MBC - Earnings call transcript Q2 2023

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Operator

Welcome to MasterBrand Second Quarter 2023 Earnings Conference. [Operator Instructions] Please note that this conference call is being recorded. I would now like to turn the call over to Farand Pawlak, Vice President of Investor Relations and Corporate Communications.

Farand Pawlak

Thank you, and good afternoon. We appreciate you joining us for today's call. With me on the call today are Dave Banyard, President and Chief Executive Officer; and Andi Simon, Executive Vice President and Chief Financial Officer. We issued a press release earlier this afternoon disclosing our second quarter 2023 financial results.

have of it our not our available do section Investors website you this is document, on If at masterbrand.com. remind either or to forward-looking like you call this I'd will statements in associated our the remarks prepared question-and-answer session. that include call cause in and and differ currently from actual to results statement subject on and risks anticipated. outlook, based those this to forward-looking current is Each uncertainties is certain contained expectations market that may materially

only statements Today's in the available which measures. Additional be release or year the to heading, quarter information of to tables, as full are with XXXX our Statements, Form today, call at these Exchange and this entitled, regarding the which information found can any obligation including the press issued Factors sec.gov afternoon and Commission, available first Please filings press as in revise XXXX masterbrand.com. XX-Q, by earlier in this issued risks section Form at masterbrand.com. The More appears our today. the and XX-K we of sec.gov Securities except forward-looking in our are are Risk company under Forward-Looking any factors and non-GAAP release update about reconciliation financial not includes statements, certain also in required in and undertake speak refer does the the discussion these law. and

discussion of our quarter outlook. will today with remarks financial second include a by business our prepared a Dave financial Our Andi, XXXX from results update XXXX current along from followed

me turn Dave. over will question-and-answer host closing that, Finally, let a to make before we call some Dave remarks the session. With

R. Banyard

in performance. of for a in line second offset flat on demand of conference XXXX the Farand. were from call. expectations EBITDA second year-over-year. lower in were softer selling our compared MasterBrand quarter $XXX.X financial afternoon, second quarter EBITDA quarter delivered you quarter of million, joining $XXX.X we here as us partially the Adjusted today adjusted this XXXX. and XXXX to sales was Net the our in Thanks, Good by with everyone, earnings decline, average market second higher end volumes delivered strong million sales price. Despite thank quarter

Our ability quarter EBITDA considerably XXX sales This continue year-over-year as last was margin teams margin year higher basis than adjusted at lower preserve level. drove EBITDA adjusted points our with going on our estimates than high a also dollars the into of to to execute expansion. internal higher

improvements free great We made in within delivered flow the also and cash quarter. capital strong working

supply This, XXXX, our are Our last swing, cash inventory improvements generate on last $XXX.X year's the the second an free of same in increase receivable, XX% quarter in helped period of from chain ahead we efforts are us over year. of and flow reductions in plan investments. full along million with accounts

only in cash quarter. us our shareholders flow of same free to strong this we consistent on which of invest Our executing through to announced program, to is time. One because are business, is at the paying continue began financial possible and the returning down debt to allowing These repurchase shareholders team's value results value share execution. previously the method return

initiatives initiatives, the utilizing progress MasterBrand Tech that us help The in outstanding and exceed Through quarter the targets we've some made quarter share future and deliver to of operational investments such or details believe Lean will an established the on and like focus Our our on I'd some repeatedly periods. make to tools Enabled. Today, drive more Way those how achieve is on allowing our strategic we growth Lead to in of meaningful Grow, Align

markets in update on you the provide we what do that, end our I with quarter. Before to during brief saw I'd second like a

anticipated. new inventory the interest homes at customers construction historically pause strength sale. This our low through the hikes call, continued a of our rate for benefited as from better serve in that than builders earnings remember, last levels quarter and existing the performing time of you market If were

Our production builders, quarter drive flexible performance. second increase financial manufacturing network helping enabled particularly from in builders, service our the us to sequential demand

still for more demand this and trajectory which overall, we're and repair year-on-year builder of new down retail While construction encouraged the customers and remodel our is through recent market has by market, serve we commentary. The end become dealer dynamic.

in quarter, U.S. in anticipated. quarter than retail largely in saw first sequential channel expectations POS was the slightly we While line decline our with the greater a the second

We to XXXX. balance remain the demand expect of soft this for

to had preserve level allowing previously margins we reductions to appropriately demand manage production work accommodate our As we and discussed, their slows. with as partners set inventory retail needs, to our closely very us

with business with line normal Our seasonality. customers in expected, sequentially improved as U.S. dealer

up However, price point. focus on cost a we is project achieve network a being is features quotes dealer the getting doing consumer as downs to from This desired with that look end before and to thoughtful are our multiple hearing some their give more remodeling budget. people trade driving

in discussed of between can we've and from to breadth As to offering the shift find various a our EBITDA before, headwind work stark and categories. to product lines us customers, solution all allows our premium our to sales product but we with right points. EBITDA adjusted for This are them by unaffected net adjusted relatively presents margins at product dollars, shifts price their

seen repair size talk compared relatively expectations. small about we the Canadian markets new underperformed the our the remodel While region and this we have given in U.S. construction often its both don't to market, and

seems balance, this to softening continue address trending the new be second taking portion the be are remodel worse to our We continue expect demand, of of construction forward. of weaker remain Regardless our in market in end trending to confident than business we repair to but these a actions a half to little ability better shifts, expectations. little strategic our to prior we transformation is our and XXXX. On drive and

strategic earlier, our largely operational and quarter both As result efforts a our initiatives. continued includes excellence. mentioned is improvement of I second This continuous our

performance. supply initiative, had on second our specifically Grow to quarter impact chain meaningful a Align work, Our financial our

benefiting already a I'll There's enabling and execution projects Tech organization lot rapid is both further. spend of of already our a initiative exciting to progress. the areas accelerate Our us time underway little the work so in increase is these other discussing of number and launched Enabled projects

of a discussed those supply remember who Day, opportunity will for our we near-term as our chain Investor to our initiative. that you you recall For Align Grow

processes. the ability efficiency and was our by of Our consolidate improve to product limited offering in the and supply our chain complexity manufacturing

the our As benefits plants, standard and common of processes chain our our a we implemented realizing organizing the possibility. across and initiative supply extended scale became box deployed full

during chain our COVID, supply the was make to challenges ability changes faced Given limited.

our optimization. able to supply chain on Now in XXXX, been we've focus

benefits realizing the efforts margin than these second earlier which expected, support our are of the strong We quarter. helped performance in

operations in While and Enabled to its performance. our is already contributing initiative Tech it's still improving our financial early stages,

previously have to across implementing and RFID other save be that tracking tags the the and a has areas. better more can our As business. been individuals of in This floor, this accuracy. to outcomes back prior reminder, now labor the tracking modernize technology mentioned in initiative to RFID is the This insights facilities. simplify goal customer-facing. I we've inventory improve on office been the help time as for technology tracking reallocated parts and allowed spent plant value-added to drive foundation on call, our or automated us

more Additionally, tightly. the working has us inventory accuracy improved allowed control capital to

back real-time goes technology foundation to and to the near look across we get office the the plant floor analytics company. as improved beyond Our

our a We technology lake partnering that strengthens operations this Adding increases with our tools job and Way buying year customer, are early to pricing these some this investing lake roll our continue is technology support to our today, We and our architecture another The XXXX. great in and our of technology or accelerated supporting our facility agility. Those was deeply to and did to the platform. connection Enabled of a this are consolidated for get onto experience Tech act process enhance ability out embedded our improve function The digital platforms We've customers. but overall initiative. speed consumer to The business investment recently to effort. ERP data to done. this data in how with with as our common tech additional seamless improve initiative in manufacturing, new are channel examples analytics MasterBrand and also we late improvements expect the

early it development works barriers and get the to agile technology so value. cross-functional every the making implementation, identifying also through It's adds place. process waste initiatives, right in all for needed place to and on sooner. Based utilize those make spending will We and increase early project taking of and the Tech sure in to our our helps Again, and us phase our pipeline in for that launched, eliminating days robust focused and a on technology when Agile accelerating barriers customers performance reduce XXXX. our demand that teams to our inputs in investment investment we is technologies across Enabled the bring growth. have keeping new work time initiative, we've strong decided our team future but the an prepare supporting strategic exciting them lot ideal presents company the a environment value for a more softer of financial these us

can as believe our in we these outlined of in targets. strengthens, we market With long-term grow as demand excess investments, the

efforts governance where ESG Along About on published And to report. find call with website Now with seriously, commitment updates June, area what's want being under page, ESG say an on to in its continuing. future the we before take corporate occasions, stakeholders. section greater you with our another Andi, of even over Us all ESG We I'm do the this of an this date. success is hand environmental, with said the I've the to to can in our ESG pleased this in home social several journey address the comes along extremely pleased our our report, I'm inaugural and journey. industry to MasterBrand report the and page for a right I launched I quarter. leader responsibility on that

After received of recognized publishing that MasterBrand Today the one Safest by being EHS Magazine. was it Companies notification America's as report,

financials over record. With We're second and safety those America's the and industry-leading that pleased to to sought I'll quarter differentiate procedures be that, For safety for our good revised safety excellence competition to outlook. review our call Andi hand years, that great our from XXXX closer has XX practices ones. programs recognized identify Safest over a Companies and for of characteristics our exemplify

Andrea Simon

Thanks, Dave, and our second discuss you quarter everyone. results, overview I'll to outlook. then XXXX good our be and here begin It's with today. updated of an financial afternoon, joining I'll great

volume net Second offset average the previously expectations. quarter XX.X% The the higher line selling our period sales to million, an with partially decline in net and in anticipated implemented in by million same attributable last actions. price, compared market to pricing $XXX.X declines were $XXX.X year were primarily

second and year were a quarters benefited the higher-than-usual call, discussed from last I third of As as we on our backlog. particularly strong last

So period down are we of the quarter comparisons. Gross a profit X.X% million the in to in challenging million year-over-year compared quarter, was second of year. $XXX.X last in $XXX.X more

However, basis gross our paying off schedule. XX.X% margin strong operational and to XXX Align expansion delivering our is strategic profit portion particular, was points year-over-year primarily significant due to chain performance. of of initiative to supply In margin This from the expanded XX%. Grow ahead

we we the extremely and restructuring and took to from as our we in XXXX. are actions are In environment, steps diligent manage addition, dynamic being half a year still capacity we thoughtful benefiting of and last in first take the

second XX.X% XXXX. Also administrative year-to-date of important savings to restructuring-related Georgia damage at $X expected million lower savings and tornado to performance tracking to the the over includes year. facility quarter of per year. Selling, insurance in with last proceeds related $X.X earlier an were the sustained in expenses million compared million, general Jackson, period our Our are same our $XXX.X quarter mention, ahead

of stand-alone Home have previously Instead, compare but I've saving As gone. if of costs. a costs portion were discussed, in that Fortune it a allocation you allocated But is & year-over-year Security the is impact we now XXXX, net Brands X, the XXXX. we in

offset the of XX.X% to by quarter did charge our of a in expect provide first outlook $XX.X interest related of we in necessary up of second year. million compared This delivered the when The by half initiatives. to of trademark more year XXXX net partially asset the increase versus in increased to debt half this dividend to a at the to the time discuss as period was Fortune impairment SG&A second spin. continue million not $XX.X I should year. driven $XX $XX.X fund Brands in of the that the reoccur the quarter million the same spend strategic pace in this I'll last color income the second related million expense on of XXXX shortly. We You investment year-over-year ramp second was quarter

to not no second pro As forma debt earnings in quarter a the our the quarter, is million the last share share sheet, an increase pro earnings in $X.XX were year second have we our assigned prior interest year. Diluted forma from XXX any the year. in during reminder, was shares balance per external earnings per expense diluted in $X.XX and XXXX, there external diluted therefore, a did earnings per Please using of calculated outstanding. note share prior

As margin pace back instruments performance throughout there prior to awards nonoperational accelerating pricing and the flat XX.X% lower strategic our with held of were year quarter, margin items GAAP, strong performance to from million prior compared year to supply also volumes. EBITDA adjusted and the were under by NBC at from controls assumed Adjusted business XXX despite no there the investments. We the removing chain very $XXX.X points EBITDA the period calculate continue and strategies, cost EBITDA. it no gross compared the will of restructuring to strong our delivered due savings million initiatives half of improvements, special comparable of basis is continuous along in improvement, equity execute U.S. improvement impact very on methodically this initiatives and the continuous equity year to results margin to we while actions. We of XX.X% $XXX.X in same as expanded that period significantly adjusted separation outstanding. We last dilutive EBITDA

Our of costs, gains actuarial items, includes defined a impairment estimated separation and EBITDA net savings cost excludes restructuring asset and charges stand-alone as and adjusted definition restructuring-related company charges and benefit losses.

our at sheet. liquidity the of million We hand with debt resulting on the EBITDA end reduction. $XXX.X in a quarterly of of net to the revolver. first of ratio quarter Net $XXX from our down available leverage second adjusted quarter the Xx quarter to the million ended was on and XXXX, of balance second million, at Turning debt cash X.Xx, end $XXX.X successive

the June in terrific performance. to year. working million of X capital compared million the with as cash $XX.X flow strong flow for $XXX remains months cash invest reflects growth. Operating the plan for well XX, sheet financial last in as comparable significant balance This the XXXX, operating improvement our the Our flexibility to business in year-on-year was improvement ended operational execution period

to decrease with the million expect months our year. expect half expenditures ended for $XX.X to $XX the We second year X majority working scheduled June capital progresses. Capital to XXXX, in were continue We the XXXX, as XX, of cash for million. of now outflows the $XX to million the spend

million a cash June than This we Our million project to be improvement capital million comparable $XXX.X $XX on last to year-over-year. prior are projects guidance year. favorable months for period X however, $XXX.X believe will general the in XXXX, to is our in compared spending lower being estimates. Free was costs track; the original ended flow due XX,

flow We net of for income continue to excess in expect XXXX. free cash

program, we $XX May MasterBrand a which million of Finally, announced stock authorization of up as repurchase repurchase the may we to under X, know, stock. common you on

stock XXX,XXX of During or our of the average of quarter, at repurchased an a under this approximately $X.X cost we shares million $XX.XX program per share. common

continue to our this market servicing outlook. to the seen construction from of the and expect increased demand balance new through trend remain about customers Turning the year. optimistic our we've We the

repair and market, XXXX. remodel persist conditions For in those customers the servicing weaker anticipate we will

Additionally, the the XXXX. market will in we be of weaker believe Canadian entirety

of XXXX mid-teens down the this year-over-year. we sales backdrop, in net to second Given expect half be

but future progress to in previously fourth strong company and have the the plan us confidence note growth. an EBITDA for calendar. From adjusted it's half of build the position our normal as the on first investment standpoint, an continuous on quarter expect fiscal and that gives to developed normal X–X–X important of week We the the remainder our seasonality momentum to better-than-anticipated extra year based XXXX. in we team's stated, strategic we we the we improvement in spending The initiatives on accelerate

for to of original year a sustained to million to roughly any a $XX our $XX million, XX% This operational $XXX now half roughly to investment On spent does not revised strategic for full facility adjusted $XX first increase of expand at EBITDA to softer our ability in tornado million and margins million to of we outlook contemplate spend estimated half XXXX this for $XXX the of revised compared updated Jackson, second this to earlier our range, on year the investments bringing we the XXXX midpoint spend plan $X adjusted million the the Our damage insurance are with $XX EBITDA performance $XX prior outlook environment. This million. Based additional to in XX.X% proceeds year, XXXX at our expect $XX we XXXX, in spending, or million to adjusted in full our the now million strong EBITDA even our outlook. investment outlook range XXXX. $XX called million million to the maintain margins reflects Georgia year-on-year year. related outlook raising to

reduced XXXX approximately to maintained XXXX expense have million rate be $XX We and our XX%. $XX expected our to of anticipated tax interest million,

The Way, have deliver our performance the team in The half the XXXX. and first from system, established business tools helped strong MasterBrand principles of

Day we Dave. like that performance the position call its extend achieve last to at the with the year. And turn I'd remainder of discussed to can financial targets the Investor to long-term We are confident company that, and this through year our back

R. Banyard

an expansion margin culture. This is Way to we're The our strength developed exceptional on quarter to improvement the adjusted spending. driving deliver MasterBrand of raise momentum investment and performance. culture our full dollars outlook at XXXX The and and the EBITDA adjusted second for with first accelerate Thanks, a sales gives in The to very adjusted forward pace. we is us confidence of declining strategic half pleased continuous team's EBITDA EBITDA the maintain our our initiatives Andi. ability outstanding our Overall, and year testament

our their up work I hard than like that, and just associates for thank XX,XXX call to Q&A. And more Lastly, open at MasterBrand to the would dedication. with I'll

Operator

Instructions] Zelman from Baumgarten & Adam question Associates. Our with first [Operator comes

Adam Baumgarten

be you impact channels? guys. the still of any on How starting maybe this positive? half the pressure back the across think And at of Do pricing. it quarter, are about Nice I year? you the we pricing should of to price in point guess seeing any expect

R. Banyard

Yes. Adam. described the it's of I environment. environment back way Thanks, we're kind The pricing pricing is today to -- normal

We raised nor price we not need have do that year to. this feel we

And of different current the to about so couple what talk there's that like. normal looks aspects a I'll

first contracts as So have based, go. move off, do going customers some index they are large the with we those some to so that indexes are with and

down And of material so their I'll seeing I costs we're bit. seeing a is wanting people that We're of in market talk come do lower project. some But back, of a come cost we've moved -- down. lot those think also go there for the as a

so designer with working time think customers you of it the parts across the engineering, the sort get of standpoint. right of value of different all from And them lot configuration, spent will, as we a if into to market

price normal portfolio cabinets, pricing has the say it. a our at needs the So the move some time. And suits as their right environment promotions then you know, for of that, point folks I'd beyond that using breadth into to in

a before in like summary, use akin think but environment we way sparingly think we and generally, of -- things cases in use say, projects to I'd was we the sort COVID and we But so it's it larger price where normal to the I for that. need it inflation. that

Adam Baumgarten

line just then all for sense the able And products Do about spectrum thinking you helpful. down the points. at have much the of that offer, hit of and engineering That's it. to the declines? price you that kind guys impacted mentioned value quarter, you and Got just in least top how trade a

R. Banyard

the different affect have think give the thought I going would. the quarter, second at -- year. to I least into sense material it's It not material but full Yes. revenue it But we to in in not the it in And of we we think for number the a think number revenue year, definitely be plays it us, for anticipated we a at again, it's than really a numbers. the hit I Obviously, you. was what don't -- line. much year-over-year factor. of It's that does the we change beginning that was

think the will I year-over-year, planning and So expectations think have I how it from it's But an impact. immaterial. year, we're our

Adam Baumgarten

And Got then Okay. me. just for it. lastly

system, you many still -- have those the more facilities that onto mentioned a on from? your facility consolidating can how do get ERP you Just benefits you

R. Banyard

today. ERP system. thing we're kind bring of to talk ERP, I of data none a resources mean, really, like hazard And This key a latest technology more number to bring to them. the to these a have I'd where is But have different to because the about order rough is I massive some to system, I say, barrel But large the about the magnitude version projects unified a for very stock It's extent, but a not it look picture allows need into up of at Yes. seems that it is about, company. X we such us facilities. of to the and when you're that, amounts talking that pedestrian do X in. are of do taking to to or upgrading this that redo more lock, put the modernization

speaking, the of little clarity it. is seen to with it just of with that of That's certain I and think past being than more have move think to me, generally done that a to the the in able It I So still a we've and part data, react things ERP helps go seeing us some business kind parts the on. get accelerating. road we're map to we of do. things of But

efficient, more workarounds that. have we obviously, So that you makes for the today, do just more it things but

Operator

with Shmois Our comes Capital Markets. Loop next from question Garik

Garik Shmois

half ask, the first to to deceleration. the sequential quarter. strong just have Certainly, year. a second first, very the margin second wanted some the of half walk the with outlook Congrats you half and for I implies respect on

in Just respect in wondering what detail whether investments with relative you out call second some mix or it's if anything the I think you I to before. that moving half margin? other the to Are sequentially. seeing would costs to of drivers speak you can an you're know increase first go -- or changes, seeing into else half, any some did to

R. Banyard

if sure. you highlights generally But we I'll go. the give Yes, missed fill in to maybe Andi I some wants line. if as top The anything. be and speaking, smaller I start with will revenue

third Fourth less second typically will first So than fourth the typically is quarter lower. are be slightly quarter. or quarter quarter and lowest

on a overall volume revenue there's So profitability. impact

X holidays in flexible flex well, you week don't for they're very really do, network? on ask And you just have where of see running so kind We holidays, fourth significantly -- you inefficient of afford is accelerating and I our you were the as And had a of a plants, before do because we absorb that. an I'd impact and the I lot we that. projects that you we this Christmas guys certain are have don't to if of them, said, those can always always -- those. And we and have, like fourth I of quarter do increasing think anticipated what ones we do then times be list it's investment, first I the to from one the but question, quarter think, We and that. is

third this look back history, that to that kind you'll through you -- you'll strongest. year, through our if see we of of quarter on profitability Last So was the the second year. year. inefficiencies pattern the of you're be see This dynamic from year, going based plants some the that quarter I strongest. We're bit little time a have the will the how to think around just have on

so, that? is Andi, on anything there I missed And

Andrea Simon

No, and initiative cyclicality, it's the strategic then investments. exactly it, that's just

Garik Shmois

follow Understood. just on wanted No, equation. the that's of to up helpful. the side R&R I

down increase you're of are or said consumers by any in Outside project more seeing selective You size trade whether and the a seeing budget change that more cancellations now, conscious. being in that right chance? bit it's an you are

R. Banyard

cancellations, Yes. say wouldn't I no.

at think in this is seeing I and on more are odd you're their an of press, probably I one. that's think I mean too. the vacations with. year, dollars spending And dynamic this people we're competing this time year, the

not now. what's see people about of right redoing is the in trigger just kitchens, interested on it pulling it interesting So their they're you activity more

that long-term I it's problem. don't a So gives us pause. I think think

I think some point it's go building now. at do people they're bit eventually, want kitchen the either their they're the that up are dreaming to a or do going budgets anticipate to we little it to And bathroom. or

money setting there's of the but is that. think people I mode. So bit mean just taking out, wait-and-see up accounts a in bit consumer I like you a think also for see the home the things distraction for consumer. I And the equity loans, they're not

the I they'd talk things around And people -- our bit we're think more. and of if down are of that say you traffic a network, so the And to seeing. kinds those dealer are shopping kind is

people it. they're just thinking to waiting may be about it So that lag of a do little longer their the kitchens,

end of bit at pocket going air to just It's actual look right in we're we going got kind the come an the thought it's different we book And line in because were of to forth. towards up so last tail when today We're market parts stronger of confident going that the in and continue is happen starts builders the are to brought the of going from order market, the little of so as quarterly. to that. Again, questioning think we market. of revenue. with a year. year be for in and they talk terms where more what's Builder, we The we we than build builder the to

good the are a So again, R&R, I little for general, us. think other. fundamentals I the the think But long-term tepid trading at for we're moment. But in one is

it. And so too worried I'm not about

Garik Shmois

is on just question the you Can side. starts between and see intend remind sale? point the Last lag us to you new the Understood. construction when what at housing this is

R. Banyard

construction. come are to still down. excess under backlog continues an homes it carrying Yes, Builders of

got of pace be still generally bit a I they'll of it's to by terms the -- that that's think be starts this it. kind noise in year, end completions. But So with on in of of speaking, normalized

it's For tail be and of and have their end in, a before to happens whatever they cabinets put the time towards doors in so cycle on typically forth to house windows in. us, be. go have to Floors

is of to in was later the is build that times cabinets our out. it's tend system -- So the in. And any have our the we X/X go come lead the down, where see inventory

is So turn I I'd think pace a and we're normal book now at for kind say what that. of

get the months order a several into we start. So

Operator

Our next Cleveland from with comes Research. question Mahoney Tom

Thomas Mahoney

to and about wanted bucket quantify you? savings to that inside indexes the flow as like inventory talked do input I are Can for second input And what you ease anticipate cost what costs material through lower. moving quarter? the of you cost you ask, looks

R. Banyard

I'd not Yes, quantify -- we're specifically. say going to don't we

[ general, cost you about about Our of sales of -- of material you. half in give best (sic) can know, cost is That's sales I XX% ]. the

Andrea Simon

of cost of sales. XX%

R. Banyard

that first in the half, much in the did why quarter. half inventory, cost cash invested did that's And The terms we we than strong the an that we organization you as last of they the I'll job know, supply chain moment here in year. amazing Sorry, flow amazing -- you in of the through working XX% to take Thanks, this an job in inventory first that of of of Andi. say and MasterBrand had sales. see within quicker year expected,

for way And what closer position where yet, our now It's not costs so there balance in is incoming we're are normal. but to inventory where paying we're on with a inventory getting new inventory. our I all the think

inventory. was past what more expensive we're if you think of I will, bubble, So the

In cost to continued has prior down. but we're material, material costs to the to of terms for not certainly back sequentially inflation-type come total difference,

Thomas Mahoney

Okay. And was to relative about that the And linked that waters the the there XXXX other down then how view? I question the backlog accelerating of you going how investment the in an view the you're updated to wanted pulling forward then market relative ask working I know do growth to muddied can buckets issue there. you incremental talk was growth are market? to forward of

R. Banyard

absolutely. Yes,

think still done the we have quarter year. still of not backlog the second by It that work it I to wasn't last So -- was end period through.

third that in backlog is to is So a be particular, of there. not going chunk quarter, big

the QX year to the decline So biggest comparing of year. is QX last going be that's of to

In we're the initiatives I'd par probably say work market terms with is the XXXX. on backlog probably out. of if year, really, growth centered on take on these you portion market, that this we're doing the more that And

don't customer of we're yet. and initiatives. that are have not consumer-facing -- Some And these we completed type

is But really any of until normal beyond one, about share every there's continuing the And do value I'd by -- day. strong which what they're we're and not and completed, that growth. to so think they're going the generate proposition, that, a excited going we the them. And to outsized kind selling winning call we're

big the a change P&L growth into is come the to you initiatives with we've to little tend large think builder longer there with retailers, all I take at when with that. think I the successful our types to our So our across trying program customers, and we're wins goal parts day been win over. But business. of of every grow a out to Those share,

of get And for that's so them year win, of spend that. we growth take some take prudent them because and develop. think take us to money takes that when time you time over it because you're why building that change this to some it's of time to more go the after to initiatives to to But time

go So XXXX. ready really we're to in

Thomas Mahoney

had quarter, didn't continue, then wholesale think that revenue moving second customers recur, the the continue? recur, pieces didn't that did And first quarter. of there any some around Was restocking the highlighted benefited quarter maybe in you channel I Great. in in builder facing the

R. Banyard

Yes.

remember number -- it be think in the that might think through period. of our I network. correctly, that flip -- builder they a a that serve I distribution through we I destocking of And if were maybe building customers

was QX there big a was So and QX. -- into that

that's it So opposite -- here. of I the perhaps think it's of sort you're how portraying

and what now. mode We're say as we So of a of deliver the say of in started, kind I'd order I'd couple it weeks. within we're out then within houses that couple a no, of we months, get get

So market of I'd orders normal the construction our say we're and in in a for is delivery. pace new terms what

Operator

I'll we Farand the the hand over questions Pawlak to call today. all That's again. have

Farand Pawlak

appreciate interest our Thank you, future. for forward thank call. operator, and speaking your and We you us. This in everyone, to concludes the joining you, look to

Operator

conference. today's concludes This

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

MasterBrand (MBC) 8 Aug 232023 Q2 Earnings call transcript