BECN - Earnings call 4 2023 | Beacon Roofing Supply, Inc.

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Operator

Good evening, ladies and gentlemen, and welcome to the Beacon Fourth Quarter 2023 Earnings Call. My name is Victoria, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the call over to Mr. Binit Sanghvi, Vice President, Capital Markets and Treasurer. Mr. proceed, Please Sanghvi.

Binit Sanghvi

Officer; website. Good today's you Victoria. section to call. Beacon's And always, will and slide Chief as I'm Chief the Beacons Thank Officer. follow with Financial taking evening, Investor prepared the the of thank Julian Executive our Francis, for by will our posted Carmelo time we Relations Carrubba, joined Interim begin you, Carmelo Julian everybody. and call to deck Today, that join remarks

After open will that, questions. we for call the

begin, please brief we reference Before a Slide couple reminders. X of for

First, company's this and call will and performance. contain forward-looking statements about future plans the objectives

words be can similar use statements to such meaning. historical do current identified Forward-looking other not words relate expect, strictly of because they estimate, as and facts anticipate, or and believe

those Risk such to materially the section statements factors, Actual forward-looking a various the differ limited company's but Form result not results in Factors may indicated forth by of important XX-K. of XXXX set from those as

forward-looking statements XX, XXXX, Second, these February are the by any as required or to information except company revise today, contained law, on statements. update call the of no of and obligation as in forward-looking this undertakes based

the contain accompanying of the certain set call. Both the presentation references are call measures. press The today's on non-GAAP presentation press and reconciliation available at in forth becn.com. this finally, comparable GAAP And appendix the these the to will to measures our is non-GAAP to most measures release website release and the

begin with Julian. opening let's remarks Now from

Julian Francis

the expectations had everyone, XX% fourth billion. delivered strategic of to very a up from executing afternoon, quarter our team XXXX. call. to quarter our finish begin record on a $X.X a I'm year-over-year to a pleased Ambition The and were Beacon plan, Thanks, Slide that and on let's above quarter result year. third as our record Sales Binit. fourth nearly we X. strong report Good

business. growth across organic of all Demand three lines services sales drove for our

for labor our the enhancing branches our top value scarce proposition, to and create to allowing they growth approximately contributed customers, newly the greenfield by to resources acquired service continue We the maximize line. them have. of X% especially productivity opened

Our third provided We on at branch our call. in bottom our stayed that our labor on came gross initiative guidance XX.X% delivered. we quarter productivity XX.X% focused of margin and above quintile

As Ambition a result, locations particularly fourth I'm record this and management our deploy of pleased of flow greenfield million. acquisitions million, $XXX quarter capacity. to we working cash with XXXX, our achieved generated including which sheet adjusted for enabled a capital, fourth us towards while our $XXX maintaining quarter of capital record EBITDA balance

in to position the acquired by in to We've become waterproofing recognized supply enhances leader completed products includes industry-leading along third waterproofing acquiring quarter. with earlier distribution. adding seaboard Metro, a we on footprint Garvin This as specialty X acquisitions construction Metro since eastern the sealants our the month. of and national end this our as waterproofing October, continue

acquisition branch also and commercial of North of roof adding South supply the of completed locations roofing Greenville, We Carolina. in

them again to welcome has of are that At on deliver that to X conditions. demonstrated paths our today We ago, results growth said goal. we I have well can Beacon. we years roofers say confidently in way Beacon, and once multiple variety the can of we unlock and strong that achieving we would great to that team Investor capabilities, The our supply potential talent and and Day we a

day. customers goals value above-market focused is our adjusted achieving margins, to central Page Day, consistent returns. doing that relentlessly team please for every is build growth, and shareholder to generate superior to great laid EBITDA double-digit Now deliver we drive Investor these a targets that turn on organization At Creating X. our out our and

with starting you building we provide me are initiatives, how our strategic a update Let with culture. an winning on

One the applies for communities. our this by build to of our better employees efforts engaging values do core to and our is climate to in environment thing, right and the our improving the

It forklift reducing launched nonproductive educate During drivers campaign our a role the truck in and their Off Turn about engine to quarter, we idling.

have pledged branches can Our job to off our throughout drivers and whenever sites turn cleaner to vehicles at their contribute to community. our they on the

branches receive their in XX we power bills. addition, from over community energy support underserved investment proud solar, to community to solar energy In which contracted to discounts our of on with We're installations. allows renewable neighborhoods

pillar and margins major includes in reach through growth to second a customer and growth initiatives. This Greenfields leader a our be in of is our investments acquisitions. Our enhancing market continues Expanding plans. driving set above targeted our

fourth team time for Each us dedicated to the continues of greenfield new distance In we branches. location, XX had opened and average quarter, sales locations. pipeline new to resources our reduced Our and execute time we add we the our customers. a on reach

share. market This overall opportunity the proposition, us enhances our value to earn giving

additions strengthening we in XXXX, roof now and Supply, branches of the well million H&H Central line have X as in also opportunities. our had the seen Valley presence impact sealants original XXXX area. of of market the accelerated our service have adding branches our our It $XXX top since Garvin branches than acquired acquisitions, years. as new Roofing On demonstrates the we and exceeding also to of We've Bakersfield These more ability We prevailing results to discussed XX our recent to Metro contributed have California, beginning program. of these opened goal. our the over new to Ambition adjust supply

branches. XX Since companies our XX we have announcing Ambition XXXX acquired plan, adding

a points off-line basis online channels. through approximately continues deliver online margin better for platform Sales Our differentiator be XXX to our clear Beacon. compared to capability competitive

in our in fourth invest we this to ourselves a on the adoption to integrations differentiate plans driving advantage performance marketplace. we are nearly highlight digital XX% sales were year-over-year. and upon XX%, the have area our achieved in by nearly of quarter, value-added as our competitive Our grew to sales leadership we residential to and build customers Digital digital and continuing build

Our driving improvement through and pillar excellence involves third expanding initiatives. continuous productivity our operational capacity and

to in the generated EBITDA fourth on bottom significant focus the Our quarter. the quintile contribution branches

and diagnosing our in to that last for the for addressing line report X quarter. fourth process million to year-over-year process disciplined has years. bottom been the added issues to core operational the approximately I'm improvements pleased the Our $XX

And stock exited by entirety remaining deployed then, the from fourth, representation. share its let's reducing to preferred over review CD&R how shares the shareholder the we're creating sold million. Board little In $XXX repurchase off outstanding converted CD&R, and our common stake Since a ads count $X.X July, in value. its we million of

repurchase X.X million last shares stock, current retiring addition, in In X our common years. execute we the our continue to to on authorization

by growth Since XX%. X.Xx. M&A more even XXXX, the on And -- billion to investment record the even without leverage the than with start of shareholder impressively, net we Ambition the in and of spending reducing exited share purchase our the year have the count returns, CapEx, as-converted with deployed shares, at we approximately $X.X debt

a and creation In tools expansion summary, growth, paths the of multiple enable cycle. we built have to have approach value through differentiated margin the and

Our our model of to the resiliency Ambition unlock potential. amplify it plan XXXX all and our business together brings

Chief Financial Officer, Carmelo let me interim Carrubba. introduce Now our

Carmelo Beacon's in he has joined various appointed. First, pleased has let operational me and President as CFO of framework this key of is that Transformation I in responsibility when been Beacon's execution accepted Carmelo XXXX leadership and drive executive, successful until a value creating Vice roles. was I'm extensive that and us experience, plan. permanent a as that delighted serving Committee. positions, creation interim supporting Executive shares of and the April In responsibility functional to Ambition say of creating Strategy member Carmelo these for value XXXX

I'll the on to With pass to our Carmelo the quarter details fourth that, results. call over provide

Carmelo Carrubba

and everyone. Julian, you, evening, Thank good

well selling our than growth X. three total overall approximately Greenfields, in price net and achieved up to less quarter, year-over-year. XX% volume in aggregate, billion year-over-year. products nearly positive across Turning slightly growth approximately X% average In $X.X XX% lines are sales performing XX%, driven the the to business primarily as increased contributions all those We contributed acquisitions. Acquisitions to fourth prices from contributed volumes, X%. sales while by net organic nearly as Organic from for including were well Slide

products, of plan. construction the as our XX the reminder, under we a been Ambition cell largest As acquisition X, acquisition of lapped November has which coal

lower now more is continued than in XX% with quarter still backlog convert to backlog The mix non-resi less with sales the was but well sequentially our above and Our aligned of historical of total. mix slightly representing the levels.

resilient sales more range. were roofing underlying R&R higher were XX% by in higher combined storm low single-digit by prices driven and with demand activity, as Residential the volumes than higher

improvement the estimate in of restocking, Our that construction see quarter We're ready in channel very strong for full in for single-family volumes with we and homes. the new adjusting pleased to the were the particular, we grew residential in year. demand line the market

than more on XX% increased solid activity. sales R&R Nonresidential

expected, our XX% end. new a grow. customer Complementary while as prices sequential stable digits volumes prior, remained increased comparable increased on year-over-year As low declined the from they at year-over-year single the destocking the Estimated basis. to an level high to waterproofing a contractor in in mid-teens came year sales in by and platforms our continue

with growth. Higher our across product that volume product now residential with in Please approximately year-over-year. Coastal, contributed of Selling lumber, to XX% exposure. XX% products the prices the complementary the keep also stable addition lines were category of of has sizing mind and nonresidential exception

margin X, to line our and was inventory Slide period. had prices XX million, nonresidential Price than in in compared was in of gross prior a margin of to review mind profits million increase approximately generated down on Gross the XX.X% especially in year points selling the OpEx Keep average cost and fourth ago we year third of the was year-over-year higher as an result $XXX $XX guidance operating product the expenses. business. Adjusted higher costs, quarter. stable that our Turning quarter call. quarter, we'll basis significant

commissions of primarily of Increases to The the change XX Adjusted offset in OpEx OpEx adjusted increases by year-over-year. were basis true-up points increase. and greenfield down sales accounted benefits, accounting wages approximately percentage partially a acquired including year-over-year driven XX.X% incentive These and contributed associated for $XX the fleet year-over-year. lower to increase. as branches in expenses million was bonus T&E by annual year-over-year comp, with and or for expenses and decreased also

helped drive leverage for operating productivity Branch year-over-year. favorable

began first can tracking level of to see, the quarter. as we quarter to the at in drive growth teams in beginning pricing and margin priorities you tools, technologies our in Ambition branch These the XXXX organization, customer enhancement dedicated experience, As fourth e-commerce reached XXXX. above-market greenfield and and our related quarter investments the M&A since per well initiatives Investments metric hour highest sales as include continued optimization. our sales

inventory the to the to at was X. Let's This effective supply and in our and capital fourth the inventory about flow greenfields. cash had to our acquired field efficiently into new support contributing the working year to with we the finish turn in compared strong year-end. Through reflects team even prior $XX now We Slide a chain less organization, Operating M&A to million. managed quarter collaboration continue management through quarter, that as million strong inventory with inventory year. management close $XXX

quarter In cash at our fourth record operating XXX% XXXX, full year with more $XXX flow EBITDA. impressive was adjusted conversion of Our XX%. cash a of more than than million generated conversion of we

between We opportunities balance allocation capital returns. and organic continue to growth and shareholder our inorganic

in ample by liquidity. invest acquisitions our sheet is Our capacity greenfields ability underpinned and to and value-creating balance

Board going exited remaining its access our capital CD&R and rating, long-term will our time, the forward. As common which same in Moody's Directors. largest cost credit representation mentioned, of our lower overall its our February, to and sold recently one notch, upgraded off Julian stake debt former our stock our shareholder, on of in improve At

amounts the our our of tools will greenfield not We well XXXX. expenditures but record business, facilities out that fleet also in in us is discussed, only in more included investments are million already as in and $XXX beyond. investing This benefit as the building capital and than technology deploying in the the upgrading XXXX

the the we shares in shares common repurchases our of $XX.X made the me prior Share in market for quarter. share fourth of share and December year. during open on stock-based on the our to you details versus the quarter Net buybacks. $XX.X Let in compensation, million at some were retirement XX repurchases million reduced time the the of through XXX,XXX issuances outstanding same resulted give

investing conditions to in to market of in changing upon of growth confident ability are successfully also start year. technologies the We foundation future in a and react a processes the forward and to to high-caliber successful order excellence. in service, compete and operational We're build and look the our

for Julian Now to back closing let me remarks. call turn his the

Julian Francis

the slide of please Page Thanks, reference materials. Carmelo, and XX

we confident service and on start level did destocking and remain we In Before and demand made X% to we despite we targets the we progress that year. results delivering we year, to commercial could from impressive uncertainties XXXX years all We high-caliber to rates toward the the we mortgage inflation headlines. We X construction at economy, of contractor XXXX, the to that third produced conveyed just grow, $X.X and adjusted focused move sluggish the new growth headwinds productivity reflect our of the the outlook, margins. take customers the a Ambition approximately have double-digit minute were like over of When XXXX delivered $XXX branches. ago. to of to the consecutive year I'd continuous improvement calendar and million started billion. and our EBITDA EBITDA our and sales housing around in on We

sales initiatives, million record contribution our both million, in and of to X-year $XX quintile We generated enhanced in XX target. accounts, We bottom growth Ambition XX the deliver our enhancing national total service and from $XX opened private EBITDA greenfields to states, branch million which XXXX initiative, label across X/X bringing digital $XX delivered customers. margins. our We our

total, branches, are our ahead These is our of setting across in our new Acquired delivering the million branches capabilities. X expectations expands nearly to XX acquisitions sales contributed pleased to and to performing the approximately branches $XXX all in to And up serve alone. new markets greenfield XXXX. well locations welcomed and million our report like new contributed country. I'm ability in acquisition strategy customers net XXXX new top We ramping that and $XXX greenfield portfolio line results.

We $XXX repurchased as million. approximately sales and X.X while of for entirety key shares the the our positions leadership for with discussed, force, a million, business retired shares at same ranks, time, We filled and inclusion initiatives. leadership several our over line advancing of and the diversity, preferred and $XXX million redeemed equity little

$X created has In than years our our third million plan performance and targets, our of customers targets. Ambition in the the and returns summary, shareholder billion double-digit shareholders, XXXX two as more EBITDA year $XXX of for of including achieving AXX well XXXX as ahead significant margin, of of sales value X of net another

Please XX. reference Slide

Before market I'd we to XXXX like provide head to Q&A, expectations. our

same sales assumption expect reroofing average. XX-year lower that demand this new expect year, will construction to be by We as to time, demand that expected and will of we residential improve to non-storm and the driven higher reroofing revert market also. be storm the our existing older repair At are Residential home the number roofs grows.

year. we Regarding first indicating below commercial roofing, of in contraction the Architectural are Index, in XX, which the remains Billing monitoring half activity the

this decline model. more repair weather We of considerably these many in is sales high cold to continued for also are year-over-year, January, be to country. the headwinds Despite be destocking in new as a as in shipments contractor value than which, progresses. demonstrating level. year expect and And had see the in quarter of prior single-digit considerable the quarter, the commercial to total and reroofing at saw X% the year the construction versus shift market wet modest our we the range Nonresidential we first we which the sales activity you from know, parts higher per experienced expected growth day

count in we related given labor high to service properly year branches, are head also expect attributable percent the expected new the and increase mix ramp expect. largely line we to tight M&A efforts acquired by expenses activity to yet as locations customers be to the is range, in it our of quarter is greenfields that that mid-XX% to making meet is down synergized. staffed and provide to sales the past and both which but markets, driven margins, the With are higher year-over-year, from level expenses to continue to to the a we've the of business to ensure seasonal first greenfield respect we Operating gross be conducted impact fully in the of of

previously contributions acquisitions we the from price low range, upward January for This the the single-digit our in For growth revision to residential percent is expectations our mid-single-digit announced April the and expectations our acquisitions in year, expect including reflecting provided recent announced. for full increase. -- sales net growth, an

gross and structural higher neutral our a percentage Regarding label somewhat the year to resulting sales are full improvements note range. be gross price mid-XX% margin, from expect private nonresidential digital cost including we mix. expected in initiatives, be to Important in by higher to margin offset that

and With between all expect range million. adjusted we $XXX that EBITDA million in $XXX mind,

as working normal Regarding half we inventory more and build the pattern seasonality year. follow cash of first flow, a of the expect we in to capital inventory

For flow with conversion expect EBITDA to year, XX%. from full generate we the adjusted strong above cash

our efficiency. Our safety, focus experience, within the daily on remain pricing execution areas and including enhancing will our control. on and customer service

will expect we for operations, with today, We're XX ready approximately results in acquisitions accelerated that but additional our initiatives locations. the and We delivering also investing continue to invest improving in will growth greenfield in result future. getting

And last, generating to for growth our shareholders, but repurchases. be will we least, we be with and investments not committed continue share certainly to returns balancing

last our approximately million year. have $XXX approval the early on authorization remaining from We left Board

our and outperform positioned all summary, the demand business are in creating market model any environment, In our we value to resilient, for stakeholders. is

rest the We are always, XXXX our helping looking more. customers and of forward to as build

that, up you Victoria, turn session. I'll open the with to it question-and-answer back and And

Operator

the Merkel line Blair. of our Instructions] with Ryan [Operator comes first question William from

Ryan Merkel

margin. gross on ask to wanted I

quarter reasons in it assumes of You will year-over-year rest the year-over-year, it that is year. down in then first be but up the why gave the be the going to

and business year? margin the are improve you improvement something mix cited the through the things So on new like do to the through the counting greenfields factors and gross Or else those drive of some dilutive year? line of you

Julian Francis

Ryan. that glad question, quarter. got, we the In for XX you Obviously, first don't that got opened quarter, the we in the what mentioned, gross full margin we've we've I'm of we've fourth Thanks those. clarification. benefit the as asked greenfields get

So the through to improve a up mix ramp them and right. better We product first get the their fully of we that's those in piece drag it. and quarter. That's expect would a get year as

larger Coastal, of the that's we're recent driving on continuing acquisitions it. Similarly, particularly with in we acquisitions, a our apart our the some some from piece But ones, So more our working included carefully of very expect. that of results. performance it's now with

to synergize the they they later because of and done acquisitions, done the yet little we've a fully newer others larger were were we've Some previously. in year, than bit

So improve more that again, of they're expect in having early an and year-over-year. the we impact on see to year

Also, come been a see carryover typically would you the shifts normally bit year more recover the lower of year. a as more seasonality inventory the margin. move years, through basis the side. in a of rest start of and residential as odd which have of out, price and to normal if back margin We've beyond terms mix sort Gross profits. couple the we first to look the of the last little a we That's towards so seasonal in we quarter that returned

relatively So in more selling more improvements be it's typical on mostly to margins have into the go the of we piece we and it the as area, of your get sort then reroof season up. other would shingle answer question succinctly, what a

we're excuse of pattern the elements. not other clarifying with thanks But question. normal me, -- on more a just it's So relying behavior for

Operator

JPMorgan. Rehaut Michael of line the from comes question next with The

Unknown Analyst

to the in how ] some saw market was can any that, of any kind surprising surprising color curious throughout little if general view [ on the on bit for develop market? Mike. you your the could kind trends in you just give that throughout addition Warman I'm of And and XXXX? of in quarter variation a of more

Julian Francis

be Thanks question. do happy to for that. I'd the

fourth for despite Residential cold think, stretched the So was a weather, I evident in contractors season couple some things, the There last out the -- seen I that work we commercial. through, were little we've to people of bit. out a year. residential was think there quarter, opportunity real And country. Obviously, western I'll it of strong. of and saw very to get the split significant particularly half done. us residential throughout working on West some a and into the remains side storms

side demand roll residential after up did of so see quarter. residential off. the most through And hard What Hurricane held we was Florida on of down fourth Ian came the sort

done. could see Hurricane going kind bit but the certainly quarter. the a clearly The the of -- difference in into third little impact in quarter, the You of fourth Ian was

So those the the offsetting greater. storms were West two they significantly weren't in impacts,

warm And the also continue we start to in into the really our we of rolling workforce demand some honestly, why see that because Quite when good. seen the days residential so through demand and be we've see seen the very to demand. wanted side. winter have particularly we've expect XXXX side, residential the maintain on the good to is February, which particularly on encouraging we we reasonably

excited we're that volumes. about So side. the Switching commercial to

I quarter in rebound was of we convinced business. the in think what the commercial kind we fourth the were saw of

just lapping but the And in don't last think a lot we I evident quarter that captured numbers quarter our year, of is of in in really think we of XXXX. the of destocking of contracted was fourth that some sort fourth that

solid. there. projects. Interest the were headwinds terms commercial the new a good. not volumes them least that out market being of believe rates So There's of is few We in

QX, commercial numbers business last So QX's little a move bit the that, Obviously, low-slope the significant. new we replacement repair destocking we the will than see towards and year think in roofing was the more that side.

seeing QX. volumes year-over-year. significant we're So uptick in in

that's not market That's probably more to of and because so destocking first manufacturing quarter. was the that as the prevalent obviously, But opposed related. in related market total sort distribution of

which part away in the the it. shift a is new we're and That's there for And to from I of also us. waterproofing been the the construction some really replace, I'd business growth underappreciated other well. a on attractive thing very commercial as of repair think touch think I seeing is

coastal really the be just the become buildings something the in When areas, see written of we're across codes that all starting you that's country, to are of around but waterproofing important waterproofing, code but renovation obviously. starting writers to the to not also to think themselves,

there. exciting So things

from that. higher the a we into OpEx So quarter, decent bit in gross year. pressure first little margin. and a are but absolutely of April, quarter the get off to year, coming the we we ready throwing think on start of the first got to second of the expect the conclusions March, May for We've year. to

Operator

comes next of from The question line the Grooms, Trey

Stephens.

Unknown Analyst

] This you [ Trey. talk through the XQ guys for maybe Could for but is cadence Sudramesh onwards? on OpEx, XQ sense, makes

Julian Francis

Yes, working I'll some I'll of add add kind what of -- a and high-level believe, Carmelo we're theory what sort of we let then color.

not we that we to normal pattern. off to belief OpEx said, a and wet season full as sort get labor we much expect do cold the breaks our as the because going get in year. really away start more once branches higher As we're of to out because do of climate into normally good winterize the we the mainly scarcity to have would did a weather the from we and of

We'll continued we've in start initiatives. see growth-enhancing believe to invest what to we that

do. for that's So to continue still believe that, to we us important

the So about greenfields as as before first greenfields, any and we up we and sales. M&A staff obviously, we you key look at you have initiatives think sort of particularly have

to We managers bring in. have the branch

the people, drivers in, to salespeople. bring warehouse the have the We

branches. greenfields. So grows obviously, to that obviously, XX we new just committed those we've announced sort ahead OpEx And around of of

mean, we in that get achieving some build And to initiatives year we really coming we're capabilities throughout goals laid out we want OpEx additional key getting out be done then new this that Ambition the as to close in there. XXXX. the year. there'll So I

couple the made over really investments off And initiatives these we've the seen in years. of pay last we've

But to And certainly just color. dial Carmelo of yet. little I'll so let add want don't that back bit we a

Carmelo Carrubba

business. expect Julian asking year following we think evolution And covered the throughout just our normal I course, the expected will of Yes, you about sales have in to kind pretty of that the like add after dynamic we quarter-over-quarter. were seasonal ramp I well. that QX,

flat in we OpEx and some XXXX. probably to And full QX so say we had leverage year, I'd will QX. what in expect remain we the see this for will versus

Operator

with The of next Capital. line the question from Loop Garik comes Shmois

Garik Shmois

you're pricing, you could price Just might for price wondering given there's a cost residential the April, assumptions? expectations how market in that if recognizing anticipating wondering your neutrality, influence increase speak but for to your

Julian Francis

mean Yes. big in question, want in that you, what increase, going terms of we've I out. I'll execution don't don't going in like. we've aggressive I to what price is factored be forecast be I the tell mean the forward. I we too of forecasting Garik, to know terms mean

encouraged we're of it. top price manufacturers. own So We've announced increase our on the by

hold recover expect to warranted. -- we certainly gross we to the it's So But and believe cost that on do margin. will we

the be the overall from we there. closely. year. demand market side we're up That's destocking watching But We're a likely level, commercial weaker the slightly area where watching the volumes demand, end to manufacturers contractor an have of the this and distributors are

we're of second feeling probably our cost the good. some average pretty we go up goods benefits in. quarter we'll get as weighted think in from do So and profits We come watch inventory

won't a as the well. in hope longer-term be out that love and to will we elsewhere. roll of model the our think see neutral. starting that opportunity of I'd quarter. Obviously, mid-third that's pricing it the year is the to roll that But expecting -- the in from to I we're expect some overall, but first And piece to impact to year, probably half second relatively off new see some and in have of we're lot impact half

numbers good on some as improve we'll well. overall year see to our hopefully, So opportunity this

Operator

next The comes of line the from question Baird. David Manthey with

David Manthey

on get a wondering couple you. of your if view I factors. Thank industry could I Julian, was

those issues. those like value could depreciated us labor value, cash give First, changes you in on and second, to you you then your mentioned from in homeowners if but of insurance general, replacement both year. last thoughts And issues verify

Julian Francis

to two I'll questions that. there, You're do be snucking David, happy but

it So all, get how this the or roof. our a our all going First all you piece you it -- figure that roof, need on the of of portion is theory going you're of need of this it's get is to look, to If you're of business it. And insurance a if pays new core insurance our the, a part out roof, is pays you of it, if about a model.

I think many, a many through partner. We contractors and offer distribution. certainly, financing

to ability the way or one is finance the a that. to get So money roof another

I a things. that terms not cash going little do, they're that think bit what roof of on it of not other in decide puts position, homeowners to the is while it's that they strain happens So it's

situation. it's about that So roofing less in

think think, the business. the and able don't there and ultimately, consumer that great find balance strong, people that borrow. business sheets, nondiscretionary roofing out will sheets challenges of we to it's customers' one So they're really is are financing it things ways creates We the so for about there, balance it roofing is

that's the part. first So

some The ago, new a the on mentioned or rule earnings second aftermath maybe the X prior We in on say losses our of see but verified this We decline. quarters to of that that, follow much that, business, an you Verify about in X X-month we back believe came that found And mitigate asked over I'd in some think general, We X-, lot contractors we in saw did the activity Florida did call, impact part immediate so not Florida. Florida. I'd in regarding programs, were period. see we ways obviously. specifically of a probably the the

fundamentally, to tightness. challenges I going of necessarily the the I is don't believe broadly, solved out some look labor. think figure we that I find to labor more we're be by to face the -- going ways labor So

roof in on If be to working We those we can by and time think efficiencies, what deliver we time. it. them time that's really do them if I productivities got it's on require save save our we're markets that floating for customers. and driven can

very working to our find contractors ways services. better enable to we're Very So clear. hard with

Operator

Our from Longbow David question next line comes of the MacGregor with Research.

David S. MacGregor

And a forward? risks Is EBITDA rate of a half basis? I second question. around go about any disruptive you back could that confident quantifying it wanted will terms how should associated to Julian, the implementing any run passing is you to the in us impact the being on a -- also, way there the and we new the or how help which on mentioned model think it to since in of And with impactful that just you pricing expected potentially going mentioned are be year. the to basis margins there you short-term model, previous

Julian Francis

for a and you the Dave, hard new worked the thank the very to question, we've great mitigate It's question. downside of model.

we So to implementing Ambition through been terms We've XX diligent presentation Investor points we our basis in a better of that. model. really have improvement committed during pricing Day XXXX

pricing seeing trial make with sure people, the good a we're to of in is the the important pick such We we're in have our rollout traction short implementation. the getting right on to which exactly early most impact begun in markets having We're probably rollouts time. several that out difficult thing period

away going that pretty the so rate, usage It very, has is that I but with think been early. I'm good. the people the very been adoption of very was high. pleased considered good. we fact not the the it. But that's still implementing abandonment It just also tool is from are adoption, And rate The about

launch basis 'till going right and it bulk to we're get be points that and do now. of no we end to the of run we'll XX through the reason come think to doubt that of the third probably We to commit through I expect, continue rate, through. and do So have not quarter. we seeing the

ability we the that pleased the execution. can the model feed to our we we better I've and into the we're people to We've have, inbound we that getting results. coming been the been market and have this just our to isn't sure scale market. have, that incredibly very better the diligent making or disruptive about to of with deliver respond that It's better size, much that data our in believe because information intel we information

won't are the and to you whole bit in at little be committed we a least would impact sort expect of quarter. margin at of up us So company. still this ramping XX year, the points for see and maybe fourth But improvement to year beginning up, the basis next I of a and tremendous running

Operator

the back the over to closing questions would for for like concludes Francis turn comments. I to That now. his call Mr.

Julian Francis

prices, was interest set truly you night. Once stock inspiring you. for Beacon. Thank Ambition that deliver Good our thank all I'm to with XXXX for that, record team. And and board, on we records our we you, in including goals. be Victoria. the a able again, to year across We've your XXXX thrilled continue thank

Operator

rest That enjoy participation, for the your concludes today's call. and Thank you of your day.

Beacon Roofing Supply (BECN) 27 Feb 242023 Q4 Earnings call transcript