BECN - Earnings call transcript Q4 2024 | Beacon Roofing Supply, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Beacon Fourth Quarter and Full Year 2024 Earnings Call. My name is Chach, and I'll be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. I would like to now turn the call over to Mr. Binit Sanghvi, Vice President, Capital Markets and Treasurer. Mr. proceed, Please Sanghvi.

Binit Sanghvi

Officer; Good you Chach. call. And always, Chief as I'm Financial Beacon's the Chris section follow of Thank taking morning, open After we deck Julian Beacon's that and the with the thank remarks Executive our the will Francis, questions. for begin website. by will Officer. posted call our Chris call time to today's prepared we Gandhi, joined Chief you, Julian everybody. and we'll to Today, slide Relations for Investor join that,

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

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

can forward-looking from XXXX those limited as statements. similar a by result historical expect, may anticipate, forth statements relate estimate, not identified section facts meaning. set the not differ indicated and in such Factors do materially strictly or various words other but to, Actual factors, XX-K. as Risk Forward-looking of believe to those results of because including, such and be important they of current use words Form the company's

Second, our forth cecn.com. press reconciliation press update are of February non-GAAP undertakes these XXXX. today's in are except accompanying this to website on GAAP measures set the finally, the contain the call. And law, required presentation The is the to Both forward-looking or the to these release measures. of this comparable today, non-GAAP at presentation and revise in as And by this the the any available certain no measures and release appendix to most XX, statements. information on obligation forward-looking company statements will references based contained as call of call

opening remarks let's from Julian. Now begin with

Julian Francis

morning, Good Binit. Thanks, everyone.

begin Slide on X. Let's

XXXX record a Ambition plan. fourth result delivered our team quarter execution a on of as Our

We sales X top supply yet would rapid past line. contracted tested to and trend. flow. and in years, October, we November yet cash continue grow December it residential impacted disruption record mostly net our were and been repeatedly especially chain records we after QX markets in West still quarter has and our slowdown roofing, The EBITDA adjusted when and inflation sales whether bottom regions, the a North the usual strategy below charge or again set Over be fourth for destocking, well in

approximately from Sales recently contributions were per billion day by up to year-over-year acquired X% branches. driven $X.X

came high of margin gross our in Our guidance. at the end

and EBITDA delivered rose fourth concerted a As of efficiency, also nearly growth We adjusted prices including of us with including in to strong in generated around $XXX actions year $XXX which meant the cost quarter we A initiative capital. earlier acquisitions. effort average result of quarter. our operating execution, selling locations and taken branch cash greenfield quintile towards pleased the million. working quarter bottom million, initiatives, enabled management our deploy resources flow of our I'm fourth

the our launched what our were over last we set we early X Ambition transform I XXXX that performance. XXXX, we When can say have plan going to company and out we done we confidently the said years. to do in

the and full to operating have We our model right an unlock team potential.

plan, the a Now targets adjusted our to and of winning achieved we safely, and out workforce X. and scarce competitive ensure many safer making retaining great XXXX. been in please us In value those home sights. results Building our employees. for important our last becomes Investor A have EBITDA everyday Page proud a resource, growth year. and labor advantage. year already a safe is to a foundation above-market are and turn superior last culture throughout delivered I'm respectful the of consistent of Day XXXX, goals have talented has generate we margins, remain drive to returns. shareholder At that working workplace laid double-digit When in build company retaining for a and attracting Ambition been and everyone is our recruiting gets our We

Our employees our to In I'm were half, injury. cut frequent in exceeded that new sprains injuries we goal. and these was showed strains that to we XXXX, for and most that analysis in determined XXXX, report pleased

our rate, OSHA history. In addition, was a total key in metric safety best Beacon's case the

share. the lever greenfield Next, to in of that portfolio, XX class and report XXXX. us investing opportunity growth reach, in earn giving I'm full year million customer overall major nearly $XX enhances and above-market in value contributed the to EBIT greenfields to is mature a in the XXXX, of proposition most driving market the our pleased the

value-added customer Our we competitive and clear channels. integrations. online basis than sizes for through ] digital entry with capability when continues loyalty our enhancing increasing generating compared quarter, grew platform, more basket a XXX by offline by [ fourth driven margin our In to larger XX% sales points Beacon year-over-year, to approximately the sales be digital

approximately Our customers. total at the fourth reached improvement quarter, basis percentage a sales by of the our XX% digital to of a residential as sales led nearly point sales XXX end year-over-year,

a will digital to digital We in and invest differentiated offering leadership. to continue our build on

of high-quality private TRI-BUILT alternatives. sold yields additional under margin the Our of and customers building brand XXX X,XXX between results for and products basis versus line delivers label professional points the

a including to its our TRI-BUILT quarter, customers sales label fourth our its offerings the meaningfully of total installation. presence roof brands bolster expand approximately invested X%. to private have better In We professional-grade ISO, we launch the serve grew and in

in of quintile driving on to bottom quarter. more EBITDA fourth Our is meaningful added branch our generate and excellence anchored process, year-over-year $X results. We continues it by the operational focus than million

in Productivity our it technologies optimization. day, the we quarter, cost per quarter. fourth increased fleet in demonstrated did And are market year-on-year, also pressures are by we driving our on executing the previously on approximately X% These changing We've ] third [ in ways leverage hour focusing branch and operating fourth we many is the adjust as including sales ability and a improvement routing hitting inflationary which software, our tract actions discussed quarter that We've the labor to strategic worked our our to every we delivering such results. record. offset and key base as Beacon expenses. leveraging conditions to ensuring using

we take talk to to let first of XXXX, playbook. under X Ambition ability line. minute branches class about the The delivering XXXX. create a acquire. is the in indicative the to businesses acquisitions M&A value. double-digit believe continue we XXXX to our group bottom Now results our of Acquired from in EBITDA this margins me are delivered tangible aggregate And plan shareholder our We improve

count initial quarter. Ambition buyback program Xx quarter, to but completed share reducing that share XXXX, value have more demonstrates that me $X.X in XX%. repurchase 'XX fourth Ambition confidence share the we margin the the multiple our growth, more to you Prith commitment program creation and details, let of paths we the both the accelerated since business we In plan. the During deployed will as-converted second the and delivering conditions. all value give expansion to XXXX our has highlight Ambition share start a our initiated shareholders in have summary, The to target, in than than buybacks, by billion built market

our plan Our an business improve Ambition engine systematically drive XXXX model to has created performance. and

to over deeper provide pass on call quarter fourth the our a results. focus to Prith I'll Now

Prithvi Gandhi

Julian, Thanks, good and morning, everyone.

up for of $X.X the this fourth X% price year, additional in volumes, Turning basis contributed net a on Organic by contributed total net while X% X% fourth day the driven billion quarter overall increased sales of decreased sales day X%. approximately Adjusting We from acquisitions. X.X%, greenfields, in over nearly to quarter, the Slide approximately year-over-year. Acquisitions X. to by per contribution in X those including X% to reached X%.

averaged November less low organic basis. contributed less Prices acquisitions a As a by we volumes significant To year weather to activity quarter sales. give than October portion fourth the October sales. of In X% in that to on percent some on around period. of XXXX, our year-over-year versus November per partially than XX% impacted typical per lower mentioned, in shingle increased experienced in December day digits sales of also slowdown the Julian strong sales single lower day offset due patterns you Roofing prior by context a a sharp basis, a the were particularly were XX% country. comparable sales and

the While using estimate movements channel for residential data line in volumes in with grew down we quarter, we year, the that adjusting ARMA our were the full in stocking. for market

Selling relatively sales nearly by stable prices in which our through the quarter per fourth stable basis. Complementary per Prices remain XX% XX last increased expanded growth a year-over-year. on strong new approximately X% XXXX. digits by in quarters, were including to Nonresidential by day as team a nearly drive products driven by specialty waterproofing sequential initiative. volumes our line division. increased day Organic the significantly and sales low waterproofing year-over-year single acceleration in continued branches acquisitions, X were declined commercial with

gross We'll and margin operating X. to Turning Slide expense. review

of of operating fully was year has Gross the million $XX digital OpEx. contributions Higher in at approximately the to increased we've higher as growth higher up and Adjusted selling $XX compared continued margin branches label and from the price posture quarter year offset unchanged basis by the impact million acquired sales adjusted of increase expenses These total, in XX that were margin. and M&A expense $XXX points the contributed Beacon's end up the In nonresidential product expense to prior our a dilutive be of year-over-year. year-over-year costs. our offset around conducted quarter. of at sales operating as was channel percentage increase expectations. products total an basis in private greenfield was to favorable through in yet high a accretive Adjusted million, XX.X% to our gross prices cost to be synergized. mix with XX%, sales approximately prior points XX increases associated and

which actions. in to per estimate increases These in quarter, our of from year-over-year the matching its which quarters. business, the by our $XX benefit million of offset in level $X $XX impact of XXXX. expenses yield actions the existing jumped hour of September key nearly worked cost branches, Sales fourth annualized million, these last in existing our approximately realized a highest measure operating million were the We productivity lower XX savings X% included in cost approximately be will

private label to make initiatives growth to support our above pricing margin technologies branch tools, sales and to and investments organization continue These optimization. and ] enhancement. e-commerce included We [ related market drive

X. Slide to Turning

we On $XXX contributing $XX basis, inventory year-over-year to by team million or the efficiently operating of the flow EBITDA, management adjusted through quarter of XXX% our We supply delivered disciplined credit capital working record field by than a increased less manage inventory. chain in third finish. receivables driven inventory the among in million compared the and and the $XXX to in cash million We collaboration $XXX organization quarter, more had close strong million.

on and to mentioned last our in our product of As seasonal customers inventory in all costs, from acquired contributed availability for with inflation the balanced the we product greenfield our country. storm-impacted call, branches recent regions conversion the year-over-year. increase load-ins and

In million XXXX, million. flow XXXX following $XXX record in we which of operating we year generated $XXX generated full cash nearly a

X over we last cash in flow. have the years, generated Over billion $X.X operating

and capital of at available our share acquisitions $X.X of X.Xx repurchases. than Our cash and of December lines organic cash underpins ability in broadly returned M&A to maintaining XX. investments and flexibility more invest sheet targeted in as approach our shareholder These balance include towards to to growth, form allocation liquidity. returns while creating totaling range ability greenfields leverage Net our generate credit billion balance and to debt with the

shareholder Ambition Have we low and we leverage Xx. chosen growth chosen of X.Xx Since debt of the billion deliver net to drive repurchases and well on $XXX $X.X million with instead end would Beacon's to the strong our support to target of be X our below we EBITDA, of returns, our beginning to customers employees. consistent of capital commitment invested range to fleet upgrade adjusted and In XXXX, at facilities the deploy approximately have in expenditure XXXX, of nearly debt, to equity. our reduce of organic capital

details. the While provide share additional with me Julian program, let you covered repurchase some

settled to per year-end delivering $XX million strong sheet. shares share of the $XXX attractive previous an nearly of of on X.X retirement $XX.X committed fourth in versus quarter remain million full share. the than reduced in repurchase maintaining additional in shares. price compensation, at $XX.X stock-based total repurchase million. million resulted year the of our remaining the shares executed while a resulted second as retired we We XXXX, million equity average X.X common the we less the outstanding that issuances a plan of Net $XX The than quarter we shares to shareholder or In accelerated at XXX,XXX December contracts of to share for XXXX more in balance XX forward $XXX of million million and approximately returns

to remarks. With closing that, for back his Julian I'll turn the call

Julian Francis

Thanks, slide Chris. Please materials. reference Page XX of the

enhanced and adjusted sluggish record eclipsing label and private housing new Before We XXXX of we construction. minute laid growth levels. made to towards in the year, and like more results the EBITDA, initiatives, record sales out billion outlook, existing digital reflect national significant progress XXXX historically throughout the to Florida, to difficult years and in produced low year-over-year take million $XXX the and year's despite than Ambition than which This, XXXX, both last nearly including commercial margin. X move a accounts, $X.X growth starts, delivered ago. comparisons I'd In we to targets sales have our generated we more X% headwinds in we home on sales delivered lower

opened XX markets XX X greenfields welcomed enhancing up and of to are our XX ramping $XXX acquisitions, states more in than And top branches, the new locations XXXX. XX to and We adding across expectations. new ahead total, new new million further greenfield contributed provinces, line These capabilities. customers. Canadian We branches reach in

Clemson within Roofing business lines the at launch more our portfolio to Canada. strategy, We our our ranks, greenfield across and Commercial and and Academy to sales developed trained sales the branches leadership our acquisition University. leadership our expanded Center performing is U.S. of ability contributed Our and force, well. including acquired serve $XXX and than million like the industry net positions customers of

a workforce We qualified demonstrated in diverse million contribution to million target X-year win backgrounds, In branch initiative, generated from X% our our $XX the XXXX repurchasing us to outstanding. $XX markets, shareholders our including EBITDA commitment hiring which total growing rapidly a a to to communities. our to XXXX, enables million adjusted shares, surpassing year bottom our Latino from quintile about we and million retiring of early. Ambition shares bringing $XXX the million by $XX returned We X.X

were to opportunities. we However, shifting missed also impacted late there that dynamics were responding demand. market

cut For spur overhead too and carried did took not into example, more we QX as in the expected, much when we interest activity action. rates

shareholders adjust the year. in later million as significant in fourth in in appropriately to in the until performance alike while And for flow has our the be which an capitalize cash has misses, This value Please our in customers XX. expectations us we we of generated and did to environment mixed below $XXX and nearly operating XXXX market positioned majority quarter. was created not our XXXX, turn to these on inventory was opportunities in Slide XXXX. expected what equally is Despite

concerns and expected are new contracted increasing with higher to continue through the in expectations There Overall of our earlier input Broadly, likely weeks, many the about due particularly talk me for Let costs construction recent markets I to rates persist half. part to weakened will availability. in interest sentiment likely market tariffs. described headwinds rise first in in with has the XXXX. labor

and and product we about a ability feel impact While rates primary to our workforce. our confident categories, limited retain may have and our attract interest on tariffs

Clearly, our all of create markets. in uncertainty X end elements greater these

We expect that demand will down year a trend tick demand year, in our residential market this driven above reroofing lower modestly be will XXXX. assumption after by storm

below as year. the from as higher to of repair remains contraction expected new half of to sales activity commercial demand Billing the well nonstorm home in In And the indicating expect nondiscretionary and remain Architectural be construction We new the on roofs. XX, sluggish. roofing, reroof cycle first are residential replacement construction in Index existing

demand by regulation is reroofing near-term housing, these insurance U.S. activity. drivers expected increased Despite replacement strong. drive in that the remain and headwinds, areas underlying investment weather repair However, towards migration and severe under impacted to improve. activity trends and

weather to sales total line compared demand prior the quarter year expenses January margin, cost from offset down in to our expenses due For the business. X% the first results primarily in existing range more harsh February, quarter. seen we've in and the management to typically the to as quarter, which the X% the expect be With it progresses. are quarter. count increase day mostly respect is to we to This year and with we per Adjusted first year-over-year related year higher in greenfield gross to expected be acquired which by branches, attributable with expect to are operating in head prior

including announced. the contributions sales from mid-single-digit full net in the For previously percent year, range, we expect acquisitions growth

business and is our geographic full be to with we cost that by from margin, the including line of in be It expect sales and higher implementation expected prior price offset are resulting a percentage to structural our to gross label of line the margin improvements partially Regarding mix note pricing initiatives, digital in year. model, year important gross private impacts. neutral

third expect contribute to cost benefits year taken realize actions We to also million. quarter from the in approximately last $XX of

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

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

year, the $XXX strong the $XXX For of we full in million to range cash expect generate flow to million. operating

XX in will locations. XX plan new growth to invest We to also open greenfield and

rigorous our with will acquisitions disciplined and pipeline of continue execute to criteria integration. We tuck-in on

service pricing Our delivering focus and on safety, including and our results, will remain on daily enhancing customer productivity efficiency. execution

a strategy, durable a business attractive great resilient and team industry. have model, an a We

forward customers to helping Our is build our future we bright and more. look

want QXO. an ongoing Back offer the XX, launched to at tender January with call I share. $XXX.XX our over Q&A, we XXXX, per on before unsolicited QXO to turn do matter Now briefly address

legal is and growth and the company QXO's our and recommended because shareholders and unanimously financial tender best interest consultation shareholders offer after determined significantly for to prospects their Therefore, its its the strongly value in the shares company creation. QXO. Board it the Board undervalues not not that independent advisers Our of with that

to maximize all and our on to targets at and more focus financial long-term shareholder March value, to and Beacon on on XXXX record future Day its year our questions and forward results. board the Importantly, fourth XXXX. Investor our sharing though, plans full opportunities quarter growth business upcoming remains considering open Please your looks XX,

session. proxy We you QXO's that, call. offer take With it and questions back turn the operator, this on tender to to not any will question-and-answer related contest I'll in

Operator

Mike The Instructions] from question [Operator comes today first from Dahl RBC.

Michael Dahl

Look, obvious but start bridging year, the you're still [ is one the ones the a to I focus year. for healthy ] full to think of pretty growth

you So you whether you can weather quarter-to-date as little price how improvement gave segments? but you've over has week acquisition gotten the bit us or are break more guide, sales, within around the down, help across us a understand about better. And then dynamics year help so, your volume contribution, and full thinking us the seen past organic

Julian Francis

first and financial trends. the the take general just January can Mike. details as Thanks, give I'll part you of well. some tough. Prith was

And be I think away. only moves mid-March, weathers, were is levels we've last it extremely a so. until days, creates until harsh been demand XX where tracking love take all has to teens February days. or said, general, week sort good the which think, we the that It few March, in sign. low generally few doesn't whether expect we down, I the of cold February seen last up towards create was it I would the demand. In around. in or states. Like demand that there in early we the snow statistic January. was last up And in

realize. that's So everyone for to important

fundamentally that's going we out. think So that, to what's play do

we around for that is this we're states weather as it tough tough. First South. going us, impacts particularly be don't type creates improvements to weather Weather-related, when see of demand And the usually in. said, seeing typically, quarter coming

to in levels actions where going far. in confidence So our that's they got year so this to seeing last get staffing be what are should carry cost And quarter a to the our where driving took we're business we've we're year. over lot obviously, of third into the to we

growth. line feel we So top our bottom prospects for about and very good

Prithvi Gandhi

Yes.

after -- you of of Just add, kind we're in remember, to a flat acquisitions break And expecting particular, On day couple sales last of did QX, terms of year, year. Mike. when were kind XX which most we're of down, March. it things done we per in to March, last

So some of confidence we've terms we got QX. in structural benefits why favorable have around

about of We're to all above-market the terms shingle year, carryover single-digit growth, full higher then let of sales in market, have X%. including slightly carryover And range. flat expecting digits. this guide X%. about across low be last year sales kind the for the to we from in start greenfields that's of and terms is me In business The with price price increases our M&A is a the mid-single total of lines percent

X the ], the we you actions of September. took terms in Julian In with EBITDA [ bridge, said, start cost XX as

and expect carryover to adding generate of the order greenfields business $XX the savings million those about We in in so especially is despite And do get then operational existing M&A XXXX. from we leverage, actions new to The forth. million. $XX expect of in

go So high that because would we point the kind back couple towards mid the what And years, of our this revert us to the If we we've volumes of actually the average. last we how we decline in end saw to get upside, of the guidance. storm we our guidance. residential that over to said XX-year year that's expect to terms of of get

Operator

Manthey question David next The from Baird. from is

David Manthey

are said First, And number you is neutral. additions for -- I budgeting we price/cost price top what on new front, as just of build greenfield for up the you the then line, XXXX? think

You price res, get XXXX does include from guidance a pricing. your increases carryover complementary? your But of any X% across nonres, any categories, XXXX

Julian Francis

Yes.

of rental locations. units XX what lease. see based toggle in market that on XX we sort for We'll and of conditions I we think to prepared our remarks, in mentioned greenfield availability

that be would this year, target a for in that So somewhere greenfield range.

increase we've residential price that I announced a that think has got been April. for

will with how Obviously, macro. that in predict projected the it's what's going tariffs difficult have we impact to that So happen factored to overall do and exactly

Operator

from question from Research. Trevor Wolfe Allinson next is The

Unknown Analyst

question the quick guys SG&A a you Yes. quarters. few clearly over been focus on last here for A

XX% You talked time. about that managing back to over

But restructuring your at maybe You've you're to in in the here. a above just expecting looks bit be got XXXX. looking like XX% the number place guide, it

what XX%? levers just digest done? you've to So happen see M&A some to this need are Do Or need do need back other you to pull to greenfield there to there? you you of get and

Julian Francis

Yes. I'll touch then as let on of well. details I'll the this some Trevor,and give Prith

We'll peel of fundamentally, to sort So earlier of we those them thesis we've we'll done. an very which digest of have detail. good away -- acquisitions got classes, continue gotten down. that that I think going new is have. Obviously, come will about add your We've right. sit start invest if got to more Prith the we're invest projects from all story But some in we've you yet. greenfields there the underlying to And to continue with that the that continue have to greenfields. today. in to really some capacity will that But We that mature value-creating of believe see as none things, where we

Prithvi Gandhi

Yes.

yes, have acquisitions Trevor, we're greenfields. the the of thinking and additional $XX coming of terms in we're about year, So how expense from OpEx just expecting million about in to

this area. operational have productivity to the we'll we then existing And XX actually drive continuing progress in think initiatives to some for further so other and coming us enable leverage business. that that months. will the within means And over excellence get we're

Operator

from Group. from is Biros Brian Thompson Research question next The

Brian Biros

demand R&R. you the Could new bit more on nonres and a between little expand

to bit. maybe you last R&R picking quarter, I little see started up demand think a

are that through the steady of based perform any So be your comments. throughout improvement? that's the year? slow maybe X Is on to Just continuing how more a on kind would year Or helpful. color seems and to that kind of maybe those be expected accelerating

Julian Francis

Happy absolutely. do that, Brian. to Yes,

prioritized all you've of So remember. that with of a almost rewind was saw got market so the because of bit chain back -- supply much 'XX that up 'XX, in sort construction there's contracted disruptions, the the we little supply Because in money you'll to into chain those and destocking, all disruptions sort just tied new more to 'XX that.

very pushing prioritize product construction. market a up and the was there repair supply availability little was ended lot disruption, chain bit. out a new of cycle the because So It And tight. replace

Obviously, it away. goes never

through a done. contracted its the a lot remixing we the construction, last and replace sort year of more the which And from towards We part. So saw what repair the destocking gotten supply way most the away diminished saw as had worked for cycle. problems new of

other the thing was a The Index contraction bit construction a as trend the started to mentioned indicates little we [ a bit a Billing so remarks. year we see muted that being prepared of ] there. XX Architectural last the below of in new The cycle little well, there's in demand

construction. lot -- steel commercial think that I there's into goes of a

So we on the having tariffs continue, of likely to believe. impact there potential in coming a muting effect new construction is

where sort of we see it. So that's

about around we there's are a bullish. sentiment a more repair it's and say we question of catch-up. bit I replace, little more As to bullish think your seeing regards wouldn't

to repair I of get capital down little for these think that commercial done. a has building of and is the most new of It commercial is sort mix it's a more of a project bit It's just replace and steady. cycle owners.

it their own kind work on So they time just of frame. through

on I It's So it's steady that. is towards new wouldn't say the down. more bullish that because just and construction mix

Prithvi Gandhi

Yes.

thing to Julian what one to Just said. add

share And on target in that certain targeted in XXXX, we markets. focused I we're are in growth above-market accelerating been focused commercial XXXX XX and think -- markets. XX We really efforts. and delivered gaining And those new we markets. growth with our on we've also those

on another share growing gaining in that's above so thing deliberately And market that's and maybe very different business. our We're the this area. in focused

Operator

Loop from is Shmois Capital. Garik from question next The

Garik Shmois

Just pricing. being want but price the to of this just bridge get residential expectation cost I with some wanted appreciate to remarks. prepared clarification neutral on that year, the

price point carryover guidance. your much April I increase? lag so, But when relative anything or increase a I how expand of the would from realize end April could in hoping is was resi? you pricing of of expecting price be choppy to kind in now right you traction there the that being years If the talked whether just given And think about markets you you're last of unusual on the from realizing the some guidance? on on not

Prithvi Gandhi

Thanks Yes. over we for basis said, in for similar assuming realization of which type we're the and as year our of a -- we the in overall, full what last assume price profits. of the as neutral question. kind it's But price kind before, terms were the small And of increase, inventory point April year. year forecast the

Julian Francis

Yes.

ASP I the the about now incremental sort little of impact the this of a we've April of sort there. costs Garik, helps could year. say, are full price/cost us because the X% said of right increase sit year where I both in is a get the we obviously, year the opaque neutral. think for number But and

see. again, demand You'd we really is markets. good. mentioned That's choppy certainly absolute what But the level of

mentioned, still is there's trend. for a -- home well demand potential for underlying trend. we Existing And below reasonably strong is below construction remains products. construction as the all remains. So new the upside which

tick storms sports to slightly. expect revert and down We

both the guide, even with commercial And holds for are construction us. optimistic markets our confident business remain all cautiously residential about So demand our solid. future we about pretty overall and But that levels year. in pretty in what waterproofing we're and the

Operator

Trey from is question next The Stephens. from Grooms

Unknown Analyst

is on Ethan This for Trey.

XXXX. within a assumptions increase cost about buckets, you're Maybe year? your could then to and price April I should price us seeing walk through the wanted you timing And how the front. announced early cost the through various touch for think for there, cost trending given and what So that the we little on

Julian Francis

inventory we would year. I touch typically, the mean, prior price be neutral We I'll liquidate to price/cost it said obviously, full on Well, the increase. the for the for that year.

a expansion narrows the over years. So bit that we little of get margin

But individual don't So we in. factored that's buckets. all out break cost

So driving driving we we add grow this focused margin if to productivity. we're -- don't EBITDA we on believe efficiency, got you've sort to Prith, of that. will But anything I that year. know certainly

sort then that's it grow, branch and margin given -- acquired and very the all Foton be productivity cost that driving neutral, productivity our process. in previously we EBITDA efficiency of quintile driving that adjusted will Our have, our and branches price on including through branches, the we're maturing in about the of flow through will benefits focused realizing of improving branches, greenfield already

bottom margin that will grow So areas And do that adjusted those we believe this improved line. said, for year. big on our driving like are I EBITDA we we focus the

Operator

is next from Research. David The from McGregor Longbow question

David S. MacGregor

in in Julian, you how And of with to how both non-OTC in acquired utilization configurations. greenfields, of distribution in much OTC on the would growth are versus fall your could at [ locations maybe and branches, the soon infrastructure XX the with you talk need RDCs arises. invest number just that where point some if XX about then into right now new capacity XXXX also to and there and markets ], point those

Julian Francis

Yes.

So OTC way, business had into in OTC majority is vast vast probably will like cases XXXX, markets I mean go a negotiate shape of our markets it, the markets. we've A one form. branches to change of inside things in right our those It's we the our difficult where some majority a that. or see bit, But lease, you of little delay now.

get continue on markets. we we gives continue that deploy as to the expand benefits strategy. the in branches our it to And competitive think networking so us from big advantage We'll together, we we think

our there the underserved And a frequently primarily but location, before, also add said we of when be on we focused that, will And do greenfields I've markets. are all markets. think as

I'm our All across what else network. a think get of... improves of service inside entire add better trying the that terms our branches in little customers to proposition OTC bit to because our

Prithvi Gandhi

things one applying in is great last platform this lot X over the Maybe in thing built waterproofing their they're we're we've is think really one infancy and doing be years, remember, a space. the of the of playbook. the going more to -- just I AXX

And we're we so gaps. some greenfields investments going have make them where in areas to big for currently in

for should so in good business. of that very And terms that be growth

Julian Francis

that are high and address same people's route. in the on and And service going add it's -- It's we great dogs cats up period. very at think back never its very to question there XX-year driveways fundamental a the are we We around a We're -- look industry. in how people people proposition. industry got and if putting this to back greenfields same Yes. ensure carefully we've where we is dangerous your capacity. driving just a proposition we mean that to strategy at service I and the is about were go job.

levels service the So high. required really are

at high play a base deliveries. It's as making these important capacity to customer very that value-creating for So our role meaningful in having really a we serve the and level is really base well. their customer and

just ability overall it the So service our great The is limit capacity than than about on service less of we the create it customers. less is total really is about our worry to for us capacity level. a

Operator

Keith from is Truist. question next The from Hughes

Kathryn Thompson

You the talked quarter and weather. a lot first the about

that directed of residential a think singles. I lot at was

quarter some outdoor, that trending far If the in just products, quarter. first so of you could . about of that's how complementary talk indoor

Julian Francis

Yes, sure.

complementary probably know some a But our generally products product same weather, all Prith because we going I of the broadly On side, same waterproofing. trends, things in is really in space in way. have line the the have cold of it. these see acquisitions they're the market. I of What on the impact Ultimately, to lot will mean mean speaking, you're exterior that Keith. now do sort I of overall details with

year-over-year having an that's So well. impact as

Prithvi Gandhi

Yes.

growth Keith, of single So similar we've lot of think generally, kind acquisitions, in the of said, in a pretty those I done of terms mid-single-digit quarter. high and type business. all But Julian lines it's decline. in of of us what to kind back type across terms It's help volume, X digits

QX. that that's so the we kind provided for get for guidance And of we our color how

Julian Francis

is all on the products weather Keith, exterior fundamentally, But the the same all impact way.

Operator

is The Instructions] question Ng Jefferies. Philip [Operator from next from

Unknown Analyst

bottom for touch Probably was multiyear on $X now. I And think Maggie a Phil. fruit accomplished full that ] This the branch you year. wanted a us is was Julien, lot that for remind the is right has been quintile what this in on to of [ I low-hanging initiative. Maybe ongoing an said initiatives. the million XQ. benefit

think maybe So that in forward. if you you could about just going opportunity XXXX talk about and how

Julian Francis

Yes, absolutely.

was $X target. $XX off in we $XX million since million generated And million So we've year. XXXX, Ambition It was $XX quarter. for versus X-year the X years million it the in the kicked full

quintile really obviously, it bottom And disciplined is what with that we've seen process. pleased structured really, there. process. a it's we're we a So the It's way

the We will improving. the the they're of to pile, at ensure always have of that bottom XX% branches and we work

you keep can fruit in finding we on focus, on generate provide for provide we improvements ways keep like look we these you we generating opportunities. We said, early But branches. tenure, has those had Now in away. my low-hanging certainly and to to see gone the resources, guidance provide that where

said, EBITDA branch the give it's done. So quintile was X% to Today, been double never It's while like fruit indication, you -- that nearly in. -- digit. it's not you X year. the It's is digit there. every I'll X% years it's ago growing and It's But closer bottom to -- margins of low-hanging X%, to we'll about be profitability get sort to branch. get it's double into some

They'll it, just it. we'll well. us, band also bottom. working narrowing So be that continue been and And always We're we continue keep opportunity. that been great to excited as process about and it's for to see great we're a

Operator

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

Julian Francis

the you. There's a faced listening our we're of Beacon. we proud for and our that, is headwinds, want weathering over call. earnings excited excited we forward producing your storm. the Thanks positioned. year. With you lot start continue conditions deliver seeing all of certainly customers in of the of our last you this another been City. about the We're team Beacon of employees, support challenge record with about in I year, to excited just all on We're to to but our shareholders. look thank Thank New business. to York we XX will believe the say market incredibly And you much. that March we're that we've year about for where XXXX another And very record on and for results I'm

Operator

call. today's Thank joining. concludes you This for

disconnect You lines. may now your

Beacon Roofing Supply (BECN) 27 Feb 252024 Q4 Earnings call transcript