BLDR - Earnings call transcript Q4 2024 | Builders FirstSource, Inc.

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Operator

Good day, and welcome to the Builders FirstSource Fourth Quarter 2024 and Full Year Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by management and the question-and-answer session.

[Operator Instructions] I'd now like to turn the call over to Heather Kos, Senior Vice President, Investor Relations for Builders Resource. Please go ahead.

Heather Kos

to quarter welcome XXXX full and call. earnings morning, our and fourth year Good the Peter release call and on at me With are our available our the investors.bldr.com. are Pete Jackson, CFO, earnings presentation press and on website Beckmann, CEO; our

refer our We to presentation the during will call.

comparable adjusted the be results measures. results purposes, for GAAP The results and today most considered We items. they GAAP include certain discussed not in informational from isolation provide directly non-GAAP should and for these non-GAAP

You discussion can these can measures we find and in a reconciliation non-GAAP filings were they SEC investors presentation. to of measures GAAP our applicable the release, earnings be believe of corresponding useful to and press a why

on statements Litigation results. and release this call various cause Our our our section in statements of actual and forward-looking forward-looking remarks contain that statements SEC within could filings Private projections. today's Securities meaning in to and cautionary from of Reform the differ Act review the results future projections press the press Please presentation factors in the forward-looking and and for release,

With that, the to over I'll call Peter. turn

Peter Jackson

morning, Heather Thank and everyone. you, good

as of Before company have the our prepared I my on FirstSource, a disaster I'm proud those remarks, wildfires. efforts. send have California get want together I to been we to thoughts behalf come of into all by to Builders who impacted how relief of support

rebuild to partners communities our in years with together help work will ahead. the We

future. focus on in Our while our operating face for complex our and the of environment fourth resilience ability to quarter and the drive results year full demonstrate results maintaining building a

as X. products we we to along as leveraging and By serving customer continuing a value-added technology, in This begins invest supplier of with our pillars addressing and choice. cutting-edge show with challenges services, our are on strategic Slide

We pertains flow disciplined remain the allocation. a as to Enabling and it opportunistic and cash consistently strong over balance generate us capital fortress sheet have cycle. to

acquisitions value-enhancing well position and opportunities any environment. growth organic in in perform us today investments Our to

The a strength operational drove margin nearly year Let's that to of and our are full year team proof now is our customers. differentiated our turn a this our dedication our of EBITDA initiatives driven success of on Results X. by members mid-teens margin further adjusted XX% gross our hardworking platform Slide XXXX. in the and XXXX the and performance support excellence

X. Slide detail I'd into on strategy. to our I more of Turning the share like execution

investments digital Our strong organic our growth and tools. is engine in solutions by fueled value-added

This demand new facilities, enhancing invested truss $XX in growing our In markets. opening more in to XXXX, than included truss million X millwork locations. address facilities we value-added manufacturing XX and our facilities XX upgrading

as along X% progress Our sales year-over-year the help expertise and we increased install our value-added our product by continuum. customers leverage

by in years While utilizing done emphasized capacity, to some markets install into existing we've always improve it and we recent new have execution in playbooks expand in ones.

By business on optimism, down were able we achieve a despite target incremental for climbing positive customers. in opportunity XXXX, are sales our platform about rates In digital to that I'm our market, adoption in persisted optimistic substantial environment that customers. for industry-leading growing steadily challenging I'm million consistent from $XXX of heels with this going digital the install our forward. line the for has pleased feedback in the

supply Our We chain XXXX. $XXX on manufacturing. this and savings in accomplished focus excellence in efficient operational productivity in more million resulted initiatives through mainly

We continuing our labor and discretionary remain of were they productivity drive efficiency, and per flexibility. initiatives stewards able board lead to truss to increase enhancing also only Not disciplined we XX% improve operational hour instance, do foot additional shortening but in are spending revenue manufacturing. and by available For panel our capacity maximize by times.

in-full to affordability over of around delivery levels face We the policy back while of on-time and XX%. in manage maintaining and building potential starts XXXX, Single-family our with pace in rate roughly XX service of challenges our uncertainty the facilities as an consolidated pulled customers builders changes.

to As we headwind steps communicated, lower align over have volumes response expected expenses. muted Multifamily facilities, in capacity head taken the and and activity. last year, In to remains reduce across a our manage count

a to multifamily basis, and normalized represents business On of net and for attractive X% profitable remains about sales XX% an us.

simpler will challenges, To XXXX. land impacted multifamily all builders again limited environment Builders builders signaled, sizes specs, down affordability infrastructure Smaller continue the development to to been smaller of options options. have in of interest working we headwind buydowns challenges. to find are affordable regulatory, rate availability and to buy and especially rates. conditions, the help current by have and and As be including market homes address complex and employ buyers navigate land a

We partnerships with offering our are solutions customers address by strengthening challenges. to innovative affordability

options, portfolio optimize product comprehensive us while Our their quality. to builders enabling allows provide to flexible maintaining costs

and to in alleviate products doors continue to more offerings affordability help windows We supply challenges. like EWP, lower-cost

for our profit to mean actions less dollars customers subside. increase these are positioned and and for remains support starts when very structural sales and profile to margin growth begin our well BFS, gross we Although strong, headwinds

Turning Slide X. on M&A to

to high-return offerings leadership desirable position pursue value-added augment in continue advance geographies. opportunities We product that and our our

million. M&A acquisitions substantial completed of proven sales aggregate developed In supplies integration. XX to Over a record the we with Long materials leading Island. memory years, successful have year prior muscle building In we ] track through $XXX we November, England. of a Cleat roughly building and improvement Lumber, of we New acquired XXXX, Douglas In [ have on provider grow acquired materials October, which in Lumber,

our we building reinforce In early commitment supplier Alpine's we acquisitions in and [ in materials acquired with to locations. of of addition Pennsylvania, panels Alpine leading West February, operated Northern invest Virginia. installation New strong a Mexico through in in and portfolio ] business OCs acquired product and building and wall prefabricated And independently XX supplier largest and completed M&A. lumber, building our includes materials lumber. work. mill January, we The lumber the Colorado in supplies, broad trusses, XXXX, These services in Maryland value-added acquisitions to

the members family. these to We new excited talented BFS are to team welcome

Turning to Slide X.

$X.X focuses in strategy growth, well organic of repurchases. opportunistic value-added X% capacity allocation executed $XXX to on XX removing sustaining and on and acquisitions business total In of generating ROI billion. repurchases footprint million geographies million a as capital expand disciplined shareholder XXXX, the high-growth returns And share shares of We maximizing investments to through value-added inorganic digital. outstanding. $X.X offerings. enhance allocated We roughly we into spent our growth we our approximately billion, deployed share as Our and $XXX growth

discuss leadership further latest updates X digital our and are value Now industry tools, challenging on audience and focused we homebuilder builders of our the interest creating BFS smaller strategy. to and from our With our addition target in substantial production let's Slide have the extending so, for growth. turn driving market, we continued doing seen customers top digital organic our with XXX position in adoption builders. multiple to growth on Despite and

sales to orders release nearly adoption. experience our from Since of Of helping user which were $XXX new incremental enhancements continue seen ago, the million billion a $X are improving that launching placed existing and year through customers. We have digital and platform. about we to drive

assistant, to forward ways raise Bob, the as expertise invoices grateful senior approximately our One other share us have frequently difference in managing Whitney a is set of area each every tasks and products. hard-working bar cited as journey detailed our additional We Bob I'm service we date, proud makes with administrative of on to to by the is first and continually celebrated grow and shining recently fill in efficient progress day. approach new and Who and more of framers a our a wood reason with a win finding standard. on choose designer to example years team an is customers. Isaka, a our I'm pleased our to by sales incremental values with homebuilders lead machine countless room. incredibly wallet BFS. talented His other. expect XX million $XXX XXXX, XX-foot designs, in key and the Bob XX his Bob high customers We're innovative such Washington. location's that computer, engineered the team members. we to began a massive as they today, and Fast to dedicated accomplish

detail. I'll greater now results turn call the financial over to in to discuss Pete our

Pete Beckmann

Peter, morning, Thank everyone. and you, good

Our our leveraging fourth our and full quarter exceptional operating ability flexibility. by reflect financial results our year to strategy and platform execute

to success. the ability balance the flow for us and capital opportunities to are further highest strong generation prudently positioning cycle, sheet, Our deploy fortress consistently cash over return

well are we long into for creation sight us homebuilders in investments and the a term. to a to scale partner Our value innovation have to key the serve operating meaningful over and believe recovery. clear We line we of as compound leverage enable positioned

to our reviewing billion, driven X quarter as fourth and commodity on decreased XX. Let's well lower performance Net X% Slides $X.X by as core sales Partially begin organic deflation. by sales prior offset multifamily growth activity in day. amid XX% against one muted by decrease selling from and by comps. core organic a decline The additional year acquisitions was driven levels sales strong

XX% prior X% remodel Value-added value represented amid products declined of start, and doors lower our sales single-family we're flat fourth balanced quarter window and and versus products roughly roughly net manufactured the Additionally, year. during millwork. and was the between per repair while

starts to there calls, organic our shared reconciling As are we core variables on sales. recent have main single-family X

single-family between permits lag starts. On QX, a X-month less our factor and normal times customers. a expect larger this first of between sale. for roughly the mostly is Like The our the we to with back first variable was construction lag and start average,

average and has Second, home the the have fallen size value decreased. of as complexity

lapping normalization saw products we non-commodity manufacturer the of margins price selling slight reduction. of Finally, in a and

dollars are grapple today, our affordability leader and products customers there trusted as in start available with building challenges. the market a less although they To are headwinds macro and summarize, sales for we partner remain persist to

fourth was $X.X margin XX% compared XX.X%, were to and year a billion, For multifamily by XXX primarily driven gross margins approximately points, prior the Gross down single-family basis the of normalization. decrease period. quarter, profit

] given of SG&A offset $XXX partially our compensation to amortization $XX acquired million decreased velocity at operations. previously, due core to Adjusted was expense, normalization approximately competitive XX.X%, by and lower [ and primarily the intangible discussed variable end attributable million, dynamics. net XXXX As to sales exit organic approximately lower

flexibility during with Enabling periods. fixed an annual approximately challenging XX% basis, On SG&A variable adjusted XX% is volumes. and

are operating profit, gross fixed the partially million, was We and $XXX by year, managing carefully lower was points Adjusted basis our profit down lower SG&A offset prior adjustments. Adjusted from lower XXX grows. margins expenses and reduced our by primarily XX.X%, costs are after positioned gross down to driven XX%, operating leverage. EBITDA to market well as primarily on the due focused approximately margin EBITDA leverage

basis, year-over-year our a decrease EPS was a for to flow roughly cash per at the of free prior On repurchases generation, $X.XX, enabled $X.XX quarter. compared share by Adjusted fourth XX% year. share the strong

on turn let's our sheet and flow, to cash Slide liquidity Now balance XX.

$XXX cash mainly billion, lower flow decrease XXXX million, a was operating Our of net $X.X attributable income. approximately to

we of flow XXXX, approximately free delivered For higher-than-expected $X.X cash billion.

flow was cash trailing XX%. capital cash Our X%, months return free flow operating on approximately invested XX while yield was

Our EBITDA net debt adjusted approximately was X.Xx. ratio to

we our long-term Excluding total have of net approximately liquidity until was under our availability $X.X year-end, no At maturities cash. XXXX. ABL $XXX consisting million borrowing ABL, and debt approximately in billion billion, the and $X.X

capital million for year. to QX $XX $XXX were million deployment. Moving and Capital in expenditures the

during QX in XXXX. million XX and approximately acquisitions acquisitions $XX X on million $XXX deployed We on

roughly quarter, approximately million million. fourth X the we During shares repurchased for $XXX

billion. repurchased Since our an $X.X XX.X% we XXXX, X.X shares inception have at repurchased per of shares we million year, billion. average $XX.XX of program $X.X August buyback outstanding for share the the for in total For of price

share returns. stewards disciplined $XXX repurchase have authorization. million paths have We and value We $X multiple of remain remaining to maximize for billion on approximately creation capital, our

XX, On our outlook. Slide XXXX show we

weakness forecast a market year continued full single-family For XXXX, flat assumes and our multifamily. in

are we net of $XX.X result, range a in sales $XX.X billion. the billion guiding As to

margin EBITDA XX%. with to We long-term expect a to our line billion. our gross XXXX adjusted be to margin in XX.X% XX%. EBITDA year expect the forecasted billion of of XX% $X.X we full target, to range is be to between $X.X be in In range Adjusted to

$XXX free growing expense. as full $XXX in of a XXXX as from higher we interest to We year and swing shrinking expect capital XXXX as The million primarily change from move cash to XXXX capital expenditures million well to $X flow sales working to billion. is due

Our our ongoing includes investments. ERP cash also flow guidance

year this phased we our complete we plan start and XXXX. said, implementation later As have a to by pilots will ERP have a

existing presentation does commodity duties foot. Our and changes This several including to outlook based not XXXX for range our XX% to XXXX is total board thousand of account list to noncommodities. earnings approximately our X% Please the on assumptions, to $XXX per assumptions. to prices significant of average X% a tariffs. assume to $XXX in commodities Imports Comprised release and and XX% refer spend. X% XX% key purchasing of of for

all and macro typically guidance. quarterly not you As wanted weather volatility. given we But to do extreme color for provide give know, we QX

We extreme billion year. Quarter-to-date, expect wildfire the $X.X start weather between and QX California to net $X.X sales approximately at lost of to sales we be have due $XX the the million of in billion.

adjusted QX to be $XXX expected million. and EBITDA $XXX million between is

While to impacted we recover. will expect by wildfires rebound severe likely California subside, our much areas take weather longer sales as quickly the the conditions to

XX. XX to Turning and Slides

driving where business, This on have business us sales As outperformance. to reminder, helps the clearly our approach our base focused a strength commodity for attention sustainable margins the volatility. assess core normalizes we of and

historical Given is same business approximately of guidance. $XXX XX-year expected prices the total board the near guide as average the per XXXX X,XXX base commodity our foot,

As to by our I our long-term strategy I financial executing am maintaining wrap confident platform drive in up, flexibility. and our ability exceptional growth leveraging

that, call to back some turn final thoughts. the With Peter I'll for over

Peter Jackson

Pete. Thanks,

we reiterating remain controlling close by me the that on controllables. Let focused

and to business any in industry in of the confident long-term underbuild breadth us due given our housing offerings environment, scale, of markets. I'm strength significant our win model to in resilient across Our the core technology. our product enables investments

capitalize well years driving as are for our execute we to growth We come to positioned this on strategy.

a through value investment helping customers and to in key install services. products, our deepen our our by value-added problems to continue solve tools as them digital We proposition partner

and Our will robust generation the sheet cash proven balance to playbook, cycle free growth through us compound long-term continue fortress [indiscernible]. flow help shareholder

and enhance future. growth for We sustainable are making efficiency the today to strategic investments drive

for call you open please Thank again now us for joining today. questions. the Operator,

Operator

from Instructions] our question Matthew first Barclays. We [Operator with take Bouley will

Matthew Bouley

the questions of couple on outlook. A

correct of you're I mentioned of you for sense wrong. of price you're to I'm wanted impacted the that XXXX, to organic back I But speaking declining in the earlier variables some home on So revenues, me XXXX, very I the core in out reductions. thinking think single-digit M&A, if sizes those organic low sort a in decline a value business get home, vendor that what the some of the if

think still like called QX. bit a I a you of out seems headwind in

of and a guide? get sense seeing are just if signs contemplated variables those across So those you're wanted the to any stabilization how in

Peter Jackson

acquire. can on it that a broader that seeing We're the things, going ways obviously, sure Thanks, level same any tell make having. broader market details or lot it engaged the is homes builders, they're to and you think to in battle at is missed. pretty that's public as But I'll listen actually the where that I that we I I trying discussions fill Matt. deliver let in frame to hearing in Maybe what the of There is market that Pete we're a we would you would below a like, the that broadly that people with find they're in affordability. all stable and

lower been than this a order level. rates rocky maintain of in of but Interest haven't Since of they've Builders it's have pace sort but of modulating level. bit we job their all sort it, been a at put stable, road. good inventories like And rather done us pretty accounts, helped. stagnant in to would reasonable a build by that's a

I continues. think that

at it's puts completions, side. starts, would say been down. but around puts the it's Unfortunately, that single-family seen see we of run the Some level, the a of all like leveling on storyline. we're I talked having low around the sort and hoping for. fairly and that's been about. that I kind out to some recovery think continue takes and And again, quite takes we've stable and Multifamily,

see just sure Pete, dependent on don't missed. what rates that's Maybe as we'll say, people know I I

Pete Beckmann

Yes.

builders past over what it's have average home, seeing the out. a -- So say, has start it's consistent toward It's with smaller it more public very downward the seeing years. modest we're mix to size, but been regarding the some than home I that They're pressure, level communicated. would still

the $XXX continue year quarter to this we in included As were lap Peter mentioned business. we see the that $XXX core with million million first in headwind half prior going in economic to And last to really the as sales indicated our multifamily, about that's comps. of year we

So that's the forward in we year. included core through look organic as the

Matthew Bouley

you're quarter year Okay. Perfect. for down Obviously, above margin. starts below helpful. fourth and jumping the the This came gross are that year, guide, in And Very the then still range. normalized I XX% guess that to where fairly XX%. to well calling in

kind talked you that -- value, Or we Or of the solving of that be it's sense, piece but for does year is that like look aggressive that some this builders. the where on as maintaining maybe gross the of with challenges to mix upside is you lower out products, margin? to about surprising in is? really primarily with -- share? So margin more to cases, it higher-margin make kind EWP Is priority

Pete Beckmann

a with line that act fine every day. we question. a That's and great balancing a deal It's

that exit we were the pressures velocity, single-family side higher our see was as our Our from margins XXXX. XX.X%. XX.X%, competitive though around a continue reminder, exit velocity as still QX continued through just a And even around was we bit

the Right now, XX% range. given our believe reasonable current to is XX% a assumptions, we range

margin the Now out And to we'll mix go profile. strength profile. But if of something continuing QX, mix from lows our that seeing assumptions, it. now, and QX our right margin value-added seeing have strength our seasonal the continue come to to we of the we're changes as evaluate from in support help -- value-add

Peter Jackson

in got what our I the plan out our industry would we think that be And to normal share is make that here would baked competitive a I to desire, the way. laid in is allows overall. total we've say, but below sure of we're thoughtful intent, But I protect stay healthy and what I terms think market. in in to aggressive protect our demonstrate, manage share of mean do profile starts. an Yes. a proven you still and think to to ability we're us very our margin expect to we've a and margins pressure seeing

Operator

our next from Capital Dahl We'll with RBC Markets. take question Mike

Michael Dahl

than the envelope, to to maybe it the on rate really exit on something can follow-up you margins? a exit about how bit what's progression closer XX.X%, little XX% you Just implies that see margins. the talk bit but to comment -- lower the with like in just XQ XX.X%, maybe a little rate the seems in guide a and gross gross more year the back the XQ embedded through

Pete Beckmann

that degree but velocity. significant guided. further exit some being So Mike, the year the seeing of competitive help to in we the have year degree, that some continued the tell especially as on pressure of of midpoint we're exiting the built is we're that the single-family pressure the and rest that in year a lows, that what keep entry the having from on in to from you multifamily can We point the seasonal to mix in we really I and the normalization from the see QX not what margins side, margin

Peter Jackson

of the add up is, have if the XXXX saying, going year, at right? builders out I to year. So okay, guess and here been higher on focused lot frequently thing bits, the see beginning the of set we for a about you coming think only you at the it to we're a that level, I'd

up velocity. trying It's the the that imagine. heavily to engaged big as starting to where and of us our work bids, out it. been might sense for with that, put a Let's exit given We've very hard you our sense year. That's in year give our is out things set let's you

sort the business. first throws all good I lapping Pete of the of So core final of that beginning of in of top year the half multifamily a think Layered is referred us flow the of it gives into of for year that on this to. that the

forecast what we're and the those aspects build as give guide. So looking of kind we X the of at out are the

Michael Dahl

And dynamics most you pursue a the are maybe of the like into little bit more year and hold you've which segues means Okay. just the other type business my That's to Maybe commodity when where would about you of add? in you to in which margin be you dynamics, you and couple little commodities is that that participating focused of still in need in selective help helpful. comment over terms you goals sounds your follow-up, How this us would share of bit share years, you the share competitive on looking very in some grow obviously understand last maybe and it share value of share, comments a kind you more. the that characterize can for of terms make competitive? been

Peter Jackson

Sure.

how margins, elevated I forever to COVID the we're guess done. over trend been were of board, for big the of out see normalization a I want they there I word. using where came do We've across context, years. Just of talking describe the all are point little was I to us past the we the -- Unfortunately, When of tired build -- couple elevated about think push don't the volumes everything. elevated

this flowed waves were individual saw we what via think of through normalization categories. have that industry I the

large of the saw normalization gate, lumber sheet out you of right the amount in goods category. So a

would saw in be consider margins a You saw in and you competition price, of to normalization we to normalization then normal return as what the levels. sort

are. a a in talked good little were lost We I I and We we we tell right you saw we feel would doing. what in about what battle now, little. we that bit where pretty share about thought the

nice done needed and finding where equilibrium be. responding has and team to margins the a job think of I

bit occurred talked bit -- different tell difficult about other has why I how anticipated. been is it a so we've been than seen we flow that through timing Mike, I of normalizations would a have have the have because and you the you What forecast We has categories. those to talked And margins. little

would year those share I think what lumber even sheet end than the are, now and each is and other advantage we last beginning, over so seeing now in balance but the the in protecting say, so, categories, have the frankly, really in we're of than more good equilibrium we're order where show the customers, for the able where and and protect we're lumber talking to able have that that like ensues categories that, value growth feel we right? to The that's that way find I returns, returns of superior take a closer I we're and but our our in still of individual battle completion to share finding normalization about that one that So price is we're think capacity capabilities the for to to versus outsized investors.

Operator

We'll from take UBS. question with next our Lovallo John

John Lovallo

there's again fires, with as off day think items, it less I unusual first the mean, one number quarter starting seems I the well. Maybe selling weather, a outlook, I to guess, there's be of

quarter You the to quarter-to-date buckets? XX%? year But margin believe, you us first framed think of about thinking the help each from that for to the can in can how of weather XX.X% implied in full bridge impact, you the you're XX.X% fires. about maybe those that the And I EBITDA for help quarter range from us full

Pete Beckmann

Yes.

Coast that's and used effects the seeing feeling We're definitely is Port not of unusual. down through quarter first Emerald We the Gold severe weather. the snow in that. had foot a Korea of to the So

and in that East business South. days lost So extreme of weather the multiple from

in as to momentum up the are able that back. come seasonal pick it a expect of We It's matter the through time and work to builders low.

may is that in to than $XX back, expect get get that all do it million QX it take outlined So to the impact remarks we longer prepared we back. that had but something

as have but far full going California the not impact for wildfires, in immediate lingering a it's year, the As huge effect. to it's a QX,

will to the work And be simple it continue day, monitor that's a selling last equation. math through year. something So we then one the just we as

where it. through start year believe is we the organic go acquisitions And full see year those you one. completed. contributions in from seeing back the as in year the to growth to say, looking through on negative deliver QX I understand we've we bit we churn through and a comps the conjunction that the I start passing would what we think the part continued, are with going we the And of

So trailing XX-month Alpine, as indicated release in their roughly sales million. $XXX press we our is regarding

But we our benefit where the in have XXXX, completed are going of haven't are platform overall acquisitions lapped of XX growth. to the incremental from contribute yet additional targeting mentioned, have XXXX. we periods as we we we sales that sales million $XXX stub also Peter And that to digital in

continue So normalization, all is headwind line. the pressure price those to a of will well have the we're seeing in some to that we're which comps a that the things and to top added margin have mentioned as it I some And of growth the going the sales. up as lap already as on multifamily compare to on

Peter Jackson

John, on sort to of fall quarter to and our have is on And you related easily impact the fires call, perspective. by an others I but a weakest leverage our and sales just distortions outsized know on weather reinforce know, to for -- our the far, through. from

mind you're doing to as just that keep the So analysis. in

John Lovallo

terms that That's the end Okay. low us then $XXX of capital about of just swing mean I the swing the can helpful. you And the working help just in in at of low and XXXX, pretty sales the end high sales about expected flat year-over-year. million think would how be end? end the working mean, range, it actually of low the seems kind I and could at range. high like think you capital sales

Pete Beckmann

year. respectively. moderate, you Really, exit cash how flow the function of will the It a is

rate point-to-point mentioned, that year. So point form it guidance compared to as will It's be out free a in were sales cash a flow able more skewed And toward measurement. the just at exit from velocity to XXXX. the prior we our we

in we have -- into bit that to thought I had million a $XXX say recognized was little did be would forward So Roughly originally 'XX. 'XX was that it of in we results. pull the 'XX going

some So the the of is outsized years. the sloshing change year-over-year. of that's between impact

Operator

take Sachs. Charles from our next with Perron-Piché question Goldman We'll

Charles Perron-Piché

want this I in guess, how do starts future your product for the talk shift about is guiding factoring the contract mix current I your year, business. you content multifamily to there? first, as value-added you in for business? look the of for your for And degradation this your more expectations risks multifamily within see

Peter Jackson

product great value us, add. segment, market Yes. right? a majority As of Multifamily the is it a category for is

product an our are work, So for our it disproportionately integrated year. value-add the categories, declines into guides both when trust to see is impact forecast those on those we in full sales, primarily and and

So a degree of confidence we we just the types because have projects amount can categories of we see. given in fairly it. forecast high backlog how given have, and those far visibility considered of our the forward of in the Got

Charles Perron-Piché

Got you about value-added you labor builders content if were that's and to vocal administration labor No, potential and management, changes color. any BLDR be policies. in could get for willingness the to the new I and stand good for the then construction Are use across has the making industry, positioning for guess think the And pressures installed against on do are and we tariffs services? that, and you against example, inventory your what repercussions portfolio? your immigration it. been how potential tariffs business

Peter Jackson

I administration, now. New hadn't heard

kidding. Just

Just kidding. Yes.

potential in in exposed the that there's that tariff category. product of a U.S., it's commodity The XX% about is right? XX% on, range So of that, lot our total single we high to given described, to not as sales tariffs, going are world,

is to disciplined [ is our not inventory we're be, what about actual the much, into us, lack given manager The pretty visibility or about. changing something flow doing product in outcome what our ] for right? cautious position So and a we around dynamic we've that going been are taking of of the And response. differently, levels

I that will some think impact be that there's the optimism there housing. on thoughtfulness around potential

XX% there. dramatic. on But based we'll that's XX% always significantly That on see. that not tariff. reset to if if tariff are expected there were normal year was could a higher a be a Canadian this the that's tariffs, regime higher already That on layered bit top process new. pretty to But We've Softwood, be had

up, we the we do, commodity past certainly go housing be it's and impact, as bad additional our wood think a a a bit will broader sales that's per for starts short, what modest on like problem Canadian of seen up be overall It that percentage meaning net to well. unit a in wood barrier think we the While now, net because it. will just basis. likely U.S. we have will limit negative. a don't in we the or tailwind In it the Any a but right space, goes

I the that skilled of leaning this immigration done is better which than around one off essentially take value-added has the think to similar anybody is ways FirstSource into things of just The finding job labor Builders answer products, else offering site. idea

advantaged radical that. that skilled think to in of anyone like or great be We that net-net, We advantaged bad still don't an any the would it. think tighten labor portfolio on have area, for starts we already a which think bad industry if labor do impact for for we force we'll impact bad The else. the severe we'll is products were affordability, and be we be immigration and than market tight downside more is

We market, in in tariffs around in hope we're immigration. the there. But the is ready. both think that it's we sure we're and So there to We is think some we think how win. going trend thoughtfulness executed

Operator

from next Rafe our Bank with take We'll America. of question Jadrosich

Rafe Jadrosich

in from targets in market of some Day, of [ Just some you thinking were about assumptions Investor the sort at 'XX assuming out, the the share guidance XXXX long-term the outgrowth gains. you X% embedded of laid ]

about you Just are for that XXXX? how thinking

Peter Jackson

has unachievable, say the out, things Well, here. ] have but the they're it played is long the a and based 'XX that done on market put not would sure [ way targets what I from

think I are that that around gain the the market. weak by dynamics with that that go around would along influenced share

changes changes I think lot things. of a dynamics. the competitive it It

share For gain pretty XXXX, modest. our expectations are

think of they the manageable around defending impact. a can to with really trying rest what we're digital And margin share I do think center our think in I really what we is accomplish space. we the

Rafe Jadrosich

today I opportunity? EBITDA revenue. is is are mentioned what the install What most the growing? percentage big that just, of Where really is [ you is That's the talk other ] see like you helpful. margin about Then have then of And or just the earlier. or either categories where as that question how a profile you install? Can services

Pete Beckmann

product as XXXX. installing. or is we're is about we to profile in sales overall around billion what of end with our So of install -- It's see our of that line of $X.X XX% The categories XX% of from the $X.X billion margin the sales, sorry.

Peter Jackson

broadly. what are market there's there, it's the say, categories, would into. currently, doors, a on partner lot see It's the that need. it's customers, can I framing, opportunities, with we I they'll but it's to right, I many more work opportunities think Those depending are And local the, main windows. mean lean we it's

Operator

David with from question Baird. Manthey our take We'll

David Manthey

When factors ranges last hope to I'm today's numbers. XXX more to address maybe but just XXXX year? smaller range not on in the February you EBITDA you issued thin, have what Versus last too absolute year, appear might was that basis volatile in risk you be as top guidance what slicing is today's the if you about in I environment. bottom points seen could see

Peter Jackson

that's how right them. we're "Oh, larger we optimistic That's it No, to yes, be going builders the good. not building year, the we're tone it see smaller that would hearing. out. -- not consistently is That there coming players the behind the going the momentum. players an played you the were tell saying, year. very kind the going Yes. amongst this That was was expectation messaging not and cuts to out be that to was last That It's into is were rate year fair. tone that of just I of was

core think the today, feel looks dynamics at looking of you're what If okay. like the we market I

we're but well. fantastic, not doing It's

not tariffs pretty intimidating the generate around down. start about unknowns to about, affordability terms that's hey, and questions I We're what environment? cut, Everybody a in policy to policy and changes changes volatility you and competitive everybody an is problem. take more housing. needs around think around some push the what immigration, to going have really of of the in is it new. vocal wider these But reason overlay if Builders the for will we are band

to that's a hesitancy comes I from. narrow band where keep such this our our think year

David Manthey

been clear. far. a little second slower That's And very expected digital. uptake than you so on has The

$XXX got this You million year.

which XXXX, the looking I quarter through were was, expecting in at if million, think rate guess, implies doesn't coincidentally, improve you I rate. $XXX all that $XXX of the that run for the fourth fourth XXXX. you're exit exit quarter But million

And you that. complex billion $X any more. a environment say target, I assume slower the today? have doesn't see still you maybe address So, we could ramp then the XXXX year it but Should more given

Peter Jackson

the question. No, for Yes. thanks

right digital solution So the for the learning that tremendous is us. opportunity very technology the confident I is remain and a answer.

would through As the would hit we why more the identified a I the the think And we we year think to year it what be. we've that nail the way time our lot we pace generalized what do isn't approached lot head, like be. that? and end a And we've I think We picking I up has of than at on the learning not is Why is pace process, this go is were spent answer thought of reassess we you -- wanted. quite to the where the adoption. to with

a specific, of process there's reset metrics, that's January year. on out a more to we're with the the We've focused leading really way with alignment December focused the to regard teams. more around with approach adoption think into this that and and where I new in coming

of bit us going to is to identifying we slow XXXX to now executing terms where where little I I get, a of fast, think we for what you're want and we to think go which our pace get in can It's is be. go what we're think ultimately

going the think it's this we'll It's -- XXXX In whether find and in I question. yet. so get much of of end out where out I new going we're to a when. like don't to year. finish you, great I be to we got have another delivering sense we'll you Day billion. is XXX% we're up, We've would the better tell think. question $X is as sense a terms coming a able reset adoption am of I the the in through the approach confident of line. Investor clearer to XXXX, still be and think, we much give Where

when. only question think it's I of a

Operator

question Keith from with Hughes We'll take our Truist. next

Keith Hughes

My question is on multifamily.

sometime Or the ratably could to 'XX? out a there chance mid-teens the You've Do for is expect half in this second year, given us you decline. our that mid year? view the hit during bottom business

Pete Beckmann

prior really $XXX Yes. seeing $XXX We're seeing volume headwind lapping lapping tough going sequentially, current of comps the is the levels What million is right this we're in but we're effect the million of be year-over-year right pretty over month now year. consistent to half from to now are month first year. the our

that So is headwind. weighted certainly front half on

Keith Hughes

does allow change, some the Okay. show that of growth at 'XX? the range, level Would would that of within EBITDA the guidance it's to to second in -- that half the midpoint

Peter Jackson

on a year-over-year? growth growth? it you Will or sequentially say Is

Keith Hughes

No year-over-year. Year-over-year.

Peter Jackson

I would say, overall, it's not enough.

Operator

with We'll Philip our Ng Jeffries. take question next from

Philip Ng

are testing out And of prepared some the did mention read your maybe but all builders on how on I customers perhaps the some are your modulate to spring gave build Peter, you in remarks, appreciate you early great I progressing, selling season? want color. they pace. color any how think

Are buying back in mortgage my have homes? of is, behavior So change nature? working of stuff spec question terms down them Are any . seen you of they notable you kind inventory? ratchet and really seeing out that in

Peter Jackson

Yes. for the No, thanks question.

production other The mentality larger side, in have light land put the And homes builders lever side, this as of on seen on So one sort what around to aggressively very modulation production They I the key -- we've their continue to to the keeping want for market. behaving pretty how they stable moved by out. moving. builders general, are down really would production say consistently. buy is

a have move starts to to a the like, little doing ensure a how going way you'd them not back we're not new in little behave Florida going if them you're a or in dependent We're goose we Denver So we these but going houses. well, up we these pace thinking. nationally. it this on a they're bit that, boy, see pull to on the That's the So individual to that in little, like. very or we we'd that right? we're expect to behave, buyback have markets more range It's inventory than

So it certainly X pullback X maybe had conversation part to something probably the months, the much but the that bigger I prior than think the periods. consistent, of a starts on last is in been is

Philip Ng

a year, the That's an helpful. from you kicked year M&A then busy. looking of And off have you pipeline seeing you and that is kind balance of of out still and where active availability do big are there? and certainly, was What How buyback? Do in pretty an XXXX have of and here? you opportunities lot some how the are And seller Okay. valuation? guys the expectations standpoint, terms

Peter Jackson

being by We've there. about effective out priority new shareholder for it we acquisitions, an our efficiency we've advantaged ability customers into M&A family. our talked assets footprint, There creator to the our tremendous teams space, extent a competitive is terms for BFS of that our as in lot overall of Yes. are serve the has can good these execute a a way brought business of us. in think The effectively consistently it's been value. that We

opportunistic with As fewer, materialization larger have more large of coming population, large you you within list a XXXX and the target. 'XX, into target With a much world. sort potential a saw of smaller a

So kind of that's I'd consistent. say

a that. to it. big see sort M&A. good And an of the of of We a of believe But We're every little number something opportunity once bit then at bigger. a a all and meaningful. we'll in some smaller one to do nature continue more pop periodic regardless while, in We opportunities, will have

buybacks, deploy of share a And be certainly, think, we We will had, the #X with lot to but continue list success have I cash through it. that it continues We'll value to our to allocation continue capture priorities. capital on way. of

Operator

from Trey question Stephens. next Grooms our with take We'll

Trey Grooms

want market I quick, I because the maybe But on horse was -- we this specific just real a just some on back bit. Was then to it you wanted market changed the said dead -- I of or production share was mentioned to to Peter, lost expected or circling and of to a more single more specific you be modest is I was of I market little beat is And geographic in this were where kind spent coming discipline I Just share multifamily to it. you'd and in if this widespread? that bit time ask know don't to any builders or kind think, down family is what's thinking a the what's guess be kind there back of kind embedded. market year, just going you going flat? kind gains -- of little it have Is what's on?

Peter Jackson

having initial based Well, or think we were production lost pretty open level can think and initial share I to around there the certain statement going on the I the back builders, it's precision. fair. tell, decimal conversation not some past, the is what analysis, at that and we But in we were transparent as look

think with So find and they were drive the trying doing bids to position share. there in a strategy They attacking -- cost when buy ways areas They players we're are that, just sharp were They how to is get down that's progressive. commodities where of will. those folks will to their for times want them. to had regard a their one pencil that certain costs

consider we and So they'll something would in irresponsible. do lean

point some stay going to enough. And to And and said, walk to I that sometimes going at take a to belongs competitive do We're we'll that's amount. we're fair it. away. business we And us, the walked away think okay,

and play. going ebbs a flows. on what's aspects There going what mirror. that market, in that balance and our gain goes we're the terms of that the share But -- think to it. anything think terms would haven't largely between are it's In But thing that's share, indicate in will I past normalization saw dynamic that that's and lately in what or to I year right? margins. quarter the and again, to still be you'll win of So X we seen review back I see in this whole the ability

win and continue I to think will we install.

trust I for supplier for the think we're preowned going to continue preferred to doors. be and

a advantage. think demonstrated we I are have areas those where

We categories, do willing set how lean the that, how sort last capture to of tool position. the set we a leg that merely and in are continue deciding much is area have in we advantage matter it's deeper categories the then protect a get to to we of an we And in, have cost relationship the in, customers, much those customers to share of our about where think solution new digital stool, those because provides. as of a digital lean stickier where we with

Trey Grooms

good and sense to makes That hear. it. Got

if the margins higher this there environment side, would this -- the manufacturer behave algorithm the of to years if seems I guys. got you lumber, how I around it and $XXX how have kind for know and on how know it. don't with up these things I ago. lot of around the So opposed if see of few this prefab questions questions on weeks more were that. It for the a tariffs think see touched been still of about follow-up like one year. to had to you And in stickier, seems we and me, lumber I've this and both might earlier side number. like Can past lumber, best we additional what lumber in remind picked us would to to down that's flow meant come margins going way were you $XXX as through through tariffs the kind

scenario help any we think with as about So of so put kind our we et analysis cetera? that, lumber, this just tariffs, can into

Peter Jackson

the going that caveat and repeat important it proposed, different thumb we The not I mean changes being But of aggressive to happen. the normal over Well, I $XX dynamics the changes lot of in bit you about fall-through are to a the -- kind given the plus relatively not or to terms a At think million the year. think worth I whether are we've around it's the what's these rules $XX are of happy on million caution sort give million a of past. in of how of fall-through about being little bit is here there's a little range. or manageable in or past commodities know I'm proposed that in sales and we've $XXX don't around that. being progressive course X% in the time and commodities to talked minus

exact I important kind how would is all an velocity the the science. of say but not thing and the market of are it's change So high-level most These numbers, responds. the

Trey Grooms

still -- of for out help. a sure, still that's unknowns of lot lot A there but

Operator

Zelman our Adam We'll next from Baumgarten with & question Associates. take

Adam Baumgarten

Can in pricing you give us seeing you're some color on what value-added from a the products perspective arena?

Pete Beckmann

value-added to to by the and we've able cycle goes getting for of in it with a margins, of or we're times the a higher still improved Yes, still products the requirement skilled with reduced the premium site, dedicated having that on facility. provide reduced to being in product and waste the times job labor completed manufacturing and lead X,XXX relative about we're basis past, to what X,XXX seeing the lumber because points provided at commodity respect to

premium that still value we're seeing from benefit in the So or add results. our

Adam Baumgarten

And pronounced space just Got more a across maybe Okay. single-family see we it. then, construction start constraints to [indiscernible]. where labor in scenario the to

Peter Jackson

you... lost We

Adam Baumgarten

Yes. Can me? hear you

Peter Jackson

back now. you're Yes,

Adam Baumgarten

Okay.

that. about Sorry

the construction see more So just immigration labor due start policies. in of to we some a where to constraints scenario in

incremental as labor? You installed your have see a opportunity actually as an maybe to some looking an your you or of maybe business, that for customers do are risk business

Peter Jackson

with Well, capacity. problem in We go We've We've The set. just win-win, it being billable the an skill able speaking, for to get it got you're It's And is to it's of to win to us -- got it's the framers, more were the hangers. the just you're order my to I'd opportunity broadly going right? of both, got disruptive. us locations. mind to ballboard be in certainly most we've going marketplace, this. I mean best rid got but say, this. in you're ready gypsum, rid impacted, if was going we not get with

get You're of going to rid roofers.

be of cause You're going don't is of the offer, inflation bad same is affordability the we are right? people. folks there sliding impacted inflation, going And have that affordability and it's don't ]. bad rid the starts. need people, for if outlet to [ parts this And you industry going have You for get that are to that to

Operator

Research from Brian Biros take next question with We'll our Thompson Group.

Brian Biros

the Any for Just of install bit install that down this impressive, or 'XX factors kind on the I for expectations little a more guide? think, a in market. base, growth into year how

Peter Jackson

So around we talk a it. it. a haven't about specifically but in we're We believers laid guide that certainly category, lot

go. . an So which think we will indication hopefully, way that's of it

Brian Biros

variance sense. then by you're year, Makes ] is starts that And way where guidance SimiFamily there to to any for guys the footprint? about in you worse for guide or your kind better positioned [ region across of or think

Peter Jackson

I'd future. Yes. think that, especially in able deeper to love difficult, be provide a interest to the don't any . point. is it's but at about this on guide of our best I forecasting

Operator

McCanless our take We'll with next Jay from Wedbush. question

James McCanless

on sales? on clarify, share, first will to, lean Peter, of just the price price? need now you you if Or are things where to value-add So one, on just clarify having protect lean kind to you Just guys are are saying to right now? in you

Peter Jackson

months, intently, the already through been on. but in more that's question. flat, that I'd for No, it's no We've Yes. managing year say, been last going X

James McCanless

the I ] a you little volumes been positive finally may change to then And nice Okay. it, not last multifamily that side any guess, turn it But talked that? that. think more bid too quarter. hear we're [ change second have your what your to I multifamily but bid in quarter material this much turnaround reading question, about the into maybe than or on is lapping and around processes

Peter Jackson

conference quarter folks talking say from a would come things stable. been were tone back change I I some shoots. I'd Yes. say about any last have in where green would there is pretty some unintentional.

Just in long. sort quick of the

Operator

Stevenson Loop Jeffrey with Capital. from question final a take We'll

Jeffrey Stevenson

I and to from start. an wanted size headwinds average this a single-family go single-family in complexity value year of back decrease to mix

single-family year? So stable are the we on relatively fiscal guidance year-over-year mix Or 'XX? expecting throughout to single-family your through does headwinds a as a mix moderate move basis, you imply

Pete Beckmann

headwinds guidance our we XXXX. pretty stable the throughout single-family reflects move we where as QX I would through say that we ended a mix outlined The year. from

still we of in this lap are there, to year. and Some the first that have we'll of -- half them

well of complexity and some as single-family size is of normalization on margin side that related products. home as Some that of non-commodity with the the to the of some

expect QX. mix impact there, that going So little are we a standpoint have bit exiting from but a it's don't of there's a where we kind to than greater

Jeffrey Stevenson

update of the the quarter cooperates pent-up guidance appreciate year. percentage move But month quarter and the on weather adverse from the start out if you demand through as And to largest first weather And makes some then That we Pete. could I sales historically, first sense, experience the are what quarter? of March?

Peter Jackson

You're we see. right, -- is to March ears, we'll is lips March, of have important. God's let's a a I From your hell guess,

Operator

you no questions your further that, are for time. this With will this participation. at There Thank today's conclude program.

You may at disconnect any time.

Builders FirstSource (BLDR) 20 Feb 252024 Q4 Earnings call transcript