Installed Building Products, Inc.

Greetings, and welcome to the Installed Building Products Fiscal 2022 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the former 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, Darren Hicks, Managing Director of Investor Relations. Thank you. You may begin.

Good morning, and welcome to Install Building Products' third quarter 2022 conference call. Earlier today, we issued a press release on the financial results for the third quarter, which can be found in an 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 law. These 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 the factors discussed in the risk factors section of the 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 for 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 a company's earnings release and additional reconciliation for adjusted EBITDA for earlier physical quarters 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 we are 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. I am pleased to report IBP achieved another quarter of record net revenue, net income, and adjusted EBITDA, which was led by a favorable volume and pricing environment across our residential end markets and the hard work of our team members. Beyond the record results, our role in creating a sustainable future through installing products that promote energy efficiency is an important component of how we define success. During the third quarter, we published our second annual ESG report outlining the progress we have made along our ESG journey over the past year. Since our inception, we have worked hard to promote the culture of doing what's right, and we believe we can continue to make a positive impact in the lives of our employees and the communities in which we operate. The dedication of our team members remains extremely important as we navigate an increasingly complex economic, social, and business environment. To everyone at IDP, thank you for your commitment, your hard work, and a tough job always done well. Looking at our record third quarter results, we experienced another quarter of excellent residential sales growth. For the quarter, within our installation segment, we experienced a 35% increase in residential same-branch sales from the prior year period, which was driven by a 35% increase in single-family same-branch sales and a 33% increase in multifamily same-branch revenue. By comparison, total U.S. residential completions increased by 6.5% during the third quarter. While completions growth did improve both sequentially and year-over-year, we believe U.S. housing completions continue to be affected by labor, material availability, and extended residential construction cycle times. During the third quarter, price mix increased 27% over the prior year period. Consistent with the inflationary trends in the construction industry and increasing demand for our services, Our pricing efforts in stabilized product mix compared to the prior year have contributed to the largest quarterly increase in price mix we've achieved since becoming a public company. We continue to make prudent adjustments to align our pricing with the value we offer our customers in ongoing inflationary trends. Additionally, the supply chain for many of the building products and materials we install remain constrained during the third quarter. We anticipate that supply chain tightness will continue to persist, but our experience managing through this environment over the last year and a half has prepared us for future challenges. We are closely watching our markets for changes in residential activity as the home building industry navigates a rising mortgage rate environment. We continue to believe IBP is better positioned than at any other time in our history to manage the business throughout the U.S. housing cycle. In addition, we believe the elevated number of houses currently under construction, according to the U.S. Census Bureau, should remain supportive of our residential business throughout 2022 and into 2023. Within our commercial business, same branch sales increased 3% in 2022 third quarter, with bidding activity remaining stable and project bid acceptance steady relative to the 2022 second quarter, and we remain focused on improving our operational efficiency. Looking into our acquisition strategy, we continue to prioritize profitable growth through acquiring well-run companies that install insulation and complementary building products. During the 2022 third quarter, we acquired an Orlando, Florida-based installer of spray foam and fiberglass insulation to residential, multifamily, and commercial customers with annual revenue of approximately $2.4 million. Our acquisition pipeline remains robust and includes opportunities across multiple geographies, products, and end markets. To date, in 2022, IDP has acquired over $73 million of annual revenue. 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. As we look to the remainder of 2022 and beyond, we remain encouraged by our market opportunity and our relative position as a leader in the insulation and building products installation industry. In order to make the most of the opportunities ahead of us, we anticipate that effective management of our supply chain will continue to be a priority. Our team will continue to work with our suppliers and customers to help ease 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 successful year, focusing on our strengths, executing our growth strategy, and creating value at IBP. So with this overview, I'd like to turn the call over to Michael to provide more detail on our third quarter financial results. Thank you, Jeff, and good morning, everyone.