Simpson Manufacturing (SSD) 24 Oct 222022 Q3 Earnings call transcript

Greetings, and welcome to the Simpson Manufacturing Company Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando with ADDO Investor Relations. Thank you, Kim.

You may begin.

Good afternoon, ladies and gentlemen, and welcome to Simpson Manufacturing Company's Third Quarter 2022 Earnings Conference Call. this forward-looking are statements. on historical statements made are fact statements call not that of Any risks Such and subject of expectations are and uncertainties. statements based are to on a certain estimates and number vary Actual statements. forward-looking materially future results from expressed by or those the implied may revise new update forward-looking note reports, to that the events and publicly to X:XX company's by to extent press the are or any We corporate public as approximately encourage in applicable statements company's the at earnings required we obligation otherwise. Please the p.m. we website. Except read you of whether available undertake release securities described on risks the filings which today, a or or no today was that company's make information, here the laws, SEC's result issued of the future Eastern Time. The available earnings Relations the company's the at page of Investor press ir.simpsonmfg.com. is website on release also Relations Today's replay a call on will company's website. available being the Investor webcast, is of be the and page

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

good I'm afternoon, call. for participation you your everyone, our thank Financial and today's and Brian Officer. today on Chief by joined Kim, Magstadt, Thanks,

I I Simpson's to joining those great work our on last over next my values-based job. by great from customers to structures. last led done help regarding responsibilities consideration, customers helping were and end years. I'd build the succeeding with moment and will our Adviser will phase to hands. To I'm remain that unfortunate value have of in has Simpson's our It's XXXX and tremendous until that retirement who and recognize assist over lead like to and to our its has people event. be me these employees, who I'm opportunity take succession XX years XXXX X, honored solutions to I'm stockholders stronger over transition want through I'm Executive provide Ian after the to as the our to the like CEO It XXXX, alongside proposition a culture involved strengthen Stockholders. the month been amazing Board on with its XX, the directly much begin, in have deepest Directors. Mike the inspired as the thrilled suffered step of on Hurricane condolences with of with grateful Board have safer, of the personal strategic also effective result a will confident and Simpson events of send assume January I've company. design of plan. Annual Officer announcement to and After of will down plan as extremely role a company for Meeting to succession of mission have is be past to and him, my Mike, decade, pleasure growth since impacted to at those helped until June Olosky, tragic losses a all a that month, Simpson the this I the Simpson's decided that as Before Executive comment Simpson's Chief CEO this Mike year, been

development as I'll be at our building detail recover to at well the opportunities involvement hope level of As affected improve rebuild, areas and on more we in support to performance. the the to as communities these to local provide in the call. product later forefront identify

damage. I'll and then to priorities results operations a third not financial the and outlook you were walk our our allocation in Florida our detail. you through business updating now I'm greater sustain did our fiscal update in XXXX Brian capital an Ian in to turn that Hurricane as will during impacted third certain report any pleased injured quarter, employees into an storm none our of While of our on and the overview financials initiatives. well as quarter key of growth facilities

and third well of lower during quarter Net from third against sales contributed which by addition prior as DIY in was offset customers. Volumes by quarter top panels. our price and as by rising throughout co-op year million, to our from up raw may in led see to Center where business, the increases European raw North from our much dollar. In challenging increases in in which by coupled our material is softer execution macroeconomic strategic America which increased channel, the the costs acquisition starts, our response macroeconomic climate, you over the million distribution driven customers background. as prior a from year offset line. Volume $XX.X costs totaled uncertain material significantly other dealer our results in our the was negative which, sales a volumes price year-over-year. million XX.X% was of continued inventory Volume volume over from our product operational despite impacted Solid financial that distributor repair to was product by improving our ETANCO, Europe, result releveling mixed $XXX.X ETANCO, distributors. quarter, we offset Home benefited both recall, strengthening of of with resulting to customers strong effect was and increased were XXX.X% primarily well which operations, our housing U.S. slightly of down plan Overall, volumes a Europe Home as $XXX.X rising contractor up the we of Center across XXXX includes year-over-year, and our implemented as quarter as remodel

internal of run executives a to operations our with at progressing environment companies. We To well are still on been ETANCO secure our plan. challenging, remain acquiring believe the our and paramount energy the highly to we although Simpson macroeconomic Europe synergy cost. Since comprised positioned process, Also project X, today, of facilitate in to years While that developed of and higher some integration changing need previous the to both and employees a we on ETANCO. operations, able the we identified April its office capture as remains our well has track has we of to our cultures from delay success in will benefits synergies opportunities. which blending circumstances, meaningful from believe been management subject of we the ahead of corporate expect complementary key both we

year. I'll dividends repurchases to are growth factory Brian partly caught up opportunities to labor our and margin points. Compared the basis the expectations as the for quarter quarter on as priorities, our year accounting primarily quarterly prior which our to and for and the turn Our in declined of on to XX.X% to our raw of enacted returning adjustments, stockholders expected, $X.X selected material the consolidated now XXX as higher of capital third further gross while million which considering increases net overhead by reduced period. with $XX.X before sales, contributed our profit well third and of costs. compared year $XX.X also through our due opportunistic the as prior focused the our million XX.X% margin of value average and stock. ETANCO allocation the elaborate purchase to margin in remainder key of simultaneously gross drivers million was on will gross ETANCO, addition approximately margin price organic costs our quarter gross we our its performance

remains capital flow, repay free to Our enable the the ETANCO. cash target return the debt us incurred XX% acquisition flexibility will of of which we to finance

operate that also opportunities to align would growth While we value priority, evaluate in especially our support potential the initiatives. M&A the which are that integration we of our continuing ETANCO propositions areas for remains in our with key markets

finished to well organic as production our to ensure to efficiencies to expansions needs safety the goods and products. reliance certain component as on while regard have growth, facility ample reducing improve prioritizing our In capacity customer and in we are our workplace, meet we service, outsourced

the of like will the quarter third in of and progressing and are on customer to best-in-class into other across Technology, footprint opportunities residential, Ohio to choice. I'd with the key business strengthen to service. Other discussion retail and Building are and continuing growth differentiators key marketing, our our economic engineering, the continue now the and with a to business expansion national deliver be turn to personnel our initiatives. X a OEM, our commercial, encompass markets: manufacturing model environment. Beginning throughout capabilities remain in areas which distribution end-use the to for our facility traction partner market. We We challenging sales to of investments review company testing residential expansion solid made the forward

structural organizations building events to and both I of and beginning, and involved training, and the the about increase resilience alluded engineers, well communities including many achieve with involved are beyond extensive with local like efforts to importance building building building of assessments. Hurricane we to As with standards conducted building adverse of awareness safe to been levels We integrity. person at higher code SEMA disaster have educate as in as weather to practices virtually preparedness post-disaster homeowners in assist Ian, regional

our in stronger. In Ian build we mass to pleased on back initiatives. those are efforts the made assist to to headway timber be help position We recovery Hurricane with more following space, the communities OEM

and product the us and to new on in educating and both engineers line has broaden timber jobs appeal of strategy training our to contractors States led Our specifications mass in and more Europe. has to customers resulted United

more to continuing choice a and for mass at in timber software purchase retail local States, been training, Washington. Within the to of of we've technology, obtain to quarter during on the customers segment as retail We their manufacturer team using for a online creating more decks, focused invest customer best for on by the to living construction solutions complete configurable regional and can we've the space, of during well sales design levels. In provide specified customers our were on market DIY fences to we our our and national bill Further, in display order solutions methods. the updated and Austria to be the project with innovations we elements partner make form were region company, sales efficient. instance, the e-commerce full We're innovations store. the to of supply pleased where programs. platform, for to customers traditional, pergolas Simpson's cross-merchandising and service quarter, relationships products to build help including ability our have R&R jobs the in all as customers such the expand at online third as Southeastern near building materials enable Seattle, United a For versus Technology, focused to ordering Building for associate a outdoor associates and selected time-consuming been portal

inefficient platform paper options, broad help them management adopted to technology Lastly, quarter the changes workflows, during regional from for processes. by transition automate and to builder pricing was our a away highly-regarded automatic

we mentioned as longer As will we steel take our the build initiative the than past, have structural to other in the anticipate market. continue initiatives we

demo connections strategic steel we to on the tested as diversified part steel Company our As rates, can of growth event, ranging to XXXX our chain customer and quarter on facility structural starts employees plan. solutions at engineers and execution future adherence as welded I our inflation, in for our even growth market of footprint labor such pleased values Stockton strength summary, progress confident customer this softer considering factors from standards. educate we particular grow continued forecast industry when front, connections to industry, well service along interest bolted productivity. In company and rising our relative U.S. and Simpson our Ambition held financial to believe our years constraints our educational support remain in positioned improve around initiative. that the ETANCO well going we the housing. on and on XXXX The and we is various at this is aimed investing to continue design fiscal results them strong housing our and third from day given during superior product centered of with achieve can supply customers. I our to are above-market in well, portfolio and country extremely with integration Through hosted our ahead, this impact the fabricators focused to quarter our highly-engineered our people, professionals Despite to on converting the we a of we for continue traditional, solutions culture as to the that thrive am

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

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

on Mike years and Karen vast many congratulate on like level I her Simpson. well well-deserved It's his been best to as to worn XX work retirement Karen of the true I'd all the wish your her alongside past begin, at and different learned I upcoming for a promotion Before as experience, having from CEO. retirement. hats in to honor knowledge you

Now to Unless April today be remarks our quarter turning prepared the my results all and all on comparisons XXXX. include the results. acquisition X, stated, of financial otherwise versus third in will the of XXXX quarter third quarter third XXXX, and year-over-year ETANCO refer discussed measures the of comparisons to of

third quarter million. consolidated net $XXX.X sales Our XX.X% to increased

Within the volumes. primarily sales due year, price increased we the North along net million, higher sales increases last America XX.X% $XXX.X segment, to with implemented to

Europe's intended increases $XX.X abroad. offset increased in compared prior XXX.X% million, without net Europe, million to down were sales material sales In net higher to $XXX.X the lesser which ETANCO, costs volumes from year price contributed and, a ETANCO to to extent, quarter. primarily

Europe's negatively dollar. the currency related addition, currencies million weakening translation $X.X States sales by United to affected foreign were Europe's in In against

increased Wood XX% to our up total gross gross down XX%. total of Construction resulted XX.X% compared which third to sales, quarter products profit million, Consolidated $XXX.X XX.X% XX.X%. from of margin sales, slightly of XX%, a in were Concrete products represented Construction XX% and from

and margin of On each in the a in to net due we material, primarily to partially offset America were raw price our to gross overhead sales, XX.X%, as segment implemented by basis, factory product XX.X% percentage compared XXXX. costs, a higher labor increases which and decreased North

$XX.X totaled to of million for margins dollars in This result was a XX.X%. adjustment nonrecurring as which ETANCO, inventory gross included Our Europe value million why a $XX.X as net accounting. to $X.X and million is from in XX.X% a of gross fair profit costs significant declined from Europe adjustment factor purchase

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

expenses costs quarter Now Total turning expenses or also costs operating Operating $XX.X our to $XX.X attributable to of were million and included an million integration million expenses. third million, $XXX.X and related ETANCO $X.X XX.X%. operating ETANCO. increase to for approximately

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

personnel primarily increased to research and increased to third primarily as quarter to $XX.X XX.X% travel-related to due XX.X% well million ETANCO expenses Selling $X.X $XX.X Our expenses. and development million, engineering costs. million, expenses personnel due from and as

in North America a up Europe, were On up selling and XX.X%. segment in expenses were XX.X%, basis, they

in million General and administrative ETANCO, expenses $X.X increased XX.X% to $XX.X travel million, primarily the acquired which well due to million for from professional overall. fees as intangible company $X.X the and personnel, of amortization assets includes as

by consolidated of due As expenses. to million an operations consolidated totaled a higher higher operating result, million, profit our increase $XXX.X from from $XXX.X partly offset income gross XX.X%

ETANCO's which flat. income gross operating operations $X.X from million, XX.X% noted In essentially million of for operating $XXX.X acquired income of XX% million to profit due America, as Europe, the million North value includes aforementioned to from expenses and million, expense were on decreased assets $X.X operations In increased nonrecurring $X to higher primarily of income given as total amortization $X.X I well million a inventory $X.X fair adjustment $X.X earlier million. integration in net costs the intangible of

our are As to preliminary additional we the XXXX. note adjustments of that in accounting ETANCO integrate our incur and and finalize costs XXXX operations, the to purchase purchase we we through expect change European continue XXXX. remainder as Please into to subject accounting

will operating operating remainder a the On XX.X%. discuss points of outlook consolidated margin fiscal our of XXXX XXX decrease a from margin was shortly. our basis, income updated approximately basis XX.X%, I for

diluted share. per to Accordingly, $XX.X totaled XX.X% or million decreased million $XX.X rate income $X.XX net fully compared to fully from per or $X.XX tax effective diluted share XX.X%. Our

flows. Now our sheet turning balance and to cash

from Our cash of balance sheet totaled XX, remained balance equivalents and healthy. $XXX.X At million, million September cash XXXX, $XX.X June as up XX. our

XX, as XXXX. debt $XXX of borrowing $XXX remained of on credit September primary and available approximately Our million totaled million line for our

$XXX our of at and levels continue strong rapidly management to XXXX. the Our inventory balance effective especially million, economic position retain service compared XX June changing environment. our was customer We'll XX, to we delivery given at standards ensure on on-time to focus September was which flat inventory

operations million. we $XXX During quarter, the approximately from generated of third cash flow

As growth the our use our remain we cash repurchases. highlighted incurred to centered supporting simultaneously business Karen earlier, primary debt of value on will the dividends of stockholders while the acquisition returning repaying of and finance share to our ETANCO and through

in average an $XX $XX share invested for our of and total approximately common the quarter, paid stockholders; During at $XX.XX million stock expenditures; to capital repurchased per of a price $XX XXX,XXX we third for million. approximately shares of dividends our million

XX, approximately our repurchase under the available $XXX remains which million million September XXXX. of of end $XX through had As authorization, effect XXXX, we share in

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

material $XX revised in XX% to range recent operating which XX% more be $XX historical results integration expected XX%, ETANCO, of approximately including for in to our income in million and to estimate expected from our like is financial latest results XX%. costs previous acquisition. on our the quarters expenses. costs business conditions of trends I'd raw discuss input expect December to demand for as expectations XXXX, the X as of outlook, our ETANCO, acquisition material is our of year our Now and ending on We regarding which now follows: updated includes better the and to average is actual October the and attributable and line today, Based XXXX margin guidance versus guidance million transaction with operating trends, to XX, The full of XX, visibility costs

XXXX to implemented throughout to XXXX top XXXX. estimate product approximately in we impact cumulative increases Further, from line $XXX be million we versus the continue price

to sold continue as net our through of expect a inventory of will also the sales we as goods work through of our We balance percentage increase on-hand XXXX. cost

revolving on loans, substantially rates. We had facility million the expect all to million including $XXX from the and $XXX swaps, million in cross-currency term which benefit of rate expense the borrowings mitigating interest interest and from be changes approximately interest credit outstanding initial $X.X volatility

Our tax now both are and range rate effective expected to income assuming of to in tax and state XX%, enacted. be no XXXX changes including XX% is law the taxes federal

of compared lead $XX estimate to expect $XX capital million Lastly, we the due million extended now $XX to in to of be previous million times. range million our to expenditures to $XX

strong quarter with are continued key In our ETANCO performance we summary, financial in growth results we operational our integrate initiatives. and pleased to during make the as and strides

long-term choice remains of plan strategy Our be dedicated intact, we strategic in to to and are the industry. partner the our

With session. begin call Q&A to to to like I'd that, over turn the the operator the

Our Instructions] [Operator Moore Daniel is with Securities. first CJS from question

Just off, and comments Brian's wish you, on Karen, career to, exceptional quickly, best. and all at first wanted congratulate you the echo Simpson an

be in us just definitely with of will missed insights of specificity North calls. Maybe roughly and volume trends what these XX% quarter How QX? the of much kind versus course. on on sorry, North any Your revenue more Can start into America America? volume you price, give the -- seeing to through -- growth and you're

Dan. Sure,

as a pounds million, bit So it in And was about XX% X-X little million. $XX we just price, volume shipped. than measure less

shy on volume So of little in just a just then and under $XX million XX% price. bit

an a last market end bit year, looks versus can easy terms little obviously, you the comp drill what possible is to fill. of in it with down inventory Brian, growth And more, true -- had you like

the any of there? exited were And thoughts into sort QX? we as what So reflections the trends quarter or

associated growth the were mid-single-digit areas a not Call that volume it kind in of retail. with the

large to like. last the couple that a inventory noted, doing rebalancing you of As QX our year some customers being was and due comp

America. channel everything Excluding North rate mid-single-digit that growth the else volume for or in

it. Got helpful. That's

or restated price the from full million reiterated benefit for You the $XXX year.

there I through about think comments your remember if we're I just QX, last quarter. from

little this have -- we for the maybe and benefit are QX? of of we Or pricing are So incremental conservative? expect we lapped most point a little at

less implemented incremental, $XX took No, lot a A year last little price were mid-quarter. we than I in the think of increases million there's QX.

So lapping them we're now. almost

I'll Maybe about basis? just jump pricing compare ETANCO a it. back. Got on as well. their million. $XX does trends How more, contributed about or X X talk volume that And year-over-year and

kind were there. -- conversion and say, approximately due they accounting not about ETANCO, and from for price in see, on X% offsetting currency to of XX% up local by, approximately to for volume that's Let's that X% -- any

Got have we obviously? FX, it. the And then

Right.

of in Okay. the the it And guide. supply-chain any in Or lastly, reflective just change Is really driven? CapEx a is it at changes all macro?

to items. contributor just chain, supply time a source continues a there. to And long Just that's take

right. All

'XX, those projects? So of spill over maybe those into presumably, of some

this No And happen guidance, that we XXXX doubt, It's bigger our in into had yes. next years. make that. year. we'll to a impact definitely when note provide sure prior rolling We've year

follow-ups. jump queue I'll Perfect. back in any with

is Wojs from with next question Baird. Our Tim

trying a getting Karen, just I'll to it's I'm it's good implies maybe the echo trying make to Maybe with of know quarter. And EBIT I'm And type Dan's right. got my maybe working the comments. math the is that in XX% seasonally, fourth a weaker on you. XX% that my make Congrats, of to guidance, sure good XX% quarter. just that, sure I'm in and to spot. been margin I've bit margin, a XX% that I little kind math

Sure.

there's perspective, -- impact a so couple So with that you're seasonality a couple that and things. From right. of

would that Our in than factors. volume Mix slightly based line the Simpson combining slightly us high the another business, with up, points there we ETANCO expectations ETANCO, to flat less And on up, -- down. maybe low merging gets guide. be -- that top obviously, but that quarter of being the end those brought XXX the didn't that of take all guide on end we to to prior basis

Okay.

ETANCO, $XX I million $XX quarter. million to of I then now, was it million last $XX to integration guess $XX think And costs the Okay. on million

wondering some right? through you're guess, costs you maybe already. if I those most those. in costs onetime was that I just flagged size think you I Is of And integration 'XX. could

all the would would if year updated that the of that work, of -- any are restructuring for so XXXX. down, costs, be continued And having There driver be guide impact likely a -- not anything number. in lot significant largely there coming type hit that's to that of integration the this would number

again, that some there, extent outlook next for in we'll when that more we've So we the year, well. color provide got add to as

can I hearing are builder terms single-family, you maybe kind pull single-family of customers kind would if pretty planning that kind of meaningful guess, for scenario? revenue like, look in mean even of in maybe levers you what we end or around, were what margins from more, if guess, to see year? of then, markets? down, decline gross XX% of your I remodeling their SG&A next And next is assumptions I say, in multifamily, year a type guess, how starts And or Okay. the I

multifamily, some give Certainly, Multifamily both as structure much single-family for it's a And multifamily. geographic content input in as decrease. the is me we've we're that it let from quite builder And location not in still and so family. Tim, Yes. about, is customers. strong. single-family we've you seeing of talked put single

there buy-downs offered, definitely incentives were were So think mortgage quarter, -- are they that were second we that I in the being about offered. being talked rates on maybe seen some

that kind I sort of, phase. they're of, through think

So housing in seeing we're listed slowdown that starts. the same they're of clearly, that seeing the

of remodel, those levers repair I'll it a turn Brian pick-up And business. little could DIY We then of bit on pull. as as we of a type are some back far the seeing the to

We, the today, time. looking back volumes, volumes that lot We be would to efficiencies. over we'd to if scale the and had investments the time, there. it's to want efficient at gain volumes on to back would of run greater of factories to that extent manufacturer to back to course, be in seeing we're feel the pull as main would how of or as those able that an take really factory, quick. To some we're we're product. levers extent We look We look that So overtime making get we at. within most customers the But of of we type items might the a for CapEx add need we be extended capacity, equipment pull products much not competitive like. the would advantage that to period a

down, sales. if overhead volumes through negatively That were is Of running of absorption see primary you would would that probably be course, difference cost the impacted.

would course, Of But there. just back to bit up pulled take a market material talked on flow biggest about a And bit significantly. the we've I longer had how would P&L. material there. absorption the for say through gone and would impact be the little little the it has That margin overhead

what's this And the through Okay. most guess, inventory I cost P&L the guess on kind higher flow of of best when point? at your

we're being think I pretty to close there.

Okay.

Okay. That's the Karen. Well of good. Great. good the again, thanks and rest year luck on

Our Davidson. next question is from Kurt Yinger D.A. with

Just starting with gross margin.

prices quarters, than would deferred guess, with X longer have? just has to last the ultimately overestimated has one your performance been higher the just impact that you consistent you've on understand about that think drivers you visibility better that trying being impact talked Or the margin cost perhaps of that, been and might b, steel You the I'm the over, thought? of increased Or pretty operating outlook. expectations? your whether guess I I have

of what seeing, would into deferral we some like. than would But were said, and we Coming slightly say also initially It's would volumes volumes. less that. have greater overhead expecting contributing being planned. to with part volumes and of I up and what than that be used quicker. year, that slightly that that that we've the the been levers the absorbed about. is those we that being to lower That talked of Also absorbed how have is -- contributes would

and around the the reduction like. of So overtime question prior was

year. current to we and for quarter the how impacts different the all guide the are see those current So for in -- the

Got it.

roughly Okay. the there to then of visibility sort rate that is ETANCO, much X-parter. million reasonable you you Or makes back feel of that second, you that this quarter, sense. like QX as going think seasonality That run with $XX And sales business? And XXXX? a of a just there? Is have do early for and

just we be The than bit of Not QX would there. little A from experienced. a a perspective. revenue seasonality what little much, though, lighter

And bigger picture then, lastly, objectives. guess, Right. XXXX Perfect. the around of question a kind I

to operating teens I decade. back given the kind business you've demand has this you do into think with the the back, fairly this that looks the of year feel through think the done of Looking outlook assumed areas, like pushed toward some still part that then reasonable back mid-teens of investments SG&A the to the of I at growth high of stage? shock, trying latter framework? conservative kind middle still pull make the targeted side outlook you're margins you material I with and what mean the on pricing the these a different guess, absent that's and or, a would get Or do kind years

a just let Kurt. that, Well, on me give general

We very aggressively compared growth -- above our or tracking to to And you first the ones are the market to as ambitions. housing working still get starts. mentioned, XXXX and one first was

I think about, additional that that we've with talked really been really we point. housing you those associated none we're at markets our on X of do of starts. that able this to see focused which that that's And function a are

confident one able over market I'll in people we've we to as And spaces. that after far as that we're the why place I Brian, think we're growth. that's So very of turn areas very be going confident put above-market but and to feel those it in do the go to to what

was in XXXX, to on increases prior that, out when commentary leverages that a early and SG&A spend. that all on follow-up put the that we And price back

no expenses that, a mid-XXs margin, a it'd although wouldn't basis or call would be revenue, the higher on operating either assuming that to margin teens, it lower changes lead necessarily So up think longer-term be of mid-teens, us in percent that price, operating down. percent being gross but with

top a to So operating the of it expenses. there line bit just that reset does because relative contribution the

Right.

That Okay. to and everyone. Well, both, sense. And makes Karen great. good Mike, here in and QX, luck congrats you

question with Sidoti next Our from Company. is Romero Julio &

you impact how synergy cetera? France? guess the way that et runway, these integration guys ETANCO, ETANCO about I at targets, the on thinking how you're about labor starting Does does thinking that And strikes in all? are change

French legacy operation have labor ETANCO France Yes. or strikes we, not I operation. our our at the this mean in affected point,

on we've So don't front. we're good And pretty either. in the our of I rest of business heard impacts for believe on shape that any that

the operating you're all those bit would -- the seeing we be margins out talked still to but feel a that us they're income Europe to that I general we synergies just operating when there think uncertainty about, of -- captured. in achieve contribute there pushing

Okay. the you Got of part that. from are hearing at the first on what side guys it. certainly change the regards And business, Thinking reassuring, big on repair about to remodel inventory just they're boxes looking front. of the how carrying 'XX? insight any they much may towards the to maybe all? have sentiment you in seem Do at that to Just least be

the you sort mean inventory. a little a tend we Well, remodel point, are really really housing I change down any to go customers. haven't not starts to We, Julio, bit, as up. status repair change in traditionally, from seen seeing go in those of know, at when tends inventory this

at early a how be might going little to this point that's -- there's project. too to think bit I So see

the you secondly, any all? update XXXX Understood. at and mentioned CapEx progressing? CapEx equipment how that that's expansion for deliveries. some And you're And on the Does delays change facility Ohio planning from on front, how

answer be on second last first. quarter significant that of -- year I'll real spend from No majority part the was in going Ohio. movement next lot A the to anyway.

question, areas. or being are those we'll evaluate add of within can we part those, of we able your improvements some initiative efficiency capacity where first look the would growth in either our facilities. up scale at to key especially operations, to from our And continue within to So our given

So year thought where sure we CapEx spend or as at versus it look would but go we're been likely accelerate just now. ago X to having a next looking may to those we larger it at we're have forward, we that want months continuing is make what

Understood. And again. Mike, Karen, comments, everyone else's I'll echo congratulations

today's This concludes conference.

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