again to weakness to like take is add people. of our Mike’s an think where supposedly because Chicago, just housing strong our that quick, what integrators products customers. to housing commercial happens pivot serve their That’s If

residential to difference more – where of business. somebody just one we something is don’t distinct that’s who a see I see in strictly reasons So their the tied might

Next question?

Actually, to like I’m showing management for back to remarks. turn closing any questions. not the call over I’d any further

exciting It’s time, integration team it’s One. Snap incredibly an and Thank to continue thank I who creating and to have members our amazing employees to you our look everybody, especially volatile a and with support, be our homes but their with of for thanks time again, for you today. and all speaking of dedicated Well, to your quarter. ongoing their Operator? and joining everywhere forward us experiences great network do we for to for businesses partners next work, investors. contributions

Quarter for you Thank Conference Second joining XXXX Snap for us One’s Fiscal Earnings today Call.

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