Simpson Manufacturing (SSD) 21 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to the Simpson Manufacturing Company Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to hand the call over to Kim Orlando with ADDO Investor Relations. Please go ahead.

of gentlemen, Earnings to on Conference that not and Third Manufacturing this ladies forward-looking are XXXX are Quarter Call. Any statements afternoon, and Simpson welcome Company's call statements. Good fact historical statements made Such and subject statements and to expectations risks are of are certain number and on uncertainties. based estimates a may from statements. those results or implied future Actual expressed vary materially forward-looking by the the on filings read corporate or encourage described public which risks to company's company's the and you the are available We the in reports, SEC's website. to extent required by any Except no future that whether securities obligation forward-looking information, or revise new today, we events the applicable publicly as otherwise. undertake the of laws, a make here to we update of result statements or measures, On most this company's such to is GAAP EBITDA comparable earnings call, income the reconciled which press we adjusted will in non-GAAP of to as net measure the release. also refer

Please release and Investor the website. note XX:XX at page press will Time. approximately Relations earnings company's webcast, the call Eastern The ir.simpsonmfg.com. be available was also company's available replay Investor at of today website Today's is is release issued that the page of the being earnings a on press p.m. on Relations the

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

outlook third you thank My today and and through remarks performance Thanks, will With greater Kim. overview and will Magstadt, walk Brian end XXXX Officer. quarter Financial Good our quarter provide afternoon, today's you our our call. joining financials of Brian for then detail. Chief everyone, updates fiscal me today markets. our an third on in is

Cross position in these pleased condolences all past we design Helene recover Hurricane moment the and were communities our those people provide in, to to to of as to both unfortunate recovery jump that I'd this efforts take founder's impacted we build like and inspire values, Red our be In by share structures. to stronger our the to core assist help through help solutions It's to Milton mission a such a Samaritan's rebuild. safer, that deepest are with American with Purse circumstances Before and Hurricane month. and who donations staying true to affected the

While our Southeast that facilities our not to were none sales the any impacting that storms I'm and injured sustain are pleased the our the region, in damage. of storms report in employees did

Our thoughts tragic of with be continue to these that all were by those affected events.

our Now turning to results.

sales million, housing the was and net quarter despite Europe U.S. third $XXX.X the remaining the markets in which under both totaled above Our year pressure. quarter prior

to continue we Importantly, outperform market. the housing U.S.

Our trailing points months a XXX starts XX basis exceeded approximately as growth North volume our growth strategy. by of housing result U.S. American

for sales million the which $XXX.X third from small with in $XXX.X our benefit recent third the of quarter were last million quarter to of volumes American year, relatively North net This led flat XXXX. versus a acquisitions. includes

customer drove While product average sales quarter, higher discounts volume mix applied. per in resulted mix the in pound price greater a

to our force our year break onboarding over manufacturers. customer truss as performance, American additional component share We center single-digit modestly market and due saw volumes home manufacturer retail high volume further last national To we sales saw continued North multiple improvements by merchandising, efforts. to our component space shelf increase have improved the down education market

mid-teens small declines a to Our to to though gain relatively year-over-year due have We both market growth as we commercial in remains the markets and single-digit market volume it revenues today. contributor OEM achieved our difficult residential conditions. continued share market experienced low

Turning to Europe.

year-over-year. a million local Our currency third X.X% quarter or net on sales of by increased basis $XXX.X X%

the declined as the rate. of new our third margin XX.X% though On to consolidated remained a market wins run third outperformed product business we in customer also above quarter applications. points the last European basis approximately gross XXX benefited from Our pre-COVID XX.X% quarter year, basis, and from local

people, investments engineering, and an make starts customers in in capabilities acceleration other to our continue anticipation equipment, in We the better to software housing in midterm. of our support provide to even

result quarter, by to last of approximately remained XX.X% X.X% run Consolidated and above XXX adjusted points declined $XXX.X year-over-year. XXX versus costs for our market investments, margin basis While totaled to the and SG&A we the operating EBITDA to accordingly. regard approximately it a will points decline pre-COVID In million rate. control the basis year, continue future monitor

peer relative Now longer housing proxy an choice, to U.S. by our invested operate, being of the initiatives, turning leader top company and growth continuing culture, to returning income strengthening to the quartile the values-based are we our which underscored growth groups in above-market operating on our proxy groups be innovative striving of our partner top business margin, to for peer capital. quartile term, of our to for return ambitions, starts, markets the returning including

customers serve our are our merchandising end performance. better reminder, our customers space markets off-shelf of investments new expanded cards the better business we've locations. of to in customer. during product product highlight and for resulting in anchors result a store to like a end-use fasteners additional of opportunities. I'd national efforts their new our direct these quarter, retail X new We are wins our to serve with enables space, increasing drive us business identify in the their approach within market-focused of application hundreds above-market our been As the to and now making Simpson's and center Beginning some which home shelf

also growing more to DeSauw set trusses market. used DeSauw This in In to products ongoing with interface the we best to solutions and existing with customers Monet, Canada. in our Monet dependable like is of our leading and provide to and support Much investment reliable goal saws acquiring our Simpson, in directly component customers. of for saws technology offering acquisition the and new further our manufacturer gives suite Monet this fabrication discussed Solutions. by and us business our the through a equipment Software the software of maintenance. By CSD software comprehensive truss of U.S. last customers. us of the offering more the of fast latest expanded within was to the solutions manufacturing Monet's expansion evident large continued Monet proprietary entry call, with space our and of offering point in in to a bring an complete component quality to quality And we enables offer our as acquisition manufacturer market, committed are our investment is customers. saw, a

This pro continue each our in business In attachment share not gain us the to with dealer by our Northwest also connector benefits and only location, helping fastener market customer. the rates. products market, anchor partnering but we our a residential large increase in

leaders demonstrations. a and customers facility discuss commitment our the national Gallatin in Each Gallatin, Additionally, opportunities from included growth we in home plan manufacturing several future to investing of and future with our event job innovative perform hosted production and Tennessee to our purchasing our visit to hands-on our fastening teams U.S.A. facility solutions driving to site,

to and to Weekly Our Duo-Fast specifications dedication awards several educating to field. from with our the continues field and demand and dedication relentless in quarter, and customer support SouthernCarlson in generate market, service was [ the third the earn distributors engineers, commercial contractors Homes. In David announced supplier ], recognized including awards

casino, steel pier buildings. recent project a and several Some examples structural for specifications a include product

QuickFrames roof we within provide to engineered steel quarter, acquired Additionally, and U.S., Mexico, USA, the frames connection commercial the top-quality Canada during leader products contractors. structural in which the

their in for to the relationship construction off-site And provide fasteners with a developed finally, products building OEM connectors we and manufacturer market, national a leading solutions.

our newly also help We within to competency continued accelerate mass connection growth saw key several that timber. temporary projects, offered initiatives. as bracing on for mass us our The traction pipeline timber, active M&A we providing continue our growth in solutions remains tuck-in opportunities core including evaluate on

become facility investments, In track constructed of XXXX. regard Gallatin, late completion fully follow our Tennessee on facility Ohio The newly Columbus, XXXX. to operational of our early will our expansion facility remains in in fastener in to the

I'd few to a I developments. important highlight like corporate Before conclude,

of company years culture. to joined year at you Brian announced helped the have I'd the Simpson like contribution an extraordinary As XX champion stockholder Simpson to know, We attention value. integral the to On in for Brian that him team, been XXXX. and in his and best of and thank many CFO, his wish of for resulted of invaluable the entire the company all his our Brian strong effective in the our has retire the end past part increased growth, behalf Magstadt XXXX improved profitability retirement.

to Officer continues, near Financial Chief we share hope some to new and in the a with positive for you future. news have search comprehensive Our

summary, in optimistic outperform in compounded to decline our have their XXXX. the and structural we in single-digit European evolved growth starts, grow gratitude single high we XXXX rate billion Simpson in with accomplished, am are housing contributions solutions Lastly, in digits in pushed want company XXXX, incredibly bell from now to than a members, by annual a over macroeconomic that an of to we with to to remain back $XXX I the XXXX as years. In I success our in to our greater approximately in we we in of range the starts team traded express sales has XXXX total all and to commemorate expect $X to our annual low leader stockholders anniversary XX%. stock despite a meaningful beyond. housing approximately of expected into are and ring the annual single-digit valued further decline suppliers closing NYSC my for world to customers, which out range growth XXth low in and of May compared sales proud in and near-term Since our U.S. the all went challenges, public pleased September. million from ability publicly

in we'll usual, outlook our on call results provide QX February. XXXX our As

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

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

in been tenure, this a for guide experience has day. best Simpson's adherence which at company Simpson to could continue principles, some known. Throughout rewarding my to be achieved at Simpson it's XXXX. year, the growth I employees and appreciate your Barc's true comments my my of begin, tremendous refer career and Simpson. comparisons successes the ever I of I quarter all the in stated, all people seen joys as that have versus like all XXXX, concluding third to since that year-over-year to measures the mention all this XXXX. quarter Mike, I'd of made company Before of financial and discussed, a serve unless choice third been pleasure company's comparisons end the of the the CFO be And the of remarks, to more XX-year I've life. are retire to us has not as one proud from of prepared I of aspects. our will the Working otherwise I

Although a be and I I to as necessary intend remain successor will to will retiring, shareholder. is remain speed bring to my up as long

to our turning third quarter results. Now

sales increased Our modestly consolidated to $XXX.X net million.

due Within our America X.X%. partially offset sales and better were X.X% increased effect a decreased resulting North support was changes On which $XXX.X partially $XXX.X percentage million sales in XX.X% segment, sales million. investments price of million mix, to compared to by and of and to volumes construction some factory North XX.X% were to to due primarily gross $X.X XX.X% translation, overhead in compared primarily margin positive concrete provide labor in customers to help the to million, which product margin in Europe, net to product the to gains. gross construction X.X% product America gross due and overhead by and to decreases X% sales costs offset profit X.X% warehouse decreased sales XX.X% to our $XXX by sales higher costs. regions. Consolidated foreign a of us to net Wood increased were in factory higher primarily currency up as up efficiency In basis, segment net higher a

European gross offset and Our on percentage products sales, to margin aspirations by was and labor, as our warehouse a partly XX% lower our XX.X% XX.X% which gross higher to quarter concrete from a margin in was XX%. Europe freight to perspective, to XX.X% net XX.X% material factoring for third due speak costs shortly. overhead, products I'll costs. product of primarily decreased From compared wood compared to were

investment the are In and engineering, months, in added we've our digital XX the increased of to drive are our turning operating to the engineering majority services, Now and forward which employees in intended services solutions sales, expenses. growth initiatives. professional we've last

show higher were professional Specifically, compensation increase offset costs, total to of expenses. and which million by and X.X%, million, operating personnel expenses reduction fees, costs, travel advertising $XXX.X primarily were increased a trade variable greater due or $X an incentive in partially

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

our customer X.X%. our investments they professional Europe, partially offset in higher digital our SG&A, And variable decreased variable expenses various due up General X.X% by a offset were costs America and X% selling research to primarily our lower detail bring X.X% administrative increased increase million due expenses to fees, up to expenses partially personnel costs and costs. are in to higher intended $XX.X primarily engineering due basis, lower North to addition lower in particularly fees, further primarily expenses to innovative costs. To increased development to amortization quarter X.X%. and Selling markets. incentive space, third and professional solutions segment in personnel million, by were the compensation an personnel to $XX.X and These incentive On $XX.X million, expense, to costs. higher in compensation solutions increased

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

with amortization lower lower income costs, operating consolidated to XX.X% from XX.X%. profit costs, from intangible licensing advertising due costs. income profit and operating reduced was expense operations decreased million from to and gross to XX.X%, IT show along expenses incentive with gross higher depreciation to Our In margin due Europe, by costs, compensation. In personnel million, from America, offset primarily trade fees, higher professional partially along down and $XXX.X decreased and personnel software operations X.X% North $XX.X variable income

ETANCO, to have costs been of the support margin this some from has European realization mentioned, compression year. optimization the the of year incurring synergies including we resulted footprint, last which previously over in defensive As

remains target Our midterm Europe unchanged. in income of XX% operating margin

environmental realization conditions, synergies economic applications. growing anticipated our and stringent improved of new drive use regulations and secular offensive increasingly construction, the that include wood Assumptions of trends, broader the including

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

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

Now balance sheet turning flow. to our and cash

recent healthy XXXX, million XX, raw Our $XXX.X due from million down balance and cash our acquisitions remained June at XX, balance at in well capital, sheet cash XXXX, primarily material totaling primarily $XX.X as as with September working equivalents changes our to purchases.

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

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

and as Our of which million, inventory up higher to XX, was of million pounds. $XXX.X September compared XXXX, balance was $XX.X position our as on June XX, XXXX,

are the While we finished working slightly goods levels service high is reduce while to inventory quarter those fourth our levels. elevated, in maintaining

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

September $XX While million our quarter, we XX. authorization approximately of during repurchase as repurchase did the remained share million $XXX from not shares available

our for to We and full financial today, operating XX, in to our of the XXXX, as business October range XX.X%. now guidance as conditions the ending XX, updated turn is trends XXXX December to on our expect Now be of follows: I'll year XX% outlook. Based margin

it is ambition. invested Although our expectations. has that anticipated and a volume this pre-COVID lagged above well average, is expectation grown our market hasn't still in our and environment below We

line our and in costs working to improve our with We profitability. overall get are the market

working million to current total net to $X and growth-focused acquisition cost sales; our Southeast; and a revised housing we the due of well in expectation overall pursue gross expected increases Europe U.S. levels, of synergies new a factoring deliver slowing as for in the defensive from margin storms million operating $X ensuring in are tooling activity be based in as Additional XXXX a wake while margin. balance market, challenging other as percentage key and on of assumptions construction addition warehouses opportunities; in to labor A include: income in the lower to softer starts to strong housing investments down sales the we

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

capital be Columbus to to estimated with Our $XXX tax rate new we've the our the to third improving of the U.S. which $XX to XX-month expanding including range into facility includes be over based is our effective million results million customer And income of environment, Gallatin XX.X%, by $XXX in challenging starts state invested expenditures and while on in construction million, estimated offerings. and tax expansion federal as outperformed quarter tax our range remaining summary, for rates trailing finally, reflected basis, a in we current carrying laws. basis the million experience to XX.X% fastener $XXX a approximately both are points the XXXX. In housing facility XXX spend have the and on

strategy cash support with that growth. While our the housing to are a sheet position in solid from costs generation term short balance in in benefit recovery in starts balancing on our rebound U.S. housing we growth focused well investments until see starts, a our and growth us ongoing we

Q&A now With turn to will the over that, the I session. the call to operator begin

[Operator Instructions] with Moore line come first And Securities. our will from CJS question Daniel the of

start me quickly, let Just Brian.

XX-plus chat to best. you and been officially wish times chance more help two for appreciated the congrats all to one It's or thanks at and you, your years. all least. the last First, over greatly a Hopefully,

you, Appreciate that. Dan. Thank

Absolutely.

do have guidance. QX relates impact as your hurricanes an with it income start the outlook. much expect revised to of sales the QX and me just on op to you kind of How Let and the

Mike. it's So, Dan,

slowdown afterwards. go Southeast concern impacted slowdowns a before There's the the repair to certainly the going and some some of coming and have starts of that both a renovation then saw that facilities we've lot a take from slowdown labor housing got the would to the normally significantly real storms that and are in, we bit of to of that have customers seen as hurricanes also a had bit some little were hurricanes. customers piece. We've our new take in their So and

our really definitely to the we But for haven't was for how that going it business fourth that is going forecast in impact quarter to guidance in thought dialed and lower than we operates us. area, So specific the be. that's

and Dan, And it's Brian.

think QX would fourth I pretty get margin as us we from up to operating So QX a XXXX and little resulting quarter, than about XX.X% of XXXX to the that maybe margin overall better comparable, the into expect operating gross of slightly XXXX XX% margin.

Maybe And expectation just with to talk of maybe is And target your points. view. you the outlook outpace basis longer-term U.S. start growth that XXX low that the underlying assumptions turning by Helpful. key we as single-digit to about starts provided, the about in 'XX. think housing is Understood.

You've better that. than doing obviously been

do months think XX over market growth expectations so? or beyond the So next of above your the we about and kind for how

probably with the seeing So, of Dan, for down low we're in X% to because forecasters. still getting break the or single U.S. next aligns input forecasters. X% I they that the by that mean in will all feeling be one in most housing we're of X% market Europe various We digits, lot regions, from be the which particular numbers of And X% our it's year start going the uncertainty. how a we're there's the the to customers we and market is, getting run group business. the then use can

better half starts little be the how seen bit. first housing ultimately of last lot consensus then I down up a think than in those X the we've there's general But second quarters, over and going ramp variability the half. to is slow as is a

from think to going operating back a below our the can we, view I happy to next We year. floor, an want key with perspective. XX% of as there I not we're emphasize income we point guidance and to as do the are XX% is everything team, get

then And next Mike. you think question helpful, I answered my really about That's Europe.

to think your growth to come down meaningful that expect 'XX, of but it doesn't significantly, way like to near-term up sound either until view? the year didn't about kind being you back indicated flat slightly. You just next Is

Yes.

Europe have So and digits going the this Housing over down governments interest they across started probably Central year. Bank there, to rates. the single be to Europe high in starts lower is

would bounce to I'll X-ish back X-ish, a growth be percent good So thing.

there on. we that We to midterm from that significant operating make better see little we control are income in up sure a really, and hit is though, the that XX% the we're over some activity feeling a a in target there. increased jump just until over starting there, The quoting see bit Dan, then really costs perspective market

been modest forecast. Got in Europe. X year improvement expect retrenchment start see Would it. some on to of to margins it's And terms of then in next that X based you or quarters

Well, that, of footprint. synergies defensive rightsizing big our Dan, on and part there our a over is we're working

of on repeat. So those Brian costs. obviously touched some Those won't

margin in So that be better gross will think forward. us we going a Europe help

Perfect. helpful. talk about just bit a little Maybe acquisitions. the more quickly Very

Monet perspective. think I a and in revenue figures they to And bring us EBITDA of XX-month terms the trailing then give from to a any modeling sense what QuickFrames DeSauw table.

Yes.

ago. complete to the a we had a solution at BCMC Monet, helps large weeks manufacturers, show offer manufacturers. the a So show couple us big and for you of component Monet if truss trade look at That's presence

customers. are are lot And we continue feedback current from lot a we of to from good feedback customers have happy really had Monet expand yet equipment current We of of not our that our a offering. customers our that

about that going pretty we're forward. So excited

us. with fantastic that's company, Kevin, and think a job the who wonderful a way, and by that has built I still done

that U.S. the at acquisitions the in less U.S., from had those here combined Dan. million impact quarter, the it's the in If $X in you we've look revenue than

revenue disclosing a We're how little not for than those would million acquisitions. I expect for at say go-forward total we're those. basis, on a least looking in balance through Dan, less of I $XX on And, XXXX, would the

total to is the QX, P&L opposed impact for 'XX that your right? to as that's And

current fourth The No, would be the based That numbers to the on for our so no. that get we're modeling for expectations. we guidance income no, amount that quarter. operating

Okay.

combined revenue less than million So for $XX both QX. from

Right.

Dan, answer the piece, excited commercial sell QuickFrames that because tool space. your us gives just to about to another that pretty into we're

the prefabricated of it's into for buildings. support commercial go roof So structural things that

for a They've great model. business. business a fit it's built also the So good

So we're forward that pretty excited about going as well.

Okay, question. operator, next

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

I'll all echo comments help. for my on Thanks Brian. the

we'll piece. So still I acknowledge just that. first Maybe to want the but talk, just

So margin past. do investments. of that actually slower margin the EBIT on in of comments, to the Because outlining an some there to I you rate invest some of the high on throttle raw Are relative And I I benefits view a, and how year? you next I mean, I that I then kind back floor basis. get secondly, guess, investments just said cut get Mike, guess, to of teens the new? do kind the XX% you is is guess, going say from mean, kind starts? of updated a materials? Do at you kind you on want

level adjust this of how you Just kind market activity. I kind of, guess, do lower to of

Good question.

be XX% And profitability. again, good we've into So of able range. to XX% our proxy translate great We've as good XX-ish peer top our We ambitions great view need mean to right I our to is the quartile team. profitability business got one and is We that quartile in a think that top financial the know, percent kind got be Tim, you group. max. is at that is of model. of a

going So anything we work to below to that, improve on. are

growth our that's XX last well quarters, below is how get of So months. probably So the we investments do last the the as question seen then been SG&A there? SG&A couple our from you've rates

we the even side continue on be both to of will where investments on balance The we the here provide going add we We're to we and customers. cost and SG&A where So dial side. goods in. that our is support want on great to make to more selective

supplier -- part choice. do all a know, model. to that's of you the being is and their people-intensive As that business of

need So to goods, are, we it need need and single part, investment of they those just be us, sourcing selective cost for SG&A the more we because the most the investments, the Tim. and we about making in

Okay.

Okay.

it's relative the cutting base. So It's rate more growth the the being necessarily to to... of just way not a selective is

More selective, yes.

Got you. Okay.

gross you should fourth And inventory just, me then heard like you some Okay. how have the quarter. sequentially right, like because I the down you think with It like revenue sequentially. you margin be help it margins to up lower want flattish take maybe sounds I of sounds guess second, about kind slightly if in to gross Brian, a can quarter. to

of I'm kind So what's the piece missing there?

Yes.

margin So assume to we gross last income slightly that look just get from at the operating annual into year. would up to when guide. We flattish

be percent warehouse a So freight And quarter flat, think last tooling little bit a a year, XX.X% percent, quarter fourth factory of line. position the gross kind a puts as there. modeling then of revenue, on potentially those material the from of perspective got fourth us a benefiting takes in revenue, gross a as and get might really margin. to it's of We've slightly are to higher, some, good flattish in again, to, the all in, But as a relatively we're close little 'XX there help we pretty and versus 'XX. a a margin and percent

Okay.

Got you. Okay.

bit of a misunderstood little that. Okay. I

And America, about was -- in price was aggregate? kind total? mix what the Was it flat then in what Okay. in of contribution North

Yes.

of couple had things there. a So we

every as metrics our -- is but we one That's as that of look increases, is volume shipped at worth pound pound follow, we the So you shipped. how same know, key we not or dollars. measure

to slight was the year last shift. that with this per higher bigger if quarter bigger. Same to third a bit in door, little some smaller of out as thing getting mix partners total, those an of change a just was relative a and of pound of bigger a little rebate percent as our distribution more, customers go the pie. products So there year sales compared the we larger of piece are a of consolidation more third paid quarter, into dollar higher slight, the as builders a customers bit the offset went There it, or the call and

of So the two that nearly kind offset. those were

Okay.

Okay. Or All right. as Got there facility. to way a the of just kind talk Ohio you. Is And you the of on then kind is, I I Columbus, last guess have like bring one what in I coming start-up guess, the costs later for with, and start-up then be 'XX? of Gallatin costs be? that might about coming online going to kind there's online that both if

Sure.

sorry, our XXXX with -- to XXXX that perspective, existing details income. I come some out the footprint we'll operating part that guide how like think fourth -- the we'll guide impact there. adding all From going that's Ohio we'll our additional provide year's we're of to be on quarter, with

I on So anticipate we're it's little a roof bit there different. some granularity We're on that that amount not moving OpEx across moving significant be a would February. -- sure would town. the That's little under spot -- in adding and spot. a additional but Gallatin, that's provide our we'll of I'm existing that -- on now, a costs right like, more space

Kurt the comes of from D.A. The next Yinger Davidson. question with line

off on start two wanted steel take from it just sides. to and I maybe

a given then or just impacted suggest on X on going pricing what just any side, anything more about gone out side, could other gross any kind mean, of have look through seen competitive a into Maybe I basis, initial the more of there? pricing that little year And maybe it's is, the next could more months how be year-to-date so? where on there maybe next has maybe or a like seen that year? of would last on actions bit kind fragmented talk we've what fastener you the conversation first that and margin as the The we've declines your sets competitor views a conversation,

So from a comfortable obviously cost-wise that on steel are and feeling where we area. we're perspective, pretty Kurt, with both keeping track in we're that,

we're goods, going a the our from cost good counterbalance feel, we of But the lot up We stuff a are that lately. of costs to certainly the in for part, to most is, other seeing on line seen bottom steel shape the the materials some of maybe forward. you've go are going market

than perspective, we're of providing And selling less to support our Kurt, ton value. ton the We're material. pricing building then We're customers. from of of a We're the bringing a X% innovation. a again,

so on the really And service. emphasis is

pricing, the over lot about to seen in this we that emphasize XX months. any At X the this point, pricing our moves perspective table. we try value competitors to get to the from a course, last bringing asked we Of we're a any and haven't really of area from significant

it. Got

considering you starts to about low to back the Okay. do operating and expenses That's commentary think helpful. have around that the how outperform and starts I XX% assumption the of that good on then floor. investment operating is you we've still? for up And of kind Or think lever can guess, level that? just you going single to there that you I digits, would framework expect top if the us are the line, seen frame margins XXXX, a guess,

little up bit, X%. We've optimistic. the a go back were So quarter. pretty Everybody We if fourth show. first got big go the starts quarter into builder XXXX is you housing

slight the are fell second X%. housing better really for lack a floor builders Still feeling of word, a of kind down then and the big were the a optimistic. X% they starts and increase, sudden, of through all of All quarter,

certainly the well, are big of lot see was well. kept just we were off So year, better And but from not to frankly. a feedback a And going this our market multifamily going in based doing customers, smaller builders when you assuming builders we up do that assuming scenario. into pick we it's it were the lot

year, we from but really more make we're XX% announce guidance -- give at trying going and sure we're to that next when quarter to through now, when that not we come to still we're look So we really details mark results. our working fourth an trying to level. and are the income into we're operating And

it. Got

you there? lastly, might true implications, Okay. have And value then any just there's or bankruptcy wondering any exposure risks if filing around opportunities the and

it's Kurt, Brian. Yes.

sold true we really and we're the announced So we sell have potential evaluating who buyer past in relationship they've to have good that with. a the value to and

our Of value a they been see but of The amount course, past. true one customers have the material revenue come for to co-op transaction itself, that we fruition. Simpson, in need to not to

how them? having is do selling we that coming -- as news we're conversations So now. them, extend we'll evaluate we out how credit, far to we do do Those continue are to as put are we right

this conclude question-and-answer session, also This concludes will and today's today's conference.

You may time, disconnect thank your at and this lines you your for participation.