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Simpson Manufacturing (SSD)

Participants
Kim Orlando ADDO Investor Relations
Karen Colonias President and Chief Executive Officer
Brian Magstadt Chief Financial Officer and Treasurer
Daniel Moore CJS Securities
Tim Wojs Baird
Kurt Yinger D.A. Davidson
Julio Romero Sidoti & Company
Call transcript
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Operator

Greetings. Welcome to Simpson Manufacturing Company Incorporated Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the to turn ADDO Orlando now Relations. Investor will conference Kim over with I may begin. you you, Thank

Kim Orlando

Web laws, extent new of approximately release ir.simpsonmfg.com. Please statements the company’s undertake also the press we was Eastern X:XX earnings page The no Good and Any release applicable Web site. the subject available and second uncertainties. Actual on on are obligation quarter this afternoon, we the a based available Manufacturing that in to at expressed of historical XXXX future results be statements. company’s of materially to vary you Simpson those on being Relations Except note as ladies issued that call by filings the estimates statements. result and company’s by make earnings whether this Investor described site update and any may a gentlemen, or reports, facts available or forward-looking from read and on earnings implied otherwise. publicly page future today, Time. is the or are number to conference Such which Web events, at risks SEC’s not a company’s webcast is the Today’s certain forward-looking are required public revise call. the risks site. are statements forward-looking securities encourage on will call press and to made We PM are the of based welcome that the statements replay the Company’s expectations corporate on or company’s today and Relations to information, Investor here of

Karen turn the would Colonias, Chief and like to I Executive Now, Officer. Simpson’s over conference President to

Karen Colonias

And our is global we environment in them were hours providing the solutions XX of and then our initiatives. be year supply quarter marked everyone. you updated for the performance very XXXX chain through current gross business begin constraints, prior and and limited a I'll to with second to to we product greater good This the XX.X% which us you financials net detail. second key walk and Brian summary Thanks, prior within in Kim, will trusted implemented quarter, sales experienced driven with XX.X% drove quarter of the outlook able higher Throughout joining in during today. volume. product which for afternoon, quarter the continue of thank and over drivers a strong period. full growth million, over year quarter, in the The XX.X% of business tight in increasing the of along $XXX.X Sales ago by implementation market. with sales increases price increases the pleased second quarter, period. two increased the XX% typically primarily significantly steel our generating from was year momentum the despite marginal XX.X% increases availability price customers labor by the our prior needs prevalence quarter meeting the recent margins and We less. or by grew

a earnings diluted per result, and As from $XXX.X to of $X.XX. operations our million led to share income improved strong

we that were increases a result experienced, Looking became was two the from June XX% into products wood price XX% US the products to depending X% our X% in quarter. for Xth, the the connector increase price our sales second These XXth, period, in over the year increases primarily of to response material wood direct went to costs. second from of detail, on the ranging Effective the we results product effective increases at majority our ranging sequentially also during more mix in certain increase concrete connectors, On prior in fasteners April both price of implemented rising and and effect. price US. on a

customers quarter, XX% third will Consistent to lines the the customers of market. enables pre-buying. XX of notification practice, to that throughout rise our a with announced this become we a our of challenging continued levels most a to across with X% which received manage price day at the in least price in steel variety in effective US, increase mid-August. business reduces advance our As significant product historical price for second clause along increases for the in in inventory This our the range us June

prior our half remainder expect we of the margins while XXXX increases into recently those together margin at sourced earlier higher significantly of are purchased with first fiscal earlier steel in surge more an price XXXX, gross to the these cost double reflect support of of more steel in will These prices. market, the levels throughout steel the than higher Importantly, our gross range or average prices in costs.

will anticipate compression continuing gross discuss during XXXX into acquire are margin XXXX. price detail We fiscal materials, late in impact result which fiscal Brian raw will to remarks. beginning his this we and more in currently in higher

sales channel our experienced channel center and home trends serve, forms in other distribution we our mixed and various performance. to including to back Turning lumberyards. channels the We of contractors distribution

the a home given percentage as channel return the While this high comparison momentum the with centers year-over-year, of a second lapping our our in decline home teens customer continued, challenging with quarter Lowe's XXXX. reflected center of sales in

our includes products we and Lowe's center much customers well stores. where Last and co-op a As our see levels year, is channel we load reminder, we as and connector DIY repair elevated as in into both our and the home business. experienced of remodel, our shipped as centers began home volume

our trends elevated housing in which growth XXXX. This trend ends aforementioned a was the our US ongoing during load as for products, sales third quarter. from volumes to from and digit and other demand due next anchor center upward double similar quarter distribution fastener We was experience our mechanical increases starts. we channels Lowe's home expect in the Offsetting lapped quarter the in in decline the to at the benefited price the strength in channel of

of As reflected of lag X% multi nearly during by which starts, we the second a strength XXXX, grew quarter from housing starts the time in demand first the year-over-year. housing generally quarter experienced month in

level to our on currency in improved Finally, second year Sales lower Europe the basis strengthening quarter where Europe, local government compared COVID-XX were ability related given which to demand in prior resulted in by mandated experienced also the sales our over sales volumes. year we continue prior introduced supported closures, Virtual growth meeting shortages. Analyst I'll Investor initiatives, our which our our during our on broader management inventory a amid this event to chain year March solid Day XXrd. due turn to practices needs customer discussion key high first earlier on we supply now

order following initiatives on and structural steel. of growth name Our the equipment and priority; focused markets, OEM, original repair, in is which do it timber; remodel no which particular manufacturers; I'll yourself; concrete five mass

first capabilities products, inorganic expansion currently as growth and test on within product our DIY, and be a manufacturing opportunity in of in given order purchase the into new In our IP we low distribution three M&A. to these initiatives. are markets construction growth fastening results, place In opportunities licensing, the engineered graded aspire we growth leader timber, R&R core five to opportunities mass focused and OEM, have each all Importantly, products, that grow broader markets, within be well as the a concrete existing have competencies in appropriately fastening solutions. of wood through markets would we traditional organic through for these markets, and solutions, of

solutions enabling tools by while In and select to job. building simultaneously striving and in that Simpson both design be for with to management, customers them technology to addition, provide specify continuing and we're right a solution innovative leader the help our stronger the options

all advancements We general. key all initiatives, stage as development. Today, of Simpson technology of different growth are enhanced of growth in well across growth as of expect will each our our a drive initiatives in in

our and in to model, and execute commitment strong you officials relationships we'll ability updates any position research above [court] arise. distributors, to expertise, ongoing testing, of our along with builders, emphasizes We We keep to top for our which initiatives apprised these as are engineers, and market business our innovation. Simpson growth, them contractors, rooted will on based with continue deep engineering our confident they believe significant

to on our to capital like touch I'd allocation moment Finally, strategy. a brief take

As cash balancing flow, appropriately strong growth on remained generate to our business focused we priorities. continues and our stockholder return

performance. space. potential areas order free previous the develop Simpson's cash complete This will as of our in growth growth the operate, better and and a We our talented and identify testing moving such In the our our cash thresholds opportunities capital initiatives innovative to acquisitions our committed such looking operations. which to flow engineering, second potential In direct we lines stockholder M&A very was capital areas our XX% change technologies financial markets assist expertise, our value of Directors our building of a we as to of to to repurchases during personnel in to with in on align growth focus To product and investing also strategies to with interest strong M&A high key for avenues, threshold well remains are prioritize We of opportunistic and returning to made regard expand approved dividends quarter, support return change Board initiative key solutions in alignment venture or capital of sales investments, operational threshold or as of share help investments. and quarter forward. as the with of market in return capabilities. these summary, returns, to remain flow efforts, to in form compared to area in we're pleased our our our XX% stockholders initiatives. other from including as strategic

we second industry position expect forward experiencing, your we We our and solutions, the for and build half Looking Simpson's field inventory starts. with attention. time and consistent Thank our longstanding including the of relationships, to customers momentum to strong ahead support, by are housing continuing continuing to year, availability. technical provide strong look on supported product you the leading to

quarter outlook turn in and call who over Brian Now, discuss second greater to the I'd financial will results like detail. to our XXXX

Brian Magstadt

Thank afternoon, to today. pleased and good with you results second I'm quarter discuss our you, everyone. Karen financial

be quarter like otherwise to the prepared Before second financial of second refer and will of comparisons discussed my remarks comparisons all versus I'd I unless the to begin, today mention in stated, measures XXXX. that, XXXX year-over-year quarter all

Now our to results. turning

our million. highlighted, net Karen $XXX.X As increased XX.X% sales consolidated to

million, product North price an along offset increased in in effect segment, rising sales marginally XX.X% to Within the effort of XXXX June and higher due costs took net April that with to sales America material $XXX.X increases primarily volumes. to

$X.X wood second stronger last XX.X%, increased year's ongoing sales primarily our quarter Europe net Europe, in XX% to to to points, prior strength by basis primarily XX.X% compared increased We solid XX% segment resulted gross our Gross reflected XX.X% the benefited from material demand America also $XX.X and compared continued distributor starts. in due From approximately XX.X% compared XX.X%. our products last COVID-XX in trends in In sales to margin was channel, in prior in Karen basis, to to total increased housing year. to was million, increased gross to slowdown. XXX positive products represented quarter, benefit quarter. million, Europe, to from increases also currency to while the related gross compared a volumes compared increased million margin construction the which higher sales represented year US some against a of translations, QX North our compared from higher by year concrete dollar. XX.X% earlier, for XX% the XX% XX%. concrete On on partially product profit to of $XXX.X offset products and price of compared foreign sales strengthening to total of gross construction a in XX% to products profit United resulting due States XX.X% which which sales were by to margin XX.X% Wood gross Consolidated margin discussed perspective, margin currencies increased compared costs. to XX.X% by Europe

and operating expenses. our costs turning quarter Now to second

As COVID-XX year, of in the expenses we curtailed pandemic. last a reminder, light

$XX.X were million million, XX%. As increase or of a $XX.X result, an expenses operating total approximately

by up professional a were cash professional Europe, expenses million increased total lower and compared basis, sales to primarily commissions, $XX.X As cash XX.X% offset Research On XX.X% operating professional Selling personnel fees and personnel entertainment XX.X% and America expenses and expenses were XX%. segment increased percentage $XX.X costs, and expenses costs, up development sales, and a XX.X%. sharing increased administrative expenses XX.X% increased to to fees. compensation. and costs, and $XX.X sharing legal travel net selling engineering fees. expenses General North to million, profit XX.X% they personnel in and to stock profit increased due of due a due to in were primarily to million, based

offset sales combined On basis, million helped consolidated In higher top solid million, $XX.X million, Our primarily operating profit. margin volumes income America, In XXX.X% operations XXX operations in with approximately from by line compared points increased to to profit, $XX.X by increased XX.X% partly our income margin, QX due income increased increased consolidated from million. Europe, $X.X to operations XX.X% income increase from gross performance, drive to a stronger of primarily our North XX.X% due gross to from operating and XX.X%. $XXX.X expenses. basis increased gross to

$X.XX or million fully increased $X.XX Our XX.X%. per to or share fully share. effective rate tax diluted from to totaled income net million $XX.X diluted compared XX.X% per $XX.X Accordingly,

and cash balance Now flow. turning sheet our to

remained to to cash $XXX.X cash of $X.X operations. totaled million, decrease our sheet a healthy liquidity XX, operate XXXX. At June million compared ample equivalents XX, day-to-day balance Our with and June

XX, As into the XXXX, mostly line of to of a our of your July Subsequent primary the unchanged us to from million agreement July was from which XXXX, additional credit $XXX June facility, entered with end. on full XXXX XX, our we covenants terms for the flexibility. a quarter, certain XX, extended provide the debt and remained end free, and credit amendment modified we fourth to borrowing available to

steel increases over of the a $XX.X at partially reduction Our saw primarily in at half inventory June the by $XXX.X to XXth from XXst, by position hand. our year, in of prices we first the balance increased due million on [pounds] offset March million

manage of while carefully on-time in levels standards. to all continue the rising purchases striving maintain our We raw customer inventory supplies, material service environment high and costs to delivery of limited and

management, million million or result of $XX.X dividends in from second we profitability XXX%. strong working our We cash of approximately $XX.X used quarter increase for improved effective during our million capital the paid XXXX, a an million and operations to quarter flow for expenditures capital As generated $X.X and of of the $XX stockholders.

on declared to quarterly Additionally, payable of The Directors as be dividend I'm of October October cash per X, XXXX. XX, record dividend of that our share. XXXX announce XXXX, of a pleased $X.XX to will stockholders Board July on XX,

per X.X% in As our early in our a share. reminder, approved or May, increase Board Directors of dividend $X.XX

commitment did per on result our financial capital quarterly X.X% this, XXXX a pleased raised returning to strong or We increase $X.XX had not to increased the stockholders. share dividend, in April the by to our XXXX. our have focus pandemic. are our last cash we at We dividend of Prior COVID-XX reflecting our of as performance continued preservation dividend and in to quarterly onset

through which amount As of full repurchase of June XXth, effect million XXXX, of our the available, authorization we $XXX share remains in the had end XXXX.

we to share and we and opportunistic will remain expect will activity. our improved it our to continue capital, higher our return in repurchase drive active initiative on relates Given performance as confidence business our expectation operational and a strategic invested that both

the July like discuss to financial conditions of outlook. business Before XXXX I'd to we over as elements are we as and call XXth, updating the of full ending trends for our questions, on guidance year follows. our XXXX XX, Based December today, certain turn

to XX.X% of anticipated our results, to margin actual that compared stronger of input XXXX. are our the now rising operating our demand costs material previous outlook price reflects XX.X% announcements, experiencing estimate be of trends current We XX%. we've outlook in range quarters the to impact and raw recent of in two XX% than increase tightening to been the The

both updating outlook. XX%, our range of we rate rates. including effective tax be income continue tax to expenditure we the state and capital to in finally, And expect our to XX% are federal In addition,

regarding our million For on fiscal $XX growth related amount I'd that and XXXX, pressure we outlined XXXX for is and CapEx material provide to earlier expectations like our of expectations, some late to in small a the raw safety million this are of Based the fiscal $XX of only anticipating used in XXXX. have $XX authorized XXXX. At CapEx into cost maintenance $XX million, Karen spend range for the approximately in we will remainder million call. and our additional time, to continued initiatives current including be also our margin pursuing to XXXX commentary CapEx.

our with noted, recently more steel margins XXXX Karen higher of market prices. steel first gross As in together half much the of at into steel to reflect cost sourced rising average prior an early purchase the or

fiscal work we raw significantly through backhalf much expected of our prices, increase are in sold XXXX price which material Even the these begin on anticipated continue to affect As increases. adversely XXXX. prices lags for our material inventory our typically to averaging higher raw from impacts hand raw of to and costs at the as if costs will goods margins buy into material and decline, our

expect As currently on Despite in pressures, value XXXX a for focus compared term company margins place XXX roughly we the put XXXX. we year the in operating by decline continue near when view, a point to XXX a founder result, full our range to basis key Simpson. Barclay long to

call some and on We being remarks. strategic, to the to back to in remain ability with operational With coming for margin summary, second you able an support quarter We forward our performance. and we our discussed confident teens against financial year we Day, As in key range the like continue we're our and quarters. updating in that, goal and closing financial current believe during in Investor progress trends. a future the leading very to annually operating initiatives can the company our with Analyst long-term, maintain in look industry to our pleased along execute turn results ambitions. Karen high In their operating I'd five demand to solid

Karen Colonias

Brian. Thanks,

very quarter we in are As summary, with Brian our pleased results. mentioned, second

We of the continue rising prices. the while key control, steel we to our characterized is our by manage current business macroeconomic that areas ongoing navigating which environment, can

will that margins these we unveiled While in remain factors our in our ambitions confident March. at result notable company five to achieve Investor to ability in our compression our in fiscal XXXX, a we Analyst Day year

is, based strengthen our Our values first want ambition culture. we to

tie Our continue and culture. they're most safety leadership to relentless employees a ensure, are customer that focus instill to asset engage involved in and them our will important Simpson programs with strong first we

all be in to a aspects our of choice want we Second, partner business. of

we we our above categories. leader This in relative Third, operating starts. growth remains continue market an US continue Fourth, quartile aim innovative income will of to our that target our proxy margin the top to we be product on strive to housing peers. to within

by of in thank to for year Operator? ambitions. our five employees structures. term our I'd with to our up expenses We increases your the Simpson design commitment While against return you help questions. to execute expand sincerely call revenue from historical hard enhanced and people we safer, we'll our to safety And is margin stronger initiatives, operating for all long every to goal targeting supported on that, their top commend growth I'd initiatives. day the mission our peers. operating as working to for our like solutions and in achieve providing for like our begin term dedication to build open remains invested over near quartile we in income the the our closing, growth expect capital support averages In from finally, our And that a continue of proxy to

Operator

[Operator question CJS is Thank Securities. Instructions] Our from Daniel Moore you first with

Daniel Moore

in comp of next are marginally of that I'll single terms volumes. growth the Press at means that mentioned for and assume the year, that expectations quarter? sales release for terms? start I the including tough low volume through what ballpark correct your Lowe's And digits. remainder QX with Is organic volume. higher

Brian Magstadt

Europe volumes certainly increase last to year. we saw relative QX Well, of in

at Looking America, nicely. I think it North you've indicated

general we're low starch with R&R a the single hearing DIY, elements. what marketplace have what to relative volume expectation We digit respect and seeing we're or to in in

Daniel Moore

I caused exactly changed understand, ‘XX you have that understand top end the factors margin what to of trying fiscal months as the then couple puts that the described past them. and takes range. Difficulty] over And the lowering of [Technical of

one two of Just would has any wondering of if relative kind that to those top that at end? changed months ago down necessarily maybe take

Brian Magstadt

other have prices it’s where multiple is months expectations steel the pretty be And the there ago. bit to Well, last a we to increase and of like. of housing end increases Also, for from where and softening year, end announced bit by there elements, things of regard to dramatically sure, some this the in a some though, three maybe example, that. little like we supply to although the of year, price continue with just even were markets appliances issues chain were impacted for due we starts

we're So months just under factors number of another belt. now various that a modeling with in our three

Daniel Moore

that the 'XX, fiscal sort on initial conservative jump started of this higher. But And commentary, margin ramped and similarly, as arguably appreciate year next year. everybody with there’s a was out for knows, expectation we quickly

described? So cause mind year than you've that compression there that bit maybe in are margin what little a to could next factors be lighter your

Karen Colonias

Dan, pricing quarter. think, has coming we like availability pushed a into fourth seems been I potential back increase, little continuing see quarter first from bit as to online steel new

So we're prices tight continuing some time to for still high and market come. seeing

Brian Magstadt

it our on current average our we talked conditions. price buy takes of new to past for as Dan, we've operations calls where steel, as while And used market in in a these the reflect steel

the just pound that per impact that see that started lower the relatively 'XX. and with element. of in pretty So full year gone in and steel we'll it’s fiscal dramatically We price up it's

Operator

Our next Tim Baird. Wojs with from question is

Tim Wojs

America, you set I'm in just contribution million did [price] of level over of quarter? the on a did $XX my doing in isn't So you have correctly, get which probably If math -- maybe to bit little questions. try correct. basic a North But couple to

Brian Magstadt

that's That much, too sounds too much.

Tim Wojs

the What That's contribution? too price was much.

Brian Magstadt

be would XX-ish. up Well, it

Tim Wojs

and had only really of because the you coming, increase, one a still right, right? only weeks second that's And really price two there's third

Brian Magstadt

Correct.

Tim Wojs

million a a basis, on million, $XX be, rate So million, could quarter? $XX run price $XX

Brian Magstadt

math little second, $XX a me still here. Give a just million.

Tim Wojs

million. $XX About

that going annualized forward. kind rate of would And be run the so

compression base though we're next Correct? margin I about a year, guess, little talking higher, before. of a much revenue even off than it's higher So

Brian Magstadt

Correct.

Tim Wojs

low we when sounds growth, single then the this quarter? Lowe's it did include the digits, that And think like lapping about of volume the

Brian Magstadt

Yes.

Tim Wojs

And if would what out, you take grown? volumes that have

Brian Magstadt

quarter, in Lowe's had we last year Well, or last QX.

both a out perspective, compatibility So we're from large quarters. of pretty pulling out numbers

combined this down center, last business, compared QX QX home total center in. of year year was that home Our load to of to due

Tim Wojs

POS positive? this Is

Brian Magstadt

We had there the in last of load year, I bit believe a was so. POS.

Tim Wojs

a And as just dollar price because kind and just of normalize you you mass? per it's really Will basis input increases. margin of then both on with have dollar costs higher and costs pricing the offset dilutive numerically effectively the

Brian Magstadt

Margin dilutive, that Yes. I would expect be correct. to

Operator

Our Yinger with next D.A. Davidson. Kurt question is from

Kurt Yinger

of to guess to the continue recognizing demand kind push the same just ability just I'm you seems curious alone this not think at price starting time about I boat. in that how it off, you're a moderating on the customers bit. is

kind type you're responses hearing? moving the what pieces within Just of and that, of

Karen Colonias

such highly to that. raw it's through, easy at is shot increases pretty information finished who's much material as steel push steel through. Simpson going course, with about a since it not on goods. only never it's their anybody industry who’s the got it's and of a price take publicized Kurt, But me Let in pushing a pricing what's

increases a steel of publicized industry. lot going as highly all on price to very construction it's the in industry, the aspects of So with going what's

able our have customer time. those inventory. that's really in means we shop goods, finished them. provide that still meet XX course be bring that have in, we're as mentioned, of a product materials steel we And customers so that raw we just not to to and have in certainly needs turnaround and happy And that we've hour our time to very to And have are we

to or is again, pricing they're steel are although think all aware we hard certainly the levels the of I customers push increase provide through, in that the service going And changes is industry. on that appreciate. that the So price any something

Kurt Yinger

North from or sticking I you some guess lines, benefited feel America being perhaps whether shortages those plates. curious you've along some chain we've around I'm service of perspective? And your from proposition in of more truss just heard strained comments same a supply competitors

Karen Colonias

We materials. certainly being our we And European that some building customers our market. we've heard of in able from some have market up been to European competitors that pick have in to supply benefited unable

much standpoint our American I from But that think North market, also. probably we needs. from can customer a availability again, be sure the want in meet as we've we've smaller to that on definitely scale we an mentioned, benefited

we to and then So support able customer want on a be don't bring not customer. to another

very do we're But job production our The right of on our I any jobs, not up we've place, customer careful that's in we're working So [moving] think great done being a that. sure has and the again, product we done team of really the job how excellent an base. has with for team sure got that making right sure.

Kurt Yinger

-- that made, of we despite that ramp targeted get operating of or the on markets lot benefiting And expect expense compression. I'm nice expect margin of growth margin leverage those from I you've assumptions behind the up investments guess that of some you're whether you're price? just to fact the drivers on see whether a the the curious the the what ‘XX outlook, about obviously, won't and some you talked gross to necessarily line you've should leverage making start will you

Brian Magstadt

within Kurt, I business. needed And from as but look supporting initiatives our SG&A support OpEx to our our would the like. the price investments SG&A we've plans say from allocate push growth we we'll an perspective, our through, how operations current only just at on increases not and got dollars

direction some that gave. the XXXX expect to relative I we Does be to given leverage would SG&A result that And being on so there side in offsetting the make sense? the gross margin

Kurt Yinger

whether there leading a in indicator out technology. on you and And as years? what software bit you've that's what demand of terms terms watch of one among customers? Could think determine next your just about become Talk seen then product about couple great. just can and in that you look that's success a little to Yes, you the adoption usage metrics something of you talk over

Karen Colonias

on a help our truss is a they can the that's different be think a takeoff. different materials they on bill choose that application elements applications little [shard] more I lumberyard efficient. component at really potentially a And used each where business bit that would of manufacturer, why versus So say doing of make based be a customer to their full would platform is that software a

So building do make effective figure have to them that particular application the part trying we of that chain. out and first and more of the needs could software efficient their start customer more a in by we

because efficient more We to are seeing, tool jobs. on using more takeoff them making our being pull it's for example, able lumberyards

as seeing lot fencing our but products lumber We're or and help course, of bring have and amount systems. locations year. to small solutions that We design our deck a products of our as only this a of to that market seeing applications, offer is centers home of have use customers total to We application. those a our there, in you're not a also well in product support, a convert software use X% share trusses component market at fencing. target share to X% into sold as to still deck their are and our this maybe to again floor used We're looking that manufacturers lumberyards significant a

specifically are are, We products, fencing or an is as there metrics one across decking can increase deck our get at look we products applications? answer, releasing The the So use for that metrics. used in we see that board. it’s new those applications no we do

those also pounds side, metrics manufacturers. that the that we We component component use plates of we the manufacturing as from sell to know,

that a solution and So could and little also can think efficient provide that But make customer, be make can the project a that building application owner our role metric more on. I each Simpson the used. the key that at them our technology working component bit different is building that manufacturer, person, on in a a home designer, takeoff that deck, final specify products they're construction we

Brian Magstadt

would other opportunities utilize Some that of would the be with metrics customers. we

looking facing CRM So tool, in we'll opportunities. them customer various at track technology our across opportunities

Operator

question next with & Romero Our from is Company. Sidoti Julio

Julio Romero

and assume Does there? talk XXX basis margin margin does XXX, that expected beginning 'XX current assume XXX early at about decrease or price late stocks XXX elevated point So maybe expected your the some of 'XX. levels, compression on steel rising commentary assumptions point you to in operating steel your decrease? a basis remains Can the just decrease in and that

Brian Magstadt

takes catch -- We it while new average average purchases in would for the our -- of our inventory mentioned to earlier, I as price expect a up.

last back So I There purchases held continue to inventory just well to X we before of going the end north of cost times was today, [Multiple we're I to out. things would of in things expect at new versus increase Speakers] level year. in like a taken what the say, go of But come to -- of down it's it’ll bit costs while to a just for to new peak get take a once ramp maybe a we purchases while while those to well. little down a in take as a it'll coming in. up,

Julio Romero

fair be that's would assumption, price But up in jump ramped steel is that or… dramatic your of into ramp XXXX like in could somewhat price, the downward factored that a downward given happen

Brian Magstadt

and there, Yes, it be how a questions just it models. much would. of those will now assumptions right of lot It’s in when, lot

Julio Romero

prices that price anything customers truss them dynamic down, change for prices gone with of have prices some to the Just you I about will to trying some jump just increases? lumber in such for as dynamic. your customers, and up steel guess inputs the maybe asking dramatic done I if manufacturers. prices have the Lumber for terms other think think up. for of about rising, gone your steel appetite prices because of absorb have your that Does

Karen Colonias

I mean, think that's the of I building residential from the the if of standpoint house, product be just you home would the in right, lumber. look at a majority that

significant mentioned steel we've as and a compared under that So past total in pretty well a to said probably we're half cost impact lumber prices the of a of increases got house. percent price a the

about your industry, is a But just impact pricing, point. I'm increase weeks, that not decreasing the And thing and housing construction if price our not so smaller affordability the overall to of an pretty which past customers, house. significant though again, much from we it's the to three answers question. has on said from wood relate as our from a overall easy been the the a it's even construction concern for is impact sure

Julio Romero

commentary. how the I walk Can fascinated shifting through that broader I'm investment about in your initiatives from maybe term? allocation a thinking in by think guess, to capital some that's perspective. gears of helping capital about Just you venture funds. you the growth the long

Brian Magstadt

that opportunity let access radar building gets we're us space, know what their really we're the the on flow. looking at about very for, deal screen. firm them where to is We looking So excited that's to engage with their edge gets within cutting technologies

not had new are We have that to and look those opportunities conversations that the at a take that can look desk forefront may we just our have potentially cross periodic at we at. technologies

may something scouting, we've access had advanced we more strategic form But to that acquire, the with that if these we in not partner this past. And be we look to made do some may you us relationship in So new gives fashion with, technologies. or that it not of a will.

Julio Romero

me then million reminder quick give us on year? increase year? in Can guess you us quick worked I give calendar this being And just what's this Just a million of CapEx a for the $X reminder this is, one the last in $XX year. currently for implied CapEx of maybe growth

Brian Magstadt

products working more. number we're to on opportunities in of Well, source a

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Operator

conference. today's conclude does This

your You and you time, thank participation. at for this your may lines disconnect