Installed Building Products, Inc.

Greetings and welcome to the installed building product fiscal 2023 second 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 Install Building Products' second quarter 2023 earnings conference call. Earlier today, we issued a press release on our financial results for the second 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 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 statement as a result of new information or future events, except as required by the federal securities laws. In addition, management uses certain non-GAAP performance measures on this call, such as EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, 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 the company's earnings release and additional reconciliation for EBITDA and 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. IVP produced another record quarter of operating and financial results, which included record second quarter sales, net income, and earnings per share. Our financial results continue to benefit from our strategic focus on profitability over volume, as well as our diversified end markets and products. As a result, we were able to more than offset softer single-family sales through ongoing strength and solid execution within our multifamily business and improving demand within our commercial business. Our continued success is a direct result of the efficiency and diligent effort of our installers and employees across the country. Looking at our installation segment results for the second quarter, total installation sales increased 2% year over year. This was driven by a 41% increase in multifamily sales and a 24% increase in commercial sales, which combined to more than offset a 10% decline in single-family sales. IVP's multifamily sales growth accelerated to 38% on a same-branch basis, up from 30% on a same-branch basis last year. We have been successful in selling IVP's installation services across branches and other markets that historically have not served multifamily customers. Within our commercial business, second quarter same-branch installation sales increased 16%. Bidding activity and project bid acceptance rates in our heavy commercial business improved in the second quarter relative to the first quarter, while same-branch sales improved both sequentially and year-over-year. During the quarter, price mix increased by 7.2% over the prior year period. We continue to apply our local market knowledge and improve job efficiency while making adjustments to align our pricing with the value we offer our customers. The strong growth in our model family and commercial end markets has also been a benefit to our price mix disclosure, as sales to these end markets have higher average job prices relative to our single family end market. We continue to expand our product offering and geographic presence through acquisition and have closed five deals so far this year with annual revenue of over $48 million. We expect to acquire at least $100 million of annual revenue once again in 2023. During the 2023 second quarter, we completed two acquisitions, including a Florida-based installer of fiberglass and spray foam insulation serving residential and commercial customers with annual revenue of approximately $3 million, and a Texas-based installer of fiberglass, spray foam, and cellulose insulation serving residential, multifamily, and commercial customers with annual revenue of approximately $3 million. Overall, the residential housing market remains resilient as stable employment and relatively low existing home inventory levels continue to support demand for residential new construction activity. We are very encouraged that the publicly traded home builders that have reported results in the last two weeks have combined order growth of approximately 18%, the first positive result for the group in over a year. While these orders will take time to impact our revenue, we believe that the recovery in single-family home construction is clearly underway. As for the multifamily end market, the backlog remains at historically high levels, with jobs extending beyond one year. We believe we are well positioned to report another year of strong operational financial performance in 2023 as we continue to focus on profitability and effective capital allocations. Longer term, we believe IBP's strong customer relationships, experienced leadership team, national scale, and diverse product categories across multiple end markets will help IBP navigate future changes in the U.S. housing market. Our strong balance sheet, coupled with our high operating cash flow generating capability, supports ongoing acquisitions, dividends, and opportunistic share repurchase activity. We believe the installation industry is well positioned to benefit from demand driven by government legislation, including the Inflation Reduction Act of 2022 and the bipartisan infrastructure law, which are intended to improve energy efficiency in residential homes. I'm proud of our continued success and excited by the prospects ahead for IVP and the broader insulation and other product installation business. So with this overview, I'd like to turn the call over to Michael to provide more detail on our second quarter financial results.