Installed Building Products, Inc.

Building Products Fiscal 2022 Fourth 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 the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Darren Hicks. Managing Director of Investor Relations. Thank you. You may begin.

Good morning, and welcome to Installed Building Products' fourth quarter 2022 conference call. Earlier today, we issued a press release on the financial results for the fourth 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. 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 potential adverse impact of the ongoing COVID-19 pandemic general economic and industry conditions, rising home prices, 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 file. 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 and accompanies 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 achieved another year of record net revenue, net income, and adjusted EBITDA. For 2022, consolidated net revenue increased 36% to $2.7 billion. Net income increased 93% to $7.74 per diluted share and adjusted EBITDA increased 54% to $439 million. Throughout the year, we focused on supporting our residential and commercial customers during a very complex operating environment, including navigating continued supply chain challenges and aligning our selling prices with the value we offer customers. The record 2022 results also extend our history of revenue, net income, and adjusted EBITDA growth to eight consecutive years every year since IBP became a public company in 2014. I'm extremely pleased that our strong performance during 2022 allowed us to continue pursuing our growth-focused capital allocation strategy. We returned a record amount of capital to shareholders in 2022 by investing $138 million to repurchase 1.5 million shares of our common stock and distributing $63 million in cash dividends In addition, we completed eight acquisitions representing approximately $109 million of annual revenue during 2022. We believe we can continue to pursue our growth-focused capital allocation strategy to route the economic cycle, and we remain focused on creating value for our shareholders. 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 2022, we published our second annual ESG report, outlining the progress we have made along our ESG journey. Employee turnover remained significantly below industry averages, which we believe is a direct result of the investments made in our employee programs since 2017. Since our inception, we have worked hard to promote a 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. Our success in 2022 is also a reflection of the resiliency of our business model, our competitive position within key geographies and end markets, the strength of our balance sheet, and the experience and dedication of our senior leaders and employees throughout the company. Since our IPO in 2014, net revenue, adjusted EBITDA, and net income have grown at compound annual growth rates of over 20%, 33%, and 40% respectively. During this period, we have completed almost 80 acquisitions, expanding our footprint across the U.S. and diversifying our revenue to additional end markets and product categories. This track record of performance is a direct result of our over 10,000 hardworking employees across the country. To everyone at IBP, thank you for your commitment and a tough job always done well. With this overview, let's look into our 2022 full year end market performance in more detail. 2022 was another excellent year of residential sales growth. Within our installation segment, we experienced a 29% increase in residential same branch sales from the prior year, which was driven by a 29% increase in single family same branch sales and a 31% increase in multi-family same branch revenue. By comparison, total U.S. residential housing completions increased by 4% in 2022. While total housing completions growth continued to improve both sequentially and year-over-year during the fourth quarter, we believe U.S. housing completions remain affected by extended residential construction cycle times. Compared to the same period last year, price mix improved 23% in 2022. Consistent with the inflationary trends in the construction industry and the increasing demand for our services, Our pricing efforts in relatively stable product mix contributed to the largest annual increase in price mix we've achieved since becoming a public company. We continue to make any necessary adjustments to align our pricing with the value we offer our customers. Within our commercial business, same branch sales increased 7% in 2022, driven by light commercial project growth, which more closely aligns with residential activity. With respect to heavy commercial, Bidding activity and project bid acceptance rates remain steady in the fourth quarter relative to the third quarter, and we are focused on improving our operational efficiency while pursuing projects with favorable economics. We continue to expand our business through acquisitions, prioritizing profitable growth through targeting well-run companies that install insulation and other complementary building products. During the 2022 fourth quarter, we completed three acquisitions, including... A North Carolina and South Carolina installer of fiberglass insulation, spray foam insulation, and gutters into new residential projects with annual revenue of approximately $21 million. A Pennsylvania installer of spray foam and fiberglass insulation into residential and commercial projects that also applies fireproofing and waterproofing to commercial structures with annual revenue of approximately $10 million. And a Montana installer of fiberglass and spray foam insulation into residential and commercial projects with annual revenue of approximately $5 million. Throughout 2022, we completed eight acquisitions representing approximately $109 million of annual revenues, surpassing our $100 million acquired revenue target. Earlier this month, we acquired Four State Insulation, a residential insulation installer servicing Virginia, Maryland, West Virginia, and Delaware with annual revenue of approximately $4 million. Looking ahead, our acquisition pipeline remains robust, and includes opportunities across multiple geographies, products, and end markets. As a result, we expect to acquire at least $100 million of revenue once again in 2023. While 2023 will present market challenges, there are also many opportunities. The backlog in our growing multifamily business is longer than one year. And while the national backlog of single-family homes is coming down, The number of units under construction continues to be at an historically high level, according to the U.S. Census Bureau. We anticipate solid financial improvement in our heavy commercial business, and strong execution in our repair and remodel business helps drive growth of nearly 50% in Q4 2022, with incentives from the Inflation Reduction Act of 2022 likely to support demand this year. So with this overview, I'd like to turn the call over to Michael to provide more detail on our fourth quarter financial results. Thank you, Jeff, and good morning, everyone.