Q4 2024 GMS Inc Earnings Call

Okay.

Operator: Greetings and welcome to the GMS, Inc. Fourth Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Operator: Greetings and welcome to the GMS Inc. 4th quarter fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Greetings and welcome to the G. M S Inc. Fourth quarter fiscal year 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your.

Operator: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Your telephone keypad.

Operator: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carey Phelps. Thank you, Ms. Phelps.

A reminder, this conference is being recorded.

Carey Phelps: It is now my pleasure to introduce your host, Carey Phelps.

It is now my pleasure to introduce your host Carey Phelps. Thank you MS helps you may begin.

Carey Phelps: Thank you, Miss Folks, you may begin. Thank you, Kat. Good morning, and thank you for joining us for the GMS earnings conference call for the 4th quarter and full year fiscal 2024. I am joined today by John Turner, President and Chief Executive Officer, and Scott Deakin, Senior Vice President and Chief Financial Officer. In addition to the press release issued this morning, we have posted PowerPoint slides to accompany this call in the investor section of our website at www.gms.com.

Carey Phelps: You may begin. Thank you, Kat. Good morning, and thank you for joining us for the GMS Earnings Conference Call for the fourth quarter and full year, fiscal 2024. I am joined today by John Turner, President and Chief Executive Officer, and Scott Deakin, Senior Vice President and Chief Financial Officer. In addition to the press release issued this morning, we have posted PowerPoint slides to accompany this call in the investor section of our website at www.gms.gov.

Kat: Thank you Kat good morning, and thank you for joining us for the G. M. S earnings conference call for the fourth quarter and full year fiscal 2024.

I am joined today by John Turner, President and Chief Executive Officer, and Scott Deakin, Senior Vice President and Chief Financial Officer.

Kat: In addition to the press release issued this morning, we have posted Powerpoint slides to accompany this call in the investors section of our website at Www Dot <unk> Dot com.

Carey Phelps: Now looking at slide 2, on today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risk of uncertainty, many of which are beyond our control and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent management's current estimates and expectations. The company assumes no obligation to update any forward-looking statements in the future. With those, are encouraged to review the more detailed discussions related to these forward-looking statements contained in the company's filings with the SEC, including the risk factors section in the company's 10-K and other periodic reports.

Carey Phelps: Now looking at slide 2, on today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risk and uncertainty, many of which are beyond our control, and may cause actual results to differ from those discussed today. As a reminder, forward-looking statements represent management's current estimates and expectations. The company assumes no obligation to update any forward-looking statements in the future.

Speaker Change: Now looking at slide two on todays call managements prepared remarks and answers to your questions may contain forward looking statements as defined in the private Securities Litigation Reform Act of 1995.

Speaker Change: Forward looking statements address matters that are subject to risks and uncertainties many of which are beyond our control and may cause actual results to differ from those discussed today.

Speaker Change: As a reminder, forward looking statements represent managements current estimates and expectations. The company assumes no obligation to upload update any forward looking statements in the future.

Carey Phelps: Listeners are encouraged to review the more detailed discussions related to these forward-looking statements contained in the company's filings with the SEC, including the risk factors section in the company's 10-K and other periodic reports. Today's presentation also includes a discussion of certain non-GAAP measures. The definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides.

Speaker Change: Listeners are encouraged to review the more detailed discussions related to these forward looking statements contained in the company's filings with the SEC, including the risk factors section in the company's 10-K and other periodic reports.

Carey Phelps: Today's presentation also includes a discussion of certain non-GAAP measures. The definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides. Please note that references on this call to the fourth quarter of fiscal 2024 relate to the quarter ended April 30, 2024.

Speaker Change: Today's presentation also includes a discussion of certain non-GAAP measures.

Speaker Change: Definitions and reconciliations of these non-GAAP measures are provided in the press release and presentation slides.

Carey Phelps: Please note that references on this call to the fourth quarter of fiscal 2024 refer to the quarter ended April 30, 2024. Finally, once we begin the question and answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up. With that, I'll turn the call over to John Turner, whose discussion will begin on slide three. Thank you, Carey. Good morning, and thank you all for joining us today.

Speaker Change: Please note that references on this call for the fourth quarter of fiscal 2024 relates to the quarter ended April 30th 2024.

Carey Phelps: Finally, once we begin the question-and-answer session of the call, in the interest of time, we kindly request that you limit yourself to one question and one follow-up. With that, I'll turn the call over to John Turner, whose discussion will be starting on slide 3. JT.

Speaker Change: Finally, once we begin the question and answer session of the call in the interest of time, we kindly request you limit yourself to one question and one follow up.

Speaker Change: With that I'll turn the call over to John Turner for his discussion will be starting on slide three J P.

John Turner: Thank you, Carrie.

Carrie: Thank you Carrie.

John Turner: Good morning, and thank you all for joining us today. Volume growth across all four of our major product categories for the year, as well as resilient pricing and wallboard and continued inflation and ceilings and complimentary products, helped drive a record $5.5 billion in net sales and $5.3 billion in organic sales for the full year fiscal 2024. Benefiting from our balanced end markets, continuing demand in multi-family and solid levels of commercial activity helped to offset a more challenging single-family backdrop as compared with the year before. Looking at just our fourth quarter results, considering the significant steel pricing and associated margin headwinds, which accelerated particularly late in the quarter.

John C. Turner: Volume growth across all four of our major product categories for the year, as well as resilient pricing in wallboard and continued inflation in ceilings and complementary products, helped drive a record $5.5 billion in net sales and $5.3 billion in organic sales for the full year of fiscal 2024. Benefiting from our balanced end markets, continuing demand for multifamily, and solid levels of commercial activity help to offset a more challenging single-family backdrop as compared with the year before.

John C. Turner: Good morning, and thank you all for joining us today.

Volume growth across all four of our major product categories for the year as well as the resilient pricing in wallboard and continued inflation in ceilings and complimentary products helped drive a record $5 $5 billion in net sales and $5 $3 billion and organic sales for the full year fiscal 2024.

John C. Turner: Benefiting from our balanced end market.

John C. Turner: I mean demand in multifamily and solid levels of commercial activity helped to offset a more challenging single family backdrop as compared with the year before.

John C. Turner: Looking at just our fourth quarter, considering the significant steel pricing and associated margin headwinds, which accelerated particularly late in the quarter, we closed out fiscal 2024 with another solid level of performance, including generating net sales of $1.4 billion, net income of $56.4 million, and adjusted EBITDA of $146.6 million. Cash flow generation was strong, with $204.2 million of cash from operations, and 186.7 million of Free Cash Flow.

Speaker Change: What can you just our fourth quarter results, considering the significant steel pricing and associated margin headwinds, which accelerated particularly late in the quarter.

John Turner: We closed out fiscal 2024 with another solid level of performance, including generating net sales of $1.4 billion, net income of $56.4 million, and adjusted EBITDA of $146.6 million. Cash flow generation was strong with $204.2 million of cash from operating activities and $186.7 million of free cash flow. As with our full year results, we delivered 4.4 volume across all four of our major product categories, albeit at a much slower rate for steel in April than expected, particularly for multi-family applications. Single family, however, began to turn favorably, and for the first time since the fall of 2022, wallboard volumes for this sector were up year over year for the quarter.

Speaker Change: We closed out fiscal 'twenty 'twenty four with another solid level of performance, including generating net sales of $1 $4 billion net income of $56 $4 million and adjusted EBITDA of $146 $6 million.

Cash flow generation was strong with $204 $2 million cash from operating activities.

Speaker Change: $186 7 million of free cash flow.

John C. Turner: As with our full-year results, we delivered fourth-quarter volume across all four of our major product categories, albeit at a much slower rate for steel in April than expected, particularly for multi-family out. Single-family, however, began to trend favorably. And for the first time since the fall of 2022, wallboard volumes for this sector were up year over year for the quarter. And although our fourth quarter average World War price was down slightly year over year, mostly due to mix, prices were flat sequentially.

Speaker Change: As with our full year results, we delivered fourth quarter volume across all four of our major product categories, albeit at a much slower rate for steel in April than they expected, particularly for multifamily applications.

Speaker Change: Aw family, However began to trend favorably and for the first time since the fall of 2022 wallboard volumes for this sector were up year over year for the quarter.

John Turner: And although our fourth quarter average wallboard price was down slightly year over year, mostly due to mix, prices were flat sequentially, and in the coming months, we expected benefit from implementation of the previously announced manufacturer pricing actions. Consistent with the typical three to six month lag, we traditionally see for wallboard price realization. As we move into fiscal 2025, we believe we are prepared for what we expect to be an environment of changing and market dynamics once again. First, although temporarily hindered by the current mortgage rate environment and record high home prices, significant pent-up demand remains for single-family housing, which provides confidence for the medium to long term.

Speaker Change: And although our fourth quarter average wallboard price was down slightly year over year, mostly due to mix prices were flat sequentially and in the coming months, we expect to benefit from implementation of the previously announced manufacturer pricing actions consistent with the typical three to six months lag we traditionally see for wallboard.

John C. Turner: And in the coming months, we expect to benefit from implementation of the previously announced Manufacturer Pricing Act, consistent with the typical three- to six-month lag we traditionally see for wall-board price realization. As we move into fiscal 2025, we believe we are prepared for what we expect to be an environment of changing and market dynamics once again. First, although temporarily hindered by the current mortgage rate environment and record-high home prices.

Speaker Change: Realization.

Speaker Change: As we move into fiscal 2025, we believe we are prepared for what we expect to be an environment of changing end market dynamics once again.

Speaker Change: First although temporarily hindered by the current mortgage rate environment and record high home prices significant pent up demand remains for single family housing.

John C. Turner: Significant pent-up demand remains for single-family houses, which provides confidence for the medium to long term. Through April, single-family starts were up almost 26% calendar year-to-date as compared with a year ago. Therefore, we expect to see continued moderate year-over-year improvement for this end market in the near term, followed by a more robust recovery thereafter with what we expect will be an eventual downward shift in interest. For multifamily, the demand environment was exceptionally strong for fiscal 2024 as compared to the prior year.

Speaker Change: Which provides confidence for the medium to long term.

John Turner: Through April, single-family starts, we're up almost 26% calendar year's date, as compared with a year ago. Therefore, we expect to see continued moderate year-over-year improvement for this end market in the near term, followed by a more robust recovery thereafter, with what we expect will be an eventual downward shift in interest rates. For multi-family, the demand environment was exceptionally strong for fiscal 2024 as compared to the prior year. However, given the significant decline in starts last year, this end market has likely peaked, and we believe it will plateau as we serve the remaining backlog over the next quarter or so before we see a notable decline in activity levels during the back half of our fiscal year.

Speaker Change: Through April single family starts were up almost 26% calendar year to date as compared with a year ago. Therefore.

Speaker Change: Therefore, we expect to see continued moderate year over year improvement for this end market in the near term followed by a more robust recovery thereafter, with what we expect will be an eventual downward shift in interest rates.

Speaker Change: For multifamily the demand environment was exceptionally strong for fiscal 2024 as compared to the prior year. However.

John C. Turner: However, given the significant decline in starts last year, this end market has likely peaked, and we believe it will plateau as we serve the remaining backlog over the next quarter or so before we see a notable decline in activity levels during the back half of our fiscal year, at approximately 15% of our sales. We expect that the pace of declines will be particularly given the expectation for offsetting demand improvement in single-family construction.

Speaker Change: However, given the significant decline in starts last year. This end market is likely peaked and we believe it will plateau as we serve the remaining backlog over the next quarter or so before we see a notable decline in activity levels during the back half of our fiscal year.

John Turner: At approximately 15% of our sales, we expect that the pace of declines will be manageable, particularly given the expectation for offsetting demand improvement in single-family construction. Finally, commercial construction activity remains solid during fiscal 2024, with a number of mega projects underway, as well as still-attracted demand in certain sub-sectors. Primarily, data centers, reshoring related and stimulus-driven projects, education, and health care. However, with put in place sending flattening and new commercial starts declining, financing availability and cost, coupled with labor constraints, and other inflationary pressures, appeared to be headwinds broadly. In this environment, we would expect a mixed demand profile by sector, as some commercial applications will likely be pressured, while others still have favorable support.

Speaker Change: At approximately 15% of our sales we would expect that the pace of declines will be manageable, particularly given the expectation for offsetting demand improvement in single family construction.

John C. Turner: Finally, commercial construction activity remained solid during fiscal 2020, with a number of megaprojects underway, as well as still attractive demand in certain subsectors, primarily data centers, reshoring related and stimulus-driven projects, education, and healthcare. However, with put in place spending flattening and new commercial starts declining, financing availability and cost, coupled with labor constraints and other inflationary pressures, appear to be headwinds, broadly.

Speaker Change: Finally, commercial construction activity remains solid during fiscal 2024 with a number of mega projects underway as well as still attracted demand in certain sub sectors, primarily data centers reassuring related and stimulus driven projects education and health care.

Speaker Change: However, we've put in place spending flattening and new commercial starts declining.

Speaker Change: Financing availability and cost coupled with labor constraints and other inflationary pressures.

Speaker Change: Here to be headwinds broadly.

John C. Turner: In this environment, we would expect a mixed-demand profile by sector, as some commercial applications will likely be pressured, while others still have favorable support. As an indication of this varied environment, steel framing demand softened late in the fourth quarter more than we had previously anticipated, both in terms of volume and price. However, more recently, most of the leading steel framing manufacturers have announced pricing, positive indicators for at least a flattening of recent deflationary pressures in the coming quarter.

Speaker Change: In this environment, we would expect a mixed demand profile by sector as some commercial applications will likely be pressure, while others still have favorable support.

John Turner: As an indication of this very environment, steel framing demands, often late in the fourth quarter, more than we had previously anticipated, both in terms of volume and price. However, more recently, most of this leading steel framing manufacturers have announced pricing. Creses, positive indicators for at least a flattening of recent deflationary pressures in the coming quarters. This dynamic backdrop of end markets brings to light the benefits of our balanced customer base, with a revenue mix that is today roughly 50/50 commercial and residential. While still constrained in the near term, we believe that improvements in single-family construction will help to offset the challenges facing the multi-family and commercial end markets.

As an indication of this very environment steel framing demand softened late in the fourth quarter more than we had previously anticipated both in terms of volume and price.

Speaker Change: However, more recently most of this leading steel framing manufacturers have announced price increases positive indicators for at least a flattening of recent deflationary pressures in the coming quarters.

John C. Turner: This dynamic backdrop of end markets brings to light the benefits of our balanced customer base, with a revenue mix that is today roughly 50-50 commercial and residential. While still constrained in the near term, we believe that improvements in single-family construction will help to offset the challenges facing the multifamily and commercial environments, and all of these markets will ultimately benefit from relief in financing rates and availability when that occurs. I would like to thank the entire GMS team for their continued commitment to delivering outstanding service and adding value for our customers.

Speaker Change: This dynamic backdrop of end markets brings to light the benefits of our balanced customer base with a revenue mix that is today, roughly 50 50 commercial and residential.

Speaker Change: While still constrained in the near term, we believe that improvements in single family construction will help to offset the challenges facing the multifamily and commercial end markets and all of these markets will ultimately benefit from relief and financing rates and availability when that occurs.

John Turner: And all of these markets will ultimately benefit from relief in financing rates and availability when that occurs.

John Turner: I would like to thank the entire GMS team for their continued commitment to delivering outstanding service and adding value for our customers. Through their efforts, we continue to flex our operations to successfully navigate the changing times of customer demand.

Speaker Change: I would like to thank the entire G and F team for their continued commitment to delivering outstanding service and adding value for our customers through their efforts, we continue to flex our operations to successfully navigate the changing tides of customer demand.

John C. Turner: Through their efforts, we continue to flex our operations to successfully navigate the changing tides of customer demand. Turning now to slide four, I'm very pleased to highlight that GMS continues to improve as we grow, and fiscal 2024 was another year of progress as our team executed with focus against our strategic pillar. We successfully expanded our share of U.S. wallboard sales by close to 80 basis points during the year when comparing our shipments to those reported by the chips and manufacturers where the 12-month ended March 31, 2024, the closest proxy we have to our fiscal year.

John Turner: Turning now to slide four, I'm very pleased to highlight that GMS continues to improve as we grow, and fiscal 2024 was another year of progress, as our team executed with focus against our strategic pillars. We successfully expanded our share of U.S. Wallboard sales by close to 80 basis points during the year, with comparing our shipments to those reported by the chips and manufacturers for the 12 months ended March 31, 2024. The closest proxy we have to our fiscal year. Likewise, in steel, for that same time period, we gained approximately 130 basis points of share, as reported by the Steel Framing Industry Association.

Speaker Change: Turning now to slide four I'm very pleased to highlight the Gms continues to improve as we grow in fiscal 2024 was another year of progress as our team executed with focus against our strategic pillars.

Speaker Change: We successfully expanded our share of U S. Wallboard sales by close to 80 basis points during the year when comparing our shipments to those reported by the gypsum manufacturers for the 12 months ended March 31, 2024, the closest proxy we have to our fiscal year.

John C. Turner: Likewise, in steel, for that same time period, we gained approximately 130 basis points of share, as reported by the Steel Framing Industry Association. And based upon available public disclosures from ceilings manufacturers, our share grew in this product space again in fiscal 2024. In total, and particularly in the higher-end architectural specialty, our service model, commitment to job site safety, and our expertise in every end market we serve, as well as our intentional effort to deepen our customer relationships and use technology to be faster and easier to work with, all contributed to our success this year. Our complementary products grew this past year by 7.4%. And in our key areas of focus, eaves and stucco, tools and fasteners, and insulation, we grew 11.5%.

Speaker Change: Likewise in steel for that same time period, we gained approximately 130 basis points of share as reported by the steel framing industry Association.

John Turner: And based upon available public disclosures from ceiling manufacturers, our share grew in this product space again in fiscal 2024, in total, and particularly in the higher-end architectural specialty products. Our service model, commitment to job site safety, and our expertise in every end market we serve, as well as our intentional effort to deepen our customer relationships and use technology to be faster and easier to work with, all contributed to our success this year. Our complimentary products grew this past year by 7.4%. In our key areas of focus, EPS and stucco, tools and fasteners, and insulation, we grew 11.5%.

Speaker Change: And based upon available public disclosures from feelings manufacturers our share grew in this product space again in fiscal 2024 in total and particularly in the higher end architectural specialties products.

Speaker Change: Our service model commitment to job site safety and our expertise in every end market, we serve as well as our intentional effort to deepen our customer relationships and use technology to be faster and easier to work with all contributed to our success this year.

Our complementary products grew this past year by seven 4% and in our key areas of focus keeps in stucco tools and fasteners and installation we grew 11, 5%.

John Turner: These outstanding results are doing many respects to those same things driving our core share, but are also due to our expanded sales organization, center-led purchasing programs, and the synergistic leveraging of acquired company expertise across the legacy business, while the newly acquired businesses benefit from GMS' systems and scale. We remain committed to both organic and equitably growth in the strategically critical complimentary product space.

John C. Turner: These outstanding results are due in many respects to those same things driving our core share, but they are also due to our expanded sales organization, Center-Led Purchasing Programs, and the synergistic leveraging of acquired company expertise across the legacy business. While the newly acquired businesses benefit from GMS's systems and scale, we remain committed to both organic and acquisitive growth in strategically critical complementary products. M&A has been and continues to be a key strategic driver of our growth.

Speaker Change: These outstanding results argue in many respects so those same things driving our core share but are also due to our expanded sales organization center land purchasing programs and the synergistic leveraging of acquired company expertise across our legacy business, while the newly acquired businesses benefits from Gms to systems and scale.

Speaker Change: We remain committed to both organic and acquisitive growth in the strategically critical complementary product space.

John Turner: M&A has been and continues to be a key strategic driver of our growth. This past year was no exception, as we acquired home lumber and building supplies, which expanded our presence and complimentary product offerings in Western Canada. AMW Construction Supply, which expanded our complimentary tools and fasteners in Phoenix, Arizona, and CAMCO Supply Cooperation, which provided us with one of the leading market positions in New York City, the largest MSA where we lack significant presence prior to this transaction. Also, subsequent to the end of our fiscal year, we announced the smaller acquisition of Howard & Sons to supplement our operations in Southern California, and our agreement to purchase Yvonne Building Supplies and other affiliated companies in Ontario, Canada, which we expect to close next month.

Speaker Change: M&A.

Speaker Change: Has been and continues to be a key strategic driver of our growth.

John C. Turner: This past year was no exception, as we acquired home lumber and building supplies, which expanded our presence and complementary product offerings in Western Canada; AMW Construction Supply, which expanded our complementary tools and fasteners in Phoenix, Arizona; and CAMCO Supply Corporation, which provided us with one of the leading market positions in New York City, the largest MSA where we lacked a significant presence prior to this transition.

Speaker Change: This past year was no exception.

Speaker Change: We acquired home lumber and building supplies, which expanded our presence in complementary product offerings in Western Canada.

Speaker Change: M W construction supply, which expanded our complementary tools and fasteners in Phoenix, Arizona, and Kimco supply Corporation, which provided us with one of the leading market positions in New York City, the largest MSA, where we lacked a significant presence prior to this transaction.

John C. Turner: Also, subsequent to the end of our fiscal year, we announced a smaller acquisition of Howard & Sons to supplement our operations in Southern California and our agreement to purchase Yvonne Building Supplies and other affiliated companies in Ontario, Canada, which we expect to close next month. We look forward to being able to welcome the Yvonne team and adding their seven locations to our portfolio to better serve the Ontario market. Our current Canadian operations generated approximately 13% of our total net sales during fiscal 2024, and of that, more than half of those sales were for complementary products, which tend to be margin accretive to the overall business.

Speaker Change: Also subsequent to the end of our fiscal year, we announced the smaller acquisition that Howard and sons to supplement our operations in Southern California, and our agreement to purchase the bond building supplies and other affiliated companies in Ontario, Canada, which we expect to close next month.

John Turner: We look forward to being able to welcome the Yvonne team and adding their seven locations to our portfolio to better serve the Ontario market. Our current Canadian operations generated approximately 13% of our total sales during fiscal 2024, and of that, more than half of those sales were in complimentary products, which tend to be margined accretive to the overall business. In addition to our more traditional acquisition targets in the United States, the substantial whitespace still available for us in Canada, we expect to continue to pursue additional margin-enhancing opportunities like the pending Yvonne transaction.

Speaker Change: We look forward to being able to welcome the bond team and adding their seven locations to our portfolio to better serve the Ontario market.

Speaker Change: Our current Canadian operations generated approximately 13% of our total net sales during fiscal 2024 and of that more than half of those sales were in complementary products, which tend to be margin accretive to the overall business.

John C. Turner: In addition to our more traditional acquisition targets in the United States, with substantial white space still available for us in Canada, we expect to continue to pursue additional margin-enhancing opportunities like the pending Yvonne transaction. Our Yard of the Future initiatives also took steps forward during Fiscal 2020. For example, we have now completed the installation of yard-wide Wi-Fi and added tablets in 85% of our yards.

Speaker Change: In addition to our more traditional acquisition targets in the United States with substantial white space still available for us in Canada, we expect to continue to pursue additional margin enhancing opportunities like depending of the AWN transaction.

John Turner: Our yard of the future initiatives also took steps forward during fiscal 2024. For example, we have now completed the installation of yard-wide Wi-Fi and added tablets in 85% of our yards where doing so makes sense. With varying degrees of adoption so far, now that we have all of the tools in place, fiscal year 25 will be the year of further operational progression of this paperless picking and loading technology. Where we have completed the necessary entity and data consolidations, we have simplified our back-of-house teams and processes and are working to implement more advanced ERP embedded purchasing capabilities.

Speaker Change: Our yard to the future initiatives also took steps forward during fiscal 'twenty 'twenty. Four for example, we have now completed the installation of yard wide Wi Fi and added tablets in the 85% of our yards where doing so it makes sense with varying degrees of adoption. So far now that we have all of the tools in place fiscal year 'twenty five.

John C. Turner: We're doing so makes, with varying degrees of adoption so far, now that we have all of the tools in place, fiscal year 25 will be the year of further operational progression of this paperless picking and loading technology. Where we have completed the necessary entity and data consolidations, we have simplified our back-of-house teams and processes, and are working to implement more advanced ERP-embedded purchasing capabilities. We've seen improved service and inventory momentum, which contributed to the free cash flow success we achieved in both our fiscal fourth quarter and the full year.

Speaker Change: Will be the year of further operational progression of this paperless picking and loading technology.

Speaker Change: Where we have completed the necessary entity and data consolidations, we have simplified our back of house teams and processes and are working to implement more advanced ERP embedded purchasing capabilities.

John Turner: We've seen improved service and inventory multi-dimensional results, which contributed to the free cash flow success we achieved in both our fiscal fourth quarter and in the full year. We expect to complete our entity consolidation and the associated process, organization, and data simplification of our various divisions by the end of calendar 2025 and expect to see cost and productivity benefits as we continue these efforts.

Speaker Change: We've seen improved service and inventory momentum as a result, which contributed to the free cash flow success, we achieved in both our fiscal fourth quarter and the full year.

John C. Turner: We expect to complete our entity consolidation and the associated process, organization, and data simplification of our various divisions by the end of calendar 2025 and expect to see cost and productivity benefits as we continue. And finally, we are making progress as we promote the value of our direct e-commerce platform to our customers. While adoption continues to evolve, we are seeing usage increase in many areas. For example, more than 70% of our customers created online accounts by fiscal year-end 2024.

Speaker Change: We expect to complete our entity consolidation and the associated process organization and beta simplification of our various divisions by the end of calendar 2025, and expect to see cost and productivity benefits as we continue these efforts.

John Turner: And finally, we are making progress as we promote the value of our direct e-commerce platform to our customers. While adoption continues to evolve, we are seeing usage increase in many areas. For example, more than 70% of our customers had created online accounts by fiscal year end 2024. And as such, we have seen increases in web orders and activity. Importantly, as at the end of fiscal 2024, the percentage of payments we are receiving through our integrated online customer portal is now approaching 20% each month, making it easier for our customers and saving the company both time and money.

Speaker Change: And finally, we are making progress as we promote the value of our direct e-commerce platform to our customers.

Speaker Change: While adoption continues to evolve we are seeing usage increase in many areas.

Speaker Change: For example, more than 70% of our customers have created online accounts by fiscal year end 2024, and as such we have seen increases in web orders and activity importantly, as at the end of fiscal 2024, the percentage of payments, we are receiving through our integrated online customer portal is now approaching 20.

Scott M. Deakin: And as such, we have seen increases in web orders and activity. Importantly, as of the end of fiscal 2024, the percentage of payments we are receiving through our integrated online customer portal is now approaching 20% each month, making it easier for our customers and saving the company both time and money. Collectively, all of the productivity initiatives we have underway are intended to help preserve and drive additional profits and make it easier to do business.

Speaker Change: Percent each month, making it easier for our customers and saving the company both time and money.

John Turner: Collectively, all of the productivity issues we have underway are intended to help preserve and drive additional profits and make it easier to do business with us. We continue to become better operators and reducing complexity in the business with the objective of providing greater value to all of our stakeholders.

Speaker Change: Collectively all of the productivity initiatives. We have underway are intended to help preserve and drive additional profit and make it easier to do business with us we continue to become better operators and reducing complexity in the business with the objective of providing greater value to all of our stakeholders.

Scott M. Deakin: We continue to become better operators and reduce complexity in the business with the objective of providing greater value to all of our stakeholders. With that, I will turn the call over to Scott. Thank you, J.T., and good morning, everyone.

Scott Deakin: With that, I will turn the call over to Scott. Thank you, JT. Starting with slide five, net sales for our fiscal fourth quarter increased 8.4% or 6.7% on a per day basis to $1.4 billion. The volume growth across our major product categories helped to offset price deflation, notably including an estimated $29 million for steel. Assuming current year volumes have been sold at prior year prices. Commercial and multi-family activity levels remain solid for the quarter, while single family turn the corner with positive year-over-year growth and demand. Our recent acquisitions, such as CAMCO, EMJ, and AMW, also contributed positively to our quarter's top line result.

Speaker Change: With that I will turn the call over to Scott.

Scott: Thank you J T and good morning, everyone.

Scott M. Deakin: Starting with slide five, net sales for our fiscal fourth quarter increased 8.4%, or 6.7% on a per day basis, to $1.4 billion, with volume growth across our major product categories helped to offset price deflation, notably including an estimated $29 million for steel, assuming current year volumes have been sold at prior year prices. Commercial multi-family activity levels remain solid for the quarter, while single-family turned the corner with positive year-over-year growth and demand Our recent acquisitions, such as CAMCO, EMJ, and AMW, also contributed positively to our quarter's top-line results.

Scott: Starting with slide five net sales for our fiscal fourth quarter increased eight 4%.

Scott: Or six 7% on a per day basis to $1 $4 billion with volume growth across our major product categories helped to offset price deflation, notably, including an estimated $29 million for steel.

Scott: The current year volumes have been sold at prior year prices.

Scott: Commercial multifamily activity levels remained solid for the quarter, while single family turned the corner with positive year over year growth in demand.

Scott: Our recent acquisitions, such as Kimco E N J N I M. W. Also contributed positively to our quarter's topline results.

Scott Deakin: Organically, consolidated sales grew 4%, or 2.4% on the same day basis, compared to the fourth quarter of fiscal 2023. From a USN market perspective, commercial sales dollars grew 6% year-over-year on a per day basis, despite continued and greater than expected deal price depletion. Single family sales showed more improvement, with the year-over-year comparison turning positive for the first time since the fall of calendar 2022. The 2.8% growth per day is compared to the fourth quarter of fiscal 2023. Multi-family activity also remained solid, particularly in wallboard, but a little slower overall than we had anticipated, principally on steel volumes. The 2.4% growth per day in sales dollars has compared to the robust fourth quarter a year ago.

Scott M. Deakin: Organically, consolidated sales grew 4%, or 2.4% on a same-day basis, compared to the fourth quarter of fiscal 2023. From a USN market perspective, commercial sales dollars grew 6% year over year on a per day basis, despite continued and greater than expected steel price deflation. Single-family sales showed marked improvement, with the year-over-year comparison turning positive for the first time since the fall of calendar 2022, with 2.8% growth per day as compared to the fourth quarter of fiscal 2023.

Scott: Organically consolidated sales grew 4% or two 4% on a same day basis compared to the fourth quarter of fiscal 2023.

From a U S end market perspective, commercial sales dollars grew 6% year over year on a per day basis, Despite continued and greater than expected steel price deflation.

Scott: Single family sales showed marked improvement with a year over year comparisons turning positive for the first time since the fall of calendar 2022.

Scott: With two 8% growth per day as compared to the fourth quarter of fiscal 2023.

Scott: Multifamily activity also remained solid, particularly in wallboard, but a little slower overall than we had anticipated principally on steel volumes with two 4% growth per day in sales dollars as compared to the robust fourth quarter a year ago.

Scott M. Deakin: Multifamily activity also remained solid, particularly in wall board, but a little slower overall than we had anticipated, principally on steel volume, with 2.4% growth per day in sales dollars as compared to the robust fourth quarter a year ago. Wall Board sales dollars of $586 million were up 7.6% over the same period last year or 5.9% on a per day basis, with multifamily volumes of 5.4% and commercial volumes of 8.7%. As expected, single family volumes also turned positive for the first time since the quarter of fiscal 2023, with wall board volume growth per day of 7.6% as compared with the fourth quarter last year.

Scott Deakin: Wallboard sales dollars of $586 million were up 7.6% over the same period last year or 5.9% on a per day basis, with multi-family volumes of 5.4% in commercial volumes of 8.7%. As expected, single-family volumes also turned positive for the first time since the quarter of fiscal 2023, with wallboard volume growth per day of 7.6% as compared with a fourth quarter last year. Organically, fourth quarter wallboard sales were up 6% compared with the prior year period or 4.3% on a per day basis, comprised of a 6.3% increase in volume, partially offset by a 1.9% decline in price and mix. A single-family board provided a greater portion of our sales this quarter.

Scott: Wallboard sales dollars or $586 million were up seven 6% over the same period last year or five 9% on a per day basis.

Scott: With multifamily volumes up five 4% and commercial volumes up eight 7%.

Scott: As expected single family volumes also turn positive for the first time since the quarter of fiscal 2023 with wallboard volume growth per day, a seven 6% as compared with the fourth quarter last year.

Scott M. Deakin: Organically, fourth-quarter wallboard sales were up 6% compared with the prior year period, or 4.3% on a per day basis, comprised of a 6.3% increase in volume, partially offset by a 1.9% decline in price and mix. A single family board comprised a greater portion of our sales this quarter. As expected, given the various supply-side dynamics, wallboard pricing remained resilient throughout calendar year 2023, despite the year-over-year slowdown in the single-family market.

Scott: Organically fourth quarter wallboard sales were up 6% compared with the prior year period or four 3% on a per day basis comprised of a six 3% increase in volume, partially offset by a one 9% decline in price and mix.

Scott: The single family Board comprised a greater portion of our sales this quarter.

Scott Deakin: As expected, given the various supply-side dynamics, wallboard pricing remained resilient throughout calendar year 2023, despite the year-over-year slowdown in the single-family market. For our fiscal fourth quarter, the average-realized wallboard price of $475.000 per-thousand square feet is up slightly from the third quarter, but down 1.3% from the same period a year ago. As the outperformance and single-family wallboard volumes led to a greater mix shift toward the less expensive pool used in that end-market construction. Moreover, as we said in past quarters, we would typically expect a lag between announced manufacturer price increases and our realization of those prices in the market.

Scott: As expected given the various supply side dynamics wallboard pricing remained resilient throughout calendar year 2023, despite the year over year slow down in the single family market.

Scott M. Deakin: For our fiscal fourth quarter, the average realized wallboard price of $475 per thousand square feet was up slightly from the third quarter, but down 1.3 percent from the same period a year ago, as the outperformance in single-family wallboard volumes led to a greater mix shift toward the less expensive board used in that end market's construction. Moreover, as we've said in past quarters, we would typically expect a lag between announced manufacturer price increases and our realization of those prices in the market. As such, our teams are still in the process of implementing the increases announced earlier this calendar year.

Scott: For our fiscal fourth quarter, the average realized wallboard price of $475 per thousand square feet was up slightly from the third quarter, but down one 3% from the same period a year ago.

Scott: The outperformance in single family Wallboard volumes led to a greater mix shift towards the less expensive for us net end markets construction.

Scott: Moreover, as we said in past quarters, we would typically expect a lag between announced manufacturer price increases and our realization of those prices in the market.

Scott Deakin: As such, our teams are still in the process of implementing the increases announced earlier this calendar year. Therefore, while we expect to see some of those pricing benefits late in our fiscal first quarter, we also expect continued mix shifts, which combined. A likely result in wallboard pricing remaining roughly flat year-over-year for us for the next several quarters. Longer term, the minimal capacity additions being made by the wallboard manufacturing space are expected to be little to alleviate the tight conditions we expect one single-family demand in some momentum, which together with higher operating and raw material cost increases, particularly in gypsum, should help drive further Deakin, David Manthey, Carey Phelps 4% and volume, and 8.4% in price and mix.

As such our teams are still in the process of implementing the increases announced earlier this calendar year.

Scott M. Deakin: Therefore, while we expect to see some of those pricing benefits late in our fiscal first quarter, we also expect continued mixed shifts, which, combined, will likely result in wallboard pricing remaining roughly flat year-over-year for us for the next several quarters. The minimal capacity additions being made by the wallboard manufacturing space are expected to do little to alleviate the tight conditions we expect once single family demand gains some momentum, which together with higher operating and raw material cost increases, particularly in gypsum, should help drive further pricing improvement.

Scott: Therefore, while we expect to see some of those pricing benefits late in our fiscal first quarter. We also expect continued mix shifts which combined well.

Scott: Likely to result in wallboard pricing remaining roughly flat year over year for us for the next several quarters.

Scott: Longer term.

Scott: The minimal capacity additions being made by the wallboard manufacturing space or expected to do little to alleviate the tight conditions. We expect one single family demand gaining some momentum.

Scott: Which together with higher operating and raw material cost increases, particularly in gypsum.

Scott: This helped drive further pricing improvements.

Scott M. Deakin: Ceiling sales of $188.9 million in the fourth quarter were up 21.7% or 19.8% on a per day basis, with strong increases of 11.4% in volume and 8.4% in price and mix. Organic sales and feelings grew 11.4% or 9.7% on a per day basis, with a 5.5% increase in volume and a 4.2% increase in price and mix.

Scott: Ceiling sales of $188 $9 million in the fourth quarter were up 21, 7% or 19, 8% on a per day basis with strong increases of 11, 4% in volume and eight 4% from price and mix.

Scott Deakin: Organic sales and feelings grow 11.4%, or 9.7% on a per day basis, with a 5.5% increase in volume, and a 4.2% increase in price and mix. Fourth quarter steel framing sale of $220.5 million were down to 1.5% or 3% on a same day basis, versus the prior year quarter, as deflationary pricing drove an 11.8% decline in price and mix, while volumes increased 8.8%. Still healthy, but below our expectations do slower multi-family conditions in certain markets, particularly late in the quarter. Organically, steel framing sales were down 6.6% on a same day basis, with a 13.5% decline in price and mix, partially offset by a 6.9% increase in volume.

Scott: Organic sales in ceilings grew 11, 4% or nine 7% on a per day basis.

Scott: With a five 5% increase in volume and a four 2% increase in price and mix.

Scott M. Deakin: Fourth quarter steel framing sales of $220.5 million were down 1.5% or 3% on a same-day basis versus the prior year quarter, as deflationary pricing drove an 11.8% decline in price and mix, while volumes increased 8.8 percent. Still healthy, but below our expectations due to slower multifamily conditions in certain markets, particularly late in the quarter. Organically, steel framing sales were down 6.6% on a same-day basis, with a 13.5% decline in price and mix, partially offset by a 6.9% increase in volume.

Scott: Fourth quarter steel framing sales of 2200 $25 million were down one 5% or 3% on a same day basis versus the prior year quarter.

Scott: It's deflationary pricing drove an all drove an 11, 8% decline in price and mix while volumes increased eight 8%.

Scott: Still healthy, but below our expectations due to slower multifamily conditions in certain markets, particularly late in the quarter.

Scott: Organically steel framing sales were down six 6% on a same day basis with a 13, 5% decline in price and mix, partially offset by a six 9% increase in volume.

Scott Deakin: Until we see some real recovery in either the office or other commercial remodeling space, steel volumes will likely continue to do less predictable, as larger projects and a higher mix of in-market applications are driving a greater portion of our commercial activity than has been true historically. Broadly speaking, prices for steel framing retreated farther and for longer than we would have expected. For the fourth quarter, prices for steel framing products were down 11.7% compared to a year ago, but were roughly flat on a sequential basis. And although we have received multiple price increased notices from the farmers, it will take some time to realize any potential acceptance by the market.

Scott M. Deakin: Until we see some real recovery in either the office or other commercial remodeling space, steel buildings will likely continue to be less predictable, as larger projects and a higher mix of in-market applications drive a greater portion of our commercial activity than has been true historically. Broadly speaking, prices for steel framing have fallen farther and for longer than we would have expected. For the fourth quarter, prices for steel framing products were down 11.7% compared to a year ago, but they were roughly flat on a sequential basis.

Scott: Until we see some real recovery in either the office or other commercial remodeling space steel volumes will likely continue to be less predictable as larger projects and a higher mix of end market applications are driving a greater portion of our commercial activity and has been true historically.

Scott: Broadly speaking prices for steel framing retreated farther in for longer than we would've expected.

Scott: For the fourth quarter prices for steel framing products were down 11, 7% compared to a year ago, but were roughly flat on a sequential basis.

Scott M. Deakin: And although we have received multiple price increase notices from the formers, it will take some time to realize any potential acceptance by the market. As a result, we expect monthly steel framing prices to soften sequentially with the remainder of Q1 at least slightly before flattening at or around the quarter-end levels in subsequent. Complementary product sales of $417.6 million for the quarter grew 9.8% year-over-year in total and 3.5% on an organic basis, representing the 16th consecutive quarter of growth for this category. On a per day basis, complementary product growth was 8% for total sales and 1.9% for organic sales.

Scott: And although we have received multiple price increase notices from the farmers.

Scott: Will take sometime to realize any potential acceptance by the market.

Scott Deakin: As a result, we expect monthly steel framing prices to soften sequentially through the remainder of Q1, at least slightly before flattening at or around the quarter-end levels in subsequent quarters. Complementary product sales of $417.6 million for the quarter grew 9.8% year over year in total, and 3.5% on an organic basis, representing the 16th consecutive quarter of growth for this category. On a per day basis, complementary product growth was 8% for total sales and 1.9% for organic sales. Expansion of complementary products, particularly for tools and fasteners, yeast and stuff, or insulation, continues to be a key element of our strategic priori, as those categories grew 10.4% for the quarter.

Scott: As a result, we expect monthly steel framing prices to soften sequentially for the remainder of Q1 at least slightly before flattening at or around the quarter end levels in subsequent quarters.

Scott: Complementary product sales of $417 6 million for the quarter grew nine 8% year over year in total and three 5% on organic basis, representing the 16th consecutive quarter of growth for this category.

Scott: On a per day basis complementary product growth was 8% for total sales in the one 9% for organic sales.

Scott M. Deakin: Expansion of complementary products, particularly for tools and fasteners, eaves and stucco, and insulation, continues to be a key element of our strategic priority, as those categories grew 10.4% for the quarter. Now, turning to slide six, which highlights our profitability for the quarter. Gross profit of $451.2 million increased 6.3% compared to the prior year quarter, due primarily to the favorable impact of our recent acquisitions and the improved volumes we delivered during the quarter across all of our major product lines, partially offset by deflationary dynamics and steel pressure.

Expansion of complementary products, particularly for tools and fasteners eastern stucco insulation continues to be a key element of our strategic priority.

Scott: Those categories grew 10, 4% for the quarter.

Scott Deakin: Now, turning to slide 6, which highlights our profitability for the quarter. Gross profit of $451.2 million increased 6.3% compared to the prior year quarter, to primarily to the favorable impact of our recent acquisitions, and the improved volumes we delivered during the quarter across all of our major product lines, partially offset by deflationary dynamics and steel pricing. Gross margin of 31.9% was down 60 basis points, compared to 32.5% a year ago, primarily related to steel price deflation, partially offset by favorable volume-driven incentives. Coss of sales for the quarter also included the negative $1.2 million impact of non-cash purchase accounting adjustments primarily related to CAMCO to increase acquired inventory to assassinated fair value.

Scott M. Deakin: Gross margin of 31.9% was down 60 basis points as compared to 32.5% a year ago, primarily related to steel price deflation, partially offset by favorable volume-driven incentives. Cost of sales for the quarter also included the negative $1.2 million impact of non-cash purchase accounting adjustments primarily related to CAMCO to increase acquired inventory to its estimated fair value.

Scott: Now turning to slide six which highlights our profitability for the quarter.

Scott: Gross profit of $451 $2 million increased six 3% compared to the prior year quarter.

Scott: Due primarily to the favorable impact of our recent acquisitions and the improved volumes, we delivered during the quarter across all of our major product lines.

Partially offset by deflationary dynamics and steel pricing.

Scott: Gross margin was 31, 9% was down 60 basis points as compared to 32, 5% a year ago, primarily related to steel price deflation, partially offset by favorable volume driven incentives.

Scott: Cost of sales for the quarter also included a negative $1 $2 million impact of noncash purchase accounting adjustments primarily related to kimco to increase acquired inventory to its estimated fair value.

Scott Deakin: These adjustments were a half a million dollars a year ago. Have some of these adjustments, gross margin would have been 32% for our fiscal fourth quarter. Together with the traditional price implementation lag, competitive dynamics, in the mix, also dampened fourth quarter gross margins as compared with our prior expectations for the quarter. Selling, general and administrative expenses were $315.5 million for the quarter and increased $35.8 million over the prior year quarter, primarily related to our recent acquisitions and greenfield openings. Also contributing to the higher SG&A expenses were increased labor costs on favorable volumes, coupled with some inflationary pressures in the wages and benefits.

Scott M. Deakin: These adjustments were a half a million dollars a year ago. Without these adjustments, gross margin would have been 32% for our fiscal fourth quarter. Together with the traditional price implementation lag, competitive dynamics in the mix also dampened fourth quarter gross margins as compared with our prior expectations for the quarter. Selling general and administrative expenses were $315.5 million for the quarter, an increase of $35.8 million over the prior year quarter, primarily related to our recent acquisitions in Greenfield Oak.

Scott: These adjustments were a half a million dollars a year ago.

Scott: Absent these adjustments gross margin would have been 32% for our fiscal fourth quarter.

Scott: Together with the traditional pricing.

Scott: Implementation lag competitive dynamics and mix also payments dampened fourth quarter gross margins as compared with our prior expectations for the quarter.

Selling general and administrative expenses were $315 5 million for the quarter, an increase of $35 $8 million over the prior year quarter, primarily related to our recent acquisitions and greenfield openings.

Scott M. Deakin: Also contributing to the higher SG&A expenses were increased labor costs on favorable volumes, coupled with some inflationary pressures on wages and benefits. Additionally, relative to our expectations going into the fourth quarter, SG&A also included a $2 million reserve for bad debt accounts. SG&A as a percentage of net sales was 22.3%, an increase of 80 basis points for the quarter of fiscal 2023, with 55 basis points of the leverage change attributable to reduced revenue as a result of product price depletion.

Scott: Also contributing to the higher SG&A expenses were increased labor costs unfavorable volumes, coupled with some inflationary pressures and wages and benefits.

Scott Deakin: Relative to our expectations going into the fourth quarter, SGNA also included a $2 million reserve for bad debt expense. SGNA as a percentage of net sales was 22.3%, an increase of 80 basis points for the quarter of fiscal 2023, with 55 basis points of the leverage change available to reduce revenue as a result of product price depletion. Increased wages, benefits, and other costs resulting mostly from improved volumes, as well as some inflationary pressure in these costs, negatively impacted SGNA leverage by an estimated 15 basis points. Approximately 10 basis points of the remaining variance would primarily be due to our recent acquisitions and greenfield yard openings.

Scott: Relative to our expectations going into the fourth quarter. SG&A also included a $2 million of reserves for bad debt expense.

Scott: SG&A as a percentage of net sales was 22, 3% an increase of 80 basis points for the quarter of fiscal 2023 with 55 basis points of the leverage change attributable to reduced revenue.

Scott: As a result of product price deflation.

Scott M. Deakin: Increased wages, benefits, and other costs resulting mostly from improved volumes, as well as some inflationary pressure on these costs, negatively impacted SG&A leverage by an estimated 15 days. Additionally, approximately 10 basis points of the remaining variance was primarily due to our recent acquisitions in Greenfield, Yard, and Opaque. Adjusted SG&A expense as a percentage of net sales of 21.8% increased 90 basis points from 20.9% in the prior year quarter. All in, inclusive of a 4.6% increase in interest expense and a 17.1% increase in income tax expense, net income decreased 25.4% to $56.4 million for the quarter, or $1.39 per diluted share, compared to net income of $75.6 million, or $1.80 per diluted share a State taxes were higher in the quarter, primarily the result of acquisitions that resulted in an increase in apportionment to higher tax jurisdictions, together with a one-time re-evaluation of the company's approved tax liability.

Scott: Increased wages benefits and other costs, resulting mostly from improved volumes as well as well as some inflationary pressure in these costs negatively impacted SG&A leveraged by an estimated 15 basis points.

Scott: Approximately 10 basis points of the remaining variance was primarily due to our recent acquisitions and greenfield yard openings.

Scott Deakin: Adjusted SGNA expense as a percentage of net sales of 21.8% increased 90 basis points from 20.9% in the prior year quarter. All in, inclusive of a 4.6% increase in interest expense and a 17.1% increase in income tax expense, net income decreased 25.4% to 56.4 million dollars for the quarter, or $1.39 per diluted share, compared to net income of 75.6 million dollars, or $1.80 per diluted share a year ago. They taxes were higher in the quarter, primarily the result of acquisitions that resulted in an increase in apportionment to higher tax jurisdictions, together with a one-time revaluation of the company's deferred tax liability.

Scott: Adjusted SG&A expense as a percentage of net sales of 21, 8% increased 90 basis points from 29% in the prior year quarter.

Scott: All in inclusive of a four 6% increase in interest expense and a 17, 1% increase in income tax expense net income decreased 25, 4% to $56 4 million for the quarter or $1 39 per diluted share compared.

Scott: Compared to net income of $75 6 million or $1 80 per diluted share a year ago.

Scott: The taxes were higher in the quarter, primarily the result of acquisitions that resulted in an increase in apportionment to higher tax jurisdictions.

Scott: Together with a one time revaluation of the company's deferred tax liability.

Scott Deakin: Also contributing to the decrease in net income was an increase in depreciation expense, in a write-off of debt discount and deferred financing fees in connection with our terminal and refinancing. Over the longer term, this refinancing is expected to benefit net income by approximately $2.6 million per year until the loan's expiration in May of 2030. For the full year of 2025, we expect our tax rate to be consistent with that of FY24. Adjusted EBITDA of $146.6 million decreased 5% or $7.8 million as compared with a year ago, and adjusted EBITDA margin decreased to 10.4% compared to last year's fourth quarter level of 11.8%.

Scott M. Deakin: Also contributing to the decrease in net income was an increase in depreciation expense and a write-off of debt discount and deferred financing fees in connection with our term loan refinancing. However, over the longer term, this refinancing is expected to benefit net income by approximately $2.6 million per year until the loan's expiration in May of 2030. For the full year of 2025, we expect our tax rate to be consistent with that of FY24. Adjusted EBITDA of $146.6 million decreased 5% or $7.8 million as compared with a year ago.

Scott: Also contributing to the decrease in net income was an increase in depreciation expense.

Scott: Write off of debt discount and deferred financing fees in connection with our term loan refinancing.

Scott: Over the longer term. This refinancing is expected to benefit net income by approximately $2 $6 million per year until the loans exploration in May 2030.

Scott: For the full year of 2025, we expect our tax rate to be consistent with that of FY 'twenty four.

Scott: Adjusted EBITDA of $146 $6 million decreased 5% or $7 8 million as compared with a year ago and adjusted EBITDA margin decreased to 10, 4% compared to last year's fourth quarter level of 11, 8%.

Scott M. Deakin: An adjusted EBITDA margin decreased to 10.4% compared to last year's fourth quarter level of 11.8%. Now, shifting to our balance sheet, which is highlighted on slide 7. At April 30th, we had cash on hand of $166.1 million and $655.9 million of available liquidity under our revolving credit fund. We had no near-term debt maturities, and our net adjusted EBITDA debt leverage at the end of the quarter was 1.7 times, better than indicated following the CAMCO transit. Last year's leverage at the end of the fourth quarter for fiscal 2023 was 1.4 times. As J.T.

Scott Deakin: Now, shifting to our balance sheet, which is highlighted on slide 7. At April 30th, we had cash on hand of $166.1 million and $655.9 million of available liquidity under our revolving credit facilities. We had known near-term debt maturities and our net adjusted EBITDA that leverage at the end of the quarter was 1.7 times better than indicated fall in the TAMCO transaction. Last year's leverage at the end of the fourth quarter for fiscal 2023 was 1.4 times.

Scott: Now shifting to our balance sheet, which is highlighted on slide seven.

Scott: At April 30, we had cash on hand of $166 $1 million and $655 $9 million of available liquidity under our revolving credit facilities, we have no near term debt maturities and our net adjusted EBITDA debt leverage at the end of the quarter was one seven times better than indicated following the <unk>.

Scott: Co transaction.

Scott: Last year's leverage at the end of the fourth quarter for fiscal 2023 was one four times.

Scott Deakin: As JT mentioned, subsequent to the end of our fiscal fourth quarter, we entered into an agreement to acquire 100% of the stock of the Yavon Supply Company and affiliates. For a purchase price of up to $196.5 million Canadian dollars, or about $143 million US dollars. With more than a quarter of the purchase price to be paid over the next five years, the transaction value is consistent with our track record of acquiring at or near GMS was marked at multiple. For the 12th month ended February 29th, 2024, Yavon generated net revenues and excess of $199 million Canadian dollars, which is just under $140 million US dollars occurring exchange rates.

Scott M. Deakin: As mentioned, subsequent to the end of our fiscal fourth quarter, we entered into an agreement to acquire 100% of the stock of Yvonne's supply company and affiliates for a purchase price of up to $196.5 million Canadian dollars, or about $143 million U.S. dollars. With more than a quarter of the purchase price to be paid over the next five years, the transaction value is consistent with our track record of acquiring at or near GMS's market price.

Speaker Change: As J P mentioned subsequent to the end of our fiscal fourth quarter, we enter entered into an agreement to acquire 100% of the stock or do you have on supply company and affiliates for a purchase price of up to $196 5 million Canadian dollars or about 143 million U S dollars.

Speaker Change: More than a quarter of the purchase price to be paid over the next five years. The transaction value is consistent with our track record of acquiring at or near Gms was market multiple.

Scott M. Deakin: For the 12-month end of February 29, 2024, Yvonne generated net revenues in excess of $190 million Canadian dollars, which is just under $140 million U.S. dollars at current exchange rates. This transaction, which we expect to close next month, We expect it to be slightly margin accretive in line with our broader Canadian operations. We expect to fund this transaction with cash on hand and from borrowings under our ADL, which we expect would, all else being equal, initially raise our net debt leverage ratio to just over two times adjusted EBIT.

Speaker Change: For the 12 months ended February 29, 2024 bond generated net revenues in excess of $190 million Canadian which.

Which is just under 140 million U S dollars at current exchange rates.

Scott Deakin: This transaction, which we expect to close next month, is expected to be slightly margin accrued in line with a lot of Canadian operations. We expect to fund this transaction with cash on hand and from borrowing under our ADL, which we expect would, all else being equal, initially raise our net leverage ratio to just over two times adjusted EBITDA with an expected 1.5 turn improvement over the course of FY25.

Speaker Change: This transaction, which we expect to close next month.

Speaker Change: Expect it to be slightly margin accretive in line with our broader Canadian operations.

Speaker Change: We expect to fund this transaction with cash on hand, and from borrowings under our ABL, which we expect would all else being equal initially raise our net debt leverage ratio to just over two times adjusted EBITDA with unexpected one half turn improvement over the course of FY 'twenty five.

Scott M. Deakin: This is an expected one-half churn improvement over the course of FY25. Our team generated significant cash flow, as we traditionally do, during the fourth quarter. Cash provided by operating activities was $204.2 million for our fiscal fourth quarter, compared to $204.8 million a year ago. Pre-cash flow was $186.7 million, compared to $185.4 million for the same period last year. Free cash flow for the quarter totaled 127.4% of adjusted EBIT.

Scott Deakin: Our team generated significant cash flow as we traditionally do during the 4th quarter. Cash provided by operating activities was $204.2 million for our fiscal 4th quarter compared to $204.8 million a year ago. Free cash flow was $186.7 million, compared to $185.4 million for the same period last year. Free cash flow for the quarter totaled 127.4% of adjusted EBITDA. For the full year, we generated cash provided by operating activities of $433.2 million in free cash flow of $376 million, representing 61.1% of adjusted EBITDA, exceeding our expectations. Capital expenditures of $17.5 million for the quarter compared to $19.4 million a year ago.

Speaker Change: Our team generated significant cash flow as we traditionally do during the fourth quarter cash provided by operating activities was $204 $2 million for fiscal fourth quarter compared to $204 $8 million a year ago.

Speaker Change: Free cash flow was $186 7 million.

Speaker Change: Compared to $185 4 million for the same period last year.

Speaker Change: Free cash flow for the quarter totaled 127, 4% of adjusted EBITDA.

Scott M. Deakin: For the full year, we generated cash provided by operating activities of $433.2 million and free cash flow of $376 million, representing 61.1% of adjusted EBITDA, exceeding our expectations. Capital expenditures of $17.5 million for the quarter compared to $19.4 million a year ago. For the full year of fiscal 2025, we expect capital expenditures to total between $50 and $55 million. We repurchased another 174.6 thousand shares of stock during the quarter for 16 million dollars, and we had 200.5 million dollars of share repurchase authorization remaining at April 30th.

Speaker Change: For the full year, we generated cash provided by operating activities of $433 2 million.

Speaker Change: Free cash flow of $376 million, representing 61, 1% of adjusted EBITDA exceeding our expectations.

Speaker Change: Capital.

Speaker Change: Spend in terms of $17 $5 million for the quarter compared to $19 $4 million a year ago for.

Scott Deakin: For the full year of fiscal 2025, we expect capital expenditures to total between $50 and $55 million. We were purchased another $174.6000 shares of stock during the quarter for $16 million and had $200.5 million of share of purchase authorization remaining at April 30th. Looking forward, we expect to continue our balanced approach of capital allocation with continuing investment in our business and attractive M&A opportunities, also seeking to opportunistically return value to our shareholders through our share buyback program. We have a solid balance sheet with known near-term and an attractive capital structure, providing an effective foundation for the continued execution of our strategic priorities.

For the full year fiscal 2025, we expect capital expenditures to total between 50 and $55 million.

Speaker Change: We repurchased another 174 6000 shares of stock during the quarter for $16 million and had $205 million of share repurchase authorization remaining at April 30th.

Scott M. Deakin: Looking forward, we expect to continue our balanced approach of capital allocation with continued investment in our business and attractive M&A opportunities, also seeking to opportunistically return value to our shareholders through our share of FIBAC program. We have a solid balance sheet with no near-term maturities and an attractive capital structure, providing an effective foundation for the continued execution of our strategic priorities. Before turning the call over to JT, I have just a couple of housekeeping items.

Speaker Change: Looking forward, we expect to continue our balanced approach of capital allocation with continued investment in our business and attractive M&A opportunities.

Speaker Change: We're also seeking to opportunity opportunistically to return value to our shareholders through our share buyback program.

We have a solid balance sheet with no near term maturities.

Speaker Change: And attractive capital structure, providing an effective foundation for the continued execution of our strategic priorities.

Scott Deakin: Before turning the call over to JTR, just a couple of housekeeping items. First, we will have an equal number of selling days per quarter year over year for our first three quarters of fiscal 2025. In our fiscal fourth quarter, we will have 63 days compared with 64 in the prior year period. In second, the projections that JTR will provide exclude any benefit we expect to get from one after that transaction closes in the last month of our quarter.

Speaker Change: Before turning the call over to J T or just a couple of housekeeping items first we will have an equal number of selling days per quarter of year over year for first three quarters of fiscal 2025.

Scott M. Deakin: First, we will have an equal number of selling days per quarter year-over-year for our first three quarters of fiscal 2025. For example, in our fiscal fourth quarter, we will have 63 days compared with 64 in the prior year period. And second, the projections that JT will provide exclude any benefit we expect to get from VON after that transaction closes in the last month of our quarter. With that, I'll now turn the call over to JT. He'll start on the slide.

Speaker Change: In our fiscal fourth quarter, we will have 63 days compared with 64 in the prior year period.

Speaker Change: Second the projections that <unk> will provide exclude any benefit we expect to get from volume after that transaction closes in the last month of our quarter.

John Turner: With that, I will now turn the call over to JTR. He will start on slide eight.

Jay: With that I'll now turn the call over to Jay who.

Jay: I'll start on slide eight.

John Turner: Thank you, Scott. We are pleased with the results we delivered for Fiscal 2024. And believe that, despite some short-term pressures in our end markets, we are well positioned to pivot as needed to address any shifts in end market demand and economics as we move throughout fiscal 2025. The resilience we saw in wallboard pricing during fiscal 2024 continued to prove out the new realities of the wallboard industry, including tight capacity, with few new or planned additions expected in the near term, coupled with rising manufacturing costs, notably including those driven by the declining availability of synthetic gypsum, primarily in the Eastern U.S.

Jay: Thank you Scott.

John C. Turner: Thank you, Scott. We're pleased with the results we delivered in fiscal 2024. And believe that, despite some short-term pressures in our end markets, we are well positioned to pivot as needed to address any shifts in end market demand and economics as we move throughout fiscal 2020. The resilience we saw in wallboard pricing during fiscal 2024 continues to prove out the new realities of the wallboard industry. Including tight capacity, with few new or planned additions expected in the near term, coupled with rising manufacturing costs, notably those driven by the declining availability of synthetic gypsum, primarily in the eastern U.S. After a slow year for single-family activity, with an undersupply of new and existing homes on the market.

Jay: We are pleased with the results we delivered for fiscal 2024 and believe that despite some short term pressures in our end markets. We are well positioned to pivot as needed to address any shifts in end market demand and economics as we move throughout fiscal 2025 the.

Jay: The resilience we saw in wallboard pricing during fiscal 2024, continuing to prove out the new realities of the wallboard industry.

<unk> high capacity with fewer planned additions expected in the near term coupled with rising manufacturing costs, notably, including those driven by the declining availability of synthetic gypsum primarily in the eastern U S.

John Turner: After a slow year for single-family activity, with an under-supply of new and existing homes on the market, we've seen some improving trends, but anticipated more substantial recovery to be tied to lower mortgage rates over time. Meanwhile, we believe that the long-anticipated multi-family decline has indeed reached certain geographic markets, even as others continue to have significant units in backlog. And, as I stated earlier in my remarks, commercial couldn't-play spending is flattening, while starts are slowing. Therefore, we expect commercial conditions to be a bit bumpy going forward, as certain mega-projects, data centers, and some other less-financing-sensitive projects likely continue, while smaller projects start, are expected to be more limited until we see some improvements in rates.

Jay: After a slow year for single family activity with an under supply of new and existing homes on the market. We've seen some improving trends, but anticipate a more substantial recovery to be tied to lower mortgage rates over time.

John C. Turner: We've seen some improving trends, but we anticipate a more substantial recovery to be tied to lower mortgage rates. Meanwhile, we believe that the long-anticipated multifamily decline has indeed reached certain geographic markets, even as others continue to have significant units in backlog. And, as I stated earlier in my remarks, commercial put-in-place spending is flattening while starts are slowing.

Jay: Meanwhile, we believe that the long anticipated multifamily decline has indeed reached certain geographic markets, even as others continue to have significant units in backlog.

And as I stated earlier in my remarks commercial put in place spending is flattening while starts are slowing.

John C. Turner: Therefore, we expect commercial conditions to be a bit bumpy going forward, as certain megaprojects, data centers, and some other less financing-sensitive projects likely continue, while smaller project starts are expected to be more limited until we see some improvements in rates. With that in mind, let me turn to our expectations looking forward. Starting with wall board volumes as compared to the prior year, we anticipate single-family volumes to be up mid-single digits for our fiscal first quarter.

Jay: Therefore, we expect commercial conditions to be a bit lumpy going forward as certain mega projects data centers and some other less financing sensitive projects likely continue while smaller projects starts are expected to be more limited until we see some improvements in rates.

John Turner: Given this backdrop, let me turn to our expectations looking forward. Starting with wallboard volumes, is compared to the prior year, we anticipate single-family to be up mid-single digits for our fiscal first quarter. And as we progress through the balance of the year on normal seasonality and without any expectation for accelerated market recovery, we expect growth to be in the high-single digits for single-family wallboard volumes on a year-over-year basis. Multi-family wallboard volumes will likely be flat to up-slightly during our fiscal first quarter before declining progressively into the back half of our fiscal year. And commercial wallboard volumes are expected to be up low single digits for our fiscal first quarter before flattening for the next couple of quarters.

Jay: Given this backdrop, let me turn to our expectations looking forward.

Starting with wallboard volumes as compared to the prior year, we anticipate single family to be up mid single digits for our fiscal first quarter.

John C. Turner: And as we progress through the balance of the year on normal seasonality, and without any expectation of an accelerated market recovery, we expect growth to be in the high single digits for single family wall board volumes on a year-over-year basis; multi-family wall board volumes will likely be flat to slightly up during our fiscal first quarter before declining progressively into the back half of our fiscal year. And commercial wall board volumes are expected to be up low single digits for our fiscal first quarter before flattening for the next couple of quarters and then likely declining year-over-year in our fiscal fourth quarter.

Jay: And as we progress through the balance of the year on normal seasonality and without any expectation for accelerated market recovery, we expect growth to be in the high single digits for single family wallboard volumes on a year over year basis.

Jay: Multifamily wallboard volumes will likely be flat to up slightly during our fiscal first quarter before declining progressively into the back half of our fiscal year.

Jay: And commercial wallboard volumes are expected to be up low single digits for our fiscal first quarter before flattening for the next couple of quarters.

John Turner: And then likely declining year-over-year in our fiscal fourth quarter. Considering all of these end-market dynamics in total per GMS, first quarter and wallboard volumes are expected to be up low to mid-single digits and also at mid-single digits in the next couple of quarters thereafter. After a nearly one-year pause in pricing actions, we believe we've begun a renewed inflationary period for wallboard. Our pricing for wallboard is expected to remain resilient this corner as we continue to work to pass through the earlier announced manufacturer price increases. While implementation of these actions is taking longer than we would like, we expect to see some benefits from these price increases beginning in July, tempered by the impact of the expected mix shift from higher single family volume.

Jay: And then likely declining year over year in our fiscal fourth quarter.

John C. Turner: Considering all these end market dynamics in total for GMS, first quarter wallboard volumes are expected to be up low to mid-single digits and also at mid-single digits in the next couple of quarters thereafter. After a nearly one year pause in pricing actions, we believe we've begun a renewed inflationary period for Walmart.

Jay: Considering all of these end market dynamics and total for Gms first quarter wallboard volumes are expected to be up low to mid single digits and also up mid single digits in the next couple of quarters thereafter.

Jay: After a nearly one year pause and pricing actions. We believe we have begun a renewed inflationary period for wallboard or.

John C. Turner: Our pricing for Wal-Mart is expected to remain resilient this quarter as we continue to work to pass through the earlier announced manufacturer pricing. While implementation of these actions is taking longer than we would like, we expect to see some benefits from these price increases beginning in July, tempered by the impact of the expected mix shift from higher single-family volumes. As such, we expect first quarter world war prices to be roughly flat as compared with the prior year period.

Our pricing for wallboard is expected to remain resilient this quarter as we continue to work to pass through the earlier announced manufacturer price increases.

Jay: While implementation of these actions is taking longer than we would like we expect to see some benefits from these price increases beginning in July tempered by the impact of the expected expected mix shift from higher single family volume.

John Turner: As such, we expect for core wallboard prices to be roughly flat as compared with the prior year period. Post our first quarter, we expect to see sequentially improve pricing in the low single digits, with further realization of this round of pricing increases.

Jay: As such we expect first quarter wallboard prices to be roughly flat as compared with the prior year period post our first quarter, we expect to see sequentially improved pricing in the low single digits with further realization of this round of price increases.

John C. Turner: Post our first quarter, we expect to see sequentially improved pricing in the low single digits with further realization of this round of pricing. For steel framing, as noted, pricing and gross margin have softened more than we expected, and demand will most likely be choppy as multifamily high-rise and certain commercial projects conclude, while key megaprojects and other commercial activity continue. For the first quarter, we expect volumes to be up low to mid-single digits year-over-year, a notable slowdown from fiscal 2024, with prices down low single digits sequentially and down in the low teens year-over-year. However, the underlying world commodities are driven by other end market sectors, and that's very difficult to predict.

John Turner: For steel framing, as noted, pricing and gross margin have softened more than we expected, and demand will most likely be choppy as multifamily high rise and certain commercial projects conclude. While key mega projects and other commercial activity continue. For the first quarter, we expect volumes to be up low to mid single digits year over year, a notable slowdown from fiscal 2020, with prices down low single digits sequentially and down in the low teens year over year. While the underlying world commodities are driven by other end market sectors and thus very difficult to predict, all of the major framing formers in our markets recently announced price increases, which should support some greater stability in future months.

Jay: For steel framing as noted pricing and gross margin have softened more than we expected and demand will most likely be choppy as multifamily high rise and certain commercial projects conclude.

Jay: Key Mega projects and other commercial activity continue.

Jay: For the first quarter, we expect volumes to be up low to mid single digits year over year, a notable slowdown from fiscal 2024 with prices down low single digits sequentially and down in the low teens year over year.

Jay: While the underlying rolled commodities are driven by other end market sectors, and that's very difficult to predict.

John C. Turner: All of the major framing formers in our markets recently announced pricing, which should support some greater stability in the future. For ceilings, given the noted level of activity in our commercial end market, we expect low to mid-teen increases year over year for volume, inclusive of recent acquisitions, and a low to mid-single-digit increase for price and mix. All considered, we expect healthy mid to high teen sales growth and ceilings for the next several quarters.

Jay: All of the major framing formers in our markets recently announced price increases, which should support some greater stability in future months.

John Turner: In ceilings, given the noted level of activity in our commercial end market, we expect low to mid-teen increases year over year for volume, inclusive of recent acquisitions, and a low to mid single digit increase for price and mix. All considered, we expect healthy mid- to high-teen sales growth in ceilings for the next several quarters. Finally, net sales for our complimentary products are expected to grow at mid-single-digit levels as compared with the first quarter of fiscal 2024, and we expect this pacing to continue through the remainder of the year. All in, as shown on slide 9, we anticipate net sales for our fiscal first quarter to be up mid single digits as compared with a year ago, with organic sales of low single digits despite the displacement area pressures and steel prices.

Jay: And feelings given the noted level of activity in our commercial end market, we expect low to mid teen increases year over year for volume inclusive of recent acquisitions.

Jay: In a low to mid single digit increase for price and mix.

Jay: All considered we expect healthy mid to high teens sales growth in ceilings for the next several quarters.

John C. Turner: Finally, net sales for our complementary products are expected to grow at mid-single-digit levels as compared with the first quarter of fiscal 2024, and we expect this pace to continue through the remainder of the year. All in, as shown on slide 9, we anticipate net sales for our fiscal first quarter to be up mid-single digits as compared with a year ago, with organic sales up low single digits despite the deflationary pressures and steel prices.

Jay: Finally, net sales for our complementary products are expected to grow at mid single digit levels as compared with the first quarter of fiscal 2024, and we expect this pacing to continue through the remainder of the year.

Jay: All in as shown on slide nine we anticipate net sales for our fiscal first quarter to be up mid single digits as compared with a year ago with organic sales up low single digits. Despite the deflationary pressures in steel prices.

John Turner: For Q2 and the full year, we expect similar growth, but with some improved pacing versus Q1. Specifically, on the continued pressures and steel pricing and the still in process implementation of wallboard pricing, we expect first quarter growth margins to be constrained versus prior year and prior quarter at approximately 31.5% before returning to more normal levels around 32% for the remainder of our fiscal year. Despite actions being taken and managed year term discretionary and investment spending, we also expect that the late year steel pricing relative to strong delivery activity will continue to have a view averaging effect on SGNA for the quarter before improving later in the year.

John C. Turner: For Q2 and the full year, we expect similar growth, but with some improved pacing versus Q1, principally due to the continued pressures in steel prices and the still-in-process implementation of wallboard pricing. We expect first quarter gross margins to be constrained versus prior year and prior quarter at approximately 31.5% before returning to more normal levels around 32% for the remainder of our fiscal year. Despite actions being taken to manage near-term discretionary and investment spending, we also expect that deflationary steel pricing relative to strong delivery activity will continue to have a deleveraging effect on SG&A for the quarter before improving later in the year. As a result, we anticipate adjusted EBITDA to be in the range of $160 million to $165 million for our fiscal first quarter, with a slight margin improvement from our fourth quarter.

Jay: For Q2, and the full year, we expect similar growth, but with some improved pacing versus Q1.

Jay: Principally on the continued pressures in steel pricing.

Jay: And that's still in process implementation of wallboard pricing.

Jay: Wed expect first quarter gross margins to be constrained versus prior year and prior quarter at approximately 31, 5% before returning to more normal levels around 32% for the remainder of our fiscal year <unk>.

Jay: Might actions being taken to manage near term discretionary and investment spending. We also expect that deflationary steel pricing relative to strong delivery activity will continue to have a deleveraging effect on SG&A for the quarter before improving later in the year.

John Turner: As a result, we anticipate adjusted EBITDA to be in the range of $160 million to $165 million for our fiscal first quarter. With a slight margin improvement from our fourth quarter.

Jay: As a result, we anticipate adjusted EBITDA to be in the range of $160 million to $165 million for our fiscal first quarter.

Jay: With a slight margin improvement from our fourth quarter.

John Turner: Sir. Assuming general stability elsewhere, given our outlook for markets and the actions we are taking to manage within them, we expect second quarter EBITDA margins to be consistent with prior year. And on a stronger overall year-over-year growth profile for the full year, we also expect to see year-over-year profitability improved in subsequent quarters.

Operator: Assuming general stability elsewhere, given our outlook for markets and the actions we are taking to manage within them, we expect second quarter EBITDA margins to be consistent with prior years. And on a stronger overall year over year growth profile for the full year, we also expect to see year over year profitability improve in subsequent Thank you for joining us today. Operator, we are ready to open the line for questions. Just a minute, guys. Sorry for the delay; we are trying to communicate electronically with the operator. Ladies and gentlemen, we apologize for the technical inconvenience. Please stand by.

Jay: Assuming general stability elsewhere, given our outlook for markets and the actions we are taking to manage within them. We expect second quarter EBITDA margins to be consistent with prior year.

Jay: And on a stronger overall year over year growth profile for the full year. We also expect to see year over year profitability improve in subsequent quarters.

John Turner: Thank you for joining us today.

Thank you for joining us today.

Operator: Operator, we are ready to open the line for questions. Cut. Just a minute, Guy. Sorry for the delay. We will, uh, we are trying to communicate. We'll electronically hear with the operator.

Speaker Change: Operator, we are ready to open the line for questions.

Speaker Change: Cat.

Speaker Change: Just a minute.

Speaker Change: Sorry for the delay we will we are.

Speaker Change: Trying to communicate.

Electronically here with the operator.

Yes.

Yes.

Speaker Change: Okay.

Operator: Ladies and gentlemen, we apologize for the technical inconvenience. Please stand by; the event will resume momentarily. Once again, ladies and gentlemen, we do apologize for the technical difficulties.

Speaker Change: Ladies and gentlemen, I apologize for the technical inconvenience, please standby Stephen will resume momentarily.

Operator: The event will resume momentarily. Once again, ladies and gentlemen, we do apologize for the technical difficulties. We will take our first question coming from the line of Trey Grooms with Stevens. Please proceed with your question. Good morning. Thanks for taking my questions. This is Noah Merkousko on the tray.

Speaker Change: Once again, ladies and gentlemen, we do apologize for the technical difficulties, we will take our first question coming from the line of Trey Grooms with Stephens. Please proceed with your question.

Noah Merkousko: We will take our first question, coming from the line of trade groups with Steven's. Please proceed with your question. Good morning. Thanks for taking my questions. This is Noah Merkousko on.

Noah: Good morning, Thanks for taking my questions. This is Noah <unk> on tray.

Speaker Change: Yes.

Noah Merkousko: Sorry, I'm not going to go ahead. I apologize for that. Go ahead and continue, please.

Speaker Change: Alright.

Speaker Change: We don't have anything on your end.

Speaker Change: Ladies and gentlemen.

Speaker Change: Yes.

Operator: I apologize for that. Go ahead and continue, please. All right, some cool tunes.

Speaker Change: I apologize for that go ahead and continue please.

Noah Merkousko: All right, some cool tunes. Yeah, so just, I know. Hey, hey.

Speaker Change: Alright cool tunes.

Noah Christopher Merkousko: Yeah, so just wanted to touch on wall board pricing. I mean, it sounds like there's maybe some limited traction, but it's kind of taking longer than expected. And we'll kind of see that play out in the coming quarters.

Speaker Change: Yes, so just.

Speaker Change: Hi, Noah.

Speaker Change: Hey.

John Turner: Yeah, so just one of the touch on world board pricing. I mean, sounds like there's maybe some limited traction, but it's kind of taken longer than expected. And we'll kind of see that play out in the coming quarters. So I guess first, I was wondering if you could kind of break out what you see as like-for-like pricing versus, you know, what you're seeing from a negative mix impact as you see single-family accelerate relative to commercial.

Speaker Change: Yeah. So just wanted to touch on wallboard pricing I mean, it sounds like there is.

Speaker Change: Maybe some limited traction, but it is kind of taking longer than expected and we'll kind of see that play out in the coming quarters and so I guess first I was wondering if you could kind of break out.

John C. Turner: And so I guess first, I was wondering if you could kind of break out what you see as like for like pricing versus, you know, what you're seeing from a negative mixed impact as you see single family accelerate relative to commercial. Yeah, I mean, as we stated just now in the call, I think like-for-like pricing will see low single-digit appreciation in the price of wallboard for both commercial and residential wallboard as we go forward.

Speaker Change: What you see as like for like pricing versus what Youre seeing from a negative mix impact as you see single family accelerate relative to commercial.

John Turner: Yeah, I mean, as we've stated just now in the call, I mean, I think like-for-like pricing, we'll see low single-digit appreciation in the crisis world board for both commercial and residential world board as we go forward. We're going to, okay. We expect some improvement in July. We've achieved some pricing with some of our larger national account customers, which we expect to come in in July. We've already achieved a little bit of pricing this quarter, believe it or not. And we would expect most of us be realized in the second quarter. .

Speaker Change: Yes, I mean, as we stated just now in the call I mean, I think like for like pricing will see low single digit appreciation in the price of wallboard for both commercial and residential wallboard as we go forward.

Speaker Change: Okay.

John C. Turner: Thank you. We're good. We expect some improvement in July. We've achieved some pricing with some of our larger national account customers, which we expect to come in during July. We've already achieved a little bit of pricing this quarter, believe it or not, and we would expect most of it to be realized in the second quarter. Okay, and then you've got the mix, negative mix impact on top of that, that's kind of keeping it at this sort of flattish 470.

Speaker Change: We expect some improvement in July we've we've achieved some pricing with.

Speaker Change: With some of our larger national account customers, which we expect to come in in July we have already achieved a little bit of pricing this quarter believe it or not.

Speaker Change: And we would expect most of it to be realized in the second quarter.

Speaker Change: Okay, and then but then you've got the mix negative mix impact on top of that Thats kind of keeping it flat.

Speaker Change: Yeah, that's right we're 70.

John C. Turner: Yeah, so from a price perspective, though, that's why we just got it back to 32% gross margins later in the year because we're having a, you know, an expected pretty good year over year single family market, even though, you know, when you read the headlines, it's not terribly significant, but last year was so bad single family wise, that, based on the activity we've seen so far, that's And, of course, that's the largest consumer of wallboard in any of our end markets.

Speaker Change: Yes, so from a price perspective, though I mean, thats why we just guided back to 32% gross margins later in the year is because we're having unexpected pretty good year over year single family market.

Speaker Change: Even though.

Speaker Change: When you read the headlines it's not terribly significant but last year was so bad single family wise that.

Speaker Change: Based on the activity we've seen so far that's where we're going to get that single family growth.

Speaker Change: On a year over year basis and of course, that's the largest consumer of wallboard.

Speaker Change: And any of our end markets as single family.

John C. Turner: Okay, that makes sense. And, and then maybe on that margin, I mean, 30, yeah, 31 and a half in the quarter, I guess, if we're just looking at wallboard, is it just the delayed impact of pricing? And that catches up later, like you said, or is there something else going on? No, I mean, it is, but two-thirds of our expected miss in, I would say, expected miss. We've never really given the quarter before, but in our own internal view, about two-thirds of what we would call the headwind for the quarter is the steal, and about a third is the wall.

Speaker Change: Okay that makes sense and then maybe on that margin I mean, 30, 31 and a half.

Speaker Change: In the quarter I guess, if we're just looking at wallboard is it just the delayed impact of pricing and that catches up later like you said or is there something else going on.

Speaker Change: No I mean, it is but two thirds of our expected Miss.

Speaker Change: I would say expected mix, we've never really given the quarter before but in our own internal view about two thirds of what we would call the headwind for the quarter as the steel and about a third as wallboard. So we see both are improving as we move through the second quarter, but yes for the Walmart question in particular, its just the realization of the price increase is taking us longer than we'd like.

John C. Turner: So, we see both improving as we move through the second. But, for the Walmart question in particular, it's just the realization of the price increase is taking us a little longer than we'd like. All right, thanks. That's helpful. I'll leave it there. Thank you, Noah.

Speaker Change: Okay.

Speaker Change: Alright, Thanks, that's helpful I'll leave it there.

Operator: Thank you. Our next question is coming from the line of Matthew Bouley with Barclays. Please proceed with your question. Hey, good morning, everyone. Thanks for taking the questions. Maybe just stick them on the wallboard piece.

Speaker Change: Thank you. Our next question is coming from the line of Matthew Bouley with Barclays. Please proceed with your question.

Speaker Change: Hey, good morning, everyone. Thanks for taking the questions.

Maybe just sticking on the.

Matthew Adrien Bouley: You know, I know you mentioned that mix is kind of the offset, you know, here and into the next quarter. I mean, as we kind of think about the shape of, I guess, volumes, as you're talking about how this year will look where new residential really is kind of the source of volume growth. I mean, presumably, the mix headwind would persist.

Speaker Change: On the wallboard piece.

Matthew Adrien Bouley: I know you mentioned that mix is kind of the offset.

Matthew Adrien Bouley: Here and into the next quarter.

Speaker Change: I mean, as we kind of think about the shape of I guess volumes as youre talking about how this year will look where more new residential really is kind of the source of volume growth.

Speaker Change: I mean, presumably the mix headwind would would persist.

Matthew Adrien Bouley: So, can you just kind of put a little color on how you think about Q2, Q3, Q4, if really new resi is the big driver of growth, you know, what that would do to the mix effect on wallboard price? Thank you. I mean, it really should be flat over the next couple of quarters in total. Maybe we can do a little bit better than that.

Speaker Change: So can you just kind of put a little color on how you think about Q2 Q3 Q4, if really new resi is the big driver of growth.

Speaker Change: What what that would do to the mix effect on wallboard price. Thank you.

Speaker Change: I mean, it really should be flat over the next couple of quarters in total maybe we can do a little bit better than that but the gross margins improve because the cost of service, while operating margins improved but so does the gross margins improve because at the end of the day, both commercial and single family growth margins are similar but the next headline price is going.

John C. Turner: But the growth margins improved because the cost of service is well; the operating margins, you know, improve. But so do the growth margins, because at the end of the day, both commercial and single family growth margins are similar, but the net headline price is going to be flat. But as both go up, the gross margin dollars improve. Get this back to that 32%, and you get this back into pretty good profitability. I got it.

Speaker Change: Flat.

Speaker Change: But as both go up gross margin dollars improve.

Speaker Change: Gets us back to about 32%.

Speaker Change: Yes.

Speaker Change: Makes us back into a pretty good profitability.

Matthew Adrien Bouley: Okay, thanks for that. And then, secondly, I guess also back down to the margin side. So, the gross margin, I guess one quick clarification: how much of that guide of 31.5 is purchase accounting from Camco. If you could quantify that, that would be great.

Speaker Change: Got it okay. Thanks for that.

Speaker Change: And then secondly.

Speaker Change: Also back down to the margin side.

Speaker Change: So the gross margin I guess, one quick clarification, how much in that guide of 31 five is purchase accounting.

Speaker Change: From Camco. So if you could quantify that but then just kind of higher level. When you think about getting back to 32 I'm curious if there is any kind of I don't know if theres like a temporary inventory headwind on the gross profit that would that would dissipate. If you saw price stability. So just any kind of color on that.

Matthew Adrien Bouley: But then, just kind of higher levels, you know, when you think about getting back to 32, I'm curious if there's any kind of, I don't know if there's like a temporary inventory headwind on the gross profit that would dissipate if you saw price stability, so just any kind of color on that. And I guess I'll squeeze this one in here too, but with EBITDA margins being consistent year over year in the second quarter, does that also mean you should be getting to SG&A leverage beginning in Q2? So, sorry for all the questions, but if you could address that, that would be great. Thank you. I'll speak to the first one, Matt.

And I guess I'll squeeze one in here too, but the but the EBITDA margins being consistent year over year in the second quarter does that also mean you should be getting to SG&A leverage beginning in Q2, so sorry for all the questions, but if you could address that thank you.

Speak to the first one that we've talked about the purchase accounting impact in Q4, we wouldn't expect any further continuous continuance of that into Q1. After the cost of sales line will obviously hasnt effects related to G&A and amortization on the step ups in those types of things both with regard to cost of sale.

Scott M. Deakin: We talked about the purchase accounting impact in Q4. We wouldn't expect any further continuance of that into Q1 at the cost of sales line. We'll obviously have impacts related to G&A and amortization on the step-ups and those types of things. But with regard to cost of sales, you shouldn't see anything. I'm going to address the last part of your question because I remember it better.

Speaker Change: You Shouldnt see anything there.

Speaker Change: I'm going to address the last part of your question because I remember it better yes, we should start seeing some SG&A leverage in Q2.

Scott M. Deakin: Yes, we should start seeing some SG&A leverage in Q2. It's not going to be dramatic, but it'll be good to get us to flat EBITDA margins on a year-over-year basis, with expected sales north of that mid-single-digit range. You know, we expect Q2 to kind of rebound nicely for us. Yep, got it, okay, and I was asking about the kind of inventory headwind. Is there any kind of inventory headwind given deflation that would dissipate, or is it temporary? Now, we don't have deflation in wallboard, so we're not placing that on the wallboard side. On the steel side, it comes through pretty quickly.

Speaker Change: It's not going to be dramatic, but it is going to be good to get us to flat EBITDA margins on a year over year basis.

Speaker Change: With expected sales north of that mid single digit range.

Speaker Change: We expect Q2 to kind of rebound nicely for us.

Speaker Change: Yeah.

Speaker Change: Yes got it Okay and then.

Speaker Change: I was asking about the kind of inventory headwind is there any kind of inventory headwind given deflation that would dissipate or is it temporary.

Matthew Adrien Bouley: So we pass pricing on steel through much faster, either up or down. So no, we don't anticipate having a big problem with inventory. You know, the steel market being commercial, a lot of the larger commercial work is protected for a period of time through bid activity and through commitments at the manufacturing level to us. And so the shorter term business, the more stock steel business, it turns very, very, very quickly. So we don't anticipate a big squeeze. All right. Thanks, guys. Thanks for addressing all that. I appreciate it.

Speaker Change: So we don't have deflation in wallboard, so we're not facing that on the wallboard side on the steel side. It comes through pretty quickly. So we pass pricing on steel through much faster either up or down. So no. We don't we don't anticipate having a big problem with inventory.

Speaker Change: The steel market being commercial.

Speaker Change: A lot of the larger commercial work is protected for a period of time.

Speaker Change: Through good activity and through commitments at the manufacturing level to us.

Speaker Change: And so the shorter term business the more stock steel business. It turns very very very quickly. So we don't anticipate a big squeeze in steel.

Speaker Change: Alright, thanks, guys. Thanks for addressing all that I appreciate it.

Speaker Change: Thank you.

Operator: Thank you. Thank you. Our next question is coming from the line of David Manthey with Baird. Please proceed with your question. Thanks. Good morning, everyone.

Speaker Change: Thank you. Our next question is coming from the line of David Manthey with Baird. Please proceed with your question.

David John Manthey: Thanks, and good morning, everyone.

David John Manthey: JT, last December on the call, you addressed each of your three key end markets. You talked about the possibility of an air pocket in commercial demand during calendar 24. You talked about a moderation in multifamily once you worked through the backlog, and then a recovery in single-family housing demand. The overlay there, though, you said that easing in credit markets will drive expansionary improvements thereafter. Just given the lack of rate movement, could you contrast your current outlook in those three categories with that of six months ago? Sure, I think multifamily, you know, that was kind of already baked in, right?

Speaker Change: J T last December on the call you you addressed each of your three key end markets, you've talked about the possibility of an air pocket in commercial demand during calendar 'twenty four you talked about.

John C. Turner: A moderation in multifamily once you work through the backlog and then a recovery in single family housing demand.

Speaker Change: The overlay there, though you said that.

Speaker Change: Using in credit markets will drive expansionary improvements thereafter, and just given the lack of rate movement could you contrast, your current outlook in those three categories with that six months ago.

Speaker Change: Sure I think multifamily that was kind of already baked in right and so.

John C. Turner: And so we, there's still 900,000 units out there as of the last report. I mean, I think this morning the new report came out, but we're on here with you guys. So 900,000 units in the last report; they build about 450,000 units a year. So we really felt like, you know, we had another. We feel like we have another couple of quarters before we start to see the big declines there. So nothing's changed in my mind about that.

Speaker Change: There is still 900000 units out there as of the last report I mean, I think this morning, the new report came out but we're on here with you guys. So 900000 units in the last report they build about 450000 units a year. So we really felt like we had a habit. We feel like we have another couple of quarters before we start to see the big declines there. So nothing's changed in my mind there.

John C. Turner: I think, you know, my hopeful side on single-family homes would have been that we would have started to at least get an indication that rates were coming down by now, and, of course, it seems like higher for longer, although maybe there's some September relief. I doubt it.

Speaker Change: I think my hopeful side on single family would have been that we would have started at least get an indication that rates were coming down by now and of course, it seems like higher for longer although maybe there's some September relief I doubt it probably.

John C. Turner: Probably, you know, post the election, I think we'll start seeing some rate relief, which is good for next year. So our single family view is the same as I gave you before, but I don't think we'll see a lot of upside to what we've just talked about. I mean, it's really bumpy.

Speaker Change: Post the election, I think we'll start seeing some rate relief, which is good for next year. So the thing are single family view is the same as I gave you before but I don't think we'll see a lot of upside to what we've just talked about and commercial activity.

Speaker Change: I mean, it's really bumpy.

John C. Turner: I think it's probably a little worse than I would have guessed six months ago, based on just a more difficult financing environment for privately financed projects. Will the megaprojects offset all of it? I don't think so.

Speaker Change: I think it's probably a little worse than I would've guessed six months ago.

Speaker Change: Upon just a more difficult financing environment for privately.

Speaker Change: Finance projects.

Speaker Change: Well the Mega projects offset all of it I don't think so I think thats why we talked about maybe having some declining year over year results in fourth quarter of next year relatively flat.

John C. Turner: I think that's why we talked about maybe having some declining year-over-year results in the fourth quarter of next year, relatively flat Q2, Q3 type overall commercial activity. Okay, thank you for that. And second.

Speaker Change: Q2, Q3 type overall commercial activity.

Speaker Change: Okay. Thank you for that.

Speaker Change: Second as.

David John Manthey: As it relates to the single-family side, I don't know exactly what timeframe you're talking about. You said through April, up 26%, and I'm not sure if that the correlation is to your 2.8 percent single-family sales per day in the April quarter. And I know there's a difference in starts and completions; there's a gap there.

Speaker Change: As it relates to the single family side I don't know exactly what timeframe you are talking about you said through April up 26% and I'm not sure.

Speaker Change: Okay.

Speaker Change: Correlation is to your two 8% single families.

Speaker Change: Sales per day in the April quarter.

Speaker Change: No Theres a difference in starts and completions of the gap there.

David John Manthey: Could you address that? And then, just in terms of within single-family housing, are you seeing any noticeable trends in the square feet of wallboard you're selling per housing start? Is there any size issue that is also influencing the numbers?

Could you address that and then just in terms of within single family housing are you seeing any noticeable trends of the square feet of wallboard, you're selling per housing start is there any size issue that.

Speaker Change: It's also influencing the numbers.

John C. Turner: Yeah, let me address the second comment first. Interestingly enough, we are not seeing, in our big national accounts, less wallboard per unit. But I think what we're seeing is we're seeing more single-family versus townhouse activity. And so while the single-family houses are using a little less wallboard, townhouse activity is much slower than it was before.

Speaker Change: Yes, let me address the second comment first interestingly enough, we are not seeing in our big National accounts less wallboard per unit, but I think what we're seeing is we're seeing more single family versus townhouse activity and so while the single family houses are using a little less wallboard.

Speaker Change: Townhouse activity is much slower than it was before.

John C. Turner: And so we're seeing more actual single families going into that, going into that, going into that market, or going into that, that demand picture. As far as the timing goes on the 26%, so let me tell you what the 26% was. That was the non-seasonally adjusted starts through April. So if you look at the single family starts through April, non-seasonally adjusted, that was the Census Bureau's number of 26% year-over-year improved starts.

Speaker Change: So we're seeing more actual single family going into that going into that.

Speaker Change: Going into that market, we're going into that demand picture for us.

Speaker Change: As far as the timing goes on the 26%. So let me tell you what the 26% was that was the non seasonally adjusted starts through April. So if you look at the single family starts through April non seasonally adjusted that was the census, bureau's number of 26% year over year improved starts.

John C. Turner: Those probably follow on in a six to nine month period. And so that's why we see accelerated family sequential growth for us as we get through our Q1 and into Q2 and Q3, which is why we just talked on the call about having our growth rate be better than mid-single digits in Q2 and Q3, almost all of that being driven by single-family activity. Got it. That sounds great.

Speaker Change: Those probably follow on in a six to nine months period.

Speaker Change: And so that's why we see accelerating <unk>.

Speaker Change: Emily sequential growth for us as we get through our Q1 and into Q2 and Q3, which is why we just talked on the call of having our growth rate better than mid single digits in Q2, and Q3, almost all of that being driven by single family activity.

David John Manthey: Thanks, J.T. Thank you, David. I appreciate it. Thank you. Our next question is coming from Steven Ramsey with Thompson Research Group. Please proceed with your question. Hey, good morning. This is actually Brian Biros, not for Steven.

Speaker Change: Got it.

Speaker Change: Sounds great. Thanks J T.

David I appreciate it.

Speaker Change: Thank you. Our next question is coming from Steven Ramsey with Thompson Research Group. Please proceed with your question.

Speaker Change: Hey, Good morning. This is actually Brian Biros on for Steven Thank you for taking my questions.

Operator: Thank you for taking my question. We're going to start on the residential side, large home builder. We've seen a lot of shared gain in the past few years here. Can you kind of just refresh us on how your positions in the past couple years have reflected this and the higher positioning for the upcoming years, the kind of strategic efforts you guys are making to benefit from the large homebuilder fair game? Yeah, I mean, we've talked about it now for multiple quarters in a row; we continue to gain share with the larger home builders. Our scale and national presence is important for the national home builders, as the national home builders tend to be more center-led over time.

Brian Biros: Maybe just start on the residential side large homebuilders I've seen a lot of share gains and in the past.

Brian Biros: Few years here can.

Brian Biros: Can you kind of just refresh us on how you're positioned in the past couple of years. So that's been a higher discounting for the upcoming years.

Speaker Change: Strategic efforts you guys are making to benefit from the large homebuilder fair game.

Brian Biros: That actually helps us as their center-led purchasing organizations and center-led construction organizations value what we do more so. So I think we've talked about it before. If the National Home Builder was representative of a 35% share, 30-35% share of the total, we're probably 45%. You know, 50% of our share is upwards almost all of our new builder businesses. National Home Building, at it, and then second, on ceiling volume.

Speaker Change: Yes.

Speaker Change: <unk> talked about it now kind of multiple quarters in a row, we continue to gain share with the larger homebuilders.

Speaker Change: Our scale and national presence is important for the national homebuilders as the National Homebuilders tend to be more center led over time that.

Speaker Change: That actually helps us as their center led purchasing organizations and centralized construction organizations value what we do.

Speaker Change: More so so I think we've talked about it.

Speaker Change: If the national Homebuilder with represented about 35% share of 30% to 35% share of the total were probably 45%.

Speaker Change: 50% of our shares is upwards almost.

Our new build their businesses.

Speaker Change: National Homebuilders.

Speaker Change: Got it and then second.

Speaker Change: On ceiling volumes.

Speaker Change: Pretty nice in the past few quarters here it looks like you're expecting another strong performance in Q1 can you just kind of touch a little bit further on kind of what's driving that I think about the end markets there with tenant improvement kind of weak not great.

Speaker Change: The headwinds and tailwind now. Thank you, yes, so offices headwind right I mean, it's still office activity remodel activity in office pretty quiet.

John C. Turner: [inaudible] Yeah, so office is your headwind, right? I mean, still office activity, and office remodel activity in the office is pretty quiet. And the tailwinds are data centers, public and private education, and the healthcare space. So those three are really good right now.

Speaker Change: And the tailwind or data centers public and private education in the healthcare space. So those three are really good right now and so datacenters use a tremendous amount.

John C. Turner: And so data centers use a tremendous amount of ceilings, suspended ceilings, obviously primary education, secondary education, lots of suspended ceilings, and that activity is really strong, and you can see it in the Census Bureau reports on where commercial spending is still growing, still growing in healthcare, still growing in education. You know, if you look at the, it shows that it grows in the office, but that's data centers. They have data centers rolling into the office category, so that's really your strength there.

Speaker Change: The amount of ceilings.

Speaker Change: Ceilings.

Speaker Change: Obviously primary education secondary education lots of suspended ceilings and that activity is really strong and seat in the census Bureau reports on where the commercial spending is still growing still growing in health care is still growing in education.

Speaker Change: If you look at the.

Speaker Change: It shows that it grows in office, but thats data centers, they have datacenters rolling into the office category. So that's really your strength there.

Speaker Change: Got it thank you.

Brian Biros: Got it, thank you. Thank you. Our next question is coming from the line of Mike Dahl with RBC Capital Markets. Pleased to see you with your question. Thanks for taking my questions.

Speaker Change: Thank you. Our next question is coming from the line of Mike Dahl with RBC capital markets. Please proceed with your question.

Operator: I want to start on steel pricing, so... Obviously, you know, we've seen some increased attempts over time, which in the recent past have proven unsuccessful. We saw weakening through the quarter. You talked about weakening month over month through 1Q. I guess, what's giving you confidence that we see stability thereafter? It's unclear fundamentally whether anyone's blinked on capacity.

Speaker Change: Hi, Thanks for taking my questions.

Michael Glaser Dahl: I wanted to start on steel pricing so.

Speaker Change: Obviously, we.

Speaker Change: We've seen some increase in terms over time, which in the recent past proven unsuccessful.

Speaker Change: A weakening through the quarter, you talked about weakening month over month through one Q I guess, what's giving you confidence that you'll see stability thereafter.

Speaker Change: It's unclear fundamentally whether anyone is bringing on capacity demand you pointed out it's still little choppy. So why why would this time be.

Michael Glaser Dahl: Demand, you've pointed out, is still choppy. So, why would this time be different on the steel price increases? And then maybe if you take your comments for 1Q as far as where you'll end up at the exit rate, thinking about carryover deflation into QQ and beyond. Yeah, we've got q1 down, you know, low single digits sequentially, and we have q2 flattening with the price increase announcement, and kind of staying there. We kind of feel like we're near a bottom. The underlying commodity seems to be bottoming or has bottomed. Of course, we've seen that before. I think every one of your comments is very fair.

Speaker Change: On the steel price increases and then maybe if you if you take your comments for <unk> as far as where you'll end up at the exit rate.

Thinking about carryover deflation into <unk> and beyond.

Speaker Change: Yes, we've got Q1 down low single digits sequentially, and we have Q2 flattening with the price increase announcements.

Speaker Change: And kind of staying there where kind of we feel like we're near bottom the underlying commodity seems to be bottoming or has bottom of course, we've seen that before I think every one of your comments is very fair.

John C. Turner: You know, for us, as you know, I don't want to call ourselves a victim by any stretch of the imagination, but we're certainly not the driver of steel prices, and we're a very small part of the overall steel market. So, I think, ultimately, what's going to stabilize steel is going to be a lower rate environment, which is going to help people go out and buy cars and buy appliances and do all the things that they'd like to do. You know, the used car market doesn't help us, obviously. The new car market is doing so well, and so everybody's buying used cars right now because the cost of a new car is crazy.

Speaker Change: For us as you know I don't want to call ourselves a victim by any stretch of imagination, but we're certainly not the driver of steel prices.

Speaker Change: And we're a very small part of the overall steel market. So.

Speaker Change: Ultimately, what's going to stabilize steel is going to be a lower rate environment, which is going to help people go out and buy cars and buy appliances and do all the things that they'd like to do.

The used car market doesn't help us obviously, the new car market does and so everybody is buying used cars right now because the cost of a new card crazy. So I think that what youll see with rates coming down.

John C. Turner: So I think that what you'll see with rates coming down... And you'll see a stabilization in a lot of places for us, but steel in particular. But right now, we feel like the steelmakers who we buy from seem to be pretty adamant that this price increase is necessary and will stick. So we'll see, we even put that in our comments here on that particular case. You know, we're calling out an inflationary environment in wallboard; we're not yet calling out an inflationary environment in steel.

Speaker Change: Youll see a stabilization and a lot of places for us, but steel in particular, but right now we feel like the forming with steel formers, who we buy from <unk>.

Speaker Change: Seem to be pretty adamant that this price increase is necessary and will stick.

Speaker Change: So we will see we even put that in our comments here on that in that particular case were calling out an inflationary environment in wallboard, not yet calling out an inflationary environment in steel, but what we have is sequential declines for this quarter and then a flattening as we go through the balance of the year, that's what's in our outlook.

John C. Turner: But what we have is sequential declines through this quarter and then a flattening as we go through the balance of the year. That's what's in our outlook. Okay, and then just to follow up and tie it into my second question, then so if we're down low single digits in, www.youtube.com.uk, Well, again, in that quarter, we have steel prices flat. This quarter is where we're going to, this is our Q1, and our Q1 is where we have it down low single digits, then flat sequentially thereafter because the price increases have all been announced for July So we don't expect to see a lot of steel deflation post this quarter, but Scott's comments indicated that this quarter we might.

Speaker Change: Okay, and then just to follow up and to tie it into my second question. Then so if we're down low single digits.

Speaker Change: <unk> and flat thereafter, it still seems like there'll be some carryover of year on year deflation. If you could size the year on year.

Speaker Change: That would imply.

Speaker Change: For <unk>.

Speaker Change: And then get back to the SG&A dynamic if you're continuing to see the deal pricing pressure.

Speaker Change: And I think.

Speaker Change: Appreciate your comments on kind of the accelerated top line, but a lot of that is also acquisition driven which has it's really elaborate SG&A some of the dynamics around some some inflationary pressures.

Speaker Change: Based on everything we hear from everyone else seems like those.

Speaker Change: Next a relatively sticky so I guess I'm still.

Speaker Change: So looking for a bit better of a bridge to that.

Speaker Change: Get to.

Speaker Change: It's a quick return to SG&A leverage in this environment.

Speaker Change: Well again in that quarter, we have steel prices flat sequentially. This quarter is where we're going to do will be as our Q1. Our Q1 is where we have it down low single digits, then flat sequentially thereafter, because of the price increases have all been announced for July.

Speaker Change: So we don't expect to see a lot of steel deflation post this quarter Scott's comments indicated that this quarter we do.

John C. Turner: And going forward, though, we also don't have much volume in steel. Right. So we're basically looking at steel being flat sequentially from a volume perspective.

Speaker Change: Going forward, though we also have much volume in the steel business.

Speaker Change: Alright, so we're basically looking at steel being flat sequentially from a volume perspective, so we're not double fighting that double whammy of a declining price and delivery expense.

John C. Turner: So we're not double fighting that double whammy of a declining price and delivery expense. So that's a big reason as to why SG&A flipped in Q2. But also, SG&A flips in Q2 because we've got strong wall board volume and a lot of that is residential, and the cost to deliver that is lower than the commercial cost to deliver. And so we expect that as that happens... We'll be able to manage our SG&A, and additionally, I mean, we're doing a lot of things internally as the commercial market and the multifamily market appear to be, you know, flattening and preparing for decline.

Speaker Change: So that's a big a big reason as to why the SG&A.

Speaker Change: It flips in in Q2, but also the SG&A flips in Q2, because we've got strong wallboard volume and a lot of that is residential and the cost to deliver that is lower than the commercial cost to deliver and.

Speaker Change: And so we expect that at that time.

Speaker Change: We will be able to manage our SG&A and Additionally, I mean, we're doing a lot of things internally is that commercial market.

Speaker Change: The multifamily market appears to be flattening or get preparing for decline were doing were doing things internally you would expect us to do which is to control our G&A right. So we're doing all of those things so.

John C. Turner: We're doing, you know, we're doing things internally that you'd expect us to do, which is to control our G&A, right? So we're doing all those things. So, you know, the big wild card, you know, is going to be steel in some respects into Q2. If what happens is what we believe will happen, I think we'll start leveraging SG&A in Q2 and post-Q2. Sorry, I don't know if I'll get cut off here, but again, I hear your comments on sequentially. That makes sense, but year over year, it still seems like some of those things would be headwinds.

Speaker Change: The big wildcard.

Speaker Change: Is gonna be steel in some respects into Q2, if what happens is what we believe will happen I think we will start leveraging SG&A in Q2 and post Q2.

Speaker Change: Okay.

Speaker Change: Sorry, I don't know if I'll get cut off here, but again.

Speaker Change #100: I hear your comments on sequentially that makes sense, but year over year. It still seems like some of those things would be.

Michael Glaser Dahl: So when you talk about leveraging SG&A, are you talking about sequential or year on year? Your SG&A percentage will be down year on year?

Speaker Change #101: So when you talk about leveraging SG&A are you talking about sequential or year on year. Your SG&A percentage will be down year on year.

John C. Turner: And again, we're going to get the wallboard price. We're getting wallboard prices, too, right? So that's important.

Speaker Change #102: Year on year.

Speaker Change #102: Year on year, and again, we're going to get wallboard price, we're getting wallboard pricing too right.

Speaker Change #103: So that's important wallboard is big part of the business Okay.

John C. Turner: Wall Board's a big part of the business still. Okay. Thank you. Absolutely.

Speaker Change #103: Okay.

Speaker Change #104: Thank you.

Speaker Change #104: Absolutely.

Operator: Thank you. Our final question is coming from the line of Jeffrey Stevenson with Loop Capital Markets. Pleased to see you with your questions. Hey, thanks for taking my questions today.

Speaker Change #105: Thank you. Our final question is coming from the line of Jeffrey Stevenson with loop capital markets. Please proceed with your question.

Jeffrey Patrick Stevenson: So regarding near-term wallboard margin pressure, have you experienced an unusual amount of pushback from large national accounts that historically need to have passed along manufacturing price increases? I mean, I'd say it's about the same except for in the environment we were in a couple of years ago when the demand, you know, housing starts were in that 1.5, 1.6 million range where, you know, the demand outstripped the ability to supply. And so there were there were.

Jeffrey Patrick Stevenson: Hi, Thanks for taking my questions today.

Jeffrey Patrick Stevenson: Regarding near term wallboard margin pressure have you experienced an unusual amount of pushback from large national accounts than you've historically had passionate along manufacturer price increases.

Speaker Change #107: I mean, I'd say, it's about the same except for in the environment. We're in a couple of years ago when the demand.

Speaker Change #107: Housing starts were in that $151 $6 million range, where the demand outstripped the ability to supply and so there were there were.

Jeffrey Patrick Stevenson: Spotty service issues across the industry. You know, right now, what you're seeing is the industry's getting close to that environment again, and we think we'll probably be in that, depending on what happens with commercial and multifamily to some extent late in our fiscal year. But with any recovery in single-family, it's gonna get pretty tight.

Speaker Change #107: Spotty service issues across the industry right now what Youre seeing is as the industry is getting close to that environment again, and we think we'll probably be in that depending on.

Speaker Change #107: What happens with commercial and multifamily to some extent.

Speaker Change #107: Late in our fiscal year, but with any recovery in single family, it's going to get pretty tight so I would say that as a pretty normal cycle for the big National Homebuilders that we talk to and like I said, we've had some success in that recently and getting getting that there I think the balance of the market.

John C. Turner: So I would say that this is a pretty normal cycle for the big national home builders that we've talked to. And like I said, we've had some success with that recently in getting that there. I think the balance of the market is a little more difficult than we had anticipated in getting pricing. All that being said, we're gonna push it through. And as I said, I think it was two years ago, I don't know if everybody remembers, or three years ago, whatever it was, whatever we take, we're gonna push through.

Speaker Change #107: Is it a little more difficult than we had anticipated and getting pricing all that being said, we're going to we're going to push it through and as I said I think it was two years ago I don't know if everybody remembers or three years ago. Whenever it was whatever we take we're going to push through and the timing of that may be a little bit elongated from time to time, but if we take pricing.

John C. Turner: And the timing of that may be a little bit elongated from time to time, but if we take pricing, it's gonna go into the market. And that's where our heads are, and that's where our guys are out there.

Speaker Change #107: It's going to go into the market.

Speaker Change #107: And Thats, where thats, where our heads are and thats, what where our guys are out executing today.

John C. Turner: Okay, understood. And just for clarification, how did your wallboard price at the end of April compare with your average quarterly wallboard price? Because you reported a sequential improvement in February wallboard pricing on your last earnings call, I wondered if pricing came off at all as the quarter progressed, or if there were any changes more mix related. Yeah, we were 475, 475, 475. But the February improvement went away pretty quickly with some national home builder mix picking up. So we were believing that we would see a little bit of sequential improvement in the quarter, but it was pretty much flat the entire quarter.

Speaker Change #108: Okay understood.

Speaker Change #109: And just for clarification, how did your wallboard price at the end of April compare with your average quarterly wallboard price because you reported a sequential improvement in February wallboard pricing last earnings call I'm wondering if pricing came off at all as the quarter progressed or if there was any changes more mix related.

Speaker Change #110: Yes, we were 475%, 75%, 75% February improvement went away pretty quickly with some national homebuilder mix pick.

Speaker Change #111: Picking up so we were believing that we would see a little bit of sequential improvement in the quarter, but it was pretty much flat for the entire quarter.

Jeffrey Patrick Stevenson: So we gave 475 as the answer, but we basically ended it flat. Okay, great. Thank you. Thank you. That concludes our question and answer session, and this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.

Speaker Change #112: So we exited 475 is that as the answer.

Speaker Change #112: We basically have it flat all quarter.

Speaker Change #113: Okay, great. Thank you.

Speaker Change #114: Thank you that concludes our question and answer session and this does conclude today's teleconference. We thank you for your participation and you may disconnect. Your lines at this time.

Speaker Change #114: Yeah.

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Speaker Change #114: Okay.

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Speaker Change #114: Mhm.

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Speaker Change #114: Yes.

Speaker Change #114: Okay.

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Speaker Change #114: Okay.

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Speaker Change #114: Uh-huh.

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