Simpson Manufacturing (SSD) 22 Jul 242024 Q2 Earnings call transcript

Greetings, and welcome to the Simpson Manufacturing Company's Second Quarter 2024 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.

gentlemen, Earnings to Conference and Second Manufacturing ladies XXXX Quarter Call. afternoon, and Simpson welcome Company's Good

in risks Any to statements statements or those Except made company's reports, applicable subject as Actual statements statements. future a are extent make certain the any of future on forward-looking no filings and implied public which to this read call fact new revise the estimates events of the or result by encourage described vary otherwise. risks We publicly undertake forward-looking of available and by we that a are results or number here SEC's the statements. and and forward-looking obligation may today, expressed Such company's expectations are on or the that of information, to on securities required to historical whether the laws, we based you are corporate update website. are the uncertainties. not from statements materially

was Time. note page is press On at earnings release p.m. comparable we company's which website Eastern the today of that the on Please earnings X:XX as release. the to such is The net reconciled to the adjusted most refer this press non-GAAP will approximately measure in the EBITDA, release of press Relations income earnings company's issued available Investor call, GAAP at measures, also ir.simpsonmfg.com.

will a be the Investor and Today's on replay website. page also company's call webcast, being is of Relations available the

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

thank you and joining afternoon, call. Good today's Kim. everyone, Thanks, for

our overview updates our today quarter Chief priorities. financials fiscal detail. end our and on outlook second will capital you will Magstadt, XXXX and quarter Brian provide Officer. Financial is through greater and talk today My then me Brian in markets second allocation our performance remarks of an With

continue strategy drive to net and execution year in the has both be line in U.S. wins by digits a that basis. U.S. quarter our customer housing continue to with mid-single challenging million, Europe. us $XXX to sales growth year-to-date quarter a new second the outperforming prior markets market in Our totaled on declining enabled housing Nevertheless, which was against

optimistic for in market, detail shortly. growth have the been this we of greater into U.S. discuss in remain housing growth our longer-term our prospects modest While extended XXXX. I'll expectations outlook year

Turning North American the to volumes QX end-use trends of mid-single-digit net last to producing down break and year. million in markets. in North further $XXX.X $XXX performance, in our markets. flat American volume manufacturer year-over-year we component relatively To were year, for million our versus achieved our compared sales OEM prior both growth

it to new deepen revenues. to have our a identify relatively OEMs, contributor with remains We cases relationships continued and use our though small

and wins. component offerings from business new Simpson manufacturers leveraging prior our to is improving software continually growth

We market relatively in also as market, prior the were improved multifamily year flat to our declines modestly the housing the second remained improvements volumes saw commercial timing to while offset compared versus conversions. in the year, significant single-family double-digit by customer of a residential single-digit quarter combination a market due retail of national challenging from weather, The quarter. in last and benefited low which comp declines

Europe. to Turning

basis overall X.X% under and due million economic currency on rates, quarter to market interest increased sales higher our pressure $XXX.X remains in year-over-year. the by weak a of reducing second or local While Europe growth activity, net construction X.X%

and has the new product continued customer given business also to wins that As local solutions-based anticipated, in our markets approach applications. selling our Europe drives outperform

our XX% XXXX margin has optimize support in further footprint, costs represent those synergy to costs our for impact continues from ETANCO to margin as These which in resulted synergies. other income primarily acquisition the and a making Europe to we year moves additional incurred XXXX operating stemming as restructuring attain big we well target last compression versus in are defensive year Europe. to as necessary are

target is the of stringent new of including increasingly reminder, on applications. environmental construction regulations a and wood As trends that also growing eventual and based this the realization use broader offensive secular drive synergies

gross to a primarily On basis, productivity declined changes of all XX.X% were last margin customers, mix, overhead partially costs, of higher second product our offset improvements. path by in in consolidated to support in the to XX.X% year our market second quarter quarter due factory and from to increases which costs better

to organic margins years. people, business equipment drive the to us make have capabilities the in even over investments and enabled engineering, last our support significant Our gross growth our and in strong customers of provide better other to couple

pertains it market will investments, accordingly. and control to to future we costs the continue SG&A As monitor

margin operating $XXX.X by approximately million to for basis pre-COVID resultant the remained year, last points XX.X% XXX totaled above Consolidated versus our points the a While rate. declined basis XXX approximately adjusted run decline year-over-year. of it X.X% EBITDA quarter,

our growth on guiding as capital. our leader the the peers our the such returning all that proxy housing for the quartile longer forward, for innovation groups operate, choice, to ambitions the of our proxy invested in principles top being U.S. continuing peer company of to culture, operating and income term, above-market relative starts, partner return core values strengthening to top we quartile Our to margin business returning of drive initiatives to an be be based markets of continue striving

more high ambitions to of is The and delivery provide level element to is we and centered the innovative solutions efficient. our complete on our standards service on underscoring markets as providing our well exceptional customer product This serve availability as for customers predicated primary become service. empowering

our to market. within now we the from investments wins end-use growth X As quarter, which stem highlighting making business been above long-term drive I'd the our new time to the markets the proof some some of during spend have sustainable, like to points endeavors,

challenging some from conditions. residential the and agreements helped we the market large resulting with continue yard last gains of large from benefit from share which Beginning conversions market, year, lumber to partnership mitigate

and lumber in space multiple and across resulted Our displays, lines our displaced America. expand customer focused efforts fastener existing the end throughout North locations partners supply caps business added conversions Pro double digits. our with additional our in and shelf competition anchor to with many quarter dealer up We've Outdoor being Accents

our with lumber awareness Further, customer fastening enabled yards our to commercial builder and divisions our In to we market, innovative players focus national Southern spread school a U.S. educate anchors key jobsite including several industry and the on California, the solutions cold-form partner continue long-standing of in the relentless a products use us solutions, hospital to trainings. relationship with provide charter via and fasteners, to steel and innovative in of demos

in our able leveraging project Tennessee, for Gallatin, Southeast we facility export manufacturing terminal and shed in By container a also the Till were Top warehouse in a supply also fasteners to Southeast. large Canada. on project a

sales connection and innovative a conversion efforts. dedicated led of our market, OEM success fastener the for high-quality prominent post a future noteworthy to in team products resulting post-grant frame In manufacturer,

timber growth We connector a continued large museum Southeast. mass in the also providing on in project solutions

We continue to market believe further there this to are develop segment. opportunities

sales during Accents These to been national merchandising including Within solid particular. rollouts building sales focused traction our many the has Outdoor line, product securing incremental efforts facilitate center home our additional space, efforts, on highly e-commerce and have in expanded busier retail team led in products season. the and stores, fastener with displays generate

the to component appeal teams manufacturer in our to market, map manufacturer finally, customers. component road our on larger long-term made solutions key progress And digital

a fit this our model. see opportunity to continue market as a significant good for business and We

turn I'll strategy, on Next, continues both growth discussion stockholder to prioritize and allocation capital to which our returns.

$XX.X dividends. for would In $XX.X million helped traction repurchases us pipeline opportunities which the of remains million million in continue capital generated cash evaluate finance M&A an that growth of accelerate help The within initiatives. from our on expenditures, quarter, million active $XX share $XX.X operations we to competencies second core we as in $XXX million, acquisition, tuck-in our and

for we software digital and for for CSD overall June, Designs drive customers. acquisition and such efficiencies increasing our Calculated help of the engineered In platform sales and America, maximizing as our design U.K. Structured engineering, solutions solutions or building the hardware forward Australia development industries wood, us North a company completed CSD Opportunities is in short. the by CSD providing

investments investments facility the the construction people, making capabilities, of equipment other continued expansion to our on in Gallatin, the engineering, are to and are addition in and remains to on In positioned expected help well service facility These housing work of market track new has recovery. Ohio, XXXX become Columbus, ensure our Tennessee. we the aforementioned given our fully operational Simpson fastener and in our customers valued

U.S. whereas in expect housing below European continue to we to we XXXX, U.S. growth down, expect XXXX, For starts. in housing year slightly mid-single-digit flat to to starts and housing prior starts be be

pushed beyond. have will Europe in market meaningful further there the growth While appears out bottomed, market we be into XXXX and believe to

that a few conclude, I the to Before highlight quarter. important transpired developments during I'd corporate like

after remain year-end his his XXXX, role decades which Company his best Roger Dankel Roger will until Executive of of North the wish an executive of in of service official retirement on First, retirement. Roger We XX, June company. to President, through Strong-Tie we all announced XXXX. retirement X sales adviser in Simpson continue the employed our Vice as American he after the will as

announce of overseeing reporting efficiency me who new will we digital further to offerings Chief to innovation, Officer, we and directly Second, Simpson. are be Technology development Mehta the excited our software as infrastructure and hiring technology to at seek Udit customer-facing and our drive as

commitment suppliers, developing in employees be to industry in many labor and partnership back been gap as programs and of and support give communities which for help skill address industry Next, as the as development with the customers in choice our we workforce well construction have dedication we partners. our work, part live of the to our of trades our the partner

our service. model the direct overall ordering, based our survey superior in customer survey received the more. These field satisfaction availability, feedback reflection and and to Additionally, continued delivery service, of online investments are April, of support, provide in areas customer on annual our employees, results business unique product customer a dedicated of positive we results

highlighting mid-June, stakeholders employees Simpson. And fiscal XXXX report, and published we corporate our lastly, our to practices social our environmentally responsibility to commitment social business and responsibility of sustainable in

it, report ESG tab. on under wish For view those that website to be accessed the can the our

outperformance remain the basis in choice. accelerate Execution making and over we ability The market our average macroeconomic to customer we our various points to continue against has will sales volumes our are the in in compounded strive of historical resulted longer top new despite of approximately returning overall a business above to improvements as in profitability. the wins also growth North strategic annual versus broader American remain significant summary, help for the our while growth quartile mid performance we challenges. investments the persistent offering to In optimistic market to supplier our term us XXX strategy

to the I'd in results will over like turn our greater discuss Brian, call to detail. With financial quarter who second that,

us joining call our for Thanks, you second quarter on earnings afternoon, Mike, and good everyone. Thank today.

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

Now turning quarter to second results. our

relatively Our remained consolidated $XXX net consistent million. sales at

X.X% on Within up million million segment, sales product currency Europe, effect pricing. volumes, to volume modestly declined product by the offset $X.X America negative wood in relatively increased million modestly of to $XXX.X were primarily net particularly were In sales higher North $XXX In flat by X.X% America, X.X%. construction the due foreign construction sales net North translation. sales concrete, sales down to sales In X.X%. and

margin points of costs, gross addition in decreased by a margin a segment of in partially our XXXX. basis net mix is gross which a higher gross Consolidated improvements. our due were in On resulting margin XX% as offset XX.X%. changes to to sales, gross QX warehouse X.X% to $XXX.X This decreased compared XX approximately XX.X% percentage historical to million, primarily XX.X%, margin North in freight basis, average gross since above compared product America and to productivity profit to

XX.X% decreased Europe freight compared our percentage XX.X% due on products for higher XX.X% to factory, margin to of a and primarily perspective, quarter products XX.X% was overhead, also in from second as labor, margin costs concrete and net warehouse XX.X% gross From compared XX.X%. was wood to gross a product Our to sales.

costs, costs operating Now head fees. $XXX Total and our and including $X.X expenses. professional to added increase higher an quarter drive were million operating or personnel growth million, primarily to second of X% due count increased our turning expenses to

operating XX.X% of net sales, compared XX.X%. expenses As total to were a percentage

X.X%. to the quarter by To and General million, expenses million, to to XX.X%. up million, costs higher our second selling increased Europe, offset noted primarily variable America costs, increased were XX.X% partially they were engineering further and compensation investments, the costs. expenses our administrative $XX.X $XX.X On expenses X.X% and personnel a higher to primarily personnel development due personnel in segment to And North SG&A $XX.X due Selling expenses lower basis, X.X% costs. detail also due primarily up to research higher in above. decreased

our result, totaled from decline a $XXX.X As operations $XXX consolidated million. X.X% of a income million, from

was Our from consolidated XX.X%. down operating income XX.X%, margin

In X.X% and costs $XX.X North million, primarily Europe, to and gross profit. due America, with fees, million compared lower operations professional costs. $XXX.X to profit $XX income to coupled was due personnel operations higher increased decreased personnel from from to lower income gross In million

effective tax year $X.XX to diluted approximately rate per $XX.X $X.XX was totaled million $XXX.X XX period. Our million than income or or higher per prior Accordingly, points fully XX.X%, net share basis share. fully the diluted compared

EBITDA adjusted of million second declined $XXX.X the For X.X%. quarter,

Now turning our balance cash to and sheet flow.

XXXX, and balance XX, down XX, due of XXXX, $XX cash totaling with acquisitions Our primarily million to as June March cash at million, expenditures, million working as equivalents balance well remained changes at share capital. in our repurchases capital $XX.X $XXX.X from sheet healthy

Our approximately million, costs, net debt of capitalized balance $XXX.X finance and net million. position $XXX.X was was debt our

remaining We borrowing have available primary on line $XXX of our credit. million for

XXXX, at March compared June our lower $XX.X XX, XXXX, XX, $XXX.X on which down to million slightly Our as million was inventory position balance pounds. of was

customers. a remains strategy Effective on-time delivery to and inventory service and management advantage competitive ensure of our core element exceptional our to

to During acquisition million second invested to our operations generated from approximately the $XX.X $X.X $XX.X million. in we facility made cash investments, stockholders. expenditures, million capital an our dividends flow paid $XXX for of compared including and million quarter, We

open $XXX.XX we also previously, of million worth repurchased at in noted average in common price the stock XXX,XXX our $XX market share. shares an As per

repurchase million As share available XX, authorization. June of approximately remained $XX our on million XXX

flat of our XX, outlook. guidance our on we XX, of trends Based December the to follows: as as now XXXX, year our financial ending full for is turning and expect today, Next, business XXXX be conditions July to and in synergies addition operating defensive initiatives. volume Europe growth a to starts costs moderate net our slightly operating as and the in warehouses pursue increase the new level expenses as well other a position continued range stable gross believe gains pricing, Key on of and $X modest and on sales, expected U.S. factory the of in in to markets margin assumptions a at margin company and share continue acquisition XX% as based relatively to to expected necessary include XX%. to overall lower total housing $X opportunities, make growth and are in we to tooling percentage labor million meaningful

we to are strong current company we deliver ensure peers quartile business the market, with in operating ability income investments to the line growth-focused costs proxy In margin can our core housing within our appropriately ambition. balancing control top challenging of our the our in a with

interest our $X rate the as borrowings and on be the from in in expected changes expected of million cross-currency to million facility cash interest revolving which of loans, this expense interest on volatility from December annual markets to all rates. the XXXX, and approximately $XXX.X offset of and substantially is is respectively, Next, million outstanding credit had Interest term benefit XX, expense. including money swaps, mitigating $XX

Our effective current is the and including rates to continue income of tax based to be tax to XX.X% laws. range on both estimated rate federal in tax state XX.X%

$XXX $XXX $XX facility in million, facility Columbus to Gallatin capital the our be carrying into million and finally, million for $XXX the estimated spend construction which over remaining expenditures to range to with of the new million And XXXX. the are includes expansion

share recent made years ambitions have tremendous our grow core strides market stones. our with our company In throughout our enhance cycles guide and summary, as performance to in we

that solid and balance investments that sheet growth financial Our ongoing supports on to residential strong remains position us position our resurgence in with eventual capitalize the housing. a overall

that, I'd like work Q&A I the Simpson operator begin turn the With call entire now hard for to to over their team session. thank the will and execution. to the

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

that headwind accounts. just the in missed the for that? impact, much basis at And how I a To X all, next retail inventory in start around the you? channel? quarter was or either destocking Can if management Is or go-forward an on with, a quarter national that of commentary or repeat for you

Yes.

question, Dan. good So

shelves and to biggest be loading is the year. retail doing. Really, in in Quarter-to-date our team work that was So volume X.X%. our really with last continue national we a driver we was down we with of pleased the quarter, Last up that the picked comps. of customers, whole bunch had some were business

So comp that little made the bit more a challenging.

about national volume up for Year-to-date, is retail X%.

with quite continue our Accents Outdoor growth pleased be We to there.

pergolas. that's We're business that our used with black decks quite segment growth on our hardware in that's also of well. and fastener the as So pleased

that. color, see starts them Appreciate coming I obviously, -- then updated where for the the you view And in year. helpful. Very housing appreciate about U.S. you around talked

above year? You Is target. to low it close continue outpace to outpace by digits kind to of just of to digits sure growth mid-single to point of at moderate that I your to make heard correctly. least continue as the by we mid-single is the you expectation XXX sort said think basis I look that that balance expectation. want to I your volume

Yes.

years, by know, lot last So outgrown recently. helping the is whole Dan, not market about XXX points. you us Clearly, X a as market the the basis we've

in put XXXX. forecasted now of little will similar the basically bit X had of flattish this out that had to operating years, that With XXXX, X what starts, we really last to a onto down we this a big of $X.XX market couple back to if X%. if million finish we we to you and in finish out year So market a level, down that that for with same to into then had U.S. we'll swing down similar size, of about year we QX the up profit. look X just in holds true, if will kind XXXX, percent, be with business billion And Dan, the added $XXX We a at of starts starts, X context, starts QX QX $X million housing QX housing from of it. quarters. the And housing year. housing down it's last what had was have with somewhat kind billion X.X-ish a

size basically that So we an range. $X.XX operating additional profit in same will $XXX billion And add the with million market.

So we're a target But things we that headwind, to been our at the basis last over do that's market, pleased how to and and we've want XXX with the years. clearly, X developed continue is outgrow least points forward. going to

Really outset of so as 'XX helpful. capacity, basis. go-forward described can of the that sort in being And then that year of year, on an outperformance investment you terms this service a from you've personnel, sustain

think does 'XX, the to SG&A type from about to housing 'XX? continue reaccelerate uplift elevated Looking margin How we income you do In other words, think mid-single-digit of growth to if growth about operating in expect you potential toward of and do kind how base in that the environment? outpace. as we

of the So because couple we've margins, really had business. back strong gross years into Dan, we've last over the reinvesting been

be salespeople, lot tools. of customers, the to terms SG&A software our a engineers, warehouses of investment So and better into to provide closer service in digital

foundation in, But we we've think in can housing cost little got to more invest think back we of conscious the been bit believe long this short-term forward. lot be of going we range, than there past. as are flattish dial even So have the in a be the a and future. lot growth market see we cost set opportunities do kind as we additional of a We that in

Yes.

it's Dan, So Brian.

above-market develop people it's bringing salespeople, those go to to have things into whether opportunities, products, next and take looking supporting those there out. with housing, those So in many are solutions, are field our along the of going we're Mike engineers as to at going customers, outpace year those think our we growth as about products field course, continue that and it's as what noted, evaluating we

for we're Mike as spending we're markets very monitoring go-forward noted, decisions what closely We and making basis. end hiring on on a and our do,

out come be company So although quartile we we're have our operating XXXX do in guidance margin be, of would yet with not what prepared to to that and ambition a top items of guiding, those on but there, margin, we're not how that programs and operating and he's making part investments we the and other that's what make we're in. decisions quite funding

I'll plus terms looking jump in M&A and But mentioned one, terms similar you mostly just size Last million that out. range, of allocation, capital deals. you of kind of opportunities. mentioned one. helpful. really That's million, you $XX in That's of in a Are tuck-in $XX

the a continue you two, shares little million buybacks bit buyback stock of looking Thanks, a and to below terms all at for you to the likely look worth color forward? back rate $XX in Are or And of bought $XXX even opportunistic answering quarter, the open average in be to a as then we price. the questions. again perhaps higher similar

we distribution allocation capital making in and a support perspective, got noted, to from So we're our business manufacturing we've our investments footprint. as some big

that Now We're that other mentioned. would some tuck-in accelerate the consider acquisitions type of that did going but opportunities it's key of help in definitely -- after being on those, ambitions us won't markets. evaluating I comment in it our a those you said, would size we -- strategic be the transaction complete quarter.

the balancing But of continue got we'll that share various a opportunistic. all of out, to allocation be laid uses with look we've to those repurchase capital. capital perspective, From plans we're

with Our Tim next from Baird. question is Wojs

just start. Maybe to

you're guidance thought? you Simpson's changed just for guiding if weaker not or now general. kind business? guess also is to -- Is -- growth kind just in So market as starts multifamily? single-family I it the of as it the year, in maybe it Is kind strong market Or before market is of in your this was down, and low single-digit flat of what's the

Yes.

from market to first we market be we the of optimistic. started customers, got a then little came hear quarter we've slow first going an a our April XXXX, pretty had initial then in of it growth our into slow and things good the more quarter, then -- customers we April So are when things starts into for second to flattish was of X% We came April, we the slowed the all And saw from analysts. Tim, see from housing really indication we bit had was a to down. saw really market be pretty the X% indications down. and being thought quarter. in, going When we

is so based starts and our above hearing And going what that's that's market off everything of we're hearing the market a flattish, we and do are best still that from some second pick we're guidance. down housing half, that why up forecasters, guess, think which to we fact bit of the our but the what's the we were from X%, little in think and things driving think

Okay.

of And America, headwinds helpful. -- created in kind but went the of kind doesn't some seem especially that last lingering is issues Or mix that of of of of the a mix sales, things or of that quarter like bunch That's quarter. still Okay. much kind kind has that it issue? kind there's quarter happened was of kind first impacted Does North away? in some to suggest then a of that this concern

No Tim, that in were were see, you called sales quarter. as issue volumes similar. as And we at out. We flattish the net the it's Brian. there looking second

quarter So not noted those repeat. items did first that you

topline making investments incremental I investments. just kind active question you're another I kind to expectations come if mean like your say, in to guess of kind are guys sounds just the over you biggest thinking what the on below in it are the could you of sales. XX then And of did about pretty Okay. pull months? how the relative XX levers next,

to so let's housing we the that up of Yes, know. assuming Tim, shortage market the going say, is because that we're all pick

time engineering people, manufacturing We've term. in We teams. would sales our in our teams to and the make revenue we teams facilities in focusing like travel, things we short finding are the case, any making the in both and to keep want on critical be hires that's role our sure impact directly and T&E, sure current if So place. hard really the a had

when so advantage we're up, ready it. of picks to And the market take

in term type So were or a that that expense in be short we travel, consulting, of anything control, hoping, lower means stuff. bit than comes would the it revenue marketing, little

Okay.

you. Okay. more Got And one to I then sneak in. want

sales, think, the year. materials? you back of year benefit raw Brian, a any gross Does from down potentially bake of that to of in little margins, be So said lower in are the as supposed a bit I half percentage this sort

get of Not pretty help factory -- -- higher bit It's in costs. sorry, of it the the little offset costs we're freight by seeing necessarily. we're may increase some a there, in that seeing warehouse, the I'm

product categories headwinds our the sales. But good -- So and guess, the and different are puts some -- gross to logistics within takes through on margin and to our Feeling forecasted margin there line. meet position production about inventory expectations. material be gross of us would within carry and on I demand in mostly the freight

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

a the about the how 'XX look some margin of I think Gallatin about you or gross think expenses kind warehouses initiative? and of you live a of part the expansion I guess just well, be kind terms point as on would path impact us significant market of some In would have that of mean, at we that, COGS year-over-year thoughts as and this of, consider how going the as on stage, line guess, margins? at the initial operating guess, might the how new on whether into cost and to I I implications Columbus And basis, headwind it

us helps closer location our to from really customers, or operations, competitive advantage that satellite of know, new feel throughout getting about thinking I the you high proposition think we've to customer's warehouses as customer value a service gets satellite for really Kurt, that we us. a and, place we're is we've to as in put a So regional It product warehouses us on our done deliver jobsite. that a select very

we at year the are warehousing As costs little they from look freight relative a perspective, up costs, bit. dollar the to prior a

additional customer at expect we revenues through because us absorbed to we much that pretty As look feel those, going drive help feel we although would really does to we've fully differentiate. service we locations forward, these continue

seen be of for on I'll lot your to that Ohio. then feel next for be grow. would expansion of growth believe have because Mississippi out has that to Midwest we Part operation we the help to hub Gallatin growth, to moment. us in to in really in bigger effective the one, of two will been Northeast, year. additional facility east with late and a be there and mid that us But and the that us question a will for pick producing the online needs our above-market we continue that of the that come distributing continue It

I expect huge regard. impact a in So wouldn't that dollar

From that's a late current there. with in getting depreciation 'XX, as fastener those some processes facilities, production, additional be Yes, we that associated location we'll we're as new vertically Gallatin site the additional ramping our there fully more activities 'XX. from Gallatin, over converted adding will at up, that do the integrate especially and our of early then

additional operations, really of reduced expect us time facilities little but I to -- for year So to the If to both margins. of wouldn't so, a little with really bring. anything, bit going be a still bit feel potentially and significant or comfortable gross it absorb of headwind all take the those of but a we a fully driver it's opportunities

Got it.

of Calculated to of software Any a that integrate acquisition? might what how you're kind there? you'll just stand-alone the Structured market And that something can Okay. into kind some mean more talk a with go you offering? maybe existing Designs about is wrap already on offerings? basis or I bit little then And that with the color of

Yes.

to for need that for Kurt, offer industry, panels, designs have comprehensive solution products. software component and us wood engineered manufacturing to we trusses, So wall a the

the the manufacturers wall make of largest manufacturers, and all So X the products. truss, truss basically, and floor the those component the typically

So if we customers. that not don't to after go offer those -- solution, complete we're have able

solution. using EWP now component, So vertically of integrate we've been licensing the the kind CSD is are which They we that. something and anyways,

out manufacturers some well able fully bigger as the And way so one floors we that go to now integrate able be there. will all design seamless to into truss after then and to component of be to that

it. Got

you're do players my guess, there to from offering service in complete Okay. a can software of dovetails is to And everything you of which where still just some kind perspective, the you feel go that Or that mean regard? they're state I that last question, work and is, on I largest at doing? like

Still work to go. some

So are production and be we working fully the the there to all truss, seamless also then able but we yet. have to panels wall on panels we to need and solution, the integrated into facilities. are their floor run management need not we And one manufacturing capabilities that,

in solutions little have that to go there we some development but We as more a space, bit have well.

we're believe are good making with for good we progress So software. our the that a people fit

aspect We customers. with model continue the business those and whole surface to emphasize

So bit. to of to there the component work us to quite little largest still very do a a that's be bit able helping we But manufacturers. have after go

from July, want If what I down earlier was our to could I Mike. month asking date America, we're of real to to is One digits from perspective on in July digits up double flat multi-family housing. revenue add Tim are in kind did about we seeing up in quick, a thing, versus year, North July. a guide mid-single last single-family, low company-wide billings

off quarter compared So relatively QX, last QX strong the starting year. to is like July

well. if that Tim, to sure you're make I wanted still So I listening, covered as

Thank conclude call. our you. This does our and time. further Q&A questions There this session no are at

may your -- lines would at you your If time. for this you you participation. Thank disconnect