Installed Building Products, Inc.

Greetings and welcome to the Installed Building Products Fiscal 2023 First 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 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, Darren Hicks, Managing Director of Investor Relations. Thank you, sir. You may begin.

Good morning, and welcome to Installed Building Product First Quarter 2023 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. 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 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 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 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. 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 record first quarter sales and profitability due to the exceptional efforts of our employees and the excellent service they provide our residential and commercial customers every day. First quarter sales benefited from our recent acquisitions and robust same branch growth within our multifamily and light commercial end markets. The ongoing strength in multifamily helped drive first quarter residential sales growth by 7%, which more than offset a modest deceleration in single family revenue. Our first quarter results reflect the resiliency of our business model, the hard work of our employees nationwide, and the benefits of our product, market, and geographic diversification strategies. Looking at our first quarter results in more detail, we experienced same sales growth in both our residential and commercial end markets. For the quarter, within our installation segment, we experienced a 4% increase in residential same branch sales from the prior year period, a 38% increase in multifamily same branch revenue, more than offset a 3% decline in single family same branch sales. By comparison, Total U.S. residential completions increased 12% during the first quarter, which was driven by significant year-over-year growth in multifamily completions. IBP's multifamily sales growth accelerated to 38% on a same-branch basis, up from 23% on a same-branch basis last year. We acquired CQ Insulation, a Florida-based insulation installer uniquely focused on the new multifamily end market in 2015, and the company has been successful in selling IBP's installation services across branches and other markets that historically have not served multifamily customers. Within our commercial business, first quarter same branch installation sales increased 22% driven by light commercial project strength. Bidding activity and project bid acceptance rates and our heavy commercial business remained steady in the first quarter relative to the fourth quarter, and same branch sales have begun to show improvement, increasing modestly from the prior year. We are focusing on improving our operational efficiency while pursuing projects with favorable economics. Our first quarter performance reflects our continued strategic focus, which prioritizes the profitability of a given job over job volume. We have worked hard to align with national, regional, and local builders who value our local market knowledge and job efficiency. We believe this approach is needed now more than ever as builders strive for more normalized construction cycle times. During the quarter, price mix increased by 16.5% over the prior year period. The inflationary trends we experienced in the construction industry throughout 2022 carried forward into the first quarter and we continue to make the necessary adjustments to align our pricing with the value that we offer our customers. We believe our strategy focused on profitable work to help us achieve same branch incremental EBITDA margin of 39.4% first quarter record. With a focus on growth, our profitability standards extend to our acquisition targets, and we have closed three deals so far this year with over $46 million of annual revenue. We expect to acquire at least $100 million of revenue once again in 2023. During the 2023 first quarter, we completed two acquisitions, including a Maryland and West Virginia-based installer of fiberglass and spray foam insulation into residential projects with annual revenues of approximately $4 million, and a Rhode Island-based installer of residential, mechanical, and industrial insulation serving residential, commercial, and industrial customers across the Northeast with annual revenue of approximately $39 million. In April of 2023, we also completed the acquisition of a Florida-based installer of fiberglass and spray foam insulation serving residential and commercial customers with annual revenue of approximately $3 million. Although we are still in the first half of 2023, indications from recent public home builder earnings commentary supports our belief that the housing market is returning to more normal seasonality and housing demand during the spring selling season has been fairly well supported. We believe the residential housing market will be more resilient in the back half of 2023 as a result of strong employment trends and relatively low existing home inventory levels. In addition, the backlog of our model family business extends beyond one year. We expect strong execution in our repair and remodel business to continue with incentives from the Inflation Reduction Act of 2022 likely to support demand this year. We believe we are well positioned to navigate future changes in the U.S. housing market given our strong customer relationships, experienced leadership team, national scale, and diverse product categories and end markets. In addition, our strong balance sheet coupled with our high operating cash flow generating capability supports ongoing acquisitions, dividends, and opportunistic share repurchase activity. I'm proud of our continued success and excited by the direction in which IBP is headed. So with this overview, I would like to turn the call over to Michael to provide more detail on our first quarter financial results. Thank you, Jeff, and good morning, everyone.