IBP - Earnings call transcript Q4 2024 | Installed Building Products, Inc.

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Operator

Greetings, and welcome to the Installed Building Products Fiscal 2024 Fourth Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Darren Hicks, Vice President of Investor Relations. Thank you, sir.

You may begin.

Darren Hicks

Good morning, and welcome to Installed Building Products Fourth Quarter and Fiscal Year 2024 Earnings Conference Call. Earlier today, we issued a press release on our financial results, which can be found in the Investor Relations section of our website. prepared statements answers federal within management's may your securities call, forward-looking contain the today's remarks to and questions laws. On meaning of and our to statements and materially actual risk from forward-looking are factors. today. Please on for differ current These refer cautionary described to and based results to are filings that factors beliefs subject those could SEC cause management's expectations statements except statements as duty or by or obligation as forward-looking a no any information result undertake laws. We future securities update events, required federal new of to

In and addition, management adjusted financial refers to certain measures non-GAAP on this call.

our reconciliation such our are now the morning's by equivalent also we which and and Chief Administrative hosted and Jeff, is and a Financial find can and conference nearest Sustainability Niswonger, earnings Chief Executive presentation, to the are investor Chief measures our Michael available GAAP our turn in Chairman You Officer. Jeff call call will Edwards, over Miller, the release website. This you. company's of Officer, of non-GAAP the of joined Jason to by Investor Officer; both in section Relations I

Jeffrey Edwards

Thanks, Darren, morning joining everyone on call. and to today's us good

highlights As results in to the start I with then before we our call detail over more usual, the turn and questions. call Michael, some discuss will will position who and financial capital your take

markets. our of end record fourth across and profitability revenue Our residential IBP, another for by results year capped growth quarter supported organic off

across commitment country. Our focus record financial performance employees a the XXXX in the and of is of IBP's reflection talent,

operating XXXX. strong opportunities to capital invest shareholders return cash with generated continue attractive flow growth in and We in to

first position that to in confidence to $X.XX approved million respectively. These and dividend combined share and dividends capital increase financial long the for strategy to credit with the $X.XX Directors goes the over repurchases. XXXX, shareholders. returning and I'm throughout the those in more have significant across for both at of our value the we our Board Again, towards million success to accomplishments report actions of acquisitions our allocated reflect and a support our a strategies, our Board's approximately annual share cash dividend per support quarterly hardworking quarter office to our the share our of $XXX During to an our the X% year, men shareholders you. invested regular and pleased combined ability XXX and To for IBP, in of women to disciplined a variable Ohio. created per approach our capital growth them our allocation States branches Columbus, term. The than from who and thank United everyone $XX

profitable to committed focus for As communities. we our doing our growth employees, to for customers continue shareholders, maximizing and the on returns we thing right and remain

of in and performance supported X% of results. growth sales year largest national full and sales was consolidated a our growth In at another of growth year approximately mix of same-branch Looking end nearly record our single-family diverse XXXX, sales market, X% local, builders. by regional our drove

our align to customer relationships, knowledge single-family were value market Additionally, and to with results. ability offer pricing key customers our our sales deep local XXXX the the we our

in diversification installation Installation segment apparent our our combined over in with XXXX. a 'XX of centralized multifamily sales remained efforts. Our multifamily service-oriented complementary benefits resilient basis, growth operational with sales model, same-branch product increased during X% On

XXXX. modestly and our share prior period. prioritized from basis, all-time jobs network market achieving end which our pursuit opportunities same-branch expansion for product We per annual a the income EBITDA and net across in long of our Installation branches, multifamily the see segment in strategic reflected through most EBITDA improved we of year an continue commercial diluted and record term. On in contributed operationally sales income attractive geographic Net XXXX to the growth growth, XXXX our growth profitable country. Across financially and to adjusted in

through X geographic we our fill the acquisition out $XXX of million. During businesses to revenue with continued XXXX, footprint of combined over annual

revenue we distributor related X accessories completed multiple focused annual acquisitions, North a fiberglass of the revenue single-family, insulation $XX Texas-based During installer of markets products and new $XX and million. to with of and and specialty annual spray commercial over revenue over supplying and Midwest-based commercial $XX including with on quarter foam building to end installer and commercial of a residential buildings of homes multifamily Carolina-based insulation million; fourth of a million; XXXX, annual with residential over

is outlook U.S. our Census for timing current XXXX is we in of Based million Bureau, to were annual deal revenue expect at least year. the in acquisition starts and X%. single-family $XXX up opportunities hard XXXX strong on Although predict, this acquire to

immigration environment, has prospects XXXX, recent resilience by continues and insulation broader and change, relatively economic data remain believe for positive. Operating steadfast business. and our regulatory financially beyond. XXXX And in we be service financial the a the growth into healthy the believe our we and improvements employment demand surrounding but environment on year and we compared ahead our be long-term XXXX. Housing been installation affordability view of installed remain level to Looking single-family challenge IBP product inevitably effort a encouraged employees will there to the on for with a focus high I will and the uncertainty was trade, remains in stable the by realizing building to for some of some services and and buyers. services for while conditions other demand exists deliver and installation potential excited operational record XXXX our a

financial Michael our fourth provide like to turn and results. quarter full So over I'd overview, more the with year to detail call to on this

Michael Miller

all IBP's increased Same-branch across end to growth up and Jeff, sales period growth record acquisitions. X% quarter in the million the to you, million for for sales Thank and for sales revenue was the net morning, markets everyone. same from last of good year. The fourth the fourth a $XXX quarter compared Consolidated quarter. $XXX fourth X% during increase reflected quarter recent

the as other distribution and partially install. manufacturing margin includes lower our due complementary percent during was XX.X%, fourth volumes to quarter Although operations. This of and primarily the we down of prior we price quantify, for administrative the XX.X% fourth sales. Adjusted in mix offset XX.X%. disclosure than quarter. Price a last percent sales behind fourth during price EBITDA EBITDA profit products business have fourth quarter decrease top million, less The segment, and which from the to by improved a increased improvement growth to fourth XXXX an mix in to fourth from achieved $XXX was in our the components the experience growth down parts offset selling to relative quarter a difficult higher year. With prior continue expenses administrative reflecting year year our the quarter fourth margin of job fourth of volume in increase margin our margin quarter, of quarter to a margin X% gross in sales as in moving the was respect XX.X% from during quarter due adjusted a period forecast expense to that to gross margins several Adjusted gross period. headwind XXXX in adjusted the X.X% mix the XX.X%, lower quarter record line are

share. target For were adjusted from variable margins range can year to margins the approximately million be quarter-to-quarter, $X.XX per net income or XX%. Incremental diluted same-branch highly we EBITDA to XX to long-term margins increased of in months ending EBITDA continue same-branch December but the XX% EBITDA XX, full incremental XXXX, $XX incremental XX%. Adjusted

of provide financial not we with We would do acquisitions amortization full we expense recent in we Although periods. year first comprehensive an expect based and to guidance, any close acquisitions, $XX expect future estimates of XXXX $XX expense approximately XXXX. we million rate quarter effective these in approximately tax Also expect XXXX on change million.

requirements our Now sheet position, let's at capital look more in balance liquidity detail. and

December we For prior generated $XXX months from operations, XX, the million XXXX, cash flow with the in in period. ended line year XX

compared expense and of no Xx. below to capital and continue we over in driven save B successful and facility, $XXX in term The in year was Our our financial with debt has business refinancing is million loan have expense in XXXX. At loan compared million completed and estimated well we to Term XXXX, our target the liquidity maturities cash $X The which we expanding significant financial interest fees company was associated to loan the at EBITDA modest to December term million our term stated was With to XX, net interest million returning fourth our March by leverage of primarily prior X.XXx net a will trailing $X more Loan period. increase XX-month terms to favorable annually. XXXX which the acquisition through debt position the $X November. The of XX, X.XXx compared repricing strong December prioritize previous until expires had adjusted ratio shareholders. leverage, XXXX, quarter

IBP the capacity up for of During new $XXX share of of buyback stock program, quarter, total XXXX our million. The XXXX repurchases to authorized of of expands to XXX,XXX value is which $X.XX million XXXX. record through is March its XXXX. IBP's March share common $XXX in XX, quarter Directors in to stock, from fourth which a bringing the repurchased shares X, Board our the and of dividend Board March previous XXXX, program. repurchase stockholders the effect per $XXX the Directors on replaces The new previous authorization XX, approved payable program first on share, million,

our quarter over determined has which we variable last record for first dividend Board. The stockholders dividend March cash amount today paid variable March other prior variable the per represents XX, the XXXX. year flow XXXX, will acquisitions part regular on X% consideration based dividend as dividend, dividend on policy, the period. Also, that a dividend planned of be our to factors The dividend concurrent of announced declared operations increase quarterly $X.XX the with The with we cash and over XX, our increase paid the annual as obligations, share X% year. a established by variable XXXX generated by is on a was Board

continuing and company our I turn the remarks. to will back to shareholders Jeff excess overview, We through now opportunistic repurchases. With share to for policy while the returning grow call this capital closing are committed to dividend

Jeffrey Edwards

and like our thanking their hard Michael. our remarks conclude again prepared to company. Thanks, I'd commitment by employees IBP work to once for

is the questions. let's over because of up open years success call possible the for Our you. Operator, made

Operator

Securities. Truist from [Operator with comes Hughes Keith Instructions] first Our question

Keith Hughes

expecting you what you IBP the those look are view multifamily, of kind into work? new single-family terms of What's markets? As the of in year,

Michael Miller

Michael. this is Keith,

currently still couple starts the today, in to essence, from to the perspective environment. with to we market so multifamily construction multifamily current sense relative our this opportunity. That at have front, pace least that in past the to believe under demonstrated And for months the starts and the under to believe side, our line. And on that the units it's quarters that in been acknowledge multifamily will continue the a continues completions that units the backlog do XX% in take XX% I think on current perspective, is can all highly outperform be think and that's of what construction. said, I for we results So units consistent the believe just fairly being of at that we X we macro we will elevated the a construction decline come it under

the again, Now believe overall have performed than perform market. that the we to better overall to than will have continue we market. I We reemphasize better

been job within for has has incredible price indicative mix, has been there. benefit -- actually to continue We benefit from encouraging continue field segment of team done an our very to that which us, multifamily and the

be So But market. the again, we do bit quarter for than half, the challenging going third better to it's expect relative this little of going to first the a overall think year. probably we into perform

side, single-family for optimistic would certainly like XXXX. it the and investors in seems other like the that I single-family growth On say are -- about companies we less rate

fairly we've season a know, spring is slow inventory, selling ground, gotten we aware all something we're there of and all a As on off lot the spec inventory to of.

the builders good low expectations weighted of year weighted year, we say, are ones last consistent we The these we half we first As case then heavily increase year. single-family probably average waited were is this that are seems are relative mid, say, about scenario though, to a the their that I quite of a think sales we of and half starts full for year, the for frankly. entire now more look track growth would with sales The -- low more in that would the public estimated numbers towards their year single-family the this heavily our year, I first get to mean, year. were increase. That this imply starts if people's over what the that's would starts sales lot us, like a are. with I comps difficult customers X%

us, comps year it's we basis not again, to talking necessarily first half realistic then half. and the think second to in full year picking get I through of couple to on negative that -- the maybe a full a And going the the industry, we're start So have year I'm then in single-family the basis, assume up points. flat about and up on

sort that's at So Hopefully, your how question. answered of the that we're looking year.

Keith Hughes

Yes, that's very comprehensive.

other one one. Just

your mix kind You what positive has for least in time. been business? your long of price begin mix a going year on What's at price a is mentioned a the do view, -- to is

Michael Miller

benign the very And at about sure least is pretty think inflationary the for for potential of us, that And it's price now everybody but a not a for soft as benefits suppliers prior aware least situation right ultimately and benign seeing talk we're environment that are our just at what just price moment. the creates we're that environment. relatively tariff benign environment benefits I periods. this. well. Again, relatively we'll But means. But environment, a a I'm clearly, mix at pricing carryover in well mix and from really It's

Operator

Kim Our next Evercore Stephen with from question comes ISI.

Stephen Kim

the color far. so Appreciate

on -- on following Keith's up about touching multifamily. Just question

performance. a growth an growth or seeking how more you that my CQ into in expansion plays and how -- for in segment if is about expansion you performance expand could Just opportunities wondering talk of new about you was much the -- much that to was that your if that? important have. I give could an we a is curious understanding on you know the I little elaborate in as of that could bit some see multifamily role multifamily an multifamily see multifamily CQ what in the sense markets. plans of result us And

Jeffrey Edwards

Jeff. is This

because know, to CQ's about penetrate. continue where relates well lot with you this those about in locations there's highly -- a As you participating. as space time, to plenty they're white we to it think our of just branch obviously, very guys, not At were ability point

to The multifamily continue thing other into second they're able that perspective that getting so into. is sell to those are to mix a jobs do from products, we

we're of again, there's opportunity a XX of active months, even in kind recently within in we're -- infancy, been but probably just kind not just certainly the really penetration of a the footprint. they've So last lot very into not Texas. Obviously, a the there. terms quite we're our in But of toddler or team IBP

Now certain or already multifamily kind branches, them matured but plenty grow of through work for to to there's of continue on doesn't we locations mean aren't and certain at relationships. that geography

Stephen Kim

Yes.

say, expansion that a I that for of think more, Jeff. target of years? there dimensionalize kind of let's over kind by expand XX% you could to of that see you multifamily a it little Just like, or an general kind that it's of Is mean, that like possible bit do any let's initiative sort have presence that division such of could we business? say, your that, period

Jeffrey Edwards

enter the XX%. the penetration It's overall major they it's But up of relates not normally you new about end do clearly probably that, multifamily which they taking or even and when markets, XX one markets. not when is these share because our they think as insignificant to make it that volume, more that of

Michael Miller

benefit if and our of they other the the definitely of market are big kind products. model, market, just Yes. we've markets. But they're we've work I of when one them, a been I total mean, multifamily you the about expand Jeff is you revenue. and lot, talked into -- saying, things even one into really And roughly of able XX% then of share doing as that -- to think will, we're the are if our was work significantly increase penetration that opportunity to as for think most with to the other mean, already there, of noticed we that know there's CQ significant a I multifamily I able go we sales as

So just but to as think basis, take on we're strategy, a implemented which in consequence, a the fully will years, essence, over-indexed become to very be high-quality we with in think a going relative very to I clear, once CQ I is manner. multifamily,

Stephen Kim

Yes.

SG&A was in line? you things other Okay. SG&A Great. this Helpful. was on comp the quarters of or And anything out some then on your secondly, the the but a expecting. than was if wondering whether it SG&A calling little that there be it have higher fine, were impacted prior just quarter, I'm front we worth incentive

Michael Miller

No, mean, G&A clumps I think selling but together, quite everybody kind very of them of separately. expense of know expense kind honestly. I and we

revenue. So -- tracks expense because just X.X% of really X.X% to selling

So rises little the last than good as we And install. year, inflation, products leverage last the about talked a with expect quarter, overall actually, speaking, generally G&A but pretty we in side, G&A, it, the felt getting bit we necessarily not more the last that of that we not quarter. inflation only

directly up obviously that, fourth would year is to first in million So see G&A of to the running essence, sales you seasonally a quarter G&A now, through to basis on on expect quarter in But lower quarterly though million that quarter. G&A on that to X% quarter $XXX a right given a sort G&A, And we in having that year. even almost $XXX rate so increases of full the first basis. flows a year end X%

Operator

comes with Rehaut JPMorgan. Michael from next Our question

Alex Isaac

on quarter. Mike. Isaac on the Alex is Congrats This for

X versus to M&A, front the XX you opportunity pipeline months characterize would you and in today ago? how of Regarding set

Jeffrey Edwards

regard. people good it's of of A as think, our I'd to as lot times, continues -- get or good of businesses opportunity. but rockier outlook typically, in little that too, makes generates when been want mom-and-pop assume that is the owned, which be they been. privately say, for individual not buying Pipeline, that be i.e., somehow opportunities I sale mean that might to be things a business. plenty could there their retirement. a selling in experience. Most private owned sale, I more not That's the them life are our And we're a business, really decent-sized when situation typically be a are the as for

Alex Isaac

where see you how That on sounds answer. cost And in fiberglass the price right. And also 'XX? then Appreciate you do trending? that see supply, do

Jeffrey Edwards

sure price increase known was of you As is too that there by historically. manufacturers is with an I'm well, not supply out it's and there's that And that there been did -- than X sit know, market. free-flowing well announced you think well the X little this clearly, I the -- a and meet more

So -- we're know year. as they and aren't should all as time we feeling this and of seeing, builders as be the maybe happy at

what on So year of potentially we'll think conversations, guess there's see, the depends one by saw like. I it's but -- going is days. from than the least at IBS today right? second half does the of know manufacturers to different in it the or at I now last market terms I in look I the being probably recent a around looks did lot even month spring I successful a increase, X know that don't that XX or of certainly no

Michael Miller

that another some this exists than it Yes. believe is environment us. us constructive one, more there increase the would think a gets there say and stronger announced is for that is -- happens because price And say is maybe and last I today this if I that's would way of than demand traction Michael. we

to price we from we been on historically able So take manufacturer. pass that the have always

delayed, ultimately, there. always little a it's get we Sometimes but

Operator

Susan Maklari Our Goldman with next question from Sachs. comes

Susan Maklari

you we various bit we're should we And Can had given a the were in of on talk My the offsets the as products. year how margins. the ops Michael, and first that there gross there that coming the look through are areas ahead distribution the dynamics complementary some in? is about mentioned you about some your business? from from headwinds environment be that sounds more just that the thinking to manufacturing it across and question commentary the like your you

Michael Miller

thanks that Sue, Yes, for question. asking

of small install So to but manufacturing lower we a that the it relatively sort the good gross operations. set, margins. just still it other OpEx gross level business. It has segment component, margins It's than distribution has lower leverage, is and very structurally disclosed has but our

be gross lower basis general, points to installed margin. in margins can XXX than gross Just those XXX the

installed that so. in X% So of segment other the around grew sort a low teens at segment the rate grew whereas quarter, or

you by had higher of So margin gross weighed to overall it XX basis growth points. about that XX business, on because in rate lower margins a gross

have, like insulation did gutters. a we products pointed -- that had the in mirrors and shower as other rate sales, products gross solid they actually so foam Fortunately, margin. faster you install grew a that's shelving, we And fiberglass. insulation complementary out, the spray and fairly door, than overall or They at improvement

an that growth. So was segment offset sales to the other

insulation, margin So question, in fundamentally everybody products margin you right? that are complementary and I did essence, products, efforts see the to answer impacts our we gross margin fortunately, the offsetting multifamily. call obviously that gross gross when margin. But come note kind products in of as the in products rates of this, we're knows And on some your had I the side higher growth cross-sell the that multifamily lower-margin improvement then right, doing think to of other the from those other products. And in the highest into should benefits improving on of

Susan Maklari

then Anything hearing about that that's color. that start are trying a market? geographies bit the the notable? there especially some anything customers, of helpful higher the different what year? at the various And But spec That's Okay. that weather big this to inventory. activity you're worth is and through And from of the end with to you public can builders noting, pressure your builder understanding across of some or they're the private under work talk maybe

Michael Miller

Yes.

production were saw the we of first, of regional local actually the say, third a fourth growth than custom think say kind in and and we the of the would surprised their but quarter production I we we down sitting pace starts did going should to back I question. has kind surprised builders of of the better pleased into lot I did great a other in that's were builders. where out So that's And think -- that little relative ground. a the softness spec well even and quarter. But discussed, builders kind then slow the and construction been half as clearly, year, because of of inventory on I the towards and this of the year

So ago like when surprise, was builder encouraged about -- longer very has resilient I think were months of local about I guess, or kind But that we've from the been. now. and X, we X how regional been

I of anywhere In $XX first to one quarter and a as per this day than terms the $XX on million. is here is as the sales think again, million fires, aware selling year the day last between is of everyone -- year. And call just weather the our point, has that less average reference

$XX impact January first to February revenue that negatively the negatively relative estimate it revenue the fires will in storms about that of from year. We So and that quarter million. last impacted and

don't of what make month of much is we how Now in up know will the March. we that

many weather for lost there. across up component to an time extended southern you to country, period part just much a in construction of the home to stopped we're I given of make construction as the uncertain Saturdays make sites basically, situation we're how be that large of is up work where very new mean, the time. But able we As to will for construction know, going

actually of itself of get in even to a that's quarter think what 'XX, we sense. normalize as that catch a any you if normally going more would we So out second or going could cause probably through March that to bit up makes little is the work maybe

Operator

Mike question next from Markets. Capital comes Our Dahl RBC with

Christopher Kalata

competitive just is you're Mike. to guys' This currently today. your I what Chris on for thoughts seeing dynamics and get wanted on

around any where weaker back? this all? expectation of builders see seeing risk price we your One competitors you're price with and conversations? of seeing competition be that something year your cited And they're markets supplier concessions. that get aggressive more Is some Should what's at

Jeffrey Edwards

in course, a I slack I than a years, to it's regard, this to for that not the team. mean, of a and it's is maintain anybody robust, in more done it pricing on a new, to environment tougher little Having of XX most otherwise. everybody as little think, not

So do. do you got to what you've

try differentiate You yourself on to service.

your long-term got typically You've relationships builders. with

fairly and it another one with usually out okay. works deal You

Michael Miller

the would And and our always it's we working the mean, is run a say we about it's to with I we Yes. always perspective a competitive will the that the a And not that just over volume. And environment that expected. continue a be I environment. price us pay -- case. fair it's we customers clear, talk business from at all is to just way let's favor the mean, rate are going be I growing because lot this that

means, not market, been and that this feel tampered it's a but in extremely we still new constructive environment right? So I dire demand medium- confidence for seeing decline substantial situation I construction think right? while and I country. still have in mean softer, or a any the this healthy about whatever, we're long-term is that it's down mean, of mean kind in the So doesn't people's

Jeffrey Edwards

a about was years you price, I'm and is for Corning trainer he XX it's was who Owens And about the with saying. price. never I it's gentleman what thereafter. And beginning. then ago, true sales understand always window completely said, in a to And the get out XXX% price that's if

the do a and But contractor that, or gets You've keeps perspective, job. you have the else everything job, you a a as got from to the after pricing the conversation. even in it's that room the job subcontractor be wins you

Christopher Kalata

on impacting quarter. once mix And you outsized a just any margin mix just of price we it that. then headwinds guys said sort your for Understood. guys are a margin declines guys know that? business? But think multifamily, you Appreciate that I with expecting headwind, associated start you was also a price headwind normalization, tailwind but assuming when there there's is this about those

Michael Miller

it's significant, lagging clearly, administrative a mean, primarily negative shorter a that if -- when than particularly environment, incrementals not X-month your you're because creates if you're and in sales I adjusting you lose general larger your costs. costs, are decrementals your Not right, which are environment, But sales say, negative -- term, no. variable

XX% $XXX that in G&A previous in right? doesn't do you So reiterate you million significantly more X to -- year, need X the the demonstrated X overall we declines on have come over as get the volumes, that will the that. But construction than to in question, that frankly, with do quite months if market. -- under units we perform believe, I XX%, very while months believe firmly down, to and million decremental at last margins call have to we the want better So going adjust $XXX we we multifamily have past of of least quarters happen, had really take the side, it, quarter that discussed that associated it's that in to

Operator

Ng comes Jefferies. Phil question next from with Our

Philip Ng

margins the of out costs, calling, some over margins biggest labor see EBITDA combination Michael, compression, flat but Appreciate great been and In out, how you or that of Like of course color. margins environment, of this compression? Your certainly an have environment, is do pretty called kind a you all I a last XXX year? quite the in points of years, guys, basis appreciate then pretty few could environment G&A pockets choppy In playing XXXX. great that this EBITDA of manage for up you you the more the could nicely margin you okay competitor and not steady carrying kind call see piece stepped it, maybe is competition.

Michael Miller

Yes.

numbers way -- and down very are of Edwards, half hopefully we're the I we it's So back to the going substantial a that the stabilization previous although not in -- we make of reality if such to so the on our -- that. That's EBITDA. you single-family I right? period and situation. as guidance. on a for company, improving. Generally things for the G&A, to company our as a and of manage going based put be systems But mean, and from improve we, very not the see But hard do on here is that the does hopefully the It we speaking, it, as don't It's particularly EBITDA tendency going you're short our hard will just all incentive manager, have that not to of we're answer to questions working stay, time branch clearly, pressure incentives softness Jeff speak, really to manage expectation want to primary provide mean, the structured the all to the every particularly working expenses. we'll single to will and know, multifamily the to not to you are cuts, margin. That's focus

Philip Ng

at good. Are different, bolt-ons cash that's I bit a there larger wheelhouse pretty little that's maybe kind out pursuing your there, pretty still Jeff? little Jeff. to Super. stock, kind environment still for you've is a returning your something versus strong, flow any a you balance guess this cash shareholders? a and and sounds how M&A pipeline looking little In back And is appetite pivot back buying current these anything maybe you question is kind for between from attractive seeing of larger? do And to that's like of of you it something where been

Jeffrey Edwards

over we'll mean, M&A I favor always else. anything

So out that flow pony free I allocation. cash you our that balance in regard. one on in mean, is as But the know, and such we don't sheet capital terms of cash the of trick run

do of relates as parts and capital of pieces can we kind it everything So allocation. to

adjacencies I'd out getting We not adjacent wheelhouse. maybe the all necessarily averse are the deals. industries, at to wheelhouse but they're seeing strategic of to the need they're to some larger have but think currently I and relationship our to core be going some say crazy, afield of not in they would some and of don't make of need in far they business. at idea We're maybe looking to kind -- terms acquisitions, would

Michael Miller

as little do not maybe different, us a it's to company, of to And I buy average going it billion and for were us know, kind like to twice gives if out for go better manageable you and time It's conservatively $X like we to going understand bit Phil, exceedingly that's our a mean, something we into do us we're before really business something push that still make but a something that. right? concerted size, deal

Operator

comes Stephens Grooms Inc. next question with Trey Our from

Ethan Roberts

on foam Trey. just to Ethan I is bit. wanted on spray little This elaborate a for

kind that So expected continue foam were of this called out trends you into spray previously to quarter.

side? bit, in outlook for just a half, of Just we given what better you're I in to expect half seeing sort your that should suppose, And second demand, the this then wondering it the on second generalize positive year? price/cost of

Michael Miller

you we a quarter. would discussed fourth in foam I'm because headwind be it quarter that it glad the as spray asked in the to about had it the third yes, was question So continued --

there of because half impact to come price we the around expectations points. What you're first XX XX kind the increases, spray to assuming, the pricing foam not that of better as stabilization say of kind So price so we there is multifamily and think lot don't it, a margin quarter, we to improves course, a are have we that margin, do would first creating there I see single-family go back manufacturer the market seeing half back in year. Again, I of into but half and the of the half. accelerates price that gross it mix gross through but first than sort stabilize have price are there of would basis provide say in expect does guidance, anywhere expect was to is mix, us starting to and stabilizes, would in as call we and is would increases, been negative I a between negative trending the

Ethan Roberts

costs. Okay. That's on helpful. And just super then lastly,

sort the a takes on seeing in cost little you're about of cost through bit you front, of spoke and sort inflation. can labor? You particularly walk us puts benign the But

Michael Miller

an kind and I say -- it again of break would from income down perspective. statement that I'll

goods there is look install are sold, cost it's environment. you If labor, and it's pretty at And inflationary but of takes benign. material the stable a that, to which and puts

average. And then of those historical goods inflation decent X.X% in been that's I saying pretty that said quarter-to-quarter. G&A, as a historically, a to on tend this you costs I consistently with look X.X% changes answer runs expense perspective earlier call, if earlier. little revenue. bit an to cost mean, overall from we But rise obviously, of selling to because disconnected were sold an As

So basis that basis, X% year G&A an go to full if up have we on annual to sense. X% look a would on make

consideration. I on be we expense the say before benefit year, for initiatives it will P&L. flow while expense through side takes the management any that into while expense management, we're would clearly particularly focused However, take management to a this of that on G&A the

Operator

from comes Markets. Capital question Zener with KeyBanc next Ken Our

Kenneth Zener

serum reason, drank like morning. some seems for guys Michael, Jeff, disclosure this a you it

something So called not I comments bad. appreciates around but pass that That's you like Michael, It's it could not that. Appreciate out. think you. everybody your is XXXX, months. in I'd cycle said high. the being you've that inventory with agree X but

like you could the kind us right, you're first X That's much if And Central think why your you question. that that bad, have not of months. If strong. that national versus around footprint you more comments Midwest, regional regional give concept expectations, Texas, on given Southwest, expand while doing half some affect Florida, could builders, second Florida, that, very

Michael Miller

for that the half that's up think multifamily contextualize all as will is comment bit current and of counter one is and to most X-month to of, look we and or what I towards think, multifamily was the -- around the other believe the so we believe, at macro given going -- trying ways that probably And current housing a higher little contextualize probably So really what environment. a back in people XXX, to to, most the that believe right on we is current to counter units multifamily level, we call at it, that to bump current what the which, under to should look construction we this relative and out. And year. Again, to do demand XXX relative by we units that construction rate has start believe go of the the starts space level under normalize think. is people bottomed the the or way, the

we the assuming construction Florida level, So current the are multifamily. your second think -- construction under that starts And versus at, Midwest units -- although or completions we though, are that big I if down roughly terms relative the their take under construction the strong. at we a single-family on very Northeast under current level, months would overall units you macro pretty starts plus. And say again, to XX% yes, mean, and market. and home completions X all a basis, rate, the markets normalize stay look construction in at it rate are their really so weak the I as I would strong units relative would that was of stay in current little current know, to believe therefore, mean though, the that, decline of and question part mean, opportunity come Florida and right going surprisingly I a to the towards industry the then Texas and new a percentage for Fundamentally, estimate are of those your more now. The Texas and

everyone think on largest our I perspective. knows, revenue Texas call a this state As is from

might are they long-term, we there team housing markets. And an in great incredible see job. big does while Our us, softness for both markets those

Kenneth Zener

the struggling a were And Right. the less understand I multifamily, with your is are -- there's builders weakness, around people of margins, we're the are which what lot right second sale. it's your We're to around for between And is for tied about more like. comments inventory the certainly what it but But single-family for more now. public half I multifamily, are like right? months think pressuring sounds comments trying to volume, toggle like But... improvement seeing X

Michael Miller

single-family. No, it's it's no, Yes, single.

Kenneth Zener

and much telling insight, like the have in they than selling almost the people of just because X This air over markets weeks been to bid Spring a an are selling what I that. risk where it's it's better dynamic that in appreciate that understand. right? is it. Where month kind time. first-time future their inventory? season have that is you to anybody just inventory? higher -- it's that to mean the amid guys It's buyers has see if probably you to I builders then good going like bad And like are this to I they fine yet some right, look trying pocket, volume are move-in the too mean, clearing think out is inventory in Where wanting come homes running quick homes, is slow. Are be builders will those back country. -- or contracts

Michael Miller

given I'm to really a frankly, not to specific because, city, demand current there environment. answer might Yes. terms city in it much but not give the subdivision where sorry, have varies Ken, real subdivision inventory just -- quite they it too I'm going of you to

and too is broad it So I under-inventoried, by not or by just subdivision don't customer spec say have brush think as to whether think on can a you I over-inventoried much subdivision it the well, they sitting ground. right? say, and really -- is Mid-Atlantic customer, really is is the Dallas

Kurt Yinger

with Our next question comes Davidson. from Kurt D.A. Yinger

Kurt Yinger

magnified kind has Just of internal the one, build-out I that kind capabilities, kind on margin expect XXXX. drag kind was hoping to you distribution a update in here similar the margin of a little expansion in been or And could bit? of maybe of of XXXX. be even you plans impact Would us

Jeffrey Edwards

we're regard. expect be I drag. margin to is don't This pretty time. it Actually, It Certainly progress Jeff. making measured really think in that takes obviously good

effort we the that times distribution not supply make out as buying knee-jerk reaction. was sure were of to in in tight much We of are a -- part of

there's not I think that being a and or not to get in this regard. It able SKU helped has loosened been that we've successful problem certainly bit supply that the with SKU. a

to in a our leverage continue which we side kind will really to both things, business we perspective, both an the regard logistics third-party is footprint, business ultimately internal little continue bought of again, but So distribution we lead expand that of from and to also. --

actually feel progress. that about I really good So

Michael Miller

Yes.

last million. a doubled was $XX not And it's it around $X in distribution, essence, XXX% well, -- but year million. you to will, internal this around correlation, if year Just

there. slightly. So G&A made in quarterly we it as great people, facilities are -- does really adding benefit we but -- and it But to gross margin we've way to a talked definitely benefiting doing a but is it we starting the progress good go, team have long add because call, there. The adding does job we is last are really,

Kurt Yinger

frame? to get of kind terms where we there build-out extend progress. Is up Got to of something meaningfully measured kind of it. want to And follow maybe in would ultimately it Or that kind as to should think you around X- time of of X-year be? just a this to the beyond comment

Jeffrey Edwards

over I this X for flat. answer. we time X some to extend margins. But only out, the improve roll honestly, is is right continue markets we and is The us thing might do benefit the for remain think a reason, get that -- way this it it if, make the to to helps as us

So margin. flat from in markets, just for X-year to help our end -- environment demand say, way let's a it's for a us a good

Operator

further over to no turn at time. now I There questions are to for floor Jeff like this back would comments. the Edwards closing

Jeffrey Edwards

call. I next just look want to to questions you. your I forward and thank all Thank for our quarterly you of

Operator

teleconference. This concludes today's

time. your for participation. this disconnect your You may you Thank lines at

Installed Building Products (IBP) 27 Feb 252024 Q4 Earnings call transcript