Installed Building Products, Inc.

Greetings and welcome to Installed Building Products Fiscal 2022 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Darren Hicks, Director of Investor Relations. Thank you, sir. You may begin your presentation.

Good morning, and welcome to Install Building Products' first quarter 2022 conference call. Earlier today, we issued a press release on our financial results for the first quarter, which can be found in the Investor Relations section of our website. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements within the meaning of the federal securities laws. forward-looking statements include statements about future expectations, anticipation, beliefs, estimates, forecasts, plans, and prospects. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. Any forward-looking statement made by management during this call is not a guarantee of future performance, and actual results may differ materially as a result of various factors, including without limitation, the adverse impact of the COVID-19 crisis, general economic and industry conditions, inflation and interest rates, the material price and supply environment, the timing of increases in our selling prices, and factors discussed in the risk factors section of our company's annual report on Form 10-K, as may be updated from time to time in our SEC filings. Any forward-looking statement speaks only as of the date hereof. The company undertakes no duty or obligation to update any forward-looking statements as a result of new information or future events. except as required by federal securities laws. In addition, management uses certain non-GAAP performance measures on this call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted gross profit margin, and adjusted selling and administrative expense. You can find a reconciliation of such measures to their nearest GAAP equivalent in the company's earnings release and additional reconciliation for adjusted EBITDA for earlier fiscal years in our investor presentation, which are available on our website. This morning's conference call is hosted by Jeff Edwards, our Chairman and Chief Executive Officer, and Michael Miller, our Chief Financial Officer, and joined by Jason Neiswanger, our Chief Administrative and Sustainability Officer. I will now turn the call over to Jeff.

Thanks, Darren, and good morning to everyone joining us on today's call. As usual, I will start the call with some highlights and then turn the call over to Michael, who will discuss our financial results and capital position in more detail before we take your questions. IBP produced another record quarter driven by strong demand within our core residential housing markets and the benefits of record quarterly price mix growth. Record first quarter sales and profitability are encouraging as we overcame continued inflationary and supply chain challenges as well as the lingering impacts of the COVID-19 pandemic, primarily within our commercial market. Our financial and operating results reflect the resiliency of our business model, the benefits of our product and market and geographic diversification strategies, and the hard work of our team members nationwide. The dedication of our team members is especially important in the current environment as homebuilders navigate ongoing supply chain constraints and struggle to keep up with significant demand for new homes. IBP's value proposition resonates with our customers because of our focus on providing an exceptional level of service by completing jobs correctly and on schedule. As a result, our local branches have done an excellent job aligning our selling prices with the value we offer our customers, which has supported profitability and strong incremental margins. To everyone at IBP, thank you for your commitment, your hard work, and a tough job always done well. Before I go further into our highlights, I would like to note that this quarter we have realigned our operating segments to reflect changes in our business. We now have two reporting segments, installation and other, which includes our distribution and manufacturing operations. Michael will touch more on this later in the call. So looking at our first quarter results in more detail, we experienced another quarter of strong residential growth while the COVID-19 pandemic continued to impact activity within our commercial operations. For the quarter, within our installation segment, we experienced a 28.3% increase in residential same-branch sales from the prior year period, which was driven by a 29.4% increase in installation single-family same-branch sales growth and a 23.1% increase in installation multifamily same-branch revenue. By comparison, Total U.S. residential completions decreased by 5.5% during the first quarter, which we believe was influenced by extended residential construction cycle times. During the first quarter, price mix increased 14.6% over the prior year period. Consistent with the inflationary trends in the construction industry and the increasing demand for our services, our pricing efforts and stabilized mix compared to the prior year have contributed to the strongest quarterly increase we have achieved since becoming a public company. We continue to make prudent adjustments to align our pricing with the value we offer customers and inflationary trends. As expected, the supply chain for many of the building products and materials we install remain constrained during the first quarter. We anticipate that supply chain challenges will continue for the foreseeable future, but our asset-light business model should enable us to remain flexible and generate strong cash flow. Our branches benefit from our national scale, material buying advantage, and strategic plans aimed at diversifying and expanding our products and markets in geographic presence. While mortgage rates have increased since the beginning of the year, favorable demographics and tight supply have continued to support housing construction. In addition, with the record number of permitted units that have yet to be started, New housing construction is expected to remain supportive of our business throughout 2022. Within our heavy commercial business, same branch sales were roughly flat in the 2022 first quarter with bidding activity remaining stable and project bid acceptance steady relative to the 2021 first quarter. We estimate our large commercial backlog was $177.7 million at March 31, 2022. The heavy commercial construction market continues to represent a significant long-term growth opportunity for IBP, and we remain focused on improving our operational efficiency while expanding our exposure within compelling commercial markets nationwide. Looking at our acquisition strategy in more detail, we continue to prioritize profitable growth through acquiring well-run companies that install insulation and complementary building products. During the first 2022 first quarter and April, we acquired a North Carolina-based installer of spray foam insulation, fiberglass insulation, and fireplaces in the Asheville, North Carolina market with annual revenue of approximately $8.5 million and a New Jersey-based distributor of gutter supplies and accessories to the U.S., Northeast, and Mid-Atlantic markets with annual revenue of approximately $45 million. Since the first quarter ended, we are excited to become an early investor in Energy.ai and a part of the innovative AI-driven platform they are developing. Their platform provides actionable insight into a company's energy usage and carbon emissions using artificial intelligence. In fact, we like the platform so much, we decided to partner with Energy.ai to implement their solution at IDP as we work to reduce our greenhouse gas emissions. Our acquisition pipeline remains robust and includes opportunities across multiple geographies, products, and end markets. As a result, we believe 2022 will be another strong year of acquisition growth, and we expect to acquire at least $100 million of revenue in 2022. As we look to 2022 and beyond, we remain excited by the direction in which we are headed and the compelling outlook across our residential and commercial end markets. We anticipate that effective management of our supply chain will continue to be a priority throughout this year. Our purchasing, logistics, and warehousing teams will continue to work with our suppliers and customers to help ease these industry-wide supply chain challenges. With access to labor, a strong position with our customers and suppliers, and a healthy backlog, we believe 2022 is shaping up to be another year of profitable growth and value creation for IVP. So with this overview, I'd like to turn the call over to Michael to provide more detail on our first quarter results.