BECN - Earnings call transcript Q1 2022 | Beacon Roofing Supply, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Beacon First Quarter 2022 Earnings Conference Call. My name is Selina and I will be your coordinator for today. At this time, all participants are in listen-only mode.

We will be conducting a question-and-answer session towards the end of this call. At that time, I will give instructions on how to ask a question. reminder, call a for being As purposes. replay Instructions] this is conference recorded [Operator contain including forward-looking company’s will call This statements, objectives future plans statements and economic performance. and the about

that of be outlook, other by to can project, or and anticipate, and such facts, similar words use current not will estimate, statements Forward-looking expect, historic the fact believe, meaning. relate they identified strictly words as expression often and do likely result,

any and Xth, these of are are obligation financial of including indicated Forward-looking in May Reform future factors, statements including of the events to statements fall uncertainties. important risks Private Commission. risk XXXX statements Securities The the statements number predictions the to differ today, and the undertakes required These and but outlook. or within Litigation in and contained actual future of the expect information of company’s the from limited as Securities subject update not Form as forward-looking XX-K are set Harbor filings by may results Exchange forth section XXXX various subsequent of those regarding Therefore, Safe company’s a financial forward-looking revise as performance only factors call forward-looking and result based by Act the statements. provisions and no the on forward-looking law, to this materially of XXXX, such company US with of company,

are in appendix to most GAAP set measures press of to non-GAAP those these contain with comparable in over presentation the on Finally, proceed, press reconciliation and and Mr. today’s Sanghvi. this I Both to Treasurer. presented measures Markets release website, conference Please Binit and like call to and certain presentation non-GAAP the www.becn.com. call. turn Vice forth references this Capital Sanghvi, are the available President, the would The now Mr. measures. release our will calculated to accompanying accordance

Binit Sanghvi

Thank good on our XXXX evening. afternoon Chief and Francis, and With first welcome call Lonegro, me Good are the CEO; quarter Julian And call. Frank and Officer. Financial you, Selina. today to earnings President

remarks prepared website. will prepared question-and-answer now will there Relations to be slide management’s session. Beacon’s over After section Investor turn deck posted of remarks, I to Our a to call correspond the Julian. the will the

Julian Francis

presentation. team's a end XX.X%. environment. situation our increased points leveraging Thanks adjusted inflationary record records -- basis our to of XXXX also ahead Gross market supply report customers. value strategy of track growth, we quarter their set the to our their Through ability a due and Binit. we on Good of challenging the demand. strong market afternoon out pleased begin especially started highly combination profitability, four by dynamic I'm increased to service, adding responsiveness margins income, net to and I'm for tackle differentiating work, slide focused XX our the EBITDA. slide expectations well a sales, year-over-year, of our have extremely with let's in and year execution Ambition February a XX% Sales that and hard with pleased first and continue for expanding of to we

to price/cost the the inflationary in As ahead offset on EBITDA to the the and to X%. We positive. pricing stay execution done increases focused cost quarters, million, $XXX XX% leverage over by multiple order we increased team Productivity our of implemented bottom-line quarter to prior have a performance successfully from to to the nearly favorable successfully and topline start of initiatives impressive headwinds margin first in adjusted year. remain curve. contributed An operating

have to restored prior in discussed our balance have calls, we our we sheet. flexibility financial As

stood leverage Our billion liquidity. have we in times, and to-date $X.X X.X at debt net

that with and ability a ample with growth Wholesale, the of opportunities we are Midway exactly last of is year, us provides sheet on successfully In balance acquisition we invest value-creating closed what Our annual November track than doing. to in that performance $XXX XX Midway roofing approximately integration the forecasted. of is distributor sales million the premier better of and Midwest. products of is pleased I'm on in locations to report across

We to ensure robust with meet as team US proactively to season we enter anticipated are also able continue our and demand invest Canada in we the construction the a to across backlog.

of when to be products where us service high-caliber they are and assured and need with can reliably and trust environment, deliver they customers prepared that demand services in we any them. Our inventory

continue XX residential strong. remains typical a replacement A and majority that business in you a Keep lasts see XX% our you that is fundamentals back of historic be XX surge market to demand construction, if in terms in Our vast years about this non-discretionary. the years roof of A of tailwind. building. cycle mind underlies look approximately also new

will side, grow activity. commercial positive the believe take On share of to us allow we trends and specialized our capabilities advantage and

in of through the believe the variety in we unlock runway a of by turn named people, on intend are five our detailed page of remain plan slide our grow which of growth scale Please to We we strategic we multiyear to engine, that deck. greenfields returns. operations, we XXXX, potential many acquisitions. While a we volume see some have growth to by Ambition to We opportunities, mixed, Investor underpinned thrilled our cycle. you economic February. and positioned reroofing signals in shareholder markets and through confident of were capitalizing at are in Day our the our person Houston our so There,

measurable. that are have We and in four map our structured detailed road with areas initiatives systematic

a winning First area building culture. is about

Second drive of above-market to is set growth. measures a comprehensive

operational continuous process, our for create our And our improvement lastly, value shareholders. performance. which drives these is Third will

$X billion $X grow X% rate. to an more sales of annual will than the XXXX, We business in billion growth compound

in annual XXXX, For in XX% EBITDA $XXX a from XXXX to $X million about will approximately grow growth. billion

on which we to turn six provide plan. a the how insight achieve page strategic intend on brief provide to please our our Now, of I'll deck. update initiatives,

culture. we winning a of First, I'd the building are highlight ways like to some

committed responsibility important an the We from and our of XXXX. first doing milestone operate. our the by report inaugural the the in for to people year fulfilling communities is highlight to we XX% are where by intensity greenhouse report our that right thing commitment. corporate goal gas is One Issuing our emissions putting reduce social

We stake begun this no but have building for are a journey, Beacon. just there who future is a sustainable more doubt has we everyone in

and Second, through we growth targeted market set a margins driving above initiatives. are of enhancing

expand and of to We footprint have through acquisitions. pipeline a greenfield tuck-in strong a our combination locations

two XXXX, markets. attractive presence our have So opened greenfield others, we in branch expanding and in acquired locations far, two

results. our quarter. to XX% approximately on in customers largest Our sales focus first We also the national accounts by generating grew is

Our on other scale customers each account support by operational national position investing contractors, and who focus us and market uniquely end capabilities high-volume specialized in dynamics representatives the to customers. builders in and account

of We as also of have plan. margin support a part our set growth initiatives that

most for way XX% compared this first our platform. provide continues them sales the of clear went the competitive capabilities differentiator to our and In platform better offline expand and be customers Our channels. residential XXX most to We in through offering on digital serve quarter, value. a brings online the complete capability approximately Beacon deliver points continue sales to the margins that digital basis to

leading digital our AccuLynx, contractors. we with all-in-one Just integrations this Go-Live to roofing our a added announcing of software business provider week, for management

brand and markets. for Sales line private high-quality a nearly recognized under the complementary TRI-BUILT building residential, name the basis trusted price at end and X,XXX private results competitive delivered and XX% versus contractors additional is yields year. TRI-BUILT products sold customers professional becoming between the points margin a professional of label of versus of label prior Our XXX across our and are our up quarter in the by commercial, alternatives.

capacity excellence. productivity you of to have operational those we who intend by following For us, been enhance and

customer remains we branches differentiator. needs. deliver teams model including over that have service network work a solves together OTC Currently, Our markets, a where our to XX XXX the

in In multiple that, markets in combined united in the addition achieve we to same P&Ls goals. are all have trying managers four to branch these

service First levels. customer improved is

and flexibility of branch to deliver the support have best the with from to combination the needs. We greater customers' product service

efficiency, resources logistics leveraging a a time emissions. cost-to-serve. is able improve delivery network and labor across reduce reduce costs benefit of and to and and mileage, we branches, Second lower are By fleet

at by XXXX. in identified reduction have We million these $XX branches in operating expenses least

is which continue supply The this challenging environment, see where disruptions. been inventory benefit to we in has third optimizing levels, chain

we However, levels. is to million our advantage, to believe ability our accelerate and is to we development. critical that continue our there $XX service an ambition inventory potential to to cut manage while our inventory locations across maintaining And fourth, around is by $XXX talent investment million,

Angeles by locations and very XXX,XXX Beacon creates our The adds OTC ability us pleased for with to country's outstanding and the our market talent, is Our dedicated experience roofing commercial deliver plans. the of facility build our MSAs. launch to the OTC unleash systems Los We Hub, execute an on to careers to world opportunities residential recent largest people were approximately enhancing local of square core for which initiative customers resources, an at both sharing customers. to with inventory, and one foot in fulfilling hub for value

branches $XX produced the deploying efficiency processes are gains continuing a see on XXXX our step EBITDA focus our Our results by improvement best million the way to first year-on-year on has the in target. Ambition country. bottom quarter, $X generated across to also approximately our solid We quintile first meaningful we and million

to committed create returns. are designed improving initiatives strategic we are and shareholder our Lastly, to value

As both settle plan. The program, confidence to a our accelerated million repurchase this at commitment second $XXX the executed program Day, year. share in our Investor we of to a expect part which in demonstrates the announced and delivering authorization $XXX buyback value of quarter share shareholders repurchase million our share we to

truly expansion. to As margin you see, and paths we multiple growth have can

tools approach that targets. our embark Ambition built delivering and a our journey results have have we to We on achieve as the XXXX measurable differentiated are

a Now, call results. our quarter provide on will deeper continuing Frank to I focus over the pass first to

Frank Lonegro

good Thanks and evening, everyone. Julian

prices first $X.X we Turning strength up by to contributed by quarter, to around sales growth higher approximately total the demand products. In our the year-over-year, achieved aggregate, to our price X% sales business. eight, estimated contributed primarily selling of billion net driven XX% volumes XX% and in continued largely average X%, in driven nearly revenue XX% for lines to slide across

Despite were were volumes higher than first quarter the shingle to the of XX% sales to Residential with the including and increased quarter Crabtree first evidenced execution approximately the solar in and Complementary Shingle XX% continuing strong volumes offset volumes show approximately growth. the issues, ARMA pressures of residential nearly XX% acquisitions performed year-over-year, entries. business sales calendar were of quarter Non-residential, Midway to comparison siding line compared an were chain January quarter and price well in and flat across year. the divestiture first on approximately and higher up Our season up XX% inflationary execution, product to we indicator slightly combined commercial late robust market shingle activity in an roofing expectations. is of recent of benefited continues in up by last roofing demand and volumes achieved late XXXX, quarter better the XXXX. the is as strong, categories. remain a waterproofing hurricane prices X% drivers to year of than improving our in more trend as all which comparable, This COVID stronger about snapback backlog. shingle residential two-year Higher XXXX. in year-over-year. residential contributed of XXXX important stack the were as sales in end our the offset comparison a and prior fundamental supply strength year-over-year The also price from our

As has XX% approximately our exposure. residential and product XX% complementary non-residential category a reminder,

first nine, a January product The to by was many XX.X%. In of categories, points approximately increased Turning to basis price the execution across price/cost the review aggregate, the on shingle positive in gross basis XX year-over-year the points margin Gross slide we'll price basis. contributed announcement to year-over-year XXX including margin. increases improvement. quarter

Our again gross execution product contributed inflation and kept which price timing once team's margin focused created to benefits, expansion. favorable above

net and higher estate rent, OpEx an of XX non-residential enhancement. includes commissions, card year $XX selling which approximately together and In mix costs namely year branches fuel associated million taxes, increase greenfields also as was travel wages driven current quarter. the compared addition, Adjusted $XXX caused our million The as in XXXX. price/cost by costs, offset $XX basis the a recently The year-over-year, headwind, and with in the private and divestiture Higher label predominantly to gross margin providing XX% entertainment million, sales fees, sales partially point increase credit well since year-over-year, with hubs opened increased headcount was increased solar real OpEx QX ago inflation of insurance. approximately of improvement. OTC and our acquired and

year-over-year, growth. season our sure staffed the given up in healthy Excluding consciously year are for Midway Crabtree difficult with and we the less and environment the line this we appropriately to was winterized hiring make We volume largely are acquisitions, expecting. headcount selling

productivity on focus and continues labor Our to fleet results. show

combined with year-over-year. points higher down basis sales efforts, sales drove adjusted XXX Our OpEx to

Importantly, greenfield growth our while levers. XXXX sales and we customer teams, are and our making our and in margin progressing also Ambition out organization complete platform. experience investments in and We're on new a our nearly M&A our model in initiative, dedicated building investing work maintaining digital pricing industry-leading enhancement

XX, our flexibility. financial Turning will review slide to we

EBITDA stood growth to same adjusted maintaining the X.X targeted times Ambition and on XXXX three quarter a capital year Our prudently range EBITDA. compared the debt X.X trailing trailing balances months leverage plan times opportunities while strategic times XX at XX-month period the to strategic investment two of of at end end of ago. at a leverage Net

Some leverage that of XX, net at X.X at may stood recall you debt March XXXX. times

balance last XXXX strategy. has have our the of the month's of This trailing we Over XX significantly Ambition our been transformation sheet EBITDA. by reduced to and years, integral $X.X approximately our increased billion launch two debt gross

We year, in beyond to and near-term of completed risk provides end, refinancing $X.X comprehensive our to XXXX last ability invest and approximately have due quarter significant liquidity maturities pushed future. debt a our out no at our refinancing billion to which

openings we and our recent our our tuck-in use As inventory can demand. included Julian meet greenfield we this effectively flexibility to have building In M&A, mentioned, has ensure to we're restored accelerate financial growth. to quarters, started

XX% our the cost the accounts first approximately X.X% Net to largely product in year. through which of invest also sales of due is end inflation, increase. $XXX quarter will expenditures approximately the business We higher capital at to this XXXX, for inventory compared of of million

from than also Crabtree to expected carrying was and to interiors lengthening Acquired longer in for items of cash the strong million adjusted to contributed also Operating sale elements related the and cycles due both quarter. certain our ensuring backlog. We availability are $XXX inventory support of negative material inventory our project to build. inventory business, Midway flow the

business, first to needs half We're our we cash pattern the report the that working Given of and use capital the of the seasonal of second generate in in pleased typically half cash year year. in our the as a start, purchases, approximately market to as repurchased off repurchase million we our on an program. executed quarter. open share during accelerated is common program of $XXX We buyback share good both the as well stock

of shares the excited $XX.X result, as outstanding $XX.X XX, first stock common XXXX, from X.X As To a of of performance decreased approximately wrap to in we're reduction about shares. of as million and million XX, up, very quarter. a million XXXX March December our

call plan. and important We part the to back on have closing we the remarks. turn significant for as most year progress momentum our Ambition Julian of are our XXXX enter that, making his I'll With

Julian Francis

Thanks, Frank.

briefly the quarter reference and your up I call wrap XX the Please slide to our turn want of to page the turn remainder attention to XXXX. of Q&A, we Before materials. over first

tailwinds. demand expect material labor market inflationary will a as eye and our watchful and residential end such headwinds new we Residential shortages mixed, indicators are to Overall roofing products construction economic disruption keep pressures, geopolitical as market from on macro and within supply even strong, benefit the We and and persist. chain will to R&R exposed developments. areas continue complementary and remain demand

remains the our low the from Gross the beginning product be net In with will up demand, guidance of up enter our in recent comparables ending overall in the index of second to the sales reflecting the positive, progresses. strong backlog. sales profits. that construction is quarters solar our day the our per all are margin and and across get expect as we XX% year, total year-over-year, as and trend acquisitions categories business. slightly sales begin in The range anticipated as roofing expected fact we June, the inventory quarter, commercial ago the a This around to April increases also we XX%. growth architectural continue. Regarding season challenging reflect activity well more several saw rising reflects billing sentiment price divestiture quarter

inflation. well Our year operating lapping but increases the a offset efficiency emphasis timing related to which remains price we on and quarter, Please as be had two execution prior pricing will remember, as benefit.

We a expect solid between to execution in result margin XX% year-to-year percentage and XX.X%. gross

execution, within management, Regarding control. cost of continue all and product sales will availability operational the on focus remainder the areas year, our and we to

We are year versus sales increasing full our XXXX. year growth expectations calendar XX% approximately XXXX to

$XXX EBITDA continued the growth expect cost of million will adjusted discipline in result million. and to sales We range that $XXX in

that believe that will and continue supply the through chain to continue demand We will environment ease constructive the challenges year.

resilient to and expansion. leadership More team in Ambition our our secular than allows up empower Non-discretionary adjusting customers as with broadly, continued demand financially margin We model growth changes questions. growth end provide our will Selina, XXXX our and for R&R growth plan members their And that, team for positioned have opportunity. business and open we'll strategically capable dedication, for our provides a continue We thank the with market. to is a X,XXX us build we to us to markets more it the quickly of underpins which more. paths and multiple success,

Operator

Ketan you. [Operator Instructions] Mamtora Markets. Please with Thank Our BMO from question first comes proceed. Capital

Ketan Mamtora

be a just and of just start I way helpful. take sort think you revenue was by And can that XX% on you your to we strong number? growth would Thank contemplated XXXX, if and congrats for your XXXX. was volume curious, segment, the price within as about by on I guidance that curious of down

Julian Francis

Ketan, thanks. Hey,

If the obviously, full volume blend think you across low So in year range, single-digit the on it when looked price. mid-single-digit only being the LOB it -- rest at range. and of really should but entirety the of shingle On obviously, in portfolio, you appreciate handicapping volumes basis, shingles a of component are I resi, the of the basis, a a something it congratulatory we're remarks.

prior You'll chain that, you us. When and a that now, given That is fairly one's little the Right quarter a strongest based supply handicap, that's the harder look year to basis. by that year one but see we're for given some of comps. handicapping QX, in non-res, the QX season selling overall, swings more on on flat at issues. significant full

the remember, was QX quite might softer. You comp comp QX and high the was

that And then in that sort So as complementary the on give I'm a range are some you complementary, here blended business, probably single-digit low of broad that's brush the using that just number the thought. out, inside there a just as the different items of model there fact given well.

Ketan Mamtora

back I'll queue. That's the very helpful. jump in

Operator

The question Capital next Thank RBC with Mike Please you. Markets. Dahl proceed. comes from

Mike Dahl

sales EBITDA just my on require step-up to given seem Thanks given for side, but a weird on that taking Frank, guide, in in the put leverage margin in SG&A And the here, gross should guide. a little the to pricing a to million. million would knock operationally when quite question. it putt how on guide, missing the seems SG&A probably to something down follow-up $XXX I I'm $XXX get you much the dynamics. the

maybe? that you bit just help little So can a more bridge

Frank Lonegro

Yes.

We That the quite would not math there. guide, Just sure. quarter. the did That guide for might margin a for the change be bit, I'm gross things guided of gross the margin part gross year. margin we for

Mike Dahl

Yes.

dynamics, mean Okay. the robust implied. fairly I ask a then, the that's If I XXs could in the non-res, quarter pricing for one second

that you the think So and through little just driving what's could on a -- of -- more that year? balance about the how can to you elaborate

Frank Lonegro

it number place a XX% a it basis. the is to manufacturers chain the come I back good non-res there. we delayed number on supply back the that of a in that of chalk up is side, right the probably resi products Demand blended to it increases see different versus COVID, was the There's would demand. but demand from have combination a been Obviously, and around Yes. come all big challenges price a is are that encountering on the strong. through coming has then healthy. Obviously, from

across things. be we inflationary I No. of I Do it board So for lines the that continue we'll for continue to us. But see to across will But XXs all an think begin environment obviously, those different think it's all of of of to year? lap I the business. the the rest think

year across throughout year various and will of think increase business, You've we lines go got about to go obviously that timing price compress forward last the back the and as year. last the

Julian Francis

add challenge challenge. been -- a It's a seen from to to couple as -- a we've Alta, It continues forward real that supply last quarter some think I'll difficult commercial been be see has It's in Julian. pull And is forward roofing well as the lines, a it the to chain. into things Mike, of construction project time year. things we delayed that

that continue. there a that there. we think strong demand believe We So will was

but don't I in bake think not see momentum, we continue we'll been to some obviously, pricing that announced. has anything

through So terms growth, there. just running product runs the of mean, we through inflation investments in execute add It's business AXX. as a I of And against to lot business, areas not of we're cost. we've SG&A the fuel, to we want all cautious got that then

there So that investments we've got we're considering. additional

at we're also want certainly the So get very sure that We we believe as managing make leverage, to -- future we're but investing we to it we're growth in are -- well. looking well. for

Mike Dahl

it. Got

Julian. Thanks Thanks, Frank. Okay.

Operator

question Garik Shmois next The you. proceed. with from Capital. Loop Thank Please comes

Garik Shmois

if didn't the to guide the for question, thanks you so think curious warned specific congratulations guess you've strength about a But inventory out could you still far? previously follow-up for the pushed and XX had costs, that we gross recognizing takes? obviously, how seen I year. I quarter. drag think point of Hi of basis formally just be I'm because bit and that puts year. us the I'll this should or about And that on of margin on full the holds some to the a just XXX pricing

Julian Francis

question. good Garik, Yes,

once XX.X% profits down the To million got as the reflective generating and of done reduction, much Investor the took that reported year. XXXX fact Day, your it XX from points. remember year, we to sort that of this won't inventory that you point, basis normalize about $XX.X we profits If of the at we good inventory we see of some given calculated as we are the

XX.X%. be So, we'll the above I think

With number. be hard I the to year-over-year, differences mix to XX% get it'd think XX%, up that

the is and just the on a number that below something slightly to one full probably middle middle So, good for year.

Garik Shmois

Great. Thank you.

Operator

Next with of from Keith proceed. the question Hughes is Truist. line Please

Keith Hughes

Thank there. lot up you. be would where on kind a are there's you good Could bit inflation about it's level Questions deficit at particularly you of inventory. know of I just a to And still talk Or you year-over-year, units residential you a like roofing. the stand in position. are inventory in a at? you of

Frank Lonegro

Keith. thanks, Yes,

of again, at of just inventory a products one in are given LOB you it. in for different the to and volume, places, dollars fact at XX% price more to units. the story ISO us on you it on there's the It's resi look that is the these, on two-thirds on lots is Non-res, So there's the When increase really yes, on sort about obviously, in one, But and on up aggregate of ply. proxies each insulation look side, single broad side, these price it membrane than obviously, it's on holding different about XX% that units. different an allow price. of XX% the basis, one-third if unlock

is But the able holding and number complementary all be some in ship. depending on job of about to let's siding XX% in is spot products to for general what there When than of bit dollars over more the waiting market place maybe, talk you price sort doing. other the volume. are it's on lot about So, up and look they there's at ISO little a

full Your see we've in overall it We did price buy obviously, on just in producing question we're numbers grow that increases. look and expectations inventory. going we are the I that to mean talked about. of how about you OEMs know the that We the we tilt. ahead obviously built

seasonality than -- business. fact -- we taking and not given month were more robust the output given year were January, was the on highest us. not are it quarter selling February, our for output the So, we selling March the season most that or of

acquired In the longer items. see the just M&A, terms mentioned mentioned. unlock to of product last inventory chain able I to booked We supply And mean of we as the us because we to that product those. we're building. OTC the commercial we're that job come inflation, a Julian I lot. got hubs having some Greenfields hold in be in then look, that like continuing for we open where to needs couple We've inventory and open.

softer, contributes we So inventory. the where to in to to where want is inventory highest. we isn't the bit me, good The all the of shape. is it most are where that challenged on are are little There inventory inventories demand still where where places be, and demand the is a

in continue customers sure have to do that are. -- kind places of advantage need. think that products to where need an we to it the we we us is them. buy that but going add, And have may make the our we're a So, to We others Julian to

Julian Francis

Yes. Thanks.

you to, where there I is today. Frank finished we was various product also around question to it as with alluded regionality across be, a Overall, your lines. want very the answer to Just to I'd pleased up. say And where

to ahead expected up. to that -- certainly for the able to early be through going advantage forward. think some chain the inventory as us we the challenges We I supply of easing that price remarks, predominate going think will be year. prepared my that in some expect in the did that's of in year. commercial increases to were very constructive that We ease say do that and roofing sector. Obviously, we built take I was

and year, eases And bit is so, to to not start manage about times perhaps that how pressure normal, as supply we'll to maybe through the as chain more a closer we lead the down we tightly but get go little think normal.

Keith Hughes

you. Okay, Thank great.

Operator

The next proceed. question comes from Noah Merkousko with Stephens. Please

Noah Merkousko

thanks evening question. my and Good taking for

Julian, that this prepared your of So sort first, in times we're in you mentioned reroofing a I remarks few think, cycle.

XX last the homebuilding that years look see back and you going was in on. all the If

guess I you're inning you asked couple is maybe long of a what we last? question can seeing multiyear Or mentioned cycle? a in, way, also times this another in So, I think how are the demand tailwind. it

just So would additional be any color appreciated? there

Julian Francis

in Sure. residential answer to commercial a question. But on Again, range same it roof multiyear, markets, if the the as estimate Noah. happy down. to they're building. it that, started XXXX or we Thanks that of one. through cycle. you type depending years, see XXXX. I'll really typical you have slightly XXXX, being a be the said, take, lasts go when roofs give started is to about come to the XX residential that XXXX for But to in build different happen -- we back

good see we direction several that growth. So, in more that of still and a years trend

thing seeing homes insurance looking is a other that that transact. The are that is when at for think, they this positive, trend we we're companies now

and have ensure existing certain new So on will is the they you to sales it. age get a home roof more over and before that and are roof the saying turnover more a if

and typically XX building cycle residential commercial on in more roofing. think owners, a the then side. So, well, positive basis good doing an influence lagged lot positively number And maintenance we're both seeing by a commercial about of on so repair residential more than as will months. residential But they're has that we the the trends roofs overall ongoing cycle

lot we as we of to for room So there's opportunity, a growth. an see that think and continue

for ahead things We just and opportunities there's for plenty market, even can a opportunity also in flat And to that space about and relatively well. us us, that we're continue with but execute to we the of we as growth control are forward excited share the market our of the grow not drive against from plan. our believe that

Noah Merkousko

it Thanks there. leave for I'll the answer.

Operator

The from you. Thank comes Research. Patterson next Please question with Wolfe Truman proceed.

Truman Patterson

afternoon, And good little non-residential everyone. my roofing Hey commercial touch thanks taking more. I wanted just question. for on side a to the bit

really challenging, quarter. understand, the in You're backlog incremental beginning to going trying of is first of able believe improvement but flattish chain think I'm this any that understand, stating just chain? should -- how in that supply And you you is to were to growth I'm I in supply the forward. are how gave see volume we you to grow volumes hoping still the seeing segment deep just segment? strength your

improves? understand if there's to chain the if trying supply upside Just

Julian Francis

for Thanks It question, is Truman. to difficult the see.

same little period. last year was quarter. the So the probably we really the But Projects first We out of the on think a in had quarter. end up. quarter daily couldn't have at year. saw I bad to basis. demand last And too through I've little continue of I the catch-up been pushed got think commercial getting honestly, that from a was really not the I a think in jammed supply so chain robustly of bit a I weather difficult was The understand question. saw it what roofing -- were We question work out. that pushed the contractors bit

We're see the in That's need manufacturers. bit. So we're to the the a supported jobs. that up in easing that chemical the product freeze we a you'll customer of hasn't that that support up That think roofing last bit. that need little important picked our from chain that jammed inventory the we supply completely We're of that which is that some think really door the little the that all able to so the can been to our that we Obviously, probably some get the come had improved, of faced ship challenges to suggests the prior US the commercial base. industry that out our so us. leveraging not going some for we scale remember do those get obviously, been repeated, I materials vendors year, February through. year pushed to

going in manufacturing through with we I closed. The all building that that a roofing. not an the to improved has some pig backlogs But prepared think think, it's on still primarily lead operations that overall, It's and about to seeing still have the think that is I year-over-year position I into go feel the of an getting will elements chain other think materials said about overall I just little that, it bit chain advantageous labor as side combined the do commercial going grow, about production inventory completing do situation a job snake strong to it's challenges. ease. the easing. supply roofing in I we're continue in of So commercial other We remarks, improvement because supply the and my we're here. It's

we're on on solid production think to affect And We're position, of in we demand. see just schedule Overall, the that of dependent feel easing. it's of supply backdrop chain materials. that but We our dependent so we're in the good not some a building. do continue we other materials overall but don't we a a touch,

Frank Lonegro

quick backlog. We're data guess, A and Hi, sequentially XX% three what about we points, I up were ago. up a couple Truman. year times on of the

been fairly about that's five here And of space. non-res backlog or overall XX% quarters. As is last the for you in know, the that consistently four growing

the because four year XXXX only the you is to answer in four non-res, reason years. years, As mean, earlier throughout think on volumes strongest But that's I second look only at in of I I comp is years allied for sort the four mentioned, I post I an quarter volume as question, the last went an us. back the say and

So really for ISO the heavy on us plan the that both quarter. single comparable in

growth story. that If a different out, see pull obviously, you you'd one volume

Truman Patterson

perfect. Okay, you. Thank

Operator

The you. question David Manthey Baird. from proceed. comes with Thank Please next

David Manthey

Good you. Thank afternoon.

discipline you getting yes at you your maintain growing what goals place supply-demand above I'm the ensure when you some reached point, branches how in at will, about of to do supply talking better market from that maintain discipline were price Julian systems that When and point the standpoint, branch wondering level? equilibrium. the Given one of Ambition they happens, at XXXX. a management do price is that chains have clearly.

Julian Francis

with we had that of benefit out I that lot is question, And think in space. time. space. model company for I focused hired I think I experience came in, something that Thanks a that that certainly, the David. this since mean on, in we've lot of We've we're will us pricing experience also over a the talked about to we building that a new people

guidance branches. the So, to we do provide

We management have around place of that. systems a lot in

a measurements daily look We price a company see doing. to an on can branch have can those level how we're overall but at cost at on at branch branch, We basis. that level, We things. just daily measure by not

years pricing systems So couple of of dynamic we've results. important we the management that driving got number has can a the our over been Obviously, in follow. incredibly last

cost incentive I standpoint is is of think put one it's well have and of the it it's and other the we valuable place management managing learned compensation -- that that sure just from place, making I in how balance. the we think everyone's been relationship price in systems in

as that benefits provide So, we terms management and a brought price I think into we're daily that schemes investing visibility of in on this the place to we experience management, managing ensure incentive well good in put the as basis the in from better compensation to company this. systems we're around and that everyone

they in, related M&A pocket, air to it's companies We an skills As help above acquire that think that had you just in to can of do we help to grow. be business. that we'll can do ongoing say got bring no differentiated specialized ways as price things matter that we volume the us we've all greenfields, sort of aren't than There's that lots growth we good rightly, going those do we more we grow market the we're well whether whether that then those past, that's we it's believe management of specialized of can and are component, that which invest management. what. grow We of to basis, well think want the an platform, we been price on of don't obviously, And as as believe drive independent balancing services, will that digital kind

David Manthey

That you. was good. Thank

Operator

proceed. from Michael Rehaut The comes Thank next question you. with JPMorgan. Please

Unidentified Analyst

for [indiscernible] Mike. Doug afternoon. Good on Hi.

just regarding and of XX months over M&A how about And targets? the of think you we what should terms just mentioned opportunities of Just size M&A. next are months? you And it, type in evaluating XX to – number

Frank Lonegro

that, -- them for done question. for are OTCs capabilities $XX next we fit map, somewhere single can the in in branch and for We of got strength. years our been to refer M&A on would our statements recently between our great Investor revenue of back have we're companies plan. the We $XXX $X Thanks we ones I'd and grow. into that locations The the the quite million billion made over and several Ambition million of we think come bring at said them there's most that from targets the Day. where XXXX have frankly, integrate the you that market to that leverage we've sales. a have, region But anticipate ideal unique the of us. opportunity to we that in

on right roofing, that a to continues pipeline, there's markets, and our we're we're complementary see pipeline good we involved So roofing residential that focused. we've focused that where That's commercial that described of the now. and it with as think be We we think overlap products good those serve core a customers. the a

Unidentified Analyst

you. Thank

Operator

comes from Please with Deepa Raghavan proceed. Thank next Fargo. you. Wells The question

Deepa Raghavan

of everyone. called you and for some low there? And growth split revenue have pretty Hi. has also comps QX tough tough on non-res XXs. complementary. Thanks taking question. like also Good out, segments? My How is guide comps evening, You question across my does that

Julian Francis

Thanks, Yes. Deepa.

And think low bit and I I look shines add mid-singles the volume there's So going most. yes, in it to price, will the strength, on you volume the on, of there's be sort the side. low XXs, there, rest side at the some a shingle in some the single-digit that obviously, we if think aggregate, then little regional brought sun acquisitions already where res the have on which the

will did the be there. strong volumes, even though see means be non-res comp in on to think earlier that the the pricing mention the probably you're but was referenced volume, to healthy should continue side, pricing that call. last to prior down are which remain I the volumes I the year, in going we going

a again, it's in think different product I lot on if -- of complementary you categories the side, there.

rest If probably there good will to proxy, low it with the a mid-single-digits you just at on as basis price. volume a be Siding the in look

So price the in continued and that strength the volume I mentioned commentary in across just board

Deepa Raghavan

into mean, outlook? really I'd in. Thanks much your an just substantial is dollars? great. you're numbers, price very assume. That's terms how Can one you EBITDA are baked of these full estimate of much. inflation year in much how And more in I squeeze give there I If us can

Julian Francis

year you'll XX of up we year-over-year. guide when do but net about mean at full the the I Yes. have math, to sales look

As res the price. I volumes think I mentioned earlier, got might in low-single-digit have you've

for. catch did with net what inflation mentioned. see Julian as the is that cost can continue costs we to or accounts cost. factor you with have and be piece impacted to up the not go by increases, We Obviously, the as up price replacement in we going replacement product the -- catch see the up, future So inventory as the well cost any

and in And well, to have insurance, those and responsive fuel out. as as guess line right OpEx now. fleet aspect taxes, then, real whether come estate, it's to or any place the we'll prepared as if Julian real up I when my mentioned, estate I things, to the of going labor on everything those be think also as of there's be seems in well, remarks So I mentioned

spot sales quite mentioned. of margin our well going And you you of and imply, things a things earlier manage to look pretty I on this to maybe all a gross able OpEx have that good be mentioned when what both the in bit Julian million we're progress us that think million We on the guide, into and the get we leverage on little $XXX the $XXX year. in And guide line, baked to that at that don't. help to that that

Deepa Raghavan

Thanks luck. pass Good color. I’ll for the it on.

Operator

next from Ryan William question you. Blair. Thank The with comes Merkel proceed. Please

Ryan Merkel

clearly, a investment what's less home in have But quite to COVID boosted helped might residential your bit. And is and reroofing. the has on business. just Hey, me I guys. a the had clear how to margins question impact pricing

you the shipments I realize look of were when shingle the quite the at last here, that but shipment years. data, So flat bit a are volumes couple

be house? or forward pull is elsewhere from XXXX a could in is, there sales outside the So the hangover consumer if spending money the question

Julian Francis

Thanks for question, Ryan. the

the housing I'll So, at in terms I substantial crash the to seem obviously time XXXX, been underinvestment general. mean, think I live to went pass there in the years. years the to There's lightpipence has money. and put in how XX to all want has downtown, what about just Recession. think might in in sort the housing under that water of that, about to that began that single-family style. that work in inevitable. how last going people XX, you over going since XXXX, the of was as not mean, a the happened probably a close I many And Great housing in investment react, so people home condo I led that everyone suburbs to this gone was new mean XX anywhere. with for was talk was the I think I place be travel never out to just of last mean

I think COVID just change that.

we think been the And a I last could. in the think a kids, and has that aspire aberration has pun house made entire but people realized underinvestment brief. to where can single-family it the to as years single-family dwellings reassess nation, in do my for and with dwellings. that just do live our wanted think the massive single-family just no not I as unit species, history, XX out COVID of want of I live sort actually somewhere again get say, intended where I that as people I I a that

old. with trends are over if the behavior a I growing house We're that we're a household companies as I particularly XX normal slow just the on population, a earlier, I revert a I got that roof to a not this mentioned going We're say which of because normal think do for we've got And side, and you momentum growth, that's it got on a got more I positive a demand. idea impacting that in that roof you've the think situation. think, got more that just demand, us. it's other to And insurance is think transaction creates it's -- some while haven't new to returning a growth. ensure you've years case you've residential seeing

combined reroofed a that years, -- you with roof new that insurance you probably what houses last cycle, them combined saying. you XX, than trends get reroof if as these more getting the that are to getting suggesting companies we're XX today other turn So of the there's house are a so the with that's over, replace have need in because

residential we've several backdrop got think I next market for for great the the years. a

Ryan Merkel

Makes sense. Thanks, Julian.

Operator

question for next The Please Phil from you. proceed. Ng Thank Jefferies. comes

Phil Ng

kind The Hey, well on given bit inflation makes working demand guys. a us Congrats where I is, an as Frank. for terms called walk that solid lapping And Can Frank, guess reason comps I you sense but volume M&A through the of I for around the of given backdrop. weaker then care I noise? I capital. some build increased guidance, full organic? demand is versus some much a that ask think resi. you're obviously and year storm growth to of in of excellent quite receivables mid-single-digit had your How had tied is inventory tougher think you quarter. questions just The as question some out you well.

Frank Lonegro

Phil. the Thanks, out. I appreciate Yes. shout

of are In year-over-year, obviously, that Higher XXX sales, XXX terms about AR, one. quarter-over-quarter. about a up driver of it's big

recently, are the talked project lengthening non-res mix nature. days' of a things and those of pay of cycles lot of have paid type A given given and longer. in clause, that happening, worth that's couple favor kind of we've thing a generally of lot deals a win of a that the receivables other probably on we've non-res DSO seen shift terms The that about

the is second then And that proportion and to being So AR just in as AR the question of the I inflation then give more a one non-res. time? mix it terms the would me of in relating higher see inflation in shift your sales

Phil Ng

a seems reason ask why demand for is for that growth environment. just How guidance backdrop I of through, that like the resi. calling mid-single-digit Your so M&A, full coming healthy it for with is storm pretty there year, growth weaker a you're is much

Julian Francis

Yes.

So announced. the is we what there M&A that's only in have

week. in got, and then Falls, Crabtree just Wichita which So obviously, we and the you've Midway announced earlier

a businesses number magnitude So of just huge acquired. it's those we not there, the given that

did dollars I an from and wouldn't net the any overall year we divestiture know the solar, when to of positive X% answer basis. question, resi that out been not answer -- last your to by M&A a is And you X% all this question, the already get I the on that's handicap stretch. on you an I so add announced, M&A it's revenue, broadly, So in dollars I being your it the a as in about more but and net acquisitions. move did

Phil Ng

Thank you.

Frank Lonegro

year, but it's it in terms but year we still first think still that been of We're higher-end it but will activity. been lower, year, saying guide, half the and bit it the the a And forecasting -- by of also be it last was If the our low-end in emphasize, light in guidance. average it's the at about be storm It's we're the of higher, little still year, the be will it's guide. end we'll at in has if of light that about it heavier average. be the of

Phil Ng

Helpful. you. Got

Operator

Please The proceed. you. question next Elliott Thank Stanley from with comes Stifel.

Stanley Elliott

label result are brand momentum reorder on of private a more customer the numbers private that business, then, question quick A in. you commercial issues? this also customers? me squeezing seeing supply of some the as chain for right now are uptake And guys with big seeing some you, Thank everybody. residential or in Hi of the the you activity you're seeing or products better

Frank Lonegro

for question. Thanks the

we our partners there to supplied. manufacturers start risk. I to because private label of of supply. important with that get think this keep treatment favorable the supply very think don't do to that's I'll position in our terms are us in issues. So We think chain We

environment. important very that's in this So

using complementary obviously our when go customers, I product. like product. forward, private The sales see model. broadly over where indicated it well. do category. several like have the a customers, think our additional we're there's plan Ambition think residential add in as of that very, branded substantial and we commercial the We take speaking, us. business room in the incenting board. position we'll It the certainly in the opportunity it's We'd we penetration people great business And It's in to but at in with get categories as to and come. to -- more we and used a the intend on across advantage the fits a we sales least high-quality We it's certainly the They to they grow label, like with the private roofing mean, business, it. categories our to who very $X that that I years. XXXX we for billion grow do to have next is we

Stanley Elliott

time. luck. the Congratulations Great guys. Thanks and for best of

Julian Francis

Thank you.

Operator

you. Thank concludes questions. that And the

closing to turn call like Mr. the would back his remarks. over I Now for to Francis

Julian Francis

Thank thank you, Obviously, to everyone, you, carefully. we're Thanks, you celebrating if about start joining home for And Ambition make this about excited opportunities. the We're evening. us We're Selina, you're please XXXX excited thrilled sure the Cinco plan. the de tonight, everyone. and with Mayo year. drive our

Operator

for Beacon First XXXX That Earnings your Quarter concludes the Thank participation. you Call.

You now your disconnect may lines.

Beacon Roofing Supply (BECN) 7 May 222022 Q1 Earnings call transcript