Simpson Manufacturing (SSD) 9 Feb 212020 Q4 Earnings call transcript

Greetings, and welcome to the Simpson Manufacturing Company's Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Kim Orlando with ADDO Investor Relations. Thank you.

You may begin.

gentlemen, Full to Call. Year and Fourth Manufacturing ladies and Quarter XXXX afternoon, and Simpson welcome Company's Good Earnings Conference statements statements. call historical this made not Any on based that facts are forward-looking are on are Such statements certain a on are uncertainties. of and subject expectations risks estimates number to and based and from results materially or by those future Actual vary the implied expressed may forward-looking statements. which website. or read the company's and reports, We the in public SEC's the corporate described encourage are the you on risks to company's available filings Except required update we publicly here forward-looking extent or a to no revise undertake events we future as that otherwise. the laws, the result securities applicable by information, of of obligation make or to whether statements new today, any today X:XX note at approximately company's that was Please the p.m. earnings press issued release Time. Eastern Relations release available the earnings of the simpsonmfg.com. Investor website The on company's page at is press a Today's website. the will replay also call be of webcast, being on page company's Investor is Relations and the available

the I Colonias, turn Now to and like President Executive Karen Simpson's would Officer. to conference over Chief

Thanks, in through pandemic. full financials highly strong COVID-XX you drivers Kim, begin of delivered fourth extremely on performance thank key proud XXXX, summary you Brian with challenging initiatives. fiscal before a good today. our financial in the outlook and XXXX joining of operating amidst our and us for business XXXX to a a I'll greater results walk quarter then our we which our turning detail. and discussion environment in I afternoon, am will operational performance and year and everyone,

the company's sales by over XXXX to net billion, volume. XX.X% highest strong $X.XX Our driven sales in the history, improved

safety Their On pandemic. for share employees operating not and Simpson our spread to disruptions of applaud over ensure possible earnings the the continue all improvement and protocols have of from employees. remains safe all XX.X% their to team, our diligence, would work These As we for a XXXX. with including to behalf strict result, enabled well-being to strive we record us minimize to of the them Simpson adherence COVID-XX, #X we management hard $X.XX help without health, of work. our been has results entire dedication place per generated our of business rewarding a will continuous minimal and The of the and efforts. priority, Simpson remains tremendous diluted

which significant supported shareholder maximize Our XXXX, by targets landscape. of and XXXX against value. our aggressive our position progress results our long-term for in to X-year changes with a further we Simpson made goals, of we've record Since to some in were operating long-term and profitable commitment July XXXX plan growth. In macroeconomic unveiled increasingly sustainable efficiencies then, to the drive XXXX of we reflect updated October

COVID-XX-related and able macroeconomic our the to activity. of to had prices, in of of the we expenses exceed due reduction the underlying conditions. temporary focusing we in ambitious related in factors, culmination result favorable At While level these business our continue certain COVID-XX, objectives. we targets based through these travel remodel all meet uncertainty Due on financial to April XXXX and XXXX the surrounded Mainly, increase did of efficiencies withdraw significant an as COVID-XX a pandemic. us and savings the the to we same repair principles, and cost experience were guide operating execute nearly or we same in of operating time, steel to tailwinds to plan elected on

I'd a and to like proud of spend you. minutes those these accomplishments, discussing few very with are We

Our first objective a XXXX on plan focus growth. was organic continued

XXXX sales of growth annual X% approximately was to XXXX. through goal rate Our compounded net from achieve a in

our this our XXXX goal XXXX, a included annual XX% products helped support compounded achieving well growth increase Wood the U.S. majority the relative target, Milestones of of Construction third rate year-end over quarter price we in of the XXXX; a this for to top the our of that signing As the strong trends our exceeded baseline. of now U.S. companies U.S. of engaged as pandemic; resulting program, COVID-XX of the XX in center of remodel one program; the homebuilding customer builders repair mid-XXXX. builder and largest on return Lowe's associated XX a in home onto with and our

XX% in both cost business. measures tackled objective a Our reduction costs total a second this expense company-wide our sales as in operating to through from procurement profitability. lowering and a took We of of improve indirect of reduce by range XX% the other We and XXXX. in involves Europe to end we rationalizing XX.X% our structure cost our of net combination XXXX zero-based to concrete to budgeting, our percent aim

experienced our In exceed practices line from cost XXXX, enabled trade of target. management as savings us benefits we reduced in combined our a growth addition, specifically, as top well onetime These with operating restrictions. travel from strong costs factors, to COVID-XX as result solid show expense expense the the and

full year expenses we percent of representing compared sales of basis XX.X%, of points as the For to a recorded XXX improvement XXXX, XXXX. of operating net

income due benefited of was to gross of costs range At and by operating next COVID-XX margin Concrete compared gross to We XX% XXXX. operating lower goal. to reported supported Our plan our spending XXXX business, improvement enhanced margins XXX XX.X% XX% this to improve plan from the our level, income another improvement was as margin margin our expenses consolidated the point margin restrictions. the gross limited significantly a on end target XXXX, exceeded operating our a basis in of for an in XX.X% to We XXXX. material

in the margin XXXX to these exceeded unveiling concentration on By profitability, concrete X late XX.X% implemented narrowing to a our global products to improving focusing in our strategy our we concrete XX% increase product in distinct of new categories. plan, gross Following by from higher-margin goal XXXX of XXXX XXXX. we the

fastener years, Nordic region progress substantial the significant Europe management lines Europe. efficiencies create few cost-cutting made goal final was initiatives. France, We've the over our operating the as our in margin European our in profitability past income Our in as out and to consolidation well of rolling to improve team in including

achieved we a As in of approximately margin $X.X SAP our X%, excluding costs of XXXX. an income million result, operating

While our to with of target reflect X%, original results, are of X% improvement XXX which range lower pleased points the basis numbers. approximately this the than we is versus XXXX

products. implementation completed of over customers X-phase the inventory made operations. Since Our working items on and primarily our lean balance management eliminating discipline. capital nonmoving third objective improving slow-moving on front focused the replacement reduction sheet XXXX or onset our this our plan, program, headway and through throughout of overall reductions the we've a and XX,XXX SKU upwards converted of principles We've to

addition, of U.S. out resulting well at in and production In efficiency many improved management rapid we events carried as practices. purchasing as inventory improvement of enhancements our facilities,

move to driving forward, remain management we lean we continuous and cost through As improved committed efficiencies initiatives. our

surpassed the our from it balance final order solid purchases invested to our with service was XX% on XXXX, in an XXXX experience. Through return tax exceptional XXXX needs end standards and with is liquidity strategy, XX.X% operational shareholder on capital maintain critical effective However, consistent to income of Jobs U.S. to XXXX. XX%. of maximizing target, element the focused commitment return the Tax of with customer to XX% improving this our enactment which rate capital by investment our The the goal range our beginning with execution, we Cuts lowered of inventory a Act plan our that we in our in XXXX, ending XXXX combined product availability with of of and value our on of

have in over their by repurchases.. XXXX operations improved In far continued XXXX, XX% this, of million in plan, sheet Beyond hard to Since to that of shareholders to all we key of stakeholders. XX%. rationalized all meet on our years. value X working exceeding cost balance thank we XXXX of to in achievements. our and I returned $XX.X our for in past our extraordinary to share returned these generated we achieved our creating management million $XXX.X accomplished like onset form in dividends million extremely the share I'd stockholders of through profitability, am turn, and return target to solid and the dedication, we've capital plan, buybacks. again shareholders, the and the payments the capital dividends cash proud improve of we work our position, for employees to of growth. want Simpson we've all to our organic by And structure We've company-wide our these executing $XX

let's our to brief information initiatives. and quarter Now results some on operating fourth turn

warehouse sales XX% in in to on net lower quarter, material million volume. to Europe, Gross grew year-over-year costs. prior Our from quarter XX.X% to increased strength $XXX.X experienced related and primarily XX.X% year consolidated margin significantly we the where fourth higher

in and and travel with Our expense from in solid X.X% margin, diluted and per both quarter in co-op drove share. volume which the our a COVID-XX, other fourth home as of the increase combined earnings experienced $X.XX distribution includes was centers reduced from related the result customers. effective a to our Home operations and restrictions management $XX.X in ongoing to of Center million year-over-year momentum costs primarily income increase The we channel, sales gross

we renovations where we solutions continuing remodel a pandemic. connectors, prior in into distribution the during result experience behavior Home completed and our are business, channels, was fastener toward supported the our home of fourth X,XXX and see of our which the to Sales of consumer mechanical over as period. year by improved rollout a stores, Growth from product Lowe's We shift Center all repair quarter. much product anchors

of reminder, customer Simpson Center the a second quarter As Home a to beginning as Lowe's returned in XXXX.

starts. sales Our housing by solid further U.S. were supported

multiple year-over-year. grew from starts, lag quarter, in we from its we strong fourth over month a which generally time quarter in demand housing start, XXXX third As the of experience XX% benefited the the

In related sales. into very addition, closures to a activity to XXXX, winter. experienced bolstering fourth net holiday the see quarter, This quarter winter enabled seasonal while the the lower continue further in year, late conditions, construction typically sales and our mild fourth we we in

United inventory to Turning to Europe chain needs March. benefited experienced Sales meet the our France through our during in strong following as COVID-XX solid trends ability of to shutdowns assisted now many competitors our and practices. late government-ordered supply continued operations our management in recover the We Kingdom issues. were demand our fourth in sales our by due Europe. and nicely believe to Sales customer quarter to

limitations customers note travel products up keep important our Kingdom and all the change. offices. are SAP the In COVID-XX. And company-wide all we locations, currently completing corporate we to United working we shutdowns that in of were locations the demand very completed transition Tennessee line and sites essential job continue regards time surge, and where important with time, Gallatin, and due progress has sales we the also to fourth of operational, offer recent continue rollout have to European production a will like been of they related quarter, XXXX, while Most possible, of this most our successfully and live. maintain should year, implementation, full the schedule. anticipate with and being to In our I'd over now to required recently, and distribution update work a our has circumstances thus on on in have rollout milestone. the world. reimplemented able to in the America, COVID-XX our we to major in completion we During rest to remote U.K. transition an continued we This will our the to monitor open organization Canadian-based SAP promoted the SAP at despite should our both branch deemed SAP, facilities remained North which the as business and such SAP to rollout

allocation Now I'd briefly structure. capital like to on our touch

able grateful essential supplier operate be very disruptions the other due only to with as are businesses We to to to pandemic. minimal a

priorities. our As and remain balancing focused cash to appropriately flow, growth return strong our generate continues we on business stockholder

as done We very line to as XXXX. to consistently a pay pleased since be off our we in and of pool, position are as have credit, borrowing declare our also well dividend quarterly

lies the quarter footprint a would bright fourth growth, future were of investments opportunities that pursue quarter we which our And to the on economy, capabilities. or another time, XXXX, XXXX, diversification, U.S. our capitalize complement in growth the to pandemic years remain positioning element be offerings, of feel ahead. the in year-over-year be less housing up to of we strengthening market confident we same this of impact over environment. economic in we to starts, for vulnerable believe in housing believe markets. the through adjacent key strong recovery existing COVID-XX At of While With to we XX% product well and Simpson. housing ahead that key challenges the continue products our And manufacturing to business continue the coming in will focused we are broader positioned strategy our continue the also including our M&A on exiting software

targets achieving growth. for success But XXXX in long-term for next strong for company Tuesday, analyst more Investor are that and foundation insight host and has and the in Our created March surrounding very announce our our XX, elements sustainable of plan to Simpson, increasingly Today, we plan positioning a on now strategy to a chapter. to ready profitable successfully provide virtual pleased and I'm XXXX Day details the business beyond. we our

and days. very in will released Additional information attention. for Thank event the about coming this your be you time much

financial and quarter the to like detail. to over turn in fourth I'd Brian, Now will our outlook XXXX greater who call results discuss

good quarter and afternoon, you with Karen, results today. pleased I'm our everyone. to financial discuss fourth you, Thank

to stated, discussed XXXX, comparisons all XXXX. fourth the my the today and begin, in unless measures all year-over-year that, financial I be prepared Before refer otherwise quarter quarter of I'd comparisons remarks like versus fourth to will mention of

Now results. our turning to

in Within return Lowe's, $XXX.X million, XX% Karen were Center customers. were volumes to segment, $XXX.X and million. due to increased co-op consolidated with Home to home strong, of highlighted, channel, our As and net increased North includes primarily net center sales remodel volumes higher the our along distribution X.X% repair America sales activity. which supported by Sales increasing sales our

XX local currency strengthening currencies. of distribution repair further remodel of last Construction new compared demand last year. by gross products margin million, Wood stronger volumes total of increased partially XX% sales Europe's which represented currency year. increased of due Consolidated experienced XX.X% by sales by Concrete positive in XX%, in translations, primarily to in activity. a to XX.X% which to basis, were Europe, margin to our channels, points, sales million against to America and United higher $XXX.X a resulted States benefited by products approximately increased and XX.X%. labor sales XX% to costs. margin material from Europe $X.X represented gross foreign and dollar. In and to segment to compared profit due other from resulting Our lower offset compared to starts costs, sales On the total Construction QX primarily XX.X% Gross some net housing $XX.X million, XX% net gross compared XX.X% basis higher warehouse benefited North from declined sales which increased

our quarter quarter. XX.X% Wood While to fourth in From Europe, gross compared our in margin and XX.X%. for perspective, compared a prior margin on Concrete quarter year compared prior year in XX.X% products XX.X% was increased to XX.X% products to the gross XX.X% was product to the

expenses compensation million to and personnel were development travel were and commissions General sharing, costs, and in to On lower in advertising due higher XX% trade million, X.X%, testing cash basis, compensation selling offset and sharing, subscriptions and profit-sharing turning and our profit and due expense. were licenses. operating decreased administrative increased costs X.X% product sales Now increase Selling expenses due partly expenses, and $XX.X in down Research mostly entertainment expenses million X.X%. or to cash America operating increased by to expenses a quarter and engineering Total flat. of and expenses. and to fourth profit an increases personnel expenses. $XX.X $XX.X segment software cash XX.X% show to Europe, stock-based stock-based $XX.X primarily expenses they million, million, compensation, costs, and to primarily $X.X stock-based approximately North

XXX expenses an percentage of compared to improvement XX.X%. a points of sales, net XX.X%, basis operating were As total

gain stronger drive due combined and and on our from operating basis, of to expenses, income performance, Europe, a In of our $X.X In management distribution a million. costs income primarily with margin to consolidated Our included operations X.X% income solid On profit. XX.X% approximately fourth to selling gross sale top the from to points. helped million XXX.X% XX increase QX and $XX.X a North decreased income basis compared increased quarter X.X% $X.X operations diligent from a operations decreased to In increased margin of consolidated facility. gross American $XX.X America, income by operating operations North million XXXX, $XX.X line from and the million. of million,

XX.X% of tax or to fully Accordingly, release the share. $XX.X $X.XX $XX.X rate diluted Our per effective foreign compared million increased share XX.X% allowances to to due diluted in or XXXX. million from income per $X.XX totaled valuation net fully

sheet balance our to turn cash flow. let's and Now

Our healthy balance compared XX, down operations. during ample on of XXXX, day-to-day million remaining an revolving $XX increase paying to sheet million cash XX, our quarter. facility and cash remained the $XXX.X December liquidity At after $XX.X the totaled to with equivalents million, our December operate credit

of was of credit XXXX, As December XX, on $XXX million primary line available our for full borrowing. the

million of see XX, experienced position December construction million at the increased $XXX.X pandemic. XX demand the inventory we've activity, September Our continue higher from through of unprecedented along at $XX.X levels by with as balance we to our

We through selective our continue purchasing highly to -- high inventory and to practices, be levels maintaining purchases, and standards. delivery level with on-time high along management regard in customer of careful service

of As from or working generated our $XX.X we XXXX, effective quarter management, profitability of flow improved million operations million the of an of strong increase for cash fourth a XX.X%. and capital $XX.X result

generated For million. $X.X cash $XXX.X million from operations, the increased full year we of XXXX, of which nearly flow

approximately capital $XX the fourth for expenditures. quarter, During used million we

including fourth our preservation We expectations $XX.X due a $XX.X million to pleased For the million, reduced $XX.X have COVID-XX. the year as result mid-XXXX XXXX, of line XXXX, were dividends paid to full million in quarter. focus also cash in of in were with capital our approximately expenditures fiscal in in on

shares total XXXX for per million. of XXX,XXX per common an our of price $XX.X includes the This at stock in repurchased of $XX.XX approximately repurchased X.XX at of stock average million $XX.X share we common a share of during for a we an addition, fourth million. average approximately quarter of that In $XX.XX price shares our total

our up went our XXXX, to authorized $XXX December year-end, XXXX. As XX, for authorization Directors million X, XX, our at Board expired of effect runs of through and January common on December of repurchases stock into on the repurchase which of common stock,

as XXXX. In of to of cash a of our be will XX, quarterly payable April Board XX, January of X, dividend addition, which April XXXX, Directors on $X.XX share, record per declared on stockholders

Before we questions, X, conditions trends our today, for like are ending outlook. as to XXXX business effective turn including Based and financial estimated XX% is the and of December discuss range approximately estimated million call on to over $XX be be taxes; XXXX, both XX.X% XX%, to in and of range the income to $XX be used of rate full will to to XX, operating million, margin which to as guidance I'd tax including year the $XX XX.X%; initiating we in be CapEx. is February state the to expenditures estimated million range for capital of in maintenance the are $XX the million, to follows: federal

of consumers, material As the duration COVID-XX may economic from and operations, general financial related a costs, impact on and economic on outlook adverse to the uncertain. current potential suppliers note of COVID-XX conditions and change impact materially impact our XXXX environment. its vendors material the on It's have magnitude that should pandemic raw to today, the our important remains conditions

quarter once impact of supporting In not who the and I'd results circumstances. COVID-XX we fourth which operations, operating in were difficult summary, customers to with of employees and thank despite safely these our the COVID-XX-related monitor dedicated quarter were of during ongoing to to our our very the impacted our performance. financial are again the challenges pleased continue fourth in XXXX. like all will uncertainty, and marketplace on We significantly working

diverse gives strong reach geographic position, offerings, and trends. industry-leading ability in product us combined our excellence position, and confidence current sheet and our maintain balance future Our operational with and demand support liquidity to

At business the questions. Day updating Investor Analyst XXXX in like call and and and Operator? Thank on to we today. strategy up I'd March time our go-forward you mentioned, for forward our attention time, XX. beyond for Karen this you during on your open As to look Virtual

[Operator Instructions].

go number I I $X.XX the we before So make was billion. corrected correction. stated to need to XXXX script, revenue $X.XX is my billion, operator. questions, that a Thank you, In our

line with of our comes And Securities. the Daniel first that, Moore CJS question from with

operating implies the margin the with a of -- range start compression. fair for I'll just guidance bit 'XX. The

higher a margin. some spend gross signaled bit and clearly investment little You of G&A

So is are this a end at the just a of level of OpEx the for year? gross implied us range? ranges what the anticipate direction not what sort contemplated you high can And or growth margin sense type and or of maybe growth But revenue you of give ranges surprise. the end low do

Dan. Sure,

So let of me through that. some walk

those then at Investor does higher we're increasing have opportunities show guidance do at into last activities as both point certain conditions. in XXXX like to have looking revenue, So Karen, overall when guess, to And anything were further revenues, a add mid-single-digit on compression both growth volume that with to looking quarter, in our will XXXX fund. resume, headwind margin We on there that there? to of relative OpEx as include spoke relative expecting a detail like and we'll such that. that going those percent OpEx plan you'd trade opportunities some activities those categories we'd perspective. of And do Day. travel, growth gross some at low to gross XXXX. such OpEx to the kind higher and, SG&A, some We reflect, be was general margin regards to there from some of rate We I on growth

basic projects reiterate, covers lack that our travel, canceled. due trade were things Again, it. just think and that in I had to we to SG&A some of shows, savings No,

pick COVID restrictions bit perfectly. Brian in of So those little some think I the as see around somewhat, we're would elements again, those that And anticipate to the the of of I easing starting hit up pandemic. would rest a

helpful. it. Got That's

robust bit end and mid-single at remains hearing. a I'm maybe R&R robust, those of higher if we housing to remains So pushed about being little we what if and digits end, the of range, guide, least the the at the upside through activity that's higher think

enthusiasm Yes. R&R I a -- from the staying an seen right mean, the And certainly, starts. there's of and amongst people of of standpoint now fences if We'll for doing But all that based I of kinds seems to see and sort projects. what continues. single-digit of think X some like I think, and we're increase lot builders on remodels reasonable in us seeing. Dan, and the about mid- at as home we -- decks we've growth pretty the

Absolutely. to that how year. Very had a part the it necessarily to or this ballpark some it's helpful. a is trade travel, whether the benefit was? come And that magnitude of that then in But activity possible trying reduced that possible quantify terms, we XXXX reason it in of much of back, of is just of beyond? benefit show sense And doesn't get is,

elements the I of latter think much relative comp of pick seem those increase, at travel that do other to maybe not so called note out a of different far we anticipate a before some activities' have could from in now if me that might and the as when -- yet. elements don't the We did note variable that part trade. in uncertainty that point. the but put I around from some the midyear, did later. earlier, I early maybe would XXXX other see were call be, really the it bit it perspective. pull for specific part the front little perspective those doesn't ends. little We lot travel release, were that year, amount dollar a to up and right I of a maybe in the I'll But there

at if could see you pull for So let me end. that I the

any last long but in your magnitude, a but March, any executed what shot goals X-year be extremely necessarily preview on whether different similar well? obviously not they'd of chance the here, be of on we or that get might type about talking And you Okay. sort metrics to

we here, wait giving some hold clarify we'll information we great And to our for able -- but you. till some associated a that's and with want March is metrics be we strategy don't surprises want that our to and be to that. just that obviously believe question, date will Yes, on we of all growth you where

Our of next from Baird. Tim line with the Wojs comes question

EBIT in Maybe guidance anything? what In revenue, exactly what just for to maybe your if start. inflation, even price range, have for -- factored exactly and you steel

Well, with some to do our comes on out. steel on right as we increases. assumptions Day more some provide guide, that want granular price that include do now, Investor more -- We detail

do So we're seeing for that with that as implement looking -- if the of steel would you and disclosing what and far what around could we us until to rising on time, Tim, as plan far as more information planning we'll that. as bear for are plan to price

in of growth Okay. should I we guess, so about, top on that, volume mid-single-digit to in we layer price take should and revenue some expectations you talked terms of the correct? low

Correct.

incremental you in on you investments, cat investment quantify But of then the your secondly, the growth kind want And know in you're bit. Okay. just the to 'XX? I bag a could just opportunities much making little to related keep how

in time, little Day, to be opportunities. go be to bit like what us a opportunities. And OpEx. do after in be on able is about talk making to that and those some -- will move 'XX talk that we'll at then Investor growth -- to investment those we'd of There about But the the the same achieve

Okay.

relative revenue at Okay. why grow rate time? a And to reason I shouldn't is mean, slower to any big SG&A over continue I guess, there picture,

then Over longer should the the on run, we'll that later, we as definitely may But would be detail general, see revenue. time, over case typically, out XXXX, the or in leverage the may not.

go Karen, sorry, -- then And Great. Okay. ahead.

job carefully. very know, the I at would just in plan a the -- spend done all our that of XXXX SG&A you of over ensuring say, we looked we've really nice as

we of will not And that so get habit. out

very very, our closely monitor to continue SG&A will spend. We

Okay. That's to back last of price go ability changed And then and anything your history the just out of Has to get terms great. relative from question, in your cost. kind on price customers?

Yes.

it really think hasn't. I

the know that's steel availability as in have in information steel it's able our customers. market -- key off customers cost element of -- costs. steel. lot a to have rising there's about, about talked to we push certainly We've increases, the a we our we've of that And that that, into As be and of that and the evaluate our

So really changed I anything's think there. don't

kind change on difference last it and we how we're that a quite year the increased steel pandemic struck between were now point is think first when what costs. where big us seeing I from has rapidly the of

jump full most was to XXXX the other we -- line line in the the year And the about before more for $X.X question, selling next entertainment G&A and savings million, travel lines. and than split,

question comes Sidoti. of from line Our Julio the Romero next with

forward? what should that can want broad have to So about, hold I guess, Day. be part to do think for continue and answer. of approach the you exceptionally growth some of well do you of the that Simpson ask best like I that details But kind going talk understanding It's maybe to to Investor guys could your that growth you if you'd about does approach to the but a the question, you

engineered solution solution. and I us typically that supply, things complete that's or we distinguish a that think the the complete

from those materials So are product the not that do its quite of performance, we only that make corrosion by and And also stronger. we with standpoint availability. resistance our do well helping differentiating but buildings building safer the its

that be we to we technology, manufacturing, these approach areas, markets, as commodity engineering, other looking are into able not we're but to looking use to we into look So complete solutions that want markets. that to be sure growth

the having of you so I guess that it's of guess, that And growth to one worked engineered is things aspect I product narrowed Got focus. of from the you've products some kind last over years years? the continues or last well X maybe benefited really since of some -- your X that so the over is approach it. for X

Yes.

talked I think dollars a product can that at fasteners, products. that very market provides provide fasteners. it our and look million, we a look and in have product exceptional we've taken large to market, type of at note narrowed when we exceptional opportunities versus So of fastener you this. performance and right? is commodity I'll say structural where focus, narrow $XXX about things we really billions of down There's an And differentiate our we've we back

look to in, very large we look ourselves. differentiate we be differentiated we it our that be in market that product Even that provide we areas grow you at and our when market, might commoditized. do not So areas services can want and that a at can though

margin start so solution. provide standpoint, you engineered on helps a with certainly level. that to -- at see selling to solution and focus that higher It And -- these our think narrow being a that to as we that's I markets, service helps sell able gross us have why we

number, it. the on goal year. hit. I guide XXXX And original about just pandemic number in your -- million, your Got was came what touching your I And year you but target original that once the today guidance. pull to $X if came guess full original for you I XXXX CapEx think you go CapEx did your back reported -- below

XXXX consider your how growth to I that be annualized about outlook, your 'XX? there kind beyond CapEx should should of right, Is or think -- Or catch-up? -- about as think it's -- So I that is I that? is higher

it from every, Good to XXXX. years. of periodically, sure, an amount will refreshed due have needs XXXX question. then Part And to to say, get we in into higher element that be investing up, years over X some may a X maybe where there rolling element investment is for catch

in So XXXX there's as of a well. bit that element

to a the of element few that some do perspective some didn't that the in nature. of every higher and 'XX there's the due So more years things that is that But from are guide XXXX. we things number in in

Yinger final question line Davidson. from D.A. our with of Kurt comes And the

steel sound to gross points, that just but -- margin mean, action just you the to and I have taken right? on doesn't to it Is pricing confirm, I like date. belabor not guys any

Well, right of rising price are steel costs. out stages initial to in increase communicating now, we due

then part where allow So we'll customers and that the at mentioned team, Virtual and greater that that of our I we need about folks it detail to to Analyst the from what I process have occur March Day. our or mentioned in Investor latter our are hearing

here be we of that Okay. out would have, really before to of And confidence first inflation back the I guess, Got far it this in seen some relegated roll I to of see something Is that mean, an visibility inventory year? we've from that do then Or it. P&L? standpoint, or half through the XXXX? half starts That's the could the how you fair.

really is factor Yes, good there of purchase because on a what bit it, today average versus the a consume we today. buying And question hand of because steel cost there. based we're on ins and and just weighted delay what as we at our -- outs our have change kind

delay that through price So of bit decreases that steel of roll on due amount just they there a have do is we as for in or matter increases hand. the sales to a cost

try or of a or based would out prices utilization, And will the on a part we period given that known year. known going how to be that gross steel quarter model So like. to what correlate margin today or based much or the the we're in volume be today, so predict on produce assumptions, it latter to facts

and strength I'm in Okay. to That the the it would Center benefit Got very of a that. here you strong relative it. again, curious that's sustain Home like load-in through whether view having without talked it revenue half, performance of XXXX. second you in whether load-in as back sense. October. with to least driver you've seen just a gaining or the about these of what strong even indicative and was, And benefits ability lows customer at as really the kind big associated the that lap sell-through you sounds was And upside set makes

QX, if of done think of load-in, of there's the end at maybe a any, I the was QX. much, don't It stores the quarter. few in toward couple beginning largely

that largely XXXX. that trend to definitely the Karen element in has of prevalent mentioned, some the elements QX, that weather, continued QX been earlier DIY So think, of due more favorable for I

a R&R be. follow DIY might and as elements continue the to So to basis, monitor those but how go-forward to a see comp, on have definitely we'll tougher as strong far trend relative growth XXXX to

it. Got

And America, you're you seeing on could gain I'm well. share just as materials that just share really to chain, type seems be market U.S., supply. guess, customer Europe Okay. And opportunities that building everything here gains to competitors think in in issue the inventory short type you that? focus relevant caught of the and -- supply service being the or a whether guys across kind on curious like be with similar have opportunity alluded in a I some and here North for you given guys,

lot I reason And seeing is Europe, Certainly, industry. really potential obviously, the building we is we that we small gains many in issue. you've maintain an is levels and as big as product market customers. able now been the the continuing us goal is, we as a in our our focus, we stated, -- availability, in think, issue service product you But the mentioned, really, I Europe. Kurt, customers' of even so meet to have Yes. many, availability have needs And remote. steel working as #X there's amazingly as our we have share customer our wood to is an ensure customer But and key. relentless see -- to for mentioned have people very much not a saw I've

to needs, versus, not And meet customers. substantially those able we the to so they meet the needs larger-sized were have were customers' U.S., if in we able

those So a little bit different market in areas. both

but saying meaning were And customers, I you were Karen, believe you competitors.

sorry. sorry, sorry, Oh,

Yes.

we the competitors. I that. problems some small meeting much who larger more U.S., mean -- competitors have have Yes. in had Right. we In much Yes. availability Europe,

difficult much customer because difficult market more get -- much meeting to needs. So they're share also

Right. Right.

me. you anything start's that's geographic helpful. I we that alluded sort there's half and the to But XXXX, there's back think there's think And type of the the issue half in you I surprised through residential you through. more of the about, in to why customers, lag know Okay. any and one That's any the impact for wouldn't whether just reason second of? necessarily going in that really pull points you, could or sit here new whether leakage strength of first see and a whether then data seeing that come guess, as volumes starts last Karen, kind between just curious,

Yes.

that definitely I think, shortage there's material we had. still demand, talked the I see some Kurt, We've about me, is biggest one the but But labor. still to same of headwinds. headwinds

have has is function that I in we to the think of construction area. hasn't picked the still increased, a but That that complete projects really able limited being demand up. resource labor

can the factor becomes that, believe your you really And build. of limiting so that I that on number starts

you the we've question-and-answer our And Thank joining as us. conference as well with reached end that, today's session call. of for

a disconnect now wonderful have day. and may You lines, your